Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 01.08.2010
US preparing forces for possibility of conflict with Iran The US does not want to see confrontation with Iran but is still preparing its military for that possibility, America's top uniformed officer said Thursday. "We've looked to do all we can to ensure that conflict doesn't break out there, while at the same time preparing forces, as we do for many contingencies that we understand might occur," Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, said during an appearance at the Washington Institute for Near East Policy. Mullen had been asked whether the US military was stretched too thin to take further action in trouble spots beyond Iraq and Afghanistan.
Russia, China, Iran redraw energy map The inauguration of the Dauletabad-Sarakhs-Khangiran pipeline on Wednesday connecting Iran's northern Caspian region with Turkmenistan's vast gas field may go unnoticed amid the Western media cacophony that it is "apocalypse now" for the Islamic regime in Tehran. The event sends strong messages for regional security. Within the space of three weeks, Turkmenistan has committed its entire gas exports to China, Russia and Iran. It has no urgent need of the pipelines that the United States and the European Union have been advancing. Are we hearing the faint notes of a Russia-China-Iran symphony?
Uh-oh: The return of $3 gas Baby, it's cold outside! And that's bad news for anybody who's been to the gas station lately. The frigid temperatures across much of the United States so far this year are one reason why energy prices have recently spiked. Crude oil is now hovering around $82.50 a barrel, barely below a 14-month high. Even more troublesome for consumers, the average price of an unleaded gallon of gasoline nationwide is now nearly $2.71 a gallon, according to AAA. Gas prices have shot up 7 cents in just the past week and are now higher than they were during any point in 2009.
Oil Could "Easily" Hit $90: Energy Key to 2010 Stock Market, Philip Roth Says
2010: Giant Gathering Storm Clouds The year 2008 bore my mark as the year the system broke. A public article addressed the issues, laid out before the breakdown occurred in September of that year. The consequences for the many failures, the desperate nationalizations, the hasty scrambles to put financial sewage under USGovt ownership, the realization of TARP as a vast slush fund for illegitimate bank rescues, the official monetization plans put forth to prevent bond implosions, and much more occurred in the year 2009 as a recognized aftermath. Here we are in 2010 and the threats must again be laid out. A prelude was offered in an mid-December article entitled " Full Circle of Govt Debt Default" where a global sovereign debt ruin in vicious circle was displayed the sequence that started in the Untied States and will end in the Untied States.
Tea Party plans to protest General Motors during Nancy Pelosi's visit to Detroit Auto Show House Speaker Nancy Pelosi will have some company next week in Detroit: Organizers of the National Tax Day Tea Party movement are calling for a rally against General Motors outside the 2010 North American International Auto Show. "Come let Nancy Pelosi and Harry Reid hear what you think about the government takeover of General Motors," reads a message on a Facebook event page set up by the group. "They will be in Detroit on Monday and so will we! Will you join us?"
Kansas City Fed's Hoenig calls for sharp rate hikes, starting soon The Federal Reserve should start tightening monetary policy -- spelling higher U.S. interest rates -- "sooner rather than later," said Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, on Thursday. "The Federal Reserve must curtail its emergency credit and financial market support programs, raise the federal-funds rate target from zero back to a more normal level, probably between 3.5% and 4.5%, and restore its balance sheet to pre-crisis size and configuration," Hoenig said in a speech at the Central Exchange in Kansas City. Hoenig will be a voting member of the Federal Open Market Committee, the panel charged with setting interest-rate policy, this year.
U.S. Warns Banks to Guard Against Rate-Rise Risks U.S. regulators including the Federal Reserve warned banks to guard against possible losses from an end to low interest rates and reduce risk or raise capital if needed. “In the current environment of historically low short-term interest rates, it is important for institutions to have robust processes for measuring and, where necessary, mitigating their exposure to potential increases in interest rates,” the Federal Financial Institutions Examination Council, made up of agencies including the Fed and the Federal Deposit Insurance Corp., said in a statement today.
Employers unexpectedly cut jobs in December U.S. employers unexpectedly cut 85,000 jobs in December, cooling optimism on the labor market's recovery and keeping pressure on President Barack Obama to find ways to spur job growth. The Labor Department said on Friday that November payrolls were revised to show the economy actually added 4,000 jobs rather than losing 11,000 as initially reported, breaking a streak of consecutive losses that dates back to December 2007. With revisions to October, however, the economy lost 1,000 more jobs than previously estimated over the two months. The unemployment rate was unchanged at 10 percent in December, but that reflected a surprisingly large number of people leaving the labor force.
