Barrel Of Laughs

So we committed the bulk of the US army to the Iraq invasion for the last six years, and one of the first pieces of real estate liberated was the Rumalia Oil field in the south near the Kuwaiti border. It was Dick Cheney's dream come true, but today Iraq put the field, and a host of other oil development contracts, up for bid. Guess who won the bid on Rumalia's 17 billion barrels of proven reserves? China, (with a little help from BP).

Yes, it seems that after a trillion dollar investment in Iraq, thousands of dead American soldiers, tens of thousands wounded, and national disgrace at places like Abu Ghuraib, Exxon Mobil turned its nose up at the price Iraq wanted per barrel for the Rumalia contract. China stepped in, knocked $2 a barrel of their price, and won the contract. They sent no troops to Iraq, lost no lives there, and squandered no Yuan. But they get the prize.

Big Oil has certainly dropped the ball in Iraq, haven't they? Can anyone tell me what the US got for the invasion of Irag? Wouldn't you just love to bid on a bona fide copy of the map of the Rumalia oil fields Dick Cheney was scribbling all over on the eve of "Operation Iraqi Liberation." Oh yes, since that clearly spelled O.I.L. they changed liberation to freedom, but make no mistake, the war was largely fought for rights to these oil and gas development contracts. Now it seems that the Chinese have pulled another fast one on Uncle Sam, using some of the $856 billion dollars reserves they have to simply outbid US companies for the paydirt. It's happening here, and in Africa, in Brazil and other places.

I've said all along that the Chinese were playing a real smart game. Instead of sticking their nose into everybody's business, building a network of military bases all over the world, telling everyone what they should or should not do,drawingup lists of "evil" countries, the Chinese are simply booking business, and booking it smart. "Very clever, these Chinese."

I wonder how much of Iraq's 115 billion barrels of light sweet crude, (#3 in the world), will end up shipping out to Beijing instead of Houston. The Chinese will need every drop they can get, because they just bought Hummer from GM. (OK, so occasionally they do make a dumb move). But after today's announcement on Rumalia, Dick Cheney must be grinding his teeth.

Reality Bites

The Home and Garden TV channel, the folks who brought us all those "go get 'em" shows about housing like Flip That House, Dream Home, House Hunters, and Designer's Challenge, have finally copped to our recessionary reality. Basically, this TV station was a top media cheerleader for the housing boom / re-fi extravaganza America went on from 2000-2006. Everyone was suddenly a real estate tycoon, swinging hot deals, flipping properties like burgers. Now these same folks would have trouble finding a job flipping the burgers themselves. The remodeling craze, where people sucked phantom equity out of their over-valued real estate to buy granite countertops, new carpeting, windows, appliances, beds, TVs, Winnebegos, and you name it, is also long over. So what is HGTV to do?

A while back they began to morph their programming with new shows like Rate My Space, Get It Sold, and Curb Appeal, trying to teach all us dumb consumers who followed their house flipping advice how to spruce up our bricks and boards so we could sell the darn things now. Fat chance. Now a new show has arrived, again to teach Average Duped Joe and Jane how to "reality price" their homes on the market. The show finds a couple trying to sell, then sternly walks them around the neighborhood showing them "comps" that have sold for much less than the asking price. The couples squirm in denial, and the show promises to revisit any sellers who don't capitulate to a lower house price to rub salt in the wounds in the months ahead.

Don't you just love the media? They couldn't see the Boom-Bust coming, and they fanned the flames of all the irresponsible house flipping and equity extraction. Now they are posing as the voice of reason and reality. It's disgusting. It reminds me of the Lending Tree TV ads where all the bankers were competing for our loan business. Now all you see on TV and radio are the vulture-like debt management companies hawking the latest scam.

When will Americans get it--the media is in no way connected to reality. It's designed exclusively to make corporations money by taking a bite out of your ever diminishing monthly budget. You are the mark. So I'd like to tell HGTV to take their new show Real Estate Intervention and shove it! Why don't they stage a show where their experts trott Landlords around who are still charging over-inflated rents left over from the housing boom so they can get a dose of reality and lower their rents? Better yet, why don't they start a show on useful home gardens--the kind that people can use to grow food. We're going to need them soon.

Community Co-Ops

There are two statistics that just seem to be getting worse each month, unemployment and real estate. What if we could find a way to put the two together for some good use? Let's take unemployment first. Ignore the official statistics published by the government, which show us just under 10%. They don't count people who's unemployment benefits have run out, people who have given up trying to find a job, and they fudge the job birth and death numbers in any number of clever, but distorting ways. Real unemployment, when all those things are considered, is now approaching 20% in this country, and is well ahead of the pace set during the Great Depression. For every new job available there are now five unemployed people in this country.

Now lets take real estate. We all know the housing industry has tanked, with sales of new and existing homes falling to all time lows. What people don't realize, however, is that a much bigger loan segment, some $550 billion in commercial real estate loans, is now having "trouble" securing refinancing. Those in the know say a big crash in the commercial real estate market is now just warming up. Think you are already seeing lots of vacant storefronts and for rent signs on office buildings? You ain't seen nuthin' yet.

But what is we took these two negatives, multiplied them by each other and found a way to come up with a positive? The answer is community co-ops, where empty commercial space that would otherwise sit vacant is made available to unemployed people in every job area as a place to market and trade their unique skills.

A possible solution will require realtors to begin innovating and evolving their business models to reflect changing economic circumstances. Those who hold fast to the old habit of credit check, first month’s rent, security deposit and a lease will see their property sit empty. And buyers will be few and far between. Even the few who do step forward to buy will have difficulty obtaining financing and more escrows will fail than those that close. But what if the space could be used to stimulate the new local economy that will inevitably grow to replace the old? Creative use of the space could turn it from an empty liability to a profit center for forward thinking brokers and agents in the badly depressed real estate market.

What if all the vacant commercial space in the business parks could be turned into co-ops open to anyone to come and utilize space and resources for business purposes? Each building could cater to a given area of the economy. There could be a computer co-op where people offering PC skills, graphic artists, web designers, writers, photographers congregate to offer their services in otherwise vacant office buildings. There are thousands with skills but without the money to open and finance a business along traditional lines. And there are thousands more who will be losing traditional jobs—people who have a wide range of skills. A commercial co-op creates a business community center focused on its defined skill set. People can come to the center to take advantage of the space for meetings, to use computers and other peripherals, to find other talented artists, image specialists or designers, locate a network guru. They could sell, trade or barter services, and the property owner just charges a set fee for daily or weekly access to the entire co-op.

