Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Fri 02.19.2010
In Surprise Move, Fed Signals Pivot to Normal Policy By Sewell Chan - NY Times WASHINGTON — Taking a step to normalize lending after holding interest rates to extraordinary lows for more than a year to prop up the financial system, the Federal Reserve on Thursday raised the interest rate it charges on short-term loans to banks. While the central bank had signaled its intentions to take such a step, the timing was a surprise. The announcement was made after the stock market had closed in a carefully worded statement that emphasized that the Fed was not yet ready to begin a broad tightening of credit that would affect businesses and consumers as they struggle to recover from the economic crisis.
Fed Statement: Hikes Discount Rate after market close Release Date: February 18, 2010 For release at 4:30 p.m. EDT The Federal Reserve Board on Thursday announced that in light of continued improvement in financial market conditions it had unanimously approved several modifications to the terms of its discount window lending programs.
Rate Rise Stirs Questions By Jon Hilsenrath - WSJ Fed Raises Cost of Emergency Loans to Banks, Spurring Talk of Tighter Credit -- The Federal Reserve raised an interest rate it charges banks for emergency loans, and emphasized that a broader tightening of credit for consumers and businesses is still at least several months away. But the late-afternoon increase in the discount rate didn't have the muted impact Fed officials hoped for. Stock futures and bond prices fell, and the dollar rose against the euro. "The Fed can talk all day about how the discount rate hike is technical and not a policy move, but the market sees it as a shot across the bow," Christopher Rupkey, an economist at Bank of Tokyo-Mitsubishi, said in a note to clients.
Induced inflation feared as way to cut debt By Patrice Hill - Washington Times Some see it as lesser evil for economy As the White House tried one more time Thursday to galvanize support from a recalcitrant Congress for a deficit commission to tackle the nation's dangerously bloated debt, fears are growing that the United States will once again resort to printing money and ginning up inflation to resolve its debt problem. While accelerating the printing presses could do irreversible damage to the dollar's international reputation and the U.S. economy, history suggests that this is the way Washington will go to avoid the political pain of having to raise taxes and cut spending on popular programs such as Social Security, defense and Medicare.
The VAT Commission Desperately seeking cover for tax increases on the middle class. WSJ - A couple of trillion dollars in new deficit spending later, President Obama yesterday signed an executive order creating a Bipartisan National Commission on Fiscal Responsibility and Reform. Yes, that's really what he called it. And you wonder why Americans are cynical about politics? Having proposed peacetime records for spending as a share of the economy—more than 25% of GDP this year and next—Mr. Obama now promises to make "the tough choices necessary to solve our fiscal problems." And what might those choices be? "Everything's on the table. That's how this thing's going to work," Mr. Obama said. By "everything," Mr. Obama means in particular tax increases. The President vowed in 2008 that he wouldn't raise taxes on anyone earning less than $250,000 a year, but that's looking to be as forlorn a hope as peace in Palestine.
In D.C., more evidence that commercial real estate headed for foreclosure crisis By V. Dion Haynes - Washington Post -- A mortgage crisis like the one that has devastated homeowners is enveloping the nation's office and retail buildings, and few places are likely to be hit as hard as Washington. The foreclosure wave is likely to swamp many smaller community banks across the country, and many well-known properties, including Washington's Mayflower Hotel and the Boulevard at the Capital Centre in Largo, are at risk, industry analysts say.
FDIC Opens A Massive New Office Near Chicago Just To Handle The Coming Tidal Wave Of Midwest Bank Closings They Are Expecting The Economic Collapse Blog -- Is the Midwest about to see a massive wave of bank closings? That is apparently what the FDIC is expecting. The FDIC is opening up a massive new satellite office in the Chicago area that will be dedicated to managing receiverships and liquidating assets from failed Midwest banks. This new facility will occupy 7 floors in an 11 floor building. The office space that the FDIC is leasing is well over 100,000 square feet and will employ approximately 500 temporary employees and contractors. This is a huge expenditure by the FDIC. So will there really be so many bank failures over the next couple of years in the Midwest that a 100,000 square foot facility is required to deal with it? Apparently someone at the FDIC thinks so. But this is not the first time the FDIC has done something like this.
Indymac Slap in our Face [original video] You won't believe the sweetheart deal that the Indymac boys were given by the FDIC.
The Indymac Slap in our Face Thanks to the boys at www.thinkbigworkmall.com, this is the perfect example of how banks have a license to steal and why our currently elected government officials can't be trusted.
