Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Tues 01.26.2010
The Scary Budget Numbers By David Walker The recession and attendant financial shock appear to be easing as I write this. But in Washington, financial imprudence is part of the fabric of government. You can see that in a single document that gets updated every year: the US budget. In putting together the budget, the president and Congress set our national priorities and allocate resources among them. The results have been pretty consistent. Over the forty years ending in 2008, revenues have averaged about 18.3 percent of our economy and spending has averaged over 20.6 percent, resulting in an average deficit of about 2.4 percent.
Marc Faber on the debt threat
The push for a debt commission The Senate on Tuesday is likely to vote on a proposal that would create a bipartisan commission charged with reining in the country's debt. The goal: Create a framework for forcing Congress to make some tough choices -- specifically tax increases and spending cuts. In a surprise move Saturday, President Obama issued his support for the fiscal commission proposal, which was introduced as an amendment to legislation that would raise the country's legal debt limit by $1.9 trillion.
We Are All Speculators Now n·vest (n-vst) v.in·vest·ed, in·vest·ing, in·vests v.tr.1. To commit (money or capital) in order to gain a financial return
When the Keynesian fractional reserve fiat banking model was sold to the public, the idea was that the citizens would accumulate wealth and prosper, furthering wealth and prosperity among the many and building the nation from the ground up. Using hindsight, we now know it was all a fraud. The American Dream was sold on the idea that a citizen could work hard and save. You could "invest" your savings and earn a rate of return greater than the increase in the cost of living, thus increasing your real wealth over time with the magic of compound interest. That was the incentive to save.
A Simpleton’s Trade: Sell US Stocks and Buy Gold Bill Bonner The yen is falling. It's down 5% against the dollar since November. Investors are finally noticing. With a deficit of 50% of GDP, the Japanese government walks where angels fear to tread. Americans aren't far behind. To make a long story short, our money is on the angels. Only an economist would dare to look 10 years ahead. Only a fool would put money on it. Today, we do both. But our new "Trade of the Decade," is not so much a look into the future as it is a look at the past.
Gold is in long term bull market The timing for an intermediate low for gold has arrived. January 21st is day number thirty-three in the originally anticipated window of 31 to 37 trading days from the December 3rd high. The magnitude of the past two day’s action (down $53) likely did a good job of shaking out many long speculators. If prices stabilize and then turn higher in the coming weeks we will have enough participants back on the sidelines to support the next rally. We continue to categorize the break as merely a correction in what will be viewed as a pause in the longer term bull market.
Expect gold to gain more than 30% this year Gold ended 2009 on a disappointing note as a sharp correction resulted in by far the worst December performance since the bull market began in 2001. The yellow metal, nevertheless, posted its ninth consecutive higher year-end close and enjoyed its third best year out of the past nine by appreciating 25 per cent. However, what transpired in December deserves closer examination.
Bernanke, Freddie & Fannie, tax cuts and student loans
Next decade is all for gold In the coming decade, nobody can stop the rise of gold, that is what the opinion of Owen Hegarty, an Australian expert in mineral resources. He told a Chinese news agency that gold prices are expected to remain on an upward track in a decade to come despite recent fluctuations. For the foreseeable future, or at least in this decade, all reasons to buy gold are positive, he said.
Gold advances as dollar dips Gold prices recovered in Asian trade Monday as the dollar dropped, reviving demand for the precious metal as an alternative asset. Spot gold was seen trading at $1,099.81 an ounce at 12.00 noon Singapore time while February delivery in New York was at $1,099.20 an ounce at the same time.
Gold unlikely to fall below $1000: Jeff Nichols Gold gained over 24% in 2009 recording a high of $1226 in December which led analysts to predict the yellow metal to zoom to $1500 and beyond in 2010. But dollar strength and tight liquidity conditions due to monetary policies announced in China and banking restrictions on risk taking by US President Obama have cast shadows in the commodities sector.
Chinese Dragon Rattles Commodities, Gold, Brazil Although the US remains the world's #1 economy it's increasingly feeling the heat of a Chinese dragon, breathing down its neck. At the beginning of the twenty-first century, the US-economy was eight-times larger than China's - a decade later the figure was down to four-times. China's $4.9-trillion economy has already passed Germany's to become the world's third largest, and is on course to overtake #2 Japan this year. China has emerged to become the world's largest exporter, shipping $1.2-trillion of goods abroad last year, and overtaking Germany, which held the title of world's biggest exporter since 2002. Factories employing low-paid workers to assemble iPods, computers, shoes, and toys are leading the boom.
