Thursday, May 26, 2005
Dr. Paranoia is sincerely tired of bafflegab
LOOKING AHEAD by Wally Dobelis
The good Dr P. writes:
I’ve had it with bafflegab Governments must lie to move their objectives, but they should not do it to the point of making themselves and us their patient subjects look ridiculous. The neocons can talk about spreading democracy through the Middle East, but they cannot afford to do so in the 22 dictatorships constituting the Arab League, because any democratic election will bring to power radical Islamists who will deny us their oil and destroy all Western economies. Washington talks about reducing gasoline prices, but the oil magnates close to the government have no intentions to do so, the profits are too sweet. Rather, they would keep exploring in the ANWR and the Gulf of Mexico, and make money off the misery of the consumer. The tax cutters chop the obligations of their millionaire supporters and blab about downsizing government, meanwhile chuckling about the vast increases state and local legislatures impose during this real estate boom on homeowners – that’s 70% of Americans – to pay for education and protection that the Feds no longer can afford to cover. The free traders set economic reality upside down, by letting imports vastly exceed exports, letting good jobs go abroad, watching American manufacturing industries employ NAFTA maquiladores and chep Chinese labor, and praying that the new capitalist countries invest their surpluses in dollars, while the latter are slowly sinking in value. When a few of the new economic mighties decide to dump their US Treasuries, we will experience the mother of all recessions.
But that’s old news, you all know these complaints, we have learned to ignore them, else we’d all go crazy with worries. Denial is therapeutic; we can always turn on the tube and watch sports ‘round the clock. Let’s go to something real.
I have had it with American claims of technological superiority. My Timex Triathlon watch permits me to take split times of athletic feats and judge my running, climbing, swimming etc progress over fractions of any course I should dream of mastering. A superb product of American technology, although a bit tricky when changing time to summer and back. Bought right here in T&V Country, it proves Thomas “The Earth is Flat” Friedman’s Ricardoan theory that we have to be just a bit better technologically than the Chinese to retain our comparative advantage. The only problem is that the plastic wristband of the great US-made timepiece has deteriorated and broken, and no store carries spare parts, 14th to 23rd Streets. I cured the breaks twice, with staples and Scotch tape (good American products) but now it has split again. Removing the band was tricky – more American ingenuity to overcome – but henceforth I can hang my watch on a string around my neck and pull it out as required. Someone suggested that I cut down and retrofit the strap of a Chinese 99-cent watch that I have been shamefacedly using as the emergency replacement, and it may come to that.
More real stuff, sneaker category. The shoe magnates claim to have special design foe each sport or hiking category, but I cannot get Nike, Reebok or other major brand footgear that cost and look like they are worth the $100 price. This is because the makers who pay sweatshop wages to their Southeast Asian laborers cannot afford to stock other than medium, D width footwear in all the myriad color-coordinated styles they need to lure the young to buy. Tough, I have to satisfy my extra-wide footgear needs with old-fashioned basic unendorsed MacGregor gear, for a measly $20 at the K-Mart, down the avenue by St. Mark’s Place. There is also a Chinese brand, on 14th Street. Give Ricardoan points to MacGregor’s and the Chinese, and the back of my hand to the big-brand bozos. If you think that’s bad, consider that GM the SUV pusher gets no Ricardoan points at all.
So there. If you hope, with Tom Freedman (this was also preached by Robert Reich, Clinton’s Secretary of Labor), that the US people will retain a comparative advantage over the Indians, who do software, and the Chinese who handle manufacturing and engineering, and produce the cheapest consumer and industrial products, think again. If you expect that we can lock up the raw materials, with our control over the Gulf Sheiks and the Americas, note that the Chinese have bought a multi-$B stake in the Alberta oil sands, contracted with the Venezuelan US-haters for conventional oil, and with the Brazilians, to have their Amazon farmers steer their crops into ethanol production. But we have Afghanistan in our corner, at least the outskirts of Kabul (the rest, warlord-controlled, is a narco nation), and the Baghdad Shias, getting decimated daily. Sweet Laura Bush (standing by her man on stem-cell research, although there’s Alzheimer’s in her family), is going out there to tell the Moslems that flushing the Koran down is a myth and the killing of prisoners an aberration. I sincerely hope that her people-to-people diplomacy has impact, and sincerely pray that she does not get attacked. We all need to set politics aside and bail, as fast as we can.
The good Dr P. writes:
I’ve had it with bafflegab Governments must lie to move their objectives, but they should not do it to the point of making themselves and us their patient subjects look ridiculous. The neocons can talk about spreading democracy through the Middle East, but they cannot afford to do so in the 22 dictatorships constituting the Arab League, because any democratic election will bring to power radical Islamists who will deny us their oil and destroy all Western economies. Washington talks about reducing gasoline prices, but the oil magnates close to the government have no intentions to do so, the profits are too sweet. Rather, they would keep exploring in the ANWR and the Gulf of Mexico, and make money off the misery of the consumer. The tax cutters chop the obligations of their millionaire supporters and blab about downsizing government, meanwhile chuckling about the vast increases state and local legislatures impose during this real estate boom on homeowners – that’s 70% of Americans – to pay for education and protection that the Feds no longer can afford to cover. The free traders set economic reality upside down, by letting imports vastly exceed exports, letting good jobs go abroad, watching American manufacturing industries employ NAFTA maquiladores and chep Chinese labor, and praying that the new capitalist countries invest their surpluses in dollars, while the latter are slowly sinking in value. When a few of the new economic mighties decide to dump their US Treasuries, we will experience the mother of all recessions.
