Archive for December, 2008

Goodnight 2008

Thought I’d ring in the New Year with some tech prophesy for 2009, including volleys between Microsoft and Apple as well as snuggling between Google and the Obama administration.

Also thought I’d propose a book for next round that I figured we’d be able to handle

Wealth re-distribution

The few members of Congress who voted against the bailout bill are looking pretty smart right now.  At least a little bit of journalism is still alive in the reporting of this story.  I’m predicting this will become a major story and people (myself included) will point to this unconscionable giveaway as proof of fundamental problems with the  Frankenstein monster of capitalism-over-democracy that’s mutating America and robbing the middle class of its hard-fought-for existence (from right under its nose)…

By Matt Apuzzo
Associated Press

WASHINGTON — It’s something any bank would demand to know before handing out a loan: Where’s the money going?

But after receiving billions in aid from U.S. taxpayers, the nation’s largest banks say they can’t track exactly how they’re spending the money or they simply refuse to discuss it.

“We’ve lent some of it. We’ve not lent some of it. We’ve not given any accounting of, ‘Here’s how we’re doing it,”’ said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. “We have not disclosed that to the public. We’re declining to.”

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what’s the plan for the rest?

None of the banks provided specific answers.

“We’re not providing dollar-in, dollar-out tracking,” said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.

Some banks said they simply didn’t know where the money was going.

“We manage our capital in its aggregate,” said Regions Financial Corp. spokesman Tim Deighton, who said the Birmingham, Ala.-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.

The answers highlight the secrecy surrounding the Troubled Asset Relief Program, which earmarked $700 billion — about the size of the Netherlands’ economy — to help rescue the financial industry. The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money.

There has been no accounting of how banks spend that money. Lawmakers summoned bank executives to Capitol Hill last month and implored them to lend the money — not to hoard it or spend it on corporate bonuses, junkets or to buy other banks. But there is no process in place to make sure that’s happening and there are no consequences for banks that don’t comply.

But, at least for now, there’s no way for taxpayers to find that out.

Pressured by the Bush administration to approve the money quickly, Congress attached nearly no strings on the $700 billion bailout in October. And the Treasury Department, which doles out the money, never asked banks how it would be spent.

“Those are legitimate questions that should have been asked on Day One,” said Rep. Scott Garrett, R-N.J., a House Financial Services Committee member who opposed the bailout as it was rushed through Congress. “Where is the money going to go to? How is it going to be spent? When are we going to get a record on it?”

Nearly every bank AP questioned — including Citibank and Bank of America, two of the largest recipients of bailout money — responded with generic public relations statements explaining that the money was being used to strengthen balance sheets and continue making loans to ease the credit crisis.

But no bank provided even the most basic accounting for the federal money.

“We’re choosing not to disclose that,” said Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion.

Others said the money couldn’t be tracked. Bob Denham, a spokesman for North Carolina-based BBT Corp., said the bailout money “doesn’t have its own bucket.” But he said taxpayer money wasn’t used in the bank’s recent purchase of a Florida insurance company. Asked how he could be sure, since the money wasn’t being tracked, Denham said the bank would have made that deal regardless.

Others, such as Morgan Stanley spokeswoman Carissa Ramirez, offered to discuss the matter with reporters on condition of anonymity. When AP refused, Ramirez sent an e-mail saying: “We are going to decline to comment on your story.” Most banks wouldn’t say why they were keeping the details secret.

Heine, the New York Mellon Corp. spokesman who said he wouldn’t share spending specifics, added: “I just would prefer if you wouldn’t say that we’re not going to discuss those details.”

Blackberry blunders

Special thanks to Fox News for its hardball reporting (although I actually saw it first on Engadget).

McCain Campaign Sells Info-Loaded Blackberry to FOX 5 Reporter

Just a final “d’oh” from the McCain campaign.  The idea of a campaign yard sale is also kind of weird to me…

Minneapolis Snow

I’m playing with the Google Earth app on my iPhone.  Its “swoop navigation” feature allows you to fly in and see the landscape from various perspectives (the accelerometer on the iPhone tilts the view as you move it in your hand).

