Be a recycler, think small and outside the box. You don't need a Mcmansion
An $800 Portable House
When Bill Case told me that his combination house and pottery studio had cost him only $800 to construct, I was impressed. Then, when he pointed out that the entire structure was portable to boot, I was simply amazed!
"Well, I was broke at the time I built it," Bill explained. "I came to New Mexico in 1974 with nothing but my truck and the clothes I was wearing. The only asset I had was a friend's promise to let me use a piece of land he owned."
For an innovator like Bill, that offer seems to have been enough. He went to his pal's place at Canada de Los Alamos . . . leveled some of the land with a hand shovel . . . and—relying on his own ingenuity and an assortment of recycled materials—managed to pull a shelter up over himself.
"In order to earn a little pocket money, I arranged to haul trash from two motorcycle shops in Santa Fe," Case explained. "But instead of dumping the discards at the local landfill, I kept the material to use when building my house."
CRATE CREATIVITY
Bill, you see, had noted that many of the motorcycle crates were made up of a wealth of building materials. First, every one contained styrofoam padding in slabs from 2" to 8" thick. The enclosed bikes were also wrapped in a heavy plastic bag, and further protected by a stout mahogany frame. (Case figured that even the thick cardboard containers that surrounded all the other material would have some value.)
So, when he'd amassed enough crates, Bill combined them with a scrounged supply of scrap 2 X 4's to fabricate his home's well-insulated walls (see the accompanying diagram). The innermost styrofoam surface, of course, provides interior insulation. The next layer is a frame of cardboard-covered 2 X 4's (the paper product traps air pockets between the studs). Finally, plastic bags that once wrapped two-wheelers form a vapor barrier over the cardboard, and the shipping crate mahogany provides the exterior sheath.
When it came time to assemble a home from the made-up walls, Bill decided to build a portable dwelling. After all, he didn't own the land (and therefore didn't want to invest his effort in a house that he'd have to leave someday). Furthermore, since he'd be working alone, Case wanted to erect the house in sections that could be managed by one person.
To do so, Bill constructed his walls in 8' X 8' prefabricated panels, which are simply joined to each other with removable bolts. Braces were needed to hold the first pair of sections up, but the rest were able to stand unsupported once they were bolted together.
The home's ceiling was made from the same materials—and in the same man ner—as were the walls. "Putting on the roof was the hardest part of the job," Case recalls. "I had to raise a 20-foot beam and set it in place . . . climb up to get it squared away . . . climb back down to check it out . . . and climb up again if any adjustments were needed. I built the whole roof like that."
INEXPENSIVE INNOVATIONS
Bill made his own creosote (a mixture of tar and gasoline) to protect the structure's sole plate and any other areas that might otherwise have been prone to rotting as a result of contact with the earth. The preservative was applied over a batting of scrounged plastic bags.
Although Case had studied architecture, he says he used more common sense than planning when he designed his home: "All I did was make a few notes on the back of some envelopes." The builder did, however, devote a lot of thought to the placement of his windows. "I wanted them to look out over the most pleasing locations, and to let their sizes and shapes be determined by those of the pieces of glass I could obtain at little or no cost."
The glazing was scrounged from construction sites and picture frame shops, and the windows were positioned to bring in as much light as possible while opening upon views of the timbered hills around his home (and avoiding vistas cluttered with a neighbor's abandoned cars).
Bill's friends worried that the house—which has no foundation—would collapse in the first high wind . . . but their fears were unfounded. The building has withstood four angry New Mexico winters and seems likely to stand until Case decides to take it down.
Again, his mode of anchoring the structure was determined by economics. He just piled local rock against the interior walls and earth-bermed the outside. (Bags of pottery clay also help to hold down the studio's inside walls.)
A PROFITABLE STOVE
With the house erected and ready for occupancy, Bill attacked the problem of warming his dwelling. He built a fireplace, but it failed to "keep the icicles off the furniture". So the resourceful recycler set out in search of an efficient woodstove.
