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?

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

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?

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.

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

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?

We are still in a serious job recession

Last night I began this post by saying the markets are sure looking ugly. The jobs report published this morning for June does nothing to alter the thesis of this post: confidence is waning because job formation is so weak. The “topline” number — 9.5% unemployment — looks superficially better than last month’s 9.7%. But actually the rate shrank because the size of the labor force shrank. And that’s not a good thing. Other metrics on the jobs report were weak: hourly pay edged down a tad as did hours worked. Translation: There’s plenty of slack in the economy. Even if business picks up, employers don’t need to run out and hire more people.

Private companies did hire last month, but at an anemic rate of 83,000. Bloomberg noted: “The pace of hiring signals it will take years for the world’s largest economy to recover the more than 8 million jobs lost during the recession that began in December 2007.” The chart at left, via Calculated Risk, say sit all. (Click to enlarge.)

And, man, the markets are sure looking ugly.

As I wrote in early June, I thought the stock market rally had gotten way ahead of the recovery story on Main Street; that’s why we shifted our portfolio to about 75% cash and bonds. An 80% rally from the lows is a bit hard to swallow with 9.7% unemployment and a record number of people who despair of ever finding a job. And so the official story for the recent correction is a new raft of weak economic data: Home sales falling off a cliff, as everybody likes to write, now that the tax credit has expired;  jobless claims rising this week; weak construction numbers, etc., etc. And the European debt woes and slowdown in China are pretty good downers, too.

But I find it hard to believe that the numbers would be much of a surprise to market watchers. They are in sync with what many were expecting: a slowdown in the second half of 2010. But suddenly all of the elements that have been “out there” have shaken the confidence of investors. (And the confidence number out this week also shocked on the downside, falling to 52.9 in June from 62.7 in May.) Shaken confidence is the big enemy of markets. Can anyone remember when commentators dared last year to speak of “little green shoots” in the economy?

Confidence is the oxygen of the marketplace. The atmosphere is getting mighty thin.

Yale professor Robert Shiller recently wrote that fear of a jobless recovery is a key factor deflating confidence; the dreaded double-dip in the language of Main Street doesn’t mean that the recovery suddenly ends this minute. GDP is in fact expanding if slowly. But the fear that has seeped into the average Joe is that even if the recovery continues in its snail-like pace for another year or two, unemployment may stay high (which did in fact happen in the last few recessions). And then the economy may get hit again by another slowdown. It’s the long-term view that’s scary, not the short-term. And it can be self-fulfilling.

Confidence is also ebbing in the system itself. I think something may be changing in the way investors look at the market as a result of the May 6 “flash crash”  when the market plunged 10% in 20 minutes, with some stocks falling to zero. It’s more than a month later and we still don’t know why the market went into cardiac arrest that day. I don’t hear much chatter about the roller coaster ride in May, but I think the after-effects linger. I’m wondering if the flash crash — along with the not-so faded memory of the 2008 meltdown — hasn’t helped to revive our sense of uncertainty in the plumbing of capitalism.

And it’s not just the plumbing of capitalism that worries. The fiscal battles in Washington don’t inspire confidence. We are witness now to an epic policy battle between those who fear more spending will drown us and those who assert more spending will revive the economy. It’s a battle that voters get. In the early days of the Obama administration, when his popularity was unassailable, I wrote that this very battle would challenge his stature more than any other. That moment has come.

Tomorrow, by the way, the June jobs report comes out. Once more, Census temporary hiring will make the report look weak as the agency releases workers. A Bloomberg survey of economists predicts nonfarm payroll will fall by 125,000 vs a 431,000  gain in May– including 411,000 temporary workers; but private payroll should rise by 110,000 vs 41,000 in May.

Click on graphic to enlarge. Via dshort.com.

Image by Getty Images North America via @daylife

What’s it like to be in a roomful of people who are too dim to understand that you are the only person who understands how the world works?

Ask Joe Cassano, the former AIG Financial Products executive who masterminded the derivative strategy that eventually led to a $132 billion bailout of the giant insurance company.

I wish I could have been there. Without a soupcon of irony, Cassano told the Financial Crisis Inquiry Commission that the derivative contracts known as credit default swaps are still money-good. The WSJ live blog reports that one FCIC commissioner asked: “Were you too optimistic about the housing market and how it could impact the cash flows of the CDS instruments you created?”

Readers, be warned: Cassano is no Warren Buffett; he did not aw-shucks his interrogators with “who could have known?” type of assertions. Cassano is a man quite sure of himself and his analytics. The WSJ blog reports, quite incredulously: “Cassano won’t even go as far to say he was wrong about the housing market. Most everybody was wrong about how far the housing market would fall.”

The guy has serious cajones. First he sells insurance contracts on $78 billion of mortgages. No hedges. Just one caveat: The buyer can issue margin calls at will.

