zTruth

Watchdog: U.S. at risk of worse financial crisis

When the government poored billions into the financial markets it made it more likely our country will face a significant crisis in the future.

So said the special inspector general for the Troubled Asset Relief Program.

2009 federal deficit soars to record high

The 2009 federal deficit soared to $1.4 trillion in the fiscal year that ended in September:

...At about 10 percent of the overall economy, the gap between federal spending and tax collections is the largest on record since the end of World War II, and bigger in nominal terms than the past four years of deficits combined.

..."There is no doubt we started the year in a difficult fiscal situation. But Congress and the administration have made a bad situation much worse with an unrelenting spending binge that has plunged our nation into a dangerous level of deficit and debt," said Rep. Paul D. Ryan (R-Wis.), the senior Republican on the House Budget Committee.

...Economists universally agree that the nation cannot run such massive deficits indefinitely...

Aside from this record deficit, the Dems want to add a repressive tax for using unclean energy onto businesses in their cap and trade bills that will be passed on to citizens in higher utility bills.  They also want to pay for the largest government led-expansion of health insurance in history in ways we don't even realize yet.  Seriously, who do you think is going to pay for it?

Both parties are at fault here.  That's why the Republicans were booted out of Congress in 2006 but the Dems aren't helping here, atl all.

Aren't struggling citizens and businesses at their wits end, already?  Their goals simply defies common sense and good judgment.

Report: Secret meetings could end oil trading in dollars

An article today in the Independent reported that plans are being made by the Middle East, China, Russia, Japan and France to replace the U.S. dollar with other currency in oil trades:

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

Canadian PM calls U.S. deficits dangerous!

The warning signs are all around about the growing U.S. deficits which caught the attention of Canada's Prime Minister:

Canadian Prime Minister Stephen Harper called the U.S. deficit "dangerous" on Monday and said it would eventually require tax increases -- a path he said his Conservative government would avoid.

Harper was responding in Parliament on Monday to a question from the opposition Liberals on the need for more transparency in stimulus spending and a suggestion that Harper copy the Obama administration and publish spending details online.

Harper replied: "The Liberal Party cites the United States as their fiscal model ... In the United States the deficit is running at four times the size of our deficit. It is a dangerous, long-term structural deficit that existed even before the recession began, one that will require tax increases eventually."

"That's not a direction we want to go," he said.

The U.S. Treasury declined to comment on Harper's remarks.

What state has the highest per capita taxes?

Have you ever wondered what states have the highest per capita state taxes?

Vermont is the highest with each person paying $3,600 per year.  Next is Hawaii followed by Wyoming, Connecticut, and Minnesota, according to the U.S. Census Bureau for 2005.

What prompted me to look into this was a statement made by a Fox News commentator who said how come the highest taxed states are in the worst financial shape referring to New York and California.  But this is incorrect.  Per capita California is ranked 10 and New York 11th so they are not the highest taxed states.

Oklahoma ranks 35th at $1,933.00!

Tea Party Day - April 15th

 

Find out where they will be held in your state here.

OKforTea website

Tea Party song:

China expands reach into Argentina with monetary swap

China feels strong enough these days to offer up the idea of a world currency thanks to the billions we buy from them in cheap goods and the billions they loan us. 

Now they have entered into a monetary deal in a Latin America country for the first time:

"Argentine officials are hopeful that a new currency swap deal with China will bolster confidence in the peso while giving the monetary authority greater power to defend the currency.

"This should boost confidence," said an Argentine Central Bank official who asked for anonymity. "Even if none of this money is ever used, its mere existence should serve to boost confidence in the currency."

Wal Street Journal Asia

The two nations agreed to a three-year currency swap totaling 70 billion yuan, ($10 billion).

China's state news agency, Xinhua, reported earlier Monday that Argentina could use the deal to pay for Chinese imports in yuan. But the Central Bank official said the deal's main goal is to restore confidence in the Argentine government's ability to manage the value of the peso..."

France may walk out of G20 summit!

President Obama may face tough challenges at Thursday's G20 meeting.  Many leaders from left-leaning European countries have blasted Obama's massive spending plans. 

The BBC reports today France may actually walk out of the meeting:

"France will walk away from this week's G20 summit if its demands for stricter financial regulation are not met, the finance minister has told the BBC.

Christine Lagarde told HardTalk that President Sarkozy would not sign any agreement if he felt "the deliverables are not there".

Strengthening financial regulation will be one of the key issues at the G20.

