The Great Depression of 2008
Leeroy F. Dermit
Sep 27, 2008
http://www.leeroyfdermit.com/2008/09/
great-depression-of-2008.html
On issue after issue, every time I dig deeper and think for myself, I discover that government is the cause – not the cure, but if free markets are so great, then how have we come within days of another Great Depression? Is it really about free markets vs. regulation? Is it naked short sellers? How big a factor is consumer and business confidence? Do the media and politicians really understand economics? Could there be economic terrorism afoot?
Conventional Wisdom
The conventional wisdom just doesn’t add up.
The conventional wisdom is that America has been in recession since late 2007, and that the cause is 20 years of Republican deregulation. Deregulation supposedly caused a recession by causing the prices for oil, steel, copper, etc. to soar, by allowing some greedy people to sell loans to some people who couldn’t afford them, and by allowing some people to more easily bet that stocks will go down (naked short sellers).
By August 28th, I had lost 3% of my savings, so how had I lost 53% of my savings by October 10th?
The conventional wisdom is obviously a myth, so we are going to have to look at a lot of facts and think for ourselves.
Free Markets
The argument for deregulation, free markets, competition, etc. is that although problems (both internal and external) can occur at all levels and at all times, for each kind of problem, some competitors will have made the right decisions to survive while those who made the wrong decisions will fail. Failure makes room for new competitors. Also, competitors can learn from past mistakes. Therefore, while every kind of problem big and small can happen once, free markets continually adapt and improve, and thus a future recurrence of that problem is unlikely. Free markets are thus more likely to serve customers best.
Unlike businesses and private organizations, government is a monopoly that forbids competition and forces us to buy its services, and thus government is less accountable and less adaptable than businesses. Therefore, government can afford to be inefficient and can make the same mistakes over and over again. Government is thus more likely to cause a problem than to solve one.
This is a pretty good summary of the argument for free markets.
Liberal Fascists
The argument for regulation may have been best summarized by Mario Palmieri (“The Philosophy of Fascism”, 1936):
Economic initiative cannot be left to the arbitrary decisions of private individual interest. Open competition, if not wisely directed and restricted, actually destroys wealth instead of creating it.
I used to think that regulation was the new form of socialism, but then I read this quote, and now I see that the Democrats are not really socialists – but are fascists. Therefore, we could accurately refer to the Democrats as socialists or as fascists – but let’s not get sidetracked.
American Capitalism
America does not really have free markets (a.k.a. capitalism). We have the second highest business taxes in the world, a ton of regulations, a load of frivolous lawsuits, the Federal Reserve, the IRS, Fannie Mae, Freddie Mac, the Securities Exchange Commission, etc.
The trend is not purely deregulation either. We now have Sarbanes Oxley, a resurgence of The Community Reinvestment Act, etc.
Of course, we do have some scary deregulation too. For example, we now have naked short sellers.
The Community Reinvestment Act
Everybody knows that banks gave loans to people who could not pay them back, and that this supposedly wouldn’t happen in a free market – which is true. However, we don’t have a free market.
The government instituted the community Reinvestment Act which ordered Fannie Mae to encourage banks to give loans to poor people and minorities regardless of credit worthiness – because that is fair, and socialism is fair if it is anything.
Freddie Mac was charged with converting these subprime loans into Mortgage Backed Securities.
Don’t take my word for it. Wikipedia says:
In early 1993 President Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities. The new rules, during a time when many banks were merging and needed to pass the CRA review process to do so, substantially increased the number and aggregate amount of loans to low- and moderate-income borrowers for home loans, some of which were "risky mortgages."
What did the Bush Administration do?
In 2003, the Bush Administration recommended that a new Department of the Treasury agency should supervise the primary agents guaranteeing subprime loans, Fannie Mae and Freddie Mac. Congressional support was approximately split along Party lines and the proposal eventually failed.
What did Obama do? Obama worked with ACORN to train activists to pressure banks to make bad loans. Any bank that wants to expand or merge with another has to show it has complied with CRA – and approval can be held up by complaints filed by groups like ACORN. I got this fact from a very revealing article about Obama/ACORN at: Obama helps ACORN set up Homeowners for Failure.
Clearly, the CRA is an example of increasing regulation (and Democrats) contributing to the current financial crisis.
Fannie Mae
To better understand how the government (not Wall Street) is a major cause at the center of the subprime mess, it is helpful to first understand that Fannie Mae and Freddie Mac are basically an arm of the Democratic party.
Sarbanes-Oxley
Part of the Sarbanes-Oxley regulation (instituted to prevent another Enron) requires the use of Mark-to-Market accounting – even in cases such as those instruments created by government institution Freddie Mac known as Mortgage Backed Securities (perhaps an unintended consequence?). Therefore, MBSs are treated just like stock even though there are real houses with their own market values as collateral for them, and thus at the end of a day, if the market value of those MBSs (not the houses) is too low, then a bank may not have enough money to pay the margin call unless they sell enough assets at a huge loss. In July This happened to Merrill Lynch who had to sell 30.6 billion dollars worth of MBSs for 6 billion. The houses alone were worth 25 billion.
Again, we see that government intervention itself has contributed to the current economic crisis.
The Fed did It
As we all know, Alan Greenspan artificially lowered interest rates in a largely successful (although now temporary) attempt to bring us out of the great Clinton.com crash at the end of the Clinton administration, which of course continued into the Bush administration.
Low rates obviously contributed greatly to the housing bubble. Low rates also increased the supply of dollars through increased borrowing, which thus weakened the dollar.
Again, we see that government intervention itself has contributed to the current economic crisis, and guess what – they’re doing it again!
The Cities did it
Perhaps the other main contributor to the housing bubble (in addition to the Fed) is the rapidly growing trend of local government intervention known as Managed Growth. It takes many forms, but Managed Growth typically is where a city restricts permits for new houses and buys up land along its outskirts to prevent development there too.
Note that cities such as Atlanta, Houston, and Dallas did not employ managed growth and thus continued to have steady housing appreciation consistent with previous decades. Consequently, housing prices in these cities did not fall (except for a little bit very recently).
Again, we see that government intervention itself has contributed to the current economic crisis, and guess what – they’re still doing it!
It’s Confidence Stupid
By all accounts, the overall problem in the market that has suddenly turned the problems of a few banks and home owners into another Great Depression – is a loss of confidence.
