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Jul. 29 2010 — 10:15 pm | 152 views | 1 recommendations | 4 comments

Where shall me meet again?

It’s been an amazing time with True/Slant. The past 16 months have been intense, terrifying and wonderful.  But first things first: Thank you to the T/S crew, a gracious, supportive, and inspiring team who created a wonderful community of writers.

Thanks to Lewis D’Vorkin  for the vision; to Andrea Spiegel and Coates Bateman for bringing me in and for unfailing encouragement and patience; to Michael Roston, the headline doctor and blogosphere tutor; and to Steve McNally and David Cautin for the behind-the-scenes work that kept the site going. And a big thank-you to my colleagues, readers and commenters who took the time to keep the conversation going. Where shall we meet again?

A few thoughts before moving on.

True/Slant was born at a pretty crazy time — the economy was crumbling and news organizations were shutting down, cutting staff, looking ways to save money. In early 2009, The Atlantic published an essay that posited The New York Times could fail in only a few months — a shocking thought because it suddenly seemed possible.

That’s just about the moment I decided it was time to re-enter journalism after spending the better part of a decade caring for our two boys.

My husband thought I was nuts. He’s not wrong. If wages are generally unchanged in the past decade for most Americans, they have fallen dramatically for freelance journalists. But I believe this is a temporary stage. (I have to.) The economic model is far from finished; CraigsList, the Internet — they have done their damage. And what they left undone, the Great Recession took care of. But I don’t believe that’s the end of the story by any stretch. Newspapers were a byproduct of the industrial revolution; it was a great ride. The Digital Era has temporarily killed the economic model for journalists, but as we speak I am hopeful that in the next few years, that will change because I suspect we are only mid-revolution. Efforts like T/S are part of that. Big thinkers are throwing out new ideas all the time. If as a society we do value journalism, then I feel confident that we will solve the problem of paying for what we need.

T/S began with the notion of entrepreneurial journalism. It sounded different but as it turns out some things never change. My husband has always said that good reporters are like mini-businesspeople scoping out their beats, carving territory, trying to make a name for themselves. They aren’t particularly good at working for other people or filing things in triplicate. So true.

To me the more fundamental shift in the new journalism revolves around the relationship between reader and writer; between the news subject and the news collector; between source and reporter. We are so much more connected to one another; the competition is more intense to attract and discover one another. The Internet ups the ante on everything; now a byline is a brand. Stories or content are products. Everyone is a reporter.

I confess, sometimes the terms chafe.

But then there’s the excitement of being part of something new and changing; being part of something you can influence. Revolution, if you can survive it, is a heady time.

When I launched this blog I thought that all the upheaval of the financial crisis would bring us to a new Wall Street. I’m less inclined to believe that. It’s fitting that this phase of the blog close with the recent signing of the financial regulatory overhaul bill. It’s a lot of nothing punctuated with a something or two. All in 2300 pages.

One of my early posts focused on AIG and a confidential PowerPoint presentation begging for another round of taxpayer money. This was a few months after the terrifying final quarter of 2008– the quarter when Lehman went under and the Dow plunged more than 700 points in a single day. At the time, the regulators reasoned that the system couldn’t stand another Lehman-like shock. The handouts were unavoidable. But were they?

We’ll never know. In that AIG piece, I took a close look at the language in the PowerPoint, which was clearly designed to scare more money out of taxpayers. The language was vague, ominous, terrifying — it was the monster under the bed.

Opaque language powerfully masked horrible changes in the way we were making decisions about how we lived, invested, and spent money.  Many homebuyers didn’t understand what they were signing when they borrowed  from unscrupulous lenders; careless investors didn’t truly understand what they were buying when they put money into complex mortgage-backed assets; credit rating agencies didn’t understand what they were rating; and everyone screamed, fright-movie-style, if you don’t save us, we will all die. Because the details were so opaque, no one was really sure if that was true or not. The muddiness hid just how clueless we were. The words were muddy because so were our thoughts.

