Recovery Shmovery: The Economic Meltdown of 2008 is FAR from Over

I was talking about EM08 (“Economic Meltdown 2008”) with my friend Torben recently, and among the things he said were, "The idiocy of the financial reporting on this is insane." I couldn’t agree more and it is absolutely amazing how even the word "recovery" can be hinted at in the midst of:


1. Record debt.

2. Record deficit.

3. Record trade deficits.

4. Record debt on borrowing, primarily from china whose bitch we are now.

5. The largest heist in history – TARP - to the tune of a trillion is still playing out.

6. Runaway war budgets.

7. Over THIRTY states now headed toward bankruptcy.

8. Related to #7, California - the giant elephant in the room NO ONE is talking about and (depending upon who you’re talking to) the 6-8th largest economy in the world, is in financial ruin with a record debt AND deficit. Related to this; someone please tell me how “The Governator” keeps his job...? Seriously, we had a referendum on Gray Davis and the debt at that time was $4.5 billion – now it’s closing in on $50 billion. I for one am mystified.

9. TRUE unemployment probably around 20%.

10. 50 million uninsured for healthcare and a system so broken and controlled by elite interests it will never in our lifetime be affordable CARE and PREVENTION. This will and can only get worse as tens of millions of boomers are now headed toward old age, retirement and Medicare. It is a ticking time bomb that is not going away, no matter what, like it or not.

11. Credit card debt is now at a trillion. I agree with Meredith Whitney, who thinks it’s a bubble ready to burst.

12. The mortgage crisis is FAR from over. Those "exotic mortgages" that I wrote about almost a year ago when I learned about them via 60 Minutes are about to raise their nasty heads again. If you've been paying attention, no, they're not the generic "sub-primes" but the sub-prime's cousins, the option-ARMs, and they are about to unleash their fury. The absolutely scariest aspect - if you haven't thrown up by now - is that not even the option-ARMS are the end of this madness of exotic mortgages. Stay tuned for the Alt-As….

Sigh. That all of the above is happening and getting worse by the minute – remember the time value of money – is something so absurd and gigantic that it’s like an ant trying to comprehend a mountain. We are in uncharted waters.

A basic strategy in sports is, for example, if you're playing zone and getting whipped, you’ve gotta try man to man. In other words, DO SOMETHING DIFFERENT! By playing to money interests, Obama, Paulson, Geithner, Summers, Dodd … have, once again as in so many before them such as the previous administration - coddled the economic elite by giving them the people’s money which was stolen through fear against our will.

So much for America turning a corner by electing a black president. Back to reality.

This article was first published by The New Technorati

Da Yanks Ain't Nuttin'

Murderer's Row, EM08, or,
Shitheads Who Don't Care about YOU.
Face it, a Pimple on their Ass Gets More Attention than You.










(click to enlarge or open in a new tab)

NYT at:
http://www.nytimes.com/2009/10/17/business/economy/17wall.html?th&emc=th
Bailout Helps Fuel a New Era of Wall Street Wealth

By GRAHAM BOWLEY
[with my wise ass remarks, cogent commentary and always insightful views here added for entertainment]
Published: October 16, 2009

Even as the economy continues to struggle, much of Wall Street is minting money — and looking forward again to hefty bonuses.
[Christian Bale! Christian Bale! Paging Christian Bale!]

Many Americans wonder how this can possibly be. [Now THAT is indeed a tragedy, that "many Americans" don't even have a clue as to how we got here.] How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes?

It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system — reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts — helped set the stage for this new era of Wall Street wealth.

Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder — a benefit of less competition after the failure of some investment firms last year.

[CUE: Christian Bale replete with dripping sarcasm meltdown voice, pumped through a pa and directed at Lloyd Blankfein and Jamie Diamond but for the public to hear - "Hey, everybody, the entire country's in a meltdown, but who receives a 'benefit'? The criminals! Oooooooh GOOD FOR YOU!!!!]

So even as big banks fight efforts in Congress to subject their industry to greater regulation — and to impose some restrictions on executive pay — Wall Street has Washington to thank in part for its latest bonanza. [Substitute "theft" for bonanza. Also, given these shitheads have raped the economy and then been monetarily rewarded, OF COURSE logic dictates that they should be less regulated.]

“All of this is facilitated by the Federal Reserve and the government, who really want financial institutions to get back to lending,” said Gary Richardson, a research fellow at the National Bureau of Economic Research. “But we have just shown them that they can have the most frightening things happen to them, and we will throw trillions of dollars to protect them. I have big concerns about that.”

[Welcome to slavery, EM08 style. Here's something for the geniuses in American mass media to ponder; why is it that when we give/lend bailout billions to auto companies, we OWN them, but if it's TARP bailout money somehow it's different and we don't own anything of the superbanks...? At least if the freshly conglomerated superbanks are going to be raking it in and able to do so with MY money, then I get a piece of it. Gamblers are all-too familiar with this principle that's as old as casinos - it's called "staking."]

Not all banks are doing so well. Giants like Citigroup and Bank of America, whose fortunes are tied to the ups-and-downs of ordinary consumers, are struggling to turn themselves around, as are many regional banks. [Citigroup deserves every bit of flame from hell it gets. Karma? My guess is that some kind of a deal will go down - possibly TARP Part Deux; Vegas has TARP 2 at 7 to 5, o&e's @ 3/31/09 cuz they wanna see how the Xmas season does - that will alleviate the pressure on BofA that the Merril fiasco brought. And I'm not just talking getting rid of John Thane's office accoutrement....]

But the decline of certain institutions, along with the outright collapse of once-vigorous competitors like Lehman Brothers, has consolidated the nation’s financial power in fewer hands. The strong are now able to wring more profits from the financial markets and charge higher fees for a wide range of banking services. [THERE'S THE BOTTOM LINE IN PLAIN ENGLISH - A BIT LATE BUT...]

“They are able to charge more for all kinds of services because companies need banks and investment banks more now, and there are fewer strong ones to help them,” said Douglas J. Elliott of the Brookings Institution.

[Huh. The country's on its knees, and you charge MORE. And how many puppies did you kill today?]

A year after the crisis struck, many of the industry’s behemoths — those institutions deemed too big to fail — are, in fact, getting bigger, not smaller. Why are you copying me...? Guess it's true what they say about flattery.] For many of them, it is business as usual. Over the last decade the financial sector was the fastest-growing part of the economy, with two-thirds of growth in gross domestic product attributable to incomes of workers in finance. [In all seriousness, that is an astounding figure]

Now, the industry has new tools at its disposal, courtesy of the government.
[AND OUR MONEY]

With interest rates so low, banks can borrow money cheaply and put those funds to work in lucrative ways, whether using the money to make loans to companies at higher rates, or to speculate in the markets. Fixed-income trading — an area that includes bonds and currencies — has been particularly profitable. [Courtesy of uncle scam, the superbanks not only have conglomerated, they go into action based upon a weakened market due to competitor elimination. They don't think about lending and investing in the sense of what's good for the economy, they think about it in terms of margin - strictly. Happy now?]

“Robust trading results led the way,” said Howard Chen, a banking analyst at Credit Suisse, describing the latest profits.

To prevent a catastrophic financial collapse that would have sent shock waves through the economy, [I'M CURIOUS, WHAT DO YOU CALL WHAT WE HAVE NOW, TEA AND CRUMPETS...?!?!?!] the government injected billions of dollars into banks. Some large institutions, like Goldman and Morgan, have since repaid their bailout money. [SEE: Christian Bale voice quote above] But most of the industry still enjoys other forms of government support, which is helping to stoke profits.

Goldman Sachs and its perennial rival Morgan Stanley were allowed to transform themselves into old-fashioned bank holding companies. That switch gave them access to cheap funding from the Federal Reserve, which had been unavailable to them. [Wow...]

Those two banks and others like JPMorgan were also allowed to issue tens of billions of dollars of bonds that are guaranteed by the Federal Deposit Insurance Corporation, which insures bank deposits. With the F.D.I.C. standing behind them, the banks could borrow the money on highly advantageous terms. While some have since issued bonds on their own, they nonetheless enjoy the benefits of their cheap financing.

[What a concept; raising capital while someone gives you 100% insurance. That's not even gambling, it's... a no-lose situation.]

Granted, banks are also benefiting from a stabilizing economy. Stocks, corporate bonds, even risky corporate i.o.u.’s — have all rallied from their bear market lows, some spectacularly so. The Dow Jones industrial average has soared 50 percent this year, and touched 10,000 this week for the first time since the crisis.