Just a few months ago, most businesses were still having record profits, but if consumers and businesses lose confidence and fear a recession, then they will spend less and pay down debt – which will cause a recession!
Markets Succeed where Governments Fail
What did happen was that Russia invaded Georgia, and Obama was utterly powerless to do anything about it. The US government was utterly powerless, and the European Union was just as powerless.
However, another force more powerful than the US Government, the European Union, and even more powerful than Barack Obama … forced Russia to promptly withdraw from Georgia.
In a nutshell, Putin had been acting aggressively, such as flying nuclear bombers to the edge of Alaskan airspace, then he invaded Georgia, and his agression caused foreign investors and businesses to flee Russia. Whereas, the governments of America and Europe failed to influence Russia in the least, market forces brought the conflict to a prompt end.
The conventional wisdom is that government solves problems created by markets, but we now see that markets solve problems created government – such as war.
Conclusion
I know it is hard to stop thinking about those naked short sellers, but the reality is that politicians, government, laws, regulation, etc. are the cause of the current economic crisis. The media and the Democrats call for more government, and no strong voice has countered them, but we now know that government is a problem masquerading as its own cure.
Neither political party has shown the slightest understanding of economics. The Democrats, the media, and Obama blame deregulation, and all John McCain can do is look guilty. I thought he was going to cry at the beginning of the first Presidential debate. PULEEEASE!
I know of precisely ONE politician who understands – Ron Paul.
You won’t hear any of THIS on MSNBC. Does that make Keith Olberman the – WORST PERSON IN THE WORLD? J
Let’s summarize:
The conventional wisdom is that Republicans, free-markets, and deregulation caused the current economic crisis; whereas, the reality is that Democrats, government, and regulation caused the current economic crisis.
1. Alan Greenspan helped cause a housing bubble when he lowered interest rates in a largely successful attempt to bring us out of the crash at the end of the Clinton administration.
2. Managed growth laws by local governments also contributed greatly to the housing bubble.
3. The Community Reinvestment Act caused a proliferation of subprime loans, which implicates Clinton, Obama, ACORN, Fannie Mae, and the whole Democratic Party.
4. The Democratic Party and most of the mainstream media have been working diligently to spread fear and reduce confidence, and fear causes recessionary behavior.
5. The new Sarbanes-Oxley regulations caused the new government mandated Mortgage Backed Securities to be valued at the market price (Mark-to-Market) at the end of each day, which caused banks to go under with little forewarning.
6. The war in Iraq has played a small role, but has reduced confidence in America and the dollar.
7. Markets solve problems, like the Russian invasion of Georgia, where governments are powerless.
The Future
Maybe once the people learn the reality, they will have a greater desire for freedom.
The promise of reality is freedom.
Saturday, November 1, 2008
Friday, October 31, 2008
Economic Crisis May Be Boon For Cybercriminals
Economic Crisis May Be Boon For Cybercriminals
Kelly Jackson Higgins
Oct 28, 2008
http://www.darkreading.com/security/attacks/
showArticle.jhtml?articleID=211601123
How the global financial crisis is affecting organized cybercrime
One industry sector is actually happy about the current state of the global economy: cybercriminals.
Organized cybercrime has already begun capitalizing on the global financial crisis, cybercrime experts say, with targeted phishing attacks on customers whose banks have folded, and attacks that scam consumers who may be shopping less online, but are now spending more time at home. With fewer business and consumer targets available, the bad guys are redirecting their efforts to adapt to the market. For example, credit cards are out; debit cards are in.
One attack used Citigroup's attempted takeover of Wachovia as a premise for stealing Wachovia customers' credentials. (Wells Fargo eventually outbid Citigroup for Wachovia). "There's been a surge in phishing, telling customers that due to the new takeover, they need new credentials," says Ori Eisen, founder and chief innovation officer for 41st Parameter. If the victim hands over his old credentials to "set" his new ones, it's game over for his bank account information.
Socially engineered attacks are typically a lucrative ploy by seasoned attackers. The FBI is seeing more spear phishing aimed at businesses that were hit hard by the economic downturn. The attackers lure them with promises of financial assistance, for instance, and some even pretend to be subpoenas from the Justice Department. One attack via e-mail urged bidders who had lost out on a government contract to resubmit their bids and, thus, spill sensitive contact and other information.
Other researchers have cited a direct correlation between the stock market's nosedive and an increase in cybercrime activity. And phony antivirus popups warning that your "system may be infected so you'd better run this scan" preyed on fears, he says.
Meanwhile, law enforcement and cybercrime experts say more malicious Web sites posing as economic or financial advisory services will start to emerge in this jittery financial climate.
That means a reverse in the trend from the past few months of cybercriminals' silently infecting legitimate sites. "Expect to see malicious sites crop up that are geared to information-stealing, malware-dropping, pharming, and phishing rather than compromising legitimate site," he says.
And just as street crime increases in times of financial stress, more novice attackers and script kiddies are likely to perform an online version of shoplifting and bank robbery. "You're going to see more quick-hit script kiddies, like street crime," DiMino says.
It's simple enough for these amateur hackers to get into the business -- there's plenty of off-the-shelf software that automates phishing. All it takes is a Web server. "We know [when] it's an amateur because they are leaving their servers completely open and unprotected," Yuval Ben-Itzhak says.
The insider threat, too, will likely also intensify as layoffs spread in the corporate world. "You're going to see insider attacks and less direct hacks," Shadowserver's DiMino says. "There will be more of an attempt to infiltrate from inside, with botnets and SQL injection."
With potentially fewer overall enterprise targets, cybercrime organizations could end up fighting over turf. "In general, cybercrime is nothing more than a new form of organized crime," the FBI's Mott says. "You may see more online cybercrime 'violence.' DDoS attacks may go up."
Kelly Jackson Higgins
Oct 28, 2008
http://www.darkreading.com/security/attacks/
showArticle.jhtml?articleID=211601123
How the global financial crisis is affecting organized cybercrime
One industry sector is actually happy about the current state of the global economy: cybercriminals.
Organized cybercrime has already begun capitalizing on the global financial crisis, cybercrime experts say, with targeted phishing attacks on customers whose banks have folded, and attacks that scam consumers who may be shopping less online, but are now spending more time at home. With fewer business and consumer targets available, the bad guys are redirecting their efforts to adapt to the market. For example, credit cards are out; debit cards are in.
