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In the New York Times, "Business" section today were headlines:
"Sony to Trim 8,000 Jobs..."
"Dow Chemical to Slim Down..."
Sounds like a regular "health and nutrition fest" instead of the loss of thousands of jobs!---BW
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Emergency Protest!
Free Mumia!
Free Troy Davis!
Two Innocent Men Facing Execution
Be there!
Tuesday, Dec. 9, 2008
Federal Court House, 7th Street and Mission, SF, 4:30 - 5:30 pm
The U.S. Supreme Court has before it the lives of two innocent, frame-up victims. Mumia Abu-Jamal & Troy Davis are challenging the “law of the land” that says, “Innocence is no defense.” Pennsylvania and Georgia seek their execution. We demand their freedom.
Mobilization to Free Mumia Abu-Jamal • freemumia.org
510-268-9429
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Bail out Workers, Not Banks! Stop Plant Closings!
Protest Bank of America, Tues., Dec. 9, 5pm
Powell and Market, San Francisco
Over 200 workers have occupied their workplace factory at Republic Windows and Doors in Chicago, after the company shut down the plant, claiming lack of funds to pay the workers their back pay, vacation and other benefits, or to give 60 days’ notice as required by federal law.
The plant closing was precipitated by Bank of America’s refusal to extend any more credit to the company, despite the fact that B of A has received $25 billion in bailout funds. These billions were supposed to help relieve credit shortages and help sustain jobs. Instead, the banks are using taxpayer dollars to merge into larger banks. Bank of America and JP Morgan Chase are the two banks that invest in Republic Windows and Doors. The workers are owed an average of 75 days’ pay and vacation. Companies are bound by federal law to either give 60 days’ notice with pay, before a plant closing or layoff of 50 or more workers.
It is reported that Republic Windows and Doors is planning to move its plant to Iowa because of cheaper labor costs, and to get out of union obligations with the United Electrical Workers Union. Workers across the country are paying a heavy price for the bank’s and corporations’ theft. It’s time for the bankers and companies to pay, NOT THE WORKERS!
The protest is initiated by A.N.S.W.E.R. Coalition. It is co-sponsored by the San Francisco Labor Council (AFL-CIO) and the Labor Council for Latin American Advancement - SF.
To endorse and get involved, call 415-821-6545. If you are holding similar activities in your town or city, please let us know by emailing info@internationalanswer.org.
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WHERE'S THEIR GOVERNMENT BAILOUT???
Chicago United Electrical, Radio and Machine Workers of America, Local 1110 need our support while sitting-in at the Republic Windows and Doors factory. The company laid off all its workers without notice and without giving them the vacation and severance pay they were owed. This is the kind of heroic effort that needs the support and solidarity of all working people.
Make checks payable to the UE Local 1110 Solidarity Fund, and mail to: 37 S. Ashland, Chicago, IL 60607. Messages of support can be sent to leahfried@gmail.com. For more information, call UE at 312-829-8300.
At the Jobs with Justice Web site, you can send a message of protest to Bank of America:
http://www.unionvoice.org/campaign/bankofamerica/
Log onto the UE website to find out more at:
http://www.ueunion.org/
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Notes on a Meltdown, and a View of the Other Side
By Ali Mir
"...so I tried to figure out what a trillion was. I knew it had 12 zeros after the 1, that it was a thousand billion or a million-million, but I couldn’t for the life of me understand what a trillion dollars might look like. So I imagined a magic machine that spits out a $10 bill every second, all day and all nightlong. Nice thought. In the first minute in my fantasy world, I would have $600. In the first hour, $36,000. In the first 24-hour day, $864,000. So far, so good. But as I kept up the calculation, and as the enormity of the numbers dawned on me, I began to dismay. I realized that after one year of this enterprise, I’d have a mere $315 million or so. It would take me three years to get close to a billion. I’d need to collect for more than 3,170 years to walk away from my machine with a trillion dollars. If I had been a contemporary of Jesus Christ, I still wouldn’t be two-thirds of the way there!"
Samar, November 10, 2008
http://www.samarmagazine.org/archive/article.php?id=269
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COURAGE TO RESIST:
SUPPORT RESISTERS DURING THE HOLIDAYS
AT A HOLIDAY LETTER WRITING PARTY!
Dear Friend,
Come to the Courage to Resist office in Oakland and write letters to GI resisters who have risked their freedom to oppose the wars in Iraq and Afghanistan. Meet with others in the anti-war movement to show your continuing support for those who have refused to fight.
The more people who show up, the more letters we can send to these heroes... so come and bring your friends and family members!
We will provide all the letter writing materials....and some snacks to keep you going!
Please join us:
Wednesday, December 10
6:30-8:30 p.m.
Courage to Resist Office
3945 Opal St.
Oakland
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UNITE TO PROTEST THE SIXTH YEAR OF U.S. WAR AND OCCUPATION IN IRAQ!
U.S. OUT OF IRAQ AND AFGHANISTAN NOW!
MONEY FOR HUMAN NEEDS NOT WAR!
MARCH 21, 2009
SIGN ON TO THE UNITY CALL!
The National Assembly to End the Iraq and Afghanistan Wars and Occupations:
Call for Unity
We hope that you and your organization agree that unified national March actions are sorely needed in these times of military and economic crises. We ask that you:
1. Sign the Open Letter to the U.S. Antiwar Movement.
2. Urge all local and national organizations and coalitions to join in building the mobilizations in D.C. in March and the mass actions on March 21.
3. Support the formation of a broad, united, ad hoc national coalition to bring massive forces out on March 21, 2009.
You can sign the Open Letter by writing natassembly@aol.com [if you are a group or individual. (Individual endorsers please include something about yourselves.)] or through the National Assembly website at www.natassembly.org [if you are a group endorsement only]. For more information, please email us at the above address or call 216-736-4704. We greatly appreciate all donations to help in our unity efforts. Checks should be made payable to National Assembly and mailed to P.O. Box 21008 , Cleveland , OH 44121 .
In peace and solidarity,
Greg Coleridge, Coordinator, Northeast Ohio Anti-War Coalition (NOAC); Economic Justice and Empowerment Program Director, Northeast Ohio American Friends Service Committee (AFSC); Member, Administrative Body, National Assembly
Marilyn Levin, Coordinating Committee, Greater Boston United for Justice with Peace; New England United; Member, Administrative Body, National Assembly
On behalf of the National Assembly to End the Iraq and Afghanistan Wars and Occupations
NATIONAL ASSEMBLY STATEMENT URGING UNITY OF THE
ANTIWAR MOVEMENT FOR THE MARCH 2009 ACTIONS
For more information please contact:
natassembly@aol.com or call 216-736-4704
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Bring the Anti-War Movement to Inauguration Day in D.C.
January 20, 2009: Join thousands to demand "Bring the troops home now!"
A.N.S.W.E.R. Coalition
http://www.answercoalition.org/
info@internationalanswer.org
National Office in Washington DC: 202-544-3389
New York City: 212-694-8720
Los Angeles: 213-251-1025
San Francisco: 415-821-6545
Chicago: 773-463-0311
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ARTICLES IN FULL:
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1) After Layoffs, Workers Stay at a Factory in Protest
[More on factory occupation by workers in Chicago...bw]
By MONICA DAVEY
December 7, 2008
http://www.nytimes.com/2008/12/07/us/07chicago.html?ref=us
2) California Cities Ban Military Recruitment of Minors
Submitted by davidswanson on Fri, 2008-12-05 16:33.
Arcata and Eureka Begin Enforcement of Youth Protection Act
By Dave Meserve
http://www.afterdowningstreet.org/node/38087
3) Tortured Justice
Editorial
December 8, 2008
http://www.nytimes.com/2008/12/08/opinion/08mon1.html
4) In Factory Sit-In, an Anger Spread Wide
By MONICA DAVEY
December 8, 2008
http://www.nytimes.com/2008/12/08/us/08chicago.html?hp
5) Army Recruiters Open War 'Experience' Arcade to Attract Youngsters
By Jim Hightower, JimHightower. com
Posted on December 5, 2008, Printed on December 6, 2008
http://www.alternet .org/bloggers/ http://jimhighto wer.com// 110495/
6) In Hard Times, Russia Moves In to Reclaim Private Industries
Kremlin Rules
By CLIFFORD J. LEVY
December 8, 2008
http://www.nytimes.com/2008/12/08/world/europe/08kremlin.html?hp
7) The Job Market for College Graduates
By Alan B. Krueger
Alan B. Krueger is an economist at Princeton.