For 9 years, no stopping gold Gold has gained some new status in 2009 with more and more investors putting their money on gold. In 2009, gold price surged 24.6% to close at $1,096 per ounce after breaking through the $1,000 psychological resistance level. 2009 marked the 9th uninterrupted gain in gold price. Prior to that gold price fell for 20 years. Between 2004-2008, 60% of the gold came from mines, 28% from recycling of gold from scrap and another 12% from sales by central banks.
U.S. gold ends higher, but investors cautious U.S. gold futures ended higher Monday on a combination of a dollar drop, crude oil gains and renewed physical buying after last week's sharp losses. Gold for February delivery GCG0 settled up $6 at $1,095.70 an ounce on the COMEX division of the New York Mercantile Exchange.
US Mint Silver Eagle Sales Top 3 Million, Best Ever January US Mint American Silver Eagle sales have already scored their best ever January. Who would have thought? After all, there is still a full week left in the month. On top of that, the bullion coins are rationed, they were unavailable for seven days, and U.S. silver futures tumbled 8.1 percent last week (6.7 percent in London). Yet, January 2010 is now in the history books. It is the best starting month of a year for the series that dates back to 1986. Despite all the aforementioned obstacles, authorized buyers scooped up 3,090,500 Silver Eagles from the United States Mint as of Friday, Jan. 22.
Art Cashin: Bank-Bashing May Cause Bear Market US markets rose Monday, after logging the worst week since March 2009. What's driving today's stock action and what's next? Art Cashin, director of floor operations at UBS Financial Services, offered CNBC his stock market insights. Cashin said the main factor lifting markets is "the Bernanke Bounce": optimism arising from hopes that Ben Bernanke is closer to winning a second term as Federal Reserve chairman.
Legalize Competing Currencies Dr. Ron Paul, U.S. Congressman Much has been made recently about the supposed economic recovery. A few blips in a few statistics and many believe our troubles are all over. Of course, they have to redefine recovery as “jobless” to account for the lack of improvement on Main Street. But the banks have money, Wall Street is chugging along, and the administration would like to get on with other agendae. They have even set up a commission to investigate the crisis as if it were all in the past.
Dollar May Resume Fall, JPM Says: Technical Analysis The dollar may resume its long-term decline because it failed to break through key resistance levels even after a two-month rally, JPMorgan Chase & Co. said. The Dollar Index, which InterContinental Exchange Inc. uses to gauge the strength of the greenback against a basket of six currencies, needs to break through 79.02, a 38.2 percent retracement of its decline to a 15-month low of 74.17 in November from 86.871 in April, to “seriously question” the currency’s long-term slide, wrote Niall O’Connor, a technical strategist in New York.
Dollar Value Sent to the Corn Fields Maybe this is the next leg down. Maybe it isn’t. In either case, we don’t want to be holding a lot of stocks and real estate when we find out. If we’re right about the depression/deleveraging… And if we’re right about the bear market… You’re probably going to see stocks lose another half of their value. Remember, a correction is equal and opposite to the deception that preceded it. That deception is almost a hundred years old…and has added trillions of (largely fictitious) dollars to the nation’s wealth. An Everest of mistakes has been made. Can all this deception be corrected in 2 years…with the feds fighting every inch of the way? Can problems caused by too much credit be cured by more credit? Can a generation’s worth of mistakes be hidden under the carpet of bailouts? Can the boondoggles be washed away by more boondoggles?
Dollar slides as stocks gain Orders for Greek bonds support the euro The U.S. dollar slumped versus the euro on Monday, though the buck was mixed versus other major counterparts, as fiscally troubled Greece found strong demand for its five-year syndicated bond issue. The move lower retraced some of its advance from last week, when several factors revived investors' desire to shift away from riskier assets, including stocks, toward the perceived relative safety of the dollar.