Harsh Realities: 85K Jobs Lost in December, "Real" Unemployment Rate at 17.3% The December payroll report was disappointing, with 85,000 jobs lost last month vs. expectations for a flat reading and "whispers" of a gain of as much as 40,000. The unemployment rate held steady at 10%, as expected. The December figures raise the stakes for President Obama, who is scheduled to speak about economic issues today at 2:40 p.m. ET. In the aftermath of Friday's jobs report, some observers are calling on the administration to do more to help the unemployed and spur job creation. Whether President Obama has the political capital to do more than jawbone remains to be seen.
Jobless Numbers May Signal Next Risk: Inflation What to watch when the data come out Friday. It’s a signal of just how bad the economy was last year that investors will probably cheer if the Labor Department announces Friday that the December unemployment rate came in at 10%. Never mind that you have to go back to the recession of 1982 to see similar jobless levels. After apparently hitting a peak of 10.2% in October, unemployment fell to 10% in November. Another month like that could indicate the economy has stopped shrinking and is even beginning to expand.
Geithner’s Fed Told AIG to Limit Swaps Disclosure The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show. AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.
AIG Bailout Keeps Dogging Tim Geithner The fall out from the government rescue of American International Group keeps raining on Tim Geithner. The latest dust up: the Federal Reserve Bank of New York, while led by Geithner, pressured AIG not to disclose payments it made to such banks as Goldman Sachs Group and Deutsche Bank, to settle swap contracts at the height of the financial crisis, according to a Bloomberg report this morning. . . . . Emails between Geithner’s Fed and AIG lawyers show that the embattled insurer originally included the information about the swaps in a draft securities filing. But under review by the Fed, AIG was told to cross out references to the swap payments, which were made at 100 cents on the dollar.
Are Geithner's Days Numbered? Near the top of President Barack Obama's To Do list for 2010 should be finding a new Treasury Secretary. It's hard to see how Tim Geithner is going to recover from recent revelations about his role in the AIG bailout that saw counterparties like Goldman Sachs (GS) paid 100 cents on the dollar when, during that time, everyone else was getting a major haircut.
Latest AIG Revelations: One More Reason Why Geithner's Got to Go The latest revelations about the New York Fed's actions in the AIG bailout make one thing clear: Treasury Secretary Tim Geithner must go. Geithner must go not just because of the emails showing that his New York Fed ordered AIG to keep details of the bailout secret, but because of many other decisions and policies he has championed in the past two years. These decisions and policies have consistently put the interests of Wall Street ahead of the interests of the taxpayer, and they have undermined the public's confidence in the government at a time when the country needs it the most.
The AIG fiasco keeps getting worse The AIG bailout isn't going away, much as Treasury Secretary Tim Geithner might like it to. The $180 billion fiasco was back in the news Thursday, after Bloomberg reported that the Federal Reserve Bank of New York prodded the troubled insurer at the end of 2008 to withhold some gory details of its bailout deal from the public. The instructions came at a time when Geithner, who is now the Treasury secretary, led the New York Fed. Along with Fed chief Ben Bernanke and former Treasury Secretary Henry Paulson, Geithner was one of the key architects of the federal response to the economic meltdown of 2008.
Banks Should Make Swap Prices More Transparent, N.Y. Fed Says Goldman Sachs Group Inc., JPMorgan Chase & Co. and other banks in the $605 trillion over-the- counter derivatives market should make swap prices more transparent, according to the Federal Reserve Bank of New York. Derivatives regulation pending in Congress should support the use of electronic trading platforms for all market participants, the New York Fed said today in a staff report. In some cases, users should be required to employ a price-reporting system similar to one established for the corporate bond market in 2002, according to the report.
The Fed's Culture of Secrecy If and when the Fed embarks upon its soul-searching project, it shouldn’t just look at its regulatory failures and its inability to spot or care about the housing bubble. It must also think long and hard about its culture of secrecy, which seems generally designed to further the interests of its big-bank shareholders while keeping the public as ignorant as possible. Hugh Son has the story of the lengths to which the Fed and its Davis Polk lawyers were consistently telling AIG (AIG) to disclose as little as possible, even as the SEC was asking for more transparency from the publicly-listed corporation.
