Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Mon 08.31.2009
Regulators Shutter Three U.S. Banks, Bringing 2009 Toll to 84 Regulators closed banks in California, Maryland and Minnesota yesterday, pushing U.S. bank failures to 84 this year amid continuing fallout from the worst economic crisis since the Great Depression. The Federal Deposit Insurance Corp. was named receiver for Affinity Bank of Ventura, California, Bradford Bank of Baltimore and Mainstreet Bank of Lake Forest, Minnesota, after yesterday’s closings, the FDIC said. Assets of $1.9 billion and deposits of $1.7 billion from the three banks were turned over to new lenders at a total cost of about $446 million to the FDIC’s deposit insurance fund, according to agency statements.
Raft of Deals for Failed Banks Puts U.S. on Hook for Billions The biggest spur to deal-making among banks isn't private-equity cash or foreign investors. It is the federal government. To encourage banks to pick through the wreckage of their collapsed competitors, the Federal Deposit Insurance Corp. has agreed to assume most of the risk on $80 billion in loans and other assets. The agency expects it will eventually have to cover $14 billion in future losses on deals cut so far. The initiative amounts to a subsidy for the banking industry.
FDIC Walks a Tightrope The Federal Deposit Insurance Corporation’s chieftain, Sheila C. Bair, whose agency overseas and insures your bank accounts, had to paint a rosier picture of American banking than deserved as she delivered the FDIC’s 2nd Quarter 2009 banking report. We would all want her to be an icon of stability rather than display panic since modern banking really relies upon faith. Banks have small reserves that anchor against their customer’s deposits which are loaned out to generate profits. So banking is a faith proposition that bankers are conservative, don’t take undue risks, and will manage your money while exercising good judgment. Of course, that isn’t the picture of modern American banking, and banked money is at greater risk now than it was months ago.
Gold to touch $1,250–$1,260 by December . . . . I think it's important we all watch key numbers for gold. There's pressure at $1,007; that's a hard resistance number. We have to get through there. The next technical number that's very important is $1,032.50. If we can rally past it, it appears we'll start a run-away to the upside. If I see some closes in gold past $1,050, I'm going to be a happy camper. I think at that price we're going to be off and running toward my $1,250–$1,260 forecast for December. My high call for gold on the December futures has been $1,250–$1,260 for months. I want to stick with that, although some have said it could go into the $1,300s. The pressure is definitely on the upside.
PRECIOUS-Gold climbs above $950/oz as dollar languishes Gold rose above $950 an ounce in Europe on Friday after heavy selling of the dollar late in the previous session boosted interest in the metal as an alternative asset, with rising oil prices also lending support. Spot gold was bid at $951.85 an ounce at 0922 GMT, against $946.75 an ounce late in New York on Thursday. U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $6.20 to $953.50 an ounce. Platinum fell, but losses were limited by a strike at South Africa's Impala Platinum and news that a union had rejected the latest wage offer from Anglo Platinum, the world's largest producer of the metal.
'Good as gold' still rings true Demand for gold is soaring and NZ Mint has opened the country's first trading floor in its new Auckland CBD headquarters. The mint's head bullion trader, Mike O'Kane, says gold has never been more popular. The price is currently relatively static, trading in a tight range around US$920 ($1356) to US$970 an ounce, after peaking at a record of more than US$1000 an ounce in February. But O'Kane expects strong price growth in the next six months as the US dollar weakens and inflation pressure climbs following last week's forecast of a US$9 trillion federal deficit facing the United States.
'Comex gold futures will fall like WTC twin towers' As I see it, the debt tower will topple when hit by permanent gold backwardation, just as the twin towers of the World Trade center did. The reason is that the availability of gold is indispensable for maintaining our system of irredeemable debt. Only then are bondholders, like the participants of the game of musical chairs, satisfied that there are plenty of vacant chairs available, so let's get on with bond trading and gold futures trading, and let the music roar on.
Gold, silver prices surge on festival demand in India Growing jewellery purchases in the wake of festival and marriage seasons have led to a surge in gold and bullion prices in Indian spot and futures market. On Saturday, gold and silver prices went up considerably well in the Mumbai bullion market, the benchmark market for bullion prices. Gold prices on rose by Rs 60 to close at Rs 15,360 per 10 gram in the bullion market here on buying by stockists and jewellery makers following firming global trend.
