I'll try to live-blog during the day on Monday in this space, but suffice it to say Monday looks like a day of financial disaster in the U.S.
Lehman Brothers is expected to file for bankruptcy, Merrill Lynch looks like it'll sell its sell-the-good-silver self to Bank of America and AIG and Washington Mutual are on death's doorstep.
Earlier in the day on Sunday, the U.S. government said it would not guarantee that Lehman would be allowed to continue trading in the markets. End of Lehman. Workers were seen Sunday night carrying boxes out of the building. Their jobs will disappear too.
There's still plenty of money on Wall Street, the Wall St. Journal notes, and as careers end and stocks slide on Monday, it notes that Wall Street bosses are lining up to make a killing.
Still, it seems like a long time ago when the the brewing financial crisis was simply blamed on a few homeowners who bit off more than they could chew.
7:07 a.m. - Oil down to about $95. Dow futures down 348.
7:11 a.m. - Jim Rogers of Rogers Holdings on Marketplace this morning:
You are going to see more financial failures. You're going to see less credit. You're going to see a contraction of the American and world economy. Again, many people, many of us are going to have more difficult times. Some of us are going to do extremely well, but there will not be many of those.
7:15 a.m. - Was Lehman solvent when it handed out more than $5 billion in bonuses in 2007? Good question asked by the blog Credit Slips.
7:18 a.m. -- MPR's Chris Farrell will be on with Morning Edition host Cathy Wurzer around 7:54. His theme: The government... won't save everyone on Wall Street.
7:54 a.m. - Farrell sees the more stunning news being Merrill Lynch ("the broker to the working class"). The significance of the moment is the line in the sand the feds drew. "They needed to do that after the rescue of Freddie Mac and Fannie Mae." What do investors do? "My primary advice is don't do anything. I can spin out all kinds of scenarios. Most of the time when people make a dramatic move in their portfolio at a dramatic time like this, it's usually the wrong thing. Most people have gone conservative on their portfolios."
How bad can it get? "Really bad," he says. "When does this end? It doesn't appear that anything the authorities are doing can stop it. The long-term concern is economic growth. We've taken on way too much debt and the long-term trend is moving back from debt. But the economy breathes on debt."
8:25 a.m. - The Silver Lining Dept. As long as Eli Manning is still the top story in the city that never sleeps, perhaps the Republic is safe:
8:37 a.m. - Dow down 103. That's less than many thought, although it's still early.
9:02 a.m. - So much for that. Dow down 337.
9:08 a.m. - Bank of America is having a news conference to talk about its buyout of Merrill Lynch. "Good strategic fit" and "absolutely no pressure from the government" are the key elements so far. See
live archived video (CNBC).
10:38 a.m. - How does this turmoil play into the presidential race. The New York Times Caucus Blog notes Obama's and McCain's reaction today. Neither is in favor of federal bailouts.
11:07 a.m. - Updated time stamp on the post.
11:13 a.m. - Twin Cities' mortgage expert Alex Stenback, who writes the Behind the Mortgage blog, says:
The immediate impact on main street will be lower mortgage rates, as money runs to the safe haven of (now Govt guaranteed!) mortgage bonds and other securities (treasuries also are rallying today) to wait out the storm
11:23 a.m. - Whoa! Huh? Wilbur Ross, chairman and CEO of WL Ross & Co. on CNBC says up to 1,000 banks may close.
12:20 p.m. - Worry? Don't worry? I wish everyone would get on the same page.
Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide.
That "run" could accelerate as people realize the FDIC fund has about $50 billion to "insure" about $1 trillion in assets at the nation's financial institutions, says Roubini. "They're going to run out of money" unless Congress acts soon to recapitalize the FDIC.
1:05 p.m.- From The Sky is Not Falling side of the fence, Andrew Ross Sorkin, writing on the New York Times' DealBook blog:
Things are tough, but the economy is still in reasonable shape. All of these troubles at Lehman, Bear, A.I.G. and WaMu are attributable to the housing crisis. If we solve that, we will begin to emerge from the woods. While parts of the country are stabilizing, others appear caught in a declining feedback loop. It would help most if we found a floor on the housing decline. To the extent the government is the answer here, then this is where it should focus.
1:07 p.m. - The Dow is down 295 points. We've seen a lot worse on a lot better days. By the way, have you looked at Northwest Airlines stock lately? Even with energy prices and a poor economy, the share price is down only $1.22 from what it was when its merger with Delta was announced.
2:45 p.m.- How big of a deal is the financial meltdown? Maybe not that big of a deal in the big scheme of things, but in New York City there's talk that it may push the city into a recession. Thirty-thousand jobs may be lost in this mess, the Boston Globe says.
