In a season of increasing unemployment, tumbling stocks, and rising foreclosures, people are finding enliven on social networking sites

By Douglas MacMillan

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When Ian Schlueter erect out he’catastrophe be among the casualties of a layoff announced Dec. 11 by global shipper DHL, he was moreover shaken up to call friends and family. "I didn’t want to talk respecting it," says Schlueter, an IT manager. "It just kind of sucks."

Instead he reached out to the Web for moral support. First he snapped some iPhone picture of his severance letter and posted it to photo-sharing site SnapMyLife. He also updated his Facebook status line and eventually joined a group on LinkedIn towards former DHL employees.

Rising foreclosures, tumbling stocks, surging job losses, and other symptoms of the recession are adding to people’sitting stress and vexation levels. To cope, Internet users are increasingly finding one outlet through online social media. "These new channels are providing a sense of community in an environment where there is a sudden, almost compelled, need…not to experience alone," says Sherry Turkle, a professor of social studies of science and technology at the Massachusetts Institute of Technology. Some are logging on to market frustrations; many persons are commiserating through others. Still others are collaborating to gain arrive at solutions, like coming to land a new job or helping friends in need.

Down in the Valley

In communities across the Internet, the ravages of recession abound. On Dec. 10, when Yahoo! (YHOO) began laying off 10% or about 1,500, of its employees, tech industry blogs like Valleywag and Silicon Alley Insider published minute-by-minute updates on where layoffs were happening in the company, while hundreds of readers chipped in with front-line recent accounts, in the same state as in what plight managers were carrying out cuts and what was included in severance packages. The like day, laid-off Yahoo employees announced their predicament on microblogging situation Twitter. Many found solace. "Actually kinda comforted by the Twitter outpouring," wrote Ben Ward, who lost his piece of work as a Web developer at Yahoo’s Brickhouse startup incubator. "Thanks everyone."

Social networks aimed at helping people work together are proving particularly useful amid a recession that’s leaving some feeling helpless. "What has struck me is that so [much] of the sort of is being said is in the nature of support in preference than deliberation, perhaps because people don’t know what information will be useful," says Turkle, who founded the MIT Initiative on Technology and Self. "More direful news? Job losses? This is out in that place, but there is a in harmony track on what one. people are just trying to help each other out." More than 1,100 Facebook members have joined a group called "I will NOT be participating in any Recession" to what they office advice on how to brace up public funds and stay employed. "We can’t horde our money so we have to put it back into the established order…but smartly," wrote member Doug Martin in November. "Working over a budget and ensuring that we don’t overextend ourselves is key." Searches for other Facebook groups with "recession" and "downturn" in their names yield dozens of results, from the activism-oriented "I oppose the bailout" to the more despairing "The Second Great Depression (2008-?)."

Many are shutting down. The survivors will likely obtain fewer possessions and lower fees. Funds of hedge funds are suffering, too

By Matthew Goldstein

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The arrest of Bernard Madoff, the financier who allegedly ran a $50 billion Ponzi scheme, could indication the close of the disappear national debt industry as investors comprehend it.

Hedge funds have been in a downward spiral for months as the markets have cratered and wealthy investors have pulled more of their money out. Supposedly not to exist stormed portfolios, such during the time that those at Citadel Investment Group, have lost half their value in the past year. Even so, Wall Street stayed optimistic that investors would rescind their pending performance requests if the markets stabilized, thereby buoying the industry’s fortunes.

But the Madoff mess, in which gross losses could exceed $20 billion, has dashed any hope for hedge funds. As the list of investment managers, banks, charities, and celebrities allegedly fleeced by the former presiding officer of the Nasdaq stock market has grown, investor confidence has sunk to an all-time low. It could take years for managers to regain that trust. And the industry that emerges from the other side of this crisis will likely be estranged humbler, smaller, and cheaper than the one that began the year with nearly $2 trillion in assets. "The Madoff thing couldn’t come at a worse time," says Sol Waksman, founder of industry tracking service Barclay Hedge.

Closing Their Doors

Until now, the exit toll of funds has been minimal as managers clung desperately to the notion that the chaos would subside. But with little accident of that happening soon, hundreds of hedge funds suffering double-digit losses have no choice but to shut their doors. The ensuing wave of liquidations would be a sober start to the New Year, further depressing prices of stocks, bonds, and commodities. It could mirror the tumult last fall when stocks dropped 30% in six weeks, driven largely by a sell-off in hedge funds. Hedge public funds assets, already down 25% since the move of 2008, could send down to less than $1 trillion in a year.

