A Government Accountability Office investigator smuggled live bomb components into a federal building in just 27 seconds, then assembled a bomb in a restroom and ventured throughout the building without being detected, a leaked tape revealed Wednesday.
In addition, congressional investigators were able to penetrate every single federal building they probed without any difficulty � 10 in all.
Indeed, as I wrote in 2005, there is substantial additional evidence that bombs could have been planted in the World Trade Center without anyone knowing:
Bomb-sniffing dogs were inexplicably removed from the Twin Towers five days before 9-11
These are just a few of the known, public examples of opportunities to plant bombs. There were undoubtedly many additional opportunities available to skilled operatives. (Remember that tightrope walker Philippe Petit snuck into the World Trade Center with a friend in 1974 with massive amounts of equipment, smuggled the equipment to the top floor and rigged up a highwire for his tightrope walking stunt without being detected). See also this video.
As with all of the other arguments trying to debunk those who question the government"s version of 9/11, the argument that bombs couldn"t have been planted without people observing it is incorrect.
The people still defending the government"s version of 9/11 have simply not spent the time to look at the facts.
The U.S. will provide as much as $30 billion to help buy the underlying assets of credit-default swaps that AIG sold to investors, including banks. AIG will contribute $5 billion and bear the risk of the first $5 billion in losses, the Fed said.
The insurer guaranteed about $372 billion of fixed-income investments as of Sept. 30, compared with $441 billion three months earlier. AIG booked more than $7 billion in writedowns during the quarter on the value of the swaps.
Under the new plan, the Fed will put $30bn in a new vehicle that will purchase some $70bn of AIG"s CDSs from its counterparties. AIG will contribute $5bn to the vehicle.
If, over the next few years, the value of the CDSs increases from the current depressed price, the Fed will keep two thirds of the profits, with AIG getting the rest.
As the Wall Street Journal explains, AIG holds more than $400 billion dollars in CDS and $80 billion of collateralized debt obligations. AIG has been forced to post about $50 billion in collateral to its trading partners, largely to offset sharp drops in the value of securities it insured with the credit-default swaps. These liabilities continue to balloon even after the first Fed bail-out.
And the BBC points out that many of AIG"s CDS were purchased by European banks - not for the purpose of minimizing risks - but solely to fool regulators into thinking that they had less exposure than they really did.
So the purchasers of many of AIG"s CDS are not without fault.
We need to abolish CDS or value every CDS contract at $1, so we the taxpayers don"t have to buy up all the toxic CDS out there on our own dime.
As corporate profits collapse, companies have no choice but to cut expenses. In the months ahead, expect to see many more headlines like this one: Motorola to freeze salaries, pensions.
Responding to a global recession, Motorola Inc. said Wednesday it will freeze its pension plan and employee salaries, suspend matching 401(k) contributions and cut the pay of top executives.
Just two months ago, Motorola (MOT) said it would eliminate 3,000 jobs in a move to reduce costs by $800 million. The company said its latest steps would help it save an unspecified amount of cash, which the brokerage Morgan Keegan estimated could reach as much as $100 million.
"The sustained downturn in the global economy requires that we take these difficult but necessary steps," co-Chief Executives Greg Brown and Sanjay Jha said in a statement. For their own part, Brown and Jha have volunteered to accept a 25% salary reduction in 2009. Both have a base salary of $1.2 million.
With the handset unit continuing to bleed cash, Motorola was planning to spin the division off into a separate company and focus on its remaining two businesses, which focus on home entertainment and emergency-response communications. Those plans have been scrapped for now given the lack of interest by investors.
Motorola In Deep Trouble
Motorola is in deep trouble but it does not seem to be terminal, at least not yet. A quick check on Yahoo Finance shows that Motorola has about $7 Billion in cash. Its burn rate from the latest Third Quarter 10-Q is $397 million. That"s a lot but it does not seem fatal. However, the 4th quarter is likely to be a complete disaster and this assessment can easily change.
Indeed, freezing salaries and pension plans is a sure sign that 4th quarter results are going to be miserable. Just as GM should have gotten rid of the Hummer and GMAC, Motorola held on far too long to some questionable operations. Those operations are not going to fetch much of anything now.