2:46 p.m. - Economic worries will take the spotlight of Sarah Palin and put the issue back in play in the campaign, says the Washington Post.
3:11 p.m. - Is one of your mutual funds listed here?
* Fidelity Select Brokerage & Investment, 4.4 percent of assets
* Morgan Stanley Financial Services, 3.2 percent
* Legg Mason Partners Aggressive Growth A, 3.2 percent
* API Efficient Frontier Value, 2.5 percent
* Tanaka Growth, 2.4 percent
3:14 p.m. - Oddest question of the day comes in a Chicago Tribune Q&A in which guy asks if the bonds in his UBS brokerage account are safe. The bonds are General Motors.
3:17 p.m. - Wall Street has saved the worst for last. Dow down 505 points.
3:20 p.m. - What does this mean to you? "If you're in the market for a loan to buy anything right now, the banks are not interested in you," says Diane Garnick, investment strategist at Invesco. She says the economy may still be tanking halfway through the administration of the next president.
3:35 p.m. - The CEO of Lehman Bros., was paid $22.1 million last year. I'd have taken the company into bankruptcy for a fraction of that.
3:59 p.m. The final word today goes to the Motley Fool:
As painful as it is, as painful as it will be, the fact that both the government and the financial industry let Lehman fail is ultimately a sign of confidence in our financial markets.
Think about it -- all of the players involved knew quite well that the markets would absolutely tank if they didn't make a deal. And it wasn't that capital was unavailable; despite the credit crisis, there's plenty of capital out there to bid -- from the more liquid Wall Street banks, from sovereign wealth funds, or from private equity players like Blackrock (NYSE: BLK) or Blackstone (NYSE: BX).
And yet these players found the risk of financial Armageddon more palatable than the price they'd have to pay to take over Lehman. There will be plenty of collateral damage with this bankruptcy -- and they still decided not to act.(16 Comments)
I've been a disgruntled music fan ever since Mercedes Benz used Janis Joplin's Mercedes Benz in an advertisement. It was just.... wrong.
Today on Midmorning (starting at 10 a.m.), Kerri Miller and the Current's Steve Seel, along with Eric Danton of the Hartford Courant, are going to talk about the music of politics. Barack Obama has appropriated Bruce Springsteen in this campaign (several of his songs on his latest album seemed intended to be lifted for the campaign). The Clintons, of course, made Fleetwood Mac totally unlistenable forever. Has Lee Greenwood recorded a hit since he recorded "Proud to be an American"? Has he had to?
Back in 1992, Ross Perot used Patsy Cline's "Crazy."
I'll be living blogging today's hour. I'm guess some of you will have good suggestions for possible campaign songs (I'm guessing most of them will be in jest), and great analysis. So don't let me down.
10:05 a.m. - Just kicking around songs in the studio before airtime. Romney used Presley's A Little Less Conversation and Kennedy used "High Hopes." Kerri opens show with "Don't Stop." If the Three Stooges were still alive, Fleetwood Mac would replace Niagra Falls.
10:08 a.m. - Kerri's question: What songs should the campaigns use to "rev people up"? I was just recalling the Democratic convention in Chicago in 1996. The Democrats brought in the cast of Rent to provide music. I never did figure out why.
10:11 a.m. - Question: Does music really make a difference? It's aimed at swing voters, Seel suggests. "How can you pick a song that appeals to one group of people and leave another group scratching their heads about the choice?"
10:13 a.m. - Do the words have to mean anything? Danton says "no, but they shouldn't detract." Uses Born in the USA as an example. The words are an indictment of the economy in Reagan's economy.
Down in the shadow of the penitentiary
Out by the gas fires of the refinery
Im ten years burning down the road
Nowhere to run aint got nowhere to go
10:15 a.m. Seel: Clinton used American Girl. "A gross mistake because it's a song about suicide."
t was kind of cold that night
She stood alone on her balcony
She could the cars roll by
Out on 441
Like waves crashin in the beach
And for one desperate moment there
He crept back in her memory
God its so painful
Something thats so close
And still so far out of reach
10:17 - Caller Sarah questions the use of Barracuda at the RNC in St. Paul after Palin's speech. When she thinks of McCain, she thinks of "18 and life."
Tequila in his heartbeat, his veins burned gasoline. It kept his motor running but it never kept him clean. They say he loved adventure, rickys the wild one. He married trouble and had a courtship with a gun. Bang bang shoot em up, the party never ends. You cant think of dying when the bottles your best friend
10:19 - Talking about using the song in venues and licensing fees and whether artists can refuse to allow campaigns to use songs. Danton says if there's music as background, that's covered by ASCAP/BMI licensing. But if campaigns use it in a more prominent say, the artist can refuse. Two different royalties are involved, he says.