December 8, 2008, 10:26 am
http://economix.blogs.nytimes.com/2008/12/08/the-job-market-for-college-graduates/?hp
8) Wall Street Braced For Grim Views From Industrials
By REUTERS
Filed at 12:52 p.m. ET
December 8, 2008
http://www.nytimes.com/reuters/business/business-us-usa-manufacturing-outlook.html
9) Judges to Decide Whether Crowded California Prisons Are Unconstitutional
By MALIA WOLLAN
December 8, 2008
http://www.nytimes.com/2008/12/08/us/08calif.html?ref=us
10) Drone to Patrol Part of Border With Canada
By MONICA DAVEY
December 8, 2008
http://www.nytimes.com/2008/12/08/us/08drone.html?ref=us
11) Major Issue in Big 3 Aid Is Final Cost
By BILL VLASIC
December 8, 2008
http://www.nytimes.com/2008/12/08/business/08auto.html?ref=business
12) Mortgages and Minorities
Editorial
December 9, 2008
http://www.nytimes.com/2008/12/09/opinion/09tue1.html
13) Uninsured Put a Strain on Hospitals
By REED ABELSON
December 9, 2008
http://www.nytimes.com/2008/12/09/business/09emergency.html
14) Talks Fail to End Sit-In at Closed Factory
By MONICA DAVEY
December 9, 2008
http://www.nytimes.com/2008/12/09/us/09chicago.html?ref=us
15) As Markets Waver, Treasury Yield Turns Negative
By MICHAEL M. GRYNBAUM and DAVID JOLLY
December 10, 2008
http://www.nytimes.com/2008/12/10/business/10markets.html?hp
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1) After Layoffs, Workers Stay at a Factory in Protest
By MONICA DAVEY
December 7, 2008
http://www.nytimes.com/2008/12/07/us/07chicago.html?ref=us
CHICAGO — Scores of workers laid off from a factory here that makes windows and doors have refused to leave, deciding to stage a “peaceful occupation” of the plant around the clock this weekend as they demand pay they say is owed them.
Workers at Republic Windows and Doors, which laid off about 250 people, said they were notified Tuesday that the plant, more than four decades old, would close Friday. They said they were given insufficient notice and were never paid for vacation days or severance.
The workers, many of whom were sitting on fold-up chairs on the factory floor Saturday afternoon, said they would not leave.
“They’re staying because the fact is that these workers feel they have nothing to lose at this point,” said Leah Fried, an organizer for the United Electrical, Radio and Machine Workers of America Local 1110, who said groups of 30 were occupying the plant in shifts. “Telling them they have three days before they are out on the street, penniless, is outrageous.”
Officials from the company, which makes vinyl windows and patio doors, were not at the plant on Saturday and could not be reached by telephone.
Crain’s Chicago Business reported that the company’s leader had reported that sales had fallen drastically over the last month.
The Chicago police said they were monitoring the situation but had no reason to remove the workers. “We haven’t got any reports of a criminal nature at this time,” a police spokesman said.
Workers blamed Bank of America, which they said had served as an important lender to Republic Windows, for cutting off credit to the company and preventing workers from being paid. Some workers carried signs and stickers criticizing the bank: “You got bailed out, we got sold out.”
A spokeswoman for Bank of America, Julie Westermann, said in a written statement that “because of our client confidentiality obligations, we cannot comment on any individual clients’ situations.” But Ms. Westermann noted, “Neither Bank of America nor any other third party lender to the company has the right to control whether the company complies with applicable laws or honors its commitments to its employees.”
Representative Luis V. Gutierrez, Democrat of Illinois, said union leaders hoped to meet Monday afternoon with the company’s leaders and its lenders.
Meanwhile, workers said they were going nowhere.
“It came as a complete surprise,” said Lalo Muñoz, 54, who had worked at Republic for 34 years and who spent the night on the factory floor Friday and was still there Saturday afternoon. “We’re waiting for answers.”
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2) California Cities Ban Military Recruitment of Minors
Submitted by davidswanson on Fri, 2008-12-05 16:33.
Arcata and Eureka Begin Enforcement of Youth Protection Act
By Dave Meserve
http://www.afterdowningstreet.org/node/38087
As of December 4th 2008, it is unlawful within the city limits of Arcata or Eureka, California, for military recruiters to initiate contact with minors under the age of 18, for the purpose of recruiting them into any branch of the military.
On Election Day, voters in both cities approved Measures F and J, by margins of 73% in Arcata and 57% in Eureka. As stated in the initiative ordinances, enforcement of the Measures begins 30 days after voter approval.
Proponents of the Youth Protection Act met Thursday with the city attorneys and city managers of Arcata and Eureka to work on a cooperative plan of implementation and enforcement for the new ordinances. In the near future, police in both cities will be briefed on their responsibility to enforce the ordinances. As required by the Measures, the Cities will also inform local military recruiters of the provisions of the new law.
Minors who are approached by military recruiters or witnesses who observe recruiters in violation of the law are encouraged to file a complaint with the police department in their city. If a police investigation finds that the complaint has merit, they will issue a citation for an infraction to both the recruiter and his or her commanding officer. The law does not prevent anyone from choosing to talk with a recruiter; it only prevents recruiters from initiating such contact with a minor.
Proponents of the Measures were pleased with the outcome of today’s meeting with the City. They look forward to ongoing cooperation with City staff and police in implementing and enforcing the Arcata and Eureka Youth Protection Acts and carrying out the expressed will of the voters.
More information and full text of the Ordinance may be found at: www.stoprecruitingkids.org
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3) Tortured Justice
Editorial
December 8, 2008
http://www.nytimes.com/2008/12/08/opinion/08mon1.html
The nation’s courts continue to grapple with the abuses committed by President Bush’s administration in the name of fighting terrorism. The extent of the damage to American liberties, and how lasting it will be, will be told in part by the outcome of two cases that are to be heard by the federal courts.
On Friday, the Supreme Court agreed to hear a case that turns on Mr. Bush’s claim that he can order people living in the United States to be detained by the military indefinitely without charges. The case involves Ali al-Marri, a citizen of Qatar who was in the United States legally. He was declared an enemy combatant in mid-2003 and has been held in a Navy brig since then.
The detention was upheld by an appeals court panel, which should be quickly and definitively reversed by the Supreme Court. This intolerable reading of the law would leave a president free to suspend the rights of anyone, including American citizens.
The other, equally notorious case is being heard on Tuesday by the United States Court of Appeals for the Second Circuit, in Manhattan. It involves Maher Arar, a Syrian-born Canadian with no ties to terrorism who became a victim of the Bush team’s lawless policy of “extraordinary rendition” — the outsourcing of interrogations to foreign governments known to torture prisoners.
Mr. Arar’s ordeal began in 2002, when he was seized by federal agents as he tried to change planes on his way home to Canada from a family vacation. After being held incommunicado in solitary confinement and subjected to harsh interrogation without proper access to a lawyer, he was “rendered” to Syria, where he was tortured. He was locked up for almost a year in a dank underground cell the size of a grave before he was finally let go.
The Canadian government later declared that it had provided erroneous information about Mr. Arar to American authorities. It apologized to him in 2007 and agreed to pay him $10 million. Last June, the Homeland Security Department’s inspector general, Richard Skinner, and its former inspector general, Clark Ervin, said at a Congressional hearing that officials may have violated federal criminal laws in sending Mr. Arar to Syria, knowing he was likely to be tortured.
Yet that same month, a three-judge federal appeals panel dismissed Mr. Arar’s civil rights lawsuit on flimsy national security grounds and, absurdly, his failure to seek court review of his rendition within the time period specified in immigration law. In essence, the 2-to-1 ruling rewarded the administration’s egregiously bad behavior in denying Mr. Arar’s initial requests to see a lawyer, and then lying to his attorney about his whereabouts, which obstructed his access to the courts.
In addition, by treating this as an immigration case, the ruling overlooked reality. The salient issue is the improper and unconstitutional tactics used by United States officials to obtain information they wrongly thought Mr. Arar possessed. That point was emphasized by Judge Robert Sack in his cogent dissenting opinion from the first appeals court ruling.
