Archive for June 19th, 2009

NEW YORK: Regional banks in Georgia and North Carolina were closed by state regulators Friday, bringing the total number of failed banks this year to 39, the Federal Deposit Insurance Corporation said. The 24 branches of Wilmington, N.C.-based Cooperative Bank will reopen Monday as branches of First Bank, which is based in Troy, N.C. Cooperative bank had assets of 970 million and total deposits of approximately 774 million. First Bank will assume all of the failed bank’s deposits and agreed to purchase 942 million of its assets.In Georgia, the five branches of Southern Community Bank, which is based in Fayetteville, will become part of United Community Bank of Blairsville. It was the seventh bank to fail in Georgia this year. United Community Bank paid a premium of 1% to acquire all of the of the 307 million deposits held in the failed bank. It also agreed to purchase approximately 364 million of assets.The assets not purchased by First Bank or United Community will be retained by the FDIC and sold later. 0:00
/5:26′Effective’ regulation, not ‘more’The FDIC said it entered into a “loss-share transaction” with both First Bank and United Community for a portion of the assets belonging to the failed banks. The arrangement is designed to maximize returns on the assets covered by keeping them in the private sector, the FDIC said. “Under the loss sharing agreement the FDIC will reimburse United Community Bank for losses on Southern Community Bank’s loans and foreclosed properties,” said Jimmy Tallent, president and chief executive of United Community Banks, in a statement. The total cost of Friday’s bank failures to the FDIC is 171 million, bringing the total for this year to 10.85 billion. That compares with 17.6 billion in all of 2008.So far this year, the number of bank failures has already exceeded last year’s total of 25, with an average of nearly 7 failures per month. The FDIC expects roughly 70 billion in losses due to the failures of insured institutions over the next 5 years.The FDIC, which is funded primarily by fees paid by banks, insures individual deposits up to 250,000. The amount was increased from 100,000 late last year in response to concerns about the stability of the nation’s banks.The Obama Administration unveiled a highly-anticipated new plan to overhaul how banks and other firms are regulated in the hope of preventing another financial collapse.Under the new proposal, the FDIC and other regulators would have more power to take over and unwind troubled financial companies beyond banks.The plan would also, among other things, expand the powers of the Federal Reserve and create a new agency dedicated to consumer protection.

Source:CNN

NEW YORK (Reuters) — Lee Scott, the former chief executive officer of Wal-Mart Stores Inc has a regret about his time at the helm of the world’s biggest retailer – not doing enough to promote the importance of retail jobs.Speaking at the World Food Business Summit in New York Friday, Scott, who is now chairman of Wal-Mart’s executive committee, said that as he was leaving the CEO post, several people asked him if there was anything he had wanted to fully accomplish before his departure.”The answer was, of course, one place I would have liked to have done more is helping people understand that Wal-Mart jobs, retail jobs in general, are good jobs,” Scott said.”They pay well and they offer extraordinary opportunities. But the fact is, you just can’t do everything.”Scott served as Wal-Mart’s CEO from January of 2000 through January of this year. He worked his way up to the top job after joining the retailer in 1979 as an assistant director of logistics.But much of his time as CEO was marked by struggles as the discount retailer found itself under attack from labor groups and politicians who accused it of mistreating employees, paying low wages and not offering adequate health care coverage.Scott worked to counter those critics. Under his tenure Wal-Mart said it was expanding the health care plans it offered U.S. employees, and the retailer also joined a coalition of labor groups and businesses pushing for “quality, affordable” health insurance coverage for all Americans by 2012.Before Scott retired as CEO, Wal-Mart also took steps to put an end to years of legal battles surrounding the treatment of its workers. In December, the retailer said it would pay up to 640 million to settle 63 class action lawsuits that accused it of wage violations.Scott also used his speech at the summit to ask food and retail companies to build a more socially and environmentally responsible supply chain.Under an environmental effort started by Scott in 2005, Wal-Mart has set the goals of one day using only renewable energy and creating zero waste, and it has pushed its suppliers to follow its lead.