Is the General Stock Market Overbought and What Does It Mean for Silver and Gold? This week The Wall Street Journal reported that silver has enjoyed greater price gains than gold so far in 2009. The Journal noted that silver often follows gold, although sometimes with greater moves since it is a less-active market and thus more prone to volatile price swings. Naturally, silver’s stillness is limited to many consolidation periods, and to the early parts of a particular upleg. When silver finally does move near the end of a rally, the move is likely to be substantial. So far in 2009, December silver futures have risen 26%, while December gold is up 6%, the Journal reported.
Fed is Accelerating the Monetization of Debt, High Inflation is on Its Way The public is enraged at what the liberals and socialists have tried to foist on them. Worse yet, the administration has submitted to Wall Street and the insurance giants, which they intended to do from before the beginning. Just look at the line up of campaign contributors. The same goes for the euthanasia section. This could well have been a loss leader to get the rest of this monstrosity passed. The exercise will cost the President and Congress dearly as their approval ratings sink to 41% and 12% respectively. November of 2010 will be the time of reckoning.
USGovt Yuan Bond Threat The tables are fast turning against the deeply indebted USGovt officials. USA Inc is in deep trouble. Its productive engines in both finance and industry are either wrecked or sputtering, even as its debt burden grows exponentially. Debt default litters the landscape. Next its sovereign bonds will be have to be sold to some extent outside the US$ Sphere, which will put at great risk its stock, namely the USDollar itself. Let’s call them USGovt Dragon Bonds. The custodians desperately seek creditors to supply much needed capital in order to fund the gigantic and growing USGovt debts, which by the way are grossly understated. The last resort is to monetize the USTreasury Bond issuance, a process well along. With the aid of the USDollar Swap Facility, the USFed has been able to secretly bid on USTBonds from foreign soil, have it appear like foreign bids, and conceal the continued and broadening monetization initiative. The United States is boldly defying the creditor nations, printing money, and buying its own debt. When more fully revealed, the USDollar will suffer the consequences. A sense of betrayal will surely come, much like discovery that the CIA has been flooding the globe with counterfeit $100 bills, or Wall Street has been flooding the globe with counterfeit Fannie Mae Bonds. Closer to home, it is akin to selling lemonade has been secretly watered down, or putting lawn mower clippings into the reefer batch before sale.
U.S. Budget Deficit Worse Than Thought
Treasury Clues in Uncertain Markets Investors like things they can rely on. Right now, one of the few things they can bank on is uncertainty. Markets are split on whether the nascent recovery is sustainable. Companies are offering vague guidance for even the next six months. Policy makers, too, remain uncertain about the path of the economy and when to withdraw their huge policy responses.
USD Falls Steeply on Thin Trading and Market Optimism After a period of steady appreciation, the USD took a sharp nose dive at the end of European market hours to close yesterday's trading at 1.4364 versus the EUR, 1.6284 against the Pound, and 1.0877 against the CAD. The greenback fell due to several reasons that are linked to thin summer trading.
Dollar knocked down ... for now The greenback becomes cheaper to borrow than the yen for the first time since 1993, raising questions about further declines in the already weak currency. The dollar continued to lose ground Friday at the end of a week in which it became cheaper for banks to borrow in yen than dollars for the first time in 16 years. The greenback has been retreating since March, when rising stock and commodity prices began luring investors into more risky investments and away from the safety of U.S. currency. At the same time, the dollar has been weakened by an ever-expanding U.S. budget deficit, which has made some of the nation's main trading partners nervous.
Why Did The U.S. Government Confiscate Gold In 1933 And Can It Happen Again? – Part 3 We previously stated that gold ownership was made illegal on 1st May 1933. What we did not tell you and we correct now, was that U.S. citizens, under Order 6102, were to own up to $100 in gold coin [+5 ounces]. Today that would be worth under $5,000 a mere token gesture to real gold owners. It acted as a tiny ‘escape valve’ to the general body of citizens and did not detract from the fact that effective gold ownership was abolished. So that we fully understand the attitude of governments to gold [which remains real money in times of crisis] we add this paragraph:
Meltdown 101: Why banks' struggles have worsened . . . . A cascade of collapses began last year as the financial crisis struck. Eighty-four banks have fallen so far this year as tumbling home prices and spiking unemployment pushed loan defaults upward. That's the largest number in a year since the early 1990s, at the apex of the savings and loan crisis. It compares with 25 bank failures last year and three in 2007. The failures have sapped billions from the federal deposit insurance fund, which guarantees account holders' money when banks go under. The fund stood at $10.4 billion in the second quarter, its lowest point since 1992.