["Stabilizing." What kind of moron says this economy's "stabilizing???] The fear that gripped the markets earlier this year, when doomsayers predicted a second Great Depression, has largely dissipated. ["The markets." Listen, since when were "the markets" the key to figuring out economics? In fact, as we've seen with John Stossel's dart throwing monkey who beat the pundits, it's in some ways a very bad measure.]

Banks that had marked down the value of the assets on their books during the dark days of the crisis are now enjoying a rebound in the value of many of those assets.

[And the taxpayers who had their money stolen so that banks could even be in the position to enjoy a "rebound"... besides holding the bag and left in the dust, when's their rebound coming...?]

“Confidence has returned,” said Shubh Saumya, a financial services specialist at the Boston Consulting Group. “Some of the assets that bankers wrote down last year in the midst of the crisis, now they have got some of that back.”

[Substitute "confidence" for "rebound in the quote above, re-word to fit grammar, insert here.]

As the number of banks has dwindled, the survivors are moving into the void left by rivals that are either dead or limping and unwilling to take risks.

A big reason for Goldman Sachs’s blowout profits this year has been the willingness of its traders to take big risks — they have put more money on the line while other banks that suffered last year have reined in such moves. Executives say there are big strategic gaps opening up between banks on Wall Street that are taking on more risks, and those that are treading a safer path.

["Christian Bale! Paging Christian Bale!"]

Banks that have waded back into the markets have been able to exploit large gaps in the prices of various investments, a feature of the postcrisis financial markets. The so-called bid-ask spreads — the difference between the price at which banks are willing to buy things like bonds, and the price at which they are willing to sell — are roughly twice what they were two years ago.

Still, the newfound success is largely limited to the big securities houses on Wall Street. [WOW - WHAT A SHOCK...] This week, Citigroup and Bank of America reported losses from credit card delinquencies and mortgage defaults — a sign of the lingering pain on Main Street.

Cuts for Cooky: Donny Hathaway's "Someday We'll All Be Free"

One of the greatest songs about the hope of hopes; freedom for all.

Donny was in that category with Marvin; he was, as we used to say, deep. Before I heard Extension of a Man he'd had success with Roberta Flack on some pop hits (Where is the Love the most well-known) and I just thought he was good, not great. The one exception that made me take note from the album with Roberta Flack was, For All We Know.

When I heard this cut I was a young man, and spinning out of control. It's safe to say that music let alone one song didn't turn me around, but it did mean a lot to me.

Today I listen to this and think about that time, the early 70's... a lot was happening besides me being crazy... Donny sounds even more relevant, powerful now, and, like Jimi and Marvin, deep.

Greenspan: "Can't Truss it!"

No less than A to da G has come out and said the super banks should be broken up - waaaaaaaay after the fact, of course, but I still give props even though he himself must shoulder responsibility for some of the hyper-valuation in the run-up to EM08.

Once again, it's amazing that the press has evidently lost all sense of irony; the Obama administration's hit team very plainly created the game in which the banks stole our money and further conglomerated - despite the "too big to fail" buzz word fear-mongering. To date, I've heard no media outlet, from WSJ to HuffPo cite this.


Bloomberg, at:
http://www.bloomberg.com/apps/news?pid=email_en&sid=aJ8HPmNUfchg

Greenspan Says U.S. Should Consider Breaking Up Large Banks

By Michael McKee and Scott Lanman

Oct. 15 (Bloomberg) -- U.S. regulators should consider breaking up large financial institutions considered “too big to fail,” former Federal Reserve Chairman Alan Greenspan said.

Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always step in to guarantee their obligations. That squeezes out competition and creates a danger to the financial system, Greenspan told the Council on Foreign Relations in New York.

“If they’re too big to fail, they’re too big,” Greenspan said today. “In 1911 we broke up Standard Oil -- so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”

At one point, no bank was considered too big to fail, Greenspan said. That changed after the Treasury Department under then-Secretary Hank Paulson effectively nationalized Fannie Mae and Freddie Mac, and the Treasury and Fed bailed out Bear Stearns Cos. and American International Group Inc.

“It’s going to be very difficult to repair their credibility on that because when push came to shove, they didn’t stand up,” Greenspan said.

Fed officials have suggested imposing a tax or requiring higher capital ratios on larger banks to ensure the firms’ safety and reduce some of the competitive advantage from the implied subsidy. Greenspan said that won’t work.

“I don’t think merely raising the fees or capital on large institutions or taxing them is enough,” Greenspan said. “I think they’ll absorb that, they’ll work with that, and it’s totally inefficient and they’ll still be using the savings.”

‘Really Arbitrarily’

The former Fed chairman said while “just really arbitrarily breaking down organizations into various different sizes” goes against his philosophical leanings, something must be done to solve the too-big-to-fail issue.

“If you don’t neutralize that, you’re going to get a moribund group of obsolescent institutions which will be a big drain on the savings of the society,” he said.

“Failure is an integral part, a necessary part of a market system,” he said. “If you start focusing on those who should be shrinking, it undermines growing standards of living and can even bring them down.”

To contact the reporter on this story: Michael McKee in New York at mmckee@bloomberg.net; Scott Lanman in Washington at slanman@bloomberg.net
Last Updated: October 15, 2009 10:50 EDT

Cuts for Cooky: Jimi's "Little Wing"

Taking a cue from the late great Man in Black, who left his daughter a list of 100 songs he felt she should be familiar with, this is your list, Renee.

This is the perfect song to lead off with because it reminds me of you.

Meredith Whitney on Small is Beautiful

Barack needs to kick his econ team to Pluto. He needs to listen up and make the following the econ generals leading the fight:

David Cay Johnston
Meredith Whitney
Muhammad Yunus
Vinod Khosla
Prof. William Black

Under them should be Matt Taibbi and Michael Lewis as special advisors or whatever fancy junior cabinet sounding names you want.

Meanwhile back in reality, EM08 continues to barf all over us, but one of the key things for Americans to keep their eyeballs glued on is the mass-media (mis)handling of it. It is absolutely nuts the way they are shooting Krugman and Roubini blanks everywhere. Oh wait, this is Bizarro world.

Right on time, here's Meredith Whitney breakin' it down on the credit crunch, small business, small banking, and the crucial role both should be playing at this turning point, with chirps from yours truly.

Before I turn you over to Meredith, I'll make the point that one of the important things completely absent in mass media coverage of EM08 are the messages that are being sent out to Americans. Think about the TARP, GM & Chrysler bailouts, AIG bailouts, and the utter madness of banks who, with public money, didn't help the public but instead helped themselves. The executive/management bonuses while reprehensible are just mis-direction by mass media; the TRUE damage is in the further conglomeration the banking system has undergone. Thus, welcome to the era of the super banks, led by JP Morgan/Chase and Goldman Sachs. As I've said but will say again until everyone knows, if you think mass-media conglomeration is bad, think about the unprecedented power these super banks now wield.

Is the irony of "too big to fail" lost on you...?

Meredith Whitney's following take makes me think about those small banks and community oriented credit unions that didn't buy into all of the toxic mortgages much less the ultra high risk gambling committed by the banks and AIG (Well, it was risky... for TAXPAYERS).

Then these law-abiding small banks and community oriented credit unions had to stand by and be humiliated as the government dumped free money on these criminals in the biggest heist in history.

Here're the questions;

How do you think those banks and credit unions feel?

As an American, how do you feel about that?

What kind of message is that to be sending?

Why isn't the mass media addressing this?

Will you continue to bank at a large bank? (Disclosure; I don't anymore. I bank at my local credit union exclusively now)

One more thing I'll say about Whitney's take; I stand and applaud her, because it's easy to see that she's sticking up for the little people and, lest we forget, sounder economic practices. But in her own way, she's really talking about communities. I believe that is one of the things Americans desperately need to get back to.

I said it before and here again; That Meredith Whitney - she's one smart gal.

Meredith Whitney

* The Wall Street Journal
* OPINION
* OCTOBER 1, 2009, 6:58 P.M. ET

The Credit Crunch Continues
Taxpayer dollars have supported institutions that are 'too big to fail.' Small business has been left out in the cold.

By MEREDITH WHITNEY

Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan.

jp: Emphasis mine. In textbook journalistic inverted pyramid form, there's the theme, in perfect accord with TARP strategy. In Bonzo Ronnie's time it was "trickle down" economics. Today it's "too big to fail."

