Sunday, September 30, 2007

Third Party For Fundies

This story is music to my ears:

Alarmed at the chance that the Republican party might pick Rudolph Giuliani as its presidential nominee despite his support for abortion rights, a coalition of influential Christian conservatives is threatening to back a third-party candidate in an attempt to stop him.

The group making the threat, which came together Saturday in Salt Lake City during a break-away gathering during a meeting of the secretive Council for National Policy, includes Dr. James Dobson of Focus on the Family, who is perhaps the most influential of the group, as well as Tony Perkins of the Family Research Council, the direct mail pioneer Richard Viguerie and dozens of other politically-oriented conservative Christians, participants said. Almost everyone present expressed support for a written resolution that “if the Republican Party nominates a pro-abortion candidate we will consider running a third party candidate.”

...

Participants in the group that endorsed the resolution said they reached their position hearing an assessment of the state of the Republican primary from Mr. Perkins, who acts as a point man in Washington for the movement. Mr. Perkins told them that Mr. Giuliani could plausibly win the primary if he carried Florida, which is also a state with many conservative Christian voters, and now was the best-chance to stop any momentum behind the campaign.

Who will the fundies settle on as a third party candidate?

Pat Buchanan?

Alan Keyes?

Jesus?

Hard to say, but this story will really send Tweety Bird Matthews into hysterics on Hardball.

He's been saying that those in the press who say the fundies won't back St. Rudy because of the abortion/family values issues are wrong.

But it sure doesn't sound like they are.

Who Really Belongs In The Rubber Room?

Leonard Brown, a veteran physics teacher at Cardozo High School, languishes in the New York City Department of Education Rubber Room these days after he was charged with "having made physical contact with a student" during a science demonstration when he asked her to push her hands up against him with all her weight.

Brown writes that he has been using this lesson for the past 18 years to demonstrate one of the axioms of Newton’s Third Law of Motion, which states that for every action there is an equal and opposite reaction.

Brown says never in all that time has there been a complaint about impropriety during the lesson but nonetheless he now faces charges against him pursuant to the 3020a State Education Law.

This means the city is trying to have him permanently removed from the classroom and strip him of his teaching license.

While Leonard Brown sits in the Rubber Room awaiting his fate, another city employee continues to work unhindered despite some pretty serious discrimination and harassment charges made against him.

This city employee has been accused of the following:

* asking a female employee if she was giving her boyfriend "good" oral sex.

* saying "I'd like to do that" and "That's a great piece of a--" to describe women in the office.

* pointing out a young female employee and telling another female employee, "If you looked like that, I would do you in a second."

* telling a pregnant employee to "Kill it!" in reference to her baby and saying "Great! Number 16!" -- an apparent reference to the number of women in the company who were pregnant or had maternity-related status.

These are just some of the specific allegations made against this city employee.

There are others but they all add up to one thing - this city employee with immense power who supervises hundreds of thousands of other city employees has been accused of creating a work atmosphere where he and "other male managers at the company made 'repeated and unwelcome' sexual comments, overtures and gestures," and contributed "to an offensive, locker-room culture."

This city employee is of course Mayor Michael Bloomberg.

Bloomberg, as I posted here on Friday, has been hit with at least three sexual harassment law suits in the past. He settled one out of court, paying the accuser off quietly and insisting upon a confidentiality agreement in the case. Another suit was quietly withdrawn by the accuser after her lawyer and Bloomberg's lawyers met for some "discussions." His company, Bloomberg LP, is currently being sued by the Equal Employment Opportunity Commission for gender discrimination after at least four female employees accused Bloomberg LP of discriminating against them either during pregnancy or upon their return from maternity leave.

Now it is true that the current discrimination allegations made against Bloomberg LP all allegedly took place after Bloomberg stepped down from day-to-day operations running the company, but the previous sexual harassment allegations were all made against Bloomberg himself and an argument can be made that the alleged gender discrimination practices currently pursued by the management of Bloomberg LP started when Mayor Mike himself was running the company (since all of the sexual harassment charges I detailed above stem from his time as CEO.)

I cannot fathom why it is that Leonard Brown, an 18 year teaching veteran who was simply trying to teach Newton's Law to students, sits in the DOE Rubber Room for months on end as the city cooks up reasons to fire him while Mayor Michael Bloomberg, accused of saying things like "That's a great piece of a--" and "If you looked like that, I would do you in a second" gets to run around Europe drumming up support and media buzz for his independent presidential bid.

I also cannot understand why there is not more outrage over these allegations from both the news media and the public.

Let's be honest here - wouldn't we hear a lot more outrage about these sexual harassment and gender discrimination charges if they were made against a teacher?

I know we would.

The teacher would be tried and convicted in the court of public opinion (otherwise known as the front covers of the NY Daily News and NY Post) while the UFT threw up their collective hands and said "Sorry, we've done all we can do."

And yet somehow Michael Bloomberg has managed to avoid serious scrutiny over some truly disturbing allegations that may or may not be true but certainly are much more troubling than what Leonard Brown is accused of doing in physics class and certainly shouldn't be glossed over the way they currently have been.

Saturday, September 29, 2007

Bank Failure

Is this just a blip on the radar or a sign of worse things to come?

ING Direct, a subsidiary of the Dutch financial group, is to take over the customers and insured deposits of NetBank, an online lender with $2.5bn (£1.2bn) in assets that was shut down on Friday by the US government following losses on subprime mortgages and other loans.

The closure marks the largest US bank failure since the end of the savings and loan crisis in the early 1990s.

It also underscores the ongoing impact of the US mortgage crisis, which has destabilised banks around the world, including Northern Rock in the UK.

ING said it would take on about $1.5bn in deposits insured by the Federal Deposit Insurance Corporation. It said it had paid about $15m to acquire the deposits. ING will also acquire $724m in assets from NetBank, which filed for bankruptcy protection.

Arkadi Kuhlmann, ING Direct chief executive, said in an interview that ING stepped in partly to insure continued consumer confidence in companies such as his and NetBank that conduct all their banking business online and do not operate branches.

“This is all about confidence in the market,” he said. “Since we are the largest direct bank we were very pleased to assist and help out and hopefully take on these customers who will continue to do business on the Internet.”

First the run on Countrywide Bank, then the Northern Rock run, now the failure of Netbank.

The shills want you to think the credit crisis and subprime mortgage mess fall-out is over and you should go on with business as usual.

But I get the feeling that there will be more bank failures before this whole thing is over.

Too much money was lent out to people with no jobs, no income and no assets (NINJA's!!!) or to people in over there heads for this to be over already.

Friday, September 28, 2007

Inflation? What Inflation? (Continued)

Winner of the "no kidding" award of the day:

Commodities had the biggest monthly gain in 32 years, led by wheat, crude oil and gold, as the dollar's slump enhanced the appeal of energy, grains and precious metals as a hedge against inflation.

The 19-commodity Reuters/Jefferies CRB Index was up 8.1 percent this month, the most since July 1975. Wheat climbed to a record in September amid a global grain shortfall, boosting corn and soybeans. Oil also hit a record, and gold reached a 27-year high. The Federal Reserve cut borrowing costs to bolster the U.S. economy, sending the dollar tumbling.

``The Fed has signaled pretty clearly that they will answer the problem of a slowing economy with greater liquidity,'' said Chip Hanlon, who manages $1 billion at Delta Global Advisors Inc. in Huntington Beach, California. ``We're in a bullish phase for commodities.''

The Fed rate cut is already stoking inflation. Can't wait to see what happens after Uncle Ben showers us with a 25 bps cut in October and either a 25 or 50 bps rate cut in December.

$95 oil? $15 wheat bushels? $5 loaves of bread?

Gotta love this "bestest economy ever."

Harassment and Discrimination

Many in the mainstream media have fallen all over themselves to praise the possibility of an independent run for the White House by Mayor Moneybags.

David Broder, the "dean" of Washington journalism and a man who is considered the weather vane of conventional political wisdom, has been pushing a Bloomberg candidacy for quite a while now.

The conventional wisdom is that Moneybags, seen as "Mr. Competent" and "Mr Apolitical," would be a candidate who could appeal to people who cannot stomach the more polarizing figure of St. Rudy of 9/11 or want to forget the sex scandals of the Clinton years by NOT voting for Hillary Rodham Clinton.

Behind the conventional wisdom lies the presumption that Bloomberg is relatively sane, highly competent, has little political or personal baggage and more money than God to spend on campaigning.