Imagine a center like this focused exclusively on clothing, where women could come and make their own clothing, buy the necessary cloth, access sewing machines, or just sell or trade items from their own wardrobe. The way women love to dress, shop, and network with one another would see a place like this explode with activity in no time at all. Now expand the idea to include maintenance services in the blue collar sector where all the laid off construction guys can come and join mechanics, plumbers, electricians in a co-op. Imagine an electronics bazaar where people can bring their TVs, audio equipment, cameras, iPods, cell phones, computers, Playstations and then buy, sell or trade. Our households are overflowing with this stuff anyway, and because they won’t have money to buy new, people will adapt and “make do” with existing products. The idea of planned obsolescence, constant upgrading, and throwing the old away will give way to frugality, reusing the old, making do with what you have. Imagine a food co-op selling home made everything: pastries, pies, jams, home grown and home canned foods. Imagine a place like the existing antique stores one usually finds in the more distressed parts of most towns, co-ops where people can come to sell or barter anything.

How does the property owner make money? Instead of collecting rent from a single tenant, he uses the realtor and his agents and brokers as property managers for the co-ops. They collect revenues by just issuing access passes to anyone using the facilities, either day passes, or weekly or monthly passes--in amounts people can easily afford. The idea is to get the space thriving with activity, for it is this activity that will generate the revenue return for the agent and owner over time.

Americans are already familiar with the shopping club concept. They have membership cards to large warehouse stores where they look to buy new goods cheap. The same idea can be applied to buying, selling or trading existing goods when people don’t have money to even to visit “Price Club” any longer. Think of it as a local eBay, right in your otherwise abandoned business park. The Property manager deducts their fee, and the rest goes to the property owner. The more active the co-op is, the greater the revenues, which could easily exceed amounts collected under a more traditional lease/rent agreement.

This is the sort of creative thinking we need, takign two negatives and makign them a positive, and the basis of a real recovery on th elocal community level--not on the level of stocks, bonds and securities traders. They are th eones that caused this collapse, now it's up to us to fix it.

Empty House, Full Heart

It is said that if you put your hand into a stream you touch the last of what came before and the first of what is yet to come in the same moment. Every moment of life is that way, though there are times when we can become more keenly aware of this.

Have you moved recently? There comes a moment, after all the planning, and boxing, and packing and masking tape, where it is just you with that empty house, and a heart full of memories, hopes, expectations, or perhaps regrets--emotions that have run their course while others struggle to be born in that time of uncertainty, all in the same moment.

Millions of Americans moved this year, some because they lost their home in this crushing economic downturn, others to look for new jobs, still others moving on after the loss of something more personal--a dream, a chance at love, a future they had embraced with a full heart, but one that failed to bloom and grow. Moving is a unique and special time. It is the making real of these things in a life, bringing thoughts, hopes, and pain into the light of a real circumstance where these inner states can be touched, felt, seen by all. When you move away from a place, or toward another place, you are making an outward acknowledgment of a choice. Moving is a kind of truth telling about your life that is visible, and undeniable. Your family comes to help you, your friends rally to support you, but in the end there is that final lifting and carrying that only you can do. It is yours to take the last of what was there with you in a full heart, and then give it away to that new place, or job, or person that awaits you, letting your life energy flow into the new moments ahead like the water of that stream.

This is the eternal flow of the Tao that Chinese thinkers like Lao Tse have expressed. It is the sublime moment on the cusp, where Yin is ready to flip to its opposite Yang, and the cycle of life begins again--for nature abhores a vacuum. That empty house will soon be full again with new life, and all the things you packed away and consigned to the moving van will soon find their way to another empty house that you will make yours. Then, as you enter the tail of that new Yang energy, the process of rebuilding a home, a new life, begins again, unpacking those boxes into new space, and unburdening your heart as well. If you are fortunate, there will be another open heart waiting for you somewhere across the miles and hours as you travel on, and ready to receive all you have in that full heart, help you unpack it, and find that special place in your new world where it feels and fits just right.

Thoughts like these come from simple mindfulness in times of transition. They soften the sometimes hectic and trying time a move can be, for a person, a family, a company, a nation. What we need now, as a people and as a nation, is this same mindfulness of our situation now, an understanding that these are but trying times of transition and change--not the end of the great nation we have been. Generations before us struggled, built, and also suffered loss and hard times. Our house may seem empty now, with lost homes, jobs, an uncertain future, yet this is but the last of what came before. Be mindful that in this time of change there is also the rest of all that is yet to come--a new sustainable and value centered America that we can build together if we do that last heavy lifting and carry our full hearts forward with resolve and hope.

Do I sound a bit like Barak Obama on election night? Why not. You have to start somewhere, and mindfulness, and right thinking is a good beginning. The rest is yet to come.

Depression Redux?

Marketwatch ran an article on Wednesday with the prominent tag line that the Fed says a "Second Great Depression has been averted." The headline was "Fed Breathes Huge Sigh of relief!" Perhaps the chairman should have a closer look at some actual economic data before he makes such pronouncements. Here is a link that clearly shows we are well into a Depression scale event, and tracking or exceeding losses sustained in the Great Depression.

It's too bad that the Main Street economy in the US isn't so cheery either. Foreclosures continue at a breakneck pace. California's situation was so bad they had to pass an emergency bill to freeze foreclosures for 90 days to try and stop the bleeding. But the Option ARM and Alt-A mortgage loan reset waves have only just begun. With the default rate on these loans already at 35%, just where is that number going when they all start resetting to higher monthly payments in the next 12 months? (Hint, through the roof).

Unemployment is also continuing unabated. California is at an official 11.8% U-3, which means the more realistic U-6 number here is well over 18% now. My guess is that we will have a U-6 of 20% unemployed nationwide by the end of 2009. Can anyone tell me where new jobs will come from? Don't expect the Real Estate market to chip in, as it will be a dead market for a decade. These numbers haven't been this bad since 1930-1931.

As unemployment gets worse, the last refuge of American spending, the credit card, is no longer an option. Cards are maxed out, and those that once had open credit had their lines reduced and interest rates hiked. Credit remains frozen on Main Street, and now you can't even transfer a credit card balance with JP Morgan Chase without paying a whopping 5% fee. No more using one credit card to pay another there.

All this points to no dramatic increase in "consumer spending," which is supposed to be 70% of the economy. So what it comes down to is that nothing has changed in housing, unemployment and consumer spending. Business can't get credit either. But hallelulia! The Fed has spoken and they say there will be no second Great Depression.

Yet the news from financial gurus was equally cheery in 1930, as headline after headline declared the worst over and a recovery imminent. So I'm not closing the book on "Great Depression II," nor am I heaving any great sigh of relief now. There's just entirely too much pain in the pipeline still, and this is while oil prices stay relatively low. Remember $150 oil? We'll visit those numbers again in the not too distant future.

Omens

A couple of omens hit the net this week on Monday. The markets closed below both their 50 and 200 day moving averages, with the DOW closing at 8339, down about 200 pts. The second omen is that insider trading by corporate CEOs and execs has been surging. They are sensing the spring “Obama Rally” has now lost its steam and dumping personal holdings of stock in their own companies at a pace exceeding any set in the last two years. Calls to mind those rats being first off a sinking ship, doesn’t it? Both these are strong “sell” signals, and the bulls are on the run.

