Credence ...

Paulson's Fairy Tales ...

I see a bad moon risin' | I see trouble on the way | I see earthquakes and lightnin' | I see bad times today

Of the 120 publicly traded firms the Journal analyzed, CEOs cashed out a total of more than $21 billion. However, data was gathered only from publicly traded companies, and thus does not include similar fortunes that have been made by "hedge fund chiefs, Wall Street traders, and executives who sold their companies outright." Nor did it include data related to exit packages, the multimillion-dollar "golden parachutes" awarded to retiring or fired executives.

The Journal’s findings underscore the parasitism and criminality of the US financial elite. Defenders have long justified extravagant CEO pay by claiming that these were the talented "risk-takers" who generated enormous wealth for investors. But the Journal’s data shows that there is no correlation between compensation and a firm’s success. On the contrary, many CEOs rewarded themselves just as their corporations approached ruin.

Tom Eley | CEOs "Cashed Out" Prior To Economic Crisis

I hear hurricanes a'blowin' | I know the end is comin' soon | I fear rivers overflowing | I hear the voice of rage and ruin


... meet your back pocket

Hope you got your things together | Hope you are prepared to die | Looks like we're in for nasty weather | One eye is taken for an eye

The creation of equity bubbles is just a clever means of social engineering, just like regressive taxation. It separates the wheat from the chaff, exacerbating dormant animosities between the classes. The Fed has skillfully aided its White House counterparts in creating the same divisions that existed during the Gilded Age, further fueling the animus towards workers. But now the massive debt bubble is crashing and threatens to bring down the whole system in heap. Bernanke and Paulson are frantically trying to plug the holes in the dam rather than rebuild on a solid foundation of fair pay for productivity.

Mike Whitney | Every Trick in the Book

Don't go around tonight | Well, it's bound to take your life | There's a bad moon on the rise

Creedence Clearwater Revival | Bad Moon Rising

The Beginning

Elephant's Eye

The dilemma Paulson has created with his inept handling of the crisis is simple: If the US Government paid the true value for these nearly worthless assets, the banks would have to write down huge losses, and, as Levy economists put it, ‘announce to the world that they are insolvent.’ On the other hand, if Paulson raised the toxic waste purchase price high enough to protect the banks from losses, $700 billion ‘will buy only a tiny fraction of the 'troubled' assets.’ That is what the latest nationalization of Citigroup is about.

It is only the beginning. The 2009 year will be one of titanic shocks and changes to the global order of a scale perhaps not experienced in the past five centuries. This is why we should speak of the end of the American Century and its Dollar System.

How destructive that process will be to the citizens of the United States who are the prime victims of Paulson’s crony capitalists, as well as to the rest of the world depends now on the urgency and resoluteness with which heads of national Governments in Germany, the EU, China, Russia and the rest of the non-US world react. It is no time for ideological sentimentality and nostalgia of the postwar old order. That collapsed this past September along with Lehman Brothers and the Republican Presidency. Waiting for a ‘miracle’ from an Obama Presidency is no longer an option for the rest of the world.

F. William Engdahl | Colossal Financial Collapse: The Truth behind the Citigroup Bank "Nationalization"

"The worst is yet to come."

Tehran Times | IMF economist says worst of crisis to come

The Revolution Will Not Be Published

Constantiaberg

This is how the story runs in RIA Novosti:

A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily Izvestia published on Monday: "The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse."

The paper said Panarin's dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year's events.

RIA Novosti | Russian analyst predicts decline and breakup of U.S.


Constantiaberg

... and this is how it appears in Bloomberg.

A professor at the diplomatic academy of Russia’s Ministry of Foreign Affairs said the U.S. will break into six parts because of the nation’s financial crisis.

“The dollar isn’t secured by anything,” Igor Panarin said in an interview transcribed by Russian newspaper Izvestia today. “The country’s foreign debt has grown like an avalanche; this is a pyramid, which has to collapse.”

Panarin said in the interview that the financial crisis will worsen, unemployment will rise and people will lose their savings — factors that will cause the country’s breakup.

Bloomberg | Russian Professor Says U.S. Will Break Up After Economic Crisis


Constantiaberg

Why does Bloomberg hack it to a caricature?

Ask Noam Chomsky.

And remember: "It's up — or down — to you."

Let me make one final comment on this. There was a meeting on November 7, I think of a group of couple, of a dozen advisers to deal with the financial crisis. Their careers were, records were reviewed in the business press, and Bloomberg News had an article reviewing their records and concluded that these people, most of these people shouldn’t be giving advice about the economy. They should be given subpoenas.

Noam Chomsky | The Elections, the Economy, and the World

Amy Goodman also chats to Desmond Tutu and Breyten Breytenbach, the latter offering "Mandela's Smile: Notes of South Africa's failed revolution" over at Harper's, where information doesn't want to be free.