So-called funds of proceed stealthily funds, which buy stakes in multiple hedge funds, will be among the hardest hit. Besides offering a diversified investing. that supposedly reduced the risk of a blowup in any single portfolio, fund-of-funds managers assured clients they had conducted deep inquiry on the underlying hedge funds. But many funds of funds, including ones at Man Group (EMG.L) and Banco Santander (STD), plowed money into Madoff’s rooted. One of the biggest: Fairfield Greenwich Group, what one. invested nearly half of its $14.4 billion with Madoff. The mistakes have dealt a black eye to common of the arrange’s indispensable sales pitches.

In the unlikely event investors bestow funds of funds a move on this disaster, the banks that lend wealth to these portfolios may not. Even though banks started cutting back credit lines to funds of funds earlier this year, the Madoff scandal unfolded so quickly that many lenders have been blindsided and could be exposed to hefty losses as a result. For example, France’s BNP Paribas (BNPP.PA), which supposing credit to funds of funds, says it could take a $470 million hit. Lenders, check licking their wounds, may exist reluctant to lend to funds of funds for quite a season. "Financial institutions that have felt penalty don’t quickly forget," says Charles Geisst, a finance professor at Manhattan College.

Long-Term Ramifications

All that is raising serious doubts with respect to the viability of funds of funds—and the long-term prospects for hedge funds in general. After all, funds of funds narration according to roughly 43% of the industry’s assets. "There are going to be more tough questions," says Chris Addy, chief charged with execution of Castle Hall Alternatives, a hedge fund just title diligence firm.

The ramifications will be felt by reason of years to come. Without the huge source of ready money, the pair from funds of funds and brim credit lines, hedge fund returns will pocket on a level after the markets rebound. For one, it’s disagreeable to produce double-digit returns free from borrowing money to leverage assets. And during the time that expectations come down, fees most certainly will follow, since investors won’t subsist willing to cough up 20% of profits. In the end, the industry may revert to its style in the 1980s, when obstruct funds tried merely to outpace the market modestly. "Hedge funds became a disguised way to ramp up in the same manner with abundant short-term profit in the same proportion that possible," says Geisst. "That’s the exact opposite of what a orally transmitted obstruct fund was supposed to be."

The Federal Reserve cuts the funds rate to 0.25% and announces unconventional measures to revitalize the economy

By Peter Coy

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Call it Ben Bernanke’s "stroke and awe" campaign.

On Dec. 16, the Federal Reserve announced that it is attacking the recession with a more valid arsenal than ever, including a cut in the federal funds traduce to a historic low of just zero to 0.25%. The central bank is counting on a show of overwhelming urge to vanquish the recession and get Americans borrowing, spending, and working once more.

The stock mart climbed after the notification, with the Dow Jones industrial average closing up 359.61 points, or 4%, at 8,924. Prices had been up slightly before the announcement in trust. see also of powerful Fed action. The consensus Wall Street expectation was a half-point cut.

Ten-year Treasury notes rallied adhering the expectation that the Fed will be buying even more of them. Their allow, that goes down when prices go up, fell to a new low of 2.3%, from 2.5%, on Dec. 15.

No Dissenters to the Vote

"Whatever it takes—that’sitting which we do," wrote Wachovia (WB) Chief Economist John Silvia, paraphrasing the rate-setting Federal Open Market Committee. Silvia said the committee went "to what no FOMC has gone before."

Usually the Fed names a particular rank for its target for the federal funds rate—most recently it was 1%. This time it named a ceiling, namely, not any again than one-quarter percent. Anything below that level, down to zero, is welcome to the Fed. That alone is a historic change.

It’s a measure of the severity of the monetary crisis that there were no dissenters from the Fed consecrated by a vow. Even inflation hawks such as Philadelphia Fed President Charles Plosser and Dallas Fed President Richard Fisher voted "yes" on the measures.

Sending the Markets a Message

The language in the statement released by the Fed was unusually strong. The central bank eschewed any effort to be even-handed about the risks of recession vs. inflation. The economic downturn is clearly Enemy No. 1.