But between the news of the sexual harassment suits filed against him personally in the past and yesterday's news that his company is being sued for gender discrimination, the conventional wisdom about Moneybags having little personal or political baggage just might be wrong.

First let's take a look at what the NY Sun has to say about the gender discrimination suit filed against his company yesterday:

New allegations of gender-based discrimination against Mayor Bloomberg's financial news company, Bloomberg L.P., could be a political liability for the mayor if he opts to run for president.

The federal Equal Employment Opportunity Commission sued the company yesterday on behalf of three women who say they were discriminated against either during pregnancy or upon their return from maternity leave.

The EEOC, which acts on only a fraction of the discrimination complaints it receives, claims that the company engaged in "unlawful employment practices" between February 2002 and the present. That is after Mr. Bloomberg stepped down and removed himself from the company's daily operations. The mayor has been at the center of a gender discrimination lawsuit in the past, but he adamantly denied the charges.

A professor of public affairs at Baruch College, Douglas Muzzio, said that though yesterday's suit covers a period after Mr. Bloomberg exited, it could hurt politically if he decides to run for president as a third party candidate.

"It could be argued that he did it before, there was a culture, he was a man at the top," Mr. Muzzio said. "If he decides to run it could be very bad because then it dredges up all the old stuff."

That's an interesting point about Bloomberg creating a culture where women were discriminated against and/or treated as "less-than," because back in 2001 the Village Voice reported that Bloomberg seemed to be pretty indifferent to sexual harassment charges and the seriousness of rape when he was running the Bloomberg L.P. too:

In a 1998, 272-page deposition never before made public, Michael Bloomberg said he would believe a rape charge only if it was supported by "an unimpeachable third-party" witness, and accused an ex-employee who said she'd been raped by a Bloomberg executive of "extortion." Asked if he believed "false claims of rape are common," the GOP mayoral contender and CEO of a vast financial-information empire replied: "I don't have an opinion." [Read excerpts.]

Bloomberg's comments are drawn from one of three sexual harassment lawsuits that have dogged him since 1996, all of which contended that "a hostile environment of persistent sexual harassment and the general degradation of women" existed at the 8000-employee company of the same name that Bloomberg founded and ran. In addition to his uninformed testimony about rape, Bloomberg also displayed a chilly indifference to sexual harassment laws and guidelines during the deposition. Bloomberg declined to discuss these issues with the Voice, though a company spokeswoman insisted it has "zero tolerance" for harassment or rape. While the rape case of sales representative Mary Ann Olszewski has been mentioned in occasional news accounts, it has not attracted as much attention as a companion case filed by Sekiko Garrison, another member of the predominantly female, and usually young, attractive, and short-skirted sales force.

The Garrison case focused on a claimed pattern of gender discrimination, with several women quoted in court documents as saying that they'd "lost lucrative portions of their sales territory, were denied business opportunities and received inferior bonuses" once they got married or had children. Garrison alleged that Bloomberg told her twice to "kill it" when she informed him she was pregnant, adding "Great! Number 16," a reference to the number of women then on maternity leave.

Now I'm not the most astute political observer and I'm certainly no David Broder, but how is it that a man who went on record saying rape charges made by women against their bosses are often "extortion" opportunities, told a woman employee who informed him she was pregnant that she should "kill" the child, and created a "good ole boy" atmosphere in his company where women were systematically discriminated against and/or harassed manages to have the reputation for being a straight shooting political guy with little political or personal baggage?

It seems to me that if somebody in the press actually looked into the numerous sexual harassment and gender discrimination charges made against Moneybags in just the past decade alone, they would find a treasure trove of dirty laundry that would permanently end his White House dreams.

You can be sure that if these stories were swirling around Bill Clinton, the press would be following up on them.

How is it that Moneybags gets a free pass?

I have this theory that's it's because he runs a media company and that journalists in general are loathe to anger potential future employers by writing negative stories about them.

I dunno if that's the case, but it sure is disturbing that Mayor Michael Bloomberg manages to avoid scrutiny for these very serious harassment and discrimination charges.

Thursday, September 27, 2007

Is Our Childrens Learning?

Preznut Bush held an education photo op yesterday with Mayor Moneybags, Uncle Joel Klein, First Lady Laura Bush and a bunch of New York City school kids.

Bush extolled his record as "Education President" and demanded the Congress extend the No Child Left Behind law.

Bush said the recently released results of the National Assessment of Educational Progress tests that showed fourth and eighth grade math scores rising between 2003 and 2005 prove that NCLB is working.

Here's how Bushie put it:

"As yesterday's positive report card shows, childrens do learn when standards are high and results are measured."

Yes, the childrens sure do learn when standards and measured results are added to the system!

And just in case you think Bush made a mistake when he said the word childrens, he followed up with this statement:

"Congress needs to work with this administration to pass legislation that helps gives (sic) our children the education they deserve."

Keith Olbermann reported last night on Countdown that the White House scrubbed the grammatical errors from the transcript of the event to make Bushie sound both articulate and grammatical.

That's one way to have high standards!

Make the mistakes, then erase them like they never happened.

Kinda like he's tried to do with the Iraq war, Katrina, the budget deficit, global warming...

Remember, accountability is only for other people.

Mayor Moneybags and Uncle Joel Klein, despite being members of different parties from Preznut Bush, hold similar views about accountability and standards.

As Bushie said yesterday about Mayor Moneybags:

"The mayor is a no-nonsense guy who understands that if you set a goal, you expect to see results in achieving that goal...He knows how to ask tough questions and he's pretty good about moving aside bureaucracy that will inhibit the people he has selected to achieve the goal."

Sure, that's one way of looking at the mayor's record on education.

Another would be to note how the mayor has continually reorganized the New York City public school system because his reform program hasn't worked, yet he refuses to accept accountability for the changes he has brought about because he says the reforms are not all in place yet.

Of course the reforms will never all be in place because Moneybags is constantly changing them so that he never has to be held accountable to those high standards he and Klein and Bushie have for others.

It's kinda like when the White House press office scrubs the transcript of Preznut Bush's mistakes and makes believe they never happened.

The lesson for our childrens is quite simple - accountability is for other people.

Wednesday, September 26, 2007

How About Some Accountability?

The Department of Education in Washington released the results of nation-wide math and reading tests for fourth and eighth graders from 2005 - known as the National Assessment of Educational Progress - yesterday.

The NY Times reports that nationally math scores rose while reading scores did not, with eighth grade reading scores actually declining.

In New York State, however, students perform poorly on both the math and the reading tests compared to the nation at large.

For example, the percentage of eighth graders in New York State who are considered proficient in math decreased from 32% in 2003 to 30% in 2005 while overall nation-wide proficiency increased.

The NY Sun reports today that the discrepancies between the national test scores and the scores students receive on New York State tests, which tend to be much higher, are causing some to call for an independent audit of the state tests:

A Manhattan Institute scholar, Sol Stern, called the discrepancies a "spanking" for the New York State Education Department. "Its claims of fabulous improvements in eighth-grade reading and math scores for 2007 have proven to be just more hype," he said.

...

The president of the teachers union, Randi Weingarten, called the discrepancies a "cloud" on returns showing achievement overall went up nationwide.

"What these tests suggest is New York State has a very serious problem with its testing program," an education historian, Diane Ravitch, said, calling for an audit of the program.

The state education commissioner, Richard Mills, has so far rejected calls for an independent audit of the state tests.

Nobody has yet asked Uncle Joel Klein and Mayor Moneybags why the city tests scores are even better than the state test scores when the national test scores clearly show New York students lagging behind other states in achievement on the fourth and eighth grade math and reading tests.

But let's be honest here - if education experts like Sol Stern and Diane Ravitch think the NAEP test scores for NY State students call into question the integrity of the state tests, the NAEP results REALLY call into question the integrity of the city tests.

Perhaps as Moneybags continues to play coy with the national political press and flirt with the idea of running for president as the "Education Mayor" and "Mr. Competency," somebody in the national or city press can stop sucking up to him long enough to ask him some direct, pointed and knowledgeable questions about the validity of the test score increases he continually brags about and the integrity of his so-called education reforms.

In other words, how about somebody holds the "Accountability Mayor" accountable for his own horse hockey?

Let's start with an independent audit of the city tests.

Tuesday, September 25, 2007

Know Nothing About Education? Have A Charter School!

The LA Times runs a story today about Academia Avance, a Highland Park charter school that former teachers, former office workers, a former principal, and parents say has serious problems with financial impropriety, gross mismanagement and academic shortcomings.