How your tax dollars were used to bribe members of Congress There’s a famous cartoon of a bird trying to eat a frog. The bird has the frog by the head but can’t swallow it because the frog has the bird by the neck and is choking the life out of it. Think of the bird as the Democrats, and the frog as either the cancerous healthcare bill, or the poor beleaguered American taxpayer. We think the Democrats are going to choke on this healthcare bill, or, if they finally pass it, the voters will strangle them in the coming election. Meanwhile . . .
Staring into a Spending Abyss The United States economy arrives in 2010 with hopes for a better year than last, but also with an old and large elephant in the national living room. Two symbolic elephants, really: the soaring federal budget deficit and the spiraling national debt. Those of a mind to see for themselves can go to www.usdebtclock.org for a quick and jarring representation of just how fast both are growing. Here you can see the dollar digits change at an eye-crossing blur on both the budget deficit and the national debt. (The U.S. Debt Clock Web site is a real-time compilation of federal economic and demographic statistics.)
Gerald Celente America like Zimbabwe Total Collapse pt 1/2 (1.02.2009)
Gold's steadfast performance... From the end of 2001 ($276.50) to the end of 2009 ($1104.00), gold has exactly quadrupled in value, registering fairly modest and methodical gains each and every year for the past eight years. From any fair-minded assessment, there is certainly nothing frothy or bubbly about its performance of the past year as it compares very typically to the range of these other annual metrics on a percentage basis.
U.S. Economy Gives More Reasons to Own Silver and Gold wise man once said "Hope for the best, plan for the worst." If he was still alive today he would probably conclude the world is "Nucking Futs". There are a number of indicators that point to the need to get out of debt, preserve your wealth, and prepare for the worst. Here's a compilation of items from here and there. - In 2009, Treasury Secretary Geithner signed off on a report that indicated the Social Security Trust Fund (SSTF) would, in 2016, pay out more than it took in from payroll taxes. Like most things the Government says, they were wrong. In 2009, seven years too soon, the SSTF took in 670B and paid out 676B. The SSTF still was in the black, thanks to interest on some 2.5T in US Treasury Bonds, but it was less than half of what was expected for 09. This does not bode well for the future.
Gold falls on stronger dollar, lower crude futures Gold futures fell Thursday for the first session in the past five as jitters that China may raise interest rates and cut global growth pressured commodities and lifted the dollar, reducing the metal's investment appeal. Crude-oil futures fell for the first time in 11 days, dropping from their highest level in nearly 15 months. Falling oil prices lessen the perceived threat of inflation. Read more on oil. The People's Bank of China made a move that fueled fears interest rates could rise soon. See story about China's rate. The dollar also rose against the yen after Japan's newly appointed top finance official talked down his country's currency. Read more about currencies.
Investment demand to fuel silver price in 2010 Precious metals prices were popping off of holiday lows Monday as traders returned to the markets. Gold had jumped as high as $1124 an ounce by 9:30am in New York and silver soared to $17.59 by 11am as a weaker dollar made the shiny cousins much more attractive. If silver continues to rally toward the $18 level, we can expect further price increases on industrial demand, says CommodityOnline, as manufacturers “buy on concerns of having to purchase silver at higher prices later.”
Dollar Holds Onto Gains China's Apparent Monetary Tightening Curtails Risk Plays The dollar retained its earlier gains as investors focused on U.S. jobs data scheduled for Friday. Caution ahead of the monthly employment report kept major currencies confined to narrow ranges on Thursday, and likely will keep movements constrained during overnight trading. "Unless we get anything untoward happening in Asia overnight, it's quite likely we've seen the extremes for the near term for the euro, and likely the yen, as well," said Shaun Osborne, chief currency strategist at TD Securities. Late Thursday in New York, the euro
2010 Preview: The Wonderful Wizard of USD The same day President Richard Nixon closed the "gold window” Ron Paul entered politics. Dr. Paul has been fighting to end the Federal Reserve ever since - he has been supporting a bill to audit the Fed since 1976. In 2009 Congressman Ron Paul’s bill to audit the Fed was included in the Wall Street reform bill and passed by the House. Only the Senate* stands in front of Congressman Paul’s heroic battle to audit the secretive act of the central bank wizards.
