The Circle Game was a 1968 album put out by old New Hampshire folkie Tom Rush. Tom still tours around this neighborhood and can occasionally be seen at the Bull Run in Shirley, Mass. The title tune was written by Joni Mitchell and has a line in it that aptly describes reflecting on the New Year.
We're captive on the carousel of time, We can't return we can only look behind, From where we came, And go round and round and round, In the circle game .
In the spirit of looking behind and prior to any guesses for 2009, I thought I might look at last year's predictions and see what kind of success I enjoyed for 2008. It actually turned out to be a pretty good year as a prognosticator although quite frankly it didn't take much talent to score well on some of the less than bold guesses I made. http://philgallagher.blogspot.com/2007/12/who-knows-where-time-goes.html
We did go into recession and the Fed was behind the curve but they caught up rather rapidly. By December they had cut the Fed Funds rate to all time lows. These actions were ratified by the bond market in general as the thirty year treasury dropped to a stunningly historic low of 2.64% and the ten year was at 2.20%.
Oil prices did fall dramatically this year and gas did fall below 2 dollars. Troop reductions did begin in Iraq and General Patreus continued to be successful in reducing violence in the country. You can tell just how successful he has been by the lack of coverage by the news media. The Globe and the New York Times won't report any thing positive on Iraq until Obama takes office, then they will trumpet his diplomatic skills.
I missed on the Patriots winning the Super Bowl and the Red Sox winning the World Series but I did have the Celtics winning the NBA championship. I was close on the other two since the Patriots lost in the Super Bowl and the Sox were within a couple of runs in game 7 of the league championship from going to the World Series.
I almost completely wiffed on the presidential election having only John McCain on the ticket for the two parties and did not have Obama on the radar screen as the winner.
Legalized gambling was not approved, marijuana was decriminalized and the income tax was not repealed. I was right on all three except the margin of defeat on the income tax was much larger than I anticipated.
Global warming is starting to lose a little bit of its cache but Hollywood still continued the theme. A great science fiction story, The Day the Earth Stood Still was ruined by having Klatu come to destroy humans because of our bad carbon footprint.
Pakistan didn't have elections but Musharaff is deposed and the tribal lands are coming under increasing attacks. Whitey Bulger wasn't caught and gold did come down in price.
On the wrong side I had Amyn Al Swahiri and Osama Bin Laden being caught or killed. Swahiri is still alive but I am betting Osama has gone to paradise.
So here goes some guesses for 2009.
1. The stock market will begin to recover sometime after the second quarter. Corporate earnings will be disastrous and won't begin to turn around until the third quarter. The Dow will finish over 11,000 in 2009.
2. The world will turn to the U.S. to solve the pirate problem.
3. Castro will pass away and Obama will loosen the foolish U.S. embargo on Cuba.
4. The news will get better. Things won't be much better in general but the news reports will be better because Bush will be gone and the media will want to give Obama every break they can.
5. Mahmoud Ahdmadinejad will lose re-election in Iran. Declining oil prices will bring great pressure on the clerics in Iran.
6. There will be social unrest in China and demonstrations over rising unemployment.
7. The Celtics will repeat as NBA champions and the Yankees will have an enormous payroll and will not win the World Series.
8. Caroline Kennedy will continue on her speaking tour in pursuit of the senate seat in New York. Each time she opens her mouth she will sound more and more like a California freshman valley girl and she will not get the appointment.
9. The state budget deficit will approach 2 billion in Massachusetts, local aid will be cut and we will see an increase in taxes and cuts in state and municipal employees.
10.,The Boston Globe will be sold for a very small price and its strangle hold on opinion in the commonwealth and its influence in general will continue to weaken.
11. I won't lose ten pounds.
Happy New Year!
Wednesday, December 31, 2008
Thursday, December 25, 2008
How Much for the Globe?
It is reported by The Wall Street Journal last night that the New York Times will be looking to liquidate assets in order to meet debt obligations. A couple of those assets are very important to our region.
The Times joined John Henry in a consortium that bought the Red Sox. Of the 700 million dollar purchase price, the Times reportedly put up 75 million dollars in 2002 for nearly 18% of the team, the park and the sports network. It is reported that the current value of the stake may be as much as 166 million.
Given the condition of the economy it may be a difficult task to get that kind of money. It is made all the more difficult because the Times will be viewed as a distressed seller. They have some where in the vicinity of 400 million dollars in bonds that are maturing near the middle of the year and the closer they get to that date the harder negotiations are going to become.
The sale of the Red Sox will have little or no effect on the region and none on the Sox. Minority partners come and go with little fanfare and no impact on the controlling interests in a company. The Times has another interest however, that has a lot to do with what goes on around here or more accurately, what gets reported on what goes on around here.
That interest is the complete ownership of the Boston Globe. In what was an epic blunder, the Times purchased the Globe in 1993 for what now seems to be an idiotic price of 1.1 billion dollars. Over the past 15 years the paper has dropped in value by approximately 80 million dollars a year and is now said to be worth about 20 million dollars according to published comments from Barclay's.
The Times apparently had a chance to dump this mistake back in October of 2006 when it was reported that former General Electric CEO, Jack Welch was interested in acquiring the paper for between 500 and 600 million dollars. Jack is counting his lucky stars that he was rebuffed.
There are many different reasons for the continued demise of the Times. Certainly the rise of the Internet as an advertising vehicle as well as a free source of a variety of information has significantly hurt the media business.
The reverse Midas touch of Arthur "Pinch" Sulzberger Jr. should not be overlooked. Almost every business decision that Pinch has made has gone to Hell in a hand basket. Bad business decisions plus a declining reputation for accuracy and a blatant tilt to the Left has turned the Times into an issuer of junk bonds. Since his rise to the top of the Times management, Pinch has watched the value of the company drop from approximately $7.5 billion down to today's market cap of about 900 million dollars.
What it probably means is that sooner than later the Boston Globe will have a new owner. With any luck a new owner will bring a house cleaning the paper so desperately needs.
The Times joined John Henry in a consortium that bought the Red Sox. Of the 700 million dollar purchase price, the Times reportedly put up 75 million dollars in 2002 for nearly 18% of the team, the park and the sports network. It is reported that the current value of the stake may be as much as 166 million.
Given the condition of the economy it may be a difficult task to get that kind of money. It is made all the more difficult because the Times will be viewed as a distressed seller. They have some where in the vicinity of 400 million dollars in bonds that are maturing near the middle of the year and the closer they get to that date the harder negotiations are going to become.
The sale of the Red Sox will have little or no effect on the region and none on the Sox. Minority partners come and go with little fanfare and no impact on the controlling interests in a company. The Times has another interest however, that has a lot to do with what goes on around here or more accurately, what gets reported on what goes on around here.
That interest is the complete ownership of the Boston Globe. In what was an epic blunder, the Times purchased the Globe in 1993 for what now seems to be an idiotic price of 1.1 billion dollars. Over the past 15 years the paper has dropped in value by approximately 80 million dollars a year and is now said to be worth about 20 million dollars according to published comments from Barclay's.
The Times apparently had a chance to dump this mistake back in October of 2006 when it was reported that former General Electric CEO, Jack Welch was interested in acquiring the paper for between 500 and 600 million dollars. Jack is counting his lucky stars that he was rebuffed.
There are many different reasons for the continued demise of the Times. Certainly the rise of the Internet as an advertising vehicle as well as a free source of a variety of information has significantly hurt the media business.
The reverse Midas touch of Arthur "Pinch" Sulzberger Jr. should not be overlooked. Almost every business decision that Pinch has made has gone to Hell in a hand basket. Bad business decisions plus a declining reputation for accuracy and a blatant tilt to the Left has turned the Times into an issuer of junk bonds. Since his rise to the top of the Times management, Pinch has watched the value of the company drop from approximately $7.5 billion down to today's market cap of about 900 million dollars.
What it probably means is that sooner than later the Boston Globe will have a new owner. With any luck a new owner will bring a house cleaning the paper so desperately needs.
Saturday, December 20, 2008
Help with a Referendum?
At the request of 7 town meeting members and perhaps because they have the authority to conduct discussions whenever they wish to, the selectmen listened to a plea by Patriot Partners last week. The essence of the pitch is to conduct a town wide referendum on the issue of the sale of the Land Locked Land. More plainly was the question Patriot Partners wants asked. Specifically they want the question to be about selling the land to them. In fact, the attorney for the group boldly offered to "help the selectmen write the referendum" question and help to get "the facts out."
This was met with a good deal of skepticism. The reason the group is pushing the idea is because they are working within a limited frame. The option that they hold on the property extends approximately to May of 2010 and without action by the board of selectmen to extend that option it would expire worthless on that date.
The odds of an extension seem remote for various reasons. If the town did pass a referendum that expressed an interest in selling the property then a couple of obvious conditions would need to be met. First and foremost is timing. Why would any seller that is not in need of de-leveraging or raising capital sell its biggest asset in the worst economy in the last 40 years? We are not distressed, we have money in the bank. Second, why would we deal with only one potential buyer?
There is a certain irony to the claims of the developer. The only reason they hold the option of right of first refusal is because of the bankruptcy of the company that originally made such bold development plans. Who can forget Kerry Hunnewell of Cadillac Fairview standing before the townsfolk during the eminent domain proceedings proclaiming the need for 2 million square feet of high-end office space and amenities for the burgeoning computer industry? The town didn't buy into the grandiose plan and subsequently concluded the plan to take the property by eminent domain.
After the consortium of landowners sued over the taking value and won a judgement, a settlement was reached. In that settlement was the option agreement. This option was provided to them as an inducement to reduce the settlement price. The consortium felt that the town was taking the property perhaps to flip it to some favored group who would then do a deal. This of course was not the plan and therefore offering the option was of little consequence if it helped reach a deal. The town never considered this as a speculative item that would be sold over the years to someone to gain a competitive advantage.
Shortly after that two things occurred similar to the economy we are experiencing today and proved the town's doubts about Cadillac Fairview dead right. The S&L crisis came about because of a tremendous glut of real estate and eventually resulted in over 700 banks in the country going out of business. So to did Cadillac Fairview.
Don't these plans have a similar hollow ring to them? Life sciences is a nascent business with no space in town that can fit that need says the proponent's attorney claiming that this project would not compete with our existing excess inventory. There is a liquidity crisis throughout the world with financial giants in tatters yet only the option holder can pull off a deal worth multiple tens of millions of dollars? Don't worry about the price they say, "we are not looking for a discount." A more suitable approach might be to hand the town a ten or twenty million dollar letter of credit and then very humbly ask the town how much we want.
Additionally, the option already has a purchase price written in it. On page 3 item 6 it says the following: If this option is exercised , the agreed purchase price for the premises is $8,885,143.56, to be adjusted by the increase (or decrease), if any, in the Consumer Price Index for All Urban Consumers, Boston, Ma, All items (1967:100), issued by the United States Department of Labor, Bureau of Statistics, for the period from the date of this agreement to the date of the delivery of the deed.
If that number is 3% annually over the past 20 years then the purchase price would be roughly $16,047,556. That number would not be reason enough to even take a phone call.
In my view a referendum is a good idea. It would provide clarity to the board and potentially save a lot of work and anxiety over the land. The question should be a very simple one, Do you want to sell the Land Locked Land? Then let's have a full blown political battle. The developers will freely spend money trying to win votes but so to will a motivated opposition.
The first thing the opposition will do is challenge the proponents to a debate. How will they fair in an open forum in which pie in the sky assertions can be refuted with existing facts? Or when current statements are compared with recent developments that have not met expectations?
I believe that in the final analysis when all the real facts are exposed, the voters will choose to vote down any suggestion of selling this parcel.
There is no economic advantage to selling the property and this can be easily proven with a pencil and piece of paper. More importantly is the community aspect of the decision. The tax payers who have lived here before us have left a marvelous legacy. They have acquired parks and cemeteries and schools and a reservoir and the Great Meadow. Our municipal buildings and properties are all in place to serve the community far into the future.
Is our mission as the latest residents, to sell off irreplaceable assets because we are to cheap to pay our taxes? Do we think that turning the entire town into asphalt and concrete will improve our quality of life? Can't something be saved for the future?
This was met with a good deal of skepticism. The reason the group is pushing the idea is because they are working within a limited frame. The option that they hold on the property extends approximately to May of 2010 and without action by the board of selectmen to extend that option it would expire worthless on that date.
The odds of an extension seem remote for various reasons. If the town did pass a referendum that expressed an interest in selling the property then a couple of obvious conditions would need to be met. First and foremost is timing. Why would any seller that is not in need of de-leveraging or raising capital sell its biggest asset in the worst economy in the last 40 years? We are not distressed, we have money in the bank. Second, why would we deal with only one potential buyer?
There is a certain irony to the claims of the developer. The only reason they hold the option of right of first refusal is because of the bankruptcy of the company that originally made such bold development plans. Who can forget Kerry Hunnewell of Cadillac Fairview standing before the townsfolk during the eminent domain proceedings proclaiming the need for 2 million square feet of high-end office space and amenities for the burgeoning computer industry? The town didn't buy into the grandiose plan and subsequently concluded the plan to take the property by eminent domain.
After the consortium of landowners sued over the taking value and won a judgement, a settlement was reached. In that settlement was the option agreement. This option was provided to them as an inducement to reduce the settlement price. The consortium felt that the town was taking the property perhaps to flip it to some favored group who would then do a deal. This of course was not the plan and therefore offering the option was of little consequence if it helped reach a deal. The town never considered this as a speculative item that would be sold over the years to someone to gain a competitive advantage.
Shortly after that two things occurred similar to the economy we are experiencing today and proved the town's doubts about Cadillac Fairview dead right. The S&L crisis came about because of a tremendous glut of real estate and eventually resulted in over 700 banks in the country going out of business. So to did Cadillac Fairview.
Don't these plans have a similar hollow ring to them? Life sciences is a nascent business with no space in town that can fit that need says the proponent's attorney claiming that this project would not compete with our existing excess inventory. There is a liquidity crisis throughout the world with financial giants in tatters yet only the option holder can pull off a deal worth multiple tens of millions of dollars? Don't worry about the price they say, "we are not looking for a discount." A more suitable approach might be to hand the town a ten or twenty million dollar letter of credit and then very humbly ask the town how much we want.
