Merry Christmas to all...

I hope everyone has a wonderful Christmas, Hanukkah, Kwanzaa or just a few days away from the daily battle. I plan to take some time off. Talk to you in a week or so.

All the best,

d'blank

The U.S. Treasury is giving American Express almost $4 billion in TARP funds. Details here. This is appalling. If there is an organization less vital to the the economic viability of this country than American Express I can't name it. This is just so depressing. For what are they going to use the money? Consumer subsidies on $50 steaks at Ruth's Chris? Funding for a new pretentious ad campaign featuring the very special people who are "members?"

What in the world is Paulson thinking? He denied the car companies help and then ladles in out for these idiots, who, as anyone who follows this industry knows, is in trouble because they started pumping cards out to pretty much anybody who asked for one a few years ago, and now they can't collect. What jerks.

Bleeding heart tightwads

Bleeding heart tightwads is the title of Nick Kristof's column today in the Times, which reports the fact that conservative people donate to charity at rates 30-50% higher than their more liberal brethren. This fact has been verified in several studies, both at the individual and state level. Red states are much more generous than blue states. Conservatives are also much more likely to volunteer their time than liberals. This phenomena also exists at a national level with U.S. citizens being more generous than more liberal-leading European nations by even bigger margins.

I have no idea what this means, but I find it really interesting.

Someone to admire

Charlie Rose had Secretary of Defense Robert Gates on for the full hour last night. To be honest, I’d never thought much about him nor heard much more than a sound bite from him before the program. But after the avalanche of news about crooked, self-serving politicians and grave-robber, Wall Street thieves, it was really refreshing and even uplifting to listen to Gates for an hour. He has a PhD in Russian Studies, and will have served eight Presidents once Obama takes office. What kind of man can serve both Nixon and Carter, Clinton and Bush? A thoughtful, intelligent, humble man who sees the world in all its complexities, and despite his role running the world’s biggest military machine, a man who clearly sees diplomacy as our most valuable and effective “weapon.” The term “devoted public servant” is grossly overused, but I think it is well-deserved in his case. The interview has not yet been posted on the Rose web site yet, but when it is, I’ll put in a link.

There were a couple of really interesting pieces in the New York Times today. The first, a front page story on how drastically major news organizations are reducing their investments in original Washington reporting. In 2000, Cox Newspapers (Atlanta Journal-Constitution, Austin American-Statesman, plus 15 additional) had 30 reporters in Washington to cover the transition to George W. Bush’s administration. This year they are will have zero; they have closed their Washington bureau. There are many other dramatic examples like this. Just when we need an independent eye watching over politicians and the money-men behind them more than ever, they are being washed away in the frenzy to make all media free and every idiot with a blog (cough) equal to Edward R. Murrow.

Finally, the Times digs, also on the front page, into the outrageous bonuses paid to Wall Streeters based on profits that never existed in the first place. While I think there should be bankers hanging from every lamppost, the Times is at least asking why shareholders aren’t suing to claw back the fraudulent bonuses. (I guess we could string them up after getting the money back.)

Who would have believed oil would ever sell well below $40 a barrel just a few short months ago?

Hypocritical lying whore of the week

The big story this week is the $50 billion Madoff swindle, which was made possible because hedge funds aren’t regulated by the SEC and don’t have to be audited the way public companies must be. For that you can thank Congress, and especially one of my Senators, Chuck Schumer, formerly Chairman of the Democratic Senatorial Campaign Committee and a member of the Senate Banking Committee.

A recent New York Times article called Schumer a “jackhammer” when it comes to fundraising and reports that he raised a record $240 million in his party role – including nearly four times as much Wall Street money as the RNC. He has also raised more personal campaign funds from the securities and investment industries than all but one other Congressman, Senator Kerry.

“So what,” you may be asking. Well, here’s a quote from the Times article: “He is serving the parochial interest of a very small group of financial people, bankers, investment bankers, fund managers, private equity firms, rather than serving the general public,” said John C. Bogle, the founder and former chairman of the Vanguard Group, the giant mutual fund house. “It has hurt the American investor first and the average American taxpayer.” Bogle is not exactly a lefty. What he is referring to is Schumer’s ongoing and enthusiastic efforts to gut the SEC, keep credit rating agencies unregulated, lower taxes for hedge funds and private equity firms, and much more. Wall Street got its money’s worth out of Chuckles. It’s all in the Times article.

So that’s the “whore” part of the headline. What makes him a hypocrite and a liar is that he is now trying to recast himself as a populist defender of the little guy’s interests. “After eight years of deregulatory zeal by the Bush administration, an attitude of ‘the market can do no wrong’ has led it down a short path to economic recession,” Mr. Schumer said on the Senate floor in September after carrying Wall Street’s water bucket for years.

