Monday, January 28, 2008

Deep Freeze

In Edmonton we have been under extreme weather warnings for the past 24 hours. It snowed all day yesterday and continues to day. As well with the wind chill factor it is almost -50 below. My furnace is set at 30 and the house is cold, even though it is 68. The cold reverberates off the windows, doors, and any little lead we haven't caught with caulking. This is weather to hibernate in.



Wind chill warning for: City of Edmonton-St. Albert-Sherwood Park
Issued at 4:33 AM MST MONDAY 28 JANUARY 2008
EXTREME WIND CHILLS TODAY. THIS IS A WARNING THAT EXTREME WIND CHILL CONDITIONS ARE IMMINENT OR OCCURRING IN THESE REGIONS. MONITOR WEATHER CONDITIONS..LISTEN FOR UPDATED STATEMENTS.
AN INTENSE WINTER STORM CONTINUES TO TRACK THROUGH THE PRAIRIE PROVINCES. MANY AREAS OF ALBERTA HAVE SEEN BLIZZARD TO NEAR BLIZZARD CONDITIONS. HEAVY SNOW CONTINUES IN THE COLD LAKE REGION HOWEVER SNOW IS EXPECTED TO TAPER OFF THIS MORNING. IN THE SYSTEMS WAKE AN ARCTIC RIDGE HAS INVADED THE PROVINCE BRINGING COLD TEMPERATURES. THESE TEMPERATURES COMBINED WITH BRISK WINDS ARE GIVING WIND CHILL VALUES BELOW MINUS 40. WINDS WILL GRADUALLY DIMINISH AS THE RIDGE SETTLES INTO ALBERTA HOWEVER TEMPERATURES WILL REMAIN COLD. SNOWFALL AMOUNTS FROM THE STORM WERE GENERALLY IN THE 5 TO 10 CENTIMETRE RANGE THROUGH MOST OF THE PROVINCE. BLOWING SNOW GAVE DRIFTS MUCH HIGHER THAN THIS HOWEVER A FEW OF THE LARGEST SNOWFALL MEASUREMENTS AS OF 4 AM MST INCLUDE: COLD LAKE...............23 CM PINCHER CREEK........17-22 CM CORONATION..............12 CM THE COLDEST WIND CHILLS IN ALBERTA RECORDED AS OF 4 AM MST INCLUDE: GRANDE PRAIRIE..........-49 CALGARY AIRPORT.........-48 CORONATION..............-48 DEL BONITA..............-47 LACOMBE.................-47 VEGREVILLE..............-47 THREE HILLS.............-47 OLDS....................-47 EDMONTON INTL AIRPORT...-46 WHITECOURT..............-46 THE STRONGEST WINDS THIS SUNDAY IN ALBERTA CAME FROM ONEFOUR NEAR THE CYPRESS HILLS WITH A GUST OF 93 KM/H.

PLEASE REFER TO THE LATEST PUBLIC FORECASTS FOR FURTHER DETAILS.


Monday
Morning
Monday
Afternoon
Monday
Evening
Monday
Overnight

Flurries Cloudy with sunny breaks Cloudy periods Clear
Temperature -31°C -29°C -31°C -39°C
Condition
Flurries
Cloudy with sunny breaks
Cloudy periods
Clear
P.O.P. 40% 20% 10% 0%
Feels Like -46 -42 - -
Wind N 25km/h NW 20km/h NW 10km/h NE 5km/h
Humidity 65% 64% 68% 79%
Snow trace - - -

From Monday Morning to Monday Overnight we expect trace of snow.




Tuesday
Jan 29
Wednesday
Jan 30
Thursday
Jan 31
Friday
Feb 1
Saturday
Feb 2
Sunday
Feb 3

Sunny Sunny Cloudy periods Variable cloudiness Cloudy Mainly sunny
High -29°C -28°C -26°C -20°C -12°C -16°C
Condition
Sunny
Sunny
Cloudy periods
Variable cloudiness
Cloudy
Mainly sunny
P.O.P. 0% 0% 10% 20% 30% 10%
Wind SE 10 km/h S 10 km/h E 10 km/h NW 5 km/h S 5 km/h S 10 km/h
Low -39°C -34°C -34°C -27°C -21°C -23°C


But at least we are not alone with extreme winter weather. Though in the U.S. they blame it on us.

An Alberta Clipper zipping through the Midwest today will bring snow to the East over the next few days, with a new shot of arctic air following close behind. Meanwhile, rain and snow continue today along the West Coast.

The clipper diving out of western Canada today is bringing snow to the Upper Midwest. The Winter Weather Center reports that the heaviest snow will fall on the northern tip of Lower Michigan and the Upper Peninsula.







The cold stretches from the far north all the way down through Canada into the U.S. The West Coast is not immune facing record winter storms, including snow in LA. Thats Los Angeles not Leduc, Alberta. And it has even impacted as far West as China.


Heavy snow affects holiday travel
Xinhua, China - 39 minutes ago
The national meteorological authority says the freezing weather will continue to pummel provinces from west to east in the coming days, with heavy snow ..

Hong Kong - Dozens of flights and trains travelling between Hong Kong and mainland China were delayed or cancelled on Monday as central China remained in the grip of severe winter weather.

Snow storms cause deaths in China ahead of Lunar New Year
AFP - 19 hours ago
BEIJING (AFP) — The worst snows to hit parts of China for 50 years killed at least a dozen people at the weekend, state media said, with thousands more ...
Snow and ice cut power, close schools in Eastern Washington
Seattle Times, United States - 9 hours ago
Heavy snow has snapped power lines, closed roads and schools, and prompted Spokane officials to warn people to stay home. Thousands of people in Eastern ...

Snow and wind likely today
Salt Lake Tribune, United States - 6 hours ago
Snow and wind likely will blast the Salt Lake Valley today and heighten avalanche danger early this week. A winter storm warning is under way until 6 pm ...

Storm brings more snow, traffic accidents to Reno-Tahoe area
San Diego Union Tribune, United States - 13 hours ago
Another powerful storm brought up to a foot of snow on Sunday to the Sierra Nevada, snarling traffic and shutting down some ski lifts. ...

