Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Thurs 01.21.2010
Distrust could dampen census count With the start of the nation's decennial census just weeks away, nearly one in five persons might decline to participate in the high-stakes head count, citing mostly a lack of interest but also a broader distrust of the federal government. A poll released Wednesday by the Pew Research Center highlighted the challenges as the U.S. Census Bureau prepares to begin its tally in March. The findings come as some groups question whether the agency's $300 million outreach effort is doing enough to reach hard-to-count communities.
Identifying Sure Signs Of The Final Economic Plunge Many researchers, including those here at Neithercorp, have projected that the third and final stage of the economic collapse will begin sometime in 2010. Barring some kind of financial miracle, or the complete dissolution of the Federal Reserve, a snowballing implosion should become visible by the end of this year. Data indicates that the dollar and the Dow are running on nothing but false promises and fiat bailouts, and that this game is slowly winding down. The Fed cannot sustain its current rate of liquidity injections without raising the ire of foreign nations heavily invested in U.S. debt, especially when banks have refused to loosen their lending practices as promised, thereby hoarding all bailout funds made available to them and stifling any chance of a credit market recovery.
Gold And Dollar Decoupling
Price Inflation Of Oil
Dollar Loses World Reserve Currency Statu
U.S. Treasury Dump
Simultaneous Dow / Dollar Drop
Jobs And Housing
Grocery Store Peculiarities
Bank Holiday
Terror Attack / New War
$8 million in assets - and can't get a mortgage The wealthy have money problems, too -- yeah they do. Even refinancing a mortgage for their fancy digs or getting a new loan can be near impossible these days thanks to skittish lenders. And the higher the loan value, the more they worry. Still, that people with high six-figure incomes, stellar credit histories and gobs of assets get mortgage requests turned down seems weird. "It's amazing really," said Susan Bruno, a financial planner with Beacon Wealth Consulting in Rowayton, Conn., "but it makes sense when you think about it."
BofA: Attitudes Changing Towards Default Within the next couple of years, probably somewhere between 10 million and 20 million U.S. homeowners will owe more on their homes, than their homes are worth. (See Homeowners With Negative Equity) One of the greatest fears for lenders (and investors in mortgage backed securities) is that it will become socially acceptable for upside down middle class Americans to walk away from their homes. "There's been a change in social attitudes toward default," Mr. Lewis says. Bankers typically have believed that cash-strapped borrowers would fall behind on their credit cards, car payments and other debts -- but would regard mortgage defaults as calamities to be avoided at all costs. That isn't always so anymore, he says.
Now, Even Borrowers With Good Credit Pose Risks Kenneth Lewis acted far ahead of the competition in 2001, when he got Bank of America out of the business of issuing subprime mortgages. While profit margins on these loans to risky borrowers seemed tempting, the bank's chief executive believed the default risks were too hefty to justify. It took a while for Mr. Lewis to be proved right, but BofA's payoff has been huge. The big Charlotte, N.C., bank has largely sidestepped the subprime mess, emerging -- despite taking some hits on investments it made in securities tied to subprime loans -- with the highest net income of any U.S. commercial bank this year. Meanwhile, some of its rivals have sustained multibillion-dollar losses from subprime lending.
'Greater Depression is going to be really serious' Louis: So, what's on your mind this week, Doug? I understand you've had a "guru moment." Doug: Well, it's nothing but a gut feeling, but I think the stock market is riding for a big fall this year. Everyone was afraid the world was going to come to an end a year ago, and it almost did. But governments all around the world stepped in and printed up trillions of their various currency units - it's not just the United States. And still, retail price inflation hasn't blossomed. It seems that governments are bent on keeping asset prices up to avert panic. They focus on controlling perception instead of fixing the problem. It stems from an economic version of the theory that all we need to fear is fear itself. As long as we have the right psychology, everything is going to be okay - total nonsense.
Is there gold in Fort Knox? Buried inside a 109,000-acre U.S. Army post in Kentucky sits one of the Federal Reserve's most secure assets and its only gold depository: the 73-year-old Fort Knox vault. Its glittering gold bricks, totaling 147.3 million ounces (that's about $168 billion at current prices), are stacked inside massive granite walls topped with a bombproof roof. Or are they? It's hard to know for sure. Few people have been inside Fort Knox, a highly classified bunker ringed by fences and multiple alarms and guarded by Apache helicopter gunships. When the U.S. finished building Fort Knox in 1937, the gold was shipped in on a special nine-car train manned by machine gunners and loaded onto Army trucks protected by a U.S. Calvary brigade. And the fort has been pretty much off limits since then. A U.S. Mint spokesman said in an email statement to MoneyWatch that the accounting firm KPMG, which audits the Mint, "has been present in the vault at Fort Knox." The Mint won't comment on exactly how much gold is in there, though. That's why U.S. Rep. Ron Paul, R-Texas, a 2008 presidential candidate known for his libertarian streak, wants to have a look around. Paul introduced a bill to audit the Federal Reserve, which includes Fort Knox's gold. "My attitude is: Let's just find out what's there," he says.
