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September 2008

The bailout

This posting is long and about economics. I read this article this weekend and it stuck with me, but if the idea of reading this makes you squirm, then really, you don’t have to.  This is only for those who are interested in this kind of thing. 

I got permission from to post this from the author, John Mauldin, who is a best-selling author and recognized financial expert.  He is also editor of the free Thoughts from the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economics letter, go to:

Keep in mind this is only one of many view points I have read about this issue, but I personally found it quite interesting and think some of you might as well.  I couldn’t figure out how to make the charts show on my site, but you could probably go to his site if you were curious.

Who’s Afraid of a Big, Bad Bailout?
by John Mauldin
September 26, 2008

In this issue:
Who’s Afraid of a Big, Bad Bailout?
It’s the End of the World As We Know It
The TED Spread Flashes Trouble
The Transmission Mechanism
Let’s Make a Deal
Colorado, California, London, and Sweden
“A tournament, a tournament, a tournament of lies.
Offer me solutions, offer me alternatives and I decline.
It’s the end of the world as we know it and I feel fine.
(It’s time I had some time alone.)”
- Lyrics from R.E.M., 1987

Flying last Tuesday, overnight from Cape Town in South Africa to London, I read in the Financial Times that Republican Congressman Joe Barton of Texas was quoted as saying (this is from memory, so it is not exact) that he had difficulty voting for a bailout plan when none of his constituents could understand the need to bail out Wall Street, didn’t understand the problem, and were against spending $700 billion of taxpayer money to solve a crisis for a bunch of (rich) people who took a lot of risk and created the crisis. That is a sentiment that many of the Republican members of the House share.

As it happens, I know Joe. My office is in his congressional district. I sat on the Executive Committee for the Texas Republican Party representing much of the same district for eight years. This week, Thoughts from the Frontline will be an open letter to Joe, and through him to Congress, telling him what the real financial problem is and how it affects his district, helping explain the problem to his constituents , and explaining why he has to hold his nose with one hand and vote for a bailout with the other.

Just for the record, Joe has been in Congress for 24 years. He is the ranking Republican on the Energy and Commerce Committee, which is one of the three most important committees and is usually considered in the top five of Republican House leadership. He is quite conservative and has been a very good and effective congressman. I have known Joe for a long time and consider him a friend. He has been my Congressman at times, depending on where they draw the line. I called his senior aide and asked him how the phone calls were going. It is at least ten to one against supporting this bill, and that is probably typical of the phones all across this country. People are angry, and with real justification. And watching the debates, it reminds us that one should never look at how sausages and laws are made. It is a very messy process.

I think what follows is as good a way as any to explain the crisis we are facing this weekend. This letter will print out a little longer, because there are a lot of charts, but the word length is about the same. Let’s jump right in.

It’s the End of the World As We Know It

Dear Joe,
I understand your reluctance to vote for a bill that 90% of the people who voted for you are against. That is generally not good politics. They don’t understand why taxpayers should spend $700 billion to bail out rich guys on Wall Street who are now in trouble. And if I only got my information from local papers and news sources, I would probably agree. But the media (apart from CNBC) has simply not gotten this story right. It is not just a crisis on Wall Street. Left unchecked, this will morph within a few weeks to a crisis on Main Street. What I want to do is describe the nature of the crisis, how this problem will come home to your district, and what has to be done to avert a true, full-blown depression, where the ultimate cost will be far higher to the taxpayers than $700 billion. And let me say that my mail is not running at 10 to 1 against, but it is really high. I am probably going to make a lot of my regular readers mad, but they need to hear what is really happening on the front lines of the financial world.

First, let’s stop calling this a bailout plan. It is not. It is an economic stabilization plan. Run properly, it might even make the taxpayers some money. If it is not enacted very soon (Monday would be fine), the losses to businesses and investors and homeowners all over the US (and the world) will be enormous. Unemployment will jump to rates approaching 10%, at a minimum. How did all this come to pass? Why is it so dire? Let’s rewind the tape a bit.

We all know about the subprime crisis. That’s part of the problem, as banks and institutions are now having to write off a lot of bad loans. The second part of the problem is a little more complex. Because we were running a huge trade deficit, countries all over the world were selling us goods and taking our dollars. They in turn invested those excess dollars in US bonds, helping to drive down interest rates. It became easy to borrow money at low rates. Banks, and what Paul McCulley properly called the Shadow Banking System, used that ability to borrow and dramatically leverage up those bad loans (when everyone thought they were good), as it seemed like easy money. They created off-balance-sheet vehicles called Structured Investment Vehicles (SIV) and put loans and other debt into them. They then borrowed money on the short-term commercial paper market to fund the SIV and made as profit the difference between the low short-term rates of commercial paper and the higher long-term rates on the loans in the SIV. And if a little leverage was good, why not use a lot of leverage and make even more money? Everyone knew these were AAA-rated securities.

And then the music stopped. It became evident that some of these SIV contained subprime debt and other risky loans. Investors stopped buying the commercial paper of these SIV. Large banks were basically forced to take the loans and other debt in the SIV back onto their balance sheets last summer as the credit crisis started. Because of a new accounting rule (called FASB 157), banks had to mark their illiquid investments to the most recent market price of a similar security that actually had a trade. Over $500 billion has been written off so far, with credible estimates that there might be another $500 billion to go. That means these large banks have to get more capital, and it also means they have less to lend. (More on the nature of these investments in a few paragraphs.)
Banks can lend to consumers and investors about 12 times their capital base. If they have to write off 20% of their capital because of losses, that means they either have to sell more equity or reduce their loan portfolios. As an example, for every $1,000 of capital, a bank can loan $12,000 (more or less). If they have to write off 20% ($200), they either have to sell stock to raise their capital back to $1,000 or reduce their loan portfolio by $2,400. Add some zeroes to that number and it gets to be huge.