Snow brings 3 inches to Hub, 7 to Cape
Boston Globe, United States - 18 hours ago
While Boston could end up with about 3 inches of snow today, Cape Cod and islands are getting hit with a northeaster that could leave up to 7 inches. ...
Cape and Islands battered by ocean stormBoston Herald
Third victim pulled from snow
Victorville Daily Press, CA - 26 Jan 2008
Avalanches are unusual in the San Gabriel Mountains, authorities said, but so was the 3 feet or more of new snow that hit the region in a matter of days ...
Southern California avalanches kill three Reuters
Actor Christopher Allport Dead After Avalanche TransWorldNews (press release)


Heavy snow to make driving dangerous in mountains
USA Today - 20 hours ago
DENVER (AP) — The winter storm that has battered California will begin moving into Colorado on Sunday afternoon with snow falling until the following ...

Weather causing problems statewide, snow still forecast for ...
Seattle Times, United States - 19 hours ago
Snow is still in the forecast for the Seattle area. According to the National Weather Service, there's a 50 percent chance of snow today, ...
Rare snow storm hits southern Willamette Valley
The Oregonian - OregonLive.com, OR - 7 hours ago
(AP) — An unexpectedly strong snow storm dumped at least a half-foot of snow in the Eugene area, the most it has seen in more than a decade. ...


Can you say climate change/global warming.


SEE

You Don't Need A Weatherman

Rain Rain Go Away


Damn Cold


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Saturday, January 26, 2008

Terror State/State Terror

I have posted a lengthy article at Carnival of Anarchy

Terror State/State Terror

A Situationist text first published in 1979 on the nature of the Terror State. The author Gianfranco Sanguinetti along with the Guy Debord, was one of the last 'official' members of the Situationist International. The text is all the more relevant today in light of the so called War On Terror.




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Blogging For Choice IV

As we approach the twentieth anniversary of the Regina vs. Morgentaler Supreme Court decision the papers are full of coverage of this monumental legal and legislative decision. Colby Cosh in todays National Post chastises the right wing moralists like Frum and Kay who whined about this in the same pages recently. He declares the court decision a victory for Anarchy, Cosh is a libertarian after all. And tongue in cheek he correctly points out the decision left it up to the State to now decide what laws around abortion it wanted to create, and the State in its wisdom decided to abdicate.


Even Justice Bertha Wilson, whose solitary contribution to the majority finding became the cornerstone of a feminist legacy, was unambiguous about this. She described the protection of the fetus as "a perfectly valid legislative objective," offered that "The value to be placed on the fetus as potential life is directly related to the stage of its development during gestation" and said that "The precise point in the development of the foetus at which the state's interest in its protection becomes 'compelling' should be left to the informed judgment of the legislature, which is in a position to receive submissions on the subject from all the relevant disciplines." Do those sound like the words of an estrogen-crazed baby-devourer?

All the court really did was get rid of a senseless morass of dilatory regulation whereby a woman's choice was limited not by a real, rational guideline, but by the local availability of willing physician-monopolists and the whims of hospital committees. The position taken by moderate pro-lifers today is, ironically, more or less exactly that of Bertha Wilson: i.e., that there should probably be some legislative decision, binding upon the whole country, concerning the exact moment when a fetus becomes an individual person for medical purposes. Only a radical, total opponent of abortion could conceivably advocate returning to the broken pre-1988 system, and only as a sly, unfair means of saving some fetal lives.

And this fact really confirms the fundamental wisdom of the Morgentaler decision. The overturning of the old legal regime was decided on a 4-2 vote, with Justices W.R. McIntyre and Gerard La Forest in dissent. The pair wrote that "there is no evidence or indication of general acceptance of the concept of abortion at will in our society." This must now stand as one of the great inadvertent jests in the history of the court. For the 20 years since their statement, abortion at the will of the mother is just what we have had. The number of people who have proven themselves actually willing to do something about the situation, as opposed to merely inveighing against it as an occasion for outraged verbiage, is minuscule. Domestic politicians of all parties recoil in fear, almost uniformly, at the suggestion that any abortion might ever be prevented by the force of law. And even criticism from other Western countries, which all regulate abortion themselves, has been rare verging on nonexistent.

This is where we are. This is what we wanted, whether we admit it to ourselves or not. And this is as it should be, with the final decision in the hands of the one who must chance the hazards and agony of birth. Long live Morgentaler! Long live anarchy!

As usual the fetus fetishists who proclaim their love of life decided to threaten Dr. Morgentaler's life, again, at the public meeting where the 20th Anniversary decision was being celebrated last night.


Morgentaler escorted from gathering marking 20th anniversary of historic abortion ruling

Jan 26, 2008

Two standing ovations and one death threat.

That's the reception Dr. Henry Morgentaler received at a University of Toronto symposium yesterday marking the 20th anniversary of the landmark Supreme Court ruling overturning Canada's abortion law.

"Over the past 37 years I have dedicated myself to the struggle to achieve rights to reproductive freedom and to provide facilities for women," Morgentaler told the symposium, held by the law faculty. "This struggle gave meaning to my life."

He said the Jan. 28, 1988, decision was the impetus for him and other physicians to establish abortion clinics across Canada.

"I am proud to have played such a pivotal role in the decision."

Ah yes and here is the contradiction the very Progressive and Left Wing forces that have supported Morgentaler then and over the years are the same folks who oppose the privatization of Health Care, which is what has made Morgentaler's business prosper over the years.

Morgentaler Clinics provide private health care, the state in its wisdom abandoned any legislation that would provide for abortions being fully funded and delivered in a local hospital. That's the other side of the anarchy coin of abortion in Canada. The Supreme court flipped that coin to the State and the State refused to make a call. The result is in effect no real choice for women, either give birth or pay for an abortion out of pocket.



"The Morgentaler decision was huge in that it has undoubtedly saved the lives and protected the health of countless women," said Vicki Saporta, president of the National Abortion Federation (NAF). "No longer did women have to jeopardize their lives or health in order to end an unwanted pregnancy."

The NAF represents abortion providers in Canada and the United States and works to ensure abortion is safe, legal and accessible to promote health and justice for women, she said.