Another strange story came from an International Trend Forecast letter. It claimed that the US State Department is quietly issuing instructions at certain overseas embassies to begin stockpiling foreign currency—enough to last a year. The post claimed US dollars were being shipped to make the currency exchanges, and the gist was that “something was about to happen” within the next 120 days that would strongly threaten the US dollar and possibly result in bank holidays here in the states. What might that something be? A devaluation of the dollar? A default on US Treasury debt? Both are rather frightening prospects, but I am beginning to pick up a lot of net “chatter” about events emerging in the next 4 months, in the early to mid-autumn time frame. I hope you’ve been feeding your piggy bank.

Now here’s another one… Kellogs, one of America’s largest food manufacturers, has been soliciting food donations from the public to “help it fight hunger.” Apparently community food banks that feed the hungry haven’t bee treated to the lavish sums of government money that other banks have received. The poor go hungry while CEOs cash in stock and muse over what color their next $48,000 office carpet will be and which private jet to take to the spa this weekend. It seems a tad odd. Couldn’t Kellogs manufacture enough extra food to meet hunger needs in America without asking Average Joe for a donation, or is it just that it costs money and would hurt their bottom line? When a food company starts asking us for donations I get a real unsettled feeling in my gut, and it’s not even dinner time.

Meanwhile… Iran has begun three days of air force “maneuvers” in the Persian Gulf amid accusations of CIA meddling to foment dissent after they rigged their election. Heaven forbid that anyone should ever protest a rigged election! The US navy has given instructions to play it soft and cool in the Gulf to avoid any potential conflict with Iran. It is also tracking a North Korean ship suspected of proliferating arms or nuclear/missiles technology. Do you see two smoldering fuses here? North Korea has been positively manic of late, threatening to nuke anyone who even casts an unseemly glance their way. I note that foreign wars have long been wonderful covers for domestic malfeasance, such as we have now on Wall Street…which takes us back to the first two omens on this list

As the Wicked Witch of the West might say..."Oh, what a world, what a world, what a world!"

Change.gov?

If you thought, hopefully, that Barak Obama was going to finally end the collusion of powerful banking interests and government, and actually give us the change we were so longing for, by now you are getting just a tad disappointed. I was a staunch Obama supporter, believing his magnetism, popularity, and intelligence would see the collapse of Wall Street Ponzi securities trading scams as the perfect opportunity to truly set this country on a new course. I was sadly disappointed to see men like Rubin, Geithner, Summers occupy key posts as economic advisors—all men bred from the Wall Street / Banking industry, and certainly destined to return home to that world once their brief public “service” ends.

But it is clear now that, regulation reforms aside, there will be no major change in how the game is played by Wall Street and the Banks. The big securities trading schemes came to a grinding halt when everyone finally realized that this was traffic in relatively worthless paper that created no real value. It was shadow wealth, traded and hoarded by shadow investors all across the globe. Instead of ending the mess and really reforming how our banking system works, we’ve thrown $14 trillion into the empty gas tank on Wall Street in a desperate attempt to restart the engine.

Why? So the banks can get back to the crap tables and roulette wheels they called SIVs, CDOs, Swaps and Derivatives? That appears to be the whole of it. Bernanke and Geithner are all about restarting that game. In the meantime, to mix metaphors, the engine of the Main Street US economy has stalled and died. We are now running on vapor. Business and consumer credit, the fuel that drove our economy, has contracted so dramatically that no one had the money to build, expand, hire or buy as they did in those halcyon days of yore we all still remember.

If the Fed manages to restart the securities game rest assured that all the good old Boyz will be back. Those that dodged the bullet in the last 6 months, the Goldman Sachs crowd, announced record bonus payouts this quarter. Isn’t capitalism wonderful? The same players and powers will take their seats around the card tables, and on we will go, because they have all been deemed “to big to fail—which was the first mistake made by Change.gov.

The notion that a bank is too big to fail is patently false. Nations have failed, empires have failed, entire species have failed. Even stars die. These same institutions and players that have brought us to ruin should be dismantled, and a new system of smaller community banks set up in their place. And when these huge insolvent banks go down they take with them all the bloated CEO salaries, "preferred" player stock equities, and hocus pocus "assets" hidden in level three accounting tables, wiping the slate completely clean. The government protects only the FDIC insured deposits, which will be a Herculean task in and of itself. The Big Boyz who made all these bad bets just take their losses. Period. Then we start over, using any funds we can then manage to scrape together to ensure proper capitalization of the new community centered banks, all under new management, and with stringent new rules and regulations to prevent this from ever happening again. It means the end of an era of greed and corruption on Wall Street and in the board rooms of the banking system that boggles the mind every time I think on it, and good riddance.

But I’m not holding my breath that this will ever happen. Change.gov has not proven itself capable of “seizing the day” thus far. It’s the same old game, with a new dealer. And that is very sad.

Line in the Sand

CNN reported that Iran's supreme leader Ayatollah Ali Khamenei drew a line in the sand and told protesters to be cautious after he officially certified the victory for hard line candidate Ahmadinejad. He defended the integrity of the election, denied allegations it was rigged and more or less dispensed with all the hanging chad in one fell swoop. The Powers That Be have spoken. Now what will the people do?

Over here, I ask that same question this month in my June article. Americans may be "mad as hell," but they appear to be taking this whole mess on the chin. Why? What will it take before Americans decide they have seen enough money funneled into the financial system to pay off bad securities bets and wealthy foreign "counterparties?" The Wall Street Journal ran an article today on how the big CEOs flew to resorts on private jets, even after we mailed them their $50 billion in free taxpayer money. What a life. The game just never ends, and these men seem to have no shame at all. Meanwhile that same issue showed Latvian pensioners at each other's throats as retirement money dries up in that beleagured nation. Is this a sneak preview of what we will have here if pension funds go bust?

All across this country the legacy of the Fed Boom-Bust cycles, and the wild leveraged speculation by the banks is plain to see. Foreclosure rates are so high that states have to pass laws to slow them down. Unemployment is increasing at a rate far in execess of the Great Depression. 401ks are evaporating and still millions of Americans go hungry, go without shelter, and without health care. Do you have any idea what the $13.8 trillion we just gave to the bankers would have bought if given instead to the American people? Read my article, and see how long it takes before you, like the millions of Iranians over there, get "mad as hell."

Writing On The Wall

The default rate for credit cards has reached 10% in companies like American Express, Capital One, and others. And looking at their delinquency rates, the credit card companies know there's a lot more coming. Debt laden consumers are now struggling just to make ends meet and finding that even the minimum payments on their portfolio of plastic can add up to many hundreds of dollars each month. When you make payments that high, in a cycle that never ends because the interest is near 30%, you eventually get into a situation where any extra spending you do inevitably must go on the credit cards. After all, you think to yourself, I paid the banks $600 this month. This new iPod can go on my Visa. But that option is diminishing month by month as banks scale back new card offers and slash credit lines to the bone. Total outstanding credit is shrinking for the first time in US history. The charge and spend party is over, and the banks see the writing on the wall in big bold letters spelling "default."