Since the onset of the credit crisis over two years ago, available credit to small businesses and consumers has contracted by trillions of dollars, and that phenomenon is reflected in dismal consumer spending trends. Equally worrisome are the trends in small-business credit, which has contracted at one of the fastest paces of any lending category. Small business loans are hard to find, and credit-card lines (a critical funding source to small businesses) have been cut by 25% since last year.

Unfortunately for small businesses, credit-line cuts are only about half way through. Home equity loans, also historically a key funding source for start-up small businesses, are not a source of liquidity anymore because more than 32% of U.S. homes are worth less than their mortgages.

Why do small businesses matter so much? In the U.S., small businesses employ 50% of the country's workforce and contribute 38% of GDP. Without access to credit, small businesses can't grow, can't hire, and too often end up going out of business. What's more, small businesses are often the primary source of this country's innovation. Apple, Dell, McDonald's, Starbucks were all started as small businesses.

What's especially disturbing is how taxpayer dollars have supported "too big to fail" businesses yet left small businesses unassisted and at a significant disadvantage. Small businesses do not have the same access to government guarantees on their debt. After all, most of these small businesses don't issue public debt. [Emphasis mine]

As is true in most recessions, banks' commercial lending portfolios shrink as creditworthy customers pay down their debts and the less-worthy borrowers are simply denied loans. Banks, in other words, want to lend only to those that don't want to borrow. Challenging as that may be, in the last cycle small businesses at least had access to their credit cards.

Small businesses primarily fund themselves through credit cards and loans from local lenders. In the past two years, credit-card lines have been cut by over $1.25 trillion. During the same time, 10% of all credit-card accounts have been cancelled. According to the most recent Federal Reserve data, small business lending is down 3%, or $113 billion, from fourth-quarter 2008 peak levels—the first contraction since 1993. Credit cards are the most common source of liquidity to small businesses, used by 82% as a vital portion of their overall funding. Thus, it is of merit when 79% of small businesses surveyed tell the Small Business Association that credit-card lending standards have tightened drastically and their access to credit lines has decreased materially.

Incentives should be provided to smaller banks to step up small-business loans on a greater scale. Smaller banks could not only bridge gaps created by the shut down in the securitization market but also gaps being created by a massive contraction in credit-card lines. Arguably credit would perform better with these types of loans as they would reintroduce and reinforce the most important rule in banking: "Know Your Customer." [Emphasis mine]

I believe that we are only in the early stages of the second half of this credit cycle. I expect another $1.5 trillion of credit-card lines to be removed from the system by the end of 2010. This includes not only the large lenders reducing exposure but also the shuttering of several major subprime credit-card lenders. Beginning in the fourth quarter of 2007, lenders began reducing available credit by zip code. During the past four quarters, lenders have cut "inactive" accounts (whether or not the customer viewed the account as a liquidity vehicle).

The next phase will likely be credit-line cuts as lenders race to pre-emptively protect themselves from regulatory changes associated with the Credit Card Accountability, Responsibility and Disclosure Act, passed in May of this year, and the 2008 Unfair and Deceptive Acts and Practices Act.

Regulators should be mindful that regulatory change during the midst of a credit crisis often ends with unintended consequences. Those same consumers that regulators are trying to help are actually being hurt by a vast reduction in available credit.

Main Street represents the foundation of this country. Reviving it should take priority over any regulatory reform or systemic overhaul. [Emphasis mine]

The Party's Over

I just want to ask a question
Who really cares?
To save a world in despair
Who really cares?
There'll come a time,
when the world won't be singin'
Flowers won't grow,
bells won't be ringin'
Who really cares?
Who is willing to try
to save a world
that is destined
to die?
When I look at the world
it fills me with sorrow
Little children today
really gonna suffer tomorrow
Oh what a shame
such a bad way to live

-Marvin Gaye, Save the Children


William Goldman said it about Hollywood: No one knows anything.

I think that holds true for the American public when it comes to EM08; it's so far-fetched, convoluted and rooted in history, the history of conglomerated corporate America, or ccA. ccA however, has the edge, and have gamed the casino in ways that make Steve Wynn look like a baby.

There's one prime reason, though, that ccA doesn't want you to know anything of the real truth as to its inner workings; as the late Tanta at Calculated Risk was fond of saying, and I paraphrase:

There's truth in the saying, "Knowledge is power."
That's why they never give you any.

This explains why a young person can emerge from 12 years of public or private schooling - and I'd bet in most cases even college/post-grad - and be economically illiterate, along with illiterate in terms of language, politics, art, history, other cultures....

My writing on the subject of EM08 had one angle on what I called the refs. At various times in our system of so-called "checks and balances," there are supposed to be standards enforced - checks - regardless of power and authority, much less image and reputation. So, the SEC are one team of refs; there's another for commodities, one for M & A, and so on. (Get this, sometimes there are multiple refs!)

When it comes to investing, one team of refs - the ratings agencies - played a crucial role in the so-called sub-prime mortgage disaster that led to EM08's first domino otherwise known as Fannie Mae & Freddie Mac being toppled. On a side note, isn't it interesting how we never hear anything about "Fannie Mac" anymore in the conglomerated mass-media?

That great young lion of a writer, Matt Taibbi, cited the rating agencies in a lengthy Rolling Stone piece deconstructing the history of economic bubbles, which I commented upon in July. In it, he said:

Take one $494 million issue that year, GSAMP Trust 2006S3. Many of the mortgages belonged to second mortgage borrowers, and the average equity they had in their homes was 0.71 percent. Moreover, 58 percent of the loans included little or no documentation — no names of the borrowers, no addresses of the homes, just zip codes. Yet both of the major ratings agencies, Moody's and Standard & Poor's, rated 93 percent of the issue as investment grade. Moody's projected that less than 10 percent of the loans would default. In reality, 18 percent of the mortgages were in default within 18 months. [emphasis, mine]

So, that Diana Golobay's article below talks about the option ARM loans about to reset is correct but nothing new, as I pointed out last December, despite the conglomerated mass-media's willful ignorance of the subject. The salient point is how Golobay never cites the irony of her source: Fitch.

The punchline? Fitch's was one of the refs - a ratings agency - in on the fix.

Housingwire.com, at:
http://www.housingwire.com/2009/09/08/134bn-of-option-arms-to-recast-by-2011-fitch/

$134bn of Option ARMs to Recast by 2011: Fitch
By DIANA GOLOBAY
September 8, 2009 11:46 AM CST

Option adjustable-rate mortgages (ARMs) are due to affect performance of US residential mortgage-backed securities (RMBS) in the next two years, according to Fitch Ratings.

Fitch Ratings determined $134bn of loans within US option ARM RMBS will recast in 2011.

Option ARMs historically present concerns over negative amortization, a process through which the loan balance essentially grows each month as borrowers elect to repay the minimum amount due.

An option ARM recasts when it reaches a balance cap typically ranging from 110%-125% of the original mortgage or 60 months of age, according to Fitch. The monthly payment obligation then increases from the minimum amount to a fully amortizing principle and interest payment.

This “payment shock,” a hike often 63% higher than the minimum payment, indicates a greater risk of default, Fitch said.

“Having not demonstrated their ability to make payments at the full rate, option ARM borrowers are at the greatest risk of default resulting from payment shock,” said Huxley Somerville, group managing director and US RMBS group head.

The majority of option ARMs Of $189bn of securitized option ARM loans outstanding, 88% have yet to recast. Of those, 94% negatively amortized through the use of minimum monthly payments.

Performance is already troubled among option ARMs. Serious delinquencies — loans more than 90 days past due, in foreclosure or real estate-owned proceedings — rose to 37% from 16% in the past year.

The risks associated with payment shock drove Fitch to rate a small number of option ARM transactions, approximately 5% of all option ARM transactions.

Just a Big Kid: Tex Avery

One of the ironies of LA being the film capitol of the world is that we've never had a world class film festival. In all my years of asking people why this was, I've never received a satisfactory answer; the closest I got was that the buyers want to get out of town. Thus, Europe (Cannes, Berlin) and North America (Montreal, Sundance) have come to dominate mass distribution. But I digress.

