The state that tried to build the $400 million bridge to nowhere is tightening its belt and looking to waste only a fraction of that amount to allow you to fly to nowhere. Today’s episode of burning stimulus money tells the tale of the $28 million headed up to Alaska to help the major international air hubs of Akiachak and Ouzinkie enter the 21st century. By comparison, the small field at JFK received $15 million.
The two Alaskan villages will get more combined airport money than New York City because they had higher-value projects that met the “ready to go” requirement. George Peter, tribal administrator in Akiachak, population 659, said the $14 million stimulus grant is “very, very important because it’s the only transportation system we have.”
There may be hope yet for that bridge..
Some strong green-shoot material here for those possessed of a more sophisticated worldview:
The U.S. trade deficit widened less than forecast in June, reflecting a second consecutive gain in exports spurred by a pick-up in economies throughout the world.
The gap increased 4 percent to $27 billion from $26 billion in May, which was the lowest level in almost a decade, Commerce Department figures showed today in Washington. Exports gained 2 percent, helped by stronger demand for goods such as semiconductors and aircraft engines, while imports rose 2.3 percent, led by a higher cost for oil.
The shift also had dramatic effects on the Trade Gap’s Third Derivative which hit all time lows because the rate of the rate of widening slowed so dramatically.
The Second Derivative of The Trade Gap Estimate To Actual Trade Gap Gap has increased in the meantime, though analysts have thusfar formed no consensus on the cause of the change, lower analytic skills or more difficult to predict gaps.
The big hero in the story is, of course, Fed Chairman Ben S. Bernanke, who was on about the potential almost a month ago in front of Congress:
Although the recession in the rest of the world led to a steep drop in the demand for U.S. exports, this drag on our economy also appears to be waning, as many of our trading partners are also seeing signs of stabilization.
U.S. Trade Gap Widens Less Than Forecast on Exports [Bloomberg]
Atticus Closes Flagship Fund (FT)
Atticus Capital’s Barakett is stepping down from his role as Manager of the fund, which has roughly 3.5B in assets. FT says his decision was “purely personal” and had nothing to do with the fact that the fund was off its high water mark.
DiPascali Admits To Madoff Fraud, Judge Denies Bail (NYT)
Frank DiPascali, the Queens kid, pled guilty to 10 counts of fraud and admitted to knowing the whole thing was a sham from the beginning. He detailed for the judge how he and the big M created wire transfers from the London to the NY office to make it look like they were earning commissions, and how they created fake account statements. Judge Sullivan ended up pulling the plug on DiPascali’s bail though, claiming that the cash involved vs. the 125 years he was facing amounted to little more than an honor system.
Ackman Easing Interest In Target (NYPost)
Shortly after Ackman’s attempt to upend Target’s board it looks like the Manager may have started dumping his positions; his exposure has dropped from 7.8% to 4.4%.
JP Morgan Looking To sell 23 Office Properties (WSJ)
On the list: One Chase Manhattan Plaza, and Four New York Plaza, as well as the former WaMu headquarters in downtown Seattle. All in all it will include 7.1MM square feet of space.
HSBC Lays Off 90 in UAE (B24-7.ae)
This is dangerous for several reasons, not the least of which is the debtor’s prison the UAE still boasts. Hopefully the company got word to the employees in ample time, if not, Godspeed.
FSA Rules To Reign In Bonuses (Bloomberg)
The FSA has moved to kill banking in the U.K. as the combination of higher taxes and death to bonuses will surely send top talent off shore.
ING Profitable After Three Quarters (NYT)
Looking to show up their Swiss three letter counterpart, the Dutch bank posted a profit of $100MM. Sure, it was down a couple of billion from the year before, and still missed analyst estimates by some two hundred million, but they beat UBS, damnit. That counts for something.
China Arrests Rio Employees (FT)
“Chinese prosecutors have formally arrested four Rio Tinto employees on suspicion of obtaining trade secrets and commercial bribery, making it more likely the highly-politicised case will be brought to trial.”
When the government is not looking to shell out over half a billion on new planes, it is digging deep to find the resources to create new job posts reminiscent of the Assistant to the Traveling Secretary. New York Democratic Senate Majority Leader Pedro Espada, who spent the better part of this summer hopping back and forth over the aisle to land better and better leadership positions must have beamed with pride when the newly rejuvenated job market landed his son a newly created $120,000/yr job as the Senate liaison between governments. The position seeks to bridge the frequently cited chasm between Democratic senators and elected officials from New York City and Washington- who happen to be predominately Democrat.
“Let me make it unequivocally clear that this is not the result of a quid pro quo or a contingency to my ending the Senate stalemate,” Mr. Espada said. “He has been expressing a desire to return to government service in some capacity and saw this opportunity. I encouraged him to pursue it. That was the extent of my involvement.”
