$24 billion shortfall at smaller U.S. banks

Here’s a sobering thought: The nation’s small and medium-sized banks are short $24 billion from meeting the government’s stress tests for capital, the Financial Times is reporting.

The stress tests would show capital shortfalls for 38 percent of the next 200 banks, the FT said. This would lead to a deficit of about $16.2 billion in common equity, according to the FT.

If the remaining 7,700 banks underwent the same financial testing, it would result in an additional $7.8 billion capital deficit, the report said

“This will ultimately migrate down the banking industry no matter what Treasury says,” a strategist at Sandler O’Neill told the FT. “It’s like telling bank examiners to close their eyes and not to think of a chicken.”

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Steele: “We wanted to help The Union survive”

In his blog on Monday, Russ Steele shares insights about what brought him and George Rebane to The Union as monthly columnists:

“As for the Union agreement, they asked for our help to provide some conservative views, and we wanted to help the Union survive.

“It is clear that TV and newspapers with a left and right views are surviving, and those with just left viewpoints are going out of business.”

That’s misguided at best.

Newspapers are going out of business, because their business model is changing, and they aren’t adapting quickly enough. It is largely a problem on the advertising and publishing side.

Papers are losing subscribers, because they are providing one-sided reporting and commentary, regardless of the political bent.

When was The Union ever a liberal newspaper?

Columnists who insult a newspaper’s readers and customers by calling them “IQ challenged” don’t do much for business either.

My idea of a more persuasive conservative columist is Victor Davis Hansen, whom I signed up for the paper.

Gathering to support incoming Cal freshmen

UC Berkeley
UC Berkeley
Our local Cal alumi group gathered this past weekend to honor and support the incoming Cal freshmen from our area.

It’s always an uplifting event. We met at a historic home in Nevada City to share our experiences, hear from the students and eat ice cream on a hot afternoon.

The students were going on to study engineering, as well as liberal arts. They already had contributed much to our community, as volunteers at hospitals, for environmental groups and as tutors and mentors for younger people.

We met at my home last week to interview some of them for two scholarships we offer to incoming Cal freshmen — one based on community service, the other based on leadership.

It was an eclectic group: We had an Eagle Scout, a black belt in Aikido, one who led an anti-bullying workshop at NU, one who started a swing dance club, and others who had visited Mexico to help a poor community.

All of the students had exceptional grades, test scores and a wide choice of universities to choose from. The gathering was a good opportunity for the students and their parents to get to know each other before school started.

Our Cal alumni chapter is a motivated group— the only active university alumni organization in the area.

I always make a pitch for the students to come back here when they finish their university education. Some of them want to — providing we have jobs for them.

Rebane and Steele: We’re “IQ challenged”

No sooner have our community’s “critical thinkers” George Rebane and Russ Steele completed their first monthly columns for The Union than they are now blaming the rest of us for “not getting it” if we express skepticism.

Their MO is to comment on each other’s blog, telling the rest of us how simple minded we are. Check it out here.

Russ insults Publisher/Editor Jeff Ackerman’s readers and customers, calling them “IQ challenged,” and George blames it all on our inability to comprehend the printed word.

I feel sorry for The Union and the local Republican Central Committee, which have turned to these two to build more *interactive, constructive dialogue* in our community. George now seems to be carrying water for developers, who need to build more broad based support among skeptics, not alienate them.

Rebane’s column this weekend had a major error, confusing “billion” with “million.” He promptly threw the paper under the bus for the mistake. Funny, since George always promotes personal responsibility as well as numerical illiteracy as his big “issues.”

Maybe he ought to be more engaged in the proofreading process.

Neither of their arguments held much water, either, and people called them out on their logic. For them it was a tough pill to swallow.

Russ complained that the Board of Supervisors was trying to grab additional board seats on the Economic Resource Council — even though the county subsidizes the group practically more than private industry.

To those of us who have served on the board and are familiar with it, a few more board seats among a couple dozen makes the group more accountable, but it doesn’t give the Rood Center a “power grab.” Russ was letting his “big government” ideology get in the way of pragmatism.

