A Gen-Xer Responds to Obama's Victory

"[W]hen we watched Barack Obama's victory speech on Tuesday night, we looked into the eyes of a real leader, and decades of cynicism about politics and grass-roots movements and community melted away in a single moment. We heard the voice of a man who can inspire with his words, who's unashamed of his own intelligence, who's willing to treat the citizens of this country like smart, capable people, worthy of respect. For the first time in some of our lifetimes, we believed." http://www.salon.com/mwt/feature/2008/11/07/havrilesky/

The End of an Era

Has the Financial Industry's Heyday Come and Gone? APRIL 28, 2008 For the past three decades, finance has claimed a growing share of the U.S. stock market, profits and the overall economy. But the role of finance -- the businesses of borrowing, lending, investing and all the middlemen in between -- may be ebbing, a shift that would redefine the U.S. economy. "The role of finance in the economy is going to come down significantly in the coming years," says Carlos Asilis, chief investment officer at Glovista Investments, a New Jersey money manager. "From a societal standpoint, we got carried away with finance." The trend already has hurt companies beyond banks and Wall Street firms. General Electric Co.'s first-quarter profits at its financial-services businesses were 21% lower than a year earlier. Retailer Target Corp., which got 13% of its before-tax profit last year from credit cards, last month wrote off $55.5 million in credit-card loans, 8.1% of its total portfolio at an annualized rate. Cast Your Vote Question of the Day: What's your forecast for the U.S. financial industry over the next two years? "I think you're seeing a clear inflection point," says Tom Gallagher, an ISI Group analyst. "Whether it's financials as a share of the stock market or financials as a share of GDP, we've peaked." Finance was lifted by deregulation, globalization and technological innovation. Combined, these forces allowed capital to flow far more freely around the globe, brought flexibility to the economy and made finance lucrative. Domestic financial-sector profits accounted for 13% of pretax profits in 1980, the Federal Reserve says. Last year, they accounted for 27%. In 1980, GE garnered 92% of its profit from manufacturing. In the first quarter, profit from GE's financial businesses, which extend credit from personal loans to factory purchases, represented 56% of profit. As finance rose, financial workers took a bigger chunk of total U.S. pay. And as technology allowed financial firms to do more with fewer people, individual paychecks got fatter. Finance was a major factor in the widening gap between the very rich and the middle class. In 1980, finance workers made about 10% more than comparable workers in other fields, estimates New York University economist Thomas Philippon. By 2005, that premium was 50%. That money diverted some of the brightest minds from other pursuits. "We're seeing significantly more of our students going into the financial sector," says Vincent Poor, dean of Princeton's engineering school. "Traditionally, engineering students had not followed that path." The creation of securities backed by mortgages and other loans and other innovations made it easier for financial firms to spread risk, and thus they became more willing to lend to households to fuel spending. Household debt including mortgages and credit cards went from 13% of household assets in 1980 to 19% last year. During that period, personal savings rates fell to nearly zero. In the 2000s, finance went into overdrive, creating an alphabet soup of derivatives that, it turned out, didn't have the risk-reducing properties they were supposed to have. Mr. Philippon compares some to "sheep with fifth legs -- something you would see in a zoo and wonder what Nature was thinking." For finance workers, this shift could resemble the 1980s, when manufacturing lost its pole position in the U.S. labor market and thousands found that skills they had honed over the years were less marketable. The Bureau of Labor Statistics already counts 60,000 fewer people working in finance than a year ago. Merrill Lynch & Co. is cutting 4,000 jobs, and Lehman Brothers Holdings Inc. is cutting 1,425. Many of Bear Stearns Cos.' 14,000 employees are expected to lose their jobs when J.P. Morgan Chase & Co. swallows the firm. Mr. Philippon argues that the surge of