Tell It To Al

Ever meet anyone who lived  through the Great Depression and wouldn’t trust banks – even to  the point of stuffing cash in a mattress?

I used to think that was funny, particularly as it’s been portrayed in film characters. But now it looks like America’s sentiments have headed back that way.

Only 23% of people surveyed say they trust banks and financial institutions, according to the Chicago Booth/Kellogg School Financial Trust Index. Click here to read more  about the index.

“Nearly 60% of respondents in our survey said they are angry or very angry about the current economic situation – the highest level of anger we’ve found since the earliest months of the financial crisis,” said Luigi Zingales, the Robert R. McCormack Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business and co-author of the Financial Trust Index, a quarterly look at trust in America’s financial systems.

Hmm.  Maybe that’s why protesters are taking to the streets. Maybe that’s why we’ve got a  Tea Party and an Occupy Wall Street movement hitting the banks  from all sides of the political spectrum.

If Bernie Madoff were blogging from prison, what would he say?

The closest we may ever get is a blog by Jay Berkman, a.k.a. Fake Bernie. Click here to read it.

Berkman has been writing at Fake Bernie since learning his father was one of the notorious Ponzi Schemer’s investors.

Click here to read my column on MarketWatch.

Today’s news is rife with claims that the economy may be improving, that there are “fresh signs that the economy was likely to duck a new recession.” Click here for just one example of this sort of reporting from Reuters.

Remember the Newsweek cover of April 2010, boasting “The Remarkable Tale Of Our Economic Turnaround”? Probably not.

Does anybody at Newsweek feel the least bit embarrassed about this almost a year and a half later? Since this pronouncement, the economy has been largely defined by continued high unemployment, raging foreclosures, people protesting in the streets against Wall Street, and a European debt crisis that keeps threatening to topple the blocks all over again.

They say negative headlines are what sell newspapers and magazines, but in an an economic malaise that goes on for years, it’s the happy news that sells.

Wherever there’s a financial crisis, we can look back and almost always find someone who sounded the warning bells and was completely ignored.

In the case of bankrupt Harrisburg, Pa., that someone was Charles Chivis, an activist who stood up for minorities and the poor as they suffered from pollution from Harrisburg’s garbage incinerator.

The mismanaged plant was finally shuttered in 2000. Before Chivis died in 2004, he warned that the city’s plan to pump hundreds of millions into retooling the plant was a dangerous folly.

Turns out he was right. The plant is cited as one of the main triggers for the city’s recent bankruptcy filing.

Chivis was hardly alone. A group called the Coalition Against The Incinerator also warned that Harrisburg was taking a financially reckless path. The group no longer exists, but you can click here to read its archived Internet site.

Click here to read my column on Chivis on MarketWatch.

Misery, misery everywhere you look, yet few economists are talking about the misery index.

“References to the misery index have clearly waned in recent years, although it remains a reasonable—if simplistic—measure of the American consumer’s economic well being,” writes Zions Bank economist Jeff Thredgold in his latest newsletter.

The misery index is simply a measure how how little you make plus how little your money can buy. It’s the nation’s most recent unemployment rate, plus the nation’s consumer price index for the most recent 12-month period. And it’s usually considered the president’s fault.

A rising misery index  helped Jimmy Carter thrash Gerald Ford in 1976. And it helped Ronald  Reagan beat Carter four years later. The parallels to Barack Obama, here, are almost too obvious to need  mentioning.

Thredgold  outlines the history of the misery index and discusses why this overlooked index is still relevant today. Click here to read his newsletter.

So here’s a lawyer who stands to bag perhaps one-third of one half of whatever Facebook is worth, and he wants off the case?

San Diego attorney Jeffrey Lake told a federal judge in Buffalo, N.Y. that he’s getting off Paul Ceglia’s lawsuit. He did not say why.

Ceglia says he wants his half of Facebook – which is worth maybe $50 billion. He claims he had a deal with founder Mark Zuckerberg, who once work for Ceglia as a freshman at Harvard. And he’s been suing.

Click here to read more. With all the loot at stake, you’d think even a ridiculous lawsuit like this would be worth a shot. I guess not.

Rachael Atchison is not taking up space at Occupy San Francisco because she needs a job.

“I’m actually doing OK,” she said.  “I’m down here because I have a social conscience.”

Atchinson, 42, is a firefighter and a paramedic who says she’s watched too many people living in bubbles, blinded to reality,  as the U.S. economy has become more unstable and more inequitable around them.