Rebane argued that senior citizens are the “cash cows” of our community, and we need to embrace them as part of our economy.

He claims “Nevada County barely makes a business case for locating or keeping information-based businesses” and others because of its location. But *our location* is what just *attracted* a Silicon Valley company here — Huntington Labs.

While promoting the retiree economy, George forgot to mention a key point: Retirees become elderly at some point and can create an undue strain on the economy.

We have a shortage of doctors, health-care workers and caregivers, largely because we have failed to diversify our economy beyond tourism and retirees.

Many service workers can’t afford to live here. Who’s going to take care of our aging population?

To be sure, a retiree economy is a double-edged sword. No analysis on that point, however.

George’s essay came across as self-serving and incomplete — for a Ph.D. no less.

He even missed the mark on the smaller points, “pooh poohing” top-notch amenities in our senior-living facilities, such as the fabulous indoor pool at Eskaton or the “patio” homes there.

In short, both of their “critical thinking” essays fell flat. They came across as out of touch, egocentric and intolerant of opposing views — not exactly constructive.

George and Russ keep talking down to us, not with us. How effective is this type of communication for a diverse community such as ours? We need commentators who can help unite us, not divide us.

Let’s get some more collaborative voices into the mix on local economic-development and economic issues. You need to provide a greater balance of views.

Let’s spend more time discussing the problem of declining enrollment in our schools, the need to attract younger people and families to our communities, and the need to create more higher-paying jobs.

Double-edged sword of a retiree economy

Our county is one of the oldest counties in the state by age — and getting older.

Retirees add much to a community. They usually have disposable income, pay their share of taxes and don’t commit many crimes.

But when a retiree population keeps getting older, it becomes an elderly population that can put an undo strain on an economy.

Elderly people require more services: health care workers, doctors, in-home caregivers, assisted-living facilities, as well as government programs. They rely on others for transportation.

An economy that doesn’t diversify beyond retirees and tourism — Florida and New Mexico are examples — strains to support its elderly population with a qualified labor pool and government services.

Our area is no exception: Despite the highest unemployment rate in decades, the local job listings include myriad openings for doctors, health-care workers and caregivers.

Eskaton in Grass Valley has been running an ad for a marketing director for weeks.

Many health-care workers complain that our housing and other expenses make it too costly to live here. They choose Sacramento instead and still enjoy a short drive to the mountains.

Many children who want to live near their parents and help care for them as they grow older can’t find any jobs to support their own families.

Retirees often drive up our housing costs, because many of them cashed out on a more expensive home in the Bay Area or Los Angeles area and don’t negotiate much to live here.

Real estate agents don’t mind: It helps their industry grow.

Trouble is, the inflation spiral in rural communities such as ours drives up costs for many of the service workers who are in demand.

Though the disposable income of retirees helps a small community, people on a fixed income are among the first to stop spending money at local restaurants, theater and music groups and with other non-profits when the economy skids.

A long-term solution is to diversify our economy well beyond retirees and tourism.

We need to look at building up our health-care, tech and “green” industries. Federal money can help us. We need to leverage our proximity to the great outdoors.

Attracting younger families to our community will provide a workforce to help care for our aging population.

Creating more higher-paying jobs will help encourage more children to live near their parents and care for them as they grow older.

We have a good opportunity to diversify our economy now that the housing bubble has burst.

But it will require a collective agreement that a healthy economy is one that is built on many pillars, not just one or two.

First marshmallow roast of the season

Our son roasting a marshmallow
Our son roasting a marshmallow
The unseasonably warm weather let us roast the first marshmallows of the season in Lake Tahoe this weekend.

We always roasted them on wire coathangers, but check out this device: It’s a rotating marshmallow roaster with a flashlight to boot.

Details of the “Super Spinmallow” are here.

I saw it on the Internet one night and bought it for my son. The fallout from being an older parent, I guess.

Enjoy your weekend.