Going forward I hope to write more about the language of Wall Street and its regulators. The language they use effectively slams the door on anyone who isn’t a member of the club. A  little more plain English may prove more potent than 2300 pages of legalese in helping everyone say, hey, this isn’t what we should be doing.

T/S is coming to a close as it was first conceived but many of the basic ideas that drove the site will be re-invigorating Forbes, a venerable brand from another time. On July 31, I will be transferring this blog to NanceFinance; for most of August I will be on vacation, though expect to contribute to financial publications periodically. Please follow me on Twitter to keep tabs on my plans for the fall.

I look forward to continuing the conversation. Your digital space or mine?



Jul. 26 2010 — 2:52 pm | 154 views | 1 recommendations | 1 comment

The new desperation: homebuilders, the economy and the Poconos

Honey, I told you to bring the coupon with you!

The ‘new normal’ for investors may be morphing into the new desperation for just about everyone and everything else.

Today, the Census Bureau reported that just 30,000 homes sold last month  — the weakest June in history. On a seasonally adjusted annualized basis, June set the second lowest rate in nearly 50 years of record-keeping at 330,000. May holds the record for the lowest at 267,000.

It’s hard to believe that things are getting worse in housing; much of 2009 was so miserable. For a while, thanks to the tax credit for homebuyers, the residential market began to turn up from its lows. The tax credit expired at the end of April, so some are arguing/hoping that the dip is only temporary. Before you know it, buyers will re-emerge and help nudge along the recovery. Maybe. But I suspect my recent experience in the Pocono Mountains in northeastern Pennsylvania is a harbinger of more trouble ahead.

The region is an inexpensive vacation haven for residents in the Northeast and MidAtlantic states. We were there for the second year in a row for a weekend of R&R and to visit my older son in sleepaway camp. Last year, the weak housing market shouted from every corner and every publication. “Reduced!” home sale signs were everywhere. The 2009 edition of the Pocono Real Estate Guide promised every manner of discounts. “BETTER VALUES!” screamed one ad which promised buyers they would “SAVE $12,000″  — $6,000 in closing costs to be paid by the builder and $6,000 in LUXURY UPGRADES. I wasn’t too surprised.

This year, I found the changes a bit of a shock.  The July 2010 edition seemed even more desperate. “Bring In This Ad/Get $5,000 In Free Upgrades!” The biggest coupon I had ever clipped in my life was for $5.00.

Builders are even offering to fill the shoes of Uncle Sam. Missed out on the tax credit for homebuyers?  “Every qualified buyer gets our summer $8,000 bonus!” announces another ad.

The guide itself is flimsier — newsprint only. Last year’s edition  had a glossy cover and only a photo of an elegant looking bedroom. This year’s has a borderline shlock quality: Get your bargains while they last. Only 3.5% down. “Ask for Leon. See Our Ad Inside!” Yeah, I’ll ask for Leon.

Also new this year: Two prominent half-page ads offering foreclosures. “Call for list.”  In other words, there’s more where that came from.

Last year the economy seemed weak, but not desperate. Demand for vacation accommodations of all sorts seemed pretty strong.  It made sense to me. The Poconos are pretty downscale compared to Nantucket or the Hamptons. For years they were the butt of jokes,  a low-class getaway for honeymooners who had a taste for heart-shaped whirlpools and mirrored ceilings. But it’s also a lovely area for families with verdant mountains, lakes galore, the Delaware River gap and the amusements of small town life. Both last year and this year we stayed in simple cottages on a private lake. To our surprise, this year the season was far from booked. In fact, the owners told us that families kept calling to say they wouldn’t be showing up after all. They had lost their jobs. These were people who reserved a year in advance and who typically return year, after year, after year.

The effects of cancellations like these are rippling through the four main counties in the Poconos. The jobless rate in June is up year-over-year, rising to 11.2% in Carbon from 10.0%;  to 10.4% from 9.3% in both Monroe and Pike; to 7.8% from 7.2% in Wayne, the only counting besting the national jobless rate of 9.5%.