Insights from the Wall Street Journal I spend a lot of time on these pages explaining why I see more hard times ahead. Aside from the fact that I believe what I write -- unlike many of those who've decided that gloom-and-doom is the new black (and a good way to make a buck) -- I genuinely detest the shills, charlatans, and pseudointellectuals who permeate Washington, Wall Street, and segments of the mainstream media, and who've made it their mission to mislead people about the way things are.
Stock market on alert over commercial real-estate exposures FDIC: commercial loans losses behind majority of bank failures so far this year U.S. stock-market analysts are pointing to a growing divide between banks, with regional players especially vulnerable to blow-ups in commercial real estate, as illustrated by the latest round of bank failures. Regulators on Friday shut down five more banks in New Mexico, Oregon, Washington, Florida and Missouri, bringing to nine the count of U.S. bank failures so far this year.
Fed bashers: Washington's odd couple The anti-fed stances of Ron Paul (left) and Bernie Sanders resonate with many on Main Street . "These are vulgar, obscene people who, in many cases, I really do believe, have serious emotional problems. In this country we have people who have drug problems, people who have alcohol problems." Just who are the addicts that Bernie Sanders, his white hair mussed, is getting all worked up about on this frigid Washington afternoon? "Compulsive moneymakers," he says. And Sanders, Vermont's independent junior senator and a onetime college radical who still pockets an authentic 1920 EUGENE DEBS FOR PRESIDENT key chain, is just getting started.
Where will the next crisis hit? Commentary: This market is filled with land mines It's official: The worst of the financial crisis is over. That's what the World Bank said in its 2009 annual report, released Wednesday. But that doesn't mean it's completely behind us. The after-shocks of the subprime meltdown and the collapse of Lehman Brothers in September 2008 continue to ripple through the financial system and the global economy. Two weeks ago, I predicted that there would be a "financial mini-crisis or two that ignites investors' fears" in 2010. It would be "worse than Dubai, but nowhere near as bad as the fall of Lehman," I wrote. Read Six big predictions for 2010.
Economic Black Hole: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover Even though the U.S. financial system nearly experienced a total meltdown in late 2008, the truth is that most Americans simply have no idea what is happening to the U.S. economy. Most people seem to think that the nasty little recession that we have just been through is almost over and that we will be experiencing another time of economic growth and prosperity very shortly. But this time around that is not the case. The reality is that we are being sucked into an economic black hole from which the U.S. economy will never fully recover.
Bonds & Zombies that ate America Two weeks ago we noted that the biggest factor which was holding down the yields in US and European bond markets was the price-insensitive buying by three investors groups: Asian central banks, Western pensions and insurance funds and, most importantly, Japanese private investors. This paper will explore in greater detail the bizarre behaviour of these seemingly brain-dead "zombie investors", who gobble up whatever paper the US government may throw towards them, regardless of value or price.
Obama targets middle class with new plan President Obama trained his sights on the sagging economy Monday, outlining a series of proposals to ease the burden on middle-class families, such as expanding the child tax credit and easing student loan bills, that will be included in his second federal budget next week. A week after Mr. Obama took on some of Wall Street's biggest players, Monday's announcement is another preview of the more populist tone expected to dominate Mr. Obama's State of the Union address to Congress on Wednesday. Aides say the president will focus in his speech on ways to restore economic security for struggling families at a time of 10 percent national unemployment.
Debt panel called 'easy way out' Obama-backed commission faces vote amid criticisms A federal debt commission backed by President Obama and a bipartisan group of Senate budget hawks faces a long-shot bid in a vote Tuesday amid concern that it would raise taxes and cut federal programs. Advocates, including the top Democrat and top Republican on the Budget Committee, argue that Congress has been fiscally irresponsible as the nation's debt hovers about $12 trillion and the annual deficit reached a record $1.4 trillion last year.
Obama rolls out initiatives to help middle-class families Promising repeatedly to "keep fighting" for average Americans, President Obama rolled out new proposals Monday to help struggling middle-class families, setting the stage for his first State of the Union address Wednesday night. "Unfortunately, the middle class has been under assault for a long time," Obama told a gathering of his Task Force on Middle Class Families at the Eisenhower Executive Office Building adjacent to the White House. "Too many Americans have known their own painful recessions long before any economist declared that there was a recession."