The closest LA came to a world class fest was Gary Essert's Filmex. Through all of its faults - and there were many - Filmex was a special time in LA, dominating the westside and the now gone Century Plaza Theaters, next to the Shubert. It was through Filmex's animation sections that I first realized that animation was more than cartooning. Among those I remember; Paul Driessen (who worked on The Beatles' "Yellow Submarine"), Ian Emes's "French Windows" (which I saw either at Filmex or "The Fantastic Animation Festival" in Laguna Beach), Marv Newland's "Bambi Meets Godzilla" (which made us laugh every time probably because we were stoned each viewing), Frank Zappa's, "Baby Snakes" which featured the claymation of Bruce Bickford who was superior to Will Vinton, and Mike Jittlov, whose "Wizard of Speed and Time" was always a showstopper but which I found really corny. As usual, they're probably all on you-know-where-tube.

It was this reckoning that made me re-assess classic studio animation, and the capper was when I read about the reverence for which the Surrealists held Tex Avery. As a kid I loved Tex. His cartoons usually had a level of lunacy beyond anything else that more often than not peaked in delirium. One of his classics, "King Size Canary," cracked me up as a kid.

Another of my favorite Avery characters was Droopy, a laconic, slow talking lil hound dawg who pulled some of the most outrageous stunts. Like being able to appear anywhere...



Droopy the foil takes a back seat here to the two main characters, placed in a tough situation...



Another Avery favorite, Chilly Willy the penguin who, like Droopy, is a foil full of trickery.


Tex Avery, much like Hitch's "Vertigo" is proof that even the studio system back in the day couldn't suppress personal visions. He still makes me laugh.

Chris Rock's "Good Hair"

Who can forget the part of Malcolm's book where he gets conked that first time?

Just saw a screening of Rock's "Good Hair," and it's really good, very entertaining, and if you're a black woman, on the real. Several funny moments, but one in particular since I'm in LA and he calls us out. That we saw it with a black audience just made it that much funnier.

Rev. Al laid out one of the most perceptive observations, I thought. And while black Hollywood was represented - Nia Long, Raven Symone, Megan Goode (very briefly), Vanessa Bell... - this is Chris Rock, certainly an A lister. Where was Oprah, Beyonce', Whitney, even Tina Turner?

An artful blend of culture, race, gender, history, and business wrapped up in a jack in the box that makes you laugh. Plus, that LA OG, Ice T, has the strong closer.

See this flick!

Down Under Race Blunder

Do I really have to comment?

Thanks - I think - to Shawn for the head's up on this...

The Guardian
Harry Connick Jr weirdly unimpressed by Australia's blackface Jackson 5

To Australia, the world's most savagely self-parodic country, where there is news of an important breakthrough in race relations.

We lay our scene on long-running Australian TV variety show Hey Hey It's Saturday, which finished in 1999, but was back on air for a reunion special on Wednesday night - along with celebrity guest Harry Connick Jr.

As is the custom on these kerrazy studio programmes, the singer was roped into the judging panel, passing his views on - among others - a musical comedy troupe introduced as The Jackson Jive.

Now, having watched the Jackson Jive's act, Lost in Showbiz can tell you that they bring almost nothing new to the lame old business of impersonating Motown's most dysfunctional family. But I guess their USP is that they perform in blackface. Isn't that darling?

Not according to Harry, oddly, who marks them zero (the Australian judge to his right comes through with a 7. "I thought you were very cute"). "Would you give them anything for turning up?" asks the bemused host. "Man, if they turned up looking like that in the United States …" comes his guest's retort, "it'd be Hey Hey There's No More Show."

Seemingly oblivious to the point being made, the host cheerily points out that this is a comeback of sorts – the Jackson Jive in fact performed this act on the show twenty years ago. You know, in the olden times of 1989, when blacking up was totally acceptable.

Anyway… If you take a look at the mind-boggling video clip, you will note that we rejoin the show after the break, during which the host seems to have had a somewhat unconvincing epiphany.

"I noticed that when we had the Jackson Jive on," he says to Harry, "and it didn't occur to me till afterwards, I think we may have offended you with that act … I know that to your countrymen, that's an insult to have a blackface routine like that on the show, so I do apologise."

Very good of him. In Australia, of course, it is perfectly acceptable, and we thank the nation for yet another important contribution to the annals of human culture.

More Exene

On the heels of my recent post (haha!) this is yesterday's LAT which ran a good story on Exene, who's moved back to LA. I'm thinking about trying to go to their December gig, but it's at the Wiltern, and it'll be nothing like seeing them at The Masque, Whiskey or Roxy. They're too big now.

The LA Times' Randy Lewis deserves credit here, as he gives Exene a lot of room to stretch out. Some good stuff here; I wish Renee could hang with her. Keep goin' Exene - don't stop.

Man, as if Exene's diagnosis wasn't enough of a bummer, but Amy Farris...

LA Times
Keeping up with Exene Cervenka
The songwriter, artist and X frontwoman is back in L.A. after a four-year sojourn in Missouri, with a new solo album out Tuesday.

If people were paintings, Exene Cervenka might be a Picasso line drawing. In conversation, as in her considerable body of work, a founding member of X expresses herself concisely, every thought contributing to a larger picture that could come only from her. And like the Spanish artist, Cervenka has transitioned successfully through a variety of career phases, starting with her stint in X, the band that perhaps best embodied the character of L.A.'s punk subculture of the early '80s. She moved on to the rootsy folk-country side project the Knitters with other members of X and the Blasters, then launched a solo career that included spoken-word performances of her own writings. In the last decade, she started taking her interest in visual art seriously to the point of regularly exhibiting in galleries around the country. A recent diagnosis of multiple sclerosis has done little to slow her creative output, but it is one factor that has figured into her return to Southern California after four years spent living in rural Missouri.

"I'm back," she said between sips of iced tea at the funky Filling Station Cafe, a former gas station in Orange's Old Towne district, which is now filled with historic turn-of-the-century homes, antique shops and vintage clothing stores.

"It's fantastic," she said of life in the land of Mark Twain. "It was something I wanted to do my whole life: move to the middle of nowhere and live in the country."

In one sense, she was escaping the big city rat race, but the move also served her artistic life. It was in Missouri that she wrote and recorded all the songs on her new solo album, "Somewhere Gone," released today.

"I've always believed this as an artist, that the best way to create is in a vacuum," she said.

Not that she considers the Midwest a vacuum, but by exiting a hive of activity like Los Angeles, she felt better able to act from within, rather than react to what was going on around her.

"That time in Missouri for me was like the punk days again in a weird way, even though there wasn't a scene. I was isolated, and I think your art is more pure, and I think that's true for visual art and music when you create that way.

"I think that's why the punk scene was so incredibly strong, because it was ignored," she said. "There was no MTV, there was no radio . . . . and it flourished because of that."

X blossomed virtually from birth about three decades ago. In such watershed albums as "Los Angeles," "Wild Gift" and "More Fun in the New World," Cervenka, bassist-singer-songwriter John Doe, guitarist Billy Zoom and drummer D.J. Bonebrake took the unbridled energy of punk and channeled it in sharply drawn portraits of life lived on the edge.

The group's songs mined the poetic and literary traditions of outsider writers such as Charles Bukowski and were sung by Cervenka and then-husband Doe in dissonant harmonies that became part of the group's signature sound.

(Her music will get virtually the full scope of settings in a string of upcoming shows, including a duo performance with Doe on Friday at the Echo, a solo set Nov. 10 at Largo at the Coronet and then a full-fledged X show Dec. 19 at the Wiltern Theatre).

Cervenka has extended that approach to the Knitters and her solo work. "Somewhere Gone" has an even more stripped-down, intimate feel than most of the Knitters' recordings, although "Walk Me Across the Night" incorporates tasty boogie-woogie piano, while "Pinpoints" evokes a seductive Gypsy caravan in Appalachia. It's instrumentally spartan, relying on the 53-year-old artist's still girlish voice, elemental acoustic guitar and harmonies with any of several duet partners.

Her husband, Jason Edge, contributes guitar and percussion work; among the other singers and instrumentalists who came to Missouri to record with her was fiddle player and singer Amy Farris, who died unexpectedly last week. Together, the women recorded the traditional folk song "The Willow Tree," though it wasn't originally set to be included on this latest collection.

"Amy came in and I had her down to play on about seven things," Cervenka said. "I told her, 'If we get five extra minutes, I'd like to do "The Willow Tree." ' We did, and it ended up on the record."

The sudden loss of her friend, with whom she had begun writing songs, comes at a time when Cervenka has been dealing with upheaval of her own in the MS diagnosis.