But, what’s even more cool, is that I discovered this geo-tagged photo (via Panoramio) called Minneapolis Snow created by Don McCrae.  It’s a photograph that he converted into a water color using photo-editing software that he doesn’t reveal.  This photo has been viewed close to 2,000 times with comments from people in France and the Netherlands.

It’s currently 1 degree Fahrenheit in sunny Minneapolis, with a beautiful coat of snow that this picture captures perfectly.  Thank you Don McCrae.

minneapolis-snow-by-don-mccrae

Tesla

tesla1 No, not the 80’s hair metal band.  I’m talking about the new electric car being manufactured in Silicon Valley – the Tesla Roadster.  Tesla Motors, a VC-backed start up based in San Carlos, CA, founded by Elon Musk (known for co-founding PayPal), has made a sweet looking, no-compromise electic car: 0-60 in 3.9 seconds, 139mph top speed, a 230 mile range, etc.  The only catch is that it costs $110,000 and only 650 have been produced so far.

tesla-roadster

 

 

Interesting factoid:

Jay Leno’s 1909 Baker Electric still operates on its original Edison cells.

Wishing on a Tsar

Fight Club’s upcoming bout is on “Time for a Model Change” by Graeme Maxton and John Wormald, two car industry veterans and writers for the Economist.  So, I thought it was fitting that this morning’s Business View in the Economist was an entertaining review of current status of Detroit bail out.

gremlinThe automakers are arguing that unlike the airlines, bankruptcy would be devastating for two reasons: 1) airline tickets are short term commitments 2) the car industry has a long supply chain with 3 million workers.  And, as Jon Stewart deftly pointed out with a Hot Wheels version of the AMC Gremlin he drove in high school, that unlike the Financial Services bail out, at least the automakers produce something useful (even though they lose $2K/car they sell).

So, all this has led to the need for a Car Tsar.  The Economist (link above) gives us a little background on the various Tsars [or Czar (derived from Caesar) originally meaning Emperor in the European medieval sense] we’ve had since 1982:

 

The first such tsar is believed to have been America’s Drug Tsar, first described thus in 1982, who had a mandate to oversee America’s war on drugs, which included activities by several government departments. Since then, the term has been used on many occasions to describe officials with grand cross-departmental responsibilities. Even the Bush administration has had a war tsar, a bird flu tsar, and a bank bailout tsar, while Al Gore reportedly declined Mr Obama’s offer to make him the climate tsar.

The word “tsar” is used because its sounds powerful, though government tsars often find the opposite is true in practice. For one thing, they tend to be appointed during a crisis, and are often invested with unrealistic expectations. Also, having responsibility for activities in several government departments often turns out to mean no power over any of them.

Still, if there is car tsar he will have a huge advantage over other tsars: namely the threat of handing the whole mess over to someone with real power—a Chapter 11 bankruptcy judge, and nobody wants to face the sayonara tsar.

Top 10 Non-Fiction in 2008

Time Magazine’s Top Ten Non-Fiction Books of 2008:

  1. The Forever War by Dexter Filkins (The gaping wounds of Iraq and Afghanistan have produced a torrent of words, but no single volume so far has the precision and power of The Forever War)
  2. The Thief at the End of the World by Joe Jackson (smuggling rubber tree seeds out of Brazil, in a single stroke handing England supremacy in one of the key resources of the 20th century)
  3. The Snowball: Warren Buffett and the Business of Life by Alice Schroeder (authorized biography of Buffet)
  4. The World Is What It Is by Patrick French (authorized biography of Nobel laureate V.S. Naipaul)
  5. The Suspicions of Mr. Whicher by Kate Summerscale (true crime, birth of forensic science)
  6. Hurry Down Sunshine by Michael Greenberg (about his 15 year-old daughter’s mental breakdown)
  7. Factory Girls by Leslie T. Chang (tells the story of several women amongst the 130 million migrant workers in China) 
  8. John Lennon by Philip Norman
  9. The Magician’s Book by Laura Miller (illuminating not only the Chronicles of Narnia, but the nature of reading itself.)
  10. Outliers by Malcolm Gladwell (a dismantling of the American myth of the self-made man)

Comments anyone?


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