Paul on Future of Fed Rep. Paul Kanjorski (D-PA) and Rep. Ron Paul (R-TX) share their opposing views of the Fed and Chairman Ben Bernanke.
Obama to propose freeze on government spending Under mounting pressure to rein in mammoth budget deficits, President Obama will propose in his State of the Union address a three-year freeze on federal spending that is not related to national security, a concession to public concern about government spending that could dramatically curtail Obama's legislative ambitions. The freeze would take effect in October and limit the overall budget for agencies other than the military, veterans affairs, homeland security and certain international programs to $447 billion a year for the remainder of Obama's first term, senior administration officials said Monday, imposing sharp limits on his ability to begin initiatives for education, the environment and other areas of domestic policy.
Obama Proposes New Financial Regulations, Declines to Tell Administration Financial Officials What They Mean Last week, President Obama announced a major new proposal for regulating financial sector activities. The proposal, which is expected to significantly alter the way large financial institutions like Goldman Sachs do business, would... uh... it would... well, as Clusterstock's John Carney reports, the administration hasn't quite gotten around to figuring that out yet: The Treasury Department has been scrambling to figure out what the new proposals unveiled by Barack Obama last week limiting the size and scope of banks. The proposals came out of the White House rather than the Treasury Department. Inside of Treasury there is the feeling that the basis of the plan came from “political people” instead of “economic policy experts,” according to a person familiar with the matter.
Market Crash if US Policies Continue: Dick Bove Some worry Washington actions may create a new bear market. But Dick Bove, financial strategist at Rochdale Securities, fears the worst: He warns that America's government may instigate a full-fledged market crash. Bove offered CNBC his insights — and named bank stocks that are still strong investments. "We all agree the market is driven by money. If the money supply increases, the money gets into the market and stock prices go up," Bove noted. "But last week, what we saw was a shot at both of the areas where money creation occurs in the United States."
Obama Seeks Freeze on Many Domestic Programs President Obama will call for a three-year freeze in spending on many domestic programs, and for increases no greater than inflation after that, an initiative intended to signal his seriousness about cutting the budget deficit, administration officials said Monday. The officials said the proposal would be a major component both of Mr. Obama’s State of the Union address on Wednesday and of the budget he will send to Congress on Monday for the fiscal year that begins in October.
Chief TARP investigator to open two AIG probes The special inspector general for the government's $700 billion Wall Street rescue plan is opening a pair of probes into the government's rescue of American International Group Inc., including efforts to slow public disclosure of all of the terms of the deal. Special Inspector General Neil Barofsky disclosed the existence of the investigations in testimony prepared for a Wednesday hearing before the House Committee on Oversight and Government Reform. Barofsky, who can conduct criminal and civil investigations, said he is investigating whether there was "any misconduct relating to the disclosure or lack thereof" surrounding the November 2008 transactions to pay off the insurer's counterparties.
SEC mulled national security status for AIG details U.S. securities regulators originally treated the New York Federal Reserve's bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters. The request to keep the details secret were made by the New York Federal Reserve -- a regulator that helped orchestrate the bailout -- and by the giant insurer itself, according to the e-mails.
Not your father's FDIC
Obama sees Geithner, Summers staying on President Barack Obama on Monday said he expects Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers to stay in their jobs, and called them "terrific advisers." "You know, we haven't had the conversation because my presumption is that they are staying. There's a lot of 'hue and cry' in Washington because this is what happens," Obama said in an interview with ABC News. Some liberal supporters of Obama have criticized Geithner and Summers as being too cozy with Wall Street. And it raised some eyebrows when former Federal Reserve Chairman Paul Volcker was the one standing at the president's side when he announced new bank rules.
If Geithner Goes, The Top Two Contenders Tim Geithner will soon find himself on the hot seat again, as he’s summoned to Congress. Considering the mood in DC, could his job be on the line? The latest storm of controversy stems from Geithner’s role involving AIG payments to banks when he headed the New York Federal Reserve. Specifically, lawmakers want to hear about his decision to pay banks in full to retire $62.1 billion in credit default swaps sold by AIG, and whether Geither disclosed information about those payments properly.