One attack used Citigroup's attempted takeover of Wachovia as a premise for stealing Wachovia customers' credentials. (Wells Fargo eventually outbid Citigroup for Wachovia). "There's been a surge in phishing, telling customers that due to the new takeover, they need new credentials," says Ori Eisen, founder and chief innovation officer for 41st Parameter. If the victim hands over his old credentials to "set" his new ones, it's game over for his bank account information.
Socially engineered attacks are typically a lucrative ploy by seasoned attackers. The FBI is seeing more spear phishing aimed at businesses that were hit hard by the economic downturn. The attackers lure them with promises of financial assistance, for instance, and some even pretend to be subpoenas from the Justice Department. One attack via e-mail urged bidders who had lost out on a government contract to resubmit their bids and, thus, spill sensitive contact and other information.
Other researchers have cited a direct correlation between the stock market's nosedive and an increase in cybercrime activity. And phony antivirus popups warning that your "system may be infected so you'd better run this scan" preyed on fears, he says.
Meanwhile, law enforcement and cybercrime experts say more malicious Web sites posing as economic or financial advisory services will start to emerge in this jittery financial climate.
That means a reverse in the trend from the past few months of cybercriminals' silently infecting legitimate sites. "Expect to see malicious sites crop up that are geared to information-stealing, malware-dropping, pharming, and phishing rather than compromising legitimate site," he says.
And just as street crime increases in times of financial stress, more novice attackers and script kiddies are likely to perform an online version of shoplifting and bank robbery. "You're going to see more quick-hit script kiddies, like street crime," DiMino says.
It's simple enough for these amateur hackers to get into the business -- there's plenty of off-the-shelf software that automates phishing. All it takes is a Web server. "We know [when] it's an amateur because they are leaving their servers completely open and unprotected," Yuval Ben-Itzhak says.
The insider threat, too, will likely also intensify as layoffs spread in the corporate world. "You're going to see insider attacks and less direct hacks," Shadowserver's DiMino says. "There will be more of an attempt to infiltrate from inside, with botnets and SQL injection."
With potentially fewer overall enterprise targets, cybercrime organizations could end up fighting over turf. "In general, cybercrime is nothing more than a new form of organized crime," the FBI's Mott says. "You may see more online cybercrime 'violence.' DDoS attacks may go up."
Thursday, October 30, 2008
Socialism We Can Believe In
Socialism We Can Believe In
Ben Johnson
Oct 29, 2008
http://frontpagemagazine.com/Articles/
Read.aspx?GUID=80B64E8F-3866-430D-842A-E8986E27E927
Now that a 2001 public radio interview has surfaced to confirm The One has plotted to redistribute middle class wealth since the beginning of his political career, the media are in overdrive to save their savior. In a burst of “news” stories culled directly from the talking points of the George Soros-funded Media Matters, a string of reporters have accused the McCain/Palin campaign of misrepresenting Obama’s statements and ideology. In the process, these impartial journalists and analysts for the nation’s most prestigious media outlets have obfuscated more than McCain could manage in his most imaginative “rhetorical flourish.”
Obama spokesman Bill Burton responded in identical fashion to other irrefutable scandals, such as his candidate’s longtime association with Bill Ayers and Jeremiah Wright: he channeled the Wizard of Oz. “This is a fake news controversy,” he said, “drummed up by the all too common alliance of Fox News, the Drudge Report, and John McCain, who apparently decided to close out his campaign with the same false, desperate attacks that have failed for months.” After shooting the messengers, the campaign, and its allies at Media Matters, claimed Obama had merely been offering an intellectual assessment of civil rights strategy – and in no way advocating (perish the thought!) the Supreme Court redistribute wealth. In his only remark addressing the content of the tape, Burton asserted, “In this seven-year-old interview, Senator Obama did not say that the courts should get into the business of redistributing wealth at all.” [Bill Burton later got into an on-air tiff with Fox News journalist Megyn Kelly, ironically charging her network with having “an agenda.”]
Soon, his words found their way into the mouths of multiple unbiased, independent journalists.
The Washington Post awarded the McCain campaign “two Pinocchios” for lying about the tape. “Obama says pretty much the opposite of what the McCain camp says he said,” the Post contended. The paper concluded, “The McCain camp is wrong to suggest that the Illinois senator advocated an [sic.] ‘wealth redistribution’ role for the Supreme Court.”
Obama made his now-infamous comments on “Odyssey,” a program hosted on the Chicago NPR station WBEZ-FM. Chicago Public Radio quickly rolled into full protection mode, with CPR’s Ben Calhoun claiming someone on YouTube “posted excerpts of the interview, edited to misrepresent Obama's statements…Obama’s position is distinctly misrepresented.” He adds, “ironically, he says the Supreme Court was a failure in cases that it took on a role of redistributing resources.”
Others went further in defending the pure common sense of Obama’s call for “economic justice.” Andrew Sullivan blogged, “it seems to me that this statement is actually a conservative one about the limits of judicial activism. Is this really all McCain has left?”
Yet no one could equal NBC’s Andrea Mitchell, who said, with a straight face, that Obama took “a strict constructionist view.” Mitchell added, “he was saying the courts were not in that business and shouldn’t be in that business.”
The world’s largest news agency joined the fray. The Associated Press charged, “Republican John McCain is misreading seven-year-old comments by rival Barack Obama.” The story implies his comments dealt only with civil rights strategy, not the court. It added, “Obama did not define redistributive change in the interview, but he said one example of such change involves education, ‘how do we get more money into the schools and how do we actually create equal schools and equal educational opportunity.’” Thus, “redistribution” simply means equal schooling; who could be against that?
In all these cases, one is left with the impression his is merely a meandering historical argument of refined legal theory, using highly specified language that does not mean what it sounds like. Normal people like Joe the Plumber cannot possibly comprehend it. However, all these media reports distort the facts and leave a false impression that covers up the explosive revelation contained in his own words: Barack Obama believes the Constitution embodies a “fundamental flaw” in the fabric of America “that continues to this day,” has pined for “economic justice” for at least a decade, seeks political power to implement “wealth redistribution” with the aid of Congress, implies the Supreme Court should “break free” from the “constraints” of the Founders, believes public financing of abortion is an “important” aspect of the struggle, and has promised an “activist” Executive Branch to enforce his socialistic vision.