Gold steady a day after slump, China data eyed TOKYO, Jan 21 (Reuters) - Gold steadied above $1,100 per ounce on Thursday after falling more than 2 percent the previous day, when investors became risk averse as the dollar rose and China's tightening bank lending capped economic optimism. Market participants were eagerly awaiting a set of Chinese economic indicators on Thursday, including CPI and gross domestic product data.
Gold prices to go higher from here A leading industry analyst has revealed that he believes diminishing global gold mine returns will underpin a continuance in Gold Price rises. Writing for Forbes India, Evy Hambro, managing director and portfolio manager with the natural resources team at Blackrock Mutual Fund, says that reduced supplies in conjunction with weakened economies has created attractive Gold Investment opportunities. He said: "Market fundamentals suggest that Gold Prices could continue to trend higher from here."
'Real interest rates are the prime driver of gold price' Pinetree Capital Resource Analyst Craig Stanley sheds some light for The Gold Report on how real interest rates are driving gold's rise. Although the 10-year real rate is positive now, he says if it goes negative, and stays negative, "Look out. The gold price could really spike." In this exclusive Gold Report interview, he discusses some of the junior exploration and development companies in Pinetree's portfolio.
Don't bet against gold with the dollar Each crash and economic downturn has been followed by another freedom-elimination, another axe-chop into the constitution, another new law courtesy of the Gman. So it all "never happens again". Risk isn't going away regardless of the promises made to you by the Gman, the banksters, the golf ball advisors, and self-appointed master traders. Which is why the foundational gold pyramid generator that I use extends to zero. Many of you still don't really understand risk properly. I keep telling you to get "out there," to go visit at least one factory owner, preferably several of these risk/reward experts.
Gold rush grips Australia Bullion lovers have been reading the fantastic stories that have been coming out of China in the last one year on the gold buying frenzy and the gold production momentum that is going on in the dragon country. China is today the largest producer of gold. China has beaten India to emerge as the largest consumer of gold. China now wants to emerge as the No 1 country in the world with the largest deposit of gold reserves.
Lower Lows Coming in Gold A forecast for Comex Gold sent out to subscribers Monday night came within a dime of nailing the low of yesterday’s $33 plunge. That’s the good news, and some subscribers evidently were able to make hay with the prediction. The bad news is that it looks doubtful that the 1106.80 print that marked the February contract’s intraday low will hold, given the recent strength in the U.S. dollar. You can see how powerful the greenback’s uptrend is in the chart, below, of the NYBOT Dollar Index. Yesterday the index scored its most impressive gain in six weeks, rallying to within a hair of a “Hidden Pivot resistance” at 78.69. The actual high was 78.45, and although it could turn out to be an important top, this looks doubtful given the shallow pullback that has occurred so far. If the resistance point is decisively exceeded today, however – say, by 0.10 points or more – or if it is exceeded on a closing basis for two consecutive days, we’d infer that the rally is bound for at least 80.78 -- roughly three percent above current levels.
Gold Pares Advance as Dollar Rallies on China Economic Data Gold pared gains as the dollar rebounded after China’s economy in the fourth quarter expanded at the fastest pace since 2007. China’s gross domestic product climbed 10.7 percent from the same period a year ago, more than the median forecast of 10.5 percent in a Bloomberg News survey, adding to speculation the world’s third-largest economy will limit lending and raise borrowing costs to curb inflation and accelerating asset prices.
US Dollar (DX) Longer Term Charts Here is the longer term view of the US Dollar as measured by a basket of currencies. Can it 'break out' here? Yes, certainly. Europe and Japan have their problems, and in the world of fiat, the grading of the paper is done 'on a curve.' The central banks and their mavens, who intervene at least indirectly in the currency markets with a certain obsessiveness these days of non-stop financial engineering, like to shove their manipulation around the plate as well. They don't 'tweak' the economy; they are the economy, at least at the margins.
Debt and Deleveraging: The global credit bubble and its economic consequences. In this report, we analyze in detail how debt and leverage have evolved in the public and private sectors in ten mature economies and four emerging economies. We also built an extensive database covering 45 episodes since 1930 in which an economy deleveraged, or significantly reduced its total debt-to-GDP ratio. With this database, we were able to identify four typical paths, or “archetypes,” for the deleveraging process. This enabled us to analyze the macroeconomic channels for deleveraging and the economic consequences of the process in the past. Finally, we have identified the practical implications of our work for policy makers, financial regulators, and business executives.