Woolies UK Goes Bust

Silvermine

Woolworths, which opened its first shop in 1909, said this morning that it filed petitions for administration after an attempt to sell its retail stores ended. ... Woolworths has more than 800 stores across the U.K. selling goods from candy to appliances. It employs almost 30,000 people, according to data compiled by Bloomberg.

As sales crumbled, the retailer was hampered by debt that totaled 295 million pounds when its first half ended on Aug. 2, more than 16 times its current market value. Woolworths had interest costs of 18.6 million pounds in the period, more than today's market capitalization. The stock has plunged by nine-tenths this year after falling 62 percent in 2007.

"If they didn't have any debt, things would have been short of expectations, but there would have been nothing to tip them into administration," Stoddart said.

Woolworths was started as part of its U.S. parent's expansion. The company has no relation to Cape Town, South Africa-based Woolworths Holdings Ltd. or Woolworths Ltd., located in Sydney, which today deferred plans to buy back stock because of concern about the world economic slump.

Bloomberg | Woolworths Near Collapse, Risking 30,000 U.K. Jobs

Deficits Don't Matter

Living the high life ...

"Reagan proved deficits don’t matter."

Dick Cheney

One thing you have to admit: Dick Cheney and the Bush Gang knew the economy. But they got shorted. MarketWatch reports the U.S. government agreeing "... Sunday night to rescue Citigroup Inc. with a huge bailout plan that includes a $20 billion capital infusion, guarantees for up to $306 billion of Citi's troubled assets — and control of executive bonuses."

Today, looking remarkably like the old kids, the new kids hit the block.

Commenting on Barack Obama's choice of Tim Geithner, Lawrence Summers, and Peter Orszag to head his fiscal hit squad, Bloomberg sees "... an economic team steeped in fighting crises and likely to push for an unprecedented government role in reviving growth and stabilizing the financial system."

Bloomberg's Rich Miller and Robert Schmidt consider Obama's top priority to be "... a stimulus package that may run to $700 billion or more, in an attempt to head off millions of job losses as the credit crunch freezes the economy."

The financial mess in which the U.S. now finds itself has already had several trillion dollars thrown at it. The stimulus package Obama will likely sign into law next February adds another trillion to the more than ten already weighing down the U.S. economy.

Bloomberg quantifies the figure so far pledged big business on behalf of the taxpayer: $7.76 trillion. This to a system that has 'vanished' $32 trillion in recent years.

Bloomberg also suspects the original 'bailout bill' will likely face that typically US-ian problem, obesity. "The incoming administration may also enlarge the $700 billion financial-rescue fund enacted last month. It may surge to perhaps $1.2 trillion, said Martin Baily, who served as White House chief economist under Clinton and is now at the Brookings Institution in Washington."

That's another half trillion.

It was the abovementioned Peter R. Orszag, who will head the Congressional Budget Office, who not too long ago noted of the U.S. budget deficit: "The key point is, even if it were sustainable, it's not desirable. We still will owe the money to foreigners. We're still mortgaging our future national income. Just because you can take out a larger mortgage to buy a bigger house doesn't mean you should."


... in BubbleWorld

"... we shouldn't worry about the deficit next year or even the year after."

Barack Obama

It seems Orszag's boss — having undergone a Keynesian Awakening, shares Dick Cheney's view. And that of the man shaping his team of Clintonistas, i.e. the only one not on it; Citigroup director, former NEC chief, and Bill Clinton's Treasury Secretary, Robert Rubin.

Of Rubin, Rahm Emmanuel's father might say: "Obviously he’ll influence the president. Why wouldn’t he? What is he, an Arab? With $20 billion in his pocket, he’s not going to be mopping floors at the White House."

When you see only one solution, I guess that's the one you use. However, with Rubin massaging the future from the Citi, one wonders just who won this past election.

"Stimulus shouldn't be paid for."

Hillary Clinton

Indeed. She should know. As top Obama economic adviser Austan Goolsbee put it on MSNBC: "Look, it needs to be as big a number as it needs to be. I really mean, it's got to meet the task at hand."

I'm sure Hillary, Rubin, Dick, and the President-Elect would agree.

Obama and the Clintonistas Play Wall Street

"Thank you very much. You've been a great audience."

In general, there does not seem to be strong empirical support for the proposition that derivatives increase volatility in financial markets. Volatility is not higher where derivatives are most prevalent.

Timothy Geithner March 2007 | Credit Markets Innovations and Their Implications

U.S. stocks on Friday surged on a report President-elect Barack Obama would nominate New York Federal Reserve President Timothy Geithner as Treasury secretary. The leap higher in the final hour of trade came on the heels of a two-session freefall and halved the market's weekly decline.

