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    Entries in Economy (77)

    Sunday
    07Feb2010

    Bad News for the Gas Princess

    Yulia Tymoshenko

    This just means that she’ll have to work harder if she wants to rule over the Ukraine:

    Ukrainian opposition leader Viktor Yanukovich won Sunday’s election for president, exit polls said, but likely challenges to results from defeated candidate Yulia Tymoshenko could paralyze the beleaguered country for weeks.

    If confirmed, a Yanukovich victory could prompt legal challenges and street protests from Tymoshenko and delay Ukraine’s chances of repaying over $100 billion of foreign debt and nursing its sickly economy back to health after a 15 percent collapse last year.

    Yanukovich, 59, a beefy ex-mechanic who wants better ties with Moscow, staged a remarkable comeback from a former election disgrace to lead Sunday’s runoff vote with 49.8 percent, according to pollsters ICTV.

    Never bet against Yulia. In some form, she will be a player in Ukrainian politics for the next generation.

    Sunday
    24Jan2010

    Cosmetic, Not Structural Change

    I have to say, up front, what the hell?

    It’s all well and good that the President is bringing back a campaign worker. I wonder if anyone has bothered to point out to the President that governing is different from campaigning, though:

    President Obamais reconstituting the team that helped him win the White House to counter Republican challenges in the midterm elections and recalibrate after political setbacks that have narrowed his legislative ambitions.

    Mr. Obama has asked his former campaign manager, David Plouffe, to oversee House, Senate and governor’s races to stave off a hemorrhage of seats in the fall. The president ordered a review of the Democratic political operation — from the White House to party committees — after last week’s Republican victory in the Massachusetts Senate race, aides said.

    In addition to Mr. Plouffe, who will primarily work from the Democratic National Committeein consultation with the White House, several top operatives from the Obama campaign will be dispatched across the country to advise major races as part of the president’s attempt to take greater control over the midterm elections, aides said.

    “We are turning the corner to a much more political season,” said David Axelrod, a senior adviser, who confirmed Mr. Plouffe’s role. “We are going to evaluate what we need to do to get timely intelligence and early warnings so we don’t face situations like we did in Massachusetts.”

    If Mr. Plouffe is the new Obama man at the DNC, then who, praytell, is former Virginia governor Tim Kaine? Is he now window dressing? Tim Kaine does not have the charisma to be considered window dressing. They might as well admit that Kaine is out, Plouffe is in, because I don’t know how the President can send such a high level advisor to the DNC and not have him be in charge.

    As Mr. Obama prepares to deliver his State of the Union address on Wednesday and lay out his initiatives for the second year of his presidency, his decision to take greater control of the party’s politics signals a new approach. The White House is searching for ways to respond to panic among Democrats over the possible demise of his health care bill and a political landscape being reshaped by a wave of populism.

    Improving tactical operations addresses only part of his challenge. A more complicated discussion under way, advisers said, is how to sharpen the president’s message and leadership style.

    That’s entirely the wrong thing to do. The President does not need to “sharpen” message or style; he needs substantive policies and clearly stated goals. He needs to make things happen by Executive Order when possible and he needs a way of pushing his agenda through Congress. That’s a structural relationship that is failing him right now. He needs, in other words, a man or a woman coordinating legislative goals with the House and Senate in a more effective way to get things happening. One way to do this is to push through legislation that deals with short term issues, and with job creation. He needs legislation that is not going to get bogged down and held up by a threatened filibuster. If you can’t make things happen with up or down votes, then you have to horse trade. And the American people cannot criticize the President if he’s horse trading in order to bring them some good government. The same old fraud, waste and abuse has to end. The collapse of American society because of economic desperation becomes more possible by the day.

    I don’t understand how President Bush was able to get most, if not everything, that he wanted out of a nearly evenly-divided Congress and how this President gets virtually nothing when his party is firmly in control of both houses.

    Without making structural changes, everything you see them doing is a cosmetic fix designed to keep in place the status quo as it now stands. After a disastrous year, heads should have rolled. The only way to get fired in the Obama Administration is to either not get hired at all—over a hundred positions still go unfilled—or to cross Rahm Emmanuel. If 2010 is anything like 2009, this President will lose the Congress and he will have to fire Emmanuel if he wants to be re-elected.