"I've got to say that like a lot of people who have something really bad happen to them, it's a blessing and a curse," she said. "I'm learning a lot about people, about my friends, my family, about me.

"I've completely changed my lifestyle around to be healthier, and I think it's one of the things that's helped me make a leap forward, hopefully. It's kind of platitude-ish, but you always want to be a better person. As you get older, you want to be more productive, slay your demons, move forward . . . . Hopefully, I can use this as a furthering of that process."

Another part of that process is her return to the Southland, and she sounds truly happy to be surrounded by her many friends in the region's artistic community.

"I moved back because of the people, not because of the place," she said. "The people I want to play music with are here, and right now I want to play music."

She hasn't abandoned her other pursuits, however. She recently had two shows of her visual art in L.A. galleries, much of it assembled collage-style with disparate images and ideas colliding, as Picasso also did in his Cubist period. Cervenka often incorporates objects she's socked away from thrift stores and any other place she can find "what the culture gives up. I've learned a lot living in Missouri, going to auctions where farms are being sold . . .

"I feel like it was my version of college," she said, "because I never went to school. It was like my four-year college. It was . . . a glorious life. But it's not what I want to do right now. I change really quickly when I change, and I've changed again."

Might she also be thinking about reclaiming her vaunted place as one of the pivotal figures in the pantheon of Los Angeles music?

"That doesn't register that much when you're buying a new broom and a mop," she said with a wry smile. "Living here is weird, but being back is good . . . I missed it when I was gone. I hated it when I left; now I love it again."

randy.lewis@latimes.com

Copyright © 2009, The Los Angeles Times

Finke You, Very Much

I hate Hollywood, "the Business," and all of the cheap shot Peter Principle wack jobs that adore it as players and field negros on the outside looking to move into massa's house. (As evidence, this is the first label for "Hollywood") It's pathetic to think about, but at this very moment, young people are either coming to or about to come to LA so that they can realize their dreams.

Ha.

There're two courses that need to be pre-reqs in any film school; call the first "The Odds." In it, the student learns about the various elements that make up the ultra high stakes gambling of the modern day studio system. So, in broad strokes it'd be; history in terms of the moguls who founded their fiefdoms, evolution to the corporate takeovers and on to today, the era of the super conglomerates. This is the factual stuff of history.

The second could have a number of titles, and among the candidates, "Bizarro World," "Day of the Shitheads," and "There's a place for jerkoffs. And they give tours." This one deals more with interpretative history but is arguably the more valuable of the two, certainly more lively and entertaining, because it deals with the wacko nut jobs that run "the Business." I mean, Harvey Weinstein ripping out phones and using them as weapons... c'mon, Thalberg's well worn wunderkind place in history is kinda ... boring in comparison.

As a dumb 20 something, I did my time working on the plantation. Here's a typical scenario; I, like so many others, would sacrifice their weekend by taking home scripts to read and write coverage (lingo for assessments or Hollywood's version of Cliff Notes meets book report). Take my word for it, every single one of those things was SHITTY, and I must have read hundreds. One was so bad I remember letting Mitchy read it; to this day we laugh.

Inevitably, the head of the department - always a 30 something, always, well, I better shut up - anyway, they toodle in around 11:30. She'll have bags from shopping, check her messages, maybe make some calls, then toodle out for lunch and be gone for at least 2 hours. Lather, rinse, repeat ad nauseum.

Meanwhile, after months of this barf-o-rama, I look around and see that I'm the lone or one of the few kids of color. Then I can't help but notice that the white kids are usually always the ones getting the promotions. So, the writing was on the wall.

It's hard not to come off as self-indulgent, "my time in Hollywood" crap, but there it is. And the truth of it is that my story isn't unique in the slightest. It does give me and the others who've slogged through this ho house a bit more room to laugh when they hear about guys like Marc Shmuger getting not just canned, but crapped on from a lot of quarters. Dude evidently was a real shithead. What's interesting though is when someone like Michael Mann steps up to bat for him.

All I can say is, check out the comments to Nikki Finke's column - a damn fine nasty bite. She's not your momma's Rona Barrett.

From this city's Snark Queen, Nikki Finke's Deadline Hollywood

Why Karma Is A Bitch For Marc Shmuger
By Nikki Finke | Category: Uncategorized | Monday October 5, 2009 @ 7:58am

UPDATE: STUDIO SHAKEUP! Adam Fogelson Named New Chairman Of Universal Pictures; Donna Langley Named Co-Chairman; Shmuger And Linde Unceremoniously Out

So I predict that when the announcement is made, and trust me it must be, everyone atop Universal and NBCU will try to play kissy face. I even bet the media will be given some fictional account that this was Marc Shmuger's and David Linde's own decision to step down. Poor Linde: he's just collateral damage since he came in as a tag team with Shmuger and will exit with him as well. But the truth is Marc kept clinging to his moguldom until the very last minute even when he was just embarrassing himself, and now he's bitter as hell at being ousted. But what choice did Ron Meyer have? Especially when so many people inside and outside the company detested Shmuger (who had become known simply as "The Schmuck"). Case in point: "We're all hoping," Brian Grazer kept replying as Hollywood kept asking when Shmuger would get the boot.

I've always considered Shmuger’s biggest problem was that he thinks he plays well with others when, in fact, he treats people badly and then is blind to the fact they hate his guts. He considers himself a political pro but really is just a polarizing asshole. Which is why he deserves to be kicked to the curb as much for his own behavior as for the infighting he instigated inside the studio and for lousy box office in a downtown economy where DVDs can no longer cover a mogul's greenlighting misses.

I believe Shmuger's fate was unofficially sealed when Ron Meyer began fielding journalist calls about whether Universal's well-liked and extremely capable and new mother Donna Langley was being fired. (Which would have besmirched Ron's carefully crafted good guy persona and made him look no better than that long ago Paramount cro-magnon mogul Ned Tanen who fired Dawn Steel while she was on maternity leave.) Meyer was bewildered how such a nasty untrue rumor even got started. But studio chatter rightly or wrongly pointed to Shmuger who needed to get the heat off himself and to blame someone else for Uni's dismal summer.

Yes, every journalist's email has been overflowing with tips about Universal which has been rumor central. (Mine, every time readers saw Ron Meyer eating at the commissary with, say, Scott Stuber.) All summer and this fall, Shmuger has been the subject of rumor after rumor, speculative article after speculative article. The reason why so many people were more than willing to throw this thin-skinned cry baby under the bus is a cautionary tale for Hollywood execs.

I'd heard earfuls about how "all the filmmakers" couldn't stand the guy. Michael Mann and Ridley Scott supposedly won't return his calls. Spike Lee reportedly will never talk to him again. And Clint Eastwood openly hates him. As an insider revealed to me, "Clint once said, 'You can see Mr. Shmuger thinking, plotting, scheming, all the time. He acts like he knows what he's doing with such certainty. But he doesn't. And he says really stupid things.'" Ouch! Of course, only an idiot would have greenlit another film with Michael Mann after the Miami Vice movie. Mann is one of those brilliant directors who also falls into the "Life Is Too Short" category. So Shmuger's inability to handle talent became all too apparant when Public Enemies was filming, and Michael Mann and Johnny Depp stopped talking to one another. Unable to cool down the hot tempers himself, Shmuger has the less than brilliant idea to send in underling Dylan Clark to act as Universal's official feud go-between. So Depp would talk to Clark who then talked to Mann, and Mann would talk to Clark who then talked to Depp. This was no way to run a production for the studio's big 2009 summer blockbuster.

Still, Shmuger and Linde last January signed a new contract. At the time, people both on the lot and in Black Tower saw them as good managers. They had the marketing and distribution and newly independent international departments well organized. So firing them now may seem unfair since they were riding high just a year ago after back-to-back record-setting numbers for the studio. [Universal Pictures recorded its biggest year ever in 2008 with global theatrical grosses totaling $2.834 billion. Universal’s domestic box-office tally of $1.12 billion outpaced the record it previously set in 2007, which was $1.099 billion. Internationally, Universal shattered 2007’s box-office mark of $1.034 billion, with a 2008 total of $1.714 billion, for an incredible year-over-year improvement of 66%.] But success like this is cyclical in Hollywood. What goes up must come down, eventually.