Deflation in Everything But the Cost of Living THEY WERE SUPPOSED to avert depression. The Bank of England continues to tout their "success". But it looks like the best that money-printing and zero rates might now deliver is '70s-style stagflation, plus '30s-style wealth destruction and a glacé cherry on top. Giving Britain its "stag" – as in stagnation – are economic output, wages, capital investment, real estate prices and now, perhaps, a return of the bear market in London shares. Whether or not GDP shows an uptick for the end of 2009, this is the deepest British recession since 1931. Business investment sank to a 6-year low on the last quarterly data, and the number of people out of work for 12 months or more has risen by two-thirds since Northern Rock was bailed out, breaking the dam of bail-outs worldwide in late 2007.
Why Deflation Is Not Inevitable (Sadly) Over the past month, I have written seven lengthy articles on the totally erroneous theory that consumer price deflation is inevitable, no matter what the U.S. government and the Federal Reserve System do. I would like to believe that this will end the debate. It won't. Why not? Because there are people in the hard money movement who reject the Austrian theory of the business cycle. They reject the views of central banking offered by Ludwig von Mises and Murray Rothbard. Incredibly, some of them claim to be followers of Mises. If so, they do not understand what he wrote. Yet Mises was easy to understand on monetary theory.
New IMF, Same Old Problems For the past couple of years, the International Monetary Fund has been thumping its chest that it has changed and is ready to take the lead on global economic issues. A report by the IMF’s independent evaluation office, which is charged with critiquing the institution, suggests the IMF still has a long way to go. Only a minority of officials in the richest, most powerful countries, found the IMF’s analyses “compelling,” the evaluation group found.
Merkel Calls for Global Exit Strategy BERLIN--Chancellor Angela Merkel said Wednesday exports will remain crucial for Germany's economy and warned that European Union countries' efforts to return to sound finances needed to be coordinated with the U.S. and Japan. Ms. Merkel said finding an "internationally coordinated exit strategy" is possibly the "biggest challenge" to overcoming the global financial crisis that peaked in late 2008. Germany debt-limit rules won't matter if a "very different policy" is being pursued in the U.S., Japan, or elsewhere, she said. "The crisis, which hasn't mainly originated in Europe, has taught us that if one big player in the global competition doesn't stick to rules, all others have to pay for the consequences," Ms. Merkel said.
Greece Debt Default Could Take Eurozone Down With it Don Miller writes: As the European Commission holds its regular monthly meeting in Brussels this week, ministers find themselves debating what to do about the Greek debt crisis -- the biggest credibility test the Eurozone has faced since the single currency was created. The question is whether the 16 countries that share the European Union's (EU) currency can force a rogue member with a weak economy to take drastic measures to cut its budget deficit without calling in the International Monetary Fund (IMF) or sparking social unrest.
Leaders Prepare For Disappointment in Europe LONDON -- With warnings of another slowdown in the euro-zone economy and powerful head-winds in the U.K., policy makers this week appeared to be preparing consumers and investors for disappointment. Juergen Stark, a member of the European Central Bank's policy council, said that the recovery in the 16-country euro zone could lose traction in the first part of this year. "It is likely that the first half of 2010 will go more slowly than in the second half of 2009," Stark said Wednesday at an economics seminar in Leipzig, Germany. "This doesn't mean a double-dip recession, but more in the character of a gradual and bumpy economic recovery over the next quarters," Mr. Stark said.
Stocks get knocked back Stocks slumped Wednesday as a strong dollar and questions about China's lending practices slammed commodities, one of the leaders of the recent rally. IBM dragged on the tech sector as investors picked apart the company's outlook one day after sending the stock higher.
Hedge Funds Hold Investors ‘Hostage’ After Rebound Hedge funds’ best year in a decade is giving little comfort to Jason D. Papastavrou. The founder of New York-based ARIS Capital Management LLC, which has about $250 million invested in hedge funds, is still waiting to get back $155 million from 22 managers that restricted withdrawals in 2008. “We don’t object to the illiquidity,” Papastavrou said in an interview. “We object to how some managers are abusing the situation and holding investors’ money hostage to generate fees.”
Fed’s Dudley: Banking System Remains Under Strain Federal Reserve Bank of New York President William Dudley flagged the uneven recovery of the financial system Wednesday, in comments that also said central bank policy was aimed at trying to help that healing process continue. “The capital markets have recovered” but “the banking system is still under quite a bit of strain,” Dudley said. For banks, “it is a healing process, it will take some time,” and that’s “one of the reasons why we have our monetary policy setting where it is,” Dudley said.
China May Buy Less U.S. Debt, CASS Researcher Says China, which cut Treasury holdings by the most in five months in November, may scale back purchases of U.S. debt on concern the dollar will decline, said Liu Yuhui, an economist at the Chinese Academy of Social Sciences. The Asian nation’s investors, the biggest foreign holders of U.S. government debt, trimmed holdings by $9.3 billion in November to $789.6 billion, a Treasury Department report showed yesterday. The decline came even as Chinese foreign-exchange reserves swelled $61 billion in the month.