Finding commercially available heaters to be quite expensive, Case decided to go into debt for a $300 welding outfit instead. He then got hold of plans for a stove built from a 55-gallon drum and put together a couple of the woodburners. "They're pretty ugly," Bill admits, "but I learned enough by making mistakes on those two to construct a much better unit." The self-taught lessons proved to be worthwhile, too . . . because Bill went on to build 40 more such stoves that he sold to support himself and pay for the welding equipment.
All in all, Case finds that his heated house is quite adequate. He has a 12' X 16' living area and a 16' X 24' pottery studio . . . and the entire initial investment in his home and shop totals just $800. (Later, however, he spent an additional $200 for a yard light and a double layer of carpeting . . . which was used to cover the recycled plastic bags that, in turn, cover the dirt floor of his living quarters.)
What's more, he can take the whole house with him if he ever moves! "All I have to do is cut the sheathing over the joints with a Skilsaw . . . unbolt each section . . . pack the whole thing in my truck . . . and go! " Case laughs.
However, he isn't likely to leave soon, because Bill's now head of Arts and Crafts Marketing for the New Mexico Department of Commerce and Industry . . . and, despite the fact that he has a steady income, he still lives in his recycled home in Canada de los Alamos.
"It's not an attractive house," Bill summarized. "Everything about it was dictated by economic necessity. Nevertheless, the structure is quite livable . . . and such a house would be an inexpensive and workable way for a back-to-the lander to get through the first winter while building a permanent dwelling on his or her property."
ANOTHER SUGGESTION
While the $800 abode lacks thermal mass and is therefore difficult to heat with solar energy, the packing crate walls could be combined with either of two popular and inexpensive New Mexico building methods to remedy that shortcoming. The "Case Wall" could, for example, enclose an adobe structure (the material is wonderful for storing heat, but doesn't, by itself, provide good insulation) . . . or a person could erect such a wall around one of the stone and adobe-mortared houses popular in eastern New Mexico, which—again—provide thermal mass but have poor insulating qualities.
Even in its original form, however, Bill's portable dwelling stands as proof that there's no reason for anyone to freeze in a tent (or pay "double rent" by maintaining a dwelling in town) while building a dream house on his or her homestead acres . . . especially not while motorcycle shops are throwing away an awful lot of valuable building material!
EDITOR'S NOTE: Although many motorcycle manufacturers were using the crates described above when Bill Case built his low-cost shelter, you may have to do a little looking to locate such high-quality containers nowadays. Most firms now ship their products in less expensive plastic and/or metal-framed boxes, and those that still use the fine wooden crates—or their dealers—may well be asking a (usually reasonable) price for then.
http://www.motherearthnews.com/Modern-Homesteading/1980-09-01/An-800-Portable-House.aspx
Political Interference Seen in Bank Bailout Decisions
Barney Frank Goes to Bat for Lender, and It Gets an Infusion
Troubled OneUnited Bank in Boston didn't look much like a candidate for aid from the Treasury Department's bank bailout fund last fall.
The Treasury had said it would give money only to healthy banks, to jump-start lending. But OneUnited had seen most of its capital evaporate. Moreover, it was under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives' use.
Nonetheless, in December OneUnited got a $12 million injection from the Treasury's Troubled Asset Relief Program, or TARP. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee.
Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection.
View Full ImageThe Washington Times /Landov
Rep. Barney Frank (D., Mass.), seen here leaving a December news conference, urged regulators to consider TARP money for a local bank.
As President Barack Obama's team sets about revising the $700 billion TARP program, following last week's release of the second half of the money, among the issues it faces is widespread dissatisfaction with way the program has been implemented. Treasury Secretary nominee Timothy Geithner, testifying Wednesday at his Senate confirmation hearing, acknowledged "there are serious concerns about transparency and accountability...confusion about the goals of the program, and a deep skepticism about whether we are using the taxpayers' money wisely."
Bankers, regulators and politicians complain of a secretive and opaque process for deciding which banks get cash and which don't. The goal of aiding only banks healthy enough to lend -- laid out by the Treasury when the program began -- clearly seems to have shifted, but in a way that's hard to pin down and that the Treasury has declined to explain. Part of the problem is that some powerful politicians have used their leverage to try to direct federal millions toward banks in their home states.