After a volatile session, equities rocketed higher in the wake of an NBC report that Obama would appoint Geithner to head the Treasury Department.

CNN | Stocks Trim Weekly Losses On Word Geithner Will Head Treasury

David Kotok, chairman of the money-management firm Cumberland Advisors in Vineland, N.J., welcomed the news about Mr. Geithner in particular, but he attributed the market rally to relief that Mr. Obama seemed to have made a decision. “The most important thing for the market and for the economy is that these decisions are made and uncertainty is removed,” Mr. Kotok said. “It probably would have been the same rally had it been someone else on the short list.”

New York Times | For Treasury, Geithner Said to Be Choice

Geithner has been deeply involved in virtually every step of the federal government's response to the financial crisis, from the subsidized sale of Bear Stearns last spring to the rescue of American International Group (AIG) this fall.

That experience could stand him in good stead as the Obama Administration takes office amid what is likely to be a bad recession, and possibly a continuing financial crisis. At the same time, it also opens him to criticism by those who say the government's response has been tepid, chaotic, and poorly conceived.

BusinessWeek | Geithner: Obama's Likely Treasury Choice

Mr Geithner has worked closely with outgoing Treasury Secretary Henry Paulson in addressing the credit crisis and finding ways to boost the economy. The 47-year-old played a crucial role in talks with Lehman Brothers before the investment bank went bankrupt. He was also instrumental in the deals involving insurer AIG and JP Morgan, another bank.

The NBC report was enough to counter concerns over the finance sector and in particular the future over banking giant Citigroup, which saw its shares plummet 20% as board members met.

BBC | US shares up on 'Treasury choice'

"The market's message is Geithner is a good choice. He's young, he's intelligent and he's experienced. What this country needs are people who are young, full of energy, and can put in 26-hour days. There's nothing like leverage," said Hugh Johnson, chairman of Johnson Illington Advisors.

MarketWatch | Stocks rally on report Geithner will head Treasury

An avalanche of reports on the economy next week, which will be shortened by the Thanksgiving holiday on Thursday, could also provide further evidence of the depth of the recession. But "there's a possibility that we have a decent week because there won't be many people at their trading terminals," said Paul Nolte, director of investments at Hinsdale Associates.

MarketWatch | Stocks look for respite in holiday-shortened week

Over the past few months, I've been trying to take our Global Economic Crisis (GEC) seriously. In fact, I've gone as far as following the markets — the blue-chip Dow in particular. I've come to realise that there is much that is bent and twisted about the so-called "markets" and that any bearing they might have on economic reality is purely coincidental. Even so, it seems some things follow each other as surely as night does day. Economy down = markets down and vice versa are supposed to fall into this category.

So could somebody please explain to me how Obama's forthcoming announcement that career-thug Timothy Geithner will succeed fellow Dartmouth old-boy King Henry should send a deeply troubled Dow, having lost ten percent of its value through a week spent in an economy destined for the dustbin, soaring 500 points.

Really. I've tried to wrap my head around this one, but can't. All I come up with is:

"Economics as practised on the trading floor is bullshit."

or

"The American capacity to indulge childlike behaviour is infinite."

Nothing else explains it. It seems that if Mr. Obama were to pay the NYSE a personal visit, the economy would experience a Siegessäule Moment — and the GEC would be behind us.

I've bolded several telling comments and acronyms above. They tell their own story — one which, to my untutored mind, is far more revealing than the verbiage in which the words reside.

The BBC article contains a gem of British journalistic wit, i.e. Geithner's chief qualification for the job: "The 47-year-old played a crucial role in talks with Lehman Brothers before the investment bank went bankrupt," deadpans the Beeb.

MarketWatch goes the other way and, in an aside to the Geithner story, offers us this telling insight on Citi's woes from Oaktree Asset Management market strategist Robert Pavlik: "When a major institution has to consider selling itself up or selling assets at a discount value, that's not a good sign."

I wonder what he charges for such analysis.

I've not included in my overview an observation made by that most heinous of tabloids, the Wall Street Journal. On the timing of the "Geithner leak", it opines:

Amid the brief market euphoria, it is hard not to notice the leaks and air of disorganization coming from the Obama transition team on these important appointment decisions. The new President may come to appreciate George W. Bush's experience with lower-tier political players who put their own compulsions above his desire to govern.

Now, everybody knows the Wall Street Journal's a bit past it for a fanatical right-wing dishrag but, c'mon, given its acceptance of the Bush regime's history of planned leaks, how the hell does the WSJ expect anybody to take such a comment seriously?

I suppose they're pandering to the question on everybody's lips these days: "How low can we go?"

