East Side Bailout!
Here we are, in another financial crisis trying to make sense of it all. Fear mongering out of Washington, partisanship in the congress, and gamesmanship on the campaign trail.
What's a poor boy to do? How does an ordinary educated person make sense of it all let alone an extraordinarily ordinary undereducated person like moi who's got no sense at all.
Well, for financial commentary one place I turn is Barry Ritholtz's blog The Big Picture.
Below you can read his letter to D.C from Wall Street. It gives a compressed, concise, yet detailed enough background on how we arrived at this point, this financial crisis where the President is asking us taxpayers to bailout huge financial institutions who gambled with investors money and lost.
It stinks to high heaven, and it's difficult to understand, what with the terms being tossed around,like MBS, CDOs, Credit Default Swaps, etc., but it's up to us citizens to make a try at sorting out the reasons and the competing theories and the ramifications of the contemplated actions. I suggest you make friends with Wikipedia for starters and do some serious surfing if you really want to dig into the subject. Start with the subprime crisis and work back and forward: Subprime on wiki
A Memo Found in the Street
By BARRY L. RITHOLTZ
Uncle Sam the enabler.
To: Washington, D.C.
From: Wall Street
Re: Credit Crisis
Dear D.C.,
WOW, WE'VE MADE QUITE A MESS OF THINGS here on Wall Street: Fannie and Freddie in conservatorship, investment banks in the tank, AIG nationalized. Thanks for sending us your new trilliondollar bailout.
We on Wall Street feel somewhat compelled to take at least some
responsibility. We used excessive leverage, failed to maintain adequate capital, engaged in reckless speculation, created new complex derivatives. We focused on short-term profits at the expense of sustainability. We not only undermined our own firms, we de-stabilized the financial sector and roiled the global economy, to boot. And we got huge bonuses.
But here's a news flash for you, D.C.: We could not have done it without you. We may be drunks, but you were our enablers: Your legislative, executive, and administrative decisions made possible all that we did.
Our recklessness would not have reached its soaring heights but for your governmental incompetence.
THIS MEMO PROVIDES A BRIEF HISTORY OF your actions that helped create this crisis.
DOW JONES REPRINTS
1997: Federal Reserve Chairman Alan Greenspan's famous "irrational exuberance" speech in 1996 was somehow ignored by, um, Fed Chairman Greenspan. The Fed missed the opportunity to change margin requirements. Had the Fed acted, the bubble would not have inflated as much, and the subsequent crash would not have been as severe.
1998: Long Term Capital Management was undercapitalized, used enormous amounts of leverage to purchase all manner of thinly traded, hard-to-value paper. It failed, and under the authority of the Federal Reserve a "private-sector" rescue plan was cobbled together. Had these bankers suffered big losses from LTCM, they might have thought twice before jumping into the exact same business model of undercapitalized, overleveraged, thinly traded, hard-to-value paper. Instead, they reaffirmed Benjamin Disraeli's famous aphorism: "What we learn from history is that we do not learn from history."
1999: The Financial Services Modernization Act repealed Glass-Steagall, a law that had separated the commercial-banking industry from Wall Street, and the two industries, plus insurance, came together again.
Banks became bigger, clumsier, and hard to manage. Apparently, risk-management became all but impossible, even as banks had greater access to larger pools of capital.
2000: The Commodities Futures Modernization Act defined financial commodities such as "interest rates,currency prices, and stock indexes" as "excluded commodities." They could trade off the futures exchanges, /with minimal oversight by the Commodity Futures Trading Commission. Neither the Securities and Exchange Commission, nor the Federal Reserve, nor any state insurance regulators had the ability to supervise or regulate the writing of credit-default swaps by hedge funds, investment banks or insurance companies.
2001-'03: Alan Greenspan's Fed dropped federal-fund rates to 1%. Lulled into a false belief that inflation was not a problem, the Fed then kept rates at 1% for more than a year. This set off an inflationary spiral in housing, and a desperate hunt for yield by fixed-income managers.
2003-'07: The Federal Reserve failed to use its supervisory and regulatory authority over banks, mortgage underwriters and other lenders, who abandoned such standards as employment history, income, down payments, credit rating, assets, property loan-to-value ratio and debt-servicing ability. The borrower's ability to repay these mortgages was replaced with the lender's ability to securitize and repackage them.