"It's totally arbitrary," says South Carolina Gov. Mark Sanford. "If you've got the right lobbyist and the right representative connected to Washington or the right ties to Washington, you get the golden tap on the shoulder," says Gov. Sanford, a Republican.
Several Ohio banks received funds after Ohio's congressional delegation complained bitterly about the treatment of Cleveland-based National City Corp., which regulators forced into a merger rather than provide with cash. And in Alabama, the state's top banking official says a windfall there -- five banks are slated to receive funds -- is testament to the influence of two powerful Alabama lawmakers who sit on key congressional committees.
TARP Funds by State
Click below for a sortable chart and interactive map detailing allocations by state and by institution.
More on the Bailout
On Dec. 3, Rep. Spencer Bachus (R., Ala.) forwarded a Dec. 2 letter from Alabama bank regulators complaining about the complexities of applying for federal funds. Alabama banks later received billions in funds.
The FDIC and Massachusetts slapped OneUnited Bank in Boston with a cease and desist order on Oct. 27, 2008, less than two months after it received $12 million in capital from Treasury.
A link between such lobbying and the release of TARP cash can't be proved. Treasury officials have said that political influence plays no role in the selection process. "The decisions are made by a committee of officials at Treasury based on recommendations and data provided by the regulators through the applications process," said Brookly McLaughlin, who was a spokeswoman for the Treasury until the Bush administration ended on Tuesday.
Restoring Credit Flow
Treasury and Federal Reserve officials have repeatedly said the TARP program was successful in its primary purpose, which was to bring the credit markets back from the precipice.
The task of further restoring credit flow now falls to Mr. Obama's team, which has spoken in favor of pumping more money into banks, as has Fed Chairman Ben Bernanke. The new administration is weighing a range of ideas, including using at least $50 billion of the TARP money to prevent foreclosures, and possibly other measures such as setting up an "aggregator bank" to hold toxic assets now burdening banks' books.
The federal plan to invest in banks was controversial from the start. The Treasury said it would acquire preferred stock in banks, and sometimes warrants for common stock as well, but not any voting or management rights. Within the broad structure known as TARP, this is called the Capital Purchase Program.
At a hastily arranged meeting on Oct. 13, then-Treasury Secretary Henry Paulson basically forced the chiefs of the country's nine biggest banks to accept cash infusions. The government invested $125 billion in the nine. Citigroup Inc. and Bank of America Corp. subsequently returned for more money.
A further $125 billion was committed under the Bush administration to buy stakes in some of the remaining 8,500 U.S. banks and thrift institutions. More than 250 have received cash or commitments so far, totaling about $68 billion. The recipients range from large regional banks to Saigon National, a 12-employee lender catering to Vietnamese-American businesses in Southern California.
The procedure for getting a capital injection is complex. State and federal regulators sometimes complain that even they don't understand how it works.
A bank applies through its federal regulator, which either recommends to the Treasury that the bank receive money or quietly tells the bank to pull its application. A public turndown could be a death sentence because it would tell investors and consumers the government thinks the bank isn't viable.
If the regulator forwards the application, the Treasury decides whether to approve it. If the Treasury's reviewing team is uncertain, it sends the request to a panel of federal regulators to debate the matter.
The results have many in the industry scratching their heads. Two banks in Green Bay, Wis., have received federal investments. But in Arizona, a state hit hard by the housing slump, officials say they are perplexed that a dozen or so state-chartered banks haven't heard back from Treasury about the status of their applications.
Arizona's banking superintendent, Felecia Rotellini, says she is teaming up with local bankers and state legislators who plan to start lobbying Arizona's congressional delegation for help. "Some states are getting better treatment, and we just want it to be a level playing field," Ms. Rotellini says. "I think it's just a question of advocacy. It has to be a congressional voice."
A body set up to monitor the program, the Congressional Oversight Panel, has said the process of allocating money lacks transparency and accountability. The Treasury declines to explain why one bank is chosen for a federal investment and not another. Those that receive federal cash sometimes boast they have a government seal of approval, leaving banks that are shut out facing awkward questions about why they didn't.