The founder of Academia Avance - Ricardo Mireles, a former technical specialist for the Metropolitan Transit Authority and LA Unified school district - decided to open his own charter school after he helped set up computer and phone systems for the California Charter Schools Association.

The LA Times says Mireles thought he had "soaked up" enough about education while working for the charter school association as a computer and phone guy to start his own charter.

Apparently top officials at LA Unified agreed because he got his charter in the fall of 2005 and started the school with 100 sixth and seventh graders. He is planning to add a grade every year so that the school eventually teaches grades 6-12.

But former employees and parents say the place is a disaster. Mireles is described as an "autocrat" who burns through staff like cheap candles. Teachers quit and are replaced by office staff, parents of children, even Mireles himself. Rarely is a qualified teacher brought in.

Mireles pads attendance records to make his school look better to LA Unified. If a student is absent but can be contacted by staff on the phone at home, in the hospital or even in Mexico, that student is declared "present" on the attendance list. Mireles denies this is so but told a parents' forum that

We explained to parents and kids, even if your child is not in school and you come and talk to your teachers and get the homework, there's a value for that," he said. If the student comes on campus for 1 minute, that counts -- that's the way the average daily attendance rules work.

Heckuva way to educate the kids! Have them stay home, watch Maury and call in for the homework or go to Mexico for the week and call in long distance for it.

I bet Chancellor Klein in New York City, who also likes to pad attendance statistics himself, might find some use for Mireles' attendance innovations.

At any rate, even when the kids show up to Academia Avance, there are huge problems. For instance, in order to make the school environment look better than it actually is to regulators from the district, Mireles has a habit of moving classes from the actual school grounds to somewhere else:

He allowed the school district's charter-school division to believe that classes were actually taking place at nearby Ramona Hall or in the facilities of Plaza de la Raza, rather than at a Presbyterian church at North Avenue 53 and Figueroa Street.

For one visit by the charter-school division, the entire student body was moved to Ramona Hall, according to former Principal Carlos O. Cortez, former office manager Maria Lopez and former teacher Miller.

Mireles denied any deception. Sometimes the church was unavailable because of construction or church-related business; sometimes it wasn't the best venue for the day's instructional program, he said.

Why does Mireles feel the need to move classes to another locale when higher-ups from the district come?

Because Academia Avance has substandard classrooms, no heat, no air conditioning, inadequate services for the disabled, computers that don't work, and broken bathrooms.

You can see why Mireles would want to take the school on a class trip on those days when the charter school supervisors show up to evaluate his school.

Academia Avance is a dump.

Mireles says all these allegations are being made by disgruntled former employees so they shouldn't be believed, but even if they are true, none of the allegations amount to a crime, so everything is swell with Academia Avance.

The LA Times says charter schools like Academia Avance, which has low test score stats as well as the numerous complaints lodged about staff turnover, inadequate facilities and administrator impropriety, will probably survive:

The story of an embattled charter school facing the school board and the court of public opinion has emerged several times in the last year. Nearly all such schools have survived, whether the issue was low test scores, admission practices, questionable accounting or an unorthodox curriculum.

It seems that charter schools lead a charmed life in the LA Unified school district.

Apparently because these schools are charters, they are allowed to get away with huge problems like financial impropriety, attendance record fraud and broken down facilities that charter school advocates would be screaming about if the schools were regular old public schools with unionized employees.

On the plus side, it does seem that if you're looking for a change in job and you know nothing about education other than you once went to school sometime in the past, LA Unified has a charter school for you.

Monday, September 24, 2007

Sucking In The Seventies

Let's see, GM workers are staging their first strike since 1970.

The U.S. dollar achieved parity with the Canadian dollar for the first time since 1976.

Oil is nearing Seventies prices, adjusted for inflation.

The bond market is worried about inflation/stagflation.

The FBI says violent crime has risen at an alarming rate the last two years.

The U.S. is stuck in a war it can't win and it can't seem to get out of.

Heckuva job, Bushie - you brought back the Seventies!!!

Inflation Fears

Post-rate cut, the Wall Street Journal says the bond market's got 'em, although not so much the stock market. The Dow is just 180 points off its all time high. Even so, the Journal says some money managers believe the Fed will have to raise rates in the spring to offset the inflation they stoked with last week's mostly unexpected 50 bps rate cut:

Until the credit crisis struck, the Fed had signaled no intention of cutting rates so soon. Lower rates typically stimulate the economy by making it easier for companies, consumers and investors to borrow. If the Fed continues cutting rates before inflationary pressures have been stifled, it risks pushing inflation higher.

The Fed has acknowledged the concern, noting in the statement announcing last week's rate cut that "some inflation risks remain." Inflation could come from the still-booming global economy and from the lower rates themselves, which push more money into the economy, making it easier to raise prices.

Some money managers already are warning that inflation may force the Fed to raise rates early next year, taking back last week's gift. Higher rates would hurt stocks because they stifle the economy and make it harder for investors to borrow.

Something similar happened in 1999, when the Fed had to raise rates after cutting them during the 1998 financial crisis. The economy ended up in recession in 2001.

Stocks soared in the 1998-1999 period. The S&P increased by 39% during that time.

As of today, investors don't seem too worried about inflation. Marketwatch says Wall Street is set to extend its post-rate cut rally today and the Dow will probably will reach an all-time high sometime this week.

And yet, given the plummeting dollar (a euro is now worth $1.41 and the Canadian dollar achieved parity to the U.S. dollar), all these stock gains may not really mean what the bulls think they mean. Barry at The Big Picture quotes Jack Ablin:

"Growth in the S&P 500, up almost 8% in dollars year-to-date, dwindles to 1% when denominated in euros. If the dollar falls further, U.S. markets become much less compelling for overseas investors."

Huh - you mean some of the stock market gains are illusory increases from inflation?

Who knew?

Still, the market will reach all-time highs again and we will hear from the Larry Kudlows who will tell us that all is well with the bestest economy ever ( The Bush Economy!!!) and that all we need to make the economy even better is more tax cuts and more rate cuts. Don't worry, they will say, inflation is not a problem!!!!

Meanwhile, I went to the grocery this week and discovered bread was up 20 cents, tofu up 20 cents, soy-based foods up 30 cents, corn up 20 cents...

...gold is $739 a ounce, oil is $82 a barrel, gas prices are set to spike as a result of rising oil prices...

...Con Edison wants a 20% rate hike for energy, the MTA wants a 20% rate hike for a subway ride...

...yada, yada, yada...

Saturday, September 22, 2007

Gotta Wonder

Think these two headlines are related?

U.S. Stocks Surge the Most Since March After Fed Cuts Rates

Treasury 10-Year Notes Fall Most Since March 2006 On Inflation Concerns

Looks like the bond market has picked up the slack from the Fed on inflation worries.

Why Hammering Pelosi And Reid From The Left Is Counterproductive

Despite the anger from the left over the Dems' inability to end the war, as long as an intractable preznut has 41 senators willing to vote w/ him in the Senate on the war, the war will not end.

The Webb amendment was the best shot to end the war. It failed - only garnering 57 votes on the cloture motion.

John Warner, the so-called moderate Repub who looks out for the military men and women, voted against it.

Instead of calling him on his bullshit, the media ignored the vote and focused on the idiotic Move On vote instead.

Reid clearly should have never let the Move On vote come up. But my point is that as long as hypocrites like John Warner and Dick Lugar are unwilling to put their votes where their war criticism is and the media is unwilling to call them on their hypocrisy, NOTHING will change.

Hammering Dems for their inability to end the war only sets up an '08 where Repubs will be in the resurgence.

Not sure why anybody who's against the war would want that, but as I watch the criticism from the anti-war left hammer Pelosi and Reid, I think that's what's going to happen.

Think the war is going to end when Rudy is president and McConnell is running the Senate?

If the left keeps bashing Dems as weak and ineffectual, we'll all find out.

POSTSCRIPT: Repubs aren't very good at running occupations, nation-building or governing here at home, but they are good at

1. Message Discipline
2. Propaganda
3. Following their leaders

As Dems and liberals eat their own over the war and the inability of Reid to get 60 senators to vote against the war in a 51/49 Senate (and remember, Holy Joe Lieberman is one of the 51), I can't help but think Dems could use just a little bit of the above skills in this battle to end the war.

Toxic Spew

The NY Daily News reported yesterday that parents of students attending one of the mayor's small schools - the Information Technology High School in Long Island City - held a news conference along with two City Council members from Queens to protest that the school site "occupies a former metal-plating warehouse contaminated with lead and petrochemicals."