financial activity that began in 2002 created an employment bubble that is now busting. His model suggests total employment in finance and insurance has to fall to 6.3 million to get back to historical norms, and that means losing an additional 700,000 jobs in the sector. Finance has seen job cuts before and bounced back. After the 1987 stock-market crash, E.F. Hutton & Co. was taken over by Shearson Lehman Brothers, then a division of American Express Co., and shed 5,000 jobs. Among them was Jeffrey Applegate's job as a strategist. He spent the subsequent year doing carpentry and thinking he might make a career of it if financial jobs didn't come back. He got hired by Shearson Lehman, which evolved into the present-day Lehman Brothers. Now chief investment officer for Citigroup Inc.'s Citi Global Wealth Management, Mr. Applegate thinks the damage to the financial sector this time will be more lasting than 1987. (Citigroup has announced 6,000 job cuts since the credit crisis began.) But he doubts finance's role in the economy will ebb much. Globalization's demand for free-flowing capital will continue. And the process of turning loans into securities is too powerful a tool for risk management and credit creation to abandon. "Is securitization going to go away? I doubt it," he says. "Is it going to be more transparent? Are ratings going to be more robust? Is there going to be more regulation? Yeah." Global governments are moving to require financial firms -- both commercial banks and investment firms like Bear Stearns -- to hold bigger capital cushions against the credit they extend so they are better able to withstand financial tornadoes. And that lower leverage, inevitably, means lower profits for finance. But even before new regulations bite, investors are wary of the securities that ultimately are tied to mortgages and other loans made to consumers. And that could pinch American consumers long dependent on credit to spend, sometimes beyond their means. Harley-Davidson Inc. last year earned about 15% of its operating income through its financial services division, which offers financing to its motorcycle customers; that's up from 5% a decade ago. In the first quarter, Harley had a hard time selling the loans it originated; its financial-services profits fell by 41%, as a result. With its customers feeling the economic downturn and less able to borrow to buy bikes, the company, which shipped 330,619 Harley-Davidson motorcycles last year, plans to ship between 23,000 and 27,000 fewer in 2008. Write to Justin Lahart at justin.lahart@wsj.com For the past three decades, finance has claimed a growing share of the U.S. stock market, profits and the overall economy. But the role of finance -- the businesses of borrowing, lending, investing and all the middlemen in between -- may be ebbing, a shift that would redefine the U.S. economy. "The role of finance in the economy is going to come down significantly in the coming years," says Carlos Asilis, chief investment officer at Glovista Investments, a New Jersey money manager. "From a societal standpoint, we got carried away with finance." The trend already has hurt companies beyond banks and Wall Street firms. General Electric Co.'s first-quarter profits at its financial-services businesses were 21% lower than a year earlier. Retailer Target Corp., which got 13% of its before-tax profit last year from credit cards, last month wrote off $55.5 million in credit-card loans, 8.1% of its total portfolio at an annualized rate. Cast Your Vote Question of the Day: What's your forecast for the U.S. financial industry over the next two years? "I think you're seeing a clear inflection point," says Tom Gallagher, an ISI Group analyst. "Whether it's financials as a share of the stock market or financials as a share of GDP, we've peaked." Finance was lifted by deregulation, globalization and technological innovation. Combined, these forces allowed capital to flow far more freely around the globe, brought flexibility to the economy and made finance lucrative. Domestic financial-sector profits accounted for 13% of pretax profits in 1980, the Federal Reserve says. Last year, they accounted for 27%. In 1980, GE garnered 92% of its profit from manufacturing. In the first quarter, profit from GE's financial businesses, which extend credit from personal loans to factory purchases, represented 56% of profit. As finance rose, financial workers took a bigger chunk