The old game was to analyze a person's income and then load them up with credit lines the banks knew they could not easily pay off if used. So customers were given generous initial lines of credit at $2000, and then this was quickly scaled up to around $5000 per card with little "congratulations" letters telling you what a good boy and girl you were, and how you deserved these three balance transfer checks that would also increase your credit limit by the amount you chose to transfer. Once sufficiently encumbered with debt, the banks would wait for the inevitable late payment, jack up the interest rate, and "bingo" you now worked for them in an unspoken 20 year contract of revolving debt nightmare.

Then they lobbied congress under Bush and Cheney to prevent people from easily discharging their debt and getting a fresh start, which has been guaranteed under US law since the time of Thomas Jefferson, who used the bankruptcy law to throw off usurious debt burdens in his own life on more than one occasion. The credit game was simply too sweet for the banks, with interest, fees, and customers for life once they were properly saddled with enough debt. In the eyes of a banker, the guy who pays off his card balance each month is a dead beat. The people they loved were customers who used credit, always carried some balance, and occasionally hit a bump in the road and paid late. This was their bread and butter customer in the credit business for decades, but no more.

The credit card reform bill is going to force banks to stop the sudden, unexplained rate hikes, the exorbitant fees, the policies of double cycle billing, and applying your payment only to the lowest interest rate balance first to prevent you from ever paying off other high interest rate balances on the account....but not until next year. The banks made sure they had a liberal grace period to continue squeezing customers until the new law takes effect. And the squeeze is on.

Customers are finding interest rates increased across the board, credit lines reduced, cards canceled. The consumer's answer, without the ability to juggle the bills by transferring balances as before, is to simply default. The banks have realized that if people are willing to simply walk away from their home in an underwater mortgage, they will have no qualms about throwing off this burdensome and unfair credit card debt as well. So the latest spin is to call the delinquent customer and offer them a deal--some banks settling the entire balance owed if the customer agrees to make a 50% payment, and some even settling for less. The banks just want anything they can get on the debt, and are increasingly willing to deal.

Of course, this means the FICO scores of millions of Americans are steadily decreasing, because again, the banks set up the scores to award higher numbers to people who used credit liberally and carried balances. In effect, the banks punish those who they cannot rope into the credit card pen, branded for life like all the rest.

After trillions in public bailout money poured into the vaults of the banks to bail them out from their massive and recklessly leveraged securities losses, this squeeze on the consumer now is just one more cruel twist of the rope the banking system has around our necks. The banks lost billions, now we pay. Consider this... If you had given the $13.8 trillion banks received in the last 6 months to US citizens instead, you could have paid off all their mortgages, car loans, credit card balances and given us all a fresh start. Or, Mr. Obama, you could have paid for every American citizen's health care, cradle to grave, for 100 years. Instead we gave it to the likes of John Thain, Ken Lewis, Vakrim Pandit and others--the too big to fail banks that created this problem through fraud, secrecy, deceit, greed and reckless policies. And the bank books still remain closely guarded secrets. The bad debt remaining there is so massive that it is hidden away and manipulated with accounting rule changes. Is it any wonder that banks are cutting deals with Average Joe to prevent further losses on their credit card game?

My advice: Never use a credit card again. Just use a debit card or better yet, pay cash. No cash? Then you just don't buy. It's that simple.

WYSIWYG ?

In case you haven't noticed, your TV signal went the way of the phonograph record and cassette player this month. It's now and all digital signal. Americans have grown up with TV. All those analog channels have been living with us, as my poet friend Richard Gylgayton might say, "like poltergeists who invite themselves to my house for dinner, who plan to stay as long as they want, and who will not help with the cleanup."

I remember the very first color TV broadcast days, when we oohed and aahed as the Wizard of Oz switched suddenly from black and white to full "living color" when Dorothy landed in Oz. For many, the TV is such a dominating presence that it is indeed like another member of the family, always on, yammering in the living room, staying up late each nite. And yes, it does look as if the TV itself created that mess in the living room when you stagger in the next morning for the chatty new shows that start our days. Once we could mute it and simply walk away, but now it has evolved to a flat screen digital behemouth, sprouting surround sound speakers and a subwoofer that delivers all the earth shattering realism possible when our DVD or Blueray movies spin out the latest blockbuster flick. The TV can now vibrate the walls of your living room! It's as close to Huxley's "Feelies" are we are likely to get for a while.

Well, we started with 10 or 12 channels, and took the ride through the 200 cable stations over the years. Personally, I have devolved down to 5 DTV signals that I can pull in with a digital antenna in my viewing area. Frankly, I liked the old analog world better. Yes DTV is a sharper image at times but, to my eye, it does not handle motion well, and when there is any interruption of the signal your screen just dissolves into a jumble of squares--much worse than a degraded analog signal. Oh well, I watch no more than an hour or two of TV a week, so it's no great loss. I have forsaken TV as a carrier signal of reality long ago, and if I want the walls of my room to vibrate, my DVD or stereo system still does the job well enough.

That said, the one thing that is just a tad disturbing about this latest "advance" in our multimedia technology is that it is fully editable at the source end. It was always said that one could never believe what they read in the papers, never believe the government, etc. But there was something about a photograph, a visual image, that did not lie--that is until Adobe Photoshop showed up. Still, Americans came to believe the images they saw on broadcast TV. It was a WYSIWYG world. (What You See Is What You Get). TV had tremendous power to command our attention and persuade us that this was, in fact, reality. Analog signals could be edited, but not with the ease of a digital signal. Cutting and splicing is in no way comprable to the creative power of digital special effects, now so advanced that it can make the arrival of Martian tripods seem a completely believable event--just as Orson Wells and his crew had thousands of people scared out of their wits when he first broadcast "The War of the Worlds" on radio. Now we live in a world where I will never be quite certian that what I am seeing on the screen is really there. If done right, a good effects team can create something that would seem entirely convincing, and we are habituated to believe our eyes, and take it on faith that what we see is real.

Yes, it's just a tad disturbing, isn't it? We don't live in a WYSIWYG world any longer. The only way you can recapture that certianty is to be there in person and actually witness an event. Like so many advances we have made in our Brave New World, truth is the first casualty. Well... Good luck at 720p or 1020i resolution folks. And, to quote a line from one of the first digital blockbusters to delight viewing audiences, "may the force be with you!"

Life Is What Happens To You

Life Is What Happens To You After You Make Your Plans...

That's a quote I've been fond of for years, for it captures so much in one simple line.--the ever uncertain nature of the world and the marvelous creative energy that lies in every moment. No matter how patterned or steady your life course might seem, the world has a way of manifesting something completely unexpected at times. Events emerge from the infinite possibilities of the future, and it is said that at any given moment you are exactly in the right place where any possible future can take you.