The Daily News goes to report that Mayor Moneybags and Chancellor Klein exploited a loophole in the law to avoid public scrutiny of the school site.

If the city had built the school on city-owned land, they would have to make the details about the entire project, including the ostensible clean-up of the toxins, public.

But the NY Times reports that the city instead leased the land for $1.5 million a year and then spent $20 million converting the warehouse for use as a high school and an occupational training center for disabled students.

The city is not required to make public any details about school buildings that are leased rather than owned outright by the city, which is why they made no details about this school and the problems with toxic waste public.

The Information Technology High School has been opened since 2003. The Department of Education claims they have tested the school building and have deemed the air quality good and the environmental quality "safe."

But according to the Times article, the pump outside the school that is supposed to pull vapors from the toxic plume under the school site and expel them has repeatedly malfunctioned and caused increased contamination levels at the site.

As a result,

the group monitoring the school’s environmental remedial system, Leggette, Brashears & Graham, Inc., advised the school system to shut down the pump until the New York State Department of Environmental Conservation could identify the cause of the increased contamination levels.

The Daily News also reports that some environmental advocates believe the building's vapor-extraction system might be making conditions at the site worse by "sucking up toxins from adjacent sites" and bringing them to the school site.

Parents and environmental advocates want the school retested for toxic contamination.

But the DOE continues to resist new testing, again saying that the school air quality has already been tested and deemed "safe" and the extraction system has "no faults."

Chancellor Klein, notably absent from said toxic waste dump while issuing his press release, said this about the problem:

"My understanding, based on all the reports we've heard, is that it is not toxic," Klein said. "But we will continue to do the appropriate testing and to make sure that obviously there's no exposure to our students."

Notice lawyer Klein's lawyerly response to the charges that the school is toxic and dangerous to students.

"Based on all the reports we've heard..."

"My understanding is...that it is not toxic..."

Heckuva way to parse language and avoid liability, Joel!

And notice too that Klein says he will continue to do "appropriate testing" of the school to see that it is safe.

By "appropriate testing," we must assume he means only tests that he approves of, and clearly new air quality tests and testing of the extraction system equipment are NOT tests he approves of.

Perhaps if these environmental air quality tests were standardized multiple choice tests that could be used for teacher merit pay he would be more inclined to support them.

In any case, it is clear that Klein will do nothing about this problem other than issue press releases from the safety of Tweed Courthouse.

And so as the Department of Education and the chancellor and the mayor do all they can to mitigate the damage from this story and make it go away, parents are left to wonder if their children are being irreparably damaged when they send them off to school every day.

As one parent told the Daily News:

"The school is great; his teachers are great. He's really learning," the Maspeth parent said. "[But] if we leave him here, we are just rolling the dice."

Another parent said:

"I want to be able to place my child in another school come Monday," he said. "Thank you. Give me my child. I'm out."

Given the track record of this mayor and this chancellor when it comes to transparency and honesty over safety issues in the schools, you'd have to think that pulling their kids out of the Information Technology High School is the best thing they can do.

Friday, September 21, 2007

Ron Paul Takes On Uncle Ben Over Currency Depreciation

Ron Paul asked Ben Bernanke a question yesterday at the House Banking Committee hearings on mortgage problems:

“I want to follow up on the discussion about moral hazard. I think we have a very narrow understanding about what moral hazard really is. Because I think moral hazard begins at the very moment that we create artificially low interest rates which we constantly do. And this is the reason people make mistakes. It isn’t because human nature causes us to make all these mistakes, but there is a normal reaction when interest rates are low that there will be overinvestment and malinvestment, excessive debt, and then there are consequences from this. My question is going to be around the subject of how can it ever be morally justifiable to deliberately depreciate the value of our currency?”

According to Scott Reamer at Minyanville, Paul then spoke about the rise in wheat, corn, soybean, oil and gold prices since Bernanke lowered the Federal Reserve's benchmark interest rate by 50 basis points and asked how he could consciously depreciate the value of the American currency when he knows it only helps Wall Street, banking interests and the rich over everybody else.

Reamer says Bernanke didn't answer Congressman Paul, but that doesn't mean we shouldn't look very closely at what Paul was asking:

You will not be surprised to know that B-52 Ben didn’t answer the question. He couldn’t answer the question (at least truthfully). Was he going to say that the Federal Reserve is a quasi-private institution whose prime directive is to cartelize and protect the profits of the banking industry? Was he going to say that the only policy the Fed knows is based on the flawed Keynesian logic that wealth can be created out of thin air via printing presses? Of course not.

But his non-answer is not germane. The element that Ron Paul introduced is: the morality of the Federal Reserve’s constant injection of credit into the system at the slightest hint of macroeconomic distress. And I mean slightest: we haven’t even seen a GDP print below 0. We were only down 4.2% from the ALL TIME high in the Dow (the Fed’s own research suggests that the stock market is the best leading indicator of the economy).

Back in July of 2006, I wrote a piece introducing this moral element into the discussion of the Federal Reserve’s monetary policies. I wrote then words that today, after a pre-emptive, forestalling 50 basis points decrease and more than $1 trillion in worldwide central bank injections of credit, are as germane as ever:

“A constant loss of value in the monetary unit forces all manner of dire consequences on economic actors: it favors consumption over saving, speculation over investment, capital over labor, and the young over the old; it prevents accurate economic calculation about the future and thus clouds investment horizons; it hollows out a country's middle class making for more class conflict between haves and have nots… there are grave time preference consequences as well that impact not only long term investment projects (as noted above) but also the very manner in which parents raise their children and how children care for their ageing parents, as well as the lessons of frugality and hard work that once were the bedrock of this nation.”

Bravo to Ron Paul for giving voice to the hundreds of millions or pensioners, savers, working stiffs, poor, fixed income beneficiaries, laborers, gasoline-, bread-, milk-, and egg-buyers who weren’t able to ask Mr. Bernanke why he – like every Fed chairman before him since 1913 – screwed them for the benefit of the top 5% of the population of this country.

The privileging of debt over savings in the modern American economy is really a problem.

With Uncle Ben printing money as fast as he can and throwing it into the air, I suspect we're going to get even more debt in the near future.

But eventually, the debts have to be paid.

What happens when it becomes clear we don't have the money.

I know - Uncle Ben will print more!!!

As they say in the Guinness commercial, "Brilliant!!!"

Uh, huh.

Thursday, September 20, 2007

Inflation? What Inflation?

Larry Kudlow and some clown from NRO just told me on Kudlow and Company that there is no inflation, so I shouldn't worry about headlines like these at Reuters:

Oil hits high over $84

U.S. dollar sinks to lifetime low vs euro

Gold hits 28-yr high on dollar fall

Inflation fears end rally, sending stocks down

I guess since there's no inflation, I shouldn't worry that the U.S. dollar is now on par with the Canadian dollar for the first time since 1976 either.

Or that every time I go to the grocery, food prices are up.

Or that my rent is set to go up $400 a month when and if I re-sign my lease.

Or that the MTA plans on raising a subway ride to $2.50.

Or that Con Edison wants (and probably will get) a 20% rate hike.

Don't worry, be happy, says Larry Kudlow - this is the bestest economy ever!!!

Ignore the price increases - price increases aren't inflation, they're a sign that you're living in the bestest economy ever - the Bush Economy!!!

Gee, it will be fun to see Kudlow try and spin the coming recession as "the bestest economy ever!!!"

UPDATE: Kevin Depew at Minyanville reports the following eye-opening numbers:

CORN RISES 3% IN CHICAGO
WHEAT RISES 1.8% ON CBOT
SOYBEANS RISE 1.6%
TREASURY YIELD GAP WIDEST SINCE MAY 2005

But don't worry - there's no inflation and plenty of price stability.

A Closer Look At The Manipulated School Crime Stats

We already know that Mayor Moneybags and Chancellor Klein manipulate test scores. The Daily News reported that back on September 4th.

We also know Moneybags and Klein manipulate the physical and sexual abuse complaints on city school buses. The Daily News reported that on September 16th.

As NYC Educator posted here
, today we learned from both the NY Times and the NY Daily News that Klein and Bloomberg are also manipulating crime statistics in public schools.

Boy, these guys know manipulation!

Let's take a closer look at how they do it.

Here's the NY Times account:

A sampling of large New York City high schools showed that the schools failed to notify the state of a significant number of violent or disruptive episodes in the 2004-5 school year, the city comptroller announced yesterday.

The comptroller, William C. Thompson Jr., said an audit showed that the city had not ensured that all principals accurately report violence in their schools, making it difficult for the public to assess their safety.

