Monthly Archives: April 2009

Torture is Torture

Dick Cheney is running off at the mouth because he’s running scared. And with good reason. The Orwellian double-speak that obfuscated the authoritarian torture state created by the Bush-Cheney administration in the aftermath of 9/11 is collapsing. Dick Cheney is facing serious jail time. He’s especially facing serious jail time if the allegation, bouncing around the Internet now, that “Global War  on Terrorism” suspects were tortured with the sole and specific intent of supporting the thesis of a link between Sadaam Hussein and Al Qaeda in the run-up to the Iraq War, proves true..

Torture is torture. Even John Boehner, that font of ignorance and obstructionism, frontman for the reactionary movement that now calls itself the Republican Party, called it so in a recent unguarded momentTorture apologists like Boehner are arguing that instead of prosecution, we should have a political debate, that this all boils down to a political disagreement. But civilized societies don’t debate the merits of torture any more than they debate the merits of genocide. There simply is no legitimate debate to be had on this issue. It is moot.

Torture is used by authoritarian and tyranical regimes solely to impose arbitrary punishment, or to elicit false confessions. Our American “enhanced interrogation techniques” were directly copied from techniques used by the Chinese and Soviet Communists, during the heart of the Cold War, and from other charming precedents like the torture of Jews and Muslims under Ferdinand and Isabel during the Spanish Inquisition. Even the Orwellian name, “enhanced interrogation techniques,” in another reactionary malapropism worthy of  the creators of political “tea-bagging,” was taken directly from the German, “Verschärfte Vernehmung,” as used specifically and most memorably by the Nazis.

The perpetrators of this crime belong in jail, and it’s supporters should be ashamed. It’s as simple as that. And the perpetrator at the head of it all, the Fuhrer, if you will, of the American torture regime, is Dick Cheney.

[As an aside, PLEASE read all of Andrew Sullivan’s brave, concerted blog reporting on torture, at his “Daily Dish” site.]

Second Wave of Bad Economic News is Here

The New York Times is reporting that General Growth Properties, the largest retail mall operator in the country, is declaring bankruptcy, largely because of its inability to refinance its existing mortgage debt.

“Our operational model is sound,” Thomas H. Nolan Jr., the company’s president and chief operating officer, said on a conference call early Thursday morning, citing “the unprecedented disruption in the real estate financing markets and the need to extend maturing debt” as the reason the company filed.

“We made extensive efforts to modify existing maturing debt outside of bankruptcy,” he added.

More and more commercial properties, property owners, and the banks that provided highly aggressive financing based on questionable valuations, are going to find themselves going down this path in the coming months. In my opinion, that is one of the reasons the Obama administration is encouraging banks to keep TARP funds, and otherwise fortify their balance sheets. This is potentially a tsunami compared to what happened in the residential markets. On the other hand, there was not nearly the amount of re-leveraging and re-packaging of these loans into derivatives as there was on the residential side, so the effect may not be as widespread.

We have one more wave to come after this – of credit card defaults. The commercial real estate mortgage market collapse will be a bellwether of whether larger banks will survive. It is both a threat and an opportunity, because commercial real estate assets will be available at once in a lifetime bargain prices, and their owners and the banks that hold the notes will be more likely to bail on the current arrangements than individual homeowners ever could or would be. It’s going to look very strange, but large banks are going to be playing both sides of this market simultaneously. If the private banking industry pulls through this in the coming months, it will easily survive its credit card problems.

Bike Thieves, Pirates and Tea-Baggers

It’s impossible to resist the temptation of getting something for nothing.

New York Times “Spokes” blogger, J. David Goodman, is fatalistic:

Having one’s bike stolen is a part of our collective experience as urban riders.

Commenters to the Spokes blog wonder where the stolen bikes and parts get “fenced.” But I’m relatively convinced that many of them — at least those that don’t end up as part of your local take-out’s fleet — end up lying discarded in gutters and garages, unused, wasted. The rip-off itself is the reward. Someone got something for nothing. Sure, it might be a filthy old bike seat or a cheap rim that needs re-truing. But the price was right. Bring it home and for a day it will take pride of place in your heap of stuff.

 The BBC’s Robyn Hunter reports that our latest media stars, the Somali pirates, don’t think of themselves as thieves, but rather, as heroes and protectors of Somalia’s coastlines:

They don’t call themselves pirates. They call themselves coastguards.

 The lavish lifestyles this new Somali bourgeoisie enjoys is not the point of their activties, supposedly, it is a fringe benefit. There’s something for nothing to be had in the waters of the Strait of Aden and the Indian Ocean. It would be criminal not to exploit it.

Which brings us to our dear friends and neighbors, the Tea-Baggers.

