plus 4, Why a Business Writer Wishes Wall Street Wasn't Such a Big Story - Huffingtonpost.com

Why a Business Writer Wishes Wall Street Wasn't Such a Big Story - Huffingtonpost.com
Boil water advisory issued - WWMT
Downing Street Garage, Denver Earns Two More Honors - PR Inside
Tools, diagnostic equipment stolen from Saylorsburg garage - Pocono Record
Baker Donelson Hosts Franchise Event Jan. 12 - Chattanoogan

Why a Business Writer Wishes Wall Street Wasn't Such a Big Story - Huffingtonpost.com

Posted: 04 Jan 2010 01:22 PM PST

I've been covering Wall Street now for nearly 20 years, and it's been a pretty good run. I've broken some big stories and written three books about the "Street," and I'm looking to write another. I've made some friends along the way -- people like Teddy Forstmann, the great investor who called the junk-bond crisis and had the insight to steer clear of several others, and I've made some enemies, namely the traders and bankers who work at many of the big firms who would have preferred I kept silent about their problems during last year's financial crisis rather than blab about them on CNBC.

The story about Wall Street is a big one -- and I'm afraid to say, it's going to get bigger in 2010 and beyond. If you want to know why the federal government allows all those community banks to fail, but bails out Citigroup, Bank of America, etc., with unlimited funding, it's because these institutions have grown so large, and become so important and intertwined in the global financial system, that letting them fail would be catastrophic. In other words, it's cheaper to guarantee Citigroup's survival (and that of Goldman Sachs, Morgan Stanley, Bank of America, JP Morgan) with hundreds of billions of dollars in bailout money as the government did last year, than watch the global banking system implode.

Now you may think I just can't wait to cover this story in 2010. Of course, the journalist in me says, "bring it on": another book and columns to write, big stories to cover. But the American citizen in me makes me wish Wall Street wasn't such a big story, that people like Vikram Pandit of Citigroup and Lloyd Blankfein of Goldman Sachs (yes, the guy who thinks trading bonds is "God's Work") just weren't such a big part of American life that the country's economy rises and falls on their bad bets.

I've come to this conclusion after reading two articles. One is a thoughtful but at bottom unrealistic piece written by several HuffPost contributors, including Arianna Huffington. It proposes that Americans remove their money from the large money-center banks at the center of the reckless risk taking that led to last year's meltdown and bailouts, and move their deposits into community banks, the good guys of finance that didn't take the risk because they weren't Too Big To Fail. The other is a less thoughtful post written by an anonymous blogger also on this site that defends Goldman Sachs and questions some of my reporting, including one piece from The Daily Beast that suggests Goldman's all-too-obvious image problems have begun to impact its investment banking business.

What I like about Arianna's piece is that it attempts to hold the bad guys responsible. Its point is pretty simple: The likes of Citigroup and Bank of America don't deserve our money, so let's hit them hard and reward those who deserve our support, namely the community banks, who, despite many failures, didn't engage in massive risk taking as the so-called large "money center" banks did over the past decade. The problem with the piece is twofold: First, community banks weren't blameless in terms of risk taking and thus aiding and abetted the real estate bubble, which is the root cause of our economic problems. That's why so many of them have failed and will continue to do so. Also, by making smaller community banks more important we might simply transfer the policy and status of Too Big To Fail to a different set of institutions. Armed with government support and subsidy from the Too Big To Fail precedent, what would stop community banks from taking excessive risk just as Citi has done?

There are almost too many ways to attack the posting from the anonymous blogger (who goes by the name "Dear John Thain"), titled "2010 Will be A Challenging Year for Goldman Sachs," (this guy obviously has a flair for understatement) so I will make the following points. Because he's anonymous, we don't know if he's a Goldman executive (one way Goldman is now looking to attack its critics is by blogging positively about the firm, I am told) an investor with holdings of Goldman Sachs stock (a substantial conflict of interest if this is true), or just some guy with too much time on his hands. In any event, one line caught my eye: He takes issue with my assertion that Goldman benefits from a subsidy from the government because of its status now as a bank; he says it's really a "financial holding company" as opposed to a "bank holding company" but fails to point out that there's really no difference. In the aftermath of the financial meltdown and bailout, Goldman is now primarily regulated by the Fed (as opposed to the Securities and Exchange Commission), the banking system's chief regulator, and receives along with that all the benefits of the classification, including being treated in the market as Too Big To Fail, and thus being able to borrow cheaply.