And that is what is happening. At first, banks were able to raise new capital. But now, many banks are finding it very difficult to raise money, and that means they have to reduce their loan portfolios. We’ll come back to this later. But now, let’s look at what is happening today. Basically, the credit markets have stopped functioning. Because banks and investors and institutions are having to deleverage, that means they need to sell assets at whatever prices they can get in order to create capital to keep their loan-to-capital ratios within the regulatory limits.

Remember, part of this started when banks and investors and funds used leverage (borrowed money) to buy more assets. Now, the opposite is happening. They are having to sell assets into a market that does not have the ability to borrow money to buy them. And because the regulators require them to sell whatever they can, the prices for some of these assets are ridiculously low. Let me offer a few examples.

Today, there are many municipal bonds that were originally sold to expire 10-15 years from now. But projects finished early and the issuers wanted to pay them off. However, the bonds often have a minimum time before they can be called. So, issuers simply buy US Treasuries and put them into the bond, to be used when the bond can be called. Now, for all intents and purposes this is a US government bond which has the added value of being tax-free. I had a friend, John Woolway, send me some of the bid and ask prices for these type of bonds. One is paying two times what a normal US Treasury would pay. Another is paying 291% of a normal US Treasury. And it is tax-free! Why would anyone sell what is essentially a US treasury bond for a discount? Because they are being forced to sell, and no one is buying! The credit markets are frozen.

Last week, I wrote about a formerly AAA-rated residential mortgage-backed security (RMBS) composed of Alt-A loans, better than subprime but less than prime. About 5% of the loans were delinquent, and there are no high-risk option ARMs in the security. It is offered at 70 cents on the dollar. If you bought that security, you would be making well over 12% on your money, and 76% of the loans in the portfolio of that security would have to default and lose over 50% of their value before you would risk even one penny. Yet the bank which is being forced to sell that loan has had to write down its value. As I wrote then, that is pricing in financial Armageddon. (You can read the full details here.)

Let’s look at the following graph. It is an index of AAA-rated mortgage bonds, created by It is composed of RMBSs similar to the one I described above. Institutions buy and sell this index as a way to hedge their portfolios. It is also a convenient way for an accounting firm to get a price for a mortgage-backed security in a client bank’s portfolio. With the introduction of the new FASB 157 accounting rule, accountants are very aggressive about making banks mark their debt down, as they do not want to be sued if there is a problem. Notice this index shows that bonds that were initially AAA are now trading at 53 cents on the dollar, which is up from 42.5 cents two months ago.

Accountants might look at the bond I described above, look at this index, and decide to tell their clients to mark the bonds down to $.53 on the dollar. The bank is offering the bond at $.70 because it knows there is quality in the security. They are being forced to sell. And guess what? There are no buyers. An almost slam-dunk 12% total-return security with loss-coverage provisions that suggest 40% of the loans could default and lose 50% before your interest rate yields even suffered, let alone risk to your principal - and it can’t find a buyer.

One of the real reasons these and thousands of other good bonds are not selling now is that there is real panic in the markets. The oldest money market fund “broke the buck” last week, because they had exposure to Lehman Brothers bonds. We are seeing massive flights of capital from money market funds, including by large institutions concerned about their capital. What are they buying? Short-term Treasury bills. Three-month Treasury bills are down to 0.84%.

It gets worse. Last week one-month Treasury bills were paying a negative 1%!!! That means some buyers were so panicked that they were willing to buy a bond for $1 that promised to pay them back only $.99 in just one month. The rate is at 0.16% today. If something is not done this weekend, it could go a lot lower over the next few days. That is panic, Joe.

I don’t want to name names, as this letter goes to about 1.5 million people and I don’t want to make problems for some fine banking names; but there is a silent bank run going on. There are no lines in the street, but it is a run nevertheless. It is large investment funds and corporations quietly pulling their money from some of the best banks in the country. They can do this simply by pushing a button. We are watching deposit bases fall. It does not take long. Lehman saw $400 billion go in just a few months this summer. Think about that number. Any whiff of a problem and an institution that is otherwise sound could be brought low in a matter of weeks. And the FDIC could end up with a large loss that seemed to have come from out of nowhere.

The TED Spread Flashes Trouble

There is something called the TED spread, which is the difference between three-month LIBOR (the London Inter Bank Offered Rate which is in euro dollars, also called The Euro Dollar Spread, thus TED) and three-month US Treasury bills. Three-month LIBOR is basically what banks charge each other to borrow money. Many mortgages and investments are based on various periods of LIBOR. Look at the chart below. Typically the TED spread is 50 basis points (0.50%) or less. When it spikes up, it is evidence of distress in the financial markets. The last time the TED spread was as high as it is now was right before the market crash of 1987. This is a weekly chart, which does not capture tonight’s (Friday) change, which would make it look even worse. Quite literally, the TED spread is screaming panic.

The Fed has lowered rates to 2%. Typically, three-month LIBOR tracks pretty close to whatever the Fed funds rate is. Starting with the credit crisis last year, that began to change. Look at the chart below.

Remember, LIBOR is what banks charge to each other to make loans. Lower rates are supposed to help banks improve their capital and their ability to make loans at lower interest rates to businesses and consumers. Look at what has happened in the past few weeks, in the chart above. The spread between three-month LIBOR and the Fed funds rate is almost 200 basis points, or 2%! That is something that defies imagination to market observers. On the chart above, it looks like it has not moved that much, but in the trading desks of banks all over the world it is a heart-pounding, scare-you-to-death move. The chart below reflects what traders have seen in the past two weeks, and it moved up more today.