Said the Fed: "Labor market conditions have deteriorated, and the serviceable data indicate that consumer expenditure, affair investment, and pertaining production be delivered of declined. Financial markets rest quite strained and credit conditions tight. Overall, the outlook on the side of economic activity has weakened to a greater distance." As for inflation, the Fed said, "inflationary pressures have diminished appreciably" and should "moderate more remote in to come quarters."

In an essay to impress the markets with its resolve, the Fed made clear that it won’t flexibility up on easy money until it is never-failing that its objectives have been reached. The Fed statement said it "anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."

Focusing onward Assets

With no more room to cut interest rates, the Fed is turning more and more toward buying up debt in one effort to drive down interest rates. It is targeting Treasuries, the corporate debt of Fannie Mae (FNM) and Freddie Mac (FRE), and mortgage-backed securities. In recent months its assets have zoomed from around $800 billion to $2.2 trillion.

In a conference call with reporters after the 2:15 p.gallimaufry. ET announcement, a more advanced Fed by authority tried to draw a superiority betwixt what the Federal Reserve is doing and what the Bank of Japan did in its efforts to stimulate the Japanese economy during the "Lost Decade of the 1990s." The official said that Japan’s central bank focused in continuance the liability side of its balance sheet, emphasizing the expansion of cash and mound reserves in brotherhood to flood the banking hypothesis with circulating medium to lend.

In contrast, the official said, the Federal Reserve is putting its suit on the asset border of the balance sheet—buying up assets such as Treasuries and mortgage-backed securities in an attempt to drive down rates and improve the health of the overall economy and, in particular, the housing market. On the same daylight that the Fed made its move, the U.S. Commerce Dept. announced that new-home building starts in November hem by 19%, the sharpest monthly drop since March 1984.

New Program in the Wings

The distinction between the Japanese and American approaches is subtle since, viewed like any accounting bookish man knows, the asset and responsibility sides of the balance sheet are mirrors of reaped ground other. But under Bernanke, the Fed is clearly hoping that targeting certain key emporium interest rates will get lending and borrowing going again.

By its charter the Fed is not allowed to make loans or accept collateral that could expose it to a big chance of loss. That’s where the Treasury Dept. comes in as a partner. In its Dec. 16 statement, the Federal Reserve served a reminder that it has a big recent program in the wings in conjunction with Treasury. Starting early next year, the Fed will lend up to $200 billion to "facilitate the extension of good reputation to households and small businesses." To grasp down the expose to danger of losses by the Fed, the Treasury Dept. will absorb the first $20 billion in losses.

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OLYMPIA — Think a batch deficit that could reach $6 billion has snuffed out the expensive and expansive dreams from all corners of the pomp? Think another time.

From the University of Washington’sitting room for expectation that taxpayers resoluteness help pay for a football-stadium renovation to rural lawmakers’ hanker after to overhaul property taxes, there still are big, costly ideas floating around as legislators prepare for a historically dour session.

Leading lawmakers hope expectations for the session resoluteness be tamped down once Gov. Christine Gregoire releases her proposed lot this month. Gregoire, who campaigned on a no-new-taxes pledge, is expected to immediate deep spending cuts.

But in the run-up to Gregoire’s governmental estimate announcement, wish lists have been steadily popping up. A small sampling:

• The UW’s plan to draw about $150 million from King County taxes that helped build professional sports stadiums, footing about half the require to be paid for a renovation of the aging Husky Stadium.

• Tacoma’s desire for more money to fix the troubled Murray Morgan Bridge. Rep. Dennis Flannigan, D-Tacoma, newly told The News Tribune he’ll seek $25 the masses more from the state for that exhibit.

• The environmental lobby’session pitch for fees on polluters, raising money for sway projects aimed at helping waterways, including contaminated Puget Sound.

• About $100 million in pay raises for state workers. Although raises were negotiated in new contracts with the ruler, the Legislature decides whether it wants to, or be able to yield to, pay the bill.

• Continued increase of soundness coverage for kids, including families that make up to 300 percent of the federal poverty level, and mental- health aid toward immigrant kids.

• Major changes to the way property taxes are levied, including a proposal from Rep. Mike Armstrong, R-Wenatchee, with respect to a constitutional amendment tying property taxes to lasting a year measures of inflation and deflation, such in the same proportion that the Consumer Price Index.

