Thursday, January 1, 2009
Eeyore's News and View
Latest government faces immediate challenge from demonstrators accusing it of seizing power via military and courts
The political chaos that has gripped Thailand could push the country into recession and double its unemployment rate, the Thai prime minister warned today, as he was forced to deliver his maiden speech at the foreign ministry after parliament was blockaded by demonstrators.
Abhisit Vejjajiva, who was elected in a parliamentary vote two weeks ago, had to deliver the speech before his government could formally start work on trying to revive an economy battered by political crises.
Hundreds of red-shirted supporters of the ousted former prime minister Thaksin Shinawatra moved to the ministry after news spread that Abhisit was there. But there were no clashes, the demonstrators abandoned the siege and the prime minister was able to leave shortly afterwards.
In a speech broadcast live on television, Abhisit referred to repeated protests culminating in an airport blockade by anti-Thaksin demonstrators that crippled tourism and damaged Thailand's image.
"Political conflicts that have spread to civic groups could push the economy, along with the tourism industry, into recession if action is not taken quickly to resolve them and revive confidence among investors and foreign tourists," Abhisit said. "These conflicts are the country's weakness, especially at a time the world economy is entering its worst crisis in a century."
The demonstrators, angry at the dismissal of a pro-Thaksin government by the courts this month, had already forced the cancellation of the speech yesterday. They spent the night outside the gates of parliament, vowing to stay until Abhisit called fresh elections.
The unrest in Thailand stretches back to 2006 when yellow-shirted protesters led by Bangkok's royalist and business elite triggered Thaksin's removal.
Supporters of the exiled Thaksin accuse Abhisit of stealing power with the aid of the military, which they say pushed smaller parties to join his coalition two weeks ago. Abhisit denies this.
The third prime minister in four months, Abhisit was formally named to the post on December 17 in what many hoped would be the end of months of turbulent, sometimes violent protests. But his party, which had been in opposition since 2001, heads a coalition that some analysts doubt is strong enough to last until the next general election in 2011.
In his 50-minute speech, Abhisit outlined his plans to jump-start the economy, heal the country's political divisions, address a four-year-old Muslim insurgency in the south and repair Thailand's tattered image among tourists and business.
"There's no confidence among tourists who want to visit Thailand," said Prakit Chinamourphong, the president of the Thai Hotel Association. "I just want to see a peaceful country without demonstrations so that the tourists will come back to Thailand again."
The anti-Abhisit protesters call themselves the Democratic Alliance Against Dictatorship and are known as the "red shirts". They are a mix of Thaksin loyalists, farmers and labourers from the cities, including the capital, Bangkok.
Abhisit delivered his maiden speech less than a month after the last government was forced from office following six months of demonstrations by an anti-Thaksin group, the People's Alliance for Democracy. The protesters seized Bangkok's two main airports for eight days, paralysing the tourism industry.
http://w8/dec/30/thailand-abhisit-speech-protestsww.guardian.co.uk/world/200
People Pulling Up to Pawnshops Today Are Driving Cadillacs and BMWs
Well-to-Do Turn to Last-Resort Lenders; Putting Up Diamonds, Dumpsters as Collateral
PHILADELPHIA -- At Society Hill Loan, a pawnshop in a middle-class neighborhood here, a steady rain fell outside as a fashionably dressed young man parked his Cadillac Escalade outside. Looking around warily, he came in to speak with Nat Leonard, co-owner of the store.
The visitor was a 29-year-old engineer who was laid off earlier this year from one of the local chemical companies. Since then, he's been cleaning planes at the airport for less than half the salary he was earning a year ago.
Now he needs a $2,500 loan on his watch -- a Movado Fiero with a diamond bezel -- to pay his mortgage note.
"I want to help," said Mr. Leonard. But unlike Rolex and a few other brands, "there's no market" for Movado in his pawn universe.
The young man, who didn't wish to give his name, left the store disappointed. "I'm not sure what I'm going to do," he said.
Typically, pawnshop customers have a household income of about $29,000, according to Dave Adelman, president of the 2,400-member National Pawnbrokers Association. But operators around the country say they are seeing a surge in new activity fueled in part by a different clientele: middle- and upper-middle-class customers facing ravaged stock portfolios, tightened bank credit and unexpected layoffs. In areas dogged by high unemployment and foreclosure rates, the pawn business is especially robust.
Rick LaChappelle, owner of four pawnshops in Maine, calculates he has lent about 33% more money this year than last. "The banking industry is not giving out any money right now," he said. "So people are relying on second-tier lending institutions."
While some pawnshops -- like Beverly Loan Co. in Beverly Hills -- have discreetly served the wealthy for decades, more stores, such as Society Hill, are newly awash with furs, diamonds and other baubles from the bubble. At places like Society Hill, transactions are up by as much as 40% in recent months.
Even Beverly Loan has seen a shift in customer patterns. "We have had so many $50,000-plus loans and more businesses [as clients] than ever before," said Chief Executive Officer Jordan Tabach-Bank. Many business clients, he said, are "getting loans to meet payroll or other obligations because their lines of credit are frozen."
Pawnshops are lending companies that take collateralized or pawned merchandise in exchange for money. If a customer defaults, or fails to pick up their belongings, then the shop can sell the goods. Though fees vary from state to state and are set by law, the cost of a typical $75 loan is about $15 a month. While total fees can pile up over a period of several months, the industry argues that its rates can be lower than some high-interest credit cards and bank fees.
Lee Amberg, owner of AA Classic Windy City Jewelry & Loan in affluent Evanston, Ill., said he's been seeing Cartier watches, two-carat diamonds, David Yurman jewelry and pieces from Tiffany's. One client, he said, brought in a fur coat from Saks Fifth Avenue that retailed at $9,000. She told him she needed a loan to help buy private-school uniforms for her child.
Diamond Exchange USA is more of a hybrid store. In addition to selling its own pieces, it makes loans against customers' goods and purchases used jewelry too. Located on a major thoroughfare in Bethesda, Md., it has a constant stream of Mercedes-Benzes, BMWs and other luxury cars pulling into the lot. Virtually all of the clientele are women. Many come to sell their gold or diamond jewelry.
A potential new customer recently strolled in to speak with co-owner Justin Carmody. A resident of Potomac, Md., she owns a small wholesale company and was looking to obtain a $6,000 loan on a 1.91-carat diamond ring given to her by her husband. With a 10% fee, she learned, it would cost her $6,600 to get the ring back. If she failed to resolve her cash issues in a month, she'd be responsible for an additional payment -- $600, or 10% of the principal -- each month until satisfying the debt.
"I've never done anything like this. I'm looking at my options," she said. "I'm trying to separate my emotions. I just want to get through the next week." Ultimately, however, she decided against the loan.
This year, the number of first-time pawnshop users is up 10%, according to Mr. Adelman of the pawnbroker trade group. Owners say the rate at which people are coming back to retrieve property and pay off loans has fallen about 10%. That leaves the store on the hook to sell the goods.
Though some pawnbrokers now have more items to sell -- the result of higher loan defaults -- their general prospects remain healthy. Richard Shane, managing director at Jefferies & Co., who covers the pawnshop industry, said publicly traded companies, such as Cash America International Inc., are doing well in this difficult economy. (Pawn balances at the company rose by 16% in the quarter ended Sept. 30.) Banks, moreover, continue to make funds available to them "because the businesses are strong and cash flow is strong," said Mr. Shane.
On a recent weekday morning, a line stretched from the front counter at Lewiston Pawn Shop. Mr. LaChappelle and his Lewiston, Maine, staff turned away many customers with less-than-desirable goods. Computers, because they become obsolete so quickly, are among the items that are hard to use as collateral. Other things such as porcelain figurines and collectibles have negligible loan value since there's a limited market to resell them if necessary.
"I try to take all I can but I also have to be aware of the market," explained Mr. LaChappelle. "We have to evolve with the economy or I get stuck with merchandise that doesn't sell."
At the 10-floor gallery, an out-of-work contractor named Albert Langlois walked the aisles pointing to construction equipment he has pawned as collateral for loans.
Included in the stash: industrial-size nail guns, drills, air compressors for running power tools and several saws. The scaffolding he uses to work on multi-story buildings is stacked in a storage room. "Pretty much everything I own is in here," Mr. Langlois said.
So far this year, Mr. Langlois, 40, has laid off the eight members of his contracting crew and lost a house through foreclosure. In addition to his equipment he has pawned two motorcycles, valued at $20,000 between them. Mr. LaChappelle has become one of the primary lenders around, Mr. Langlois said. "You can't go to a bank and get small loans to make ends meet, so you come to Rick."
Derek Arthur, 27, owner of Ground Up Construction, was returning to the store to recover his equipment after satisfying a loan. A year ago, he said, he had 20 people working for him, including subcontractors. Now he has four employees and just one job. He had needed a $3,000 loan to get the business through a rough period while awaiting payment from a customer.
Mr. Arthur figured no bank would lend him such a small amount for a month or two. So he pawned a dump trailer as well as other equipment and a smattering of jewelry. The money, he said, paid his work crew, insurance and other expenses.
"You have to have a Plan B," he said. "If you don't have one, you'd better find one fast."
http://online.wsj.com/article/SB123059909346041273.html
Depression Then and Now
In the "great" depression after the 1929 stock market crash there was tremendous hardship, unemployment and, millions of Americans starved.
As more and more families became destitute, parents, who could no longer feed their children, would desperately search for relatives, acquaintances and ultimately even total strangers who could feed them and were willing to take them into their homes. The parents would then try to fend for themselves and were often totally lost to memory.
The parents, of course hoped and told themselves that the children would be okay. Unfortunately, in many cases the children were treated like unpaid servants required to do whatever was demanded of them and be thankful that they were allowed to have food and a place to stay.
During those years over 80% of the population was closely tied to the small family farms so most of the people could actually get food. There was food even though many had no money to buy it.
Going into this present depression less than one half of 1% of our population is connected to farming. Further, we are in the third year of a global famine. America will soon see food shortages even for those who still have money. The financial crash is so severe that grocery stores can't get credit to restock their shelves and farmers can't get loans to plant and harvest. America is well on track for runaway inflation where $100 loaves of bread will not be unrealistic.