As I pointed out in my book The Sellout, there's much to admire about Goldman and its history in risk taking compared with the other big firms; this was, of course, the only firm to question its own irrational exuberance and short the subprime real estate market back in late 2006 (a trade in which a firm makes money if prices decline) whiles it competitors were betting bigger on the bubble. But that hedge only delayed the inevitable -- Goldman, like the rest of the financial business (except maybe JP Morgan), bet big and wrong, so wrong that by the fall of 2009 it, along with most of its competitors, was falling into insolvency.

All of which brings me to the bigger point of this piece: We as journalists, as commentators, and policy makers spend way too much time arguing over the fine points of Goldman's status as a bank holding company or a financial holding company. Lloyd Blankfein is pilloried for saying he does God's Work when he trades stocks or bonds, when in a more perfect world, what he says or what he does just shouldn't mean that much to the guy who owns an auto repair shop in Queens or the family farmer in Iowa.

That's why I kind of like Arianna's idea (despite its drawbacks) of empowering community banks as opposed to the money center banks that are way too important and powerful and whose leaders just shouldn't wield that type of influence because at bottom they're just not smart enough -- nor, perhaps, is anyone. Dear John Thain's nom de plume is a reference, of course, to the former CEO of Merrill Lynch John Thain, who by all accounts didn't think twice about spending more than $1 million decorating his office during the financial crisis, including tens of thousands on a high-end commode.

To be sure, bankers have always wielded enormous power in our society -- JP Morgan was a real person, after all. But somehow the importance of people like John Thain (whose spending spree also included a $1,400 parchment paper waste basket) and Lloyd Blankfein has grown beyond anyone's comprehension, even their own. When former Lehman Brothers CEO Dick Fuld was rebuffing offers to buy his firm before its free fall into bankruptcy last year, I don't think he truly envisioned the power of his inaction: That the entire financial system would shut down as a consequence of holding out for more money. One of the great lessons of the financial crisis is that this power was bestowed on the wrong people -- the people who helped foment the housing bubble (along with the government) by packaging all those risky mortgages into allegedly safe bonds and then took so much risk that they destroyed the financial system and created the Great Recession and with it 10 percent unemployment.

It would be nice if in the not so distant future the Dick Fulds and Lloyd Blankfeins of the world become less important, even if I lose a book deal in the process.

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Boil water advisory issued - WWMT

Posted: 04 Jan 2010 12:53 PM PST

RICHLAND TOWNSHIP, Mich. (NEWSCHANNEL 3) – A boil water advisory has been put in effect in Richland Township after an auto struck a fire hydrant near Macywood Drive and 32^nd Street in Richland.

The City of Kalamazoo Department of Public Services in cooperation with the Kalamazoo County Health and Community Services Department has issued a precautionary boil water advisory for all water intended for drinking or ingestion. The advisory is precautionary only, as there have not been any tests that confirmed coliform bacteria in the water supply.

The area under the advisory is bound by the following streets; 32^nd Street north of Macywood Drive, then west along C Avenue (M-89) to the termination of the water system in the 8000 block of C Avenue.

Residents there are advised to either use bottled water for consumption, or bring tap water to a rolling boil for at least one minute prior to use for drinking or other ingestion.

Public Services personnel are working to repair the damaged hydrant. The boil advisory will remain in effect until further notice.

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Downing Street Garage, Denver Earns Two More Honors - PR Inside

Posted: 04 Jan 2010 11:20 AM PST

2010-01-04 20:19:56 -

Downing Street Garage has earned two more prestigious awards beginning with the inclusion in the Motor Age Top 10 Shops for 2009 Award, and as the first organization and the first auto garage to be admitted into the Denver P2 (Pollution Prevention) Partners Program in the City and County of Denver.