LET'S FIGHT BACK TOGETHER! INDYMAC BANK Complaint by Freeindeed I am also losing my home to One West. But I have decided to fight back! This is a letter that I posted on congress.org. Please visit my soap box alert at http://www.congress.org/soapbox/alert/14417451 and where it says Take action now put in your zip code. It will automatically take you to where you can write a letter to your official in your state. Please DO IT!!! One West is not going to give you a loan modification! Don't let them fool you! Fighting Back! American Homeowners United For Justice
Is The FDIC Killing Indymac OneWest Bank Short Sales? By Robert G. Hertzog - Active Rain Blog As some of you may already know, I specialize in helping homeowners avoid foreclosure through the use of short sales. Recently, I dealt with a very interesting case involving Indymac/OneWest Bank, that I felt needed to be brought to the attention of all American taxpayers. Basically, IndyMac Bank (now OneWest Bank), is holding one of my clients hostage, demanding a $75k promissory note, or they will proceed to foreclosure. For the life of me, I couldn't figure out why they were doing this. The BPO came in at the contract price of $275k, with a net to IndyMac of $241k. What advantage could there possibly be for them to proceed to foreclosure?
FDIC Responds To IndyMac/OneWest Video Alleging Sheila Bair Transferred Billions In Taxpayer Funds To Paulson & Co., And Others by Tyler Durden - Zero Hedge -- A few days ago we posted "The Great Highway Robbery Continues: How the FDIC is Legally Transferring Billions in Taxpayer Money to Hedge Funds" which presented a clip by Think Big Work Small, highlighting what was seemingly a grand scheme to defraud taxpayers with the FDIC's complicity. Today, the FDIC strikes back, issuing a Press Release claiming the video contains "blatantly false claims", "perpetrates other falsehoods" and has "no credibility." The counterargument which is supposed to render all allegations of impropriety false: "OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets" and that "in order to be paid through loss share, OneWest must have adhered to HAMP." Unfortunately, reading between the lines of the response indicates that not only are the falsehoods actually truehoods, but the video is still, sorry Shila, quite credible.
The Great Highway Robbery Continues: by Tyler Durden - Zero Hedge How The FDIC Is Legally Transferring Billions In Taxpayer Money To Hedge Funds It is not a secret to anyone who has been closely following the FDIC's quasi criminal bank takeover practices over the past year, that acquirors of failed banks end up receiving a massive and risk-free gift in the form of taxpayer benefits via the FDIC when it comes to funding losses on a given bank acquisition. Should there be a short sale resulting in a loss to the full principal (not the cost basis mind you)? Not to worry, Sheila Bair is there to hand out taxpayer money to the hedge funds/banks owning the newly transferred assets. A recent example of this was the glaring insider trading which preceded the acquisition of failed AmTrust Bank by New York Community Bancorp, in which both NYB and those who bought calls in advance of information being made public, made massive illegal profits.
Inside Look: The Failure of IndyMac
Inside Look: Paulson Urges Approval for Fannie and Freddie Funds - July 2008
Fed Raises Discount Rate by Quarter-Point to 0.75% By Craig Torres Feb. 18 (Bloomberg) -- The Federal Reserve Board raised the discount rate charged to banks for direct loans by a quarter point to 0.75 percent and said the move will encourage financial institutions to rely more on money markets rather than the central bank for short-term liquidity needs. “These changes are intended as a further normalization of the Federal Reserve’s lending facilities,” the central bank said today in a statement. “The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy.”
Fed hikes discount rate but not tightening policy Emily Kaiser WASHINGTON (Reuters) - The U.S. Federal Reserve on Thursday made its first interest rate move since December 2008, hiking an emergency lending rate it charges banks, but insisted borrowing costs would not rise for consumers or companies. The Fed cast its decision to raise the discount rate to 0.75 percent from 0.5 percent as a response to improved financial market conditions that warrant less of a helping hand from the U.S. central bank. It went to pains to draw a distinction between the discount rate and the federal funds interbank lending rate, its main monetary policy tool, which remains unchanged near zero percent to help sustain a fragile U.S. economic recovery.
Managing Perceptions: Fed Raises Discount Rate After the Close JESSE'S CAFÉ AMÉRICAIN "The last duty of a central banker is to tell the public the truth." Alan Blinder, former Vice Chairman of the Federal Reserve In a largely symbolic move, the Fed raised the Discount Rate after the bell by 25 basis points to .75%. As you know, the Discount Rate is the interest rate that the Fed charges banks who borrow from them short term on an emergency basis. This is the shaping of perception by the Fed. It does not raise rates for the consumer or businesses, and does not affect the rates and guarantees in the many Fed and Treasury programs which are still supporting the commercial banks.
The Fed Raises Its Discount Rate in a First Tightening Move By DAN BURROWS - Daily Finance Stock-index futures fell sharply late Thursday after the Federal Reserve announced it's raising the discount rate it charges on loans to banks. The dollar rallied sharply, and the euro touched a nine-month low on the move, which market participants interpret as signaling the beginning of the end of the central bank's extraordinary stimulus measures. The Fed raised the discount rate to 0.75% from 0.5% in order to encourage banks to tap money markets rather than the central bank for short-term loans.