Such thoughts urge us to be present, and fully aware, of this very moment, open to whatever it holds and any possibility it may bring. Anything could emerge from the mysterious weave of life--a sudden opportunity or challenge; a tragic event, or a chance encounter that leads to a new love. Yours is just to be there when it happens, and not lost in any of a thousand places we hide each day, distracted, amused, bothered, frustrated or impatient--too busy with our plans to realize what is happening. These "thousand nothings of the hour" as Matthew Arnold wrote in The Buried Life, might seem inconsequential, but could also hold the seed of some major transformation in your life, if you but attend and open to the energy that is present.

You will know such moments when they come to you because of the easy, effortless flow of your life into the change that presents itself. Change can sometimes be tumultuous and jarring, as in events like the 9/11 attacks. But it can also come in the soft first light as you meet a new person, a quiet transition that happens for you when you realize you completely resonate and rest in the other, without any pretense, or strain, or effort of any kind. New love is this way. It feels like a suit of clothes that was made just for you, an easy fit, and you just feel great. So pay attention the next time you are at Starbucks! You could meet someone at a cafe that could change your life forever!

Arnold talks about the constant din of the world, and of how we strive so that we sometimes lose touch with our inner selves, that buried stream of life within us that flows on and on, even though we do not fathom its depths. This "unregarded River of our Life" is always there, whether we heed it or not, and each moment presents us with a chance to put our hand into the stream, if we can but relinquish our expectations and just be present. There is a Zen poem that goes: "He would not give me lodging! How disagreeable it was. But yet, through his kindness, I can sleep this night beneath the Cherry Blossoms, under this moonlit sky!"

So in every moment, even those that seem to hold loss, frustration, setback--those rocks in the stream we all encounter--find a way to see what is present and open to the gift that moment could become for you if you simply pay attention there. Anything could happen! So whatever it is that besets you, good or bad--a lost job, or home, or love--just keep your heart open and pay attention. You could miss your connection at an airport and suddenly realize you now have that time you've been wanting to write a letter to someone special. You could lose something, or someone, you once thought you could never live without, and discover that was what simply had to happen in order for the the bounty of this moment to be before you now.

And you will know it to a certainty when you find the stream of your life in the here and now. Perhaps you made a recent move, or changed jobs, and the place just seems so very right when the change comes. That is the easy flow of your life into the newness of here and now. You are more awake at such times, bright with the energy of discovery. And for new love Arnold has this to say:

"Only--but this is rare--
When a beloved hand is laid in ours,
When, jaded with the rush and glare
Of interminable hours,
Our eyes can in another's eyes read clear,
When our world-deafened ear
Is by the tones of a loved voice caressed--
A bolt is shot back somewhere in our breast
And a lost pulse of feeling stirs again;
The eye sinks inward, and the heart lies plain,
And what we mean, we say, and what we would, we know.
A man becomes aware of his life's flow,
And he hears its winding murmur, and he sees
The meadows where it glides, the sun, the breeze...
The hills where his life rose,
And the sea where it goes."

So pay attention! Someone could take your hand one day and dip it gently into the buried, inner stream of your life--and they could do this just with the sublime look of joy they have on their face when they bite into a drumbstick ice cream cone, covered with chocolate and peanuts!

Life will never work out just the way you wish, or hope, or dream. But it will work out just the way it is now--in everything that happens to you after you make your plans. Seize this moment in the palm of your hand and you are truly alive.

Suitcase Bond Bomb

Everyone was once worried at the prospect of someone sneaking a suitcase nuke into the US. Yet this week a suitcase full of an equally explosive story cross the wires, though it was largely ignored.

A pair of unsettling stories appeared in the bitstream in the last day, one talking about the Japanese quietly attempting to offload about 25% of their US Treasury bond debt holdings, and then this headline: "Italy Seizes $135 Billion in US Treasury Certificates." Asia Times reported: "Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US $134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland." The bonds were secreted in a simple travel suitcase, heading for Switzerland, the land of secret bank safety deposit boxes.

The story was unclear as to what was up with this seizure and speculated it was either a surreptitious attempt by the Japanese to dump bonds, or perhaps a massive counterfeiting operation. In any case, the story hints at the growing discomfort of foreign sovereign governments holding US Treasury Debt, particularly China ($770 Billion) and Japan ($686 billion). Treasury bond prices have continued to slip in spite of the Fed's effort to bolster this market by simply printing money and buying T-Bills. As prices slip, so do the value of these foreign holdings, and the value of the dollar itself. It should be no mystery that China and Japan want to divest themselves of some of this debt. It's the cloak & dagger secrecy of it that I find curious, and also the fact that the US media largely ignored the story. (I suppose that should come as no surprise).

The root of this tooth is the ominous prospect of a default should these bond markets collapse. Since the once "almighty dollar" is really backed by nothing more than confidence in the US, what happens if the massive debt load simply becomes unmanageable? And isn't it now astounding to think that if nations like Japan and China do not continue to buy our debt the US would be in grave peril? Treasury Secretary Geithner's recent trip to try and assure the Chinese their assets are safe may have also been a cheer leading campaign to bolster the faltering bond markets. He was practically laughed off the stage by Chinese university students.

Is the US becoming a laughingstock of the world because of our massive and unsustainable debt?

Pandemic - It's Official

Well, I started this blog writing about the possibility of a pandemic outbreak of the H1N1 "Swine" flu, and today the World Health Organization made it official. The virus has spread sufficiently, and with a high enough infection rate, to now be considered a serious pandemic threat. More than 27,000 cases have now been reported, with nearly half of those here in the US (13,217). Another 5,717 cases have been reported in Mexico, and over 2000 in Canada, so the North American Continent is ground zero for any potential second wave this fall if the virus returns.

The key question I have is whether the virus will mutate into a more virulent form or not. We have had conflicting stories on this, with some researchers claiming the mild initial outbreak was due to a weaknesses in the virus that makes it more difficult to infect the lungs. Only 141 people have died from the virus, and normal flu kills between 300,000 and 500,000 people each year. So by any measure this "pandemic" is extremely mild, at least in this initial wave. Yet WHO's definition of "pandemic" has nothing to do with the severity of an outbreak, but instead defines a spreading infection pattern that is global, (now in 74 countries). So we could just have a rapidly spreading, yet very weak virus here, that does not pose any serious threat.

That said, WHO seems genuinely concerned. What do they know about how the virus is mutating that the public has yet to learn? And why is the vaccine taking so long to develop?

Green Shoots?

Just how green are the green shoots the news pundits keep talking about, glowing as they are in the light of the Spring rally on the stock market? Since what we are really facing, in our personal finances, businesses, and as a nation, is a crisis born of too much debt, then it may be instructive to see just how we are doing in that arena. Mortgage debt that could no longer be serviced by the borrower triggered this crisis. It that all behind us now? Not by a long shot.

McKinsey Research released a report analyzing bad debts incurred to date and estimating how much more is likely to come in various categories. Here are the results.

In Residential Real Estate we appear to be half way through the problem, with $640 billion lost so far and another $640 billion still to come. Most of the sub-prime defaults are behind us, but there are still huge waves of Alt-A, Option ARMs and other loan resets ahead that will keep the housing bust crashing in the foreseeable future.