We took it as an encouraging sign when the appellate court took the rare step of scheduling Tuesday’s rehearing before its entire bench before an appeal was filed. A decision allowing Mr. Arar’s case to proceed would recognize the court’s essential role in protecting constitutional rights. It also would firmly reject the Bush administration’s seamy efforts to frustrate accountability for executive branch excesses.
The Obama administration will then have to decide whether to defend the indefensible when the case comes to trial. That will provide an interesting test of the new Justice Department’s commitment to due process.
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4) In Factory Sit-In, an Anger Spread Wide
By MONICA DAVEY
December 8, 2008
http://www.nytimes.com/2008/12/08/us/08chicago.html?hp
CHICAGO — The scene inside a long, low-slung factory on this city’s North Side this weekend offered a glimpse at how the nation’s loss of more than 600,000 manufacturing jobs in a year of recession is boiling over.
Workers laid off Friday from Republic Windows and Doors, who for years assembled vinyl windows and sliding doors here, said they would not leave, even after company officials announced that the factory was closing.
Some of the plant’s 250 workers stayed all night, all weekend, in what they were calling an occupation of the factory. Their sharpest criticisms were aimed at their former bosses, who they said gave them only three days’ notice of the closing, and the company’s creditors. But their anger stretched broadly to the government’s costly corporate bailout plans, which, they argued, had forgotten about regular workers.
“They want the poor person to stay down,” said Silvia Mazon, 47, a mother of two who worked as an assembler here for 13 years and said she had never before been the sort to march in protests or make a fuss. “We’re here, and we’re not going anywhere until we get what’s fair and what’s ours. They thought they would get rid of us easily, but if we have to be here for Christmas, it doesn’t matter.”
The workers, members of Local 1110 of the United Electrical, Radio and Machine Workers of America, said they were owed vacation and severance pay and were not given the 60 days of notice generally required by federal law when companies make layoffs. Lisa Madigan, the attorney general of Illinois, said her office was investigating, and representatives from her office interviewed workers at the plant on Sunday.
At a news conference Sunday, President-elect Barack Obama said the company should follow through on its commitments to its workers.
“The workers who are asking for the benefits and payments that they have earned,” Mr. Obama said, “I think they’re absolutely right and understand that what’s happening to them is reflective of what’s happening across this economy.”
Company officials, who were no longer at the factory, did not return telephone or e-mail messages. A meeting between the owners and workers is scheduled for Monday. The company, which was founded in 1965 and once employed more than 700 people, had struggled in recent months as home construction dipped, workers said.
Still, as they milled around the factory’s entrance this weekend, some workers said they doubted that the company was really in financial straits, and they suggested that it would reopen elsewhere with cheaper costs and lower pay. Others said managers had kept their struggles secret, at one point before Thanksgiving removing heavy equipment in the middle of the night but claiming, when asked about it, that all was well.
Workers also pointedly blamed Bank of America, a lender to Republic Windows, saying the bank had prevented the company from paying them what they were owed, particularly for vacation time accrued.
“Here the banks like Bank of America get a bailout, but workers cannot be paid?” said Leah Fried, an organizer with the union workers. “The taxpayers would like to see that bailout go toward saving jobs, not saving C.E.O.’s.”
In a statement issued Saturday, Bank of America officials said they could not comment on an individual client’s situation because of confidentiality obligations. Still, a spokeswoman also said, “Neither Bank of America nor any other third party lender to the company has the right to control whether the company complies with applicable laws or honors its commitments to its employees.”
Inside the factory, the “occupation” was relatively quiet. The Chicago police said that they were monitoring the situation but that they had had no reports of a criminal matter to investigate.
About 30 workers sat in folding chairs on the factory floor. (Reporters and supporters were not allowed to enter, but the workers could be observed through an open door.) They came in shifts around the clock. They tidied things. They shoveled snow. They met with visiting leaders, including Representatives Luis V. Gutierrez and Jan Schakowsky, both Democrats from Illinois, and the Rev. Jesse Jackson.
Throughout the weekend, people came by with donations of food, water and other supplies.
The workers said they were determined to keep their action — reminiscent, union leaders said, of autoworkers’ efforts in Michigan in the 1930s — peaceful and to preserve the factory.
“The fact is that workers really feel like they have nothing to lose at this point,” Ms. Fried said. “It shows something about our economic times, and it says something about how people feel about the bailout.”
Until last Tuesday, many workers here said, they had no sense that there was any problem. Shortly before 1 p.m. that day, workers were told in a meeting that the plant would close Friday, they said. Some people wept, others expressed fury.
Many employees said they had worked in the factory for decades. Lalo Muñoz, who was among those sleeping over in the building, said he arrived 34 years ago. The workers — about 80 percent of them Hispanic, with the rest black or of other ethnic and national backgrounds — made $14 an hour on average and received health care and retirement benefits, Ms. Fried said.
“This never happens — to take a company from the inside,” Ms. Mazon said. “But I’m fighting for my family, and we’re not going anywhere.”
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5) Army Recruiters Open War 'Experience' Arcade to Attract Youngsters
By Jim Hightower, JimHightower. com
Posted on December 5, 2008, Printed on December 6, 2008
http://www.alternet .org/bloggers/ http://jimhighto wer.com// 110495/
From football to beach volleyball, competitive games can get your
juices going.
But the ultimate game, the one that'll give you the greatest rush,
is ... what? Why, it's war, of course. Yeah, man, you literally get
to kill the other team! How great is that?
Such thinking (if it can be called thinking) is behind the latest
leap in marketing by the U.S. Army. In its constant effort to lure
young people into the killing business, the office of military
recruitment has come up with a whiz bang showcase to appeal to a
generation that's been raised on computer games and that hangs out
at the mall a lot. It's called the "Army Experience Center," and the
first one has opened right across from the Dave & Busters food and
fun outlet in a mall in northeast Philadelphia.
With more than 14,000 square feet of prime mall space, the
experience center is bigger than three basketball courts and is
filled with lots of dazzle. There are nearly 80 video gaming
stations, all sorts of interactive exhibits, a replica command-and-
control center, and -- best of all -- a bunch of high-tech
simulators that let the kids get a feel for the military action of,
say, a Black Hawk helicopter.
The simulators are way cool. For example, youngsters can sit in a
model chopper with a simulator that makes it seem as though they're
ripping right over a mountain village, and – get this – they get the
thrill of shooting at enemies in the village! Yes, the virtural
thrill of the kill coming to a mall near you. And, indeed, the army
says it hopes to replicate the experience all across the country.
One enthusiastic Army general says that the center is "a learning
laboratory." Yeah, but... do we really want youngsters learning that
stuff? Not to worry, say the recruiters, for the Army does have
rules – for example, while the "laboratory" is open to all ages,
kids can't play the video games until they're 13. No toddlers
allowed.
Jim Hightower is a national radio commentator, writer, public
speaker, and author of "Thieves In High Places: They've Stolen Our
Country And It's Time to Take It Back." He publishes the
monthly "Hightower Lowdown," co-edited by Phillip Frazer.
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6) In Hard Times, Russia Moves In to Reclaim Private Industries
Kremlin Rules
By CLIFFORD J. LEVY
December 8, 2008
http://www.nytimes.com/2008/12/08/world/europe/08kremlin.html?hp
BEREZNIKI, Russia — In late October, one of Vladimir V. Putin’s top lieutenants abruptly summoned a billionaire mining oligarch to a private meeting. The official, Igor I. Sechin, had taken a sudden interest in a two-year-old accident at the oligarch’s highly lucrative mining operations here in Russia’s industrial heartland.
Mr. Sechin, who is a leader of a shadowy Kremlin faction tied to the state security services, said he was ordering a new inquiry into the mishap, according to minutes of the meeting. With a deputy interior minister who investigates financial crime at his side, Mr. Sechin threatened crippling fines against the company, Uralkali.
Startled, the oligarch, Dmitri E. Rybolovlev, pointed out that the government had already examined the incident thoroughly and had cleared the company of responsibility.
He further sought to fend off the inquiry by saying he would pay for some of the damage to infrastructure from the accident, a mine collapse that injured no one but left a gaping sinkhole.
His offer was rebuffed, and it seemed clear why: the Kremlin was maneuvering to seize Uralkali outright.
Mr. Putin, the former president and current prime minister, has long maintained that Russia made a colossal error in the 1990s by allowing its enormous reserves of oil, gas and other natural resources to fall into private hands.
He has acted uncompromisingly — most notably in the case of the Yukos Oil Company in 2003 — to get them back.