The audit examined an array of records in 10 schools, comparing them with computerized data sent to the state. It found, for example, that officials at Brooklyn’s Boys and Girls High School informed the state of 14 cases of violence or misbehavior through a special computer system, which the state uses to comply with reporting obligations under the federal No Child Left Behind law.

But the audit also found that in 41 additional cases the state was never informed, including one rape and an instance outside the school in which two students were “about to be jumped” by gang members.

At Alfred E. Smith Career and Technical Education High School in the Bronx, 133 cases, ranging from graffiti to the removal of six students from a particularly disruptive class, were noted in school records but not placed in the computer system and sent to the state, the audit found.

On average, more than one in five episodes at the 10 schools were not reported to the state, the audit found. Reporting varied widely among the schools; some reported most incidents, while others did not.

Chancellor Klein, ever the model for accountability so long as it is teachers being held accountable, promptly blamed the person who ran the audit of the 10 schools - New York City Comptroller Bill Thompson - for the mess and said the public school system has “one of the most comprehensive reporting systems in the country.”

Klein also said that if there was any fault on the part of the school system, it clearly lays with the principals and the school personnel who do the reporting of the crime statistics.

Never mind that it is the chancellor's guidelines, clearly approved by the mayor, that are so vague and open to interpretation that a school principal can fail to report rape and gang violence as crimes.

It's funny how the accountability in the school system always seems to reside just below Klein's level and certainly never gets anywhere near Moneybags either.

For his part, Comptroller Thompson - a candidate for mayor in '09 and probably not someone who is going to want to keep Chancellor Klein around to finish the Children First reforms - dismissed claims that his audit was imprecise and misleading:

"I think parents would want to know the accurate numbers as to whether a school is safe or not safe."

Failing to report every incident, he said, "creates a bit of illusion" that could deprive a school of public resources that might flow with a full accounting.

It also could deprive parents of the right to move their kids to safer schools. Students at schools on the state's list of persistently dangerous schools can request a transfer.

Not to mention it makes it look like Moneybags and Klein are doing a much better job with the school system than they really are.

Ironically, Moneybags released a set of statistics yesterday that showed major felony crime down 2% in schools, from 1,187 in fiscal year 2006 to 1,164 instances in 2007. Bloomberg also reported major felony crimes were down 22% in schools where he sent extra police as part of an anti-crime program. Thompson's audit showed on average more than 1 in 5 crimes or violent incidents were not reported in the 10 schools he audited.

While the comptroller's audit looked at 2004 and the mayor's vaunted stats released yesterday were for 2006-2007, you'd have to think that if there was underreporting in just the 10 schools Thompson looked at, there was underreporting in plenty more that he didn't look at.

You'd also have to think that the statistics Bloomberg released yesterday that he claims shows major reductions in school crime are as phony as his 4th grade math test score statistics.

It's good that Comptroller Thompson called Bloomberg and Klein on their phony crime stats the very day they released others showing how great a job they're doing running the system.

One final note about all this: while Klein seemed to dismiss the whole thing as political nonsense created by Thompson to help him in his mayoral bid in '09, we know from a Daily News report from last week that when principals fail to report incidents properly, deadly consequences can occur:

Heavy pressure to make a school seem less dangerous may have exacerbated a stroke that 15-year-old Mariya Fatima suffered at Jamaica High School in Queens last spring, the girl's family said.

The Daily News reported last week that Jamaica High officials may have waited too long to call for help because an assistant principal barred deans from dialing 911.

Although Thompson stopped short of saying the unreported incidents were deliberately covered up by unscrupulous officials, he referenced the story in The News about Mariya as an example of a "lax attitude" that "paints an artificial and illusory picture of what's actually going on."

Bloomberg and Klein need to open the books and show the methodology for their stats. They claimed in a statement that "The [controller's] methodology wouldn't make it to first base with a researcher worth their salt" because "it used old data, different crime definitions from the ones schools use and looked at only 10 schools."

Different crime definitions?

At one school, a rape wasn't reported as a crime.

Since when is rape not a crime?

Since Mayor Moneybags and Chancellor Klein rewrote the crime definitions!

Bloomberg And Klein Manipulate School Crime Statistics Too

We already know that Mayor Moneybags and Chancellor Klein manipulate test scores. The Daily News reported that back on September 4th.

We also know Moneybags and Klein manipulate the physical and sexual abuse complaints on city school buses. The Daily News reported that on September 16th.

Today we learn from both the NY Times and the NY Daily News that Klein and Bloomberg are also underreporting crime statistics in public schools.

Here's the NY Times account:

A sampling of large New York City high schools showed that the schools failed to notify the state of a significant number of violent or disruptive episodes in the 2004-5 school year, the city comptroller announced yesterday.

The comptroller, William C. Thompson Jr., said an audit showed that the city had not ensured that all principals accurately report violence in their schools, making it difficult for the public to assess their safety.

The audit examined an array of records in 10 schools, comparing them with computerized data sent to the state. It found, for example, that officials at Brooklyn’s Boys and Girls High School informed the state of 14 cases of violence or misbehavior through a special computer system, which the state uses to comply with reporting obligations under the federal No Child Left Behind law.

But the audit also found that in 41 additional cases the state was never informed, including one rape and an instance outside the school in which two students were “about to be jumped” by gang members.

At Alfred E. Smith Career and Technical Education High School in the Bronx, 133 cases, ranging from graffiti to the removal of six students from a particularly disruptive class, were noted in school records but not placed in the computer system and sent to the state, the audit found.

On average, more than one in five episodes at the 10 schools were not reported to the state, the audit found. Reporting varied widely among the schools; some reported most incidents, while others did not.

Chancellor Klein, ever the model for accountability so long as it is teachers being held accountable, promptly blamed the person who ran the audit of the 10 schools - New York City Comptroller Bill Thompson - for the mess and said the public school system has “one of the most comprehensive reporting systems in the country.”

Klein also said that if there was any fault on the part of the school system, it clearly lays with the principals and the school personnel who do the reporting of the crime statistics.

Never mind that it is the chancellor's guidelines, clearly approved by the mayor, that are so vague and open to interpretation that a school principal can fail to report rape and gang violence as crimes.

It's funny how the accountability in the school system always seems to reside just below Klein's level and certainly never gets anywhere near Moneybags either.

For his part, Comptroller Thompson - a candidate for mayor in '09 and probably not someone who is going to want to keep Chancellor Klein around to finish the Children First reforms - dismissed claims that his audit was imprecise and misleading:

"I think parents would want to know the accurate numbers as to whether a school is safe or not safe."

Failing to report every incident, he said, "creates a bit of illusion" that could deprive a school of public resources that might flow with a full accounting.

It also could deprive parents of the right to move their kids to safer schools. Students at schools on the state's list of persistently dangerous schools can request a transfer.

Not to mention it makes it look like Moneybags and Klein are doing a much better job with the school system than they really are.

Ironically, Moneybags released a set of statistics yesterday that showed major felony crime down 2% in schools, from 1,187 in fiscal year 2006 to 1,164 instances in 2007. Bloomberg also reported major felony crimes were down 22% in schools where he sent extra police as part of an anti-crime program. Thompson's audit showed on average more than 1 in 5 crimes or violent incidents were not reported in the 10 schools he audited.

While the comptroller's audit looked at 2004 and the mayor's vaunted stats released yesterday were for 2006-2007, you'd have to think that if there was underreporting in just the 10 schools Thompson looked at, there was underreporting in plenty more that he didn't look at.

You'd also have to think that the statistics Bloomberg released yesterday that he claims shows major reductions in school crime are as phony as his 4th grade math test score statistics.

It's good that Comptroller Thompson called Bloomberg and Klein on their phony crime stats the very day they released others showing how great a job they're doing running the system.

One final note about all this: while Klein seemed to dismiss the whole thing as political nonsense created by Thompson to help him in his mayoral bid in '09, we know from a Daily News report from last week that when principals fail to report incidents properly, deadly consequences can occur:

Heavy pressure to make a school seem less dangerous may have exacerbated a stroke that 15-year-old Mariya Fatima suffered at Jamaica High School in Queens last spring, the girl's family said.

The Daily News reported last week that Jamaica High officials may have waited too long to call for help because an assistant principal barred deans from dialing 911.

Although Thompson stopped short of saying the unreported incidents were deliberately covered up by unscrupulous officials, he referenced the story in The News about Mariya as an example of a "lax attitude" that "paints an artificial and illusory picture of what's actually going on."

