Hot and Cold

This weekend in Southern California it is hot! In Claremont Sunday the temperature was 106 degrees. Many people say it is global warming or the world is out of whack, but realistically September is always the warmest time of year in Southern California, it is just a bit more extreme this weekend, so just “deal with it”.

The same holds true with the economy, it is in a mess. It will be years until we can say finance is back to normal (if there is a normal). But this happens, yes a bit more extreme this time around but economies crash and go into slumps. Two years ago this week, the financial world imploded. In the past 24 months, the markets have recovered big chunks of their losses. As it turns out, the government bailouts, guarantees, direct investments, and loans prevented a collapse and created the conditions for a market and economic recovery, however shaky.

The Panic of 2008 left behind a legacy: heightened investor skepticism, new regulations, and a shrunken financial sector. There were and are plenty of losers; 125 banks have failed, unemployment is high and will remain high until business becomes confident in the recovery, all government budgets have been severely affected, and faith in our leadership has lessened. But we still go on; we cackle and text into more cellular phones, if you don’t have a HD television in every room of your home you are in the minority, women pay $250 for purses, men pay $250 to watch The Lakers. We “deal with it” and no matter how it seems the economy is out of whack, like this past weekend’s heat wave it will pass and what we think and believe is normal will return.

RECESSION HAS ENDED - The organization responsible for dating changes in the U.S. business cycle said the U.S. recession that started in December 2007 ended in June of last year.

In a statement on its website, the National Bureau of Economic Research said that in determining an end to the downturn, "the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity." As worries persist about the struggling U.S. economy and its future path, the NBER warned "any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007."

BIG MARKET CHANGES SINCE LEHMAN - WSJ's Tom Lauricella and Mark Gongloff report on pg. C1: “Two years after Lehman Brothers Holdings Inc. collapsed into bankruptcy, the impact of the financial crisis can be seen on almost every market around the globe. The preference of investors for reliable income streams from bonds of all types has led to big rallies in both safe-haven U.S. Treasurys and risky 'junk' bonds, even amid a chorus of warnings about a 'bond bubble.' But many stock markets, most notably in the U.S., haven't reclaimed losses suffered since Lehman filed for bankruptcy on Sept. 15, 2008. The Dow Jones Industrial Average remains more than 900 points below its pre-Lehman level. U.S. financial stocks, at the epicenter of the crisis, remain nearly a third lower than where they were two years ago.”

NFL TICKET PRICES - AP: "The Team Marketing Report said Friday that average ticket prices for NFL games increased 4.5 percent this year to $76.47, up from a 3.9 percent hike last season. The New York teams had the steepest increases after moving into the New Meadowlands Stadium in East Rutherford, N.J. Jets non-premium tickets went up 31.8 percent to $114.64 on average, and the Giants rose 26 percent to $111.69. New Orleans raised its average 20.5 percent to $74.99 after winning the Super Bowl. New England's prices stayed flat, but it still had the highest average cost - $117.84. ... Cleveland has the lowest average ticket price at $54.51."

OLDER UNEMPLOYED FEAR NEVER WORKING AGAIN - NYT's Mokoto Rich reports on pg. A1: "Since the economic collapse, there are not enough jobs being created for the population as a whole, much less for those in the twilight of their careers. Of the 14.9 million unemployed, more than 2.2 million are 55 or older. Nearly half of them have been unemployed six months or longer, according to the Labor Department. The unemployment rate in the group -7.3 percent - is at a record, more than double what it was at the beginning of the latest recession. After other recent downturns, older people who lost jobs fretted about how long it would take to return to the work force and worried that they might never recover their former incomes. But today, because it will take years to absorb the giant pool of unemployed at the economy's recent pace, many of these older people may simply age out of the labor force before their luck changes. ... Being unemployed at any age can be crushing. But older workers suspect their résumés often get shoved aside in favor of those from younger workers."