Japan finance minister: will act on yen if needed Japan's new finance minister said Friday that Tokyo would take action over the strong yen if needed, but added that in general markets should set currency levels. "Basically, the market determines foreign exchange" rates, Naoto Kan said at a news conference. As finance minister, however, it was his duty "to take action on foreign exchange when necessary," he added.
The Mess That Bernanke Is Making Worse If there is one man in the nation's capitol who maybe isn't too unhappy about Treasury Secretary Tim Geithner being in the news today, it's probably Fed Chairman Ben Bernanke who delivered a speech titled Monetary Policy and the Housing Bubble over the weekend, a topic that continues to generate a lot of discussion at mid-week, little of it positive.
Gerald Celente America like Zimbabwe Total Collapse pt 2/2 (1.02.2009)
Fed Plan to Stop Buying Mortgages Feeds Recovery Worries The Federal Reserve's pledge to stop buying mortgages by the end of March is sparking fears among home builders, mortgage investors and even some Fed officials that mortgage rates could rise and knock the fragile housing recovery off course. Rates on 30-year fixed-rate mortgage have risen by a quarter of a percentage point in the past month to around 5.2%, according to HSH Associates, near their highest levels since September as the bond market has pushed up long-term interest rates amid signs of an improving economy.
Fed Debates Extending Its Mortgage Purchases Beyond March Should the Federal Reserve continue to support the housing market through its mortgage-purchase program beyond March 2010? That question stirred some contention at the Dec.15-16 meeting of the Federal Open Market Committee, according to the minutes of that meeting released Wednesday. All members at the meeting agreed there should be "no changes to the Committee's large scale asset purchase programs" at that time. The committee affirmed its intention to purchase $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt by the end of the first quarter of 2010, and to "gradually slow the pace of these purchases to promote a smooth transition in markets."
Investors wait to see who fills US mortgage hole As the US Federal Reserve pulls back from the mortgage market, will the government and its proxies, Fannie Mae and Freddie Mac, pick up the baton? Many investors are looking to Fannie and Freddie to play an expanded role in the market for mortgage-backed securities (MBS) – helping to keep the market liquid and mortgage rates low – as the Fed completes its $1,250bn (£780bn) purchase programme.
Fed emergency loans to banks up slightly Fed emergency loans to banks increase slightly but remain well below levels at peak of crisis Banks borrowed slightly more from the Federal Reserve's emergency lending program over the past week but the amount was still well below levels reached during the height of the financial crisis, the Fed said Thursday. Commercial banks averaged $19.45 billion in daily borrowing for the week that ended Wednesday. That was up from $18.74 billion in average borrowing for the previous week.
Bank of America to pay bonuses close to '07 levels Bank of America Corp will pay its investment bankers bonuses close to the levels of 2007, as it tries to reduce defections following its takeover of Merrill Lynch & Co., the Wall Street Journal said late Thursday. Citing people familiar with the matter, the paper said on its website some bankers were expected to receive bonuses equal to what they got in 2007, but the overall average was likely to be "somewhat" lower. Under the basic formula likely to be used, about 25 percent of 2009 bonuses will be paid in cash, with the rest as deferred payments of stock or cash that will vary in value with the company's performance, the Journal said.
Big pay for Fannie, Freddie CEOs As the nation's thoughts turned to eggnog and gift-giving on Christmas Eve, the news hit: "Fannie Mae, Freddie Mac executive compensation significantly reduced." Better yet, the government said the pay would be more aligned with "taxpayer interests." All this sounded like a reason for some holiday cheer. One might expect the government to keep pay under tight control at the mortgage giants, which have taken $111 billion in taxpayer money over the last year and just got a blank check for more. Instead, the taxpayer got scrooged.
Broken Promises: Obama's Legislative Agenda in Trouble, Politico's Vogel Says News that two senior Democrats -- Chris Dodd of Connecticut and Byron Dorgan of North Dakota -- are retiring from the Senate has shaken the ground under President Obama. "His legislative agenda is what's in trouble," says our guest Ken Vogel, senior reporter at Politico.com. Sure the President pushed through his health-care agenda. But "in doing so the Democrats dispensed with this idea that he (Obama) was going to really pursue a bipartisan course and seek consensus to bring on board Republicans. That's over."