Now let’s look at the next chart. This is the amount of Tier 1 commercial paper issued. This is the life blood of the business world. This is how many large and medium-sized businesses finance their day-to-day operations. The total amount of commercial paper issued is down about 15% from a year ago, with half of that drop coming in the last few weeks. Quite literally, the economic body is hemorrhaging. Unless something is done, businesses all over the US are going to wake up in a few weeks and find they simply cannot transact business as usual. This is going to put a real crimp in all sorts of business we think of as being very far from Wall Street.

I could go on. Credit spreads on high-yield bonds that many of our best high-growth businesses use to finance their growth are blowing out to levels which make it impossible for the companies to come to the market for new funds. And that is even if they could find investors in this market! There are lots of other examples (solid corporate loans selling at big discounts, asset-backed securities at discounts, etc.), but you get the idea. Suffice it to say that the current climate in the financial market is the worst since the 1930s. But how does a crisis in the financial markets affect businesses and families in Arlington, Texas, where my office and half of your district is?

The Transmission Mechanism

The transmission in a car takes energy from the engine and transfers it to the wheels. Let’s talk about how the transmission mechanism of the economy works.
Let’s start with our friend Dave Moritz down the street. He needs financing to be able to sell an automobile. To get those loans at good prices, an auto maker has to be able to borrow money and make the loans to Dave’s customers. But if something does not stop the bleeding, it is going to get very expensive for GM to get money to make loans. That will make his cars more expensive to consumers. Cheap loans with small down payments are the life blood of the auto selling business. That is going to change dramatically unless something is done to stabilize the markets.

Credit card debt is typically packaged and sold to investors like pension funds and insurance companies. But in today’s environment, that credit card debt is going to have to pay a much higher price in order to find a buyer. That means higher interest rates. Further, because most of the large issuers of credit cards are struggling with their leverage, they are reducing the amount of credit card debt they will give their card holders. If they continue to have to write down mortgages on their books because of mark-to-market rules which price assets at the last fire-sale price, it will mean even more shrinkage in available credit.

Try and sell a home above the loan limits of Fannie and Freddie today with a nonconforming jumbo loan. Try and find one that does not have very high rates, because many lenders who normally do them simply cannot afford to keep them on their balance sheets. And a subprime mortgage? Forget about it. This is going to get even worse if the financial markets melt down.
We are in a recession. Unemployment is going to rise to well over 6%. Consumer spending is going to slow. This is an environment which normally means it is tougher for small businesses and consumers to get financing in any event. Congress or the Fed cannot repeal the business cycle. There are always going to be recessions. And we always get through them, because we have a dynamic economy that figures out how to get things moving again.

Recessions are part of the normal business cycle. But it takes a major policy mistake by Congress or the Fed to create a depression. Allowing the credit markets to freeze would count as a major policy mistake.

I have been on record for some time that the economy will go through a normal recession and a slow recovery, what I call a Muddle Through Economy. This week I met with executives of one of the larger hedge funds in the world. They challenged me on my Muddle Through stance. And I had to admit that my Muddle Through scenario is at risk if Congress does not act to stabilize the credit markets.

Let’s Make a Deal

Why do we need this Stabilization Plan? Why can’t the regular capital markets handle it? The reason is that the problem is simply too big for the market to deal with. It requires massive amounts of patient, long-term money to solve the problem. And the only source for that would be the US government.

There is no reason for the taxpayer to lose money. Warren Buffett, Bill Gross of PIMCO, and my friend Andy Kessler have all said this could be done without the taxpayer losing money, and perhaps could even make a profit. As noted above, these bonds could be bought at market prices that would actually make a long-term buyer a profit. Put someone like Bill Gross in charge and let him make sure the taxpayers are buying value. This would re-liquefy the banks and help get their capital ratios back in line.

Why are banks not lending to each other? Because they don’t know what kind of assets are on each other’s books. There is simply no trust. The Fed has had to step in and loan out hundreds of billions of dollars in order to keep the financial markets from collapsing. If you allow the banks to sell their impaired assets at a market-clearing fair price (not at the original price), then once the landscape is cleared, banks will decide they can start trusting each other. The commercial paper market will come back. Credit spreads will come down. Banks will be able to stabilize their loan portfolios and start lending again.
Again, the US government is the only entity with enough size and patience to act. We do not have to bail out Wall Street. They will still take large losses on their securities, just not as large a loss as they are now facing in a credit market that is frozen. As noted above, there are many securities that are being marked down and sold far below a rational price.

If we act now, we will start to see securitization of mortgages, credit cards, auto loans, and business loans so that the economy can begin to function properly.

What happens if we walk away? Within a few weeks at most, financial markets will freeze even more. We will see electronic runs on major banks, and the FDIC will have more problems than you can possibly imagine. The TED spread and LIBOR will get much worse. Businesses which use the short-term commercial paper markets will start having problems rolling over their paper, forcing them to make difficult cuts in spending and employment. Larger businesses will find it more difficult to get loans and credit. That will have effects on down the economic food chain. Jim Cramer estimated today that without a plan of some type, we could see the Dow drop to 8300. That is as good a guess as any. It could be worse. Home valuations and sales will drop even further.

The average voter? They will see stock market investments off another 25% at the least. Home prices will go down even more. Consumer spending will drop. What should be a run-of-the-mill recession becomes a deep recession or soft depression. Yes, that may be worst-case scenario. But that is the risk I think we take with inaction.

A properly constructed Stabilization Plan hopefully avoids the worst-case scenario. It should ultimately not cost the taxpayer much, and maybe even return a profit. The AIG rescue that Paulson arranged is an example of how to do it right. My bet is that the taxpayer is going to make a real profit on this deal. We got 80% of AIG, with what is now a loan paying the taxpayer over 12%, plus almost $2 billion in upfront fees for doing the loan. That is not a bailout. That is a business deal that sounds like it was done by Mack the Knife.

