Société Générale: a Logical Conclusion of Impatient Money

Société Générale trader, Jérôme Kerviel, 31, was accused by the Société Générale, Paris of implementing an elaborate, year-long fraud that involved betting billions of dollars of the bank’s money on European stock index futures. Michel Histel, 62, a French retiree who is closely following the story argues that it is common knowledge that the Société Générale’s has played a leading role in financial derivatives products. Jérôme Kerviel was employed by the Société Générale and in his role as arbitrageur he was expected to hedge large bets on index futures. In a sense what he was doing is a logical conclusion of the irrational process of betting on potential but risky, uncertain and unguaranteed future stock values prices. The value gaps may be intelligently guessed but the risk of unforeseen socio-economic structural, geopolitical and/or environmental changes, is always there so that even real financial transactions are more virtual that really real. In this risk society there is a chance for (even and often) very young people with an intuitive grasp of gaming to win big on their wagers. But this is not the logic of a marketplace. Impatient money contributes hugely to the growing inequality between the ultra-rich who can afford to gamble and the deterioration of the quality of life in the lower quintiles especially those who are most vulnerable to social exclusion.

Folksonomy cloud

impatient money, hedge funds, private equity funds, arbitrageur, arbitrage, value gaps, financial instruments, fictitious trades, fictitious sales transactions, virtual, real, risk management, auditors, audit, futures contracts, index futures, one-way bets, “long” positions, very high total nominal amounts, real portfolios of stock index futures, European stock index futures, Dow Jones Euro Stoxx, DAX, FTSE, speculation, financial derivatives products, repackinging of risky investments, transparent versus veiled financial dealings, current crisis in confidence in the banking sector, interconnections between banks, hedge funds, high risk investments and pension and mutual funds, group think, market will correct itself, learned incompetence,

Timeline of events related to the Subprime Market

1965-2005 Between 1965 to 2005 there was no national US real-estate bust as home prices surpassed inflation by a percentage point or two on average. However local reversals have taken place and some cities have never recovered (Christie 2005).

1970s “The additional grades or risk have arisen from the willingness to underwrite mortgages for more risky borrowers, encouraged by the democratization of credit since the 1970s. Lending to more risky borrowers is, by definition, more risky. More loans to risky borrowers increases the total amount of risk to be sold in the marketplace” (Mason and Rosner 2007).

1973-5 US investors in the S&P 500 lost 14% in 1973 and 26% in 1974 but gained 37% in 1975 (Mann 2000).

1975 Foreign competition made its inroads into the North American economy. Corporations panicked with a knee-jerk reaction by implementing the first major layoffs which eventually spread and multiplied, in time destroying the notion of job security and the dignity of work in North America (Uchitelle 2006; Uchitelle 2007).

1983 Australia’s benchmark ASX 200 index experienced a long losing streak which would be unparalled until 2008-01-21 (BBC News 2008-01-21).”

1985 In Peoria, Ill. a more traditional area the average home price fell from $60,800 in 1981 to $51,400 in 1985 partially because of strikes and lay-offs at Caterpillar, the city’s biggest employer (Christie 2005).

1986 The “total pay of top managers in North America has increased from 1986 through 2006 to roughly 40 times the average and from 1966 to 110 times the average(Leary 1998:265).”

1987 Canadian families saved 20 percent of their take-home pay (Ed 2007).

1987 Oliver Stone’s and Stanley Weiser’s fascinating but soulless film entitled Wall Street about a young stockbroker, Bud Fox’s entanglement in white-collar crime through his mentor and hero, Gordon Gekko (Michael Douglas), an extremely successful businessman and Wall Street broker. in a speech by Gekko to a Teldar Paper shareholders’ meeting, a company he planning to take over, Gekko, and by extension, the Wall Street raiders he personifies, justifies his actions. He argues that he is liberating corporate America’s from its slothfulness and waste accumulated through the postwar years. He argued, “Greed is good” a slogan which symbolised the ruthless, profit-obsessed, short-term corporate culture of the 1980s and 1990s. These values became associated with neoclassical, anti-union economic policies that made slash-and-burn capitalism possible. Wall Street refers to the symbolic and geographical location in Lower Manhattan, the first permanent home of the New York Stock Exchange, center of New York’s financial district and the financial industry.

1987 Stock market crash

1987-19-20 London’s FTSE 100 experienced one of its worst days down 10.8% (BBC News 2008-01-21).

1987-10-20 London’s FTSE 100 experienced one of its worst days down 12.2% (BBC News 2008-01-21).

1987-10-21 London’s FTSE 100 experienced one of its best days up 7.9% (BBC News 2008-01-21).

1987-10-22 London’s FTSE 100 experienced one of its worst days down 5.7% (BBC News 2008-01-21).

1987-10-26 London’s FTSE 100 experienced one of its worst days down 6.2% (BBC News 2008-01-21).

1988 In “oil patch” cities like Oklahoma City prices plummeted 26 percent from 1983 to 1988. They only returned to 1983 levels in 2003 fifteen years later. In Oklahoma City, the inflation-adjusted price in 1983 was $196,600. Today, it’s just $135,100 (Christie 2005).

1988 Houston home prices fell 22 percent from $111,000 in 1983 to $86,800 in 1988 rebounded only in 2003. Counting inflation, the average Houston home, which cost just $159,700 in 2004, is actually worth less [in 2005] than it was [in 1983]. When, adjusted for inflation, a home cost about $219,000 in 1983 (Christie 2005).

1988 – 1990s Real estate prices fell in Northern California first followed by the rest of the state “as employers fled, incomes dwindled, quakes rumbled, sales fell and prices slipped. [. . .] Silicon Valley’s housing market crashed into recession along with the state’s economy (Perkins 2001).

1980-1990 In Los Angeles real estate was turbocharged for nearly 10 years (Christie 2005).

1989-90 The notorious price bubble of 1989-90 was linked to central banks specifically the Bank of Japan. “The Japanese economy continued to suffer during the early 1990s, and remained in recession until the end of 1993. Nominal GDP growth rates, which had been around 7 percent during the bubble period, fell beginning in 1990 and by 1991-93 were close to zero. Profits in the manufacturing sector fell 24.5 percent in 1991 and 32.1 percent in 1992. Bankruptcies began to rise starting in the latter half of 1990; by 1992, bankruptcies with debt more than Y10 million totaled 14,569 cases. Failures of real estate firms or of firms engaged in “active fund management” constituted more than half the corporate bankruptcies in 1991 and 1992 (Miller 2001).”

1991 Inflation-adjusted take-home pay in Canada froze to this level (Ed. 2007).”

1992 A new car in Canada cost $20, 000.

1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).

1992-04-10 London’s FTSE 100 experienced one of its best days up 5.6% (BBC News 2008-01-21).

1996 There was a housing market reversal in Los Angeles with average house price dropping from $222,200 in 1990 to $176,300 in 1996, a loss of 20.7 percent. “Furthermore, those are nominal prices, not real values. To calculate the loss more realistically you would have to figure in the cost of inflation: $222,200 in 1990 would have been worth $266,700 in 1996 dollars, which means the actual loss for homeowners buying in 1990 and selling in 1996 was closer to 34 percent (Christie 2005).”

1994- 1996 “In 1994, [Japanese] banks wrote off non-performing assets of Y5.7 trillion, exceeding the previous high of Y4.3 trillion in fiscal year 1993. As yet, no major bank has failed, although a number have reportedly encountered serious difficulties. In December, 1994, the Bank of Japan supervised the takeover of two credit cooperatives, the Tokyo Kyowa Credit Cooperative and the Anzen Credit Cooperative, through the creation of a bridge bank with government support. The Bank’s decision not to let these institutions fail and pay off depositors under the deposit guarantee program was based, largely, on concern for the potential systemic effects of a deposit payoff on public confidence in the banking system in general. The “jusen,” or housing finance banks, suffered the most serious problems; these institutions, which were typically organized and sponsored by major commercial banks and staffed, in part, by former officials from the Ministry of Finance, lost tens of billions of dollars as a result of the collapse of the price bubble, and became one of the most contentious political issues of the day during 1995-86 (Miller 2001)”.

1996-12-05 “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.” Alan Greenspan (December 5, 1996)**

1998 There was a market correction in the United States in October of 1998.

2000 In Tampa Bay Florida, high risk adjustable-rate mortgages (ARM) made homes “seem affordable when wages stagnated as prices soared. They were just the ticket for cash-out refinancings and home equity credit lines that bought cars and swimming pools and paid off credit card debt. “What happened in a lot of expensive real estate markets is that first-time home buyers who felt they could not afford a home otherwise, took on a loan that had lower monthly payments than a traditional mortgage would have,” said Allen Fishbein, director of housing policy for the Consumer Federation of America. “They weren’t being underwritten on the basis of the borrower’s reasonable capacity to handle these loans.” The payments started out manageable, especially since many loans offered teaser rates. But borrowers are getting a lesson in what the word “adjustable” means. More than $130-billion in mortgages payments were reset in 2006″ In 2006 nearly a third of Tampa Bay mortgages were the high-risk varieties, up from 10 percent in 2003 (Huntley 2006).1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).

2001-09-11 London’s FTSE 100 experienced one of its worst days down 5.7% (BBC News 2008-01-21).

2002-10-15 London’s FTSE 100 experienced one of its best days up 5.1% (BBC News 2008-01-21).

2002-07-02 London’s FTSE 100 experienced one of its best days up 5.0% (BBC News 2008-01-21).

2003-03-13 London’s FTSE 100 experienced one of its best days up 6.1% (BBC News 2008-01-21).