And that's where karma was a bitch for Marc. Here's why:

In 2008, the usually successful studio Twentieth Century Fox had one of its worst summers in recent memory. Almost immediately, certain journalists predicted heads would roll among the long stable management because of what was suddenly seen as deep systemic problems at the studio. Prior to the summer, Tom Rothman and Jim Gianopulos had been lauded for doing more with less: spending little money and smartly laying off risk on highly commercial movies that outperformed with moviegoers if not the critics. Rothman especially was rumored ready to be axed that summer, and the relentless media rushed to print the minuscule Rotten Tomatoes scores for his slate of swill. (Ring a bell, LA Times columnist/blogger Patrick Goldstein?)

But what the film community didn't know (and it even took Fox a long time to find out) is that those stories were no coincidence. They were planted by Shmuger who pushed and prodded and pressured entertainment and business journalists to badmouth the rival studio. He gave reporters all the ammunition they needed, from pithy off-the-record quotes about how Rothman had "ruined" the movie biz, to emailed handouts with facts and figures. He even put together the list of Rotten Tomatoes scores for all of Fox movies in recent years. His motivation for going to the media was that Fox made junk while he was making edgy and important movies at Universal. He depicted himself as the one truly creative mogul. And when some journalists wouldn't play his nasty parlor game [Full Disclosure: I refused, arguing that successful slates were cyclical and the place for this criticism was in my weekly box office reports and not my banner headlines], he froze them out.

Flash forward to 2009 when suddenly it's Universal's turn to fall apart at the box office. To their credit, the Fox moguls didn't return the favor when now it was Shmuger's time for public humiliation. And that's why no one is crying a river for Shmuger now. If anything, the feeling is he's getting what he deserved. Certainly, Uni's movie slate isn't getting any better since the summer. Love Happens didn't with audiences, and that upcoming Vince Vaughn starrer Couples Retreat has little box office heat. True, Nancy Meyer's It's Complicated does have considerable buzz, but it's a comedy aimed at adults. As a result, Universal won’t make its numbers this year, which would mean that for the first time in a long while the studio won't be quietly contributing is annual $1 billion profit into GE coffers.

Shmuger and Linde started out strong in the wake of Stacey Snider's unexpected departure to go run Steven Spielberg's DreamWorks. Meyer had total confidence in Snider, and let her do her thing while he did his. Which, like all those top jobs at subsidiaries of bigger media companies which are subsidiaries of even bigger companies, consists of kissing the rings of corporate overlords. And GE especially is a dictator when it comes to meetings and retreats and town halls and all the other bullshit, not to mention the GE Finance beancounters. So why doesn't this fish stink at the head? Because Ron Meyer isn't really in the movie biz, he's in the running-the-studio biz. He has to leave the movie-picking and -production to underlings, who in exchange for freedom have to bear the responsibility.

Shmuger and Linde were merely dogpaddling for a good long while as they carefully navigated their new moguldom. Linde took over international and did well. (He's the guy who oversaw Quentin Tarantino's Inglourious Basterds from spec script to box office success, trying not to be manipulated by Harvey Weinstein all the while.) But the creative part of the job was all Shmuger's.

It's not just that he made too many Russell Crowe movies. And too many ambivalent message war movies. Or that he bizarrely patted himself on the back for originality when he rebooted Fast And Furious with the original cast. Or took Hellboy from Sony and came out with a sequel. Coming from marketing, without production experience, he was viewed suspiciously by filmmakers. It wasn't long before they complained about all things Marc. They hated his habit of forcing them to undergo humiliating Q&As before he greenlighted a movie. "Which was impossible because you can't answer every question. So you bull-shitted him," a source told me. "He acted like that dean in Animal House who takes himself so seriously, but we all know he's a joke."

Then, after the movies would start production, Shmuger was scorned for periodically calling up filmmakers "and giving them random notes on one set of dailies and never doing the foreplay," one insider described.

When things were going swell, Marc was never warm but at least cordial. But when things began to go badly, first with State Of Play, then with Land Of The Lost which was such a huge embarrassing bomb (and, ironically, exactly the kind of low-brow comedy that Fox would release only better executed), "Marc was so traumatized that he just sounded like he was under a hypnotic spell."

Then things went from bad to worse. Universal's next 3 movies had to total $300 in any combination: Bruno, Public Enemies, and Funny People. First, Public Enemies opened July 1st and to date has taken in only $97.1M domestic. Bruno debuted July 10th and tapped out around $60M. And Funny People was released July 31st and hit a high of $51.8M. That's $209M tops, not nearly good enough. "During that time, Shmuger became delusional and weirdly paralyzed. It was too hard to talk to him. He became a contrarian. If you said one thing, he'd say the other thing," an insider told me.

To their credit, both Shmuger and Linde responded to the crisis by setting the example of working even harder than before (they were never slackers) and mending fences hither and yon. But Shmuger's deep-rooted insecurity got the better of him. Obsessed with what the media were not just writing about him but also thinking about him as they circled like vultures in search of carrion, Shmuger went pleading to NBCU for a vote of confidence. "He said he wanted to be supported in some press story about what his accomplishments are, that would let him go talk about them and then the bosses reinforce that. He wanted a bullshit endorsement," one Hollywood publicist told me. But there was worry "it would be a Band-Aid on a surgical wound". Nevertheless, Shmuger arranged for LA Times journalist Claudia Eller to do an exclusive interview (and kept that secret from other media, ridiculously responding to their constant phone calls with just ums and ers). While his future remained uncertain at Universal, he attempted to rally other journalists on his behalf.

It was Meyer's call whether to can Shmuger and Linde, but GE still had to agree to pay off the 2 1/2 years that they both have left on their contracts -- not an inconsequential amount.

FYI, my info is the Los Angeles Times was 100% wrong when it reported Friday that Shmuger's and Linde's fate would have to wait until the negotiations for a sale of NBC Universal was complete. And that stuff about Jeff Zucker telling Ron Meyer to wait because of "something big" was pure fiction. But, if others were writing speculation about turmoil at the top of Universal, why didn't I?

Because, readers, I hate Shmuger, really detest the putz, and I didn't want it to look like I was doing him harm because of a personal vendetta. I told The New Yorker why I was waiting: because I believe in killing the king, not just wounding him. And I feared writing one of my trademark brutally honest posts only to have Shmuger's bosses suddenly feel sorry for him and keep him. Yes, I want Marc gone that much. More importantly, I'm not the only one.
Comments (53)

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But we had Will Ferrell in Land of the Lost…audiences love him, right???
Comment by Tyler-Perry_is_the_Anti-Christ — October 5, 2009 @ 8:36 am Reply to this post
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The pity of it all is that a man like this could ever advance to the level that he did. Those of us in the industry, especially on the marketing side from which Shmuger arose, have always known, marveled at, resented, and laughed at Marc’s total ineptness in the creative community. This applies to both the marketing side, which he single handed ruined through his lack of heart and his malicious spirit, and the production side which subsequently experienced the same dunderheadedness that he brought to marketing. For the last 20 years, people have lived in fear and misery from this guy, and their only reward was to watch him rise through the ranks. Please dear god let it be finally over. As for Shmuger’s legacy of mediocrioty and cold hearted nastiness, let us just say, “nice shot dork”.
Comment by shamefully anonymous — October 5, 2009 @ 9:05 am Reply to this post
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There IS a god.
Comment by ExExec — October 5, 2009 @ 9:13 am Reply to this post
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That whole organization needs to be revamped. Especially those in Theatrical and Home Entertainment! Hopefully Meyer will look at other depts too.
Comment by In the Biz — October 5, 2009 @ 2:53 pm Reply to this post
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When does the head get chopped off when the when the fish is out of wthe ater. It seems to me Zucker should be held accountable for something. Ron Meyer has his sandbox to play in. But Zucker is in charge of the playground. One day the Zucker cyst that he uses for a head will pop. I hope they catch it on film.
Zuckercyst
Comment by Zuckercyst — October 5, 2009 @ 9:27 am Reply to this post
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I haven’t laughed as hard as I did now, reading the “Zucker cyst” tag line, in many months. Hopefully, Zucker cyst, you write comedy.
Comment by Anonymous — October 6, 2009 @ 9:36 pm Reply to this post
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now that’s how to kick start monday.
Comment by crossly — October 5, 2009 @ 9:54 am Reply to this post
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New website yes but the same cutting edge journalism we come to love and expect from you Nikki. Great article, this is why I read your website every day. ps They should keep David Kosse though as he is one of the good guys…
Comment by The Judge — October 5, 2009 @ 9:59 am Reply to this post
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Linde will go back and run Focus
Comment by Anonymous — October 5, 2009 @ 10:00 am Reply to this post
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Wow, that’s pretty much the definition of a hit job…
Comment by Jesus — October 5, 2009 @ 10:04 am Reply to this post
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When Clint Eastwood hates you, you are dead.

