Tag Archives: Politics

New York State Governor Eliot Spitzer’s One Sentence Resignation Letter

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Thanks to our friends at the New York Times, here’s the one sentence resignation letter that Eliot Spitzer sent to Sheldon Silver, Speaker of the New York State Assembly, and to Joseph Bruno, President and Majority Leader of the New York State Senate, on March 12, 2008. (see the Times’ coverage).

Mr. Spitzer’s letter reads…

“I am writing to advise you that I am resigning my position as Governor of the State of New York effective at 12:00 noon on Monday, March 17, 2008.”

Although we have read it over and over, we can’t locate the part where he provides the reason for his decision to quit. Knowing that a sitting governor does not resign without good reason, I think we will go back and read the letter a few more times, since we must have missed something. Perhaps verbosity is not one of Mr. Spitzer’s strengths, but wouldn’t an elected official want the reason for his resignation to be on record for the history books?

As for Eliot Spitzer’s replacement, David A. Paterson, hopes for a new Governor with a squeaky-clean past have already been dashed. Even before the sun had set on his inauguration day, the skeletons in Mr. Paterson’s closet had started to make noise.

– RoutingByRumor

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March 17, 2008 – A Gathering Storm On Wall Street

The stunning collapse of investment banking firm Bear Stearns over the weekend, and it’s fire-sale purchase for pennies on the dollar by JP Morgan Chase has is just the latest bad news rattling investors’ nerves.

Oil, which crossed the $100 / barrel mark less than a month ago, hit another record high of almost $112 / barrel on world markets today. Gasoline prices have followed suit, hitting new highs on a daily basis, with no end in sight. Rising fuel prices prompted United Airlines to raise round trip fares as much as $50 last week.

The Federal Reserve enacted another emergency rate cut over the weekend, with yet another cut of up to 100 basis points expected later this week.

The U.S. dollar continues to weaken, making foreign goods more and more expensive for Americans.

Almost every day, you hear of another major retailer reporting dismal sales figures.

Saying that the U.S. real estate market is in a slump is like saying that the Titanic sprung a minor leak.

The Dow finished last week below 12,000. Overseas markets have dropped sharply today, down between 4% and 5%. Fasten your seat belt when the U.S. markets open today.

Will today come to be known as the St. Patrick’s Day Massacre on Wall Street, or will it simply be another roller coaster ride for investors?

More and more lately, it seems that “no news is good news”.

And yet the Bush administration still can’t bring itself to  accept the fact that the U.S. economy is in a recession.

– RoutingByRumor

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New York Governor Eliot Spitzer Involved With A Prostitution Ring

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above image is from this Harvard Political Review Article
(looks like Brooke Masters might have to update that title !)

As first reported by the New York Times, New York Governor Eliot Spitzer has informed the most senior officials in his administration that he has been involved in a prostitution ring, a Spitzer administration official said this morning. See New York Times Coverage.Read Eliot Spitzer’s biography at Wikipedia.

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Silda Wall-Spitzer and Eliot Spitzer at today’s news conference (AP Photo)

In a scene reminiscent of New Jersey Governor Jim McGreevey‘s 2004 fall from grace, Mr. Spitzer apologized to his family and the public in a terse statement to reporters this afternoon in New York City. He did not say what he was apologizing for. In fact, despite the fact that his lips were moving, he really didn’t say anything. Some things speak for themselves. Some things are better left unsaid.

In any case, apologies that come only after you get caught are pretty worthless. Mr. Spitzer was reportedly caught on tape by a federal wiretap. Let’s say he did not get exposed by the federal investigation. Could you ever imagine him holding a news conference, admitting his transgressions, and asking for forgiveness, just because his conscience was bothering him? We can’t.