Mike Smart, a 51-year-old oil field worker from West Texas, held up a white handwritten sign that said, “I’ll keep my freedom, my $ and my guns. You keep the change.”

“I just want the government to stay out of my way. I won’t get in their way if they don’t get in mine,” said Smart, who described himself as conservative but not a Republican.

And of course, what do you suppose Mr. Smart has in mind when he says government is “in his way.” Why, that they impose taxes on him.

The late Senator Russell Long had a saying that summarized Americans’ typical attitude towards taxes and tax reform. “Don’t tax me; don’t tax thee;” they’ll say, “tax that fellow behind the tree.” You know that police department that came when my house was robbed? The fire department that kept my place from burning down last year? The public hospital where my wife had the cancer surgery? The public school, the courthouse, the downtown parking garage, the sewer system, the electrical lines, the Interstate Highway System that brought me my latest assault weapon? That’s all just free stuff. Stuff I’m entitled to as an American, like the disability payments I get for that slipped disc. I ain’t payin’ for that. Get out of my way!

Gearing up for tea-bagging, Salt Lake City

Gearing up for tea-bagging, Salt Lake City

With all the maturity and insight of bicycle thieves and pirates, our tea-baggers are sailing out to meet their moment of infamy, secure in their belief that they are not what they seem to be — a bunch of angry white people with a questionable collective grasp of history, politics or economics – but rather, like their pirate brethren, the very guardians of our coasts of freedom. That sidewalk we’re marching on, the park where we’re congregating? God put that there for good, white Americans to use. Just like J*sus, in his Queen’s English, promised us. No gub-mint did that. It’s the American miracle, and we’re here to protect it.

You know, they used to say that all the nuts in America had come loose and rolled off to California. This tea-bagging movement just proves that we’ve still got plenty of nuts to spare, in communities all across the country. And while they remain a distinct minority, they are a sizable minority, and the combination of Second Amendment absolutism, racial animus and inflammatory anti-government rhetoric is a fearful brew which, like the khat that stokes the imaginations and assuages the fears of the young Somali pirates, has great potential for fueling violence and tragedy.

Isn’t it time to go home, cash your tax refund checks, and play with your guns? The grown-ups amongst us are too busy trying to manage a financial crisis to take to the streets to protest that we’re not getting enough for nothing.

Children at St. Louis tea-bag party.

Children at St. Louis tea-bag party.

In the Hamptons, by Dan Rattiner

In the (East) end, mostly gossip.


Climate Ride

There’s a fantastic, new activist and awareness ride on the U.S. east coast – the Climate Ride – a 5-day, 300-mile adventure from New York City to Washington, D.C.

It’s an interesting ride for many reasons: it includes some urban riding, in addition to covering some of the most historical landscapes in the nation; and it is as much an exercise in political activism and consciousness raising as it is a pure fundraiser. The late-September date also means you riders should be in peak form for making this incredible trip.

I will be writing more about Climate Ride, its objectives and highlights, in the coming days. In the meantime, you can check them out at their home page:

Hope Is a Thing that Blings

“It’s premature to conclude the economy has turned,” said CFO Howard Atkins in an interview with The Associated Press.
Atkins did say the bank was seeing a clear benefit from the government’s actions to bring interest rates down. “All I can tell you is, we’re seeing a lot of business.”

$3 billion buys a lot of bling. That’s the net revenue Wells Fargo expects to report for the first quarter. Suddenly, the debate on the economy is focused on whether Wells Fargo’s results are representative, or an anomaly. The President, understandably, is looking on the bright side:

President Obama emerged from a meeting with his senior economic advisers on Friday to say “what you’re starting to see is glimmers of hope across the economy.” But there were also signs of growing tensions between the White House and the nation’s banks over the next phase of the financial rescue.

Currency speculators the world over seem to share the President’s optimism.

April 11 (Bloomberg) — The dollar posted the biggest weekly gain versus the euro in more than two months on optimism the worst of the financial crisis in the U.S. is over.

Still, plenty of people are out there offering more dour assessments.

Wells Fargo announced today $3 Billion in profits. It was fantastic news and it sent the stock market soaring.

However, one thing that didn’t get talked about was why they made so much money.
Wells Fargo CFO Howard Atkins discusses the banks $3 billion reported first quarter 2009 earnings. Atkins hypes the impact of mortgages to the bottom line, due to low interest rates and foreclosure selling no doubt, but shockingly admits at the 7:45 mark that with the writedowns that would have been required by Mark to Market the bank actually lost money on the quarter.

To put it another way, Wells Fargo made money because the government allowed them to play “let’s pretend your assets are worth something”.

But what if that’s exactly what’s going on, and it’s working? What if instead of creating some toxic asset merry-go-round, banks are just allowed to hold toxic assets off their balance sheets long enough for rationality to return, and sensible valuations to emerge?