But that’s old news, you all know these complaints, we have learned to ignore them, else we’d all go crazy with worries. Denial is therapeutic; we can always turn on the tube and watch sports ‘round the clock. Let’s go to something real.
I have had it with American claims of technological superiority. My Timex Triathlon watch permits me to take split times of athletic feats and judge my running, climbing, swimming etc progress over fractions of any course I should dream of mastering. A superb product of American technology, although a bit tricky when changing time to summer and back. Bought right here in T&V Country, it proves Thomas “The Earth is Flat” Friedman’s Ricardoan theory that we have to be just a bit better technologically than the Chinese to retain our comparative advantage. The only problem is that the plastic wristband of the great US-made timepiece has deteriorated and broken, and no store carries spare parts, 14th to 23rd Streets. I cured the breaks twice, with staples and Scotch tape (good American products) but now it has split again. Removing the band was tricky – more American ingenuity to overcome – but henceforth I can hang my watch on a string around my neck and pull it out as required. Someone suggested that I cut down and retrofit the strap of a Chinese 99-cent watch that I have been shamefacedly using as the emergency replacement, and it may come to that.
More real stuff, sneaker category. The shoe magnates claim to have special design foe each sport or hiking category, but I cannot get Nike, Reebok or other major brand footgear that cost and look like they are worth the $100 price. This is because the makers who pay sweatshop wages to their Southeast Asian laborers cannot afford to stock other than medium, D width footwear in all the myriad color-coordinated styles they need to lure the young to buy. Tough, I have to satisfy my extra-wide footgear needs with old-fashioned basic unendorsed MacGregor gear, for a measly $20 at the K-Mart, down the avenue by St. Mark’s Place. There is also a Chinese brand, on 14th Street. Give Ricardoan points to MacGregor’s and the Chinese, and the back of my hand to the big-brand bozos. If you think that’s bad, consider that GM the SUV pusher gets no Ricardoan points at all.
So there. If you hope, with Tom Freedman (this was also preached by Robert Reich, Clinton’s Secretary of Labor), that the US people will retain a comparative advantage over the Indians, who do software, and the Chinese who handle manufacturing and engineering, and produce the cheapest consumer and industrial products, think again. If you expect that we can lock up the raw materials, with our control over the Gulf Sheiks and the Americas, note that the Chinese have bought a multi-$B stake in the Alberta oil sands, contracted with the Venezuelan US-haters for conventional oil, and with the Brazilians, to have their Amazon farmers steer their crops into ethanol production. But we have Afghanistan in our corner, at least the outskirts of Kabul (the rest, warlord-controlled, is a narco nation), and the Baghdad Shias, getting decimated daily. Sweet Laura Bush (standing by her man on stem-cell research, although there’s Alzheimer’s in her family), is going out there to tell the Moslems that flushing the Koran down is a myth and the killing of prisoners an aberration. I sincerely hope that her people-to-people diplomacy has impact, and sincerely pray that she does not get attacked. We all need to set politics aside and bail, as fast as we can.
Thursday, May 19, 2005
NY Public Library trustees - unkind thoughts about
LOOKING AHEAD by Wally Dobelis
Unkind thoughts about the NY Public Library trustees
The spring art auction season at Sotheby’s and Christie’s has come to a close, with some high-priced items being withdrawn, or fetching below-expectations prices.
A particularly painful event to New Yorkers, especially Gramercy Park people, was the auction sale of Asher Durand’s 1849 Hudson River School masterpiece “Kindred Spirits,” depicting William Cullen Bryant and Thomas Cole on a rocky ledge overlooking the Caterskill Gap, given to the NYPL by Bryant’s daughter many years ago. It was one of the treasures I would look up whenever visiting Reference, Room 315. The buyer was a Sam Walton heiress, Alice L. Walton, 54, a Texas horse breeder worth $16.5B. It will be the cornerstone in a museum maintained in Bentonville, AK by the world’s richest family, a long way for the world to beat a path to see the accumulated treasures. She, however, will lend it to national museums and NY museums “ to assure that it will continue to be seen there in the future.”
Horse feathers, there is no there there, the painting belongs here. New York, consider yourself put in your place. Wealth has its privileges, though, I bow low to those public-spirited patrons who not only give major art to the public but also donate 300M to their local university. But to sequester such major art in Bentonville seems uncommonly ungenerous.
One feels let down by the trustees of New York Public Library, no matter how poverty-struck their endowment (it dropped from $530M to $436M in two years, to 2002, but has since recovered), and how badly they missed out on pricey book acquisitions. They might have emulated Dr. Vartan Gregorian, who knew how to ask for money, invoke local pride and raise funds without selling off the treasures. The silent auction, using sealed bids, was run by Sotheby’s, with the library “offering preferential purchase terms to New York institutions.” Ha! The realistic Met Museum/National Gallery of Art counter-bid was not big enough, and the use of sealed bids assured the Bentonville moguls of the prize regardless of the price, at an estimated $35M the highest ever in an auction of an American painting.