Yet the view that slavery lingers in 21st century America is perhaps the most contemptuous thing one can say about a country that lost hundreds of thousands of lives fighting a war to end slavery, endured massive social upheaval to bury Jim Crow, transferred untold trillions of dollars of wealth so that we would “wipe away the scars of centuries,” then welcomed the son of a Kenyan Muslim reared in a foreign land and are presently entertaining a national debate about elevating him to the most powerful office in the world.
It is, however, precisely what is to be expected from an individual reared by an “unreconstructed liberal” mother of the ‘60s era, an individual who consciously sought out Marxist professors – both as college instructors and as sponsors for his career in Chicago politics.
Far from an insignificant and highly theoretical bout of legal navel-gazing, this 2001 interview provides a clear glimpse into the ideology Obama wishes to implement. For this reason, the transcripts must be assailed – with those news outlets that report them.
After all, he does not have the luxury of saying he made these comments when he was naïve and inexperienced, because he is still naïve and inexperienced. Further, reparations based on race, sex, class, or sexual orientation still lie at the heart of his judicial philosophy. His only option is to deny the words on the page. His fan base in the media has gotten ahead of him on the matter. Will he be successful in his effort to deny his own views and thereby get an opportunity to implement them?
Next Tuesday, we may find out.
Ben Johnson
Oct 29, 2008
http://frontpagemagazine.com/Articles/
Read.aspx?GUID=80B64E8F-3866-430D-842A-E8986E27E927
Now that a 2001 public radio interview has surfaced to confirm The One has plotted to redistribute middle class wealth since the beginning of his political career, the media are in overdrive to save their savior. In a burst of “news” stories culled directly from the talking points of the George Soros-funded Media Matters, a string of reporters have accused the McCain/Palin campaign of misrepresenting Obama’s statements and ideology. In the process, these impartial journalists and analysts for the nation’s most prestigious media outlets have obfuscated more than McCain could manage in his most imaginative “rhetorical flourish.”
Obama spokesman Bill Burton responded in identical fashion to other irrefutable scandals, such as his candidate’s longtime association with Bill Ayers and Jeremiah Wright: he channeled the Wizard of Oz. “This is a fake news controversy,” he said, “drummed up by the all too common alliance of Fox News, the Drudge Report, and John McCain, who apparently decided to close out his campaign with the same false, desperate attacks that have failed for months.” After shooting the messengers, the campaign, and its allies at Media Matters, claimed Obama had merely been offering an intellectual assessment of civil rights strategy – and in no way advocating (perish the thought!) the Supreme Court redistribute wealth. In his only remark addressing the content of the tape, Burton asserted, “In this seven-year-old interview, Senator Obama did not say that the courts should get into the business of redistributing wealth at all.” [Bill Burton later got into an on-air tiff with Fox News journalist Megyn Kelly, ironically charging her network with having “an agenda.”]
Soon, his words found their way into the mouths of multiple unbiased, independent journalists.
The Washington Post awarded the McCain campaign “two Pinocchios” for lying about the tape. “Obama says pretty much the opposite of what the McCain camp says he said,” the Post contended. The paper concluded, “The McCain camp is wrong to suggest that the Illinois senator advocated an [sic.] ‘wealth redistribution’ role for the Supreme Court.”
Obama made his now-infamous comments on “Odyssey,” a program hosted on the Chicago NPR station WBEZ-FM. Chicago Public Radio quickly rolled into full protection mode, with CPR’s Ben Calhoun claiming someone on YouTube “posted excerpts of the interview, edited to misrepresent Obama's statements…Obama’s position is distinctly misrepresented.” He adds, “ironically, he says the Supreme Court was a failure in cases that it took on a role of redistributing resources.”
Others went further in defending the pure common sense of Obama’s call for “economic justice.” Andrew Sullivan blogged, “it seems to me that this statement is actually a conservative one about the limits of judicial activism. Is this really all McCain has left?”
Yet no one could equal NBC’s Andrea Mitchell, who said, with a straight face, that Obama took “a strict constructionist view.” Mitchell added, “he was saying the courts were not in that business and shouldn’t be in that business.”
The world’s largest news agency joined the fray. The Associated Press charged, “Republican John McCain is misreading seven-year-old comments by rival Barack Obama.” The story implies his comments dealt only with civil rights strategy, not the court. It added, “Obama did not define redistributive change in the interview, but he said one example of such change involves education, ‘how do we get more money into the schools and how do we actually create equal schools and equal educational opportunity.’” Thus, “redistribution” simply means equal schooling; who could be against that?
In all these cases, one is left with the impression his is merely a meandering historical argument of refined legal theory, using highly specified language that does not mean what it sounds like. Normal people like Joe the Plumber cannot possibly comprehend it. However, all these media reports distort the facts and leave a false impression that covers up the explosive revelation contained in his own words: Barack Obama believes the Constitution embodies a “fundamental flaw” in the fabric of America “that continues to this day,” has pined for “economic justice” for at least a decade, seeks political power to implement “wealth redistribution” with the aid of Congress, implies the Supreme Court should “break free” from the “constraints” of the Founders, believes public financing of abortion is an “important” aspect of the struggle, and has promised an “activist” Executive Branch to enforce his socialistic vision.
Yet the view that slavery lingers in 21st century America is perhaps the most contemptuous thing one can say about a country that lost hundreds of thousands of lives fighting a war to end slavery, endured massive social upheaval to bury Jim Crow, transferred untold trillions of dollars of wealth so that we would “wipe away the scars of centuries,” then welcomed the son of a Kenyan Muslim reared in a foreign land and are presently entertaining a national debate about elevating him to the most powerful office in the world.
It is, however, precisely what is to be expected from an individual reared by an “unreconstructed liberal” mother of the ‘60s era, an individual who consciously sought out Marxist professors – both as college instructors and as sponsors for his career in Chicago politics.
Far from an insignificant and highly theoretical bout of legal navel-gazing, this 2001 interview provides a clear glimpse into the ideology Obama wishes to implement. For this reason, the transcripts must be assailed – with those news outlets that report them.
After all, he does not have the luxury of saying he made these comments when he was naïve and inexperienced, because he is still naïve and inexperienced. Further, reparations based on race, sex, class, or sexual orientation still lie at the heart of his judicial philosophy. His only option is to deny the words on the page. His fan base in the media has gotten ahead of him on the matter. Will he be successful in his effort to deny his own views and thereby get an opportunity to implement them?
