Eeyore's News and Views

Makeshift church services bring comfort to Ike's victims

ANAHUAC, Texas (AP) — Wearing jeans and rubber boots, clutching Bibles and weeping between hymns, residents of the storm-shattered Texas coast comforted each other Sunday at makeshift church services that provided more than a respite from Hurricane Ike cleanup.
About 50 people came together on a basketball court outside the Oak Island Baptist Church on the tip of Trinity Bay. They sat on folding chairs or simply stood, forced outdoors by the 1-inch layer of mud left inside the one-story red brick building by floodwaters that tossed pews like matchsticks.
Behind the church, a demolished mobile home was still lodged among trees, many of them snapped by the storm's 110-mph winds that somehow left the church's trio of 20-foot white crosses still standing. Across the street, piles of debris had sprouted, signs of the labor undertaken since the storm blew through last weekend and of the work yet to come.
"I know it's hard. Looking around, it's tough," the Rev. Eddie Shauberger told the congregants. "But there is a God, and he has a plan for our lives."
Similar services were being held on Galveston Island and throughout the Houston area, where power had been restored to enough residents that schools planned to hold classes Monday for the first time since the storm.

Observances in the hardest-hit spots weren't overflowing with residents, however. Most of Galveston won't reopen until Wednesday, and it could be weeks or more before basic services are restored in all areas.
The island is far from deserted, though. At least 15,000 people ignored mandatory evacuation orders before and after the storm, and many of them were still there Sunday.
Authorities cautioned that evacuees could find drastically different conditions depending on how their property fared.
"We have people whose homes are totally and completely destroyed, all the way to the other end of the spectrum, to where your home is perfectly fine," city manager Steve LeBlanc said.
Fuel and other essentials remained scarce. Some businesses were beginning to reopen, cell service was improving and electricity was coming back on.
But the strides are small, and island leaders emphasized that Galveston remained dangerous. Police will indefinitely enforce a 6 p.m. to 6 a.m. curfew once the island reopens, and parents were warned their children could be exposed to infections from storm debris and other hazards.
Planes continued spraying the island to control mosquitoes. Officials urged those returning to wear masks to protect from mold and to properly dispose of spoiled food to stave off vermin.
Cadaver dogs continued sniffing through rubble and debris on Bolivar Peninsula, which suffered even heavier damage than Galveston. Residents there will also start seeing their homes this week, albeit for only a quick peek. Because the main road is impassible in many spots, residents will be loaded into dump trucks and other heavy vehicles for their tour.
Authorities had blamed the storm for 26 deaths in Texas and 61 total in the U.S., including a utility contractor from Florida who was electrocuted Friday while trying to restore power in Louisville
Power had been restored to most of the customers in Texas whose electricity was cut by Ike, though the state said about 900,000 remained in the dark Sunday.
More than 1 million people evacuated the Texas coast as Ike steamed across the Gulf of Mexico.
http://www.usatoday.com/news/nation/2008-09-21-ike-galveston-sunday_N.htm


Feds raid Ark. compound in child porn case
FOUKE, Ark. (AP) — A 15-acre church compound was quiet Sunday morning following a raid by federal and state law enforcement officers as part of a child-abuse and pornography investigation. A prosecutor said an arrest warrant was likely.
A man at the gate of the Tony Alamo Christian Ministries turned away an Associated Press reporter Sunday morning. He refused to give his name and said no one was available to comment.
Police said the church complex would be allowed to open for Sunday services.
More than 100 state officers and FBI agents hit the compound Saturday in a raid that ministry leader and convicted tax evader Tony Alamo claimed in a telephone interview was part of a federal push to legalize same-sex marriage while outlawing polygamy.
Prosecutors once labeled Alamo as a polygamist who preys on girls and women.