China Curbs Bank Loans as Asset Bubble Worries Grow Unemployment is in the double digits in the United States. China, meanwhile, is expected to expand its GDP at near double-digit rates again. Given the starkly different scenarios, it's easy to be envious of the emerging giant's seemingly comfortable position in the global economy. But China is actually in the midst of a high-stakes balancing act. And Wednesday's announcement that China is planning to further curb bank lending -- the latest in a series of maneuvers to deflate potential asset bubbles -- sheds more light on the tough choices the country is now facing.
China’s GDP Growth Accelerates to Fastest Since 2007 China’s growth rate accelerated to the fastest pace since 2007 in the fourth quarter, signaling a need to rein in credit growth that threatens to destabilize the world’s fastest-growing major economy. Gross domestic product rose 10.7 percent from a year before, more than the median forecast of 10.5 percent in a Bloomberg News survey, a statistics bureau report showed in Beijing. Asset-price gains, particularly in property, are creating problems for the government to guide the economy, Ma Jiantang, who heads the bureau, told reporters after the release.
Mexico Peso Falls the Most in 2010 as China Curbs Bank Lending Mexico’s peso fell the most in 2010 on concern China’s move to curb bank lending will slow the global economic recovery, reducing demand for higher-yielding, emerging-market assets. The MSCI Emerging Markets Index of 22 nations lost 1.8 percent after Liu Mingkang, China’s chief banking regulator, said some banks were asked to pare lending after a record 9.59 trillion yuan ($1.4 trillion) in new loans in 2009.
World Bank sees risk of recovery losing steam The global economic crisis is largely over and a modest recovery is under way but it could quickly lose steam as governments pull back some of the extraordinary liquidity they pumped into markets, the World Bank said on Wednesday. The World Bank’s annual Global Economic Prospects report for 2010 said the fragile recovery posed special risks for developing countries including stiffer borrowing costs, reduced credit and capital flows. To deal with tighter financial conditions, which could impede investment, the World Bank said there was “considerable scope” for countries to cut domestic borrowing costs and promote local capital markets.
No New Normal on Wall Street as Economists Dismiss Pimco’s GDP “New normal” may not be the new norm after all. Wall Street economists aren’t buying the theory propounded by Bill Gross and Mohamed El-Erian, co-chief investment officers at Pacific Investment Management Co., that the U.S. will be mired in long-term sluggish growth averaging 2 percent a year. They see potential real growth, or the rate of expansion at which inflation is steady, at 2.5 percent, matching the average quarterly rate of the past 20 years, according to the median forecast in a Bloomberg News survey of 46 economists.
The Source of America's Imperial Presidency By William Pfaff The imposingly versatile Garry Wills, Northwestern University historian, political polemicist, sometime philosopher, theologian and church historian, has a new book inspired by liberal disappointment with President Barack Obama, blaming Obama's faults as well as other U.S. presidential disorders on the atom bomb. He argues in "Bomb Power" that possession of the bomb-a product of an enormous and a secret scientific undertaking, the Manhattan Project, launched by Franklin D. Roosevelt-has ever since given U.S. presidents an intoxicating degree of unchecked personal power, so that there is "no constitutional check on his actions ... [which amounts to] a violent break in our whole governmental system."
'Scott Brown' candidates rising up As Washington struggled to discern a meaning from Massachusetts' special election, candidates outside the Beltway said one message is clear: Outsider, grass-roots campaigns that tap voters' anger at Washington arrogance will win in 2010. Republican Scott Brown, who outhustled his opponent Tuesday to win a Senate seat that Democrats had held since 1953, became an instant brand name, with Republicans claiming to be "Scott Brown" candidates in their own races and Democratic candidates trying to heed the lessons of his shocking victory.
Three Nagging Questions About Barack Obama By Ruth Marcus Since the start of his presidency, I've been wrestling with three questions about Barack Obama: Did he take on too much? Is he too hands-off in his dealings with Congress? And the biggest, which puzzled me throughout the campaign as well-where is he, exactly, on the political spectrum? These are questions without certain answers. For one thing, the counterfactual can never be fully known: What if he hadn't chosen to press health care and climate change and financial reform? What if he had been more clear about his bottom line on health reform earlier in the process? For another, the story of Obama's presidency is unfolding. The first chapters do not presage the outcome.
Obama's Domestic Agenda Needs a Reset I think Massachusetts Republican State Senator Scott Brown's victory in the election to replace the late Senator Ted Kennedy is 40% a result of his far superior campaign -- his defeated opponent was a painfully inept campaigner -- and 60% a bolt of lightning delivered to the White House's nervous system from voters in what had previously been thought of as the safest Democratic state in the union. The message traveling down that bolt of lightning was that perennial favorite -- it's the economy, stupid.