Son of Key Figure in N.Y. Senate Coup Gets Job in Chamber [WSJ]
It is not the material goods we want, it is the rewards. (…) The next time you see someone driving a Ferrari, don’t think this is someone who is greedy, think this is someone who is incredibly vulnerable and in need of love.
Alain de Botton on ‘success’ [A Fistful of Euros]
Successfully navigating a bailout company back to the land living is a tiring business. Long hours are spent carefully deciding what move to make next. There is an sense of dedication and urgency that permeates executive offices. Unless of course you’re the new CEO of AIG. Completely spent from his first day at the helm of the bailout poster child, Robert Benmosche will soon be heading to his Croatian villa for two weeks or so of well deserved R&R. But before judging his actions too quickly, the newest member of the ‘he did WHAT club’ wants you to remember just how sweet his place on the Adriatic is.
“It’s breathtaking — you couldn’t find anything like this anywhere else,” Benmosche told Forbes. “I’m an hour’s flight to most places in Europe and a ferry ride across the Adriatic to Italy.”
Maxine, how would you like to take one of those new planes and kick off your CFPA tour on the Dalmatian Coast?
Liechtenstein, and its citizens, have long been more than a little strange. All microstates are a little strange, being, like Liechtenstein the, polar political opposite of failed states.
Failed states are plagued by institutions too weak to prop up the flaccid rule of law, and thereby permitting “shadow institutions” (the black market, organized crime, official corruption, non-governmental bases of power) to garner such a mass of power and influence so as to tear apart the thin threads of justice and stability merely by the centrifugal force of their motion.
Microstates enjoy an artificially stable state by virtue of their globally envied institutions. Usually, these were created during formative times in global history. Often they were augmented by the highly centralized, even imperial rule in place when the borders were drawn. In Liechtenstein, Vaduz was lorded over by no feudal subject and therefore beholden only to the Emperor (making it the early 18th century, European equivalent of North Carolina for carpet bagging). When Napoleon dismantled the Holy Roman Empire, of which Liechtenstein had officially been member, the tiny Principality, unlike her peers, dissolved into a state with no fealty at all save to its local princes.
Come World War I and World War II, the entire country is basically a big safe deposit box for Europe.
Set the way forward machine to 2008-2009. Banking is getting clobbered. In other words, the institutions (primarily Swiss) of banking secrecy and investment acumen, which permitted a country which otherwise lacked the critical mass to be even remotely interesting, much less worth using as a safe haven, to hold it together, are under siege.
The only real question is: Will Liechtenstein be annexed by Switzerland, or Austria?
UK Seals Deal To End Liechtenstein Tax Havens [Times Online]
How Dick Bove? How is this possible? Here we are in the middle of the furious V-shaped recovery we keep hearing about and you want people to do what? Take money off the table in bank stocks? Surely you were just misquoted when you said they were running on “fumes”. Exactly how loaded did Kenny boy get you on that BAC victory flight? What possible celestial alignment could lead you to say this?
“The rational investor would step away from psychology at this point and take some profits,” he said.
Bove said bank earnings will not improve in the third or even fourth quarter this year. “Many of these companies will show losses,” he said
But who is going to step up and make those ‘buy’ recommendations on banks that frequently produce side-splitting laughter from now on? Oh right….that’s who.
Someday Poland will grow up and realize that issuing more debt, not selling assets, is what modern economies do during a fiscal crisis. Don’t worry though, Poland, we will still be around when you decide to join the cool kids debtors club.
Poland’s Cabinet approved a plan to sell stakes in state-owned companies including KGHM Polska Miedz SA and Grupa Lotos SA in an effort to finance its budget deficit after tax revenue slumped and public debt soared.
“The plan acknowledges the need to speed up privatization,” said Prime Minister Donald Tusk at a press conference in Warsaw today. The budget “requires a cash injection to cover basic spending.”
Comments like this one from a former Polish finance minister are why people like this are (were) finance ministers in Poland:
“It’s high time that Poland undertook real privatization,” said economist Miroslaw Gronicki, a former finance minister, by phone. “Any revenue from privatization means a reduction in debt, and as far as the budget is concerned it’s an extremely sensible move.”
Seriously, who talks like that anymore?
Polish Government Approves Asset Sales to Cover Swollen Deficit [Bloomberg]
Caught by one of our readers, this month’s version of “juxtapositional comedy” care of the Wall Street Journal:
In Today’s Paper [The Wall Street Journal]
Barton Biggs & Co. were up close to 20% YTD (through June) and were reportedly up 15% in July thanks to some Eastern European CDS plays which put them above their high-water mark for the first time in 2009.
Traxis Partners Investor Letter.pdf
The state that tried to build the $400 million bridge to nowhere is tightening its belt and looking to waste only a fraction of that amount to allow you to fly to nowhere. Today’s episode of burning stimulus money tells the tale of the $28 million headed up to Alaska to help the major international air hubs of Akiachak and Ouzinkie enter the 21st century. By comparison, the small field at JFK received $15 million.