Fed Move May Signal End to Easy Bank Profits By GRAHAM BOWLEY and ERIC DASH - NY Times Federal Reserve to Wall Street: The days of easy money — and, just maybe, easy profits — are numbered. News on Thursday that the Fed would raise the interest rate that it charges banks for temporary loans was seen by lenders as a sign that their long, profitable period of ultralow rates was coming to an end. The move suggested that policy makers believed the nation’s banks had healed enough to withdraw some of the extraordinary support that Washington put in place during the financial crisis. And, while all those bailouts stabilized the banking industry, it was low rates from the Fed that helped propel banks’ rapid recover.
Gold May Advance to $1,400 in 12 Months By Nicholas Larkin Feb. 18 (Bloomberg) -- Gold may climb to about $1,400 an ounce in the next 12 months, according to technical analysis by Chartered Market Technician Daniel Bruno, who advises banks and hedge funds. The attached chart shows gold is trading above a trend line that starts from the metal’s low in January last year. A climb to $1,419 an ounce would equate to a 150 percent projection of bullion’s rally from January 2009 to its record in December, according to a series of numbers known as the Fibonacci sequence.
IMF Gold Sale Announcement Causes Temporary Dip in Prices Tim Iacono - Seeking Alpha Well, it looks as though the gold price is now recovering nicely from the announcement yesterday by the IMF (International Monetary Fund) that they intend to sell another 191 tonnes of gold bullion on the open market. A graphic depiction of the damage that was done yesterday is shown below from this item at the International Business Times, but, since this chart was created last night, the gold price has risen smartly back up to almost $1,120 an ounce.
Coming IMF sale fails to halt gold Beth Ye and agencies - The Standard HK The International Monetary Fund will soon begin open-market sales of 191.3 tonnes of gold to raise revenue for lending. Gold prices fell 1.13 percent yesterday after the IMF announcement, but managed to recover later in the day. In early afternoon trade in London, the precious metal stood at US$1,109.80 (HK$8,656.44) an ounce.
Asian central banks tagged as potential buyers for 191.3 tonnes of IMF gold Lesley Wroughton and Lewa Pardomuan The International Monetary Fund says it will soon begin a planned sale of a remaining 191.3 tonnes of gold to raise funds for lending operations SINGAPORE/WASHINGTON (REUTERS) - The International Monetary Fund said it would soon begin a planned sale of a remaining 191.3 tonnes of gold to raise new resources for lending, with traders saying it may seek buyers among Asian central banks. But a drop of 1 percent in gold prices after Wednesday's news showed the market still cautious about future IMF sales -- nearly four months after India's purchase of 200 tonnes boosted the country's gold holdings to the 10th largest among central banks.
Gold: Down on IMF Sales, Up on Inflation Daryl Montgomery - Seeking Alpha Two pieces of news are affecting gold's price currently. First, the IMF just announced that it will soon begin phased sales of 191.3 metric tons of gold, which pressured the market causing a sudden sharp sell off. Shortly thereafter, the U.S. released the PPI, the Producer Price Index, for January and there was a very inflationary 1.4% rise from December. This caused gold to rally sharply. While the longer-term direction for gold is unquestionably up, the shorter-term picture is murkier.
The Case for More Inflation Michael Shulman - Seeking alpha . . . . There are several things that have to happen to kick off and sustain inflation, the primary equation being too much money chasing too few goods. There are derivatives of this simple equation: cost-push inflation where there is a monopoly over a vital good or service, such as oil - and the cost to everyone rises and becomes embedded in other goods and services, pushing up their cost and igniting generalized inflation. But at the end of the day, it was too much money willing to buy oil given the limited supply of oil in the world, so you end up at the beginning -- too much money chasing too few goods.
U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion The Onion -- WASHINGTON—The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct. What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world's largest economy.
Jan. wholesale prices jump 1.4 percent By Martin Crutsinger AP via Washington Times U.S. wholesale prices shot up at double the expected pace in January, propelled higher by big increases in energy costs. The surprisingly large jump was viewed as a temporary blip and not the start of inflation problems, however. The Labor Department said Thursday that wholesale prices rose 1.4 percent last month, reflecting higher costs for gasoline and other energy products. Private economists had expected a 0.7 percent increase.
Producer Prices in U.S. Increase More Than Forecast By Timothy R. Homan Feb. 18 (Bloomberg) -- Wholesale prices in the U.S. accelerated more than anticipated in January, led by a jump in the costs of energy, light trucks and pharmaceuticals. The 1.4 percent rise in prices paid to factories, farmers and other producers followed a 0.4 percent increase in December, according to figures from the Labor Department in Washington. Excluding food and fuel, so-called core prices rose 0.3 percent, exceeding the median forecast in a Bloomberg News survey.