Source:CNN

NEW YORK: There’s a lot of talking going on about health care reform and urgent warnings of what will happen if it doesn’t pass. But for all the talk, there’s very little clarity for the public about what kind of reform has a serious chance of passing and how lawmakers intend to pay for it.The reason: Legitimate disagreement about how the country should overhaul the health care system. And it’s not just between Democrats and Republicans. It’s within the parties as well.Vigorous debate is inevitable and necessary. After all, health care reform would be the biggest and most complex undertaking that lawmakers have dealt with in decades, and it would have consequences for every American.But President Obama has set a tight deadline. He wants both the House and Senate to pass their health reform bills by Aug. 1.So where do things stand?Congress has come up with pieces of proposed plans with partial cost estimates and no idea how such pieces might interact with other parts of the health care system or yet-to-be-detailed reform measures. Such interactions will have a direct bearing on cost.So far, Democrats have put out two drafts of bills. Each leaves out key details on which the reform debate will turn. With any luck, a third may be released in the next week before Congress breaks for the July 4 holiday, but that’s far from guaranteed.House plants a flagThe latest bill — which its authors label a “discussion draft” because they say everything is still up for discussion — came in Friday afternoon at 852 pages. It’s the product of three committees in the House that have jurisdiction over health issues.The tricommittee House bill calls for the creation of a public plan option that would have to be self-sustaining and would have to operate under the same reform rules as private insurers. Participation in the plan by health providers would be voluntary.Except in cases of financial hardship or religious objection, the bill would mandate that Americans have health insurance or pay a penalty based on 2% of their adjusted gross income over a certain level.Employers would be required to “pay or play.” Companies would have to offer workers insurance that meets certain minimum requirements and pay a minimum amount of the premiums. Or, employers that don’t offer coverage would have to pay a fee based on 8% of payroll to help workers buy insurance. Certain small businesses would be exempt from the requirement and may be eligible for a new tax credit to encourage them to offer a health plan.The House bill would also establish an insurance exchange where consumers could comparison shop for their coverage. The government would subsidize the purchase of insurance on the exchange for households making up to 400% of poverty level (43,420 for individuals and 88,200 for a family of four).The bill is mostly silent on one major issue: How to pay for reform, which is expected to cost in the neighborhood of 1 trillion over 10 years.It may become clearer just how much the House would need to come up with once the Congressional Budget Office makes public its preliminary cost estimates for provisions in the bill. Paying for it: A sticking pointCost sparked a ruckus over the 615-page health reform bill released by the Senate Health, Education, Labor and Pension Committee a week earlier. That Senate bill calls for the federal government to give grants to states to set up insurance exchanges. And it would offer subsidies of varying levels to help households with incomes up to 500% of poverty level. The federal government would also subsidize small businesses that offer health benefits if they have workers with low wages.The CBO estimated just those efforts alone would cost 1 trillion and reduce the ranks of the uninsured by only a third. But CBO stressed that the estimate was incomplete because the bill left blank the sections calling for a public health plan option and did not elaborate on other elements, such as a requirement for individuals to obtain insurance.Like its House cousin, the Senate health committee bill does not address how to pay for reform.Also silent on that issue is the Senate Finance Committee, which had promised to put out a draft of its reform bill this past week. The Finance panel was scheduled to mark up and vote on the bill by June 26, but Chairman Max Baucus, D-Mont., postponed release of the draft amid reports that private CBO cost estimates came in considerably higher than expected.The delay has raised questions about whether Obama’s signature issue is “on the rocks” as Republicans seize on the cost issue to attack Democrats’ proposals. But one senior White House official told CNN, “We’ve seen this movie before: [the congressional process] looks like a total mess, nothing is getting done, and then something happens.” Even if the House and Senate manage to meet the Aug. 1 deadline for passing a bill, then the really hard work of reconciling the two bills will begin. And it again will be conducted on a tight schedule. Obama has said he wants a bill to sign in October.Congress will be in recess for five weeks starting in August. That leaves lawmakers no more than 7 or 8 weeks to negotiate one final bill and pass it out of both chambers in time to get a bill to the White House before Halloween.- CNN’s Ed Henry and Deirdre Walsh contributed to this report.