You just don’t know it yet :P
Comment by Nurf? — October 5, 2009 @ 10:38 am Reply to this post
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Nikki, I’ve been critical of you lately (and in true Nikki form, you probably don’t give a shit).

But this article is a return to what makes you great: you are a good story teller who exposes the stories the public would otherwise not hear.

Good work, much appreciated.
Comment by J.R. — October 5, 2009 @ 11:02 am Reply to this post
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There is a god…and he hates movie executives. :)
Comment by King Jack — October 5, 2009 @ 11:23 am Reply to this post
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RE: King Jack -

“There is a god… and he hates movie executives.”

He hates movie executives who hate creative people and don’t love making movies.

Congrats to Adam F and Donna L for surviving and thriving!
Comment by Happy Days — October 5, 2009 @ 11:37 am Reply to this post
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“For months, Finke has been privately promising to write a tough piece about Universal, which has had a bad year at the box office. She’s biding her time until it’s clear that there will be changes in the executive suite. In general, she says, “I like to do kill-the-king, don’t just injure them.”

Hats off to the New Yorker. They totally called this one right!
Comment by Monkey Munch — October 5, 2009 @ 11:42 am Reply to this post
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One down, one to go, watch out Oren Aviv. If there is a God you’re next.
Comment by Snarky — October 5, 2009 @ 12:05 pm Reply to this post
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Lionsgate has their version of Shmuger. The name is Tim Palen.
Comment by violet — October 5, 2009 @ 12:13 pm Reply to this post
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I knew Marc as one of mmy closest friends in High School in suburban St Louis. He was one of the three most briliant men I have ever met in my life. And Marc always had teremendous character and drive.

You get to know the real person when close as a teenager and I saw Marc’s inner personality. Those of you cowards who post here anonymously–unwilingness to sign your sign name says a lot.

Marc may take the fall b/c U’s fortunes changed this year after two highly profitable years. But do not attack him personally, Because Marc is of the highest personal character.

Daniel Bloom
St Louis Mo
Comment by Daniel N Bloom — October 5, 2009 @ 12:20 pm Reply to this post
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Daniel,

I too grew up with Marc but only knew him because our parents were friends. He never had a whole lot to say and was a complete ass to people in the industry who moved to LA from his home town St. Louis. In fact, I don’t think he even wanted to admit he was from St. Louis.
Based on how he treated people here, I would not say he has any personal character.
Comment by Kathy — October 5, 2009 @ 1:21 pm Reply to this post
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Daniel, you are right that Marc had drive, but Kathy is correct that he forgot his Midwestern roots.

As a reporter, I covered Sony when he was there and that drive of his led him to take credit for other’s work. When called out on it, he became arrogant.

I think Marc would gain a lot in going back to St. Louis and getting back to who he used to be.

And Daniel, you are right, people should post their names. There are just too many cowards in Hollywood.

fyi, I’m from Granite City.
Comment by Anita Busch — October 5, 2009 @ 8:13 pm Reply to this post
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Anita:

Considering all the sheer hell you been put through when you dared to speak truth to power, it is refreshing and heartening to hear from a survivor like you. And to paraphrase the late playwright and civil rights activist Endesha Ida Mae Holland, “If I can survive — and thrive, so can you.”

You have made my day!
Comment by John Arthur Lowe — October 6, 2009 @ 1:53 pm Reply to this post
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Hey look, they got the internet in St. Louis!! Two breaking stories in one day!

People post here anonymously b/c they’re smart, Daniel Bloom. It’s a small town. The internet has its own rules.
Comment by smokey mccracksalot — October 5, 2009 @ 1:43 pm Reply to this post
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“Hey look, they got the internet in St. Louis!! Two breaking stories in one day!” ”
Yep and 5000 square foot homes on acre lots for less than 2 million where you leave your doors unlocked, and do not have to worry about driving 3 blocks from the best parts of town to be confronted by a gang member. My parents live In Beverly Hills. I went to school in so cal (still recovering from the smog). I have the armpit of the world and it los angeles.

Anyone who has actualy lived in both socal and St Louis knows which is the better place to live. Next time you fly over our state–keep flying please don’t land.
Comment by Anonymous — October 5, 2009 @ 3:30 pm Reply to this post
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As Missouri lacks competitive production incentives for the filmed entertainment business, I have no reason to go there. As Missouri is a place dying entertainers go to perform to decrepit audiences… it is irrelevant to this discussion. You can have it. We don’t miss you. buh. bye.
Comment by smokey — October 6, 2009 @ 12:21 pm Reply to this post
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First you set your sights on Shaye and Lynne and they were quickly ‘dispatched’. Now it’s Shmuger’s turn and he’s been similarly dealt with.

Universal have really improved their standing in alot of ways the last few years but I never understood some of their alleged ’successes’ under Shmuger. For example, how can they claim Hellboy 2 is a hit?

If anything that film is one of an alarmingly more common creature. A film that ‘bombs’ after it’s initial strong opening. A $75m domestic gross is not a summer hit never mind a franchise starter.
Comment by Warner Borg — October 5, 2009 @ 12:41 pm Reply to this post
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Shmuger can go back to Sony Pix as Jeff Blake always loved him…ha,ha,ha!
Comment by King Jack 2 — October 5, 2009 @ 12:51 pm Reply to this post
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Damn, Nikki! Very impressive article. The amount of stuff that you know about this industry keeps me coming back to this site every day. A studio head so hated by the world-class filmmakers working under him that they won’t return his calls? OUch!
Comment by Armando — October 5, 2009 @ 1:10 pm Reply to this post
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It’s about time – he was a dick when I worked for him at Sony. And the talent hated him then too – a couple of A-list stars threatened to walk off the set unless he was escorted off the stage. I guess you could say he’s not really a “people person”.
Comment by Ex-Sonyite — October 5, 2009 @ 1:16 pm Reply to this post
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Giving Marketing guys Production responsibilities was suuuccccccccch a great idea tho!!!!

Tick tock, Mr. Aviv. Tick. Tock.
Comment by even still it took too long — October 5, 2009 @ 1:29 pm Reply to this post
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“Giving Marketing guys Production responsibilities was suuuccccccccch a great idea tho!!!”
You would think someone might have learned that when Frank Price tried it with Marvin Antonowsky but I guess this is a business where they not only remake scripts they remake mistakes over and over again.
Comment by Gofer — October 5, 2009 @ 2:03 pm Reply to this post
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In the span of a few months, the heads of NBCU have rolled, Silverman at NBC, Shmuger and Linde at U. I wonder who is running NBCU and how big of a putz he’d have to be to have such staggeringly incompetent top execs on both sides of his company? Could it be the same exec who took NBC from 1st to 4th? Could it be the same guy about to be replaced by Steve Burke or Ted Harbert, dear G-d we hope?
Comment by Tom — October 5, 2009 @ 2:25 pm Reply to this post
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I feel bad for David Linde.
Comment by Charlotte A. Cavatica — October 5, 2009 @ 2:55 pm Reply to this post
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David Linde reached for the brass ring – good for him. He is a huge talent and will come out on top.
Comment by Anonymous — October 5, 2009 @ 5:21 pm Reply to this post
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wow – go get em nikki. so when are you going to start on tony sella at fox? pages and pages of shit can be (and should be) written about that guy. and his “co” head of marketing – pam levine. what a joke those two are….
Comment by exfoxer — October 5, 2009 @ 3:18 pm Reply to this post
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Hey no anti-Ned Tanen statements here, Nik. You know damn well this business would be better off both financially and creatively if there were a Ned Tanen clone running every studio in town.
Comment by Valerie — October 5, 2009 @ 3:23 pm Reply to this post
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So Glad to see the Wicked Dick is gone! I agree with 99% of Hollywood, Nobody liked this guy! He was a creative dud, a horrible manager, and didn’t know the difference between production and basket weaving! Truly I am shocked it took this long for Ron to can this Guy! Even with two successful years at U, working with this guy was utter hell! FOR EVERYONE! He lost me over a year ago, I swore never to make another film with U until he was out! If it wasn’t for David Linde I would have scraped that project to!