Before inflation hits and while there is still food, every one of us must get the supplies that we need immediately.
http://www.efoodsdirect.com/depression_era.html?aid=6
LyondellBasell says bankruptcy is an option
December 31, 2008 - 1:34pm
By ERNEST SCHEYDER
AP Energy Writer
NEW YORK (AP) - LyondellBasell Industries, the world's third-largest independent chemical company, said Wednesday that bankruptcy protection is an option as a broadening recession eats away demand for its products.
"We are looking to restructure our debt, and we are looking at all of our options," company spokeswoman Susan Moore said in an interview. "Filing for Chapter 11 protection is one of those options."
The privately held company has brought in outside advisers, Moore said.
The LyondellBasell announcement arrived just two days after the collapse of a $17.4 billion joint venture between Dow Chemical and Kuwait's Petrochemical Industries Co.
The industry has been hit by slumping demand and volatile energy prices in 2008, which have scuttled one major buyout and has put another, involving Dow, at risk.
Earlier this month, LyondellBasell said in a filing with the Securities and Exchange Commission that several lenders have allowed it to postpone $160 million in loan payments.
Standard & Poor's Ratings Services downgraded the company's long-term corporate credit rating to junk status and Moody's lowered LyondellBasell's corporate family rating to "Caa2," its fourth-worst junk rating.
S&P said a restructuring of the company's debt could lead to "substantial principal losses for some creditors, especially nonsenior lenders, which will be tantamount to a default under our criteria and definition."
LyondellBasell denied that it had defaulted on any debt.
LyondellBasell Industries AF was formed in 2007 when Dutch chemical company Basell International Holdings paid $12.7 billion for Houston-based Lyondell Chemical.
The deal was struck just as crude oil began its rapid ascent to nearly $150 per barrel over the summer, prices that squeezed margins for all chemical makers.
But a broadening recession slashed demand both for the products the industry makes and the energy prices that led to a consolidation in the industry in the first place.
Chemical companies have scrambled to undue major deals and cut costs.
Hexion Specialty Chemicals Inc. walked away from a $6.5 billion buyout of Salt Lake City-based Huntsman Corp. in June. The dispute was settled privately earlier this month, putting aside a string of lawsuits.
Midland, Mich.-based Dow Chemical laid off 5,000 workers and closed 20 plants in December.
When Kuwait's Petrochemical Industries called if its joint venture with Dow Chemical late Sunday, it threw Dow's pending $15.3 billion acquisition of Philadelphia-based rival Rohm & Haas Co. into doubt.
Dow may be forced to draw down a $13 billion bride loan to pay for the entire acquisition with the money expected from the joint venture now apparently gone.
Dow's credit rating has also taken a hit.
Wilmington, Del.-based DuPont Co. let 2,500 workers go in December and released 4,000 contractors. DuPont spokeswoman Lori Captain said Wednesday that the company remains financially strong and that LyondellBasell is not a significant customer, supplier or competitor.
Even in the context of a global economic downturn, volatility in the chemical sector and the end of the year stands out.
"The year marched in like a lamb, and we're obviously exiting being buffeted by very depressing economic activity," said Frank Mitsch, an analyst with BB&T Capital Markets.
Deals that were completed came with some baggage as well this year.
Ashland Inc., which makes Valvoline took on $700 million in debt when it bought Hercules Inc. in November. After the buyout, the Covington, Ky.-based company had to cut its dividend by 73 percent to conserve cash.
LyondellBasell has annual sales of $54.6 billion and more then 16,000 employees worldwide, according to its Web site.
http://wtop.com/?nid=111&sid=1562114
Wednesday, December 31, 2008
Eeyore's News and View
Tight times, and budgets, will hasten the end for some things
By Mike Elgan
December 23, 2008
The government says we've been in a recession for the past year. Experts say it'll be at least another year before it's over. And everybody says it's the worst economic downturn since the Great Depression.
Nice sound bite. What does that mean?
Who knows? We can be sure that this downturn will differ totally from the Depression, and also different from the many recessions we've suffered every decade or every other decade since the '30s. I'm not an economist or a historian, but it seems to me that this recession will be something unprecedented.
One reason is that that there was no Internet or mobile technology in the 1930s. That means individual people and companies have very low-cost, high-efficiency alternatives for doing a wide range of activities. That will accelerate the demise of those things fated to be replaced anyway.
Here are 10 things that I believe won't survive the recession.
1. Free tech support
The practice still employed by some companies of paying humans to answer phones and solve technical problems with hardware or software purchased for consumers will become a thing of the past. PCs, laptops, and hardware peripherals, as well as application software -- these categories will be purchased like airline tickets, with price becoming the sole criteria for many buyers. In order to compete on price, companies who now offer real tech support will replace it with message boards (users helping users), wikis, wizards, software-based troubleshooting tools, and other unsatisfying alternatives.
2. Wi-Fi you have to pay for
Everyone is going to share the cost of public Wi-Fi because the penny-pinching public will gravitate to places that offer "free" Wi-Fi. Companies that charge extra for Wi-Fi will see their iPhone, BlackBerry, and netbook-toting customers -- i.e., everybody -- taking business elsewhere. The only place you'll pay for Wi-Fi will be on an airplane.
3. Landline phones
Digital phone bundles for homes (where TV, home networking, and landline phone service are offered in a total package) will keep the landline idea alive for a while, but as millions of households drop their cable TV services and as consumers look to cut all needless costs, the trend toward dropping landline service in favor of cell phone service only will accelerate until it's totally mainstream, and only grandma still has a landline phone.
4. Movie rental stores
The idea of retail stores where you drive there, pick a movie, stand in line, and drive home with it will become a quaint relic of the new fin de siecle (look it up!). The new old way to get movies will be discs by mail, and the new, new way will be downloading.
5. Web 2.0 companies without a business plan
The era when Web-based companies could emerge and grow on venture capital, collecting eyeballs and members at a rapid clip and deferring the business plan until later are dead and gone. Yeah, I'm talking to you, Twitter. Sand Hill Road-style venture capital is shrinking toward nothing, and investors in general will be hard to come by. Those few remaining investors will want to see real, solid business plans before the first dollar is wired to any startup's bank.
6. Most companies in Silicon Valley
Tech company failures and mergers will leave the industry with a low two-digit percentage (maybe 25 percent) of the total number of companies now in existence. Like the automobile industry, which had more than 200 car makers in the 1920s and emerged from the Depression with just a few, Silicon Valley is in for some serious contraction. The difference is that the auto industry ended up with the Big Three, whereas the number of tech companies will grow dramatically again during the next boom.
7. Palm Inc.
Elevation Partners, which has among its principals U2 lead singer Bono, pumped a whopping $100 million into the failing Palm Inc. this week.
The idea is to give the company time to release its forthcoming Nova operating system, which will take the cell phone world by storm and give Apple a run for its money. It would have been far more efficient, however, to just flush that money down the toilet. With the iPhone setting the handset interface agenda, BlackBerry maker RIM kicking butt in the businesses market, and Google stirring up trouble with its Android platform, this is no time for a clueless company like Palm to be introducing a new operating system. By this time next year, Palm will be gone. And so might Elevation Partners.
8. Yahoo
Yahoo is another company that can't seem to do anything right. Or, at least, can't compete with Google. Yahoo will be acquired by someone, and its brand will become an empty shell -- used for some inane set of services but appreciated only by armchair historians (joining the ranks of Netscape, Napster, and Commodore).
9. Half of all retail stores
Many retail stores are obsolete and will be replaced by online competitors. Entire malls will become ghost towns. By this time next year, most video game stores, book stores and toy stores -- as well as many other categories -- will simply vanish. Amazon.com will grow and grow.
10. Satellite radio
I'm sorry, Howard Stern. It's over. The newly merged Sirius XM Radio simply cannot sustain its losses. The company is already deeply in debt and would need to dramatically increase subscribers over the next six months in order to meet its debt obligations. Unfortunately, new car sales, where a huge percentage of satellite radios are sold, are in the gutter and stand-alone subscriptions are way down.
Change is hard. But efficiency is good. While boom years gives us radical innovation and improve consumer choice, recessions help us focus on what's really important and accelerate the demise of technologies and companies that are already obsolete.
So say good-bye to these 10 things, and say hello (eventually) to a new economy, a new boom and a new way of doing things.
http://www.infoworld.com/archives/emailPrint.jsp?R=printThis&A=/article/08/12/23/10_things_that_wont_survive_the_recession_1.html
Great Depression witnesses remember
As Americans try to cope with lost jobs and lost homes and deal with the continuing crises in the financial and credit markets that some compare with conditions during the Great Depression, economists say that, so far, the United States has not seen the level of deprivation that marked the 1930s.
Nevertheless, the unfolding collapse in housing values has obliterated an estimated $4 trillion in home equity, which will cause millions of households to lose their homes through foreclosure. The bear market - the Dow Jones Industrial Average is down about 40 percent from its peak - has eliminated additional trillions of dollars in stockholders' wealth. Also, last month the unemployment rate reached its highest level (6.7 percent) in more than 15 years.
But by comparison, at its nadir the Dow Jones Industrial Average lost nearly 90 percent of its value in the Great Depression, when the unemployment rate peaked at
24.9 percent and economic output declined by 13 percent in a single year. (Even if the gross domestic product plunges by an annual rate of 5 percent during the fourth quarter, GDP will still be 1.2 percent higher in 2008 than it was last year.)
Robert E. Miller, 87; Queen Esther Woodard, 96; and Lillie Deloatch, 88, lived through those hard times, and they shared their Depression-era experiences in conversations at the Stoddard Baptist Nursing Home in Northwest.
Robert E. Miller, 87.
Born in 1921 at Columbia Hospital in the District , Mr. Miller spent the Depression years as a child in the nation's capital.
Robert E. Miller, 87, grew up in the District during the Great Depression with two sisters and three brothers. "We always had some kind of food. My father would eat opossum," he said. (Rod Lamkey Jr./The Washington Times)
Growing up in a home at 23rd and P streets on top of Rock Creek Park, Mr. Miller had two sisters, three brothers and a big German police dog - "and that was all that boys want, a brother and police dog."
His father worked as a night watchman from 7 at night until 7 the next morning, all for $75 a month. "We lived off that, and I don't know how you could say it, but we were a very happy family, eatin' with what we could get, your bread. ... A loaf of bread, white bread, cost five cents," he said.
"You didn't have any electric lights in your house. You had what they call coal oil lamps," he recalled. "We had no electricity at all ... no running water ... had to go down to the corner, pump's on the corner, just mash on the top and the water would come out. You take your bucket and go down there and pump, get your water, come back to the house, and that's the way you got your water."
