The Socialist Hellscape

by twit

of Norway, as reported by the New York Times on May 14, 2009:

… in the midst of the worst global downturn since the Depression, Norway’s economy grew last year by just under 3 percent. The government enjoys a budget surplus of 11 percent and its ledger is entirely free of debt.

[…] Banks represent just 2 percent of the economy and tight public oversight over their lending practices have kept Norwegian banks from taking on the risk that brought down their Icelandic counterparts. But they certainly have not closed their doors to borrowers.

[…] To Ms. Halvorsen, the finance minister, even the underside of the Norwegian dream looks pretty good compared to the economic nightmares elsewhere.

“As a socialist, I have always said that the market can’t regulate itself,” she said. “But even I was surprised how strong the failure was.”

for future reference, while we wait with baited bated breath for the Republicans to launch their upcoming campaign to ‘rebrand’ Democrats as the “Democrat Socialist Party.”

Systemic risk in the American Dream

by lestro

Today, the NYT profiles a bank in Georgia that has been there for 104 years but went under last week.

Here is the key graph, in my opinion:

To Glascock residents, it now seems as if the crisis has extended a slimy tentacle from Atlanta to their quiet community of farms and sawmills 120 miles to the east, where “sprawl” is something one does in the den after work. “It wasn’t the loans at this bank,” said J.H. Usry, 74, a retired hairstylist. “But we’re part of it and that’s brought us down too.”

It was a small town bank;  real “It’s a Wonderful Life” type stuff.  According to the story, for a long time, people didn’t even have account numbers and folks just knew each other.  It’s all very quaint.  So what went wrong?

But in 2000, the Griffin heirs decided to sell the bank — a decision opposed by Lee Griffin and his brother, Skip (Erasmus Eggleston III), who worked at the bank. At the time, the bank had only about $11 million in assets, but it had a charter, and to lenders in a hurry to cash in on the expanding real estate market, that was its most attractive possession.

The bank was bought by an Atlanta-area mortgage lender, who changed the name to FirstCity and moved the headquarters to Stockbridge, an Atlanta suburb where 20 other banks have offices. FirstCity proceeded to focus on real estate, which ultimately made up more than 90 percent of its loans.

Most of the bank’s money came from “brokered deposits,” investments obtained from third parties that shop around for the highest rates, rather than more reliable “core deposits,” which come from local customers. Of the bank’s three branches, where core deposits are typically made, the one in Glascock had the most money.

When historians look back, it will be this era in which they determine America died.  This story is a fantastic metaphor about what we are losing in our small towns as giant corporations chew up and shit out what we used to refer to as “the American dream.”

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Ninja bandits

by twit

According to Local6.com on June 18, 2008, there are ninja bandits on the loose in Florida:

Several men dressed in ninja costumes forced people into a cooler at gunpoint during the fourth robbery of a Central Florida drug store in a week.

now wherever did they get such an idea? The New York Times has a suggestion on June 16, 2008:

Between early 2004 and mid-2007, a period of unprecedented wealth on Wall Street, seven of the nation’s largest financial companies earned a combined $254 billion in profits.

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