    Thursday
    21Jan2010

    Air America Goes Off the Air

    How is it, at the height of the Obama Presidency, Air America goes off the air:

    Air America, the liberal talk-radio network that helped boost the careers of Al Franken and Rachel Maddow, said Thursday that it was declaring bankruptcy and going off the air.

    The company, founded in 2004 and based in New York, strove to provide left-leaning commentary and call-in programs as an alternative to such popular conservative radio talkers as Rush Limbaugh, Sean Hannity and Michael Savage.

    It was troubled almost from the start. The company had difficulty lining up affiliates and attracting a sizable audience. It filed for Chapter 11 bankruptcy-court protection just 30 months after its inception and was resold to an investor group in early 2007 for $4.25 million.

    Charlie Kireker, one of Air America’s principal owners and its chairman, said in a memo to employees Thursday that the company was done in by “a perfect storm” of plunging ad revenues, intense competition, high debt and poor prospects for new financing. A search for new investors, he said, has been fruitless. The company declined further comment.

    It helps to actually understand the radio business before you attempt to go into it. No one at Air America understood the radio business. First and foremost, you hire professional radio talent. Then, you develop that talent. If people are buying your ideas and if they’re accepting what your talent has to say, it’s gravy from then on. All they would have had to do is copy—copy—the way successful broadcasters do business. They survive based on their talent. Can they hold the interest of someone listening? Can they speak a common language that the listeners can understand? Can they interview a guest? Can they talk about a subject with some degree of knowledge?

    If not, they will fail. There are more Democrats than Republicans in this country, but no one was buying what they were selling. No one on Air America was so compelling to listen to that people would do whatever they could to hear what they had to say. Their stable of talent—God bless them—went on to do things like MSNBC and the United States Senate. At least, that’s what two of them did. Where’d the rest of them go? I have no idea. And neither does anyone else. That’s because they were nobodies, sir. Nobodies.

    I hate to say this, but,  by going with amateurs, half-assed celebrities, and unhinged personalities, they wrote their own obituary long before today.

    And I’ll say this until I am blue in the face: if you have nothing but contempt for middle America, guns, hunting, fishing, sports, country music, and just plain old corn pone, then that’s exactly the kind of audience you’re going to have. You’re going to attract three or four people who have nothing but contempt for a good number of Americans who listen to the radio. And, if you can’t get the people who listen to radio to listen to you because your talent can’t do anything except talk down to people and act like high and mighty jackasses, watch your business collapse into a damp heap of nothing.

    Oh, and this will kick your ass, too:

    In October 2006, ABC Radio Networks, then under Disney’s ABC, told its stations to black out all ads from about 90 companies that did not want to have their ads on radio stations that carried Air America Radio. The internal memo from ABC Radio Networks to its affiliates was headlined “Air America Blackout” and was addressed to the Traffic Director who handles advertising for the affiliates. The memo states, “Please be advised that Hewlett Packard has purchased schedules with ABC Radio Networks between October 30th and December 24th, 2006. Please make sure you blackout this advertiser on your station, as they do not wish it to air on any Air America affiliate.”

    The memo then goes on to say, “Please see below for a complete list of all advertisers requesting that NONE of their commercials air within Air America programming.” The list includes large corporations such as Wal-Mart, General Electric, Exxon Mobil, Microsoft, Bank of America, Fed-Ex, Visa, Allstate, McDonald’s, Sony, and Johnson & Johnson. Also on the list of advertisers that did not want their commercials to be on Air America Radio were the U.S. Navy and the U.S. Postal Service.

    The complete list follows:

    Allstate | American Heart Association | Aventis | Avon | Bank of America | Bayer | BMW Motorcycles | Chattem products such as Capzasin penetrating rub, Gold Bond for skin care, and Gold Bond Foot Spray | Cigna | Cingular (now AT&T Mobility) | Clorox | Coke | Coty | Dean’s Morningstar Food’s | Dell | Denny’s | Discovery Channel | Eharmony.com | Epson | Expedia.com | Exxon Mobil | Farmers Insurance | FedEx | Foot Action (under Foot Locker) | Frito-Lay (under PepsiCo) | General Electric | Gillette Venus (under Procter & Gamble) | Goodyear | Heineken/Amstel Light | Hershey | Hewlett Packard | Home Depot | Hormel | Hyatt | Interstate Batteries | J. C. Penney | Johnson & Johnson | Kohl’s | Levi’s | Masterfoods USA (under Mars) | McDonald’s | Men’s Frontline | MGM | Michelin | Microsoft | Morningstar | National Cattleman’s Beef | Nestle | Nissan | NYSE | Office Depot | Outdoor Life Network | Procter & Gamble products Bounty, Charmin, Febreeze, Iams Dog/Cat Foods, and Pepto-Bismol | Paramount (under Viacom) | Pepsi | Philip Morris | Pier 1 Imports | Red Lobster (Darden Restaurants) | Re/Max | REI Sporting Goods | Rent-way | Robert Half | Schering-Plough | Sherwin Williams | Sony | State Farm | Toys R Us | Travelocity.com | True Value | United Healthcare | U.S. Navy | USPS (U.S. Postal Service) | Visa | Walgreens| Wal-Mart | Welch’s | Wrigley | Wyeth

