U.S. stock markets were preparing to open in the wake of Sandy on Wednesday, ending a shutdown that left investors unable to trade for two days and sparked recriminations over whether Wall Street should have been better prepared to handle the impact of such a storm.

 After four days away from the markets --Saturday, Sunday and two days of storm-related delays -- the New York Stock Exchange is open for business again. Jonathan Cheng reports on the markets returning to business as usual, post-Sandy. Photo: Reuters.

 The New York Stock Exchange said Tuesday that it plans to open as usual at 9:30 a.m. and that its trading floor and headquarters in lower Manhattan were "fully operational" despite widespread blackouts and flooding in that part of the city. The Nasdaq Stock Market and other exchanges will open as well. Bond markets will follow suit.

 After a historic two-day closure because of Superstorm Sandy, Asian markets are anticipating the reopening of the U.S. stock exchanges. The WSJ's Ken Brown talks about why U.S. firms and banks were unprepared to act on the backup plan during the disaster.

 While investors and industry officials breathed a sigh of relief, critics argued that the storm exposed how ill-prepared exchanges and their Wall Street customers are for such an event. Regulators on Tuesday said they plan to probe whether more needs to be done to get exchanges and the trading community ready for such disasters.

 Enlarge Image Close European Pressphoto Agency Regulators plan to probe the readiness of exchanges during disasters. Here, a firetruck outside the New York Stock Exchange on Tuesday.

 "The whole saga has demonstrated just how little the exchanges have prepared for a natural, pandemic or terrorist threat since 9/11," said Christopher Nagy, an exchange and trading-firm consultant who formerly handled the routing of orders for brokerage firm TD Ameritrade Holding Corp. "This is another in a long line of examples of exchange failures and an exercise in losing consumer confidence."

 Conflicts between the exchanges and customers arose Sunday, when Big Board operator NYSE Euronext said it was seeking to close its trading floor for the hurricane but keep electronic trading open, something that it hasn't done before.

 Banks and brokerages complained that they hadn't properly tested such a mode of trading, and that doing so would mean bringing workers into their offices just as Sandy was approaching.

 NYSE and customers have been at odds over this emergency backup plan for more than a year. Customers expressed similar concerns ahead of Hurricane Irene in 2011, according to people involved in the discussions. Irene went easy on Lower Manhattan, and didn't require the backup plan.

 After Irene, NYSE kept the same emergency plan in place but many firms didn't test their systems. Throughout the weekend and Monday and Tuesday, exchange officials and customers in private pointed the finger at one another for not having a proper emergency system in place, according to people involved in some of the conversations.

 Enlarge Image Close Associated Press The streets surrounding the New York Stock Exchange are deserted as financial markets remain closed for the second day due to superstorm Sandy.

 The industry pushed back, arguing that without the Big Board's floor in operation, brokers weren't sure they could trust the markets to set opening and closing stock prices.

 Trading firms said on conference calls with exchange officials Sunday night that they weren't prepared for the NYSE plan, known as "Print as N," named after the designation for the Big Board used by computerized trading algorithms.

 New York's Blackout Skyline Compare New York's usual skyline with its blackout skyline View Interactive

 "The comfort level wasn't there" with the NYSE's plan on Sunday night, said Jamie Selway, managing director at ITG, a New York brokerage firm, who participated in many of the industry calls ahead of the storm. "People either didn't understand it or trust it."

 Instead, the industry agreed to shut down the markets.

 Banks, brokers and exchanges continued Tuesday morning to test a new backup plan put together Monday that would shift NYSE operations to its all-electronic platform. But as weather eased, the exchange announced it would open its trading floor.

 The Securities and Exchange Commission, which approved the NYSE backup plan in 2009, expects to review the NYSE's tests and preparations and determine how the industry can be better prepared for the next disaster, according to an agency official. The regulator isn't involved with testing of computer trading systems.

 But some critics say the SEC needs to do more to ensure that exchanges and trading firms are prepared for natural and man-made disasters. "The regulators had a responsibility, particularly after 9/11, to see to it that every exchange had a backup plan that would ensure that regional disruptions wouldn't cause them to go down," said former SEC Chairman Arthur Levitt.

 For now, the agency is primarily focused on getting markets back into working order. Throughout Tuesday, SEC Chairman Mary Schapiro participated in calls with NYSE officials about the exchange operator's ability to resume trading Wednesday.

 While a remote possibility, the SEC has the option of halting trading midday if trading gets overly erratic.

 Trading could start Wednesday with a flurry as investors with pent up orders rush to get their trades in, investors said.

 With many roads flooded and mass transit still in disarray, NYSE officials helped trading-floor workers arrange rides and carpools to reach the exchange for the market opening. The NYSE needs about 100 staff and traders on hand to effectively open its stock exchange, according to exchange officials.

 The NYSE building remained accessible from the north despite floodwaters encroaching on lower Manhattan, NYSE Euronext Chief Operating Officer Lawrence Leibowitz said.

 The NYSE switched over to its backup power generator Monday night when Consolidated Edison Inc. cut power to sections of lower Manhattan amid Sandy's surge, Mr. Leibowitz said. On Tuesday morning, extra fuel was delivered to the exchange, enabling it to run for 40 hours, and plans were to further top up the supply as the day progressed.

 Reopening the NYSE floor is critical for U.S. stock markets because of the NYSE's role as the primary exchange for many blue-chip listings. NYSE Chief Executive Duncan Niederauer plans to be at the Big Board for the market open, an exchange spokesman said.

 Nasdaq officials had pushed for stock-market trading to resume Wednesday, telling customers that they intended to keep Nasdaq OMX Group's downtown Manhattan headquarters closed and run operations from data centers in Carteret, N.J., Shelton, Conn., and Philadelphia.

 Nasdaq's chief executive, Robert Greifeld, will work in Carteret on Wednesday morning, according to a person familiar with the matter.

 —Matt Jarzemsky contributed to this article.

 Write to Jenny Strasburg at jenny.strasburg@wsj.com, Scott Patterson at scott.patterson@wsj.com and Jacob Bunge at jacob.bunge@dowjones.com

 A version of this article appeared October 31, 2012, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: Questions Cloud Market Reopening. ||||| The devastation was so widespread and so severe many residents cannot find the words to describe what they have seen.

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 By Dan Goldberg and Brent Johnson/The Star-Ledger

 MORRISTOWN — No light, no power, no rest.

 More than 24 hours after Hurricane Sandy pummeled New Jersey, crews worked through the night to assess the damage, and formulate a plan to rebuild in months what Sandy destroyed in moments.

 This morning, Gov. Chris Christie said, New Jersey enters a new phase.

 Today is when the state must transition from remorse to recovery, he said.

 And there is plenty of work to be done.

 The devastation was so widespread and so severe many residents cannot find the words to describe what they have seen. Christie called the losses “almost incalculable.”

 Homes gone, landmarks crumbled and loved ones lost. At least seven people in New Jersey have died because of the storm.

 The governor plans to tour the shore today with President Obama and U.S. Sen. Robert Menendez in the afternoon — after a 9 a.m. cabinet meeting and a tour of Sayreville.

 Early Tuesday morning on MSNBC, Christie said the president’s handling of the disaster “has been great.” When asked about the elections at a press conference later in the day, he said: “This administration at the moment could give a damn less about the Election Day. ... I've got much bigger fish to fry.”

 “(Tuesday) was a bit of a day of sorrow for a lot of people,” Christie said. “And we need to feel that. It’s appropriate to feel that. We need to feel it and take it in. There’s nothing wrong with that. But as long as sorrow does not displace resilience, then we’ll be just fine.”

 Moonachie, which had four feet of river water running through town, is slowly drying out, police said.

 “There are no more rescue efforts, and the water has receded quite a bit,” said borough police officer Jeff Napolitano.

 Waters are also beginning to recede in Hoboken, though the city is still a mess. Late Tuesday night, the National Guard rolled in, using high-wheeled vehicles to bring supplies to the beleaguered city and help thousands of residents who found themselves trapped by flood waters.

 Forecasters predict the state will have some time to clean up. Light sprinkles are expected today but nowhere near enough rain for there to be more flooding, said Walter Drag, a meteorologist with the National Weather Service.

 “Sandy has moved on,” he said. “It’s a matter of cleanup now.”

 Utility crews spent most of Tuesday night riding around New Jersey, assessing damage and restoring service where possible. Though progress was made, more than half the state will again wake up without power.

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 Estimates vary on when it will return, but Christie said it could take more than a week for service to be fully restored.

 “To the people of New Jersey, hang in there,” the governor said on Tuesday.

 As of 3:30 a.m. today, JCP&L; was able to restore power to about 13,000 customers during the night, but there are still 958,000 to go.

 “Today, the goal is still to be assessing damage,” said Jennifer Young, a spokeswoman for the power company. “Where we can, we will also make repairs. This is the worst storm damage we’ve seen in our company’s history. It is far worse than what we saw during Irene and the snowstorm last October. With the damage we are seeing, it is really going to take a while to get all customers back online.”

 PSE&G;, which had a peak of 1.4 million outages, reported at 5 a.m. that about 900,000 customers without power. Atlantic City Electric still has 121,000, down from a peak 152,000.

 But if you are looking forward to a bit of trick-or-treating to break the monotony of a dark, disconnected home, think twice before heading out, especially if you have children.

 Christie advised against walking in the streets in the wake of so many felled trees and downed power lines.

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 “I can’t imagine it is going to be safe for kids to go around for Halloween,” he said on Tuesday. “If we have to reschedule Halloween for another day … we want kids to have Halloween, but I also want kids to be safe and alive.”

 The lack of power — and the uncertainty of its return — has forced the state to ask resident to conserve water.

 “Power companies are working hard to restore electricity to water utilities, but right now it’s impossible to say how long these facilities will have to be operated on backup generators,” state Department of Environmental Protection Commissioner Bob Martin said in a press release. “Everyone must pitch in immediately and take steps to reduce water consumption. Without conservation now, homes and businesses could find themselves without water in the near future if backup generation fails. We need full and immediate cooperation.”