Now, the Kremlin seems to be capitalizing on the economic crisis, exploiting the opportunity to establish more control over financially weakened industries that it has long coveted, particularly those in natural resources.
Last month, for example, the government assumed greater influence over Norilsk Nickel, the world’s biggest nickel producer, whose large shareholders, two billionaire oligarchs, have ailing finances. And Mr. Putin said Thursday that he was considering other such interventions.
Yet the Uralkali affair stands out for illustrating with rare clarity the willingness of the authorities to use whatever means necessary to obtain these assets, including subjecting companies to questionable investigations that they have little chance of resisting, financial analysts here say.
At the forefront of these efforts is Mr. Sechin, 48, a deputy prime minister who has been a Putin confidant since the two served in the St. Petersburg city government in the early 1990s. Mr. Sechin almost never gives interviews or speaks publicly, but he is believed to spearhead the use of the secret services and other government arms to capture companies.
“He is the state’s main raider,” said Olga Kryshtanovskaya, a prominent Kremlin expert at the Center for the Study of Elites in Moscow. “He organizes these raider seizures, sometimes to the benefit of the state, or sometimes to the benefit of companies that are friendly to him.”
Mr. Sechin’s role in the Uralkali inquiry immediately caused analysts and investors to presume that the company was in peril. Uralkali’s stock, once highly prized by fund managers, has plunged more than 60 percent since the inquiry began, far more than the broader Russian stock market.
That has caused steep losses for Mr. Rybolovlev, 42, a former medical student who is known as Russia’s fertilizer king because of his dominance of the business of mining potash, a principal fertilizer component. Last June, when Uralkali was soaring, the otherwise low-key Mr. Rybolovlev attracted attention by buying Donald J. Trump’s mansion in Palm Beach, Fla., for $95 million.
The Kremlin has not said when there will be a decision on Uralkali, and the company is hoping to negotiate a settlement that would include a fine of a few hundred million dollars. Analysts emphasized that there was still a chance that Mr. Sechin might pull back after seeing the stock market react so hostilely to the inquiry.
Developments in the overall economy might also give the Kremlin pause. A growing recognition of its outsize influence over business appears to have helped sour the investment climate here, and suggests in part why the Russian stock market has been among the worst performers in the world this year.
Widespread corruption has deepened this mistrust. So it is perhaps not surprising that the Uralkali affair has been marked by what appears to be insider trading.
Around the time of the meeting called by Mr. Sechin on Oct. 29 in Moscow, there was a sharp spike in short selling in Uralkali’s stock on the London Stock Exchange — that is, bets that the stock would fall, according to Data Explorers, an analytical firm that studied the securities data at the request of The New York Times. The meeting itself was not made public until Nov. 7, at which point the stock plummeted.
Mr. Sechin would not comment on the investigation, but a spokesman, Dmitri S. Peskov, said Mr. Sechin’s reputation was not warranted. “The press sometimes has a tendency to demonize people,” Mr. Peskov said.
Last month, a first deputy prime minister, Igor I. Shuvalov, dismissed concerns about the government’s intent.
“No one is going to destroy the company — we need strong business units,” Mr. Shuvalov said. “If after payments the company goes bankrupt, that won’t stop the government. A new owner will be found for Uralkali.”
With the financial crisis jolting economies around the world, Russia is hardly alone in taking ownership stakes in corporations these days. But many governments seem to view this as an uncomfortable role that has been thrust upon them. Russia’s rulers, however, appear to perceive the crisis as a chance to further expand their control over the economy, concentrating ever more power and wealth in the Kremlin.
“We will put capital directly into major companies, in cases when it would be beneficial to the state and eventually to the taxpayer, and in those enterprises that are the basis of the economy of the Russian Federation,” Mr. Putin said in a television appearance on Thursday. “We do not exclude that these tools may be used in a large-scale way.”
What seems to have drawn the Russian leadership’s attention to Uralkali was its impressive balance sheet, which expanded robustly over the last year as the prices of food and commodities shot up. Its revenues swelled to $1.1 billion in the first half of 2008, double the level in the same period the year before. Its profits more than tripled to $550 million.
With that kind of cash flow, the company was better able to ward off any fines and penalties the Kremlin could reasonably levy. But as its revenues have dropped because of the downturn, Uralkali has become more vulnerable.
Russians undoubtedly have ambivalent feelings about oligarchs like Mr. Rybolovlev. They tend to resent the oligarchs’ wealth, believing that it was accumulated through underhanded means in the 1990s. (Mr. Rybolovlev himself was accused of orchestrating the killing of a rival back then, though he was cleared of the charges.)
But they also worry that government officials want to seize these assets for their own venal purposes, and that they will end up mismanaging them, just as in Soviet times.
Here in Berezniki, 750 miles northeast of Moscow in the Ural Mountains, the new investigation has stirred anxiety among some miners, who said in interviews that they would fear lower salaries if the government took the company.
Federal officials have already aroused resentment here among residents who had to move after the 2006 mine accident into new, government-built homes that they said were shoddy.
Vladimir Smirnoff, 48, who drives a transporter in the mine, said workers did not understand the need for the inquiry, given that the earlier one had absolved the company.
The first government inquiry concluded that the mine collapse, which happened with enough warning that all the miners escaped, was caused by “a previously unknown geological anomaly.”
“It seems to us that the authorities simply want to take the company away from Rybolovlev,” Mr. Smirnoff said. “The authorities just can’t watch all that money pass them by.”
Mr. Rybolovlev and other Uralkali executives declined to be interviewed for this article.
The company said last month that “there are no legal or moral grounds” for blaming it for the accident. It said that if the new inquiry found Uralkali responsible, “it will suffer an enormous financial burden. The company’s future and plans would be in doubt.”
Uralkali fears that officials will seek compensation equal to future taxes and fees that the company would have paid to the government if the section of the mine that collapsed had continued operating, a penalty that could amount to well over $1 billion.
The new investigation carries echoes of the case that has come to define Mr. Putin’s tenure — the government’s forcible takeover of Yukos, once the country’s biggest oil company. Mr. Sechin is said to have led that case, and now also serves as chairman of Rosneft, the government-controlled oil company that swallowed up many of Yukos’s assets.
“The Uralkali case says that the government feels it has the power to interfere in any way in these industries,” said Marina Alexeenkova, a vice president at Renaissance Capital, an investment bank in Moscow. “It looks really aggressive and really risky. In general, this has been considered the most serious attack on a company since Yukos.”
The government imprisoned Yukos’s owner — the billionaire oligarch Mikhail B. Khodorkovsky, who had angered Mr. Putin by engaging in politics — on tax charges. It does not appear that Mr. Rybolovlev will suffer a similar punishment.
Like many oligarchs who have heeded Mr. Khodorkovsky’s example, Mr. Rybolovlev has backed the Kremlin, and has spurned pleas for financial support from opposition politicians here in the Perm region.
As the inquiry continued last week, the government sent conflicting signals about its course. It said Wednesday that investigators would need at least two more weeks before forwarding their report to Mr. Sechin, dimming Uralkali’s quest for a settlement. The next day, the natural resources minister, Yuri P. Trutnev, a close friend of Mr. Rybolovlev’s, publicly supported the company. He is not directly involved in the new inquiry, though, and analysts discounted the importance of his statement.
Investigators are now said to be examining whether Uralkali should pay for rerouting 30 miles of railroad track around the sinkhole, as well as for reimbursing the government for resettling people and other costs. But their primary objective is to scrutinize the accident itself and decide whether the company was at fault, which could expose it to heavy penalties.
Here in Berezniki, though, people seem confused about how the investigators are going to do that. It turns out that the part of the mine that collapsed is now completely filled with water, preventing anyone from getting anywhere close to it.
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7) The Job Market for College Graduates
By Alan B. Krueger
Alan B. Krueger is an economist at Princeton.
December 8, 2008, 10:26 am
http://economix.blogs.nytimes.com/2008/12/08/the-job-market-for-college-graduates/?hp
On Friday, David Leonhardt pointed out that the increase in the unemployment rate in November understated the weakening of the job market because many workers have given up looking for work. This is an important and ominous development in the economy. There is even more to the story. The gap between declining employment and rising unemployment is greatest for college graduates because they are leaving the labor force at a rapid rate.
To be counted as unemployed, the Bureau of Labor Statistics requires that someone: 1) was without a job in the reference week; 2) made an effort to actively search for a job in the last four weeks; and 3) was available for work. A person who is not employed and does not meet this definition of unemployed is considered out of the labor force.