Republicans Want the Senate Back With Just One Win For the weight given yesterday’s Senate race in Massachusetts, you would think the Democratic majority status in the Senate hung in the balance. It didn’t. But its supermajority status did, and that’s what counts these days, sad to say. Without 60 votes to kill a threatened filibuster, it might take a legislative trick to get health-care reform passed, for example. This isn’t just about health care. Not long ago, either party would have considered itself on solid ground with 59 votes in the 100-member Senate. Filibusters aimed at killing bills were rarely undertaken or even threatened when a strong majority supported the measure.
Massachusetts Message: Democrats Must Create Jobs, or Else Massachusetts Republican Scott Brown's stunning win over Democrat Martha Coakley for the U.S. Senate seat vacated by the passing of Edward M. Kennedy both reshapes the public policy landscape and puts President Barack Obama and Congressional Democrats on notice: Fix the economy and bring back job growth -- or face large seat losses in the November Congressional election.
Democrats Propose $1.9T Increase in Debt Limit Senate Democrats propose $1.9 trillion increase in federal debt limit Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion. The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations. It promises to be a challenging debate for Democrats, who, as the party in power, hold the responsibility for passing the legislation.
Bank of America losses grow to $5.2 billion Losses at Bank of America widened to $5.2 billion in the fourth quarter, as its results were squeezed by the company's decision to return bailout money owed to the government. Even as consumer loan troubles again ate away at profits, much of the decline was prompted by its repayment of $45 billion the company received through TARP, or the Troubled Asset Relief Program.
Cautious about the economy, big banks report slow lending Two of the nation's largest banks said Wednesday that loan losses generally have stopped increasing but that relatively few customers are seeking new loans, reports that are in broad agreement with other indicators showing that the economy remains weak. Bank of America and Wells Fargo posted starkly different annual results. Bank of America said it lost $2.2 billion during 2009, its first annual loss in at least 20 years, and Wells Fargo reported an $8 billion annual profit, among its largest ever.
Obama to Nationalize Student Lending with Pending Budget Bill A bill currently before the Senate would empower the Obama administration to nationalize the student lending industry, eliminating the federally subsidized private loans millions of university students rely on to finance their educations. The Student Aid and Fiscal Responsibility Act – currently being considered by the Senate Health, Education, Labor, and Pensions (HELP) Committee – would eliminate the Federal Family Education Loan (FFEL) program. FFEL loans are federally subsidized and make up approximately 80 percent of the student lending industry.
Loan Troubles Bedevil Banks Wells Fargo swings to profit, adding to round of improved results a year after meltdown The loan troubles of many U.S. consumers weighed down fourth-quarter results at Bank of America Corp., Wells Fargo & Co. and U.S. Bancorp, but bank executives predicted loan losses are near a peak. The three banks hold a combined 24% of all U.S. deposits and operate more than 15,000 retail branches, making them important barometers of consumer sentiment and the health of the U.S. banking industry.
States urge action on foreclosures Cut loan principal for borrowers whose homes are worth much less than their mortgages. Attack the problem of option adjustable rate mortgages. Cut down on red tape. Those are some of the ideas in a plan issued Wednesday by a group of state officials who have been working for more than two years to stem the foreclosure tide. The state attorneys general and banking regulators urged the Obama administration and loan servicing firms to step up their efforts.
Cold Weather Chills Housing Starts New-home construction fell in December, as bad weather kept construction crews from breaking ground. But an increase in newly issued building permits suggested the decline was only temporary. Separately, inflation at the wholesale level was muted last month, as higher food prices were offset by a decline in energy prices. The number of new-home starts in December fell 4% from November to a seasonally adjusted 557,000 annual rate, the Commerce Department said Wednesday.
Obama Cracking Down On Contractor Tax Cheats President Barack Obama is ordering a new crackdown on federal contractors who don't pay their taxes. He was signing an executive order Wednesday telling federal agency chiefs to take steps to bar those companies from receiving new government contracts. Obama was also directing the IRS to review contractor filings to ensure the companies are not lying about the taxes they've paid. "It is simply wrong for companies to take taxpayer dollars and not be taxpayers themselves," Obama said in his prepared remarks. "We need to insist on the same sense of responsibility in Washington that so many of you strive to uphold in your own lives, in your own families and in your own businesses."
Rocky mountain coming down The Democratic West under threat AT A beer distributor’s in Loveland, Colorado, Scott McInnis, the front-runner in the race for the state’s Republican gubernatorial nomination, was talking about Bill Ritter, the state’s Democratic governor. At the end of the previous Republican administration, he reckoned, there were plenty of jobs, and Colorado was known as a business-friendly state. But Mr Ritter had slapped punitive regulations on the oil and gas industry, and failed to compete effectively for big military projects. Recent polls had shown Mr Ritter trailing in a matchup with Mr McInnis. The next day, January 6th, Democrats were stunned when Mr Ritter announced that he would not stand for re-election this year after all.