Additionally, the option already has a purchase price written in it. On page 3 item 6 it says the following: If this option is exercised , the agreed purchase price for the premises is $8,885,143.56, to be adjusted by the increase (or decrease), if any, in the Consumer Price Index for All Urban Consumers, Boston, Ma, All items (1967:100), issued by the United States Department of Labor, Bureau of Statistics, for the period from the date of this agreement to the date of the delivery of the deed.
If that number is 3% annually over the past 20 years then the purchase price would be roughly $16,047,556. That number would not be reason enough to even take a phone call.
In my view a referendum is a good idea. It would provide clarity to the board and potentially save a lot of work and anxiety over the land. The question should be a very simple one, Do you want to sell the Land Locked Land? Then let's have a full blown political battle. The developers will freely spend money trying to win votes but so to will a motivated opposition.
The first thing the opposition will do is challenge the proponents to a debate. How will they fair in an open forum in which pie in the sky assertions can be refuted with existing facts? Or when current statements are compared with recent developments that have not met expectations?
I believe that in the final analysis when all the real facts are exposed, the voters will choose to vote down any suggestion of selling this parcel.
There is no economic advantage to selling the property and this can be easily proven with a pencil and piece of paper. More importantly is the community aspect of the decision. The tax payers who have lived here before us have left a marvelous legacy. They have acquired parks and cemeteries and schools and a reservoir and the Great Meadow. Our municipal buildings and properties are all in place to serve the community far into the future.
Is our mission as the latest residents, to sell off irreplaceable assets because we are to cheap to pay our taxes? Do we think that turning the entire town into asphalt and concrete will improve our quality of life? Can't something be saved for the future?
Sunday, December 14, 2008
Probably Going to Get Worse Before it Gets Better
Over the weekend the finishing touches will be put into place for the auto industry to gain access to the government TARP funds. The failure of congress to come up with a plan forces the administration to take these steps. After all, if we can spend 80 billion on just one company AIG, why can't we spend 15 billion on the working stiff in Detroit? The argument that the auto workers are over paid pales in comparison to some of the Wall Street and Fannie Mae abuses.
Let’s review some of the major events in our control and out of our control that have led us here.
The first major event contributing to our problem is the passage of Gramm Leach Blilely Act in 1999. This repealed the 1933 Depression era Glass Steagull act which had erected a wall between the lending of money and the investing or leverage of money. This came on the heels of the elimination of interstate banking restrictions in 1997.
The first activities post passage was the consolidation of banking, brokerage and insurance. This was illustrated most prominently by the combination of Citibank, Travelers insurance, Smith Barney and Saloman Brothers.
The next significant event was historically low interest rates. At the end of the century, rates stood at 6.25% and began to come down as the Fed was dealing with the bursting of the internet bubble. At the time of the attack on New York, rates stood at 3%. Six days after the attack on the towers the Fed cut 50 basis points and continued to cut until November of 2002 with rates hitting post WW2 lows of .75%.
What followed was a natural reaction to cheap money. Huge amounts of debt were issued throughout the US economy. Home owners increased credit card debt and accessed equity in their home, nonprofits went on building sprees, big business and municipalities floated bond issues. The states and federal government did as well.
A combination of cheap money and new Wall Street capital being available to the housing market spurred a real estate and housing boom not seen since 1990. Traditional lending criteria were now replaced by such things as structured investment vehicles (SIVS) namely collateralized debt obligations (CDO’s). Because of very low interest rates, the fixed income investment community was yield starved. Wall Street recognized this and began bundling mortgages into securities and selling them in tranches as secured, higher yielding instruments that were backed by the American home owner. What better collateral could you get? The problem was that brokers were being paid to produce loans and Wall Street was being paid to create securities. However, because neither of them were holding the asset in their long term portfolio they weren’t concerned with credit quality. Hence the term “subprime” now enters the American Lexicon.
Tremendous amounts of capital in the market as well as lowered lending standards and a host of new products like interest only and LIBOR plus mortgages produced a typical reaction. To much money chasing to few houses resulted in an imbalance that was reflected in values. I can use our home town as an example. From 1990 to 2000 Burlington Home values rose from 1.24 billion to 1.58 billion or 27%. From 2000 to 2007 we went from 1.58 billion to 3.2 or over 100% in just 7 years.
The affect of cheap money and consumer driven buying can be seen in the equity markets as well. The Dow, after hitting a high of 11,000 in March 2000 struck a post 9/11 low of 7181 on October 10 of 2002. Almost 5 years to the day in on October 9, the Dow reached a high of 14,164 a little more than 1-year later we hit the current closing bottom of 7552 on November 20th.
The bloom began to come off the rose in late 2003 as the fed began to raise rates to bring a more realistic cost of money into the market place. By August 2005 they had completed 10 consecutive raises. But they weren't done. They completed 7 more raises and by June of 2006 The Fed Funds rate was now 5.25%. Just as they had overreacted and cut to much post 9/11, they now overreacted and raised to much and in fact inverted the yield curve.
An inverted yield curve means that long-term rates were lower than short terms rates. Long-term treasury yields showed that inflation was not a concern yet the Fed kept raising rates. An inverted yield curve has been a leading economic indicator in 5 of the last 6 recessions.
The rise in rates and in residential values coupled with energy costs resulted in a triple whammy for home owners. Affordable mortgages at a couple of percent now were less affordable as adjustable rates began to reset at much higher levels. Higher rates, rising property taxes and higher heating and utility costs and home owners began to feel the pinch. Those who began to have trouble found that their homes were now significantly under water. Again as an example I will use our own community. Three years ago we experienced a 25% tax increase on the residential sector not because of a rise in the budget but because of a significant shift in value.
Oil and gas prices significantly aggravated the general economy during this period and once again government was partially to blame. The war in Iraq affected prices but the real rise came from hurricane Katrina, unrest in Nigeria, Chinese and Indian demand and lastly the two most important elements were government buying and speculation in the markets. The Chinese, Americans, Germans and Japanese were all buying to fill their strategic reserves. Volume in contracts on the Nymex exchange increased by ten fold. This was primarily driven by the entry of hedge funds using commodities contracts for alternative investment classes. These contracts were previously used by people in the energy business to hedge prices for their inventories.
The first major crack in the financial system occurred last year when the auction rate market failed. This was followed by Bear Stearns and then the real thunderclap was when Lehman Brothers failed. The culprit was subprime mortgages and it wasn't long before Indy Mac, Fannie Mae and Freddie Mac and Washington Mutual have all followed suit.
The liquidity crisis became the new headline. Because values were falling so rapidly in these mortgages very few people had any confidence in them as collateral and were hesitant to lend against them. One example was a major brokerage house selling over 30 billion dollars of these securities. Pressed for cash to pay maturing bonds, they were only able to get a little over 6 billion for the bundle. The company sold off shortly there after.
That brings us to where we are today. The investment banking business in shambles if it even exists anymore. Once great franchises like Wachovia, Merrill Lynch, Citigroup, Morgan Stanley and Goldman Sacks have been sold or are continuing to sell assets.
The good news is we are first in and will probably be first out. The Europeans were slower to recognize the problem and have only recently begun to take action. The Fed is aggressively cutting rates again and pumping liquidity into the system. Unlike 1929 the government has acted quickly to prop up the banking system, and unlike 1990 most of the regional and community banks have avoided these problems.
We will recover from this just as we have recovered from other economic calamities in the past. It may take longer and it will probably get worse before it gets better. The stock market is a leading economic indicator and unemployment is a trailing one. We will be lucky if the nation stays under 9% and Massachusetts stays below 7.5%. One comforting aspect of this is that our adversaries are doing much worse.
The North Koreans may face threats of famine. Hugo Chavez will get quieter and quieter as oil continues to fall. Iran is facing a similar problem. With the fall in price of their principle export product and the corresponding impact on the domestic budgets, these guys will be more interested in staying in power than creating problems for the United States. In particular, Iran will have less money to fund a nuclear program or Hamas and Hezbollah.
One major international problem may result in China. The standard of living for the average Chinese has risen dramatically. The government compact with the Chinese people has been acceptance of rigid controls on personal freedom in exhange for economic gains. What will happen to the Chinese social fabric if extraordinary growth is replaced by rising levels of unemployment? The last time this happened resulted in the events of Tiannemen Square. Since that time many more Chinese have left the agrarian culture and emigrated to new cities. The New Year will certainly be a challenging one around the globe.
Let’s review some of the major events in our control and out of our control that have led us here.
The first major event contributing to our problem is the passage of Gramm Leach Blilely Act in 1999. This repealed the 1933 Depression era Glass Steagull act which had erected a wall between the lending of money and the investing or leverage of money. This came on the heels of the elimination of interstate banking restrictions in 1997.
The first activities post passage was the consolidation of banking, brokerage and insurance. This was illustrated most prominently by the combination of Citibank, Travelers insurance, Smith Barney and Saloman Brothers.
The next significant event was historically low interest rates. At the end of the century, rates stood at 6.25% and began to come down as the Fed was dealing with the bursting of the internet bubble. At the time of the attack on New York, rates stood at 3%. Six days after the attack on the towers the Fed cut 50 basis points and continued to cut until November of 2002 with rates hitting post WW2 lows of .75%.
What followed was a natural reaction to cheap money. Huge amounts of debt were issued throughout the US economy. Home owners increased credit card debt and accessed equity in their home, nonprofits went on building sprees, big business and municipalities floated bond issues. The states and federal government did as well.
A combination of cheap money and new Wall Street capital being available to the housing market spurred a real estate and housing boom not seen since 1990. Traditional lending criteria were now replaced by such things as structured investment vehicles (SIVS) namely collateralized debt obligations (CDO’s). Because of very low interest rates, the fixed income investment community was yield starved. Wall Street recognized this and began bundling mortgages into securities and selling them in tranches as secured, higher yielding instruments that were backed by the American home owner. What better collateral could you get? The problem was that brokers were being paid to produce loans and Wall Street was being paid to create securities. However, because neither of them were holding the asset in their long term portfolio they weren’t concerned with credit quality. Hence the term “subprime” now enters the American Lexicon.
Tremendous amounts of capital in the market as well as lowered lending standards and a host of new products like interest only and LIBOR plus mortgages produced a typical reaction. To much money chasing to few houses resulted in an imbalance that was reflected in values. I can use our home town as an example. From 1990 to 2000 Burlington Home values rose from 1.24 billion to 1.58 billion or 27%. From 2000 to 2007 we went from 1.58 billion to 3.2 or over 100% in just 7 years.
The affect of cheap money and consumer driven buying can be seen in the equity markets as well. The Dow, after hitting a high of 11,000 in March 2000 struck a post 9/11 low of 7181 on October 10 of 2002. Almost 5 years to the day in on October 9, the Dow reached a high of 14,164 a little more than 1-year later we hit the current closing bottom of 7552 on November 20th.
The bloom began to come off the rose in late 2003 as the fed began to raise rates to bring a more realistic cost of money into the market place. By August 2005 they had completed 10 consecutive raises. But they weren't done. They completed 7 more raises and by June of 2006 The Fed Funds rate was now 5.25%. Just as they had overreacted and cut to much post 9/11, they now overreacted and raised to much and in fact inverted the yield curve.
An inverted yield curve means that long-term rates were lower than short terms rates. Long-term treasury yields showed that inflation was not a concern yet the Fed kept raising rates. An inverted yield curve has been a leading economic indicator in 5 of the last 6 recessions.
The rise in rates and in residential values coupled with energy costs resulted in a triple whammy for home owners. Affordable mortgages at a couple of percent now were less affordable as adjustable rates began to reset at much higher levels. Higher rates, rising property taxes and higher heating and utility costs and home owners began to feel the pinch. Those who began to have trouble found that their homes were now significantly under water. Again as an example I will use our own community. Three years ago we experienced a 25% tax increase on the residential sector not because of a rise in the budget but because of a significant shift in value.
Oil and gas prices significantly aggravated the general economy during this period and once again government was partially to blame. The war in Iraq affected prices but the real rise came from hurricane Katrina, unrest in Nigeria, Chinese and Indian demand and lastly the two most important elements were government buying and speculation in the markets. The Chinese, Americans, Germans and Japanese were all buying to fill their strategic reserves. Volume in contracts on the Nymex exchange increased by ten fold. This was primarily driven by the entry of hedge funds using commodities contracts for alternative investment classes. These contracts were previously used by people in the energy business to hedge prices for their inventories.
The first major crack in the financial system occurred last year when the auction rate market failed. This was followed by Bear Stearns and then the real thunderclap was when Lehman Brothers failed. The culprit was subprime mortgages and it wasn't long before Indy Mac, Fannie Mae and Freddie Mac and Washington Mutual have all followed suit.
The liquidity crisis became the new headline. Because values were falling so rapidly in these mortgages very few people had any confidence in them as collateral and were hesitant to lend against them. One example was a major brokerage house selling over 30 billion dollars of these securities. Pressed for cash to pay maturing bonds, they were only able to get a little over 6 billion for the bundle. The company sold off shortly there after.
That brings us to where we are today. The investment banking business in shambles if it even exists anymore. Once great franchises like Wachovia, Merrill Lynch, Citigroup, Morgan Stanley and Goldman Sacks have been sold or are continuing to sell assets.
The good news is we are first in and will probably be first out. The Europeans were slower to recognize the problem and have only recently begun to take action. The Fed is aggressively cutting rates again and pumping liquidity into the system. Unlike 1929 the government has acted quickly to prop up the banking system, and unlike 1990 most of the regional and community banks have avoided these problems.
We will recover from this just as we have recovered from other economic calamities in the past. It may take longer and it will probably get worse before it gets better. The stock market is a leading economic indicator and unemployment is a trailing one. We will be lucky if the nation stays under 9% and Massachusetts stays below 7.5%. One comforting aspect of this is that our adversaries are doing much worse.
The North Koreans may face threats of famine. Hugo Chavez will get quieter and quieter as oil continues to fall. Iran is facing a similar problem. With the fall in price of their principle export product and the corresponding impact on the domestic budgets, these guys will be more interested in staying in power than creating problems for the United States. In particular, Iran will have less money to fund a nuclear program or Hamas and Hezbollah.
One major international problem may result in China. The standard of living for the average Chinese has risen dramatically. The government compact with the Chinese people has been acceptance of rigid controls on personal freedom in exhange for economic gains. What will happen to the Chinese social fabric if extraordinary growth is replaced by rising levels of unemployment? The last time this happened resulted in the events of Tiannemen Square. Since that time many more Chinese have left the agrarian culture and emigrated to new cities. The New Year will certainly be a challenging one around the globe.