2004: The SEC waived its leverage rules. Previously, broker/dealer net-capital rules limited firms to a maximum debt-to-net-capital ratio of 12 to 1. This 2004 exemption allowed them to exceed this leverage/rule. Only five firms -- Goldman Sachs, Merrill Lynch, Lehman Brothers, Bear Stearns and Morgan Stanley --* were granted this exemption; they promptly levered up 20, 30 and even 40 to 1.
2005-'07: Unscrupulous home appraisers found that they could attract more business by inflating appraisals. Intrinsic value was ignored, so referrals kept coming in. This helped borrowers obtain financing at prices that were increasingly unsupportable. When honest appraisers petitioned both Congress and the bureaucracy to intervene in the widespread fraud, neither branch of government acted.
THERE'S ACTUALLY A LOT MORE we could add to these items. We could mention impotent supervision of Fannie and Freddie by the Office of Federal Housing Enterprise Oversight; the negligent oversight on ratings agencies; the Boskin Commission's monkeying around with how inflation gets measured; the "Greenspan Put," etc.
We could mention former Fed Governor Edward Gramlich, who warned about making home loans to people who could not afford them, and who said the runaway subprime-mortgage industry would create problems in the housing and the credit markets. But Gramlich was up against a Fed chairman who apparently believed that markets can regulate themselves. (Gramlich died last year, three months after the housing bubble started to deflate.)
We on Wall Street do not deny our part. We created these securities, we rated them triple-A, we traded them without understanding them. Now that they have gone bad, we are real close to getting the rest of the country to take them off our hands.
Thanks, D.C. None of this would have been possible without you.
Very truly yours,
Wall Street
- - -
BARRY L. RITHOLTZ is CEO of Fusion IQ, a research firm, and blogs financial topics at <bigpicture.typepad.com.
Barron's Online http://online.barrons.com/article_print/SB122246742997580395...
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Posted at 11:50 AM | Issues | Comments (0)
EAST SIDE RANT!!!!!!
"The class gap here is not only a grand canyon, but one that is filled with hate, entitlement, and some of the worst liberal hypocrisy I have ever seen. It borders on total ignorance."
"The moneyed people on the east side as a whole, are a bunch of exclusionary monsters, who successfully got rid of the Dunkin Donuts on Hope St.(one of the only affordable lunch counters) because the awning outside 'ruined the neighborhood aesthetic'."
I came across this insightful, heartfelt piece of writing on a discussion board on the Outside In site, simply titled Rant!!!!!!!!.
I suggest it for everyone here as a good read for it is quite apt in some regards and raises some further questions for debate.
Here is the link:
Rant!!!!!!!! (from Outside In)
Here are a few more excerpts:
"I am a native Rhode Islander who lives on the west side, and I have worked in a non-professional job on the east side for almost 5 years. I deal with the public in the Mount Hope/Rochambeau area, and I am currently looking for another job. I am sitting here on a Sunday afternoon so twisted up with anxiety over going to work tomorrow, that I have indigestion, and hives."
"I have lived and worked in several different urban communities in my life including New York City, and the east side is among the worst as far as inter-personal relations go. The people I deal with in the community from day to day are predominately white, and professional. Most are involved to a strong degree in academia-professors, grad students etc. The class gap here is not only a grand canyon, but one that is filled with hate, entitlement, and some of the worst liberal hypocrisy I have ever seen. It borders on total ignorance."
Our ranter sums it up neatly in a few paragraphs:
"To sum it up, the folks I deal with are cold, insulting, and very entitled. They play psychological mind games with me, and treat me like an indentured servant on a day to day basis. I have had so much of my personal self criticized from my wardrobe, to my RI dialect."
"Thanks so much for reading this, I hope others do too, and adopt a new way of looking at class issues apart from race. A little inclusion, faith and open-mindedness never hurt, and smiles on the street are always free."
You comments are welcome both here and on the linked discussion board.
Posted at 10:23 AM | Community | Comments (0)
East Side Broken Windows: Why isn't the City . . .?
