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Olympia – Senate Democratic leaders held a press conference today, joined by a few of their House colleagues, to announce their intention, as Josh mentioned earlier, to tighten the belt that holds up our state government’s proverbial pants.

Another way to describe the event would be to pose it as follows:

Q: How many times can a group of lawmakers use some variance of the phrase “belt-tightening” in a thirty minute press conference?

A: Considerably more than you would think.

Senate Majority Leader Lisa Brown (D-Spokane), acting somewhat gubernatorial in her initiation of hard budget cuts, kicked off the afternoon presser by announcing the news that, in light of recent gloomy budget news, the state Senate would begin cutting operations in order to save money even before final cuts are made later on in the session.

Those cuts include reducing administrative budgets and freezing salaries, hiring, travel and major spending.

Brown emphasized repeatedly that the actions Democrats were taking had bipartisan support across the board, though Republicans used their position to talk some too-little-too-late smack, with state Sen. Joe Zarelli telling the Tacoma News-Tribune’s Joe Turner that “we moved from a 52-inch waist to a 51-inch waist and we desperately need to get down to a 32-inch waist.”

Zarelli also told Turner that the Senate’s plan to wait until late February or early March would further hurt the state’s ability to maximize budget savings. Brown, however, reiterated during the press conference that cuts for the sake of cuts were unwise, and that her caucus would be “deliberative as well as urgent.”

Sen. Rodney Tom (D-Mercer Island), who himself may seek greener pastures in the future, added that this move was more than just financially important, it was necessary to show the public that their elected officials have a real “sense of urgency” and that through across the board cuts the message they hoped to put across was that “we are all in this together.”

Tom also added, on multiple occasions, that the Senate plan goes above and beyond the governor’s call, citing a $78 million figure from the governor’s office compared with the $105 million that the state Senate aimed to cut.

House Democrats are also hoping to instigate some budget cuts, though they are taking the more traditional approach of calling for an early action budget bill.

“We appreciate what the Senate did in dropping an early action bill,” said House Ways & Means chair Rep. Kelli Linville (D-Bellingham), and added that the House was taking the more traditional route of creating a fast-tracked budget bill, evoking President Obama’s call for a line-by-line budget review.

“Everybody is going to share the pain,” she added.

Linville appeared tempted, but ultimately refused to give any examples of specific budget cuts prior to caucus meetings, which were set to take place after the conference. She did, however, say that they were hoping to save about $300 million from this budget, which would carry forward into $600 million during the next biennium.

Still, in spite of all the gloomy news for those on the wrong end of the budget machete, the day was not totally without cheer.

When the press conference opened up to questions from the gathered hacks, the politicians responded with the kind of comedy gold that tends to be glaringly absent from the political trail that we have been following for the last year and a half.

A couple of examples:

Asked who would be the watchdog for the coming budget cuts, Brown jokingly responded that it would have to be the seven or eight gathered journos, before immediately amending her answer to say that it would instead be the doomed P-I, which was greeted with equal amount of groans and chuckles.

Sen. Jim Hargrove (D-Hoquiam), meanwhile, did his best Dark Helmet impression when he stated that the Senate Dems would be working at, I kid you not, “ludicrous speed” in order to get the budget cuts rolling.

I suggest they go on a comedy tour with proceeds going toward paying down the budget deficit. Watch out, Paul Blart, Washington State Senate Democrats are gunning for you.

Some really outstanding reporting by Columbian reporter Courtney Sherwood about the failure of Bank of Clark County, the first Washington bank seized by the state since 1993. Well worth a full read if you are trying to understand how a smaller bank got into such serious trouble. For starters, the bank began making riskier loans starting in 2005, according to The Columbian.

Another factor that seems to be worth focusing on is the issue of brokered deposits, which are (of all things) deposits made by brokers on behalf of clients, usually those seeking a higher rate of return. As Sherwood notes in her article, the FDIC has rules about this sort of thing.

With its core deposits falling, the Bank of Clark County appears to have sought out even more of the risky brokered deposits it had come to depend on. Over three months, it brought in $28.7 million this way, and brokered deposits climbed to 35.7 percent of all deposits.

Mounting loan troubles may have triggered an FDIC rule that forbids banks with lower capital ratios from taking on any more brokered deposits, though there’s not yet enough public data about the bank’s finances to be certain.