This deal needs to be done by Monday. Every day we wait will see more and more money fly out the doors of the banks, putting the FDIC at ever greater risk. Panic will start to set in, moving to ever smaller banks. Frankly, we are at the point where we need to consider raising the FDIC limits for all deposits for a period of time, until the Stabilization Plan quells the panic.

I understand that this is a really, really bad idea according classical free-market economic theory. You know me; I am as free market as it comes. But I also know that without immediate action a lot of people are really going to be hurt. Unemployment is not a good thing. Losses on your home and investments hurt. It is all nice and well to talk about theories and contend the market should be allowed to sort itself out; and if we have a deep recession, then that is what is needed. But the risk we take is not a deep recession but a soft depression. The consequences of inaction are simply unthinkable.
Joe, I am telling you that the markets are screaming panic. Yes, Senator Richard Shelby has his 200 economists saying this is a bad deal. But they are ivory tower kibitzers who have never sat at a trading desk. They have never tried to put a loan deal together or had to worry about commercial paper markets collapsing. I am talking daily with the people on the desks who are seeing what is really happening. Shelby’s economists are armchair generals far from the front lines. I am talking to the foot soldiers who are on the front lines.

Every sign of potential disaster is there. You and the rest of the House have to act. It has to be bipartisan. This should not be about politics (even though Barney Frank keeps talking bipartisan and then taking partisan shots, but I guess he just can’t help himself). It should be about doing the right thing for our country and the world. I know it will not be fun coming back to the district. Talking about TED spreads and LIBOR will not do much to assuage voters who are angry. But it is the right thing to do. And I will be glad to come to the town hall meeting with you and help if you like.

With your help, we will get through this. In a few years, things will be back to normal and we can all have stories to tell to our grandkids about how we lived through interesting times. But right now we have to act.

-777.68 the largest point drop ever

Well, if you are an adrenaline junkie, you got your fix in spades today.  No sense in recapping what just went down, politically, financially, the markets.  All I can say is, what now? 

Batten down the hatches, because the repercussions of this, if unresolved, are immense. 

I would be lying if I said I wasn’t just a little bit scared.  We are facing the unknown.  A storm of gargantuan proportions.  Will we be plummeted into the depth of it?  Or will some freak miracle happen to stave it off for another day?


Word On The Street was fun!  Thanks to everyone who showed up and crowded into my tent.  It is heartwarming to see so many smiling faces, taking the time out of your day to come and talk for awhile, to show such awesome support for us writers.  It makes us feel like we aren’t writing into a void.  That it truly is a give-and-take proposition. 

And then there were the surprises.  Like Cheryl.  The best neighbour I have ever had.  This woman has such a huge generous heart.  And not in the namby-pamby-look-what-a-good-giving-person-I-am.  She is the real deal.  Was “just a neighbour” but was there for me, solid as a rock, when I was struggling on my own, with three small children, living in a log cabin in the woods. 

The way she and her husband would lend a hand, was in the way that you didn’t even realize that help was being quietly and solidly given until years later, after we had lost touch, and I had added a few years of maturity under my belt.  Then I could see the full extent of how lucky I was, how blessed to have this loud, rowdy, heart-warm person as my neighbour and friend.

Anyway, she was there, hadn’t aged a day, and she gave me a huge hug, and a card and a canned jar of homemade salsa.  And I am so glad she heard about WOTS and showed up.

And Val came by.  A woman that was in the ballet class above me, that I looked up to.  Who was a beautiful dancer.  Hard working, like me.  And I’d always wondered what had happened to her. 

And I saw Bryan Pike who helped organize Word On the Street, but more importantly, it was the same Bryan Pike who drove us over countless mile on the BC Book Tour and it was lovely to see his smiling face.

I had a wonderful time today, with my writer friends from afar who have flown in for the week to write and talk and they took time away from their computers to came to support me.  I haven’t read outloud from First Time before, and people seemed to really respond to it, and that is always a good thing…and a relief. 

And afterwards we had Dim sum at The Pink Pearl and it was good.  And it didn’t pour with rain, like it did last year, and what could be better.  Sunshine, friends, old and new, and books and food, you can’t beat that!

Word On The Street

James and Ken arrived this morning for a week-long stay of writing and food and mischief-making of some kind or another.  And it feels nice to have their energy in the house.  Stirs up the writing pot and hopefully we will all leave this week with a thick sheath of newly written pages and full of ideas. 

Word on The Street is tomorrow.  This takes place in many of the major cities through Canada and is open to the public and is absolutely free.  So, take advantage of this opportunity and check out if your city is having Word on The Street and if so, go on down and listen to wonderful writers and people in the literary world, read and talk about their work. 

You don’t need tickets or permission.  Just walk into any tent that interests you and sit down and listen and ask questions and most of all enjoy!  Or if you want to browse and not get committed to listening to an author, do what I do, and lurk outside the tent, close enough to see if it’s something that interests me, and if it is, then I sidle up and plop down in a seat, and if I’m not enthralled then I drift on to the next tent and eavesdrop for a while.  Although, don’t take too long in deciding, because each author has only about 20 minutes and then it’s on to the next one.

(And…um…if any author sees me stand outside their tent for a while and then drift on, it might actually be because I have to leave to get ready for my own reading, and not because I’m bored.)

Anyway, I’ll be reading from my new book, First Time, at Library Square in downtown Vancouver at the Canada Writes Tent at 12:00 sharp.  It is over in a blink of an eye, so those of you planning on attending, don’t be late. 

See you there! xo

A tiny taste of Paris

On Urban Rush yesterday, everyone seemed very interested to hear about my trip to Paris, so I thought I’d post a few pictures to give you a tiny visual taste of our visit. 