2004 British Columbia graduates from university have an average debt of $20, 000.

2005 Real-estate investing spiked, pressuring prices upward. In Phoenix, according to Bill Jilbert, president and COO of the Coldwell Banker brokerage there, investors from Nevada and California have invaded the Arizona market, and “affordable housing has been pushed to extremes (Christie 2005).”

2005 Market analyst Winzer (2005 cited in Christie 2005) warned that the housing market was high-risk as the boom has already gone on longer than expected. Low interest rates which means cheap mortgage rates extended the cycle of the real estate boom artificially creating higher demand and higher prices as all market levels (Winzer cited in Christie 2005). “Winzer assesses local market risk by taking into account economic and population growth, construction costs, vacancy rates, and, especially, income. He also considers such factors as density and access to open land. Prices in densely settled New York have always been higher than those of cities with lots of space for new housing (Christie 2005).

1991- 2005 “[I]ncreased complexity from increased grading of risk can also result in increased opacity. Risk that is more difficult to see, by virtue of complexity, is risk just the same. There are plenty of reasons to believe that the amount of risk in the marketplace has increased. Figure 3 shows that defaults on ABS and residential mortgage-backed securities (RMBS) increased substantially between 1991 and 2005″ (Mason and Rosner 2007).

2006-06-12. “Canadian Executives Indicate Human Resources and Rising Canadian Dollar are the Major Business Challenges.” CTV. June 12, 2006.

http://www.ctv.ca/servlet/ArticleNews/show/CTVShows/20060611/ctv_release_20060611/20060612

2006 Fitch Global Structured Finance 1991-2005 Default Study revealed that, “the overwhelming majority of global structured finance defaults over the 1991-2005 period were from the U.S., accounting for more than 97 percent of the total. While the 1,000 U.S. defaults were mainly concentrated in the Asset-Backed Securities._ (ABS) sector, the 27 international defaults were primarily from the collateralized debt obligations (CDO) sector.” See Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on 1.

2006 In Florida millions of homeowners were warned of the mortgage meltdown in which they will “face a financial nightmare brought on by a combination of higher interest rates, risky mortgages and a housing market gone cold (Huntley 2006).

2007-05-10 Desmarais, Paul Jr. 2007. “Private equity, public interest.” National and Global Perspectives . May 10, 2007. p. 16. Paul Desmarais, Jr., Chairman of Power Corporation of Canada warned of the structural impact on the industrialized world caused by the meteoric rise of private equity and hedge funds in the financial markets in a an article (2007) published in the Canadian Council of Chief Executives journal National and Global Perspectives. The current crisis in confidence in the banking sector is a direct result of the meteoric rise of private equity and hedge funds which transformed the mortgage market.

Is it not ironic that the principal investors in private equity and hedge funds – large institutional investors – are happy to put massive amounts of money in the hands of people who do not register with any securities commission, or have few, if any, governance regulations to adhere to and report on? (Desmarais 2007:16).

2007-05-10 Desmarais, Paul Jr. 2007a. “Chairman’s Address to Shareholders.” Power Corporation of Canada. May 10, 2007.

2007-06-14 Gandalf Group. 2007. “C-Suite Survey On The Role of Private Equity.” Report on Business. Globe and Mail. June 14, 2007. http://www.dwpv.com/images/C-Suite_June_2007.pdf In May and June, 2007 the 150 C-Suite executives from the top 1000 corporations interviewed by the Gandalf Group were generally optimistic about the Canadian economy (Gandalf Group 2007:4). Some expressed concerns about the increasing levels of foreign ownership in key sectors and about private equity firms hollowing out corporate Canada. 23% have concerns that private equity firms engage in too much short-term thinking (Gandalf Group 2007:32). Most executives now favour restrictions in strategic industries. “The strongest areas of consensus about the negative impacts of private equity relate to keeping the company Canadian owned and about the debt burden of the company. A substantial percentage of executives believe that private equity also has a negative impact on the economic contribution the company will make to Canada and to the community it operates in, on the labour relations of the company and on the governance of the company (Gandalf Group 2007:28 ).”

2007. “C-Suite Survey.” Globe and Mail, Report on Business. 18 June 2007: B5.

http://www.theglobeandmail.com/servlet/Page/document/video/vs?id=RTGAM.20070619.wvcsuite0619&ids=RTGAM.20070619.wvcsuite0619&hub=search

2007 Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007].” [T]hey caution that “structural changes in mortgage origination and servicing have interacted with complex residential mortgage-backed securities (RMBS) and highly volatile CDO funding structures to place the U.S. housing market at risk. This [. . .] could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructuring and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

2007-06-27 “In a Marketplace interview Amy Scott asked interviewees about the disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds. In June, 2007 two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market are now verging on collapse as the number of borrowers defaulting on these mortgages increases. Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market [. . .] Those hedge fund investment managers create investments that are bought by our pension funds and mutual funds. Charitable foundations are invested in these. It’s a broad investor base, and it’s not the rich versus the poor.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007).” See Democratization of Debt: Bear Stearn and Mortgage Meltdowns

2007-09-06 The U.S. subprime mortgage meltdown “Only 5% of mortgages in Canada are subprime compared to 20% in the US. And Canadian financial institutions are more prudent than their American counterparts insisting on mortgage insurance when appropriate and separate appraisals of a home’s purchase price to ensure they are not financing more than 100 per cent of a home’s value. In the US by late 2006 subprime lenders were going bankrupt and as many as 1.5 million Americans could lose their homes before the panic is over. In this under-regulated US industry, lenders partnered with hedge funds to make quick returns on investments then called in debts to avoid losses. Since we are all in some way linked to these investment portfolios, either through mortgages, pensions or insurance, we end up contributing to processes that are fuelled by high-risk, short-term, fast-profits thinking that enriches a few while causing havoc for most of us. See also http://www.cbc.ca/news/background/personalfinance/mortgage-meltdown.html

2007-11-27 “Staggering poverty report has province listening: A United Way report Losing Ground: The Persistent Growth of Family Poverty in Canada’s Largest City claims almost 93,000 Toronto, Canada households are raising children in poverty. That’s 30% compared with 16 per cent in 1990.” OECD, Policy Development, Public Policy, child poverty, del.icio.us, digg story, digg.com, economic efficiency model, how to be poor in a rich country, policy research, social exclusion, vulnerability to social exclusion

2007 Since 1991 inflation-adjusted hourly wages rose only 10 cents (Ed. 2007).”

2007 A new car in Canada cost $32,000 a 60 percent increase from 1992 (Ed. 2007).”

2007 Canadians collectively owe three quarters of a trillion dollars in personal debt. Canadian families not only have no savings, they draw on pension savings to make ends meet.

“The result of the easy credit is that an average family now owes far more than it takes in. That means we remain solvent only so long as the book value of our assets — things like our home, pension funds or investments — continue to increase (Ed. 2007).”

2007 British Columbia graduates from university have an average debt of $27, 000.

2007 It is now acceptable for Canadian families to pay 60 percent of income to pay monthly payments of their home mortgages (Ed. 2007).

2007 The British Columbia government will allow home owners who are over 55 to defer property tax payments for as long as they live. The government will claim unpaid taxes after you die or sell effectively placing the tax burden on the children (Ed. 2007).

2007 “The number of corporate failures in Japan rose for the third month in a row totaling 896 cases in December up 18.2%. November flops were up 6.5% and the number of companies going belly up in October were up 7.8%. The amount of debts the insolvent companies left behind were up 30.6% to 463.09 billion yen (Belew 2007).

2007 In March Bob Lawless reported in his blog that, “The folks at Automated Access to Court Electronic Records or AACER regularly collect data from all the bankruptcy courts for creditors and attorneys. They have a wealth of information that does not show up in the mainstream media. Most recently, they tell me that there were 58,640 total U.S. bankruptcy filings in February 2007 as compared to 55,088 total U.S. bankruptcy filings in January 2007. OK, that looks like a slight increase, but looks are deceiving. It’s actually a fairly hefty increase. The February filings were spread over only nineteen business days while the January filings were spread over twenty-one days. On a daily basis, the February filings were up 17.7% as compared to January (Lawless 2007).”
2007 Jayson Seth analysed data in National Association of Realtors (NAR) June 24, 2007 report. Seth argues that “America’s easy-credit, quick-flipping, borrow-now-and-forget-the-consequences lifestyle is coming to an increasingly painful, grinding halt” and the “confidence of homebuilders is at a 16-year low (Seth 2007).”

2007 Lawrence Yun, National Association of Realtors announced that the real estate market is softening due to psychological factors, tighter credit for subprime borrowers. NAR’s Lawrence Yun explained that since late 2006 housing sales have slowed as buyers double up with family, friends or just mortgage helper units in their homes to be able to pay for higher-priced homes.

2007 Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on 1. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007]” Furthermore they caution that “structural changes in mortgage origination and servicing have interacted with complex RMBS and highly volatile CDO funding structures to place the U.S. housing market at risk. Equally as important, however, is that housing market weaknesses feed back through financial markets to further weaken financial instruments backing today’s CDOs. Decreased housing starts that will result from lower liquidity in the MBS sector will further weaken credit spreads and depress CDO and MBS issuance. This feedback mechanism can create imbalances in the U.S. economy that, if left unchecked, could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructurings and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

2007 In a Marketplace interview Amy Scott asked interviewees about the disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds. In June two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market are now verging on collapse as the number of borrowers defaulting on these mortgages increases. Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007).