If I understand correctly, one reason brokered deposits can be risky is that large dollar amounts can quickly be pulled out of a bank when, for example, brokered CD’s expire and investors chase higher returns elsewhere. In other words, the use of brokered deposits is part of the mix, but too heavy a reliance can be dangerous.

The underlying cause of the failure, of course, was a collapse in real estate values. While it wasn’t a Southern California scale bubble, it was still a speculative bubble fueled by lax lending standards in the house buying, selling and financing industry. As we move forward, state and federal regulators (not to mention lawmakers) are going to have to come to grips with what worked and what didn’t work in terms of oversight.

More details are emerging about the failure of Bank of Clark County. In an interesting development, it appears that the total dollar amount of uninsured accounts will be substantially less than the approximately $39 million that was widely report initially. Reported figures are now more in the $10 million range.

Most press accounts describe Bank of Clark County as a “community bank,” which is accurate enough, but it’s important to understand that this bank was essentially set up by and for real estate developers and builders. The bank’s web site disappeared Friday night, but thanks to the Google cache you can peruse the backgrounds of its board of directors.

News accounts tonight suggest the bank was heavily exposed to a collapsing construction and real estate sector, while at the same time it was reluctant to deal with problem properties. A substantial amount of money was withdrawn in the last four days of operation, according to published accounts.

[Read more…]

Lots of government people in suits showed up after the Bank of Clark County closed for business this evening. It’s not good.

The Bank of Clark County became the first locally based bank to fail in recent memory, following a ruling by state regulators on Friday that the Vancouver financial institution did not have adequate cash to stay in business. Its two branches will open Tuesday under the control of Umpqua Bank, which has assumed all of its roughly $209 million in insured deposits.

Sounds pretty serious. According to the Columbian, the state closed the bank and FDIC took receivership. The newspaper reports that there is over $39 million in uninsured deposits.

Several top Bank of Clark County executives, including President Mike Worthy, were relieved of their positions on Friday.

The rest of the bank’s 91 employees, based at two branches, will continue to work for Umpqua Bank, which still plans to open a branch next to Esther Short Park this summer.

“Employees heard the news that their bank has inadequate capital and their bank was declared closed, and we walked in the room five minutes later to tell them were taking over,” said Sullivan.

He entered with a phalanx of bankers and regulators in suits and ties that converged on 1400 Washington St. just after the 6 p.m. close of business on Friday.

Bank of Clark County was basically a local bidness guys and gals bank, started by some local movers and shakers in the late 1990’s.

The bank grew quickly as it aggressively courted business borrowers and developers during Clark County’s building boom. But when the housing market soured, so did its finances, as did the finances of most other banks in the region.

Until recently, it was clear that the Bank of Clark County had lost money on construction and development loans, but not how bad things had become.

“The last number of months they saw tremendous decreases in some of the values in their loan portfolio,” said Brad Williamson, director of the state Department of Financial Institutions banking division. “That requires a bank to make tremendous loan loss provisions. If the bank does not have enough in earnings, it comes out of its capital.”

This is quite the blow to certain aspects of the Clark County economy. The credit crunch and housing bubble deflation were already putting a severe strain on developers, and now their main local bank had to be seized by regulators.

It’ll be interesting to see what details emerge.

I’ve been neck deep in tech stuff recently, preparing for some cool new stuff in the HA universe, so I haven’t been writing much recently.  But I will again.  And soon.

So please be patient.

This is bad any way you slice it:

Retail sales plunged far more than expected in December, a record sixth straight monthly decline as consumers were battered by a recession, a severe credit crisis and soaring job losses, none of which are likely to ease anytime soon.

The Commerce Department reported Wednesday that retail sales dropped 2.7 percent last month, more than double the 1.2 percent decline that Wall Street expected.

And it’s especially bad for a border county.

Retail sales in Clark County experienced a sharp decline in last year’s third quarter as the effect of the housing slowdown continued to seep into the local economy.

According to a report Tuesday from the Washington Department of Revenue, the county’s store-only sales totalled $499.9 million in the three months ending in September. That was down 7.9 percent from $542.6 million spent at retail stores in the third quarter in 2007, and weaker than statewide trend.