Why isn't the City putting all the weight of it's resources and agencies to correct the quality of life imbalance extant in Mt. Hope in comparison to all other East Side neighborhoods. Is the City racist? Do the City's policies toward Mt. Hope reflect institutional racism? Is criminality allowed to prosper in Mt. Hope because there is a small, influential minority population in Mt. Hope who are invested in the Drug Trade and who wield a disproportionate influence on how the police police and the City governs? To the detriment of the Real Mt. Hope? The law abiding, tax paying citizens of Mt. Hope?
Just look at these disgusting pictures of boarded up houses and drug dealing locations!
Knowles Street near the corner with Pleasant Street
Pleasant Street
Camp Street, corner of Camp & Grandview
Boarded up houses on Knowles and Pleasant, a house on Camp Street home to notorious drug dealers who operate in broad daylight with the windows blocked with heavy doors and a garage around back where drugs are peddled and is the site of public drunkenness on a daily basis?
I defy you to provide evidence of any other such properties in similar condition in any other East Side Neighborhood: any other open air drug markets on the East Side. It is just not tolerated in other East Side neighborhoods.
Why?
My best guess is that Mt. Hope is the only East Side Neighborhood with a measurable African American demographic. Drug dealing and dilapidated housing, clearly in violation of criminal law and housing codes, simply is not tolerated in other East Side Neighborhoods.
Institutional racism? Call it what you will, the situation exists.
Is this the fault of the African American Community in Mt. Hope? I think not. The embedded drug trade in Mt. Hope is embedded in the political/social institutions in Mt. Hope who have enabled the drug trade to flourish. Those who are part and parcel of the drug trade who masquerade as community activists and so-called pastors. Preying on their own community, contributing to Black on Black violence. The larger African American community in Mt Hope are victims of these entrepreneurs who prey on their own people with drugs and death.
Drug dealing in Mt. Hope is an African American run business: is that why the City is impotent, or even loath to enforcing the law. Is it institutional racism. The old, "Let them destroy each other, let them kill each other", as long as it doesn't spread to other, predominately white neighborhoods?
From the WPRI report:
Lt. David Schiavulli says "It's kind of the broken windows theory. If the neighborhood looks rundown, and the neighborhood looks unkempt, it invites crime."
The Broken Windows Theory
Hmmmn. Lt. Schiavulli may be a visionary up against the powers that be. I'm sure that if the Lt. had his way Mt. Hope would be free of drug dealing and rundown housing. But he is up against the entrenched political establishement who try to tie his hands behind his back so as to not upset the apple cart and the vote generating machine in the form of M-O-N-E-Y.
Politics is ugly, dishonest, and the new liberal residents of Mt. Hope do not deign to dirty their hands with inconvenient truths.
How convenient.
Yet politics means speaking up for your rights, politics means righting wrongs, setting things straight.
Where is Code Enforcement in Mt. Hope? Where is the Drug Squad, the NOCD, of the Police Department? Where is our Councilman, Kevin Jackson on the embedded drug trade in Mt. Hope.
Are any of you asking these people where they are, what they are doing about these problems?
I guess it's just too embarrassing or scary to make waves, eh?
Not really! Not for a few! Anonymous tips have been rolling in along with cellphone pics. So, keep them coming.
Soon GCCC wil be doing some fundraising to upgrade this website, establish a dedicated tip phone line and to hire a top law firm to represent GCCC and Mt. Hope.
Keep your ears to the ground and continue to be proactive with phone calls to Code Enforcement and to the Police NOCD.
And click on the link below to send anonymous information.
Posted at 10:56 PM | Community | Comments (0)
East Side Crime Tips Roll In!
The East Side Mt. Hope neighborhood declares it has had enough of the Open Air Drug Market: the tips are rolling in in response to the call for anonymous tips identifying the most notorious drug dealing locations in Mt. Hope.
The consensus seem to be that the brown stucco house at the corner of Camp and Grandview is by far the most problematic.
The Corner of Camp & Grandview
Here is what some tips said about this location:
. . . the brown stucco house on the corner of Camp and Grand View is a drug den.
. . . and it's very active there between 2 & 4 . . .
