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.)