In the winter time, Mr. Miller and his siblings had only one over coat to share among them. On the way to school, whoever got dressed first got to wear the coat. "The rest didn't have any, so we just walk with shirt sleeves, sweater, no sweater, and we'd walk [24 blocks] to Dunbar [High School]. We would walk that, rain, snow, whatever. . . . Get to school the best way you could, and still we managed to be happy, jovial, playin' all the time, never any fightin' anything," as he tells it.
He and his siblings would wear their shoes until the soles were completely worn out, using newspaper to cover the holes.
"But it was a tough time, I remember. I guess that was the recession then. People didn't have any jobs; they would stand on the corner and sell apples, nickel apiece. They were unemployed, they didn't have nothing else to do," he remembered. "That's the way they made their living."
Those were the days before credit cards, when life was simple. But one could have credit at the corner grocery store and pay it at the end of the month.
The merchant "just had a big ledger. You come in and get $20 worth of stuff. And the end of the month he was expecting you to pay him your $20, which a lot of people didn't do, but that's the way you worked."
At the time, Mr. Miller didn't know about the Depression. As a child , that that's just how things were. Times were hard.
"I thought that was just normal life," he remembers. "We always had some kind of food. My father would eat opossum. We'd go to Rock Creek Park, get a opossum for him, right in the park, bring it home, he'd eat it. I wouldn't eat any of it," he said.
"We always had sufficient food. Meager-type food. It wasn't the best food. We would maybe get some kind of meat, maybe neck bones or something like that. My mother would cook them, my father would eat the neck bones, and we'd eat what now would be thrown away: the greases off the neck bones, that is what we would eat, heat it up and pour it on in a plate, get some bread, and sop that, and we thought we were living good. We were happy with that."
Sharecropper's daughter Lillie Deloatch, 88, talks about her experiences growing up during the Great Depression: "Yes, indeed, I remember," she says. "When Hoover was in the seat, right? And we couldn't get good flour. ... We were poor, but a lot of love. We all went to church. We were all right." (Rod Lamkey Jr./The Washington Times)
He said, "It was a nice childhood, but it was tough times. It never occurred to you that you were living in hardship.
"I did grow up knowing that you had to look ahead: If you get a dollar, don't spend the whole dollar. Spend maybe 75 cents, but keep a quarter. You're gonna need it one day. And that's the way I lived," he recalled. "I bought my first home like that, puttin' away nickels and dimes.
"I live in two different worlds, the world back then and world we got now, and the world we got now I don't think too much of it, to tell you the truth."
Queen Esther Woodard, 96.
Born on Jan. 26, 1912, Queen Esther Woodard was 18 years old when the stock market crashed Oct. 29, 1929. She is the daughter of a sharecropper.
Queen Esther Woodard, 96, was 18 when the stock market crashed Oct. 29, 1929. The Depression wasn't too hard for her, she recalled, because her father grew everything and they lived off the land. (Rod Lamkey Jr./The Washington Times)
Sitting upright in her wheelchair, Ms. Woodard is alert and full of life in a red sweater and a blue plaid blanket that covers her lap. She is surrounded by messages of faith, posters on the walls, eight Bibles on the shelves, stuffed animals on the bed and old photographs.
The seventh of 14 children , she grew up as a child in Rocky Mount, N.C. She married Oscar Woodard, a carpenter, at age 21.
Working the fields was not just for adults. Everyone who could work did so. Ms. Woodard worked in the fields from age 11, with her brothers and sisters. In the fields for long hours even after school, their labor was needed by their father, who toiled in the fields of peanuts, cabbage, sweet potatoes, collard greens and corn.
Robert E. Miller, 87, spent the Depression years as a child in the District. "We lived off that [$75 a month], and I don't know how you could say it, but we were a very happy family," he said. (Rod Lamkey Jr./The Washington Times)
"When I was a child, we didn't go to school but six months out of the year, and sometimes when we get home from school, we had to change our school clothes because we didn't have but one pair of shoes. Get them shoes off so you wouldn't wear them out too quick and go in the field and go to work," she recalls.
In addition to the hard times of the Depression, the country was also segregated. Her best girlfriend was white, yet they couldn't eat together at a restaurant. "But it didn't change the taste of the food," she says, laughing.
Ms. Woodard said life wasn't too hard for her and her family because her father grew everything, living off the land. Although times were extremely harsh, they were generous. Her father would kill the hogs, take the meat and give it away like he had no mouths to feed. He'd kill six hogs in November and six more in February, and that meat would last.
Taking the lessons and examples of her generous parents and strict religious upbringing during life in the Great Depression, she has given to others in need through the years. "I guess some people think I'm crazy, but you know, I don't value my money that well. I don't value it's so important to me that if you're hungry I couldn't give you a soda and sandwich."
Lillie Deloatch, 88.
Ms. Deloatch was born on May 8, 1920 in Branchville, Va., nearly 10 years before the stock market crash. Today she sits in her room at the Stoddard Baptist Nursing Home in the District, safe, comfortable and far from the farm where she grew up near the North Carolina border. The room is clean, the bed made.
She rests in her wheelchair, and the blinds are open to the street below, with its barren trees marking the winter season as the nation's economy remains in crisis.
Her father was a sharecropper.
"Yes, indeed, I remember," she says. "When Hoover was in the seat, right? And we couldn't get good flour. ... The hogs had died, and we didn't have no meat," she recollects. "We raised our hogs, chickens; we had cows, dogs, cats and eight children. There was a lot of love. We were poor, but a lot of love. We all went to church. We were all right.
"Momma made our clothes. Somehow, I don't know, somehow we made it. My father was a huntsman. He hunted rabbits and squirrels. We ate it."
Even though she lived on a farm, hardships were everywhere; not many were spared. On the farm, she worked in the fields picking cotton.
"It really was really a hard time. I remember my mother asked my father one day - he was taking a bail of cotton to Branchville: 'Joe, bring me a piece of cloth [so I can] make Lillie a dress to wear to field.' And he bought it, cotton material, and my mother cried. She said, 'Joe, Lillie never wore anything like this in her life.' And I liked it. It was all right for the field."
Ms. Deloatch compared life during the Great Depression to life today. "But back then, in those days, they was good old days. Wasn't like we hatin' one another like they do now. There was more love, you know," she said.
http://www.washingtontimes.com/news/2008/dec/29/witnesses-to-the-great-depression-remember/
Senior Chinese, Russian military officials hold first-ever talks via direct phone link
BEIJING, Dec. 29 (Xinhua) -- Chen Bingde, chief of General Staff of the People's Liberation Army (PLA) of China and his Russian counterpart Nikolay Makarov held their first-ever conversation via direct phone link on Monday.
Both military leaders hailed the successful launch of the direct phone link.
Chen said the launch of the direct phone link between the two countries' chiefs of general staff is another important measure for deepening pragmatic cooperation between Chinese and Russian militaries and another showcase of the tow countries' mutual political trust and strategic cooperation.
The direct phone link will help the two sides maintain timely communication on significant issues such as the exchange and cooperation between the armies and exchange views and collaborate stances in time on international and regional affairs, so as to promote the exchange and cooperation between the two militaries, Chen added.
For his part, Makarov said the launch of the direct phone link once more showcased the high-level of the China-Russia strategic partnership and the two countries' military ties.
He expressed his willingness to work with the Chinese side to keep frequent exchanges on the two armies' cooperation and other important issues in order to push forward their military ties.
The two leaders also exchanged views on international and regional situation, bilateral relations, and other issues of common concern.
http://news.xinhuanet.com/english/2008-12/29/content_10575726.htm
Squatters: The latest real-estate menace
Vacant properties across the country are being seized by a new breed of squatters. They’re organized and often armed with fake paperwork, and it can take months to get them out.
When he moved in, David Dobbs did the same things most people would do when they set up in a new house. He unpacked his belongings, hooked up cable, transferred utilities, filled the swimming pool and watered the lawn, which was withering under the hot California sunshine.
"It was like he had just moved in and was a proud new owner," says Prudential California real-estate agent Tom Tennant, who listed the Corona, Calif., property.
The problem was, Dobbs had no right to move into the house: He was a squatter. The vacant house he occupied on affluent Star Canyon Drive was a foreclosed property owned by a bank, and it was in escrow to a new owner.
Dobbs is part of a troubling new breed of trespassers and con artists moving into vacant foreclosures across the country. Unlike most squatters, these people aren't derelict and living on the streets, and they don't move on once discovered by police or sheriff’s officers. It can take months to get them out, agents and attorneys say.
"Possession is nine-tenths of the law," says Michigan real-estate broker Ralph Roberts, author of "Protect Yourself from Real Estate and Mortgage Fraud." "You can call the police, but the police aren't necessarily going to move them out."
That's because some squatters successfully confuse police by claiming they have a right to be there, often showing bogus leases, as Dobbs did, to put off being evicted.
The scams
Squatting schemes can take a few different forms, police say. In some, individuals will gain access to a lockbox code on a property, open the door and start moving in. No breaking or entering is involved.
Or a con artist will hire an unscrupulous locksmith to change the locks on a property so he can place ads and rent it out to people.
What's your home worth?
In this scenario, the individual passing himself off as a landlord will collect first and last month's rent — sometimes from several unsuspecting people — before disappearing, says Detective Mike Wood of the Sacramento Police Department's real-estate fraud unit. Criminals also can lift information about a house off of legitimate real-estate listings and then put out their own ad on Craigslist to lure renters, he says.
But oftentimes, the squatters will knowingly produce phony leases or other documents that cloud the issue, and send the matter to the court system for a formal eviction, which can take as long as several months.
The woman accused of providing Dobbs with the bogus paperwork, Gwendolyn Johnson, is reported to have filed about a dozen deed transfers at the county recorder's office for houses where she planned to move squatters. She told the local newspaper that she seizes possession of these properties and leases them out to tenants for a one-time fee of several hundred dollars. (Johnson was recently arrested on a felony charge of falsifying documents and is out on bail awaiting her court date.)
But, attorneys say, even without legitimate-looking paperwork, it can be hard to evict squatting tenants once they've moved in and claim a verbal month-to-month agreement.
"A verbal agreement is just as binding" if it's real, says Los Angeles eviction attorney Dennis Block.
"They (the officials) have to decide who's telling the truth."
Squatters’ rights?