 Star-Ledger staff writer Jenna Portnoy and the Associated Press contributed to this report. ||||| People in the coastal corridor battered by superstorm Sandy took the first cautious steps Wednesday to reclaim routines upended by the disaster, even as rescuers combed neighborhoods strewn with debris and scarred by floods and fire.

 People walk through the houses destroyed in the aftermath of yesterday's storm surge from superstorm Sandy, Tuesday, Oct. 30, 2012, in Coney Island's Sea Gate community in New York. (AP Photo/Bebeto Matthews) (Associated Press)

 Marcus Konner, 22, boards his home in the aftermath of a storm surge from Hurricane Sandy, Tuesday, Oct. 30, 2012, in Coney Island's Sea Gate community in New York. (AP Photo/Bebeto Matthews) (Associated Press)

 A car is upended on a mailbox on Surf Avenue in Coney Island, N.Y., in the aftermath of Sandy on Tuesday, Oct. 30, 2012. Sandy, the storm that made landfall Monday, caused multiple fatalities, halted... (Associated Press)

 People stop along the Brooklyn waterfront to look at the Brooklyn Bridge and the Manhattan skyline, Tuesday, Oct. 30, 2012 in New York. Much of lower Manhattan is without electric power following the... (Associated Press)

 One World Trade Center and large portions of lower Manhattan and Hoboken, N.J., are seen without power from Jersey City, N.J., Tuesday, Oct. 30, 2012, the morning after a powerful storm that started out... (Associated Press)

 This photo provided by Metropolitan Transportation Authority shows people boarding a bus, as partial bus service was restored on Tuesday, Oct. 30, 2012. Mass transit, including buses, was suspended during... (Associated Press)

 A parking lot full of yellow cabs is flooded as a result of superstorm Sandy on Tuesday, Oct. 30, 2012 in Hoboken, NJ. (AP Photo/Charles Sykes) (Associated Press)

 But while New York City buses returned to darkened streets and the New York Stock Exchange prepared to reopen its storied trading floor, it became clear that restoring the region to its ordinarily frenetic pace could take days _ and that rebuilding the hardest-hit communities and the transportation networks that link them together could take considerably longer.

 "We will get through the days ahead by doing what we always do in tough times _ by standing together, shoulder to shoulder, ready to help a neighbor, comfort a stranger and get the city we love back on its feet," New York Mayor Michael Bloomberg said.

 The scale of the challenge was clear across the Hudson River in New Jersey, where National Guard troops arrived in the heavily flooded city of Hoboken to help evacuate thousands still stuck in their homes. And new problems arose when firefighters were unable to reach blazes rekindled by natural gas leaks in the heavily hit shore town of Mantoloking.

 As New York began its second day after the megastorm, commuters noticed an uptick in traffic and a small sign of normalcy: people waiting at bus stops.

 On the Brooklyn Bridge, closed earlier because of high winds, joggers and bikers made their way across the span before sunrise. One cyclist carried a flashlight. Car traffic on the bridge was busy, and slowed as it neared Manhattan.

 By late Tuesday, the winds and flooding inflicted by the fast-weakening Sandy had subsided, leaving at least 55 people dead along the Atlantic Coast and splintering beachfront homes and boardwalks from the mid-Atlantic states to southern New England.

 The storm later moved across Pennsylvania on a predicted path toward New York State and Canada.

 At the height of the disaster, more than 8.2 million lost electricity _ some as far away as Michigan. Nearly a quarter of those without power were in New York, where lower Manhattan's usually bright lights remained dark for a second night.

 But, amid the despair, talk of recovery was already beginning.

 "It's heartbreaking after being here 37 years," Barry Prezioso of Point Pleasant, N.J., said as he returned to his house in the beachfront community to survey the damage. "You see your home demolished like this, it's tough. But nobody got hurt and the upstairs is still livable, so we can still live upstairs and clean this out. I'm sure there's people that had worse. I feel kind of lucky."

 Much of the initial recovery efforts focused on New York City, the region's economic heart. Bloomberg said it could take four or five days before the subway, which suffered the worst damage in its 108-year history, is running again. All 10 of the tunnels that carry commuters under the East River were flooded. But high water prevented inspectors from immediately assessing damage to key equipment, raising the possibility that the nation's largest city could endure an extended shutdown of the system that 5 million people count on to get to work and school each day. The chairman of the state agency that runs the subway, Joseph Lhota, said service might have to resume piecemeal, and experts said the cost of the repairs could be staggering.

 Power company Consolidated Edison said it would be four days before the last of the 337,000 customers in Manhattan and Brooklyn who lost power have electricity again and it could take a week to restore outages in the Bronx, Queens, Staten Island and Westchester County. Floodwater led to explosions that disabled a power substation Monday night, contributing to the outages.

 Surveying the widespread damage, it was clear much of the recovery and rebuilding will take far longer.

 When New Jersey Gov. Chris Christie stopped in Belmar, N.J., during a tour of the devastation, one woman wept openly and 42-year-old Walter Patrickis told him, "Governor, I lost everything."

 Christie, who called the shore damage "unthinkable," said a full recovery would take months, at least, and it would likely be a week or more before power is restored to everyone who lost it.

 "Now we've got a big task ahead of us that we have to do together. This is the kind of thing New Jerseyans are built for," he said. President Barack Obama is scheduled to visit the state Wednesday to inspect the storm damage.

 By sundown Tuesday, however, announcements from officials and scenes on the streets signaled that New York and nearby towns were edging toward a semblance of routine.

 First came the reopening of highways in Connecticut and bridges across the Hudson and East rivers, although the Brooklyn-Battery Tunnel, connecting Brooklyn to Manhattan, and the Holland Tunnel, between New York and New Jersey, remained closed.

 A limited number of the white and blue buses that crisscross New York's grid returned Tuesday evening to Broadway and other thoroughfares on a reduced schedule _ but free of charge. Gov. Andrew Cuomo said he hoped there would be full service by Wednesday. Still, school was canceled for a third straight day Wednesday in the city, where many students rely on buses and subways to reach classrooms.

 In one bit of good news, officials announced that John F. Kennedy International Airport in New York and Newark International Airport in New Jersey would reopen at 7 a.m. Wednesday with limited service. New York's LaGuardia Airport remains closed.

 The New York Stock Exchange was again silent Tuesday _ the first weather-related, two-day closure since the 19th century _ but trading was scheduled to resume Wednesday morning with Bloomberg ringing the opening bell.

 Amtrak also laid out plans to resume some runs in the Northeast on Wednesday, with modified service between Newark, N.J., and points south. That includes restoring Virginia service to Lynchburg, Richmond and Newport News, Keystone trains in Pennsylvania, and Downeaster service between Boston and Portland, Maine.

 But flooding continues to prevent service to and from New York's Penn Station. Amtrak said the amount of water in train tunnels under the Hudson and East rivers is unprecedented. There will be no Northeast Regional service between New York and Boston and no Acela Express service for the entire length of the Northeast Corridor. No date has been set for when it might resume.

 But even with the return of some transportation and plans to reopen schools and businesses, the damage and pain inflicted by Sandy continued to unfold, confirming the challenge posed by rebuilding.

 In New Jersey, amusement rides that once crowned a pier in Seaside Heights were dumped into the ocean, some homes were smashed, and others were partially buried in sand.

 National Guard troops arrived in Hoboken on Tuesday night to find live wires dangling in the floodwaters that Mayor Dawn Zimmer said were rapidly mixing with sewage.

 About 2.1 million homes and businesses remained without power across the state late Tuesday. When Tropical Storm Irene struck last year, it took more than a week to restore power everywhere. The state's largest utility, PSE&G, said it was trying to dry out substations it had to shut down.

 Outages in the state's two largest cities, Newark and Jersey City, left traffic signals dark, resulting in numerous fender-benders at intersections where police were not directing traffic. And in one Jersey City supermarket, there were long lines to get bread and a spot at an outlet to charge cellphones.

 Trees and power lines were down in every corner of the state. Schools and state government offices were closed for a second day, and many called off classes for Wednesday, too. The governor said the PATH trains connecting northern New Jersey with Manhattan would be out of service for at least seven to 10 days because of flooding. All the New Jersey Transit rail lines were damaged, he said, and it was not clear when the rail lines would be able to open.

 In Connecticut, some residents of Fairfield returned home in kayaks and canoes to inspect widespread damage left by retreating floodwaters that kept other homeowners at bay.

 "The uncertainty is the worst," said Jessica Levitt, who was told it could be a week before she can enter her house. "Even if we had damage, you just want to be able to do something. We can't even get started."

 The storm caused irreparable damage to homes in East Haven, Milford and other shore towns. Still, many were grateful the storm did not deliver a bigger blow, considering the havoc wrought in New York City and New Jersey.

 "I feel like we are blessed," said Bertha Weismann, whose garage was flooded in Bridgeport. "It could have been worse."

 And in New York, residents of the flooded beachfront neighborhood of Breezy Point in returned home to find fire had taken everything the water had not. A huge blaze destroyed perhaps 100 homes in the close-knit community where many had stayed behind despite being told to evacuate.

 John Frawley, 57, acknowledged the mistake. Frawley, who lived about five houses from the fire's edge, said he spent the night terrified "not knowing if the fire was going to jump the boulevard and come up to my house."

 "I stayed up all night," he said. "The screams. The fire. It was horrifying."

 There were still only hints of the economic impact of the storm.

 Forecasting firm IHS Global Insight predicted it will end up causing about $20 billion in damage and $10 billion to $30 billion in lost business. Another firm, AIR Worldwide, estimated losses up to $15 billion _ big numbers probably offset by reconstruction and repairs that will contribute to longer-term growth.

 "The biggest problem is not the first few days but the coming months," said Alan Rubin, an expert in natural disaster recovery.

 Some of those who lost homes and businesses to Sandy were promising to return and rebuild, but many sounded chastened by their encounter with nature's fury. They included Tom Shalvey of Warwick, R.I., whose 500-square-foot cottage on the beach in South Kingstown was washed away by raging surf, leaving a utility pipe as the only marker of where it once sat.

 "We love the beach. We had many great times here," Shalvey said. "We will be back. But it will not be on the front row."