Last month, the number of college graduates who were working fell by 282,000, while only 2,000 more college graduates were classified as unemployed. Why this gap? Laid off college workers, who are unaccustomed to unemployment, may feel a stigma if they report themselves as actively looking for work, so they are uncounted among the unemployed. Additionally, many nonworking college graduates may retire or return to school in response to weak job prospects.
Since March 2008, college-educated workers have been abandoning the labor force while high school dropouts have been joining it. Over the same period, the unemployment rate has risen more than twice as much for high school dropouts as for college graduates.
The tables below show the change in employment status by education level from the official start of the recession in December 2007 to March 2008 and from March 2008 to last month. The first column shows the change in the employment-to-population rate, which represents the percentage of people in a particular education group who have jobs. The second column is the unemployment rate for the education group, which is the percentage of people in the labor force (employed plus unemployed) who are unemployed. The third column is the labor-force participation rate, which is the number of unemployed plus employed people relative to the population.
Tables can be found on-line at:
http://economix.blogs.nytimes.com/2008/12/08/the-job-market-for-college-graduates/?hp
It is clear that there is a twist in these measures after March 2008. The beginning of the recession looked like a typical downturn, with jobs shrinking more and unemployment rising more for the less educated. After March, however, employment has declined more for college graduates while unemployment has continued to rise more for less-educated workers.
Why is March apparently a turning point? I had previously written here that the collapse of Bear Stearns in March 2008 and ensuing financial market crisis meant that this downturn “is likely to be more democratic than the norm because of the severity of the credit crunch. Research indicates that employers hire relatively more skilled workers when they invest in new plant and equipment. … If funds for investment are not available because of the financial crisis, however, companies will hire fewer skilled workers.”
This scenario seems to be playing out — in terms of employment losses but not in terms of unemployment.
The job situation is likely to weaken considerably for less-educated workers as the downturn persists, however, because employers are likely to raise skill requirements. Employers tend to be more selective in downturns. A study by Paul Devereux, for example, found “the education levels of new hires within occupations are higher when the unemployment rate is high and this effect is more pronounced in lower-paying occupations.” If this is right, then more college graduates should be working at Starbucks in the months ahead.
Because jobless college-educated workers appear unlikely to be classified as unemployed and because it is likely that well-educated workers will be taking jobs for which they are overqualified, the depths of this recession should not be measured only by the official unemployment rate. The fraction of the population that is employed is probably a better indicator of the strength of the job market, even though it does not reflect the underutilization of skills by workers who do find jobs.
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8) Wall Street Braced For Grim Views From Industrials
By REUTERS
Filed at 12:52 p.m. ET
December 8, 2008
http://www.nytimes.com/reuters/business/business-us-usa-manufacturing-outlook.html
BOSTON (Reuters) - With some of the United States' largest and most diversified companies ready to spell out their 2009 financial forecasts over the next two weeks, Wall Street is braced for bad news.
The question is how bad?
Investors expect many U.S. industrials to follow the lead of 3M Co
More job cuts are likely to be a key theme. Companies across all sectors of the U.S. economy, including Dow Chemical Co
A key worry for investors will be how order backlogs are holding up. Big-ticket capital goods such as jet engines, electricity-producing turbines and automation equipment are typically ordered months if not years in advance and industrial companies count on a backlog of orders to help smooth out results when the economy weakens.
"What are they seeing in terms of cancellations and how is the backlog holding up for projects that they've signed?" is a top concern of Peter Sorrentino, senior vice president and portfolio manager at Huntington Asset Advisors in Cincinnati, which holds stakes in GE, United Technologies and Honeywell International Inc
"If we're starting to already see large-scale cancellations and a rapid erosion of backlog, the stocks are definitely vulnerable for another leg down," Sorrentino said.
Industrial shares have been hit hard this year, with the Standard & Poor's capital goods industry index <.GSPIC> down about 46 percent, a steeper fall than the 38.5 percent slide of the broad S&P 500 <.SPX> and the 33 percent decline of the Dow Jones industrial average <.DJI>.
3M shares tumbled 5 percent on Monday after the company warned profit would fall next year.
LOWER GUIDANCE
Wall Street's expectations are already low ahead of outlook briefings from United Technologies, Danaher Corp
Analysts, on average, expect GE earnings per share to tumble 18.3 percent next year and Honeywell to fall 5.6 percent, according to Reuters Estimates. They look for United Tech EPS to grow 3.4 percent, ITT to rise 2.3 percent and Danaher to tick up 0.9 percent.
But even those forecasts may be too high, given the recessions in the United States, Japan and much of Europe, and fears that U.S. unemployment could near 10 percent next year.
"We sense that 2009 EPS forecasts are likely to be further trimmed by most companies," Sterne Agee analyst Nicholas Heymann wrote in a note to clients.
He forecast that, even in the wake of recent job cuts, major U.S. companies could slash payrolls another 20 percent next year as they make dramatic moves to cut costs.
Some observers have already warned aggressive job cutting could set off a self-reinforcing vicious cycle in the U.S. economy, which is highly dependent on consumer spending.
"Frankly, I hate to see it," Sorrentino said of the flurry of pink slips. "Typically, the first victim when you start doing layoffs is productivity, so in a way it almost amplifies the downward push on profitability when you get into this."
Another worry for the industrial sector is slowing demand in emerging markets, which had kept many diversified manufacturers on a growth footing even as the U.S. economy slowed over the past year.
"A recession among our trading partners has weakened the outlook for exports, which is one of the few remaining pillars providing positive support to the economy, particularly to the manufacturing sector," said Daniel Meckstroth, chief economist the Manufacturers Alliance/MAPI trade group.
MAPI forecast on Monday that U.S. manufacturing production would fall 4.2 percent next year.
While U.S. President-elect Barack Obama's plan for major investment in the nation's infrastructure, which sparked a rally in stocks on Monday, was a bright spot for the sector investors said the benefits of that plan might not be felt till the latter part of next year.
That leaves industrials facing an uncertain start to 2009.
"We would not be surprised if companies were to abandon quarterly EPS targets in favor of annual guidance updated quarterly," Deutsche Bank AG analyst Nigel Coe wrote in a note to clients.
(Editing by Andre Grenon)
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9) Judges to Decide Whether Crowded California Prisons Are Unconstitutional
By MALIA WOLLAN
December 8, 2008
http://www.nytimes.com/2008/12/08/us/08calif.html?ref=us
SAN FRANCISCO — Faced with chronically packed prisons and a federal mandate to improve medical and living conditions, a three-judge panel is meeting here to decide whether the overcrowding results in unconstitutional treatment of California’s more than 150,000 inmates. If so, the judges could order the state to release tens of thousands of prisoners.
“We have a motion today to exercise a very serious order which interferes in a profound way with the state’s right to run its own affairs,” one of the judges on the panel, Lawrence Karlton of Federal District Court, said in a hearing last week. “And on the other hand, we have a serious failure of the state to provide adequate care.”
California’s 33 adult prisons teem with nearly double the inmates they were designed to hold. Lawyers for the inmates say the conditions lead to violence, outbreaks of disease, inadequate mental and other health care for prisoners, and even death.
“Overcrowding is dangerous for the prisoners, for the corrections officers and for the public,” said Michael Bien, a lawyer for the inmates, who asked the judges to reduce the prison population by 52,000 inmates over two years.
Lawyers for the state argued that reducing the prison population would result in increased crime and burden counties already facing tight budgets.
“Releasing more than 50,000 inmates onto the streets is dangerous,” said Matthew Cate, secretary of the California Department of Corrections and Rehabilitation, who added that he had seen reports saying that California’s inmates tended to have more felony offenses than inmates in other states.
“Our most serious problem is providing enough appropriate space for our seriously mentally ill inmates,” Mr. Cate said, “and releasing prisoners is not going to fix that problem.”
But lawyers for the inmates said that they were not seeking the release of dangerous criminals and that much of the reduction in the number of inmates could come from not sending people who have committed minor parole violations back to prison.
The state’s prison health system is currently under the control of a federal receiver, who announced in August that the state would need to spend $8 billion to fix its prisons and build facilities.
But the state is also facing a severe budget crisis. Last Monday, Gov. Arnold Schwarzenegger declared a financial emergency and requested the State Legislature to address an $11.2 billion dollar deficit, saying that without immediate action, “our state is headed for a fiscal disaster where everyone will be hurt.”