He was not alone, of course. Lots of bad people in Washington, New York and elsewhere made their contribution to the financial meltdown. But Schumer played a pivotal role, and is another “elite” -- Harvard undergrad, Harvard Law – who might have served the country in gratitude for the blessings he received, but served himself instead.

Did you watch 60 Minutes last night. If you think the mortgage mess is nearly over, there is a second wave about to hit that is bigger than the first one. You can see the segment here.

Movies: Two I can highly recommend to you are Gran Torino, staring my man Clint. If you love him, you’ll love this movie, and if you are one of those people who have never liked the Dirty Harry side of life, this movie might surprise you.
Another that came to me out of left field, that I really enjoyed, was Slum Dog Millionaire. A sweet love story, but wrapped in a rowdy, 15-year flashback that takes place in the underbelly of India. Also – can’t wait to see Cadillac Records which gets a strong recommendation from AY, my personal movie critic.

Oh, I forgot to mention last week, O.J. wants you to know he is very sorry.

Misunderstood?

I plan to read little about Rod Blagojevic, and write even less. Mostly because this is one of those American news items where active attention isn’t required; I’ll get much more than I need or want via media osmosis. Plus, I don’t want to become sympathetic to this mope, which is a real possibility if the current circus stays in town much longer.

This is the kind of story we really like to just beat to death in this country. An egotistical, immoral, big-city bumpkin, with a bad haircut and a worse wife makes us all feel morally superior. We can just pound him to a pulp without remorse or need of even a morsel Christian charity. And it keeps us from having to consider the question, “what’s the big deal here?”

Certainly no one believes a politician trading actions for something in return is an uncommon occurrence? In addition to the update in the 12/7 post, Charlie Rangel is also being investigated for changing his vote on a federal tax provision in favor of a company that donated $1 million to a school building fund that plans to slap Charlie the Tuna’s name over the front door.

Or is it that it is a Senate seat being treated like a used i-Pod on eBay that is troubling everyone? Well, as Gail Collins points out in her NYT column today, Delaware’s Governor Minner appointed one of Sen. Biden’s long-time aides to finish his unexpired term; the aide promptly promised not to run for reelection, which will make it easy for Biden’s son to run when he comes back from active duty in Iraq. There’s one big favor on the books for the Gov. Will the new VP return it in the form of a taxpayer funded “something?” Isn’t that what politics is?

Alright, I get it. Blago was more brazen, lacks style, and is out of step with the times, but here’s a thought: Why don’t we put him on trial -- a real one with lawyers, witnesses, discovery, and a judge and jury, and see what comes of it? That used to be the American way, instead of running him up in front of the High Court of NBC, the Honorable Judge Matt presiding, where the only evidence is in the form of leaked government transcripts, rumors, and carefully selected video designed to make Blago look like a off-duty Elvis impersonator.

Is this really the way we want our judicial system to operate?

New Car Czar?

I love Congress. They berated the car execs for asking for half as much money as Congress thinks they will really need, and then they gave them half of what they asked for. But at least half of the Midwest won’t be unemployed for Christmas.

Now it’s time to find the new Car Czar to oversee the renaissance of Detroit. This post is seeking your nominations, and I’ll get the ball rolling with a few suggestions. Here are three in no particular order:

1. Billie Gibbons of ZZ Top, in part because we need someone in government who looks like this, but this is also a man who knows cars. One look at his custom Cadzilla is all you need to know the truth of it.

2. Michael Vick, former Atlanta Falcons’ quarterback (currently residing in Leavenworth, Kansas). Mike is another car lover. In fact, he bought a $99,500 Mercedes S550 on the day he left for Leavenworth. Used a debit card to pay for it. Mike has bought dozens of cars of all types in his young life. You can read about how he spent over $18 million in two years in a recent Atlanta Journal article. That kind of power-spending could be very useful when you consider how much new money Detroit will have to spend.

3. Jay Leno. Jay is one of the great car collectors of all times, and is particularly knowledgeable about Detroit iron. He has a great web site that shows off his collection with both still and video art. And of course, he is a funny guy, and I have a feeling we’re really going to need a sense of humor before we work ourselves out of this mess.

Can someone explain this?

Here were the headlines on http://www.cnnmoney.com/ at the end of the day on Friday:

* Most jobs lost in 34 years. 11 month decline of 1.9 million

* Unemployment rate soars to 6.7%

* Foreclosures soar 76% to record 1.35 million

* Dow rises 269.13

If this were an SAT test I think I could nail the line that doesn’t belong here. I will never understand the financial markets; but then again, the professionals don’t seem to either.

Charlie Rangel is back in the news. Seems he applied for and received a “homestead” tax rebate from NY state for a house he owns, but to legally qualify the house must be one’s principal residence. But Charlie lives in three rent controlled apartments in Harlem, also in conflict with the law. Then there is he failure to pay taxes on his condo in the Dominican. It’s good to be the king. It’s been a tough year for NY Dems. In addition to Charlie’s and Governor Spitzer’s little problems, new Governor Patterson had to fire his number one aide who had failed to pay US income taxes for several years. His lawyer claimed a form of mental illness that prevents a person from paying taxes. I wish it was contagious.