What we find most interesting about this case is that it supposedly started as a money laundering investigation by the IRS. Early in the investigation, it has been reported, political corruption or blackmail seemed to be the likely reason for cash payments that Governor Spitzer was making to shell companies. But you have to wonder whether the IRS stumbled across this on their own, or if somebody “dropped a dime” on him. People in Mr. Spitzer’s former line of work tend to make a lot of enemies. As we all know, friends may come and go, but enemies accumulate.

You would think a former prosecutor and attorney general would have been smarter and have impeccable morals. Failing that, you would think they would be more cautious about leaving a money trail. Certainly makes you wonder.

Former New York City mayor Ed Koch, who has never minced words, gave this interview about Eliot Spitzer to CNN’s Wolf Blitzer.  It is classic Ed Koch, who we have always liked, particularly for his unvarnished opinions on things.

It is widely expected that Governor Spitzer will resign his position as Governor of New York State. We suggest he consider applying for a job here. New Yorkers deserve a governor whose moral compass is in working order and points to True North.

We wonder… Since he is still the Governor as of this writing, can he pardon himself before he resigns? In any case, Mr. Spitzer seems to be thinking about life after politics. See our post about his just anounced movie deal.

And so, another brilliant political career implodes. As Queen elequently put it, Another One Bites The Dust (watch the youtube video)

– RoutingByRumor

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Oil Closes Above $100.00/Barrel, Toilet Paper Closes Above $1.00/Roll, Wal-Mart’s Quarterly Sales Surpass $100 Billion and Postage Rates Are Going Up Again !

All of these increases are related, and they all spell serious trouble for the U.S. economy.

Energy costs are driving up the price of all consumer goods and services. Raw materials, production and transportation costs are all being pushed higher because of the price of oil.

U.S. crude for March delivery jumped $4.51, closing yesterday at $100.01 a barrel on the New York Mercantile Exchange. The previous record close was $99.62 on January 2, 2008. It has never closed above the century mark until now.

In a recent shopping trip, we found single rolls of Scott toilet tissue selling at a national drugstore chain for $1.15 a roll. I’ve never seen single rolls of toilet paper priced at or above $1.00 a roll. The cost of paper products seems to have increased 25-30% within the space of a few weeks.

And with Americans hard pressed to stretch every dollar, Wal-Mart continues to post record sales figures despite the widespread belief that retailers such as Wal-Mart are major contributors to the nation’s economic problems. The United Food and Commercial Workers (UFCW) union says Wal-Mart employs more than one million U.S. workers, earning an average of $8.00/hour.

If you need a better feel for what $100 billion actually means, it’s the same as saying “one hundred thousand million dollars”. It’s $100,000,000,000.00 …and that’s just for the fourth quarter of 2007. That works out to more than $1 billion a day, or put another way, more than a thousand million dollars every day. That translates to $400 billion a year if they continue those figures for four quarters. At this rate, Wal-mart, the world’s largest retailer and the largest private employer in the U.S. (see this UFCW fact sheet), will have a trillion dollars in annual sales before long.

The prices mentioned above are significant milestones, even if the specific numbers are not economically significant. It’s similar to when U.S. gasoline prices went above $1.00/gallon for the first time, back in the Summer of 1979. We feel that they portend even higher prices in the near future. Expect sharp increases to continue in the cost of living and inflation. Expect the size of those rolls of toilet paper to continue shrinking, while the price continues heading North. If you have any letters to mail, better do it soon. On second thought, use e-mail.

Trips to the supermarket are getting more painful every week. All of the basic grocery items, bread, milk, eggs, cereal, etc. are rising sharply. For instance, we’ve seen the price of a dozen eggs almost double in the last few months. Too bad gasoline doesn’t taste better, because milk is now almost double the price of gasoline, per gallon. It makes you wonder if the cows are the ones who are getting milked. We’ve seen some bakeries raising prices so often that they don’t even wait until their old packaging is used up before they raise the price. They are covering the printed prices on their plastic bags with stickers showing the new price. I’ve seen that some boxes of cereal have shrunk to less than 9 ounces. For instance, I spotted a 8.9 ounce box of General Mills Cheerios.