Hewlett-Packard Said to Be Freezing Pay to Cut Costs
Hewlett-Packard Co., the world�s largest personal-computer maker, is freezing salaries as part of Chief Executive Officer Mark Hurd�s efforts to contain costs, people familiar with the plan said.
Employees have been notified by e-mail that they won�t receive a salary increase in fiscal 2009, which began in November, according to two people who asked not to be identified because the message was confidential. The only exceptions will be in countries where pay freezes are illegal, the two people said.
Hurd has cut jobs, closed offices and merged data centers to lift profit, even as he expands through acquisitions. Hewlett- Packard also is limiting travel, curtailing hiring and eliminating �favorite science projects� to save on research costs in 2009, Chief Financial Officer Cathie Lesjak said last month on a conference call.
Hewlett-Packard, which has 320,000 employees, declined to confirm the salary freeze. �In this difficult macroeconomic environment, we believe it is prudent and responsible to reduce costs where possible,� said spokeswoman Emma McCulloch. �H-P has a longstanding and disciplined approach to managing costs in order to invest in the company�s growth.�
Beyond Manufacturing
This post may seem like it"s about Motorola and HP. It"s not. It"s not about manufacturing or electronics either. It"s about rising layoffs, salary freezes, and the death of benefit plans on a massive scale in the year ahead.
Think health care is immune? Think again. Here is a an email from Cynthia writing about hospitals in Rio Rancho, New Mexico.
One of the large local hospitals has told it employees NO raises for next year. The hospital is getting creamed by having to treat so many new people who have no insurance and no jobs. My neighbor"s daughter is an ER physician and told her father yesterday that there will be no raises next year. This afternoon she is attending an emergency meeting on the hospital"s finances.
Expect to hear about thousands of such occurrences in 2009. Few if any sectors will go unscathed. Those who have a job are going to find their dollar going farther, but another 2 million are going to find themselves jobless.
Deflation continues to pick up steam. Frozen wages is proof enough.
The BBC are working on a documentary on the Sage of Omaha, Warren Buffett. Associate Producer Charlotte Dawes is looking for shareholders of Berkshire Hathaway (although I don"t expect many from New Zealand) who are willing to share their thoughts or stories about the man and his investment style.
I have been asked to participate as to why I follow his unique way of investing but Charlotte is principally looking for Poms to be included, because it is the BBC and they will be following some Brits to the Berkshire Stockholders meeting coming up in May.
If you are interested in participating please email Darren Rickard here .
I would be chuffed to get some readers to contribute their thoughts opinions and ideas, especially if you are a shareholder.
Most Americans find themselves thinking about money every April. After all, that"s when the IRS reminds us how much we are (and are not) worth. Even if you happen to be lucky enough not to feel the squeeze of income tax, the stock market has been on such a roller-coaster ride that it seems the struggling economy has touched us all.
One person who probably isn"t feeling the pain is Warren Buffett, the 77-year-old CEO of Berkshire Hathaway Inc. and -- officially -- the richest person in the world. His estimated net worth is about $62 billion.
Buffett has a remarkably frugal life style. While other billionaires have multiple estates, cars and trophy wives, Buffett still lives in the home he purchased in Omaha, Neb., in 1958 for $31,500. Today, it"s worth $700,000. And when it comes to annual compensation, Buffett"s salary is meager by most CEO standards: $100,000.
I have read many articles on this fascinating man as well as his collaboration with Lawrence Cunningham, The Essays of Warren Buffet: Lessons for Corporate America, and visited the Berkshire Hathaway Web site, www.berkshirehathaway.com.
I now know the recent problems on Wall Street present the type of money-making opportunity that Buffett most enjoys. He instinctively knows how to turn today"s problems into tomorrow"s profits. When other investors are panic-stricken, Buffett views downturns as perfect buying opportunities.
He has a style known as "value investing," which means that if a company is undervalued in relation to its intrinsic value, it has the potential to be a good investment. Berkshire Hathaway, originally a textile company, owns a variety of businesses that range from utilities to jewelry. Half its profits come from insurance companies, such as National Indemnity Co. and GEICO.