And that can be difficult. Police who are called out to a house don't want to arrest someone who has a legitimate right to be there, or was duped into renting a place from a bogus landlord. Most police and sheriff's officers don't want to face a lawsuit for acting too quickly.
"No one wants to get sued throwing someone out who's an actual victim" of a scam, Wood says.
Block says most police officers don't feel qualified to judge the merits of either side's arguments, so they simply tell real-estate asset managers to get an attorney to start the eviction process.
"The police are really there to keep the peace and make sure no laws are being violated," Block says. "They have to make a sure a crime existed before they make any arrest."
The eviction process, which starts with a five-day notice to vacate and ends with an order for the sheriff's department to remove the squatter, can take months if it is contested in court.
Real-estate agent Tennant, who was managing the Star Canyon property and had its utilities in his name, tried to get the squatter out himself, by persuading the city to cut off water to the property, a large Spanish-style home in a gated community, after Dobbs transferred it to his name along with electricity and gas.
In the weeks leading up to the order for his eviction, Dobbs broke the water meter repeatedly and even tried to tap into the water line illegally, sending water down the street and an officer to the house to arrest him on a misdemeanor charge of theft of utilities, Corona police confirmed.
Tennant says there is now an order for Dobbs to be evicted from the house. The one-time buyer of the property has since moved on, to look at other communities and other houses after a contractual clause let him out of the purchase because the house wasn't vacant.
Move-outs for money
Not all squatters are as tenacious as Dobbs. Some only want to stick around long enough to get a payoff from the lender to evacuate.
Banks, in order to speed up the eviction process and avoid legal action, are paying these occupants as much as several thousand dollars to get them out quickly, a strategy known as "cash for keys."
This practice, real-estate agents and law enforcement officials say, has encouraged all kinds of ne'er-do-wells to break into vacant foreclosure properties in hopes of earning a little extra cash.
"They get a place to live for a couple of months rent-free and the banks will give them a couple thousand in moving expenses," Wood says.
Some are pulling this scam repeatedly in a number of properties once they find out which lenders are paying.
If someone knows, for instance, that a particular lender is paying $3,000 for people to move out of their vacant properties, Roberts says, they have more incentive to target several of its properties for squatting.
"It's like they're letting people walk into the vault and take money," Roberts says.
Often, the same real-estate firm or lender keeps the same code for its lockboxes, making it easier for trespassers to move in once they get a code or combination.
Neighbors band together
Because these squatters have been so hard to evict, neighbors in many high-foreclosure communities have been forced to take matters into their own hands.
After squatters moved into several houses in Scott Elliot's 1,100-home gated community in Riverside County, Calif., he and other neighbors banded together to make life difficult for the squatters that police refused to throw out and to try to prevent new ones from moving in.
They tipped off the local news channel about these occupants to get news crews out filming them, and they formed a neighborhood watch of all of Victoria Grove's empty houses. They collected phone numbers for the local police as well as for the real-estate asset managers of all the vacant properties, and the neighbors called whenever they saw suspicious activity.
"In 15 to 20 minutes, we can have 30 people there standing outside. It's a show of force," says Elliot, a retired attorney who heads the community maintenance association.
In one case, these neighbors called the authorities early enough to get a new set of squatters out, who had pulled up to a house a half-hour after the last ones had been evicted, Elliot says.
"We are learning as we go," Elliot says. "We have succeeded in getting five groups of squatters out. I think we have the upper hand now, and our community is really together for the first time."
Agents, too, have had to step up their own surveillance of properties they are listing and take proactive measures to prevent them from being occupied, such as taking out all the toilets from a home or turning off utilities.
"I have my properties inspected once a week," Tennant says. "But most of the time access is being gained in the evenings or weekends."
Not just the bank's problem
Agents say the problem of squatting is only going to get worse as the unprecedented wave of foreclosures works its way through the system. Bill Collins, a real-estate broker with ERA Queen Realty in South Orange, N.J., says it is becoming a much bigger problem in his area.
"A lot of properties that were in very good condition are winding up falling through the cracks and being inhabited by squatters," Collins says. That's bad for the safety and value of the surrounding community, he says. And, it puts more strain on everyone; not only agents, but also police and sheriff's officers who are being repeatedly called out to these properties.
Tennant and others are pressing for more arrests in this "grand theft house." Police "need to react swiftly and harshly to this," Tennant says. "They need to send the message to someone with an organized criminal background that this isn't acceptable."
8 ways to avoid falling victim to a squatting scam
Squatting is a problem that can hurt renters as well as neighboring homeowners. Here's what you need to know to protect yourself.
Homeowners
1. Keep a list
If your neighborhood has a lot of vacant properties, keep a list of them as well as phone numbers for the real-estate agent or asset manager in charge of them, and local law enforcement contacts. Pass them out to your neighbors, so if anyone sees something suspicious, you can get someone out there to handle it quickly.
2. Catch them in the act
Try to catch squatters in the act of moving in. It's easier to get them out of the house before all the utilities are in their name, police officials say.
3. Organize a neighborhood watch
Most real-estate agents drive by their foreclosure properties regularly to make sure they're not being vandalized. But they mostly do this during the day and in the middle of the week. Squatters typically move in at night or on the weekend. If vacant houses are a problem in your community, sit down with neighbors and schedule times to patrol these properties at night or on weekends and call police if you see suspicious activity. It shouldn't be your responsibility, but ultimately, securing these houses protects your community's real-estate values and safety.
Renters
Some squatters are posing as landlords to lure people into paying them “rent.” Here are five ways to avoid being duped.
1. Do your research
Run an Internet search on the name of the person who's listing the house, as well as his e-mail address, phone number and anything you else you know about him, Woods and Roberts say. Often it can turn up complaints, arrests or other unflattering information about the fake landlord, or it can provide information that contradicts his story.
2. Say cheese
Most scam artists won't want to get their picture taken. So if you are leasing a place, suggest a picture to commemorate the special occasion of you finding a great new place. If they're shady, they'll most likely decline the snapshot, Roberts says.
3. Beware of the cash deal
If a landlord is asking for first and last month's rent in cash or a cashier's check, be a little skeptical, Roberts says. And don't do business with someone you haven't seen who just leaves a key and asks for payment to be wired because he's out of town.
4. Sign papers in an office, not on the hood of a car.
Just about anyone can pass as a landlord or property manager, armed with a set of keys and some boilerplate rental agreements. But it's typically safer to rent a place through a professional property manager, and it doesn't cost the renter any extra, as the owner is the one paying the fees.
5. If the rent is too good to be true, it probably is.
One of the ways con artists are able to entice renters into these vacant properties is with rents that are priced just below the market, police say. A low, low price makes many people willing to move quickly to fork over a deposit and not spend too much time thinking about the landlord.
Then, says Roberts, you become the problem in the community. "A tenant can pay real money to a bad guy and then be considered a bad guy."
http://realestate.msn.com/article.aspx?cp-documentid=15819672
Show off, or better put showing off for the world. Just trying to draw attention.
Medvedev’s assertiveness troubles Putin
Published: December 30 2008 17:51 | Last updated: December 30 2008 17:51
It was an innocuous sounding comment in what appeared to be a routine television interview. But in the six days since Dmitry Medvedev, Russia’s president, described his feelings about taking the oath of office in May, the corridors of power have been buzzing.
“The final responsibility for what happens in the country and for the important decisions taken would rest on my shoulders alone and I would not be able to share this responsibility with anyone,” Mr Medvedev told an interviewer.
For a normal president in a normal country, such a remark would have been a statement of the obvious. But to a select few, it was a “dog whistle”, a message audible only to those Mr Medvedev wanted to hear.
Usually when discussing such matters he stresses his “consultation” with Vladimir Putin, the prime minister and former president, who all but installed Mr Medvedev in his job and is thought to take most of the big decisions. But this time Mr Medvedev stressed that he was the single constitutionally empowered decision-maker.
Kremlin watchers say this assertiveness seems to be part of a new pattern, with Mr Medvedev appearing frustrated that, in spite of his constitutional power as commander in chief, he is stuck in a subordinate role.
“An apprehension is growing on both sides, particularly the Putin side,” said Dmitry Simes, head of the Nixon Centre in Washington, who spent last week in Moscow.
“No one is quoting Putin as saying anything . . . But several of Putin’s associates are uneasy about his [Medvedev’s] new assertiveness.”
Mr Simes said Mr Medvedev had summoned cabinet members and given instructions. “Clearly it was Medvedev reaching out to members of the cabinet on economic issues which normally would be considered Putin’s prerogative.”
A Putin adviser said Mr Medvedev’s remarks in the interview demonstrated a “cavalier” attitude. Mr Simes said: “Medvedev sounded very self-confident. He was not very deferential.”
Personal relations between the two men are warm, but most attempts by Mr Medvedev to pursue independent policies have been thwarted. Anti-corruption measures he championed were changed by Russia’s usually supine parliament in October. According to Russian press reports, plans by Mr Medvedev to appoint independent judges were thwarted by Putin allies.
Mr Medvedev’s big legislative success has been a constitutional change to lengthen the presidential term from four to six years, which has sailed through the approval process. The reason? “Everyone understood that this was Putin’s idea,” said the Russian-language version of Newsweek
Dmitri Trenin, director of the Carnegie Moscow Centre think-tank, said: “I don’t think he [Medvedev] is amused that. . . he is regarded as a junior partner.”
However, the economic crisis could test both men. Lilya Shevtsova of the Carnegie Centre said: “They both understand that the. . . system of power depends on them getting along.”
http://www.ft.com/cms/s/0/cfa5d788-d697-11dd-9bf7-000077b07658.html
Monday, December 8, 2008
Eeyore's News and View
China has begun to devalue the yuan for the first time in over a decade, raising fears that it will set off a 1930s-style race to the bottom and tip the global economy into an even deeper slump.
By Ambrose Evans-Pritchard,
The central bank has shifted the central peg of its dollar band twice this week in a calculated move that suggests Beijing aims to offset the precipitous slide in Chinese manufacturing by trying to gain further export share abroad.
The futures markets are pricing in a 6pc devaluation over the next year. "This is clearly a big shift in policy and we are now on alert," said Simon Derrick, currency chief at the Bank of New York Mellon.
The move follows a Politburo speech by President Hu Jintao warning that China is "losing competitive edge in the world market".
China has allowed a crawling 20pc revaluation over the past three years. Any reversal risks setting off conflict with the incoming team of President-Elect Barack Obama in Washington. Mr Obama called China a "currency manipulator" during the campaign, a term that carries penalties under US trade law.