The Power of the U.S. Fed, Deflation and U.S. Dollar Devaluation The non-federal, private federal reserve corporation has a no-bid contract to print money out of thin air and charge U.S. citizens money (interest) for this enormous privilege. Their so-called powers are legion and they are the cause of much distortion and inequality in our economy, to be sure.
Impending Bank Holiday - The Collapse of The US Dollar This Bank Holiday is no 'Holiday' at all, but one similar to that engineered by FDR in March, 1933 which finished the collapse of the World's economy. Another forced “bank holiday” will likely lead to a formal devaluation of the already broadsided U.S. dollar. But devalue against what? The euro? Doubtful. Gold? Maybe, but highly doubtful - or, devalued against the IMF basket of currencies, which is more likely. When I posed the question of the actual reality of such an event occurring to several of my sources including those within several Federal Agencies (CIA, FBI, Attorney Generals office, DHS) I received the following statement almost verbatim from each and every one of them - "The way it will come down is that starting 8/24, no later than Labor Day, groups of banks will be closed in certain regions of the country for a week or so. They will open again, and then other groups of banks in different regions will be closed; and on and on it will go, until all the banks in the country have gone through that process.
Bank Runs, China, Peter Schiff, Gerald Celente, Max Keiser Max Kaiser speaks about the predicted bank run and currency destruction of the US economy. He also speaks about how China will be on top of the depression because they are spending their stimulus on domestic growth. Peter Schiff makes a guest appearance, as well as Gerald Celente.
Bill Would Give President Emergency Control of Internet Internet companies and civil liberties groups were alarmed this spring when a U.S. Senate bill proposed handing the White House the power to disconnect private-sector computers from the Internet. They're not much happier about a revised version that aides to Sen. Jay Rockefeller, a West Virginia Democrat, have spent months drafting behind closed doors. CNET News has obtained a copy of the 55-page draft of S.773 (excerpt), which still appears to permit the president to seize temporary control of private-sector networks during a so-called cybersecurity emergency.
The Coming Great Depression Why Government Is Powerless . . . . The stock market by no means predicts the economy. A stock market crash does not cause a Depression. The Crash of 1903 was properly titled - "The Rich Man's Panic." What has always distinguished a recession from a Depression is the stock market drop may signal a recession, but the collapse in debt signals a Depression. This Depression was set in motion by (1) excessive leverage by the banks once more, but (2) the lifting of usury laws back in 1980 to fight inflation that opened the door to the highest consumer interest rates in thousands of years and shifted spending that created jobs into the banks as interest on things like credit cards. As a percent of GDP, household debt doubled since 1980 making the banks rich and now the clear and present danger to our economic survival. A greater proportion of spending by the consumer that use to go to savings and creating jobs, goes to interest and that has undermined the ability to avoid a major economic melt-down.
The Great Depression and Today - Sobering Parallels Abound The market has been up, which puts investors in a good mood. It is this feeling of security, however, that preceded every major market meltdown. Think back to the 2000 and 2007 stock market highs and compare it today. 1929 was no different. In fact, the parallels are fear inspiringly similar. If there's ever been a lesson to be learned from history, it's RIGHT NOW. It's been said (and perhaps you are getting tired of hearing it) that history may not repeat itself, but it certainly rhymes. Furthermore, those who don't learn from history are doomed to repeat it.
US Bank Enemies At The Gates While all manner of attention remains transfixed inside the United States on a remedy and recovery of its bank sector, once again Americans make dangerous assumptions. They tend to assume that the US Federal Reserve near 0% interest rates, Quantitative Easing (aka exploding Printing Pre$$ output), endless liquidity facilities (e.g. TALF), TARP funds (aka Wall Street slush fund), Stress Tests (rigged), bank stock sales (aided by FASB accounting fraud), bank carry trades (exploiting low short-term & higher long-term rates), and the passage of time can revive the US banking industry. They tend domestically to overlook the gradually worsening insolvency condition. Banks are bracing for a new wave of commercial mortgage losses, of prime Option ARMortgage losses, and credit card losses. The delinquency rate of prime Option ARMs is now higher than subprime home loans!!
China Import-From-Export Transformation Buoys Asia’s Currencies China, battling its worst export slump in more than two decades, is finally getting consumers to pick up some of the slack. The government’s 4 trillion yuan ($585 billion) stimulus plan -- coupled with record lending, tax cuts and subsidies -- has spurred a 60 percent gain in property sales in the first seven months from a year ago, driven car sales 70 percent higher in July and is stoking demand for televisions and computers.