Commercial Real Estate is another ticking time bomb. While only $40 billion in losses has been sustained so far, McKinsey expects another $390 billion in losses here as empty strip malls, business centers and apartment complexes fail to secure refinancing and default. That's more bad news for Main Street.

Corporate and Industrial loans have only sustained 10% of expected losses, just $30 billion so far while another $300 billion is in the pipeline of pain.

Leveraged and High Yield Loans have lost $90 billion so far with an estimated future loss of another $330 billion.

And as for Average Joe, consumer loan losses so far have totaled $130 billion, but another $530 billion in defaults may come in the next 18 months according to McKinsey. That's a lot of bad plastic!

Add it all up and you will see that we are only about one third of the way through this debt crisis. $930 billion in loan losses have been sustained to date, but another $2.19 trillion are still to come. This means you can expect the cirsis in housing and commercial RE to continue indefinitely, at least the next several years. On Main Street, expect unemployment to continue exceeding Depression era levels. Our "official" 9.4% U-3 number now, and the more realistic 16.4% U-6 figure were reached just 8 months after the market crash, while it took over 24 months for unemployment to reach these levels in the Great Depression. In fact, our current U-6 unemployment is well ahead of the 1931 figure of 15.9% recorded a full two years after the 1929 market crash.

With home equity gone, job loss continuing, debt default ruining credit and FICO scores all across the nation, where in the world do you think the "recovery" will come from? People without jobs, with damaged credit and with no collateral cannot borrow. Why would banks lend in this environment?

The hard facts--we are in the bottom of the third inning in this economic crisis. Our starter, (Bush) has been relieved and the government bullpen has been working overtime ever since. We Yankees are a can do bunch, but I'm not sure if even our very own political version of Mariano Rivera (Obama) can save this one. We'll just have to go through the deleveraging process with all this bad debt before we hope to see any real recovery.

Now show me the green shoots.

The World Is Their Playground

"The World" came to Monterey Bay this week, a massive cruise ship that sells residential suites ranging from a $1 million dollar studio apartment to more lavish accommodations in the $7.5 million range. The units are the permanent living space for the obviously wealthy folks aboard and, quite literally "The World," (the ship's name), is their playground. The vessel sports two restaurants, a study, elegant spa, gym, pool deck, plaza with shopping, and it moves from port to port, dropping anchor all over the globe. Think of it as one long vacation, a lifestyle of perpetual tourism, dining, shopping, lounging, and I suppose the occasional business phone call to a broker to keep the earnings from vaporware stocks and bonds flowing.

Operated by a Miami based company called "ResidenSea," the ship is billed as: "the only private community at sea offering residential options and rental travel experiences to the discriminating traveler." And I imagine the word "discriminating" has dual usage here, because Average Joe isn't likely to be found anywhere aboard, unless he works on the kitchen staff.

There is something just a tad unsettling about this obvious display of wealth and privilege in a world where so many go hungry each day, and scratch out a bare minimal existence. Yet it is a microcosm of how the wealthy insulate themselves from the rest of the "real" world with their millions. Some may say they've earned such a life, but let's face it, money begets money in this world, and much of the wealth that has come to the upper crust of our society was largely unearned. Consider the big Wall street insiders, men who were paid more money in a single month than the average American could make in decades, and all for basically bankrupting the institutions they "served" by setting up enormous derivatives trades that are now one huge financial albatross.

The Rich Dads on "The World" (average age 52 aboard the vessel), spent 2 days in Monterey Bay and are now heading north to San Francisco and ports 'o call further up the coast. They are undoubtedly oblivious to the housing bust, recession, record breaking unemployment, and all the rest of our collective pain as they go merrily on their cruise, where they have been living and playing aboard their ship since 2002. And all across America you will find enclaves of wealth like this in secluded, exclusive locations where the wealthy 1%, who own just about everything frolic and dine and play.

The top 1% now own over 42% of all wealth in the US.
The next 4% own an additional 27%, which means the top 5% hold 69% of the bucks.
The next 5% hold 12% and the next 10% hold another12%

This means the rest of us, 80% of the population in the US, are left with just 6% of the wealth...and we pay most of that back to the Rich Dads in rent, mortgage payments and loan fees. See how capitalism works? The old saying that the rich get richer and the poor stay poor is so very true.

The City

I spent the weekend in one of America's grand old cities, San Francisco, wandering from Nob Hill to Union Square, to North Beach, Chinatown, Fisherman's Wharf and Ghirardelli Square. The city was alive with the energy and movement of people seeing the sights, dining at street side tables, packed into the fabled cable cars like sardines. The locals sat in their favorite spots, reading books or listening to music on their I-pods. The tourists, all marked by the camera they were carrying, snapped photos of everything in sight--the beautiful skyline, architecture, busy streets, cable cars.

With all the people shopping and browsing, cars seemed so ill suited to this busy inner city environment, just something that actually impeded the flow of energy there. But after a four block descent from Nob Hill, down fairly steep hills for breakfast, the last thing you want to do is climb them again. So I found myself in what looked to be a 30 minute line to board a cable car, a five block uphill ride that would have cost our party of four $24. until I suggested a $5 cab fare would be a better choice. Cars do have their uses in some capacity, but I found myself wondering why anyone would want to take a personal automobile into the heart of a city like this, where parking is virtually impossible to find and you spend more time riding the brake than the gas pedal. If we could find a way to get us quickly from one city to another, and then set up more efficient ways to move pedestrians about, we might be able to say goodbye to our beloved cars, along with GM and Chrysler. Our own car sat unloved in an expensive parking berth the whole day, useful only when it came time to change locations and head out of town to Sausalito. In thinking about our situation now as a nation in the fire of decline and transformation, the fate of the car will soon be decided. Yet at the moment we are "wandering between two worlds, one dead, the other powerless to be born," as Matthew Arnold wrote. What will replace our cars? Are we even thinking about it, let alone designing and building that new transportation system? How long will we wait to begin the enormous task of building a new world on the ashes of the old? Our whole infrastructure is still set up to accommodate cars and credit card carrying shoppers, both in evident decline.

During the visit we must have passed all of 500 stores selling gifts, clothing, food, antiques, and Asian artifacts, and I wondered how long it would take a person to simply visit each store in Chinatown. I have always been drawn to all things Asian, and was simply thrilled to be immersed in a place where dragons and tigers glowered from bamboo wall hangings, while other paintings depicted elegant ladies sitting beneath ornate parasols in their traditional Chinese Qipao dresses. I have long stared at the delicate strokes of Chinese calligraphy, wondering at the hidden meaning, and ascribing to each character some hint of the deep mysteries of Buddhism and Taoism, religions I have studied for years. At long last I had a native speaker of Mandarin with me to actually tell me what all the wall hangings were saying! Looking longingly at a beautiful red banner, I learned, to my chagrin, that it simply read "Merry Christmas / Happy New Year!"