    Whoops. I forgot that. If you can’t get the United States Navy to advertise on your radio network, brother, you’re not long for this industry.

    Anyway, wow. Goodbye, Air America.

    Tuesday
    19Jan2010

    The Federal Housing Administration Finally Wakes Up

    This was a long time in coming:

    The Federal Housing Administration, which is supporting the housing market by insuring thousands of new mortgages every day, is expected to announce on Wednesday that it is tightening standards.

    Borrowers who get an F.H.A.-insured loan will soon have to pay a higher initial insurance premium. The new premium will be 2.25 percent of the value of the loan, up from 1.75 percent.

    Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent.

    Other changes will try to hold lenders who participate in the F.H.A. program more accountable by publicly reporting their performance rankings.

    The new measures are aimed at shoring up the agency’s finances while also screening out unprepared borrowers.

    For years, the F.H.A. operated largely out of the public view. But it has become a subject of controversy recently even as it has ballooned in size. Some of the agency’s critics want it to tamp down risk by insuring fewer loans; others think it should help the market by insuring even more.

    As of December, the F.H.A. was insuring 5.8 million single-family residences that had a total loan balance of $750 billion. More than half a million of the loans were seriously delinquent and heading toward foreclosure.

    Many of these troubled loans were made in 2007 and 2008 as the market was plunging. Last fall, the agency said its cash reserves had tumbled to 0.5 percent of its loans outstanding, far below the 2 percent mandated by Congress.

    I don’t have a problem putting poor people into homes. I want everyone to join the ownership society and own their own home. I think that, when you’re young, you should rent. You should move around. Find your way. Make a mistake here and there. And when you have a little more maturity, there’s nothing wrong with the government helping you to find a home and finance the purchase of that home.

    Where the FHA needs to improve is in deciding who gets to join that ownership society. There will ALWAYS be foreclosures and there will always be those who should never have tried to join at the time they were trying to join. In the last decade, those rules were loosened; now they should be tightened back up. As the standards rise, and the number of foreclosures drops, more money into the system and more stability in the market will make it easier to for the right people to buy their own homes.

    Let’s not get off on a tangent about who is, and who is not, one of the “right people” to help out. It can be anyone. It could be your dopey kid. It could be the fresh-faced kid from Bangalore, fresh off the boat. I don’t care who it is. All I care about is not having to pay more taxes because someone wanted to give Joe and Jill Sixpack their own starter trailer at 12% with a balloon payment due when their eighth kid is hitting kindergarten.

    Tuesday
    19Jan2010

    The Supreme Court Turns its Back on Common Sense

    Warning poster for Carp

    Come now, what’s a Supreme Court for anyway?

    The U.S. Supreme Court on Tuesday refused to order immediate closure of shipping locks near Chicago to prevent Asian carp from infesting the Great Lakes.

    The court rejected a request by Michigan for a preliminary injunction to close the locks temporarily while a long-term solution is sought to the threatened invasion by the ravenous fish. The one-sentence ruling didn’t explain the court’s reasoning.

    Asian carp, primarily big head and silver varieties, have been migrating up the Mississippi and Illinois rivers toward the Great Lakes for decades. They have swarmed waterways near Chicago leading to Lake Michigan.

    Thanks to some yahoo with a Koi Pond, we’re about to see the Great Lakes infested with vicious, disgusting Asian carp. Thank you very much. Why does this matter?

    Many scientists say they could starve out popular species such as trout and salmon.

    They also are spooked by passing motors and often hurtle from the water, colliding with boaters forcefully enough to break bones.