The Power Of The fed And Deflation The non-federal, private federal reserve corporation has a no-bid contract to print money out of thin air and charge U.S. citizens money (interest) for this enormous privilege. Their so-called powers are legion and they are the cause of much distortion and inequality in our economy, to be sure. But the belief that the fed can inflate forever in a fiat system ignores a few important concepts. First, a debt-based system requires someone to get into debt. There has to be a willing and capable borrower for a banker to acquire a new debt slave. The American public is now finally at the point of saturation and is, in aggregate, underwater and a poor credit risk. Additionally, people in the United States in aggregate are (finally) starting to become scared to take on more debt. These are new secular trends not to be taken lightly.
Release of Federal Reserve Docs To CAUSE PANIC! he release of Federal Reserve documents could cause massive panic when it is revealed which banks and financial institutions received more than $2 Trillion dollars worth of bail out money. Federal Reserve ordered to release documents
I do not recall this in my lifetime. A majority in the House of Representatives has co-signed H.R. 1207, a bill introduced by Ron Paul to have the Federal Reserve System audited by an independent government agency, the Comptroller General's office. The bill has been bottled up in committee by Barney Frank, who has insisted that he is doing this in order to better coordinate consideration of the best way to gain greater transparency from the Federal Reserve. He has not said that he favors an independent audit of the FED.
Frank Said to Back Broader Fed Audits Rep. Ron Paul said he has a commitment from the chairman of the House Financial Services Committee, Barney Frank, to advance the Texas Republican's legislation opening the Federal Reserve to broader federal audits. In an interview Friday, Mr. Paul said Mr. Frank agreed to allow a vote on the bill and to work on language that would allow the Government Accountability Office, the investigative arm of Congress, to audit the Fed's monetary-policy operations. While details are unresolved, the discussions increase the likelihood that some version of Mr. Paul's bill will pass the House. "Barney told me, 'It's going to come. You're going to get what you want,' " Mr. Paul said. "We're going to have some hearings and we'll get a vote."
Why The Fed Is So Desperate To Keep Its Bailout Gifts Secret Bloomberg sued the Fed to force it to reveal the names of the banks that have dumped all their crap assets onto the Fed's balance sheet (a.k.a., the taxpayer). And Bloomberg won! But the Fed is still refusing to reveal which banks it has secretly bailed out. And the Fed is now appealing the ruling. The Fed says its refusal to reveal the names is about "competition." Please.
Rewarding Failure: Unintended Consequences of Bank Bailouts Mount American taxpayers have pocketed a 10 percent return on bailing out banks that were dubbed "too big to fail" and have paid back their TARP funds, The WSJ reports, citing SNL Financial. Hurray! Right? So why no cheers from our guest John Tamny, editor of RealClearMarkets.com? "No, we shouldn't be celebrating this...banks are too important to be bailed out," Tamny says. "Big surprise that the government got some of its money back saving banks that should have been allowed to die. There's going to be a natural return there, but it shouldn't have happened."
No Free Lunch Modern fiat currencies are not going to disappear, no matter how hard Obama and Bernanke try to destroy them. They are simply too good of a medium of exchange. The ease with which labor is divided over the whole globe and capital exchanges are transacted across thousands of miles, instantaneously, is a planetary first! It is a marvel of the modern computer age!
Cap And Trade Will Be Huge For Investment Banking The cap and trade bill will be huge business for investment banks, leading to a boom in M&A and underwriting activity, says Kyle Stock on the WSJ's Deal Journal blog. In particular, U.S. industrial companies will begin to look more attractive to companies in Europe, which has had a carbon market since 2005. While the U.S. power market has long looked good to foreigners, because Americans buy a relatively large amount of electricity per-capita and the regulatory structure here lends itself to rate increases, European companies have shied away from acquisitions because of the carbon question mark. They would likely be bolder if carbon had a price and a fixed supply.
All Of The Government's Global Warming Solutions Are Dumb We've had twenty years of futile government efforts to stop global warming, yet we are pursuing the same policies that led to the futility. How about trying something new, asks Bjorn Lomborg in today's Wall Street Journal Opinion section. Lomborg's op-ed is mostly restating what he's said elsewhere. He thinks we should spend money on researching technology and consider geo-engineering our solutions.
Gerald Celente Speaks About Cap & Trade Gerald Celente speaks about the cap and trade policies of the various governments implementing the false global warming paradigm.
Nearly A Third Of Banks Lose Money The number FDIC problem banks rose while asset quality continues to deteriorate. The number of "problem banks" in the United States reached a 15 year high, while 28.3% were unprofitable, according to the Federal Deposit Insurance Corporation, which delievered a litany of painful quarterly data from the lending industry. "Banking, and by extention the FDIC, is going to be under considerable stress for the foreseeable future," said Brian Olasov, managing director at the law firm McKenna, Long & Aldridge.