NEW YORK (Fortune) — Where will Mary Schapiro focus her scrutiny? That’s no small matter to the investing world.A day after President Obama unveiled the foundation for a sweeping overhaul of the U.S. financial system, Securities and Exchange Commission chairman Schapiro detailed specific targets of potential new regulation.She named four: target-date funds, municipal securities, investment advisers and so-called dark pools.”These are four areas where I believe the SEC has a particular responsibility to ensure that the markets work for individual investors, not just for institutions and professionals,” Schapiro said in a speech to financial writers Thursday night. (The event honored Fortune senior editor at large Allan Sloan.)Alternative markets. Schapiro’s reference to possible regulation of “dark pools” has received the most attention so far. Dark pools, operated by banks from Goldman Sachs (GS, Fortune 500) to BNP Paribas, allow institutional investors like mutual funds to move big blocks of shares in the alternative-trading markets without displaying public price quotes. The question for the SEC is whether these alternative markets give institutions a leg up on retail investors.”We have heard concerns from market participants that the lack of post-trade transparency by dark pools makes it difficult, if not impossible, for the public to assess dark-pool trading and to identify pools that are most active in particular stocks,” Schapiro said.Trading on these alternative markets rose to 24% of trades made in April, up from 15% last September, according to Fidelity Capital Markets. While trading has remained heaviest in large exchanges like the New York Stock Exchange and NASDAQ, market share has been shifting to these dark pools. Fidelity says NASDAQ’s market share fell from 30% to 20% over the same time period. In response, Nasdaq OMX and NYSE Euronext are pushing the SEC to regulate pools.One alternative exchange, BATS Exchange, which routes trades through dark pools, declined to comment on Friday about Schapiro’s remarks.But look for BATS and others to come under greater scrutiny for dark pools and flash orders, a method used by alternative exchanges to show all market members a potential trade, if it’s not matched, before it’s sent to a public exchange.0:00
/5:30Financial product safetyFull disclosure. She also called for better regulation of broker-dealer behavior to ensure they put investors’ best interest first. In addition, she addressed target date funds, which have been popular retirement-plan investments because investors can put their money in one place and rely on the fund manager to rebalance their portfolios, moving assets among stocks, bonds and other investments. Schapiro said these funds are hard to evaluate because their structure varies so much. She cited the returns on the 31 funds with a 2010 target date: Their returns ranged from — 4% to — 41% in 2008. (See: Target funds miss the mark.)Schapiro also called for increased disclosure to be made available to investors in municipal securities because many people expect little or no chance of default on such securities, which is not exactly the case; in 2008, 140 municipal issuers defaulted on 7.6 billion in bonds. “Despite the tremendous importance of these markets and the broad retail participation,” she said, “the information available to municipal securities investors is lacking, compared to the information available to investors in public corporations.”All night, journalists with open note pads hovered around Schapiro, who has taken over SEC at a time when its task is an epic one. After her speech, she fielded questions about Bernie Madoff. She declined to say how the SEC went wrong in its failure to detect Madoff’s scheme, deferring instead to an inspector general’s report to be released this summer, but said the SEC is revamping its process to deal with the 2,000 tips it receives each day.Schapiro added that the SEC aims to set up a whistle-blower compensation system funded by the fines it collects.”We must re-make the agency into the kind of nimble, effective and rigorous regulator that American investors deserve in the 21st century,” she said. “It is fair that we be judged by our actions, not by our words.”

