The Cheney Observer

Filing for Bankrupcy Protections doesn't necessarily mean increased joblessness. Keeping jobs in the face of poor business performance to maintain product production and marketing also provides 'economic stimulus' instead of unemployment.

There was nothing so wrong with the existing fiscal infrastructure that wouldn't provide BETTER for continued economic bouyancy than any 'bailout.'

When Silverado was 'bailed out' the federal banking system was sound and the FDIC provided funding for the S&L bailout. But, this was different. This literally was the federal system taking a huge nose dive into insolvency.


Republicans don't listen. They like to 'cover their tracks' long enough to blame others. You try to tell folks that if allowed to file bankrupcy rather than face a bailout would provide PROTECTIONS rather than the continued accumulation of 'continued bad' debt. They just don't 'get it.' Or don't WANT to 'get it.'

The 'thing' is this, now, AIG is losing ground again. And why? Because it didn't have the protections it needed to 'reorganize' and attempt survival. The monies that Paulson and Bernanke gave AIG simply went to 'continue' the losses that existed in the first place. AIG never had a breather, simply continued financing of their previous 'bad decisions.' Let's put it this way: the AIG 'bailout' wasn't so much a bailout as a chance to tread water a little bit longer. Why? Anyone's guess.

The chances the $700 billion 'bailout' will 'come back' to the USA Treasury is skeptical at best. The Paulson 'sell-out' of the financial markets may have staved off the liquidation of Goldman-Sachs, but, the 'idea' that all the bailout money was simply 'short term' bouyancy to a recovery is unrealistic. Besides, why 'bailout' rather than file for 'bankrupcy protections.' The USA Legislature was sold a 'bill of goods' under pressure from a panicked public.

Effectiveness of AIG's $143 Billion Rescue Questioned (click here)
By Carol D. Leonnig

Washington Post Staff

Writer Monday, November 3, 2008; Page A18
A number of financial experts now fear that the federal government's $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing....

Nobel Winner Aumann Says Bernanke, Paulson Steps `Not Smart' (click here)
By Tal Barak and Alisa Odenheimer
Nov. 2 (Bloomberg) -- Robert J. Aumann, the Israeli economist who won the 2005 Nobel Prize in economics, said the steps taken by Federal Reserve Chairman Ben S. Bernanke and U.S. Treasury Secretary Henry Paulson to save financial markets ``weren't smart.''
``The intervention by the regulators to save the U.S. economy will lead to further bankruptcies of banks and insurance companies,'' Aumann said at a rabbinical conference in Jerusalem yesterday. ``They are only encouraging institutions to take more uncalculated risks.''
The crisis in the financial markets was caused by the incentives provided to managers of banks and other financial institutions that caused them to act to their own benefit and not the banks', he said. Bonuses were given on the basis of loan sales, without considering who the borrowers were, he said.
More than 100 of the world's biggest banks and securities firms have posted about $685.4 billion in asset writedowns and credit losses because of the financial turmoil. A month ago, Congress approved a $700 billion rescue package that gave the Treasury wide authority to buy and guarantee assets to prevent a U.S. financial collapse.
Aumann, who won the Nobel Prize for his work on game theory, said there is ``no financial crisis'' in Israel. The Israeli government's decision not to intervene in the financial markets was correct, he said.
To contact the reporters on this story: Tal Barak in Tel Aviv at tbarak@bloomberg.net; Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net. Last Updated: November 2, 2008 11:19 EST



George Magnus, senior economic adviser to UBS, is widely acknowledged to have predicted that the US sub-prime mortgage crisis would trigger a global recession. Photo: Jane Mingay

George Magnus: the man who predicted the sub-prime crisis would lead to recession (click here)
George Magnus does not look like a prophet. Yet this is the man widely acknowledged to have predicted that the US sub-prime mortgage crisis would trigger a global recession.
By Josephine Moulds
Last Updated: 11:22PM GMT 02 Nov 2008
George Magnus, senior economic adviser to UBS, is widely acknowledged to have predicted that the US sub-prime mortgage crisis would trigger a global recession. Photo: Jane Mingay
Last March, when US Treasury Secretary Henry Paulson was busy reassuring the world that he for one was not concerned about global market gyrations, Magnus wrote a paper that now seems eerily prescient. As senior economic adviser to UBS, he suggested that the US sub-prime mortgage crisis could cause the end of the credit cycle "with potentially systemic economic consequences".
Liquidity could dry up, exposing the stratospheric levels of debt in the system, with knock-on reactions in complex financial asset structures and prices. Financial institutions, he wrote, could put a freeze on lending, prompting a recession that would give rise to more defaults, a downturn in the credit cycle and a negative feedback loop with the economy.
So, how does it feel to forecast the biggest financial crisis since the 1930s? "I'd like to have predicted something really nice," laughs Magnus, who at 59 has the air of a University lecturer rather than an investment banker....