In mid-October, days after summoning the nine big-bank executives to Washington to accept aid, the government took a far different approach with Cleveland's National City, which was struggling with soured real-estate loans.
National City executives consulted with their examiners at the Office of the Comptroller of the Currency, which is a division of Treasury, about whether they should apply for a capital injection. Local OCC officials gave them the green light, according to people familiar with the matter.
In Washington, National City got a chillier reception. The company was facing mounting losses stemming in part from its ill-timed purchases of two Florida banks shortly before the state's real-estate market imploded. Comptroller of the Currency John Dugan informed National City executives they shouldn't apply because their bank was too weak. Instead, he told the bank to sell itself. Within a week, it agreed to a $5.6 billion takeover by PNC Financial Services Group Inc. in Pittsburgh. (PNC declined to comment.)
A political firestorm erupted in Ohio when it became clear the government had turned down National City, a 163-year-old bank with deep roots in Cleveland. Ohio's congressional delegation sent dozens of letters to Messrs. Dugan and Paulson and threatened to hold hearings on how the Treasury had supposedly wrecked a bank they said wasn't in immediate danger of collapsing.
Some lawyers, bankers and analysts say the case marked a turning point in the Treasury's handling of capital injections. For one thing, since then, some weak regional banks have pocketed billions of dollars in TARP funds.
In addition, Ohio banks are now faring better. Twelve Ohio banks have subsequently received a total of $7.7 billion in taxpayer funds. In neighboring Michigan -- like Ohio, hurt by the auto-industry slump -- only two banks have had federal infusions and a third has preliminary approval, for infusions totaling $638 million.
Among the Ohio beneficiaries is Huntington Bancshares Inc., of Columbus. It received a $1.4 billion federal investment in November, even though, like National City, it was hurt by souring real-estate loans and the weak regional economy. Amid mounting losses, the bank last week replaced its chief executive.
In Alabama, Colonial BancGroup Inc. asked for Treasury cash in November. With its application blessed by its state regulator and the Federal Deposit Insurance Corp., the Montgomery bank figured it was a shoo-in for funds, say people familiar with the bank.
Real-Estate Loans
But because Colonial was weighed down by real-estate loans, the Treasury sent the bid to its panel for reviewing controversial applications, consisting of four federal regulatory bodies: the FDIC, the Fed, the OCC and the Office of Thrift Supervision. Negotiations lasted several weeks. Eventually, the Treasury gave preliminary approval to Colonial's request for $550 million in capital.
The slow process infuriated Alabama officials. The same day that Colonial announced its application had been approved, Trabo Reed, Alabama's deputy banking superintendent, wrote a letter to Rep. Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee, complaining that the government had dragged its feet and kept banks and state officials in the dark. The letter didn't specifically cite Colonial (which had no comment).
Rep. Bachus's office forwarded the letter to the heads of bank regulatory agencies and asked them to examine the situation. Since the letter was forwarded, two more Alabama banks have received TARP funding. Five Alabama banks, including Colonial, are slated to collect a total of about $4.2 billion.
In all, about 50 state-chartered Alabama banks applied, according to state banking superintendent John Harrison. He says his office helped shepherd them through the process, figuring that "the more applied, the more had the chance to get it."
Mr. Harrison says that in addition to Rep. Bachus, Alabama Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee, "has been a big proponent for Alabama state-chartered banks...and he was really concerned that the TARP money went here." The banking official added: "We're blessed with a U.S. senator that was on the banking committee and Spencer Bachus being the ranking Republican" on the House panel. "I think [the Treasury] got the message."
Aides to Rep. Bachus said he did nothing more than forward Mr. Reed's letter and ask for consideration. Sen. Shelby has consistently opposed the financial-system bailout. His office denied that he was involved in helping Alabama banks get money. "Sen. Shelby has never intervened on anyone's behalf for TARP money," an aide to the lawmaker said.