The first one is the great boulangerie where we bought delicious sandwiches on fantastic crispy/soft baguettes, and croissants and tiny puff balls that melted in my mouth and were sprinkled with little chunks of white sugar.

The next picture is Jenny looking fabulous at her birthday dinner.

The third one is the wonderful gang of friends who flew to Paris to help celebrate this special day with Jenny, sans Greg who arrived in the evening.  This is the birthday luncheon restaurant that I wrote about before, where Jenny made those delicious champagne concoctions.

And the last picture, I couldn’t resist including.  It is the beautiful chandelier at the Louis Vuitton House that I shall dream about for years to come.





Urban Rush

Well, I probably should be washing a load of laundry, rummaging through my closet, trying to put together a half-way decent outfit to wear.  I probably should have gotten a haircut, or at least a trim.  I haven’t had scissors to hair since June.  I should probably be conjuring up some sort of clever repartee, making up imaginary conversations in my head, so that when Michael and Fiona, (the hosts of Urban Rush) ask me something when I show up at the studio today, cameras rolling, I don’t look at them blankly and stare off into the distance. 

But I am doing none of the get-yourself-together-to-be-a-public-person things.  I am sitting on the sofa, blogging to you, wearing some exercise gear as if wearing the outfit, makes up for not actually getting on the treadmill and exercising.

And it’s not that I’m dreading going on Urban Rush, I’m not.  I really like Michael and Fiona.  They are always nice to me, fun to chat to.  They’ve always prepped and read the book and are quite intelligent to talk to.  The producers are congenial, as is the crew.  I’m happy to go, chat for a while. 

It’s just, I think, that I’m going through a phase of wanting to hibernate, snuggle down into my nest, and solitude, and I think part of that longing comes from over booking this Fall. 

Snuggling down is not an option.  BUT here’s what I’ve decided to do.  I’ve promised myself that I won’t take on anything more until next Fall.  I am going to give myself a huge patch of time to write, read, and savor the Spring with my family.  It is my youngest child’s last year of High School.  Then he is planning on going to spend some time with his Dad and study there and whatnot. 

This is my last year of being a full-time, hands on Mom.  And it’s an odd feeling.  I can’t even imagine what it is going to be like, to not have school schedules to adhere to and hot breakfasts to make, and so on.  I’ve been doing this for over 24 years.  It’s seems impossible to believe that this phase of my life is soon going to be over.

And yes, there will be the next phase, a different phase, and I’ll probably find much to enjoy and embrace about all that freedom, but there is a slight hesitancy as well.  A pausing at the edge of the diving board, wondering if I will remember how to swim, a worry that the water will be too cold.

And yes, of course my children will always be in my life, and me in theirs.  But it’s different when they are grown and off, living their lives.  It’s a different kind of mothering that is required.  A stepping back.  A letting go.  A trying not to over-protect and control.  Because really, how would I know what would be best for them.  There are changes that occur.  Life that has been lived on both sides.  And none of us are exactly the same person that we were the last time we saw each other.  And so there is that adjustment, that awkward bumping, sorting out, and then we all go off again. 

So, anyway, I am not going to plan anything for the rest of the year.  After I finish my obligations this Fall, I am going to tuck down, cook way too much food, take long walks, and try to be in the moment, and enjoy my boy and the end of this stage of mothering.

Don’t read if you are feeling a little depressed, because this won’t help.

I feel slightly sad today.  I don’t know why.  It’s not a horrible weeping my eyes out thing.  More of a tamped down feeling.  Like a slow underlying feeling of despondency, the slight ache in the throat, like if I had a good reason, I would cry, but I don’t.

I have no reason to feel this way, which doesn’t help matters. 

I know how lucky I am.  Have been.  My whole life, I’ve been so blessed.

And so, that I feel this way, today, seems ungrateful somehow.  Like I have no right. 

Is this part of menopause?  This feeling?  Or is it a low-grade depression that I’ve been carrying ever since last Fall when all that scary s__t when down with ____.

The thing is, when my blood Dad died, I was sad, but I wasn’t floored with grief, because I didn’t really know him all that well.  My mother and father divorced when I was 3 1/2.  Saw him maybe a total of 6 or 7 times in the subsequent years.  And so when he died, the thing I cried for, wasn’t the father that I had actually met, but the fantasy father that I had held in my heart, all those years growing up.  The father that saw me as special.  The father that loved me.  Supported me.  Was behind me, watching my back, and me watching his.

My father wasn’t able to be that man.  It was unfair to put those expectations on him.  He was a mere mortal, with all the flaws and shortcomings that are present in everybody.  But to me, the betrayal, of that fairy-tale image that I clung onto all those years to keep me going through the dark nights.  Well, it was impossible to forgive him.

I wish I had.

When, Harry, my dad, died, I consoled myself.  “He was only my blood father,” I told myself.  “Now, if ____ were to pass.  The grief would be unbearable.” 

Well, in a way he has.  But in a worse way than an actual death.  That would be easy.  But this decision that he made was a conscious choice.  And I think it was the right one and the healthiest one for all involved, but it is hard none-the-less.  And how does one grieve that?  How does one put it aside?  How does one come to terms with the fact that a friendship that she thought was unbreakable is broken?

Because it is broken.  Too much has been said, done.  There is no going back.  No wanting to.  But the grief is still there.  I am grieving two things.  The abandonment and loss of my real father and my pretend one all mushed up together. 

I guess that’s why I’m feeling sad. 