The Bailout Didn’t Work The long run inflationary consequences of the bailouts of our financial system has sent us on a path of national ruin, famed economist Peter Boettke argues. Despite the short term gains in the stock market and what looks like the start of an economic recovery, the cycle of debt, deficits and government expansion will be economically crippling, he says
"Better" Corporate Governance Made Banks Riskier Banks that were more responsive to shareholders performed much better before the financial crisis and much worse during it, a new study demonstrates. A pair of finance professors examined the returns and governance styles of banks before and during the crisis. What they found is that many of the banks with that are considered "better governed" according to standard models of corporate governance, fared far worse during the crisis.
Peter Schiff on CNBC 28 Aug 2009
Banks 'Too Big to Fail' Have Grown Even Bigger Behemoths Born of the Bailout Reduce Consumer Choice, Tempt Corporate Moral Hazard When the credit crisis struck last year, federal regulators pumped tens of billions of dollars into the nation's leading financial institutions because the banks were so big that officials feared their failure would ruin the entire financial system. Today, the biggest of those banks are even bigger.
Rep. Frank Eyes Fed Audit, Emergency Lending Curbs Rep. Barney Frank, the chairman of the U.S. House of Representatives Financial Services Committee, said he plans legislation to restrict the Federal Reserve's emergency lending powers and subject the central bank to a "complete audit." At a recent town hall meeting, Frank said the House would pass a bill to use an audit to crack open the central bank's books more widely, but in a way that will not encroach on the central bank's monetary policy independence. In addition, he said the House would move to rein in the authority that allows the Fed to lend to a wide range of non-bank firms in "unusual and exigent circumstances." A bill sponsored by Texas Republican Rep. Ron Paul that would allow the Government Accountability Office, a federal watchdog agency, to audit Fed interest-rate decisions has won the co-sponsorship of more than half of the House.
'Spread the wealth! Change the whole system' Using White House position to push communist policies? Just days before his White House appointment, Van Jones, Obama's environmental adviser, used a forum at a major youth convention to push for what can easily be interpreted as a communist or socialist agenda. As WND previously reported, Van Jones, special adviser for green jobs, enterprise and innovation to the White House Council on Environmental Quality, is an admitted black nationalist and radical communist.
Our quarter-century penance is just starting Never in modern times has there been such a flat contradiction between the euphoria of markets and the stern warnings of officialdom at central banks and financial watchdogs. Corporate credit has seen the steepest rally in almost a hundred years, according to Morgan Stanley. Hedge funds are reviving the final bubble play of early 2007, writing put options on long-dated "volatility" contracts to wring out extra profit. It is as if the Great Contraction – as the Bank of England now calls it – was just a random shock, as if we should naturally expect "V-shaped" resurgence to take us back to where we were. Yet that is what precisely we are being told will not and cannot happen.
A Shocking Fall The syndrome of hope and false expectations Some readers might feel that we are prophets of doom and that there is only gloomy news coming out of Matterhorn Asset Management. For people who want only good news we suggest that you listen to politicians or read the newspapers or your average stockbroker’s forecast. This is where you find the good news. But if you do listen to these people, remember that virtually nobody warned you about the events in the last couple of years, and that today most of these people are saying that the worst is over. And this is also what stockmarkets are telling us, isn’t it? These “optimists” whether they are politicians, bankers or from the media all make their living based on good news and this is why they will continually tell you lies and never warn you about the risks.
America's Deepening Inferiority Complex Begins to Bite Russia As the US beats a path through a social, political and economic forest of epic proportions, is it mere coincidence that news stories on Russia are becoming more hostile than ever? Strangely, the end of the Cold War did not significantly alter the Western media’s perceptions of Russia. In fact, the collapse of communism seems to have forced the American media establishment to dish out the dirt on Russia with more gusto than ever before.
Swiss Banks Ordered To Reveal Accounts Swiss Banks have been ordered to reveal their account holders from the United States. Could this trigger a bank run? For a select breed of upper-bracket Americans, it has been one of their inalienable rights, along with life, liberty and the pursuit of obscene wealth. We're talking about the right to beat the tax man by stashing your cash in secret, numbered foreign bank accounts.