The decision also allowed for abortions to be a publicly funded medical procedure. However, Saporta said many women still face barriers in accessing therapeutic abortion services, particularly because it is not on the interprovincial billing agreement.

Women living in rural areas, such as Chatham-Kent, have difficulty accessing abortion clinics because the majority of abortion care is located in urban centres.

"Some women are traveling 60 miles or more. It can often be a significant barrier for some women that cannot be overcome," said Saporta, adding the closest abortion clinics are in London,Toronto and Detroit.

There are no therapeutic abortion clinics currently operating in Chatham-Kent, however the Chatham-Kent Health Alliance does perform medical abortions if it is necessary for the health of the mother.

"The obstetricians and gynecologists within Chatham-Kent do not include abortions within their scope of practice," said Kim Bossy, director of communications and community relations at CKHA.

The Chatham-Kent Public Health Unit provides women with information on options available to them regarding unwanted pregnancies and remains neutral in the decision, said Kelly Farrugia, school age health program manager.

"Our policy is to review all the options for unplanned pregnancies," she said. "I think every woman has their own reasons why they choose the option they do."



The Morgentaler decision: Choice? What choice?
Two decades after the landmark ruling on abortion rights, poor access and a lack of treatment alternatives still hamper a woman's ability to choose

ANDRÉ PICARD

From Thursday's Globe and Mail

January 24, 2008

While there are, theoretically, no restrictions on abortion, the number of abortions has not increased.

In fact, the number of abortions has held steady over all, and the teen abortion rate has actually fallen.

Each year in Canada, there are about 330,000 lives births and 110,000 abortions.

Despite what you see in Hollywood movies, the vast majority of those having abortions are not teens, but women in their 20s and 30s. They have, almost universally, exercised their freedom of choice judiciously, law or no law.

While the highest court ruled that the state has no place in the uteruses of the nation, the state does have a role in the provision of medically necessary health services, of which abortion is one.

Yet our health system - from the politicians who oversee it to the policy makers and administrators through to the physicians and nurses who should provide non-judgmental care in public institutions - has largely failed women who seek abortions.

The failings are many and varied, but revolve principally around lack of access to timely care.

In short, the arbitrary rules that have crept into the system in the past two decades make a mockery of the Supreme Court ruling.

In Canada, fewer than one in five hospitals perform abortions. One province, Prince Edward Island, offers no abortion services at all. Another, New Brunswick, has created unjustified (and likely unconstitutional) barriers to access, requiring referrals from two doctors.

In the nation's capital, Ottawa, the wait time for an abortion stretches to six weeks, a perversity. (If there is one area of care for which there should be a wait-time guarantee, it is abortion, obviously a time-sensitive procedure.)

But the greatest injustice is that faced by Canadian women living outside major metropolitan centres, particularly those in the North.

Virtually every hospital and clinic offering abortion services in Canada is located within 150 kilometres of the U.S. border, and there is not a single abortion provider north of the Trans-Canada Highway in Ontario.

A woman in northern Manitoba, for example, needs to travel about 20 hours to access the nearest in-province abortion provider. For women in the three territories, travel can be an insurmountable obstacle.

Abortion should be covered by medicare but, in reality, it is expensive. If a woman opts for an abortion in a private clinic - something that is often necessary given the lack of service offered in hospitals - she must pay out of pocket and be reimbursed. (This policy was recently struck down by the courts in Quebec, which deemed that medicare should foot the bill, regardless of where the procedure is done.)

Worse yet, if a woman travels out of province or to the United States - which, again, many women are forced to do because of lack of timely access domestically - she will not be reimbursed at all.

Further, Canadian women wanting to terminate a pregnancy have no option other than surgical abortion.

Drug-induced abortion - the method of choice of about one-third of women in Europe and the United States - is not even available in Canada. Mifepristone (brand name Mifeprex, also known as RU-486) is a safe, proven alternative, and its lack of availability in Canada is a scandal.

Between the legalization of abortion in 1969 and its complete decriminalization in 1988, women fought many tough battles.