The Top Shop Award winners were announced at the Automotive

Service Association (ASA) awards luncheon during the CARS show in Las Vegas in November. The competition was the 4 th annual Motor Age Top 10 Shops for 2009 that identifies the top 10 mechanical repair shops in the U.S. Downing Street Garage is no stranger to the award as they were honored with this award in 2006 as well. OTC, Mitchell1, Goodyear and Blue Mountain Professional sponsored the Motor Age Top Shop competition.

"Downing Street Garage is offering their community and their customers more than customer service and auto repair by caring about the environment that they live, work and play in, which is evidenced in their total commitment to environmental practices and reductions in emissions to air, land and water. These efforts extend to their sustainability focus by giving back not only in charitable ways but environmentally as well," said Janet Burgesser, Environmental Public Health Analyst, Denver P2 (Pollution Prevention) Partners, City and County of Denver. "We are thrilled to honor Downing Street Garage as the first business and auto shop to be admitted to our program."

Downing Street Garage adds these two new awards to the list that they have earned over the years: 2008 Silver Level Designation in the Colorado Environmental Leadership Program; 2006 Motor Age Magazine, Voted one of the Top 10 Repair Shops; 2004 International BBB Torch Award for Marketplace Ethics; 2004 Colorado Ethics in Business Alliance Award; 2003 Denver/Boulder BBB Torch Award for Marketplace Ethics; 2002 AAA, Voted among the top five AAA Approved Repair Shops in Colorado.

Downing Street Garage is a full-service auto repair facility serving domestic and import cars, trucks and SUV's, whose mission is to build respectful, long lasting relationships with customers, employees, vendors, community and the environment. With services ranging from a basic oil change to more complicated repairs, Downing Street Garage is the key to reliable auto repair and maintenance in Denver.

Downing Street GarageShelly St. John, 303-860-0384 or 303-596-4640

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Tools, diagnostic equipment stolen from Saylorsburg garage - Pocono Record

Posted: 04 Jan 2010 11:56 AM PST

Police are investigating a break-in and robbery this weekend at Advantage Auto Repair in Sciota. Sometime between 6:15 p.m. Saturday night and 2 p.m. Sunday, someone forced entry into the business and removed $10,000 worth of tools and $12,000 of vehicle computer diagnostic equipment.

Anyone with information is asked to call State Police at Swiftwater at (570) 839-7701.

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Baker Donelson Hosts Franchise Event Jan. 12 - Chattanoogan

Posted: 04 Jan 2010 10:59 AM PST

Baker Donelson Hosts Franchise Event Jan. 12
posted January 4, 2010

Baker, Donelson, Bearman, Caldwell & Berkowitz, PC will host the winter meeting of the International Franchise Association's Franchise Business Network on Tuesday, Jan. 12, at 12:30 p.m.

The 90-minute meeting will originate from Nashville, but the firm will also provide an opportunity to participate via videoconference at the Firm's office in Chattanooga, which is located on the 18th floor of the Republic Centre at 633 Chestnut St.

The theme for the quarterly meeting is "Social Media and Digital Point of Sale Marketing." The speakers and topics include:

Jeff Pennington, Uniguest, Nashville, who will speak on and demonstrate digital point-of-purchase marketing and how it benefits businesses.

Valerie Walsh Johnson, Baker Donelson, Memphis, who will discuss social media law and policy.

Adam Small and Jake Greene, Strategic Business Network, Nashville, who will speak about social media marketing to younger and older consumers.

Host attorney Joel Buckberg (of Baker Donelson's Nashville office) also will provide an update on the latest developments in franchise law. The business meeting will conclude with an open forum during which participants will have the opportunity to ask questions about franchising.

The Franchise Business Network brings local franchisors, franchisees and suppliers together on a regular basis to create business-to-business and grassroots networking opportunities. Franchise leaders discuss current industry topics and take advantage of accessible and valuable education opportunities. The International Franchise Association is the world's oldest and largest trade group representing franchising, the business strategy that generates an estimated $1 trillion annually in U.S. sales. Its members are franchisees and franchisors in more than 75 industries, from auto repair to weight loss, daycare to travel agencies and many more.

The event is free and open to interested franchisees, franchisors and suppliers. Lunch will be provided; but reservations are requested by Thursday, Jan. 7. For more information or to make a reservation, contact Laura Ellis at 615 726-5550 or lellis@bakerdonelson.com.

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