The Elephant in the Room is Racism

I watched Anderson Cooper’s interview with a juror from the George Zimmerman case.  She constantly referred to the defendant as “George” as though he was a friend of hers.  It was obvious to her that “George” was merely defending himself.  By stalking an unarmed teenager, then shooting him.

Americans have to face the truth—in the criminal justice system (and other situations), white lives are more valuable than black lives.  If Trayvon Martin had pulled a gun on George Zimmerman, who thinks he would be able to use the “Stand Your Ground” defense?  Unless we have a major discussion on race, black children will always be in jeopardy.  They are guilty until they prove their innocence.

To hear the professionals share on MSNBC their stories of sitting down with their sons and explain the facts of life (behave with the police, don’t resist) especially if they are innocent of any charge made me so sad.  White people are not aware they have invisible white privilege.

The Trayvon Martin Verdict: It's Dangerous to Walk While Black

George Zimmerman, who shot the unarmed teen after confronting him while stalking him, was found not guilty by an all-white jury in Florida.

The trial was rigged from the start.  The prosecution did a piss poor job of portraying Trayvon as the exemplary teen that he was.  Instead, they let the defense show Trayvon as a dangerous thug.

If that verdict didn't prove that we are not a post-racial society, the SCOTUS knocked down part 4 of the Voting Rights Act.  The opinion was that there is no reason to have certain states notorious for their voter suppression tactics have to register with the federal government because black and white individuals are treated the same.  Plessy v. Ferguson: Separate but unequal. 

I don't know if SCOTUS caught a glimpse of the terrible travesty of 2012 election day, especially egregious in Florida, where people waited patiently in line for hours to get a chance to vote, but it seemed pretty political to me.  The day SCOTUS ruled against Part 4, states got busy making it harder to vote.

Now the vigilante law of Stand Your Ground is enshrined as a license to kill.  All one has to do is shoot first and answer questions later.   

FEDCAP Commencement at Apollo Theater

As a former and/or current ReServist (ReServe is an employment agency under the FEDCAP umbrella), I was invited to the FEDCAP commencement.  FEDCAP is an organization whose mission statement (in a nutshell) is jobs for people, services for business.  I wanted to go.  FEDCAP acts as a liaison between its business sponsors such as Fairway and ADM.  Not only do they underwrite many expenses, they also hire a lot of graduates from FEDCAP training.

The most moving parts of the graduation ceremony were the alumni telling their stories.  One person told the story of how he was helped after he got out of prison.  A woman living in a family shelter talked about the difficulty getting and keeping a job (all the speakers emphasized “keeping” a job—retention) because she suffered from a learning disability.  Since she trained at FEDCAP, she was placed and working, and filled with hope that she’d be able to finally leave the shelter.  She was trembling as she spoke, swept up in her emotions.  I think all the graduates were strong and managed to survive.  They were so grateful to FEDCAP and they wanted to succeed despite the odds.

The event was held at Harlem’s World Famous Apollo Theater on 125^th Street.  I’d never been there.  It was beautiful, ornate gold trim and red velvet interiors.  It had balconies on the side.  While the attendees were being seated, the PA system issued songs and artists who’d performed there: the Jackson Five, Billie Holiday, and everyone in between.

Bill Thompson, one of many running for mayor, gave the keynote address.  He praised the graduates and asked them to be role models for the community.  I was impressed with how happy the graduates were.  They cherished every moment that they were being feted.  (There was a little problem at the end, when the person read their names before they could step up to the plate.  I wondered what they were going to do when the diplomas had to be given to his/her rightful owner.)  They went through real job training with a good chance of a job offer afterward from one of FEDCAP’s business partners.

One of the alumni stories was that of a home health aide caring for her client during and after Sandy hit the shore.  There was no electricity or communications between the aides and the agencies they worked for.  But she soldiered on and didn’t leave her post.  She stayed with her client until the electricity was turned back on.  In her mind there was never a thought that she would abandon her, not a thought for her own safety.

At 15,000, who do you invest with? Or do you?

The Dow Jones Industrial Average (DJIA) hit 15,000 this week for the first time ever.  One main reason is that in the age of negative interest rates, there’s no other place for fixed-income depositors to go.  If they park their money in the bank, they lose because inflation eats their principal for lunch.  They want to play with house money, too.  The question becomes, who to invest with?  An ETF?  Or a celebrity hedge fund manager?