Another judge at the hearing, Stephen Reinhardt of the United States Court of Appeals for the Ninth Circuit, said, “We should start from the premise that there’s not going to be any more money spent on this problem.”
The panel is expected to rule early next year, but an order to release prisoners would most likely face an appeal to the United States Supreme Court.
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10) Drone to Patrol Part of Border With Canada
By MONICA DAVEY
December 8, 2008
http://www.nytimes.com/2008/12/08/us/08drone.html?ref=us
FARGO, N.D. — Federal Customs and Border Protection authorities are preparing to launch unmanned aircraft patrols from this state, the first time such monitoring will occur along the nation’s northern border.
A Predator B aircraft, delivered to Grand Forks on Saturday, will make runs along the northern edge of North Dakota using sensors that can provide video and detect heat and changes to landscape, Customs and Border Protection officials said.
The plane, which can go 260 miles per hour and fly as high as 50,000 feet, can stay aloft for 18 hours. The first missions, designed to help spot people crossing the border illegally or avoiding ports of entry, are expected to start next month.
Similar aircraft have patrolled the nation’s southern border since 2005, where they have helped lead to the discovery of more than 18,000 pounds of marijuana and 4,000 illegal immigrants, a spokesman for the agency said.
John Stanton, executive director of the service’s national air security operations, said the authorities decided to move to the northern border because enough aircraft were now available. (The base cost for the Predator is about $10 million.)
Along the entire northern border, Customs and Border Protection officials make about 4,000 arrests and intercept about 40,000 pounds of illegal drugs each year.
For the moment, though, the flights from Grand Forks will remain mostly along the 300 miles of the upper edge of North Dakota and a slim part of Minnesota, Mr. Stanton said.
Asked whether he expected to uncover a significant problem with drugs, border crossings or terrorism in northern North Dakota, Mr. Stanton said no one was sure.
“We hope to actually use this aircraft to measure that,” he said. “You don’t know what you don’t know.”
Some experts have questioned the safety of unmanned planes. In 2006, a Predator patrolling the southern border crashed near Nogales, Ariz.; no one was hurt and no property was damaged, but the plane narrowly missed a house. Investigators blamed human error; the pilot was at a control panel far from the plane.
“This aircraft has over 300,000 hours of use,” Mr. Stanton said. “We’ve been able to capitalize on other peoples’ mistakes and lessons. This is as safe as we can possibly make it.”
The aircraft, about 66 feet long and weighing more than 10,000 pounds, experienced minor setbacks on its way to North Dakota. It was expected to arrive in Grand Forks on Thursday from an Army field in Arizona, but officials reported maintenance problems and the flight was delayed a day. On Friday, the plane was forced to turn back after encountering poor weather and turbulence. It touched down at the Air Force base in Grand Forks on Saturday afternoon.
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11) Major Issue in Big 3 Aid Is Final Cost
By BILL VLASIC
December 8, 2008
http://www.nytimes.com/2008/12/08/business/08auto.html?ref=business
DETROIT — So what will it cost to fix Detroit’s Big Three automakers?
Now that Congress has signaled its willingness to help the ailing car companies with short-term loans, that question has gained new urgency — particularly for President-elect Barack Obama, who will inherit the crisis in Detroit when he takes office.
The ultimate price tag for a new and improved American auto industry may be as unfathomable as questions about the potential harm to the economy if any of the companies were allowed to collapse.
But estimates of the final bill are rising rapidly, particularly as the economy weakens and car sales keep falling.
A comprehensive bailout for General Motors, the Ford Motor Company and Chrysler could cost as much as $125 billion, and even the companies themselves are hard pressed to dispute that figure.
Mark Zandi, chief economist of Moody’s Economy.com, testified before Congress last week that the Big Three’s request for $34 billion in loans “will not be sufficient for them to avoid bankruptcy at some point in the next two years.” He said from $75 billion to $125 billion would be needed to pay for a full-scale reorganization of the automakers.
Lawmakers have indicated they may give G.M. and Chrysler about $15 billion in emergency aid to keep them in business until the spring, when the Obama administration and the new Congress can craft a longer-term rescue plan.
Throughout four hearings on Capitol Hill, the chief executives of G.M., Ford and Chrysler have tried to assure lawmakers that all they need is temporary assistance until the sick economy and the depressed auto market recover.
G.M.’s chairman and chief executive, Rick Wagoner, tried to assure Congress last week that G.M. can be profitable again with $18 billion in federal loans and an aggressive reorganization plan.
“Our plan is far reaching and extensive,” Mr. Wagoner said. “It is a different way of thinking and our team is committed to achieving it.”
Still, there are many variables that could derail the Big Three’s recovery plans.
Despite an infusion of $700 billion into financial institutions, there are few signs that car loans are becoming more available to consumers — a critical component in any rebound in vehicle sales, which have fallen to their lowest level in 25 years in the United States.
Important foreign markets in Europe and Asia are also deteriorating, further reducing revenues at G.M. and Ford.
And Detroit is also facing huge bills — interest payments on their enormous debt loads, large contributions to health care trusts for retired hourly workers as well as tens of billions of dollars in expenses to meet stringent new government fuel-economy requirements.
The magnitude of the companies’ obligations left some lawmakers groping for answers during the testimony of the Big Three executives.
“Do we know what we’re doing? Do we know what we’re trying to achieve?” asked Representative Peter King, Republican of New York. “If I was reasonably convinced that the money was going to work, I would support it.”
Detroit has lost tens of billions of dollars in recent years; credibility has evaporated among investors and analysts who have seen a series of reorganization efforts and new products fail to produce a lasting turnaround.
The fact that the companies first asked for $25 billion in mid-November, then upped the ante to $34 billion two weeks later hardly gave lawmakers confidence in the automakers’ current plans.
“I don’t want to send you home again because it’s going to get more expensive in another two weeks,” Representative Gary L. Ackerman, Democrat of New York, said at last Friday’s hearing.
Because it is the biggest and most troubled of the automakers, G.M. generated the most skepticism with its plan. The company says that it needs $10 billion to get through March, another $2 billion for the remainder of 2009, and a $6 billion line of credit beyond that.
But this is a company that has lost $20 billion so far this year, spent $2 billion a month in cash since July, and consistently missed its sales targets and financial benchmarks.
G.M. has already cut its American work force in half in the last three years. Yet its latest reorganization plan calls for downsizing its brands and dealerships and cutting another 30,000 jobs — without addressing how it would generate new revenue.
Because G.M. also has more than $60 billion in debt outstanding and a bill for $21 billion in retiree health care benefits coming due, experts cannot see how it will survive with temporary government loans.
“Even with the most generous assumptions as to operating results and carefully adhering to G.M.’s proposed restructuring, G.M is still a highly distressed company and likely to go bankrupt, probably within in one year,” said Professor Edward I. Altman, of the Stern School of Business at New York University.
Despite the willingness of the United Auto Workers union to make concessions on job security and health care payments, G.M. desperately needs its bondholders and other creditors to allow it to revamp its debt payments.
G.M. could accomplish those ends if it sought bankruptcy protection, but the company maintains steadfastly that a Chapter 11 filing would ruin its already shaky reputation among consumers.
In a bankruptcy proceeding, the U.A.W. would be in jeopardy of losing its $28-an-hour wage scale and its long-term health care benefits. The union’s president, Ron Gettelfinger, argued during the hearings that Congress should appoint a trustee or oversight committee with authority to force concessions from G.M.’s debtors.
“What Congress can and should do is put in place a process that would require all the stakeholders to participate outside of bankruptcy,” Mr. Gettelfinger said.
But a federally appointed “car czar” would hardly have the same legal authority as a bankruptcy judge to demand that bondholders, for example, take equity in exchange for reducing their debt.
The situations at Ford and Chrysler are a little different, but both companies still have large obligations to debtors and union health care trusts.
While Mr. Obama has repeatedly said that Chapter 11 is not preferable for the companies, several lawmakers see bankruptcy as the only viable way for the Big Three to get a fresh start as smaller, less-indebted entities.
“They could come out leaner and more vibrant and more successful,” Senator Jeff Sessions, a Republican from Alabama, said Sunday in an appearance on CBS’s “Face the Nation.” “This is the way to save jobs.”