 ___

 Contributors to this report included Associated Press writers Angela Delli Santi in Belmar, N.J.; Geoff Mulvihill and Larry Rosenthal in Trenton, N.J.; Katie Zezima in Atlantic City, N.J.; Samantha Henry in Jersey City, N.J.; Pat Eaton-Robb and Michael Melia in Hartford, Conn.; Susan Haigh in New London, Conn.; John Christoffersen in Bridgeport, Conn.; Alicia Caldwell and Martin Crutsinger in Washington; David Klepper in South Kingstown, R.I.; David B. Caruso, Colleen Long, Jennifer Peltz, Tom Hays, Larry Neumeister, Ralph Russo and Scott Mayerowitz in New York. ||||| NEW YORK Some limited air travel is expected to return to the New York City metro area on Wednesday following the superstorm Sandy.

 Superstorm floods New York City

 The Port Authority of New York and New Jersey says John F. Kennedy International Airport in New York and Newark International Airport in New Jersey will open at 7 a.m. with limited service. They were closed in the storm.

 It's unclear what carriers will have flights operating.

 "As airports ramp up service this week, passengers are strongly urged to confirm with their individual carriers regarding flight status in the coming days before traveling to the airports," read a Port Authority statement, CBS New York station WCBS-TV reports.

 The Port Authority says some carriers would be landing planes with no passengers at JFK starting Tuesday night to be prepared for flights Wednesday.

 Watch: Aerials of flooded LaGuardia Airport in NYC

 New York's LaGuardia Airport remains closed.

 East Coast airports, including Washington's Reagan National, were largely deserted for a second straight day as airlines cancelled 7,000 Tuesday flights, CBS News correspondent Bob Orr reports.

 There were a few hopeful travelers. Among them were Colby Kuhns and his new bride, who were anxious to start their honeymoon.

 "We came in this morning and it was out of one of those Apocalypse movies where everybody's gone," Kuhns said.

 Sandy creates transportation nightmares across U.S.

 The storm caused one of the largest disruptions of the U.S. aviation system since 9/11.

 Since Sunday, airlines have cancelled more than 16,000 flights, and 2,116 more have already been scrubbed for Wednesday. Every major carrier is taking a hit.

 United Airlines has cancelled more than 2,100 flights; American Airlines more than 1,800 flights; Southwest/AirTran just about 1,800 flights; and US Airways has cancelled more than 1,500 flights.

 Industry analysts say airlines stand to lose more than $200 million to Sandy.

 And frustrated travelers, like Rod Johnson, are running short on patience.

 "So far today I've had my flight cancelled four different times," Johnson said.

 Superstorm's most dramatic images

 Rail travel through the storm zone is not much better. While Washington's Metro service limped back to life Tuesday, Amtrak's northeast corridor, between D.C. and Boston, remains shut down.

 Some Amtrak service may resume Wednesday. But spokesman Steve Kulm says track inspections must be done.

 "We have over 300 miles that we own and operate, that we need to go out and inspect to make sure everything is safe and ready to go for the operation -- when we are ready to get back to operations," Kulm said.

 It will take longer for air service to get back to normal -- it could be the end of the week. It will take so long because there are so many planes and flight crews out of position. The whole system essentially has to be reset. Even after a snowstorm in New York, it can take two days to unwind the travel logjam. Sandy is, of course, is much, much worse. ||||| Eventually they loaded him onto a city bus that carried them out of the flooded area, and later into an ambulance that took him to Maimonides Hospital. He was treated for cuts, muscle strains and hypothermia .

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 Fifteen people in the Far Rockaway section of Queens and nine in Coney Island were charged with burglary and other offenses in connection with looting at stores. Among them was a 29-year-old woman who faced a weapons charge “after the safe she was carrying from a store was found to contain a firearm,” Mr. Browne said.

 For those who did not have basements that flooded or buildings that slipped off their foundations, there were lines at the gasoline stations that have power to pump fuel for generators and for cars. In New Jersey, Gov. Chris Christie ’s office warned drivers to be careful because lines were so long that they had stretched onto the Garden State Parkway and the New Jersey Turnpike. One Twitter feed that had been following the hurricane on the Jersey Shore began sending out updates about where to buy gas.

 A wide stretch of Lower Manhattan remained dark, as did the Jersey Shore, waterfront neighborhoods in Brooklyn and Queens, and most of Long Island .

 But the first section of Manhattan that lost power on Monday night, after an explosion and fire at a substation on East 14th Street, had had its lights turned back on, a Consolidated Edison executive said. Doing that restored power to about 2,000 of more than 220,000 customers below 39th Steet in Manhattan. The rest will probably have to wait until Friday or Saturday, said John Miksad, Con Ed’s senior vice president for electric operations.

 Power also returned to the Brighton Beach section of Brooklyn. But repairing all of the downed wires in other boroughs and in Westchester County could take another week, Mr. Miksad said.

 In New Jersey, executives at Public Service Electric and Gas Company said 900,000 customers were still without power, down from a peak of 1.7 million on Tuesday. Some of the company’s main lines, carrying power to substations for local distribution, still needed to be repaired, officials said. But they said electricity was on again in Newark, Elizabeth and parts of Jersey City, and they expected to have all power restored by Nov. 9.

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 Another big utility, Jersey Central Power and Light, said nearly 950,000 customers did not have electricity. About half were in Monmouth and Ocean Counties along the shore.

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 Connecticut Light and Power reported that more than 318,000 customers were out, including about two-thirds of its customers in Greenwich and New Canaan and 9 out of 10 in Weston.

 Mr. Cuomo said restoring power to Long Island, where the storm knocked out power to 90 percent of the Long Island Power Authority ’s customers, posed particular difficulties. He said 1,800 utility workers from other areas, mostly upstate, were being sent there to provide extra help.

 It was clear that it would be a while before many of the small businesses that were so much a part of the city — visually, with their kaleidoscope of street-level storefronts, and economically — recovered. It was just as clear that it would be days before many restaurants reopened. Some lost large inventories when the power went out and food in their walk-in refrigerators began to spoil.

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 Some lost more than food. Before the storm, Andrew Carmellini, the chef at the Dutch in SoHo and Locanda Verde in TriBeCa, rented a car for around-town transportation. He left it on West 23rd Street. “The car got destroyed in the flood,” he said. “The water went over the dashboard.”

 Mayor Michael R. Bloomberg said his evacuation orders remained in effect for low-lying communities from Coney Island in Brooklyn to Battery Park City in Manhattan. Mr. Bloomberg said they would not be lifted until the Buildings Department had had time to inspect buildings in those areas. “I know it’s annoying to everyone,” he said at a briefing, “but we don’t need more loss of life.”

 Would the city be back to normal? Perhaps, he said — but not for families who were missing a child, a parent, a brother, a sister.

 “For all we do to recover, it’s fair to say we can’t replace the lives of the people lost in the storm,” he began, speaking in a softer voice than he had used at earlier briefings. “Any loss of life is tragic; sadly, nature is dangerous, and these things occur. The best thing we can do for those who did die is make sure this city recovers for those who come out of this and build a better life for those left behind.” ||||| There may be no light in the kitchen, but there’s likely food in the pantry.

 The city’s food network roared back to life yesterday, with trucks rolling in and out of the Hunts Point Cooperative Market in The Bronx and other key distribution hubs.

 “That’s why we have produce and people standing on line outside going into the store,” said John Catsimatidis, who owns the city’s 32 Gristedes supermarkets.

 “We are doing it hour by hour, trying to get trucks from our warehouses,” he said. “Customers might notice a few things missing. What goes first? Bread and milk. We might be running a day behind.”

 But residents of downtown neighborhoods without power, where 11 Gristedes are located, may have to trek uptown to re-stock their shelves.

 For most shoppers, the main inconvenience may be the lack of their favorite brands, but there are plenty of substitutes.

 For instance, Perdue Farms of Maryland warned local grocers that it would have trouble for the next few days because of Sandy, but other chicken suppliers are working to make up the shortfall.

 Some brands that distribute directly to retailers from their factories or farms may also encounter delays.

 City and state officials take food distribution very seriously.

 “The literal movement of food into the city is the problem; that’s the thing that’s going to be the trick,” said Columbia professor Irwin Redlener, who heads the Ivy League university’s National Center for Disaster Preparedness.

 Advances in supply-chain management mean that large cities like New York typically have only two to three days of food on hand at normal consumption levels. During the Cold War era, from the late 1940s to 1991, cities had as much as five days.

 Representatives from major food suppliers have a seat in the command centers of the city’s and state’s Office of Emergency Management.

 That way, food trucks can convoy with police escorts along roads and bridges closed to the public.

 “We have priority consideration so we can restock shelves and people can feel a return to normalcy,” said James Rogers, president of the Food Industry Alliance of New York.

 So far, neither the state or city has needed to give food trucks escorts to keep them rolling.

 “We restocked three of our stores last night from The Bronx,” said George Zoitas, CEO of Westside Market.

 “We are fully operational and fully stocked with everything. Milk, we got,” he said.

 Other deliveries were getting back to normal.

 The United States Postal Service has resumed limited services in parts of the city and suburbs.

 FedEx said it’s delivering essential medical supplies, and expects to resume regular operations soon.

Summary: – Hurricane Sandy's fingerprints are still all over the Northeastern US—particularly in New York and New Jersey—but the region began slowly churning back to life today. Here's the latest on the recovery: New York City's subway is still waterlogged, but buses are expected to be out in full force by rush hour, and running free of charge, the New York Times reports. There will also be 4,000 cabs on the streets implementing a ride-sharing program. The Brooklyn Bridge has reopened. Food trucks are rolling to try to restock empty grocery shelves, the New York Post adds. The New York Stock Exchange will also reopen today, and says it expects to be "fully operational," the Wall Street Journal reports. The NASDAQ and bond markets will do likewise. More than half of New Jersey is still without power, and the state is asking residents to conserve water. National Guard troops have arrived in Hoboken with high-wheeled vehicles, to bring supplies to or help evacuate the thousands trapped in their homes there, the Star-Ledger reports. Kennedy and Newark airports are open for business again, but it's unclear how many carriers will actually have flights running, and LaGuardia remains closed, CBS News reports, adding that most major East Coast airports, like Washington's Reagan National, are mostly deserted. Amtrak is restoring a good amount of its East Coast service, the AP reports, with modified service between Newark and points south, including Virginia and Pennsylvania. In Connecticut, the AP found people returning to inspect their homes via kayak and canoe. "The uncertainty is the worst," said one woman who might not be able to get inside for a week. "Even if we had damage, you just want to be able to do something. We can't even get started."