of total U.S. pay. And as technology allowed financial firms to do more with fewer people, individual paychecks got fatter. Finance was a major factor in the widening gap between the very rich and the middle class. In 1980, finance workers made about 10% more than comparable workers in other fields, estimates New York University economist Thomas Philippon. By 2005, that premium was 50%. That money diverted some of the brightest minds from other pursuits. "We're seeing significantly more of our students going into the financial sector," says Vincent Poor, dean of Princeton's engineering school. "Traditionally, engineering students had not followed that path." The creation of securities backed by mortgages and other loans and other innovations made it easier for financial firms to spread risk, and thus they became more willing to lend to households to fuel spending. Household debt including mortgages and credit cards went from 13% of household assets in 1980 to 19% last year. During that period, personal savings rates fell to nearly zero. In the 2000s, finance went into overdrive, creating an alphabet soup of derivatives that, it turned out, didn't have the risk-reducing properties they were supposed to have. Mr. Philippon compares some to "sheep with fifth legs -- something you would see in a zoo and wonder what Nature was thinking." For finance workers, this shift could resemble the 1980s, when manufacturing lost its pole position in the U.S. labor market and thousands found that skills they had honed over the years were less marketable. The Bureau of Labor Statistics already counts 60,000 fewer people working in finance than a year ago. Merrill Lynch & Co. is cutting 4,000 jobs, and Lehman Brothers Holdings Inc. is cutting 1,425. Many of Bear Stearns Cos.' 14,000 employees are expected to lose their jobs when J.P. Morgan Chase & Co. swallows the firm. Mr. Philippon argues that the surge of financial activity that began in 2002 created an employment bubble that is now busting. His model suggests total employment in finance and insurance has to fall to 6.3 million to get back to historical norms, and that means losing an additional 700,000 jobs in the sector. Finance has seen job cuts before and bounced back. After the 1987 stock-market crash, E.F. Hutton & Co. was taken over by Shearson Lehman Brothers, then a division of American Express Co., and shed 5,000 jobs. Among them was Jeffrey Applegate's job as a strategist. He spent the subsequent year doing carpentry and thinking he might make a career of it if financial jobs didn't come back. He got hired by Shearson Lehman, which evolved into the present-day Lehman Brothers. Now chief investment officer for Citigroup Inc.'s Citi Global Wealth Management, Mr. Applegate thinks the damage to the financial sector this time will be more lasting than 1987. (Citigroup has announced 6,000 job cuts since the credit crisis began.) But he doubts finance's role in the economy will ebb much. Globalization's demand for free-flowing capital will continue. And the process of turning loans into securities is too powerful a tool for risk management and credit creation to abandon. "Is securitization going to go away? I doubt it," he says. "Is it going to be more transparent? Are ratings going to be more robust? Is there going to be more regulation? Yeah." Global governments are moving to require financial firms -- both commercial banks and investment firms like Bear Stearns -- to hold bigger capital cushions against the credit they extend so they are better able to withstand financial tornadoes. And that lower leverage, inevitably, means lower profits for finance. But even before new regulations bite, investors are wary of the securities that ultimately are tied to mortgages and other loans made to consumers. And that could pinch American consumers long dependent on credit to spend, sometimes beyond their means. Harley-Davidson Inc. last year earned about 15% of its operating income through its financial services division, which offers financing to its motorcycle customers; that's up from 5% a decade ago. In the first quarter, Harley had a hard time selling the loans it originated; its financial-services profits fell by 41%, as a result. With its customers feeling the economic downturn and less able to borrow to buy bikes, the company, which shipped 330,619 Harley-Davidson motorcycles last year, plans to ship between 23,000 and 27,000 fewer in 2008.