“I’m out here because I believe the current system in America is not working for the majority of Americans,” she said. “I’m feeling hopeful for the first time in a long time that people are starting to wake up and starting to ask more questions.”

The Occupy Wall Street Movement is a month old, beginning in New York City, on Sept. 17. It has spread across the nation and shows no signs of letting up, despite police crackdowns, arrests, and barb-slinging commentators who would dismiss the movement as a bunch of malcontents, hippies, leftists, commies,  people who need to get a job or  …  (add your favorite slur here and they have likely said that, too).

Even if a cold winter discourages crowds in the months to come,  the sentiments that protesters are expressing are not going away.

Big government collusion with big banks and corporations. An economy stripped of opportunities  by opportunists at the top. An unattended foreclosure crisis still raging out of control. These, unfortunately, are regular headlines.

The sometimes-brutal police raids, like those in San Francisco, ooze with irony since protesters are trying to do something about an economic climate that has resulted in state and municipal budget crises – and, um, police layoffs, too. One day you’re threatening to crack heads on the street – and the next, well you’re just out on the street.  Click here to read about where complaints about police treatment of San Francisco protesters are going . Cracking down on protesters simply redirects the protesters.

Joe Rinaldi, 64, manages a 53-unit apartment building not far from the San Francisco protest. He says he comes whenever he can find a few hours and has been coming every day since it began.

“What makes America the great country that it is, is because people can stand up for what’s right,” he said.

Rinaldi, a New Yorker by birth, has been in San Francisco for 33 years. He is a former school teacher who wants to stand up for the kids who will inherit this country.

“I taught kids that to stand up for what they believe is right and wrong,” he said.

The kids are keeping the movement going he said. The ones who are always in the crowd have time on their hands because they can’t get jobs. “Everyone is too busy making a living to do what these kids are doing,” Rinaldi said.

“I’m kind of ashamed to say that I can only come on the weekend because I have a job,” said Dave Konsfeldt, 56.

He is a building inspector from Las Vegas. He’d be working in Vegas if there was work in Vegas, but there isn’t. So he’s working in Napa Valley and coming to the protest in his off time.

“We are thankful that the young people are out here and doing what we should actually be doing,” he said.

Konsfeldt says the Occupy movement is too readily misunderstood by its critics.

“The first thing they say is that it’s an assault on capitalism,” he said. “I don’t have a problem with capitalism. I just have a problem with what it’s morphed into.

“I actually think the system has collapsed. It’s like having a dead body right in front of you, and you’re just waiting around for someone to pronounce it dead.”

So Goldman Sachs lost $428 million in the third quarter. So it’s the a new record loss for the global investment banker. So it’s only the second time it’s had to lament big losses in its storied history:

“Our results were significantly impacted by the environment and we were disappointed to record a loss in the quarter,” said Goldman’s CEO Lloyd Blankfein.

But don’t be too disappointed. While $428 millions sounds like a lot to lose in a single quarter, it’s less than:

The $550 million Goldman paid in July 2010 to settle fraud allegations with the Securities and Exchange Commission.

The million or more it paid in bonuses to 953 employees in 2008,  while receiving billions from a  federal bailout.

Or the $4 billion two Goldman Sach traders bagged in 2007 by betting on a collapse in the subprime housing market.

Easy come, easy go.

I went to Lowes this weekend,  and at least five staffers asked me how I was doing and if they could help me. Some even called me “sir.”

I usually get OK service from Lowes, but sometimes I have to walk several aisles to find someone. This was unusually overwhelming service.

Then I read today that Lowes is laying off 1,950 people and closing 20 stores to catch up with the cost-cutting prowess of its competitor, Home Depot. Click here to read about that.

This is yet another a bad sign for the labor market. Lowes and Home Depot are where people in the building trades go to work when they’re having trouble finding steady construction or remodeling gigs.   Now where are they going to work?

I sure hope I don’t have to do any plumbing any time soon. I hate trying to find pluming parts by myself.

I met Chicago video producer Vicki Gumbiner on LaSalle St. in downtown Chicago while I was covering the Occupy Chicago protest a couple weeks ago. One reason she produced this video is because she hasn’t had a lot of other things to produce, if you know what I mean. Like many of the protesters she’s having trouble finding work. The result is this video that shows the variety of similarly situated people who’ve taken to the streets thanks to stubbornly high unemployment. Yes, our economy is certainly generating it’s share of volunteers for this movement. Gumbiner can be reached at VickiGProductions@gmail.com.