Important News - Oct. 21 update 1
By Daniel at 21 October, 2009, 3:15 pm
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Tell me something I don’t already know.
2) Another reason why the recovery is way off……way off!
Housing-related job sectors taking the big long-term hit
3) The Story Of 21 Year Old With The Underwater FHA Loan Is Even Worse Than You Think
“Denise got an FHA loan to buy her home for $155,000. She took out a second loan (called a 203-K loan) to refurbish the place. The total loan amount is about $183,000. She says, “In total, I gave the bank $5,087 + $1,500 which were all deposit and closing costs.”
So her “down payment” was no more than 4% of the value of the home when she bought it. She will get all of that back and then some with the first-time home buyer tax credit.
In other words, thanks to the various government tax breaks, Denise put absolutely no money down on her home. If she has to default on her mortgage, she’ll lose nothing except her credit rating. Of course, since she’s only 21 years old, there’s plenty of time to recover from that.
How is the FHA still engaged in promoting this kind of lending? Barney Frank has explained that expanding home ownership is the policy of the United States. Now, more than ever, the government wants to promote home buying to prop up the great American home ownership scheme. If people like Tejada can’t buy a home with no money down, then the recession wins.”
4) I don’t suppose you know an attorney willing to step up for our Country?
5)Sen. Schumer calls for tough dark-pool regulations: The day before the Securities and Exchange Commission meets to discuss new rules for dark pools, Sen. Charles Schumer added his voice to the discussion, saying the sector needs tough regulations. Schumer sent SEC Chairwoman Mary Schapiro a letter Tuesday urging the agency to approve a new monitor for the market as well as adopt some of the strictest measures being discussed. Schumer said dark pools threaten to undermine more transparent markets. “We want to keep them in existence … but we want a much more level playing field, which is what we don’t have right now,” Schumer said. Reuters
6) Barofsky says TARP has increased moral hazard in markets
Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, says the rescue plan has increased moral hazard in the financial markets. TARP injected capital into financial institutions at the center of the crisis and clearly influenced market behavior, he said. Barofsky said the program may have helped the financial system avoid collapsing, but it will likely reinforce the belief that the government will intervene to prevent banks and other systemically important firms from failing. Reuters
7) French official says U.S. trying to inflate away debt
The United States is pumping out liquidity to try to inflate away its debt, leading to the depreciation of the U.S. dollar, Henri Guaino, a top advisor to French President Nicolas Sarkozy said on Tuesday
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More currency (dollar) interventions by Hong Kong and by Russia - 9) Technology Exports See Double-Digit Decline in First Half of 2009
“U.S. high-tech goods exports were up by $2.3 billion, or one percent in 2008,
for a total of $223 billion. Yet TechAmerica Foundation’s supplemental
quarterly breakdown reveals that high-tech exports had begun to decline in the
4th quarter, and continued in the first half of 2009. High-tech exports were
down eight percent in Q4 2008 compared to Q4 2007. The drop steepened with a
22 percent decline in Q1 2009 and a 23 percent decline in Q2 2009 compared to
their respective quarters in 2008. This tracks closely with the overall
decline in U.S. merchandise exports in the first half of 2009.
High tech was the single largest merchandise export sector in the United
States in 2008, representing 17 percent of all U.S. exports to the world.”
“SAN DIEGO — The threat of layoffs, bigger classes and deep cuts to popular programs are once again looming over San Diego’s public schools.
The San Diego school board held the first in what will be a series of workshops yesterday designed to map out a budget strategy for next year.
It’s early, but the situation already looks grim.
“The range of possibilities go from bad to catastrophic,” said Monica Henestroza, government relations director for the San Diego Unified School District.
A list of unexpected expenses are projected to put the district $16.6 million in the red this academic year. Next year, cuts from $119 million to $175 million to the $1.2 billion operating budget are forecast, financial planners warned the board.”
“the number of bankruptcies in the state hit 70,799 from January to September of this year. That marks a 48 percent rise in bankruptcy filings in the state whencompared to the same period of time in 2008″
- 12) San Diego
“City’s future: building or bankruptcy?
Talk about a city at a crossroads.
Two groups of San Diego leaders will gather tomorrow to discuss incongruous approaches to the city’s future: building three grand civic projects and filing for municipal bankruptcy.”
“Already facing a $258 million budget gap for next year, Los Angeles Unified School District now has to begin grappling with an additional $221 million in potential cuts, officials said Tuesday.’
“SigTARP Neil Barofsky, overseer of the $700 billion TARP program, says the cost to taxpayers will be a lot greater than the government is letting on.