Or maybe it’s all the uncertainty in the world.  The wild volatility of the markets.  Three of the five major investment banks imploding, the other two propped up by toothpicks.  The short term interest rate on T-Bills falling to their lowest rate in over 60 years.  That an article I read yesterday suggested that over 2,000 regional banks will fail in the US.  The whole election situation in the States.  The bad news that is on the Internet, the TV, the news, every single day.  Global warming.  Depleting water, food, oil.  And I’ve been reading all this stuff for years.  Felt it coming.  Not to this extent, mind you.  But I felt it coming and positioned myself accordingly.  So, I’m okay.  Really, haven’t been touched much.  But when I see the diving numbers, and I see families and people loosing jobs and savings and retirement funds.  When I see the foreclosure numbers, they aren’t just numbers in my mind.  I see the parents having sleepless nights, the creditors knocking on the doors, the children, frightened and scared and confused.  And it makes me run to the chocolate box for comfort. 

It’s just too much, what is happening.  What I want to know, among all this greed and corruption on Wall Street and on all levels of Government, is where are the good people?  Where are the hopeful stories?  Where are the heroes that didn’t grab with both fists, while screwing the orphans and widows and children?  Where are these people in these dark times?  That’s what I want, need to know.

Do I look more sophisticated?

Well, hello Bloggers.  I am back.  And you’ll never guess in a million years where I was this last week…

I was in PARIS! 

That’s right.  That was not a typo.  That’s were I was.  As a matter of fact, two days ago, I was sitting on the steps of the Musee de Orsy eating an excellent sandwich.  A light and crispy French baguette with jambon (ham), brie (delicious cheese) and burree avec demi-sel (salted butter).  And after that very nice lunch, Don and I went into the museum and visited every single scrap of art in the place.

What was I doing there?  Why did I up-and-go?  Especially given that it was the beginning of the school year and I never go anywhere at that time.


So, we went to celebrate with her.  AND BOY DID WE CELEBRATE!  And I had the best time ever!  I got to get to know her boyfriend, Phil better.  What a sweetie he is.  And I got to meet a bunch of her friends, who were fabulous!  We drank and ate and laughed and talked and worried about the market and then ate some more. 

We all stayed in this house in an old part of Paris.  And we went to this ornate, baroque restaurant for Jenny’s birthday lunch which had a garden in the middle.  And it used to be a brothel with all the windows facing in towards the courtyard.  And Jenny ordered champagne and fresh raspberries and strawberries and squeezed them up in my champagne flute with a glug of a red liquor of some kind that made the whole thing taste like a party.  And we ate and laughed and drank and then we walked for a while in a fancy shopping area until it was time to go home and get dressed for the birthday dinner. 

I felt like I had been dropped in the middle of a movie set or a dream about fabulous people, living fabulous lives, and I still couldn’t quite believe that Don and me were actually there, and that the gorgeous woman clad in a long elegant black velvet gown with a ridiculously beautiful period broach and siren red hair and glowing black eyes was my sister!  That we were there, in Paris, celebrating her birthday. 

And then after dinner, and more champagne, Paul sat us around the living room, that was lit by candlelight and a fire crackling in the hearth, and took pictures and normally, I don’t like getting my picture taken, but this was different, because these friends of Jenny’s were so fun.  So, even sitting and Paul saying, “Don’t move, don’t even breath,” was part of what made the whole night special, because it wasn’t like snapshots, it was more like art. 

Yes, we went to Paris for Jenny’s birthday and I realized that I understood and spoke a little more French that I thought I knew, (still not much, but all the same, it was a happy surprise.)  And we saw beautiful buildings and gardens and paintings and sculptures, but not only that…

Kirk, (an incredibly sweet man) set it up so Jenny and her pack (Phil, me, Don, Kirk, Greg, Morton, John and Paul) got to go to the Louis Vuitton (hope I spelt that right) house for lunch and then they took up on a tour of the factory. 

The house was SO beautiful and everyone there was so nice.  And the lunch was delicious and there was champagne and wine.  And even the factory was beautiful, with wide open windows that looked out on green leafed trees that were gently rustling in the breeze.  And every single person there was so careful in how they did everything.  And they have a woman who checks things at the end to make sure that everything is exactly so.  And there was a briefcase that apparently had a slight flaw, and she was showing it to us, but honestly, for the life of me, I couldn’t see what this minuscule flaw was that she was talking about.  It looked amazing to me.

It was such a thoughtful, perfect gift for Kirk to have organized. 

Afterwards, we got dropped off at the Louis Vuitton store in Paris.  It was the first time I’d ever entered their store before.  And even though I would never, ever, spend that kind of money, I have to say, I looked at their product with an entirely new respect.  I would see a briefcase perched on a gleaming surface and I would think about the man in the factory with his little hammer and his containers of different kind of nails.  I would think about the man who punched out the leather and the women at the sewing machines, sewing slow and painstakingly careful.  I would remember the long dark haired man, with tattoos, who held himself like an artist, working on a special order trunk.  And I would remember the glowing faces of the rest of our company, their raptures over the pieces, and felt tremors of excitement course through me as well.  Not because I lusted after the pieces, I just felt really happy that this was such a big deal and Kirk had made it happen for Jenny.

Don and I had the best time ever, and I am so glad Jenny asked us to come.  And HAPPY BIRTHDAY JENNY!  WE LOVE YOU!  xxxooo


Good Morning

It’s 5:46 am, but I’m blogging now, because things are really getting busy here, and I don’t want to forget. 

I wanted to let you know that I’m going out of town and won’t be bringing my computer, so there won’t be any blogging until I get back on Sept 20th.  I’ll try to touch base then, but if I’m too pooped, then I’ll say hello on the 21st.

The next order of business is, what to make for breakfast?  We are running low on food supplies.  We are out of eggs, which cuts out a whole slew of breakfast options.  Not just the eggs things, like omelets, scrambled, etc.  It also eliminates, crepes, pancakes, coffee cake, blueberry muffins. 