Store-only taxable retail sales throughout Washington declined by 6.2 percent to $12.4 billion.

State lawmakers and local governments are chasing a constantly moving revenue target, and the target is going down, down, down.

That’s what happens when your system of taxation relies far too heavily on a regressive sales tax. By the time new revenue estimates are available, they’re most likely already outdated.

People are understandably worried about their own personal pocketbooks. I’m not so sure the wider public truly understands the huge impact on things we all take for granted, like schools, roads, police, parks and other basic services.

Our system of taxation never made much sense, and now it is just going to make things worse. And down here where a short drive over the river takes one to sales tax free Oregon, the trend is likely to accelerate.

Deep thought: usually recessions are relatively short and the state’s coffers are replenished. Is anyone talking much about what will happen in an extended downturn of say, two to four years?

The Seattle Times editorial board has published a correction today regarding a school scheduled for closure:  “It is the Old Hay building, not John Hay Elementary.”

That’s okay.  Mistakes happen, and it’s always good form to correct them. No biggie.

But as long as the Times’ editorialists are admitting their factual errors, it sure would be refreshing to see them admit their editorial errors as well.  You know… those times when their opinions were just plain wrong.

For example, take this bit of oh-so-conventional wisdom from a February 13, 2008 editorial:

The transit-only folks delude themselves if they believe voters killed last fall’s “Roads and Transit” ballot measure because they didn’t want the roads. They do want the roads. And the idea of combining transit and roads was right. Both are needed. The ballot measure failed because the light-rail part was too expensive and created a tax that was too high.

Uh-huh.

In hindsight, with the subsequent passage of the transit portion of the measure, and by a comfortable margin, the opinion leaders at the Times look pretty damn out of touch.  But it didn’t take much hindsight to pick apart the Times’ analysis, for as I wrote at the time:

Um… when the Times says voters “do want roads,” and the “measure failed because the light-rail part was too expensive and created a tax that was too high,” they’re basing those assertions on what? Polls? Intuition? Gentle assurances from John Stanton over foie gras and Chateau Lynch-Bages at the Rainier Club? A public opinion fairy they plucked out of their ass?

Yeah, that’s right, Prop 1 failed solely because of the rail portion of the package. All those polls that showed RTID dragging the measure down, and all that opposition from anti-roads advocates like the Sierra Club — that had absolutely nothing to do with Prop 1’s failure. Jesus… talk about deluded.

Of course, nobody’s perfect, and even I got it wrong on this issue, insisting during the months leading up to the 2007 measure that the powers that be would never allow a transit only measure on the ballot in 2008.  My bad.  But at least I admitted it.

Vancouver City Council member Tim Leavitt, who has announced he will challenge long-serving Mayor Royce Pollard for the city’s top spot, complains about Department of Ecology stormwater regulations:

Leavitt, an engineer by profession, doesn’t believe that is a reasonable rule to follow.

“Where do I find a map of pre-European development?” he asked during a Monday city council work session. “Did Lewis and Clark produce a map when they came out this way?”

Um, yes.

Seattle area house prices continued to fall:

House prices in King, Pierce and Snohomish counties dropped 1.4 percent from September and 10.2 percent from October 2007, according to Standard & Poor’s S&P/Case-Shiller Home Price Indices. Area prices now have fallen 11.4 percent from the July 2007 peak and are back to where they were in the spring of 2006.

The year-over-year decline was the first double-digit annual drop for S&P’s Seattle index, which goes back to the start of 1990, and put Seattle eighth among the 20 areas S&P tracks. The monthly drop was unchanged from September’s and good for fifth place.

The Portland area seems about the same:

The Portland-Vancouver area saw housing prices decline an average of 10.1 percent in the 12 months ending in October, according to the S&P/Case-Shiller Home Price Index report Tuesday.

The region’s price decline was not as bad as many other parts of the U.S. with urban areas such as Phoenix, Detroit and Las Vegas down more than 20 percent. Prices in the 20-city index have plummeted more than 23.4 percent from their peak in July 2006.

It’s good that our region might not be facing the kind of insane declines in value as some other places, but high inventory and economic uncertainty means more bumpy sledding lies ahead. It may be a “great time to buy a house,” as industry advertising suggests, but only for those with stellar credit. Not sure there are enough of those folks left to really stabilize things right now.

