Tag Archives: Alaska

Finally, Bankers Are Getting Some Competition

As good credit is getting harder and harder to get – at least for ordinary people and small businesses – new solutions is starting to emerge. Like the lending clubs.  The concept is not new – in fact – this is what the good old banks once used to do.

“Folks just need a way out.”

Don Burke


Planet Depos owner Joe DiMonte was struggling with his bank to get funding for his newly started business, so he reached out to Lending Club, an online peer-to-peer lending service, and got his money in less than 2 weeks.”Someone from California gives $25. Someone from Alaska or Florida gives another $75 and before you know it, you’re up to $15,000,” the happy business owner reports.

The staff of the 9 month old startup is working to get depositions taken all over the world.

But this time last year, Planet Depos, barely had a camera or a court reporter.

And, they struggled to get any help from a bank.

“You go there, and you just kinda get laughed at,” says Planet Depos owner Joe DiMonte.

So DiMonte reached out to Lending Club, an online peer-to-peer lending service, and got his money in less than 2 weeks.

“Someone from California gives $25. Someone from Alaska or Florida gives another $75 and before you know it, you’re up to $15,000,” he says.

Ages ago, when simplicity reigned, neighbors were the real community bank.

Now there’s a rebirth of this kind of transaction, through what’s called peer-to-peer lending.

“It’s not being paid to a nameless, faceless bank. They know there’s a real person on the other end. It’s the same for investors,” says John Donovan COO of Lending Club.

Donovan says the approach is simple; credit worthy borrowers get low interest rates and investors see big returns.

However, the selection process is very detailed. You must have a score of at least 660 to qualify.

Peer lending differs from bank lending in the way they diversify their loans. Today’s large banks aren’t putting all their eggs in one basket, and the people who invest get to spread out their risk.

The lending clubs are putting a few eggs in a few baskets. Borrowers get money from different sources and by given only smaller amounts, they also reduce their overall risk.

“I have 899 that are currently in some stage of being paid back – and current,” investor Don Burke says.

Burke joined a lending club 18 months ago to diversify his investments.

But the stories behind the loan applications, made him clinch the deal.

Loans From The Heart

One of his first loans truly tugged at the heart:

“A fella ended up in a wheelchair and needed to make his home more wheelchair accessible,” he says.

Something Mr Burke probably will have to do in a few years, as he has muscular dystrophy.

“Folks just need a way out,” Burke says.

A Game Changer

Both givers and receivers call this approach to banking – a game changer.

Business owner Joe DiMonte says he hopes to complete the circle.

“Maybe one day I’ll be an investor on Lending Club.”

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Is The Earth Moving?

The Modern Survival Blog has made an interesting observation; it seems like the one of the earth’s seven major   tectonic plates are moving! As we have pointed out separately – both here at the Econotwist’s and at MSB – something strange is going on deep down in the planet’s lithosphere. One thing seems clear; there are major forces at work.

“Just seven hours after the 6.7 earthquake, a magnitude 6.9 struck at New Britain Region, Papua New Guinea, some 4,600 miles away on the other side of the “Pacific Ring Of Fire” – the Pacific tectonic plate.”

Modern Survival Blog


As the graphic above illustrates; it seems like one of the tectonic plates that covers the planet is about to make a move. A record numbers of earthquakes have been recorded this year, and some of them unusual strong. At the Modern Survival Blog they’ve started chartering the earthquakes. The pattern it shows, is stunning!


What’s going on at the Pacific tectonic plate?

Yesterday a strong earthquake shook at Fox Islands, Aleutian Islands, Alaska, was followed by a swarm of earthquakes.

The Modern Survival Blog has looked at the number of earthquakes in the region of Alaska, Aleutian Islands, going back about a month, and writes:

“It looks like on average there has been about one relatively small earthquake every three days, more or less, with the occasional two earthquakes in a day. That is until 18-July when a strong magnitude 6.7 struck the region. Since then there have been many numerous after shocks, many of which are impressive in magnitude, as high as 5.8 as of this post.”

“What makes this even more interesting is that just seven hours after the 6.7 earthquake, a magnitude 6.9 struck at NEW BRITAIN REGION, PAPUA NEW GUINEA, some 4,600 miles away on the other side of the ‘Pacific Ring Of Fire’, the Pacific tectonic plate. Then, just 31 minutes later, boom, a magnitude 7.3 struck at nearly the same location. Wow, there are serious forces at work here.”


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The blogger have plotted the location of the earthquakes, illustrating the distance between them while also showing the direction of movement of the Pacific tectonic plate. It seems like one side popping in Alaska may have stressed the other side such that it also needed to move in New Guinea.

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It may be coincidence, the MSB continues.  “But something tells me otherwise…”

“Does it feel like to you that there has been increasing earth movements lately? It does to me. I’ve previously reported on the statistics of magnitude 5.0 and higher with regards to historical occurrences, and the frequency of occurrence is definitely up so far this year, 2010. We will see how the rest of the year averages out, while I expect to do a new analysis during early August.”


Here at the Econotwist’s Blog, I’ve separately made many similar observations, and also raised questions about what might be going on.

Specially the story about the many rare deep water fish that’s been surfacing lately, is an interesting related piece.