FDIC Weighs Tying Fees to Banks' Pay The Federal Deposit Insurance Corp.'s board could vote next week to propose tying the fees lenders pay the agency for deposit insurance to the risk profile of compensation packages for executives, people familiar with the matter said. The plan, if adopted by the regulator, could serve as both a carrot and a stick for lenders. Banks with compensation structures the FDIC views as less risky, such as those that allow firms to claw back pay from executives, could be given a break on the fees they pay on deposit insurance. Firms that have pay structures the FDIC views as giving officials an incentive to put the company at more risk could be forced to pay more.
Feldstein Says Lack of 2010 Stimulus ‘Serious Cloud’ on Growth Harvard University economics professor Martin Feldstein said U.S. economic growth may falter this year because of a waning stimulus from federal spending and tax incentives for purchases of homes and autos. “These forms of stimulus will be missing in 2010, creating a serious cloud over the near-term economic outlook,” Feldstein said today during a panel discussion in Atlanta sponsored by the Allied Social Science Associations. His comments were echoed by Joseph Stiglitz, the Nobel Prize-winning economist, who said on the same panel that “robust” growth is unlikely soon.
Ron Paul: Don't Fire Bernanke - Fire the Fed!
Deficit, Budget Woes Need Solutions as U.S. Nears the Precipice The Obama administration has a lot to wish for in 2010, including a new health-care system and a sustainable economic recovery. But even if those wishes come true, policy makers face an even bigger problem in the new year and beyond: convincing the world that the U.S. government can get its finances back in order.
10 Emerging Financial Centers That Will Blindside New York and London The financial crisis slammed global banking hubs around the world. Were it not for government bailouts, Wall Street, The City and other banking hubs may never have recovered. The traditional financial powerhouses stand weakened, and others, long hungry to steal their business, are taking advantage. Around the world, regional banking centers like Toronto, Shanghai, Singapore and Zurich are poised for explosive growth and to become the new world financial leaders.
Chinese Decision on Rates Seen as ‘Turning Point’ HONG KONG — China’s central bank raised a key interest rate slightly Thursday for the first time in nearly five months, in what economists interpreted as the beginning of a broader move to tighten monetary policy and forestall inflation. After breaking stride a year ago during the global economic slowdown, the Chinese economy resumed galloping growth over the summer. Government investments, real estate construction and consumer spending are all rising briskly, thanks to a surge in lending by government-controlled banks. Even exports have begun to recover despite continued economic weakness in the European Union and the United States, China’s two biggest overseas markets.
Contrarian Investor Predicts Economic Crash in China SHANGHAI — James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true. Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc. As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.
It’s Not Our Fault It seems that the primary qualification needed by any chairman of the Federal Reserve is the ability to never admit error, no matter how damning the evidence. During his tenure on the job, Alan Greenspan set the standard for implausible deniability. But in a speech last weekend in Atlanta, current chairman Ben Bernanke did the Maestro one better. In a tortured academic dissertation, Bernanke explicitly denied any Fed culpability for inflating the housing bubble and for the financial crisis that began when it burst. Despite his best efforts, no one seemed particularly convinced. By taking such an absurd stand, he has destroyed any credibility he may have had left.
Ben Bernanke was Wrong
What Price a Planned Economy? The link between classical liberalism and present-day Socialism — often still misnamed liberalism — is undoubtedly the belief that the consummation of individual freedom requires relief from the most pressing economic cares. If this seems attainable only at the price of restricting freedom in economic activity, then that price must be paid; and it may be conceded that most of those who want to restrict private initiative in economic life do so in the hope of creating more freedom in spheres which they value higher.
The Gates of Hell Have Opened The abyss is widening, many have already fallen in. The Fat Boys at Goldman say they are doing God's work, do they really believe that. Maybe they know dark secrets we are not privy to. What does God's work entail? Stopping fear and panic? Holding up asset prices and presenting the illusion of a stable, recovering economy? If they fail, then hell will follow.
The Human Ecology of Collapse The old legend of the Holy Grail has a plot twist that's oddly relevant to the predicament of industrial civilization. A knight who went searching for the Grail, so the story has it, if he was brave and pure, would sooner or later reach an isolated castle in the midst of the desolate Waste Land. There the Grail could be found and the Waste Land made green again, but only if the knight asked the right question. Failing that, he would wake the next morning in a deserted castle, which would vanish behind him as soon as he left, and it might take years of searching to find the castle again.