Bob Prechter Points Out The Many Signs Of Deflation by Nico Isaac, Financial Sense Yes, You Heard Us Right Everywhere you look, the mainstream financial experts are pinning on their "WIN 2" buttons in a show of solidarity against what they see as the number one threat to the U.S. economy: Whip Inflation Now. There's just one problem: They're primed to fight the wrong enemy. Fact is, despite ten rate cuts by the Federal Reserve Board to record low levels plus $13 trillion (and counting) in government bailout money over the past three years -- the Demand For and Availability Of credit is plunging. Without a borrower or lender, the massive supply of debt LOSES value, bringing down every exposed investment like one long, toppling row of dominoes.
Bank Profits Ready to Tumble, Stocks to Fall: Whitney By: Jeff Cox - CNBC.com The US banking system will lose 30 percent more than consensus estimates as shrinking loan portfolios squeeze profits, analyst Meredith Whitney told CNBC. While increased governmental regulations will restrict the industry somewhat, Whitney said that the decline of up to 20 percent in lending portfolios will enact far more damage on bank balance sheets. "Your good borrowers don't want to borrow, and your bad borrowers you're trying to kick out of the system," she said. "So on average lending portfolios are down 4 to 20 percent and we think they're going to be down another 10 to 15 percent for all the big banks this year."
Bernanke Is Asked for Fed’s AIG Documents by Issa By Hugh Son Feb. 18 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke has been asked by a Republican lawmaker to turn over documents related to the decision to rescue insurer American International Group Inc. The Federal Reserve should deliver the records by March 2, according to a letter dated yesterday from Representative Darrell Issa of California, ranking member of the House Oversight and Government Reform Committee. Bernanke last month invited the Government Accountability Office to conduct a “full review” of the central bank’s actions tied to the bailout that swelled to $182.3 billion.
Lewis Knew of Legal Decision By Dan Fitzpatrick - WSJ Testimony Shows Ex-BofA Chief Was Briefed on Not Disclosing Growing Losses Former Bank of America Corp. Chief Executive Kenneth D. Lewis told the Securities and Exchange Commission that he was briefed twice about legal decisions not to disclose ballooning losses at Merrill Lynch & Co. before shareholders approved the securities firm's takeover, according to a court filing. The filing, an October 2009 deposition of Mr. Lewis by the SEC, was made in U.S. District Court in New York as part of a judge's review of the proposed $150 million settlement that would end a lawsuit filed against the Charlotte, N.C., bank by the SEC over the handling of Merrill's losses.
Is all this "exit strategy" talk warranted? by Tim Iacono - Financial Sense Boy, for a group of policymakers at the nation's central bank who, in a best case scenario, are going to just sit on their hands for at least the rest of the year, there sure has been a lot of talk about an "exit strategy". That is, how the Federal Reserve plans to withdrawal the trillions of dollars in asset purchases, emergency lending facilities, and liquidity measures that have been undertaken over the last year that purportedly saved us from another Great Depression.
Jim Rogers on the Federal Reserve (CNBC)
Dodd to Unveil Financial Overhaul Bill Next Week By Alison Vekshin Feb. 18 (Bloomberg) -- Senate Banking Committee Chairman Christopher Dodd will unveil his plan to overhaul U.S. financial regulations next week, advancing measures sought by the Obama administration after months of negotiations with Republicans. Dodd, a Connecticut Democrat who is crafting the bill with Republican Senator Bob Corker of Tennessee, will hold a committee meeting in the first week of March to weigh changes to the plan, his spokeswoman Kirstin Brost said today in an e-mail.
Senate Republicans Said to Draft Alternative Financial Overhaul By Alison Vekshin Feb. 18 (Bloomberg) -- Senate Republicans led by Richard Shelby are drafting an alternative to financial-regulation legislation that Senator Christopher Dodd is developing after bipartisan talks collapsed this month, two Shelby aides said. Shelby’s plan will likely aim to create a consumer protection unit within a new bank regulator instead of the standalone agency sought by Dodd and President Barack Obama, said the aides, who requested anonymity because the talks are private. It would shield taxpayers from costs of unwinding systemically important failed financial firms, the aides said.
The Dangers of Monetary Reform Mises Daily: by Kaj Grussner Austrians have long called for a reform of the monetary system. The current, Fed-driven, fiat-money system is on the verge of collapse. But however bad the current system is, a new system won't necessarily be better. Many libertarians would favor a return to the gold standard, while others would be content with simply repealing legal-tender laws and allowing competition in currencies. However, even in a great collapse like the one looming now, these reforms may still seem too extreme to the general public. This is especially true if they have an alternative that seems reasonable and gives total control over the monetary system to the state. One such alternative is the 100-percent-reserve solution advocated by Stephen Zarlenga, director of the American Monetary Institute, and author of the book "The Lost Science of Money."