WHO'S STILL RICH? Per Forbes: Bill Gates ($54b), Warren Buffett ($45b), Larry Ellison, Christy Walton, Charles Koch, David Koch, Jim Walton, Alice Walton, S. Robson Walton, Michael Bloomberg ($18b), Larry Page, Sergey Brin, Sheldon Adelson, George Soros, Michael Dell.

TREASURY TO SCALE DOWN GM IPO - NYT's Nick Bunkley and Michael J. de la Merced report on pg. B1: "The initial public stock offering by General Motors will be smaller than previously suggested, and the federal government will most likely sell a relatively small portion of its 61 percent stake in the company, according to people with knowledge. ... To fetch the highest possible price for the government, G.M. is planning an overall offering of stock valued at $8 billion to $10 billion, which is lower than previous internal targets. ... Earlier, there were suggestions the stock offering could rival the largest in United States history, when the credit card giant Visa raised more than $19 billion in 2008. G.M. and its bankers had been pushing for the largest possible offering because that would mean higher fees for the bankers and a larger pool of investors for G.M. But the Treasury Department has made it clear to G.M. and its underwriters that the government is more interested in setting the highest price possible for the stock rather than maximizing the size of the offering. While both G.M. and the Treasury still hope to reduce the government's stake in the company to less than 50 percent and rid the company of its Government Motors nickname, that goal may not be met, one of the people said."

COLLEGE FOOTBALL PICK OF THE WEEK – Saturday 10/2, Stanford Cardinal (4-0) ranked #9 visit the Oregon Ducks (4-0) ranked #4, 8:00 PM ET, ABC. Jim Harbaugh (next coach at Michigan) takes his Cardinal into the Duck Pond, give the 6.5 points and take the Ducks. Season to date (4-0).

NFL PICK OF THE WEEK – Sunday 10/3, Baltimore Ravens (2-1) @ Pittsburgh Steelers (3-0), 1:00 PM ET, CBS. Who cares about Big Ben, The Steelers are 3-0, give the 1.0 points and bet on the “Steel Curtain”. Season to date (1-2).

SMALL COLLEGE PICK OF THE WEEK – Saturday 10/2, The tenth ranked Polar Bears of Ohio Northern (3-0) visit the number two ranked Mount Union Purple Raiders in a HUGE Ohio Athletic Conference tilt, 1:30 PM ET. Mount Union has too many veterans, go with the Purple Raiders as they march to the Stagg Bowl. Season to date (3-0).

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to President Jimmy Carter (86), Don “Soul Train” Cornelius (74), Cynthia Denne…famous Health Crusader, Bryant Gumbel (62), Steve Lesniak…famous Education Crusader, Jacques Martin (58), Se Ri Pak (33), Sting (59).

DONALD RUMSFELD'S memoir, "Known and Unknown," will be out in January. AP National Writer Hillel Italie: "Rumsfeld, 78, will write about his childhood and long political career, ... the publisher, Sentinel, said in a statement Monday. ... Rumsfeld received no advance and will donate all proceeds to veterans charities. The statement from Sentinel, an imprint of Penguin Group (USA), said Rumsfeld would include anecdotes about everyone from Elvis Presley to his close friend and ally Dick Cheney, the former vice president whose own memoir is scheduled for the spring."

JACKASS OF THE MONTH – It is the purpose of this blog to inform, offer insight and opinion. Again this month we honor those who go beyond the call of duty to humiliate themselves. This month in the short history of this blog we have our first two time winner: Robert Rizzo, former City Manager, and seven other former city officials. For stealing millions of dollars from the City of Bell, California. It takes a very special JACKASS to achieve this ultimate in recognition. It is a mad, mad, mad, mad world when individuals who are appointed or elected to represent their fellow citizens take advantage of them as they have done in Bell. It should be every citizen’s responsibility to hold their public officials accountable; thank you to citizens of Bell, L.A. County and the Los Angeles Times.

Next week: The first of October, are the Christmas decorations up yet?

Until next Monday, Adios.

Claremont, CA
September 27, 2010