France wants a stronger global financial regulator than the US and the UK would like.

If France were to leave the summit, it would be a blow to both UK Prime Minister Gordon Brown and US President Barack Obama..."

BBC

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Also see:

G20: Economic snapshot

Islamic finance pushes for role in G-20 agenda

Saudi Arabia prepared to contribute more to IMF

Young Saudi activist to advise G20 leaders

 Brown Retreats From Calls for Fiscal Stimulus in UK

A NEW WORLD POWER

G20 summit will show the shift of power from U.S.-led economic order towards emerging market nations (Z: one writer's perspective)

England's Daniel Hannon chews out PM Gordon Brown

Video:

Daniel Hannan, MEP for South East England, gives a speech during Gordon Brown´s visit to the European Parliament on 24th March, 2009.  This video has been viewed over 600,000 times.  Brown gets quite a verbal whipping.

Check out Hannan's blog, too, at the London Telegraph.

New York to eliminate 8,900 state jobs!

Liberal states have had liberal spending habits, right?  So it's not too surprising in New York that nearly 9,000 state jobs will be eliminated. 

What led to this action by the governor was that unions refused to give any wage concessions, which seems like a rather foolish move on their part:

"Gov. David Paterson will reduce the state work force by 8,900 positions -- through a combination of layoffs and attrition -- after public employee unions declined to go along with concessions to help balance the state's budget.

The decision to lay off government workers, the first time since the budget crisis of the early 1990s, came after a breakdown in discussions with unions over Paterson's plan to freeze state salaries and have workers take a one-week furlough, among other cost-saving steps.

"This is not a decision that has been reached lightly. However, given the fact that savings through labor concessions were not achieved, Governor Paterson was forced to make this difficult decision for the good of the entire state," Dennis Whalen, the governor's director of state operations, said in a memo this afternoon to state agency commissioners.

The job cuts, to begin this summer, will save $481 million over two years, according to Jeffrey Gordon, a spokesman for the governor's budget division.

Word of the work force reductions came just a few hours after Paterson said the state's deficit had swelled by another $2.2 billion to $16.2 billion -- the largest in state history. The state's next fiscal year starts next Tuesday..."

Buffalo News

EU presidency says U.S. and UK economic plans on the "road to hell"

Concerns about spending trillions of borrowed foreign money by the U.S. government to spend its way out of a serious economic recession isn't just affecting Americans who find it very worrisome.  Now criticism has spilled into Europe:

"Barack Obama and Gordon Brown's plans to increase spending on economic recovery have been described as "a road to hell" by the European Union presidency.

Internal European divisions are growing over the Prime Minister and US President's strategies to fight the economic crisis just one week before a critical G20 summit in London.

Mirek Topolanek, the Czech prime minister who is running a caretaker EU presidency after the collapse of his government on Tuesday, highlighted European splits over fiscal stimulus plans promoted by Mr Obama, with Mr Brown's support.

Mr Topolanek warned the European Parliament that the Obama administration's stimulus package and financial bail-out "will undermine the stability of the global financial market".

...Writing in newspaper articles published across Europe on Wednesday, Mr Obama implicitly criticised countries, such as Germany, France and the Czech Republic, that are opposed to further stimulus measures..."

Telegraph

60 Minutes interviewer Kroft to Obama: Are you punch drunk?

Video:

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Other recent headlines made by President Obama: 

Obama's Special Olympics comment bothersome York Daily Record

Obama interview: Wall Street was 'out of balance'

Obama Says a Way Out of Afghanistan Is Needed  (didn't he campaign this place is where the real war was?)

Obama ponders Afghan 'exit plan' BBC News

Biden takes Geithner joke to the bank, as Obama's busy defending him

Hamas chief hails Obama approach

Sen. Gregg says Obama budget will bankrupt US

Venezuela's Chavez calls Obama "ignoramus" Reuters

 

China is worred about its U.S. treasury holdings!

China, one of the largest purchaser of U.S. debt, is now worried about their treasury holdings.  Gulp.

"China is worried about its vast United States treasury holdings, premier Wen Jiabao said today, urging Washington to safeguard their value.

...His remarks came ahead of the meeting of finance ministers and central bankers in London this weekend to lay the groundwork for next month's G20 summit on the global downturn.

...While relations with the US are broadly stable, there was displeasure when treasury secretary Timothy Geithner said President Barack Obama believed China was manipulating its currency. The administration subsequently rowed back from the remarks.