Next Tuesday, we may find out.
Wednesday, October 29, 2008
Huffington Post and Politico Lead Wave of Explosive Growth
Huffington Post and Politico Lead Wave of Explosive Growth
Press Release
Oct 22, 2008
http://www.comscore.com/press/release.asp?press=2525
Huffington Post and Politico Lead Wave of Explosive Growth at Independent Political Blogs and News Sites this Election Season.
Political Blog Visitors Skew Older, Wealthier, More Male than Overall U.S. Internet Population.
Comsore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released a study of visitation to political blogs and news sites during the 2008 presidential election season, which showed strong gains at most sites compared to year ago. HuffingtonPost.com led among a group of selected stand-alone political blogs and news sites with 4.5 million visitors in September, up 472 percent versus year ago, while Politico.com attracted 2.4 million visitors (up 344 percent) and DrudgeReport.com saw 2.1 million visitors (up 70 percent).
“With each new election cycle, the Internet is playing a more significant role in shaping the stories of the day that are so crucial in formulating public opinion on issues and candidates,” said Andrew Lipsman, senior analyst at comScore. “That most mainstream news outlets now have their own political blogs is a testament to their increasing reach and influence. However, several independent blogs unaffiliated with larger media outlets paved the way in this space and are really beginning to enter the mainstream public consciousness with this current election cycle.”
Selected Stand-Alone* Political Blogs & News Sites
huffingtonpost.com
politico.com
drudgereport.com
realclearpolitics.com
freerepublic.com
capitol advantage
dailykos.com
townhall.com
newsbusters.org
worldnetdaily.com
talkingpointsmemo.com
michellemalkin.com
redstate.com
crooksandliars.com
rawstory.com
pollster.com
mediamatters.org
fivethirtyeight.com
cqpolitics.com
americablog.com
*Stand-alone refers to blogs unaffiliated with larger news properties, such as the New York Times Caucus Blog or Time’s“The Page”.
Some additional findings include:
· September represented the single biggest month on record for both HuffingtonPost.com and Politico.com since their respective launches.
· Several sites dedicated to political poll-watching achieved notable gains. RealClearPolitics.com, which tracks composites of polls by state, attracted 1.1 million visitors in September, up 489 percent versus year ago. Two other polling-oriented sites, Pollster.com with 194,000 visitors and FiveThirtyEight.com with 169,000 visitors, also saw notable traffic in September.
· The top conservative leaning blog, FreeRepublic.com, actually saw marginal declines versus year ago, though it still attracted nearly 1 million visitors in September. Other conservative blogs, such as Newsbusters.org (up 547 percent to 732,000 visitors), WorldNetDaily.com (up 55 percent to 636,000 visitors) and MichelleMalkin.com (up 140 percent to 247,000 visitors) saw strong gains.
Political Blog Visitors Skew Older and Wealthier Than Average Americans
Looking at the demographic profiles for the top three sites, HuffingtonPost.com, Politico.com and DrudgeReport.com, one can conclude that visitors to these sites tend to be older, wealthier, and more likely to be male than the average U.S. Internet user.
Of the three sites, Politico.com skewed the oldest with 23 percent of its visitors age 55 and older, while DrudgeReport.com skewed wealthiest, with 40 percent of its visitors earning at least $100,000 a year, and had the highest concentration of males at 57 percent. HuffingtonPost.com, the site with the largest audience, was the most similar of the three when compared to the overall U.S. Internet audience.
Press Release
Oct 22, 2008
http://www.comscore.com/press/release.asp?press=2525
Huffington Post and Politico Lead Wave of Explosive Growth at Independent Political Blogs and News Sites this Election Season.
Political Blog Visitors Skew Older, Wealthier, More Male than Overall U.S. Internet Population.
Comsore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released a study of visitation to political blogs and news sites during the 2008 presidential election season, which showed strong gains at most sites compared to year ago. HuffingtonPost.com led among a group of selected stand-alone political blogs and news sites with 4.5 million visitors in September, up 472 percent versus year ago, while Politico.com attracted 2.4 million visitors (up 344 percent) and DrudgeReport.com saw 2.1 million visitors (up 70 percent).
“With each new election cycle, the Internet is playing a more significant role in shaping the stories of the day that are so crucial in formulating public opinion on issues and candidates,” said Andrew Lipsman, senior analyst at comScore. “That most mainstream news outlets now have their own political blogs is a testament to their increasing reach and influence. However, several independent blogs unaffiliated with larger media outlets paved the way in this space and are really beginning to enter the mainstream public consciousness with this current election cycle.”
Selected Stand-Alone* Political Blogs & News Sites
huffingtonpost.com
politico.com
drudgereport.com
realclearpolitics.com
freerepublic.com
capitol advantage
dailykos.com
townhall.com
newsbusters.org
worldnetdaily.com
talkingpointsmemo.com
michellemalkin.com
redstate.com
crooksandliars.com
rawstory.com
pollster.com
mediamatters.org
fivethirtyeight.com
cqpolitics.com
americablog.com
*Stand-alone refers to blogs unaffiliated with larger news properties, such as the New York Times Caucus Blog or Time’s“The Page”.
Some additional findings include:
· September represented the single biggest month on record for both HuffingtonPost.com and Politico.com since their respective launches.
· Several sites dedicated to political poll-watching achieved notable gains. RealClearPolitics.com, which tracks composites of polls by state, attracted 1.1 million visitors in September, up 489 percent versus year ago. Two other polling-oriented sites, Pollster.com with 194,000 visitors and FiveThirtyEight.com with 169,000 visitors, also saw notable traffic in September.
· The top conservative leaning blog, FreeRepublic.com, actually saw marginal declines versus year ago, though it still attracted nearly 1 million visitors in September. Other conservative blogs, such as Newsbusters.org (up 547 percent to 732,000 visitors), WorldNetDaily.com (up 55 percent to 636,000 visitors) and MichelleMalkin.com (up 140 percent to 247,000 visitors) saw strong gains.
Political Blog Visitors Skew Older and Wealthier Than Average Americans
Looking at the demographic profiles for the top three sites, HuffingtonPost.com, Politico.com and DrudgeReport.com, one can conclude that visitors to these sites tend to be older, wealthier, and more likely to be male than the average U.S. Internet user.