Beside debts and legacy costs, Detroit faces substantial costs to meet new federal fuel-efficiency requirements for cleaner vehicles. The automakers have said it may require $100 billion to remake their fleets, far beyond the $25 billion program that Congress approved to help the companies meet the new standards.
The mounting cost issues obscure what lies at the heart of the Big Three’s current cash crisis — a shrinking share of a vehicle market that has sunk to levels not seen since the 1980s.
G.M., Ford and Chrysler have based their turnaround plans and loan requests on market projections that would have seemed outrageously low just a year ago.
G.M., for example, is tying its profitability to maintaining at least a 20 percent share of an annual United States sales market of about 13 million vehicles.
That level is far below the 16 million in annual sales that the industry has achieved in recent years, but in line with the depressed levels of 2008.
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12) Mortgages and Minorities
Editorial
December 9, 2008
http://www.nytimes.com/2008/12/09/opinion/09tue1.html
The mortgage crisis that has placed millions of Americans at risk of losing their homes has been especially devastating for black and Hispanic borrowers and their families. It seems clear at this point that minorities were more likely than whites to be steered into risky, high-priced loans — even when researchers controlled for such crucial factors as income, loan size and location.
The Congress that takes office in January can start to deal with this problem by strengthening fair-lending laws, especially the Community Reinvestment Act, which encourages fair, sound lending practices while requiring banks to lend, invest and open branches in low- and moderate-income areas.
Lawmakers should also extend that law to cover the often fly-by-night mortgage-lending companies that helped drive the subprime crisis. Those companies saddled entire neighborhoods with risky, high-priced loans that borrowers could never hope to pay back, sold those loans to Wall Street and then went out of business.
Congress needs to keep in mind that many of those players are surely to be back in operation somewhere down the line. Some already have returned in the guise of offering to help homeowners avoid foreclosure.
The need to revisit fair-lending law is evident in numerous studies of federal lending data. A particularly striking analysis in 2006 by the National Community Reinvestment Coalition found that nearly 55 percent of loans to African-Americans, 40 percent of loans to Hispanics and 35 percent of loans to American Indians fell into the high-cost category, as opposed to about 23 percent for whites. There also were troubling gender differences. Women got less-favorable terms than men.
A classic discrimination study by the reinvestment coalition found that black and Hispanic people who posed as borrowers received significantly worse treatment and were offered costlier, less-attractive loans more often than whites — even though minority testers had been given more attractive financial profiles, including better credit standings and employment tenures. That study, and others, go a long way to rebutting mortgage companies’ claims that lending patterns are explained by so-called risk characteristics like credit scores.
John Taylor, the coalition’s president, told a Congressional hearing last year, that minority borrowers were paying a “race tax.” While lenders are required to report to the federal government such things as race, gender, census tract, amount of loan and income, they omit credit score data. By guarding the single most important statistic used in making loans, the lenders have given themselves a ready shield against charges of discrimination.
But with indications of discrimination popping up everywhere, Congress has no choice but to require lenders to report on all data that form the basis of lending decisions, including data that would permit neutral third parties to determine whether lenders were discriminating by race. Ideally, lenders would have to report, not just on the borrower’s credit worthiness, but on details of the terms and conditions of the loan itself.
Looking back, it’s hard to say whether such reporting requirements would have forestalled the subprime crisis. Certainly, they would have given consumer advocates and regulators more information earlier on. There is no excuse for not putting them in place now to avoid the possibility of history repeating itself and having all those risky, high-priced loans issued and sold off as securities before anyone intervenes.
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13) Uninsured Put a Strain on Hospitals
By REED ABELSON
December 9, 2008
http://www.nytimes.com/2008/12/09/business/09emergency.html
As increasing numbers of the unemployed and uninsured turn to the nation’s emergency rooms as a medical last resort, doctors warn that the centers — many already overburdened — could have even more trouble handling the heart attacks, broken bones and other traumas that define their core mission.
Even before the recession became evident, many emergency rooms around the country were already overcrowded, with dangerously long waits for some patients and the frequent need to redirect ambulances to other hospitals.
“We have no capacity now,” said Dr. Angela F. Gardner, the president-elect of the American College of Emergency Physicians, which represents 27,000 emergency doctors. “There’s no way we have room for any more people to come to the table.”
In a report to be released Tuesday, her group warns that the nation’s system of emergency rooms is in “serious condition.” Dr. Gardner argues that any public discussion of overhauling the current health system must include the nation’s emergency departments.
The number of patients coming to emergency departments has been steadily increasing. Helping push up that volume have been the growing ranks of the uninsured, because emergency rooms are legally obliged to see all patients who enter their doors, regardless of their ability to pay. But even insured patients who have no quick access to regular doctors are also showing up — among them older people, who represent the fastest growing population of emergency room visitors.
So far, there are no firm figures on the recent influx. But even two years ago, when a government survey found that the annual volume of visits to emergency departments had reached 120 million — a third higher than a decade earlier — doctors considered many emergency rooms overburdened.
Now the recession, whose full impact is yet to be seen, threatens to make conditions even worse, emergency doctors say. Hospitals are absorbing increasing amounts in unpaid medical bills, and some are already experiencing much higher numbers of patients without insurance.
For example, Denver Health, a public hospital system, had a 19 percent increase in emergency visits by uninsured patients in November — to 3,325, up from 2,792 a year earlier.
“Virtually every time I work a nine-hour shift, I encounter a couple of patients who have never been here before because they’ve just lost their insurance,” said Dr. Vincent J. Markovchick, the director of the hospital’s emergency medical services.
They include patients like Matthew Armijo, 29, who was laid off from his client services job at a technology company in August and could continue his health insurance only through October. He showed up at Denver Health’s urgent care center, a part of the emergency department, suffering from increasing abdominal pain. Mr. Armijo said he went there because he would not have to pay anything.
Denver Health expects the amount of care it delivers for which it will never be paid to grow to more than $300 million this year, compared with $276 million in 2007.
Some patients are people who have delayed seeking medical care as long as they can, like those who arrive during an asthma attack after deferring treatment.
“I am definitely seeing patients coming in presenting worse in their illness because they are further along,” said Dr. Katherine A. Bakes, the director of the program’s emergency services for children.
Other doctors around the country also report treating people who seem to have no other option. One emergency room doctor in Iowa, Dr. Thomas E. Benzoni, said he recently saw a mother come in with her two children for what he thought was routine care. When he asked her why she had not gone to her family doctor, she said she did not have health insurance.
“I don’t know what else she was supposed to do,” Dr. Benzoni said.
The increase is not affecting all emergency rooms. Some emergency physicians, in fact, said there had actually been a recent decline in visits. A report by the American Hospital Association for July, August and September found a slight overall decrease in hospital traffic, including emergency visits, as some people apparently sought to avoid spending money on anything they did not deem absolutely essential.
But as the recession continues, many officials of the college of emergency doctors predict it is only a matter of time until the rising number of uninsured and the delays in getting primary care create a crisis.
“I think we’re seeing the tip,” said Dr. Nicholas J. Jouriles, the group’s current president. Patients, he said, will have no choice but to come to the emergency department when they have no money or insurance. “They will get turned away elsewhere,” he said.
One of the doctors’ major concerns is the long waits by patients requiring a hospital bed. The doctors group, surveying its members last year, learned of at least 200 deaths related to the practice of “boarding” — in which patients on stretchers line the corridors until they can be moved into a bed.
“Crowding is a national public health problem,” said Dr. Jesse M. Pines, an emergency physician in Philadelphia.
Patients forced to wait for hours on end for a bed clearly suffer.
“It was pure hell,” recalled Robert Roth, whose 90-year-old mother, Kato, last year spent 36 hours at the emergency department of a Queens hospital, near her home in Jackson Heights, waiting for a room after going to the emergency room in the middle of the night. Mrs. Roth, who had a recent series of falls, said she had been hearing music in her ears, and both her son and the doctor he called were worried about a possible stroke.
After the first five hours of waiting, she became increasingly disoriented and delusional. Mr. Roth was unable to stay with her during the entire wait. After he left and returned, he said, the hospital staff told him they had no idea where she was. She turned up in an empty room off the emergency department, and her physical and mental condition had clearly deteriorated, Mr. Roth said. She believed that she had been kidnapped.
When she had to go several weeks later to another emergency department in Manhattan, she endured a 20-hour wait for a room, again becoming disoriented after several hours, forcing her to be sedated.