Paul Nolte's comment is wonderful. Next week Monday sees reports on October existing home sales. On Tuesday, the S&P/Case-Shiller home price index for September and the Conference Board's consumer confidence index for November are due. Wednesday will see new home sales figures, weekly jobless claims, another reading of third-quarter growth, personal income data, a manufacturing survey from the Chicago region in November, and durable goods orders for October.

But everybody will be on holiday. So none of it matters.

If Nolte's statement doesn't inspire fear, surely that of Johnson Illington Advisors chairman Hugh Johnson, commenting on Geithner's appointment, must: "There's nothing like leverage," he says.

It's leverage that got us into this mess in the first place. Ask the twenty-second banker.

A right-of-centre Obama presidency — highlighting the business-as-usual nature of Geithner's likely nomination and the absurdity of Wall Street's response to it, is starting to look more like a Michael Jackson concert filmed by Disney than a shot at economic recovery.

Really, I give up. It's all beyond me.

Let the band play on. It's a real crowd pleaser.

Credit market innovation does not appear to have resulted in a large increase in leverage in the corporate sector, as some had feared.

Timothy Geithner March 2007 | Credit Markets Innovations and Their Implications

Note: The National Intelligence Council report, Global Trends 2025: A Transformed World, pointed to above, is a 8.5 MB pdf download. You might wish to save the bandwidth. Written by the usual suspects, it reads like Reader's Digest ...

... which this week features president-elect Obama's plan to save the U.S. economy.

Dow closes below 8,000 Nasdaq down 7 percent

Dow closes at 7,997.28

Stocks fell hard on Wednesday as a selloff gained momentum near the close and the major indexes tumbled to 5-1/2 year lows.

The Dow closed below 8,000 for the first time since March 2003 as investor confidence dried up amid ongoing worries about the economy and the future of the auto industry.

The Dow Jones industrial average (INDU) shed more than 400 points to close down about 5%, according to early tallies. All 30 Dow components ended lower.

The Standard & Poor's 500 (SPX) index slid 6% to its lowest level since March of 2003. And the Nasdaq composite (COMP) lost 6.5% to settle at its lowest point since April 2003.

CNN | Dow below 8,000 - 1st time since '03

Massive US trade deficits have been financed by giving up US assets to foreigners, who now own the income flows as well. Budget deficits from 6 years of pointless wars and from unsustainable levels of military spending have helped to flood the world with dollars and to drive down the dollar’s exchange value. Consumers themselves are drowning in debt and can provide no lift to the economy. Millions of the best jobs have been moved offshore, and research, design, and innovation have followed them. Considering America’s dependency on imports, part of any stimulus package that reaches the consumer will bleed off to foreign countries.

Generally, when countries acquire more debt than they can service, they inflate away the debt. If foreign creditors do not save the Obama administration, the Treasury will print bonds and give them to the Federal Reserve, which will issue money.

The inflation will be severe, particularly as Americans will not be able to pay for the imports of manufactured goods from abroad on which they have become dependent. The exchange value of the dollar will decline with the domestic inflation. Once inflation is off and running, the printing press dollars will only have goods made in America to chase after. The real crisis has not yet begun.

Paul Craig Roberts | The Crisis Has Hardly Begun

Trust me ... him. Whoever.

Back in March 2003, when the first U.S. Marine Corp boot crossed the line in the sand dividing Kuwait and Iraq, millions called an end to U.S. hegemony. What we see today was determined back then.

Early in November 2005, mythic former-CIA asset Osama bin Laden proclaimed:

We gained experience in guerilla warfare and in conducting a war of attrition in our fight with the iniquitous, great power, that is, when we conducted a war of attrition against Russia with Jihad fighters for 10 years until they went bankrupt, with Allah's grace; as a result, they were forced to withdraw in defeat, all praise and thanks to Allah. We are continuing in the same policy — to make America bleed profusely to the point of bankruptcy, Allah willing. And that is not too difficult for Allah.

I guess today it's a case of Mission Accomplished.

Alternatively, you could think of it as Dubya's parting shot. He and his fellow travelers got what they wanted. We merely got what we deserved.

Market in Tatters — Dow Bludgeoned to 7553

... by auto dealers without shame.

Ah well, we saw it coming, didn't we? By the bell Thursday, the S&P 500 had plummeted 6.7 percent to a '97 low.

Looks like the chickens are finally finding their flight path. They're coming home in droves.

Cluck cluck ...

Christ, I don't believe it can get any worse than this. Brokers are weeping openly and slashing their wrists on the trading floor. It's embarrassing.

And why the hell is GM still listed on the Dow?

I see FOXNews tracked down Ayman al-Zawahiri (Al Cader's 2iC) for comment on the above. A talkative chap — he lectures Obama at length, he finally reiterates the message from The Man to The American People:

As for my final message, it is to the American people. I tell it: you incurred defeat and losses from the foolish actions of Bush and his gang, and at the same time, Shaykh Usama bin Ladin (may Allah preserve him) sent you a message to withdraw from the lands of the Muslims and refrain from stealing their treasures and interfering in their affairs. So choose for yourself whatever you like, and bear the consequences of your choice, and as you judge, you will be judged.