Wasilla hillbillies looting Neiman Marcus from coast to coast

WOW. NEWSWEEK has also learned that Palin's shopping spree at high-end department stores was more extensive than previously reported. While publicly supporting Palin, McCain's top advisers privately fumed at what they regarded as her outrageous profligacy. One senior aide said that Nicolle Wallace had told Palin to buy three suits for the convention and hire a stylist. But instead, the vice presidential nominee began buying for herself and her family—clothes and accessories from top stores such as Saks Fifth Avenue and Neiman Marcus. According to two knowledgeable sources, a vast majority of the clothes were bought by a wealthy donor, who was shocked when he got the bill. Palin also used low-level staffers to buy some of the clothes on their credit cards. The McCain campaign found out last week when the aides sought reimbursement. One aide estimated that she spent "tens of thousands" more than the reported $150,000, and that $20,000 to $40,000 went to buy clothes for her husband. Some articles of clothing have apparently been lost. An angry aide characterized the shopping spree as "Wasilla hillbillies looting Neiman Marcus from coast to coast," and said the truth will eventually come out when the Republican Party audits its books.

Like Father, Like Son

Republican red faces as regulators close bank By Andrew Ward in Washington and Joanna Chung in New York Published: September 8 2008 03:11 Last updated: September 8 2008 03:11 A bank with ties to the family of John McCain was shut down by federal regulators on Friday, marking the 11th US bank failure this year and threatening to cause ripples across the presidential election campaign. Andrew McCain, son of the Republican presidential nominee, was a director of Nevada-based Silver State Bank until resigning in July for “personal reasons”. He was a member of Silver State’s audit committee, which has responsibility for overseeing the bank’s financial accounts. Silver State was heavily exposed to construction and land development loans that have come under pressure as the housing market slumps. Much of the bank’s business was concentrated in Las Vegas and other western cities that have suffered some of the sharpest falls in land prices after years of rapid growth and heavy speculation. [Me: Anyone else remember Charles Keating and Lincoln Savings and Loan?} Silver State had about $2bn of assets and $1.7bn in deposits at the end of June and reported a second-quarter net loss of $72.3m. Its failure is expected to cost the Federal Deposit Insurance Corporation, which insures bank deposits up to $100,000, about $450m-$550m. There is no evidence that Mr McCain did anything wrong nor that his departure was connected to the bank’s financial troubles. But the episode is a potential embarrassment to his father at a time when bank failures are adding to a broader sense of gloom and economic insecurity among US voters. It could revive memories of John McCain’s role in the “Keating Five” scandal during the 1980s savings and loans crisis, when he was reprimanded by a Senate watchdog for lobbying on behalf of a campaign donor whose mortgage lending institution was under investigation by regulators. [Me: Apparently, at least one British journalist does.] The younger McCain joined the board of Silver State in February after it acquired Arizona-based Choice Bank, for whom he had served as a director since 2006. He is an adopted son from his father’s first marriage but also has close ties to the senator’s second wife, Cindy, in his role as chief financial officer of Hensley & Co, the Arizona-based beer distribution company controlled by Mrs McCain. The 11 bank failures in the US this year compare with three in all of 2007 and none in the preceding two years. More are expected. The number of so-called “problem” banks grew from 90 institutions at the end of the first quarter to 117 at the end of June, the highest level since 2003, according to the FDIC. It is drawing up plans to raise additional capital to shore up its insurance fund that has been depleted by this year’s bank rescues. The fund currently holds about $45bn.

Best website EVER for political junkies

Talk about information overload. I love this chart!!!

The Best Dive Bars in Minneapolis

The CC Club is a good pick, but it's an absolute travesty that Liquor Lyle's is not on The List.

Tool of the shorts, but who cares?

I don't know if it's middle age brain setting in or what, but I'm having a hard time keeping track of the casualties of the mortgage bubble. Fortunately, there's the Mortgage Lender Implode-O-Meter to help casual observers of mortgage debacle keep score. While there, be sure to check out Option ARMageddon.

Isn't it ironic (don't you think?)

Obama in St. Paul

Old news, but worth posting anyway. Minnesota Public Radio documents the long and winding line to see Barack Obama at the Excel Center in St. Paul, Minnesota on June 3, 2008

More Iowa Flooding

The Daily Iowan posted a slideshow of aerial photos of the flood: Slideshow: New aerial flooding photos - Photo/Video

Disobedient Rivers

These images coming out of eastern Iowa are downright depressing

Bankers Bawl

Michael Lewis rocks.