One does not really care for the sell-off of the two George Washingtons by Gilbert Stuart, New York has more, and they are of national interest. Besides, Stuart painted nearly 100 of them, mostly of the third, Vaughan sitting. But to put the most meaningful NYPL association artwork for sale is sinful, and disrespectful to the memories of Bryant (1794-1878), whose name is carried by the park that hosts the Library, and to John Bigelow, the planner (for a quarter century, to 1911), founder and first president of the Library. The latter (1816-1911) was Bryant’s partner and co-owner of the New York Post (then Evening Post, founded by Alexander Hamilton). Bigelow was the executor of Samuel Jones Tilden’s (1814-1886) Trust, the main source of the funds that created the NYPL, and lived at 21 Gramercy Park South. The house was given to him by Tilden who dubbed the old historian and Civil War diplomat “the worst used man in the US.” His daughter Grace (the actual donee – Tilden knew that the old man would refuse the gift) was a trustee and eventually President of Gramercy Park (1916-32), and John Bigelow’s great-great grandson Andrew Eristoff was our area’s City Councilmember 1n the 1990s.
It is truly a sad commentary that the paintings, visited by tourists and locals a lot more than the books, should be sold. As regards buying important book collections, rare books at 42nd Street and 5th Avenue are of limited specialist interest, and the graduate students will travel. As for high school and college student interest, the libraries founded by Andrew Carnegie to serve the public are doing away with older titles, to make space for multiple copies of mystery fiction. The kids often cannot get to Jane Austen, or early Saul Bellows, for that matter, and may resort to Cliff Notes and Barron’s, because the library does not keep old books. Read that again and think how you feel about it
To tell you more about our loss, Thomas Cole (1801-1848) originated the Hudson River School by trudging up the river in 1825 to sketch the Catskills. By the time his short life ended he had recorded American wilderness all the way to Mount Desert Island in Maine. “Go forth, under the open sky, and list to Nature’s teachings,” said his friend the poet Bryant. Cole’s first disciple was Asher Brown Durant, an established engraver and artist, who gave up the burin for a brush and followed Cole into the wilderness. Bryant had given the oration at Cole’s funeral, and Durand painted the picture as a gift to the poet, although it was commissioned by a patron of Durand’s. Cole’s small cottage near Catskill is now a modest museum.
Wally Dobelis thanks Carol Vogel and the Times.
Unkind thoughts about the NY Public Library trustees
The spring art auction season at Sotheby’s and Christie’s has come to a close, with some high-priced items being withdrawn, or fetching below-expectations prices.
A particularly painful event to New Yorkers, especially Gramercy Park people, was the auction sale of Asher Durand’s 1849 Hudson River School masterpiece “Kindred Spirits,” depicting William Cullen Bryant and Thomas Cole on a rocky ledge overlooking the Caterskill Gap, given to the NYPL by Bryant’s daughter many years ago. It was one of the treasures I would look up whenever visiting Reference, Room 315. The buyer was a Sam Walton heiress, Alice L. Walton, 54, a Texas horse breeder worth $16.5B. It will be the cornerstone in a museum maintained in Bentonville, AK by the world’s richest family, a long way for the world to beat a path to see the accumulated treasures. She, however, will lend it to national museums and NY museums “ to assure that it will continue to be seen there in the future.”
Horse feathers, there is no there there, the painting belongs here. New York, consider yourself put in your place. Wealth has its privileges, though, I bow low to those public-spirited patrons who not only give major art to the public but also donate 300M to their local university. But to sequester such major art in Bentonville seems uncommonly ungenerous.
One feels let down by the trustees of New York Public Library, no matter how poverty-struck their endowment (it dropped from $530M to $436M in two years, to 2002, but has since recovered), and how badly they missed out on pricey book acquisitions. They might have emulated Dr. Vartan Gregorian, who knew how to ask for money, invoke local pride and raise funds without selling off the treasures. The silent auction, using sealed bids, was run by Sotheby’s, with the library “offering preferential purchase terms to New York institutions.” Ha! The realistic Met Museum/National Gallery of Art counter-bid was not big enough, and the use of sealed bids assured the Bentonville moguls of the prize regardless of the price, at an estimated $35M the highest ever in an auction of an American painting.
One does not really care for the sell-off of the two George Washingtons by Gilbert Stuart, New York has more, and they are of national interest. Besides, Stuart painted nearly 100 of them, mostly of the third, Vaughan sitting. But to put the most meaningful NYPL association artwork for sale is sinful, and disrespectful to the memories of Bryant (1794-1878), whose name is carried by the park that hosts the Library, and to John Bigelow, the planner (for a quarter century, to 1911), founder and first president of the Library. The latter (1816-1911) was Bryant’s partner and co-owner of the New York Post (then Evening Post, founded by Alexander Hamilton). Bigelow was the executor of Samuel Jones Tilden’s (1814-1886) Trust, the main source of the funds that created the NYPL, and lived at 21 Gramercy Park South. The house was given to him by Tilden who dubbed the old historian and Civil War diplomat “the worst used man in the US.” His daughter Grace (the actual donee – Tilden knew that the old man would refuse the gift) was a trustee and eventually President of Gramercy Park (1916-32), and John Bigelow’s great-great grandson Andrew Eristoff was our area’s City Councilmember 1n the 1990s.