• About $40 million for a new phase of the long-planned north-south freeway in the Spokane area.

Balance those against a staggering budget deficit that brings back memories of the dark times in the early 1980s.

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Most Washington elementary-school principals, preschool teachers and parents mean it would be a competent idea to screen children to make sure they are ready for kindergarten, however they wonder who would pay for this proposed new state requirement.

Many schools already screen children just before they start kindergarten or soon afterward, but the Washington Department of Early Learning was asked by the Legislature to explore a statewide policy for readiness testing.

In a report to the governor and the Legislature on Monday, the department summarized its research on how welcome such a system would have existence.

The report moreover reviewed the state’s fresh child-care quality-rating system, for which theatre of war testing was suspended earlier this month to save the Department of Early Learning $2.8 very great number, per the governor’sitting order to divide state budgets because of a looming deficit.

The voluntary rating system would have told parents how a child-care provider rated, without ceasing a scale of 1 to 5, in its wide information environment, professional development, family relationships and management.

The program to improve early learning has been a antecedence of Gov. Christine Gregoire’sitting and is closely tied to the other goals of the Department of Early Learning, including the kindergarten-assessment project.

Nearly moiety the schools that put forward kindergarten in Washington participated in the charge study in some way. Almost all of them reported they test kids going into kindergarten by taking a look at language, literacy and communication skills.

About three-quarters moreover look at cognition and general knowledge. Only about a quarter influence by looks at natural well-being, health and motor development. A few assess social exhibition and warmth for learning.

Only hind part before three-quarters of the schools in the study also assess children for developmental delays.

Schools use prekindergarten and early school assessments to help teachers outline out what to teach and to inform parents of children’s strengths and weaknesses.

Although 67 percent of the elementary-school principals, preschool teachers, parents, education policymakers and tribal members surveyed think it would be a good idea to establish a statewide system with respect to testing kids before they start school, 20 percent didn’t.

Most of those who didn’familiarily want a new testing system were concerned about the cost to districts and schools. Many also expressed concern encircling adding to the toil of kindergarten teachers and using their time because of something other than instruction.

The report recommends individual more year of planning and then a steersman program the following year.

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SAMMAMISH — Trailing long delayed in the fourth quarter of the Class 4A championship game and facing third-and-13, Skyline junior quarterback Jake Heaps looked to the sideline notwithstanding the call.

We’ll collide something short, he speculation, and set up a manageable fourth down.

The call came from first-year coach Mat Taylor, and the Skyline players each looked at the play cards on their wrist. The Spartans were about to go long. With Heaps, Skyline can always podagra long.

On the not oblique side, two Skyline receivers ran deep routes toward the end zone. When the safety bit toward the centre, Heaps didn’t miss it. He knew receiver Kasen Williams would be open onward the sideline.

“I was licking my chops,” Heaps remembers.

He threw deep, the way alone Heaps does, a iris of a throw that never loses its zip, and hit Williams 40 yards downfield. Three plays later, Heaps threw for the winning touchdown.

“Go big or go home. That was our mentality as an offense,” Heaps said.

Remarkably, in two seasons in the manner that a starter, Heaps has never gone home a loser. He is 28-0, a two-time position champion, the state’s most hounded recruit, and The Seattle Times’ State Player of the Year.

Heaps threw for 2,888 yards and 38 touchdowns this season, and with 5,991 yards in two seasons he is 871 yards shy of a newly come KingCo record. In those pair years, he has thrown 69 touchdown passes, yet this is one of Taylor’s favorite statistics: Heaps has been intercepted only 11 times.

“You almost take for granted how good he in truth is,” Taylor said.

The Spartans won only three games this season by the agency of fewer than 21 points, and in each one Heaps led Skyline down the field and threw the winning touchdown pass in the supporter half. Blessed with four of the body politic’session most gifted receivers, Skyline’s four-wide spread offense was rarely stopped; the Spartans punted only 21 times in 14 games.

“When they [defenses] want to bring the blitz knotty, we have power to do so many things to attack that,” Heaps said. “When they suit remote and operate zone, we be possible to do a ton of things to attack that, too.”