You’ll probably read that the June home sale numbers mark a big improvement when compared to May, up 23.5%. True. And that the inventory of new homes fell. Also true. But consider this: June home sales are still 16.7% below the 2009 June number. So is this a new bottom or new trouble? I don’t know. But I couldn’t help noticing that in both 2009 and 2010, the inside front cover of the Pocono Real Estate Guide featured families, both with two young kids, obviously chomping at the bit to move into a home framed nearby — a 4-bedroom house with vaulted ceilings and central heat and a/c. But the families today are different. The house remains the same — down to the trees in front. Which made me wonder: What happened to last year’s family? Did they move? Did they default? What other options did they have?



Jul. 19 2010 — 7:49 am | 187 views | 1 recommendations | 0 comments

Nantucket’s two worlds

Last year, after reading a story about the depressed vacation home market in Nantucket, I considered bidding on a mega-property up for absolute auction — no minimum bid. Little did I know that the Colgan family in New Jersey would also respond as I did too the New York Times piece. The tale of their purchase of a distressed property is a telling anecdote for Nantucket real estate, which I write about more deeply in a lead story for Fortune.com today and in a brief item last week for Barron’s.

Everyone likes to write about the hot properties. And my stories touch on some trophy properties — like the recent contract for the estate of ex-Goldman Sachs honcho Jon Winkelried. (The property was reportedly signed for close to $29 million, an island record.) But the Fortune.com feature focuses on the year-round residents, who are still picking up the pieces from Wall Street real estate’s binge in the first part of the decade.

The family consortium I assembled to bid on the Second Glance never even got to first base last year; the auctioneer convinced us that the bargains I envisioned were illusory. And in the case of that one property, she was right. It went for more than $5 million. (You can read those stories here and here). But the Colgans were much shrewder and dogged bargain hunters than we were. To think, we could have been neighbors.

This item on the backstory to Nantucket home sales wouldn’t be complete without a shout out to former T/S contributor Paul Smalera, now a senior editor at Fortune.com. He was a pleasure to work with.

Here’s the story of two worlds  on Nantucket — Wall Street, where fortunes are turning around fast, and everyone else.

FORTUNE — In the past decade, Nantucket Island has served as a barometer for the fortunes of Wall Street. The glass cracked after years of unsustainable pressures. But almost by magic, the barometer is rising once more even as something new and unexpected has come to the summer paradise: foreclosures, short sales, failed auctions, and a skinnier municipal budget. And while financiers can cut and run, it’s the locals who are being hardest hit.

“It’s two different markets,” says Brian Sullivan, a broker for Maury People Sothebys. There’s Wall Street, and everyone else. You can see that on Yahoo’s;s real estate listing for distressed properties on Nantucket: nearly two-thirds are listed for under $1 million, the price sector dominated by the island’s 12,000 year-round residents. But the banks have basically turned their backs on small borrowers, so anyone who does want to buy will have a hard time getting a loan. “They want to lend to people borrowing $1.5 million and up,” says Sullivan.

via Millionaire foreclosures on Nantucket – Jul. 19, 2010.



Jul. 11 2010 — 12:34 am | 53 views | 1 recommendations | 4 comments

Debt-laden US is a leader in job losses

In my previous post on the jobs market, I asked about different ways to help long-term unemployed people — especially those who were unlikely ever to find work in the areas they were trained for. Now, the Wall Street Journal reports that the US is way behind in new job formation since the global economic meltdown began. A key reason: too much debt and  shaky banks. So it appears we need to engage in a double-tracked conversation to heal the jobless situation: trimming the debt while re-training the jobless.

At the bottom of this post, I share the very disturbing WSJ graphics, which show how poorly the job market here is faring — down 4.8%  from December 2007 (click to enlarge). It’s a sad day when you see US fall behind countries as diverse as Brazil and Japan and Hungary in creating new jobs. Here’s the top of the WSJ story:

One year into the global recovery, the U.S. is lagging far behind other major economies in restoring jobs lost in the recession.

A Wall Street Journal analysis of employment trends in 11 countries suggests that manageable debt burdens and healthy banking systems—areas in which the U.S. doesn’t excel—are proving to be crucial factors in creating jobs.

via U.S. Lags in Job Growth – WSJ.com.