BILL WOULD BAN FEDERAL CURRENCY IN SC By Adam Fogle Palmetto Scoop PITTS INTRODUCES LEGISLATION TO REPLACE PAPER MONEY WITH GOLD, SILVER COINS -- South Carolina will no longer recognize U.S. currency as legal tender, if State Rep. Mike Pitts has his way. Pitts, a fourth-term Republican from Laurens, introduced legislation earlier this month that would ban what he calls "the unconstitutional substitution of Federal Reserve Notes for silver and gold coin" in South Carolina. If the bill were to become law, South Carolina would no longer accept or use anything other than silver and gold coins as a form of payment for any debt, meaning paper money would be out in the Palmetto State.
South Carolina Lawmaker Seeks to Ban Federal Currency Posted by Brian Montopoli CBS News South Carolina Rep. Mike Pitts has introduced legislation that would mandate that gold and silver coins replace federal currency as legal tender in his state. As the Palmetto Scoop first reported, Pitts, a Republican, introduced legislation this month banning "the unconstitutional substitution of Federal Reserve Notes for silver and gold coin" in South Carolina. In an interview, Pitts told Hotsheet that he believes that "if the federal government continues to spend money at the rate it's spending money, and if it continues to print money at the rate it's printing money, our economic system is going to collapse."
South Carolina Congressman Hates Your Money Author: Matt Sussman - Technorati The best things in life are free. For example, South Carolina state representative Mike Pitts introducing a bill that would recognize only gold and silver coins as legal tender. Money: that's not what he wants. The Palmetto Scoop found this curious bill currently being distributed in the SC House of Reps based on Pitts' belief that all those paper rectangles in your wallet are unconstitutional. Illegal. Morally reprehensible, honestly. Pitts' bill was introduced back on February 2 but was clearly ripped from the headlines thanks to some spotlight-hungry groundhogs.
How Banks Are "Crowding Out" the U.S. Rebound BY MARTIN HUTCHINSON, Money Morning When U.S. President Barack Obama unveiled the $787 billion "stimulus" bill of extra spending and modest tax cuts last year, it became clear that the U.S. budget deficit was going to eclipse the 10% of gross domestic product (GDP) level for at least one year (and, as we now know, probably three years). On those grounds, I opposed the "stimulus" - a position that was a lot less popular then than it has since become. However, as I'll show you below, it now looks as if I was right - and the implications for the U.S. economy are highly worrisome.
‘Game of Chicken’ With Greece May Hurt Recovery By Peter Woodifield Feb. 19 (Bloomberg) -- The European Union risks repeating Japan’s mistakes of the 1990s as it helps Greece tackle the region’s biggest budget deficit, said Jeremy Beckwith, chief investment officer of Kleinwort Benson. “Greece and the European Union is the world’s biggest game of chicken” since the Cuban missile crisis in 1962, Beckwith said in an interview at the wealth manager’s Edinburgh office. “It’s an effective tightening of policy that we were not expecting a few weeks ago. It’s quite worrying.”
Greece Turns the Euro into a “Carry Trade” Currency By Gary Dorsch, Global Money Trends via GoldSeek Last year’s parabolic rallies in copper, gold, Brazilian and Russian stocks, and the Australian dollar, are running out of steam. Suddenly, there are eerie reminiscences of scarier days gone-by. Volatility has returned to the money markets, amid worries about a possible “double-dip” recession for the world economy, capital flight from European sovereign debt markets, monetary tightening in Australia, China, and India, and the President Obama’s backing for the “Volcker rule,” – which calls for a clamp-down on the speculative trading binges of the Wall Street Oligarchs.
Ron Paul: Are US Taxpayers Bailing Out Greece?
Greece Broke the Rules James Turk - Kitco “There are rules, and these rules need to be adhered to." This quote could easily have been made by Sir Isaac Newton 300 hundred years ago explaining how financial discipline would be imposed by his then new invention, the classical Gold Standard. But no, these are the words of German Chancellor Angela Merkel uttered just yesterday. In effect, they precisely state how the Greek crisis should be solved. Greece broke the rules. The Greek government borrowed too much. It spent too much. Because it broke the rules, it is not worthy to be included in the eurozone. So Greece should be expelled. Doing so would re-affirm the reliability of the euro and indeed, make credible the promise of every European government before joining the eurozone that it would follow the rules.
Desperate Times and Desperate Measures By: Adam Brochert - Gold Seek Things are going to continue to get darker economically. Nothing has been solved but massive currency debasement has already occurred to try to stem the tide. The reason is simple. I forget where I stole this chart from and if anyone knows who is making this chart and keeps regularly updating it, please let me know so I can check their site periodically: . . . . New debt is now a drag on the economy rather than a boost. This is a bizarre concept. Piling more debt on top of the old, rickety, sky-high debt pile currently in the economy now actually makes things worse. This is a deflationary trap that will require new approaches to stoke up true inflation in the economy.