NO ACCESS, NO CHOICE

Abortion

CHLOÉ FEDIO / Vue Weekly

In 1983, political activist Judy Rebick became the unintended victim of assault when a man brandishing garden shears lunged at Dr Henry Morgentaler at the opening of his Toronto abortion clinic. She blocked the attack and Dr Morgentaler emerged unscathed, but the incident is just one of several threats Rebick has endured because of her involvement in the pro-choice movement.
Despite it all, Rebick refused to be intimidated in the debate that continues to elicit contention to this day.
“I learned a lot from Dr Morgentaler, because he’d gone to jail—he almost died in jail. He was constantly a target of attack, constantly a target of threats and so on, and his attitude was, if you do this work this is part of the price you pay,” Rebick said.
Rebick was part of the Ontario Coalition for Abortion Clinics, the group that encouraged and helped Dr Morgentaler open his Toronto clinic.
“It’s probably one of the proudest things I’ve done in my life. There is a certain amount of courage involved, but it was also such a splendid victory,” said Rebick. “When we started, everyone was against us—the courts were against us, the cops, the government. It was really a magnificent battle.”
In 1969, Dr Morgentaler broke the law to open Canada’s first abortion clinic in MontrĂ©al, becoming one of the country’s most controversial figures. But it was only after police raided his newly-opened Toronto clinic in 1983 that he became the central figure in an historic case that paved the way for reproductive rights in Canada.
Before the decision, abortion was only legal in a hospital, and only if approved by a three-doctor therapeutic abortion committee. But on Jan 28, 1988, the Supreme Court struck down that law as unconstitutional, ruling that it infringed upon a woman's right to “life, liberty and security of person.”
But 20 years after the lifting of federal legal restrictions on abortion, women across the country still face significant challenges in accessing the procedure.
Patricia Larue, executive director of Canadians for Choice, a non-profit charitable organization based out of Ottawa, explained that abortion services in Canada are concentrated in urban areas, forcing many women to travel great distances to gain access to the procedure.
“Most of the places that offer abortion services—clinics or hospitals—are located in the south of the country, about 100 kilometres north of the American border. So for women living in the north, or even central Canada, it’s really difficult to have access to a place where they can go for an abortion,” Larue said.
Edmonton is the sixth largest metropolitan region in Canada, with a population of over one million, but there’s only one abortion clinic in the area. In May 2005, the Royal Alexandra Hospital stopped performing the procedure, leaving the Edmonton Morgentaler Clinic with the brunt of the responsibility in northern Alberta. Dr Christa Delacruz, who operates out of Grande Prairie, also provides abortions, but access outside of the major urban centres of Edmonton and Calgary is extremely limited.
Larry Brockman, the executive director of Planned Parenthood Edmonton, explained that having a single abortion provider in Edmonton can cause a backlog, increasing wait times for women seeking the service. He said the single point of access can also allow anti-abortion groups to concentrate their efforts.
“There is from time to time, lobbying or civil action that takes place that attempts to block access of women to abortion,” Brockman said. “It’s a concern that now it’s reduced to one site—it’s a little easier for protest groups to focus on one site.”
Corrie Mekar works on the front lines at Planned Parenthood Edmonton, dealing directly with women who are considering an abortion. She said the recent surge in population, coupled with the single point of access, is causing a strain on abortion services in Edmonton.
“You can kind of talk about abortion in terms of every other type of service that’s out here in Edmonton right now, with the influx of people coming in,” Mekar said. “Our population has exploded because of the economic boom, and because of that I think they’re having trouble with health everywhere, and this is no different.”
Since Jul 1, 1996, all abortion fees in Alberta are covered for any woman with Alberta Health Care or Saskatchewan Health Care coverage. But Brockman explained that women from other Canadian provinces sometimes face challenges with coverage in Alberta, while recent immigrants are left to foot the bill on their own.
Howard May, spokesperson for Alberta Health and Wellness, explained that Alberta Health Care covers the doctor’s fees and hospital costs of medically required abortion outside the province, but won’t cover the facility fee if the abortion is done in a private clinic. He said that under federal legislation, abortions are not included in the multi-province reciprocal billing agreement.
“The rationale behind the exclusion from the reciprocal agreements is that provinces and territories have different rules and regulations regarding the coverage of abortions,” said May. “Some will only cover the costs if the abortion is provided in a hospital. Others require the recommendation of two physicians.”
The cost of an abortion at the Edmonton Morgentaler Clinic ranges from $400 to $800, depending on how far along a woman is in her pregnancy.

There is an alternative, it is for public hospitals to adopt the Morgentaler method and provide fully paid for abortions including pre and post therapeutic consultations. That is the new struggle facing us twenty years later.

Let us not cheer Dr. Morgentaler who acted out of his own self interest and has gained wealth and fame as result and who has undermined the public health system in Canada as a result of the Supreme Court decision.

The Morgentaler decision in effect left women with no choice but of paying for abortions out of their own pocket, furthering the femininzation of poverty. Those who can afford do so, those who cannot have their choices restricted. Which is why you see no real increase in abortions in Canada over the past twenty years.

The struggle continues, and it is the struggle for womens reproductive rights; not just the struggle for abortion or to defend Dr. Morgentaler, as the struggle for reproductive rights was reduced to for twenty years before the SCC decision.

The struggle for womens reproductive rights is the struggle for more than just the right to abortion as I have outlined in my first post.

And that struggle can only be won without and despite Dr. Morgentaler. It is time for the Progressive and Left activists to divorce themselves from Morgentaler and his legacy; the privatization of health care.


SEE:


Blogging For Choice III


Blogging For Choice II

Blogging For Choice



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Friday, January 25, 2008

Robbing the Bank From the Inside


Bad news just gets worse...not only do we have the collapse of the paper credit market.... can you say junk bond scandal of the eighties.. now we have a flashback to bank scandals of the nineties...wait a minute shouldn't the market have regulated itself so this didn't happen, again...once again the myth of self regulation is exposed for the sham it is...global markets are not self regulating never have been that is why Capitalism created the State in its own image.



French bank hit by worst scandal ever

SocGen trader's $7.1B loss dwarfs Barings debacle


PARIS - A junior computer whiz at the French bank Societe Generale has been accused of racking up a $7-billion loss in bad bets on stocks in the biggest trading scandal in banking history.

France's central bank and government scrambled to shore up confidence in the banking system after the 144-year-old SocGen told investors already battered by the credit crisis that it had discovered the "exceptional" fraud late last week.

The trader had circumvented the bank's risk controls through in-depth knowledge of its computer systems, but was caught when he tried to cover up his losses.

The country's central bank chief dubbed the trader "a genius of fraud" while French police announced a criminal probe.

Richard Fuld, the chief of Wall Street firm Lehman Brothers, called the debacle "everyone's worst nightmare" at the meeting of policy and business leaders in Davos.

The losses spiralled to ¤4.9-billion ($7.1-billion) -- nearly its net profit in 2006 -- as the bank tried to close out the rogue trader's stock index futures positions in Monday's sliding market.


2002: Former currency trader John Rusnak accused of hiding US$691 million in losses at Allfirst bank of Baltimore, at the time under parent Allied Irish Bank, pleads guilty to one of the largest bank fraud cases in U.S. history. Rusnak was sentenced in 2003 to 7 1/2 years in prison.

_ 1996: Sumitomo Corp., a 300-year old Japanese metals trader, discovers that its star copper trader, Yasuo Hamanaka, amassed $2.6 billion in losses in unauthorized trades over a decade. The revelation caused copper prices to plummet worldwide. Sumitomo has paid millions of dollars in class action lawsuits and Hamanaka served more than seven years in prison.

_ 1995: Collapse of Britain's Barings Bank after a trader in Singapore, Nick Leeson, lost 860 million pounds (then worth US$1.38 billion) on futures trades. The fraud prompted banks worldwide to tighten internal checks. Leeson spent four years in prison.

_ 1995: Toshihide Iguchi, a New York bond trader for Japan's Daiwa Bank, charged with hiding $1.1 billion in trading losses he accumulated over 12 years. The bank later pleaded guilty to failing to notify U.S. authorities sooner. It was hit with $340 million in fines and ordered to shut its U.S. operations. Iguchi was sentenced to four years in prison and fined.