Mayor Terry Purvis said he watched as the left around 12:30 a.m. Sunday. He said authorities did not tell him what they found.
"In an investigation like this, they're pretty lip-locked," Purvis said.
U.S. Attorney Bob Balfe did not respond to a call seeking comment Sunday.
The raid started an hour before sunset at the complex in tiny Fouke, in southwestern Arkansas. Armed guards regularly patrol the headquarters, but there was no resistance as agents moved in, state police said.
No one was arrested, but U.S. Attorney Bob Balfe said before the raid that he expected an arrest warrant for Alamo to be issued later. The federal investigation centered on the production of child pornography, while state police were looking into allegations of other child abuse, he said.
Social workers interviewed children who live at the complex, which critics call a cult. A two-year investigation involves a law that prohibits the transportation of children across state lines for criminal activity, said Tom Browne, who runs the FBI office in Little Rock.
In a phone call to The Associated Press from a friend's house in the Los Angeles area, Alamo — who was also once accused of child abuse — denied involvement in pornography.
"We don't go into pornography; nobody in the church is into that," said Alamo, 73. "Where do these allegations stem from? The anti-Christ government. The Catholics don't like me because I have cut their congregation in half. They hate true Christianity."
Alamo and his wife Susan were street preachers along Hollywood's Sunset Strip in 1966 before forming a commune near Saugus, Calif. Susan Alamo died of cancer in 1982 and Alamo claimed she would be resurrected and kept her body on display for six months while their followers prayed.
In 1988, following a raid near Santa Ana, Calif., three boys whose mothers were Alamo followers were placed in the custody of their fathers. Justin Miller, then 11, told police that Alamo directed four men to strike him 140 times with a wooden paddle as punishment for minor offenses. Alamo was later charged with child abuse but prosecutors dropped the charge, citing a lack of evidence.
Alamo was convicted of tax-related charges in 1994 after the IRS said he owed the government $7.9 million. He served four years in prison.
Prosecutors in the tax case argued before sentencing that Alamo was a flight risk and a polygamist who preyed on married women and girls in his congregation.
http://www.usatoday.com/news/nation/2008-09-20-ark-raid_N.htm

Do you want a list of all the banks that have failed since 2000? go to the following link.
http://www.fdic.gov/bank/individual/failed/banklist.html

New Wall Street crisis will create a new financial world order, says RCM CIO
By Danielle Levy 12:40:00 16 September 2008
As the sell-off in global markets continues, RCM's CIO for Europe Neil Dwane believes the aftermath of Monday's events will lead to the formation of a 'new world order', in which the remaining financial giants will flourish.
'Merrills rushed into the arms of Bank of America (BoA) who last night shut down its investment banking operations admitting failure. Surely BoA will not indulge Merrills' investment banking operations anywhere near to the extent that the old Merrills' management had done?' Dwane asks.
Dwane believes the key implication of the Fed's decision not to facilitate the sale of Lehmans Brothers is that it shows that capacity is being removed from the markets, alongside the clear message that 'policy will not bail out all investors and losers'.
'Moral hazard is back and negligent Boards will find there to be no willing supplier of capital except on very onerous terms. The key messages of this weekend remain that capital remains scarce, leverage and accounting for the leveraged assets remains incomplete and inconsistent and a New World order is being born where financial behemoths are best placed,' he says.
One of the key features of this 'New World order' will be increased regulation, transparency and risk control, according to Dwane. However, the CIO of the equity specialist of Allianz Global Investors is anxious that 'investors remain complacent over the changes to come and the lower returns and earnings power of the sector in the future'.
http://www.citywire.co.uk/selector/-/news/other/content.aspx?ID=314440