Friday, December 12, 2008
How About a Little Sewerage with Your Flood?
The images you see are from about noon on December 12. The location is the main sewer lift station on Terrace Hall Ave. What is happening here is that after last nights heavy rain in the region, the system from Burlington down to the Boston sewer treatment plants was over loaded. This happens as a result of inflow, infiltration and now, in my view, under capacity.
Inflow is the result of illegal water drainage hookups to the sanitary sewer system. Infiltration results from Mother Nature's assault on the integrity of the system. Frost heaves and other general deterioration of the manholes and sewer line joints allows rain water into the system causing more water to go down to Boston. Under capacity is of course more and more building without attention to the need to have sufficient sewer capacity to deal with the new effluent flow.
When Burlington officials are notified that the system is over flowing in Woburn, they authorize the DPW to begin relieving that pressure by pumping raw sewerage directly out of the pipes and into the Vine Brook that runs adjacent to the pumping station (how convenient).
You will notice that there is neither chlorination equipment or a filtering mechanism on these pipes. Even though you can imagine what is going on here let me be blunt and describe it accurately. Toilet paper, condoms, feminine sanitary products and everything else that goes in the toilet is coming out of those pipes directly into the Vine Brook. The picture in the left hand corner is the over flowing brook into which this sewerage is being pumped.
The location is directly across the street from the pumping station and behind many buildings on Middlesex Turnpike. The brook flows from here down through the Sun Microsystems site into Bedford and finally into the Shawsheen River up stream of where we pump water from the river into our reservoir. Good idea huh?
Was today's storm an unusual one? Maybe, but it was certainly not of a long duration and it was not accompanied by any melting of a snow pack. Can you imagine how much more will have to be pumped if this happens in the spring?
We thought that this would be relieved with the addition of the Cummingsville connector down stream. It is apparent that it has not provided that expected relief. I am afraid that in the future this is again going to become a regular occurrence in Burlington.
Saturday, December 06, 2008
Why is it Good for Us?
This past Thursday night, the Planning Board put the brakes on the proposal to change the IG zoning district in town to a new designation of "office park." They did this despite the fact that a developer who was making a pitch for a zoning change to the not yet approved zone and curiously, the planning director both requested that the subject be put on the January warrant anyway for town meeting "just in case" the zoning proposal would be ready.
This action by the board seemed to surprise the applicants and their attorney but came not at all as a surprise to the most casual town observer. There are a number of things very questionable about these two simultaneous proposals which will take months if not years to sort out and are likely to involve many more people than just the planning director and the applicant.
How for instance did the planning director arrive at the conclusion that the IG district needs to be changed at all? And how did one applicant manage to arrange a full presentation and begin a public hearing process on a change of their zoning to the new designation before the planning board and the public at large had even begun to examine the new proposal?
Despite the fact that the zoning change proposal was continued to February, after town meeting, the developers still laid out their request. As usual it was filled with devspeak (developer speak) which we are all now wholly familiar with. They need 300,000 to 800,000 more square feet of hotel, retail and other amenities beyond what current zoning allows in order to attract high quality tenants here because their vacancy rate is 20%.
Haven't we heard all this before in other presentations? Wasn't the Lahey Clinic expansion, the Commons, previous hotels and expansions of the Mall supposed to attract high quality companies to the region? Wasn't the Sun, Oracle and Northwest Park changes sufficient to attract them? How about the petition to the legislature to raise the number of liquor licenses allowable in the community? Aren't those proposed amenities or the new already built high end restaurants enough?
The proposed project is with in several hundred yards of most of the existing amenities in town yet they need more? Some of the planning board members are beginning to ask the same questions that residents want answers to.
Perhaps it is not more square feet or faults in our zoning which is the answer to any problems. Perhaps questions should be asked such as would you have less vacancies if your rents were lower? Or isn't the real problem that the entire region has much more space than demand can fill? Or instead of telling us how this will help you, please explain in detail how it will help us? Why for instance in a community that has given tax breaks for development, those projects are delayed or on hold? Why is another new hotel necessary? How will new construction directly in the aquifer benefit the water supply?
Perhaps the planning director could expand on his comments regarding the new zone in helping Burlington "market itself." If we have almost 4 million square feet approved but unbuilt because of lack of demand, how will a new zone spur that demand?
These are just a few questions when in reality there are literally hundreds more at this point in our economic life as a community. Some of the most obvious ones are such as why is the same law firm telling us we need more space here and on the Landlocked parcel when they told us Northwest Park needed more space and yet that project is struggling to get off the ground? Will huge new amounts of space jeopardize the investment we have made there?
With the new zone proposal accompanied simultaneously with a new project proposal we blur the fact that any changes in the IG district will effect not only one park but also hundreds of other similarly IG zoned parcels through out the town. What impact will that have?
Most importantly is the impact on our revenue. According to the assessors tax rate history, the total commercial taxable value of the town in 1990 was $1,122,000,000, 17 years later in fiscal year 2007 that value had only risen to $1,361,000,000. This is a fundamental question that all members of the leadership in the community must begin to address. Why after all the development we have allowed has our taxable value increased such a paltry amount?
This proposed zoning designation change is one of the most far reaching revisions of our zoning in the past 25 years. This proposal is more significant than both the town center proposal and the yet uncompleted sign by law review. Both of those required several years of study by multi board participant study groups before any proposal was made or action taken.
We are at a historically significant economic crossroads in both our community and our nation. It would be foolhardy for us to move even another inch forward without having a full understanding of what impact the already enormous changes that we have approved will have on our residents. The first question that has to be asked and answered in explicit detail from now on is "why is it good for us? If not, then the new answer from now on is NO.
This action by the board seemed to surprise the applicants and their attorney but came not at all as a surprise to the most casual town observer. There are a number of things very questionable about these two simultaneous proposals which will take months if not years to sort out and are likely to involve many more people than just the planning director and the applicant.
How for instance did the planning director arrive at the conclusion that the IG district needs to be changed at all? And how did one applicant manage to arrange a full presentation and begin a public hearing process on a change of their zoning to the new designation before the planning board and the public at large had even begun to examine the new proposal?
Despite the fact that the zoning change proposal was continued to February, after town meeting, the developers still laid out their request. As usual it was filled with devspeak (developer speak) which we are all now wholly familiar with. They need 300,000 to 800,000 more square feet of hotel, retail and other amenities beyond what current zoning allows in order to attract high quality tenants here because their vacancy rate is 20%.
Haven't we heard all this before in other presentations? Wasn't the Lahey Clinic expansion, the Commons, previous hotels and expansions of the Mall supposed to attract high quality companies to the region? Wasn't the Sun, Oracle and Northwest Park changes sufficient to attract them? How about the petition to the legislature to raise the number of liquor licenses allowable in the community? Aren't those proposed amenities or the new already built high end restaurants enough?
The proposed project is with in several hundred yards of most of the existing amenities in town yet they need more? Some of the planning board members are beginning to ask the same questions that residents want answers to.
Perhaps it is not more square feet or faults in our zoning which is the answer to any problems. Perhaps questions should be asked such as would you have less vacancies if your rents were lower? Or isn't the real problem that the entire region has much more space than demand can fill? Or instead of telling us how this will help you, please explain in detail how it will help us? Why for instance in a community that has given tax breaks for development, those projects are delayed or on hold? Why is another new hotel necessary? How will new construction directly in the aquifer benefit the water supply?
Perhaps the planning director could expand on his comments regarding the new zone in helping Burlington "market itself." If we have almost 4 million square feet approved but unbuilt because of lack of demand, how will a new zone spur that demand?
These are just a few questions when in reality there are literally hundreds more at this point in our economic life as a community. Some of the most obvious ones are such as why is the same law firm telling us we need more space here and on the Landlocked parcel when they told us Northwest Park needed more space and yet that project is struggling to get off the ground? Will huge new amounts of space jeopardize the investment we have made there?
With the new zone proposal accompanied simultaneously with a new project proposal we blur the fact that any changes in the IG district will effect not only one park but also hundreds of other similarly IG zoned parcels through out the town. What impact will that have?
Most importantly is the impact on our revenue. According to the assessors tax rate history, the total commercial taxable value of the town in 1990 was $1,122,000,000, 17 years later in fiscal year 2007 that value had only risen to $1,361,000,000. This is a fundamental question that all members of the leadership in the community must begin to address. Why after all the development we have allowed has our taxable value increased such a paltry amount?
This proposed zoning designation change is one of the most far reaching revisions of our zoning in the past 25 years. This proposal is more significant than both the town center proposal and the yet uncompleted sign by law review. Both of those required several years of study by multi board participant study groups before any proposal was made or action taken.
We are at a historically significant economic crossroads in both our community and our nation. It would be foolhardy for us to move even another inch forward without having a full understanding of what impact the already enormous changes that we have approved will have on our residents. The first question that has to be asked and answered in explicit detail from now on is "why is it good for us? If not, then the new answer from now on is NO.
Sunday, November 23, 2008
More commercial density?
Over the past fifty years, conventional wisdom in Burlington has been that continued development would contribute significantly to the tax base and result in the community having its cake and eating it too. Classification would allow a shift of a major part of the tax burden to the commercial sector and result in services of every kind without fees and a low residential tax rate.
Since 2002 that thinking has not been born out. In fact it has been just the opposite. The commercial industrial value of the town in 2002 was $1,473,890,731 and the commercial sector of the community paid 64.74% of the total tax levy. As of fiscal year 2007 the value has dropped over 100 millions dollars to $1,361,394,435 and the commercial sector pays 54.96% of the tax burden. This despite the fact that we have allowed a great deal more development during that period. These figures are taken exactly from the town assessor Russell Washburn's tax history chart on the towns web page.
Since the events of 2001, the region and the country enjoyed a significant economic boom yet our commercial values fell while our residential values skyrocketed. This combination of events resulted in a residential tax increase of 24% three years ago. What can be the reason for this phenomena and what does it bode for the future?
The only explanation that I can arrive at is that we have simply put on so much space that we are now driving down our own commercial values and income by virtue of over supply and the tremendous competition for commercial tenants.
This can be born out again in an analysis of the hotels in town by looking at the revenue stream from the hotel tax. What follows is a list by year of the town's receipts from the hotel tax beginning in fiscal year 1999.
1999.......$1,032,514
2000....... 1,344,562
2001........1,534,562
2002....... 1,191,603
2003......... 956,453
2004..........903,362
2005..........989,502
2006....... 1,049,991
2007....... 1,344,911
2008....... 1,432,492
The most distressing aspect of this is that the town added the following inventory of rooms. In 1999 came Summerfield Suites with 151 rooms, in 2000, Homestead with 141rooms, Staybridge in 2002 with 142 rooms and finally Candlewood in 2002 adding 149 rooms for a total of 583 new rooms added to the inventory.
The net result is that since 2000 we have almost doubled the number of available room rentals in the town yet we have not equaled the same of amount of tax revenue that we got in 2001 with half as many rooms. That can only be explained by the glut of hotel competition that was put on during that time in Burlington and the adjacent communities.
This can also be born out in the value of these hotel properties. The old Sheraton FourPoints/Wyndham Gardens/Holiday Inn on Wheeler Road was reportedly sold for 14 million dollars in 2000 but changed hands again four years later when it went out of business and was sold for $6,480,000. This, despite the fact that nearly 2 million dollars had been spent in renovations. As you can imagine, this kind of drop in value also resulted in a corresponding drop in taxes.
A complete and exhaustive analysis should be done on our projected revenue before we make any more changes to our zoning bylaw or before we allow any additional Planned Development Districts that allow increased square footage beyond what the current zoning bylaws allow. In addition, the Board of Selectmen should inform the Board of Appeals that any circumventing of the FAR by law (foot area ratio) by the Board of Appeals will be brought to court. An iron clad prohibition on hotels should be implemented unless the applicant can prove that a new hotel will increase revenue and not put one or more of our existing hotels out of business.
The reasons for this are very simple.The town has made enormous commitments already to developments that are the very cornerstone of our income. The total amount of space approved but not built or rented according to the Landlocked Parcel Study Committee is 3,997,000 square feet consisting of the following:
Trammel Crow .......227,000
Wheeler Road .........250,000
Burlington Woods ..100,000
Wall Street ..............170,000
Palomar ..................200,000
Sun Microsystems .300,000
Northwest Park ..2,150,000
South Ave ...............600,000
These numbers are a staggering addition to the in place commercial space in the town. It could take as much as 10 to 15 years to absorb this space into the market. This letter is not a call to institute any kind of a moratorium or restrict the legitimate rights of land holders. It is however, a suggestion that the town has reached a point of diminishing returns and would be foolish to pass any more zoning changes that gives away enormous increases in density. More excess supply only reduces our current values. The old argument that it is good for the residents by lowering the tax rate simply cannot be justified.
Since 2002 that thinking has not been born out. In fact it has been just the opposite. The commercial industrial value of the town in 2002 was $1,473,890,731 and the commercial sector of the community paid 64.74% of the total tax levy. As of fiscal year 2007 the value has dropped over 100 millions dollars to $1,361,394,435 and the commercial sector pays 54.96% of the tax burden. This despite the fact that we have allowed a great deal more development during that period. These figures are taken exactly from the town assessor Russell Washburn's tax history chart on the towns web page.
Since the events of 2001, the region and the country enjoyed a significant economic boom yet our commercial values fell while our residential values skyrocketed. This combination of events resulted in a residential tax increase of 24% three years ago. What can be the reason for this phenomena and what does it bode for the future?
The only explanation that I can arrive at is that we have simply put on so much space that we are now driving down our own commercial values and income by virtue of over supply and the tremendous competition for commercial tenants.
This can be born out again in an analysis of the hotels in town by looking at the revenue stream from the hotel tax. What follows is a list by year of the town's receipts from the hotel tax beginning in fiscal year 1999.
1999.......$1,032,514
2000....... 1,344,562
2001........1,534,562
2002....... 1,191,603
2003......... 956,453
2004..........903,362
2005..........989,502
2006....... 1,049,991
2007....... 1,344,911
2008....... 1,432,492
The most distressing aspect of this is that the town added the following inventory of rooms. In 1999 came Summerfield Suites with 151 rooms, in 2000, Homestead with 141rooms, Staybridge in 2002 with 142 rooms and finally Candlewood in 2002 adding 149 rooms for a total of 583 new rooms added to the inventory.