And Cassano, who is no longer under threat of civil prosecution, forgets to mention to the bosses that AIG is at risk for mega-margin calls. (The FCIC members seem pretty stunned that Cassano was able to keep this under his hat until 2007 when the phone started ringing — and it wasn’t Jerry Lewis at the other end of the line asking for money.)

So, is it small wonder then that Cassano is the only guy in the universe who can out-negotiate Goldman Sachs? (He was obviously good at negotiating something: He earned $300 million during his 6-year tenure at AIGFP, including consulting fees after his departure.) Cassano clearly has no patience for the way the feds handled the counterparty payouts on the CDS. The Reuters blog quotes Cassano as saying that he would have “negotiated a much better deal for the taxpayer than what the taxpayer got.”

Especially when it came to Goldman, which accounted for about 25% of the CDS book and was the most aggressive in its collateral calls. In one example, Cassano says Goldman requested $1.8 billion in collateral. He negotiated that down to $480 million. Again, from the Reuters blog, Cassano says: “”My job is not to trust Goldman Sachs’s numbers, but to verify.”

In other words, Treasury Secretary Timothy Geithner should have realized it was sunrise in America and told Goldman and friends to bugger off when they demanded 100 cents on the dollar for their contracts. True, Lehman Brothers had just bitten the dust, so it was hard in that moment to be full of optimism for the future. But a touch of the Old Gipper would have been beneficial: trust but verify.

So, it seems Cassano does have one regret: He was forced out in 2008 when the auditors decided the AIG FP accounting methods were a bit unorthodox. If he had been at AIG during the worst of the storm, he says he could have saved taxpayers billions. Who knows, maybe he could have convinced everyone to stop with all that crazy mark-to-market accounting and pretend that all was well in the land of Financial Oz. It worked for former Fed Chairman Paul Volcker during the Latin American debt crisis of the early 1980s and even has a name: extend and pretend.

We’ll never know now if it would have worked. But we know one man who has no doubts about it. In fact, for Cassano, there would have been no pretend because really, according to Joe, the investments are working out exactly as he expected.

Why, by the way, c-span didn’t air these hearings is beyond me. Also testifying today was Gary Cohn, No. 2 at Goldman, aka, CEO Lloyd Blankfein’s best friend. Twitter had great live-blogging on the hearings today from @cate_long. Check out her stream.

The General Slocum (via Wikipedia)

The other evening, as my husband and I went for a walk through the East Village, we stumbled on a plaque commemorating the deaths of more than 1,000 people aboard the General Slocum, a pleasure-seeking side-wheel steamship. They were German immigrants, mostly women and children bound for the annual community picnic. Technically,  it was flames or the treacherous currents of the East River that killed them. But that wouldn’t accurately describe the true cause of their deaths. The real culprit was corruption.

Would it surprise you to learn that regulators had inspected the ship not long before the 1,300-plus Lutheran church members had embarked on their excursion, and declared it fit? Would it surprise you even a little that the crew had never trained for disaster and the safety equipment was faulty? The lifeboats were painted and wired to the deck; the life jackets were so old that those who donned them sank.

The anniversary of that disaster in 1904 is almost here — June 15.  And until terrorists struck the World Trade Center towers in 2001, it was the deadliest fire in New York City history.

After we finished reading the plaque, my husband turned to me and said: Nothing ever really changes, does it? We fight the same battles over and over. The oversight breakdown at the General Slocum is sui generis, the losses too horrible to contemplate. But over the course of time we seem to bump into the same issues over and over. Moral laxness is a poison in our system. BP. The financial meltdown. It’s still hard to believe that people in charge of our safety and well-being would  shirk their responsibilities for personal gain.

Almost no one was held accountable for the General Slocum tragedy. Only the captain went to jail. He later received a pardon from President Taft. No on else from the ship company even went to trial. And the inspectors? They lost their jobs. That appears to be it; the Coast Guard took over inspection duties.

Accountability seems more elusive than ever. Over the past week we’ve seen a barrage of news bruiting the perils of regulator capture and indifference to the weakest among us.

Rolling Stone reports in chilling detail the sins of omission and commission leading to the disastrous oil spill in the Gulf of Mexico. The application for the rig, put forth when the new broom of Ken Salazar promised to sweep away the fecklessness of the Bush administration Department of the Interior, was a joke. A telling detail: In the event of a catastrophe, BP promises to protect walruses and other cold mammals swimming off the coast of Louisiana. Some plan.