U.S. is No. 1 in job losses since the start of the economic turmoil

Graphics via WSJ



Jul. 7 2010 — 9:38 pm | 292 views | 2 recommendations | 24 comments

The jobless benefit debate revisited

This morning the Wall Street Journal published a front-page story debating whether extended jobless benefits subtly encourage recipients to remain unemployed. In March, I wrote a similar post raising the same question and was skewered as an indifferent let-em-eat-cake Marie Antoinette.

The issue hits a nerve, as well it should. As I wrote in the spring, no jobs, no real recovery. So I will re-frame the question: Does the system we now have work for an extended economic crisis as intended? Or, put another way: Unemployment benefits were designed so that workers would not be forced to take just any job. If you were a skilled factory worker, that would mean you could wait for the right job, which typically took about 26 weeks — the traditional length of unemployment insurance. You wouldn’t be forced to take the first job that came along, says, as an unskilled laborer. That is a core value embedded in unemployment benefits.

Now, let’s fast-forward to the Great Recession. There are five workers for every available position, a statistic that’s about as subtle as a mallet on a pinhead. Some areas have jobs aplenty — healthcare and government have expanded throughout the recession. Other areas are suffering and are unlikely EVER to return. Think autoworkers; administrative assistants; newspaper reporters or newspaper delivery services.

The WSJ begins the debate today with a story of a recruiter trying to place engineers in $60,000/year jobs. Here’s what happened:

“We called several engineers that were unemployed,” says Karl Dinse, a managing partner at the recruiting firm. “They said, nah, you know, if it were paying $80,000 I’d think about it.” Some candidates suggested he call them back when their benefits were scheduled to run out, he says.

But, of course, that’s just one story. Plenty of others aren’t so fortunate. They find themselves competing with scores, maybe even hundreds, of others for low-paying jobs. There’s the $12/hour forklift operator who says he can’t find any work after a one-and-a-half-year search and has no benefits left. If Congress would renew the law extending benefits for 99 weeks, he would have continued to receive $315 a week. Economists argue that providing benefits to people in that situation is good for the economy. They spend the money right away and are not forced to seek other benefits that may prove even more costly.

Now back in March, I took the opportunity to mock Paul Krugman — who specializes in condescending to anyone who doesn’t agree with him. He is a strong advocate for extending benefits, even though he himself has written that that can lead to slower job recovery. Krugman argues that this time is different. I agree, this time round is different. Most jobless workers are not lolling about, taking summer vacation at the taxpayer expense. The degree of hopelessness is breathtaking. U6 unemployment number, which includes those that have given up looking for work, has hit record highs, and is now pegged at 16.5%.

Back in his academic days, Larry Summers, the White House chief economic advisor, has written much the same thing as Paul Krugman. But Summers emphasized something very important that hasn’t been adequately discussed: job training. The Administration has created some job-training programs. But as one expert told me, the history of government training programs is less than stellar. Community colleges are actually the most cost-efficient re-training venues.

This is a topic that I will need to address in depth another time;  so I will need to leave this post with a series of questions for you to consider:

–Is there some way to re-structure benefits during a prolonged economic crisis so that those who can get jobs should take them, even if they aren’t ideal? Would that save enough money to enable other jobless workers to get re-training for jobs in this economy? Is it even practicable to enforce?

–Is there something special we should be doing to encourage employers to hire older workers, who face the stiffest problems in finding jobs? Or for families with small children? In other words, is there some way to make the system subtler and more responsive to the very real needs of a hurting population without raising the costs to frightening levels?


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    About Me

    I am a financial writer and have worked for or contributed to a number of news publishers. As the song goes, "some are dead and some are living, but in my life, I have loved them all" -- Knight-Ridder Financial, USA Today, Quick Nikkei News, and Barron's -- to name a few. I am grateful to Wall Street for creating a spectacular market smash-up based on the mortgage securities market, my first beat. I'm ever so much more popular at dinner parties these days. I hope you enjoy my blog, it marks my return from the mommy track. There's no tantrum I can't handle.

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