Two more reasons I love magazines: Read Esquire’s article in the December issue on Dean Kamen. Inventing the Segway may be among the least impressive (and least strange) of his many accomplishments. Turning sewage into drinking water? A perpetual motion machine? No problem for Dean. No blog is ever going to provide the world with this kind of journalism.

Is there any doubt that Clint Eastwood is the coolest guy on earth? Read this mini review in Time of his acting and directing career combined with more info on the upcoming Gran Torino, which he says will be his last acting job. His timing is also impeccable as it turns out he plays a recently retired Ford assembly line worker. Pretty topical.

Why is this man smiling?

In the Senate, the leading opponent of giving aid to the domestic auto firms is the man to the left. No, it’s not Rip Torn. It’s Alabama Senator Richard Shelby. And why is he so opposed? Could it be because, according to the Alabama Automotive Manufacturers Association, the number of automotive manufacturing jobs in Alabama has increased by 80% since 2001, and the state is home to nearly 300 plants? Close to 500,000 cars were manufactured in Alabama in 2005. Mercedes-Benz, Honda, Hyundai and Toyota all have a strong presence there.

And every one of those jobs is there for two reasons: First, because there are no unions in the south; and second, because Alabama gave enormous tax abatements and other financial inducements to the manufacturers in order to lure them to Alabama. Those inducements included things like building roads and railway lines to the plant locations at no cost to the manufacturer, but at great expense to the taxpayers. Hundreds of millions of dollars were given away.

It would be a major imprudence, in Sen. Shelby’s view, to use taxpayers’ money to help Detroit, but it was no doubt a highly prudent investment in the future of Alabama to set Toyota up with some free roads in order to get the jobs.

In fairness it must be said that if Alabama had not, then Tennessee, South Carolina and Michigan too would have happily done so. It’s a buyer’s market when you are looking for a location for a few hundred jobs.

Senator Shelby would be happy to see the Big 3 go under. He’s betting that will just mean more manufacturing jobs for his state, while the taxpayers of all 50 states will bear the cost of supporting hundreds of thousands of displaced workers, and their families, in the Midwest.

Where the hell is everybody?

Here’s my own little economic survey. I flew to St. Louis Tuesday from LaGuardia on the only non-stop flight in the late afternoon, and the plane was half full. I stayed at the Ritz (corporate dictate) and they upgraded me to a junior suite and gave me a free bottle of wine with dinner. I took a client to lunch the next day at Mike Shannon’s, a classic St. Louis steak joint that’s been around for years, and they could have shut down half the dinning room and played a half court game of 5-on-5. That afternoon at the airport I was early and got a shoe-shine. The shoe-man had been at the same stand for 30 years and said he’d never seen it so dead as it had been the past few months. My flight home (again the only direct option) was less than a third full; I got all three seats in the emergency exit row to myself.

These are not good signs. I can’t even remember the last flight I was on that wasn’t completely full, and I’m not one of those road warriors who belongs to all the travel rewards clubs and knows all the tricks; these were random perks.

Another troubling sign: the most direct path between my office and Grand Central takes me through Rockefeller Plaza every morning and evening, except for the period from roughly November 15 until January 15, when the crush of tourists visiting New York makes walking through the Plaza in the evenings impossible; I have to swing north and go cross-town on 51st Street over to Madison. But not this year. I’m still cutting through the Plaza because there are far fewer tourists – especially from abroad.

So it’s not just car sales and home prices that are down big. People are staying home in droves.

Post-turkey blues

I'm still awakening from my tryptophan-induced comma and basically have nothing to say, except that the market is down over 400 points now that it turns out we've been in a recession for over a year already. In lieu of originality, I shall reprint a joke recently sent to me by the Hankster, that perfectly captures the zeitgeist:

Young Chuck moved to Texas and bought a Donkey from a farmer for $100. The farmer agreed to deliver the Donkey the next day.
The next day he drove up and said, "Sorry son, but I have some bad news, the donkey died."
Chuck replied, "Well, then just give me my money back."
The farmer said, "Can't do that. I went and spent it already."
Chuck said, "Ok, then, just bring me the dead donkey."
The farmer asked, "What ya gonna do with him?"
Chuck said, "I'm going to raffle him off."
The farmer said, "You can't raffle off a dead donkey!"
Chuck said, "Sure I can. Watch me. I just won't tell anybody he's dead."
A month later, the farmer met up with Chuck and asked, "What happened with that dead donkey?"
Chuck said, "'I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $998."
The farmer asked, "Didn't anyone complain?"
Chuck said, "Just the guy who won. So I gave him his two dollars back."
Chuck now works for Goldman Sachs.