Outgoing US Treasury Secretary Hank Paulson is viewed as a "friend of China". He called for a stronger yuan this week before embarking on a visit to Beijing, but the plea was couched in friendly terms. This soft-peddling may soon change.
Hans Redeker, currency head at BNP Paribas, said China's policy switch could set off a dangerous chain of events. "If they play this beggar-thy-neighbour game, it will cause a deflationary shock for the whole world," he said.
It makes sense for countries with current account deficits such as the UK, US or Turkey to let their currencies fall, but China has the world's biggest trade surplus.
Michael Pettis, a professor at Beijing University, said it was "very worrying" that a pro-devalulation bloc seemed to be gaining the upper hand in the Communist Party. "I really do believe that we are on the brink of a very ugly period for trade relations," he said.
China has relied on exports to North America and Europe as its growth engine, making it acutely vulnerable to the contraction in global demand. Mr Pettis said this recalls the role played by the US in the 1920s, a parallel fraught with danger. "In the 1930s the US foolishly tried to dump capacity abroad, but the furious reaction of trading partners caused the strategy to misfire. China already seems to be in the process of engineering its own Smoot-Hawley," he said, referring to the infamous US Tariff Act in 1930.
China showed restraint during the Asian crisis in 1998, holding the line against domino devaluations across the region. It may yet hold the line this time.
However, this crisis is more serious. The manufacturing sector has seen the steepest decline since the records began, with devastation sweeping the textile, furniture and toy sectors. Civil unrest has begun to rock the Guangdong and Longnan regions.
Beijing has slashed rates and unveiled a fiscal stimulus of 14pc of GDP, but most of the spending comes in the form of instructions to local governments to spend more – but without giving them the money. Does China really intend to step in to prop up global demand? The jury is out.
http://www.telegraph.co.uk/finance/economics/3546471/Chinese-economy-1930s-beggar-thy-neighbour-fears-as-China-devalues.html
"Koobface" virus turns up on Facebook
By Jim Finkle
BOSTON (Reuters) - Facebook's 120 million users are being targeted by a virus dubbed "Koobface" that uses the social network's messaging system to infect PCs, then tries to gather sensitive information such as credit card numbers.
It is the latest attack by hackers increasingly looking to prey on users of social networking sites.
"A few other viruses have tried to use Facebook in similar ways to propagate themselves," Facebook spokesman Barry Schnitt said in an e-mail. He said a "very small percentage of users" had been affected by these viruses.
"It is on the rise, relative to other threats like e-mails," said Craig Schmugar, a researcher with McAfee Inc.
Koobface spreads by sending notes to friends of someone whose PC has been infected. The messages, with subject headers like, "You look just awesome in this new movie," direct recipients to a website where they are asked to download what it claims is an update of Adobe Systems Inc's Flash player.
If they download the software, users end up with an infected computer, which then takes users to contaminated sites when they try to use search engines from Google, Yahoo, MSN and Live.com, according McAfee.
McAfee warned in a blog entry on Wednesday that its researchers had discovered that Koobface was making the rounds on Facebook.
Facebook requires senders of messages within the network to be members and hides user data from people who do not have accounts, said Chris Boyd, a researcher with FaceTime Security Labs. Because of that, users tend to be far less suspicious of messages they receive in the network.
"People tend to let their guard down. They think you've got to log in with an account, so there is no way that worms and other viruses could infect them," Boyd said.
Social network MySpace, owned by News Corp, was hit by a version of Koobface in August and used security technology to eradicate it, according to a company spokeswoman. The virus has not cropped up since then, she said.
Privately held Facebook has told members to delete contaminated e-mails and has posted directions at www.facebook.com/security on how to clean infected computers.
Richard Larmer, chief executive of RLM Public Relations in New York, said he threw out his PC after it became infected by Koobface, which downloaded malicious software onto his PC. It was really bad. It destroyed my computer," he said.
McAfee has not yet identified the perpetrators behind Koobface, who are improving the malicious software behind the virus in a bid to outsmart security at Facebook and MySpace.
"The people behind it are updating it, refining it, adding new functionalities," said McAfee's Schmugar.
http://www.reuters.com/article/technologyNews/idUSTRE4B37LV20081205
The last Thanksgiving before GD2?By David ChuOnline Journal Guest WriterNov 27, 2008, 00:16
Happy Thanksgiving, America!
Enjoy this wonderful family and friends celebration while you still can.
Because around the corner lurks GD2. More about this vile monster later.
Thanksgiving, U.S.A.
I remember fondly the Thanksgivings I used to spend with the Catholic family of my ex-wife in Southern California. I only mentioned that they are Catholic to emphasis that these festive celebrations were large gatherings. They usually took place either in Anaheim where her parents lived or in Orange where her uncle and aunt lived.
Thanksgiving in southern California is a special time. Weather is not cold as it is in most parts of the U.S. There is no snow on the ground. It feels more like a late summer than an early winter.
Usually, there would be almost 40 family members including a lot of grown-up kids and grandkids. The beloved matriarch who held this family together is an incredible lady whose first name is Gloria, having been born on Easter day in 1924. Gloria was one of these rare ladies whose refined manners and compassion could straighten out any delinquent and stray youth, and she did do that during her teaching days at a community college in Anaheim.
Even though I didn’t make it to her funeral (she passed away in 2005 after many years of courageously fighting a rare and painful lung disease), I respect this woman and consider her to be a true saint who touched the lives of many including mine. Because if there was ever an unassuming, flesh-and-blood saint that I have met in this lifetime, Gloria would be that one!
So I dedicate this “prescient” article on this Thanksgiving 2008 to “Lady Gloria.” (I think she would want you to know what is about to happen from her vantage point. She can certainly see it much better from up there!)
What the heck is GD2?
Simply, “Great Depression 2.”
But as the famous physicist, Neil Bohr, once remarked, “Prediction is very difficult, especially about the future.”
However, just because something is difficult does not mean that we shouldn’t try to get a handle on it, especially on something dire that concerns our future, or attempt to read the “handwriting on the wall” to use an old Biblical expression.
Using my long ago analogy by calling the ship of state (financial and economic affairs) of the U.S. as the U.S.S. Titanic, America has already scrapped that massive iceberg: there is a huge gaping hole on the starboard side of the U.S.S. Titanic!
The U.S.S. Titanic encountered this iceberg during the week of October 6, 2008. Everything that happens afterwards and in the immediate days, weeks, months, and even years following is just governments and their corrupt, criminal fiends on Wall Street and elsewhere going through the motions. Like the band that kept playing aboard the real R.M.S. Titanic, the politicians and the “captains of industry” will paint a bright and rosy picture for the third-class passengers aboard the U.S.S. Titanic, while they all don on their financial life jackets and run like hell for the very few financial lifeboats!
What do you think the $850 billion TARP (“Troubled Asset Recovery Program”) was for?
Then visualize life jackets embossed with the letters “TARP” on the back!
Buried in a report from Biz.yahoo.com on November 12 titled “Stocks plunge for third straight session” was the following incredible statement: “According to the Dow Jones Wilshire 5000 index [which reflects the value of almost all U.S. stocks], Wednesday’s [November 12] paper losses amounted to about $600 billion. By that measure, the [U.S.] stock market has shed $9.1 trillion since the index’s Oct. 9, 2007, peak.” The bolded emphasis in mine. The Dow Industrial Average or Dow, which is comprised of 30 “blue chip” stocks, closed out at 8,262 on November 12, and was at 8,046 at the close on November 21, so the estimate of $9.1 trillion of financial losses since October 9 is a pretty close guess, if not a conservative one.
(There is more with charts and other viusual aids, go to read complete article and links for charts)
http://onlinejournal.com/artman/publish/article_4059.shtml
I wish it was our courts in the US doing this, but good for you UK
One million innocent people could have their profiles wiped from Britain's 'Orwellian' DNA database after court ruling
Nearly a million innocent citizens could see their profiles deleted from the DNA database following a landmark court ruling.
European judges said it was unlawful for police to store swabs and fingerprints from suspects later cleared of wrongdoing.
In a damning verdict, the 17-strong panel said keeping the records 'could not be regarded as necessary in a democracy'.
Home Secretary Jacqui Smith said she was disappointed by the decision.
But some campaigners said the future of other Government databases, including the national ID register, was in doubt.
Before 2001, the police had to destroy DNA samples of individuals acquitted or not charged. But a rule change has allowed them to keep profiles of everyone arrested for a recordable offence in England, Wales and Northern Ireland.
The details of about 4.5million people are held on the database yet one in five - including 40,000 children - has never been charged with an offence.
The Home Office says the register has proved a key intelligence tool in solving 3,500 cases - including high-profile rapes and murders.
Yesterday however the European Court of Human Rights ruled against police in a case brought by two British men.
Their profiles were stored by South Yorkshire Police despite neither being convicted of an offence.
The Strasbourg court found the force had violated article 8 of the European Convention on Human Rights - the right to respect for private and family life.
In a strongly-worded attack, it condemned the 'blanket and indiscriminate nature' of the powers.
One of the victors is Michael Marper, 45, the other a 19-year-old named in court only as 'S'.
The judges said that keeping their DNA had left them under a cloud of suspicion because they were 'entitled to the presumption of innocence, yet were treated in the same way as convicted persons'.
Peter Mahy, who represented the men, said: 'The Government should now start destroying the DNA records of those people who are currently on the database and who are innocent of any crime.'
MPs, civil liberty groups, and individual protesters have claimed the DNA database was brought in without proper legislation.
Dominic Grieve, Tory Shadow Home Secretary, said: 'This vindicates all that we have been saying about the Government's wrongheaded approach to this issue which has caused so much resentment amongst the law-abiding majority and done so much to undermine confidence in the criminal justice system.
'That the DNA database has become arbitrary with the profiles of over a million innocent people on it but not the profiles of every serious offender in the country. It should target the guilty, not the innocent.'
Liberal Democrat leader Nick Clegg said: 'This demolishes the Government's view that the way to fight crime is to blur the distinction between innocence and guilt.
'It is a measure of this Government's disregard for civil liberties that a European court has to fight to protect traditional British freedoms from an Orwellian database.'