I am happy to Report a good call with Adam is on the horizon, I will be delighted to bring my business back to him! If Shmuger is the devil then Adam is Jesus! U will be all the better with the presence of someone with even an ounce of integrity. Shmuger can go find a hole to die in, he will be hard pressed to find anyone in this town to work with and if he does they can count me OUT!
Comment by eyeforaneye — October 5, 2009 @ 3:36 pm Reply to this post
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Congratulations to Adam! It’s about time the good guy with talent wins in this town!
Comment by EOS — October 5, 2009 @ 5:58 pm Reply to this post
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Does the shmuger get to keep his ruby red slippers?
Comment by kink 2 — October 5, 2009 @ 3:45 pm Reply to this post
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I love how people in Hollywood equate genius and great guy with the fact that they’ve thrown business their way or said yes to them. What a bunch of children. Adam Fogelson might be the right call for Universal right now — a tree stump would be better than Shmuger — or he might be just an inexpensive seat-filler to do no harm until the new overlords come in. Deifying him is a bit much, if he is anything like his father, then he is a conniving little prick. How does Michael Moses feel now that he no longer has to wipe Shmuger’s ass or carry out his evil deeds?
Comment by James Early — October 5, 2009 @ 4:13 pm Reply to this post
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“These are really hard decisions to make. What movies to make, how to make them at what price, how to market and release them. In isolation, that is very challenging.”

Marc Shmuger quote
Comment by no friends left — October 5, 2009 @ 4:14 pm Reply to this post
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From LA TIMES:

Universal’s top execs used to play ball with Finke. But that cozy relationship ended some time ago, with the studio freezing her out, which is why as the news surfaced this morning that studio chairman Marc Shmuger was getting the ax, Finke erupted with an incredibly nasty post — even by her standards — about Shmuger. She called him, among other things, a “polarizing [jerk...though she uses stronger language that I can't print here]” and a “thin-skinned cry baby,” adding “I hate Shmuger, really detest the putz.”

To bolster her case that he was a loser, she claims that a wide variety of top filmmakers couldn’t stand him either, citing Michael Mann (”supposedly won’t return his calls”), Spike Lee (”reportedly will never talk to him again”) and Clint Eastwood (”openly hates him”). It sounds like very damning stuff, but is it actually true? I don’t have Clint’s home phone number, so I couldn’t ask him for verification, but guess what? I did talk to Michael Mann today after Shmuger was fired, so he had no need to suck up to the guy anymore. And Mann said that Finke’s account was totally erroneous.

“That stuff about me not returning his calls — that’s just not true,” Mann told me. “He’s a terrific guy, and Marc and I have a terrific relationship. He was incredibly supportive during the making of ‘Public Enemies,’ and I think he’s going to have a lot of good will wherever he goes. I don’t dislike him at all. In fact, I like him a lot. He always had a lot of good ideas and was a stand-up guy. From a filmmaker’s point of view, working with him, and Donna Langley and Adam Fogelson, it was a really great experience.”

Mann laughed. “You really have to stretch to say I had problems at Universal. I even got along with the business affairs guys, who are the ones you’re supposed to have a tough time with.”
Comment by BitterNoMo — October 5, 2009 @ 5:51 pm Reply to this post
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David Linde is one of the smartest, kindest people I’ve ever worked with. Somehow, in the midst of the most stressful jobs, he always took care of his employees and always was there for you if you needed him. Wherever he lands, they will be lucky to have him. What a talent, what a gentleman.
Comment by underwater — October 5, 2009 @ 8:09 pm Reply to this post
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marc is a weirdo who dresses up in women’s clothes and likes things hard and undercover.

daniel- did you ever have to work with this guy? if so, you would know why everyone hated his ass.
Comment by adam — October 5, 2009 @ 9:36 pm Reply to this post
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I certainly wish all the best to David Linde, he’s a very calm and focused gentleman and a pleasure to work with.
Comment by Joz Bernstein — October 5, 2009 @ 10:39 pm Reply to this post
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Maria- Stop making posts as bitternomore. Marc is gone now so you can stop kissing his ass and give Adam’s your undivided attention. Don’t worry though, Ant Farm may be laying off people but you can always sign on with Workshop.
Comment by Keyartguy — October 6, 2009 @ 5:04 am Reply to this post
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It’s “BitterNoMo,” Key Art Guy, not “BitterNoMore.” Maybe it’s your lack of attention to detail that prevents you from getting more work? Just a thought.

Not Maria – but whatever. Just someone who has worked with her and appreciates smart, out-of-the-box thinking and really can’t tolerate angry, entitled, hack keyartguys. Hey, we all have our prejudices.
Comment by BitterNoMo — October 6, 2009 @ 12:12 pm Reply to this post
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I agree with The Judge about David Kosse. He’s a true professional, great to work with and a real talent. They are lucky to have his international expertise.
Comment by Mary de Costa — October 6, 2009 @ 7:29 am Reply to this post
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Um, am I the only one who noticed ANITA BUSCH posted here?!
Comment by m — October 6, 2009 @ 9:34 am Reply to this post
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i hope she doesn’t get another sicilian message for her cuglione di ferro in posting publicly or a karate chop from segall! hahahhah
Comment by lurker — October 6, 2009 @ 2:19 pm Reply to this post
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Thank you Keyartguy for “outing” Maria. The quote from Mann read like a publicist’s handiwork and typical “on the record” fare. I laughed when I read it and laughed harder when I read your reply!
Comment by Jean — October 6, 2009 @ 10:56 am Reply to this post
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Does anybody know what Ron Meyer does?
Comment by Sam Spiegel — October 6, 2009 @ 1:57 pm Reply to this post
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Give Maria a break – she learned the business from Dana Precious, who did the exact same thing at Sony. The apple doesn’t fall far from the tree.
Comment by Ex-Sonyite — October 6, 2009 @ 5:24 pm Reply to this post
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I’m sitting here reading this blog and these entries and I don’t recognize the Marc Shmuger you describe. I’ve known Marc for over 30 years dating to freshman year of college and he’s one of the brightest, kindest, most sincere people I’ve ever known. And, yes, his warmth and generosity haven’t changed one iota since we were 18 year olds.

Long ago I asked Marc how he planned to survive in Hollywood, a place –even then — known as a swamp of scheming, back-stabbing, schadenfreude-infused narcissists. Well, now I know –he wasn’t up to the task. I also know — after reading the original blog and subsequent comments — that my original thoughts about Hollywood’s denizens were way too kind. You all make my skin crawl.
Comment by Aghast — October 6, 2009 @ 9:16 pm Reply to this post

White Girl: Exene

To have been of age in the late 70's/early 80's was to have experienced bizarro world. The move to "greed is good" was gearing up, and yuppies were everything I hated. LA was leading the nation in terms of coke consumption and, as usual, vapidity, but one of the ironies about being an industry town is the enormous overflow. Thus, punk's perfect petri dish was set.

The first time I heard X I'd already heard of them, but when Thrust threw in a casette in the dash of Los Angeles I casually pushed "off." Love at first listen it wasn't.

Later, I saw the cover...

...and decided any band that would have a cover as cool as that deserved a second chance. Besides, Ray Manzarek was producing, so the curiosity quotient went up a notch.

The thing that got me was their contrasts; Zoom was this rockabilly dude, Doe the Levis wearing blue collar dude, Bonebrake seemed like a skateboarder, and then there was this weird, ultra pale goth kinda nerd chick, eponymously named Exene.


And she "sang" kinda off, but somehow that off kilter approach worked in contrast to Doe's straightforward approach. An analogy could be drawn to Flav's craziness in contrast to Chuck's normal delivery in PE.

In her own way back then she was kinda cute.


Having been a musician, I acknowledged their talent in a sea of mediocrity - let's face it, while punk was fun, there were tons of bad hacks. The fact that there were so many good bands then is because there was such a huge pool to begin with coupled with unprecedented will to give them venues. So the music grabbed me, but then I started to read Exene's lyrics and I was really sold then. I love live shows, and that period delivered, but of them all, X stands out. It's cliche' to say, I know, but it's true; X was and is a great live band.

The reason I'm committing something here is because I found out not long ago that Exene has been diagnosed with MS. That bummed me out. I hope she does alright.



The following vid is jacked; dropouts and a real rough look complete with bad audio; there are slicker versions, but this one captures their live spirit better.