Bloomberg and Klein need to open the books and show the methodology for their stats. They claimed in a statement that "The [controller's] methodology wouldn't make it to first base with a researcher worth their salt" because "it used old data, different crime definitions from the ones schools use and looked at only 10 schools."

Different crime definitions?

At one school, a rape wasn't reported as a crime.

Since when is rape not a crime?

Since Mayor Moneybags and Chancellor Klein rewrote the crime definitions!

Wednesday, September 19, 2007

What If Long-Term Interest Rates Rise?

When the Fed cut its benchmark interest rate by 50 basis points to 4.75% yesterday, the immediate assumption was that long-term interest rates will fall and help out homeowners with adjustable rate mortgages set to reset to a higher interest rate.

But the LA Times says that may not be the case:

The Federal Reserve's interest-rate cut will help many people save money on home-equity credit lines and adjustable-rate mortgages -- but whether it will revive the troubled housing market is far from clear.

One risk is that the Fed's move Tuesday could ignite inflation fears, which could drive up conventional mortgage rates and make matters worse for housing.

"If the Fed does revive inflation it's going to put a damper on housing and other activity in the economy" by pushing up long-term rates, said Gregory Hess, professor of economics at Claremont McKenna College in Claremont

...

New home buyers and homeowners who want to refinance into a 30-year loan face the biggest question mark, because it isn't certain that the Fed's reduction in its short-term rate will translate into lower long-term mortgage rates.

That's because long-term interest rates are set by the marketplace, not by the Fed. And one key consideration of investors in determining long-term rates is what inflation rate they expect, because inflation eats away at bonds' fixed returns.

If investors think the Fed's credit-easing move could stoke the economy and boost inflation pressures in 2008, that could result in long-term rates rising, analysts warn.

For the beleaguered housing market, that would mean "putting it in a worse bind" than it already faces, said George Goncalves, Treasury-market strategist at brokerage Morgan Stanley in New York.

On Tuesday, the 10-year Treasury note yield inched up to 4.47% from 4.46% on Monday, even as short-term rates fell. Thirty-year mortgage rates tend to track the 10-year T-note.

Still, because the 10-year T-note yield has tumbled from 5.05% in mid-July, 30-year home loan rates also have fallen. They averaged 6.31% nationwide last week, down from 6.73% in mid-July, according to mortgage finance giant Freddie Mac.

The Wall Street Journal also says the Fed's move may not help out mortgage holders because some mortgage rates are tied to the Libor:

There also is likely to be little immediate relief for borrowers with certain types of adjustable-rate mortgages. That's because the rates on some of these loans are tied to the London interbank offered rate, or Libor, which recently jumped sharply above the Fed funds rate because of the continuing credit crunch in the markets. Libor, which has drifted downward recently, is an interest rate charged by banks for short-term loans to each other.

"If Libor doesn't come down, there is no relief" for many mortgage borrowers, says James Bianco, president of Bianco Research LLC, a market-research firm in Chicago.

Homeowners with adjustable rate mortgages tied to the U.S. prime rate will see immediate relief. The major banks dropped their prime rate for borrowing yesterday by a full 50 basis points. But those tied to the Libor, not so much.

Same goes for adjustable rate student loans. Prime-based see relief, Libor-based do not.

Credit card holders will see relief. Interest rates should fall a bit for people carrying revolving debt.

Interestingly enough, I expected to see lower interest rates on savings accounts almost immediately after the Fed announcement, but so far that hasn't happened.

The WSJ says

Some banks have already started to reduce their rates or scale back their deals. Bank of America Corp., for instance, recently shortened the maturities on its promotional CDs paying 5% to four months from eight months.

Nevertheless, banks are going to be reluctant to cut rates before their competitors, in part because consumer deposits remain one of the cheapest sources of funds available for the banks, says Bankrate.com's Mr. McBride. In fact, average CD rates have barely budged in recent months with yields on five-, three- and one-year CDs currently at 4%, 3.77% and 3.76%. "That is very uncharacteristic," since CD yields normally move well in advance of a Fed action, he says. "Savers are getting a break."

Citibank actually raised interest rates on its Ultimate Money Account last week to 5.10% from 5.0%. This move came even with the expectation that Uncle Ben would cut at least 25 basis points a week later at the FOMC meeting.

Could it be that banks are so desperate for cash that they cannot afford to lower interest rates on savings accounts for fear that savers will pull their money out and go elsewhere?

I dunno.

Perhaps rates will fall later this week or next week, but as of now, yesterday's Fed cut hasn't lowered interest rates on many savings accounts and that may be a sign that the Fed move may not have the consequences Uncle Ben and his Merry Men wanted it to have.

Tuesday, September 18, 2007

Miracles

Wall Street reacted with glee today at Ben Bernanke's "Miracle of the 50 Basis Points Interest Rate Cut With Maybe More To Come."

Most of the shills on CNBC loved the move too and cooed for more cuts in the future.

City National Bank chief investment officer Richard Weiss says the markets today got “everything they wanted and more.”

Jon Evans, chief executive of Atlantic Central Bankers Bank, said “God bless the greatest central bank in the world. This is great news for the economy and the consumer.”

I decided to listen to The Move rather than watch Jim Cramer's show tonight, but I'm sure he's issuing lots of "boo-yah's!!!" in celebration of today's cuts.

But not everybody is gleeful:


Sept. 18 (Bloomberg) -- Interest rate cuts by Federal Reserve Chairman Ben S. Bernanke will spur inflation, cause the U.S. dollar to collapse and push the world's largest economy into recession, investors Jim Rogers and Marc Faber said.

``Every time the Fed turns around to save its friends on Wall Street, it makes the situation worse,'' Rogers said in an interview from Shanghai. ``If Bernanke starts running those printing presses even faster than he's doing already, yes we are going to have a serious recession. The dollar's going to collapse, the bond market's going to collapse. There's going to be a lot of problems in the U.S.''

Faber and Rogers, who both spoke today before the Fed decision on rates, said the central bank should raise borrowing costs to quell inflation and support the U.S. currency.

``The cause of the problems we have today, they are due to artificially low interest rates, expansionary monetary policies and extremely rapid credit growth that was fueled by a totally irresponsible Fed,'' said Faber, who oversees about $300 million as managing director of Hong Kong-based investment advisory company Marc Faber Ltd. ``It's suicidal to cut interest rates.''

I guess Faber and Rogers aren't believers in the "Miracle of the 50 Basis Points Interest Rate Cut With Maybe More To Come."

Heathens.

Helicopter Ben Rides To The Rescue With A Bailout

Cheap money for all!!!! Wheeeeee!!!!!!! Cheap money for everybody!!!!!!! Wheeeeee!!!!!!!!!!!

Bernanke lowered the Fed's benchmark interest rate to 4.75% and the discount window rate to 5.25%.

Wall Street roared with approval. The Dow ended up more than 335 points, the Nasdaq was up 70 and the S&P closed up 43.

In the Fed's statement, Bernanke said recession concerns trumped inflationary pressures and warranted the huge rate cuts, though the Fed says it will continue to monitor inflation developments carefully.

Meanwhile U.S. crude closed at $81.50 and is over $82 a barrel in extended hours trading.

Gold futures climbed to $730.50 an ounce for December - a 25 year high.

The dollar dropped to a new record low against the Euro and a fresh 30 year low against the Canadian dollar. It fell against most other major currencies.

Bonddad says the Fed clearly is spooked:

Until August 7, the Fed was primarily concerned about inflation. However, even at that meeting the Fed observed:

"Economic growth was moderate during the first half of the year. Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy."

So even at that meeting, the Fed thought growth would be OK. That was a month and a half ago. In a month and a half the enough things have gone wrong to warrant a 50 BP cut. And even then, the Fed is still concerned about inflation.

In other words, enough indicators have turned negative in the last month and a half to warrant exposing the economy to a higher-inflation monetary policy even at a time when the Fed is concerned about increasing inflation.

Barry at The Big Picture notes that after today's rate cuts, the Fed now has three problems

1. Recession concerns
2. Inflationary concerns
3. They have become Wall Street's bitch.

That last one's a real good point.

Bloomberg Cover-Up Of Deutsche Bank Fire Continues

The NY Times reported on Saturday that Mayor Michael Bloomberg tried to have firefighters involved in the deadly August 18th fire at the toxic Deutsche Bank Building "debriefed" by city lawyers before the they talked to prosecutors in District Attorney Robert Morgenthau's office about the incident.

Prosecutors believe the city may have been trying to scare the firefighters into silence about the incident in order to save higher ups from a criminal probe and/or limit the city's criminal liability in the case.