It is truly a sad commentary that the paintings, visited by tourists and locals a lot more than the books, should be sold. As regards buying important book collections, rare books at 42nd Street and 5th Avenue are of limited specialist interest, and the graduate students will travel. As for high school and college student interest, the libraries founded by Andrew Carnegie to serve the public are doing away with older titles, to make space for multiple copies of mystery fiction. The kids often cannot get to Jane Austen, or early Saul Bellows, for that matter, and may resort to Cliff Notes and Barron’s, because the library does not keep old books. Read that again and think how you feel about it
To tell you more about our loss, Thomas Cole (1801-1848) originated the Hudson River School by trudging up the river in 1825 to sketch the Catskills. By the time his short life ended he had recorded American wilderness all the way to Mount Desert Island in Maine. “Go forth, under the open sky, and list to Nature’s teachings,” said his friend the poet Bryant. Cole’s first disciple was Asher Brown Durant, an established engraver and artist, who gave up the burin for a brush and followed Cole into the wilderness. Bryant had given the oration at Cole’s funeral, and Durand painted the picture as a gift to the poet, although it was commissioned by a patron of Durand’s. Cole’s small cottage near Catskill is now a modest museum.
Wally Dobelis thanks Carol Vogel and the Times.
Monday, May 16, 2005
PARK TOWERS NEWSLETTER 201 East 17th Street, New York City
PARK TOWERS NEWSLETTER 201 East 17th Street, New York City
Special Annual MeetingEdition, June 2005201 East 17th Street ("Park Towers") Cooperative Annual Meeting onThursday. 6/16/2005 - Notes by Wally Dobelis
Renovation. President Sam Haupt opened the meeting with the good news thatthe 100% brick replacement/ renovation will be completed inOctober-November 2005 (that's 2005, practically tomorrow).A discussion of future repairs indicated that, having cured the leaks onthe 17th Street plaza and the Local Law 11 façade replacement, we must nowthink of equivalent maintenance of the 18th Street plaza, of replacement of the main roof and any work indicated for the 3rd Avenue below- street- level plaza accessingthe doctors' offices. Scheduling will take place in accordance with theevaluation of needs and availability of funds.As to the latter, Fred Rothman, in his Treasurer's report, supplied thefinancials.
There are still projects that need addressing, and the recentrefinancing and increase of the mortgage, from a 7.5% to a 5.33% rate(principal due 2014) was key to paying for required work withoutassessments or maintenance increases (for details see Note 4. of theFinancial Statement). A prepayment by the garage tenant put us nearly outof the coop category (20-80 commercial income ratio) for a month. That hasbeen balanced out, legally, which accounts for the extra statement lines.
Bob Lepisko, in his June-to-June coop apartment sales report, indicated arise in values. The two 2BR apts sold averaged $700k, vs. last year's$634k (12 apts), and the four 1BRs averaged $426k vs. last year's $370k (15apts). Susan Steward observed that current listings show a 35% rise. Wow!Three Board vacancies were open, two incumbents returning (Steward, JackCalcagno) and the third, vacated by Rothman, being contested by MarkGoldman and Dr. Lewis Burrows. The incumbents and Mark Goldman wereelected.Some questions from the floor:No, sorry, the roof recreation area will not be reopened for sunbathingthis Summer, it is too dangerous.Window washer - we have no arrangement. Residents must solicit their own contractor for window washing, who is licensed and insured.Can we expand basement rental storage space? - the Board is investigating the possibility.Can we stop the 18 Street scaffold vibrations? - have patience, it isnearly overCan we remove unsightly remnants of building repairs? - ditto. Why not prepay the mortgage rather than increase it, since the balloonpayment is due in 10 years? - we refinanced at favorable fixed rate, the alternative would have been assessments or maintenance increases.Can we explain mysterious dirt on bathroom floor ?- bathroom and kitchen air vents should be vacuumed and cleaned on a regular basis.
At the conclusion of the meeting, the audience extended a vote of thanks tothe Board and Mr. Nikc and the building staff for work well done The Boardand the tenancy also offered their sincere condolences to Jack Calcagno,who was unable to attend due to the death of his father on the day of themeeting.
Board of Directors, June 2005:Jack CalcagnoMark GoldmanSamuel HauptRobert LepiskoSamuel Lewis (Goodstein)Kathy McLaughlinCarole PfeifferAlex RepolaSusan StewardBuilding ManagementCheryl CastellanoPeter NikcA copy of these minutes will be posted in the blog attached to websitewww.dobelis.net
Special Annual MeetingEdition, June 2005201 East 17th Street ("Park Towers") Cooperative Annual Meeting onThursday. 6/16/2005 - Notes by Wally Dobelis
Renovation. President Sam Haupt opened the meeting with the good news thatthe 100% brick replacement/ renovation will be completed inOctober-November 2005 (that's 2005, practically tomorrow).A discussion of future repairs indicated that, having cured the leaks onthe 17th Street plaza and the Local Law 11 façade replacement, we must nowthink of equivalent maintenance of the 18th Street plaza, of replacement of the main roof and any work indicated for the 3rd Avenue below- street- level plaza accessingthe doctors' offices. Scheduling will take place in accordance with theevaluation of needs and availability of funds.As to the latter, Fred Rothman, in his Treasurer's report, supplied thefinancials.