NEW YORK (CNNMoney.com) — The $700 billion bailout will ultimately cost taxpayers billions of dollars, but the government stands to lose much more than the money it’s pouring into companies.” (video)
- 15) Munis in Worst Month Since ‘08 as California, Alabama to Borrow
“Municipal issuers want to sell $17.7 billion in fixed-rate bonds during the next 30 days, 45 percent more than the 12-month average, according to an index compiled from planned offerings on Bloomberg calendars.”
- 16) New York investment houses will dole out $26 billion in bonus checks by the end of March
- “With commercial mortgage-backed securities (CMBS) servicers needing more time to resolve delinquent loans combined with market value declines, loss severities are expected to rise markedly for U.S. CMBS next year and well into 2010, according to Fitch Ratings in its latest annual U.S. CMBS loss study.”
- 18) Three headlines posted at DSNews:
- Banks Report Gains on ‘Toxic’ Assets as Valuation Remains Cloudy
- Bank Analyst Sees Fannie, Freddie Shares as Worthless,
- Fraud Taints First-Time Homebuyer Tax Credit, as Extension Gains Ground (read 2nd paragraph)
- *******19) FOCUS: Dollar Decline Draws International Protest (Wall Street Journal)********
“LONDON (Dow Jones)–This could end up being viewed as the week when dollar weakness became too much for the rest of the world to bear, setting the scene for tense encounters at the upcoming meeting of finance ministers from the world’s 20 largest economies.
Brazil has now imposed a tax on some foreign-exchange inflows. The Bank of Canada has cranked up its negative tone on the strength of the Canadian dollar. And a whole slew of European officials have practically begged the U.S. to step in and boost the buck.
This chorus of pain marks a rise in international pressure on the U.S. to live up to its oft-quoted “strong-dollar policy,” after central banks in South Korea, Taiwan, the Philippines, Thailand, Indonesia and Hong Kong all stepped in to weaken their currencies against the greenback earlier this month.
Now, the G20 meeting scheduled for Nov. 6-7 in Scotland will offer a perfect forum for such concerns over dollar weakness to be aired. “I think there will be fireworks at the G20,” said Stephen Jen, a well-respected currencies investor at hedge fund BlueGold Capital Management in London.
“The G20 has such diverse membership” that disagreement over how to handle the dollar’s decline is very likely, he added.
When measured against a basket of currencies from the U.S.’s trading partners, the dollar is now only around 7% above its lowest point since 1971. The greenback has recently hit some notable lows against a range of currencies, with the euro briefly nudging $1.50 Wednesday.
“Some sort of crisis is looking inevitable,” said Neil Mellor, a currencies analyst at The Bank of New York Mellon in London. “You can’t continue down this road without something giving way, and it’s clear that the U.S. is not going to do anything to put meat on the bones of its strong-dollar policy.”"
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20) Colorado: 1st state to Lower its Minimum Wage (dcm)
Colorado will become the first state to reduce its minimum wage because of a falling cost of living [?!] Colorado is one of 10 states where the minimum wage is tied to inflation. The indexing is thought to protect low-wage workers from having flat wages as the cost of living goes up. But because Colorado’s provision allows wage declines, the minimum wage will drop because of a falling consumer price index. It will be the first decrease in any state since the federal minimum wage law was passed in 1938
http://globaleconomicanalysis.blogspot.com/2009/10/colorado-minimum-wage-poised-to-drop.html
21) Is your gold really there? (dcm)
Continuing doubts are being expressed that all the gold claimed to be held by Central Banks and others may not be there, or title is being held by several parties as the statistics just don’t appear to add up.
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=90927&sn=Detail#
22) The Consumer Confidence Index Dresses Down for Halloween(dcm)
The Conference Board Consumer Confidence Index™, which had improved moderately in September, fell to an all-time low in October. The Index now stands at 38.0 (1985=100), down from 61.4 in September. The Present Situation Index decreased to 41.9 from 61.1 last month. The Expectations Index declined to 35.5 from 61.5 in September.
The Consumer Confidence Survey™ is based on a representative sample of 5,000 U.S. households
http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=3507
23) Buy & Sell Local Produce in your Area (dcm)
Do you grow your own fruits or vegetables, but harvest more produce than you, your family, friends and co-workers can eat? One can register to post free classified ads to sell, trade or give away your surplus backyard produce. Individuals and food pantries can also register to post wanted classifieds.
http://www.thefarmersgarden.com/default.php
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