Source:CNN

NEW YORK: General Motors owes hundreds of millions of dollars to major suppliers who have never made an auto part, rubber tire or sheet of steel — and they’re not likely to get paid anytime soon.GM is on the hook for more than 100 million for advertising it purchased before filing for bankruptcy earlier this month. The list of utilities who are GM creditors takes up 80 pages in its bankruptcy filing.Among the company’s top 50 creditors, 10 are outside the auto or transportation industries. GM owes these firms just under 250 million. But they have to take a back seat in the bankruptcy process. While virtually all of the auto parts makers who work with GM are being declared “critical vendors,” which allows them to receive their next payments by July 2, GM’s other suppliers are not guaranteed payments anytime soon. The company cannot make payments to them without approval from the bankruptcy court.0:00
/1:07GM sells Saab”This is affecting many many different industries, far more than people realize,” said Heidi Sorvino, head of the bankruptcy practice in the New York office of law firm Smith, Gambrell & Russell, who is representing some of GM’s suppliers.The lucky vendors, those that will have a continued business relationship with GM after it emerges from bankruptcy, are likely to eventually get paid for their services once they renew their contracts. But they may have to wait months before doing so. Media buying firm Starcom Mediavest Group is GM’s largest vendor creditor. It is owed 121 million for ad time and space it purchased on GM’s behalf. That’s about 11 million more than what GM owes Delphi, its largest auto parts supplier.GM owes three ad agencies a total of 46 million. Technology giant Hewlett Packard (HPQ, Fortune 500) is owed 17 million, just a bit less than the money it owes railroads CSX (CSX, Fortune 500) and Union Pacific (UNP, Fortune 500) combined. GM also owes AT&T (T, Fortune 500) more than it owes U.S. Steel (X, Fortune 500) or any other steelmaker.Several of these big vendor creditors outside the auto industry had no comment about when they expected to be paid by GM. Of course, none of these major companies are likely to face a cash crunch if GM doesn’t pay them in a timely fashion. But for many other vendors, delayed payments could be a matter of corporate life and death.”If you’re a small supplier, and you live hand to mouth, you need that check,” said Sorvino. “You have your own operating expenses, payroll and leases.”GM does not break down in its bankruptcy filing how much it owes to critical versus non-critical vendors. But the company owed 18 billion to vendors worldwide as of March 31. That means a lot of suppliers probably won’t get paid next month. Sorvino said she expects widespread bankruptcies of smaller GM vendors. That could lead to many workers losing their jobs who didn’t even realize they were depending on GM for their livelihood.Worse off are suppliers who do not have a continuing contract relationship with GM, but are currently owed money. Even if these firms do work with GM again in the future, their previous bills make them unsecured creditors. So they will be lucky to get pennies on the dollar on what’s owed to them — and probably not for at least another year.GM spokesman Dan Flores said the company has done what it can to help vendors, particularly auto parts suppliers who depend on GM to stay in business.”Unfortunately through this process there are suppliers that do not fall into that [critical vendor] category,” he said. “However, we are continuing to work with them as much as we can.”

WASHINGTON (CNN) — Two federal agencies warned consumers Friday not to eat raw Nestle Toll House refrigerated cookie dough.The company said it is recalling an estimated 300,000 cases of the dough as a precaution after reports of food-borne illness in 28 states.There are concerns that the pre-made dough may be contaminated with the bacterium E. coli 0157:H7, which causes abdominal cramping, vomiting and diarrhea, the Food and Drug Administration and the Centers for Disease Control and Prevention said. Young children and the elderly can suffer more serious symptoms.Nestle issued a statement saying, “While the E. coli strain implicated in this investigation has not been detected in our product, the health and safety of our consumers is paramount, so we are initiating this voluntary recall.”According to Nestle spokeswoman Laurie MacDonald, raw dough was one of the things the sick people reported eating.”The health and safety of our consumers is our number one priority,” she said. “We felt the best thing to do is a voluntary recall.”She said the company was informed by the FDA Wednesday night “and immediately took action.”"We really want to remind consumers that raw cookie dough should not be eaten,” she added.Since March, the CDC says, 66 people have become sick in 28 states after eating raw cookie dough. Twenty-five people were hospitalized. No one has died.The FDA and the CDC say people who have become sick after eating refrigerated Toll House cookie dough should contact their doctors.They advise consumers to throw out all prepackaged, refrigerated Nestle Toll House cookie dough products. Retailers and restauranteurs should not sell or serve the any Toll House cookie dough products, the agencies said.The company said the market share for Nestle Toll House refrigerated cookie dough for the most recent 52-week period was 41%.The recall does not include already-baked Toll House cookies, varieties of Toll House morsels, chocolate baking bars or cocoa or Dreyer’s and Edy’s ice cream products with Nestle (NSRGY) Toll House cookie dough ingredients.