Related by the Econotwist:

Earthquake Frequency Up 133% In 2010

The Earth: A Danger Zone

Katla Could Be 100 Times – Not 10 – More Explosive Than Eyjafjallajokull

More Mysterious “Monster Fish” Comes To Surface

Low-Oxygen Zones In Oceans Worry Scientists

Earthquake May Have Shortened Days on Earth

Mother Earth On Crack

New Aftershock of 6,1 Hits Haiti

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U.S. Stimulus Program Pours Millions Into Wine Train Project

The Anchorage-based company Suulutaaq have won a $54 million federal contract to build a new railroad bridge and other structures for the famed Napa Valley Wine Train tourist attraction without competitive bidding. According to a report submitted by Suulutaaq late last year, the $54 million project had so far created 12 jobs – in Alaska.

“It’s an ideal stimulus project. Shovel-ready, green, and it provides jobs.”

Jill Techel


In December, U.S. Senators John McCain, R-Ariz., and Tom Coburn, R-Okla., issued a report listing the Wine Train among 100 stimulus projects that they derided as “silly and shortsighted” and a waste of money.

The corporate shareholders live in tribal villages in the outback of western Alaska, investigative reporter Lance Williams writes in his latest article about the project at californiawatch.com.

The CEO is in South Carolina, where his prior multimillion-dollar venture – a dot-com for sail boaters – collapsed in bankruptcy.

But the main action today is in Napa, where, without competitive bidding, this unusual construction company won a $54 million federal contract to build a new railroad bridge and other structures for the famed Napa Valley Wine Train tourist attraction.

This is the world of Anchorage-based Suulutaaq Inc. Because the company was founded by Alaska natives, it enjoys special access to federal contracts.

That’s how it obtained one of the biggest federal stimulus contracts in California – a key segment of a U.S. Army Corps of Engineers’ flood-control project on the Napa River.

Army and Napa city officials say they’re pleased with Suulutaaq’s work on what they describe as an environmentally friendly project to curtail devastating winter flooding. It’s an ideal stimulus project, says Napa Mayor Jill Techel: “shovel-ready, green, and it provides jobs.”

But in December, U.S. Sens. John McCain, R-Ariz., and Tom Coburn, R-Okla., issued a report listing the Wine Train among 100 stimulus projects that they derided as “silly and shortsighted” and a waste of money.

The lawmakers also suggested the project wasn’t doing much for the economy. According to a report submitted by Suulutaaq late last year, the $54 million project had so far created 12 jobs. Officials involved with the project say that more recently roughly 40 workers have been on the scene, and they hope the project will ultimately create up to 200 jobs.

A Walnut Creek construction executive whose firm built a prior phase of the flood-control project said the government likely overspent by millions when it negotiated a contract with Suulutaaq rather than seeking competitive bids.

Meanwhile, investors aggrieved over the bankruptcy of the South Carolina dot-com called Sailnet said they were surprised to learn of former CEO Samuel Boyle’s new job as CEO of Suulutaaq. Boyle did not mention having construction experience or ties to Alaska tribes, they told California Watch. Some said Boyle’s involvement in Suulutaaq boded ill for the Alaska firm.

“My comment to anybody connected to this thing – if Sam Boyle is involved, watch out,” said Arizona venture capitalist Kent Mueller, who said he lost more than $1 million in Sailnet. Based on that experience, “I would not invest a nickel with this guy,” Mueller said.

Suulutaaq officials declined to be interviewed. In response to written questions, the company issued a statement saying that taxpayers were getting a “fair and reasonable” price on the project. The statement said that although Boyle lacked “specific construction experience,” he had “invaluable business experience” to make the Napa project a success.

But the company declined to answer most questions about the project, saying the information was confidential. It rebuffed a query about whether Suulutaaq employed lobbyists by asserting that the question “has potential undertones of a race-based presumption.”

Boyle also declined to be interviewed. In a statement, he wrote that the dot-com’s bankruptcy was “a tragedy” for which he was not responsible because he had left the company by the time it occurred.

Emerging players

Suulutaaq is one of dozens of Alaska Native corporations that have emerged as players in federal contracting via measures crafted in the 1980s and 1990s by former U.S. Sen. Ted Stevens, R-Alaska, a powerful lawmaker whose career ended with a contracting scandal.

For decades, the U.S. Small Business Administration has run a preferential contracting program to aid disadvantaged businesses. Qualifying firms can get federal contracts worth up to $5.5 million by negotiation, rather than competitive bidding.

The Stevens measures gave corporations that were set up by Alaska Natives special access to the program – with no cap on the size of contracts they can obtain. The share of federal contracts going toward Alaska Native corporations has grown rapidly. It was $508 million in 2000 and $5.2 billion in 2008, records show.

Advocates say the program has provided crucial economic development for impoverished Alaskan tribes. It’s a way of redressing centuries of grievous wrongs against them, they say.

But critics have complained that the no-bid contracts provide relatively few jobs and little investment income to the tribes while costing taxpayers a fortune.

“Alaska Native corporations don’t have to prove that they’re socially or economically disadvantaged,” U.S. Sen. Claire McCaskill, D-Mo., said at a 2009 hearing. “They don’t have to be small businesses. And they can receive no-bid contracts worth billions of dollars.”

The companies employ few Alaska natives and “rely heavily on non-native managers,” McCaskill claimed. Thus the firms create relatively few jobs for the people they are supposed to benefit, she argued.

McCaskill also contended that some of the companies “may also be passing through work to their subcontractors.” In those cases, the companies were collecting a profit simply because they had special access to federal contracts, not because they were performing actual work, she said.

McCaskill proposed putting a cap on the no-bid contracts, but the measure stalled in the face of intense lobbying by tribal corporations.

Read the full article here.

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