(you can read the complete article at the following link)
http://www.dailymail.co.uk/news/article-1091880/One-million-innocent-people-profiles-wiped-Britains-DNA-database-court-ruling.html
Friday, November 21, 2008
Eeyore's News and View
Astronaut loses tool bag, spacewalk to continue
HOUSTON (AP) — Flight controllers were revamping plans Wednesday for the remaining spacewalks planned during space shuttle Endeavour's visit to the international space station, after a crucial tool bag floated out to space during a repair trip.
The briefcase-sized tool bag drifted away from astronaut Heidemarie Stefanyshyn-Piper on Tuesday as she cleaned and lubed a gummed-up joint on a wing of solar panels on the space station. She and fellow astronaut Stephen Bowen were midway through the first of four spacewalks planned for the mission. The tool bag was one of the largest items ever lost by a spacewalker.
As Stefanyshyn-Piper cleaned up a large gob of grease that seeped from a gun used to lubricate the joint, the tool case somehow became untethered from a larger bag and floated away along with a pair of grease guns, wipes and a putty knife attached to it.
"What it boils down to is all it takes is one small mistake for a tether not to be hooked up quite correctly or to slip off, and that's what happened here," said lead spacewalk officer John Ray.
Stefanyshyn-Piper and Bowen finished the spacewalk in almost seven hours by sharing tools from Bowen's bag. Ray noted that Stefanyshyn-Piper showed "real character and great discipline" by continuing on. She was the first woman to be assigned as lead spacewalker for a shuttle flight.
"Despite my little hiccup, or major hiccup, I think we did a good job out there," Stefanyshyn-Piper said after returning to the space station.
Flight controllers are considering having the two spacewalkers share Bowen's pair of grease guns for the three remaining spacewalks on Thursday, Saturday and Monday. They could also use caulking guns meant for repairing the space shuttle. Another option is to have one spacewalker clean the joint while the other uses the grease gun to lubricate it.
For more than a year, the joint has been unable to automatically point the right-side solar wings toward the sun for maximum energy production.
Officials weren't worried the bag would hit the space station or the docked space shuttle because by late Tuesday it already was 2 1/2 miles (4 kilometers) in front of the orbiting complex, said flight director Ginger Kerrick.
"It is definitely moving away with every orbit," Kerrick said.
Inside the space station, crewmembers were so ahead of schedule in moving equipment delivered by Endeavour that shuttle flight planners were contemplating skipping an extra day at the outpost orbiting 220 miles (355 kilometers) above Earth.
The equipment includes a recycling system that converts urine into water, an extra bathroom, kitchenette, two bedrooms, an exercise machine and refrigerator that will allow space station residents to enjoy cold drinks for the first time. And the extra gear will allow the space station's crew to double to six next year.
The water recycling system was to be hooked up late Wednesday, and the first batch of urine would run through the system later in the week. Samples will be flown back to Earth for safety tests before astronauts use it.
http://www.usatoday.com/tech/science/space/2008-11-18-space-shuttle_N.htm
(If you go to the link they have some neat graphics and video also)
European Stocks Advance; Total, Shell, Alcatel Lead the Gains
By Adam Haigh
Nov. 18 (Bloomberg) -- European stocks rose as higher oil prices lifted energy producers and better-than-expected earnings from Hewlett-Packard Co. and Home Depot Inc. eased concern the recession will snuff out profits.
Total SA, Europe's third-largest energy producer, and BP Plc climbed more than 4 percent as crude gained. Alcatel-Lucent SA jumped 4.8 percent on Dassault Aviation's 1.56 billion-euro ($2 billion) offer for Alcatel's stake in Thales SA.
The Dow Jones Stoxx 600 Index added 0.8 percent at 201.91 in London, reversing an earlier decline of as much as 2.2 percent. The gauge has lost 45 percent this year as writedowns and credit losses topped $965 billion in the worst financial crisis since the Great Depression.
U.S. earnings are ``reassuring the market,'' said Arnaud Scarpaci, a fund manager at Agilis Gestion in Paris, which oversees $152 million. The market ``seems oversold,'' he said.
The Stoxx 600 is valued at 9 times reported earnings of the companies in the index, below the four-year average of 14 times profit. The gauge traded at 7.9 times earnings in Oct. 27, the lowest since at least January 2002.
National benchmark indexes increased in nine of the 18 markets in western Europe. The U.K.'s FTSE 100 rose 1.9 percent, and France's CAC 40 gained 1.1 percent. Germany's DAX added 0.5 percent.
Total climbed 4.6 percent to 40.76 euros. BP, Europe's second-biggest oil producer, added 4.1 percent to 507.5 pence, and Royal Dutch Shell Plc, the largest, gained 3.9 percent to 1,693 pence.
Oil Gains
Crude oil for December delivery rose 75 cents, or 1.4 percent, to $55.70 a barrel in New York.
Alcatel-Lucent jumped 4.8 percent to 1.90 euros. Dassault Aviation offered 1.56 billion euros ($2 billion) for Alcatel- Lucent's 20.8 percent stake in Thales SA.
Earnings from Hewlett-Packard, the world's biggest maker of personal computers, and Home Depot, the largest home-improvement retailer, signaled they are withstanding the economic slowdown. Banks led declines earlier today as concern the economic slowdown will trigger more losses, while Burberry Group Plc's forecast disappointed investors.
BNP Paribas SA dropped 5.1 percent to 40.81 euros. UBS AG, the Swiss bank that got a $59.2 billion aid package from the state and central bank, lost 3.5 percent to 13.27 francs.
The cost of protecting bank bonds from default rose to the highest in almost a month as prices of mortgage-linked securities tumble.
Burberry
Burberry, the London-based luxury goods company, slid 13 percent to 175 pence after saying pretax earnings may be at the ``mid to lower'' end of analysts' projections in the current fiscal year.
Earnings for the 1,829 companies in western Europe that reported results since Oct. 7 declined 9.9 percent on average, trailing expectations by 6 percent, Bloomberg data show.
Analysts now predict profit will slide 10 percent in 2008, compared with 11 percent growth forecast at the start of the year, the data show.
Carphone Warehouse Group Plc slumped 9.4 percent to 118 pence. Europe's largest mobile-phone retailer said it won't sell the TalkTalk Internet unit as it considers splitting into two listed companies.
ERG SpA, Italy's biggest exporter of oil products, slipped 4.6 percent to 11.26 euros. Morgan Stanley gave it an ``underweight'' recommendation and a price estimate of 10.40 euros on the shares.
Bilfinger Berger AG, Germany's second-largest construction company, led construction shares lower after Goldman Sachs Group Inc. added the stock to its ``conviction sell'' list, citing expectations for lower capital spending in chemicals and oil industries. The shares lost 4.9 percent to 30.61 euros.
Hochtief AG, Germany's biggest construction company, sank 2.8 percent to 27.66 euros.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6LygoxbIcxc&refer=home
Here are a couple of articles that go along with the pirate post, i did this past Wednesday. The first one is about how as BadTimes set in the crime rate will increase. The story is from Scotland, but it will happen here also. The others are about the Pirate problems.
Inside Home Affairs: Heading for recession – and the crime wave that goes with it
Published Date: 19 November 2008
By Michael Howie
NOW that people increasingly feel they cannot afford that new HD TV or hi-fi, will they be more likely to steal it?
That is the question senior police officers are asking themselves as the economic downturn starts to bite in Scotland.
After several years of declining crime rates, there are some indications the tide may be turning as recession triggers an increase in shoplifting, housebreaking, fraud and other "dishonesty" offences.
Last week, a report from Lothian and Borders Police showed a 9 per cent increase in crimes of dishonesty, year on year, for the three months ending 30 September.
Tom Halpin, the force's acting chief constable, said he was "very alert to the possibility that the current financial climate could have had an effect on the level of crime".
A 9 per cent increase means more than 1,500 more crimes were committed in the force area in one quarter.
Jacqui Smith, the Home Secretary, recently warned violent crime could grow by nearly a fifth – a prediction based on what happened during the 1991-2 recession.
The Home Office has singled out attacks on immigrants, who may be blamed for "stealing jobs", as a particular concern.
It appears, however, that a credit-crunch crime wave has yet to hit us.
The Scotsman has learned that, since April, crimes of dishonesty have fallen in at least four of Scotland's eight police force areas – Grampian, Fife, Central Scotland and Dumfries and Galloway.
However, most experts are in agreement: crime rates will increase as the recession deepens.
And one leading academic told me: "We are likely to see rates of imprisonment rise as unemployment rises.
"Courts tend to favour custodial sentences because unemployment people will have more free time and therefore be more inclined to commit further offences."
A rise in white-collar crime is also predicted, as tens of thousands of middle-class workers face redundancy.
The picture appears to be bleak indeed.
http://news.scotsman.com/scotland/Heading-for-recession--and.4706853.jp
Off Africa's coast, pirates 'out of control'By Tom Vanden Brook, Jim Michaels and Peter Eisler, USA TODAY
They come out of the darkness in the waters off the coast of East Africa, zooming up in speedboats to the sides of massive cargo ships, armed with grappling hooks, AK-47s and rocket-propelled grenades.
Quickly, these modern-day pirates climb aboard their prey: cargo ships that contain food, machine parts and, most recently, oil or enough weaponry to supply a small army. Most of the time they meet no opposition — only frightened, unarmed crews who find themselves prisoners and held for ransoms that have exceeded $1 million.
Based in Somalia, these pirates are only a little like the images of the daring, swashbuckling thieves who have gallivanted through Hollywood movies or adventure stories that have been passed on for generations.
These pirates typically use the Global Positioning System to coordinate attacks along major shipping corridors in the Indian Ocean and Gulf of Aden. A report last month by Chatham House, a British think tank, said that once aboard, Somali pirates typically are focused on demanding a ransom from the ship's operators and chewing khat, a narcotic leaf that is a stimulant, that they bring with them.
Piracy off Somalia's coast has long been a symbol of that African nation's instability. Now attacks on shipping are soaring and becoming more brazen, heightening concerns about the safety of shipping from oil-rich areas in Africa and the Middle East at a time of global economic instability.
The potential for Somali renegades to send tremors through the world's economy was clear Saturday, when pirates captured their biggest prize to date: the Sirius Star, a Saudi supertanker brimming with 2 million barrels of oil (estimated value: $100 million).
The Times of London reported Wednesday the Saudi government had confirmed that the ship's owner — Vela International Marine — was negotiating a possible ransom with pirates who boarded the oil tanker more than 450 nautical miles from the Kenyan port of Mombasa.