How Bernanke's Banker Rescue Spells Their Demise: Michael Lewis Commentary by Michael Lewis

June 10 (Bloomberg) -- One of the many consequences of the Federal Reserve's bailout of the subprime-mortgage market is the sudden urge felt by Fed Chairman Ben Bernanke to let everyone know he won't be making a habit of the practice.

``Once financial conditions become more normal,'' he told a Fed conference on May 13, ``the extraordinary provision of liquidity by the Federal Reserve will no longer be needed. As (Walter) Bagehot would surely advise, under normal conditions financial institutions should look to private counterparties and not central banks as a source of ongoing funding.'

I don't know if Bernanke actually believes that his words will make any difference, or if he's just hoping out loud. But he might as well save his breath because his actions have spoken for him.... [I]f the Fed's money is implicitly on the line every time Lehman Brothers or Goldman Sachs or Morgan Stanley make a trade, one of two things must now happen: Either the Fed permits nature to take its course and allows investment banks to get themselves into trouble all over again. Or the Fed regulates the risk-taking ability of the traders inside the investment banks.

Either Lehman Brothers, Goldman Sachs and Morgan Stanley will use the implicit government guarantee to underwrite their relentless pursuit of incredible sums of money for themselves -- and thus create problems for the Fed and the financial system that will make the undoing of Bear Stearns seem trivial. Or some government agency will explicitly prevent them from taking those risks.

[T] here's no chance that Wall Street investment banks, operating with a government guarantee, can be controlled by anything short of new rules. Even without a government guarantee their risk-taking has proven all but impossible to monitor.

One of the unsettling traits of our financial markets is the inability of its putative authorities -- a group that includes not just the Fed chairman and the Treasury Secretary but also the chief executive officers of the big firms -- to understand what the people inside them do for a living.

Another related trait is the near total absence of stigma attached to risk takers who lose large sums of money. There's status to be had from huge trading losses: The guy who lost the fortune must know something or he would never been put into the position to lose it. Brian Hunter breaks a world record, blowing through $6.8 billion betting on the direction of natural-gas prices at Amaranth Group Inc., then turns up a few months later, inside his new hedge fund, running other people's money. No, once the government guarantees the debts of a big Wall Street firm it must inevitably also seek to control the risks that firm runs. And so while the bailout of Bear Stearns may seem like a gift to the big Wall Street firms, it's really not. Limit the risk that these firms run and you also limit the sums of money they can make. For some time now the action has been moving out of the big Wall Street firms and into hedge funds. The quality of financial information, and the ability to act on it, is better outside the big firms than inside of them, even, it now appears, when the information concerns one of the big firms. (The Security and Exchange Commission's investigation into the run on Bear Stearns that preceded the crash has identified three alleged culprits and two of them are hedge funds: Citadel Investment Group and Paulson & Co.)

That trend is about to accelerate, as the golden age of the Wall Street investment bank draws to a close. The glorious 25- year run of these firms will have ended not with a bang, or a whimper, but with a government guarantee.

And the investment banker himself will have taken the final step on the journey to becoming, in all but name, the worst thing he can imagine being: a commercial banker. Last Updated: June 10, 2008 00:05 EDT

Naples' Garbage Problem

Oh my!

Fires and protests greet cabinet in Naples

By Guy Dinmore in Naples

Published: May 21 2008 03:43 Last updated: May 21 2008 03:43

Barricades in the streets of Naples and the smoking remains of a torched Gypsy camp await the first official cabinet meeting on Wednesday of Italy’s new government under Silvio Berlusconi.

The billionaire prime minister promised in his April election campaign to take his ministers from Rome to this southern port city whose descent into the stinking chaos of piles of uncollected garbage became a rallying cry for his centre-right coalition.