Of the three sites, Politico.com skewed the oldest with 23 percent of its visitors age 55 and older, while DrudgeReport.com skewed wealthiest, with 40 percent of its visitors earning at least $100,000 a year, and had the highest concentration of males at 57 percent. HuffingtonPost.com, the site with the largest audience, was the most similar of the three when compared to the overall U.S. Internet audience.
Tuesday, October 28, 2008
Dollar and yen benefit in crisis
Dollar and yen benefit in crisis
Tim Bowler
Oct 27, 2008
http://news.bbc.co.uk/1/hi/business/7693020.stm
The US dollar and the Japanese yen are emerging as winning currencies in the global financial crisis.
Both are considered safe havens because their banks have lent less than banks in other countries to emerging markets. In contrast, the main currency losers have been the euro and the British pound.
Investors had been using dollar-denominated loans to invest elsewhere, but as the crisis has worsened cash-strapped banks and lenders have been calling in these loans, which has resulted in a scramble for dollars to pay them off.
The yen has gained from the ending of the "carry trade", where currency investors sought to take advantage of the difference in interest rates between Japan - where rates have been traditionally low - and other countries where rates were higher.
The pound has come in for a hammering given the British economy's vulnerability to the financial crisis and expectations of further UK interest rate cuts.
Meanwhile the euro is falling in value because of worries about Europe's exposure to emerging markets - particularly in eastern European countries.
RISING DOLLAR
The dollar has emerged as one of the main winners in the financial crisis.
As credit has dried up, banks have started to call in loans, which has meant borrowers having to buy up dollars to repay loans they owe in the currency.
This all of which means the price of the dollar is set to continue rising.
It is possible that the prospect of falling US interest rates may offset some of this demand for the dollar, as the US already has the lowest interest rates of any G7 industrialised country except Japan.
Another potential limit on the dollar's rise, may be the flood of debt the US government will sell to finance its budget deficit and bank bailouts. However, most currency traders expect the dollar to continue to strengthen over coming months.
SOARING YEN
The Japanese yen has been the other main beneficiary, and against the US dollar it has risen towards a 13-year high - despite the dollar's strength.
This is largely down to the virtual ending of the yen "carry trade" where investors had sought to take advantage of the difference in countries' interest rates.
The shares of top Japanese exporters like Toyota and Sony have been hit hard - despite reports Japan's government is considering a massive capital injection into struggling banks in a bid to calm jittery financial markets.
Mounting concerns about the surging yen have the G7 group of leading industrial nations to issue a statement warning about "recent excessive volatility".
WEAKENING POUND
In the UK, the pound has continued to fall sharply against the dollar, battered by fears of a recession and predictions that the Bank of England may be ready to slash interest rates further.
The Bank of England cut interest rates on 22 October to 4.5% and most economists expect it will be forced to cut interest rates again in an attempt to stave off a prolonged and painful recession.
On Friday, figures showed the UK economy shrank for the first time in 16 years, contracting by 0.5% in the third quarter, intensifying fears about the depth of recession the country could be facing.
The pound's steep falls have led some currency experts to forecast that it could fall below the $1.50 level.
FALLING EURO
The euro is under pressure on two counts - on worries about European banks' exposure to investments in emerging markets and on expectations that the European Central Bank will cut interest rates.
It has now fallen to its lowest level against the dollar in over two years.
European banks have lent heavily to crisis-stricken eastern European countries such as Ukraine, Hungary and Belarus. Ukraine and Hungary have both turned to the International Monetary Fund for help, and more countries are expected to follow.
Any damage to the European banking system would worsen the financial losses that have forced governments to put up about 1.7 trillion euros in guarantees and other aid.
The euro's weakness is an almost complete reversal of the situation in July, when the 15-country currency hit a lifetime high of $1.6038 - to the dismay of politicians across the continent who then worried that the high value of the currency would hit European exports.
Tim Bowler
Oct 27, 2008
http://news.bbc.co.uk/1/hi/business/7693020.stm
The US dollar and the Japanese yen are emerging as winning currencies in the global financial crisis.
Both are considered safe havens because their banks have lent less than banks in other countries to emerging markets. In contrast, the main currency losers have been the euro and the British pound.
Investors had been using dollar-denominated loans to invest elsewhere, but as the crisis has worsened cash-strapped banks and lenders have been calling in these loans, which has resulted in a scramble for dollars to pay them off.
The yen has gained from the ending of the "carry trade", where currency investors sought to take advantage of the difference in interest rates between Japan - where rates have been traditionally low - and other countries where rates were higher.
The pound has come in for a hammering given the British economy's vulnerability to the financial crisis and expectations of further UK interest rate cuts.
Meanwhile the euro is falling in value because of worries about Europe's exposure to emerging markets - particularly in eastern European countries.
RISING DOLLAR
The dollar has emerged as one of the main winners in the financial crisis.
As credit has dried up, banks have started to call in loans, which has meant borrowers having to buy up dollars to repay loans they owe in the currency.
This all of which means the price of the dollar is set to continue rising.
It is possible that the prospect of falling US interest rates may offset some of this demand for the dollar, as the US already has the lowest interest rates of any G7 industrialised country except Japan.
Another potential limit on the dollar's rise, may be the flood of debt the US government will sell to finance its budget deficit and bank bailouts. However, most currency traders expect the dollar to continue to strengthen over coming months.
SOARING YEN
The Japanese yen has been the other main beneficiary, and against the US dollar it has risen towards a 13-year high - despite the dollar's strength.
This is largely down to the virtual ending of the yen "carry trade" where investors had sought to take advantage of the difference in countries' interest rates.
The shares of top Japanese exporters like Toyota and Sony have been hit hard - despite reports Japan's government is considering a massive capital injection into struggling banks in a bid to calm jittery financial markets.
Mounting concerns about the surging yen have the G7 group of leading industrial nations to issue a statement warning about "recent excessive volatility".
WEAKENING POUND
In the UK, the pound has continued to fall sharply against the dollar, battered by fears of a recession and predictions that the Bank of England may be ready to slash interest rates further.
The Bank of England cut interest rates on 22 October to 4.5% and most economists expect it will be forced to cut interest rates again in an attempt to stave off a prolonged and painful recession.