Back in October of 2014 I wrote a story titled "Millions of Federal Student Loans Lining Up to Be Eliminated and Borrowers Repaid".

 At the time I wrote that article some people said I was crazy. After all, how could people actually have their federal student loans forgiven because they were defrauded.

 Well the simple answer is because it is the law. It's a little known and buried law and I went into detail with examples about it. Just look at this.

 As I said then, "Recently the Department of Education brought a section of federal law to light that would allow federal loans to be eliminated if, "the borrower may assert as a defense against repayment, an act or omission of the school attended by the student that would give rise to a cause of action against the school under applicable State law." For more information on this, click here."

 And today the Wall Street Journal ran a story that said "Americans are flooding the government with appeals to have their student loans forgiven on the grounds that schools deceived them with false promises of a well-paying career -- part of a growing protest against years of surging college costs."

 In the past six months, the story reports, more than 7,500 borrowers have applied to have their student loans eliminated in a process that is law today.

 The interesting part of the Wall Street Journal article is this quote, "The sudden surge in claims has flummoxed the Education Department, which says the 1994 forgiveness program is overly vague. The law doesn't specify, for example, what proof is needed to demonstrate a school committed fraud. Last week, the department a began monthslong negotiation with representatives of students, schools and lenders to set clear rules, including when the department can go after institutions to claw back tuition money funded by student loans."

 If I was right in reading the tea leaves about the regulation allowing people to apply for federal student loan forgiveness when they were defrauded, then I would bet the government will be closing that door soon. So if you feel you had been defrauded I would urge you to get your claim in as soon as possible.

 Lawmakers will soon get significant lobbying pressure to change that law since it will lead to a huge amount of loans forgiven and money clawed back from for-profit and public schools and universities.

 Since there is no official claim for to use I'm aware of, I would urge you to consider taking one of three action steps.

 First, you may want to contact an attorney who is licensed in your state to represent you in making your claim. The attorney should be able to help with document and submit a legal and valid claim based on the specifics of your situation. You will have to pay the attorney for their services. Tell the attorney to refer to this article and this one for more details.

 Second, you might want to consider a less expensive option like contacting a good debt coach like Damon Day or Michael Bovee for help in submitting a well documented and professional claim to hopefully be more easily processed by the Department of Education.

 Finally, you can always attempt to put forward a claim yourself. Just make sure it is not a rant, it contains specific facts to backup your allegations, and state the basis for making your claim. I can't stress enough how much you need to make sure your claim is neat, tidy, easy to read, and can be easily assessed to be valid. In my decades of experience helping people with debt problems I've just seen too many people submit sloppy documentation, poor narratives, and not track their correspondence. If you decide to go the self-help route, take time to submit a professional, through, and well documented claim. Please.

 And to help reinforce the sound of the door preparing to slam, here is a final quote from the Wall Street Journal story, "The Education Department has hired a special master to sort through existing claims as it drafts permanent rules."

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 If you have a credit or debt question you'd like to ask, just click here and ask away.

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 Follow Steve Rhode on Twitter: www.twitter.com/GetOutOfDebtGuy ||||| Americans are flooding the government with appeals to have their student loans forgiven on the grounds that schools deceived them with false promises of a well-paying career—part of a growing protest against years of surging college costs.

 In the past six months, more than 7,500 borrowers owing $164 million have applied to have their student debt expunged under an obscure federal law that had been applied only in three instances... ||||| There are millions of onetime college students in America who owe huge sums of money for student loans that bought them an education that turned out to have little market value. Now, there may be a ray of hope for their financial future.

 The Wall Street Journal reports that what may have once been seen as a fanciful dream of desperate student debtors is now catching on in a serious way:

 In the past six months, more than 7,500 borrowers owing $164 million have applied to have their student debt expunged under an obscure federal law that had been applied only in three instances before last year. The law forgives debt for borrowers who prove their schools used illegal tactics to recruit them, such as by lying about their graduates’ earnings.

 To be clear, we are not talking here about the stereotypical “Oberlin art history major who found out their lavish degree was worthless” that is used to brush this topic away so frequently. According to the WSJ, “So far, almost all of the borrowers applying for forgiveness under the 1994 program attended for-profit schools,” those actually fraudulent institutions whose business model is to prey on the needy and ignorant and soak them in exchange for degrees with little real world value. And, the story makes clear, the government is viewing their claims as potentially valid.

 It is nice to imagine this debt forgiveness standard spreading to all types of universities. It would revolutionize how higher education is designed and marketed in America. But even if it only has the effect of denting the for-profit scam diploma industry, it’s worthwhile.

 If you went to a for-profit school and owe a ton of student debt, start Googling.

 [Photo via FB]

Summary: – Over the past six months, more than 7,500 Americans have applied to have their cumulative $164 million in student loans forgiven, claiming their colleges defrauded them, the Wall Street Journal reports. And as Gawker clarifies: "We are not talking here about the stereotypical 'Oberlin art history major who found out their lavish degree was worthless.'" No, these students are taking advantage of an almost entirely unused 1994 law that allows student loans to be forgiven if current or former students can prove their schools "used illegal tactics to recruit them," the Journal reports. Student activists found the law last year, and so far it's mostly been used against for-profit chain colleges, such as ITT Technical Institutes and Art Institutes. "I feel robbed of my life," one student, who owes $114,000 after attending an Art Institute, tells the Journal. Another says he was promised an industry job after graduation only to have the Art Institute get him a gig at Office Depot for $8 an hour. Meanwhile, the Education Department has been shocked by the obscure law's sudden popularity. The department is now looking at the law, which it claims is too vague and potentially costly to taxpayers. Steve Rhode at the Huffington Post writes that students who feel defrauded by for-profit schools should get their claims in ASAP, as pressure will soon start mounting on politicians to repeal the law. "I would bet the government will be closing that door soon," he says.


Archive-It Partner 1067: The Political TV Ad Archive, a project of the Internet Archive, collects political TV ads and social media sites in key 2016 primary election states, unlocking the metadata underneath and highlighting quality journalism to provide journalists, civic organizations, academics, and the general public with reliable information on who is trying to influence them & how. ||||| Breaking News Emails Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.

 / Updated By Safia Samee Ali

 A Michigan official that manages tax foreclosed homes for the county where Flint sits has resigned after an audio recording of him blaming the city’s water problems on "n---ers (who) don't pay their bills" surfaced online.

 Phil Stair, who was a sales manager at the Genesee County Land Bank, was recorded using racial slurs by local water activist Chelsea Lyons who later posted the recordings to the website Truth Against the Machine.

 In the recording, Stair is heard saying "Flint has the same problems as Detroit, f--ing n---ers don't pay their bills, believe me, I deal with them,” he said.

 The City of Flint Water Plant is illuminated by moonlight on Jan. 23, 2016. Brett Carlsen / Getty Images, file

 “They just don’t pay their bills. Well, Detroit, didn’t collect on their bills, so they charged everybody else, but — Flint — Flint had to pay their bill to Detroit.”

 Lyons was worried about the Land Bank, which is tasked with the sale, rehabilitation, and demolition of tax-foreclosed homes in the county, being Flint's largest property owner to, she told MLive.com on Monday.

 "The Land Bank is taking up all of the properties in Flint," Lyons told the publication. "They are pushing people out of neighborhood."

 Thousands of Flint residents are facing foreclosure due to unpaid water bills — water that many are still not able to fully use.

 The recordings took place over two days and began after Lyons and another woman met Stair at a local bar, she said.

 Michele Wildman, the executive director of Genesee County Land Bank confirmed Stair's resignation to NBC News on Monday.

 "We are deeply troubled by the offensive and inexcusable comments," she said. "This individual does not reflect our values as a company, and we are engaging with the community to restore and regain public trust," she said.

 Corroded water pipes at a Flint, Michigan, facility. NBC News Channel - file

 Flint, which is over 56 percent black, was the center of the nation’s largest water crisis that resulted in a surge of lead poisoning, especially among children.

 Flint's water was contaminated with lead for at least 18 months after the city tapped the Flint River as its water source to save money. But the water was not treated to reduce corrosion and toxicity rampantly spread to all those utilizing the city’s water.

 A U.S. district judge in Detroit approved a settlement in a lawsuit in March, freeing up almost $100 million in state money to tear out lead or galvanized steel water lines leading to at least 18,000 Flint homes by Jan. 1, 2020.

 Several officials have faced criminal charges over the handling of the city's water. ||||| A local Flint official with the controversial Genesee County Land Bank suggested that the root causes of the Flint water crisis were that black people don’t pay their bills, audio recordings obtained by Truth Against The Machine reveal.

 “Flint has the same problems as Detroit—fucking ni**ers don’t pay their bills, believe me, I deal with them,” Phil Stair, sales manager for the Genesee County Land Bank said on May 26th during a conversation with Truth Against the Machine reporter and environmental activist Chelsea Lyons in Flint.

 [EDITOR’S NOTE: The full 20-minute audio of Stair’s is at the bottom of this story]

 He was driving to a restaurant with Lyons and another individual, who he’d met that night, when he made the comments, which were recorded and later obtained by TATM.

 Stair did go on to try and clarify: “I don’t want to call them ni**ers, shit I just went to Myrtle Beach, 24 guys, and I was the only white guy; I got friends, I mean, there’s trash and there’s people that do this shit. They just don’t pay their bills. Well, Detroit, didn’t collect on their bills, so they charged everybody else, but- Flint- Flint had to pay their bill to Detroit.”

 Stair, a government employee through the Land Bank, which, according to its website, is a “non-profit government organization,” went on to explain to the activists his theory on the water crisis—one that’s been parroted by Governor Snyder and many other state and local officials.

 “Detroit was charging all its customers for the cost—they weren’t collecting from their residents, they were shutting water off, they were letting bills go forever, they were charging everybody else; Flint has the same problems as Detroit—fucking ni**ers don’t pay their bills, believe me, I deal with them.”