NEW YORK: To be clear, we’re talking about people here who don’t qualify for Medicaid or COBRA. If this is you, you may need to buy insurance in the private marketplace. There are obvious downsides here. Cost is one. People who don’t have health insurance pay about 2, 260 in out of pocket costs per year — that’s twice as much as someone who is covered under an employer’s plan according to Consumer Reports. And in many states, you can’t even get coverage on the private market if you have a pre-existing condition, like diabetes. But … the reality is that going without health insurance is dangerous. High medical bills is a main reason why people declare bankruptcy. But you don’t have to get an all-comprehensive policy. You can opt for short-term health care or catastrophic insurance coverage that will kick in when there’s an emergency. How to shop for individual insurance plansThere are basically three ways to go. First, check out insurance comparison Web sites like eHealthinsurance.com. Use it to get a range of individual health insurance policies and to compare prices and benefit levels. Next, go to your state insurance department’s Web site. Here you may find companies selling individual coverage in your state. And the insurance department may also provide complaint records on individual insurance companies. Finally, consider using a health care broker who knows your local market. Brokers can help you shop for price. They’ll also know what company is more liable to accept you based on your health conditions. The best part is that you won’t pay a dime out of pocket says Amir Mostafie at eHealthinsurance.com. They get a commission paid by the insurance company that you sign up with. To find an agent in your area, go to the National Association of Health Underwriters at Nahu.org.Know your eligibilityYou don’t automatically qualify for Medicaid just because you have a low income. It also depends on your family status — if you have kids etc. To find out what eligibility requirements of health care programs like S-Chip or programs for the elderly, go to coverageforall.org. Got a financial dilemma? Go to CNNMoney.com/helpdesk to submit questions, read the Help Desk articles and check out new Help Desk videos. And tune in to CNN’s Newsroom Tuesdays and Fridays, when Gerri Willis and other experts answer your questions.

Source:CNN

SAN FRANCISCO (Reuters) — California, which is struggling to close a 24.3 billion budget gap, faces the prospect of a “multi-notch” downgrade in its credit rating if the state’s legislature fails to act quickly to produce a budget, Moody’s Investors Service warned Friday.Moody’s decision to place California’s general obligation debt on alert for a possible “multi-notch” downgrade stunned state officials.The state’s current A2 credit rating is Moody’s sixth-highest investment grade and makes California the lowest rated of the 50 states.The A2 rating is just five notches above speculative status and Moody’s raised the potential for the rating to tumble toward “junk” status if lawmakers fail to quickly produce a budget for Governor Arnold Schwarzenegger to sign.”If the legislature does not take action quickly, the state’s cash situation will deteriorate to the point where the controller will have to delay most non-priority payments in July,” Moody’s said in a statement.”Lack of action could result in a multi-notch downgrade,” Moody’s added.”I cannot remember reading a ratings note that raised the specter of a multi-notch downgrade,” said H.D. Palmer, a spokesman for Schwarzenegger on state finance matters. “It’s another clear warning from the financial markets that there will be substantial and costly consequences if the legislature does not send the governor a budget that he can sign.”A downgrade could push California’s borrowing costs up at time when state officials expect to issue up to 9 billion in revenue anticipation notes as soon as possible after a budget agreement is notched – a deal whose timing is in doubt.Moody’s said California’s leasing debt and other state-related debt are also on review, affecting a total of 72 billion of debt.State finances a messMoody’s cited California’s expected massive budget gap for fiscal 2010 of more than 20% of its general fund budget; warnings by the state controller that without budget solutions the state will not be able to meet all its financial obligations in July; continued political stalemate, and the limited options.Schwarzenegger and lawmakers face the task of closing a 24.3 billion budget deficit for the state’s fiscal year beginning on July 1.The gap was opened by the state’s most severe drop in revenues since the Great Depression, including a steep drop in personal income taxes and sagging retail activity as consumers reined in spending, and the long-running downturn in housing.Rising joblessness is also weighing on the state. Its unemployment rate jumped to 11.5% in May from 6.8% a year earlier, state officials reported on Friday.0:00
/02:56State budgets: billions shortThe UCLA Anderson Forecast unit said earlier this week that the state economy would grow at more normal levels by the beginning of 2011, but will not create enough jobs to push the jobless rate below double digits until the end of that year.Standard & Poor’s on Monday placed California on review for a possible downgrade, also citing concerns about the state’s fiscal stress.Spreads on California general obligation debt have widened as the state’s budget crisis has worsened. Since May 1, the yield on the five-year California GO scale is up 92 basis points, compared with a rise of 41 basis points for the five-year benchmark Municipal Market Data triple-A scale.The warnings by the rating agencies may scare off some investors from holding the state’s debt, said Lawrence Glazer, managing partner of Mayflower Advisors in Boston. “It appears that California will have some unpleasant decisions ahead of them. … A scary headline is probably enough to shake some investors out of their positions in the State of California.”On the other hand, California’s strained finances may attract investors looking for risk premium. “Some investors will look at buying and getting a yield advantage from California,” he said.