Today the NY Post writes in an editorial that Bloomberg has hired one of the nation's top trial lawyers to represent the city in the ongoing criminal probe of the Deutsche Bank Building fire. The lawyer, Gary Naftalis, has previously represented officials at Tyco, the former CEO of Arthur Andersen in the Enron case and the Bank of Credit and Commerce International (BCCI.)

Even the NY Post, normally a Bloomberg-friendly paper, wonders why Bloomberg would want lawyers "to get between Morgenthau and witnesses to a potential crime."

The Bloomberg administration claims they were merely trying "to offer to provide or pay for the firefighters' legal representation."

The NY Post editorial says it seems more likely they were trying to shape the firefighters' stories before the firefighters talked to prosecutors.

Now why would the "Accountability Mayor" want to do that?

Well, the Post says probably because the city failed to have an advance plan for fighting a fire in the Deutsche Bank Building and never inspected the site - even though a FDNY fire battalion chief had called for inspections of the building as part of the development of a pre-fire plan.

Because there were no inspections of the site by the city, the companies running the demolition of the building - John Galt Corporation and Bovis - were allowed to get away with numerous safety violations including the dismantling of the standpipe water system used to fight fires and the blocking of stairwells.

Two firefighters died as a result. Numerous others were injured.

Even worse, today's NY Daily News reports that the demolition of the Deutsche Bank Building was a nightmare of safety violations and near disasters long before the fatal August 18th fire. The Daily News says that federal documents show John Galt Corporation had repeatedly tried to mislead regulators about safety violations. For instance, Galt assured regulators that the standpipe water system was in "working condition" long after it had already dismantled it. Since nobody from the city came around to check Galt's claims, Galt got away with the violation.

Galt also tried to claim debris that was contaminated with toxic dust was "clean," but couldn't provide documentation to the Environmental Protection Agency to prove that claim. When the EPA came by to check Galt's claim, they found the 35th floor of the building contaminated with toxic dust. According to the EPA documents, Galt executives shrugged at the violations and said the building wasn't subject to any standards, "so what standard could it possibly fail?"

In addition, Galt nearly set the building on fire before the August 18th fire that killed the two firefighters and accidentally dropped pieces of molten metal from the building. Here's the Daily News account:

One of the worst days came on July 31, weeks before the blaze that killed Firefighters Robert Beddia and Joseph Graffagnino.

That day, CH2M Hill said Galt workers cutting steel on the 28th floor set afire safety netting hanging outside the building. Galt workers doused the blaze with extinguishers and a water hose.

Inspectors on the 23rd floor saw "pieces of molten metal" falling from above and landing on outside scaffolding.

Finally, they asked a Galt "management specialist" to identify the contents of drums of toxic waste that were to be transported from the building.

"After 15 minutes, it becomes apparent that the specialist is not really sure what is in each drum," the consultant wrote.

Two days later, the city Buildings Department ordered all burning work halted, issuing a violation for unsafe storage of combustible materials, records show.

A Fire Department spokesman declined to comment.

Sure the Fire Department had no comment. And sure Mayor Moneybags hired a high-priced defense lawyer who has made a career out of defending the indefensible (officials at Arthur Andersen, BCCI, and Tyco.)

They're trying to save their own hides.

Clearly higher-ups in the FDNY, the city Buildings Department and even City Hall should have known about all the safety violations that John Galt and Bovis were trying to get away with at the very high profile dismantling of the last vestige of 9/11.

And clearly somebody should have looked into the records of John Galt Corporation before it was hired to dismantle the building. With numerous ties to organized crime, the city and the state should have forced the Lower Manhattan Development Corporation to hire a less mobbed-up company.

But Deputy Mayor Dan Doctoroff, one of Bloomberg's top aides and a member of the LMDC, helped Galt get the gig.

Perhaps investigators should take a look at Deputy Dan's ties to this case?

And while they're at it, they should find out what Fire Commissioner Scoppetta and Mayor Bloomberg knew (or didn't know) about Galt, the safety violations and the dismantling process at the building.

Both Morgenthau and the state continue to investigate this case, even as the city tries to throw as many roadblocks in front of the investigators as it can.

Clearly there are reasons why Bloomberg feels the need to throw up so many roadblocks even while he claims to be doing everything he can to help the investigations along.

Can't wait to see what those reasons are.

Monday, September 17, 2007

U.K. Bank Run Continues

Problems at Britain's fourth largest mortgage lender continue from last week:

LONDON (MarketWatch) -- Shares of U.K. mortgage lender Northern Rock dropped as much as 34% on Monday, retreating further following reports that nervous customers, worried the bank would go under, have pulled out 2 billion pounds ($4 billion).

Shares of Northern Rock, down 33% at 296 pence in mid-morning trading, have now dropped around 50% since the company announced it may get an unspecified amount of funding from the Bank of England. See last week's story on emergency bailout.

The fresh share-price drop to start the week comes as customers flocked over the weekend -- either lining up at branches, or via phone and the Internet -- to withdraw money from the lender. Northern Rock opened an hour early to meet the demands of customers wanting their cash.

As of last Thursday, Northern Rock had 24 billion pounds in deposits.

The news dented the British pound once more and dragged stock markets in the U.K. and Europe lower for a second day.

Reuters reports that Northern Rock doesn't have much exposure to subprime mortgage problems.

Rather, Northern Rock "got into trouble when global worries about the widespread repackaging of poor-quality debt made banks reluctant to lend to each other in August."

So Northern Rock is a victim of the credit crunch.

Wall Street hopes Uncle Ben's helicopter ride this week will help that credit crunch.

But until there is some transparency with the banks and people figure out who is in trouble and who isn't as a result of the subprime and Alt-A mortgage problems, it doesn't seem like the credit crunch is going to go away.

And the interest rate cut will not filter through the economy quickly enough to solve short-term problems in the credit market.

While We Await Uncle Ben's Rate Cut

Wall Street is eagerly awaiting the Fed meeting tomorrow, hoping Ben Bernanke will cut 50 basis points from the Fed's benchmark interest rate and signal that more cuts will be coming down the road.

The Fed Fund Futures are pricing in a 42% probability of a 25 point interest rate cut versus a 58% probability for a 50 point rate cut from the current 5.25% rate.

If the Fed does cut rates, this will be the first interest rate cut after the Fed raised rates 17 times, going from 1% in June 2004 to 5.25% in June 2006.

I have a feeling that Bernanke will only cut the Fed rate by 25 basis points and will signal that inflation remains a concern.

Here's why:

Goldman Sachs is forecasting oil will increase to $85 by the end of the year and could hit $90.

Agriculture prices have been surging - wheat prices are at all-time highs in the Asian markets and wheat supplies are near all-time lows.

Gold and other commodity prices continue to rise.

Bernanke will lower rates, there is little doubt of that.

The weak August job numbers gave him cover for that.

But I just don't see how he justifies lowering the rate by more than 25 basis points when prices are so high and the Fed has been using inflation as an excuse to NOT cut rates for the last year when Wall Street investors were clambering for one.

Plus, he has to make a statement saying something like the "Fed will do everything it can to ensure growth and liquidity but must maintain vigilance against inflationary pressures."

If Bernanke does issue that kind of statement, I bet Wall Street doesn't rally, even after it gets its rate cut.

After all, investors are greedy - they want assurances from Ben that they're going to get larger and more frequent rate cuts through the end of the year.

UPDATE: Last night on 60 Minutes, Uncle Alan Greenspan repeated his warnings that inflation will be a big future problem and double digit interest rates will be needed to contain those pressures:

WASHINGTON (MarketWatch) -- Former Federal Reserve Board Chairman Alan Greenspan says his outlook for the future of the U.S. economy is "pretty gloomy."

In an interview with correspondent Lesley Stahl of the CBS News program "60 minutes," Greenspan said that over the long run, the biggest problem facing the U.S. economy is "the re-emergence of inflation," and rising interest rates.

How does Uncle Ben give Wall Street a full 100-200 basis points rate cut when inflation looms as such a problem and Uncle Alan says double digit interest rates will be needed again in the future to contain that problem?

Sunday, September 16, 2007

Another Bloomberg/Klein Cover-Up

Yesterday the NY Times reported that Mayor Moneybags Bloomberg tried to have city lawyers "debrief" firefighters involved in August 18th's deadly Deutsche Bank Building fire before the firefighters spoke to prosecutors in the district attorney's office. Prosecutors are concerned that Bloomberg and Fire Department officials are trying to cover-up malfeasance by city officials and/or limit the liability of the city in future lawsuits by having city lawyers scare city employees into silence.