On 5/8/13 the Financial Times ran an illuminating article, “Tips from Wall Street hedge fund gurus fail to reward the faithful,” by Dan McCrum and Arash Massoudi where last year predictions from the managers were contrasted with simply passively tracking the DJIA with an index fund.  Two of the most high profile managers, Bill Ackman of Pershing Square and David Einhorn of Greenlight Capital, while successful, did not match the 22% profit gained by investing in an index fund.  Ackman focused on the underappreciated value of the retailer J.C. Penney, which turned out to be underappreciated for a reason: plummeting sales and profits.  The stock is down 37% since last year.   Einhorn made a good prediction on selling the yen against the dollar but his advice to sell shares in Martin Marietta Materials, “a building group boosted by government stimulus spending, would have lost 66% of their money.”

 
Hedge funds are not cheap.  You pay a 2% management fee and 20% of your profits.  In the meantime, withdrawals are capped at a few times a year.  My advice is: take the celebrities with a grain of salt.

Giving Credit Where Credit Is Due

My previous post on the reopening of banks in Cyprus and the capital control rules depended a great deal on the reporting of Liz Alderman of the New York Times.

Cyprus Lesson: Put Your Money In Your Mattress for the Good of the Country

The Troika (the European Commission, the ECB and the IMF) have made a sweeping power grab in Cyprus.  In exchange for a paltry bailout, Cyprus gave up its rights not only to negotiate its own affairs but to have free flow of capital.

Some of the capital controls imposed:

• Electronic transfer of funds from Cyprus to other countries is prohibited
• An individual cannot take more than 3000 euros in cash outside the country
• Credit and debit withdrawals are limited to 5000 euros a month
• Banks will not cash checks; they will only accept deposits
• Bank clients will not be able to withdraw from fixed-term deposits before their maturity

The ECB did its part.  It sent an airplane filled with 1.5 billion euros in a cargo container made of gold (only kidding about the gold—can’t let the Cypriots get ahead of themselves).

It’s estimated despite these “controls” some 10% of Cyprus’s 64 billion euros on deposit will be withdrawn today when the banks reopen.

The question I have is: how does this power/money grab improve the Cyprus situation?  Oh, that’s right.  It doesn’t.  Isn’t the point simply to put Troika managers in charge of all the Eurozone nation-states?

Thousands of employees will lose their jobs at Laiki Bank, the country’s 2^nd largest bank.  Businesses have not been able to pay their employees.  In a country dependent on imports, importers haven’t been able to pay their bills, raising the spectre of shortages and higher prices.

Under European Union treaties, restricting the free movement of capital is forbidden.  Critics say that what is happening in Cyprus shows that union rules will be flouted when the IMF (International Monetary Fund, the ECB (European Central Bank) and the EU (European Union)-THE TROIKA—leaders find it convenient to do so.

There is no need to fight bloody wars for treasure.  These are bloodless coups.  Where will it end?

Mortgage Giants Gouge the Taxpayers With No End in Sight

In Gretchen Morgenson's article in today's New York Times she dissects how much the government owned mortgage insurers Fannie Mae and Freddie Mac drain the tax-payer with no hope of recouping the money.  Because the private mortgage market won't step in, Fannie and Freddie insure mortgages up to $417,000.  Any monies they make go directly to the Treasury, not to taxpayers.

And they're still in the red costing taxpayers hundreds of billions of dollars:

Last fall, the regulator charged with overseeing Fannie and Freddie estimated that the taxpayer bill for the companies could be $200 billion by the end of 2015.

 The chief executives who ran the companies into the ground made huge amounts of money.  For instance, Franklin Raines, former head of Fannie Mae, was paid $90 million from 1998-2004.  He still is on the taxpayer dole after replacement.  Not only does the taxpayer guarantee retiree pensions, he/she also pays their legal bills:

[F]rom September 2008 through 2012, taxpayers also spent $114 million for legal bills racked up by former executives and directors testifying in lawsuits relating to the accounting scandals or financial crisis inquiries.

If this money was taken out of these entities and returned to the taxpayer, that amount alone could stimulate the economy further.