Staying one night in the luxury Vesuvius hotel, at a reported cost of €4,200 (£3,345) for a suite with pool, it is not clear whether the 71-year-old media mogul will get a personal taste of the “creeping anarchy” described on Tuesday by the daily Mattino. With a burst of activity since the weekend, the city’s unpopular leftwing mayor Rosa Russa Iervolino got the historic centre – where the cabinet will meet – cleaned up and even had railings painted around public works.

Life is quite different in the grim suburbs where shoulder-high mounds of garbage have accumulated since the latest chapter in Naples’ long-running refuse crisis erupted in December.

The Anti-Smog Mammas Association advises parents not to send children to school in sandals for fear of rat attacks. Many are simply keeping them at home.

Over the past week or so, firemen have had to extinguish scores of protest fires set nightly by residents. Some newspapers reported that Mr Berlusconi has received intelligence reports that Mafia gangs, known in Naples as the Camorra, are setting fires in order to assert territorial dominance.

While many residents are pinning their hopes, but not much faith, in Mr Berlusconi to alleviate their plight, at least seven protest rallies are being organised, from environmentalists to labour activists and immigrants.

In the northern suburb of Chiaiano, residents are keeping vigil to stop a municipal proposal to use a vast disused quarry inside a park as a new “mega-tip”. Trees have been felled and cars overturned to block access.

According to unconfirmed reports, Chiaiano will be one of 10 new tips to be designated by the cabinet on Wednesday. People are furious. From the left and right as well as the Camorra, residents have united in protest.

“It would be like making a rubbish tip out of Hyde Park in London,” said Ludovico Maratello, spokesman for the protest committee.

Another kind of fear is gripping the city’s Roma or Gypsy community, which blames right-wing nationalists in the government, as well as the media, for whipping up a xenophobic frenzy over security and immigration during the elections. This manifested itself in mob attacks last week after a Gypsy teenager was said to have been arrested for allegedly trying to steal a baby.

An illegal Gypsy camp in the largely Camorra-controlled suburb of Ponticelli was still smouldering on Tuesday. One man explained that they had torched the shacks after making sure all the residents were safely driven away.

Anti-immigration measures, as well as tax cuts for property owners, are on the cabinet agenda on Wednesday. Gypsies, many of them born in Italy but denied citizenship, fear they will be targeted. “This government is full of fascists,” commented one Gypsy who asked not to have his name published.

Run for the Lakes

It was a marvelous day for a 13.1-mile run (thank god I wasn't running the full marathon!) Criminy! It's almost May.

We’re #1!

When it comes to incarceration, the U.S. truly is the global leader:

The United States has less than 5 percent of the world’s population. But it has almost a quarter of the world’s prisoners. Indeed, the United States leads the world in producing prisoners, a reflection of a relatively recent and now entirely distinctive American approach to crime and punishment. Americans are locked up for crimes — from writing bad checks to using drugs — that would rarely produce prison sentences in other countries. And in particular they are kept incarcerated far longer than prisoners in other nations. Criminologists and legal scholars in other industrialized nations say they are mystified and appalled by the number and length of American prison sentences. The United States has, for instance, 2.3 million criminals behind bars, more than any other nation, according to data maintained by the International Center for Prison Studies at King’s College London. China, which is four times more populous than the United States, is a distant second, with 1.6 million people in prison. (That number excludes hundreds of thousands of people held in administrative detention, most of them in China’s extrajudicial system of re-education through labor, which often singles out political activists who have not committed crimes.)

Think Twice before Taking a Break from Your Exercise Routine!

Consistency, consistency! Check out these findings reported in Science Daily.