Source:CNN

(breakingviews.com) — Aristotle said tragedy should provide catharsis. The shock of the play was supposed to purify the audience. By that standard, the current financial crisis is more like a lesson in botany than Greek drama.This pattern, at least in the U.S., was well established by the Great Depression. Its feature included heartfelt statements of remorse, high-profile trials exposing ridiculously extravagant lifestyles and painfully long prison sentences for the accused.It certainly worked that way in the corporate greed-fraud scandals of Enron, Tyco and WorldCom at the turn of the last century. Thursday’s 2.9 billion civil judgment against Richard Scrushy is a reminder. The former HealthSouth boss is already serving a seven-year prison sentence for bribery. But his punishments keep on coming.This time around, there has been remarkably little remorse, almost no criminal indictments and the white-collar prisons are still waiting for instructors in Efficient Markets for Felons.Sure, the big guys on Wall Street are vaguely sorry they didn’t do more to head off the excesses of the credit binge. Lloyd Blankfein, the Goldman Sachs boss, wrote that “we regret that we participated in the market euphoria” and that “certain practices were unhealthy.”But those were little more than asides in a letter explaining how Goldman was getting out of the government’s TARP fund, so as to get back to the “process of growth and innovation which is at the heart of the of capital markets”.As for crimes and punishments, there’s been next to nothing. Allen Stanford, the Caribbean-based financier, has now been indicted for fraud and Bernard Madoff is serving time, but neither were really direct players in the credit bubble.The biggest criminal case so far is probably an indictment of New York State employees accused of taking kickbacks from private equity funds. The funds don’t face any criminal charges. Nor do any of the former and current billionaires and millionaires who profited mightily as the financial system sped towards disaster.The criminal dramas may still be on the way. But the audience may have lost its taste for this particular purification. Perhaps the spectators themselves feel guilty. After all, many of them enjoyed the real estate and stock market bubbles themselves. Or it could be that after so many decades of excess, the greed of the rich has lost its ability to shock.