We wandered into 5 or 6 stores, barely 1% of the places I saw on just a few of the busy streets. How did all these businesses survive? One store had a carving of jade carp priced at just under $5000, and I wondered how long that item had been sitting there--possibly for years, unsold. While there was clearly no sign of the dread "recession" in the heart of San Francisco, I wondered what the city life would be if all the tourists, about 50% of the traffic, were removed. Were we to be a nation of tourists, taking pictures of each other while the larger infrastructure of our society slowly came unraveled around us?

Yet there was so much life and energy in the city--so much art and creativity, a dynamic flow that had everyone smiling, walking, talking, gawking about with the wonder of what human beings had created there, an eclectic mix of cultures, languages, art, cuisine, and craftsmanship. There was history, modernity, magic in the city, and I felt it strongly. And yes, I knew to a certainty why Tony Bennett could sing that he left his heart in San Francisco--for I found mine there that weekend, born again and glowing with the light of early love. And something told me that the same sweat and desire and life that had raised up this beautiful city would survive this period of change and transformation, and build something new and equally wonderful. We may be feeling our decline now, but there is yet a spirit and inner strand of courage and creativity that will see us through. As Tennyson wrote in his epic poem Ulysses:

'Some work of noble note, may yet be done,
Not unbecoming men that strove with Gods.
The lights begin to twinkle from the rocks;
The long day wanes; the slow moon climbs; the deep
Moans round with many voices.
Come, my friends. 'T is not too late to seek a newer world...

Tho' much is taken, much abides; and tho'
We are not now that strength which in old days
Moved earth and heaven, that which we are, we are,--
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.'

Rich Dad Blues

Well another "Rich Rad" was formally charged with fraud by the SEC. Marketwatch reported that Ex-Countrywide CEO Angelo Mozilo "with securities fraud for failing to disclose credit risks, concerns and uncertainties they had with the company's future, and in particular, problems with the credit-worthiness of the company's Pay Option ARM loans." Mozilo was also charged with insider trading. Basically the picture the SEC filing paints is one of a company that was in the thick of the loan sharking business, relaxing lending standards to glut their portfolio with trick mortgages designed to explode like IEDs. While Mozilo was sporting his suntan and smile on TV, and talking up the company, he was privately urging that the entire portfolio of Pay Option ARMs be sold because they were such a bad risk, and the icing on the cake was his nifty little sale of stock, netting an estimated $140 million just before the company collapsed and had to be gobbled up by Bank of America. Isn't it nice to be a wealthy insider?

So one of the Rich Dads that pretty much lit the fuse on this economic mess has finally been called on the carpet. It remains to be seen if he will end up joining Bernie Madoff as a cell mate, and then the two of them can act like a couple of Mafia bosses on ice, dreaming of all those hidden accounts where millions of dollars once flowed through their greedy hands. This is American business at its very worst.

Meanwhile, half a million more Poor Dads lost jobs last month, and someone please tell me how those lost jobs are ever going to come back anytime soon. While he was quietly preparing to abandon ship, Mozilo wrote a nifty "Dear Collegue" letter to employees at Countrywide, announcing an expected layoff of 10,000 to 12,000 at the very end. Mozilo's ill gotten stock profits on the alleged insider trading could have paid the average annual salary of 4000 of those employees, and God only knows how much other loot has been stashed in bonds, hidden derivatives, securities, or Swiss bank accounts. The SEC is just looking at the tip of the ice berg where the Rich Dads behind this crisis are concerned. I hope there will be many more charges filed and successfully prosecuted, because we need to know, on some level, that there is still a shred of justice in this world for men like Angelo Mozilo, Bernie Madoff and so many others who may now be quietly "making arrangements" with the billions they looted from the system before jig was up. You can read about some others here.

We are well past the time when pitch forks and torches should have surrounded the Rich Dad mansions in this country. But at least this SEC filing is a step in the right direction.

April Fools

The banks may have had their wrist slapped by congress recently about exorbitant salaries and their long legacy of credit card ripoff policies, but where the rubber meets the road it is really business as usual. Bankers want something done to bolster their profits, they summon legions of lobbyists and start doling out campaign contributions to key congressional committee members--bingo, the rules and laws are changed. Their latest victory was pushing aside the "mark to market" accounting rules that were forcing them to devalue securities. Even when valued at 50 cents on the dollar because of current market woes, there were no buyers. While this was clear evidence that the free market thought these securities were now worth even less that 50 cents on the dollar, admitting that on bank accounting sheets was causing massive losses and forcing them to raise truckloads of new capital. The bankers didn't like that, so they just changed the rules.

The Wall Street Journal reported today: "Earlier this year, financial-services organizations put their lobbyists on the case. Thirty-one financial firms and trade groups formed a coalition and spent $27.6 million in the first quarter lobbying Washington about the rule and other issues, according to a Wall Street Journal analysis of public filings. They also directed campaign contributions totaling $286,000 to legislators on a key committee, many of whom pushed for the rule change, the filings indicate."

Tuck enough cash into the pockets of our Senators and Representatives and you can get most anything accomplished. "Mark to Market" was transformed overnight into "Mark to Fantasy," and the banks can now use their own internal models to assign value to these securities. No more massive losses, and the pressure to raise new capital is off. The banks can now continue to pretend they are solvent and turn their attention to the next lobby--stopping reform in the derivative markets, a big profit center for most banks. They are also fighting to prevent another accounting change that would effectively close "the other set of books." The off balance sheet reporting measure would end the practice of hiding assets off the balance sheet. The misnamed "assets" are usually securities, CDOs, etc. that have depreciated in value.

The mark to market accounting rule change took full effect in April, so expect another round of bogus profit reports from the banks in the second quarter. It gives April Fools Day a whole new meaning. Gee, wouldn't it be nice if all the millions of homeowners out there who have lost most or all of their equity could just wave a magic wand and decide what the value of their home is now, in spite of what anyone in the real market would pay for it? Let's lobby congress. Maybe they'll pass a law that says the housing crash never happened, there isn't really a recession, and those people in the unemployment lines out there simply have it all wrong.

Passing The Baton

While the US continues to print enormous sums of money to service existing debt, China has recently been a sobering rock in the stream, warning that America may be over extending itself with its soaring deficits and low savings rate. Over here, Bernanke and Geithner testify before congress and appear on news interviews with carefully crafted statements concerning the stability of our financial house. The old maxim that "you can fool all of the people some of the time, and some of the people all of the time" characterizes their public comments. But you can't fool the Chinese!

When US Treasury Secretary Tim Geithner recently addressed students at Peking University he tried to assure him that the massive Chinese investment in the US was, as he put it, "very safe." The audience broke out in loud, unrestrained laughter! China has also not minced words when it strongly suggested that the US had better guarantee the $768 billion it presently holds in Treasury Certificates. And other actions, such as approving the use of Yuan in direct trade deals, (formerly conducted in dollars), and suggesting that the dollar be replaced by a basket of other currencies as the world's reserve, all hint at China's growing unease with the sad state of US finances.