I'd listen to these buggers. They mean business. When they speak of consequences, they're speaking Chalmers Johnson-type shit. The Dow's looking pretty reasonable right now at 7,550 but you never know ...

Were I The Kenyan, I'd pack my bags and leave Kandahar by morning. It'd be nice to know there's still a global economy worth saving.

Touch and Go ...

Squeezing through ...

U.S. stocks fell Tuesday, with the major indexes headed to their lowest close in more than five years, after a gauge of home building sank, erasing optimism that came as retailer Home Depot Inc. reported better-than-anticipated results.

"My personal bottom line is however the dream or nightmare ends, we're not close to the end yet," said Linda Duessel, equity market strategist at Federated Investors.

After shifting between positive and negative territory, the Dow Jones Industrial Average was off 154.28 points to 8,119.3, putting the blue-chip index on pace to its lowest finish since April 1, 2003.

MarketWatch | U.S. stocks fall, on track to close at five-year lows

Not quite but, at 2:50PM, it looked to be a close-run thing ...

Not that a surge to 8,425 is too difficult to fix in a low-volume market so volatile reporters should know better than to file a story an hour before the close.

OK, the pretense passing for market forces — bearing only a passing likeness to reality, is set for a fall. Lows have been tested and retested and they look anything but difficult to break. (How is it that the market rallies on HP's lowered expectations but ignores some of the most dire reports ever to leave the statisticians' desks?)

It certainly won't require GM going bust to break the already broken back of our global economy and, as Barack Obama leads his merry band of Clintonistas into the corridors of power, he'd do well to listen to Republican Mitt Romney.

GM CEO Rick Wagoner can bleat all he likes, but common sense is stacked against him and the dying city of Detroit. What is it with these people? The U.S. economy has already undergone "... a catastrophic collapse ..." yet US$4.2845 trillion has been spent trying to pretend it didn't happen. That's over and above the US$32 trillion erased from the value of global equities this year.

It's money that — if it existed, might have been put to far better use.

America's "Futurama" is defunct. The famous walk-through diorama of a car-and-suburb world, imagineered by Norman Bel Geddes for General Motors at the 1939 New York World's Fair, has weathered into a dreary emblem of our national backwardness. While GM bleeds to death on a Detroit street corner, the steel-and-concrete Interstate landscape built in the 1950s and 1960s is rapidly decaying into this century's equivalent of Victorian rubble.

Mike Davis | Why Obama's Futurama Can Wait

Killers on the Road

Cape Point

Riders on the storm | Riders on the storm | Into this house we're born | Into this world we're thrown | Like a dog without a bone | An actor out on loan | Riders on the storm

Escaping the city for Cape Point early Saturday, I passed a dead cyclist. His body, lying at the curbside and encircled by police and several civilians, was covered by the ubiquitous white blanket of death. I experienced a familiar sickening lurch; the momentary realization of a life abruptly ended and a black hell of despair befalling an innocent family.

Creslin Attwood, 54, a member of the SuperCycling team, was brutally murdered on the Glencairn Road at 06:00 by a drunken tourist driving a Black VW Polo. Fleeing the scene, the driver almost took out several other cyclists. He apparently handed himself over to the police on Sunday.

Actually, according to this report, he didn't. That should make it murder. And who said he was a tourist? Or a 'he'?

Let's get a couple of things straight. 'Spandex Bullets', training for the Argus Cycle Tour, are a pain. Too many ride abreast and abuse motorists who ask them to get into line. In short, they're a cocky bunch and I don't like them. I mean, why cycle when you can drive? Alternatively, why not walk?

That said, cycling is a major sport and Cape Town's coastal roads offer arguably the world's most exhilarating training routes. Natural-born fetishists, cyclists adorn themselves in the most garish, sickeningly colorful bodysuits imaginable. They're a bloody eyesore, stick out a mile and, no matter their misbehavior, there is no good reason — bar out-and-out accidents, to hit them.

Unless it's proved otherwise, I assume the driver of the Black VW Polo did not have good reason to kill Creslyn Attwood. Clubs and bars disgorge their drunken patrons in the early hours and, with the traffic police sleeping late, death reaps a rich harvest Saturday and Sunday mornings. I assume our errant Polo driver was drunk, stoned, asleep, or a mix of the three.

I travel that road most weekends and I do not drive slowly. There is a speed limit and I stick to it — most of the time. Moreover, the road on which Creslyn was killed — outside Dixie's, allows me to. It's broad, enabling cars to overtake each other while cyclists drive abreast. Driving defensively, one should not be involved in an accident unless it's a head-on collision.