2008-01-12 Should banks avoid investing in carbon-intensive projects? “Ceres is composed of and works with investors ($4 trillion) and environmental groups to address sustainability challenges. In their report Corporate Governance and Climate Change (2008) they argue that the banking sector needs to become aligned with GHG reductions.” read more | digg story

2007-01-20 “Globalization and the Rise of Inequality: The extremes of wealth and poverty threaten globalisation. North American companies lose jobs to the Chinese Special Economic Zone (SEZ) where factories often employ rural women to work in 19th century conditions to keep their costs low. Meanwhile the total pay of top managers in North America has increased from 1986 through 2006 to roughly 40 times the average and from 1966 to 110 times the average. Globalization “refers to the current transformation of the world economy the reduction of national barriers to trade and investment, the expansion of telecommunications and information systems, the growth of off-shore financial markets, the increasing role of multinational enterprises, the explosion of mergers and acquisitions, global inter-firm networking arrangements and alliances, regional economic integration and the development of a single unified global market. The phenomenon of globalization is accompanied by increasing international mobility, the migration of workers, the growth of tourism and the increasing ease of international travel (Leary 1998:265).”

2008-01-19 The Bush administration announce they are seeking “a stimulus package of as much as $145 billion”. However the stock market did not respond positively as investors were concerned that the looming American recession would trigger economic crisis that will span the globe. See (Jolly and Timmons 2008-01-21).

2008-01-21 Société Générale trader, Jérôme Kerviel, 31, was accused by the Société Générale, Paris of implementing an elaborate, year-long fraud that involved betting billions of dollars of the bank’s money on European stock index futures. Michel Histel, 62, a French retiree who is closely following the story argues that it is common knowledge that the Société Générale’s has played a leading role in financial derivatives products. Jérôme Kerviel was employed by the Société Générale and in his role as arbitrageur he was expected to hedge large bets on index futures.

2008-01-21 “Global stock markets tumbled, with European indexes set for some of their biggest losses in recent years, amid growing fears of a recession in the US (BBC News 2008-01-21).”

2008-01-20 “Global stock markets plunged on Monday as fears spread that the turmoil in United States mortgage markets is spreading. Indexes in Europe fell as much as 7 percent after a huge sell-off in Asia. “There’s something approaching panic in the market,” Holger Schmieding, the chief European economist at Bank of America in London, said by telephone. “There’s been a reassessment in the market of the U.S. economic outlook, with most people now thinking that there will be a recession,” and investors are starting to reconsider the idea that the rest of the world “will remain aloof from U.S. problems [. . .] The selling began in Sydney, with Australian stocks falling nearly 3 percent for an 11th consecutive decline. Major markets in Asia followed suit, with the benchmark Nikkei 225-stock average in Tokyo falling 3.9 percent, the Hang Seng in Hong Kong falling 5.5 percent and the benchmark mainland Chinese index falling more than 5 percent (Jolly and Timmons 2008-01-21).”

2008-01-21 London’s FTSE 100 index fell 4.5% to 5,637.3 (BBC News 2008-01-21).

2008-01-21 Hugues Rialan of Robeco France says we are in a panic mode and a crisis in consumer confidence as the banking sector’s reassurances that they were not overexposed to US mortgage-related investments, prove to ring hollow and false. The banking sector lost consumer trust when they lost of “billions of pounds on investments linked to the US housing and mortgage markets (BBC News 2008-01-21).”

2008-01-21 “Australia’s benchmark ASX 200 index closed down 2.9%, or 166.9, points at 5,580.4″, amid growing fears of a recession in the US. This is ASX 200 index’s “lowest level for a year. It was also the 11th consecutive negative day for the index, the longest losing streak in more than 25 years (BBC News 2008-01-21).”

2008-01-21 “There may be more downturns in store for Asia, particularly as banks report the fallout from their investments in the United States mortgage market. Companies “have not announced their year-end numbers yet,” Schuller, of Moody’s, said, and if they are holding subprime assets, they may need to write-off their value, she said. “They are going to be taking these 25 to 30 percent haircuts we’re seeing on Wall Street,” she said. “I think it is going to shock people.” [This article which appeared in the New York Times was written by David Jolly reporting from Paris and Heather Timmons from New Delhi. Tim Johnston contributed reporting from Sydney, and Martin Foster from Tokyo (Jolly and Timmons 2008-01-21).”

“Mustier explained that Kerviel’s role on the trading desk was that of an arbitrageur, which meant that he was entrusted to purchase one portfolio of stock index futures and at the same time sell a similar mix of index futures, but with a slightly different value. The object of arbitrage is to try to make a profit from these differences in value. Because the value gaps between similar financial instruments are usually very small and temporary, this type of activity typically involves trading in very high total nominal amounts. Kerviel’s fraud, according to the bank, consisted of placing sizeable, real purchases in one portfolio but creating fictitious sales transactions in the second, off-setting portfolio. This gave the impression to risk managers that the risks in the first portfolio were hedged, when in fact they were not. As a result, the bank wound up exposed to massive, one-way bets, or “long” positions. Instead of hedging, which was his job, Kerviel was effectively speculating with the bank’s money. Mustier said a review of Kerviel’s trading records showed that he first began creating the fictitious trades in late 2006 and early 2007, but that these transactions were relatively small. The fake trading increased in frequency, and in size, during the course of the year, he said, but the largest fictitious trades – involving futures contracts on the Dow Jones Euro Stoxx 50, the DAX in Germany and the FTSE index in Britain – were entered in early January. “Our controls identified from time to time problems with this trader’s portfolio,” Mustier said, although he declined to say when the first questions were raised by risk managers, saying that the bank’s auditors were still investigating. Each time one of Kerviel’s trades was questioned, Mustier said, Kerviel would describe it as a “mistake” and cancel the trade (Clark 2008-01-27).”

2009-01-21 Analyst Mike Lenhoff at Brewin Dolphin Securities predicts that the prospect of falling US interest rates announced by the US administration will have a positive effect on the market by January 2009 and the crisis mode of January 2008 and the drop in global indexes based on fears of a US recession will be proven to be a panicked knee-jerk reaction (BBC News 2008-01-21).”

Bibliography and Webliography

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CBC News. 2008. “TSX plunges 500 points.” Last Updated: 2008-01-21:13:26 ET.

Clark, Nicola. 2008. “Société Générale reveals more details of €4.9 billion fraud.” >> International Herald Tribune. www.iht.com Uploaded January 27. Accessed January http://www.iht.com/bin/printfriendly.php?id=9534514

Jolly, David; Timmons, Heather. 2008-01-21. “Stocks Plunge in Europe and Asia on U.S. Recession Fear.” New York Times. http://www.nytimes.com/2008/01/21/business/22stox-web.html?_r=1&ei=5088&en=f84e22b0fa01257e&ex=1358658000&oref=slogin&partner=rssnyt&emc=rss&pagewanted=print

Leary, Virginia A. 1998. “Globalization and Human Rights.” In Symonides, Janusz (Ed.) Human Rights: New Dimensions and Challenges: Manual on Human Rights. Aldershot, UK: Ashgate Dartmouth Publishing Company Ltd. / UNESCO Publishing. pp. 265-276. 2007.

“Rich man, poor man.” The Economist. Jan 18th 2007. Accessed January 18, 2007.

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Flynn-Burhoe, Maureen. 2008. “Risk Society: Unintended Consequences of Subprime Market.” >> Google docs. January 21. http://docs.google.com/Doc?id=ddp3qxmz_505grfcrtgjFlynn-Burhoe, Maureen. 2008. “Societe Generale: a Logical Conclusion of Impatient Money, Unregulated Hedge Funds and Private Equity Funds.” >> Google Docs. Uploaded January 28. http://docs.google.com/Doc?id=ddp3qxmz_510gwkhvrcs

Shakespeare’s Romeo and Juliet inspired by Nizami’s Layli and Maj

“From Arab and Habib folklore the story passed into Persian literature, and in 12th century, Nizami wrote a famous adaptation of Layli and Majnun in Persian. In his adaptation, the young lovers become acquainted at school and desperately fall in love. However, they cannot see each other because of a family feud, and Laila’s family arranges for her to marry another man. It is a tragic story of undying love much like the later Romeo and Juliet, which was itself said to have been inspired by a Latin version of Layla and Majnun to an extent. [4] However, Shakespearean scholars deny any such influence.[5]. The Azerbaijani Turkish adaptation of the story, Dâstân-ı Leylî vü Mecnûn (داستان ليلى و مجنون; “The Epic of Layla and Majnun”) was written in 16th century by Fuzûlî. In Azerbaijan, Fuzûlî’s adaptation of Layli and Majnun was made into an opera by the renowned Azerbaijani composer Uzeyir Hajibeyov and staged in Baku on January 25, 1908. The myth has influenced many Middle Eastern poets, especially Sufi writers in whose literature the name Leyli/Layla suggests a reference to their concept of the Beloved. The name has also found its way into modern occult literature in connection with the archetype called Babylon or Babalon. These writings use the spelling Laylah, which also suggests the Arabic and Hebrew words for night. Where romance outside of marriage is frowned upon, the name Layla has influenced other aspects of Middle Eastern culture. The name ‘Layla’ means ‘one who works by night’, referring to the fact that the romance was hidden and kept a secret. In Turkey, the phrase “To feel like Layla” is used to describe the feeling one gets when one is completely “out-of-it” and dazed, or, like Majnun, to be crazily in love. The word ‘Majnun‘ (or Majnoon) in Persian and Arabic means ‘crazy’. It is also a common motif used in the Muslim literature of South Asia, especially in Urdu ghazals (wikipedia article).”