Housing starts fall, producer prices rise New U.S. housing starts unexpectedly fell in December, likely the result of unusually cold weather, while producer prices rose for a third straight month. The Commerce Department said on Wednesday housing starts fell 4 percent to a seasonally adjusted annual rate of 557,000 units, pulled down by a drop in groundbreaking activity for single-family dwellings. Analysts polled by Reuters had expected housing starts to rise to 580,000 units. Building permits, however, soared in December. "At first glance housing starts were disappointing. But, they were offset by a huge jump in building permits. The data is suggestive of a continued gain in housing construction over the next several months," said Michelle Meyer, economist at Barclays Capital in New York.
‘Tranche Warfare’ Erupts as Property Owners Slide Into Default When Lightstone Group bought Extended Stay Hotels Inc. in June 2007, it relied on more than $7 billion in debt financing to complete the $8 billion deal just weeks before the leveraged-buyout market imploded. Today, Extended Stay’s creditors are battling each other after the company filed the largest bankruptcy case by a U.S. hotel owner. A company reorganization plan, which includes financing from Centerbridge Partners LP and Paulson & Co., may be challenged by a proposal from Starwood Capital Group LLC that is backed by some so-called mezzanine lenders.
Harder to get an Uncle Sam mortgage It's going to be harder to get a government-backed mortgage from now on. Looking to shore up its weakening finances, the Federal Housing Administration is set to announce stricter standards on Wednesday. The agency, which insured nearly a third of new mortgages in 2009, will increase the premium it charges for its mortgage insurance and require those with weaker credit scores to come up with larger down payments.
FHA Raises Premiums, Down Payments as Mortgages Sour The cost of a government-guaranteed mortgage will be more expensive for U.S. homebuyers as the Federal Housing Administration raises insurance rates and tightens credit- score rules to combat a rise in delinquencies. The premiums FHA charges to insure mortgages will rise to 2.25 percent from 1.75 percent this year, the agency said in a statement today. Borrowers who have credit scores below 580 will also have to make down payments of at least 10 percent, up from 3.5 percent, and allowable seller concessions will be cut by half.
Jobs bill: New Senate math means rough road The road for another stimulus bill just got tougher following Tuesday's election of Republican Scott Brown to the Senate in Democratic stronghold Massachusetts. After health care, Congress' next big priority is to pass something that shows voters in an election year that they're on top of the nation's unemployment scourge.
Study: Unemployment to Stay High Through 2013 Unemployment rates will likely peak in most U.S. cities in 2010, but it will be many more years before jobless rates hit their lows of the last decade, a report released by a U.S. mayors group shows. In some areas, such as California's central valley and cities in Nevada, unemployment rates will stay at or above 10 percent through 2013, according to the report published on Wednesday by the U.S. Conference of Mayors and research group Global Insight. The mayors group released the report a day ahead of a meeting with U.S. President Barack Obama in which it will seek federal financial aid for small and large cities.
Sioux City John Morrell Plant to Close The city of Sioux City issued a written announcement Tuesday evening regarding the future of the John Morrell Plant. John Morrell employees roughly 1,400 workers. Sioux City Economic Development Director Marty Dougherty shared the following: "Mayor Mike Hobart was contacted by phone late Tuesday afternoon by John Morrell Plant Manager Dan Pacquin indicating the Sioux City plant would close April 20. The City is awaiting Economic development and the Siouxland Chamber of Commerce. More information will be provided tomorrow [Wednesday] after meeting with Morrell officials."
Jobless rates seen high for many more years Unemployment rates will likely peak in most U.S. cities in 2010, but it will be many more years before jobless rates hit their lows of the last decade, a report released by a U.S. mayors group shows. In some areas, such as California's central valley and cities in Nevada, unemployment rates will stay at or above 10 percent through 2013, according to the report published on Wednesday by the U.S. Conference of Mayors and research group Global Insight. The mayors group released the report a day ahead of a meeting with U.S. President Barack Obama in which it will seek federal financial aid for small and large cities. "What is just as alarming as the double-digit unemployment in many of the nation's major metro areas is the lethargic rate at which it will recede once the job market turns around," the report said.
Man fired for bringing dog to work PetSmart eventually offered Eric Favetta his job back "We love to see healthy, happy pets" is PetSmart's motto — but apparently the policy doesn't apply to pets belonging to employees. Eric Favetta, a 31-year-old PetSmart employee, was fired for "theft of services" after bringing his dog to work during an overnight shift he'd picked up as a favor to his manager, according to the Newark Star-Ledger. (The Secaucus, N.J., store added an overnight shift in order to prep the store for a visit by officials from Martha Stewart's company, who wanted to discuss selling products at PetSmart.)