The bank that Rep. Frank of Massachusetts went to bat for, OneUnited, saw its capital level sink in early September after the U.S. took control of the overextended mortgage giants Fannie Mae and Freddie Mac. OneUnited, a closely held Boston-based lender with offices in Florida and California too, held large amounts of Fannie Mae preferred shares. Their value plunged after the U.S. put Fannie and Freddie into a federal conservatorship, acquired preferred shares in them and took warrants entitling the government to nearly 80% of their common stock.
The moves left OneUnited's capital badly depleted. A measure called "Tier 1 risk-based capital" equaled only 1.88% of assets at the bank, versus a desired level of about 6%. A OneUnited lawyer, Robert Cooper, says he called Rep. Frank and Rep. Maxine Waters of California, both Democrats, to complain that the Treasury's move had hurt the bank.
Rep. Waters heads the House Financial Services subcommittee on housing, and until last spring her husband, Sidney Williams, was a OneUnited director. Rep. Frank, besides heading the Financial Services Committee, has longstanding ties to OneUnited, and recalls having had a deposit account at a predecessor bank in the 1960s.
Later that month, Rep. Frank was intimately involved in crafting the legislation that created the $700 billion financial-system rescue plan. Mr. Frank says that in order to protect OneUnited bank, he inserted into the bill a provision to give special consideration to banks that had less than $1 billion of assets, had been well-capitalized as of June 30, served low- and moderate-income areas, and had taken a capital hit in the federal seizure of Fannie Mae and Freddie Mac.
"I did feel that it was important to frankly try and save them since it was federal action that put them into the dumper," Mr. Frank says.
Porsche for Executives
On Oct. 27, the FDIC and Massachusetts bank regulatory officials, alleging poor lending practices and executive-compensation abuses by OneUnited, slapped it with a strong enforcement action, a cease-and-desist order. Among other things, the officials told the bank to get rid of a 2008 Porsche for executives.
Mr. Cooper, the bank's attorney, dismisses the order as a "hastily cobbled together" action. "What we are talking about is a hiccup, a blip on the screen of an otherwise-stellar enterprise," he says. Asked whether the bank had sold the Porsche, he said only that it was complying with the order.
Mr. Frank -- who has played a leading role in both the initial design of TARP and current planning to revamp it -- says he spoke with a federal regulator and asked that OneUnited be given consideration for TARP money, "without in any way impinging on their general safety and soundness rules." Mr. Frank said he didn't remember which federal regulator he spoke with.
On Dec. 19, OneUnited received $12 million from the Treasury, on condition it raise $20 million from its shareholders, which it did.
Ms. McLaughlin, the spokeswoman for the Bush administration Treasury, said that OneUnited's application was subject to the same review process as other banks faced.
Mr. Frank said he didn't try to interfere with the regulatory process. "We have never told the regulators that they should ease up on them or not order them to do this or that," he said.
He cites the bank's status as the state's only financial institution owned by African-Americans. "We did say, yes, I thought it would have been a social tragedy if the one minority bank in Massachusetts that has been working so hard and had been overextended into housing was to be wiped out by a federal action, the Fannie-Freddie preferred [shares] thing, and that's why I think it was important to try to help them."
Rep. Waters said she was unaware that the bank received money. OneUnited was "just a small" bank, she said.
http://online.wsj.com/article/SB123258284337504295.html
Asian economic woe grows as China slows and Japanese exports plunge
China's economy may have ground to a halt entirely between the third and fourth quarters of last year and Japanese exports plunged 35pc in December, underlining the scale of the slowdown in Asia.
China's national statistics bureau said gross domestic product had grown at an annual rate of 6.8pc in the fourth quarter of 2008, compared to a gain of 9pc in the previous three months.
The annual rate of growth for the world's third-largest economy was the lowest since the second quarter of 1998. "The international financial crisis is deepening and spreading with a continuing negative impact on the domestic economy," said Ma Jiantang, head of the statistics bureau.
Although the annual rate of growth was 6.8pc, economists speculated that the actual growth between September and December last year could have been zero, or even negative.
"My rough assumption is that it was basically zero," said Stephen Green, an economist at Standard Chartered bank in Shanghai. However, he added, recent revisions to Chinese GDP figures made an accurate calculation impossible. Mr Green also predicted that GDP may not grow in the first quarter of this year, compared to the last quarter.