On Friday, figures showed the UK economy shrank for the first time in 16 years, contracting by 0.5% in the third quarter, intensifying fears about the depth of recession the country could be facing.
The pound's steep falls have led some currency experts to forecast that it could fall below the $1.50 level.
FALLING EURO
The euro is under pressure on two counts - on worries about European banks' exposure to investments in emerging markets and on expectations that the European Central Bank will cut interest rates.
It has now fallen to its lowest level against the dollar in over two years.
European banks have lent heavily to crisis-stricken eastern European countries such as Ukraine, Hungary and Belarus. Ukraine and Hungary have both turned to the International Monetary Fund for help, and more countries are expected to follow.
Any damage to the European banking system would worsen the financial losses that have forced governments to put up about 1.7 trillion euros in guarantees and other aid.
The euro's weakness is an almost complete reversal of the situation in July, when the 15-country currency hit a lifetime high of $1.6038 - to the dismay of politicians across the continent who then worried that the high value of the currency would hit European exports.
Monday, October 27, 2008
Banks Are Likely to Hold Tight to Bailout Money
Banks Are Likely to Hold Tight to Bailout Money
Louise Story and Eric Dash
Oct 16, 2008
http://www.nytimes.com/2008/10/17/business/
17bank.html?partner=permalink&exprod=permalink
Even as the government moves to plug holes in the nation’s banks, new gaps keep appearing.
As two financial giants, Citigroup and Merrill Lynch, reported fresh multibillion-dollar losses on Thursday, the industry passed a grim milestone: All of the combined profits that major banks earned in recent years have vanished.
Since mid-2007, when the credit crisis erupted, the country’s nine largest banks have written down the value of their troubled assets by a combined $323 billion. With a recession looming, the pain is unlikely to end there. The problems that began with home mortgages, analysts say, are migrating to auto, credit card and commercial real estate loans.
The deepening red ink underscores a crucial question about the government’s plan: Will lenders deploy their new-found capital quickly, as the Treasury hopes, and unlock the flow of credit through the economy? Or will they hoard the money to protect themselves?
Even with the capital from the government, analysts say, the banking industry still needs to raise around $275 billion in light of the looming losses.
Mr. Dugan added that he would not examine how the banks used the money, but he said their actions would “be open to the court of public opinion.”
The banks could use the money from the government for any number of things. Some analysts say the banks may use it to acquire weaker competitors. Others say they might use it to avoid painful cost-cutting. And still others say the banks may sit on the capital.
Lenders have been pulling back on credit lines for businesses, mortgages, home equity loans and credit card offers, and analysts said that trend was unlikely to be reversed by the government’s money.
“I don’t think that the market wants to see that capital being put to work to leverage the business up again,” said Roger Freeman, an analyst at Barclays Capital, which acquired parts of the now-bankrupt Lehman Brothers last month. “My expectation is it’s quarters off, not months off, before you see that capital being put to work.”
Many banks are still plagued by past excesses. Losses on a variety of different types of loans of all sorts are growing and spreading beyond the country’s borders. Citigroup and Merrill Lynch have each lost money every quarter in the last year, as deteriorating assets wiped out revenue.
Merrill, which is in the process of merging with Bank of America, reported a $5.15 billion loss, dragged down by about $12 billion in write-downs.
Citigroup lost $2.82 billion, as its $13.2 billion in charges related to credit losses more than overwhelmed every bit of revenue that the bank generated. And analysts say Citigroup is likely to face several more quarters of loan losses as the global economy slows.
Every corner of the economy goes through cyclical ups and downs. But the banking downturn has acted with ferocious speed to erase past profits.
In the case of the nine-largest commercial banks — Citigroup, Merrill Lynch, Bank of America, Morgan Stanley, JPMorgan Chase, Goldman Sachs, Wells Fargo, Washington Mutual and Wachovia — profits from early 2004 until the middle of 2007 were a combined $305 billion. But since July 2007, those banks have marked down their valuations on loans and other assets by just over that amount.
At Citigroup, for instance, the write-downs on mortgages and other loans have eaten away 60 percent of all the profits made by the bank during the boom years. At Morgan Stanley, the cost has reached 70 percent of those profits, and at Merrill Lynch, the tally is 250 percent of the investment bank’s record earnings over those three and half years.
It is those same banks that are in some shape benefiting from the government’s recent capital infusion. Three of the nine — Merrill Lynch, Washington Mutual and Wachovia — are in the process of mergers with others in the group. Two other banks — State Street and Bank of New York Mellon — also received capital from the government this week.
Several of the banks, including Wells Fargo, Morgan Stanley, and Goldman Sachs, declined to comment on how they will spend the government funds once they arrive.
Indeed, observers point to the growing well of bank losses, deeper by the quarter, as reason to question whether the government funding will be used as a financial Band-Aid, instead of an engine to move forward.
“It is the government’s responsibility to set the terms and conditions on this money,” said David M. Walker, the former federal comptroller general and now president of the Peter G. Peterson Foundation. “This is the people’s money. They’re giving it out with no rules.”
Louise Story and Eric Dash
Oct 16, 2008
http://www.nytimes.com/2008/10/17/business/
17bank.html?partner=permalink&exprod=permalink
Even as the government moves to plug holes in the nation’s banks, new gaps keep appearing.
As two financial giants, Citigroup and Merrill Lynch, reported fresh multibillion-dollar losses on Thursday, the industry passed a grim milestone: All of the combined profits that major banks earned in recent years have vanished.
Since mid-2007, when the credit crisis erupted, the country’s nine largest banks have written down the value of their troubled assets by a combined $323 billion. With a recession looming, the pain is unlikely to end there. The problems that began with home mortgages, analysts say, are migrating to auto, credit card and commercial real estate loans.
The deepening red ink underscores a crucial question about the government’s plan: Will lenders deploy their new-found capital quickly, as the Treasury hopes, and unlock the flow of credit through the economy? Or will they hoard the money to protect themselves?
Even with the capital from the government, analysts say, the banking industry still needs to raise around $275 billion in light of the looming losses.
Mr. Dugan added that he would not examine how the banks used the money, but he said their actions would “be open to the court of public opinion.”
The banks could use the money from the government for any number of things. Some analysts say the banks may use it to acquire weaker competitors. Others say they might use it to avoid painful cost-cutting. And still others say the banks may sit on the capital.