1994: Joseph Jett, a government bond trader at Wall Street brokerage Kidder Peabody & Co., was fired after the firm accused him of faking $348 million in profits to fatten his bonus. Jett denied wrongdoing and wasn't charged criminally. Last year a federal judge upheld a March 2004 order by the Securities and Exchange Commission saying Jett had booked fake profits of approximately $264 million and had to return $8.2 million of bonuses and pay a $200,000 civil penalty. The scandal contributed to the demise of the venerable Kidder.

_ 1991: Bank of Credit and Commerce International (BCCI), operating in nearly 70 countries, is seized by bank regulators, acting on auditors' reports of huge losses from illegal loans to corporate insiders and from trading transactions. Some 250,000 depositors left without funds. Claims exceeded US$10 billion.

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Bank of America Settles Suit Over the Collapse of Enron - WSJ.com

By Rick Brooks and Carrick Mollenkamp Staff Reporters of THE WALL STREET JOURNAL

Companies Featured in This Article: Bank of America, Citigroup, J.P. Morgan Chase, Merrill Lynch, Deutsche Bank, Canadian Imperial Bank of Commerce, Toronto-Dominion Bank

Bank of America Corp. became the first bank to settle a class-action lawsuit alleging that some of the top U.S. financial institutions participated in a scheme with Enron Corp. executives to deceive shareholders.

The Charlotte, N.C., bank, the third-largest in the U.S. in assets, agreed to pay $69 million to investors who had billions of dollars in losses as a result of Enron's collapse amid scandal in 2001. In making the settlement, Bank of America denied that it "violated any law," adding that it decided to make the payment "solely to eliminate the uncertainties, expense and

Why the Blowup May Get Worse

Not since 1966 -- when the term "credit crunch" was coined after the Fed pushed market interest rates above the legal limits banks and thrifts then could pay on deposits and thus stopped lending in its tracks -- has the nation's mortgage apparatus been so close to breaking down.

The current crisis arguably has the potential for more economic disruption than the celebrated 1998 Long Term Capital Management meltdown. Then, as Northern Trust economist Asha Bangalore points out, the economy cruising along -- in contrast to the past four quarters, which have seen below-potential growth on average.

Moreover, mortgage borrowers perversely benefited from the LTCM fiasco. Not only did the Greenspan Fed lower rates, sparking a huge bond rally, but, also, the government-sponsored enterprises Fannie Mae (FNM) and Freddie Mac (FRE) went on virtual buying sprees. As a result, the biggest part of the credit market -- mortgages -- remained flush. Now, Fannie is looking to expand its portfolio beyond the $727 billion limit imposed on it after its accounting and governance scandals -- a move viewed skeptically by the White House but supported by some congressional Democrats.

Indeed, the full impact of the mortgage crisis still lies ahead. From the beginning of 2007 through mid 2008, interest rates on over $1 trillion of adjustable-rate mortgages are slated to be reset, many from low "teaser" rates.

[gorge chart]

THE SUBPRIME MESS ALSO RECALLS another crisis -- the virtual collapse of the commercial-paper market in the wake of the Penn Central bankruptcy of 1970. Back then, the paper market consisted of relatively simple short-term corporate IOUs. Now, so-called asset-backed commercial paper is backed by all manner of things, from credit cards and auto loans to collateralized debt obligations, and comprises over half the CP outstanding. Moreover, notes MacroMavens' Stephanie Pomboy, money-market funds own 27% of CP outstanding.

While the Fed managed to soothe the financial markets' nerves by week's end, the potential for future upheavals remains. As a result, the futures market is looking for the central bank to ride to the rescue with rate cuts. Fed-funds contracts are fully discounting a quarter-point cut, to 5%, at the Sept. 18 Federal Open Market Committee meeting, and a further reduction to 4¾% in December.

As the chart here shows, financial crises have tended to coincide with peaks in the fed-funds rate and subsequent Fed easing. The subsequent rate relief would be hailed by the markets as the start of a new bull run.

There is a new wrinkle -- the precarious state of the dollar. No longer is the greenback viewed as a safe haven in the world, contends Barclay Capital's currency team.

Indeed, as MacroMavens' Pomboy has posited, a Fed rate cut that sends the dollar tumbling could have a perverse effect. The influx of foreign capital has kept U.S. interest rates low and provided a flood of credit for everything from leveraged buyouts to, of course, subprime mortgages. If there's an exodus of foreign capital fleeing a declining dollar, credit could tighten even as the Fed eases. Be careful of what you wish for.




High-yield debt - Wikipedia, the free encyclopedia

The original speculative grade bonds were bonds that once had been investment grade at time of issue, but where the credit rating of the issuer had slipped and the possibility of default increased significantly. These bonds are called "Fallen Angels".

The investment banker, Michael Milken, realised that fallen angels had regularly been valued less than what they were worth. His time with speculative grade bonds started with his investment in these. Only later did he and other investment bankers at Drexel Burnham Lambert, followed by those of competing firms, begin organising the issue of bonds that were speculative grade from the start. Speculative grade bonds thus became ubiquitous in the 1980s as a financing mechanism in mergers and acquisitions. In a leveraged buyout (LBO) an acquirer would issue speculative grade bonds to help pay for an acquisition and then use the target's cash flow to help pay the debt over time.

In 2005, over 80% of the principal amount of high yield debt issued by U.S. companies went toward corporate purposes rather than acquisitions or buyouts.

High-yield bonds can also be repackaged into collateralized debt obligations (CDO), thereby raising the credit rating of the senior tranches above the rating of the original debt. The senior tranches of high-yield CDOs can thus meet the minimum credit rating requirements of pension funds and other institutional investors despite the significant risk in the original high-yield debt.


Hedge funds have gotten rich from credit derivatives. Will they blow up?