Source:CNN

NEW YORK (Fortune) — I wake up in bed with welts on my spine, calluses on my hands, and deep brown bruises wrapped around my hips like some creepy guy’s hands in a sketchy slow dance.I’m a business reporter at the Boston Globe. What the hell has happened?It all started three days earlier: I’d arrived at a Catholic middle school in Boston for their “Career Day,” and I was supposed to brag about my sweet job as a journalist. Except it was May 1, the day that the New York Times (NYT) — the Globe’s owner — had threatened to shut down my paper.The door to the school’s auditorium swung open, and suddenly a bunch of suits were in my face: one from a lobbying firm, a sales guy from a radio station and a financial planner. They all had the same questions: “How are things going at the Globe? Is it really going to close?”Having these complete strangers asking me probing, personal questions — usually my job — made me hate them instantly. I threw the question back at the financial planner like a dart: “How is Wall Street these days? I hear the markets are totally harsh.”Of course, he had a point. With newspapers slashing jobs or shutting down entirely, things did look really bleak in the journalism industry at the moment. Especially for the Globe: The Times had demanded 20 million in concessions from workers by May 1 — today — or else. And here I was at “Career Day.”So I skulked up to the podium.I sped through my speech. A sea of middle school hands rose. I prayed for an easy sports question, calling on the skinny boy in the second row.”I hear the Boston Globe is supposed to shut down today. Are you still going to have a job?”Little bastard. I took a deep breath and smiled. “Yes, our paper is having financial troubles, and the New York Times has threatened to close the Boston Globe. We’re hoping that doesn’t happen, and I’ll probably have to take a pay cut and lose my 401(k).”So the kids weren’t going to be journalists. As the financial planner stepped up to show the class a picture of his son, Timmy, who’d died from a brain tumor — just the sort of unexpected situation a financial planner can help families prepare for, it turns out — I ducked out the side door and didn’t look back.Go-karting?I was late for my Plan B.Go-karting.Sure, it’s not the next obvious step. But speeding around a track in a metal contraption sends chills down my spine. This dates back to my college days at Cornell University. My friends and I would drive off campus to a track where we’d race around in purple carts with names like “Plum Crazy.” As the regular folks drove at grandma speed, I’d lap them, blazing across the finish line with my mind clear as the cool starry night.Go-karting later proved to be a saving grace on an otherwise intolerable road trip with an ex-boyfriend who dragged me on a tour of state capitals and minor league baseball stadiums. On a beautiful stretch of blacktop in Kentucky — with the sun in my face, wisps of blonde hair flying in the air, and adrenaline rushing through my veins — I managed to hold my own against country boys twice my size.Go-karting made me feel invincible. But it was hardly my first choice when the New York Times had threatened on April 4 to shutter the Globe in a month.0:00
/2:49The N.Y. Times’ Boston problemFirst, I tried a more conventional survival strategy: I stayed up all night writing a cover letter, updating my resume, searching JournalismJobs.com, and looking on Craigslist. I applied for a gig at the China Daily newspaper, debating whether it would be worse to be unemployed or to be employed by a communist government. I seriously considered writing appraisal reports or editing college essays.In my sleep-deprived haze, the most promising offer was from a loving couple who would pay 10,000 for the eggs of a fertile woman under 32. At 30, I was perfect. But my boyfriend, Paul, balked, so I promised not to scrape my ovaries to make money if the paper closed.And that’s when it came to me: Go-karting could be my future.I’d build on my dominance on the small track and graduate to big-time raceways la Danica Patrick. Sure, I’d be starting late. But hell, Paul Newman was at the racetrack when he was 81.On deadlineA month later, go-karting was more a reality than ever. F1 Boston, the local go-karting emporium, was hosting a rookie league that started Monday, May 4. And that was fitting, considering that the Times had extended the deadline for a decision on the Globe’s future to Sunday, May 3. If I couldn’t be a Boston Globe reporter anymore, at least my career as a go-kart driver would be underway.I’d already proved myself under the bright lights of F1, donning the track’s glitzy red racing suits, polyurethane neck braces, and large, glistening helmets with scratched plastic visors. After I’d bailed on “Career Day” on May 1, I’d convinced a friend to meet me at F1 where I’d lapped him twice and left with the best time and the highest speed. I was destined for speedway stardom.But as ready as I was for my league debut, I couldn’t distract my brain from the Globe negotiations. After all, reporters need to know.So on Sunday, I showed up at a church in Weymouth where the two sides were talking and swept past the mob of salivating media. I chatted up union leaders and posted what I heard to a secret Facebook group of fellow reporters and editors. And I left at 4 a.m. with news of the latest threat: The New York Times would file notice within hours to shutter the Globe in 60 days.With three hours of sleep, I blundered into the office Monday morning. People were freaking out. Could the paper really close in two months? Was there any hope?I barely made deadline, sprinted to the bathroom to trade my suit for jeans and an orange Talladega Speedway T-shirt, and sped off to F1 Boston.Race dayI walk into the lounge of fellow drivers at F1, and my confidence wilts like a scorched sunflower.These are no rookies. One driver has blue suede high-top racing shoes. Another is wearing his own black and silver racing suit. They glare at me like frat boys wondering who invited their geeky little sister to the keg party.A short, pudgy F1 league assistant offers me a pillow so I fit better in the seat and don’t hurt my back. Another warns me it gets rough out there and I might need a rib-cage protector. Whatever.But once we’re racing, I’m getting slammed from behind and pushed all over the track, my torso bouncing violently like a pinball around the metal cage. I thought you weren’t allowed to hit other cars, but soon I’m grasping for the pillow, bleary-eyed and bloody-knuckled.I’m on my 102nd lap. I’ve been dive bombed and torpedoed by carts trying to cut me off. One guy crashes into me so hard that my helmet flies off. He spots the long blond hair poking out of the black head sock, and apologizes.I refuse to respond. This isn’t about making friends. This is about making a future.Finally, I stumble out of the track and limp to my car. I call my mom in Long Island in case I veer off the road and die in a ditch, bleeding and alone. I explain that go-karting was the first time in a month my brain escaped from the hamster wheel of craziness over my future.Somehow I make it home. Paul examines my warrior wounds, shakes his head, and returns to his fantasy baseball league.I shower, as though I can wash the bright purple marks from my pale white skin. I sink into my foam mattress, feeling like Sonny Liston lying on the mat with Muhammad Ali straddling his beaten body.Hours later, I wake up with a cold compress on my head and a heating pad on my back. My neck won’t turn and my legs are pudding.My alarm clock is blaring out an NPR report: “What would it mean to lose the Boston Globe?”I click it off.I pop more Tylenol.And then I begin searching Craigslist for a rib-cage protector.Jenn Abelson can be reached at abelson@globe.com

Source:CNN