Cotton merchant Paul Reinhart AG's US unit files for Bankruptcy Protection (click here)
10/18/2008 3:57 AM ET
(RTTNews) - Paul Reinhart Inc., Dallas, an indirect subsidiary of cotton merchant Paul Reinhart AG of Switzerand, announced the recent filing of protection under Chapter 11....

Digital Vision handed bankruptcy protection (click here)
Published: 16 October 2008 19:54
Author: Will Strauss
Last Updated: 16 October 2008 19:54
The short-term future of Digital Vision, the Swedish manufacturer behind the Film Master grading system, has been secured after the company successfully applied for its domestic equivalent of Chapter 11 bankruptcy....

Frontier gets OK to toss union pact (click here)
Machinists, judge hope outsourcing can be avoided
Bloomberg News
Published October 31, 2008 at 8:05 p.m.
Frontier Airlines can reject a contract with unionized machinists after agreeing to changes that make outsourcing aircraft maintenance work less likely....

Infinity condo developer files for bankruptcy protection (click here)
By Ryan Starr - Surrey North Delta Leader
Published: October 15, 2008 5:00 PM
Updated: October 16, 2008 10:46 AM
Wall Street woes have sent shockwaves through Surrey's Main Street.
The developer of the five-tower Infinity project in North Surrey has filed for bankruptcy protection as a result of the collapse of one of its chief financiers, Lehman Brothers.
The global investment bank filed for bankruptcy Sept. 15 after the U.S. Treasury Department refused to bail it out in the midst of the global credit-market meltdown....

Hilander loses bankruptcy protection (click here)
Wednesday, October 15, 2008 12:52 PM PDT
By Erik Olson
A federal bankruptcy judge in Tacoma revoked bankruptcy protection for the Hilander Family Fun Center in Kelso last week, leaving the business vulnerable to shutdown for failure to pay as much as $436,000 in back taxes....

Auto parts supplier base teetering in downturn (click here)
By Sharon Silke Carty, USA TODAY
DETROIT — While the big U.S. automakers lobby the government for some form of bailout, industry watchers are bracing for a major failure of the auto supply base if one or more of the Detroit 3 seek bankruptcy court protection....

Goody's says court confirms reorganization (click here)
Associated Press 10.08.08, 7:59 AM ET
NEW YORK -
Apparel retailer Goody's Family Clothing Inc., which filed for bankruptcy protection in June, said a court confirmed its reorganization plan.
The U.S. Bankruptcy Court for the District of Delaware confirmed the plan, which is expected to become effective in about 10 days.
In a statement Tuesday, Goody's Chief Executive Paul White said the decision will allow the business to move forward with "renewed vigor."...

Vocations go on vacation as the Mid-South economy stumbles (click here)
By David Flaum , Memphis Commercial Appeal
Sunday, November 2, 2008
Rising foreclosures and bankruptcy filings, more small businesses launched, fewer apartment renters, lower new-car sales and higher used-car sales -- all signs of one troubling trend: rising unemployment.
The September jobless rate of 7.1 percent for Tennessee was the highest in 21 years -- including during two recessions -- said William Fox, executive director of the Center for Business and Economic Research at University of Tennessee-Knoxville....

Stores may post weakest October sales on record (click here)
By ANNE D'INNOCENZIO – 2 days ago
NEW YORK (AP) — After slashing their spending in September as the financial meltdown intensified, shoppers went into full retreat in October, spooked by rising layoffs and shriveling retirement funds.
Retailers reporting October sales data for established stores next week expect to see the weakest performance for that month since at least 1969 — in many cases percentage declines in the mid-teens — and are frantically cutting prices even more to pull in shoppers.
"Consumers just stopped shopping," said Michael P. Niemira, chief economist at the International Council of Shopping Centers....

Oct. 07, 2008 IN BRIEF
Sun Country will seek bankruptcy protection (click here)
Vacation-oriented Sun Country Airlines will file for bankruptcy protection but will keep flying to Southern Nevada and other destinations...