A final decision due this week on replacing the Alaskan Way Viaduct has been postponed, so that transportation officials can reconsider the option of a deep-bore tunnel.

“I think the governor would say that if we could make the numbers work, that is probably the most viable option,” Judd said. “But that option is going to mean that there has to be a real meaningful partnership with the city and county and Port [of Seattle] to make it happen.”

Meaningful partnership? In other words, Seattle taxpayers are going to be asked to pony up the extra bucks needed to pay the extra cost of a tunnel over the less expensive surface/transit option… which I suppose would be fair, if Seattle taxpayers actually preferred the tunnel… which they don’t.  Whether the money comes from the county, the city or the port, it still comes from us taxpayers, and I betcha if you put the two options on the ballot with the cost to local taxpayers clearly stated, the pricier tunnel option gets buried in a landslide.  That’s why, if chosen, you won’t see this on a ballot.

Oh, but wait… the Discovery Institute’s Bruce Agnew, the main advocate of The Big Bore, says the tunnel would actually cost less than engineers have previously estimated:

“We’ve always felt that, given the advances in deep-bore tunnels and the ability to build a deep-bore tunnel without interfering with the economy downtown and, given the experience we have in the region with deep-bore tunnel, specifically Beacon Hill, it would be a real tragedy to take it prematurely out of the running.”

Yeah, but then again, these are folks who don’t believe in evolution, so forgive me for taking their claimed scientific and technical expertise with a grain of salt.  As I wrote on this subject over a year ago:

In a city where completion of a 1.3 mile vanity trolley line is feted like some transportation miracle, the very notion that local voters might commit more than a half billion dollars a mile to an untested technology is a dramatic tribute to Discovery’s primary mission of promoting the exercise of faith over reason.

Of course, what Discovery really has faith in is the invisible hand of God—ie, the divine power of the free market to make gobs of money for themselves and their well-heeled friends—and buried along with their tunnel proposal is the notion that the extra cost will be paid for via some sort of “public-private” partnership… you know, taxpayer money heavily subsidizing a for-profit venture.  So now that we’re seriously talking about a deep-bore tunnel, get ready for the talk about privatizing it.

Good times.

Yet even by WaMu’s relaxed standards, one mortgage four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer.

Mr. Parsons could not verify the singer’s income, so he had him photographed in front of his home dressed in his mariachi outfit. The photo went into a WaMu file. Approved.

“I’d lie if I said every piece of documentation was properly signed and dated,” said Mr. Parsons, speaking through wire-reinforced glass at a California prison near here, where he is serving 16 months for theft after his fourth arrest — all involving drugs.

While Mr. Parsons, whose incarceration is not related to his work for WaMu, oversaw a team screening mortgage applications, he was snorting methamphetamine daily, he said.

No wonder Republicans were always screaming about sex offenders. It diverted attention from the tweekers running amok in the house building, financing and selling industry. At least in the 1980’s it was just cocaine.

Every Joo
Down in Joo-ville
Liked Chanukah as such…

But the Kvetch,
Who lived just north of Joo-ville,
… not so much.

The Kvetch hated Chanukah, the whole Chanukah season.
Now don’t ask me why. What? Should I know the reason?
It could be he wasn’t a mensch, that is all.
Or his petzel, perhaps, was two sizes too small.
Such meshug’as comes from one thing or another,
But like most Joo-ish boys, we should just blame his mother!

But,
The reason, whatever,
His mom or his putz,
The Kvetch hated Chanukah. Oy, what a yutz!
For he knew every Joo down in Joo-ville tonight
Was busy preparing menorahs to light.

“And they’re giving out gelt!” he sighed as he said
“I need waxy chocolate like holes in my head!”
Then he nervously whined as his fingers tapped horas,
“I MUST stop the Joos from igniting menorahs!”

For,
The Kvetch knew that soon…

… All the Joo girls and boys
Would say the baruch’ha, then unwrap their toys!
And then! Oh, the oys! Oh, the Oys! Oys! Oys! Oys!
If it’s not what they wanted, the OYS! OYS! OYS! OYS!

Then the Joos, young and old, would sit down for a nosh.
And they’d nosh! And they’d nosh!
And they’d NOSH! NOSH! NOSH! NOSH!
They would nosh on Joo-latkes, and Gefilte-Joo-Fish,
Which was surely the Kvetch’s least favorite dish!