Seattle Times All-State Offense
	Player	School	Ht.	Wt.	Yr.
QB	Jake Heaps	Skyline	6-2	195	Jr.
Nation’s upper side younger QB prospect threw for 2,888 yards, 38 TDs, only four INTs
RB	Tre Watson	Kennedy	5-10	187	Sr.
Electric senior averaged 12 yards per support, scored 35 TDs in 10 games
RB	Grant Gellatly	Issaquah	5-10	180	Jr.
Racked up 797 yards and 12 touchdowns in five playoff games
WR	Kirby Moore	Prosser	6-3	210	Sr.
Boise State recruit set national record with 34 receiving touchdowns
WR	Gino Simone	Skyline	6-0	175	Sr.
KingCo 4A Crest co-MVP caught TD passes, scored on four returns, ran for a TD
OL	Hunter Blackmore	Kentwood	6-2	260	Sr.
Three-year starter, SPSL North Lineman of Year not missed a acting out in four years
OL	Grant Enger	O’Dea	6-6	250	Sr.
Oregon State recruit dominated occupation of scrimmage in Metro League
OL	Anthony Luna	Gonzaga Prep	6-4	295	Sr.
Strong, flexible Luna was solid in run game, pass protection
OL	Sione Potoa’e	Lakes	6-3	285	Sr.
SPSL 3A Lineman of Year opened road toward two 1,000-yard backs
OL	Christian Rennie	Issaquah	6-5	280	Sr.
Big tackle paved the way in the place of Eagles’ come short to Class 4A final
AP	Marion Bactol	Eastside Catholic	5-10	180	Sr.
Returned three punts, two kickoffs for TDs, had more than 1,000 all-purpose yards
K	Blaze Vela	Central Valley	6-1	205	Sr.
Booted 10 battle-field goals and has range, making four from at least 40 yards

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Seattle Times All-State Defense
	Player	School	Ht.	Wt.	Yr.
DL	Deandre Coleman	Garfield	6-4	285	Sr.
Elite trust so large and athletic, he demanded double and triple teams
DL	Chris Mastin	Lewis & Clark	6-2	205	Sr.
WSU recruit was co-Defensive MVP of Greater Spokane League
DL	Geoff Meinken	Lynnwood	6-4	260	Sr.
Versatile lineman had six sacks, took back a pair of interceptions for TDs
DL	Travis Long	Gonzaga Prep	6-4	245	Sr.
Division I prospect at TE was co-Defensive MVP of Greater Spokane League
LB	Anthony DeMatteo	Skyline	6-0	190	Jr.
Animated junior was KingCo 4A Crest Division Defensive Player of Year
LB	Kellen Matsuno	Eastside Catholic	5-9	200	Sr.
Unanimous Metro League Mountain Defensive MVP had 81 tackles, four sacks
LB	Jeff Gouveia	Auburn	5-10	200	Sr.
Relentless put on defense, Gouveia also scored 31 touchdowns as running posterior portion
DB	Desmond Trufant	Wilson	5-11	170	Sr.
Quarterbacks completed only 6 of 28 passes throwing Marcus’ brother’s way
DB	Jamal Atofau	Bellevue	5-10	190	Sr.
State champions’ safety was KingCo 3A Defensive Player of Year
DB	Casey Locker	Ferndale	5-11	175	Sr.
Jake’s cousin was Northwest League Player of Year past two years
DB	Jamison Rowe	Richland	5-10	175	Sr.
Also a denunciation viewed like a returner, Rowe was the most dangerous player in Tri-Cities
P	Cameron Homan	Eatonville	6-2	180	Sr.
College prospect averaged 41.9 yards, pinned 10 punts inside the 10-yard line

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Olympia

Washington forest regulators are going to allow logging in incontrovertible spotted-owl habitat where it had been banned.

The state Forest Practices Board on Tuesday adopted an emergency rule for 2009 that allows landowners to log in owl habitat in actual stipulations.

The rule replaces a moratorium on logging in certain owl sites that ends Dec. 31.

It power of determination confess landowners to log if they show that maculated owls aren’t present.

An advisory collection must also evaluate the site and conclude that it isn’t needed to save the owl while the board reviews logging rules next year.

The spotted owl was declared a threatened species in 1990, primarily because of heavy logging in old-growth forests.

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Seattle School Superintendent Maria-Goodloe Johnson will accord. some other update to the School Board this evening on school moves and closures.

Goodloe-Johnson made her preparatory step recommendations last month and added more options last week.

If any new options are discussed, they will have being posted this evening on www.seattletimes.com.