An Echo Chamber of Boom and Bust THE global signs of a recovery in economic confidence seem puzzling. It is a large and diverse world, after all, so why should confidence have rebounded so quickly in so many places? Government stimulus and bailout packages have generally not been big enough to have such a profound effect. What happened? Economic analysts often turn to indicators like employment, housing starts or retail sales as causes of a recovery, when in fact they are merely symptoms. For a fuller explanation, look beyond the traditional economic links and think of the world economy as driven by social epidemics, contagion of ideas and huge feedback loops that gradually change world views.
Uncomfortable Choices in a Deflationary High Deficits Economic Environment We have arrived at this particular economic moment in time by the choices we have made, which now leave us with choices in our future that will be neither easy, convenient, nor comfortable. Sometimes there are just no good choices, only less-bad ones. In this week's letter we look at what some of those choices might be, and ponder their possible consequences. Are we headed for a double-dip recession? Read on.
True Bottom Lies Far, Far Below Because we never shared investors’ wild enthusiasm for Cerberus, its near-collapse in recent days hardly came as a shock. The once-huge private-equity firm specialized in distressed assets at a time when even the bluest of blue-chip companies – the name Lehman Brothers springs to mind – have fallen into mortal peril literally overnight. Cerberus’s biggest gambles were in GMAC and Chrysler. The latter company’s future looked as bleak to us five years ago as it did in May, when the automaker went belly-up. What could Cerberus CEO Stephen Feinberg have been thinking?
No Wage Growth; No Economic Recovery A recent poll shows that most economists now believe that the recession, which began in December 2007, will end in the third quarter of 2009. There's been an uptick in manufacturing and consumer confidence, and the decline in housing prices appears to be flattening out. Unfortunately, the return to positive GDP will likely be short-lived. The current surge in production is mainly the result of President Obama's fiscal stimulus and the rebuilding of inventories that were slashed after Lehman Bros defaulted in September, 2008. These factors should boost GDP for two or perhaps three quarters before the economy lapses back into recession.
pt 1/3 Peter Schiff on King World News August 28 2009
pt 2/3 Peter Schiff on King World News August 28 2009
pt 3/3 Peter Schiff on King World News August 28 2009
Subprime Lenders Head the Line for Federal Subsidies About two dozen firms that led the country into the subprime debacle are now lined up to receive billions of taxpayer dollars through a federal program aimed at stemming foreclosures, according to a report released Wednesday, Aug. 26. The report, issued by Washington's Center for Public Integrity, found that at least 21 of the top 25 firms taking part in the Home Affordable Modification Program, or HAMP, were heavily involved in the frenzied lending that led to the subprime blowup. The firms originated or serviced subprime loans, or both.
Stocks brace for September The week ahead brings reports on manufacturing and the job market, as investors try to stretch out the advance. With stocks now sitting more than 50% above March lows and notorious rally-spoiler September in sight, the calls for a pullback have been getting louder. But the momentum of the stock rally and other signs of optimism in the economy might just keep investors buying. "We're up sharply from the lows, moving into the seasonally weak September through October period and everyone is talking about a correction," said Rick Campagna, chief investment officer at 300 North Capital. "And that's why it won't happen."
Stagnant Incomes Raise Recovery Fears Household income in the U.S. is essentially stagnant, raising doubts about whether consumers already hurt by job losses can sustain an economic recovery. The now-ended Cash for Clunkers program helped lift consumer spending last month and is expected to provide an even bigger boost in August. But any rebound could falter if shoppers don't boost their buying, which makes up about 70 percent of U.S. economic activity. "Consumers just don't have the financial firepower to go out and spend more," said Mark Zandi, chief economist at Moody's Economy.com. "Unless businesses curtail their job cuts, the recovery could very well peter out."
As Internet Booms, the Postal Service Fights Back Amid unrelenting bad news, the Postal Service is striving to make the case that mail is here to stay. “We’re very optimistic about the future of mail because mail has great value,” said Susan Plonkey, vice president for sales. “Mail works.” Top postal officials say the recession is to blame for the agency’s $7 billion deficit and a steep drop in the volume of mail, and they express confidence that mail, particularly advertising, will rebound.
Recession Finally Hits Down on the Farm The American farm, which has weathered the global recession better than most U.S. industries, is starting to succumb to the downturn. The Agriculture Department forecast Thursday that U.S. farm profits will fall 38% this year, indicating that the slump is taking hold in rural America. Much of the sector had escaped the harsher aspects of the crisis, such as the big drop in property values plaguing city dwellers and suburbanites.