Had Creslyn's killer handed himself in, he'd probably have been found guilty of culpable homicide and fined ZAR3,000. That's US$300. Life is "cheap" in Cape Town.


Cape of Good Hope

There's a killer on the road | His brain is squirmin' like a toad | Take a long holiday | Let your children play | If ya give this man a ride | Sweet memory will die | Killer on the road, yeah

All I can do is hope that Creslyn's family comes to terms with his death as soon as possible and that they are supported by friends now and in the future. I doubt they could give a toss about what happens to the driver. It won't bring Creslyn back.

What troubles me more is the road rage I experienced inside the Reserve.

Conditions need to be ideal to visit the caves beneath Cape Point. If you don't know the walk, don't do it. An incoming tide and an inadequate knowledge of the ledges will see you trapped. Even a walk that beautiful doesn't warrant R10,000 or R20,000 in rescue fees — around six times the probable financial value that will be attached to Creslyn Attwood's life.

A small swell, spring low tide, and some cloud cover suits photography best. The sun was out but, what the hell, I wanted to see how winter's storms had altered the coast. They'd changed it appreciably. The coast has been stripped of sand and the boom of the wreck of the Shir Yib, an Iranian barge that went aground in the mid-70s, has been flattened by falling rocks.

The shore's a dangerous, rock-strewn mess; but with the tunnels beneath the cliffs having been cleaned out by the sea, it's a beautiful mess.

The two most precarious transit points on the short walk from Dias's Beach have been made more so by the sand's erosion, i.e. immediately before and after the wreck. More, as I discovered the weekend before, Dias Beach has had the sand gouged from it at the Cape Point end, creating a steep dune drop to the sea.

On the other side, you can walk up to Cape Maclear and across to the Cape of Good Hope — there's a beautiful cove, densely birded, on the way.

I left the Point around 15:00 and, having had the good karma washed from me by the hordes of tourists atop the cliffs, headed for the gate. From the Point, I was followed by a white VW Golf which, like me, was traveling with its lights on. Right up my exhaust.

Bugger it. I was doing 60 km/h and this was, after all, a national park. This guy wanted to go faster and I wasn't going to let him. Especially after what I'd seen in the morning.

On the stretch past Buffelsfontein, I upped my speed to 80km/h and readied my camera. The Golf overtook me on a curve and there was no way I could get a picture. Angered, I followed it from the top of the Smitswinkel Flats to the Olifantsbosch turnoff at 100km/h but the driver picked up speed all the way.

Heading up to the Smitswinkelbaai lookout, he overtook a tourist bus on a blind curve and disappeared.

I felt an asshole. Here I was, in Cape Town's most sacred place, traveling 100 km/h. I still feel bad about it. Had a buck, ostrich, baboon, tortoise or anything else crossed the road, either the Golf driver or I would have hit it. But I badly wanted a picture of that car.

I wanted that guy banned from the reserve.

Because such people — people like me, who occasionally lose it — kill people like Creslyn Attwood.

Girl ya gotta love your man | Girl ya gotta love your man | Take him by the hand | Make him understand | The world on you depends | Our life will never end | Gotta love your man, yeah

The Doors | Riders on the Storm

Note: I stopped riding a bicycle about fifteen years ago. One morning while riding to work, a large truck brushed my elbow. I decided to call it a day. I'm also the guy who "thinks bike". Having ridden a motorcycle some twenty to thirty years ago, I watch for bikes in my rear-view mirror and pull over for them — enjoying the thanks and recognition of a raised gauntlet. Also, I see too many wrecks on my way to and from the Point, both cars and motorcycles. Our roads are fucking insane. Nevertheless, like those who drive without a thought for the driver in front of or behind them, I'm not immune from the odd rush of blood to the head.

I'd like to think Creslyn Attwood did not die in vain. Tens of thousands of cyclists remain out there and all should complete the Argus Cycle Tour. For that, we're responsible.

AIG Execs Party On ...

The money pit ...

Even as the company was pleading the federal government for another $40 billion dollars in loans, AIG sent top executives to a secret gathering at a luxury resort in Phoenix last week.

Brian Ross investigates the insurance giant's "seminar" at a posh resort.
Reporters for abc15.com (KNXV) caught the AIG executives on hidden cameras poolside and leaving the spa at the Pointe Hilton Squaw Peak Resort, despite apparent efforts by the company to disguise its involvement.

"AIG made significant efforts to disguise the conference, making sure there were no AIG logos or signs anywhere on the property," KNXV reported.

A hotel employee told KNXV reporter Josh Bernstein, "We can't even say the word [AIG]."

A company spokesperson, Nick Ashooh, confirmed AIG instructed the hotel to make sure there were no AIG signs or mention of the company by staff.