Lenders have been pulling back on credit lines for businesses, mortgages, home equity loans and credit card offers, and analysts said that trend was unlikely to be reversed by the government’s money.
“I don’t think that the market wants to see that capital being put to work to leverage the business up again,” said Roger Freeman, an analyst at Barclays Capital, which acquired parts of the now-bankrupt Lehman Brothers last month. “My expectation is it’s quarters off, not months off, before you see that capital being put to work.”
Many banks are still plagued by past excesses. Losses on a variety of different types of loans of all sorts are growing and spreading beyond the country’s borders. Citigroup and Merrill Lynch have each lost money every quarter in the last year, as deteriorating assets wiped out revenue.
Merrill, which is in the process of merging with Bank of America, reported a $5.15 billion loss, dragged down by about $12 billion in write-downs.
Citigroup lost $2.82 billion, as its $13.2 billion in charges related to credit losses more than overwhelmed every bit of revenue that the bank generated. And analysts say Citigroup is likely to face several more quarters of loan losses as the global economy slows.
Every corner of the economy goes through cyclical ups and downs. But the banking downturn has acted with ferocious speed to erase past profits.
In the case of the nine-largest commercial banks — Citigroup, Merrill Lynch, Bank of America, Morgan Stanley, JPMorgan Chase, Goldman Sachs, Wells Fargo, Washington Mutual and Wachovia — profits from early 2004 until the middle of 2007 were a combined $305 billion. But since July 2007, those banks have marked down their valuations on loans and other assets by just over that amount.
At Citigroup, for instance, the write-downs on mortgages and other loans have eaten away 60 percent of all the profits made by the bank during the boom years. At Morgan Stanley, the cost has reached 70 percent of those profits, and at Merrill Lynch, the tally is 250 percent of the investment bank’s record earnings over those three and half years.
It is those same banks that are in some shape benefiting from the government’s recent capital infusion. Three of the nine — Merrill Lynch, Washington Mutual and Wachovia — are in the process of mergers with others in the group. Two other banks — State Street and Bank of New York Mellon — also received capital from the government this week.
Several of the banks, including Wells Fargo, Morgan Stanley, and Goldman Sachs, declined to comment on how they will spend the government funds once they arrive.
Indeed, observers point to the growing well of bank losses, deeper by the quarter, as reason to question whether the government funding will be used as a financial Band-Aid, instead of an engine to move forward.
“It is the government’s responsibility to set the terms and conditions on this money,” said David M. Walker, the former federal comptroller general and now president of the Peter G. Peterson Foundation. “This is the people’s money. They’re giving it out with no rules.”
Sunday, October 26, 2008
Mass layoffs highest since 9/11
Mass layoffs highest since 9/11
Emily Maltby
Oct 22, 2008
http://money.cnn.com/2008/10/22/
news/economy/mass_layoffs/index.htm
Government report says job cuts of 50 or more up significantly last month.
The number of layoff announcements involving at least 50 workers rose in September to the highest level since the Sept. 11 terrorist attacks seven years ago, the government said Wednesday.
There were 2,269 mass layoff actions, up 497 from August, according to statistics released by the Labor Department. That was the most mass layoffs since the 2,407 in September 2001.
Overall, the number of initial claims for unemployment benefits related to mass layoffs rose by 61,726 to 235,681. That was the highest level since September 2005, after Hurricane Katrina devastated the Gulf Coast, resulting in 297,544 claims.
The manufacturing industry pulled the most devastating numbers, accounting for 28% of all mass layoffs and 36% of unemployment insurance claims in September. More specifically, 19,278 of the 46,391 claims in that industry came from the transportation equipment sector.
"Most manufacturers are pretty secure," said Chris Kuehl, economic analyst for the Fabricators and Manufacturers Association. "But there's been a lot of action in the auto and aerospace sectors, such as the Boeing strikes and the low demand for cars due to the credit crunch."
Kuehl believes that layoffs at auto and aerospace companies, a large segment of the manufacturing industry, don't tell the whole story. "After all, the medical manufacturing and energy segments are gangbusters," he said.
But the overall situation is grim, and the worst may not be over, according to some experts.
Sue Murphy, manager for National Human Resources Association in Nashua, N.H., believes that there will be an increase in layoffs as the practice of scrutinizing employee count continues.
She said companies will accelerate the trend of cutting hours, replacing jobs with technology and outsourcing labor during tough times like these, when their priorities are protecting costs and market share.
"The companies look at the nice-to-haves and the must-haves, and the employees that are not essential will be up for review," Murphy said. "A lot of quality people will be out of work."
Emily Maltby
Oct 22, 2008
http://money.cnn.com/2008/10/22/
news/economy/mass_layoffs/index.htm
Government report says job cuts of 50 or more up significantly last month.
The number of layoff announcements involving at least 50 workers rose in September to the highest level since the Sept. 11 terrorist attacks seven years ago, the government said Wednesday.
There were 2,269 mass layoff actions, up 497 from August, according to statistics released by the Labor Department. That was the most mass layoffs since the 2,407 in September 2001.
Overall, the number of initial claims for unemployment benefits related to mass layoffs rose by 61,726 to 235,681. That was the highest level since September 2005, after Hurricane Katrina devastated the Gulf Coast, resulting in 297,544 claims.
The manufacturing industry pulled the most devastating numbers, accounting for 28% of all mass layoffs and 36% of unemployment insurance claims in September. More specifically, 19,278 of the 46,391 claims in that industry came from the transportation equipment sector.
"Most manufacturers are pretty secure," said Chris Kuehl, economic analyst for the Fabricators and Manufacturers Association. "But there's been a lot of action in the auto and aerospace sectors, such as the Boeing strikes and the low demand for cars due to the credit crunch."
Kuehl believes that layoffs at auto and aerospace companies, a large segment of the manufacturing industry, don't tell the whole story. "After all, the medical manufacturing and energy segments are gangbusters," he said.
But the overall situation is grim, and the worst may not be over, according to some experts.
Sue Murphy, manager for National Human Resources Association in Nashua, N.H., believes that there will be an increase in layoffs as the practice of scrutinizing employee count continues.
She said companies will accelerate the trend of cutting hours, replacing jobs with technology and outsourcing labor during tough times like these, when their priorities are protecting costs and market share.
"The companies look at the nice-to-haves and the must-haves, and the employees that are not essential will be up for review," Murphy said. "A lot of quality people will be out of work."
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