Japanese exporters endured a torrid December as demand for a range of goods fell sharply. Exports to the US fell 26pc, those to Europe dropped 41.8pc and those to China were down 35pc.
In China, much of the slowdown has been blamed on a lack of demand from the rest of the world for Chinese-made goods. Wen Jiabao, the prime minister, said earlier this week that the outlook for Chinese employment is "very grim" as factories shut down and foreign companies rein in their spending.
Mr Wen will visit the UK next week, and Gordon Brown has already called upon him to make sure that China plays its part in stabilising the global economy. "We need China to play a full role, in partnership with us, if we are to restore confidence, growth and jobs," said Mr Brown.
China, however, has insisted that it must get its own house in order first, and there are indications that the government has already instructed banks to unleash credit into the market. The value of loans issued in November and December soared by nearly 19pc.
"It is hard to overestimate the potential importance of this," said Mr Green. "Mature economies' banking systems are currently flooded with liquidity that is not being lent out. China's interbank market is similarly flooded, but the difference is that the banks are lending."
The banks are likely to be ordered to finance a large chunk of the Pounds400 billion fiscal stimulus package that the Chinese government announced in November. There is a further Pounds2 trillion of spending demands from local governments across China that they may also be called upon to help with, irrespective of the possibility of bad loans.
Other bright spots included a slight rebound in industrial production growth to 5.7pc in December from 5.2pc in November, and a strong set of retail sales figures, where growth was 19pc.
Goldman Sachs, which issued one of the most bearish predictions for Chinese economic growth in 2009, at 6pc, admitted that there are "rising upside risks" that they may be incorrect, given the money flooding into the market.
"Our checks with commercial banks suggest the value of loans extended in January is likely to be even larger than the amount in December," said Yu Song, an economist at Goldman, adding that falling inflation also raised the possibility of further interest rate cuts.
However, Goldman said that China could be hit by even weaker export demand and maintained its prediction for now. "It is way too early to even claim the worst is over," said Mr Green. "Exports and domestic consumption, as well as profit growth, are now slowing and they will continue to grind lower over the year. Property still looks fragile, as does private investor sentiment. Even if we reach 8pc growth for this year, it will not feel like it," he added.
http://www.telegraph.co.uk/news/worldnews/asia/china/4312120/Asian-economic-woe-grows-as-China-slows-and-Japanese-exports-plunge.html
Will China lead the world into depression?
Oh no!
Albert Edwards at Societe Generale has issued another terror alert:
Sell everything. Hide in a bunker with plenty of whisky. The S&P 500 index of US shares is about to crash through its half-century support line to 500.
"Technicals say it is time to bail out. Cut equity expose and prepare for rout. US depression looking likely. While China's 2009 implosion could get ugly."
Mr Edwards -- who is of an "Austrian" persuasion, ie hates excess debt -- was one of the very few economists to see this whole crisis coming, and to issue warnings clearly and emphatically (unlike others who now claim to have been seers, but in fact hedged). He said interests rates would be slashed to zero and that bond yields would fall to the lowest in history. All this has occurred.
The key argument is that markets have been sold a pup on the China growth miracle and have massively underestimated the risks for the global FX and trading system as this unravels.
"The Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression.... Do you really trust politicians to "do the right thing"?
Mr Edwards has been tactically bullish on equities since the end of October when the MACD (Moving Average Convergence /Divergence Oscillator) for the S&P 500 broke upwards. This technical indicator broke down again two days ago.
He said the CBOE put/call ratio had dropped to the lowest level in a year (a contrary indicator).. Don't ask me to explain.. I am a technical dolt.
While a "deflationary quagmire" lies in store, this will not be a repeat of Japan's Lost Decade. Fed stimulus a l'outrance points to an inflation denouement down the road (2-3 years?).. hopefully not hyper.
He notes that China's electric power output has fallen for three months. The OECD's leading indicator for China has fallen off a cliff. Exports have collapsed across Asia.
"We continue to emphasize our long-held view that emerging economies are particularly vulnerable to a reversal in the global liquidity pump."