"We're trying to avoid confrontation, keep our profile low," said Ashooh. "Some of our employees have been harassed."

ABCNews | Another AIG Resort "Junket": Top Execs Caught on Tape

The above records this past weekend. A bit of background...

AIG has been in the hot seat since a few days after the federal government committed $85 billion to bailout the company, when it was revealed that the company spent $440,000 for a week-long retreat at a luxury resort and spa.

Still battered by that outrage, AIG later called off plans to hold a second retreat at the exclusive Ritz-Carlton Resort in Half Moon Bay, California. It was reported today in the "New York Daily News" that AIG executives spent $86,000 on a partridge hunt in the English countryside the same week that AIG got a second bailout loan of $37.5 billion.

Cuomo's office sent a cease and desist letter to AIG, ordering them not to use taxpayer funds to take any more trips.

ABCNews | 'The Party's Over' for AIG Says Cuomo

"Fuck Cuomo," say the fat cats at AIG.

American International Group Inc.'s losses from the collapsing mortgage market account for almost half the $123.6 billion inflicted on North American insurers, helping push the tally for the world's biggest financial firms toward the trillion-dollar mark.

AIG, which posted a record third-quarter loss yesterday, accounts for $60.9 billion of the writedowns and credit losses. Bond insurer Ambac Financial Group Inc. is second among the insurers with $10.6 billion, and life insurer MetLife Inc. is third at $7.2 billion. The industry losses are three times as costly as Hurricane Katrina, the worst natural disaster in U.S. history.

Bloomberg | AIG's Losses Lead Insurers as Tally Nears $1 Trillion

What does Paulson do for his buddies? He gives them a further $27 billion. Go figure ... you Americans are crazy.

GM and Chrysler Chapter 7 Candidates

Bankrot ... Photo: Google Images

As GM and Chrysler idle plants and facilities, more employees are laid off the employee related liabilities of GM/Chrysler will increase by hundreds of millions. Since GM and Chrysler are insolvent, who will pay these increased costs? Can any of these costs be avoided in a Chapter 11 case of Chrysler or GM?

The Truth About Cars | Why the GM/Cerberus/Chrysler Bailout is bad for taxpayers and doomed to fail without the benefits of a Chapter 11 filing for both Chrysler and GM

Part of an analysis sent TTAC by "... a New York City bankruptcy lawyer who wishes to remain anonymous," the above editorial argues for GM and Chrysler to file for Chapter 11 bankruptcy before they and the dubious Cerberus Capital inflict further damage the U.S. economy.

The assessment is logical but, bearing Delphi in mind, why Chapter 11? These companies, kept alive by a sentiment worthy of Hallmark, are finished.

The Delphi case is raised by a commenter. It's well worth reading.

Chapter 11 calls on management to bargain with unions in good faith to reduce costs, but also permits management to petition the court to void labor contracts and substitute whatever terms it chooses. Properly stage-managed and set in motion, the restructuring process can steamroll the union, peel away retiree benefits and dump pension obligations onto the PBGC.

That's exactly what happened during Miller's 19-month tenure as chief executive of Bethlehem Steel. Some 95,000 retirees and dependents lost their health-care plan in 2003 when the bankruptcy judge sold the company's assets to International Steel Group, a company controlled by billionaire financier Wilbur L. Ross.

Mark Reutter | How Chapter 11 is demolishing Employee Expectations

Read that again. Yep ... Chapter 11 is the Fat Cat's Bailout or Exit Strategy. Employees get stiffed. And, in Detroit, with the UAW's motives being called into question, the Venture Vultures and their hitmen are circling.

Should the remains of GM and Chrysler approach the courts with a view to a merger, Chapter 11 (meaning 35,000 layoffs translating to 5 times as many jobs in the broader economy) should not be allowed on the table.

These are not companies "too big to fail." They have failed. And should file for Chapter 7. At least the many hundreds of thousands then laid off — rather than the bloated members of management — retain some claim on their retiree health care benefits and severance packages.

Mark Reutter's site lends great weight to Naomi Klein's words:

Now that the election has been won, this movement's new missions should be clear: loudly holding Obama to his campaign promises, and letting the Democrats know that there will be consequences for betrayal.

Naomi Klein | Real Change Depends on Stopping the Bailout Profiteers

So, go ahead. Force their hand.

The End of Kakistocracy

The End of Kakistocracy

One way or another, South Africans understand your feelings on this one.

Trust me.

Left Behind - Again

Obama's economic advisers have included former U.S. Federal Reserve Chairman Paul Volcker, University of Chicago economist Austan Goolsbee, former Clinton White House aides Jason Furman and Gene Sperling, and Clinton-era Treasury Secretaries Robert Rubin and Larry Summers. Speculation will now turn to the shape of Obama's Cabinet, with particularly keen attention focused on the selection of a Treasury secretary to replace Henry Paulson, economists said.