Automakers are stuck in small car quandary Gas prices, times may require them, but Americans still don’t want them If the wildly successful Cash for Clunkers program proved anything, it's that with the right kind of financial incentive Americans will buy small, fuel-efficient cars. Armed with rebates of up to $4,500 from the federal government, consumers snapped up cars such as the Honda Civic and Ford Focus. They did pretty much the same thing last summer when gasoline prices in the U.S. roared past four bucks a gallon.
California Holds Massive Garage Sale Gov. Arnold Schwarzenegger is hoping that the "Great California Garage Sale" will turn government clutter like surplus prison uniforms and office furniture into cash to bulk up the state's depleted finances. On offer as the state clears out clutter are nearly 600 state-owned vehicles and thousands of pieces of office furniture, computers, electronics, jewelry, pianos, even a surf board, a food saver and an Xbox 360 gaming system.
Financial crisis cripples new affordable housing Building of low-cost homes drops by more than half in two years For thousands of low-income renters nationwide — but especially in rural towns and small cities — the recession is hitting home in an unexpected way. Nationwide, funding to build low-cost apartments has dropped by more than half in two years to $4 billion. Hundreds of projects can't get off the ground because the federal tax credits that help offset development costs are currently worthless to traditional investors.
4 hidden costs of health care If you're going to fix the system, start with the problems that make it so expensive in the first place. Health care is by far the most cartelized, anti-competitive big business in America. The market is crippled by a web of quotas, entry barriers, monopolistic licensing laws, and discount limits that wouldn't be tolerated in any other industry.
Like Your Health-Insurance Plan? Great. Keep It! Don't Like It? Too Bad. Keep It! As Obama has attempted to sell health-care reform to the public this year, one of the key messages has been that those who like their current plans will be able to keep them. One of the main reasons he's emphasized this is that, during the HillaryCare debate in 1994, the fact that many people would have to switch away from their plans proved a major obstacle to reform. Of course, Obama usually omits the fact that those people will only get to keep their plans if their employers continue to offer them, which is a less than sure thing given the structural changes to the insurance system that reformers are proposing but it's certainly more true under current proposals than it was in 1994.
Howard Dean: Democrats Left Tort Reform Out of Health Care Bill Because They Feared 'Taking On' Trial Lawyers Former Democratic National Committee Chairman Howard Dean, a medical doctor who served as governor of Vermont, said at a town hall meeting on Tuesday night that Democrats in Congress did not include tort reform in the health care bill because they were fearful of “taking on” the trial lawyers.
Until Medical Bills Do Us Part Critics fret that health care reform would undermine American family values, not least by convening somber death panels to wheel away Grandma as if she were Old Yeller. But peel away the emotions and fearmongering, and in fact it is the existing system that unnecessarily takes lives and breaks apart families. My friend M. — you’ll understand in a moment why she’s terrified of my using her name — had to make a searing decision a year ago. She was married to a sweet, gentle man whom she loved, but who had become increasingly absent-minded. Finally, he was diagnosed with early-onset dementia.
At 58, a Life Story in Need of a Rewrite MICHAEL BLATTMAN, 58, took a prudent path to a successful business career. Armed with an M.B.A., he started with the federal government, working at the General Accounting Office and Federal Reserve, before moving to the Sallie Mae student loan program, where he rose to be director of national sales. From 2001 to 2008 he was a senior vice president for a private student-loan company and at his high point earned $225,000 a year in salary and bonuses, he says. He also taught business courses at the University of Maryland; lived in a 4,000-square-foot home in upscale Potomac, Md., and drove a Mercedes.
Drug Use On The Rise Among Elderly As Baby Boomers Age If you assume that providing healthcare to Baby Boomers (as they become elderly) is going to be like treating past generations of the elderly, think again. In addition to hip replacements and all that stuff, you should add drug treatment, given the Baby Boom generation's higher use rates than previous generations.
Baby Boomers Still Using Drugs Drug use among adults between the ages of 50 and 59 is on the rise, a factor "driven" by the "aging of the Baby Boom cohort," which has a higher lifetime drug use rate than previous generations, reports the federal Substance Abuse and Mental Health Service Administration -- but not, it seems, a higher percentage of lifetime users than subsequent generations.