But never fear.  My family won’t go hungry, at least not today.  I’ve decided to make a fruit crumble.  I’ve got a bunch of delicious summer fruit tucked away in the freezer, a couple of apples in the crisper, I have the butter, oatmeal, some flour (although, that’s getting low too),  some sugar and cinnamon.  If I dig hard enough, I’m sure I’ll be able to find a wrinkled up lemon lurking in the back of my fridge.  I also have pecans and almonds which is good, because I like to grind up a handful of them to throw into the topping.  And best of all, I have some heavy whipping cream to drizzle on top. 

I love that about cooking.  You can open your fridge and think, oh God, there is nothing edible in here to eat.  And then you take a little of this and a dab of that and the next thing you know, nothing has turned into a delicious something. 

Have a great week, everybody.  I’m off to have fun in the kitchen.  See you when I get back! xo

Difficult choices

I’ve decided to sell my little island place.  I feel really sad, even though I know it is the right thing to do.  Don was heroic in his efforts, but he never was really comfortable there.  Better to sell it and find something that can be a heart home for both of us.  Otherwise I am just holding on to an empty dream.

ho hum

I haven’t blogged for the last two days because nothing interesting is happening here, not that that has stopped me from blogging before…

But really, you don’t want to hear about me wading through endless stacks of paperwork, filling out forms, opening three weeks worth of mail, shredding what needed to be shredded, filing or tossing that which remained.  You don’t want to hear about the sludge work that accompanies the glamorous life of a writer, where you have to fill out endless questionnaires and forms and try to sound like a proper authorly type.

So, I think I shan’t tell you all about that.  I shall slip away silently, like a unwelcome ghost.  Farewell…farewell…Back to my chores…Aaaahhhheeeeeoooo.

Okay, that wasn’t silent, but you can’t have everything.

North Vancouver is opening a beautiful new library!

I am please to announce that the North Shore has a beautiful new library opening and equally happy that they have invited me to be a part of their celebrations! 

We didn’t have TV growing up, so, my brothers and sisters and I would devour way more than our fair share of books, the majority coming from school and public libraries.  We would always check out the maximum amount allowed and then would swap with each other when we had finished reading our stack.  And when we found an author we liked, we would check out every book that author had ever written.

I love libraries.  They were a huge part of some of the happiest memories I have of growing up.  The worlds all those books opened up for me, the escape they provided, the hope.

So, those of you who find yourself with some time on your hands, come on out and show your support and check out this beautiful new facility.

The City of North Vancouver is celebrating the completion of a landmark building in the heart of the City, marking the official opening of the North Vancouver City Library and Spirit Square Civic Plaza.

On Saturday, September 20th from 11:00am-3:00pm, Mayor Darrell Mussatto, members of Council and the Library board, as well as special guests and dignitaries will lead a community celebration that recognizes the importance of literacy and library services to the City.

The outdoor, literary-themed, family-friendly celebration takes place in Central Lonsdale, beginning with an official ceremony at the Main Stage and the unveiling of commemorative plaques. Many other planned activities and attractions include:

* Main Stage entertainment, including fire juggler Mike Battie and musical quartet Mimosa
* Author readings throughout the Library and Civic Plaza
* Meet-the-author book signings, including, Meg Tilly, David Leach and Victoria Miles
* Educational displays from Friends of the Library, North Vancouver Museum & Archives, North Vancouver Recreation Commission, National Maritime Centre, BC150, Leadership in Energy and Environmental Design (LEEDS), City of North Vancouver Sustainability, and Spirit Trail
* Read-a-thon recognizing summer reading students
* Taste of Lonsdale, where participants can sample a variety of locally prepared cuisine
* Strolling entertainment, featuring popular storybook characters such as Harry Potter
* Kids’ activity area with face painting, balloon creations and story time
* A contest where participants guess how many LED lights there are in the public art piece located at the entrance to the Library
* Free celebration cupcakes
* Much much more

Occupying three floors totaling 3,200 square meters, the new North Vancouver City Library is a state-of-the-art facility. Library amenities include an expanded collection of 150,000 items, as well as public computers, wireless access, a study hall, community meeting rooms, a children’s reading garden, an area for teens, a café on the plaza level, public art, and underground parking.

The adjoining Spirit Square Civic Plaza connects the new Library with City Hall and Lonsdale Avenue, providing the community with easy access to the City’s newest civic facility. The Civic Plaza features a wireless café terrace, market promenade, amphitheatre and outdoor reading rooms. Funded in part by the Provincial Government’s B.C. Spirit Squares program, the new Civic Plaza provides a unique and welcoming gathering place for the community.

The public is invited to join the City for a unique and exciting celebration in Central Lonsdale. The official opening celebration takes place from 11:00am to 3:00pm in Spirit Square Civic Plaza, located at West 14th Street and Lonsdale. For event details, visit


Middle of the night.  Can’t sleep.  Lay in bed tossing and turning, for what seemed like hours.  Being careful not to toss too vigorously so Don wouldn’t wake up, but another part of me, really wanting him to, so maybe then I could talk with him about all the little niggling worries that leap on me at night and they would go away.

I really should make my computer go directly to my mailbox and bypasses all the bad news. 

And when the news isn’t depressing me, then don’t worry, I can manage to drum up worries quite fine all on my own. 

Are my children happy?  Is water really going to get as scarce as they say?  Is it inflation or deflation?  Am I making good decisions?  Keeping the family finances safe?  How is my mother doing?  My daughter?  My son?  Will and his friend get on a plane in a few hours.  He is grown, and yet, still I get scared.  Does my writing suck?  I have to read a friend’s manuscript and how am I going to find the time and the focus when I am struggling so mightily with my own?  What should I make for breakfast?  Why can’t I sleep through the nights anymore?  Will this fractured sleep stop when I get through menopause?  Or is this the way it’s going to be here on out?  Why is it that the better my life gets and the happier I am, the more scared I get about dying?  Shouldn’t it be the other way around?  And then there is that article my brother Ben sent me about Palin that scared the c__p out of me. 