10:22 Caller Taylor: Says he was one of the audio engineers at the RNC in St. Paul. He worked 5 weeks ahead of time preparing thngs. He was in charge of live music. The inside scoop: They hadn't made any choices to have any music at all but the pressure was so great from the Democrats so the jazz band that played all four days was only scheduled for one. They caught the band at the airport to come back and provide some music. The only other piece was the "Raisin' McCain" song by John Rich. He says the engineers wrote a song that will be available on whatsyourproblem.com. It's called "The Change." The URL doesn't work right now.
10:28 a.m. - Here's Eric Danton's blog. Top story: Britney Spears to release new album.
10:31 a.m. - I'm recalling the reaction on Twitter after Obama's speech. He played country music. Country music is practically owned by the Republican Party. Rolling Stone has a note about the choice; it didn't bother Brooks & Dunn, apparently. They were big Bush backers.
10:44 a.m. - Perhaps we can learn more about the candidates by the music they like. Here are the comparisons.
10:46 a.m. - Caller talks about how songs have become commodities. I wonder whether songwriters are writing songs specifically so they can be used in commercials.
10:49 a.m. - "What does Marvin Gaye say to you," Miller asks Seel.(It's on Obama's list of favorites). "A cry for unity," he says, after pointing out that the list of favorite music by politicians is probably not really their favorite music, but another pitch for a demographic. But if that's true, would you really name ABBA as your favorite?
10:53 a.m. Commenter asks if McCain know that Dancing Queen is about gay men? I'm not sure it is, the lyrics focus on a 17 year old girl, looking for a "king."
10:54 a.m. -- I'm surprised nobody has mentioned probably the longest-lasting campaign song in history, next to, perhaps Happy Days are Here Again.: Proud to be an American by Lee Greenwood.(14 Comments)
India has become the first country to convict someone of a crime relying on evidence from a brain scanner that produces images of the human mind in action and is said to reveal signs that a suspect remembers details of the crime in question, reports the New York Times.
Psychologists and neuroscientists in the United States, which has been at the forefront of brain-based lie detection, variously called India's application of the technology to legal cases "fascinating," "ridiculous," "chilling" and "unconscionable."
It's a short distance between "intriguing" and "creepy."
Take the Army's mind control project, which also uses the power of an electroencephalogram...
... improvements in computing power and a better understanding of how the brain works have scientists busy hunting for the distinctive neural fingerprints that flash through a brain when a person is talking to himself. The Army's initial goal is to capture those brain waves with incredibly sophisticated software that then translates the waves into audible radio messages for other troops in the field. "It'd be radio without a microphone, " says Dr. Elmar Schmeisser, the Army neuroscientist overseeing the program. "Because soldiers are already trained to talk in clean, clear and formulaic ways, it would be a very small step to have them think that way."
The price of gasoline jumped by 40 cents a gallon over the weekend because of a hurricane that didn't even make the leaves rustle in these parts. Why? Because 30 percent of the U.S. oil refining capability is offline.
Hurricane Ike forced the refineries along the Gulf Coast to shut down. The lack of refinining capability coupled with an already short supply of fuel has caused the price run-up according to the Web site, The Oil Drum, which sees the 10-day shutdown causing price hikes and shortages at least into October.
I have said that it is likely to take a week or two to get refinery production up to pre-Ike levels. Suppose it takes 10 days. Adding 10 days to the date of the hurricane (September 12) brings us to September 22. If it takes an average of 18.5 days to get product from Texas to New Jersey by pipeline, it will take until approximately October 10 before supplies are back to normal. It could be a little shorter than this, or quite a bit longer.
Of the 15 top-producing oil refineries in the United States, only four are located in hurricane-safe areas. One of them is the Flint Hills refinery along the Mississippi River in Minnesota. That refinery is ranked #12 in the country.
Some politicians have argued for an easing of regulations to allow more refineries to be built. But Ralph Nader's Public Citizen says it's not environmental regulations preventing new refineries.
From 1975 to 2000, the U.S. Environmental Protection Agency (EPA) received only one permit request for a new refinery. And in March, EPA approved Arizona Clean Fuels' application for an air permit for a proposed refinery in Arizona. In addition, oil companies are regularly applying for - and receiving - permits to modify and expand their existing refineries.
And even the oil industry admits that just because a new refinery hasn't been built in over 30 years, doesn't mean refining capacity hasn't increased. Says a Political Fact Check on the St. Petersburg Times Web site...
The industry has found it costs less money and takes less time to expand existing facilities, he said. Over the past 15 years, the U.S. refining industry has added the equivalent of one new, state-of-the-art refinery a year, each with a capacity to refine 150,000 to 300,000 barrels per day.