From:"Kevin McKern"
Received:10/19/2006 11:45 AM
Subject:Will they blow up?
The downfall of Amaranth Advisors, the hedge fund that lost $6 billion in a single week by betting on natural gas, was a special case. There was no domino effect taking down energy traders generally, no meltdown of an industry. But if you want to fret over the next financial catastrophes, turn your gaze away from energy futures and focus on something far more obscure: credit default swaps. Hedge funds are neck-deep in these derivatives, and if something goes wrong, the pain will be widespread. A credit swap is an insurance policy on a bond, often a junk bond. The fellow selling the swap--writing the policy, that is--collects a premium. If nothing goes wrong, he pockets the premium and looks like a financial genius. But if the bond defaults, the swap seller has to make good. The notional amount--the aggregate of bonds, loans and other debt covered by credit default swaps--is now $26 trillion. This is a staggering sum, twice the annual economic output of the U.S. Hedge funds account for 58% of the trading in these derivatives, says Greenwich Associates, a financial research firm. Selling protection has been a big moneymaker for funds like $23 billion (assets) D.E. Shaw and $12 billion Citadel, say market participants, and for specialized outfits like Primus Guaranty (nyse: PRS - news - people ) in Bermuda, which took in $57 million in the first half of 2006 selling protection on $1.6 billion in debt. With corporate debt defaults low these days, the temptation is high to write insurance policies on bonds. A hedge fund can make $60,000 to $1 million a year selling protection on $10 million in bonds. It's like finding money in the street. Unless, of course, the economy suddenly enters a recession. If that happens, hedge funds addicted to the credit market will be in deep trouble. "A lot of [hedge funds] have sold insurance, are sitting on the premiums--and are bare-ass," says Charles Gradante, cofounder of Hennessee Group, which tracks hedge fund performance. "If there is a Long Term Capital-type systemic risk potential out there, it's in the [credit swap] market." There must be a lot of investors--or credit speculators--who are cavalier about corporate defaults because junk bonds are trading at yields only modestly higher than the yields on safe U.S. Treasury bonds. The chart displays the yield spread, as calculated by Moody's Investors Service, between junk bonds rated speculative and seven-year Treasurys. Saks bonds with a 97TK8 coupon due October 2011, for example, are now yielding 7.6%, or 287 basis points (2.9 percentage points) over seven-year Treasurys, compared with a 700-basis-point spread to Treasurys four years ago. Today's tight spreads don't leave much of a cushion to cover defaults. There is a close correlation between yield spreads and credit default swap prices. That's because selling a credit swap is equivalent to buying the corporate bond on margin. If you buy a junk bond with borrowed funds, you collect the high coupon on the bond while paying out a lower amount, presumably not too much more than what the U.S. government pays to borrow money. Either way--with a swap or a margined bond trade--you pocket the spread, unless and until the corporate bond gets into trouble, at which point you're sitting on a painful capital loss. The credit-derivatives business is dominated by 14 dealers. Among them: jpmorgan Chase, Citigroup (nyse: C - news - people ), Bank of America (nyse: BAC - news - people ), Goldman Sachs (nyse: GS - news - people ) and Morgan Stanley (nyse: MS - news - people ). All have staggering amounts of derivatives on their books: JPMorgan's notional exposure was $3.6 trillion as of June 30, according to the Federal Deposit Insurance Corp., which is almost three times assets and 30 times capital. Credit derivatives at Wachovia Corp. (nyse: WB - news - people ) have jumped sevenfold since 2003 to $170 billion, more than three times capital. Banks love derivatives because they provide multiple ways to make money. Revenue from all types of derivatives will hit $34 billion or so this year at U.S. banks and securities firms, says Tower Group (nasdaq: TWGP - news - people ), a financial-research outfit, with hedge funds generating much of the money. Hedge funds also buy the potentially toxic waste that banks create when they bundle credit derivatives into so-called synthetic deals. By separating a portfolio of derivatives into different tranches, banks can create virtually default-proof securities for conservative investors--if somebody else is willing to buy riskier "equity" tranches whose value vaporizes when as few as one or two of the underlying bonds default. Banks once kept such tranches on their books as a cost of doing business. Now, says Fitch Ratings, hedge funds are buying them to goose returns. Regulators say there's no reason to worry--yet. All big banks require hedge funds to back up their swaps with cash collateral that is adjusted daily, says Kathryn Dick, deputy comptroller for credit and market risk at the Office of the Comptroller of the Currency. But banks can make only rough guesses at the value of swaps and thus how much collateral their counterparties need to ante up. Even the smartest guys can come up shorthanded. Ask Charlie T. Munger, vice chairman of Warren Buffett's Berkshire Hathaway (nyse: BRKA - news - people ), which lost $404 million unwinding credit, interest-rate and foreign-exchange derivatives positions in its General Re unit. "When we ran it off, it didn't run off at anything like book value," Munger says. "I would bet a lot of money there are some terrible valuations on the books of corporate America." JPMorgan, the most forthcoming of the big derivatives dealers, figures it could lose $65 billion over several years if everybody on the other side of a derivatives trade went broke. A scary number when compared with the bank's $110 billion in capital. Implausible, too, because most of its counterparties are big financial institutions. Hedge funds and other smaller players are much more exposed. Like swaps on interest rates and foreign currency, credit swaps outstanding dwarf the underlying bonds in circulation. That can be a problem when a creditor defaults, as with Delphi (nyse: DPH - news - people ) and other auto parts makers earlier this year. With most swaps, the buyer of protection has to hand over defaulted bonds to get its money, tough to do if, as with Delphi, $20 billion in protection has been written on just $2 billion in bonds. Calamity was averted by the International Swaps & Derivatives Association, which held an auction to determine the amount of cash protection buyers would get. The derivatives market weathered its last near-death experience in early 2005, when credit agencies downgraded the debt of General Motors (nyse: GM - news - people ) and Ford (nyse: F - news - people ), devastating the value of the most risky synthetic derivatives. Hedge funds thought they'd been smart by locking in a three-to-four-percentage-point spread by selling protection on those tranches and buying it on less risky ones. Suddenly, though, they had to close out their moneylosing positions. So many funds had made the same bet that it "magnified the deleveraging process," in the dry words of the Bank for International Settlements. Translation: "Banks refused to buy or sell," says Randall Dodd, a former Commodity Futures Trading Commission economist who now runs the Financial Policy Forum, a Washington think tank. "These guys couldn't trade out of their positions." Bottom-fishing investment banks eventually bailed hedge funds out of their problems. But Dodd and other critics wonder if banks have extracted enough collateral from their hedge fund clients to protect themselves in a wider crisis. "No one has good facts on these things," says David Hsieh, professor at Fuqua School of Business at Duke University, "because hedge funds are private investments."