Anyway, those are just a handful of things that my mind flipped to while lying in bed while sleep laughed at me.  There were tons more. 

Listen.  Think.  Do something.  This is too important.

I received this today from Astrid Heger and thought that she said it better than I ever could, and so, I am sharing her words with you.

Maria had driven to Tijuana with her mom, sister and little brother to buy a special dress for her aunts wedding.  This was the most beautiful dress she had ever owned—-no the most beautiful thing she had ever seen——and she hung it on a nail pounded into the wall of a garage in Bell Gardens that they called home.  Every Sunday she tried on the dress—-anxious for the time to pass when she could wear it to be in the wedding.  But this past Sunday the dress had become too small, her mother could not fasten the small white buttons.  Her mother rushed her to the emergency room fearing the worst——cancer.
I was summoned to the Emergency room to evaluate Maria——She was sitting in the corner of the windowless exam room with tears running down her face.  Her mother had fled the room leaving her to fend for herself.  A tiny 10 year old she looked much younger than her age, and now dressed in a too-big dress handed down to her and wearing black Mary-Jane shoes and bright white socks she looked translucent—-a shadow of the girl that might have been.

At age 10 she had just been told that she was pregnant.  Pregnant by her father who had been raping her for over two years.  We spoke and I comforted her—-on examination we found her to be 16 weeks pregnant, and because she was so small her womb was now pushing down her vagina making intercourse impossible so her father had been raping her anally.  Her sister when asked about whether the little brother had been sexually abused——said “No, he still laughs.”

So last night when the Republicans welcomed with thundering applause, a woman who believes that all abortions must be outlawed——my heart stopped in my chest at the very idea that we as a Nation would ever considered taking away the rights of women and children—-my patients—-raped, abused and violated in the most horrific ways.  How careless we are with the lives and souls of those who are less fortunate. 

I am moved to tears at the thought of the precipice that we are approaching.  I could spend hours on poverty, loss of the medical class, no health care etc etc etc.——but sitting there that day in that stark, cold clinic room with a little girl whose only hope for survival was an abortion——I was glad to have that option.  Of course I would love to see a time come when everyone knew to practice abstinence, or even birth control, or a time when rape and incest were words we did not understand and women had the right to say no and have someone hear her—but apparently none of these words—-abstinence, birth control, rape or incest has penetrated the isolated, cold world of Gov. Pallin.

Tell me where to go to be heard—-I cannot believe that women across this country who understand what violence against women and children really means—-will not stand up to be counted.

Astrid Heppenstall Heger, M.D.
Executive Director
Violence Intervention Program
1721 Griffin Ave.
Los Angeles, CA 90031

Back to school

I got up early, peeled and chopped a bunch of apples, added some cinnamon, nutmeg and two dashes of cloves, squeezed in a little lemon juice, a handful of light brown sugar, a little water, and set it on the stove in a pot with a lid to simmer. 

I love piping hot fresh homemade applesauce in the morning for breakfast. 

Once the apples were soft, I took the potato masher to them.  They were still a little tart, so I added another spoonful of sugar.  Then I cooked up some breakfast sausages, a couple English muffins and we were ready to go.

It’s funny this whole hot breakfast thing. 

I’d read once when the children were small, that kids who ate a good breakfast did substantially better at academics, math and reading and what-not, than children who skipped breakfast, or had a doughnut or something.  So, my kids have had to suffer through hot breakfasts every single school day of the year. 

In our house, a special treat on weekends, was going down to the store and buying sugar cereals.

But I wonder now, after all those years of getting up early and making pancakes, and waffles, and crepes, and omelets, and hot porridge, and eggs easy-over, and warm gingerbread cake, and coffee cake, and blueberry muffins, and scrambled eggs, and fried eggs and Mom’s breakfast cinnamon puffs, and boiled eggs, and applesauce, and Mom’s breakfast mash, and homemade hot chocolate, if it made a difference?

If I could have fed them pop-tarts, or cold cereal day in and day out, and they would have been just as happy and done just as well?

The hot breakfasts didn’t help Emily one bit in the Math department.  And both David and Will struggled with reading.  Would they all have struggled more if they hadn’t had hot breakfasts?  Or would it have all turned out exactly the same. 

Now that Emily is grown and comes home to visit, she rarely will partake in breakfast.  And when Dave comes, if he’s not off to an early mountain biking start, he’ll generally sleep in and eat a large breakfast at lunchtime.  And this morning, Will barely ate anything, and didn’t even make a dent in his hot freshly made applesauce.

And I wondered if, my way of loving, cooking heaps of food, so no one will ever be hungry and suffer through a growling stomach, is a tyranny of another kind?  Where people feel they have to eat, whether they want to or not.

See, my mother didn’t cook once we got old enough to.  I only remember two meals that she actually prepared.  Both were memories from before I was in school, so I must have been three or four.  One memory was her at the stove making oatmeal, and the other was a pot tuna casserole. 

My children don’t like tuna casserole.  But, the odd thing is, I do.  I think it is all tied up with memories of a time when things were different as a child.  The time before she met our step-father, John.  When our life was more normal.  And sometimes, when the children were out, visiting their fathers, I would get myself a can of tuna and some cottage cheese and mozzarella and noodles and I’ll try and reproduce that tuna casserole that my mother made and I’ll eat it and feel loved.  Same thing with clam chip dip.  We made that once, and every time there is a special occasion, like a bunch of family coming over, or Boxing Day or New Years Eve, I’ll make clam chip dip and it feels like a party.

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