And then come two new reports of regulatory capture. The SEC’s Elizabeth King, a key player in market and trading oversight, is joining high-frequency trading firm Getco — which is doubtless keenly interested in the investigation the agency is now putting together on the May 6 flash crash. John Paulson, the hedgie who  (in)famously shorted the housing market through a trade with Goldman Sachs, has added two former SEC heavies to his board, the NY Post reports exclusively: former SEC Chairman Harvey Pitt and former SEC Commissioner Roel Campos. Could this move be a form of insurance against a civil investigation?

Meanwhile, Forbes is stunned at the way financial reform so unabashedly favors the strong over the weak: six too-big-to-fail banks, beneficiaries of taxpayer money and central bank policy moves, earned $51 billion in 2009 while 980 lost money, the story notes. “Public policy has benefited the oligopoly at the cost of hurting some of the other 980 bank holding companies in the nation. The financial overhaul bill unfairly penalizes any bank with more than $50 billion–even if it is a retail bank serving Main Street, making loans to small business and mortgages to ordinary people, not billionaire hedge fund managers.”

The plaque commemorating the Slocum is attached to an iron fence in front of a synagogue, the house of worship for the next immigrant group that came to this country seeking a better way of life. As I think about these issues I suddenly realize why my grandmother always talked about people who died in the course of building this country — and not from war. She would have been too young to remember the Slocum disaster or the fire in the Triangle Shirt Waist factory. But in retrospect I think she was keenly aware of the perils that threatened the little guy — the riveter, the pattern cutter, or the picnickers on a sunny morning.

Below, a detailed assessment of what happened on the General Slocum more than 100 years ago.

In the official investigation that followed, it became evident that many confluent factors contributed to the heavy loss of life: the rampant corruption of that era, inadequate safety precautions and lack of crew preparation (the 35-man crew had never received required training or had a fire drill) and the still debatable decision of the captain to press ahead. One month before the disaster, two inspectors from the U.S. Steamboat Inspection Service had declared the Slocum safe and sound.

In fact, the six lifeboats were all tied down and glued to their chocks (blocks used to prevent them from temporarily moving) from a recent paint job and would not budge. The life belts were nailed tight to the overhead by rusty wiring and dated “1891.” They were required by law to contain six pounds of solid cork; however, a noticeable powdery substance was spilling out of them. When the passengers put them on and jumped into the river, instead of floating, they sank like a rock from their weight. The fire hoses, which were declared in “good condition,” burst apart from the water pressure.

However, Captain Van Schaick was declared solely culpable and was the only one to go to jail. (He later received a presidential pardon.) Steamboat company officials were tried, but never convicted even though records indicate that owners bribed the inspectors; in any case, the latter most likely bought their jobs, as this was the practice of the day. Upon inspection of all the harbor excursion boats, many were found to have similar violations. As a result, there was a complete shakeup of the Inspection Service. Since 1942, the U.S. Coast Guard has carried out its functions.

via Remembering the Slocum disaster, a century later.

Addendum: After reading this post, my 11-year-old son said to me, “Mom, you have to say something more. You can’t just end it here. Ending it here feels like a stack of unstapled papers.”  But I have very little to add; I only hope that we get better at learning how to prevent the morally-challenged from harming us — and that we must recognize that regulations often give us a false sense of confidence. 

Cue up Gene Hackman and the 1991 film “Class Action,” a legal thriller that pits father against daughter (Mary Elizabeth Mastrantonio) in a suit involving an auto maker — think Pinto and Ralph Nader. The film turns on the ability of the lawyers to manipulate a data dump:  SPOILER ALERT!  Will the key players notice missing documents in the mounds of paper? Will someone be able to slip in incriminating material?  I seem to recall Mastrantonio muttering: “It’s a f***ing Library of Congress!”  (See trailer at bottom of post.)

Next question: Who will play panel chairman Phil Angelides in the inevitable movie, “God’s Work”?

June 7 (Bloomberg) — Goldman Sachs Group Inc. was subpoenaed by the Financial Crisis Inquiry Commission after panel members said the most profitable firm in Wall Street history engaged in a document “dump” to hinder a probe.

Goldman Sachs sent more than a billion pages of documents, FCIC Vice Chairman Bill Thomas said on a conference call with reporters today. Not all of the information is what the panel requested, and Goldman Sachs didn’t cooperate with requests to interview Chief Executive Officer Lloyd Blankfein, Chief Operating Officer Gary Cohn and Chief Financial Officer David Viniar, FCIC Chairman Phil Angelides said.

“We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish,” said Angelides, 56, who previously served as California’s treasurer. “This has been a very deliberate effort over time to run out the clock.”

via Goldman Subpoenaed After FCIC Says Firm Slowed Probe (Update1) – Bloomberg.com.