Balancing the Books
A Legacy Worth Disinheriting: The Federal Reserve remains spooked by the specter of the Great Depression
Edited by Jay Palmer
03/03/2003
Barron's
32

A History of the Federal Reserve Volume 1: 1913-1951

By Allan H. Meltzer

University of Chicago Press; 800pp; $75

Reviewed by Randall W. Forsyth


Central bankers, like generals, often are accused of fighting the last war. The Federal Reserve remains haunted by its most humiliating defeat -- an utter failure not only to prevent the Great Depression, but its ineptitude in countering the most severe downward spiral in American economic history. That failure arguably has a profound impact on Fed policy to this day.

Serious students of monetary policy will be familiar with the broad outline of what's told in Allan H. Meltzer's monumental "A History of the Federal Reserve: Volume 1: 1913-1951." The Great Depression is the most crucial period covered in the book, which encompasses the span from the Fed's founding to the Treasury Accord of 1951, when it gained its independence as a modern central bank.

Unlike others who lay the blame for the Depression on a single cause -- the stock-market Crash of '29, the Smoot-Hawley tariff, the collapse of the international gold standard or the Fed's permitting a one-third contraction in the money supply -- Meltzer reasonably attributes the catastrophe to the confluence of these shocks. But the Fed, which was established after a succession of financial panics in the 19th and early 20th centuries -- precisely to prevent their recurrence -- failed in that narrower mission.

That failure, as Meltzer keenly describes, was a result of misguided policies and political infighting. Policy was ruled by the (wrongheaded) conventional wisdom of the day, that said that the collapse of the 'Thirties was necessary to purge the excesses of the 'Twenties. The Fed was to restrict itself to providing credit solely to meet the private sector's needs -- by buying only "real bills" and not purchasing government securities, which supposedly only pumped up speculative credit, according to the prevailing notion of the time. The reestablishment of the gold standard in the 1920s was considered a success then, but Meltzer describes how it sowed the downturn's seeds. Britain needed to deflate while France and the U.S. had to inflate, so all resisted. New York Fed President Benjamin Strong, who de facto ran policy in the 'Twenties, eased to help the pound. But his jealous counterparts would posthumously blame him for inflating the bubble that burst in 1929.

More important, Meltzer details the dithering that prevented the Fed from taking the most basic monetary action -- large-scale purchases of government securities to add liquidity to the banking system. Fed officials thought policy already was easy because interest rates were near zero and banks didn't borrow from the Fed, ignoring the rise in real interest rates caused by deflation and the contraction in the money stock.

The Bank of Japan repeated those blunders through most of the 'Nineties. The Fed, having learned from history, has not been doomed to repeat it. The U.S. central bank already has slashed its key interest rate target 12 times since January 2001 to a nearly irreducible 1 1/4%. And in a speech last November that still reverberates, Fed Governor Ben Bernanke pointed out that the central bank hasn't run out of monetary bullets even if it runs out of basis points. Even at 0%, the Fed still has a magical device -- the printing press. With a steward of the dollar trumpeting the power to debase it, is it any wonder that gold has rallied and the spread between TIPS (Treasury inflation-protected securities) and fixed-return Treasuries has widened?

Yet the circumstances of the bursting of the bubbles of the 'Twenties and the 'Nineties were markedly different. Ahead of the '29 Crash, the Fed was actively trying to curb speculation. Greenspan & Co. claim no part in the recent bubble, with the Maestro contending that actions to curb the inflation in asset prices posed risks to the economy.

His protest, however, ignores the role played by the Fed in encouraging soaring asset inflation. As previously noted in Barron's, the central bank provided the monetary fuel for the Nasdaq bubble and then throttled it back ("Fed Inflated, Then Burst IPO Bubble," Dec. 11, 2000). Investors and traders also comforted themselves with the notion that the central bank would (and could) rescue the financial markets if they collapsed. That belief, which gained currency especially after the Long Term Capital Management debacle of 1998, came to be known as "The Greenspan Put" -- a get-out-of-jail-free card for speculators.

Now, even though the world enjoys expanding international trade and growth in output and income-exactly the opposite of the 'Thirties -- the Fed still worries about deflation and depression. Moreover, every indicator -- money supply, negative real rates, a steeply sloped yield curve, a weakening dollar and rising commodity prices -- is full-tilt expansionary. Indeed, William Silber of New York University's Stern School recently wrote in the Financial Times that the Fed may not act to curb inflation soon enough -- its blunder of the 1970s. How the Fed failed to foster stable prices after 1951 should be the basis of Meltzer's second volume, which I eagerly await.

---

RANDALL W. FORSYTH is an assistant managing editor at Barron's


SEE

Wall Street Mantra

Black Gold

U.S. Economy Entering Twilight Zone

Hedge Funds, Junk Bonds, Ponzi Schemes



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Today We Are All Scot's

A'hae toast ya laddie with a wee dram.
It is Robbie Burns Day around the world.


http://www.360flowers.net/360flowers_images/robbieburns.jpg


In commemoration I link to my previous posts for your enlightenment, entertainment and erudition.

Happy Burns Day-2007


Happy Rabbie Burns Day-2006


Radical Robbie Burns, Peoples Poet-2005




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Thursday, January 24, 2008

Blogging For Choice III

As follow up on my previous Blogging For Choice articles; I and II here is more evidence that the Supreme Courts decision over abortion left the door open to privatization of health care in Canada, in particular the privatization of abortion services.

That meant a restriction of genuine choice for women who need or want abortions to using Morgentaler Clinics or else leaving their provinces for clinics in other provinces or in the U.S.


Many Canadian women lack access to reproductive health services




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Blogging For Choice II

I got chastised for having assumed that Blogging For Choice was all that was occurring around the upcoming 20th Anniversary of the Morgentaler Decision that saw the Supreme Court abandon all laws aground abortion.