Testing Taxpayers' Pain Threshold Global authorities repeatedly have said they will do whatever it takes to combat the credit crisis and recession. But are taxpayers prepared to pay whatever it takes? For some, like Latvia, Iceland and Ireland, austerity budgets already are in place; for others, the pain still lies ahead. Investors should watch out for clashes between the social contract governments have with citizens and the market contracts governments have with lenders and investors.
State Tax Revenue in U.S. Drops Most Since 1963, Study Says U.S. state tax collections fell the most in 46 years in the first three quarters of 2009 as the recession shrank revenue from sources including personal income, the Nelson A. Rockefeller Institute of Government said. Revenue dropped 13.3 percent, or $80 billion, compared with the same nine months of 2008, to $523 billion, the institute said. Collections in the third quarter alone sank 10.9 percent to about $162 billion, according to the report released today by the Albany-based body. It was the fourth straight quarterly decline. The institute is the public policy research arm of the State University of New York.
Principal Cuts on Lender Menus as Foreclosures Rise Efforts by U.S. banks to help distressed homeowners have focused mainly on temporary fixes such as interest-rate reductions that may only put off the day of reckoning, despite policy makers wanting them to do more. Banks may be forced to resort to a remedy they’ve been trying to avoid -- principal reductions -- as another wave of foreclosures looms and payments on risky loans rise, Bloomberg BusinessWeek magazine reports in the Jan. 18 issue.
Soaring rate of bankruptcies expected to continue in 2010 Debt, mortgage woes hit hard Not only did U.S. consumer bankruptcies jump by nearly a third in 2009, but bankruptcy analysts expect matters to worsen again in 2010 as the deepest economic downturn since the Great Depression continues to work its way through American households. Consumer bankruptcy filings exceeded 1.4 million last year compared with 1.06 million in 2008, an increase of 32 percent, according to the American Bankruptcy Institute (ABI), a nonpartisan, independent research and education organization. The ABI relied on data compiled by the National Bankruptcy Research Center.
Wave of Bankruptcies Hits States Hammered by Housing Bust Personal bankruptcies soared last year in Western states hit hardest by the real-estate bust. In states such as California, Arizona and Nevada, where housing prices soared and then collapsed during the past decade, consumer bankruptcy filings rose roughly twice as much as the national average increase of 32%. Homeowners fell behind on mortgages and could no longer tap into their home equity to pay down other debts.
Schwarzenegger Seeks U.S. Funds California Gov. Arnold Schwarzenegger on Wednesday asked Washington for funds to help close his state's massive budget shortfall -- a move some other states are likely to follow in coming months as they deal with their own fiscal woes. "The federal government is part of our budget problem," the Republican governor said in his annual State of the State address, reiterating a longstanding complaint that California sends far more money to Washington than it receives in return. Mr. Schwarzenegger also said federally mandated spending of state money has further strained California's coffers.
More California hotels in trouble in 2009 The number of California hotels that are in default or in foreclosure continued to increase in 2009 because of slumping travel demand and declining real estate values, according to a new hospitality report. The report by Atlas Hospitality Group said the number of hotels that were in foreclosure rose 313%, from 15 in 2008 to 62 in 2009. More than half of the foreclosed hotels have filed for bankruptcy. The number of hotels in default on their loans jumped 479%, from 53 in 2008 to 307 in 2009. The largest hotel to be foreclosed is the 469-room Marriott in downtown Los Angeles. Other troubled properties include the St. Regis Monarch Beach in Dana Point, the Sheraton Universal and the W hotel in San Diego.
Rubin, Oil Rally Predictor, Sees $100 Crude in 2010 Jeff Rubin, the former CIBC World Markets Inc. chief economist who accurately predicted oil’s surge during the last decade, expects crude to reach $90 a barrel this quarter and $100 by the year’s end. Accelerating demand in Asia and the Middle East will force consumers to rely on costlier non-conventional energy sources such as oil sands, said Rubin, who spent 20 years with the Toronto-based bank and last year published a book on energy economics, “Why Your World is About to Get a Whole Lot Smaller.” Rubin correctly forecast in 2007 that crude would reach $100.