"They are worried about forever-rising deficits, which may devalue treasuries by pushing interest rates higher," Frank Gong, a JP Morgan economist, told Reuters. "Inside China there has been a lot of debate about whether they should continue to buy treasuries."

...Figures released this week show a mixed picture for the Chinese economy, with exports slumping by more than 25% in February and retail sales weakening, but a sustained surge in bank lending which some analysts believe offers hope of a recovery."

Guardian

DOW sinks below 7,000!

Big goverment:  Recession-----Depression-----Disaster

6834.58 -228.35 (-3.23%)  Mar 2 12:15pm ET

Stocks Drop, and Dow Falls Below 7000 Mark   - 32 minutes ago Stocks in New York continued lower into midday Monday, led by declines in energy and financials, and a triple-digit drop in the Dow Jones Industrial Average ...

Will alternative energy raise your utility bills?

   

Photo credit: Ari Levinson

In a word, yes!

Pictured above is Barack Obama giving a speech at the University of Southern California in support of California Proposition 87 in 2006. The proposition would have established a $4 billion program with a goal of reducing petroleum consumption by 25%, with research and production incentives for alternative energy, but it did not pass. In terms of Obama's energy policy, he has consistently argued for a reduction in the usage of fossil fuels, having voted for the Energy Policy Act of 2005 and opposed drilling for oil in the Arctic National Wildlife Refuge.

Source: Wikipedia

Stimulus Watch

There is a new website called Stimulus Watch that has added the many projects from the Economic Stimulus bill that we, our children, and their children and their children will pay over the decades to come.   The ability to sort, comment, and track these projects are part of the website.

The site was built by volunteers who say they are not affiliated with any organization, according to their Q&A page.  There's a video tutorial here on how to use the website.

The data on their site comes from the U.S. Conference of Mayors' MainStreet Economic Recovery Report. 

What's useful about this website is that local citizens can fill in the blanks about the projects listed for their city and makes comments and vote for or against as they learn more about them,  which is pretty cool.

The project for Oklahoma are listed here. The total cost of all the projects submitted by Oklahoma City is $501,318,000 and for Tulsa it is $944,612,008. 

This website could be a great resource going forward so I think it's worth checking out.

Stock market sinks to 1997 levels!

Apparently the Economic Stimulus plan President Obama signed into law is not being view favorably by the markets.  Duh!  Did anyone think they would be happy?

This could be dramatically dire for investors if the markets keep going down.  But another way to look at this big problem if the fall continues; stocks will be on the 90% clearance table soon!

"Investors' sagging confidence has pulled the major stock market indexes to their lowest levels in over a decade. The Standard & Poor's 500 index fell to April 1997 levels Monday, while the Dow Jones industrial average, down about 150 points, reached its levels of October 1997 as investors succumbed to their growing worries about a recession that has no end in sight.

"People left and right are throwing in the towel," said Keith Springer, president of Capital Financial Advisory Services..."

Chron.com

Stock Info Market Monitor

 

Is our standard of living undergoing a permanent change?

One retail expert thinks so.  I would hate to even think he could possibly be right but add his concerns to the unprecedentd government spending gamble that will be taking place and one wonders:

"There's no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.

But "the worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of:

• An $8 trillion negative wealth effect from declining home values.
• A $10 trillion negative wealth effect from weakened capital markets.
• A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies."

...The end of rampant consumerism is ultimately a good thing, he says, but the unraveling of an economy built on debt-fueled spending will be painful for years to come.

Yahoo Finance

Why do the Democrats blame President Bush on last fall's bailout bill?

The next time you hear President Barack Obama or the democratic-led Congress blame President Bush for the bailout bill last fall, be aware of the facts:

The final bill that passed was an alternative to President Bush's bailout plan and included oversight (see below).

Maybe I'm missing something here but I say don't be fooled.

Also be sure to read about an ad that ran in the Wall Street Journal yesterday which was signed by hundreds of economists about the current stimulus package at the CATO Institute.

Read the latest TARP bill at ReadTheStimulus

References:

Nancy Pelosi's speech on the financial bail-out bill | Business ...

Sep 30, 2008 ... Nancy Pelosi's speech on the financial bail-out bill. Republicans blamed the failure of the financial rescue bill partly on remarks by the ...

"...Over the past several days, we have worked with our Republican colleagues to fashion an alternative to the original plan of the Bush administration.

I must recognise the outstanding leadership provided by -- Barney Frank, whose enormous intellectual and strategic abilities have never before been so urgently needed, or so widely admired.