There are still projects that need addressing, and the recentrefinancing and increase of the mortgage, from a 7.5% to a 5.33% rate(principal due 2014) was key to paying for required work withoutassessments or maintenance increases (for details see Note 4. of theFinancial Statement). A prepayment by the garage tenant put us nearly outof the coop category (20-80 commercial income ratio) for a month. That hasbeen balanced out, legally, which accounts for the extra statement lines.
Bob Lepisko, in his June-to-June coop apartment sales report, indicated arise in values. The two 2BR apts sold averaged $700k, vs. last year's$634k (12 apts), and the four 1BRs averaged $426k vs. last year's $370k (15apts). Susan Steward observed that current listings show a 35% rise. Wow!Three Board vacancies were open, two incumbents returning (Steward, JackCalcagno) and the third, vacated by Rothman, being contested by MarkGoldman and Dr. Lewis Burrows. The incumbents and Mark Goldman wereelected.Some questions from the floor:No, sorry, the roof recreation area will not be reopened for sunbathingthis Summer, it is too dangerous.Window washer - we have no arrangement. Residents must solicit their own contractor for window washing, who is licensed and insured.Can we expand basement rental storage space? - the Board is investigating the possibility.Can we stop the 18 Street scaffold vibrations? - have patience, it isnearly overCan we remove unsightly remnants of building repairs? - ditto. Why not prepay the mortgage rather than increase it, since the balloonpayment is due in 10 years? - we refinanced at favorable fixed rate, the alternative would have been assessments or maintenance increases.Can we explain mysterious dirt on bathroom floor ?- bathroom and kitchen air vents should be vacuumed and cleaned on a regular basis.
At the conclusion of the meeting, the audience extended a vote of thanks tothe Board and Mr. Nikc and the building staff for work well done The Boardand the tenancy also offered their sincere condolences to Jack Calcagno,who was unable to attend due to the death of his father on the day of themeeting.
Board of Directors, June 2005:Jack CalcagnoMark GoldmanSamuel HauptRobert LepiskoSamuel Lewis (Goodstein)Kathy McLaughlinCarole PfeifferAlex RepolaSusan StewardBuilding ManagementCheryl CastellanoPeter NikcA copy of these minutes will be posted in the blog attached to websitewww.dobelis.net
Thursday, May 12, 2005
For MetLife watchers, some updates and surmises
LOOKING AHEAD by Wally Dobelis
There are financial reasons behind the Met’s push for photo key-cards. The company needs money, and the ST/PCV tenancy, protected by rent control/rent stabilization, stops them from maximizing their rental income. The landlords feel deprived of revenue by certain tenants who flaunt the rent laws, either housing illegal subtenants or subletting the premises while spending significant time in vacationland, thus no longer qualifying as full-time tenants. The Met would like to cash in and try to move the guilty parties out, opening the space for market-rate rentals. But the key-cards are legitimately resisted by people who object to an unconscionable regimentation and invasion of privacy, which inhibits their ability to admit housekeepers, caretakers and other bona-fide visitors. The insurer is bound to continue the pressure, in courts and otherwise, without resorting to overt “rough landlord” tactics, which would impair their reputation as the good Snoopy company, protectors of widows and orphans.
Why the pressure? Well, the Met, low on new sales since certain scandals of the 1980s, demutualized in 1998, selling stock to acquire some operating capital and rebuild the sales force. Robert Benmosche, the architect of the old Met’s turning into a stock company, came in 1995, from PaineWebber with orders to rejuvenate the “sleeping giant.” The demutualization was a success, with stock prices climbing. Meanwhile, the low interest rates kept the sales of traditional ordinary life insurance down, the stockholder directors wanted better results, and Benmosche early in 2005 bought Travelers Life and Accident, a Hartford stock company, for 11.5B, from an old insurance smarty, Sandy Weil, who had built his Firemen’s Life in 20 years into an insurance and banking empire, the Citicorp.
Weil sold out, ostensibly because his money is best employed in high-return banking (a strange turnaround, since in the 1990s he offered to buy the Met). Met bought because of a product and marketing fit, at some pain, having to sell the old 1893 landmarked flagship, One Madison, with the gold dome and N. C. Wyeth’s paintings of Puritans in the ground floor lobby offices, to a developer who will turn the tower into coop apartments, for $918M. The new flagship 200 Madison, the former PanAm Building, went to Tishman-Speyer for $1.7B. The Met is also selling $11B worth of unregistered and new shares. May stock prices have jumped, on news of good investment income and annuity sales, but more cash is needed, and the ST/PCV activity goes on.
Is the Met that cash-strapped? My insurance sources unearth this story.