Grassley seeks accounting of 'Cash for Clunkers' costs A top Senate Republican has asked for a full accounting of the "Cash for Clunkers" incentive program as the Department of Transportation puts the finishing touches on last summer's economic boost to the struggling auto industry. A report submitted to Congress in late December said the department has spent $77 million on administrative costs to run the Consumer Assistance to Recycle and Save Act, commonly known as CARS or by the Clunkers meme. The popular program provided up to $4,500 to customers trading in older vehicles. Congress added an additional $2 billion to the program last summer amid unexpectedly high demand.
A New Target for Conservatives: Power Companies The annual winter meeting of the nation’s biggest shareholder-owned electric utilities is normally a snooze, getting little attention from outsiders. Not this year. On Thursday, dozens of marchers -– some toting signs with slogans such as “Welcome, Carbon Crooks” -– protested outside the Edison Electric Institute’s annual board of directors meeting in Scottsdale, Ariz., venting their fury over the industry’s efforts to help congressional Democrats on legislation that would cap U.S. greenhouse-gas emissions.
7 million lost jobs: Gone forever? A two-year string of job losses appears to be near an end, if it hasn't ended already. But most economists don't expect the employment picture to significantly improve anytime this year -- or over the next few years for that matter. The unemployment rate, which stood at 10% in November, is expected to stay uncomfortably high for the foreseeable future. Some experts even suggest that the labor market won't be able to fully recover from the 7.2 million jobs lost since the start of 2008 before another recession and round of job losses.
Job Growth Erodes as Housing Bust Pushes Mobility to Record Low Raul Lopez, laid off from three construction jobs since October 2007, is focusing his search for work near Antioch, California, because his $392,000 mortgage is almost triple the price his home there would sell for today. “If it wasn’t for the house, I’d probably move closer to Oakland, Hayward, San Leandro, places where there are jobs,” said Lopez, 36, who is married with four daughters. The ability to relocate for employment, which helped the U.S. recover quickly after previous deep recessions, is the latest victim of the housing bust. About 12.5 percent of Americans moved in the year ended March 2009, the second-lowest ever, estimates Brookings Institution demographer William Frey, after a 60-year record low of 11.9 percent the previous year.
Delinquency Rate Rises for Mortgages Commercial Borrowers Fall Behind More than 6% of commercial-mortgage borrowers in the U.S. have fallen behind in their payments, a sign of potential troubles ahead as nearly $40 billion of commercial-mortgage-backed bonds come due this year. The percentage of loans 30 days or more delinquent rose to 6.07% in December from 5.65% a month earlier, according to data provider Trepp LLC, a commercial-mortgage data provider. That is the highest delinquency rate since the advent of commercial-mortgage-backed securities.
Walk Away From Your Mortgage! John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the "message" they will send to "their family and their kids and their friends." Courson was implying that homeowners - record numbers of whom continue to default - have a responsibility to make good. He wasn't referring to the people who have no choice, who can't afford their payments. He was speaking about the rising number of folks who are voluntarily choosing not to pay.
U.S. Now a Renters' Market With Apartment-Vacancy Rate at 30-Year High, Landlords Cut Prices 3% in 2009 Apartment vacancies hit a 30-year high in the fourth quarter, and rents fell as landlords scrambled to retain existing tenants and attract new ones. The vacancy rate ended the year at 8%, the highest level since Reis Inc., a New York research firm that tracks vacancies and rents in the top 79 U.S. markets, began its tally in 1980. Rents fell 3% last year, according to Reis, led by declines in San Jose, Calif., Seattle, San Francisco and other cities that had brisk growth until the recession.
Pelosi says Congress close to health deal U.S. House of Representatives Speaker Nancy Pelosi said on Wednesday congressional Democrats were close to agreement on merging their healthcare bills but still faced challenges in blending the two approaches. For the second consecutive day, Pelosi and other House Democratic leaders met with President Barack Obama at the White House to discuss ways to reconcile the House's healthcare overhaul with a version passed by the Senate. "We've had a very intense couple of days," Pelosi told reporters after the White House meeting. "I think we are very close to reconciliation, respectful of the challenges."