Cotton firms get relief in Reinhart bankruptcy (click here)
BY NANCY COLE
Posted on Thursday, October 30, 2008
Arkansas cotton producers holding contracts to sell at least a portion of their 2008 crop to Paul Reinhart Inc. are breathing a little easier this week.
U. S. Bankruptcy Judge Harlin DeWayne Hale for the Northern District of Texas has authorized Reinhart, the fourth-largest U. S. cotton merchant, to reject all of its outstanding cotton-purchase contracts....

North Georgia business bankruptcy filings surge (click here)
By MARGARET NEWKIRK
The Atlanta Journal-Constitution
Sunday, October 26, 2008
The popped housing bubble and crushed credit market have pushed record numbers of North Georgia businesses into bankruptcy court this year.
Chapter 11 filings are up between 50 percent and 70 percent over all of last year, depending on how they’re counted....
BUSINESS CH. 11FILINGS IN N. GEORGIA•
1998 -- 113
1999 -- 80
2000 -- 152
2001 -- 132
2002 -- 185
2003 -- 128
2004 -- 177
2005 -- 148
2006 -- 148
2007 -- 161
2008 to date -- 283
This year
January -- 6
February -- 53
March -- 24
April -- 15
May -- 34
June -- 29
July -- 16
August -- 53
September -- 24
October-- 29
Figure includes multiple related filings.

Thursday, October 23, 2008
Dynamic Leisure files for bankruptcy protection (click here)
Tampa Bay Business Journal
Wholesale travel company Dynamic Leisure Corp. has filed for Chapter 7 bankruptcy protection.
The company’s most recent quarterly report filed in May with the Securities and Exchange Commission several references to its failed attempts to gain capital.
“We have experienced historical losses and a substantial accumulated deficit. If we are unable to reverse this trend, we will likely be forced to cease operations,” the filing said.
At the time of the filing, the company reported $8.7 million in assets....

AND THEN out of tragedy comes a little ray of economic sunshine. Will there be insurance available to prevent complete losses in the future? Sure. At a price. Who cannot afford to pay the price actually? Someone is making money.

Lloyd's investors benefit from AIG fallout (click here)
By Ellen Kelleher
Published: November 1 2008 02:00
Last updated: November 1 2008 02:00
The black cloud hanging over the American International Group (AIG) may be poor news for the US economy, but it is good news for the syndicates of Lloyd's of London which are already seeing business flow their way as a result.
The troubles at AIG, which has received $123bn in emerging lending from the US Federal Reserve, are forcing both underwriters and clients of AIG to defect to Lloyd's. So the UK group's trading prospects are set to improve even after a long hurricane season, as rates are expected to rise in the wake of the US insurance giant's near-collapse and the credit crisis.
Indeed, some of the most popular of Lloyd's 75 syndicates, including Hiscox, are already looking to increase their capacity - or the amount of business they are able to write - next year to prepare for growing demand. And the tectonic shifts in the balance of power of the world's insurance sector are being welcomed by the 2,500 or so private investors who now underwrite about 17 per cent of the £16bn Lloyd's has in capacity. As rates rise, profits tend to rise with them.
"We believe that the effective nationalisation of AIG, the losses from hurricanes Gustav and Ike and the damaged financial health of several other leading insurers and reinsurers will lead to a steady improvement in Lloyd's prospects over the next two to three years," said James Sparrow, chief executive of Alpha Insurance Analysts, a members agency which offers private investors the chance to underwrite premiums in Lloyd's syndicates....

The list of bankrupcies filed in the month of October are far to numerous to continue to list here. The point is that although banks failed and were sold, the businesses within the American Landscape might be surviving okay.

Job preservation and creation needs to be the focus of any federal plan to protect the American economy.

Wall Street will take care of itself.

The businesses that provide the economy 'with purpose' and 'longevity of purpose' while employing a widening tax base will determine the best outcome to the failing and flailing USA economy.

Health Emergency :: 23 years of cheap and unhealthy food policy - 15 years Republican Presidents can take the responsibility. ENOUGH !

Health care costs will come down and we will have a healthier nation when government engages the issues of disease. Removing 'gym' from public school curriculum will be out of the question if that means higher health care costs and ultimate early death rates for citizens. Having a National Health Care policy as a guideline for insurancers will promote better health for Americans.

There is absolutely no reason for this level of negligence of our citizens, especially the ones most vulnerable.