 Flint, which is 56 percent African American, was forced to switch to the toxic Flint River because of Detroit’s price hikes, according to Stair.

 “Now, they need a 3-year extension on their contract to get on the new pipeline [Karegnondi Water Authority] they’re building to Flint. Detroit said no, we want a 20-year agreement. Flint said no we’re building the new system or whatever, and they jacked em, they jacked the price up and they [Flint] couldn’t afford to pay it, so they said, well, we gotta go back to what we did in 1978.”

 He continued: “They [Flint] had a water plant, we’ll take the [water] out of the Flint River and the reservoirs—there’s two reservoirs upstream—and we’ll just treat the water, because they had to maintain that plant because Detroit was supposed to have a second source- unless you have a backup you gotta- they had to maintain their plants. So they used to maintain their water plant, they treated their water, tested it, said it was good, and they’d dump it back in the river, because they couldn’t mix it with the Detroit water.”

 Stair’s version of events doesn’t match previous records and reporting, which show Flint’s decision to switch off of Detroit’s water system—made by the unelected Emergency Manager appointed by Governor Rick Snyder—was not about saving money in the face of Detroit price-gouging.

 Emails from before the 2014 water switch showed Detroit’s water and sewage department bending over backwards to retain Flint as a customer; after all, Flint was DWAS’s biggest customer other than the city of Detroit.

 [BEAT THE PRESS: DONATE TO TATM SO WE CAN PAY OUR FEARLESS JOURNALISTS AND EDITORS TO CONTINUE THEIR PURSUIT OF EXPOSING THE OLIGARCHY.]

 In an email dated April 15, 2013, Sue McCormick, DWAS’s Director, offers Flint a 48 percent rate cut immediately, which compared to the KWA over a 30-year- period, would be 20 percent cheaper for Flint.

 Flint’s elected officials also own a large share of the blame for the water crisis. Beginning in 2007, the city habitually overspent and underestimated their budget deficits. In a 2011 audit of Flint by the state of Michigan, it was revealed that the city had pulled millions from the water and sewage funds, transferring the money from the at-that-time solvent water fund to make up for an insolvent general fund. More importantly, the city also had increased water and sewage rates 35 percent in 2011—to make up for their own spending shenanigans.

 Four years later, Genesee county circuit court Judge Hayman found that the transferring of funds and subsequent price hikes was illegal; he also declared the tax foreclosures many residents experienced—because they couldn’t afford the price-gouged rates— to be illegal. The city was ordered to issue a refund for the 35 percent hike, but, in reality, the credits applied to water and sewer bills didn’t fully make up for the rate hike, and the overall water and sewer rates continued to increase. Detroit Free Press found that Flint residents paid the highest water rates in America in a 2015 study.

 So, Stair’s version of events, which points to Detroit’s unyielding price hikes as the catalyst for Flint deciding to temporarily switch to the Flint River while KWA being built, doesn’t match reality.

 He later doubles down on the type of people he feels have caused the blight in Flint.

 As his conversation with the environmental activists continued, they asked him to elaborate: “Is the east side [of Flint] the bad side?”

 “Yeah,” Stairs begins.

 STAIR: “Well, I call the south side, where we were, that’s the new east side cause we [land bank] tore most of it down; all them derelict motherfuckers have moved down to the south side. They’re destroying that.”

 LYONS: “Who is?”

 STAIR: “Fuckin’ deadbeats who, when they tear the houses down, they gotta go somewhere, they go on the south side. It just shifts- it just shifts the shit. The people are still the people, they fucked the houses up, then they leave and when we tear em down, they just go somewhere else and just fuck those houses up. I bought my house for $23,000 dollars in 1981, and they sold that house right there for $4,000 dollars about four years ago. So, 30 years it didn’t… but… it doesn’t owe me anything.”

 LYONS: “So, like, did this used to be, like, a white neighborhood?”

 STAIR: “It’s still white. Well, this street isn’t so much, but overall, it’s still pretty white” (editor’s note—as stated earlier, Flint is 56 percent African American).

 This kind of raw opinion on, as Stair puts it, the “derelicts and deadbeats” residing in Flint, is disturbing considering, as sales manager, he and his colleagues at the Land Bank are supposed to be guiding the residents of Flint to economic recovery in order to “restore value to the community,” as stated on the Land Bank’s website.

 Stair didn’t hold back on elected officials, blaming Michigan Governor Snyder for not doing enough to prevent the crisis.

 “It was really a failure on the part of the Governor to step in,” he said. “So when Detroit jacked em [Flint], the Governor should’ve stepped in and said ‘you bankrupt city,” cause they were under negotiations; Detroit filed bankruptcy, you’re not going to jack a city like Flint; and you’re gonna, we’ll give give you a little increase, but you’re going to extend their contract. He didn’t step in so, what they do? They [Flint] had to go with the other thing [KWA] and they fucked it up. It’s just a total fuck-up. The Governor should have said, no, you’re going to give an extension for 3 years, and you’ll get a little increase from what you’ve been getting, and nothing would’ve happened. Now they’re afraid to get on the new pipeline because they don’t want to mess with the water again.”

 On this part, Stair is both correct and misinformed. Detroit was indeed raising its water prices to Flint. But one of the driving reasons has barely been reported.

 As Jacobin Magazine reported, Detroit, like other cities, got burned by betting their taxpayers’ money as the subprime mortgage house of cards was about to fall.

 The water crisis in Michigan is also intertwined with the subprime mortgage meltdown, which is closely related to financial deregulation. In 2005–7, Detroit had the highest rate of subprime mortgage foreclosures in the United States. While increasingly deregulated banks were aggressively marketing adjustable-rate subprime mortgages to working-class African Americans in Detroit, they were also selling risky financial instruments to the city government. The Commodity Futures Modernization Act of 2000 allowed the swaps market to metastasize from $180 billion in 1998 to $6 trillion in 2004 to $57 trillion by the summer of 2008. In 2005, during this “wild west” period for predatory lenders, Detroit entered into a $1.4 billion dollar deal with UBS AG and Merrill Lynch Capital Services (later acquired by Bank of America). The deal included two layers of speculative financial instruments, one of which was an “interest rate swap” to fund DWSD. The swap deal constituted a bet that interest rates would rise. After interest rates plummeted as a result of the 2008 crash, DWSD was forced to pay $537 million in swap termination payments to banks. In order to pay the termination fees, DWSD increased water rates, and took out $489 million in further bond debt in 2012. That year, Bloomberg reported that “debt service has climbed to more than 40 percent of revenue” at DWSD. As a result, nearly half of Detroiters’ water payments were going to pay debt service to banks, inflated by the banks’ predatory swap deal. In April 2013, ongoing DWSD rate increases provided a public rationale for Flint’s emergency manager, Ed Kurtz, to switch from DWSD to the Flint River, although the actual reasons remain murky.

 So, as you can see, it was more of a city-government-recklessly-placing-bets-with-other people’s-money kind of thing—and then price gouging its residents when they lost the bet—than a “ni**ers” don’t pay their bills” kind of thing.

 But he’s correct in that Snyder should have stepped in to stop Flint from switching off of Detroit’s water system; he knew Detroit had offered to cut its rate nearly in half; he knew the Flint River had a legacy for being a toxic water body that plants like GM dump toxic waste in; he knew the water treatment plant in Flint was not updated or up to the standards needed to treat Flint River water; and he knew the EPA had warned the Michigan Department of Environmental Quality that, upon switching to the Flint River, not adding anti-corrosives to the lead pipes would cause lead to dislodge into the drinking water.

 But alas, when your goal as Governor is to push privatization and fracking—which the KWA checks both boxes—you look the other way.

 The Genesee County Land Bank was founded by Michigan Rep. Dan Kildee (D-MI 5th), who was the Genesee County Treasurer at the time. In fact, Stair claims he was personally hired by Kildee as the first Land Bank employee.

 “I was the first employee they hired…he’s a congressman now, but he was the county treasurer,” he said.

 “Who?” inquires an activist. “Dan Kildee,” clarifies Stair.

 Stair also told the activists how the Genesee County Land Bank—which many Flint residents refer to as the Genesee County “Land Grab”—operates.

 “Well they [residents] don’t pay their bills [water]. Because they [the city] don’t shut it off, so if they don’t shut it off, they just keep using the water; they [the city] lien it on their taxes, then they don’t pay their taxes, it gets wiped out, the house forecloses, the Landbank and the treasurer gets the house, and if it doesn’t get sold at auction, Land Bank gets the house, so we get 200 occupied houses a year, [Inaudible].”

 “I mean it’s poverty, it’s poverty, you can’t fix poverty,” he said. Stair is incorrect when he says “they don’t shut it off”: thousands of residents have received water shut off notices in recent months—for poisoned water.

 Only after residents continue to not pay for the undrinkable water is the water shut off, followed by a threat of a tax lien on a resident’s property. Recently, 8,000 residents received tax lien threats for unpaid poison water bills. The Flint City Council voted 8-1 to place a one-year moratorium on the tax liens; on June 14th, the Snyder-appointed Receivership Transition Advisory Board—essentially a shadow government that can overrule Flint Mayor Karen Weaver and City Council Members—will meet and vote whether to ratify the City Council’s vote.

 In a later encounter, Stair doubles down on who he feels is to blame for the crisis.

 “Long story short, Detroit was supposed to supply a second line that came up like through Troy to Flint as a backup because there was just a single line. Because there was just the one pipeline, Flint had to maintain their water treatment plant all the years that they had it. So, when Detroit wanted to jack em on the price because their contract ran out and they just wanted three years until the new pipeline, they said no. Flint couldn’t pay for it.”

 As shown earlier, this is untrue—Detroit had offered a nearly 50 percent price reduction immediately to Flint.

 “The governor should’ve stepped in and told broke-ass Detroit: you’re not gonna jack broke-ass Flint,” Stair continued. “You’re gonna give them the water, we’ll give you a little increase, and give them their time, don’t fuck with em, don’t do a- didn’t happened.”

 When asked about why the state hasn’t done anything to help the Flint residents living in crisis, Stair responded

 “They have. Oh, millions of dollars are coming here. Millions…to fix the fuck-up. If he would’ve just told Detroit: give them the water… nothing would’ve changed.”