Restoring the Con in Confidence September 20, 2008 The mega-bailout of the U.S. financial system is supposedly all about "restoring confidence." Let's examine that via 20 questions.
1. Are you confident the U.S. taxpayers' interests are being well-protected and secured by the assumption of every toxic mortgage and bad debt in the land?
2. Are you confident that housing will now leap up in price like the stock market?
3. Are you confident non-U.S. investors and central banks will buy U.S.-based mortgage-backed securities with the same abandon they did a few years ago?
4. Are you confident the new "owners" of Fannie and Freddie and AIG, i.e. your central government, will manage the firms in the best interests of the real owners, i.e. us taxpayers?
5. Are you confident that the political-influence conduit between big Wall Street donors and politicians has been severed?
6. Are you confident interest rates can stay low even as the U.S. Treasury sells a $1 trillion or more in new T-bills to fund the bailout, plus the existing $500 billion in standard deficit spending?
7. Are you confident that the ethics of Wall Street and the mortgage industry are sound, and that we can now trust these same institutions and players who ignored risk and embraced fraud and conflicts of interest for their own profit?
8. Are you confident risk will be properly priced in, despite the complete abandonment of any pretense of "moral hazard" now that the government is "backstopping" virtually all bad debt in the financial system?
9. Are you confident that all the toxic /worthless debt the government is buying/ taking on will have any value in the future, as many claim?
10. Are you confident that all the capital which is being provided by taxpayers will be allocated properly, and not mis-allocated like the trillions of capital that was lost in the easily-predicted meltdown?
11. Are you confident that politicians won't interfere in the liquidation of near-worthless assets in private capital markets?
12. Are you confident that all this taxpayer-funded "liquidity" will actually find creditworthy borrowers who will use the funds to expand real businesses?
13. Are you confident that the CEOs and investment bankers who took home billions in paychecks and bonuses during the speculative credit bubble are now chastened, despite getting to keep all their ill-gotten gains?
14. Are you confident that the trillions being promised in your name to protect stock and bondholders of insolvent banks will not be squandered, just as the first $1 trillion in bailouts and "liquidity" was squandered, to literally no effect?
15. Are you confident that banning short-selling of 799 financial companies will eliminate all the nasty horrible speculators--even though the largest speculators were the investment bankers we have just bailed out and made whole?
16. Are you confident that the U.S. consumer, even though he/she is weighed down with unprecedented amounts of debt, is now poised and anxious to borrow more money from banks?
17. Are you confident that this massive bailout has renewed foreign investors' confidence in the U.S. financial system, now that the U.S. government has taken control of the levers of that entire financial system?
18. Are you confident that banning short-selling will actually increase the value of U.S. companies even as the U.S. enters a long, deep recession?
19. Are you confident that the stock market is "forward-looking" and is rising because U.S. corporate profits are sure to soar next year despite a global recession?
20. Are you confident that the U.S. stock market is not being manipulated to persuade foreign entities and retail buyers that "it's now safe to buy and speculate in U.S. stocks, as long as you're buying on the long side"?
Special bonus question: Are you confident this bailout is legal, and that huge legal challenges stemming from systemwide fraud, conflicts of interest, etc., won't sprout like rank mushrooms and gum up the supposedly seamless works our fearless Fed and Treasury have cobbled together overnight?
I would say confidence in any of these 21 points is sadly misplaced, for the simple reason that bailing out banks and the owners of bonds and securities by assuming worthless/severely-impaired/near-worthless securities and mortgages has changed nothing in the system: a system which mispriced risk, allowed fraud to flourish and put volume and velocity of real estate and securitized debt above all else because that's what generated the huge fees for everyone in the food chain from realtors to builders to mortgage brokers to ratings agencies to investment bankers to congresspeople pocketing huge payola/donations from Fannie Mae executives.
The consumer is tapped out and cannot borrow more money; legitimate businesses are hunkering down and cancelling capital projects as the global recession becomes painfully visible to everyone but government-employed statisticians and cheerleading pundits.
So how are newly capitalized banks and lending agencies supposed to make money when the volume and velocity of money has fallen drastically? Put another way: how can you induce people to borrow more when they're already groaning under unprecedented debt burdens?
How can banks make money when consumers are losing their jobs and their ability to service the debt they already have, never mind servicing additional debt?
How can a family with an income cut in half due to job losses make a mortgage payment, even one that has been trimmed in a "reduction" or "workout"?
How can you con the people into believing "all is right with the world again" despite the obvious fact that we have bailed out the very people who engaged in the most blatant fraud and trickery, and promised them unlimited opportunity to ignore risk ("moral hazard") once the furor has died down, because they now know they can sell any garbage risky loan to the Federal agencies?
By taking on all risk, does that reduce risk or increase it? The answer is obvious: removing the risk from transactions increases the odds that risk will again be ignored in the rush to book outsized profits from transactions.
If few can borrow and even fewer are willing to borrow, then how can the financial system we just bailed out make any money? The short answer: it can't. It did so via fraud, trickery, bribes (political donations), bluffing, legerdemain and "off-balance sheet" cloaking of risk, and now that the game has been exposed the number of suckers has diminished.
As one of the articles below notes, the business model of Wall Street is broken, and bailing out those who bought the risky assets for their own gain does nothing to construct a new, ethical, sustainable model in its place.
http://www.oftwominds.com/blog.html