Bank tax 'strictly political,' but popular President Barack Obama's proposed new tax on large financial institutions has a good chance of passing Congress, despite objections that it is unfair and could make credit even harder to get. The president wants to slap a tax on financial institutions with more than $50 billion in assets as a way to ensure that taxpayers recover “every single dime” of the federal government's $700 billion financial rescue program.
Bernanke likely to win second term as Fed chief: analysts A firestorm of doubt that erupted late last week over whether lawmakers' support for Federal Reserve Chairman Ben Bernanke was eroding has been all but extinguished almost as quickly, with key members of the Senate saying it looked like he has the votes to be confirmed for a second four-year term. "When it comes to Bernanke, the adults have taken over," said Greg Valliere, chief policy strategist at Potomac Research group. Bernanke could get up to 70 votes in the Senate, Valliere said, a number that would be comfortably above the 60 votes that he needs to overcome determined opposition.
A bailout for Bernanke Republicans find something to be in favor of Ben Bernanke's future as the leader of the Federal Reserve was in doubt late last week, but he's been bailed out by a strange coalition: The White House and the Senate Republican leadership. On Friday, it appeared that Bernanke's confirmation to a second term as Fed chairman was in trouble, with several liberal Democrats declaring their opposition. Senate Democratic leader Harry Reid was also wavering.
Bank of China's Ambiguous Plans The first concrete plans from a major Chinese bank to raise new capital have yielded more questions than answers. Bank of China wants to sell up to $5.9 billion in convertible bonds, and is considering—eventually—selling stock equivalent to 20% of its existing share capital, either in Shanghai or Hong Kong. Investors have been worried about the coming capital issuance; the bank's Hong Kong-listed stock is down 23% since mid-November. Of all the top Chinese banks, BOC was the most zealous in pushing loans out last year, with its lending book growing 38%.
China May Consider One-Time Yuan Gain, Goldman's O'Neill Says China will probably let its currency appreciate by at least 5 percent in a one-time move and raise interest rates to cool the economy and curb inflationary pressures, Goldman Sachs Group Inc. Chief Economist Jim O'Neill said. The Chinese government may allow the yuan to have "a bigger one-off move than people talk about, at least 5 percent, maybe more," O'Neill said in an interview today at the London School of Economics. "They may also consider having a wide band to let it move more frequently on the daily basis to stop speculative players."
Tell Senate “No” on Bernanke Cloture The Administration put on a full court press this weekend to shore up Bernanke’s confirmation vote, which was looking increasingly doubtful as of Friday. Over the weekend, Democratic and Republican leaders in the Senate said they were confident that Bernanke would be confirmed. The media took up the call, with stories appearing in virtually every MSM outlet blaring that Bernanke was in. But how seriously should we take this declaration of victory? Contrary to the efforts to present the confirmation vote as sealed, it is not in the bag: Of senators who made statements or were contacted by Bloomberg yesterday and today, 27 said they would vote for or were leaning in favor of Bernanke, while 16 were opposed or leaning against him, and 30 were undecided.
Economy Flounders, Despite the Stimulus by Ron Paul A year after a nearly $800 billion stimulus package was passed, the U.S. economy still finds itself mired in mediocrity. Economic growth is stagnant, unemployment remains higher than almost any time since the Great Depression and millions of Americans are upset that trillions of taxpayer dollars have been committed to numerous government bailout programs with no improvement of the economy within sight. They question, rightfully, where this money is going and why it hasn't been as helpful as the government has claimed.
Obama Would 'Rather Be Really Good One-Term President' Obama Tells Diane Sawyer That Health Care Bill Had Political Cost President Obama, buffeted by criticism of his massive health care reform bill and election setbacks, said today he remained determined to tackle health care and other big problems despite the political dangers to his presidency. "I'd rather be a really good one-term president than a mediocre two-term president," he told ABC's "World News" anchor Diane Sawyer in an exclusive interview today.
Obama: 'I'd Rather Be Good One-Term President Than Mediocre Two-Termer' - Brit Hume: Really?
Bond Rally on Borrowed Time as Options Foresee Tightening January's surprise rally in Treasuries may prove fleeting, as options traders bet on bigger price swings in bonds and waning volatility in stocks for the first time since 2006. Barclays Capital indexes show interest-rate volatility rose from a six-month low in November on speculation borrowing costs will increase as the improving economy allows the Federal Reserve to remove the unprecedented cash it pumped into the financial system. At the same time, confidence in the outlook for profits helped push the Chicago Board Options Exchange Volatility Index to an almost two-year low this month.