The consequences of quitting exercise may be greater than previously thought, according to a new study from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory that determined that the weight gained during an exercise hiatus can be tough to shed when exercise is resumed at a later date. Using data collected from the National Runners’ Health Study, Williams found that the impacts of increasing and decreasing vigorous exercise aren’t the same among all runners. At distances above 20 miles per week in men and 10 miles per week in women, the pounds gained by running less were about the same as the pounds lost by running more. At these exercise levels, the effects of training and quitting training are comparable, and the weight gains and losses associated with changes in exercise levels are probably reversible. However, Williams found that people who didn’t run as many miles per week face an uphill battle if they want to lose the pounds accumulated during an exercise hiatus. At these less intense levels, an interruption in exercise produces weight gain that is not lost by simply resuming the same exercise regimen.

Globalization, Meet Gates of the Arctic

Scary stuff from the National Park Service: BILLINGS, Mont. (AP) - Pesticides, heavy metals and other airborne contaminants are raining down on national parks across the West and Alaska, turning up at sometimes dangerously high levels in lakes, plants and fish. A sweeping, six-year federal study released Tuesday found evidence of 70 contaminants in 20 national parks and monuments - from Denali in Alaska and Glacier in Montana, to Big Bend in Texas and Yosemite in California. The findings revealed that some of the Earth's most pristine wilderness is still within reach of the toxic byproducts of the industrial age. "Contaminants are everywhere. You can't get more remote than these northern parts of Alaska and the high Rockies," said Michael Kent, a fish researcher with Oregon State University who co-authored the study. The substances detected ranged from mercury produced by power plants and industrial chemicals such as PCBs to the banned insecticides dieldrin and DDT. Those can cause health problems in humans including nervous system damage, dampened immune system responses and lowered reproductive success. Contaminants that accumulated in fish exceeded human consumption thresholds at the eight parks that researchers focussed on most: Sequoia and Kings Canyon, Mount Rainier, Olympic, Glacier, Rocky Mountain, Gates of the Arctic and Denali national parks and Alaska's Noatak National Preserve. Also, mercury levels at the eight parks and DDT levels at Glacier and Sequoia and Kings Canyon exceeded health thresholds for fish-eating wildlife. Kent said he found airborne contaminants are causing male fish to develop female organs in some parks. Much of the contamination is thought to have come from overseas - traveling global air currents from Europe and Asia. But researchers said they were surprised to find substantial contamination from the local use of legal pesticides, particularly in agricultural areas around Glacier, Rocky Mountain and Sequoia and Kings Canyon parks. University of Washington atmospheric researcher Daniel Jaffe said scientists previously thought banning substances like DDT and dieldrin would lessen the persistence of chemicals in the environment. "We replaced them with pesticides with much shorter lifetimes in the environment," Jaffe said. "But in places like the Central Valley of California, we are applying many, many tons of these every year. ... We now know they can move substantial distances." A parks advocacy group called the federal report "a wake-up call" that should mobilize Congress to take a tougher stance on air pollution. "We can take steps to reduce mercury emissions from power plants, steps to reduce carbon dioxide emissions that cause global warming," said Will Hammerquist with the National Parks Conservation Association. The $6 million study is known as the Western Airborne Contaminants Assessment Project. It is the most comprehensive to date on the distribution and concentration of contaminants outside developed areas, according to the project's scientific director, Dixon Landers with the Environmental Protection Agency. Contrary to the conventional wisdom that remoteness means less pollution, Landers said many of the parks - particularly those at higher elevations and in colder climates - actually are at higher risk. Mercury from power plants in China, for example, is borne across the Pacific in clouds that rise up when they hit West Coast mountains. That causes the mercury to drop out of the clouds attached to rain droplets or snowflakes, he said. Release of the study, which was coordinated by the National Park Service, came after a delay of several months. A Park Service spokeswoman, Colleen Flanagan, said the delay was caused by the time needed to analyze the vast volumes of data collected, from 2002 to 2007.