Among the poems attributed to Qays bin al-Mullawah, regarding Layla:<SUP class=reference id=”_ref-5[6]

I pass by these walls, the walls of Layla

And I kiss this wall and that wall
It’s not Love of the houses that has taken my heart
But of the One who dwells in those houses

In the late 19th century, Ahmed Shawqi wrote a poetic play about the tragedy. Qay’s lines from the play are sometimes confused with his actual poems. The play is considered one of the best in modern Arab poetry.

The story is also featured in Bahá’u'lláh’s Sufi writings, the Seven Valleys.

Webliography and Bibliography

ArRalm. “The Original Legend in Arabic Literature” >> ArtArena. Accessed January 26, 2008.

Coker, J. T. 2000. “Follow Your Heart: The Story of Layla and Majnun.” Sunrise. June/July. Theosophical University Press.

Mabillard, Amanda. 2007. “An Analysis of Shakespeare’s Sources for Romeo and Juliet”. Shakespeare Online. Unable to access January 26, 2008.

Perlm. “Layli and Madjnun in Persian Literature” >> ArtArena. Accessed January 26, 2008.

Rabbani, Faraz. 2006. “Loss of Meaning.” Islamica Magazine. No. 15.

Smith, Paul. “Nizami: Layla and Majnun.” [3]

Symon, Roz. “Romeo and Juliet sources.” Royal Shakespeare Company Play Guide. >> Royal Shakespeare Company. http://www.rsc.org.uk/romeo/about/sources.html >> Royal Shakespeare Company site. Accessed January 26, 2008.

Wikipedia Layla and Majnun http://en.wikipedia.org/wiki/Layla_and_Majnun#_note-3 Last accessed January 26, 2008.

Mabillard, Amanda. 2007. “An Analysis of Shakespeare’s Sources for Romeo and Juliet”. Shakespeare Online. (09/12/07) , [1] . On Shakespeare’s sources for Romeo and Juliet see further [2] , the Royal Shakespeare Company site, [3].

Who’s Who

Mabillard, Amanda B.A. (Honors), from 1999-2003 (last updated 08/28/2005 compiled information for a site http://www.shakespeare-online.com/ intended to provide comprehensive and accurate information about the Bard. She also wrote the Guide to Shakespeare for About, Inc., A part of The New York Times Company, where she published her original articles on Shakespeare’s life and works. Her site was listed as a Wiki source, however the link to her article, “An Analysis of Shakespeare’s Sources for Romeo and Juliet” is a deadlink.

Roz Symon is RSC’s Play Guide Writer and Editor. Royal Shakespeare Company is a new Romeo and Juliet Play Guide, a unique resource offering readers detailed insights to the process of theatre. Through extracts from rehearsal diaries and a series of interviews with directors, designers and actors, you can learn more about Peter Gill’s production of Romeo and Juliet [RSC 2004-5] and more about the play in general. The Guide also offers practical, entertaining ways for students, teachers and life-long learners to explore a 400-year old performance text. The Guide includes photographs of past productions, film versions of the play, the Royal Shakespeare Company rehearsal process, Shakespeare’s life and times, stage fighting or design issues. His site was listed as a Wiki source.

?symon?>Roz Symon, writer and editor of of the Royal Shakespeare Company’s online site, while there are a number of versions of love stories written in the mid-15th century to mid-16th century that are similar to Shakespeare’s Romeo and Juliet there is there is no evidence to suggest that Shakespeare read them. “Ephesiaca is a 5th-century story (printed in 1726 and translated into English the following year) which tells the story of a woman called Anthia, who is separated from her husband and rescued from robbers by Perilaus. To avoid marrying Perilaus, Anthia obtains a draught from a physician which she thinks will kill her, but which turns out only to be a sleeping potion. She awakes in a tomb and is carried off by tomb-robbers to other adventures.”

“The theme of star-crossed lovers became popular in Renaissance Italy. Masuccio’s Il Novellino (1476) includes the story of Mariotto and Giannozza of Sienna, who are secretly married by a Friar, after which Mariotto quarrels with a prominent citizen, kills him and is exiled to Alexandria. Giannozza’s father chooses a husband for her but to avoid marriage, Giannozza gets a sleeping potion from the Friar, sends word to her husband of what’s going to happen, is buried, taken from the tomb by the Friar, and sets sails for Alexandria. By a cruel twist of fate, the messenger carrying her letter is captured by pirates and Mariotto, hearing she has died, returns to Sienna disguised as a pilgrim. Trying to open the tomb, he is seized and beheaded. Giannozza makes her way home to Sienna and dies in a convent.”

Symon claimed that Luigi da Porto’s tale of Montecchi and Cappelletti” entitled Istoria Novellamente Ritrovata di due Nobili Amanti (published c. 1530) is closer to Shakespeare’s play. “The story is set in Verona, the lovers, Romeo and Giulietta, are aristocrats. Their families – the Montecchi and the Cappelletti – are sworn enemies. Romeo goes disguised to a Carnival ball at the Cappelletti’s house, hoping to see the object of his unrequited love. There, Giulietta falls in love with him at first sight, he abandons his pursuit of unrequited love and later climbs up to Giulietta’s balcony to woo her. Hoping their union will reconcile the two houses, they go to a Franciscan Friar, Lorenzo, who marries them hoping that peace will follow. He is wrong. At the end of the story, Giulietta awakes before Romeo dies and so they have the chance to speak to each other. Giulietta ‘drew in her breath and held it long, and then, uttering a great cry, fell dead on the corpse of Romeo’ (Symon). ”

“There are other versions dating back to the mid 16-centruy but Shakespeare’s main source is undoubtedly Arthur Brooke’s long poem The Tragicall Historye of Romeus and Juliet (1562), which text is a loose translation of Boiastuau (Symon).”

Romeo and Juliet before Shakespeare: four early stories of star-crossed love (Toronto: Centre for Reformation and Renaissance studies, 2000) contains four early versions of the Romeo and Juliet story :

Mariotto and Ganozza by Masuccio Salernitano, A tale about two noble lovers by Luigi da Porto, The unfortunate death of two most wrethched lovers by Matteo Bandello and Of two lovers by Pierre Boaistuau.

Flynn-Burhoe, Maureen. 2008. “Shakespeare’s Romeo and Juliet inspired by Nizami’s Layli and Majnun.”>> Google Docs. http://docs.google.com/Doc?id=ddp3qxmz_507ct84shfc Updated January, 26.

Black History Month: Stag Hotel, Preston, NS

Stag Hotel Signboard
Originally uploaded by ocean.flynn.

In his publication entitled Black Nova Scotians John N. Grant (1980:31) described how the Stag Hotel 1, an Inn located in Preston, was sometimes the terminus of Lt. Governor Joseph Howe’s carriage drives.” (p. 31.) Stag Hotel is a clever play on words as the proprietor was William Deer, an African Canadian.

This inn is referred to at length in Manette’s thesis (1990) where she describes and quotes Mrs. Deer. It is also in Brown’s Illustrated History of Canada (Brown 1987: 287) but no mention is made of the fact that the owners were black.

The book by John N. Grant entitled Black Nova Scotians was produced by Nova Scotia Communications and Information Centre and published by the Nova Scotia Museum as part of the Education Resource Service Program presenting the history of the Black Nova Scotians both as a people and as an important chapter in the history of Nova Scotia. It asserts the unique heritage of Black Nova Scotians. It traces the history from the arrival of the first Black Loyalists in 1793, the Refugees of the War of 1812 through the period of slavery examinging the role of education and religion. Grant underlines the fact that mainstream white educators overlooked the existence of black history.

The Stag Hotel, was popular with Halifax sportsmen for its hunting and fishing. On May 28, 1873, Joseph Howe — ex-premier and new Lieutenant-Governor of the province — visited it for sentimental reasons. But the long drive was too much for his failing health, and he died three days later (Brown 1987: 287).”We inserted this image of a mid-19th century oil painting by an anonymous artist into a Google generated map of Preston, Nova Scotia. This image was uploaded from my Flickr account and is geotagged to a spot near the Black Cultural Centre in Cherrybrook, Nova Scotia. I am not sure of the exact location of the Stag Hotel in Preston although I know it is ten miles east of Dartmouth.

The words on the sign were written by Colonel William Charnley. He described the Stag Hotel kept by William Dear:

“Outside the House looks somewhat queer, Only Look-in, and there’s no fear, But you’ll find Inside, the best of Cheer, Brandy, Whiskey, Hop, Spruce, Ginger Beer, Clean Beds and food for Horses here: Round about, both far and near, Are Streams for Trout, and Woods for Deer. To suit the Public taste, ’tis clear, Bill Dear will Labour, so will his dearest dear (Brown 1987: 287) .”