Treasuries Fall, Yields Rise From One-Month Low, Before GDP Treasuries fell, pushing yields up from a one-month low, on speculation a government report this week will show the U.S. economy expanded in the last quarter of 2009 at the fastest pace in almost four years. Government securities also dropped as traders bet Federal Reserve Chairman Ben S. Bernanke will win Senate confirmation for a second term this week to pursue his policies for spurring the U.S. economy. The Treasury Department prepared to auction a record-tying $118 billion of two-, five-and seven-year notes in three sales starting tomorrow.
Wall Street Firms Cut Pay, ‘Buckling’ to Washington Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.’s investment bank slashed their compensation in the fourth quarter, responding to political pressure that will probably persist as details of bonuses for their top executives emerge in coming weeks. The three Wall Street firms set aside $39.9 billion for pay in 2009, below the 2007 record of $44.7 billion. The total fell short of the $46.1 billion five analysts expected this month and is almost $10 billion less than what some analysts estimated in October.
Nomura’s Sheard Says China to Pick Up Slack of U.S. Consumer Developing countries led by China and India will supplant the American consumer as the source of “natural growth” for the global economy, according to Paul Sheard of Nomura Securities International Inc. There will be “less exuberant and robust consumption than we had in the past few years” in the U.S. because the American household will continue to “tighten its belt,” New-York based Sheard, global chief economist at Nomura, said in a Bloomberg Television interview in Hong Kong today. “There are other parts of the world, though, that can take up some of that slack,” such as China and India, he said.
Chief of Staff Draws Fire From Left as Obama Falters President Barack Obama's liberal backers have a long list of grievances. The Guantanamo Bay prison is still open. Health care hasn't been transformed. And Wall Street banks are still paying huge bonuses. But they are directing their anger less at Mr. Obama than at the man who works down the hall from him. Chief of Staff Rahm Emanuel, they say, is the prime obstacle to the changes they thought Mr. Obama's election would bring.
We' The People By: CAPTAINHOOK That’s quite the title, no? But without making it even longer, because it covers a vast and complicated subject, it encapsulates what I think will be the most important event that could become apparent to the masses this coming year, which means process would accelerate to a more recognizable end. Let me explain what I mean now that all this confusing stuff is up in the air and in need of some grounding; like our currencies. In the first place one needs to understand the difference between currency and money.
Stiglitz pinpoints 'moral' core of crisis By Henry CK Liu Nobel Laureate economist Joseph Stiglitz, a Roosevelt Institute senior fellow and its chief economist, said on CNBC on January 19 that the US is infested with "ersatz capitalism", a flawed, unfair system that socializes economic losses and privatizes the gains. He decries the "moral depravity" that has led to the current financial crisis. Stiglitz served in the Bill Clinton administration as chairman of the Council of Economic Advisers (1995-97) before moving to the World Bank as its chief economist, where he developed a Pauline epiphany against the very neo-liberalism he helped promote in the form of "the Third Way", to criticize belatedly but rightly and vocally policies of the International Monetary Fund (IMF).
Peter Schiff: Barack Obama’s Wall Street Reforms Are Doomed To Failure . . . . Once again, President Obama completely missed the mark on the causes of and solutions to the financial crisis. In his speech this morning, the President outlined a major initiative to increase regulation of banks. He claims the financial crisis was caused by reckless speculation by greedy bankers in search of quick profits. What he fails to acknowledge is that this behavior was the direct result of the cheap credit supplied by the Federal Reserve and the moral hazard supplied by government regulations and subsidies.
Bill Gates Supports Bank Fees, Expects Tax Increases Gates on the U.S. Economy, the Importance of Innovation and Why He Joined Twitter Billionaire businessman and philanthropist Bill Gates said he isn't surprised by the sluggish economic recovery, adding that tax increases are needed to balance the federal budget. "The budget is very, very out of balance," Gates said on"Good Morning America" today. "Without changes in taxes or entitlement policies, it won't get back into balance. Taxes are going to have to go up and entitlements are going to have to be moderated."