China, already known as the manufacturing center of the world, is the one country that continues to grow in spite of the recession. It is perhaps ironic that GM was forced to sell off its Hummer line to a Chinese company, passing the baton in a strange symbolic sense as the US auto industry dies. Why China would want to buy this ugly and inefficient vehicle design escapes me, but they will eventually realize that Hummers and all their SUV brothers are doomed to extinction, relics of a culture of excess that has characterized the last 50 years here in the US.

Commercials for Hummers once showed frustrated guys in grocery store lines buying vegetables and being embarassed by chunky men ahead of them in line who were ringing up two inch thick steaks. The solution? Buy a Hummer! The next scene in the commercial showed the vegetarian fellow smirking behind the wheel of a Hummer, the T-Rex of all SUVs, and the vehicle of choice for California's very own Terminator, Arnold Schwartzenneger. I wonder how Hummers will be advertized in China? Will Guan-Yu and The Jade Emperor be pictured in the front seat, with the Eight Immortals riding in the back?

The US should well consider just how long China will continue to buy up our debt, our excessive Hummers and other assets before they come to the conclusion that Uncle Sam is no longer a good investment! Me? I think I'll settle down with a nice Chinese lady and start learning Mandarin.

Over Limit

I went out to pick up a few things at the grocery store and got in the slow line. There seemed to be some problem with a little gray haired lady trying to swipe her visa card for three bags of groceries. The bank was playing hardball, and kept refusing the charge with an "over limit " message for the poor lady. So she was unpacking things from her bags, setting them aside, and having the clerk re-ring to get a lower total. Yet each time the bank refused the charge, a moment of real embarrassment for the poor woman. The clerk was rolling her eyes, feeling pressure from the line forming. The bagger was standing there watching the woman sorting through her groceries to try and get her total down. It was a scene that has probably played itself out in thousands of stores across the nation in these hard economic times, now that credit is so tight. People are stretched thin--right to the edge of those maxed out credit cards.

Well, I couldn't bear this, so I took out my wallet and asked the lady if she needed a little help today, and told her "these things always happen when you least expect them," to try and relieve the embarassment. She thanked me, but would not accept my offer to pay--pride always going before the fall, I suppose. Instead she went over to the store phone and tried to haggle with her bank in the busy market. That got her nowhere, so she told the clerk that she was just going to "forget this whole thing," and left.

The checker said it was very nice of me to offer help, even if it was not received. And though my offer did not cure the problem, I was still glad I had the compassion to open my mouth instead of standing there like a wooden Indian, trying not to notice., like everyone else in line. On the way home I could not help but think of Citigroup, and JP Morgan Chase, and BofA, all awash in billions of free taxpayer dollars. Their "get tough" policies concerning credit these days are perhaps a way to vent steam over losing the battle in congress against the credit card reform bill that passed recently. Now they are girding themselves to oppose reforms in the derivatives markets. They'll spend millions and millions in that effort, all to ensure their profits, those $28,000 office carpets, and the lucrative bonus money that is still being paid out to men who engineered and furthered the greatest financial crisis in a century with their incompetence and simple greed.

But this cold hearted system could not approve a $40. grocery tab for a hungry old woman, so she left without her yogurt, and oatmeal, and the other things she was pulling out of the paper bags to try and lower her tab. I passed a moment of anger over this on my way home, but realized that the only real and human thing I could do about it was to open my mouth and extend that helping hand to another in distress. This is what Buddha meant when he talked about "joyful participation in the sorrows of the world." Now I'm no saint, just a guy who can't bear to think of anyone going hungry. There are going to be so many more who find themselves "over limit" before this recession ends. What are we going to do about it?

Folks...We have to start taking care of one another if this thing is ever to turn around. If you are holding your breath for the resurrection of GM, or hopng that re-fi money will start flowing again any time soon, you are in for a sad disappointment. The recovery will have to start on the street with us, one person at a time finding hope and moving forward. We can't do the big things to turn this around, but we can do the little things, help where we can, and just hope for the best.

Bye, Bye G.M.

GM has finally given up the ghost and filed for bankruptcy, leaving only the company Henry Ford built as the last auto manufacturer in the US. As the old GM dies, analysts speculate that another quarter million jobs will be lost, in supplier shops, dealerships and showrooms all across the nation. The stock was .81 cents this morning. The company's market cap an anemic $496 million after receiving fifty times that, ($25 billion) in an initial bailout, and then begging another $25 billion more from the taxpayers who stopped buying their cars. I guess they'll get your money one way or another. Once one of America's great corporations, GM now writes its name in another guest register--now the fourth largest bankruptcy in US history. (An $82.3. billion loss). It's stock will soon be removed from the DOW.

Yet the odd thing about all this Monday morning news is that the stock rallied on the news! By mid day the DOW was up nearly 250 points, and this while oil climbed almost 3.5% and began nudging up towards the $70/barrel price. It's a strange disconnect.

The news for GM has been echoed in so many other US corporations that have been losing value this year... McGraw Hill, Freddie Mac, Nordstrom, Sears, Qwest, Sprint, Hershey, JC Penny, Federated, not to even mention the big banks that failed last year like WaMu. Towns and cities all across the nation have experienced the blight, while others appear largely immune. Drive into the valley to Modesto CA for a look at some hard times and empty, abandonded neighborhoods. Visit lovely Carmel on the coast for quite another story--art galleries, elegant restaurants and boutiques still open.... Folks out window shopping, wine tasting and strolling along the well manicured streets... Sales clerks hawking elegant garments for the ridiculous low price of "only" $199. (Marked down from $425...for a shawl?)... The smiling face of former mayor and local celebrity Clint Eastwood is still prominently featured on city tourist guides. Clearly there are islands of wealth that will remain unscathed by this deep recession, the higher tiers of the economic caste system we have in this country.

But that aside, my thoughts are now with the little job shops, parts suppliers, car salesman, finance managers, and soon to be ex-factory workers as the old GM dies. We can see this in one of two ways--as the end of the long era of carcentric living in this country, the harbinger of our imperial decline, or as a time of transformation and change, where we release our illusions of getting something for nothing down and low, easy payments. backed by a government guarantee. GM will have to reinvent itself for the future that lies in the ashes of this recession and change. Hopefully it will emerge a leaner, more competitive and eventually profitable business--if they can just start delivering cars with the quality and efficiency of Toyota and Honda. The future is what we create with our choices and commitments made right now--in all things, be it personal relationships or business dealings.

Can you feel it? I sense the energy of change and transformation beginning to surge from the embers of this forest fire we've endured. It may not be green shoots yet, but the fire itself is burning away the old, unsustainable elements of our way of life and clearing a path for tomorrow. Do that in your life this year and you will be well on your way to better times and the "recovery" the news media keeps talking about. It's not here yet, but it begins with our choice to say "yes" to a possible new future that can and will transform our lives--if we but make it so.