Footnotes

Grant also included an illustration of the sign and the inn in his Black Nova Scotians.
Grant’s (1980) helpful publication is a useful complement to Winks’ drier read. I have incorporated many of my notes from this book into my chronology. In 1783, after the American Revolution, 50,000 Loyalists came to Maritimes. 3,000 were Black. Many, both black and white were disillusioned. Life was so difficult that many whites Loyalists chose to go back to the United States. The Black Loyalists couldn’t. In Nova Scotia Black Loyalists who had been promised land were having great difficulty. Thomas Peters, a former sergeant with the Black Pioneers, went to England with a petition for land grants that had been denied Black Loyalists. Some of the most industrious Black Loyalists emigrated at that time to Sierre Leone from Nova Scotia. In 1796 543 Maroons arrived in Nova Scotia. Maroons had waged war with Britain for 140 years (1655 – 1796) in Jamaica. In Halifax the Maroons built Citadel Hill fortifications. Wentworth ordered special uniforms for them and named the officers but the Maroons had control of their own hierarchy. Money ran out and the Maroons became increasingly impatient with continual discomfort and hardships. The Maroons, as well, eventually agreed to go to Sierre Leone. They left in 1801. Only a few remained. Slavery did exist in Nova Scotia but by 1810 it was largely a dead issue. Although not completely abolished until the 1830’s the law would not assist slave-owners to catch runaway slaves. During the War of 1812-1814 Cochrane promised freedom to to Chesapeake Bay area slaves who crossed over to British lines. He had planned to recruit the newly freed slaves to the army. The Black troops `the Colonial Marines’ produced the desired effect on the side of the British. Many of them, 1500-2000 would later come to Nova Scotia. Their first winter was extremely difficult. The land given to them was not rich enough for agriculture but they had no other alternatives. The war economy of Nova Scotia was booming. But after the war was the slowdown. The 1815 smallpox epidemic added to the difficulties. In 1820s ome of the Colonial Marines were sent to Ireland Island in Bermuda and others emigrated to Trinidad. There were a few success stories among the Black community. Mr. Campbell, a successful businessman in the 1830’s owned the chief livery stable in Halifax. His farm and stock were comparable to Lieutenant Governor Sir James Kempt. However, most remained as unskilled labourers. Cross-reference to [ Halifax Robert Field]. There is a wonderful story of the role black ministers played re: education and social change as well as an 1850 illustration of Richard Preston. There is also a beautiful story of how he found his mother in Preston. In 1901 there were 5,984 black Nova Scotians (1% of the population). In the same year there were 17,432 black Canadians. In 1873 a Depression hit Canada. Canada continued to experience the financial bust until the Klondike gold strike in the 1890’s. The boom in the West did not help the Maritimes in general and was particularly devastating for the already vulnerable black Nova Scotians.Grant concludes by celebrating the lives of seven Black Nova Scotians including champion boxer: George Dixon, Dr. W. H. Golor college president, William Hall, VC (1826-1904) and B.A. Husbands, president of Halifax Coloured Citizens Improvement League.Webliography and Bibliography

Grant, John N. 1980. Black Nova Scotians. Halifax. Nova Scotia Museum.

Manette, J. A. 1990. Revelation, Revolution, or Both: Black Art as Cultural Politics. Toronto.

Brown, Robert Craig, Ed. 1987. The Illustrated History of Canada. Toronto. Lester & Orpen Dennys Limited.

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CC Flynn-Burhoe, Maureen and Melanie G. H. 2008. “Popular 19th Century African Canadian-owned Stag Hotel and NS Premier Joseph Howe.” >> Google Docs.Uploaded by ocean.flynn on 23 Jan 08, 12.32PM MST.

Sub-sub-prime for mortgage meltdown

It is ironical that my post which was intended as a soft arguement for patient money, secure loans, more regulation and against impatient money, hedge funds, etc would attract advertisements such as this one.

 Michel Bond added a comment to my post yesterday that his UK company offers fast unsecured loans: “Instant unsecured loans are the quick loans provided without keeping any security. It is the best loan for tenants who need some urgent cash but either don’t have any property to keep as security or don’t want to risk them. As these loans are generally provided by online lenders, the loan is approved quickly. Also being unsecured there is no wastage of time in documentation which further makes the whole process fast.If you have any queries about quick cash payday loans, bad credit payday loans, fast cash advance loans, online payday loan service visit.”

While I disapproved the comment with its attached url I found the process intriguing.

Risk society: NYT, BBC, CBC Headlines Warn Global Investor Crisis of Confidence is Turning to Panic

Headlines in the New York Times, BBC and CBC News announce a crisis of confidence in the banking sector as an unintended consequence of the subprime mortgage meltdown. We are now experiencing the predicted disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds (Scott 2007) (such as the infamous collapse of two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market). Borrowers defaulting on mortgages continues to increase. In 2007 Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market [. . .] Those hedge fund investment managers create investments that are bought by our pension funds and mutual funds. Charitable foundations are invested in these. It’s a broad investor base, and it’s not the rich versus the poor.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007). See Democratization of Debt: Bear Stearn and Mortgage Meltdowns

Paul Desmarais, Jr., Chairman of Power Corporation of Canada warned of the structural impact on the industrialized world caused by the meteoric rise of private equity and hedge funds in the financial markets in a an article (2007) published in the Canadian Council of Chief Executives journal National and Global Perspectives. The current crisis in confidence in the banking sector is a direct result of the meteoric rise of private equity and hedge funds which transformed the mortgage market.

Is it not ironic that the principal investors in private equity and hedge funds – large institutional investors – are happy to put massive amounts of money in the hands of people who do not register with any securities commission, or have few, if any, governance regulations to adhere to and report on? (Desmarais 2007:16).

As well Mason and Rosner (2007) warned that risk continued to increase, as ratings agencies revised their loss expectations to account for the dynamics of the mortgage meltdown. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007].” [T]hey caution that “structural changes in mortgage origination and servicing have interacted with complex residential mortgage-backed securities (RMBS) and highly volatile CDO funding structures to place the U.S. housing market at risk. This [. . .] could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructuring and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

Timeline of events related to the Subprime Market

1965-2005 Between 1965 to 2005 there was no national US real-estate bust as home prices surpassed inflation by a percentage point or two on average. However local reversals have taken place and some cities have never recovered (Christie 2005).

1970s “The additional grades or risk have arisen from the willingness to underwrite mortgages for more risky borrowers, encouraged by the democratization of credit since the 1970s. Lending to more risky borrowers is, by definition, more risky. More loans to risky borrowers increases the total amount of risk to be sold in the marketplace” (Mason and Rosner 2007).

1973-5 US investors in the S&P 500 lost 14% in 1973 and 26% in 1974 but gained 37% in 1975 (Mann 2000).

1975 Foreign competition made its inroads into the North American economy. Corporations panicked with a knee-jerk reaction by implementing the first major layoffs which eventually spread and multiplied, in time destroying the notion of job security and the dignity of work in North America (Uchitelle 2006; Uchitelle 2007).

1983 Australia’s benchmark ASX 200 index experienced a long losing streak which would be unparalled until 2008-01-21 (BBC News 2008-01-21).”

1985 In Peoria, Ill. a more traditional area the average home price fell from $60,800 in 1981 to $51,400 in 1985 partially because of strikes and lay-offs at Caterpillar, the city’s biggest employer (Christie 2005).

1986 The “total pay of top managers in North America has increased from 1986 through 2006 to roughly 40 times the average and from 1966 to 110 times the average(Leary 1998:265).”

1987 Canadian families saved 20 percent of their take-home pay (Ed 2007).

1987 Oliver Stone’s and Stanley Weiser’s fascinating but soulless film entitled Wall Street about a young stockbroker, Bud Fox’s entanglement in white-collar crime through his mentor and hero, Gordon Gekko (Michael Douglas), an extremely successful businessman and Wall Street broker. in a speech by Gekko to a Teldar Paper shareholders’ meeting, a company he planning to take over, Gekko, and by extension, the Wall Street raiders he personifies, justifies his actions. He argues that he is liberating corporate America’s from its slothfulness and waste accumulated through the postwar years. He argued, “Greed is good” a slogan which symbolised the ruthless, profit-obsessed, short-term corporate culture of the 1980s and 1990s. These values became associated with neoclassical, anti-union economic policies that made slash-and-burn capitalism possible. Wall Street refers to the symbolic and geographical location in Lower Manhattan, the first permanent home of the New York Stock Exchange, center of New York’s financial district and the financial industry.

1987 Stock market crash

1987-19-20 London’s FTSE 100 experienced one of its worst days down 10.8% (BBC News 2008-01-21).

1987-10-20 London’s FTSE 100 experienced one of its worst days down 12.2% (BBC News 2008-01-21).

1987-10-21 London’s FTSE 100 experienced one of its best days up 7.9% (BBC News 2008-01-21).

1987-10-22 London’s FTSE 100 experienced one of its worst days down 5.7% (BBC News 2008-01-21).

1987-10-26 London’s FTSE 100 experienced one of its worst days down 6.2% (BBC News 2008-01-21).

1988 In “oil patch” cities like Oklahoma City prices plummeted 26 percent from 1983 to 1988. They only returned to 1983 levels in 2003 fifteen years later. In Oklahoma City, the inflation-adjusted price in 1983 was $196,600. Today, it’s just $135,100 (Christie 2005).

1988 Houston home prices fell 22 percent from $111,000 in 1983 to $86,800 in 1988 rebounded only in 2003. Counting inflation, the average Houston home, which cost just $159,700 in 2004, is actually worth less [in 2005] than it was [in 1983]. When, adjusted for inflation, a home cost about $219,000 in 1983 (Christie 2005).

1988 – 1990s Real estate prices fell in Northern California first followed by the rest of the state “as employers fled, incomes dwindled, quakes rumbled, sales fell and prices slipped. [. . .] Silicon Valley’s housing market crashed into recession along with the state’s economy (Perkins 2001).

1980-1990 In Los Angeles real estate was turbocharged for nearly 10 years (Christie 2005).

1989-90 The notorious price bubble of 1989-90 was linked to central banks specifically the Bank of Japan. “The Japanese economy continued to suffer during the early 1990s, and remained in recession until the end of 1993. Nominal GDP growth rates, which had been around 7 percent during the bubble period, fell beginning in 1990 and by 1991-93 were close to zero. Profits in the manufacturing sector fell 24.5 percent in 1991 and 32.1 percent in 1992. Bankruptcies began to rise starting in the latter half of 1990; by 1992, bankruptcies with debt more than Y10 million totaled 14,569 cases. Failures of real estate firms or of firms engaged in “active fund management” constituted more than half the corporate bankruptcies in 1991 and 1992 (Miller 2001).”