1,336 mutual funds cease to exist in 2009 The mutual fund universe continues to get smaller. Activia Growth didn't grow enough. Dreyfus Passport is among the departed. HealthShares Cancer lost its long struggle. All told, 1,336 mutual funds — counting each share class separately — were liquidated last year, says fund-tracker Lipper. Counting each individual portfolio, about 425 funds died last year. In 2008, fund managers liquidated 826 funds, or 145 individual portfolios.
No Mortgage, Still Foreclosed? Bank of America Sued for Seizing Wrong Homes In the Last Four Months, Three Homeowners Have Sued Bank of America for Mistakenly Foreclosing on Their Homes Some 2.8 million homeowners faced the threat of foreclosure last year, but it wasn't supposed to happen to Charlie and Maria Cordoso. In 2005, the New Bedford, Mass. couple paid in full -- in cash -- for a house in Springville, Fla., and rented it out with plans eventually to use the home as a retirement getaway. They said they were shocked to learn earlier this month that Bank of America had locked them out and removed their clothing and furniture from the property. "All the love I put in that house -- I fix things up every time I go there," Charlie Cordoso, a construction worker, told ABC affiliate WCVB Boston. "Bank of America or somebody should apologize."
Peter Schiff on CNBC 22 January 2010
Cash Strapped Illinois Accelerates Property Tax Collections In a futile attempt to stay solvent, the state of Illinois has resorted to a trick I have not seen before, accelerating property tax collections. Until this year, property taxes have been collected in two equal installments. This year it's 55% in the first half, 45% in the second half. Here is an Email from "Abundance" describing what has happened. It must be getting bad here in Illinois. I opened up my first tax installment and was surprised to see that it was $300-$350 more than I expected.It turns out that taxes were in fact NOT raised. There was a note that said that "the Illinois Assembly voted to require that 55 percent of annual real estate taxes be collected during the first installment."
Business owners brace for another rough year Do you have any idea if the economy will rebound in 2010? Small business owners don't, and it's the single biggest challenge they face in planning for the year ahead, according to a recent survey by the National Small Business Association. The industry trade group polled 450 small business owners around the country for its year-end report. Economic uncertainty is their biggest challenge, respondents said: 64% called it a threat to the growth and survival of their business. More than 70% said their sales dropped or stayed flat in 2010, with just 22% reporting revenue growth.
What If the Goverment Cuts Its Lifeline for Housing? If the government carries through with its plans, major support for the housing industry could end by April, leaving the sector to fend for itself. That could happen because of two critical decisions: The Federal Reserve plans to stop buying mortgages by the end of March, and the tax credit for home purchases will end with contracts signed by April 30 (buyers have until June 30 to complete their purchases).
The Worst Housing Flip of All Time Back in the height of the bubble, just three short years ago, this plot of land, glass and concrete represented the biggest real estate deal in US history: This morning, we filed it in our bulging “signs of the times” folder… Witness one of the worst housing “flips” of our time: The busted owners of NYC’s Stuyvesant Town and Peter Cooper Village returned the city-within-a-city to their creditors today.
Biggest Real Estate Deal in History Goes Belly-Up On Monday, Tishman Speyer Properties announced its decision to give up ownership of Manhattan's massive Peter Cooper Village (PCV) and Stuyvesant Town housing complexes. As this project, the biggest single-property real estate deal in history, imploded, it became a symbol of an overloaded real estate market bloated on a glut of hype, money and boundless optimism.
Existing Home Sales Plunged 16.7% in December The nearly year-long, positive trend in the U.S. housing sector ended 2009 on a sour note, as existing home sales plunged 16.7% in December to a 5.45 million-unit annualized rate, the National Association of Realtors announced Monday. Sales fell as the federal government's original tax credit program expired. December's existing sales tumble was the largest one-month drop since the NAR started keeping records for this statistic.