The pirates' raid of the Sirius Star — and hijackings Tuesday in the Gulf of Aden of a Thai ship with 16 crewmembers and an Iranian cargo vessel with a crew of 25 — are signs that attacks by loosely organized bands of Somali pirates are "a criminal enterprise which has gone completely out of control," says Capt. Pottengal Mukundan, director of the International Maritime Bureau, which tracks piracy.
U.S. and British analysts say the series of raids underscore worries that terrorists could dive into the same lawless seas off East Africa, capture booty to finance their operations or mount a spectacular attack with a seized ship.
"There is serious concern that terrorists see piracy as an opportunity for themselves," says Roger Middleton, an expert on piracy at Chatham House. "It can provide the means to generate enormous amounts of money, or to capture a boat with the more disturbing prospect of a huge oil tanker as a floating bomb."
In March, the Pentagon confirmed that U.S. forces attacked a suspected al-Qaeda terrorist in Somalia.
Pirates already are driving up the cost of shipping and insurance. Some shipping lines have begun avoiding the shipping corridors near Somalia and their shortcut to the West through the Red Sea and Suez Canal, which can add between five and 10 days to a trip from Asia to Europe, says David Ellis, president of Odfjell USA, a Norwegian-owned shipping company. Each extra day at sea, he says, costs about $30,000.
Environmental catastrophe looms if a supertanker is punctured during an attack or purposely sunk, Middleton says.
The Bush administration is trying to coordinate efforts to stop the pirates, although military officials say they can't stop all pirates because there are too many ships in a huge area to protect.
"We're working with other members of the Security Council right now to see if there are actions that we can do to more effectively fight against piracy and prevent it," White House spokeswoman Dana Perino said Wednesday.
Meantime, the pirates continue to operate with near impunity across broad swaths of the Indian Ocean. They often anchor their seized boats near the ungoverned Somali coast and wait for the ships' owners to pay increasingly lucrative ransoms.
This year, pirates have attacked at least 95 ships near Somalia, including 38 hijackings, Mukundan says. More than 740 crewmembers have been taken hostage. There has been one fatality, Middleton says, adding that he fears hijackings could become increasingly violent.
Last year saw fewer than 25 attacks. As recently as 2004, pirates made just five raids. During the last week alone, pirates attacked 11 ships off Somalia and in the Gulf of Aden.
The pirates' targets usually are slow-moving cargo ships that can't match the mobility of the pirates' small, swift 15-foot skiffs powered by outboard engines. The pirates zip around the larger ships, locate a low deck and climb aboard with rope ladders. The shipping vessels' small crews — the huge supertanker had just 25 aboard — often are armed lightly, if at all, and are easily subdued by pirates with automatic weapons.
"Clearly, they are tactically proficient at what they do," says Cmdr. Jane Campbell, spokeswoman for the U.S. Navy's 5th Fleet in Bahrain, which patrols the region.
At first, the pirates worked in the waters close to shore. Now, they're ranging into open waters, expanding their range with so-called mother ships. These vessels, often fishing trawlers, can hold several skiffs and travel hundreds of miles offshore to menace shipping lanes.
For now, money appears to be the primary motive for piracy, Middleton says. A few years ago, ransoms in the tens of thousands of dollars were common. Last year, pirates gathered ransoms of a few hundred thousand dollars. In 2008, they have been topping $1 million. Ransom payments could total $30 million this year, Middleton says.
In one case, Middleton wrote, the ransom was paid in cash delivered by boat to the pirates on the captured ship. After splitting the cash, the pirates slipped away at night and evaded capture.
When coalition warships board pirate ships, they dispose of the weapons, but have to let the suspects go, Vice Adm. Bill Gortney, commander of the 5th Fleet, told USA TODAY on Wednesday. "That is the single biggest shortfall that we have. We could have a huge effect if we could solve that problem."
Fighting back
The challenge of protecting more than 16,000 ships that move through the region is enormous. Ships from the 5th Fleet, NATO, Russia and other countries cruise the waters. But the pirates' hunting grounds are vast: more than 1 million square miles. That's an area roughly four times the size of Texas or the Red and Mediterranean seas combined.
"We can't be everywhere," Gortney says. "They can be fishermen and 10 minutes later they're on the vessel," he says. "Once they're onboard the vessel, we have a hostage situation."
In recent months, there has been some success in fending off pirates. Last month, pirates captured 31% of the ships they attacked compared with 53% in August, according to the 5th Fleet.
On Tuesday, for example, the Indian Navy encountered a suspected pirate mother ship in the Gulf of Aden towing two speedboats, an Indian government statement said. The suspected pirates, seen brandishing rocket-propelled grenade launchers, fired at the Indian ship.
The INS Tabar returned fire and sank the ship. The suspected pirates fled on the speedboats.
The International Maritime Organization has urged its members to use a recommended corridor in the sea that is patrolled by the U.S. Navy, NATO and ships from other countries.
An average of 15 military vessels operate in the Maritime Security Protection Area, which was established Aug. 22 to protect commercial ships in the Gulf of Aden. Participating nations include the United States, Denmark, France, Greece, India, Italy, Malaysia, Netherlands, Russia, Saudi Arabia, Turkey, and the United Kingdom, according to Royal Navy Cdr. Stephen Chaston, a NATO spokesman.
Another challenge: Ship operators often are reluctant to carry firearms on board, says Nick Knittel, vice president of Miami-based McRoberts Maritime Security. Weapons create bureaucratic problems, because shipmasters often must declare any firearms when entering a port, and the weapons typically are impounded by that country's authorities until the ship departs, he says.
Having weapons on board could make a situation more dangerous, says Knittel, a former Army captain with the 101st Airborne Division. Crewmembers could be wounded in a firefight, Knittel says, and pirates could capture the weapons and use them against the crew.
Many large cargo ships now feature satellite tracking devices that allow companies to monitor for any changes in course or speed — and contact authorities if there are signs of a pirate attack. Crews sometimes are trained to use fire hoses to fend off pirates, and many large cargo ships sailing high-risk routes light their decks with floodlights at night and assign crewmembers to watch for attackers.
Shipping companies also can hire armed guards to ride on ships, but in many cases "it's very expensive to have armed private security, like hiring over-the-seas mercenaries," Knittel says.
Even so, the surge in pirate attacks is prompting shipping companies to consider new ways to protect their crews and cargo.
Blackwater Worldwide, the private security firm that protected U.S. diplomats in Iraq, has offered its services and 183-foot ship, the McArthur, to any nation that wants to pay to protect its cargo. It's not clear what security measures had been taken on the Sirius Star.
Having security teams aboard cargo ships may help deter attacks, Gortney says. "Companies don't think twice about using security guards to protect their valuable facilities onshore. Protecting valuable ships and their crews at sea is no different."
Fixing Somalia
The ultimate solution to piracy: creating a stable government in Somalia, which is nominally under the control of a faction backed by neighboring Ethiopia. That, says Mukundan of the International Maritime Bureau, "could take decades."
Since the ouster of longtime dictator Mohamed Siad Barre in 1991, Somalia has been under the influence of various ethnic and religious factions. U.S. troops landed there in 1992 to help restore order; in October 1993, a battle between Army Rangers and insurgents left 18 soldiers and hundreds of Somalis dead. That battle inspired the book and movie Black Hawk Down.
The United States backed the ouster of the government led by the fundamentalist Islamic Courts Union in 2006.
It's a "stateless society," says Stephen Morrison, an Africa expert at the Center for Strategic and International Studies in Washington. "Until you get some semblance of order and governance within Somalia, you're going to see these kinds of developments — piracy, the insertion of radical Islamist movements … and you're going to see humanitarian catastrophe."http://www.usatoday.com/news/world/2008-11-19-pirates_N.htm
Russia sends in the navy to fight pirates Reuters | Friday, 21 November 2008 Russia will keep a warship off the coast of East Africa to patrol against Somali pirates.
This month one of its destroyers, the Neustrashimy (Fearless), scared off pirates trying to capture ships in the Gulf of Aden.
"After the Neustrashimy, ships from other fleets of the Russian navy will head to the region," Admiral Vladimir Vysotsky told the RIA Novosti news agency. Military forces across the world are trying to protect cargo ships using the sea corridor around the Horn of Africa linking Europe and Asia – one of the busiest trade routes in the world. On Saturday, pirates captured a Saudi Arabian tanker carrying a cargo of oil valued at around US$100 million.
The aging Russian navy wants to improve its image after a series of deadly accidents.
This month 20 people died on a Russian submarine when fire extinguishing equipment went off, releasing a toxic gas which asphyxiated them.
It was the worst Russian naval accident since an explosion on a submarine killed 118 sailors in 2000.
Depression 2009: What would it look like?
Lines at the ER, a television boom, emptying suburbs. A catastrophic economic downturn would feel nothing like the last one.
(Greg Klee/Globe Staff Illustration)
By Drake Bennett
November 16, 2008
OVER THE PAST few months, Americans have been hearing the word "depression" with unfamiliar and alarming regularity. The financial crisis tearing through Wall Street is routinely described as the worst since the Great Depression, and the recession into which we are sinking looks deep enough, financial commentators warn, that a few poor policy decisions could put us in a depression of our own.
It's a frightening possibility, but also in many ways an abstraction. The country has gone so long without a depression that it's hard to know what it would be like to live through one.
Most of us, of course, think we know what a depression looks like. Open a history book and the images will be familiar: mobs at banks and lines at soup kitchens, stockbrokers in suits selling apples on the street, families piled with all their belongings into jalopies. Families scrimp on coffee and flour and sugar, rinsing off tinfoil to reuse it and re-mending their pants and dresses. A desperate government mobilizes legions of the unemployed to build bridges and airports, to blaze trails in national forests, to put on traveling plays and paint social-realist murals.
Today, however, whatever a depression would look like, that's not it. We are separated from the 1930s by decades of profound economic, technological, and political change, and a modern landscape of scarcity would reflect that.
What, then, would we see instead? And how would we even know a depression had started? It's not a topic that professional observers of the economy study much. And there's no single answer, because there's no one way a depression might unfold. But it's nonetheless an important question to consider - there's no way to make informed decisions about the present without understanding, in some detail, the worst-case scenario about the future.