 “Now they gotta do the pipes and everything, it’s such a clusterfuck.”

 As far as the “millions of dollars” coming to Flint, yes, there are grants on top of promises on top of lawsuits that all assured millions of dollars were coming to Flint. However, at every junction down the line, those millions of dollars got redirected and appropriated to other purposes. The most relevant number that demonstrates the funding going to help Flint: since the beginning of the crisis more than three years ago, fewer than 800 lead pipes—of the estimated 20,000 that are slated for removal—have been replaced in the city.

 Corruption in Flint runs deep; as do the racist undertones of its officials. Government officials, both elected and appointed, have a habit of blaming Flint’s problems on the poorest and most vulnerable. In reality, the families trying to get by in a dilapidated city suffer through rate hikes, water shutoffs and tax liens while the taxpayer-funded employees get raise after raise after raise.

 On Tuesday, Part two of this story will publish, consisting of other damning audio from Stair regarding certain illegal substances being used at government offices in Flint and other water-crisis-related audio from Stair.

 For all inquiries, contact us at truthagainstmachine@gmail.com

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 UPDATE June 4th, 9:15pm eastern:

 In response to Truth Against The Machine’s exclusive, U.S. Congressman Dan Kildee (D-MI 5th) tweeted: ||||| A Genesee County Land Bank official resigned today, a day after a tape surfaced of him using a racial epithet to describe Flint residents.

 Before 9 a.m., a small crowd chanted in front of the Genesee County Land Bank office, calling for Sales Manager Phil Stair’s resignation.

 Stair’s resignation was announced a short time later.

 Environmental activist Chelsea Lyons posted a recording of Stair using a racial slur to blame African-American residents of Flint who didn’t pay their water bills as a reason for the city’s water crisis.

 On the audio recording, Stair can be heard saying “n*ggers don't pay their bills.”

 “I had no idea that he was going to say the things that he said. That was not exactly the thing I was going for,” says Lyons, who says she has concerns about Land Bank policy.

 Lyons recorded Stair over two days last week, including stops at local bars in Flint.

 “[Stair] didn’t appear to be drunk. He was drinking, though he didn’t appear to be inebriated in anyway,” says Lyons, who’s part of a group of environmental activists who have been campaigning in Flint.

 The head of the Genesee County Land Bank accepted Stair’s resignation today.

 Michele Wildman apologized for Stair’s remarks at the Genesee County Board of Commissioners meeting.

 “We are outraged by the offensive statements and committed to taking all steps necessary to rebuild public trust,” says Wildman. ||||| FLINT, MI -- A woman who secretly recorded a former executive at the Genesee County Land Bank making a racial slur about Flint residents says she plans to release additional recordings from the conversation in coming days.

 "There are more audio files coming ... We're not going to let this die," said Chelsea Lyons, an environmental activist and independent journalist who recorded Philip Stair, former sales manager of the Land Bank, after meeting him at a local bar.

 Stair, who's white, was recorded saying "Flint has the same problems as Detroit -- f**ing ni***** don't pay their bills, believe me, I deal with them."

 The recordings were first reported online by Truth Against The Machine. In the audio, Stair also calls tenants in Flint houses "derelict mother fu*****" and "fu***** deadbeats."

 "They fu** the houses up and then leave, and we tear them down," Stair said of how he saw the cycle of property foreclosures in Flint.

 Official resigns after using n-word to describe Flint residents

 Stair has resigned from his position at the Land Bank and Executive Director Michele M. Wildman apologized on behalf of the agency Monday, June 5.

 Wildman told the Genesee County Board of Commissioners that Stair's comments don't reflect attitudes inside the Land Bank and said she expected to immediately speak to employees about the situation Monday.

 The executive director said the agency may hire a consultant and add training for staff to ensure the office is treating residents with respect. She also said she never suspected Stair harbored the feelings she heard him speak on the audio recording.

 "If I had ever been aware he would have used a racial slur, I would have dealt with it immediately," she said.

 Wildman said she had yet to speak to Stair about the incident and said his resignation was on her desk when she arrived at work Monday.

 Lyons said the Stair case is important not only because of the racial slur he used but because of how many people have been pushed out of Flint because tax foreclosures that put so much property into the Land Bank's possession, which owns about 13,000 properties in the county, almost 12,000 of which are in Flint.

 Wildman said she's willing to discuss the tax foreclosure process and how the Land Bank carries out its work demolishing structures and putting properties into productive use with Lyons or others who have concerns.

 Lyons called the Land Bank "a disaster, which is why I wanted to talk to (Stair) in the first place.

 "I had no idea he was going to say the things that he said. That was not exactly what I was going for," she said.

 Lyons declined to say what was said on the unreleased audio recording that she said were made over the course of two days last month. ||||| UPDATE: Activist says more recordings on the way of official who used racial slur

 FLINT, MI -- The sales manager of the Genesee County Land Bank has resigned his position after water activists recorded him saying Flint's problems were caused by "ni***** (who) don't pay their bills."

 Michele M. Wildman, executive director of the Land Bank, said Monday, June 5, that she has accepted the resignation of Phil Stair, a longtime employee of the agency.

 Stair, who's white, was recorded making the comment by Chelsea Lyons, an environmental activist and independent journalist who has been active recently in the Flint water crisis.

 "Flint has the same problems as Detroit -- f**ing ni***** don't pay their bills, believe me, I deal with them," Stair is heard to say on the recording posted online by Truth Against The Machine.

 Lyons said she's concerned by the Land Bank's role as Flint's largest property owner. The agency takes over tax-foreclosed properties, carrying out demolitions, rehabilitations and sales.

 "The Land Bank is taking up all of the properties in Flint... They are pushing people out of neighborhood," Lyons said this morning.

 The recording of Stair took place over two days and started after Lyons and another woman met him after having received a tip that he was at a local bar, Lyons said.

 Wildman addressed the county Board of Commissioners Monday morning, saying she accepted Stair's resignation and apologized for his remarks.

 "I am deeply troubled by (the statements)," she said. "The citizens of Flint deserve to have trust in their public officials."

Summary: – As thousands of residents in Flint, Mich., are confronted with the possibility of foreclosure due to unpaid water bills—for water that many still can't use, NBC News notes—an official who worked for a county nonprofit that handles foreclosed homes has stepped down after audio emerged of what he thinks caused Flint's woes. "Flint has the same problems as Detroit: F---ing n---ers don't pay their bills," ex-Genesee County Land Bank sales manager Phil Stair can be heard saying on the tape, obtained by local environmental activist Chelsea Lyons, who put the recordings on the Truth Against the Machine website Sunday. "Believe me, I deal with them," Stair goes on during his May 26 talk with Lyons, in which he blames the city of Detroit for driving Flint away from its water system via price-gouging (which Lyons notes doesn't exactly sync with other accounts of Detroit's role). Per MLive.com, Lyons had received a tip Stair was hanging out at a local bar and headed over to talk to him about the GCLB, which began two days of taped conversations. Lyons notes Stair was drinking when they chatted, though he "didn't appear to be drunk," per Michigan Radio. In Stair's story, he also blames Gov. Rick Snyder for not stopping Flint from turning away from Detroit's water system (which Lyons agrees with), then continues on about Flint's residents, some of whom he calls "derelict mother f---ers" and "f---in' deadbeats." "I don't want to call them n---ers; s---, I just went to Myrtle Beach, 24 guys, and I was the only white guy," he says. "I mean, there's trash and there's people that do this sh--." GCLB's director confirmed Monday to NBC that Stair was no longer an employee, saying the group was "deeply troubled" by his "offensive and inexcusable" remarks. Lyons' full story, with more "damning audio" set to be released Tuesday, is here.


New York Rep. Peter King indicated Sunday he's seeking more clarity about the events surrounding retired Gen. David Petraeus' resignation as director of the CIA.

 "How the FBI could've been investigating this this long . . . To me if it was, the FBI director had the obligation to tell the president or the National Security Council at the earliest date. So it seems this has been going on for several months, and yet now it appears that they're saying the FBI did not realize until election day that General Petraeus was involved, it just doesn't add up," the Republican congressman said on CNN's "State of the Union.".

 "I have real questions about this. I think the timeline has to be looked at," the House Homeland Security Committee chairman said. "I'm suggesting there's a lot of unanswered questions."

 King has called for Petraeus to testify before Congress this week.

 Read more about: CIA, Peter King, David Petraeus ||||| President Barack Obama's long-time political strategist, David Axelrod, said on Sunday House Speaker John Boehner's comments on the approaching fiscal cliff were "encouraging."

 "I think that the speaker's comments have been encouraging, and obviously there's money to be gained by closing some of these loopholes and applying them to deficit reduction. So I think there are a lot of ways to skin this cat so long as everybody comes with a positive, constructive attitude toward the task," Axelrod said on CBS' "Face the Nation."

 Axelrod noted that exit polls showed about 60 percent of Americans agreed with the president on raising taxes on the wealthiest.

 "It is obvious that we can't resolve the challenge here simply by cutting the budget - we've cut by a trillion-one. There are more cuts to be made, but you need new revenues. But everyone - every objective person who's looked at this agrees on that. So, the question is where is that revenue going to come from?" Axelrod said. "The president believes it's more equitable to get that from the wealthiest Americans who have done very well and frankly don't need those tax cuts."

 Read more about: David Axelrod, John Boehner, Bipartisanship ||||| 5 years ago

 Washington (CNN) – Sen. Charles Schumer, the third ranking Senate Democrat, said Sunday that he and Republican Sen. Lindsey Graham will officially restart immigration reform talks that crumbled two years ago.

 Schumer told NBC's "Meet the Press" Sunday that he and Graham have a plan designed to appeal to stakeholders on all sides of the highly contentious issue and he's optimistic that it can get through a gridlocked Congress.

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 "[Sen.] Graham and I are talking to our colleagues about this right now. I think we have a darn good chance using this blueprint to get something done this year," Schumer said.

 The plan includes four key elements: stronger border security, creation of non-forgeable proof-of-citizenship documents, fairer legal immigration for desirable candidates, and a tough-love path to citizenship for those already in the U.S.

 That path, Schumer said, would require applicants to learn English, wait their turn behind immigrants who've used proper legal channels, hold down a steady job, and refrain from criminal activity.