And THEN
They’d do something
Which made the Kvetch plotz!
Every Joo down in Joo-ville, Bar Mitzvahed or not,
Would sit down together, their proud ponim’s grinning.
Then dreidels in hand, all the Joos would start spinning!

They’d spin! And they’d spin!
AND they’d SPIN! SPIN! SPIN! SPIN!
And the more the Kvetch thought of this Joo-Dreidel-Spin,
The more the Kvetch thought, “I can’t let this begin!
“Oy, for fifty-three years I’ve put up with it now!
“Chanukah, Schmanukah! Stop it!
… But HOW?”

Then he got an idea!
And the moment he had,
He said
“I’m no Einstein, but this… not half bad!”

“I know just what to do!” Then he donned an old sheet,
And dug up some sandals to wear on his feet.
“I’m the Prophet Elijiah! They’ve set me a plate!”
(For the Kvetch couldn’t keep Joo-ish holidays straight.)
“The Joos ‘ll oblige ol’ Elijiah, no doubt!
“I will simply walk in. Then I’ll clean the place out!”

“All I need is a camel…”
He looked far and near,
But this wasn’t the desert, and camels are dear.
Did that stop the old Kvetch…?
That pischer? No, never:
“If I can’t find a camel,” the Kvetch said, “…whatever.”
So he called his dog, Max. Then he took an old sack
And he tied a hump onto the front of his back.

THEN
He climbed on this
dog-dromedaryish mammal.
You never have seen
Such a schmuck on a camel.

Then the Kvetch cried “Oy vey!”
As old Max started down
Toward the homes, while the Joos
Where still schmoozing in town.

All their driveways were empty. Just SUV tracks.
All the Joos were out last-minute-shopping at Saks,
As he rode to a not-so-small house on old Max.
“It’s a good thing I brought” the old Prophet Kvetch thought,
“All these bags with to stuff all the stuff the Joos bought.”

Then he looked at the chimney. It seemed quite a stretch
That a fat goy like Santa could fit, thought the Kvetch,
“Still, the goyim believe stranger things, that’s for sure.”
Then the Kvetch shrugged his shoulders, and walked through the door
Where the little Joo dreidels were all strewn about.
“These dreidels,” he grinned, “are the first to go out!”

And he schvitzed, as he shlepped, with an odor unpleasant,
Around the whole house, as he took every present!
Barbie dolls! Mountain bikes! Brios! And blocks!
Pokemon! GameBoys! And all of that shlock!
And he stuffed them in bags. Then his arms spread akimbo,
He shlepped all the bags, one by one, out the wimbo!

Then he shlepped to the kitchen. He took every dish.
He took the Joo-latkes. The Gefilte-Joo-Fish.
He cleaned out the Sub-Zero so nimbly and neat,
Careful to separate dairy from meat.
Then he shlepped the Joo-nosh right out the front door-a.
“And NOW!” kvelled the Kvetch, “I will shlep the menorah!”

And he grabbed the menorah, and started to shlep on,
When he heard a whine, like a cat being stepped on.
He spun ‘round with shpilkes, and coming his way,
It was Ruth Levy-Joo, who was two, if a day.

The Kvetch had been caught by this small shaina maidel,
Who’d been watching TV on her big RCA’dle.
“The Prophet Elijiah?” she quizzed the old fool,
“You visit on Pesach, they taught us in shul.”

And although the old Kvetch was surprised and confused,
It’s not hard to lie to a girl in her twos.
“Bubbeleh… sweatheart…” he started his tale,
“Your dad paid full price, when this all was on sale!
“And like any good merchant, I just want to please ya.
“I’ll ring it up right, then I’ll refund your VISA.”

Then he patted her tush. Put a Barney tape in.
And she spaced-out as fast as the spindle could spin.
And as Ruth Levy-Joo watched her mauve dinosaura,
HE went to the door and shlepped out the menorah!

Then the match for the shamas
Was last to be filched!
Then he shlepped himself out to continue his pillage.
On the walls he left nothing at all. Bubkes. Zilch.
And the one speck of food
That he left in the house
Was a matzoh ball even too dense for a mouse.