Just to be clear: I believe the market in mortgage backed securities and their derivatives, is as “undersold” today as it was “oversold” in the middle years of the decade. The herd mentality and “animal spirits”  are every bit as evident in this economic climate as they were in the giddiest days of the Internet, commodities and real estate bubbles. Only everybody’s running to the exits, blocking the aisles, so to speak.

Taking a quick look at “Unbossed’s” graphs of monthly default notices; yeah, sure there’s a spike coming, and defaults on both residential and commercial mortgages are going to double in the coming weeks and month. But double from what basis?


If the baseline rate of default a year ago was say somewhere in the neighborhood of 1% or 2% (which would have been historically typical), and is anticipated to double based on NODs, then the expected total rate of default will rise to between 2% and 4%. If defaults peak in this range, then portfolios of mortgages will still be worth 75 to 80 cents on the dollar, not the 25 to 30 cents the market values them at today.

Most banks will be able to “ride out” a 2% to 5% rate of default in either commercial or residential mortgages, especially with generous amounts of cheap cash available from the Fed to shore up balance sheets.

In short, everybody has an interest in “staying put” for as long as possible, then capitalizing their losses after the panic subsides. This includes property owners. If the “results” from Wells Fargo are representative – even if they were goosed by new leniency in mark-to-market accounting – it is a sign that the middle-ground bailout and TARP strategy adopted by the Administration is working, It may involve a bit of “accounting magic,” but doesn’t all banking? And in the circumstances, the pessimism that dominates the zeitgeist may in hindsight come to be seen as hysterial (in every sense of the word) as yesterday’s notion that no investment is as safe as real estate.

There’s another trend to look out for. Banks and other financial market makers understand that the current under-valuation of residential and commercial real estate, and the even greater discounts of mortgage portfolios, is the best opportunity for profit they’ve seen in years. They don’t want to partner with other investors or the government, or sell out their interests at all, if they don’t have to. Conditions have been created in which, if they can weather the storm, there is a quick, profitable path to a major windfall.

The bling at the end of the rainbow for many of these institutions is going to turn out to be the very same mortgage-backed securities and collateral debt obligations that got us into the crisis in the first place. When they finally do start trading, they are going to trade significantly below their true long-term asset values. And the smart money is going to snap them up. The Administration is right in limiting the government’s upside potential in all of this, because in the end there is going to be a backlash that buyers and the government took advantage of the original holders of these instruments, and underpaid for them. Put that in your pipe and smoke it, Mr. Roubini.

Going Orange

Batavus commuter, courtesy

Batavus commuter, courtesy

Two hundred orange-painted commuter bikes, by Dutch manufacturer Batavus are on their way to Manhattan (née, “New Amsterdam”) this spring, as part of the celebration of NYC 400, the anniversary of Henry Hudson’s arrival in the New World.

Look for them in a procession up Manhattan’s West Side bike path on April 30, and to be available for bike sharing this summer as part of City Streets, the program that closes Park Avenue to vehicular traffic on three Saturdays in August.

Modern New York, I suppose, has no shortage of old master paintings and clogs, but we’ve run a little behind in the bike commuter department over the years. So this will make a welcome invasion. I only can’t help but wonder – hey, what about a little something for us here in Yonkers, who proudly bear our Dutch identity into a fifth century of “graceful riverside living”?

Westchester Bicycling Summit

Yesterday, David Wilson, President of the Westchester (New York) Cycle Club, and a former political correspondent for Westchester’s Journal News, put together an extraordinary program of cycling and pedestrian advocacy, The Westchester Bicycling Summit, at the Westchester County Civic Center in White Plains.

Mr. Wilson brought together an impressive array of political leaders, cycling advocates, city and transportation planners, researchers and consultants, and cyclists and other interested citizens from across Westchester County. He also announced the formation of a new advocacy group for cyclists and pedestrians in this classically suburban community, The Westchester Biking and Walking Alliance, which will hold its first organizing meeting at 7:00 pm on Monday, May 11, at the Bronxville Library.

Attendees included The Honorable Nita Lowey, congresswoman from New York’s 18th Congressional District; Westchester County Executive Andy Spano; Westchester County Legislator Michael Kaplowitz; President of the League of American Bicyclists, Mr. Andy Clarke; Michael Oliva, Mid-Atlantic Trail Coordinator for the East Coast Greenway; Jackson Wandres, representing the RBA Group, planners and engineers who have consulted with the City of New York and other municipalities on Safe Routes to School and other alternative transportation projects;  Westchester County Planner Lukas Herbert; Julie Bond of the Center for Urban Transportation Research; as well as local representatives of the MTA and New York State Department of Transportation.