1991 Inflation-adjusted take-home pay in Canada froze to this level (Ed. 2007).”

1992 A new car in Canada cost $20, 000.

1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).

1992-04-10 London’s FTSE 100 experienced one of its best days up 5.6% (BBC News 2008-01-21).

1996 There was a housing market reversal in Los Angeles with average house price dropping from $222,200 in 1990 to $176,300 in 1996, a loss of 20.7 percent. “Furthermore, those are nominal prices, not real values. To calculate the loss more realistically you would have to figure in the cost of inflation: $222,200 in 1990 would have been worth $266,700 in 1996 dollars, which means the actual loss for homeowners buying in 1990 and selling in 1996 was closer to 34 percent (Christie 2005).”

1994- 1996 “In 1994, [Japanese] banks wrote off non-performing assets of Y5.7 trillion, exceeding the previous high of Y4.3 trillion in fiscal year 1993. As yet, no major bank has failed, although a number have reportedly encountered serious difficulties. In December, 1994, the Bank of Japan supervised the takeover of two credit cooperatives, the Tokyo Kyowa Credit Cooperative and the Anzen Credit Cooperative, through the creation of a bridge bank with government support. The Bank’s decision not to let these institutions fail and pay off depositors under the deposit guarantee program was based, largely, on concern for the potential systemic effects of a deposit payoff on public confidence in the banking system in general. The “jusen,” or housing finance banks, suffered the most serious problems; these institutions, which were typically organized and sponsored by major commercial banks and staffed, in part, by former officials from the Ministry of Finance, lost tens of billions of dollars as a result of the collapse of the price bubble, and became one of the most contentious political issues of the day during 1995-86 (Miller 2001)”.

1996-12-05 “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.” Alan Greenspan (December 5, 1996)**

1998 There was a market correction in the United States in October of 1998.

2000 In Tampa Bay Florida, high risk adjustable-rate mortgages (ARM) made homes “seem affordable when wages stagnated as prices soared. They were just the ticket for cash-out refinancings and home equity credit lines that bought cars and swimming pools and paid off credit card debt. “What happened in a lot of expensive real estate markets is that first-time home buyers who felt they could not afford a home otherwise, took on a loan that had lower monthly payments than a traditional mortgage would have,” said Allen Fishbein, director of housing policy for the Consumer Federation of America. “They weren’t being underwritten on the basis of the borrower’s reasonable capacity to handle these loans.” The payments started out manageable, especially since many loans offered teaser rates. But borrowers are getting a lesson in what the word “adjustable” means. More than $130-billion in mortgages payments were reset in 2006″ In 2006 nearly a third of Tampa Bay mortgages were the high-risk varieties, up from 10 percent in 2003 (Huntley 2006).1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).

2001-09-11 London’s FTSE 100 experienced one of its worst days down 5.7% (BBC News 2008-01-21).

2002-10-15 London’s FTSE 100 experienced one of its best days up 5.1% (BBC News 2008-01-21).

2002-07-02 London’s FTSE 100 experienced one of its best days up 5.0% (BBC News 2008-01-21).

2003-03-13 London’s FTSE 100 experienced one of its best days up 6.1% (BBC News 2008-01-21).

2004 British Columbia graduates from university have an average debt of $20, 000.

2005 Real-estate investing spiked, pressuring prices upward. In Phoenix, according to Bill Jilbert, president and COO of the Coldwell Banker brokerage there, investors from Nevada and California have invaded the Arizona market, and “affordable housing has been pushed to extremes (Christie 2005).”

2005 Market analyst Winzer (2005 cited in Christie 2005) warned that the housing market was high-risk as the boom has already gone on longer than expected. Low interest rates which means cheap mortgage rates extended the cycle of the real estate boom artificially creating higher demand and higher prices as all market levels (Winzer cited in Christie 2005). “Winzer assesses local market risk by taking into account economic and population growth, construction costs, vacancy rates, and, especially, income. He also considers such factors as density and access to open land. Prices in densely settled New York have always been higher than those of cities with lots of space for new housing (Christie 2005).

1991- 2005 “[I]ncreased complexity from increased grading of risk can also result in increased opacity. Risk that is more difficult to see, by virtue of complexity, is risk just the same. There are plenty of reasons to believe that the amount of risk in the marketplace has increased. Figure 3 shows that defaults on ABS and residential mortgage-backed securities (RMBS) increased substantially between 1991 and 2005″ (Mason and Rosner 2007).

2006-06-12. “Canadian Executives Indicate Human Resources and Rising Canadian Dollar are the Major Business Challenges.” CTV. June 12, 2006.

http://www.ctv.ca/servlet/ArticleNews/show/CTVShows/20060611/ctv_release_20060611/20060612

2006 Fitch Global Structured Finance 1991-2005 Default Study revealed that, “the overwhelming majority of global structured finance defaults over the 1991-2005 period were from the U.S., accounting for more than 97 percent of the total. While the 1,000 U.S. defaults were mainly concentrated in the Asset-Backed Securities._ (ABS) sector, the 27 international defaults were primarily from the collateralized debt obligations (CDO) sector.” See Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on 1.

2006 In Florida millions of homeowners were warned of the mortgage meltdown in which they will “face a financial nightmare brought on by a combination of higher interest rates, risky mortgages and a housing market gone cold (Huntley 2006).

2007-05-10 Desmarais, Paul Jr. 2007. “Private equity, public interest.” National and Global Perspectives . May 10, 2007. p. 16.

2007-05-10 Desmarais, Paul Jr. 2007a. “Chairman’s Address to Shareholders.” Power Corporation of Canada. May 10, 2007.

2007-06-14 Gandalf Group. 2007. “C-Suite Survey On The Role of Private Equity.” Report on Business. Globe and Mail. June 14, 2007. http://www.dwpv.com/images/C-Suite_June_2007.pdf In May and June, 2007 the 150 C-Suite executives from the top 1000 corporations interviewed by the Gandalf Group were generally optimistic about the Canadian economy (Gandalf Group 2007:4). Some expressed concerns about the increasing levels of foreign ownership in key sectors and about private equity firms hollowing out corporate Canada. 23% have concerns that private equity firms engage in too much short-term thinking (Gandalf Group 2007:32). Most executives now favour restrictions in strategic industries. “The strongest areas of consensus about the negative impacts of private equity relate to keeping the company Canadian owned and about the debt burden of the company. A substantial percentage of executives believe that private equity also has a negative impact on the economic contribution the company will make to Canada and to the community it operates in, on the labour relations of the company and on the governance of the company (Gandalf Group 2007:28).”

2007. “C-Suite Survey.” Globe and Mail, Report on Business. 18 June 2007: B5.

http://www.theglobeandmail.com/servlet/Page/document/video/vs?id=RTGAM.20070619.wvcsuite0619&ids=RTGAM.20070619.wvcsuite0619&hub=search

2007 Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007].” [T]hey caution that “structural changes in mortgage origination and servicing have interacted with complex residential mortgage-backed securities (RMBS) and highly volatile CDO funding structures to place the U.S. housing market at risk. This [. . .] could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructuring and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

2007-06-27 “In a Marketplace interview Amy Scott asked interviewees about the disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds. In June, 2007 two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market are now verging on collapse as the number of borrowers defaulting on these mortgages increases. Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market [. . .] Those hedge fund investment managers create investments that are bought by our pension funds and mutual funds. Charitable foundations are invested in these. It’s a broad investor base, and it’s not the rich versus the poor.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007).” See Democratization of Debt: Bear Stearn and Mortgage Meltdowns

2007-09-06 The U.S. subprime mortgage meltdown “Only 5% of mortgages in Canada are subprime compared to 20% in the US. And Canadian financial institutions are more prudent than their American counterparts insisting on mortgage insurance when appropriate and separate appraisals of a home’s purchase price to ensure they are not financing more than 100 per cent of a home’s value. In the US by late 2006 subprime lenders were going bankrupt and as many as 1.5 million Americans could lose their homes before the panic is over. In this under-regulated US industry, lenders partnered with hedge funds to make quick returns on investments then called in debts to avoid losses. Since we are all in some way linked to these investment portfolios, either through mortgages, pensions or insurance, we end up contributing to processes that are fuelled by high-risk, short-term, fast-profits thinking that enriches a few while causing havoc for most of us. See also http://www.cbc.ca/news/background/personalfinance/mortgage-meltdown.html

2007-11-27 “Staggering poverty report has province listening: A United Way report Losing Ground: The Persistent Growth of Family Poverty in Canada’s Largest City claims almost 93,000 Toronto, Canada households are raising children in poverty. That’s 30% compared with 16 per cent in 1990.” OECD, Policy Development, Public Policy, child poverty, del.icio.us, digg story, digg.com, economic efficiency model, how to be poor in a rich country, policy research, social exclusion, vulnerability to social exclusion

2007 Since 1991 inflation-adjusted hourly wages rose only 10 cents (Ed. 2007).”

2007 A new car in Canada cost $32,000 a 60 percent increase from 1992 (Ed. 2007).”

2007 Canadians collectively owe three quarters of a trillion dollars in personal debt. Canadian families not only have no savings, they draw on pension savings to make ends meet.

“The result of the easy credit is that an average family now owes far more than it takes in. That means we remain solvent only so long as the book value of our assets — things like our home, pension funds or investments — continue to increase (Ed. 2007).”