US credit conditions: Hoard mentality The Economist A recent Bloomberg article notes that American commercial banks are hoarding record amounts of cash in relation to corporate loans. A steady decline in the ratio of cash to business loans—from around 60% in the 1970s to a low of 20% in late 2008—has reversed sharply over the past year. According to Federal Reserve data, banks hoarded an all-time high of 98 cents in cash for every dollar of existing corporate loans during the week of January 13th. The latest reading, for the week of February 3rd, stands at 95 cents.
U.S. state pension funds have $1 trillion shortfall: Pew WASHINGTON (Reuters) - U.S. states face a total shortfall of at least $1 trillion in their funds for employees' pensions and retirement benefits, and their financial problems are quickly mounting, according to a report released by the Pew Center on the States on Thursday. Illinois is in the worst shape, with only 54 percent of its pension obligations funded, according to the report, which looked at fiscal year 2008. Because the analysis did not encompass the final six months of calendar year 2008 -- most states' fiscal year's end during the summer -- it does not include the market downturn that devastated many funds' investment portfolios.
10 percent reportedly late on mortgages BY ROGER SHOWLEY, UNION-TRIBUNE County figure up from 6.2 percent year earlier Nearly 10 percent of San Diego County homeowners with mortgages are at least two months late on their payments and are likely to default and fall into foreclosure, a sampling of area credit records shows. According to Chicago-based Trans-Union, a credit and information management company, a record 9.9 percent of mortgage holders in the county were 60 days or more delinquent in the fourth quarter of last year. That’s up from 6.2 percent a year earlier and 1.5 percent, the historic average, at the beginning of 2007.
Why Homeowners 'Walk Away' From Their Mortgages By: Mark Koba - CNBC Wayne Bryant and his wife have just stopped paying the mortgage on their home in northern California, even though they can afford to pay. The reason? Because, Bryant says, the value of the house is less than what they owe. "We are 45-50 percent under water," claims the 61-year-old Bryant, who works in airport management. "At this point we are 20 years away from being even. We're walking away because it's a good business decision."
Bleak Economy Pushing Health Insurers to Raise Rates, Analysts Say By REED ABELSON - NY Times Health insurers lately seem more afraid of Wall Street than of Washington. The nation’s insurers have come under sharp attack by the Obama administration for seeking seemingly staggering rate increases on policies they sell to individuals. The health and human services secretary, Kathleen Sebelius, recently pounced on WellPoint’s Anthem Blue Cross unit for wanting to raise premiums as much as 39 percent in California, and on Thursday she issued a scathing report detailing double-digit increases sought by other insurers last year and so far this year.
Jobless Claims Rose Unexpectedly Last Week By Martin Crutsinger & Daniel Wagner Job market improvement may be slowing, data show Washington (AP) - The job market isn't improving as fast as some analysts had expected. That was the message Thursday in a government report that the number of people filing first-time claims for unemployment benefits rose unexpectedly last week. Jobless claims rose by 31,000 to a seasonally adjusted 473,000.
General Motors fighting back against bill to help Colorado dealers Denver Business Journal - by Ed Sealover General Motors is launching a $60,000 print and radio ad campaign Friday against a bill going through the Colorado Legislature that would allow ousted dealers to recover their franchises and their most recent improvement costs more easily. After learning of the plan, sponsors and supporters of the bill lashed out against the “arrogance” of a company bailed out by taxpayers that’s spending government funds to campaign against local dealers.
The Credit Card Trap: How U.S. Credit Card Companies Are Sucking The Financial Life Out Of The American Consumer The Economic Collapse Blog There have been very few things more damaging to American consumers over the past couple of decades than credit card debt. Easy credit has enabled many of us to live absolutely fabulous lifestyles, but outrageously high interest rates, ridiculous penalties and predatory fees have sucked the financial life out of millions of American families. It is very easy to blame the rapidly exploding debt of the U.S. government for the economic collapse that we are now experiencing, but the truth is that tens of millions of Americans have created their own personal economic disasters by overusing credit cards. The temptation of easy credit has been too much for millions of Americans to resist, but now all of that easy credit is proving to be incredibly difficult to pay back, and massive debt problems are literally tearing many American families apart. It is hard to underestimate how devastating credit card debt can be to a family.
States short $1 trillion to fund retiree benefits By Tami Luhby NEW YORK (CNNMoney.com) -- Just as they are contending with massive gaps in their operating budgets, states and localities must also deal with a $1 trillion deficit in public employees' retirement benefits' funds, a new report found. The shortfall amounts to more than $8,800 for every household in the nation, according to the Pew Center on the States, which published its findings Thursday.
L.A. City Council orders 3,000 more job cuts By Phil Willon and Maeve Reston - LA Times To help address the city's budget crisis -- and after the threat of a credit downgrade -- the council tells agencies to act by July 1. The move is on top of 1,000 cuts already in the works. Under the threat of a credit rating downgrade, the Los Angeles City Council on Thursday instructed agency heads to eliminate 3,000 additional city jobs before July 1 "by any means necessary, including layoffs." The reduction -- aimed in part at wresting further concessions from the city's labor unions -- would be on top of 1,000 job cuts already in the works.