The net result is that since 2000 we have almost doubled the number of available room rentals in the town yet we have not equaled the same of amount of tax revenue that we got in 2001 with half as many rooms. That can only be explained by the glut of hotel competition that was put on during that time in Burlington and the adjacent communities.
This can also be born out in the value of these hotel properties. The old Sheraton FourPoints/Wyndham Gardens/Holiday Inn on Wheeler Road was reportedly sold for 14 million dollars in 2000 but changed hands again four years later when it went out of business and was sold for $6,480,000. This, despite the fact that nearly 2 million dollars had been spent in renovations. As you can imagine, this kind of drop in value also resulted in a corresponding drop in taxes.
A complete and exhaustive analysis should be done on our projected revenue before we make any more changes to our zoning bylaw or before we allow any additional Planned Development Districts that allow increased square footage beyond what the current zoning bylaws allow. In addition, the Board of Selectmen should inform the Board of Appeals that any circumventing of the FAR by law (foot area ratio) by the Board of Appeals will be brought to court. An iron clad prohibition on hotels should be implemented unless the applicant can prove that a new hotel will increase revenue and not put one or more of our existing hotels out of business.
The reasons for this are very simple.The town has made enormous commitments already to developments that are the very cornerstone of our income. The total amount of space approved but not built or rented according to the Landlocked Parcel Study Committee is 3,997,000 square feet consisting of the following:
Trammel Crow .......227,000
Wheeler Road .........250,000
Burlington Woods ..100,000
Wall Street ..............170,000
Palomar ..................200,000
Sun Microsystems .300,000
Northwest Park ..2,150,000
South Ave ...............600,000
These numbers are a staggering addition to the in place commercial space in the town. It could take as much as 10 to 15 years to absorb this space into the market. This letter is not a call to institute any kind of a moratorium or restrict the legitimate rights of land holders. It is however, a suggestion that the town has reached a point of diminishing returns and would be foolish to pass any more zoning changes that gives away enormous increases in density. More excess supply only reduces our current values. The old argument that it is good for the residents by lowering the tax rate simply cannot be justified.
Saturday, November 08, 2008
Victory has 100 fathers and defeat is an orphan
Well there is a new sheriff in town and his name is Obama. It really doesn't matter what color he is or what party he is from or where he was born and anything else for that matter. He is the leader elect of the most powerful nation on earth and strictly from the stand point of self interest don't we all want him to succeed at the highest levels?
For him or against can't we all share in the pride that American ideals have once again been proven? Europeans are so civil and much more sophisticated than us colonial hicks but can you see what just happened here being played out in the capitols of Europe?
Unfortunately, most of the euphoria of his historic victory will blow over all to soon and he will be faced with an abundance of problems facing the nation and the world. Lofty rhetoric and pure ideals will be faced with the reality of Realpolitik. His victory, although large from an electoral standpoint, was not one of a crushing mandate and though a shift to the Left it does not mean that there will be a sudden shift of the country into the Europeanization of America.
The two great ironies of his victory are the institutions which played key roles in his shift of fortunes. Hillary Clinton was the press favorite and presumptive nominee until the press got Obama fever. There will be a great deal of post election analysis by alleged experts but the results are what any casual observer can already tell you, the coverage was overwhelmingly pro-Obama. The Washington Post Ombudsman http://www.washingtonpost.com/wp-dyn/content/article/2008/11/07/AR2008110702895.html?hpid=opinionsbox1. admits this in a piece today. The Pew Research Center says it in a different way, the media wasn't as much Obama as they were anti McCain. What's the difference? http://www.journalism.org/node/13307
The media industry favorability ratings were already falling like a stone in the eyes of Americans and this election certainly helped to accelerate the demise of the big print media outlets. Television news programming won't fair much better as advocacy journalism will fall out of favor with viewers. Maybe not today or tomorrow but eventually the likes of Keith Olberman willl go back to speculating on football game winners where he belongs. It takes a heck of an effort to fall beneath the ratings of congress and car salesmen but journalists have managed to do so.
It would be interesting to view some of the lesson plans in journalism classes at colleges across the nation. Are they exploring the long term potential damage of media bias or are they reveling in the results?
As the Obama presidency progresses you can be sure that at some point hero worship will end and some of the very same people that help propel him to near god like status on the basis of a very thin resume will suddenly turn on him like angry dogs in hopes of garnering some elusive Pulitzer recognition. American media loves to elevate people to rock star status only to skewer them when then prove all to human.
The most surprising and unwitting push for Obama came from that bastion of capitalists on Wall Street. The mid September failure of the Lehman Brothers, the fourth largest investment bank in the country set off an earth quake in the financial markets that is still careening out of control today. It shifted the fundamental issues of the campaign from the wars in Iraq and Afghanistan to the financial crisis at home. Up until that that time the race seemed to be tightening and McCain was making up ground on the issues of the success of the surge and the Russian invasion of Georgia. By election day Iraq was back page news.
This chart shows the Dow at 11,300 http://finance.yahoo.com/echarts?s=%5EDJI#symbol=%5EDJI;range=1y in mid September at the time of the Lehman collapse, a little over a month later on October 27, the Dow had cratered to 8175 and the once proud and arrogant investment banking business was decimated. Unfortunately for us, the plague was not restricted to just Wall Street. With the sudden and dramatic shrinking of America's IRA and 401K balances so to did McCain's chances.
So the tables are turned and the bitterness of presidential defeat is now being tasted by the Republicans. As you would expect, they are not handling it any better than the Democrats did during the Gore and Kerry debacles.
The anonymous sniping going on in the McCain camp regarding Sarah Palin is one example. The old adage of "Victory has a hundred fathers and defeat is an orphan" is being played out by the McCain brain trust. Some of the McCain insiders would have you believe that somehow Palin was responsible for the defeat under the misguided notion that it will draw attention from a completely uninspiring effort by McCain. In the final analysis it might prove that it might have been a far worse defeat for McCain had Palin not been on the ticket.
Despite the visceral hatred for Palin by the press, she still managed to come out of the election as a high profile candidate for the future. The coverage of Palin versus that of Joe Biden was almost criminally one sided. Palin was drawing huge and enthusiastic crowds for the Republicans while Joe was virtually locked in a closet for fear that another famous Biden gaffe might derail Obama.
The next four years will enable the Republicans and the nation to get a better understanding of just how good or bad a politician Palin is as she will govern Alaska and may even end up in the senate if Stevens is kicked out over his recent conviction. She will be a force to be reckoned with in the process in 2012.
So the interminable election show is over and the most expensive campaign in American history has mercifully come to an end. President elect Obama will have about fifteen minutes to bask in the glory of his tremendous victory. He has already realized that elected office has two main pieces, winning and then serving. Winning the election will surely have proven to be the easy part. Over the next four years we will see him age before our eyes with the burden of the office just as every other president has before him.
For obvious reasons we should all hail President Elect Obama's victory, pray for his success and make damn sure of his security.
For him or against can't we all share in the pride that American ideals have once again been proven? Europeans are so civil and much more sophisticated than us colonial hicks but can you see what just happened here being played out in the capitols of Europe?
Unfortunately, most of the euphoria of his historic victory will blow over all to soon and he will be faced with an abundance of problems facing the nation and the world. Lofty rhetoric and pure ideals will be faced with the reality of Realpolitik. His victory, although large from an electoral standpoint, was not one of a crushing mandate and though a shift to the Left it does not mean that there will be a sudden shift of the country into the Europeanization of America.
The two great ironies of his victory are the institutions which played key roles in his shift of fortunes. Hillary Clinton was the press favorite and presumptive nominee until the press got Obama fever. There will be a great deal of post election analysis by alleged experts but the results are what any casual observer can already tell you, the coverage was overwhelmingly pro-Obama. The Washington Post Ombudsman http://www.washingtonpost.com/wp-dyn/content/article/2008/11/07/AR2008110702895.html?hpid=opinionsbox1. admits this in a piece today. The Pew Research Center says it in a different way, the media wasn't as much Obama as they were anti McCain. What's the difference? http://www.journalism.org/node/13307
The media industry favorability ratings were already falling like a stone in the eyes of Americans and this election certainly helped to accelerate the demise of the big print media outlets. Television news programming won't fair much better as advocacy journalism will fall out of favor with viewers. Maybe not today or tomorrow but eventually the likes of Keith Olberman willl go back to speculating on football game winners where he belongs. It takes a heck of an effort to fall beneath the ratings of congress and car salesmen but journalists have managed to do so.
It would be interesting to view some of the lesson plans in journalism classes at colleges across the nation. Are they exploring the long term potential damage of media bias or are they reveling in the results?
As the Obama presidency progresses you can be sure that at some point hero worship will end and some of the very same people that help propel him to near god like status on the basis of a very thin resume will suddenly turn on him like angry dogs in hopes of garnering some elusive Pulitzer recognition. American media loves to elevate people to rock star status only to skewer them when then prove all to human.
The most surprising and unwitting push for Obama came from that bastion of capitalists on Wall Street. The mid September failure of the Lehman Brothers, the fourth largest investment bank in the country set off an earth quake in the financial markets that is still careening out of control today. It shifted the fundamental issues of the campaign from the wars in Iraq and Afghanistan to the financial crisis at home. Up until that that time the race seemed to be tightening and McCain was making up ground on the issues of the success of the surge and the Russian invasion of Georgia. By election day Iraq was back page news.
This chart shows the Dow at 11,300 http://finance.yahoo.com/echarts?s=%5EDJI#symbol=%5EDJI;range=1y in mid September at the time of the Lehman collapse, a little over a month later on October 27, the Dow had cratered to 8175 and the once proud and arrogant investment banking business was decimated. Unfortunately for us, the plague was not restricted to just Wall Street. With the sudden and dramatic shrinking of America's IRA and 401K balances so to did McCain's chances.
So the tables are turned and the bitterness of presidential defeat is now being tasted by the Republicans. As you would expect, they are not handling it any better than the Democrats did during the Gore and Kerry debacles.
The anonymous sniping going on in the McCain camp regarding Sarah Palin is one example. The old adage of "Victory has a hundred fathers and defeat is an orphan" is being played out by the McCain brain trust. Some of the McCain insiders would have you believe that somehow Palin was responsible for the defeat under the misguided notion that it will draw attention from a completely uninspiring effort by McCain. In the final analysis it might prove that it might have been a far worse defeat for McCain had Palin not been on the ticket.
Despite the visceral hatred for Palin by the press, she still managed to come out of the election as a high profile candidate for the future. The coverage of Palin versus that of Joe Biden was almost criminally one sided. Palin was drawing huge and enthusiastic crowds for the Republicans while Joe was virtually locked in a closet for fear that another famous Biden gaffe might derail Obama.
The next four years will enable the Republicans and the nation to get a better understanding of just how good or bad a politician Palin is as she will govern Alaska and may even end up in the senate if Stevens is kicked out over his recent conviction. She will be a force to be reckoned with in the process in 2012.
So the interminable election show is over and the most expensive campaign in American history has mercifully come to an end. President elect Obama will have about fifteen minutes to bask in the glory of his tremendous victory. He has already realized that elected office has two main pieces, winning and then serving. Winning the election will surely have proven to be the easy part. Over the next four years we will see him age before our eyes with the burden of the office just as every other president has before him.
For obvious reasons we should all hail President Elect Obama's victory, pray for his success and make damn sure of his security.
Saturday, November 01, 2008
No New Cemeteries
This week a presentation will be made by the DPW to the Selectmen to use the Wildwood School site as another cemetery. This proposal should be rejected immediately.
The town already has three cemeteries which occupy prime property right in the middle of the community. The last one was acquired when the town exercised its right to acquire the Seminatore property around 1986. The town had the right because the property was under a tax classification that reduced the property tax as an agricultural use but gave the community the right of first refusal if the property was sold for commercial use.
The property was under option to be acquired for use as a large assisted living facility when the town exercised its rights and decided to use the property to expand the cemetery which was right down the street from the existing Chestnut Hill Cemetery and the original Olde Burying ground.
At the time of this acquisition, the town had a moratorium on grave sales because of lack of space. You could only buy a group of four graves when you had a death in your immediate family. At the time of the acquisition the board had stated that despite the fact that new ground was being purchased it was necessary to keep the moratorium and make the new property last as long as possible. When the new space ran out it was time to determine if it was appropriate for the town to continue to be in the business of using vital town property for burial purposes.
Despite the fact that knowing that space would be dwindling, subsequent boards did not keep in place a moratorium and here we are 20 years later discussing the need for new space. Some people connected to the burial industry have even suggested that an appropriate use for the Land Locked land is to bury people there!
The time is now to end any commitment to providing new burial space in the town. No where in the town by laws or charter does it say that the town should be committed to providing this service forever. One only need to examine the pace at which the town has developed to figure out that eventually there will be no space at all, town owned or otherwise to bury the deceased.
At some point the decision is inevitable so it might as well be made now rather than later so that sites like the Wildwood property can be kept for the benefit of the living rather than the dead.
If the leadership insists on using additional property for cemetery space then they ought to consider the acquisition of the Thorstensen properties on Muller Road. The site consists of approximately 14 acres in a total of 10 parcels, 8 parcels zoned IG that front Muller Road and and 2 zoned RO. Since this area will be under a good deal of development stress in the coming years perhaps a cemetery use might be more acceptable to the neighbors than having business uses adjacent to them.
The property should soon come out of probate and it would appear that it will be available at a reasonable price given the facts surrounding the current real estate market as well as that it is reported that town sewer is about 1200 feet short of the sites.
The acquisition could be financed by a revenue bond rather than a general obligation bond since the sale of graves could provide sufficient cash flow to pay for the property.
The town already has three cemeteries which occupy prime property right in the middle of the community. The last one was acquired when the town exercised its right to acquire the Seminatore property around 1986. The town had the right because the property was under a tax classification that reduced the property tax as an agricultural use but gave the community the right of first refusal if the property was sold for commercial use.
The property was under option to be acquired for use as a large assisted living facility when the town exercised its rights and decided to use the property to expand the cemetery which was right down the street from the existing Chestnut Hill Cemetery and the original Olde Burying ground.