A new significant oil refinery hasn't been built in the U.S. since 1976, but smaller ones have been. And South Dakota may be the next lab rat to see how easily a major refinery can be constructed. In June, voters -- thanks mostly to the votes of those in populated areas -- approved rezoning some rural county land for a new refinery.
Last week, a South Dakota agency approved a draft air quality permit for the project.
According to Hyperion's application, the center each year would emit nearly 2,000 tons of carbon monoxide, 773 tons of nitrogen oxides, more than 1,000 tons of particulate matter, 863 tons of sulfur dioxide and 473 tons of volatile organic compounds.
But that's not what has many opponents working -- against long political odds -- to prevent the refinery. They say the oil to be refined is what will cause the most environmental damage.
Largely overlooked in the discussion has been the source and type of crude oil -- Canadian tar sands -- to be refined at the Hyperion facility. Canadian tar sands are probably the dirtiest source of oil on earth, and mining tar sands has created what might be the most polluted area in North America. Tar sands development in northeast Alberta has devastated 180 square miles of boreal forest. The process uses prodigious amounts of fresh water, and much of the water ends up so toxic it kills any wildlife that touches it. Millions of gallons of this poisoned water are now impounded in hundreds of toxic lakes and ponds.
But at least there's no hurricanes in South Dakota.
A commenter in a thread on polling last week took me -- and the rest of the media -- to task for mentioning national poll numbers when, in fact, we elect our presidents via the electoral college. The post was about the gains the McCain campaign has made in the last few weeks.
The commenter is right of course, which is why this piece of news is fairly interesting. For the first time since the campaign started, individual state polls show John McCain with more electoral votes than Barack Obama, according to electoral-vote.org.
It turned largely on the strength of new polls in Ohio, Nevada and Virginia. McCain has outpolled Obama in those three states where previously Obama had held the edge.
McCain "shares" are also trading higher than Obama on the Intrade Web site.(3 Comments)
If Minnesota really is the state of hockey -- and as a native son of Massachusetts, I'm bound by genetics to insist it's not, though I know better -- then you'll know the name Jack Falla.
Falla, a former sportswriter for Sports Illustrated, is the guy who caused a tempest back in the '90s by insisting that the U.S. Hockey Hall of Fame belongs anywhere but in Eveleth, Minnesota.
In 1993 the U.S. Hockey Hall of Fame was described by its executive director, Ted Brill, as "a place of dignity and honor which all Americans should be able to point to with pride." Point to? Few Americans even know where the museum is. Perhaps that's because it's hidden away in Eveleth, Minn. (pop. 4,064), 200 miles north of Minneapolis-St. Paul International Airport. While the area is popular for fishing, hunting, skiing and snowmobiling, the 23-year-old Hall of Fame is not, as Brill concedes, "a tourist destination."
Nor should it be, given the shabby state it's in. Last year the Hall drew about 10,000 visitors, most of them during the summer. The museum is located in Eveleth because the people there were the first ones to raise the money to open it, but now, sadly, it is a disappointing collection of broken exhibits, outdated and tarnished plaques, and an inappropriately violent video show.
The guy could write, but more important, the guy knew that what connects hockey to this land isn't the spiffy indoor ice arenas that have made "softies" of all hockey players in the state who play in them, but it was the backyard rink and the ice on the ponds of Minnesota and elsewhere. It was frostbitten toes and comic books stuffed down into the jeans as shin guards. There was no checking on a lot of backyard rinks because if you did, you really would knock the snot out of the other guy, sometimes with disastrous results.
If you've ever tried to build a backyard hockey rink, chances are good, you were instructed by Jack Falla. His own rink, born of years of frustration at trying to build one, became a pretty famous hangout for purists in Natick, Mass. He wrote a book about the emotional connections to backyard rinks (video). You folks reading this blog from outside the land of the frozen pond wouldn't understand.
He was one of the stars, sort of, of the documentary film, Pond Hockey, which was produced by a couple of folks with Minnesota connections who were, as Euan Kerr of MPR described earlier this year, worried that the roots of hockey were being lost.
Fallin died on Sunday after suffering a heart attack in Maine. One of his former students -- he also taught public relations and journalism at Boston University -- penned a nice tribute to him today on the Boston Globe's Bruins blog.
Two years ago, several days after Hana was born, she got one of her first birthday presents. My friend Jack Falla had mailed the stick, on which he inscribed, in his unique and horrendous handwriting, the following message: "Retaliate first. H. Shinzawa #1."
It belongs to Hana, but it means so much more to her father.
The stick captures everything about the man. His passion for hockey. His affinity for goaltending. His admiration for Montreal, the city more so than its hockey franchise, and his exploration of French-Canadian culture. His mastery of language. Most of all, his love for children and friends and connecting in a human way in which he had no equal.
Don't tell that to the folks in Eveleth.