2007 British Columbia graduates from university have an average debt of $27, 000.

2007 It is now acceptable for Canadian families to pay 60 percent of income to pay monthly payments of their home mortgages (Ed. 2007).

2007 The British Columbia government will allow home owners who are over 55 to defer property tax payments for as long as they live. The government will claim unpaid taxes after you die or sell effectively placing the tax burden on the children (Ed. 2007).

2007 “The number of corporate failures in Japan rose for the third month in a row totaling 896 cases in December up 18.2%. November flops were up 6.5% and the number of companies going belly up in October were up 7.8%. The amount of debts the insolvent companies left behind were up 30.6% to 463.09 billion yen (Belew 2007).

2007 In March Bob Lawless reported in his blog that, “The folks at Automated Access to Court Electronic Records or AACER regularly collect data from all the bankruptcy courts for creditors and attorneys. They have a wealth of information that does not show up in the mainstream media. Most recently, they tell me that there were 58,640 total U.S. bankruptcy filings in February 2007 as compared to 55,088 total U.S. bankruptcy filings in January 2007. OK, that looks like a slight increase, but looks are deceiving. It’s actually a fairly hefty increase. The February filings were spread over only nineteen business days while the January filings were spread over twenty-one days. On a daily basis, the February filings were up 17.7% as compared to January (Lawless 2007).”
2007 Jayson Seth analysed data in National Association of Realtors (NAR) June 24, 2007 report. Seth argues that “America’s easy-credit, quick-flipping, borrow-now-and-forget-the-consequences lifestyle is coming to an increasingly painful, grinding halt” and the “confidence of homebuilders is at a 16-year low (Seth 2007).”

2007 Lawrence Yun, National Association of Realtors announced that the real estate market is softening due to psychological factors, tighter credit for subprime borrowers. NAR’s Lawrence Yun explained that since late 2006 housing sales have slowed as buyers double up with family, friends or just mortgage helper units in their homes to be able to pay for higher-priced homes.

2007 Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on 1. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007]” Furthermore they caution that “structural changes in mortgage origination and servicing have interacted with complex RMBS and highly volatile CDO funding structures to place the U.S. housing market at risk. Equally as important, however, is that housing market weaknesses feed back through financial markets to further weaken financial instruments backing today’s CDOs. Decreased housing starts that will result from lower liquidity in the MBS sector will further weaken credit spreads and depress CDO and MBS issuance. This feedback mechanism can create imbalances in the U.S. economy that, if left unchecked, could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructurings and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

2007 In a Marketplace interview Amy Scott asked interviewees about the disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds. In June two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market are now verging on collapse as the number of borrowers defaulting on these mortgages increases. Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007).

2008-01-12 Should banks avoid investing in carbon-intensive projects? “Ceres is composed of and works with investors ($4 trillion) and environmental groups to address sustainability challenges. In their report Corporate Governance and Climate Change (2008) they argue that the banking sector needs to become aligned with GHG reductions.” read more | digg story

2007-01-20 “Globalization and the Rise of Inequality: The extremes of wealth and poverty threaten globalisation. North American companies lose jobs to the Chinese Special Economic Zone (SEZ) where factories often employ rural women to work in 19th century conditions to keep their costs low. Meanwhile the total pay of top managers in North America has increased from 1986 through 2006 to roughly 40 times the average and from 1966 to 110 times the average. Globalization “refers to the current transformation of the world economy the reduction of national barriers to trade and investment, the expansion of telecommunications and information systems, the growth of off-shore financial markets, the increasing role of multinational enterprises, the explosion of mergers and acquisitions, global inter-firm networking arrangements and alliances, regional economic integration and the development of a single unified global market. The phenomenon of globalization is accompanied by increasing international mobility, the migration of workers, the growth of tourism and the increasing ease of international travel (Leary 1998:265).”

2008-01-19 The Bush administration announce they are seeking “a stimulus package of as much as $145 billion”. However the stock market did not respond positively as investors were concerned that the looming American recession would trigger economic crisis that will span the globe. See (Jolly and Timmons 2008-01-21).

2008-01-21 “Global stock markets have tumbled, with European indexes set for some of their biggest losses in recent years, amid growing fears of a recession in the US (BBC News 2008-01-21).”

2008-01-20 “Global stock markets plunged on Monday as fears spread that the turmoil in United States mortgage markets is spreading. Indexes in Europe fell as much as 7 percent after a huge sell-off in Asia. “There’s something approaching panic in the market,” Holger Schmieding, the chief European economist at Bank of America in London, said by telephone. “There’s been a reassessment in the market of the U.S. economic outlook, with most people now thinking that there will be a recession,” and investors are starting to reconsider the idea that the rest of the world “will remain aloof from U.S. problems [. . .] The selling began in Sydney, with Australian stocks falling nearly 3 percent for an 11th consecutive decline. Major markets in Asia followed suit, with the benchmark Nikkei 225-stock average in Tokyo falling 3.9 percent, the Hang Seng in Hong Kong falling 5.5 percent and the benchmark mainland Chinese index falling more than 5 percent (Jolly and Timmons 2008-01-21).”

2008-01-21 London’s FTSE 100 index fell 4.5% to 5,637.3 (BBC News 2008-01-21).

2008-01-21 Hugues Rialan of Robeco France says we are in a panic mode and a crisis in consumer confidence as the banking sector’s reassurances that they were not overexposed to US mortgage-related investments, prove to ring hollow and false. The banking sector lost consumer trust when they lost of “billions of pounds on investments linked to the US housing and mortgage markets (BBC News 2008-01-21).”

2008-01-21 “Australia’s benchmark ASX 200 index closed down 2.9%, or 166.9, points at 5,580.4″, amid growing fears of a recession in the US. This is ASX 200 index’s “lowest level for a year. It was also the 11th consecutive negative day for the index, the longest losing streak in more than 25 years (BBC News 2008-01-21).”

2008-01-21 “There may be more downturns in store for Asia, particularly as banks report the fallout from their investments in the United States mortgage market. Companies “have not announced their year-end numbers yet,” Schuller, of Moody’s, said, and if they are holding subprime assets, they may need to write-off their value, she said. “They are going to be taking these 25 to 30 percent haircuts we’re seeing on Wall Street,” she said. “I think it is going to shock people.” [This article which appeared in the New York Times was written by David Jolly reporting from Paris and Heather Timmons from New Delhi. Tim Johnston contributed reporting from Sydney, and Martin Foster from Tokyo (Jolly and Timmons 2008-01-21).”

2009-01-21 Analyst Mike Lenhoff at Brewin Dolphin Securities predicts that the prospect of falling US interest rates announced by the US administration will have a positive effect on the market by January 2009 and the crisis mode of January 2008 and the drop in global indexes based on fears of a US recession will be proven to be a panicked knee-jerk reaction (BBC News 2008-01-21).”

Bibliography and Webliography

BBC. 2008-01-21. “Global shares tumble on US fears.” BBC News on-line. Uploaded 2008/01/21 16:10:48 GMT. Accessed 2008-21. http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7199552.stm http://news.bbc.co.uk/2/hi/business/7199552.stm

CBC News. 2008. “TSX plunges 500 points.” Last Updated: 2008-01-21:13:26 ET.

Jolly, David; Timmons, Heather. 2008-01-21. “Stocks Plunge in Europe and Asia on U.S. Recession Fear.” New York Times. http://www.nytimes.com/2008/01/21/business/22stox-web.html?_r=1&ei=5088&en=f84e22b0fa01257e&ex=1358658000&oref=slogin&partner=rssnyt&emc=rss&pagewanted=print

Selected Bibliography and Webliography: Leary, Virginia A. 1998. “Globalization and Human Rights.” In Symonides, Janusz (Ed.) Human Rights: New Dimensions and Challenges: Manual on Human Rights. Aldershot, UK: Ashgate Dartmouth Publishing Company Ltd. / UNESCO Publishing. pp. 265-276. 2007. “Rich man, poor man.” The Economist. Jan 18th 2007. Accessed January 18, 2007

Flynn-Burhoe, Maureen. 2008. “Risk Society: Unintended Consequences of Subprime Market.” >> Google docs. January 21. http://docs.google.com/Doc?id=ddp3qxmz_505grfcrtgj

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Ye are the stars . . .

Didymosphenia geminata algae

Calgary is the world’s cleanest city and the Bow River is clean enough for fly fishers. Algal ecologists are closely monitoring a bumper crop of Didymosphenia geminata bloom, an algae that thrives on dams and clean water.

Folksonomy: algal ecologist, bumper-crop blooming, jet-set fly fishers, Canadian Journal of Fisheries and Aquatic Sciences, rock snot, NB, Quebec, East Coast, New Zealand, headwater rivers of South Saskatchewan River basin, Bow River, Red Deer River,

Who’s who

Didymosphenia geminata (aka Didymo, rock snot) is a single-celled algae called a diatom which is attracted to pristine clear water, an unusual characteristic for algae. When it blooms it covers river bottom rocks with a shag carpet that can completely inundate kilometres of river bottom. Trout like clean waters and their habitat can be destroyed by this invasive Didymosphenia geminata bloom. It has been noticed in the Bow River near Calgary. See Kirkwood, Andrea E.

Kirkwood, Andrea E. akirkwoo@uncalgary.ca; Shea, T.; Jackson, L. J.; McCauley, E. Department of Biological Sciences, University of Calgary, 2500 University Drive

TERA Environmental Consultants, Suite 1100, 815-8th Avenue S.W., Calgary, AB T2P 3P2

Timeline

2002 “[A]nglers and provincial scientists noticed blooms on lower reaches of the Bow River near Calgary, and the Oldman River below the Oldman Dam (Kirkwood, Shea, Jackson, McCauley 2007 ).”