    Officials poisoned a section of the canal in December after discovering genetic material that suggested at least some carp might have eluded an electric barrier on the Chicago Sanitary and Ship Canal and could be within six miles of Lake Michigan. If so, the only other obstacles between them and the lake are shipping locks and gates.

    Last week, the U.S. Army Corps of Engineers said additional carp DNA — but no live fish — had been found in three different spots along the Chicago River within a mile of where it flows into Lake Michigan.

    As usual, the incompetence and corruption of the State of Illinois is in play here:

    The state of Illinois, backed by the Obama administration, fought the proposal. They said the DNA samples weren’t sufficient evidence that the carp were on the verge of slipping into Lake Michigan, and said closing the locks would damage shipping and passenger traffic on the busy waterway.

    A message seeking comment was left Tuesday with Illinois Attorney General Lisa Madigan’s office.

    Money triumphs over common sense. Hey, I thought we got rid of the crooks in Illinois? Apparently not.

    Close the locks, poison the water, stop the invasion. I don’t care if someone’s greased palm loses a few dollars. The economic loss of game fishing is too much to risk. There’s a darned good reason why Minnesota, Wisconsin, and Michigan are trying to protect the environment—they have common sense. In Illinois? They have filthy rivers, polluted lakes, and virtually no one with the credentials to call themselves a sportsman. Every year, carloads of Illinois jackasses wander into the north country, starting forest fires, using illegal drift nets, fishing with dynamite sticks, and shooting cows. It’s a disgrace.

    Tuesday
    19Jan2010

    Japan Airlines Goes Bankrupt

    Japan Airlines advertisement (Charlie Allen, a talented genius)

    Whenever I get nostalgic for the 1980s, I’m reminded of how the Japanese were going to end up owning us all. What happened? Old guys like me were supposed to end up serving drinks to Japanese tycoons on Park Avenue. Instead, the typical businessman in Tokyo has his shirt tail hanging out, his pockets are reversed out, and his downcast face tells you all that you need to know.

    I’ve flown Japan Airlines at least a dozen times. Now they’re bankrupt. These two things are unrelated:

    Japan Airlines Corp filed for bankruptcy protection on Tuesday owing more than $25 billion and vowed to slash 15,700 jobs and unprofitable routes as part of a plan to survive an industry beset by volatile fuel costs and fickle flyers.

    JAL, Asia’s largest airline by revenues, will remain in the skies thanks to almost 1 trillion yen ($11 billion) in support from a state-backed fund, but must go through a sweeping restructuring under a new board and management.

    Shareholders will be wiped out and lenders will forgive a larger-than-expected 730 billion yen in debt as part of the deal with the fund, the Enterprise Turnaround Initiative Corp of Japan (ETIC).

    We’re not the only ones bailing out industry, I guess. How do you slash 15,700 jobs from an airline and stay in business? How big were they, for crying out loud? Was JAL sitting on a bloated work force? Are we going to be treated to more scenes of sad sack businessmen, stumbling through train stations like zombies, unable to function because their job went poof! I hope not. Pathos always gives me indigestion. It’s true. We have the Hallmark Channel blocked for this very reason.

    It throws several airlines in this country up in the air:

    Japan Airlines Corp., facing possible [actual bankrupcy, actually] bankruptcy this week, may drop partner American Airlines for an accord with Delta Air Lines, according to two people familiar with the situation.

    Delta, based in Atlanta, is unlikely to take a stake in JAL, based in Tokyo, and will only pay costs resulting from the switch, said the people, who declined to be identified, as the talks are private. Delta earlier offered JAL $300 million in compensation for lost sales as part of a package designed to lure JAL into Delta’s SkyTeam alliance from American’s Oneworld.

    American spokeswoman Mary Frances Fagan said suggestions that JAL will switch from Oneworld to SkyTeam were “unsubstantiated.” American is “eager” to submit a venture plan that it has worked on with JAL for some months to regulators as soon as possible, she said by e-mail. The plan guarantees JAL $300 million in revenue over the next three years, she said.

    American and partner TPG have offered to invest $1.4 billion in JAL.

    Obviously, bankruptcy has arrived. So what happens to the partnership with American? What happens to Delta if they make the deal and JAL goes under?

    Should the U.S. government help bail out JAL? Seeing as how we have close ties to that business, is it a stretch to consider bailing out a company identified so closely with Japan?