At the time of this acquisition, the town had a moratorium on grave sales because of lack of space. You could only buy a group of four graves when you had a death in your immediate family. At the time of the acquisition the board had stated that despite the fact that new ground was being purchased it was necessary to keep the moratorium and make the new property last as long as possible. When the new space ran out it was time to determine if it was appropriate for the town to continue to be in the business of using vital town property for burial purposes.
Despite the fact that knowing that space would be dwindling, subsequent boards did not keep in place a moratorium and here we are 20 years later discussing the need for new space. Some people connected to the burial industry have even suggested that an appropriate use for the Land Locked land is to bury people there!
The time is now to end any commitment to providing new burial space in the town. No where in the town by laws or charter does it say that the town should be committed to providing this service forever. One only need to examine the pace at which the town has developed to figure out that eventually there will be no space at all, town owned or otherwise to bury the deceased.
At some point the decision is inevitable so it might as well be made now rather than later so that sites like the Wildwood property can be kept for the benefit of the living rather than the dead.
If the leadership insists on using additional property for cemetery space then they ought to consider the acquisition of the Thorstensen properties on Muller Road. The site consists of approximately 14 acres in a total of 10 parcels, 8 parcels zoned IG that front Muller Road and and 2 zoned RO. Since this area will be under a good deal of development stress in the coming years perhaps a cemetery use might be more acceptable to the neighbors than having business uses adjacent to them.
The property should soon come out of probate and it would appear that it will be available at a reasonable price given the facts surrounding the current real estate market as well as that it is reported that town sewer is about 1200 feet short of the sites.
The acquisition could be financed by a revenue bond rather than a general obligation bond since the sale of graves could provide sufficient cash flow to pay for the property.
Sunday, October 26, 2008
The Former Genius
Alan Greenspan got taken to the wood shed this week in his testimony before congress regarding the current economic melt down. He called it a "once-in-a century credit tsunami." You can read his entire testimony herehttp://oversight.house.gov/story.asp?ID=2256
The reputation of the once highly regarded financial guru is taking a substantial hit in hind sight as we can examine some of his policies and determine that they had a direct impact on our current situation.
Oversight and Government Reform Committee Chairman Henry Waxman was quick to point the finger at Greenspan in his opening remarks.
"For too long, the prevailing attitude in Washington has been that the market always knows best. The Federal Reserve had the authority to stop the irresponsible lending practices that fueled the subprime mortgage market. But its long-time Chairman, Alan Greenspan, rejected pleas that he intervene."
Some of this is true, but of course Henry is silent on the subject of reining in Fannie Mae and Freddie Mac during the entire period and that failure can be clearly laid at the feet of Barney Frank and others. Democratic affordable housing goals have come back to haunt them in driving prices down dramatically to the point that lots of housing is affordable but there are not enough buyers or lenders with money to enter and stabilize the market up to this point in the crisis.
Had conventional lending practices been allowed to stay in force over the past seven years we might have avoided a good deal of the distress we are now under. By instituting lending practices that encouraged unqualified buyers to over extend themselves, it contributed to an enormous increase in demand and subsequent substantial increase home ownership but like any bubble bursting it is now wreaking vengeance on the down side in a way that has never before been experienced.
This kind of social engineering in the housing markets can also be illustrated in Massachusetts under the Chapter 40B "anti snob" legislation. This legislation allows a developer to get state approval to over ride local zoning ordinances and build very dense projects in markets that would otherwise not allow them.
What this does is to decimate urban housing. The process is simple. In a real estate market that is not artificially manipulated, investment will eventually go to where costs are lower and land is cheaper. Such opportunities have existed all over the Commonwealth. In the North, in cities like Lawrence and Haverhill and in the South in Fall River and New Bedford, land for housing is available but why would housing developers take risks in building or rehabbing in older urban settings when they can use 40B to build very dense and very profitable housing in more desirable suburban communities? Additionally, why would a renter go where market forces would direct them when they could go to a manipulated market that provides roughly the same cost but is in a better location?
Poorly thought out housing legislation in Massachusetts, however, is not what triggered the mess we are in right now across the nation. Some very specific events can be traced to the tumbling financial dominoes that contributed to the problem for the system and then exposed its weakness.
The first was the dramatic decrease in interest rates following the September 11th attacks. In an effort to jump start a paralyzed America, Greenspan and the Fed dropped rates to levels unseen in our life time. After the millenium and internet bubble bursting, the Fed began to reduce the Fed rate from a high point of six percent in May of 2000 down to 3% in August of 2001.http://www.newyorkfed.org/markets/statistics/dlyrates/fedrate.html
Six days after the September 11, 2001 attacks the Fed cut 50 basis points and continued to cut until the rate hit a low of .75% in November of 2002. What followed was a purely natural reaction to such cheap money. The economy flourished in a host of areas particularly in housing and in other large ticket capital consumer goods. The post 9/11 market low on the Dow Industrial averages was 7181.87 on October 10, 2002. Almost five years later to the day, the Dow close on October 9, 2007 was 14,164.53.
Huge amounts of debt were issued through out the entire economy. Home owners accessed money through equity loans, businesses borrowed at cheap rates, big business floated bonds, non profits went on building sprees and municipalities, states and other agencies all did like wise.
The benefits of such a boom were visible through out the United States and other international societies. With money available and cheap sources of labor in such emerging economies as China and India, purchasing power went a long way. The ultimate benefit in the U.S. was that more people entered the housing market than at any time in U.S.history. The benefit globally was that more people left poverty than at any time in history.
The bloom started to come off the rose in 2005. The Fed had begun to raise rates in 2003 in order to bring a more realistic cost of money into the market place. However, by the end of 2005 it became apparent that the inflation fighters at the Fed were going over board. In August of 2005 the Fed had completed ten consecutive increases in the rates and they weren't done. Although stopping increases was apparent even to an amateur, http://philgallagher.blogspot.com/2005/12/stop-raising-interest-rates.html, the Fed went on to raise rates 7 more times, culminating in a Fed Funds rate of 5.25% in June of 2006.
As rates rose it began to affect many of the designer type mortgages that had been created during the housing boom. Adjustable rate mortgages began to reset as well as LIBOR plus mortgages continued to climb and soon a trickle of people in trouble began to become a steady stream. What exacerbated the problem for the home owner was two other assaults on his budget. Heating and utility costs were climbing as well as property taxes. Communities experienced significant increases in residential values while commercial values sank because of increased competition from new construction. This resulted in property taxes rising on the residential sector significantly.
Where the crack in the credit markets came was in a rather odd place . Earlier this year it was reported that an obscure debt market called the auction rate market ceased to operate.
The auction rate market was a place where a variety of issuers of debt could get short term rates on long term paper by simply having an auction every 7 or 28 days. The buyers were companies, government entities and investors with lots of cash who wanted higher than money market rates of return, yet could have liquidity if they needed the money. The market was made by Wall Street firms who would buy up paper for their own books to smooth out any liquidity differences between buyers as sellers.
This system enabled the Wall Street firms to essentially sell this market on the basis of it being as good as cash. Having participated in this market myself for many years and having purchased hundreds of millions of dollars for clients, I had no doubt as to the veracity of that statement. Working a different book of business these days in the banking industry I was not close to events as they unfolded, yet when the auction rate market failed earlier this year I was stunned that such a thing could happen so quickly.
Here is where rates and foreclosures in the housing market began to take a huge toll and up to this point what has decimated and perhaps killed the investment banking business. Sub prime is now a term that entered the American lexicon.
During the housing boom, Wall Street saw an opportunity to sell securities made up of tranches of mortgages that were sub prime, meaning made up of home owners who would not qualify for a conventional mortgage you might find in the regular banking community. Because they were made up of something as stable as the American home and they offered a good rate of return, many institutional buyers purchased them and added them to their portfolios. Of course, many of the investment banks who wrote these SIVS (structured investment vehicle) and (RMO's (residential mortgage obligations) had them on their own books.
Now comes the bursting of the bubble and the term liquidity crisis becomes a common term in America and around the world. Mark to market accounting, although less well known also plays a key role.
As home owners began to fail and as the housing market began to cool, suddenly mortgages contained in the investments on the books of these companies began to drop in value. As companies who needed cash began to liquidate these securities at discounted prices it spread through the markets like a fast moving virus. If you have a similar security to mine in your book and I sell it at a 20% discount the rules now said you had to adjust your balance sheet to show that loss of value.
As the values plummeted and subsequently became unable to even be priced, the damage began to unfold in the form of a complete lack of buyers. The story continues to unfold and although we may be at or near a bottom we are still in uncharted waters.
I can leave you with one very dramatic example of the damage done to a companies balance sheet. On July 28, a famous Wall Street firm sold a total of 30.6 billion dollars worth of CDO's (Collateralized debt obligations, CDOs are an unregulated type of asset-backed security and structured credit product) for a total of 6.7 billion dollars. They sold at this level because the firm could not find anyone else willing to buy the portfolio for more.
Was it a fair price? Fair of course is in the eyes of the beholder. The buyer got a basket of securities back by mortgage collateral. If we say that everyone of those mortgages default and go to auction, in order for the buyer to lose money every single one of those mortgages would have to auction at 22 cents on the dollar. The world famous firm that was the seller of those securities was bought in a fire sale two months later.
It is difficult to guess the bottom of the market and when the credit conditions will stabilize. One thing that is not hard to predict is that going forward it will not be business as usual in the credit markets. Fundamental rules must be put in place and maintained so that the leveraging of the economy does not precipitate a near destruction of the country again.
The reputation of the once highly regarded financial guru is taking a substantial hit in hind sight as we can examine some of his policies and determine that they had a direct impact on our current situation.
Oversight and Government Reform Committee Chairman Henry Waxman was quick to point the finger at Greenspan in his opening remarks.
"For too long, the prevailing attitude in Washington has been that the market always knows best. The Federal Reserve had the authority to stop the irresponsible lending practices that fueled the subprime mortgage market. But its long-time Chairman, Alan Greenspan, rejected pleas that he intervene."
Some of this is true, but of course Henry is silent on the subject of reining in Fannie Mae and Freddie Mac during the entire period and that failure can be clearly laid at the feet of Barney Frank and others. Democratic affordable housing goals have come back to haunt them in driving prices down dramatically to the point that lots of housing is affordable but there are not enough buyers or lenders with money to enter and stabilize the market up to this point in the crisis.
Had conventional lending practices been allowed to stay in force over the past seven years we might have avoided a good deal of the distress we are now under. By instituting lending practices that encouraged unqualified buyers to over extend themselves, it contributed to an enormous increase in demand and subsequent substantial increase home ownership but like any bubble bursting it is now wreaking vengeance on the down side in a way that has never before been experienced.
This kind of social engineering in the housing markets can also be illustrated in Massachusetts under the Chapter 40B "anti snob" legislation. This legislation allows a developer to get state approval to over ride local zoning ordinances and build very dense projects in markets that would otherwise not allow them.
What this does is to decimate urban housing. The process is simple. In a real estate market that is not artificially manipulated, investment will eventually go to where costs are lower and land is cheaper. Such opportunities have existed all over the Commonwealth. In the North, in cities like Lawrence and Haverhill and in the South in Fall River and New Bedford, land for housing is available but why would housing developers take risks in building or rehabbing in older urban settings when they can use 40B to build very dense and very profitable housing in more desirable suburban communities? Additionally, why would a renter go where market forces would direct them when they could go to a manipulated market that provides roughly the same cost but is in a better location?
Poorly thought out housing legislation in Massachusetts, however, is not what triggered the mess we are in right now across the nation. Some very specific events can be traced to the tumbling financial dominoes that contributed to the problem for the system and then exposed its weakness.
The first was the dramatic decrease in interest rates following the September 11th attacks. In an effort to jump start a paralyzed America, Greenspan and the Fed dropped rates to levels unseen in our life time. After the millenium and internet bubble bursting, the Fed began to reduce the Fed rate from a high point of six percent in May of 2000 down to 3% in August of 2001.http://www.newyorkfed.org/markets/statistics/dlyrates/fedrate.html
Six days after the September 11, 2001 attacks the Fed cut 50 basis points and continued to cut until the rate hit a low of .75% in November of 2002. What followed was a purely natural reaction to such cheap money. The economy flourished in a host of areas particularly in housing and in other large ticket capital consumer goods. The post 9/11 market low on the Dow Industrial averages was 7181.87 on October 10, 2002. Almost five years later to the day, the Dow close on October 9, 2007 was 14,164.53.
Huge amounts of debt were issued through out the entire economy. Home owners accessed money through equity loans, businesses borrowed at cheap rates, big business floated bonds, non profits went on building sprees and municipalities, states and other agencies all did like wise.
The benefits of such a boom were visible through out the United States and other international societies. With money available and cheap sources of labor in such emerging economies as China and India, purchasing power went a long way. The ultimate benefit in the U.S. was that more people entered the housing market than at any time in U.S.history. The benefit globally was that more people left poverty than at any time in history.
The bloom started to come off the rose in 2005. The Fed had begun to raise rates in 2003 in order to bring a more realistic cost of money into the market place. However, by the end of 2005 it became apparent that the inflation fighters at the Fed were going over board. In August of 2005 the Fed had completed ten consecutive increases in the rates and they weren't done. Although stopping increases was apparent even to an amateur, http://philgallagher.blogspot.com/2005/12/stop-raising-interest-rates.html, the Fed went on to raise rates 7 more times, culminating in a Fed Funds rate of 5.25% in June of 2006.
As rates rose it began to affect many of the designer type mortgages that had been created during the housing boom. Adjustable rate mortgages began to reset as well as LIBOR plus mortgages continued to climb and soon a trickle of people in trouble began to become a steady stream. What exacerbated the problem for the home owner was two other assaults on his budget. Heating and utility costs were climbing as well as property taxes. Communities experienced significant increases in residential values while commercial values sank because of increased competition from new construction. This resulted in property taxes rising on the residential sector significantly.
Where the crack in the credit markets came was in a rather odd place . Earlier this year it was reported that an obscure debt market called the auction rate market ceased to operate.
The auction rate market was a place where a variety of issuers of debt could get short term rates on long term paper by simply having an auction every 7 or 28 days. The buyers were companies, government entities and investors with lots of cash who wanted higher than money market rates of return, yet could have liquidity if they needed the money. The market was made by Wall Street firms who would buy up paper for their own books to smooth out any liquidity differences between buyers as sellers.