Signs Of The Apocalypse: The Return Of The Layoff Layoffs in unrelated industries, even when close together in time, are just that—unrelated. That is until they begin to grow rapidly in number. Three of America’s largest firm announced firings or signaled them during the last week. Wal-Mart cut the deepest, which is frightening because it is the most financially healthy company in the world. In a surprise announcement, the world’s largest retailer said it would cut 10% of its Sam’s Club division, which means nearly 12,000 workers will get axed. The news cannot be good for the staggering retail sector. Christmas was weak, but Wall St. assumed that Wal-Mart was doing as well as if not better than its smaller competitors. The Wal-Mart move will give other retail firms “permission” to take fresh looks at their staff levels without the stigma of announcing firings ahead of other large store chains.
Sad Violins: Philadelphia Orchestra May File for Bankruptcy The recession has undermined the pilings supporting many once-stable organizations, ranging from financial institutions to restaurants to newspaper publishers. Now the economy may claim another victim: The Philadelphia Orchestra. The 110-year old cultural mainstay may declare bankruptcy after ticket sales dwindled this season and its endowment failed to meet its goal, according to the Philadelphia Inquirer.
Sugar Hits 29-Year High Strong demand for sugar catapulted prices above 30 cents a pound in intraday trading to a 29-year high. The tight global supply situation was illustrated by news Monday that Indonesia expected a 530,976-metric-ton production shortfall at the end of April, which will be met largely through imports totaling 500,000 tons. Efforts to import white sugar have been stymied by soaring world prices and a lack of sellers.
Oil rises over $75 on weaker dollar, Wall St gains Oil prices rose to $75 a barrel on Monday as support from a weaker dollar, higher U.S. stocks, and an oil spill in Texas which limited crude oil deliveries to some U.S. refiners. Still, oil prices were still near a one-month low of $74 a barrel after having fallen by almost $10 a barrel over the last two weeks since hitting a 15-month peak of $83.95 on January 11.
900 auto dealers file to appeal shutdown About 900 General Motors and Chrysler dealerships that got the ax as the Detroit giants went through bankruptcy have filed notice that they will appeal their shutdown, according to the American Arbitration Association. The nearly 3,000 dealerships the auto manufacturers scrapped have until Monday to file with the AAA for an independent arbitration of their case. But applications from dealers are still rolling in, so it's hard to tell what the final count will be, said India Johnson, senior vice president of AAA.
Full-strength beer in Colorado convenience stores? A Colorado Springs Republican introduced the first of what is expected to be a full menu of proposals this year to expand liquor sales in Colorado. House Bill 1186, sponsored by Rep. Larry Liston, would let convenience stores of less than 5,000 square feet sell beer with an alcohol content of more than the currently allowed 3.2 percent maximum, just as liquor stores can do. The bill does not allow sales of wine or spirits at the stores and does not touch on whether grocery stores can sell full-strength beer or wine.
20 years later, greed's still good for Douglas in 'Wall Street' sequel NEW YORK — Gordon Gekko, that cutthroat swashbuckler of a corporate raider who once sneered "Lunch is for wimps," is holding sway over a table at a jammed Manhattan restaurant. No, it's not an '80s flashback but a scene being shot for Wall Street: Money Never Sleeps, a sequel to the 1987 original due this spring that takes place more than 20 years later. Instead of the ambition-served-raw atmosphere of the 21 Club depicted in the first film, the locale is Shun Lee, an Upper West Side institution where decorative demon-eyed monkeys dangle above the bar like mute witnesses. And rather than coercing a would-be high-stakes player into doing his shady bidding, Gekko is focused on reconnecting with Winnie, his estranged daughter whom he hardly knows after serving a hefty 14-year jail sentence for insider trading.
Beijing accuses U.S. of cyberwarfare By Bill Gertz China's government and state-run media stepped up criticism of the United States on Monday over the issue of computer network cyber-attacks. The Chinese accused the Pentagon of boosting cyberwarfare efforts, and suggested Washington both covertly used electronic social networks to foment recent protests in Iran and was behind recent computer attacks on the Chinese Internet-search engine Baidu.
Greece's Line In The Sand Greece has drawn a line, albeit an expensive one, in the sand. The success of its 8 billion euros ($11.3 billion) five-year bond sale, for which orders reached 25 billion euros, means the market should step back from a trade that was starting to price in the unthinkable: an imminent default by a euro-zone sovereign. But while Greece passed this test and its bonds should rally, the market now will expect Greek authorities to be similarly proactive in cutting spending and raising taxes to rein in the country's runaway budget deficit.
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