Who decides on these strange product sizes? Did a committee of pricing experts say that 9 ounces was way too big, but 8.75 ounces looked too small ? It’s voodoo marketing. It’s deception engineering. What’s next? The 8.1275 ounce box of Kellogg’s Frosted Flakes?

We can’t remember any time in the past 30 years that the cost of living has risen so sharply and for so long a period of time.

Just nine months ago, the Postal Service raised the first class postage rate (up to one ounce) by two cents, to 41 cents. They have just announced another increase to take effect this Spring. No wonder they introduced their “Forever” stamp. They saw these frequent rate increases coming, and probably wanted to limit the public outcry. Unless you have lots of money to tie up in “Forever” stamps, the idea of locking in your postage rate is pretty meaningless. You’d be much better off investing your money anyway. What we need is the “Forever” gallon of gasoline and the “Forever” quart of milk. Shoppers going to the supermarket are behaving more and more like stock market speculators every day. Should I buy that loaf of bread today? I really don’t need bread yet, but it might be 30 cents more tomorrow. Better fill up the car today, because the radio just said the price of a barrel of oil hit a record high yesterday, and that means the price at the pump will be going up in the next couple of days.

With these almost daily price increases and product downsizings, what we need is a new way of tracking the true cost of living. Forget about the U.S. government’s inflation index. Forget about the “market basket” price surveys. Forget about The Lundberg survey of gasoline prices. What this country needs is “The RoutingByRumor National Toilet Paper Price Survey”, adjusted of course, for the shrinking size of toilet paper rolls. Laugh all you want. We think it will be a very accurate gauge of inflation.

– RoutingByRumor

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Filed under Business, Consumerism, Deception Engineering, Energy, Energy costs, Kimberly-Clark, Money, News, Politics, Retail, Routing by Rumor, Scott Tissue, Shopping, Shrinking Products, Stock Markets, The Economy, Your Money

The Gray Lady Is Hurting – Job Cuts Announced At The New York Times

Life imitates art.

Life also imitates blogs.

The Gray Lady has fallen. When you’re her age, recovery is very difficult, even impossible someTimes. A couple of days ago, in this posting about layoffs at CBS radio stations, we talked about the incredible shrinking New York Times. Today, the Times announced job cuts. Maybe we’re psychic or something.

No, we can’t claim any psychic powers. It wasn’t really hard to see this one coming. As we discussed, all of the traditional media are struggling. Newspapers have been getting smaller while their newsstand price has been climbing. Radio stations have been reduced to generating ad revenue by running commercials for snake oil, 24 hours a day. Broadcast television is pretty much a wasteland. Hey, Mr. FCC chairman… Is broadcasting infomercials most of the time considered “broadcasting in the public interest”? Don’t broadcasters have to demonstrate that as a condition of license renewal?

But good news is just around the corner. The Fed is talking about yet another rate cut, and the President says the checks are (almost) in the mail.

Our economy is looking more and more like an emaciated drug addict every day. Our neighborhood dealer, Mr. Bernanke, who has gotten us dependent on rate cuts, is going to run out of his brand of crack before too long. If the IRS doesn’t keep sending us rebate checks, we might have to start robbing little old ladies to support our habits. Disgusting habits. Like eating …and filling our gas tanks …and heating the house …and paying the mortgage.

How do things sound where you are? That giant sucking sound is getting louder around here. Ross Perot was right.

July, 2008 Update…

The New York Times layoffs are now five months old, the newspaper continues to shrink, and now, they raise the cover price yet again.  Read our latest article here.

– RoutingByRumor

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Bad Day At Black Rock – The Axe Falls At CBS Flagship Radio Station WCBS 880 AM In New York City

…And we’re not referring to the 1955 John Sturges movie by the same name, starring Spencer Tracy.