This system enabled the Wall Street firms to essentially sell this market on the basis of it being as good as cash. Having participated in this market myself for many years and having purchased hundreds of millions of dollars for clients, I had no doubt as to the veracity of that statement. Working a different book of business these days in the banking industry I was not close to events as they unfolded, yet when the auction rate market failed earlier this year I was stunned that such a thing could happen so quickly.
Here is where rates and foreclosures in the housing market began to take a huge toll and up to this point what has decimated and perhaps killed the investment banking business. Sub prime is now a term that entered the American lexicon.
During the housing boom, Wall Street saw an opportunity to sell securities made up of tranches of mortgages that were sub prime, meaning made up of home owners who would not qualify for a conventional mortgage you might find in the regular banking community. Because they were made up of something as stable as the American home and they offered a good rate of return, many institutional buyers purchased them and added them to their portfolios. Of course, many of the investment banks who wrote these SIVS (structured investment vehicle) and (RMO's (residential mortgage obligations) had them on their own books.
Now comes the bursting of the bubble and the term liquidity crisis becomes a common term in America and around the world. Mark to market accounting, although less well known also plays a key role.
As home owners began to fail and as the housing market began to cool, suddenly mortgages contained in the investments on the books of these companies began to drop in value. As companies who needed cash began to liquidate these securities at discounted prices it spread through the markets like a fast moving virus. If you have a similar security to mine in your book and I sell it at a 20% discount the rules now said you had to adjust your balance sheet to show that loss of value.
As the values plummeted and subsequently became unable to even be priced, the damage began to unfold in the form of a complete lack of buyers. The story continues to unfold and although we may be at or near a bottom we are still in uncharted waters.
I can leave you with one very dramatic example of the damage done to a companies balance sheet. On July 28, a famous Wall Street firm sold a total of 30.6 billion dollars worth of CDO's (Collateralized debt obligations, CDOs are an unregulated type of asset-backed security and structured credit product) for a total of 6.7 billion dollars. They sold at this level because the firm could not find anyone else willing to buy the portfolio for more.
Was it a fair price? Fair of course is in the eyes of the beholder. The buyer got a basket of securities back by mortgage collateral. If we say that everyone of those mortgages default and go to auction, in order for the buyer to lose money every single one of those mortgages would have to auction at 22 cents on the dollar. The world famous firm that was the seller of those securities was bought in a fire sale two months later.
It is difficult to guess the bottom of the market and when the credit conditions will stabilize. One thing that is not hard to predict is that going forward it will not be business as usual in the credit markets. Fundamental rules must be put in place and maintained so that the leveraging of the economy does not precipitate a near destruction of the country again.
Saturday, October 18, 2008
Give me just one thing
It is no secret that in Massachusetts you would find supporters of a liberal Democrat. It is also no secret that who ever was the Democratic nominee would get the endorsement of the Boston Globe. It used to be that you could be assured they would endorse a Democrat because they always do. But now that they are the junior varsity for the New York Times, you could be sure that the word came down from Pinch just in case anyone was thinking of going off the reservation.
In all probability come election day I will pull the lever for Obama, partly from family and party affiliation and primarily because I have never been a real big McCain fan. He is to old, seems to lack real commitment to his own party, compromises on key issues and is in questionable health. McCain Feingold campaign finance reform has been a disaster and his position on immigration was rejected unceremoniously by both parties. Despite all of these liabilities I have not completely ruled out McCain because of one very important reason. That reason is substance. At least McCain has some. He was right on the surge and he was right on Fannie Mae and Freddie Mac.
Please help me out here. People I know, like and respect are voting for Obama but when I ask them this one question not one of them can come up with a straight forward answer. What exactly has Barack Obama accomplished on his own in life that would qualify him to be the president of the United States?
Has he run a business or government? Has he authored any legislation? Has he led a movement or fulfilled a commitment of any kind? Has he managed men and women in crisis or in battle? The Globe says, "Obama shows great faith in the possibility of persuasion overseas and in the ingenuity of the American economy." Or how about this magnificent achievement, "the way Obama has run his campaign has been a marvel of sound management." This is the essence of their endorsement, a bunch of clap trap rhetoric that you can find at any medicine or revival tent show.
His first major decision after his nomination was to choose the chief bloviator, Joe Biden, amongst the many senate bloviators as his VP. Were it not for the melt down on Wall Street, that single decision might have sunk his chances weeks ago.
The real question about Obama is not about liberal or even socialist type domestic policies but very simply whether or not he is a weakling. The Globe shows its citizen of the world concerns by this quote, "While intransigent rogue states can't be finger-wagged into giving up on nuclear weapons, perhaps they can be talked back from the brink." The last weakling talker we had in the presidency was Jimmy Carter and we are still feeling the global ramifications of his incompetence. The Left constantly advocates American appeasement on such things as North Korea and Iran. Will Obama pay bribes and ransom?
Will European style weakness embolden various regimes and militant factions into provocative actions to test the new America that is interested in "improving" our global image? Will the Israelis take unilateral action knowing that an Obama administration will talk softly but can't be trusted to carry a big stick?
How important in the course of world events is that we Americans should be popular?The Europeans may look down their nose at Bush and the United States but will they yearn for him during the next crisis? Pehaps the Europeans are preparing to defend their own ships against pirates in Africa? Do you think those pirates would have ransomed an American ship while Bush was on duty?
So here he is, a machine politician from Chicago with a paper thin resume, soon to join San Francisco Nancy Pelosi, and the gambling industry connected senate majority leader, Harry Reid, on the brink of leading our country. The choices available to us says a lot about the condition of politics in the nation.
In all probability come election day I will pull the lever for Obama, partly from family and party affiliation and primarily because I have never been a real big McCain fan. He is to old, seems to lack real commitment to his own party, compromises on key issues and is in questionable health. McCain Feingold campaign finance reform has been a disaster and his position on immigration was rejected unceremoniously by both parties. Despite all of these liabilities I have not completely ruled out McCain because of one very important reason. That reason is substance. At least McCain has some. He was right on the surge and he was right on Fannie Mae and Freddie Mac.
Please help me out here. People I know, like and respect are voting for Obama but when I ask them this one question not one of them can come up with a straight forward answer. What exactly has Barack Obama accomplished on his own in life that would qualify him to be the president of the United States?
Has he run a business or government? Has he authored any legislation? Has he led a movement or fulfilled a commitment of any kind? Has he managed men and women in crisis or in battle? The Globe says, "Obama shows great faith in the possibility of persuasion overseas and in the ingenuity of the American economy." Or how about this magnificent achievement, "the way Obama has run his campaign has been a marvel of sound management." This is the essence of their endorsement, a bunch of clap trap rhetoric that you can find at any medicine or revival tent show.
His first major decision after his nomination was to choose the chief bloviator, Joe Biden, amongst the many senate bloviators as his VP. Were it not for the melt down on Wall Street, that single decision might have sunk his chances weeks ago.
The real question about Obama is not about liberal or even socialist type domestic policies but very simply whether or not he is a weakling. The Globe shows its citizen of the world concerns by this quote, "While intransigent rogue states can't be finger-wagged into giving up on nuclear weapons, perhaps they can be talked back from the brink." The last weakling talker we had in the presidency was Jimmy Carter and we are still feeling the global ramifications of his incompetence. The Left constantly advocates American appeasement on such things as North Korea and Iran. Will Obama pay bribes and ransom?
Will European style weakness embolden various regimes and militant factions into provocative actions to test the new America that is interested in "improving" our global image? Will the Israelis take unilateral action knowing that an Obama administration will talk softly but can't be trusted to carry a big stick?
How important in the course of world events is that we Americans should be popular?The Europeans may look down their nose at Bush and the United States but will they yearn for him during the next crisis? Pehaps the Europeans are preparing to defend their own ships against pirates in Africa? Do you think those pirates would have ransomed an American ship while Bush was on duty?
So here he is, a machine politician from Chicago with a paper thin resume, soon to join San Francisco Nancy Pelosi, and the gambling industry connected senate majority leader, Harry Reid, on the brink of leading our country. The choices available to us says a lot about the condition of politics in the nation.
Wednesday, October 15, 2008
No on 1 yes on 2
Question one as it appears on the November ballot would accomplish the following according to the ballot summary:
This proposed law would reduce the state personal income tax rate to 2.65% for all categories of taxable income for the tax year beginning on or after January 1, 2009, and would eliminate the tax for all tax years beginning on or after January 1, 2010. The personal income tax applies to income received or gain realized by individuals and married couples, by estates of deceased persons, by certain trustees and other fiduciaries, by persons who are partners in and receive income from partnerships, by corporate trusts, and by persons who receive income as shareholders of "S corporations" as defined under federal tax law. The proposed law would not affect the tax due on income or gain realized in a tax year beginning before January 1, 2009. The proposed law states that if any of its parts were declared invalid, the other parts would stay in effect.
Hey what a great idea! It would probably save me and you about $3600 a year on our state income tax. Who is kidding who? The estimates are that this would knock out about 40% of state revenue. Now let's suggest for a moment that that number is inflated by a variety of the sky is falling groups who rely on the state for their income. So let's reduce that figure down to a measly 25%.
The fact of the matter is that a 25% reduction in state income would result in chaos across the commonwealth. Let's not consider the individual human impact of state workers being let go, after all if we don't have any in our family or who are our neighbors or friends why should we care?. Let's instead focus on that thing that cuts closest to home, yes self interest.
What do you think will happen to your property taxes if local aid is cut by 25%? Or how about that new school building you thought the state was going to pick up half the cost of? Even more importantly is the impact on both the local communities and the state's bond rating. It is a difficult enough market to move any new bonds in, can you imagine how much more difficult it would be if the revenue stream necessary to repay the bonds was reduced so dramatically and the Massachusetts state and local ratings were cut two or three notches?
Think for a moment who is likely to bear the brunt of the cuts. Do you think it will be the strongest of the state unions or legislative pay, or judges or lawyers? No, I think it will be the people with the least muscle on Beacon Hill who will bear the brunt of this. Kids and the homeless and the mentally ill don't have connected lobbyists working for them.
Cutting taxes and running an economical government is a great idea. So vote for people who advocate such a stance. Perhaps we should even once again have a 2 party system in Massachusetts. Voting yes for Question 1 is the equivalent of using a chain saw to cure a headache.
Vote yes on Question 2. The summary is as follows:
This proposed law would replace the criminal penalties for possession of one ounce or less of marijuana with a new system of civil penalties, to be enforced by issuing citations, and would exclude information regarding this civil offense from the state's criminal record information system. Offenders age 18 or older would be subject to forfeiture of the marijuana plus a civil penalty of $100. Offenders under the age of 18 would be subject to the same forfeiture and, if they complete a drug awareness program within one year of the offense, the same $100 penalty.
Offenders under 18 and their parents or legal guardian would be notified of the offense and the option for the offender to complete a drug awareness program developed by the state Department of Youth Services. Such programs would include ten hours of community service and at least four hours of instruction or group discussion concerning the use and abuse of marijuana and other drugs and emphasizing early detection and prevention of substance abuse.
The penalty for offenders under 18 who fail to complete such a program within one year could be increased to as much as $1,000, unless the offender showed an inability to pay, an inability to participate in such a program, or the unavailability of such a program. Such an offender's parents could also be held liable for the increased penalty.
Failure by an offender under 17 to complete such a program could also be a basis for a delinquency proceeding. The proposed law would define possession of one ounce or less of marijuana as including possession of one ounce or less of tetrahydrocannibinol ("THC"), or having metabolized products of marijuana or THC in one's body.
Under the proposed law, possessing an ounce or less of marijuana could not be grounds for state or local government entities imposing any other penalty, sanction, or disqualification, such as denying student financial aid, public housing, public financial assistance including unemployment benefits, the right to operate a motor vehicle, or the opportunity to serve as a foster or adoptive parent.
The proposed law would allow local ordinances or bylaws that prohibit the public use of marijuana, and would not affect existing laws, practices, or policies concerning operating a motor vehicle or taking other actions while under the influence of marijuana, unlawful possession of prescription forms of marijuana, or selling, manufacturing, or trafficking in marijuana.The money received from the new civil penalties would go to the city or town where the offense occurred.
Vote yes on 2.
The war on drugs is now and has been a failure. Prohibition has never worked and it is not working now. The crime in drugs is the huge amount of money that is created by the demand for an illegal substance. It is filling jails (mostly with young minority men) and ruining lives and wasting law enforcement money on trying to control a substance that can grow wild in your back yard. Let's have cops spending time trying to catch violent criminals instead of making phony pinches of weed smokers.
The age old argument of marijuana being a gateway drug is nonsense. Ask 50 of your friends what was the first illegal substance they consumed and I bet 95% of them will tell you it was nipping the old man's whiskey in the liquor cabinet at home. If an adult wants to sit at home watching 2001 smoking weed, why should it be the state's business? Other states and other countries have an adult non criminal approach to this issue, why can't we?
This proposed law would reduce the state personal income tax rate to 2.65% for all categories of taxable income for the tax year beginning on or after January 1, 2009, and would eliminate the tax for all tax years beginning on or after January 1, 2010. The personal income tax applies to income received or gain realized by individuals and married couples, by estates of deceased persons, by certain trustees and other fiduciaries, by persons who are partners in and receive income from partnerships, by corporate trusts, and by persons who receive income as shareholders of "S corporations" as defined under federal tax law. The proposed law would not affect the tax due on income or gain realized in a tax year beginning before January 1, 2009. The proposed law states that if any of its parts were declared invalid, the other parts would stay in effect.
Hey what a great idea! It would probably save me and you about $3600 a year on our state income tax. Who is kidding who? The estimates are that this would knock out about 40% of state revenue. Now let's suggest for a moment that that number is inflated by a variety of the sky is falling groups who rely on the state for their income. So let's reduce that figure down to a measly 25%.
The fact of the matter is that a 25% reduction in state income would result in chaos across the commonwealth. Let's not consider the individual human impact of state workers being let go, after all if we don't have any in our family or who are our neighbors or friends why should we care?. Let's instead focus on that thing that cuts closest to home, yes self interest.