I stand corrected it appears there will be blogging bursts and public events occurring around this. In fact
Antonia Zerbisias kicked it off on her blog last weekend

However one of points which I raised in my post and my comments in response to my commentators remained unanswered. So I will ask it again. Why is it that 20 years later Morgentaler has a great private medical business going, and women still do not have access to publicly funded abortions.


Toronto, Friday, January 25, 7:30pm. Fundraising Reception for National Abortion Federation Canada ’s Patient Assistance Fund. Many women lack the resources to pay for costs associated with abortion care, such as transportation, childcare, and medications. Also, some women cannot access medical coverage and require financial support. Donations to this fund will allow NAF Canada to provide financial assistance when it is urgently needed.
And once this money is raised will it be used to lobby for womens right to free publicly provided abortions? No of course not it will be used to top up Morgentaler's private clinic fees. The Left and the Womens movement need to move beyond supporting Morgentaler and demand fully funded abortions to be provided by public hospitals.

On the other hand the libertarian right need to advocate for choice, after all thats the credo of the right, by defending a woman's right to choose against their social conservative allies and defend Dr. Morgentaler since his clinics provide an example of a privatized alternative to the public system that has worked quite effectively for twenty years.

That is the real debate that would move this beyond the moral pretenses of the religious right which have shaped the debate since the Supreme Court decision twenty years ago.

Twenty years ago the movement for Womens Reproductive rights got side tracked into a single issue campaign around abortion and then that became reduced to the defense of Dr. Morgentaler. An honest assessment of that needs to be done twenty years later by the Feminist movement, the Left and the Libertarians.

A possible reconciliation between these two apparently contradictory positions would be the creation of co-operative Womens Health Clinic. Medical practitioners would be on salary, workers in the centre would be on the co-op board, a combination of Doctors and Nurse Practitioners, as well as specialists Gyn-Ob would work in the clinics as well as Mid Wives. The centre would provide contraceptive and family planning information, natural child birth options as well as a full delivery centre and abortion services. As well a health spa could be part of the services provided, using the European methods of non-osteopathic therapies, as well as having certified acupuncturists, massage therapists and naturopath's available. In other words a holistic approach to womens health and especially reproductive health.Those services could be covered by benefit plans when not covered by Medicare. Extra costs that are not covered by medicare, benefit plans, or third party insurance, could then be covered by annual membership fee.

Finally let us look at the root of the problem of abortion. The failure of contraception and family planning.

Here is an interesting post I came across that points out a significant challenge to popular misconceptions about teen pregnancy.

Teen Pregnancy Does Not Perpetuate Poverty

I just read an interesting article about a study by Frank Furstenberg that shows that teen motherhood does not perpetuate poverty.

According to the 30-year-study, postponing motherhood does not have a significant impact on a person’s chances of escaping poverty. For all intents and purposes, impoverished girls who bear children tend to do just as well economically and educationally as the ones who do not.

In other words, poor teens tend to get pregnant more often, but teenagers who get pregnant have the same odds of educational and financial success as the ones who do not.

Mainly, the economic conditions in which a person grows up determine their odds of ending up poor. Whether or not the person gets pregnant as a teenager has little affect.

Although the findings go against the common perception, I guess it makes sense. A poor girl will likely end up in poverty later in life regardless of whether or not she gets pregnant as a teenager. A wealthy girl’s parents can still ensure her success with their money even when the girl gets pregnant as a teenager.

I still see teen pregnancy as a significant mistake, but we have such a classist society that making mistakes has little statistical effect on who ends up poor and who does not. While we need to help people not make mistakes, we have to find a way to eliminate the classism of our society to ever end poverty.


Jamie Lee Spears is a perfect example of the challenge of teen pregnancy, and of unplanned unwanted pregnancies. But unlike working class and poor teen age girls, she is rich. Of course that does not mean she will make a good or responsible mother, just look at her sister.

However her pop star status makes it seem like its a lesser sin to have pre-marital sex if you are willing to stay pregnant and keep your child. This leads to a social acceptance of teen pregnancy, rather than teen sex per se, that is teen sex with protection to avoid pregnancy. That would never do. She of course has become a poster girl for the right wing anti-abortion hypocrites.

The Anti-Abortion movement opposes all forms of family planning and contraception, they oppose public health and sex eduction as well a relationship education based on humanistic principles. They demand sex education be moral education based on their particular religious view in opposition to ethical humanist sexuality/relationship education.

They push abstinence as an alternative to contraception, in perpetual denial that teens are sexually active. They deny the pleasure principle which challenges their ideology of sex for reproduction only. They hate the sexual revolution that occurred in the sixties with advent of the development of the birth control bill, which allowed for sex for pleasure rather than reproduction. In fact they continually blame the sexual revolution and the pleasure principle it embraced as the cause of all social evils.
In doing so the followers of the patriarchal Abrahamic religions deny the fact that in their holy book the pleasure principle was first espoused.


And here again is where the Left and the Libertarian wings of feminism can align; the need for making informed responsible choices. The right loves choice and of course responsibility, versus rights. Yet when it comes to human sexuality and relationships they deny the very information needed and access to contraception, that would allow for an informed responsible decisions by anyone intending on having sex. Hence their continued attacks on planned parenthood.

Thus they create the conditions for the continued emotional plague where we see teens taking the lives of other teens because of their emotional immaturity in dealing with jealousy, or we see young women giving birth in denial and abandoning their babies. Such is the moral consequence of the anti-abortion advocates of abstinence, which is simply denial of reality. Teens and adults have sex, for pleasure, not for procreation.

Only the liberation of the natural capacity for love in human beings

can master their sadistic destructiveness.

Wilhelm Reich, on Sigmund Freud's hope






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Wednesday, January 23, 2008

Mr. Dithers II

It's clear that dithering is now an official Liberal leadership trait.

Dion did not respond specifically when asked if Liberals are prepared to defeat the government over Afghanistan, should Harper make extension of the mission a matter of confidence.





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SEE

Liberals Gain Third Party Status



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