I also want to recognise -- Rahm Emanuel, who combined his deep knowledge of financial institutions with his pragmatic policy experience to resolve key disagreements."

...With passage of this legislation today, we can begin the difficult job of turning our economy around, of helping those who depend on a growing economy and stable financial institutions for a secure retirement, for the education of their children, for jobs and small business credit.

The Crypt: Pelosi, Reid name members of TARP oversight - Politico.com

Nov 14, 2008 ... Pelosi, Reid name members of TARP oversight. Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev. ...

 

Pelosi named Richard H. Neiman, superintendent of Banks in New York. Reid appointed Elizabeth Warren of Harvard Law School. And the two leaders jointly appointed Damon Silvers, AFL-CIO Associate General Counsel.

 

$700-Billion Bailout Lacks Transparency, Accountability ...
CNSNews.com, VA - Jan 14, 2009
The Congressional Oversight Panel was established by Congress to oversee the Treasury’s TARP program and to assess the bailout’s impact on the economy...

 

TARP Oversight Report
TIME - Feb 5, 2009
In his first report to Congress, a Special Inspector General charged with overseeing the so-called Troubled Assets Relief Program (TARP) tries to answer ...

 

Calls for Clarity in New Bailout for US Banks
New York Times, United States - 12 hours ago
Elizabeth Warren, chairwoman of the TARP oversight panel. Lawrence H. Summers, director of the National Economic Council. Forcing banks to reveal what they ...

 

Treasury Dept. Details Plan For Remaining Bailout Money
AHN - 49 minutes ago
Congress approved the TARP last October amid strong GOP opposition despite appeals from the top Republican, former President George W. Bush. ...

 

Blame Bush:

Obama spokesman touts bailout relief initiative
The Associated Press - 2 hours ago
The previous administration's disbursement of money under the first installment of TARP — the Troubled Asset Relief Program — has been widely criticized in ...

 

Tighter conditions on TARP recipients expected
The Associated Press - Feb 6, 2009
Congress approved the $700 billion program last fall, but since then, many lawmakers have complained that the Bush administration implemented a confused and ...

 

Bush overpaid banks in bailout, watchdog says
The Associated Press - Feb 6, 2009
WASHINGTON (AP) — The Bush administration overpaid tens of billions of dollars for stocks and other assets in its massive bailout last year of Wall Street ...

 

Stimulus offers lots of worry
Gary Post Tribune, IN - Feb 8, 2009
The TARP money, approved under the Bushadministration and designed to start the wheels of credit turning again, is still largely undeployed. ...

 

Bad bank + toxic debts = moral hazard x10
MarketWatch - Feb 3, 2009
(MarketWatch) -- BusinessWeek says Paulson/Bush & Co. wasted $350 billion in TARP money ... the Congressional Budget Office and GOP say Obama & Co. will ...

 

Frank Says Obama to Force Banks in TARP to Lend More
Bloomberg - Feb 1, 2009
Frank and other Democrats have faulted the Bush administration for not setting restrictions on banks that got capital injections from the first $350 billion ...

Non-partisan Congressional Budget Office: Stimulus plan will hurt economy eventually

Hello???  Is anyone in Congress paying attention to this report:

"President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.

The House last week passed a bill totaling about $820 billion while the Senate is working on a proposal reaching about $900 billion in spending increases and tax cuts..."

Washington Times

"Buy America" provision in stimulus bill condemned by Australia

The "Buy America" provision in the stimulus bill President Obama is trying to get passed in Congress has brought warnings from Australia:

"Australia condemned the "Buy American" provisions in the United States stimulus measures on Thursday, warning the move to protect U.S. iron and steel makers would lead to a retaliatory trade war.

The U.S. Senate on Wednesday voted to soften the "Buy American" plan to ensure the provisions of the $900 billion stimulus bill remained consistent with U.S. trade agreements.

..."This is the wrong course of action, they have got to reverse their decision," Crean said in a statement. "It will result in retaliatory action, it will result in a trade war."

...He said Australia was also examining the "Buy American" to see if it had any impact on the Australia-U.S. free trade agreement."

Reuters

Quotes from President Obama on the economy

I found a listing of recent quotes from President Obama on the economy as he seeks to sell a stimulus plan to Congress stressing its urgency.  In a two week time frame, he describes the economy from very weak to near catastrophic yesterday, if no action is taken.