What do you think will happen to your property taxes if local aid is cut by 25%? Or how about that new school building you thought the state was going to pick up half the cost of? Even more importantly is the impact on both the local communities and the state's bond rating. It is a difficult enough market to move any new bonds in, can you imagine how much more difficult it would be if the revenue stream necessary to repay the bonds was reduced so dramatically and the Massachusetts state and local ratings were cut two or three notches?
Think for a moment who is likely to bear the brunt of the cuts. Do you think it will be the strongest of the state unions or legislative pay, or judges or lawyers? No, I think it will be the people with the least muscle on Beacon Hill who will bear the brunt of this. Kids and the homeless and the mentally ill don't have connected lobbyists working for them.
Cutting taxes and running an economical government is a great idea. So vote for people who advocate such a stance. Perhaps we should even once again have a 2 party system in Massachusetts. Voting yes for Question 1 is the equivalent of using a chain saw to cure a headache.
Vote yes on Question 2. The summary is as follows:
This proposed law would replace the criminal penalties for possession of one ounce or less of marijuana with a new system of civil penalties, to be enforced by issuing citations, and would exclude information regarding this civil offense from the state's criminal record information system. Offenders age 18 or older would be subject to forfeiture of the marijuana plus a civil penalty of $100. Offenders under the age of 18 would be subject to the same forfeiture and, if they complete a drug awareness program within one year of the offense, the same $100 penalty.
Offenders under 18 and their parents or legal guardian would be notified of the offense and the option for the offender to complete a drug awareness program developed by the state Department of Youth Services. Such programs would include ten hours of community service and at least four hours of instruction or group discussion concerning the use and abuse of marijuana and other drugs and emphasizing early detection and prevention of substance abuse.
The penalty for offenders under 18 who fail to complete such a program within one year could be increased to as much as $1,000, unless the offender showed an inability to pay, an inability to participate in such a program, or the unavailability of such a program. Such an offender's parents could also be held liable for the increased penalty.
Failure by an offender under 17 to complete such a program could also be a basis for a delinquency proceeding. The proposed law would define possession of one ounce or less of marijuana as including possession of one ounce or less of tetrahydrocannibinol ("THC"), or having metabolized products of marijuana or THC in one's body.
Under the proposed law, possessing an ounce or less of marijuana could not be grounds for state or local government entities imposing any other penalty, sanction, or disqualification, such as denying student financial aid, public housing, public financial assistance including unemployment benefits, the right to operate a motor vehicle, or the opportunity to serve as a foster or adoptive parent.
The proposed law would allow local ordinances or bylaws that prohibit the public use of marijuana, and would not affect existing laws, practices, or policies concerning operating a motor vehicle or taking other actions while under the influence of marijuana, unlawful possession of prescription forms of marijuana, or selling, manufacturing, or trafficking in marijuana.The money received from the new civil penalties would go to the city or town where the offense occurred.
Vote yes on 2.
The war on drugs is now and has been a failure. Prohibition has never worked and it is not working now. The crime in drugs is the huge amount of money that is created by the demand for an illegal substance. It is filling jails (mostly with young minority men) and ruining lives and wasting law enforcement money on trying to control a substance that can grow wild in your back yard. Let's have cops spending time trying to catch violent criminals instead of making phony pinches of weed smokers.
The age old argument of marijuana being a gateway drug is nonsense. Ask 50 of your friends what was the first illegal substance they consumed and I bet 95% of them will tell you it was nipping the old man's whiskey in the liquor cabinet at home. If an adult wants to sit at home watching 2001 smoking weed, why should it be the state's business? Other states and other countries have an adult non criminal approach to this issue, why can't we?
Saturday, October 04, 2008
The following resolution was passed overwhelmingly by the Burlington town meeting this past Wednesday night. It is significant in that it might mark a turning point in the town's attitude toward the City of Boston regarding its trusteeship of the Cummings property and the Friends of Mary Cummings Park's complaint regarding that trusteeship.
It needn't have arrived at town meeting had the board of selectmen taken a leadership role. Instead the board passed on any support of the complaint under the guise of town counsel opining that the town could be subject to legal liability if the board supported the complaint. This stance is of course nonsense and was completely debunked during the meeting. No amount of obfuscation on the subject by counsel on Wednesday could give the selectmen cover.
The leadership of the board wanted a reason to ignore the issue and continue with a 25 year old failed policy of appeasing Boston and they looked to counsel to provide that cover with a verbal opinion. The fact the selectmen remained silent during the discussion Wednesday further demonstrated their complete lack of understanding of the subject matter.
The matter now rests in the hands of Attorney General Coakley and that fact represents both the problem and the potential solution, since this is only a complaint by the Friends of Mary Cummings to the AG, it is not litigation in front of the courts
Under her authority as AG, she can order an investigation into Boston's behaviour under the public charities division, however she can also choose to completely ignore the complaint. Considering the severity of the items in the complaint you would think this impossible but guess again. Every attorney general of the commonwealth aspires to be the governor. I imagine Coakley has the same ambitions as her predecessors. There are clearly more votes to be had in Boston than in Burlington or Woburn. Attorney General Coakley's response to this problem will speak a great deal about her politics or her integrity.
Attorney General Martha Coakley
Massachusetts’s Attorney General Office
One Ashburton Place
Boston, Mass. 02108
Public Charities Division
Attorney General Coakley,
The following is a resolution of the Burlington Town Meeting in support of the complaint filed by the Friends of Mary Cummings Park.
Where as; Mary P.C. Cummings left the property known as Babylon Hill “To hold and keep the same forever open as a public pleasure ground, and to maintain and care for the same in a suitable manner in accordance with that purpose.”
Where as: Mrs. Cummings left substantial assets for the purposes of meeting the terms of her bequest.
Where as: Mrs. Cummings left a successor in the event that “said City of Boston shall decline or fail to accept said real estate in Woburn and Burlington for the purposes aforesaid,”
Where as: The City of Boston has spent trust assets for the purposes of protecting commercial development rights, appraisals and attorney’s fees outside of the specific instructions of the trust.
Where as: The City of Boston has received specific legal advice on how to position the trust property as unable to meet the wishes of the donor.
Where as: The City of Boston has taken specific action to prevent access to the park.
Now comes the Burlington Town Meeting to request that you look favorably upon the complaint of the Friends of Mary Cummings Park under authority granted to you in MGL c12 Paragraph 8H, to investigate thoroughly how this trust is being managed under the terms of the donor’s bequest.
It needn't have arrived at town meeting had the board of selectmen taken a leadership role. Instead the board passed on any support of the complaint under the guise of town counsel opining that the town could be subject to legal liability if the board supported the complaint. This stance is of course nonsense and was completely debunked during the meeting. No amount of obfuscation on the subject by counsel on Wednesday could give the selectmen cover.
The leadership of the board wanted a reason to ignore the issue and continue with a 25 year old failed policy of appeasing Boston and they looked to counsel to provide that cover with a verbal opinion. The fact the selectmen remained silent during the discussion Wednesday further demonstrated their complete lack of understanding of the subject matter.
The matter now rests in the hands of Attorney General Coakley and that fact represents both the problem and the potential solution, since this is only a complaint by the Friends of Mary Cummings to the AG, it is not litigation in front of the courts
Under her authority as AG, she can order an investigation into Boston's behaviour under the public charities division, however she can also choose to completely ignore the complaint. Considering the severity of the items in the complaint you would think this impossible but guess again. Every attorney general of the commonwealth aspires to be the governor. I imagine Coakley has the same ambitions as her predecessors. There are clearly more votes to be had in Boston than in Burlington or Woburn. Attorney General Coakley's response to this problem will speak a great deal about her politics or her integrity.
Attorney General Martha Coakley
Massachusetts’s Attorney General Office
One Ashburton Place
Boston, Mass. 02108
Public Charities Division
Attorney General Coakley,
The following is a resolution of the Burlington Town Meeting in support of the complaint filed by the Friends of Mary Cummings Park.
Where as; Mary P.C. Cummings left the property known as Babylon Hill “To hold and keep the same forever open as a public pleasure ground, and to maintain and care for the same in a suitable manner in accordance with that purpose.”
Where as: Mrs. Cummings left substantial assets for the purposes of meeting the terms of her bequest.
Where as: Mrs. Cummings left a successor in the event that “said City of Boston shall decline or fail to accept said real estate in Woburn and Burlington for the purposes aforesaid,”
Where as: The City of Boston has spent trust assets for the purposes of protecting commercial development rights, appraisals and attorney’s fees outside of the specific instructions of the trust.
Where as: The City of Boston has received specific legal advice on how to position the trust property as unable to meet the wishes of the donor.
Where as: The City of Boston has taken specific action to prevent access to the park.
Now comes the Burlington Town Meeting to request that you look favorably upon the complaint of the Friends of Mary Cummings Park under authority granted to you in MGL c12 Paragraph 8H, to investigate thoroughly how this trust is being managed under the terms of the donor’s bequest.
Media help only hurts Obama
Barack Obama is doing quite well in this election without the need for help from the media. If the papers and networks just play it straight and focus on the facts it should be enough for Obama to win on the basis of simply saying vote for me because I am not them. The Republicans have held the white house for 8 years and it is time to give someone else a try who isn't them.
How the media is straying from the playing field is very simply demonstrated by their fixation with trying to make the Republican VP nominee look like a dope that doesn't belong on the ticket, is an incoherent airhead, is guilty of getting a free facial, zoning special treatment, is hateful about a brother in law who tasered his son and somehow is a radical ANTI feminist who is likely to endanger every woman in America.
All this does is to so lower expectations, so that when Sarah Palin does utter a complete sentence it is considered a substantial victory for her. Not only does it lift Palin in the eyes of the voter but it also makes a fair minded person wonder why opposition figures are not held to the same standard. As an example is Sen. Biden's recent pronouncement regarding President Roosevelt addressing the nation on television in 1929 regarding the Great Depression. Perhaps Katie Couric might have asked Joe what periodical he read that in?
This is just about as stupid a comment that a 30 plus year member of the senate could possibly utter yet it got no where near the coverage, laughter or general derision in the press that Palin's edited "seeing Russia from her house" comment got. A fair minded person need only read the transcript of the interview to know that the network edited this for maximum embarrassment.
The continued focus on Palin's credentials again makes a fair minded person wonder why the New York Times and various network anchors think that a sitting governor and former mayor has less management and governing capabilities as vice presidential material than a freshman senator with no governing experience has to be presidential material. They continually bring home the point that Palin might be only a heartbeat away from the presidency but are not one bit concerned that a complete neophyte on the Democratic side WOULD be the president.
Gov. Palin has responsibility for approximately a 15 billion dollar budget and ten thousand plus employees. This is not an insignificant piece of information on Palin's resume and in fact can't be matched by any of the other three candidates. It might be useful to compare the number of presidents elected directly from the senate versus the number of governors elected directly from their state capitols to the nations capitol.
The poll results have not yet shown the impact of the Biden/Palin debate on Thursday night. What can be deduced immediately is that by merely holding her own against Biden she has plainly demonstrated that the rumored media elite disdain for a western frontier woman is very real. If the media continues to portray Palin in a way that is in direct contrast to what American voters hear for themselves when she speaks directly to them, it may provide a voter backlash that McCain is so desperately in need of.
How the media is straying from the playing field is very simply demonstrated by their fixation with trying to make the Republican VP nominee look like a dope that doesn't belong on the ticket, is an incoherent airhead, is guilty of getting a free facial, zoning special treatment, is hateful about a brother in law who tasered his son and somehow is a radical ANTI feminist who is likely to endanger every woman in America.
All this does is to so lower expectations, so that when Sarah Palin does utter a complete sentence it is considered a substantial victory for her. Not only does it lift Palin in the eyes of the voter but it also makes a fair minded person wonder why opposition figures are not held to the same standard. As an example is Sen. Biden's recent pronouncement regarding President Roosevelt addressing the nation on television in 1929 regarding the Great Depression. Perhaps Katie Couric might have asked Joe what periodical he read that in?
This is just about as stupid a comment that a 30 plus year member of the senate could possibly utter yet it got no where near the coverage, laughter or general derision in the press that Palin's edited "seeing Russia from her house" comment got. A fair minded person need only read the transcript of the interview to know that the network edited this for maximum embarrassment.
The continued focus on Palin's credentials again makes a fair minded person wonder why the New York Times and various network anchors think that a sitting governor and former mayor has less management and governing capabilities as vice presidential material than a freshman senator with no governing experience has to be presidential material. They continually bring home the point that Palin might be only a heartbeat away from the presidency but are not one bit concerned that a complete neophyte on the Democratic side WOULD be the president.
Gov. Palin has responsibility for approximately a 15 billion dollar budget and ten thousand plus employees. This is not an insignificant piece of information on Palin's resume and in fact can't be matched by any of the other three candidates. It might be useful to compare the number of presidents elected directly from the senate versus the number of governors elected directly from their state capitols to the nations capitol.
The poll results have not yet shown the impact of the Biden/Palin debate on Thursday night. What can be deduced immediately is that by merely holding her own against Biden she has plainly demonstrated that the rumored media elite disdain for a western frontier woman is very real. If the media continues to portray Palin in a way that is in direct contrast to what American voters hear for themselves when she speaks directly to them, it may provide a voter backlash that McCain is so desperately in need of.
Saturday, September 27, 2008
Low expectations
The Red Sox are the defending World Series champions and remain in that position until proven otherwise. Why is it that there doesn't appear to be a great deal of enthusiasm about the possibility of their retaining that crown?
It could be anger over what could have been. Manny Ramirez might have proven he had a gram of integrity by having his torrid September in a Boston uniform but no, he is busy winning over followers of the junior varsity in Los Angeles. However, let's leave any residual antipathy towards that dog behind and focus on the team that is going to the tournament.
They have lost a big bat but they are arguably a better ball club defensively and in the club house. Certainly Jason Bay is a significant upgrade in left field and the other outfield positions are even stronger with Ellsbury improving daily and both Coco Crisp and J.D. Drew proven defenders.
The infield is basically improved by subtraction. Julio Lugo was not contributing either in the field or at the bat and Jed Lowrie has proven to be a more than adequate replacement in both categories. Both Pedroia and Youkilis are having career years and either could win the MVP award. When you get 211 hits and a .493 slugging percentage out of a middle infielder you know you have something very special. The kicker with Pedroia is that he just turned 25 years old. Youkilis has filled in admirably in the clean up spot with 29 home runs and 115 RBI.