Dropped gym classes linked to obesity surge (click here)
A survey's results prompts researchers to urge mandatory high school phys ed.
By MATTHEW CHUNG, CP
Ontario should consider changes to its high school physical education program, researchers said yesterday, after finding most students are dropping gym classes, raising fears of obesity in teens.... (click here for free article)


Obesity blamed for doubling rate of diabetes cases (click here)
By MIKE STOBBE – 1 day ago
ATLANTA (AP) — The nation's obesity epidemic is exacting a heavy toll: The rate of new diabetes cases nearly doubled in the United States in the past 10 years, the government said Thursday. The highest rates were in the South, according to the first state-by-state review of new diagnoses. The worst was in West Virginia, where about 13 in 1,000 adults were diagnosed with the disease in 2005-07. The lowest was in Minnesota, where the rate was 5 in 1,000.
Nationally, the rate of new cases climbed from about 5 per 1,000 in the mid-1990s to 9 per 1,000 in the middle of this decade.
Roughly 90 percent of cases are Type 2 diabetes, the form linked to obesity.
The findings dovetail with trends seen in obesity and lack of exercise — two health measures where Southern states also rank at the bottom.
"It isn't surprising the problem is heaviest in the South — no pun intended," agreed Matt Petersen, who oversees data and statistics for the American Diabetes Association....

The animated map below shows the United States obesity prevalence from 1985 through 2007. (click here)

U.S. Obesity Trends 1985–2007
During the past 20 years there has been a dramatic increase in obesity in the United States. This slide set illustrates this trend by mapping the increased prevalence of obesity across each of the states.
In 2007, only one state (Colorado) had a prevalence of obesity less than 20%. Thirty states had a prevalence equal to or greater than 25%; three of these states (Alabama, Mississippi and Tennessee) had a prevalence of obesity equal to or greater than 30%.The animated map below shows the United States obesity prevalence from 1985 through 2007....

Growing Trend: Fatty liver disease in children latest obesity risk (click here)
By Linda A. Johnson LINDA A. JOHNSON
Tuesday, October 07, 2008Story last updated at 10/7/2008 - 8:01 am
In a new and disturbing twist on the obesity epidemic, some overweight teenagers have severe liver damage caused by too much body fat. A handful, such as Irving Shaffino of Shallowater, have needed liver transplants.
Many more may need a new liver by their 30s or 40s, say experts warning that pediatricians need to be more vigilant. The condition, which can lead to cirrhosis and liver failure or liver cancer, is being seen in kids in the United States, Europe, Australia and even some developing countries, according to a surge of recent medical studies and doctors interviewed by The Associated Press.
The American Liver Foundation and other experts estimate 2 percent to 5 percent of American children older than 5, nearly all of them obese or overweight, have the condition, called nonalcoholic fatty liver disease....

Organ transplants
The gap between supply and demand (click here)
Oct 9th 2008From The Economist print edition
As demand for life-saving transplant surgery grows, the idea of paying donors is gaining support

“PLEASE don’t take your organs to heaven,” reads the American bumper sticker. “Heaven knows that we need them here on earth.” Last year more than 7,000 Americans died while awaiting an organ transplant—almost double the number of American soldiers killed in Iraq since 2003. In Europe, too, thousands of people whose lives could be extended or transformed (by having sight restored, for example) through transplants forfeit the opportunity for want of available organs.
Research by the World Health Organisation (WHO) has found that only one in ten people in need of a new kidney, the body part most in demand, manages to get one. In the poorest places, of course, a complex transplant—which in the American health system costs $500,000—is unthinkable for most people anyway. But the gap between supply and demand for organs affects the poor too, by creating a market in body parts where abuses are rife....

New battle for obese teens: liver disease (click here)
Pediatricians are warned to be vigilant about link
By LINDA A. JOHNSON Associated Press
Sept. 7, 2008, 11:21PM

TRENTON, N.J. — In a new and disturbing twist on the obesity epidemic, some overweight teenagers have severe liver damage caused by too much body fat, and a handful have needed liver transplants.
Many more may need a new liver by their 30s or 40s, say experts warning that pediatricians need to be more vigilant. The condition, which can lead to cirrhosis and liver failure or liver cancer, is being seen in kids in the U.S., Europe, Australia and even some developing countries, according to a surge of recent medical studies and doctors interviewed.
The American Liver Foundation and other experts estimate 2 percent to 5 percent of American children over age 5, nearly all of them obese or overweight, have the condition, called nonalcoholic fatty liver disease....