The overall message of the day was clear. The writing is on the wall, and the time is right, to rethink how we plan and build transportation infrastructure. Traditional suburbs, like many of the communities in Westchester County, have long been remiss by planning most of their infrastructure with the automobile the only form of transportation taken into consideration. Shockingly, families move to Westchester for the peace and quiet, only to realize, in many communities, that they can’t safely allow their children outdoors to play, or even walk to school, because of the speed and volume of car traffic in their neighborhoods, and the absence of pedestrian and cycling-friendly improvements.

Despite her brave admission that she herself is afraid to ride a bike outdoors, Congresswoman Lowey gave the meeting her sense that the Democratic Congress, and the administration of President Barack Obama, would both look favorably on “green” infrastructure projects, and that she intended to see to it that both stimulus funds and regular appropriations would be made available throughout her district for cyclist and pedestrian friendly improvements such as bike paths, bike routes and new sidewalk construction. County Executive Andy Spano pledged that he would see to it that Bee-Line buses would install and permit use of bike racks, and that he believed that it was both likely and feasible that many of the projects now planned or underway, like the scheduled improvements to the Bronx River Greenway Corridor, would in fact go forward. Associate County Planner Lukas Herbert described significant near-term plans for major improvements to bike paths and bike routes throughout the County, and some of the complexities, successes and frustrations of getting those projects funded and built.

Andy Clarke, of the League of American Bicyclists, gave a fascinating presentation on their Bike Friendly Communities program (a version available here). Among other interesting facts, he noted that 85% of automobile trips nationwide are for recreational purposes, rebutting once and for all the tired common wisdom that automobile-only roadway improvements are “serious,” while projects that include bike and pedestrian friendly elements are somehow frivolous.

One point all interested parties agreed on: We will get the infrastructure we ask for, only if we ask for it. If we want green, walkable and bikeable communities in Westchester County, we as citizens have to step up to the plate and demand them. After some initial hemming and hawing, County Executive Spano confessed that, yes, the squeeky wheel gets the grease, and only citizen interest and participation will motivate legislators – at the municipal, county, state and federal levels – to deliver the funds necessary to build the kinds of bike and pedestrian friendly transportation infrastructure we want and deserve in our Westchester cities and towns.

Children enjoying Westchesters North County Trailway

Children enjoying Westchester's North County Trailway

Here Comes the Sun

According to Jewish tradition, the sun completes its cycle in the universe every 28 years. This morning, coincidentally the morning of the first night of Passover, the sun is said to begin its new cycle.

Late medieval sun prayer, courtesy

Late medieval sun prayer, courtesy

Not a particularly religious person, I cannot help but fervently join those celebrating today, in looking forward to new beginnings, to a new dawn, to the world made anew.

Perhaps it is just me, and my personal situation, confronted as I am with the necessity of reinventing my professional life in the teeth of a miserable recession. Sure the choice was mine to walk away from hawking mutual funds and lipstick (as I like to put it), and transition into the public sector, the non-profit sector, the education sector, in the hope of accomplishing something more personally meaningful. But the air itself seems to be full of change and new beginnings: the sudden thaw in America’s relationship with Cuba, a new direction in Middle East diplomacy, radical and yet-to-be-understood changes in both the private and public sector economies.

Novus Ordo Seclorum meets dona nobis pacem. American as apple pie, this protean self, this wish for glorious new beginnings. We call on our g*d or g*ds, whatever their names, for a  long-overdue reinvigoration of civic pride; a chance to restore our lives, our families, our communities; a new opportunity to wage peace, and appreciate our relative prosperity. So whether you find your inspiration today in this ancient rite, in the supplications of the dark, middle days of Easter week, the mindfulness of Pesach, or merely the incrementally higher inclination of a friendly old star in its nearly timeless meridians, let us share, this day, our hopes for a world made anew.

The Shower as Class Metaphor

Despite the fact that America has become the most class stratified, the least socially and financially mobile, society in the developed world, we still cannot talk about class transparently. We don’t even have an accepted language for dicussing social and economic class in this country. And merely raising the issue almost assures that you will be characterized as a Leninist class warrior.

Or maybe we have a language emerging. Complete with soap.

This week, social class in America emerged from the shower:

Here’s Ed Schultz, a new MSNBC host, describing his politics:

I’m gonna be the guy who represents people who take a shower after work. I’m gonna be that guy who’s gonna be there for the working folk of America. I’m a staunch supporter of unions. 

And here’s United Steelworkers President Leo Gerard complaining this week on Huffington Post about the structure of the federal bailouts:

The message here could not be more clear: Washington will bailout out those who shower before work but not those who shower afterwards.

So. Stay clean America! I suppose this conversation has to start somewhere. Even in ridiculous and obfuscating metaphor.