In the 1980s a former football coach, A.L. Williams, came up with a mass marketing idea that upset the staid old insurers no end, making a big case of the slogan “buy term and invest the difference.” His company, Milico, hired young salesmen by the hundreds to sell term insurance with the catchy slogan to friends and family members, and dropped them as soon as the leads petered out. Nevertheless, some 180,000 lads followed the “Coach,” who ran the organization like a team. The sales involved many replacements of old cash-value policies, and the Coach preached hate towards the opponents, using phrases such as “wet the Met” and proclaiming a worse rhyming fate for Prudential Life. The Coach eventually departed, connected with a “twisting” fraud, and the organization was bought by Weill, became Primerica Life and remains his, although Travelers is joining the Met.
Now enters a watcher and critic of the insurers, actuary Joseph Belth of Indiana U., who publishes a pricey monthly journal, The Insurance Forum, exposing tricksters and trying to keep the industry on course (everyone subscribes, to catch any criticisms first-hand and to see what the competition is pulling). Belth believes in permanent cash-value life insurance as premier investment, since the excess earnings of the part of the premiums we the insureds pay as reserves towards future claims increase the policy’s value, just like a mutual fund, but are not taxable as income to the beneficiary. A truly good deal, provided the insureds do not make withdrawals ahead of time. Now, he and another ordinary life guru, Alan Press, have discovered that the Met, as part of thee Travelers deal, is counting on Citicorp bank branches, Smith-Barney and, shockingly, Primerica, as outstanding distribution channels of the Met product. Shockingly, because Primerica during the mid-1990s was responsible for nearly half of life insurance replacement activities (the skeptics claim “churning”), including some affecting the Met’s traditional product, and Primerica, though cleaned up, is still active, even pushing the lawmakers for a term-only insurance agents’ license. The surmise is that the Met must be really worrying about the stockholder reactions to a drop in life sales, to resort to courting the Coach’s progeny.
With all this going on Benmosche has announced his retirement at 61, come next spring. His replacement, Robert Henrikson, 58, who has been the Met’s president since April 2004, has a lot of work ahead of him.
There are financial reasons behind the Met’s push for photo key-cards. The company needs money, and the ST/PCV tenancy, protected by rent control/rent stabilization, stops them from maximizing their rental income. The landlords feel deprived of revenue by certain tenants who flaunt the rent laws, either housing illegal subtenants or subletting the premises while spending significant time in vacationland, thus no longer qualifying as full-time tenants. The Met would like to cash in and try to move the guilty parties out, opening the space for market-rate rentals. But the key-cards are legitimately resisted by people who object to an unconscionable regimentation and invasion of privacy, which inhibits their ability to admit housekeepers, caretakers and other bona-fide visitors. The insurer is bound to continue the pressure, in courts and otherwise, without resorting to overt “rough landlord” tactics, which would impair their reputation as the good Snoopy company, protectors of widows and orphans.
Why the pressure? Well, the Met, low on new sales since certain scandals of the 1980s, demutualized in 1998, selling stock to acquire some operating capital and rebuild the sales force. Robert Benmosche, the architect of the old Met’s turning into a stock company, came in 1995, from PaineWebber with orders to rejuvenate the “sleeping giant.” The demutualization was a success, with stock prices climbing. Meanwhile, the low interest rates kept the sales of traditional ordinary life insurance down, the stockholder directors wanted better results, and Benmosche early in 2005 bought Travelers Life and Accident, a Hartford stock company, for 11.5B, from an old insurance smarty, Sandy Weil, who had built his Firemen’s Life in 20 years into an insurance and banking empire, the Citicorp.
Weil sold out, ostensibly because his money is best employed in high-return banking (a strange turnaround, since in the 1990s he offered to buy the Met). Met bought because of a product and marketing fit, at some pain, having to sell the old 1893 landmarked flagship, One Madison, with the gold dome and N. C. Wyeth’s paintings of Puritans in the ground floor lobby offices, to a developer who will turn the tower into coop apartments, for $918M. The new flagship 200 Madison, the former PanAm Building, went to Tishman-Speyer for $1.7B. The Met is also selling $11B worth of unregistered and new shares. May stock prices have jumped, on news of good investment income and annuity sales, but more cash is needed, and the ST/PCV activity goes on.
Is the Met that cash-strapped? My insurance sources unearth this story.
In the 1980s a former football coach, A.L. Williams, came up with a mass marketing idea that upset the staid old insurers no end, making a big case of the slogan “buy term and invest the difference.” His company, Milico, hired young salesmen by the hundreds to sell term insurance with the catchy slogan to friends and family members, and dropped them as soon as the leads petered out. Nevertheless, some 180,000 lads followed the “Coach,” who ran the organization like a team. The sales involved many replacements of old cash-value policies, and the Coach preached hate towards the opponents, using phrases such as “wet the Met” and proclaiming a worse rhyming fate for Prudential Life. The Coach eventually departed, connected with a “twisting” fraud, and the organization was bought by Weill, became Primerica Life and remains his, although Travelers is joining the Met.