Media speculation has centered on a range of potential nominees, including New York Federal Reserve Bank President Timothy Geithner and J.P. Morgan Chase CEO James Dimon.

MarketWatch | World awaits Obama's response to economic woes

Ok, so The Rapture has come and gone. George W. Bush and the 200 million or so who — at some stage before changing their minds — sailed with him, have flown off to savor the fruits of their ill-gotten gains.

We're left with a world trashed by ignorance, malice, and ineptitude. As a species, we remain riddled with uncertainty, fear, and our perennial favorite, greed.

Things have never looked so grim.

Except, of course, for the election of Barack Obama to the U.S. presidency.

Make no mistake, this is what we in the trade call a very good thing. Obama lends value to the maxim "Cometh the hour, cometh the man." He is now, as so many African American comedians bemoan, The Man. He offers hope, clarity, intelligence, insight, and stability.

So what's the first thing we ask of him? Before he takes over the presidency?

"Fix the economy. Or else."



From the global economic meltdown to war, we have to find a new way. This is a rare moment when party lines are breaking down. Yet if Obama buckles to the corporate lobbyists, how will his passionate supporters pressure him? They have built a historic campaign operation—but they don’t control it. People need strong, independent grass-roots organizations to effect genuine, long-term change. This is how movements are built. As Obama heads to the White House, his campaign organization needs to be returned to the people who built it, to continue the community organizing that made history.

Amy Goodman | Organizer in Chief

No wonder The Rapture was too good for us. Barack Obama ain't ever gonna fix an economy that has as much chance of recovery as our dear, nearly departed friend, Ariel Sharon. And we are going to burn in Hell, with Arik and the equally fast-decomposing economy, if we continue to make such demands of the American president-elect.

The U.S. president's job is to serve and uphold the Constitution. In short, and contrary to everything achieved by George W. Bush, his job is to not break anything or allow anything to be broken.

To carry out the latter duty, he appoints a Cabinet or administration.

And this is where MarketWatch's article highlights the potential for an early misstep by the incoming U.S. president. A product of the plutocracy, he is now — to use a good Anglo-Saxon phrase, deep in the mire. Check out the names punted for Treasury Secretary.

Paul Volcker. Robert Rubin. Larry Summers. Timothy Geithner. Jamie Dimon.



The surest way to destroy the economy is to hand over control of the financial system to investment banks and speculators. That's what transpired before the Great Depression and Wall Street has restaged the same coup today. By overturning critical market regulations, the investment alchemists have created a toxic stew of exotic debt-instruments, shadowy off-balance sheets operations, and opaque derivative contracts, all designed to avoid prudent capital requirements.

Mike Whitney | Obama's Little Red Book

This is what's left after Sarah Palin leaves the room? We must surely be in Hell. I'd sooner have Tim LaHaye as Treasury Secretary than any of these fools.

Face it. The euphoria following Obama's election had more to do with George W. Bush's demise than it did with the candidate's individual, undoubted brilliance. He cannot 'fix' the economy (as so many have worked for so long to do). We're in for four or five years of economic misery and grinding poverty.

Starvation and Depression-era unemployment loom.

What Obama can do, is put a few of his brighter economic prospects to work — perhaps Austan Goolsbee, Jason Furman, and Gene Sperling are equal to the task — so that, when the 81-year old Volcker turns up his corrupted toes and the 70-year old Robert Rubin starts peeing on the carpet or drooling on the balance sheet, they can step in.

As for Geithner, Summers, and Dimon... well, he can just take them outside and shoot them. Why not? Until recently, some of the U.S.'s best friends engaged in such sport.

Look at it this way. The American people are not going to precipitate or participate in any revolution, so it has to come from within the ranks of the ruling elite. With Obama's appointment of Chief-of-Staff Rahm Emanuel, an affable-but-hardcore Zioncon and deal maker (he voted for the invasion of Iraq), it's unlikely the new elite will be asking Obama to upend the system anytime soon.

Rahm's reputation is deservedly that of an 'enforcer'.

And, yeah, isn't that dear old Madelaine Albright — yet another Council on Foreign Relations graduate, ducking into that doorway over there? As for the rest? A team is taking shape and things are looking good.

So it's back to business as usual ... for now.

There is a better way to fix a broken financial system. ... The possibilities of what could be done if a chunk of the banking system were genuinely under public control — from a moratorium on home foreclosures to mandatory investment in green community redevelopment — are limitless.

Because here is what George Bush and Henry Paulson are hoping we won't figure out: When a society no longer has enough money to pay for its most pressing needs, there are worse things than discovering you own the banks.

Naomi Klein | The New Trough