Buffett has historically bought family-owned companies where the purchase price is lower, in exchange for retaining the staff. Now he"s looking overseas and investing in Israel, China and the United Kingdom. Part of this strategy is because he"s bearish on the dollar and plans to buy firms that generate income outside the U.S.
Berkshire Hathaway shares sell for well over $100,000 and have gained more than 4,000 percent in the past 20 years, roughly six times the Standard & Poor"s 500.
Buffett"s background suggests that he has always had a talent for making money. When he was 13, he filed his first income-tax return and claimed his bicycle as a $35 work expense. At 15, he and a friend bought a used pinball machine and placed it in a barbershop. Within a few months, they had machines in three locations. By the time he was 19, he was at the Wharton School, and when he was 20, he enrolled at Columbia Business School.
In what may have been his only business stalemate, after graduating from Columbia, he purchased a Sinclair gas station, but it didn"t succeed the way he hoped. During the same period, he worked as a stockbroker, took a Dale Carnegie course, and taught investment principles at a night class at the University of Nebraska. By age 25, his savings account had more than $140,000 (in 1956 dollars).
Buffett"s wealth and financial partnerships grew almost exponentially, and by 1979 at age 49, he appeared on the Forbes 400 list for the first time with a net worth of $620 million. The trajectory of Berkshire Hathaway"s growth and Buffett"s wealth has continued to this day.
Two years ago, Buffett announced that he plans to give away close to $40 billion worth of Berkshire Hathaway stock to five charitable foundations. The bulk of his philanthropy will be directed to the Bill and Melinda Gates Foundation. His gift is the largest charitable donation in history.
Buffett"s three children (who will not inherit much of his wealth) run several charitable foundations. In his words, "I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing."
Best-selling author Connie Glaser is one of the country"s leading experts on gender communication and women"s leadership issues. Her recently-published book, GenderTalk Works, provides an upbeat guide for bridging the gender gap at work. A popular speaker at corporate and business events, she can be reached at www.connieglaser.com
In a sign of the times, the second-largest mall owner in America - General Growth Properties - will probably file for bankruptcy on Friday, December 12th. Here"s a timeline:
Fitch"s believes that General Growth will probably negotiate a deal with its creditors and restructure the debt. However, Fitch"s would consider that an event of default, even if General Growth avoids bankruptcy tomorrow.
At a recent lecture I gave in Hangzhou, one wealthy member of the audience said: �Property may be 100% overvalued. But I will still get half when it comes down. Paper money will be worth zero.� The allure of this latest tale is that the economy doesn�t matter. If the world is in recession, so what? If stock and property markets collapse, so what? We just run away from paper money, right? Better to borrow to buy assets. This is where bank lending policies come into play. But the more willing the banks are to lend, the hotter the asset markets become...
Paper money loses value over time at the rate of the difference between inflation and interest rates, so if the inflation rate is 6% and the bank deposit rate is 2%, paper money loses 4% per annum, or 0.33% per month. Stocks and properties in China may be 100% overvalued, with only two decades of relatively high inflation justifying their prices. However, persistently high inflation leads to currency devaluation, which triggers capital flight and, eventually, an asset market collapse. This story simply won�t hold together for long.
A case in point is the US Savings and Loans crisis of the late 1980s and early 1990s. The US Federal Reserve kept monetary policy loose to help the banking system. The dollar went into a prolonged bear market. During the descent, Asian economies that pegged their currencies to the dollar could increase money supply and lending without worrying about devaluation, but the money couldn�t leave home due to the dollar�s poor outlook, so it went into asset markets.
When the dollar began to rebound in 1996, Asian economies came under tightening pressure that burst their asset bubbles.
The collapsing asset prices triggered capital outflows that reinforced asset deflation. Asset deflation destroyed their banking systems. In short, the US banking crisis created the environment for a credit boom in Asia. When US banks recovered, Asian banks collapsed.
Is China heading down the same path?
Does this confirm what John Exeter, Antal Fekete, Darryl Schoon and maybe even Alan Greenspan have been saying: that when investors lose confidence in fiat currencies, they move into gold and other hard assets?