Rep. M. A. Pitts Discusses Resolution Reaffirming States' Rights South Carolina Representative Michael Pitts discusses why he proposed H. 3509, a concurrent resolution that reaffirms South Carolina's belief in states' rights.
Conservative manifesto is call to action, say signers By Stephen Dinan - Washington Times Leaders of major conservative groups on Wednesday signed a manifesto vowing to push the country to return to constitutional principles, saying they've grown tired of having to accept government expansion at the hands of liberals. "It's our turn. We've had about enough of you. We're going to take you on, and it's time to defeat you," said Mark Levin, a talk-radio host and president of the Landmark Legal Foundation.
'Tea party' activists change dynamic at CPAC By Stephen Dinan and Ralph Z. Hallow - Washington Times Republicans pressed to earn loyalty of conservative group Amid a euphoria unimaginable just a year ago, activists Thursday at the largest conservative gathering in the country plotted how to ride the "tea party" wave to sweeping Republican victories in this year's elections - and to force the GOP to govern as conservatives after the vote.
Judge Napolitano: Tea Parties Should Coopt GOP, Not Other Way Around 2/16/10
2/16/10 Lew Rockwell on Freedom Watch: Tea Party's Dilemma
AUSTIN PLANE ATTACK: TEA PARTY TERRORISM? Truth Dig Authorities are still investigating why Joe Stack of Texas flew his small airplane into the Austin offices of the IRS, but based on early reports and a tirade the attacker posted on the Internet, it had something to do with taxes, big government, corporate crime and bailouts. Some of what Stack wrote in his online screed actually sounds quite reasonable. For instance, “in my lifetime I can say with a great degree of certainty that there has never been a politician cast a vote on any matter with the likes of me or my interests in mind.” That’s a bit extreme, but the basic sentiment is shared by many Americans. According to Gallup, 78 percent of Americans disapprove of the job Congress is doing.
Small Plane Crashes Into Building AUSTIN, Texas (AP) -- A low-flying small plane crashed into an office building that houses the Internal Revenue Service in Texas on Thursday, and officials said they were investigating whether it was an intentional act by the pilot. The U.S. law enforcement officials said authorities were trying to determine if the pilot intentionally targeted the IRS. They spoke on condition of anonymity because the investigation is continuing. Assistant Austin Fire Chief Harry Evans said at least one person was missing and two people were taken to a hospital. Their conditions and identities were not immediately known.
Official: Plane crash pilot left anti-tax note By Jim Vertuno AP via Washington Times AUSTIN, Texas (AP) -- A software engineer furious with the Internal Revenue Service launched a suicide attack on the agency Thursday by crashing his small plane into an office building containing nearly 200 IRS employees, setting off a raging fire that sent workers fleeing for their lives. At least one person in the building was missing. The FBI tentatively identified the pilot as Joseph Stack. A federal law official said investigators were looking at a long anti-government screed and farewell note that he apparently posted on the Web earlier in the day as an explanation for what he was about to do.
Witnesses react to plane crash
Two Chinese Schools Said to Be Tied to Online Attacks By JOHN MARKOFF and DAVID BARBOZA - NY Times SAN FRANCISCO — A series of online attacks on Google and dozens of other American corporations have been traced to computers at two educational institutions in China, including one with close ties to the Chinese military, say people involved in the investigation. They also said the attacks, aimed at stealing trade secrets and computer codes and capturing e-mail of Chinese human rights activists, may have begun as early as April, months earlier than previously believed. Google announced on Jan. 12 that it and other companies had been subjected to sophisticated attacks that probably came from China.
Area Radio Stations go Music Free Thursday Morning Press Release: Wausau To raise awareness about a new proposed tax they say will destroy the industry, five area radio station will go music-free Thursday morning. Five of Central Wisconsin's most-listened-to radio station will stop playing music between 8am and 10am on Thursday, Feb. 18, to raise awareness about a music performance tax that's being considered in Congress. The Music Performance Tax would force radio stations to pay record labels for the music they broadcast. In this difficult economy, a new tax would cripple the local radio stations and force dramatic changes in what listeners hear. The live music-free broadcast will originate from the Midwest Communications Broadcast Centre at 557 Scott Street. There will also be a live broadcast from outside the Rib Mountain Municipal Center, where Rep. David Obey ( D-Wausau) will be meeting with local officials. Congressman Obey supports the new tax on radio broadcasters.