Accidental entrepreneurs on the rise Unable to find work, some simply start their own business Andy Owen never thought he’d go into business for himself. “I was dragged in kicking and screaming,” he said. “I like working for other people.” Things changed when he was laid off from his job at a Michigan school district in June 2008 amid the nation's worst recession in decades. He quickly found that he was unable to land another job that paid enough to afford child care for the baby he and his wife were expecting.
Oil tumbles 2% on China worries Oil prices plunged Wednesday on a stronger dollar and amid investor concern that the Chinese government will continue to tighten its credit policy. What prices are doing: Oil fell $1.87, or nearly 2%, to settle at $77.62 a barrel, after dipping as low as $76.96 a barrel earlier in the session. On Tuesday, oil rose for the first time in six days, recovering from its lowest level so far this year. What's driving prices: Reports that China has asked major banks to cease lending until the end of the month in order to tighten the country's credit market spooked investors. The news comes a week after the Chinese government raised bank reserve requirements for the first time since 2008.
Detroit auto show: A dose of reality hits the Motor City Dream cars and exotic concepts have been in short supply during this year’s Detroit auto show. Reality has set in, with mega horsepower motors and flamboyant styling giving way to small cars and speeches about fuel efficiency. But the harsh economic realities that sent car sales tumbling – and brought Chrysler and General Motors to the brink of collapse – have provided some welcome surprises during this year’s show.
POPULAR MUSIC: A KEY ILLUMINATI TOOL Music is a powerful influence, both for good and evil. In The Republic, Plato recognized its potential as a disintegrating force and advocated its control. In the modern era, Antonio Gramsci recognized that Communism (an Illuminati movement) could succeed only if the traditional culture, including music, was first subverted. For the past two generations, popular music has become openly hostile to traditional values. While some forms, such as country, have resisted this trend, most popular music is a purveyor of drugs, rebellion, perverted sex, the primitive and the occult, and Satanism. Traditional values always rest upon a religious foundation, so the most powerful attack in a culture war is an attack upon the underlying faith. Satanism, which inverts the Judeo-Christian tradition -- calling evil good and good evil -- is the sharpest possible attack.
New York Times to Charge for Some Web Content in 2011 New York Times Co. will begin charging users for some content on its namesake Web site in 2011, its second attempt in four years to make online readers pay amid slumping circulation and advertising sales. The New York-based publisher said in a statement today that it will give users access to a set number of articles a month for free on NYTimes.com and charge a fee for further reading. Subscribers to the New York Times print edition won’t be charged for Web access.
What Massachusetts Got Right By Robert Scheer The president got creamed in Massachusetts. No amount of blaming this disastrous outcome on the weaknesses of the local Democratic candidate or her Republican opponent's strengths can gainsay that fact. Obama's opportunistic search for win-win solutions to our health care concerns and our larger economic problems is leading to a lose-lose outcome for the president and the country. The two issues that mattered on Election Day were the economy, which Obama has sold out to Wall Street-as quite a few disgruntled voters pointed out-and his plea to save health care reform, which the voters who had backed him for the presidency with a huge majority now spurned.
The Surveillance Society: Trading Freedom For The Illusion Of Safety Governments, regardless of their political structure or historical background, have always striven to not only control information, but also to gather it from the people by covert means. Often, this secretive observation of the citizenry escalates into a completely open and full-fledged surveillance state. The U.S. in particular stands on a precarious edge: the line between abhorring invasion of privacy, and embracing invasion of privacy as necessary for the “greater good.” Many people assume that such a mindset is forced on the masses by the elite, that strength of arms is somehow required to make them accept the conditions of a police state, but this is not always so. It is very difficult for governments, despite any technological developments or resources they may have, to enforce and maintain a fascistic political construct. In order to retain control, they must build a “Surveillance Culture;” a society in which the people watch each other, and where individuals censor themselves instead of being censored by the authorities. In the end, a police state cannot exist without the help of the people it means to dominate. By spying on each other, we destroy ourselves.
America is More Like Haiti than We'd Like to Think The recent earthquake in the island nation of Haiti illustrates the fragility of all societies. While Haiti is unusual in its lack of infrastructure and its high dependence on foreign aid--more than half of its annual government budget comes from foreign aid--it is still similar in many ways to other nations: From the 1960s to the turn of the 21st century, as in many other nations, Haiti became an urbanized nation. Before the 1960s a substantial portion of Haitian society still lived on rural semi-self sufficient farmsteads. But as urbanization and specialization went on, fewer and fewer people lived off the land and more and more citizens became dependent on foreign aid and a scant number of industrial jobs. This trend has been repeated around the globe, making nearly all societies increasingly vulnerable to disasters, man-made or natural. The resiliency of traditional agrarian societies has sadly become a thing of the past. Here in America, 2% of the population now feeds the other 98%. This is now something that First, Second, and Third World nations have in common. America is more like Haiti than we'd like to think. Human nature is the same in every culture and nation: fundamentally sinful.