. . . they seem to know when the cops are around.
. . . constant cars pulling over and people running back and forth along with the doors blocking all the windows are just about as blatant as you can get.
. . . obvious code violations and they get a free ride?
. . . how could the police not have busted these ignoramuses? It's so obvious.
. . . In my daily travels up and down Camp that house seems to be the last remaining drug pit.
Looking Down Camp Street, Corner of Grandview.
Wait a minute. Is that not the house that was the target of the GCCC's Local Nuisance Task force back in march of 2005?
I believe so: check out the blog at that time: March 2005
If I remember correctly a local womam and several other residents requested our help in addressing that problem, and so we formed the Local Nuisance Task force to address that problem that so impacted her children and her family and the families and children on Grandview that had to walk past the dealers every day. And we were quite successful at that time in shutting down that operation and getting code enforcement involved as well as the AG's office.
Well, some things never change: the minute you let your guard down . . well, no matter where you go, there you are.
They're baaaaaack!
Can someone please do the research necessary to find out who is the legal owner of that address?
Why are the windows blocked with heavy wooden doors? Isn't that a code violation as one tipster pointed out?
Can someone please call code enforcement and ask them to look into it?
Can someone please call the Police and get the NOFC involved: they are the department within the police who should be handling this blatant drug dealing right in our faces on Camp Street.
If you think the City and the Police are going to put a stop to drug dealing in Mt. Hope under their own initiative you got another think coming! It's in their best interest to look the other way and not make waves. Only if we lean on them relentlessly!
Keep those tips coming in. We've had tips on other locations and we will be revealing them soon enough as the information comes in.
Keep them tips coming: Anonymous Tips
Posted at 6:02 PM | Community | Comments (0)
East Side Open Air Drug Market Back!
Yes! The Open Air Drug Market is Back!
Just drive down Camp Street in the evening, and you will see at least 4 locations where drug dealers ply their trade right in front of their houses without fear of the police!
After a relatively quiet summer on the drug front, a virtual explosion of drug dealing has taken place on the East Side in Mt. Hope.
The air changes, the energy feels different, the noise level increases, the number of intoxicated people on the streets increases,
the anxiety level goes up, and the potential for violence hangs in the air.
You know it! You feel it! You see it!
Let's Stop it Before it Gains Traction!
Click on the link below to send in your anonymous tip on Mt. Hope Drug Dealing. Confidentiality guaranteed!
Coming soon: a dedicated phone line for crime tips!
Posted at 9:24 PM | Crime | Comments (0)
Mt. Hope Rises Up Against Drug Trade!
The Drug Trade is almost defeated in Mt. Hope, almost wiped out as far as street level dealing is concerned. Our community has come a long way. Yet a few pockets of in-your-face lawlessness remain and they bring down the entire community.
Mt. Hope needs your help in bringing down the remaining criminal Kingpins and dealers. Send us your Anonymous Tips.
You know where they are, where they deal and you may even know who they are.
You're timid, afraid, that is very understandable. I'm a timid individual myself, and yes, I confess to being afraid at times. Yet some define courage as being able to overcome your fear, as opposed to courage as reckless abandon without regard for your safety or your neighbors. Prudence is the better part of valor, they say, and I agree.
If you wish to play a courageous role in ridding Mt. Hope of the remnants of the pesky Drug Trade and you have information you wish to share, yet you wish to remain prudently anonymous, there is a way for you to contribute.
Click the link below and share your information: you will be kept anonymous and your information will be used to bring the remaining drug traffickers in Mt. Hope to justice.
Location, names, times, descriptions, license plate numbers, addresses, methods of operation, whatever you know is welcome information.
Posted at 8:45 PM | Crime | Comments (0)
WPRI: Pleasant Street Faces Lt. Schiavulli & Judge Tavares!
You've go to doff your hats to our own District 8, Lt. Commander Lt. David Schiavulli for taking the bull by the horns, being pro-active, and taking up Judge Tavares offer at face value and walking Pleasant St. with the Judge.
You know Pleasant Street? That's the street that imports criminality to the rest of Mt. Hope and to the rest of the East Side.
Below, read the report from WPRI TV.