WordPress.com crashes, downs major blogs San Francisco Business Times - by Patrick Hoge WordPress.com, the fast growing hosting service for millions of blogs, including TechCrunch and GigaOm, crashed for 110 minutes Thursday afternoon. The outage affected 10.2 million blogs, blogged Matt Mullenwag, founder and CEO of San Francisco-based Automattic, the company that runs WordPress. It was the company's worst outage in four years, he wrote. "We are still gathering details, but it appears an unscheduled change to a core router by one of our datacenter providers messed up our network in a way we haven’t experienced before, and broke the site," Mullenwag wrote. "It also broke all the mechanisms for failover between our locations in San Antonio and Chicago. All of your data was safe and secure, we just couldn’t serve it."
eBay and PayPal To Be Translated into Russian Pravda.ru The world’s largest online auction, eBay, finally comes to Russia. The Russian division of the auction is to start working on March 16. As a result, all Russian users of eBay will be able to buy and sell their goods on the Internet easily. In addition, they will be able to enjoy all advantages of PayPal payment system. eBay’s key competitor on the Russian market, Molotok.ru, says that it is not afraid of possible competition. Experts say, though, that the Russian auction will have no chances in the fight with the online giant: eBay’s choice of goods and the quality of provided services is much better.
Climate Change Head Resigns John Vidal - guardian.co.uk Yvo de Boer, head of the UN's climate change body for the last four years, has unexpectedly resigned in a move which could further set back global negotiations. In a telephone interview given to Associated Press, the veteran UN diplomat said he was announcing his retirement to allow the UN secretary-general, Ban Ki-moon, to find a successor well before November, when 192 countries meet in Mexico to conclude fraught climate talks. He will leave officially in July.Copenhagen outcome was unrelated to decision.
LEE: Confronting Beijing's new bipolar reality By John Lee - Washington Times Hubris and domestic insecurity both on display Several years before his historic visit to China in 1972, Richard Nix -on articulated what was to become the contemporary rationale behind America's policy of engagement toward China: Taking the long view, we simply cannot afford to leave China forever outside the family of nations - there to nurture its fantasies, cherish its hates and threaten its neighbors. Fast forward four decades, and the received wisdom is that it is better for America to see a strong and confident China striding the world than a weak and insecure one.
Dalai Lama Issue: Jim Rogers on China-US collision course The Dalai Lama is in Washington DC ahead of a meeting with U.S. president Barack Obama. China has already warned the talks will affect relations with America. Recently tension's escalated between the two countries following trade rows and a fallout over proposed U.S. arms sales to Taiwan
Obama-Dalai Lama meeting 'closed press' By Joseph Curl POLITICAL THEATER - Washington Times The last time His Holiness the 14th Dalai Lama of Tibet came to Washington, President Obama refused to meet with him, worried that he would anger China before a planned Beijing summit with President Hu Jintao. But on Thursday, the president finally met with his fellow Nobel Peace Prize laureate. Only not in the Oval Office. And not in public. The brief meeting in the basement Map Room was "closed press," and the White House barred still photographers from capturing the historic moment.
Dubai police call on Interpol to help arrest Mossad head Julian Borger, Mark Tran - guardian.co.uk Interpol should help arrest the head of Mossad if Israel's spy agency was responsible for the killing of a Hamas commander in Dubai, the emirate's police chief said today. In comments to be aired on Dubai TV, Lieutenant General Dahi Khalfan Tamim called for Interpol to issue "a red notice against the head of Mossad ... as a killer in case Mossad is proved to be behind the crime, which is likely now".
Hamas official accused of helping Mossad hit squad Ian Black, Paul Lewis, Kate Connolly - guardian.co.uk A key security operative of the Palestinian Islamist movement Hamas was under arrest in Syria tonight on suspicion of having helped an alleged Israeli hit squad identify Mahmoud al-Mabhouh before he was assassinated in Dubai, the Guardian has learned. Palestinian sources in the Gulf confirmed Nahro Massoud, a Hamas security official, was in detention and under interrogation in Damascus in connection with the 19 January killing, which is now widely assumed to have been mounted by Israel's Mossad secret intelligence service.
Iran Enriches Nuclear Fuel, Says IAEA By DAVID CRAWFORD And JONATHAN WEISMAN - WSJ The United Nations' nuclear watchdog said it has information suggesting Iran may be working to build a nuclear warhead, an assessment that could escalate the U.S. and other Western governments' confrontation with Iran over its nuclear activities. The International Atomic Energy Agency, a Vienna-based U.N. body, said in a confidential report Thursday that Iran has impeded agency efforts to establish the true purpose of Tehran's nuclear program.
Webster Tarpley on Alex Jones Tv 1/5: Establishment Will Blackmail Obama Into Attacking Iran
Webster Tarpley on Alex Jones Tv 2/5: Establishment Will Blackmail Obama Into Attacking Iran
Webster Tarpley on Alex Jones Tv 3/5: Establishment Will Blackmail Obama Into Attacking Iran
Webster Tarpley on Alex Jones Tv 4/5: Establishment Will Blackmail Obama Into Attacking Iran
Webster Tarpley on Alex Jones Tv 5/5: Establishment Will Blackmail Obama Into Attacking Iran
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