 The long-simmering issue of immigration reform has been thrust into the spotlight again on the heels of Republicans' Election Day losses in races where the Latino vote played a key role. Mitt Romney, the GOP nominee, won only 27% of the Latino vote.

 In the days since the election, Republican lawmakers, political commentators and thought leaders have taken on a more conciliatory tone when discussing immigration. Graham himself was quick to point out that Republicans missed an opportunity.

 "Conservatism would sell with Hispanics. They're hard working, entrepreneurial, pro-life, pro-military," Graham said Sunday on CBS. "But the truth of the matter is the immigration debate that we engaged in in 2006 and 2007 has built a wall between the Republican Party and the Hispanic community because of the tone and rhetoric."

 Graham made clear that he wasn't inclined to miss the opportunity the next time around.

 "It's one thing to shoot yourself in the foot. Just don't reload the gun. So I intend not to reload this gun when it comes to Hispanics. I intend to tear down this wall and pass an immigration reform bill."

 But it remains to be seen how much support can be rallied. Schumer and Graham have made several attempts to tackle immigration reform. In 2010, President Barack Obama expressed support for Schumer and Graham's efforts, saying he was "pleased" to see a promising bipartisan framework.

 "We had put together a comprehensive detailed blueprint on immigration reform. It had the real potential for bi-partisan support based on the theory that most Americans are for legal immigration but very much against illegal immigration," Schumer said.

 However, their efforts drew fire from all sides, with the progressive publication The American Prospect at one point calling their plan "ridiculous" and GOP party committees in Graham's home state of South Carolina censuring him for his congressional votes on immigration. Talks eventually stalled.

 On Sunday, Schumer didn't offer any more specifics about the timeline for talks or implementation. He did emphasize the need for compromise from both sides and a strong role for moderate Republican voices as the talks unfold. ||||| The vice-chairman of the Senate Intelligence Committee said Sunday he believes former CIA Director David Petraeus was "straight up" with the committee during his confirmation hearings.

 "Absolutely, I am," Sen. Saxby Chambliss (R-Ga.) said on ABC's "This Week. "I don't know the exact date of when all of this, the process began. We're confident David Petraeus was very straight up with us during the confirmation hearing."

 Petraeus, who resigned Friday after admitting to an extramartial affair, was confirmed in June 2011. It's unclear when the affair began.

 Chambliss also said he was satisfied with having Acting CIA Director Mike Morell testify instead of Petraeus at a hearing this week looking at the attack on the U.S. consulate in Benghazi, Libya. Petraeus could testify in the future, Chambliss said.

 "He and I have already had a conversation," Chambliss said. "He's trying to put his life back together right now, that's what he needs to focus on."

 Read more about: This Week, David Petraeus, Saxby Chambliss ||||| Weekly Standard Editor Bill Kristol said Sunday the GOP should consider allowing the Bush-era tax cuts expire for incomes above $1 million, "half of whom voted Democratic."

 "The leadership of the Republican Party and the leadership of the conservative movement has to pull back, let people float new ideas. Let's have a serious debate," Kristol said on "Fox News Sunday." "Don't scream and yell if one person says 'You know what? It won't kill the country if we raise taxes a little bit on millionaires.' It really won't, I don't think."

 President Barack Obama has said his reelection indicates the American people want taxes to go up on incomes above $250,000. And House Speaker John Boehner (R-Ohio) has indicated he's willing to accept increased revenues, but won't increase tax rates.

 "I don't really understand why Republicans don't take Obama's offer to freeze taxes for everyone below $250,000, make it $500,000, make it $1 million," Kristol said. "Really? The Republican Party is going to fall on its sword to defend a bunch of millionaires, half of whom voted Democratic and half of whom live in Hollywood?"

 Read more about: Taxes, Bush Tax Cuts, Bill Kristol ||||| Senate Intelligence Committee Chairwoman Dianne Feinstein said Sunday there was "absolutely not" a link between David Petraeus' resignation as CIA director and the Sept. 11 attack on the U.S. consulate in Benghazi, Libya.

 "The events in Benghazi and his resignation? Absolutely not," Feinstein said on "Fox News Sunday" when asked if there was a link between the two events. "I think if you really think this thing out, anyone will come to that conclusion."

 The California Democrat said it would be a "committee decision" regarding whether to call Petraeus as a witness in their investigation into Benghazi. The former CIA director was scheduled to testify at hearing later this week, but has been replaced on the docket by Acting CIA Director Mike Morell. Feinstein said the committee would decide whether or not to call Petraeus after that hearing.

 Feinstein also made clear her shock at Petraeus' departure.

 "For me, it's a heart break," she said. "This is a truly bright man, a credible person, a great leader. ... This is very, very hard. I do think he did the right thing."

 Feinstein said she didn't learn of the affair until she received press inquiries on Friday.

 "We received no advanced notice," she said. "It was like a lightning bolt."

 Feinstein said the committee would "absolutely" investigate why the FBI didn't inform the Intelligence Committee before Friday, since the FBI is required by law to keep the committee up to date on investigations that could impact national security.

 Read more about: Dianne Feinstein, Fox News Sunday, David Petraeus, Benghazi

Summary: – The election might be over, but the talk shows must go on and in case you hadn't heard, David Petraeus had an affair and quit his job as CIA chief, causing much gnashing of teeth and many protestations of shock—shock!—on your television dial. Without further ado, as per Politico: Senate Intelligence Committee chair Dianne Feinstein: "Absolutely not" any link between Petraeus' departure and "the events in Benghazi. I think if you really think this thing out, anyone will come to that conclusion." Feinstein on the FBI's failure to alert the intel committee about the investigation: "We received no advanced notice. It was like a lightning bolt." She "absolutely" plans to investigate. Feinstein speaking personally about Petraeus: "For me, it's a heartbreak. This is a truly bright man, a credible person, a great leader. ... This is very, very hard. I do think he did the right thing." House Homeland Security Committee chair Pete King: "It seems this has been going on for several months, and yet now it appears that they're saying the FBI did not realize until Election Day that General Petraeus was involved, it just doesn't add up. I have real questions about this. I think the timeline has to be looked at." King wants Petraeus to testify about the Benghazi attack regardless. Senate Intel Committee vice chair Saxby Chambliss: "Absolutely ... we're confident David Petraeus was very straight up with us during the confirmation hearing." Further, "he and I have already had a conversation. He's trying to put his life back together right now, that's what he needs to focus on." And in non-Petraeus news, Bill Kristol on the 'fiscal cliff:' "I don't really understand why Republicans don't take Obama's offer to freeze taxes for everyone below $250,000, make it $500,000, make it $1 million. Really? The Republican Party is going to fall on its sword to defend a bunch of millionaires, half of whom voted Democratic and half of whom live in Hollywood?" Chuck Schumer on immigration reform, via CNN: "(Lyndsey) Graham and I are talking to our colleagues about this right now. I think we have a darn good chance using this blueprint to get something done this year," David Axelrod on John Boehner's new revenue leaf: "I think that the speaker's comments have been encouraging, and obviously there's money to be gained by closing some of these loopholes and applying them to deficit reduction. So I think there are a lot of ways to skin this cat so long as everybody comes with a positive, constructive attitude toward the task."


Detectives investigating the case of multiple murders by Philip Onyancha Friday questioned the woman believed to have recruited the self confessed serial killer.

 Elizabeth Wambui was picked up on Thursday and is being held at Kasarani police station as police strive to uncover the mystery murders.

 The teacher at Gatamaiyu secondary school in Ruiru had earlier been reported missing.

 The manhunt for the female teacher began on Tuesday after Onyancha who has confessed to killing 19 people alleged that she recruited him into the blood sacking cult while he was a student at Kenyatta Mahiga high school in 1996.

 According to police Commissioner Mathew Iteere, no stone will be left unturned until into the mystery murders are resolved.

 The investigating team led by head of special crime prevention police unit Richard Katola accompanied by the murder suspect are at the moment visiting different areas within Dagoretti constituency where the suspect is alleged to have committed more murders.

 During police interrogation and interviews with journalists, the suspect said he planned to accomplish his mission of killing 100 people in a span of five years and was mainly targeting women and children under 10 because they are weak.

 The suspect will be taken to court next week.

 On Thursday, the suspect took police to Nakuru where he was greeted by a big crowd who turned up to see the self confessed serial killer as he led the police to a lodging in Town where he is alleged to have killed and hid a middle aged lady in a wall unit two months ago.

 Onyancha was arrested in Nairobi on Thursday last week, after he was traced through a mobile tracking system.

 This was after he made a call to extort money from the father of a boy he had killed.

 Mr Onyancha said he was grateful to the police for arresting him because it had helped him speak against the "evil spirits" which have been haunting him.

 Police say they have arrested three of the suspect's accomplices in connection with the murders and are intending to widen their operations to other parts of the country as more evidence emerges.

 Born in February 1980 in Kerich, Onyancha and his siblings were brought up by their mother after their father died when he was young.

 His mother and brothers live in Nairobi.

 Onyancha's victims who have so far been identified include Anthony, Catherine from Nairobi, Jackline Wamboi and Helen Nyambura from Thika and Chepkurui in Naivasha.

 Three bodies are yet to be identified. ||||| Kenyan police are hunting for an alleged cult leader who is said to have instructed a self-confessed serial killer to take up his killing spree.

 Philip Onyancha, 32, was arrested on Sunday after confessing to killing 17 people, mainly women.

 He said he was recruited into a cult while at school by a teacher, who told him to kill 100 people and drink their blood for good fortune.

 The teacher, who recently moved schools, was not at work on Thursday.

 The BBC's Ruth Nesoba in Kenya's Central Province says police have been questioning the school authorities about her possible whereabouts.

 Suspicious

 For the last three days, Mr Onyancha has been leading the police on a gruesome tour of the country.

 With the media in tow, he has been showing them the places in Nairobi, Central Province and Rift Valley where he says he murdered his victims.

 "My target was to kill 100 women. I managed 17 and there were 83 to go," he told Kenya's Daily Nation newspaper.

 On Wednesday, he took them to a private home where he had worked three years ago as a security guard.

 There the remains of a woman were recovered from a sewer.