Mr Edwards said investors have a "touching faith" that China's authorities are in control of events.
"Could the economic situation in China become so bad that it threatens the regime itself? Of course it could. But before being swept away in a tidal wave of worker unrest it has one key tool in its economic armoury it has used before. MEGA-DEVALUATION. China has a track record of such things. At the end of 1993 the authorities devalued the yuan by 33pc."
A replay would be the surest route to a Smoot-Hawley II.
"Amid confidence that the ongoing, massive, monetary and fiscal stimulus will prevent a repeat of the Great Depression, will it instead be competitive devaluation and implosion of world trade that we should watch out for."
This is not my view. I believe the Chinese leadership will hold the line and behave responsibly, as they did in 1998. I wouldn't want to bet the farm that Albert Edwards is wrong.
http://blogs.telegraph.co.uk/ambrose_evans-pritchard/blog/2009/01/15/will_china_lead_the_world_into_depression
Harley to cut 1,100 jobs as recession stings motorcycle maker
MILWAUKEE (AP) — Harley-Davidson (HOG) said Friday it will cut 1,100 jobs over two years, close some operations and consolidate others as it grapples with a slowdown in motorcycle sales.
The company also reported its fourth-quarter profit fell nearly 60%, and said it is slashing motorcycle shipments in 2009 to cope with reduced demand.
The iconic motorcycle maker said it will consolidate two engine and transmission plants in Milwaukee into its facility in Menomonee Falls, Wis. It will shrink its paint and frame operations in its York, Pa., plant and close its distribution facility in Franklin, Wis. Harley also said it will end its domestic transportation fleet operation.
The company said 70% of the job cuts will occur this year and the rest in 2010. The cuts will result in one-time charges of $110 million to $140 million over 2009 and 2010. Once they are finished, the cuts will save $60 million to $70 million per year.
Harley has been stung by the rapid downturn in motorcycle demand. The economic recession has prompted many consumers to put off purchases of its high-end bikes, while the credit crunch has kept some would-be customers from obtaining financing.
Harley said it is slashing motorcycle shipments in 2009 to 264,000 to 273,000 to cope with the down market. That would be a drop of 10% to 13% from a year earlier.
In 2008, Harley said it shipped 303,479 motorcycles, down 8% from 330,619 motorcycles in 2007.
Harley said its fourth-quarter profit fell 58% to $77.8 million, or 34 cents a share, for the quarter ended Dec. 31, compared with $186.1 million, or 78 cents a share, in the same quarter last year.
Revenue fell 6.8% to $1.29 billion from the year-ago quarter.
The results fell short of Wall Street estimates. Analysts surveyed by Thomson Reuters expected 57 cents a share on sales of $1.29 billion, on average.
Harley said its financial-services division swung to an operating loss of $24.9 million in fourth quarter.
The company said it is evaluating "a range of options" to provide funding for the ailing Harley-Davidson Financial Services. Many analysts have suggested the lending unit may have to be sold because it has been unable to unload its debt in the financial markets.
For the full year, Harley said its earnings fell 30% to $654.7 million, or $2.79 a share, from last year. Sales fell 2.3% to $5.59 billion.
Analysts expected $3.02 a share on sales of $5.61 billion in revenue.
Harley said it would not provide earnings guidance for 2009, but analysts call for $2.15 a share. Shares of Harley closed Thursday at $12.40 and are down 69% in the last 52 weeks.
http://www.usatoday.com/money/companies/earnings/2009-01-23-harley_N.htm?loc=interstitialskip
Missiles kill 7 in NW Pakistan
ISLAMABAD, Pakistan (AP) - Missiles fired from a suspected U.S. spy plane killed seven people Friday on the Pakistan side of the Afghan border, a lawless region where al-Qaida militants are known to hide out, officials said.
The strike was the first on Pakistani territory since the inauguration of President Barrack Obama.
Pakistani leaders had expressed hope Obama would halt the attacks, more than 30 of which have been launched since the middle of last year, reportedly killing several senior militants.