Third base would normally be well staffed but apparently Mike Lowell re-injured his hip last night and at this point may be a question mark for the playoffs. The Sox are strong on the bench however and his absence could be filled by moving Youkilis to third and putting Casey on first. The injury bug may also affect the outfield as Drew is just back from a disc injury and we will not know for a while if he is at peak efficiency.
The catching department is solid with Varitek and Cash. They aren't hitting for average but there is power there and the game calling and defensive experience of Varitek is a definite advantage. The middle of the batting order is filled with David Ortiz and as long as he is breathing, opposing pitchers will have fear in their hearts and the Boston fans will have hope.
Starting pitching would appear to be the Sox biggest advantage. The big three of Beckett, Matsusaka and Lester is better than anyone else is throwing and until someone proves differently, Beckett is the reigning World Series stud. Pitcher number four is up in the air at the moment but Paul Byrd or Tim Wakefield are seasoned performers.
The bull pen would seem to be a bit of a question mark. Papelbon is nearly a sure thing but getting to him has been a bit spotty. Okajima is merely mortal this year as opposed to last and Manny Delcarmen has not yet achieved lights out status. Justin Masterson has proven to be a solid set up man but as a rookie has not been on the very big stage.
So the defense of the crown begins on Wednesday against the Angels in L.A.. We have faced them a number of times in the past and handled them however, they are a bit retooled this year and own the American League's best record. It is a good match up for us but if Lowell, who was last year's Series MVP and Drew are lost for the series it might be a difference maker in a series of evenly matched clubs.
It could be anger over what could have been. Manny Ramirez might have proven he had a gram of integrity by having his torrid September in a Boston uniform but no, he is busy winning over followers of the junior varsity in Los Angeles. However, let's leave any residual antipathy towards that dog behind and focus on the team that is going to the tournament.
They have lost a big bat but they are arguably a better ball club defensively and in the club house. Certainly Jason Bay is a significant upgrade in left field and the other outfield positions are even stronger with Ellsbury improving daily and both Coco Crisp and J.D. Drew proven defenders.
The infield is basically improved by subtraction. Julio Lugo was not contributing either in the field or at the bat and Jed Lowrie has proven to be a more than adequate replacement in both categories. Both Pedroia and Youkilis are having career years and either could win the MVP award. When you get 211 hits and a .493 slugging percentage out of a middle infielder you know you have something very special. The kicker with Pedroia is that he just turned 25 years old. Youkilis has filled in admirably in the clean up spot with 29 home runs and 115 RBI.
Third base would normally be well staffed but apparently Mike Lowell re-injured his hip last night and at this point may be a question mark for the playoffs. The Sox are strong on the bench however and his absence could be filled by moving Youkilis to third and putting Casey on first. The injury bug may also affect the outfield as Drew is just back from a disc injury and we will not know for a while if he is at peak efficiency.
The catching department is solid with Varitek and Cash. They aren't hitting for average but there is power there and the game calling and defensive experience of Varitek is a definite advantage. The middle of the batting order is filled with David Ortiz and as long as he is breathing, opposing pitchers will have fear in their hearts and the Boston fans will have hope.
Starting pitching would appear to be the Sox biggest advantage. The big three of Beckett, Matsusaka and Lester is better than anyone else is throwing and until someone proves differently, Beckett is the reigning World Series stud. Pitcher number four is up in the air at the moment but Paul Byrd or Tim Wakefield are seasoned performers.
The bull pen would seem to be a bit of a question mark. Papelbon is nearly a sure thing but getting to him has been a bit spotty. Okajima is merely mortal this year as opposed to last and Manny Delcarmen has not yet achieved lights out status. Justin Masterson has proven to be a solid set up man but as a rookie has not been on the very big stage.
So the defense of the crown begins on Wednesday against the Angels in L.A.. We have faced them a number of times in the past and handled them however, they are a bit retooled this year and own the American League's best record. It is a good match up for us but if Lowell, who was last year's Series MVP and Drew are lost for the series it might be a difference maker in a series of evenly matched clubs.
Sunday, September 14, 2008
Still No Strategy
The selectmen's meeting Monday night was illuminating more for what didn't take place than what did. For the first time in many many years the subject of the Cummings property was on the agenda. The Friends of Mary Cummings Park came to explain elements of the complaint that had been made to the attorney generals office regarding Boston's breach of trust in their responsibility as trustee. The second part of the meeting revolved around asking the board to cast a vote in favor of supporting the complaint.
Two things that would be obvious to the casual observer was that the board had already made a decision not to support the complaint. This was obvious because the chairman announced before any discussion even took place what the board's position would be. This was rather strange since no motion was made on the subject during the course of the discussion.
The other thing that was obvious is that very little examination was done by the members of the complaint itself. Rather than address the content of the complaint, one selectman was more concerned about the facial expressions of one of the Friend's representatives.
The selectmen comments revolved chiefly around town counsel's opinion as well as "supporting the intent of the trust." When responding that they would not support sale of the property it became apparent that they had no idea what the main intent of the trust is nor were they aware of the substantial assets in the trust for its maintenance and upkeep. When informed what the intent of the trust actually was, they declined to take any action in supporting the "intent of the trust."
Town counsel's opinion was not to support the complaint for fear of sparking legal action by Boston against the town. This assertion is absurd on its face and I would challenge counsel to put such an opinion on paper. The Friend's complaint is a request to the chief legal officer of the state to examine Boston trustee performance. Is town counsel suggesting that we could be sued for that?
Counsel's opinion on another matter related to the Cumming's land is rather interesting and in direct contrast to the board's current position. According to the town administrator, Boston has assured him that they will not attempt to sell the land. But listen to town counsel's opinion related to the upcoming attempt by Paul Raymond to re-zone the park to "open space."
Counsel warns of "significant legal fees" if the town rezones the property. "If the City, for example, were able to obtain a court order on a cy pres petition to the Probate court, permitting the city to sell the land, perhaps subject to a covenant that the proceeds of the sale be used for park purposes within the City , it is possible that the City might seek to invalidate the rezoning, arguing that the rezoning of the land for Open Space uses has no rational basis and constitutes a regulatory taking."
Boston has attempted just such a filing for cy pres in the past. They have also had the property appraised for sale and in a proposed lease agreement with the town for construction of a ball field, they insisted on an out clause in the event of sale of the property.
On one hand counsel advises the selectmen not to support the Friend's complaint which seeks to prevent Boston from ever having the opportunity to sell the property and on the other hand he is warning town meeting not to take any action because Boston might sell the land. Who the Hell are they working for, us or Boston?
In the end it really didn't matter what the selectmen had to say. True, it might have helped at the AG's office if they had submitted a note of support but based on what little knowledge they seem to have on the subject and the fact that they are content to support a failed strategy that is 25 years old, their involvement might do more harm than good.
Two things that would be obvious to the casual observer was that the board had already made a decision not to support the complaint. This was obvious because the chairman announced before any discussion even took place what the board's position would be. This was rather strange since no motion was made on the subject during the course of the discussion.
The other thing that was obvious is that very little examination was done by the members of the complaint itself. Rather than address the content of the complaint, one selectman was more concerned about the facial expressions of one of the Friend's representatives.
The selectmen comments revolved chiefly around town counsel's opinion as well as "supporting the intent of the trust." When responding that they would not support sale of the property it became apparent that they had no idea what the main intent of the trust is nor were they aware of the substantial assets in the trust for its maintenance and upkeep. When informed what the intent of the trust actually was, they declined to take any action in supporting the "intent of the trust."
Town counsel's opinion was not to support the complaint for fear of sparking legal action by Boston against the town. This assertion is absurd on its face and I would challenge counsel to put such an opinion on paper. The Friend's complaint is a request to the chief legal officer of the state to examine Boston trustee performance. Is town counsel suggesting that we could be sued for that?
Counsel's opinion on another matter related to the Cumming's land is rather interesting and in direct contrast to the board's current position. According to the town administrator, Boston has assured him that they will not attempt to sell the land. But listen to town counsel's opinion related to the upcoming attempt by Paul Raymond to re-zone the park to "open space."
Counsel warns of "significant legal fees" if the town rezones the property. "If the City, for example, were able to obtain a court order on a cy pres petition to the Probate court, permitting the city to sell the land, perhaps subject to a covenant that the proceeds of the sale be used for park purposes within the City , it is possible that the City might seek to invalidate the rezoning, arguing that the rezoning of the land for Open Space uses has no rational basis and constitutes a regulatory taking."
Boston has attempted just such a filing for cy pres in the past. They have also had the property appraised for sale and in a proposed lease agreement with the town for construction of a ball field, they insisted on an out clause in the event of sale of the property.
On one hand counsel advises the selectmen not to support the Friend's complaint which seeks to prevent Boston from ever having the opportunity to sell the property and on the other hand he is warning town meeting not to take any action because Boston might sell the land. Who the Hell are they working for, us or Boston?
In the end it really didn't matter what the selectmen had to say. True, it might have helped at the AG's office if they had submitted a note of support but based on what little knowledge they seem to have on the subject and the fact that they are content to support a failed strategy that is 25 years old, their involvement might do more harm than good.
Saturday, September 06, 2008
Ridiculing Palin
If ridicule is the strategy that Democrats are intending to use as a cudgel against the opposition party nominee for vice president then they better rethink it very quickly.
All the usual suspects in representing the Left in the media have been quick to use derision in their commentary. Eleanor Clift, ( dumb as a rock) Sally Quinn, Maureen Dowd and Campbell Brown among others all think that women won't fall in line behind the Alaskan hick with "extremist" views and a very thin resume.
Those women aren't the ones that would be independent in this election anyway. They aren't on the fence. However, a good many in middle America that are on the fence in swing states are going to bother to take a look at this very intriguing young woman.
Even a short and shallow examination shows a woman of substance in the political arena. Forget the fact that she rose to the occasion with flying colors in the biggest public event of her life. Simply take a look at her experience in public and private sector management. The fact is that she has more hands on government experience than everyone else on both tickets. City council, mayor and governor are all on her resume compared to her running mate and opponents who have experience in the windy halls of the senate but not much else in the way of managing anything beyond a small senate staff.
The Boston Globe did a quick trashing of her college credentials. They aren't Ivy League but they apparently weren't filled with proven accusations of plagiarism as Biden's record contains.
She has been a governor for only two years however in that two years she has negotiated what appears to be the largest single construction project in the history of the United States. To give you an idea just how big, the total money spent will be three or four times as large as our Big Dig public swindle here in Massachusetts.
Her approval rating in her home state is the highest of any governor in the country and apparently her peers in Alaska thought enough of her to elect her President of Alaska Conference of Mayors.
So there is comparable if not superior substance to this woman against her male counterparts. Add to that a good deal of superficial stuff like beautiful faces on her and her family as well as the ability to generate a good deal of excitement when she speaks and you have what turns out to be an asset for McCain. She simply is everything that McCain is not. The difference between her and Joe Biden is just as stark.
Other derisive strategies that will not work against her involve her role as a mom. All the feminists who have championed the breaking of the glass ceiling for women cannot send this woman home to mind her kids. In this day and age there is no reason why the husband can't take on a good deal of the weight. All over America it is being done, and besides, being vice president is likely to be more of a vacation than being a working governor.
Yes, McCain has the democrats very worried about this woman. You can see that illustrated in our own home town rag. This week American forces handed over Anbar Province to the Iraqi military. You would think that this would merit some sort of notice by the Boston Globe. But guess what was on the front page below the fold on that day? A story about Palin's 17 year old daughter being pregnant. This is the same paper that completely ignored the John Edwards pregnancy story until almost every other outlet in the union had printed it.
By this time next week McCain will be even or perhaps ahead in polls. This is going to be a horse race and is likely to hinge on a single gaffe by one of the participants. If you are wagering it might be Sarah Palin that stumbles, don't put the house on it.
All the usual suspects in representing the Left in the media have been quick to use derision in their commentary. Eleanor Clift, ( dumb as a rock) Sally Quinn, Maureen Dowd and Campbell Brown among others all think that women won't fall in line behind the Alaskan hick with "extremist" views and a very thin resume.
Those women aren't the ones that would be independent in this election anyway. They aren't on the fence. However, a good many in middle America that are on the fence in swing states are going to bother to take a look at this very intriguing young woman.
Even a short and shallow examination shows a woman of substance in the political arena. Forget the fact that she rose to the occasion with flying colors in the biggest public event of her life. Simply take a look at her experience in public and private sector management. The fact is that she has more hands on government experience than everyone else on both tickets. City council, mayor and governor are all on her resume compared to her running mate and opponents who have experience in the windy halls of the senate but not much else in the way of managing anything beyond a small senate staff.
The Boston Globe did a quick trashing of her college credentials. They aren't Ivy League but they apparently weren't filled with proven accusations of plagiarism as Biden's record contains.
She has been a governor for only two years however in that two years she has negotiated what appears to be the largest single construction project in the history of the United States. To give you an idea just how big, the total money spent will be three or four times as large as our Big Dig public swindle here in Massachusetts.
Her approval rating in her home state is the highest of any governor in the country and apparently her peers in Alaska thought enough of her to elect her President of Alaska Conference of Mayors.
So there is comparable if not superior substance to this woman against her male counterparts. Add to that a good deal of superficial stuff like beautiful faces on her and her family as well as the ability to generate a good deal of excitement when she speaks and you have what turns out to be an asset for McCain. She simply is everything that McCain is not. The difference between her and Joe Biden is just as stark.
Other derisive strategies that will not work against her involve her role as a mom. All the feminists who have championed the breaking of the glass ceiling for women cannot send this woman home to mind her kids. In this day and age there is no reason why the husband can't take on a good deal of the weight. All over America it is being done, and besides, being vice president is likely to be more of a vacation than being a working governor.
Yes, McCain has the democrats very worried about this woman. You can see that illustrated in our own home town rag. This week American forces handed over Anbar Province to the Iraqi military. You would think that this would merit some sort of notice by the Boston Globe. But guess what was on the front page below the fold on that day? A story about Palin's 17 year old daughter being pregnant. This is the same paper that completely ignored the John Edwards pregnancy story until almost every other outlet in the union had printed it.
By this time next week McCain will be even or perhaps ahead in polls. This is going to be a horse race and is likely to hinge on a single gaffe by one of the participants. If you are wagering it might be Sarah Palin that stumbles, don't put the house on it.
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