We’ve written here recently that it seems to us that the vast majority of the advertising on radio stations lately is for products best described as snake oil, and services of questionable efficacy, almost always targeted at individuals in some sort of trouble. Advertising for legitimate, mainstream products and services seems to have all but disappeared. In our mind, this is direct evidence of the faltering economy in the United States, as well as a result of the impact the Internet has had on manufacturer’s and retailer’s advertising habits. We doubt that a radio station enjoys the same type of advertising revenue from a commercial for some brand of snake oil, as it would for an ad from an automobile manufacturer, airline, bank or any other “real” advertiser. And when you hear the same snake oil spot being broadcast every few minutes, day-in and day-out, we think it’s a good bet that they are buying the airtime dirt-cheap. Tough economic times always breed a bumper crop of hucksters, snake oil salesmen and get-rich-quick schemes. We guess P.T. Barnum was right.

It came as no surprise then, when we learned that there was a round of layoffs this week at CBS radio stations, including at WCBS-AM (880 kHz) in New York City. There are reports that nearly 200 CBS radio employees lost their jobs this week. According to this posting, it’s Crystal clear that the bloodletting included WCBS jettisoning their Program Director, Crys Quimby. You can still (at least at this writing) read about Crys on her page at WCBS880.com. She had been with CBS for more than 20 years! You know things are bad when people with that much service are shown the door. We guess that means there will be no gold watch.

The day after I blogged this story, this article appeared in the Newark Star-Ledger. A statement released by CBS Radio included the following explanation…

“With these actions, we continue to build on our strategy of deploying our assets to best grow our ratings and monetize the results”

Now, if that isn’t a piece of tortured doublespeak, penned by some corporate spinmaster, we don’t know what is. In fact, we’re not even sure it’s written in English. We parsed it using our Captain Midnight secret decoder ring. It translated into “The Internet has killed our audience. Between that and the failing economy, our advertising revenue has dried up like a lake bed in a drought. We’re running out of money”.

What’s next? Hooking WCBS 880’s traffic reporter Tom Kaminski up to a bunch of helium balloons instead of having him report from “Chopper 880”? Maybe they’ll have chopper pilot Christopher LaCasse manning the helium tank. We would love to have Tom take a few hits of helium just before he goes on the air. His traffic reports would sound like this (please don’t try this, since it could be dangerous, and there’s always the chance you could sound like one of the Munchkins permanently). The Wizard Of Oz has always been our favorite movie. As a child, we would cry every time we watched it, afraid that Dorothy and Toto wouldn’t get back to Kansas. By the way, here’s why helium does funny things to your voice.

…But we digress.

About the only advice we can offer to the employees at WCBS-AM and other CBS stations who are now unemployed, is to not bother applying for jobs at Macy’s. But WCBS could enter Tom Kaminski as the newest float in the Macy’s Thanksgiving Day Parade. Macy’s, one of America’s oldest and best known retailers, just announced they are cutting 2,300 jobs (read about it here). No big surprise here either, since retailers are really hurting in this economy. But hey, Wal-Mart is still hiring. As we have previously written, don’t expect the $600 income tax rebate checks Americans will be getting thanks to the U.S. Economic Stimulus Plan to be much help. In fact, we wouldn’t be surprised if Macy’s ends their more than 80 year sponsorship of the annual Thanksgiving day parade in New York City. In that case, you could say that the axe fell on the turkey, too. The Macy’s Fourth of July Fireworks show, which has dazzled New York City for over 30 years might also fizzle.