Endurance Sports Meet Private Equity

Wow. Those private equity schmucks will not stop until they have taken over the world. Falconhead Capital LLC issued a press release today announcing the completion of its acquisition of Inside Communications Inc., the publisher of the venerable cycling magazine VeloNews "The Journal of Competitive Cycling." Falconhead Capital also recently purchased Elite Racing - the firm that puts on the Rock 'n' Roll Marathon series. Falconhead is also rumored to be interested in purchasing the Los Angeles Marathon. Why are these parasites so interested in endurance sports? Here's a hint from a The Deal.com article that is available on Falconhead's website.

Triathlons are a $1.3 billion industry and growing; membership has risen by 23% since 2002 and is now growing by 35% a year, according to USA Triathlon, the sport's official governing body."

Moreover, the demographics "are highly attractive to marketers," says Moross, noting that the average household income for triathletes is $160,000.

"Where we see big value is where we can harness all customers who read these magazines. It's all about being able to spend more money and get folks to buy things," he adds. Revenue comes from entry fees, sponsorship, TV, merchandise and fitness expos.

I haven't quite processed all of this yet. But I'm pretty sure that this is not a good thing, and that it signals the top of the running/cycling/triathlon boom.

The End of the Specialty Running Store

Can small independent running stores compete as chaings like Road Runner Sports, The Running Room, and Fleet Feet expand? Check out this NY Times article.

Some of the stores are seemingly no bigger than a closet and their wares fairly limited. But for a generation, specialty running stores have managed to survive — even thrive — around the country despite competition from the big chains and online and mail order outlets. These small stores may be at a turning point, though. They face newly invigorated competition from bigger players looking for a piece of their profitable action. Chief among them is Road Runner Sports, a 25-year-old mail order (and now Internet) powerhouse based in San Diego. The company is opening its 19th store this month, and its president and chief executive, Michael Gotfredson, has a goal of 100. The Road Runner stores offer the same personalized service as their specialty rivals but are far bigger (8,500 square feet of selling space, on average) and have a more extensive inventory. At the same time, the specialty running stores are, in effect, graying. Some of the pioneers of the genre got into the business more than 30 years ago, and are now close to retirement age, many without a succession plan.

So much for the great moderation!

I'm tardy in posting this, but this David Leonhardt column should be required reading.

So, how bad could this get?

Until a few months ago, it was accepted wisdom that the American economy functioned far more smoothly than in the past. Economic expansions lasted longer, and recessions were both shorter and milder. Inflation had been tamed. The spreading of financial risk, across institutions and around the world, had reduced the odds of a crisis.

Back in 2004, Ben Bernanke, then a Federal Reserve governor, borrowed a phrase from an academic research paper to give these happy developments a name: “the great moderation.”

These days, though, the great moderation isn’t looking quite so great — or so moderate.

The great moderation now seems to have depended — in part — on a huge speculative bubble, first in stocks and then real estate, that hid the economy’s rough edges. Everyone from first-time home buyers to Wall Street chief executives made bets they did not fully understand, and then spent money as if those bets couldn’t go bad. For the past 16 years, American consumers have increased their overall spending every single quarter, which is almost twice as long as any previous streak.

33 for MVP!

The Minneapolis Star Tribune is reporting that the Twins have reached a long-term deal with first baseman and 2006 MVP Justin Morneau. No details yet, but this can only be good news for Twins fans.

A financial system gone very, very wrong

They say more money has been lost chasing yield than has been lost at the point of a gun. Paul Krugman, the curmudgeon economist / New York Times columnist, reminds us why in his latest missive:

In other words, the United States was not, in fact, uniquely well-suited to make use of the world’s surplus funds. It was, instead, a place where large sums could be and were invested very badly. Directly or indirectly, capital flowing into America from global investors ended up financing a housing-and-credit bubble that has now burst, with painful consequences.

The good news is that Krugman does not foresee America experiencing an economic recession as severe as Argentina circa 1950 (but only because our debt to foreigners is US Dollar- denominated.) Oh, and he uses the word “sophistry” in describing structured financial assets. Love it!