Now enters a watcher and critic of the insurers, actuary Joseph Belth of Indiana U., who publishes a pricey monthly journal, The Insurance Forum, exposing tricksters and trying to keep the industry on course (everyone subscribes, to catch any criticisms first-hand and to see what the competition is pulling). Belth believes in permanent cash-value life insurance as premier investment, since the excess earnings of the part of the premiums we the insureds pay as reserves towards future claims increase the policy’s value, just like a mutual fund, but are not taxable as income to the beneficiary. A truly good deal, provided the insureds do not make withdrawals ahead of time. Now, he and another ordinary life guru, Alan Press, have discovered that the Met, as part of thee Travelers deal, is counting on Citicorp bank branches, Smith-Barney and, shockingly, Primerica, as outstanding distribution channels of the Met product. Shockingly, because Primerica during the mid-1990s was responsible for nearly half of life insurance replacement activities (the skeptics claim “churning”), including some affecting the Met’s traditional product, and Primerica, though cleaned up, is still active, even pushing the lawmakers for a term-only insurance agents’ license. The surmise is that the Met must be really worrying about the stockholder reactions to a drop in life sales, to resort to courting the Coach’s progeny.
With all this going on Benmosche has announced his retirement at 61, come next spring. His replacement, Robert Henrikson, 58, who has been the Met’s president since April 2004, has a lot of work ahead of him.
Thursday, May 05, 2005
Get used to the new banking world and the cashless society
LOOKING AHEAD by Wally Dobelis
Get used to the new banking world and the cash-less society
There’s this revolution in banking going on, right here in River City, as we speak. The old marble columned banks, built to impress depositors with their solidity, have turned into cultural centers, or restaurants or theatres, right before our eyes. The institutions themselves, with tellers’ cages, Lexan partitions and money bags armed with red paint sprayers to foil bank robbers, have turned into simple low-security storefronts, and the banking functions have gone upstairs, leaving the teller functions to sometimes cashless associates, and/or to ATM machines accessible 24 hours a day, holidays notwithstanding. It is an environment that would totally frustrate Willie Sutton, who robbed the aforementioned institutions by the dozen, “because that’s where the money is. “ It ain’t, not necessarily. Some of these bank tellers actually don’t have any money to disperse, they give the clients chits with account information, to be played into giant money machines, super ATMs. Bank managers can no longer be freely kidnapped and held captive while the robber comes with the hijacked password and keys and opens the vault – the boss of the branch may not have the authority over nor the combination of his own treasury. How does a simple bank robber hold up a machine that is non-responsive to threats, emits instant squawks to a central office and prompts the practically simultaneous arrival of guards bristling with guns? Career changes seem induicated.
The bank robbers’ loss is the customers’ gain. Banks have become more accessible and less expensive to use. There is a new breed of player in town, Washington Mutual, North Fork, Wachovia, Bank of America and Commerce, that are giving the willies to our staid institutions, Chase, Citigroup, and such. You are beginning to get offers from the old warhorses, of no charge-no minimum balance checking accounts, easy credit and similar service inducements. But the upstarts continue to grow, North Fork from 75 to 138 branches in two years, BOA from 4 to 65, Commerce from 6 to 38, while Chase is down from 216 to 213 and Citigroup from 140 to 137 branches, reports the NY Post.
Visiting a branch of Washington Mutual on Broadway south of 14th Street, housed in a converted antiques store, one finds a busy ATM up front and a banking office with a four or five standalone posts, like the high desks of Norman Rockwell’s green-eyeshaded bookkeepers, with computers on top and a filing cabinet below, manned by young fellows in golf shirts, who wave customers over, enter their transactions in the computers and issue chits, to be collected from a common cash machine. The clerks stand up all day, so it seems, moving from post to post. Service announcements cover the walls, pamphlets are offering retirement and investment strategies, college savings plans and credit cards. No vestiges of the reserved atmosphere an old-fashioned bank used to exude are noted, it is an all retail environment. There are desks in thee back, for sit-down banking transactions, but the old dignified “carpet” areas are transformed.
A lot of this ties in with the cash-less world that is moving in on us. Not just ATMs, think of how many of our fellow shoppers at the Associated, the Food Emporium and the Met use debit and credit cards to pay for routine minor purchases, annoying the impatient. Debit cards are getting to be accepted in discount groceries, such as Aldi’s upstate and in Pennsylvania, and the major chains (Food Emporium, locally) are trying to eliminate the checkout clerks, a big expense despite their low wages. Token- and toll-booth clerks are getting to be a thing of the past, all subway riders use Metro cards, and maybe one in 40 passengers on the 1st Avenue bus still uses cash (I’ve counted, more then once). All toll road, tunnel and bridge authorities, country-wide, are installing smart cards, allowing the cars to pass through, non-stop .If technology cuts out progressively more and more of labor costs, particularly of people who spend their paychecks, and sends the good jobs offshore, who’s going to buy the goods? Miraculously, America still produces, although imports are estimated to be up to 17% of the GDP.
Speaking of smart cards and e-cash, some foreign countries are well ahead of us. In Hong Kong their Metro card equivalents were inadequate because of the multiplicity of transportation systems and vendors, and Sony came up with the Octopus card, containing a tiny computer CPU and a transmitter, which can be waved in front of sensor, no physical contact necessary to either re-load it with cash from a bank account or pay for the trips and goods. In Finland, the great mobile phone country, that instrument can be used for payment of public transportation.