By looking at what we know about how society and commerce would slow down, and how people respond, it's possible to envision what we might face. Unlike the 1930s, when food and clothing were far more expensive, today we spend much of our money on healthcare, child care, and education, and we'd see uncomfortable changes in those parts of our lives. The lines wouldn't be outside soup kitchens but at emergency rooms, and rather than itinerant farmers we could see waves of laid-off office workers leaving homes to foreclosure and heading for areas of the country where there's more work - or just a relative with a free room over the garage. Already hollowed-out manufacturing cities could be all but deserted, and suburban neighborhoods left checkerboarded, with abandoned houses next to overcrowded ones.
And above all, a depression circa 2009 might be a less visible and more isolating experience. With the diminishing price of televisions and the proliferation of channels, it's getting easier and easier to kill time alone, and free time is one thing a 21st-century depression would create in abundance. Instead of dusty farm families, the icon of a modern-day depression might be something as subtle as the flickering glow of millions of televisions glimpsed through living room windows, as the nation's unemployed sit at home filling their days with the cheapest form of distraction available.
The odds are, most economists say, we will yet avoid a full-blown depression - the world's policy makers, they argue, have learned enough not to repeat the mistakes of the 1930s. Still, in a country that has known little but economic growth for 50 years, it matters to think about what life would look like without it.
There is, in fact, no agreed-upon definition of what a depression is. Economists are unanimous that the Great Depression was the worst economic downturn the industrial world has ever seen, and that we haven't had a depression since, but beyond that there is not a consensus. Recessions have an official definition from the National Bureau of Economic Research, but the bureau pointedly declines to define a depression.
What sets a depression apart, most economists would agree, are duration and the scale of joblessness. To be worthy of the name, a depression needs to be more than a few years long - far longer than the eight-month average of our recent recessions - and it needs to put a lot of people out of work. The Great Depression lasted a decade by some measures, and at its worst, one in four American workers was out of a job. (By comparison, unemployment now is at a 14-year high of 6.5 percent.)
In a modern depression, the swelling ranks of the unemployed would likely change the landscape of the country, uprooting people who would rather stay where they are and trapping people who want to move. In the 1930s, this took the visible form of waves of displaced tenant farmers washing into California, but it also had another, subtler effect: it froze the movement of the middle class. The suburbanization that was to define the post-World-War-II years had in fact started in the 1920s, only to be brought sharply to a halt when the economy collapsed.
Today, a depression could reverse that process altogether. In a deep and sustained downturn, home prices would likely sink further and not rise, dimming the appeal of homeownership, a large part of suburbia's draw. Renting an apartment - perhaps in a city, where commuting costs are lower - might be more tempting. And although city crime might increase, the sense of safety that attracted city-dwellers to the suburbs might suffer, too, in a downturn. Many suburban areas have already seen upticks in crime in recent years, which would only get worse as tax-poor towns spent less money on policing and public services.
"You could have a sort of desurburbanization phenomenon," suggests Michael Bernstein, a historian of the Depression and the provost of Tulane University.
The migrations kicked off by a depression wouldn't be in one direction, but a tangle of demographic crosscurrents: young families moving back to their hometowns to live with the grandparents when they can no longer afford to live on their own, parents moving in with their adult children when their postretirement fixed incomes can no longer support them. Some parts of the country, especially the Rust Belt, could see a wholesale depopulation as the last remnants of the American heavy-manufacturing base die out.
"There will be some cities like Detroit that in a real depression could just become ghost towns," says Jeffrey Frankel, a Harvard economist and member of the National Bureau of Economic Research committee that declares recessions. (Frankel does not, he emphasizes, think we are headed for a depression.)
At the household level, the look of want is different today than during the last prolonged downturn. The government helps the unemployed and the poor with programs that didn't exist when the Great Depression hit - unemployment insurance, Medicaid, food stamps, Social Security for seniors. Beyond that, two of the basics of existence - food and clothing - are a lot cheaper today, thanks to industrial agriculture and overseas labor. The average middle-class man in the late 1920s, according to the writer and cultural critic Virginia Postrel, could afford just six outfits, and his wife nine - by comparison, the average woman today has seven pairs of jeans alone. So we're less likely to see one of the iconic images of the Great Depression: Formerly middle-class workers in threadbare clothes lining up for free food.
If we look closely, however, we might see more former lawyers wearing knockoffs, doing their back-to-school shopping at Target or Wal-Mart rather than Banana Republic and Abercrombie & Fitch. Lean times might kill off much of the taboo around buying hand-me-downs, and with modern distribution networks - and a push from the reduce-reuse-recycle mind-set of environmentalism - we might see the development of nationwide used-clothing chains.
In general, novelty would lose some of its luster. It's not simply that we'd buy less, we'd look for different qualities in what we buy. New technology would grow less seductive, basic reliability more important. We'd see more products like Nextel phones and the Panasonic Toughbook laptop, which trade on their sturdiness, and fewer like the iPhone - beautiful, cleverly designed, but not known for durability. The neighborhood appliance shop could reappear in a new form - unlicensed, with hacked cellphones and rebuilt computers.
And while very few would starve, a depression would change how we eat. Food costs remain far below what they were for a family in the 1920s and 1930s, but they have been rising in recent years, and many people already on the edge of poverty would be unable to feed themselves on their own in a harsh economic climate - soup kitchens are already seeing an uptick in attendance. At the high end of the market, specialty and organic foods - which drove the success of chains like Whole Foods - would seem pointlessly expensive; the booming organic food movement could suffer as people start to see specially grown produce as more of a luxury than a moral choice. New England's surviving farmers would be particularly hard-hit, as demand for their seasonal, relatively high-cost products dried up.
According to Marion Nestle, a food and public health professor at New York University, people low on cash and with more time on their hands will cook more rather than go out. They may also, Nestle suggests, try their hands at growing and even raising more of their own food, if they have any way of doing so. Among the green lawns of suburbia, kitchen gardens would spring up. And it might go well beyond just growing your own tomatoes: early last month, the English bookstore chain Waterstone's reported a 200 percent increase in the sales of books on keeping chickens.
At the same time, the cheapest option for many is decidedly less rustic: meals like packaged macaroni and cheese and drive-through fast food. And we're likely to see a move in that direction, as well, toward cheaper, easier calories. If so, lean times could have the odd effect of making the population fatter, as more Americans eat like today's poor.
To understand where a depression would hit hardest, however, look at the biggest-ticket items on people's budgets.
Housing, health insurance, transportation, and child care are the top expenses for American families, according to Elizabeth Warren, a bankruptcy law specialist at Harvard Law School; along with taxes, these take up two-thirds of income, on average. And when those are squeezed, that could mean everything from more crowded subways to a proliferation of cheap, unlicensed day-care centers.
Health insurance premiums have risen to onerous levels in recent years, and in a long period of unemployment - or underemployment - they would quickly become unmanageable for many people. Dropping health insurance would be an immediate way for families to save hundreds of dollars per month. People without health insurance tend to skip routine dental and medical checkups, and instead deal with health problems only when they become acute - meaning they get their healthcare through hospital emergency rooms.
That means even longer waits at ERs, which are even now overtaxed in many places, and a growing financial drain on hospitals that already struggle to pay for the care they give uninsured people. And if, as is likely, this coincided with cuts in money for hospitals coming from cash-strapped state and local governments, there's a very real possibility that many hospitals would have to close, only further increasing the burden on those that remain open. In their place people could rely more on federally-funded health centers, or the growing number of drugstore clinics, like the MinuteClinics in CVS branches, for vaccines, physicals, strep throat tests, and other basic medical care. And as the costs of traditional medicine climbed out reach for families, the appeal of alternative medicine would in all likelihood grow.
Higher education, another big expense, would probably take a hit as well. Students unable to afford private universities would opt for public universities, students unable to afford four-year colleges would opt for community colleges, and students unable to afford community college wouldn't go at all. With fewer applicants, admissions standards would drop, with spots that once would have been filled by more qualified, poorer students going instead to wealthier applicants who before would not have made the cut. Some universities would simply shrink. In Boston, a city almost uniquely dependent on higher education, the results - fewer students renting apartments, going to restaurants and bars, opening bank accounts, buying books, taking taxis - would be particularly acute.
A depression would last too long for unemployed college graduates to ride out the downturn in business or law school, so people would have to change career plans entirely. One place that could see an uptick in applications and interest is government work: Its relative stability, combined with a suspicion of free-market ideology that would accompany a truly disastrous downturn, could attract more people and even help the public sector shake off its image as a redoubt for the mediocre and the unambitious.
In many ways, though, today's depression would not look like the last one because it would not look like much at all. As Warren wrote in an e-mail, "The New Depression would be largely invisible because people would experience loss privately, not publicly."
In the public imagination, the Depression was a galvanizing time, the crucible in which the Greatest Generation came of age and came together. That is, at best, only partly true. Harvard political scientist Robert Putnam has found that, for many, the Depression was isolating: Kiwanis clubs, PTAs, and other social groups lost around half their members from 1930 to 1935. And other studies on economic hardship suggest that it tends to sap people's civic engagement, often permanently.
"When people become unemployed in the Great Depression, they hunker down, they pull in from everybody." Putnam says.
That effect, Putnam believes, would only be more pronounced today. The Depression was, famously, a boom time for movies - people flocked to cheap double features to escape the dreariness of their everyday poverty. Today, however, movies are no longer cheap. Nor is a day at the ballpark.
Much of a modern depression would unfold in the domestic sphere: people driving less, shopping less, and eating in their houses more. They would watch television at home; unemployed parents would watch over their own kids instead of taking them to day care. With online banking, it would even be possible to have a bank run in which no one leaves the comfort of their home.
There would be darker effects, as well. Depression, unsurprisingly, is higher in economically distressed households; so is domestic violence. Suicide rates go up in tough times, marriage rates and birthrates go down. And while divorce rates usually rise in recessions, they dropped during the Great Depression, in part because unhappy couples found they simply couldn't afford separation.
In precarious times, hunkering down can become not simply a defense mechanism, but a worldview. Grant McCracken, an anthropologist affiliated with MIT who studies consumer behavior, calls this distinction "surging" vs. "dwelling" - the difference, as he wrote recently on his blog, between believing that the world "teems with new features, new things, new opportunities, new excitement" and thinking that life's pleasures come from counting one's blessings and appreciating and holding onto what one already has. Economic uncertainty, he argues, drives us toward the latter.
As a nation, we have grown very accustomed to the momentum that surging imparts. And while a depression remains far from inevitable, it's as close as it has been in a lifetime. We might want to get a sense for what dwelling feels like.
http://www.boston.com/bostonglobe/ideas/articles/2008/11/16/depression_2009_what_would_it_look_like/