Of course, it’s not just CBS Radio or radio and TV broadcasters in general who are feeling the pinch. Newspapers are folding (pun intended) under the weight of a failing economy, coupled with the exodus of advertising dollars to the Internet, cellphones, and other electronic venues. Take The New York Times, one of America’s most venerable and respected newspapers, for example. The print edition of The New York Times is a shadow of it’s former self. Over the last year or so, entire sections of the Sunday New York Times have disappeared, while the newsstand price has climbed to $4.00. That alone, I am sure has contributed to much of the decrease in circulation that they have seen. For a long time, they didn’t even bother to renumber the remaining sections. For instance, when they killed section 10 (Help Wanted) and section 13 (Television), they simply sold the Sunday newspaper with those section numbers missing for about a year. I would imagine that prompted a lot of complaints from readers that their copy was missing some sections. Then recently, they decided to drop the section numbers altogether, simply using the remaining sections’ names only (Sports, Real Estate, etc.). I took this as an omnious sign that they expect to discontinue even more sections of their Sunday edition. We were particularly upset when the Technology section (formerly the Computers section) that appeared one (weekday) per week, shrunk and shrunk until all that remains today is one or two pages a week inside the Times’ Business section. Even the physical size of their pages has been reduced. We guess that means the Times is shrinking literally AND figuratively.

We’re not the only ones thinking that The New York Times is in big trouble. Internet pioneer Marc Andreessen, the co-founder of Netscape, has begun his “New York Times deathwatch” (see this CNN article).

So I guess we will be getting most of our news off of the Internet from now on. Too bad, because we were starting to find all those radio commercials for snake oil to be quite entertaining.

– RoutingByRumor

P.S. – Ever wonder why WCBS-AM, which used to go by the moniker “Newsradio 88” adopted the “880” identity? They’re still at the same spot on the AM dial, 880 kHz (or 0.880 mHz). When radios, especially car radios, had analog tuning dials, it was the norm to drop the last digit of frequencies below 1 megahertz. Hence, 530 kHz was shown as “53” or “53“, and 880 kHz was shown as “88” or “88” (to avoid clutter, only a few frequencies would usually be shown on the tuning dial. You would have to guesstimate the position of the other stations). Some listeners would scratch a mark into the face of the radio to mark the position of their favorite stations. We would put little dots of “white-out” on the face of the dial. With the move to digital displays on modern radios, 880 kHz is usually shown as “880”. WCBS, as well as other AM stations, simply wanted to keep things in sync, and have what you see displayed match their announced frequency.

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What’s Next, Mr. Bernanke… Free Money?

The Federal Reserve surprised a lot of people today, including us, here at RoutingByRumor.

They announced another cut to the target federal funds rate, this time it was 50 basis points, or 1/2% (read the Fed’s announcement, here). That is on top of the 75 basis point or 3/4% emergency cut announced eight days ago. This brings the overnight bank rate down 125 basis points in the past week, to 3.00%. The only member of the Federal Reserve’s Open Market Committee to vote against the latest rate cut was Richard W. Fisher. There’s a black sheep in every herd.

The Fed must be very, very concerned about the economy. But they can’t repeat these tricks forever. Eventually, they will run out of string, and “eventually” is sooner than you may think. Just think about it… Another two cuts like those in the past week, and money will almost be free.

Have you ever come across a vending machine that was set up to dispense product without having to insert any money? You can find these machines in some company cafeterias. I can still remember the time that I accompanied my father on a trip to a company he did business with. I must have been seven or eight years old at the time. That company had such a soda machine. Like any young child, I would push the buttons on every machine I’d come across, trying to get free gumballs, candy, soda or whatever. And don’t forget to check the coin return for some free money. Of course, I had to press every button on this soda machine, too. Every time I’d hit a button, another can of soda would be dispensed. I thought I hit the jackpot. The man who had to put all those soda cans back into the machine was not as amused as I was.

Now, if the Fed keeps lowering the funds rate, we figure that pretty soon, the banks might set up their ATMs to dispense free cash. It would make the kid in me very happy. I could just stand there all day, pressing buttons.

What’s next, banks giving away free toasters, blenders and TV sets? I remember those days too. Actually, I could use a new television, since in February 2009, when broadcasters stop transmitting analog signals, my current televisions will no longer work (at least not without a digital-to-analog converter box). Gee, Mr. Bernanke, maybe this was a great idea after all.