PROVIDENCE, R.I. (WPRI) - A city plagued by rundown homes. Absentee owners, letting their properties rot bringing down entire neighborhoods and worse these homes are often a magnet to crime.
Now a dramatic approach to holding homeowners accountable. Target 12 Investigator Tim White has the exclusive details.
Since our first story exposing a dead-beat property owner back in February, the Target 12 Investigators have been responding to your emails and phone calls demanding action on abandoned, rundown homes.
Now, we've learned police in Providence have teamed up with a judge to hit the streets, and get aggressive on a city-wide crisis. Pleasant Street in Providence, doesn't always live up to its name. Some homes so bad, Cindy Price's kids say "They're haunted, haunted houses."
At the very least scary. Smashed windows. Garbage, everywhere. The front door, kicked off its hinges. Cindy Price lives near abandoned home.
Tim White asks, So do you tell them don't go near that house?
Cindy: "Yeah I told them and neighbors children as well, I say don't go in that house because they told us someone burned it down."
Just up the road is another disaster. Police tell another abandoned house caught fire when a squatter inside knocked over a candle while smoking crack. The problem not unique, of course to Pleasant Street it's a city epidemic.
Lt. David Schiavulli says, "This is one of the worst ones in my district this house right here."
Schiavulli is a district commander with Providence police. Rundown homes, he says, are like welcome signs for hoods.
Lt. David Schiavulli says "It's kind of the broken windows theory. If the neighborhood looks rundown, and the neighborhood looks unkempt, it invites crime."
The evidence, bullet holes poc-mark the siding of a rundown home where five people were shot in just one night. The city of Providence identified more than 900 abandoned properties. Compounding the problem getting absentee property owners to fix their homes. The issue was brought to the attention of housing judge Angel Tavares at a meeting with Providence police.
Lt. David Schiavulli: "He gave all of us his phone number and said if there was a problem we can go directly to him."
Tim White: So you did.
Lt David Schiavulli: "I took him up on his offer and he's been great.
The call prompted Judge Tavares to leave the bench and walk the streets with Schiavulli.
Tim White: Nothing drives the point home like actually coming out here and seeing it.
Lt. David Schiavulli: "That's true and I think it helps him to deal better with it in court."
Sometimes, the mere presence of a judge prompts action. After talking to the judge on the scene he cleaned up the outside of the house all the garbage that was in the backyard. If a homeowner doesn't cooperate, the judge can put a home into receivership: placing someone else in charge and possibly putting the home up for sale or demolition.
A possibility for the Pleasant Street "haunted" house. Its destiny now sits in the hands of judge Tavares. To Price, that's good news.
Cindy Price: "A lot safer, because I know they are doing their job they're actually out here checking out the streets to make sure nothing is going on."
Lt. David Schiavulli says he was the first district commander to take up the judge on his offer, since then, others have followed suit.
Read the story and watch the video:
http://www.wpri.com/Global/story.asp?s=8824175
Posted at 8:23 PM | Community | Comments (0)
Wonderful Event in Billy Taylor Park
The Baptist Church in Mt. Hope today held a wonderful event in Billy Taylor Park reinforcing what I have always believed: that the African-American community in Mt. Hope is not just about the punks and drug dealers you see polluting our Mt. Hope neighborhood, but it is also about teaching young people to steer toward a righteous path.
From my backyard I heard glorious Gospel Music from a live band, I heard speaker after speaker expound on personal responsibility, duty to community, and commitment to moral values.
It was a pleasure to witness such an event in the park, for that is how our park should be used. Too many African-American events in BTP have degenerated into violence, drug and alcohol abuse, and property vandalism. This event was a wonderful exception!
Hats off to the congregation of the Baptist Church for not reinforcing the negative sterotype of African-American events featuring drugs and violence in Billy Taylor Park.
Prick us, no matter our race, and we all bleed red, and I believe we all bleed red for our neighborhood, held hostage for so long by the embedded drug trade in Mt. Hope.
I hope the GCCC can look forward to working with the leadership of the Baptist Church to end, once and for all, the scourge of the embedded drug trade in Mt. Hope.
John Twomey
Posted at 3:50 AM | Community | Comments (0)