 Mr Onyancha also led the police to cheap lodges where he admitted killing several prostitutes. He has also admitted kidnapping several children.

 So far, four bodies have been found and he had led police to the sites of several unresolved murders.

 The BBC's East Africa correspondent Will Ross says that for the police, these admissions conveniently close the cases.

 For that reason some Kenyans are left feeling a little suspicious as to whether Mr Onyancha's version of events is entirely true, he adds.

Summary: – A high school teacher has been detained in Kenya, after a self-confessed serial killer said that she told him to kill 100 people for good fortune. Philip Onyancha, 32, has confessed to killing 17 people, mostly women, and says he did so because teacher Elizabeth Wambui inducted him into her blood-drinking cult when he was in school in 1996, the Kenyan Broadcasting Corporation reports. “My target was to kill 100 women,” Onyancha said. “I managed 17 and there were 83 to go.” He said he targeted women and young children because they were weak. Police nabbed Onyancha last Thursday when he called the father of one of his victims to extort money from him. Since then, he’s been remarkably helpful, leading them to various murder sites around the country. He’s neatly resolved so many unsolved murders that some Kenyans suspect he’s lying, a BBC correspondent reports.


Six months is not a long time when measured against the conflict between the Israelis and the Palestinians, which goes back generations. It is considerably longer when measured in the context of the Iranian nuclear program, which could achieve the capacity to produce undetected a bomb’s worth of fissile material in only twice that time.

 So the criticism that U.S. Secretary of State John Kerry has spent too much time -- six months, to be precise -- in shuttle diplomacy between the Israelis and Palestinians is both churlish and well-taken. His efforts have resulted in the Israelis and Palestinians tentatively agreeing to sit down for new peace talks after a lapse of almost three years. Working to bring about a settlement is a worthwhile investment of U.S. time and energy -- but not if it comes at the expense of a more urgent priority, which is peacefully resolving the Iranian nuclear issue.

 The obstacles to an Israel-Palestinian peace agreement are well-known and long-standing, and they haven’t lessened with time. That said, the payoff for success would be huge. An agreement would liberate the Palestinians from the yoke of occupation, improve Israel’s safety, deprive extremists worldwide of an excuse for anti-Semitic and anti-American violence, demonstrate the value of U.S. diplomacy, and, not coincidentally, secure a legacy for Kerry.

 As other Mideast peace efforts have proved, however, brokering talks requires an enormous investment of U.S. resources. The U.S. will need to keep a close accounting of opportunity costs, especially once the new Iranian president is installed in August, presenting U.S. diplomats with a chance to resolve the standoff over Iran’s nuclear program through negotiations.

 Positive Signs

 Kerry’s initiative offers two elements that may give it an advantage over the many previous failed efforts. He has put together an economic investment package of about $4 billion for the Palestinians, which may expand their constituency for peace. And he has appointed a U.S. team to assess what security measures Israel would need if a Palestinian state were created. (Palestinian negotiators probably would assign more credibility to a U.S. appraisal than an Israeli one.)

 And yet. Kerry’s effort comes at a time when the kind of leadership typically associated with peacemaking appears to be lacking on both sides. Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu have given no indication that they are any more willing to make the concessions necessary for a permanent peace agreement than they were the last few times talks broke down.

 Certainly, Abbas, whose Palestinian Authority is financially troubled, can use the assistance Kerry is offering. And Netanyahu has an interest in talking, if not necessarily resolving anything. His government wants to win goodwill internationally and forestall actions like the European Union’s decision last week to prohibit the award of grants, prizes and financial instruments to Israeli entities operating in the West Bank. The Israelis also hope Abbas will drop his threat to seek war-crimes charges against Israeli officials at the International Criminal Court.

 As this fragile process proceeds, the U.S. should be careful to husband its resources. It’s constructive for U.S. diplomats to get the parties to the table. But U.S. involvement must necessarily be guided by the willingness of the Israelis and Palestinians to compromise. Otherwise, the process may create false expectations and end up reinforcing the extremist view that Israeli-Palestinian peace is impossible. It may also complicate efforts to resolve the currently more consequential conflict with Iran.

 Attack Fears

 With the installation of advanced centrifuges at its uranium-enrichment plants and construction of a heavy water reactor that can make plutonium, Iran is speeding toward a nuclear-weapons capacity. Netanyahu is again threatening that Israel may unilaterally launch military strikes against Iran’s facilities. That would be far from ideal, as an Israeli attack might set off a larger regional conflagration.

 A negotiated deal with Iran is conceivable. President-elect Hassan Rohani demonstrated a conciliatory approach as a past nuclear negotiator. Having ruled that nuclear weapons are un-Islamic, Supreme Leader Ayatollah Ali Khamenei may settle for the soft power of possessing limited nuclear-enrichment capabilities rather than the hard power of possessing actual bombs, if Iran is offered meaningful sanctions relief.

 Given the enormous distrust between Iran and the U.S., getting to that kind of agreement would require a major U.S. government undertaking of tremendous delicacy. That should be a top priority -- and would be a worthy legacy -- for John Kerry.

 To contact the Bloomberg View editorial board: view@bloomberg.net. ||||| Veteran Middle East peace processors are arguing that naysayers are in bad odor this week, now that John Kerry, the U.S. secretary of state, has seemingly defied the skeptics.

 Kerry has actually achieved what so many American officials have achieved before -- which is to say, getting the Israelis and Palestinians to agree, provisionally, to sit down and yell at each other before retreating to their respective corners, thus providing the next secretary of state a chance to score yet another "Groundhog Day" Middle East breakthrough.

 I'm not discounting Kerry's achievement, by the way (though I wish he'd spend more time focused on the Syrian civil war and the tragic, slow-motion collapse of Egypt). It isn't easy to bring Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas together to talk about anything, and Kerry's indefatigability and sincerity are impressive.

 His reported choice for Middle East peace envoy, Martin Indyk, is also impressive. Indyk (a friend, though a friend who is often peeved at me for my opinions) is a former ambassador to Israel and feels the need for such a two-state solution in his bones. Although he is well versed on this issue, he was sidelined, as were other former Middle East peace negotiators, during the reign of Kerry's predecessor, Hillary Clinton (who famously sidelined the entire issue of Middle East peacemaking). It's a welcome sign that he might be back.

 But as I've written before, I think Kerry is on a fool's errand, and I think the collapse of these talks, which is almost inevitable, could have dangerous consequences. Remember what followed the collapse of the Camp David peace process in 2000: years of violence, including horrific bus-bombing campaigns.

 To believe in this process, as Kerry envisions it, you have to blind yourself to at least two realities.

 The first is that Hamas exists and is in control of the Gaza Strip, whether we like it or not. Abbas's Palestinian Authority, which will be bargaining with Israel, will represent at best half of Palestine. How do you negotiate a state into existence that is divided between two warring factions? It isn't even clear if the Palestinian Authority is fully in control of those parts of the West Bank that Israel deigns to let it control. (I will save for another time the deeper discussion of whether the maximum an Israeli government could offer the Palestinians represents the minimum the Palestinians could plausibly accept.)

 You also have to blind yourself to the reality that the Jewish settlement movement on the West Bank is now the most powerful political force in Israel. This is a movement whose leaders and Knesset representatives and cabinet ministers will subvert any peace process that would lead to the dismantling of even a single settlement, including any of the dozens of well-populated ones far beyond Israel's West Bank security barrier.

 Oh, and by the way, to believe in this process you have to believe that the parties are ready to divide Jerusalem.

 Instead of pursuing direct talks between the two sides, Kerry would be better off first negotiating with them separately.

 With the Israelis, Kerry (and his boss) should talk about the demographic, security and moral challenges of governing a population that doesn't want to be governed by Israel. He would be pushing on a bit of an open door -- the increasingly centrist Netanyahu (who is becoming more and more alienated from his robustly right-wing Likud party), seems to understand now that continued occupation (an occupation that exists at this point mainly to support the settlers) is undermining Israel's international legitimacy and its future as a Jewish-majority democracy.

 Kerry is understood in Israel as a true friend; his lobbying could be effective. If the Israelis would take small, unilateral steps on settlements, they could change the Palestinian calculus and improve Israel's reputation (which has become a genuine national-security concern).

 On the other side, Kerry might want to try a bit more aggressively to help the Palestinian Authority become a viable governing body with a functioning economy and a bureaucracy that is reasonably free of corruption. Strengthening the Palestinian Authority (and working to weaken Hamas) while cajoling the Israelis to wean themselves from their addiction to settlements are two steps Kerry could take to advance negotiations.

 It's true that Kerry has gotten the Israelis to agree to release some Palestinian prisoners. And he may convince the Palestinians to cease, for a while, their campaign to delegitimize Israel in the international arena. But these developments, by themselves, won't advance the larger cause.

 I'd like to be proved wrong, but given my doubts about the viability of a two-state solution -- even a solution negotiated by the most visionary and large-hearted of Palestinian and Israeli leaders -- I'm not imagining great success for Kerry in the coming months.

 (Jeffrey Goldberg is a Bloomberg View columnist. Follow him on Twitter.)

Summary: – Congratulations, John Kerry. You've not only managed to get Israel and the Palestinian Authority to agree on new peace talks, you've even managed to score some prisoner releases in advance. What's next? Only for both sides to "sit down and yell at each other before retreating to their respective corners, thus providing the next secretary of state a chance to score yet another 'Groundhog Day' Middle East breakthrough," writes Jeffrey Goldberg at Bloomberg View. Kerry, in short, is on a "fool's errand." Why the pessimism? For one thing, Mahmoud Abbas and the Palestinian Authority represent only "half of Palestine"—these talks ignore the reality of Hamas. "How do you negotiate a state into existence that is divided between two warring factions?" And then there's the ever-expanding Jewish settlements on the West Bank. Israel has plenty of politicians who would rather torpedo the peace process than give up even one of them. Kerry might have a better shot negotiating such problems separately with each side, writes Goldberg. "I'd like to be proved wrong, but given my doubts about the viability of a two-state solution ... I'm not imagining great success for Kerry in the coming months." In fact, this just may make things worse. Click for Goldberg's full column. (The Bloomberg editors, meanwhile, think Kerry would be better served focusing on Iran's nuclear program.)