2004 a “large-scale periphyton study in Red Deer and Bow rivers to investigate natural and anthropolical driven transitions in Alberta rivers” [. . .] The Bow River sub-basin is 26,240 km squared, whereas the Red Deer River sub-basin is 47,831 squared. The SSRB is located in the transition between the Rocky Mountains of western Alberta and the eastern Great Plains. Source water for these rivers originates along the eastern slopes of the Rocky Mountains and is a mixture (depending on the time of year) of rain water, glacial and snowmelt water, and groundwater. Though the Bow and Red rivers share similar edaphic and land-use characteristics, they differ with respect to urban footprints, sewage-agricultural inputs, and flow regulation-diversion by dams and hydroelectric utilties. The Bow River has five dams and one substantial weir that regulates and stabilizes flows, while the Red Deer River has only one dam (Kirkwood, Shea, Jackson, McCauley 2007).”

2005 “95% of the freshwater users of the South Island of New Zealand knew about didymo, yet it is hardly recognized within the general populace of North America and Europe (Special Session on Didymosphenia geminata ).”

2006 Special Session on Didymosphenia geminata. Western Division American Fisheries Society Meeting. May 15-16, 2006 Bozeman, Montana. REVISED Post meeting update. Over 60 scientists and aquatic managers from across the US, western Canada, New Zealand, England, and Iceland gathered to exchange information and discuss new findings at the special symposium in Bozeman. The symposium offered the opportunity for people to meet, develop ideas and collaborations, and to express concerns about the impacts of didymo. Donors included Federation of Fly Fishers, US Environmental Protection Agency, the Trout and Salmon Foundation, the Black Hills Fly Fishers, and the Overmountain Chapter of Trout Unlimited.

2007 Kirkwood et al noted the relationship between dams and Didymosphenia geminata bloom.

Webliography and Bibliography

2006. Special Session on Didymosphenia geminata. Western Division American Fisheries Society Meeting. May 15-16, 2006 Bozeman, Montana.

Brooymans, Hanneke, 2008. “‘Rock snot’ threatens rivers.” Calgary Herald. January 14. B2.

Kirkwood, Andrea E.; Shea, T.; Jackson, L. J.; McCauley, E. 2007. “Didymosphenia geminate in two Alberta headwater rivers: an emerging invasive species that challenges conventional views on algal bloom development.” Vol. 64. pp.1703-1709. http://restigouche.org/reports/Didymo_CJFAS.pdf

Kirkwood, Andrea. 2008. Canadian Journal of Fisheries and Aquatic Sciences.

Flynn-Burhoe, Maureen. 2008. “Dams, Didymo and jetset flyfishers: Didymosphenia geminata algae.”

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Collective consciousness, social cohesion, social inclusion and social exclusion

He is a young doctor literally without borders who chose to work with AIDS patients. When he was forced to leave his own strife-torn country as refugee he left behind his family including the woman he hopes to marry. She too is a doctor and because of his political situation, she was forced to leave her country recently as well. At the time she left, the safest African country seemed to be Kenya.

For awhile he accepted what his newly adopted country offered him as work: he joined the ranks of over-qualified African-Canadian security guards. While living through the horrors of everyday violence in his home country, he was able to sleep at night because his family and friends provided an almost impermeable sense of social cohesion. Alone in Canada, working at a job that offered no future, exiting the role of professional health care worker, his sense of self, of his identity was profoundly shaken. Then the nightmares began. Why is it that trauma as mental illnesses is integral to a western medical system yet depression, PTSD are not a prominent part of the medical profession in Africa where people are faced with struggle for the most basic human needs, such as freedom from violence, minimal nutrition and even water?

As he follows the violent eruptions in Kenya his first concern is finding a way to secure safety for his life partner. He feels that if she were here beside him in Canada that the two of them together could survive.

Meanwhile he has found another job. It seems ironic yet fitting that he works with the most at-risk Canadian populations, the urban homeless. He is learning rapidly that most of those living on the streets are mentally ill. Of this group how many are First Nations and Inuit? How many are women? These are the groups who are most vulnerable to social exclusion and who will not find the health care they need in the public system but who will never be able to access a private system.

As I read about the public/private health care debates I cannot help but think of those who are excluded. Even as a newly arrived immigrant, I want to believe that he will not be of those. I have met so many immigrants particularly from Africa who remain underemployed for their entire work lives in Canada. Will our desparate need for doctors faciliate the process for him and his partner? Perhaps even their perspective will transform in some small way, a system that has come to depend on market solutions for all social problems.

How would I present this topic as a part of a robust conversation where divergent voices could be heard including First Nations, Inuit and immigrant students to enhance their understanding of social history in Canada and comparative social histories (particularly with other OECD nations)? How can I share the relevance of Derrida’s urgent call for a need for philosophy from a cosmopolitical point of view? What tools can I develop to enhance cross- and interdisciplinary readings without sacrificing legitimacy (academic capital) based on a system of closed disciplines?

tag cloud: Open Source, memory palace, memory work, sociological imagination, governance, Derrida, cosmopolitical, democracy, liberal democracy, social democracy, economics, elite studies, vertical mosaic revisited, Jeffrey Sachs, Stephen Harper’s relation to the Calgary School, wealth disparities will intensify, vulnerability to social exclusion, human rights, judiciary, Canadian elite studies, academia,

Concepts

Ccollective conscience as used in modern societies a way of describing how an entire community comes together to share similar values. French sociologist, Émile Durkheim (1893). Other forms of collective consciousness through a sociological imagination include solidarity attitudes, memes and extreme behaviors like groupthink, herd behavior. Herd behaviour through a political science lens is explored as a weakness in governance as in mob rule. Through a spiritual imagination collective consciousness is discussed as an outcome of meditation and self-realization.

Timeline of social history related to changing interpretations of the concepts of social consciousness, social cohesion, social inclusion, social exclusion in process . . .

1789 Thomas Jefferson in correspondence to James Madison argued that majority rights cannot exist if individual rights do not (Jefferson 1989).

1893 French sociologist, Émile Durkheim (1858-1917) published his first book The Division of Labor in Society in which he “argued that religion plays an important role in uniting members of segmentary (i.e., clan-based) societies through the creation of a common conscience or consciousness (conscience collective). The contents of each individual’s consciousness largely coincide with those of others, and such a society is therefore integrated by mechanical solidarity, or the mutual likeness of its members. As societies become more differentiated and individuated, the division of labor increasingly requires a new morality of specialized service. Organic solidarity, based on a “categorical imperative” of specialized, yet mutually supportive social performances, displaces the need for a collective consciousness (Swatos nd ).” (1893), and his third one, Suicide (1897), contain significant and mutually congruent analyses of religion in the context of a focus on other sociological problemsand guiding figure in the influential French or “Durkheim school” of sociology. Born to Jewish parents in Epinal, in the Eastern part of France, his father was a prominent rabbi in the region, while his grandfather and great-grandfather had been rabbis before him. As a youth, Durkheim himself was apparently destined for the rabbinate but instead entered on a course of secular education. At the École Normale Superieure in Paris, he concentrated on philosophy but also explored a wider range of political and social issues. Among his eminent classmates were Henri Bergson, Jean Jaurès, and Pierre Janet. After a year of study in Germany (1885-1886), Durkheim secured a position at Bordeaux in 1887. There he taught pedagogy and social sciences until 1902, when he was called to a professorship of education (later changed to include sociology) at the Sorbonne in Paris, where he remained until his death in 1917. Although he had already emerged to prominence at Bordeaux, Durkheim became a leading figure in French intellectual life during his years in Paris, and his work exercised a strong influence in official educational circles as well as the social sciences (Swatos nd).”1895 French sociologist, Émile Durkheim (1858-1917) published The Rules of Sociological Method which presents “Durkheim’s distinctive sociological approach, with its emphasis on the reality of society (versus the individual level), the need to study social facts as things (choses) , and the comparative, analytical method (Swatos nd ).”

1989 Sanford Levinson published Constitutional Faith in which he argued (1989:60) Note that the US Constitution states that unlike a pure democracy, in a constitutional republic, citizens in the US are not governed by the majority of the people but by the rule of law (Levinson 1989 ).”Constitutional Republics are a deliberate attempt to diminish the threat of mobocracy thereby protecting minority groups from the tyranny of the majority by placing checks on the power of the majority of the population. The power of the majority of the people is checked by limiting that power to electing representatives who govern within limits of overarching constitutional law rather than the popular vote or government having power to deny any inalienable right.[41] Moreover, the power of elected representatives is also checked by prohibitions against any single individual having legislative, judicial, and executive powers so that basic constitutional law is extremely difficult to change. John Adams defined a constitutional republic as “a government of laws, and not of men.” (wiki)”

Webliography and Bibliography

Jefferson, Thomas in correspodence to James Madison. ME 7:455, Papers 15:393.

Levinson, Sanford. Constitutional Faith. Princeton University Press, 1989, p. 60

Swatos, William H. Jr. Ed. “Durkheim.” Encyclopedia of Religion and Social Science. Hartford Institute for Religion Research. Hartford, CT. http://hirr.hartsem.edu/ency/durkheim.htm

to be continued . . .

CC Flynn-Burhoe, Maureen. 2008. “Collective consciousness, social cohesion, social inclusion and social exclusion” January 13, 2008.

See also

CC Flynn-Burhoe, Maureen. 2008. “What is Being Done in the Name of Social Cohesion?” << Speechless. March 12, 2008.