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February 2009
We do not make jokes, we simply watch the LA Times, the Orange County Register and CID/HOA board of directors and report the facts!
Locke
and Loaded - Laguna Woods Village’s Alternate
Universe
By
John Locke - 01/18/2009
6:00 PM
According
to superstring
theory, there are at least 11 dimensions to the
physical universe. This would apparently allow,
at least theoretically, a number of parallel
universes. Apparently the directors in
Laguna Woods Village live in one such alternate
universe, immune to the economic ravages which
seem to beset the world at large.
GRF,
for instance, opted to forgo their annual party until
economists declared that the US had been in a
recession for virtually the past year. At that
point, ignoring attempts of various housing mutuals to
exercise fiscal restraint, changed their collective
minds and decided to go ahead with their annual party.
In this case fiscal restraint apparently meant
spending only $1500 for entertainment alone for a
total of at least $3500 for the evening. In
their universe, though, there was a good reason.
As GRF director Ken Hammer said, “We deserve it.”
One
might regard the celebratory event as merely the
nucleation point for the formation of countless
“little bangs” creating a proliferation of tiny
alternate universes somewhat reminiscent of the movie
Men in Black where an entire galaxy was found on Orion
the cat’s collar. All you have to do is look
around Laguna Woods Village to find countless tiny
universes where the economy is robust, all the women
are strong, all the men are good looking, and all the
grandchildren are above average. I even have
proofs that this universe exists. GRF is
apparently intent on escalating its level of spending.
Apparently this august board intends to refurbish
Clubhouse 2 and build a new starter palace for the
golf course even though the thought of this fiscal
irresponsibility was so odious that it caused the
resignation of GRF director Mark Schneider, the chair
of the subcommittees that are supposed to recommend
such actions. Considering his reputation, it is
hard to imagine anything he would consider so
repugnant as to cause him to resign his (vaunted)
position as director. (For those of a classical
bent, this would be like seeing a person or object so
abhorrent it would cause the Gorgon Medusa to turn to
stone.)
The
alternate economy of this tiny universe apparently
extends into the alternate world at large. The
Third Housing Mutual has been looking into depositing
its funds in a bank other than Bank of America.
Director Freshley of this same board has come to the
conclusion, after exhaustive interviews, that Bank of
America is fiscally sound, solid as the Rock of
Gibraltar, and immune to financial catastrophe such as
bank failure. In Freshley’s universe banking
with Farmers and Merchants bank, which has over $2
billion in assets, is so risky that it causes her to
nearly faint with anxiety. It caused her so much
anxiety, in fact, that she was inspired to ask bank
officers a series of detailed questions she did not
pose to any other bank. Despite apparent savings
in the tens of thousands of dollars Freshley presented
data purporting to show that Third Mutual would be
charged for a plethora of services without actually
showing charges for these services or even showing
that these were services offered by Third’s current
bank, Bank of America. And we all know, in
Freshley’s universe, that BofA is without financial
peer since it is the largest bank in the United
States.
Of
course in our universe, sometimes called the real
world by unbelievers, BofA has come close to failing
twice in the past six months. In October 2008,
in order to stave off a collapse of BofA, TARP (the
governments Troubled Asset Relief Program) stepped in
with some $20 billion or so to prop up the endangered
bank. In our world that was apparently not
nearly sufficient to stave off BofA’s collapse as it
struggled to complete the purchase of Merrill Lynch
(which posted a $15 billion fourth quarter loss)
despite a loan portfolio about to set a record of
worthlessness exceeded only by the portfolio of
Bernard Madoff. I’m sure that
Freshley’s faith and support in BofA’s business
acumen was instrumental in a heroic turnaround.
Or perhaps Freshley is a member of the (in)famous
prayer group led by Ms. Cyn and they prayed over the
report, hearing a direct word to select BofA.
All things considered, that would be miraculous!
Of
course in our world BofA was not yet out of the clear.
Far from attaining financial stability by the infusion
of almost obscene amounts of government cash, by
December 2008 BofA had burned through its government
largesse and declared a $2.4 billion fourth quarter
loss and was still sitting on a huge portfolio of
shaky (to put it charitably) loans. Rather than
risk a total meltdown on the US banking system
(picture 1930) TARP once again stepped in and even
upped the ante by investing another $20 billion in the
(f)ailing financial institution and stepped in to
provide a guarantee of $118 billion of its “most
toxic assets.” Imagine, $118 billion in
assets described as “most toxic.” Apparently
Freshley, an engineer in Jack Welch’s General
Electric, confused assets with liabilities or thought
that toxic referred to some sort of monetary waste
dump. Oh, I guess there is a similarity after
all. BofA certainly does have the appearance of
a toxic waste dump for money.
It
is certain that Freshley was able and willing to
overlook the financial peccadilloes of the nation’s
largest bank to suggest in a public forum, an open
meeting of the Third Mutual’s financial committee,
that changing banks from BofA to F&M (and saving a
tidy bundle in the process) would be fiscally
irresponsible. It is especially interesting to
note that Freshley made these recommendations
without input from colleague Stan Feldstein who was
kept in the dark about Freshley’s recommendation
until the night before the financial committee met,
too late to review and respond . Third board
President Moore was moved to gush over Freshley’s
presentation of her findings until Director Feldstein
declared that he was denied any role in preparing the
document, which, in fact, did not at all reflect his
opinions.
When
one remembers that Freshley was the darling of the PCM/Positive
Solutions crew in the recent board elections, you just
have to wonder about motivation. What could
possibly cause a presumably savvy director to ignore a
$150 billion sink hole under BofA? Where did
Freshley, new to the Third board and the finance
committee, get pages of banking services that might
accrue charges unless they were supplied by PCM’s
Janet Price? What could possibly provide a
motive for PCM to lobby against choosing another bank?
Why would PCM have an interest in preventing the
separation of Third Mutual’s funds? Would it
possibly be that the move to a separate bank would
prevent Third’s funds from being moved between
accounts by a simple fiat from Janet Price?
Would it give Third Mutual the power to resist
irresponsible cost increases and demand
accountability?
And, most importantly, just where is this alternate universe
where Freshley lives where the economy is robust, all
the women are strong, all the men are good looking,
all the grandchildren are above average, and all the
directors know excrement from Shinola? Where
indeed was Freshley’s head when her report was
written?
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