In further Bloombergian cover-up news, today we learn from the NY Daily News that Mayor Moneybags and New York City Public Schools Chancellor Joel Klein have been hiding hundreds of complaints of abuse on city school buses:

The City Education Department hid 225 complaints of abuse aboard public school buses to keep the numbers down, a Daily News investigation found.

The hidden cases include some in which school investigators established that bus drivers or monitors beat children or covered up abuse aboard buses, documents show.

In one case, a driver used a school bus and his official uniform in a film playing himself as a New York City school bus driver who smokes marijuana, drinks beer and has sex - all while on duty.

In another hidden case, a driver and monitor admitted they'd covered up a razor attack on an 11-year-old boy.

In another, Department of Education records noted a driver had been suspended - but didn't say why. The new documents said the driver was operating a bus while drunk. DOE spokesman David Cantor said the documents were withheld due to an "oversight."

In a fourth case - perhaps the most disturbing - a school bus monitor witnessed a driver beat a 12-year-old special needs child on Dec. 20, 2005.

...

None of those cases was disclosed to The News, which requested the information under a Freedom of Information Law request. Last spring, the DOE insisted it had given The News all substantiated cases of physical and sexual abuse aboard buses in response to the FOIL request.

Now, officials say they have "discovered" 175 more cases. Officials also reclassified 50 more allegations of abuse aboard school buses in 2005 and last year that its investigators had termed "substantiated."

In some of the "unsubstantiated" cases, the department's investigators had determined there was ample evidence of wrongdoing and the department had imposed punishment, including decertifying bus monitors and drivers.

The revelations of the hidden cases comes after The News' series, "School Bus Disgrace," forced the department to admit the unit that investigates such abuse was in chaos.

The News found seven Education Department investigators were overwhelmed trying to probe 3,547 complaints of abuse on city school buses last year. The number of investigators remained flat, though the number of complaints shot up.

In previous reports, the Daily News has documented how the DOE has illegally "blacked out" public information on cases of physical and sexual abuse aboard city school buses.

The News says the DOE has admitted that at least 916 allegations that investigators had declared "unsubstantiated" were in reality never investigated because the DOE didn't have enough manpower.

When the Daily News asked for and received data from the DOE on abuse allegations on city school buses, they found "inconsistencies" in the data - namely the DOE kept changing the number of "substantiated" cases.

The News raised these "inconsistencies" with the DOE and that's when an additional 140 pages of records were turned over to the newspaper.

The DOE claims the reason why the records weren't first turned over to the Daily News was because "they were lost due to a mix-up."

Uh, huh.

Or the Department of Education was keeping two sets of books - one "real" set and one set that could be made public and be given to the news media.

Let's be honest here - this mayor and this chancellor are very good at maintaining and releasing statistics and records when the stats and the records make themselves and the city look good.

But when it comes to honestly complying with the law and releasing all public records related to the school system - even if those records show serious deficiencies in how the DOE and the city has run parts of the school system - then Bloomberg and Klein aren't so good.

On the flip side, Mayor Moneybags is pretty good at cover-ups and limiting scandal damage. Right now he's engaged in at least two cover-ups (school bus allegations, Deutsche Bank Building fire), yet he's managed to keep himself and his top deputies at the DOE and the FDNY from serious harm.

You can imagine how Bloomberg and Klein would react publicly if a principal or a teacher in a NY city school knew that "substantiated" cases of abuse had occurred, but the officials in charge did nothing about them.

Yet here are Mayor Moneybags and Chancellor Klein, big accountability guys that they are, helping to hide hundreds of cases of abuse on city school buses so that they aren't embarrassed publicly by the number of incidents.

I guess accountability is only for teachers and principals.

Saturday, September 15, 2007

Channeling Frankie Pentangeli's Brother


Mayor Bloomberg is big on accountability, as long as he and his political cronies are not the ones being held accountable.

In the case of the Deutsche Bank Building fire investigation, Bloomberg said he is making sure every city employee cooperates with the investigations into the disaster that killed two firefighters back on August 18. But the NY Times reports today that Fire Department officials directed several firefighters involved in the tragedy to meet with city lawyers last week before they were to be questioned by prosecutors at NY District Attorney Robert Morgenthau's office. The Fire Department employees ignored the directive by their superiors to meet with Bloomberg's lawyers before going to Morgenthau's office and instead gave their accounts of the fire to prosecutors without interference by city lawyers.

This is not the first time Bloomberg has tried to have city employees involved in a tragedy meet with city lawyers before offering their stories to prosecutors. Back in 2003, city employees were debriefed by Bloomberg's lawyers before they met with federal prosecutors investigating the crash of the Staten Island Ferry. At that time, federal prosecutors complained that the city lawyers had a chilling effect on the willingness of city employees to criticize their superiors or reveal information that would not be in either their superiors' or the city's interests to investigators.

Remember the scene in The Godfather II when Michael Corleone quashes Frankie Pentangeli's testimony before the Senate by bringing Pentangeli's brother in from Sicily to sit in the gallery and stare at Frankie during the hearings, scaring him into recounting allegations he has made against the Corleone Family?

Sounds like Bloomberg does the same thing with city lawyers during criminal investigations where malfeasance and/or criminal liability may be revealed by city employees.

Only this time the firemen involved wouldn't play Bloomberg's game and the investigation is proceeding without Bloombergian interference. This is important because there seems little doubt that the deaths of two firemen could have been prevented had city officials conducted inspections or looked into the companies doing the work at the high profile site. Here's how the Times article puts it:

Relations between Mr. Morgenthau’s office and City Hall have become strained as prosecutors press their investigation into the fire at the contaminated former bank building, which looms over ground zero and is both an ugly reminder of 9/11 and of the government’s slow progress in rebuilding Lower Manhattan.

Prosecutors are focusing not only on the firefighters’ deaths, but also on the actions of several contractors and city and state officials and agencies. The city faces potentially significant civil liability in the case.

In particular, prosecutors are reviewing the work of several contractors, examining why the building had not been properly inspected by the city, and exploring how a company with little experience was approved by the Lower Manhattan Development Corporation for the $60 million contract to demolish the building.

Firefighting units that responded to the blaze in the tower found that demolition work had created difficult conditions.

A standpipe used to deliver water to the upper floors had been dismantled, forcing fire companies to improvise with their own system of hoses, a procedure that delayed getting water on the fire.

Required inspections in the building, including tests of the standpipe, had not been done, and the stairwells had been sealed as part of efforts to remove asbestos.

Gee, no wonder Bloomberg tried to have city lawyers debrief the firemen before they met with prosecutors.

It sounds like the Fire Department, city agencies and the mayor himself have got some serious accountability problems in this case.

Friday, September 14, 2007

Uncle Alan Hammers Bush

There's nothing like a little after-the-fact criticism when it can't do any good. Uncle Alan Greenspan is engaging in plenty:

Sept. 14 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan criticized President George W. Bush for pursuing an economic agenda driven by politics rather than sound policy, with little concern for future consequences.

...

``Little value was placed on rigorous economic policy debate or the weighing of long-term consequences,'' he wrote.

Interestingly enough, Bush has placed little value on rigorous foreign policy debate or the weighing of long-term consequences of either underfunding the war in Afghanistan or launching a war of choice in Iraq.

Same goes for giving any thought to the long-term consequences of his environmental policies.

You know, when even Uncle Alan Greenspan - loyal Republican Party apparatchik and Ayn Rand accolyte - says Bush is a crappy preznut with a legacy of destructive policies, stupid decisions, and overall incompetence, you have to think Bushie's going down in history as WORST PREZNUT EVER.

Unless Karl Rove is the only one left to write the history books, that is.

POSTSCRIPT: According to the NY Times, Uncle Alan reserves his highest praise for Bill Clinton:

Of the presidents he worked with, Mr. Greenspan reserves his highest praise for Bill Clinton, whom he described in the interview as a sponge for economic data who maintained “a consistent, disciplined focus on long-term economic growth.” It was a presidency marred by the Monica Lewinsky scandal, he writes, but he fondly describes his alliance with two of Mr. Clinton’s Treasury secretaries, Robert E. Rubin and Lawrence H. Summers, in battling financial crises in Latin America and then Asia.

By contrast, Mr. Greenspan paints a picture of Mr. Bush as a man driven more by ideology and fulfilling campaign promises made in 2000, incurious about the effects of his own economic policy, and portrays an administration incapable of executing policy.

George W. Bush - worst preznut ever.

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