Married Couples Pay More Than Unmarried Under Health Bill Some married couples would pay thousands of dollars more for the same health insurance coverage as unmarried people living together, under the health insurance overhaul plan pending in Congress. The built-in "marriage penalty" in both House and Senate healthcare bills has received scant attention. But for scores of low-income and middle-income couples, it could mean a hike of $2,000 or more in annual insurance premiums the moment they say "I do." The disparity comes about in part because subsidies for purchasing health insurance under the plan from congressional Democrats are pegged to federal poverty guidelines. That has the effect of limiting subsidies for married couples with a combined income, compared to if the individuals are single.
ObamaCare Transparency Promise Broken Transparency be damned. It seems as if many of the elites in Washington, D.C. were for transparency before they were against it. President Barack Obama, Speaker of the House Nancy Pelosi and Senate Majority Leader Harry Reid all promised and pledged transparency as part of a covenant with the American people to allow them to take power. Those promises have been broken. One Senior Congressional Staffer tells Big Government that “for elected officials that promised the most transparent Congress ever, I never believed them, but it is stunning how fast they are going back on their promises as if they think the voters are too dumb to remember things they said 3 years ago.”
Obama OKs Taxing High End Health Plans President Barack Obama signaled to House Democratic leaders Wednesday that they'll have to drop their opposition to taxing high-end health insurance plans to pay for health coverage for millions of uninsured Americans. In a meeting at the White House, Obama expressed his preference for the insurance tax contained in the Senate's health overhaul bill, but largely opposed by House Democrats and organized labor, Democratic aides said. The aides spoke on condition of anonymity because the meeting was private.
No. 1 persecutor tests weapons on Christians North Korea tops list dominated by nations under Islamic law North Korea, which reportedly has used believers as guinea pigs to test chemical and biological weapons, is the world's worst persecutor of Christians, while Iran, which may be using Christians as scapegoats for internal opposition to its president, is No. 2 on the Open Doors 2010 World Watch List.
Fallen pawns in US's strategic game CHIANG MAI - Thailand's recent decision to send back more than 4,000 ethnic Hmong refugees to neighboring Laos has raised hackles with human-rights groups and stoked tensions with the United States and United Nations. The forced repatriation marks a controversial closure to the US Central Intelligence Agency's Vietnam War era support for the rebel Hmong, who continue in small numbers to resist the communist-run Lao government. The Hmong have been a sticking point in normalizing Thai-Laos bilateral relations, which have gradually improved since the end of the Cold War and a brief border war fought in 1987-1988. For Thailand, the repatriation removes a potentially destabilizing factor in its continued internal political battle between the government of Prime Minister Abhisit Vejjajiva and supporters of ousted former premier, Thaksin Shinawatra. Appeals to Thai nationalism have already inflamed a row with neighboring Cambodia, which Thaksin's operatives have exploited to their political advantage.
Gaza snakeheads and Mexican drug cartels What does a Gazan "snakehead" (or smuggling-tunnel owner) have in common with a drug dealer working for the Mexican cartel? Both have profit margins of around 400 percent: A Gazan snakehead can build a tunnel for $40,000 and make up to $200,000 each day; likewise, the wholesale price for a kilo of cocaine in America can run between $15,000 and $25,000 (depending on the seller's proximity to the Mexican border) and can fetch around $90,000. And both represent a seemingly unfixable border problem between two countries.
Yemen says there are limits to its military cooperation with United States SANAA, YEMEN -- In its strongest language yet, Yemen's government declared Thursday that there are limits to its military cooperation with the United States, warning that any direct U.S. action in this impoverished Middle Eastern nation could bolster the popularity of Islamist militants. "If there is direct intervention by the United States, it will strengthen al-Qaeda," warned Rashad al-Alimi, Yemen's deputy prime minister for security and defense. "We cannot accept any foreign troops on Yemeni territory."
What the Soviets Learned Thirty years ago today, on Dec. 24, 1979, the Soviet Union invaded Afghanistan. The United States saw the invasion as unmistakable evidence that the Soviets were committed to aggression in the Middle East and the Third World. It was “the greatest threat to peace since the Second World War,” President Jimmy Carter announced. But archival documents released since the cold war’s end show that the Soviet’s actions were defensive, not offensive. The Soviets had sincere, albeit highly exaggerated, concerns about US involvement in Afghanistan.
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