Then
He did the same schtick
In the other Joo’s houses.

Leaving knaidlach
Too dense
For the other Joo’s mouses!

It was quarter to dusk…
All the Joos, still at Saks,
All the Joos, still a-shmooze
When he packed up old Max,
Packed him up with their presents! The gelt and the dreidels!
The chotchkes and latkes! The knish and the knaidels!

He hauled it all up to his condo in haste!
(A Grinch might have dumped it, but why go to waste?)
“Shtup you!” to the Joos, the Kvetch loudly cheered,
“They’re finding out Chanukah’s cancelled this year!
“They’re just coming home! I know just what they’ll say!
“They’ll ask their homeowners insurance to pay,
“Then the Joos down in Joo-ville will all cry OY VEY!”

“All those Oys,” kvelled the Kvetch,
“Now THIS I must hear!”
So he paused. And the Kvetch put his hand to his ear.
And he did hear a sound rising up from the shtetl.
It started to grow. Then the Kvetch grew unsettled…

Why the sound wasn’t sad,
It was more like the noise
Of a UPS trucker
Delivering toys!

He stared down at Joo-ville!
And then the Kvetch shook,
As truck after truck
Replaced all that he took!

Every Joo down in Joo-ville, the Golds and the Steins,
Re-ordered their presents by going online!

Chanukah HADN’T been cancelled!
IT CAME!
…On UPS trucks… but it came just the same!

Then the Kvetch, staring down at the gifts where they sat,
Stood kvitching and kvetching: “For this, I did that?
“It came without traffic! It came without tax!
“It came without shopping at Bloomie’s or Saks!”
And he kvetched on and on, til he started to shvitz,
Then the Kvetch thought of something which might make him rich!
“Maybe stores,” thought the Kvetch, “don’t need mortar and bricks.
“Maybe toys can be bought with a few well-placed clicks!”

And what happened then…?
Well… in Joo-ville they say
That the Kvetch raised
Ten million in venture that day!
And the minute his web site was ready to go,
He raised ten billion more on his new IPO!
He sold back the toys to the homes they came from!
And he…

… he the Kvetch…!
Founded YA-JOO.COM!

©2000 by David Goldstein
All rights reserved

[An HA holiday tradition, with apologies to the late, great Dr. Seuss—but not to the greedy, litigious bastards at Dr. Seuss Enterprises, LLC. So there. Happy Christmukah.]

I love snow. I always have. And it’s snowing. Again. It’s beautiful. I should be thrilled.

Instead, I’m just pissed off. We live on a hill, in Fremont, that’s been a skating rink for nearly a week now. I understand when side streets don’t get plowed during an emergency. But impassable for a week?

And it’s not just side streets. The nearest arterial is less than three blocks away. It’s flat. It connects to other streets that are flat (or, in one case, gently sloping). By all appearances, that street hasn’t been plowed, either. Or salted. Or even sanded. The bus, needless to say, doesn’t come.

Read some of the over 250 comments on Joel Connelly’s latest column and you’ll quickly deduce that this situation is happening all over the region, and especially in the cities of Seattle, Bellevue, and Redmond. And there’s no excuse. None.

“But Seattle has hills!” So does Pittsburgh. And Boston. And any number of other cities that get snow regularly. They cope. “But it’s rare here!” I’ve lived in any number of places in the South – Houston, Memphis, South Carolina, Virginia – where it snowed in amounts roughly comparable to Seattle: a couple times a year, maybe, and one big storm a decade. Some of these places have hills, too. They cope. Mind you, we’re talking the South, where local governments are loathe to tax or to provide any services, and where buses are something the black maids use to get to the suburbs each morning. They handle this shit better than Seattle. “Salt hurts the environment!” Once or twice a year? I can live with that. But then, I could live with sand on the roads, too, and I’m not seeing that, either. After seven fucking days.

It’s preposterous that in the 21st century, a metropolitan area of nearly four million people — one of the wealthiest metropolitan areas in the world, I might add — can be nearly paralyzed for a week or more by a few inches of snow.

Oh, speaking of the P-I, one other thought: we haven’t gotten home delivery of our newspaper since Friday, and, guess what? We haven’t missed it. Everything we need is online. Wonder how many other households will reach the same conclusion this week?