The emergency staffs “just seemed overwhelmed, overwhelmed,” said Mr. Roth, who wondered why emergency departments could not handle the elderly in a special fashion.
Dr. Ann S. O’Malley is a physician and senior researcher for the Center for Studying Health System Change, a nonprofit group in Washington that has studied emergency services in different communities. While some hospitals have taken steps to reduce crowding and move patients more efficiently from the emergency department into rooms, Dr. O’Malley said, others have responded by expanding their facilities — attracting more patients.
“Emergency departments,” she said, “are a kind of barometer of the general health of the rest of the system.”
Dr. Eric J. Lavonas, an emergency physician in Denver, said: “The nation’s emergency rooms are the end of the line. We will strain and stretch and bulge under the weight.”
Dr. Gardner, of the emergency doctors’ group, said the question now is whether the emergency room safety net will break — how often people with heart attacks will not be able to get care in time to be saved. Her group’s report, she said, is meant to alert people to the precarious nature of the system.
“What they don’t understand,” she said, “is that the system is fundamentally flawed and will fail.”
Melinda Sink contributed reporting from Denver.
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14) Talks Fail to End Sit-In at Closed Factory
By MONICA DAVEY
December 9, 2008
http://www.nytimes.com/2008/12/09/us/09chicago.html?ref=us
CHICAGO — As workers at a window-making plant here prepared to spend a fourth night in the factory they had been told to leave for good, union leaders, bankers and company owners met into the night on Monday but the meetings ended without bringing about an end to the workers’ peaceful but increasingly tense occupation of the plant.
The layoff of 250 workers last week at Republic Windows and Doors on the North Side with only three days’ warning and without pay the workers say is owed to them had, by Monday, drawn the attention of nearly every politician with a connection to this city, numerous union and workers’ rights groups and scores of ordinary people, who arrived at the plant offering families toys, food and money.
Gov. Rod R. Blagojevich, who met with the workers Monday morning, said the State of Illinois was suspending its business with the Bank of America, Republic Windows’ lenders, and that the Illinois Department of Labor was poised to file a complaint over the plant closing if need be. Political leaders on the Chicago City Council and in Cook County threatened similar actions. Representative Luis V. Gutierrez said he was encouraging the Department of Labor and the Department of Justice to investigate. “Families are already struggling to keep afloat,” Mr. Blagojevich said.
Workers here say they blame the operators of Republic Windows and Doors, a manufacturing company that was founded in 1965, for giving them just three days’ notice before closing last Friday, with no earlier hints to the employees that orders for vinyl windows and sliding doors had fallen off.
Late Monday, the company released a statement that indicated that it had known since at least mid-October that it intended to close the factory by January. The statement suggested that it had gone back and forth with Bank of America for more than a month, but that the bank had rejected several of its “wind down” plans as well as the company’s request for financing to pay workers’ owed vacation.
The statement also revealed that the family of Richard Gillman, once a minority shareholder who in 2006 and 2007 bought out Republic, last month formed a new window business — Echo Windows LLC. All along, workers here said they feared the owners were shutting down to reopen a cheaper operation somewhere else. A trade publication reported last week that Echo had recently bought a window manufacturing plant in Red Oak, Iowa. No one from Republic could be reached for comment.
“It is looking like reopening is exactly what happened,” said Tara Taffera, the editor and publisher of the publication, Door and Window Manufacturing magazine.
The company’s statement said it had been placed, “in the impossible position of not having the ability to further reduce fixed costs, coupled with severe constrictions in the capital debt markets and an unwillingness of the current debt holder to continue funding the operations.”
The workers here also blamed Bank of America for preventing the owners from paying its workers for already-earned vacation time and severance. Workers here said the owners told them last week that Bank of America had cut off the company’s credit line and would not allow payments.
As part of government bailout efforts for the struggling banking industry, Bank of America has received $15 billion, and is expected to receive an additional $10 billion. That fact left many workers here seething.
“Taxpayers would like to see that bailout money go toward saving jobs, not saving C.E.O.’s,” said Leah Fried, an organizer for the United Electrical, Radio and Machine Workers of America. “This is outrageous.”
Officials said negotiations would resume Tuesday.
Bank of America issued a statement late Monday stating that the company, not the bank, had the ability to choose whether to honor what it owed workers.
“We agree with the statements of public officials that Republic Windows and Doors should do all it can to honor its obligations to its employees and minimize the impact of failure on those employees,” the statement said.
“When a company faces such a dire situation, its lender is not empowered to direct the company’s management how to manage its affairs and what obligations should be paid,” it went on. “Such decisions belong to the management and owners of the company.”
Federal law from the late 1980s requires employers to give workers 60 days’ notice (or 60 days of pay) in cases of plant closings or large layoffs. Still, that federal law, known as the Worker Adjustment and Retraining Notification Act, or WARN, provides exceptions in cases when a “faltering company” is actively seeking capital to save itself and has reason to believe announcing a possible closing might prevent it from getting that capital or in “unforeseeable business circumstances,” like unexpected conditions outside an employer’s control.
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15) As Markets Waver, Treasury Yield Turns Negative
By MICHAEL M. GRYNBAUM and DAVID JOLLY
December 10, 2008
http://www.nytimes.com/2008/12/10/business/10markets.html?hp
A mixed day on Wall Street threatened to turn sour on Tuesday afternoon as stocks moved lower and investors fled to the safety of Treasury bills, sending the Dow Jones industrials down 242.85 points to 8,691.33.
Investors were so desperate to put their cash into government notes that they were willing to pay a penalty for the privilege: three-month notes traded at a negative yield, meaning that investors will receive about 99 cents on the dollar in return after the note matures. The news sends a sobering signal: in this environment, losing only a small amount of money on an investment is tantamount to coming out ahead.
Four-week Treasury bills, considered one of the safest possible short-term investments, traded at zero percent yields, and investors snapped up $30 billion worth. It was the lowest yield since the Treasury began issuing the notes in 2001.
A scramble into Treasury notes helps to line the federal coffers, providing money at a time when the government is embarking on ambitious stimulus projects with a price tag in the billions. Bank bailouts, credit facilities and public works programs will all be helped by the influx of investors’ cash.
The primary impetus behind the move into Treasuries is a flight to safety. But seasonal factors are also at work.
Tuesday was by no means a catastrophic day in the stock market, meaning that many investors were still trading in equities. Instead, analysts speculated that institutional investors were seeking to shore up their balance sheets ahead of Jan. 1, allowing them to put a cheerful gloss on their year-end letters to clients.
On Wall Street, a string of weak earnings reports and speculation about a government bailout for Detroit conspired to drag down the Dow, after the index spent much of the day in modest negative territory.
The broad Standard & Poor’s 500-stock index gave up 2.3 percent and the technology-heavy Nasdaq retreated from earlier gains, slipping 1.5 percent.
Investors took in warnings from both Texas Instruments, the chip maker, and the FedEx Corporation, the package delivery service. FedEx cut its earnings forecast and Texas Instruments warned of a significant decline in business, lowering its revenue projections. Those announcements came on the heels of Sony’s move to cut 8,000 jobs, or 4 percent of its total work force.
Oil prices fell, settling at $42.07 a barrel, down $1.64 on Tuesday after the Energy Information Administration forecast that the world economic slowdown would shrink global oil consumption this year for the first time since the early 1980s.
Shares of General Motors and Ford were about 5 percent lower on Tuesday after recording 20 percent gains to start the week.
White House and Democratic leaders in Congress appeared to be nearing a deal on Monday for a $15 billion government rescue plan. “I’d say the market has taken a slightly more optimistic mood,” said David Thébault, head of derivative sales at Global Equities in Paris.
The Detroit bailout could ultimately have a significant impact on investor sentiment, Mr. Thébault said: “Combined with the financial sector bailouts and stimulus measures, this suggests there’s starting to be some light at the end of the tunnel.”
European stocks ended higher, with the FTSE 100 index in London up 1.9 percent; the CAC 40 in Paris up 1.6 percent; and the DAX in Frankfurt up 1.3 percent.
Asian stocks ended mostly lower. The S.& P./ASX 200 index in Sydney fell 0.8 percent. The Hang Seng index in Hong Kong was down 1.9 percent, and the Shanghai Stock Exchange composite index lost 2.5 percent.
The Nikkei 225 stock average rose 0.8 percent in Tokyo, bucking the trend, despite a negative reading on the gross domestic product of Japan.
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