The Grapes of Wrath revisited: The changing face of Valle Vista, Arizona Seventy years on from John Steinbeck's tough take on depression-era America, Chris McGreal continues his series tracing the route of The Grapes of Wrath and finds that the foreclosures of this decade are stripping homes to the rafters in one Arizona retreat Patti Levine is under siege. There are the plans to build a sprawling factory on one side of her pristine desert paradise and proposals for a huge solar power plant on the other. Mexicans are flooding across the border, forcing her to wait for a doctor, and a large chunk of her retirement fund has been wiped out on the New York stock exchange. And now, the country has gone and elected a president who, if you're sitting in the middle of an Arizona country club, looks very much as if he wants to turn the US into the Soviet Union, and worst of all, strip Levine of her guns. "I have a licence to carry a concealed weapon and when I fly my airplane I take my gun. When you're single and you're 64 years old you gotta be careful. Even here," she says.
G20 fears oil price may derail recovery Finance ministers and central bankers of the G20 countries, who meet in London this week, will celebrate signs that the worst of the recession is over and that upturns have begun in some countries. However, they will also warn of continued fragilities in the banking system and the need to remain vigilant against further crises. They will say that the rise in the oil price, currently $73 a barrel, poses a potential threat to recovery.
Seniors Leaning on Credit Balances Balloon for Older Cardholders -- and Health Bills Don't Help Alice Smith thought she would live comfortably and quietly in her Hyattsville retirement community. Instead she's fretfully dodging calls from her creditors. She owes more than $10,000 to four credit card companies and more than $7,000 to a credit union -- in part, she said, because of spending to help her family. She doesn't give exact figures because she is unsure of them: With late fees and higher interest rates, the amount she owes has grown. Her income has not. Through a pension and Social Security from her former job at a National Institutes of Health laboratory, she receives about $2,000 a month. Her rent is $955. She doesn't know how she can ever pay down her debts. So she thinks she just might not.
State fairs offer many people badly needed jobs A year's worth of failed job leads prepared Richard Briggs for anything, including night shifts as a Minnesota State Fair custodian. For $8.50 an hour, the out-of-work financial analyst vacuums and cleans bathrooms in fairground buildings. Briggs, 38, said he's "something of a curiosity" among his co-workers. "You know, they don't hire financial analysts to clean the sidewalks," Briggs said. A crippled economy has sent droves of unemployed and underemployed people to fairs nationwide, with many reporting record numbers of applicants to tear tickets, serve food and clean up after crowds.
Chinese Tire-Import Spat Puts Obama in Trade-Policy Pickle A politically charged case involving Chinese tire imports will soon force the hand of an Obama administration that has yet to articulate a clear trade policy to anxious global trading partners. President Barack Obama has until Sept. 17 to rule on a U.S. International Trade Commission recommendation that the White House put a 55% tariff on low-grade car tires imported from China. The ITC's finding followed a complaint by the United Steelworkers that a flood of cheap Chinese tires in recent years had cost more than 5,000 union jobs.
What high street banking will look like in 2020 [UK] Banking technology is developing so swiftly that soon you’ll be able to buy things without your PIN or plastic Imagine a world where, when you walk into your bank, messages and adverts pop up that address you by name. A world where debit and credit cards are extinct and business is done by a swipe of your mobile phone. A world where you make payments using an iris scan and do not have to remember those pesky PINs. It might sound like the premise of the futuristic 2002 film Minority Report, based on the novel by the science-fiction master Philip K. Dick. But the technology to make all this possible is already being developed. What sounds far-fetched now could be the norm in just a few years.
Weary Britons flee gloom to a land Down Under Britons who have had enough of rising unemployment and dismal weather are resorting to a time-honoured tradition to escape the gloom — they are moving to Australia. Hays, the international recruitment consultancy, has reported a 20 per cent increase in the number of Brits seeking jobs in Australia and New Zealand in the past year. It is receiving 200 inquiries a week from people seeking work Down Under.
Mullen blasts US 'strategic communication' efforts in Afghanistan Criticism by highest US military officer comes as officials admit the US is losing the war of ideas against the Taliban The highest officer in the US military today issued a scathing critique of American "strategic communication" efforts in Afghanistan and the Muslim world, writing that the gap between promised improvements and actual developments harms the credibility of the US message. In an article written for Joint Force Quarterly, a military publication, Admiral Mike Mullen said that US efforts in Afghanistan and elsewhere to send a positive message about US military action and development efforts hurt US credibility when they do not coincide with what the populace sees on the ground.
As US fades, Iran ups the ante in Iraq In the chaos following the disputed June presidential elections in Iran, journalist Spencer Ackerman reported that the administration of United States President Barack Obama "insisted that it would not interfere with the struggle for power between regime-backed President Mahmud Ahmadinejad and the thousands of demonstrators who contend the election was stolen". It didn't take long, however, for the world to learn that this policy was quickly fine-tuned and adjusted to Iran's expanding socio-political crisis.
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