The pro-U.S. government routinely protests them as a violation of the country's sovereignty, but most observers speculate it has an unwritten agreement allowing them to take place.
One drone fired three missiles into the village of Zharki in North Waziristan, hitting two buildings, the intelligence officials said on condition of anonymity because they were not authorized to speak to the media.
At least seven people were killed, but there identities were not immediately known.
The United States rarely acknowledges firing the missiles, which are mostly fired from drones believed launched from neighboring Afghanistan.
Pakistan's air force is not known to possess drones. NATO officers in Afghanistan say they respect Pakistani sovereignty.
http://www.breitbart.com/article.php?id=D95SSHE80&show_article=1
Obama adviser: White males need not apply
Robert Reich tells House panel stimulus package should emphasize 'social return' over worker skill
Posted: January 22, 2009
12:17 pm Eastern
© 2009 WorldNetDaily
A top economic adviser to President Obama has told a congressional panel the billions of dollars in the proposed economic stimulus plan should be allocated with social issues in mind, to make sure the money doesn't go to just "white male construction workers" or the highly skilled.
Robert Reich, who served as labor secretary under President Clinton, was speaking to the House Steering and Policy Committee Jan. 7 about funding infrastructure projects across the nation.
"It seems to me that infrastructure spending is a very important and good way of stimulating the economy. The challenge will be to do it quickly, to find projects that can be done that will have a high social return, that also can be done with the greatest speed possible," Reich said.
"I am concerned, as I'm sure many of you are, that these jobs not simply go to high skilled people who are already professionals or to white male construction workers," he said.
The hearing took place two weeks before Obama was inaugurated.
"I have nothing against white male construction workers," Reich said. "I'm just saying there are a lot of other people who have needs as well.
"There are ways in which the money can be, criteria can be set so the money does go to others, the long term unemployed, minorities, women," he said.
Rep. Charles Rangel, D-N.Y., appeared to agree, suggesting federal money be directed to specific groups of people.
The federal government, he said, must "remove the discretion" about where the funds go, or what projects would be involved, even to the point of eliminating any input from governors or state legislatures.
Reich agreed: "Governors ought to be, should be given a choice of signing on the bottom line or not."
Then Rangel noted the "middle class" would be unlikely to create any opposition to funds directed to minorities.
"One thing that you can depend on, you don't have to be worried about what the middle class is going to do. Things are so bad, they have to put food on their tables, get clothes for their kids, get them in school," he said.
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Commentator Michelle Malkin said Reich's statements expose "the lie that the Obama administration is actually interested in revitalizing basic infrastructure for the good of the economy."
"No, what Team Obama really wants is to ensure that the least skilled, least qualified workers get jobs based on their chromosomes and pigment," she said.
Malkin cited Reich's own blog, where the Obama adviser wrote of the economic stimulus plan: "I'd suggest that all contracts entered into with stimulus funds require contractors to provide at least 20 percent of jobs to the long-term unemployed and to people with incomes at or below 200 percent of the federal poverty level."
This, Malkin wrote, is "spoken like a true-blue wealth redistributor. The 'needs' (read: demands) of politically protected minorities trump the need for competently build roads and bridges."
On his blog, Reich makes his case for, "The Stimulus: How to Create Jobs Without Them All Going to Skilled Professionals and White Male Construction Workers."
"At least 2 percent of project funds should be allocated to such training. In addition, advantage should be taken of buildings trades apprenticeships -- which must be fully available to women and minorities," he wrote.
Race already has become an issue several times in the Obama administration.
As WND reported, Democratic Party strategist Donna Brazile admitted she swiped Obama's complimentary blanket from his inauguration ceremony and then joked it was not a criminal offense because, "We have a black president ... this was free."
Outrage also erupted over the inauguration benediction by Rev. Joseph Lowery, the 87-year-old civil rights pioneer, for asking God to help mankind work for a day when "white would embrace what is right."
Obama reacted to the benediction with a smile.
Reich's statements were highlighted in a video by NakedEmporerNews, which is embedded here:
http://www.youtube.com/watch?v=opxuUj6vFa4
http://wnd.com/index.php?fa=PAGE.view&pageId=86827
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