David Rosenberg – Disturbing tidbits:

A FEW MORE DISTURBING EMPLOYMENT TIDBITS

First, if it weren’t for the plunge in the labour force, the U.S. unemployment rate would have climbed to 10% in May. Second, the Household survey actually flagged a 35,000 outright decline in employment last month. Third, the 41,000 increase in private payrolls, about one-third of what was widely expected and the low-water mark for the year, was exaggerated by a 29,000 boost from the “birth-death” model. Fourth, the fact that the hottest sector of the economy, manufacturing, could only post a 29,000 gain, a sharp slowing from 40,000 in April is quite disconcerting — especially since it is clear that the ISM index has peaked for the cycle. Fifth, the declines in the financial sector, construction and State/local governments are a vivid reminder that the parts of the economy that were most affected by the bursting of the housing and credit bubble are still licking their wounds and cannot be relied upon to play any role in helping revive what is still very much a moribund jobs market.

It’s not just the labour market that is behaving poorly, but the housing market is too. It is remarkable that with interest rates so low that we would be seeing mortgage applications for new purchases down to a 13-year low. Take a look at page A6 of the weekend WSJ and you will see that Ivy Zelman, the country’s best housing analyst, is calling for nationwide home sales to slide between 25% and 30% in May and that is sequential, not year-on-year (that is very close to a 100% annual rate plunge. Even the usually optimistic National Association of Realtors is expecting “June and July to remain fairly weak”). A survey conducted by Credit Suisse (released on Friday) showed that in stark contrast to the latest National Association of Home builders survey, the traffic of prospective homebuyers in May was back to depths of late 2008 when the financial crisis was in full gear.

via Breakfast with Dave (by subscription only)

“Davidson”

Part 1: An anomaly:

…The fact that the [employment] surveys cover ~1% of the population which is then scaled to produce a current est. leaves plenty of room for statistical error. The accelerating employment growth since Dec2009 does not suddenly slow down. In recoveries they accelerate and are the source for consumer spending especially car and light truck sales which have been so strong of late. Economic cycles are slow ponderous things and do not start and stop. Measuring economic activity has always been fraught with errors which are corrected over time and even then becomes only our best estimate. I think the survey sample was an anomaly which will be corrected next month. The data shows similar patterns throughout its history.

via Todd Sullivan

Part 2: On good news from the Conference Board and help-wanted:

Help Wanted Online as tracked by The Conference Board has remained strong at elevated levels. This can only be good news eventually for equity investors. I pulled two excerpts of interest below. There is simply not much commentary to add when the news remains this positive.

The full press release is available at this link: http://www.conference-board.org/pdf_free/HWschoolout.pdf

Excerpts:

“After the large 223,000 April increase in online advertised vacancies that kicked off the spring hiring season, employers essentially held steady in May,” said June Shelp, Vice President at The Conference Board. “As the economy comes out of the recession, online demand has risen in a wide variety of occupations. Occupations commonly associated with office work (administrative, legal and computer jobs) as well as manufacturing and construction vacancies are improving but remain below their pre-recession levels, while online demand for workers in sales, education and training, entertainment, food preparation and service, healthcare support and personal care are all at or above their pre-recession 2007 levels.”

Online help-wanted on the upswing

via Todd Sullivan,

Barry Ritholtz — Soft Patch?

As the data confirms, there can be no doubt we have entered a soft patch. Indeed, the following data points confirm a general slowing:

• Jobs: Private sector hiring cooled off last month, with just 41,000 hires;

• GDP grew at a 3% in Q1 2010, down from 5.6% Q4 2009.

• Europe: The problems in Greek Spain and Hungary are likely to lead to significant austerity measures in Europe. Expect the Continent to see anemic growth at about 1% GDP, and that can shave 0.5% off of US GDP.

• Retailers showed a disappointing May, making no gains (outside of Autos).

• Homebuilders sentiment and mortgage apps have plunged, following the expiration of the home buyer tax credit.

• China appears to be guiding its credit and real estate sectors to slower growth.

• Conference Board Leading Economic Index (LEI) fell in April by 0.1% — the first downturn since March 2009; (May data wont be out for another 2 weeks, but it also appears to have softened).

• Dr. Copper looks pretty sorry, as commodity prices plunge worldwide.

• Unemployment claims were declining, but that progress seems to have stalled

This is, historically speaking, normal. ECRI’s Lakshman Achuthan told Newsweek: “You always have a spurt in growth out of recession and then you throttle back. But we’d need to see a pronounced, pervasive, and persistent decline in the level of the leading indicators to start talking about recession risk.”

That “pronounced, pervasive, and persistent decline” is simply not present. Indeed, double dip recessions are actually rather rare. As Yale Professor Robert Shiller pointed out in a recent Sunday NYT article, “When inflation-adjusted G.D.P. has come out of a decline and posted three or four quarters of gains, it has never immediately begun to fall again — at least not since quarterly numbers began to be issued in 1947.”

From The Big Picture, Double Dip — Or Soft Patch?