Pope criticizes the ‘cruelty’ of capitalism In a new book, Benedict XVI decries power of rich over the poor VATICAN CITY - Benedict XVI criticizes the “cruelty” of capitalism and colonialism and the power of the wealthy over the poor in his first book as pope released on Friday. Benedict began writing his personal meditation on Jesus Christ’s teachings, entitled “Jesus of Nazareth,” in 2003 when he was still Cardinal Joseph Ratzinger. He stressed that the book is an expression of his “personal search for the face of the Lord” and is by no means official Catholic Church doctrine. “Everyone is free, then, to contradict me,” he wrote.
UN abandons climate change deadline The timetable to reach a global deal to tackle climate change lay in tatters on Wednesday after the UN waived the first deadline of the process laid out at last month’s fractious Copenhagen summit. Nations agreed then to declare their emissions reduction targets by the end of this month. Developed countries would state their intended cuts by 2020: developing countries would outline how they would curb emissions growth. But Yvo de Boer, the UN’s senior climate change official, admitted that the deadline had in effect been shelved.
Lord Monckton Questions Global Warming Science
Increased “Risk of Secession” in European Union 01/20/10 Stockholm, Sweden – Ambrose Evans-Pritchard has recently pulled some noteworthy quotes from the European Central Bank’s December 2009 guide on expulsion from the EU, such as, “recent developments have, perhaps, increased the risk of secession…” The new document is part of a legal working paper series and is entitled, “Withdrawal and expulsion from the EU and EMU: some reflections” (PDF). With the ongoing economic upheaval throughout the industrialized world, and especially in the PIGS (Portugal, Italy, Greece, and Spain) nations, it’s looking like an increasingly useful resource for EU leaders to have on hand.
It was less corrupt under the Taliban, say Afghans Corruption in Afghanistan has become so entrenched that the population is being forced to pay out the equivalent of a quarter of the country's GDP in bribes, according to a UN report published yesterday. Six out of 10 Afghans view corruption as a bigger problem than violence, the dossier, compiled by the UN Office of Drugs and Crime (UNODC), found. It showed that many illicit payments – totalling $2.5bn (£1.5bn) – were made to officials in order to obtain essential public services.
Israel deports US journalist News editor for Palestinian agency put on flight to New York Israeli authorities today deported an American journalist who was working as an editor for a Palestinian news agency. Jared Malsin, who is Jewish and in his late 20s, was detained at Tel Aviv's Ben Gurion airport eight days ago as he returned from a holiday in Prague. His girlfriend, a Lutheran church volunteer who flew back with him, was deported two days later., but Malsin was held in detention at a cell in the airport while he began a legal challenge to his deportation order.
The peace process will resume, but why? Israeli-Palestinian final status talks will be renewed because the international community -particularly the United States but also the moderate Arab states - wants this to happen. Probably sooner rather than later a formula will be found for sitting the two sides' negotiating teams down with US envoy George Mitchell.
Iran to unveil three new home-built satellites: report TEHRAN — Iran will unveil three new satellites in February, a report said Wednesday, amid Western concerns that Tehran is using its nuclear and space industries to develop atomic and ballistic weapons. ISNA news agency quoted Communications Minister Reza Taghipour as saying that one of the three home-built communications satellites is still under construction. Taghipour named the three satellites as Toloo (Dawn), Ya Mahdi and Mesbah-2, but did not elaborate on exactly when they would be launched.
U.S. to deploy missiles near Russia President Obama sent two of his top national security officials to Moscow on Wednesday to clear the last hurdles to a new nuclear pact, but a revelation that U.S. missiles will soon be deployed near Russian territory could complicate the talks. The White House said that National Security Adviser James L. Jones and Joint Chiefs of Staff Chairman Adm. Mike Mullen will meet with Russian officials "primarily to discuss the remaining issues left to conclude" a follow-on to the 1991 Strategic Arms Reduction Treaty (START), which the U.S. ambassador to Moscow predicted will be completed within weeks.
Iran in billion-euro gas deal with Germany TEHRAN — Iran has signed a one-billion-euro (1.44-billion-dollar) deal with a German firm to build 100 gas turbo-compressors, an industry official said in newspapers on Wednesday. The contract provides for the unnamed German firm to transfer the know-how to build, install and run the equipment needed to exploit and transport gas, said Iran's Gas Engineering and Development Company head, Ali Reza Gharibi. The German company has already delivered 45 such turbo-compressors to Iran, Gharibi said, according to Iran Daily. Industry experts said he was apparently referring to Siemens. But the National Iranian Gas Company (NIGC) denied the signing of a deal.
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