Then again, maybe not.

In fact, maybe black isn’t such a bad color after all. I like black better than red. Black goes with everything.

Maybe following the herd just leads you to the butcher sometimes.

So, they’re making money cheap, which should encourage people to start buying homes again… and cars, and televisions, and computers, and everything else we don’t make here any more.

Who will be hurt the most by these aggressive rate cuts by the Fed?  People on fixed incomes and retirees.  You can’t depend on the stock market these days.  Putting your nestegg into stocks, even if diversified,  is just slightly less dangerous than playing Russian roulette.  Inflation was already outstripping anything you might hope to earn from a bank CD or insured money market account.

With the rate cuts in the past week, bank rates have fallen through the floorboards.  I just checked Bank of America’s website… Putting $10,000.00  into a 1-year CD or a money market account will currently get you an APR of slightly more than 2%.  To add insult to injury, if by some miracle you manage to earn a few dollars in interest, it’s taxable income.  That dismal rate of return is sure to go even lower over the next few weeks and months, especially if there’s another Fed rate cut.  Just a few months ago, 1-year CD rates of 5% were commonplace.

Make no mistake about it.  The faltering stock market and  plummeting interest rates on instruments such as certificates of deposit,  are very bad news indeed.  You will see increasing numbers of elderly Americans, who thought their golden years would be reasonably secure, now faced with loss of their homes, or worse.

Time to start stuffing the mattresses.

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President Bush delivering his final State of the Union Address on 1/28/2008

In his State of the Union Address two nights ago (read the full text here), President Bush touched on the need to increase exports. Funny, but I didn’t catch him mentioning the need to limit imports. In fact, President Bush never mentioned the phrases “trade deficit” or “imports” even once during his State of the Union Address. Rather, he said “we are pursuing opportunities to open up new markets by passing free trade agreements“. That’s wonderful. Just what America needs. More jobs going overseas. More cheap imports flooding the U.S. More unemployed American workers. The imbalance between U.S. salaries and those in most foreign countries is so great that we will never be on the winning side of any free trade agreements. Have any free trade agreements we’ve signed in the past resulted in a trade surplus (I think that’s what you’d call the opposite of a trade deficit, but since we never hear the term, I’m not sure that’s correct). Have they ever even resulted in balanced trade?

Thank God for term limits. Could you imagine four more years of this? Our trade deficit is already so lopsided, that unless we put limits on imports, we can never hope to make a dent in the trade deficit.

Cheap money will allow very few people who are at risk to avoid foreclosure on their homes.  For the few it might benefit, our advice is to postpone the celebration, because  cheap money won’t last forever. Maybe until the next election. Then what? Americans who can’t find decent paying jobs will use cheap credit to increase their spending and their debt. Then, when interest rates inevitably rise again, look out. If you think things are bad now, you ain’t seen nothing yet. Pity all those families who are convinced that lower interest rates mean that this is now the perfect time to buy a home. If you think there have been a lot of foreclosures recently, just wait a while and see what happens.

We’ve said this before, and we’ll say it again… If America continues to be flooded with cheap imports that are sucking good paying jobs out of this country, our economy will continue to get worse, no matter how many interest rate cuts the Fed delivers. Can you say “quick fix”?

Wal-Mart might be the biggest employer in America, but they can’t employ all of us. And even if they did, we couldn’t afford to shop there. Minimum wage doesn’t go very far. Especially when you need medical care, and your employer doesn’t provide health coverage.

So thank you, Mr. Bernanke. It was very gracious of you and the Federal Open Market Committee to give America this latest gift. We don’t want to seem ungrateful, but could we exchange the gift for something we really need? Perhaps the creation of good jobs that pay decent wages. Imagine being able to go shopping and actually finding products that say “Made In USA” once again, not to mention having the money to buy those products without going into debt. How quaint.

Thank You.

– Sincerely,

RoutingByRumor

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