The world of stocks and bonds has also changed. Those of us who make limited use of stockbrokers’ services, by phone or internet, may not be acquainted with the 24/7 international trading environment that the staid New York Stock Exchange has just jumped into, by acquiring (or surrendering itself to) Archipelago, the 3rd largest (after NASDAQ and Instinet) on-line trading system. Customers are supposed to be the winners, benefiting from competitive prices, and eliminating some of the illegal shenanigans certain stock brokers have been convicted of, such as shoving their own orders ahead of client purchases, thus benefiting from the lower prices.
More of the impending stock market transformation later.Wally Dobelis thanks Monica McCollum and the Post, and Gartner Group
Get used to the new banking world and the cash-less society
There’s this revolution in banking going on, right here in River City, as we speak. The old marble columned banks, built to impress depositors with their solidity, have turned into cultural centers, or restaurants or theatres, right before our eyes. The institutions themselves, with tellers’ cages, Lexan partitions and money bags armed with red paint sprayers to foil bank robbers, have turned into simple low-security storefronts, and the banking functions have gone upstairs, leaving the teller functions to sometimes cashless associates, and/or to ATM machines accessible 24 hours a day, holidays notwithstanding. It is an environment that would totally frustrate Willie Sutton, who robbed the aforementioned institutions by the dozen, “because that’s where the money is. “ It ain’t, not necessarily. Some of these bank tellers actually don’t have any money to disperse, they give the clients chits with account information, to be played into giant money machines, super ATMs. Bank managers can no longer be freely kidnapped and held captive while the robber comes with the hijacked password and keys and opens the vault – the boss of the branch may not have the authority over nor the combination of his own treasury. How does a simple bank robber hold up a machine that is non-responsive to threats, emits instant squawks to a central office and prompts the practically simultaneous arrival of guards bristling with guns? Career changes seem induicated.
The bank robbers’ loss is the customers’ gain. Banks have become more accessible and less expensive to use. There is a new breed of player in town, Washington Mutual, North Fork, Wachovia, Bank of America and Commerce, that are giving the willies to our staid institutions, Chase, Citigroup, and such. You are beginning to get offers from the old warhorses, of no charge-no minimum balance checking accounts, easy credit and similar service inducements. But the upstarts continue to grow, North Fork from 75 to 138 branches in two years, BOA from 4 to 65, Commerce from 6 to 38, while Chase is down from 216 to 213 and Citigroup from 140 to 137 branches, reports the NY Post.
Visiting a branch of Washington Mutual on Broadway south of 14th Street, housed in a converted antiques store, one finds a busy ATM up front and a banking office with a four or five standalone posts, like the high desks of Norman Rockwell’s green-eyeshaded bookkeepers, with computers on top and a filing cabinet below, manned by young fellows in golf shirts, who wave customers over, enter their transactions in the computers and issue chits, to be collected from a common cash machine. The clerks stand up all day, so it seems, moving from post to post. Service announcements cover the walls, pamphlets are offering retirement and investment strategies, college savings plans and credit cards. No vestiges of the reserved atmosphere an old-fashioned bank used to exude are noted, it is an all retail environment. There are desks in thee back, for sit-down banking transactions, but the old dignified “carpet” areas are transformed.
A lot of this ties in with the cash-less world that is moving in on us. Not just ATMs, think of how many of our fellow shoppers at the Associated, the Food Emporium and the Met use debit and credit cards to pay for routine minor purchases, annoying the impatient. Debit cards are getting to be accepted in discount groceries, such as Aldi’s upstate and in Pennsylvania, and the major chains (Food Emporium, locally) are trying to eliminate the checkout clerks, a big expense despite their low wages. Token- and toll-booth clerks are getting to be a thing of the past, all subway riders use Metro cards, and maybe one in 40 passengers on the 1st Avenue bus still uses cash (I’ve counted, more then once). All toll road, tunnel and bridge authorities, country-wide, are installing smart cards, allowing the cars to pass through, non-stop .If technology cuts out progressively more and more of labor costs, particularly of people who spend their paychecks, and sends the good jobs offshore, who’s going to buy the goods? Miraculously, America still produces, although imports are estimated to be up to 17% of the GDP.
Speaking of smart cards and e-cash, some foreign countries are well ahead of us. In Hong Kong their Metro card equivalents were inadequate because of the multiplicity of transportation systems and vendors, and Sony came up with the Octopus card, containing a tiny computer CPU and a transmitter, which can be waved in front of sensor, no physical contact necessary to either re-load it with cash from a bank account or pay for the trips and goods. In Finland, the great mobile phone country, that instrument can be used for payment of public transportation.
The world of stocks and bonds has also changed. Those of us who make limited use of stockbrokers’ services, by phone or internet, may not be acquainted with the 24/7 international trading environment that the staid New York Stock Exchange has just jumped into, by acquiring (or surrendering itself to) Archipelago, the 3rd largest (after NASDAQ and Instinet) on-line trading system. Customers are supposed to be the winners, benefiting from competitive prices, and eliminating some of the illegal shenanigans certain stock brokers have been convicted of, such as shoving their own orders ahead of client purchases, thus benefiting from the lower prices.
More of the impending stock market transformation later.Wally Dobelis thanks Monica McCollum and the Post, and Gartner Group