FROM 'WEAKENED' TO 'CATASTROPHE'

President Obama's descriptions of the state of the economy have grown stronger since he took office two weeks ago: Date Quote Jan. 20 "Our economy is badly weakened" Jan. 23 "We are experiencing an unprecedented, perhaps, economic crisis" Jan. 24 "A bad situation could become dramatically worse" Jan. 27 "The statistics every day underscore the urgency of the economic situation" Jan. 30 "This is a continuing disaster for America's working families" Jan. 31 "Rarely in history has our country faced economic problems as devastating as this crisis" Feb. 3 "The economy is in desperate straits" Feb. 4 "A failure to act, and act now, will turn crisis into a catastrophe" USA Today

President Obama caps executive compensation, if they receive our tax money

In a brilliant and long overdue move, President Obama caps executive compensation to $500,000 if they receive federal money in a bailout.

The party's over.

"President Obama on Wednesday imposed a $500,000 cap on executive pay for companies that get federal bailout money.

"In order to restore our financial system, we've got to restore trust," Obama said. "And in order to restore trust, we've got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street."

Obama said the lavish bonuses for some Wall Street executives are "shameful." He bemoaned a "culture of narrow self-interest and short-term gain."

USA Today

Stock market worst inauguration day drop in history!

Here's an interesting and worrisome fact for today:

"...The Dow Jones lost 4% (332 points) to close at 7,949; the S&P 500 fell 5.2% (44 points) to 805; the Nasdaq tumbled 5.8% (88 points) to end at 1,440; and the Russell 2000 plummeted 7% (32 points) to finish at 433. It was the Dow's worst Inauguration Day drop in its history and pushed the S&P to its worst start to a year.

...Nouriel Roubini, the New York University professor who predicted the economic and stock-market meltdowns, said at a conference today that U.S. financial losses may hit $3.6 trillion.

“If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion,” he said in Dubai. “This is a systemic banking crisis.”

USA Today

U.S. Postal Service considering layoffs - a first in their history

This isn't good news:

"We lost 2 billion dollars and like any other business we have to stay afloat." And to keep from sinking, the United States Postal Service is considering cutting thousands of jobs nationwide.  Lavelle Pepper with the post office in Shreveport says they too are feeling the affects of the same disease hitting the country... a struggling economy. "We employ about 685,000 people. If we do layoffs it would include clerks, carriers, mail handlers across all crafts."

Pepper says the postal service is looking to eliminate 40,000 jobs nationwide. There's not an exact number on how many of those could be from the Ark-La-Tex. Pepper says workers who are not part of union with six or less years of service would likely be the first on the chopping block. "We've identified 16 thousand people that are not covered under contract. We'll see what those numbers add up to."

ksla.com

Two day stock market point loss largest in Dow history

The two days following the election of Barack H. Obama, a president-elect of many firsts, the stock market drop in value was the largest since 1987 and is the largest two day point loss in Dow history!

Does the financial markets not have confidence in Barack Obama and his promises to fix everything for everybody?  It may be my amateur take on things but it makes sense the market is sending this signal along with dismal economic news. 

The president-elect has nothing in his track record of managing anything that I'm aware and he has promised a lot which will cost billions.  During these trying times, which could get far worse than better, I hope his supporters are comforted by his words of hope and change and his request to his fans to believe in him. 

But it may not take long for his fans to get disenchanted.  Sensing this as a very real problem his team has formulated a plan to let people down gently from all his promises which generated a euphoria unlike we've seen in any presidential race.

Having said all this, I hope and pray that president-elect Obama will be successful for our country's sake and future.

One adoring fan of Barack Obama, whose post was allowed to say on Obama's presidential website:

 

Largest post-election stock plunge in U. S. history

This may not be good news for an Obama presidency. I don't see how he can fulfill all he said he would with the reality of what is going on:

"The stock market posted its biggest plunge following a presidential election as reports on jobs and service industries stoked concern the economy will worsen even as President-elect Barack Obama tries to stimulate growth.

The market's decline came a day after the biggest presidential Election Day gain since the New York Stock Exchange first opened for trading on a voting day in 1984.

...The report by ADP Employer Services showed companies cut 157,000 jobs in October, the most since November 2002 when the U.S. was emerging from a recession. The Institute for Supply Management said service industries in the U.S., which make up 90 percent of the economy, contracted by the most on record..."

Bloomberg

PM Brown: Saudi's will have a say in new world economic order

This is not good news:

"British Prime Minister Gordon Brown said Sunday he is confident that Saudi Arabia will contribute to the International Monetary Fund's bailout reserves after he promised business leaders in the Gulf that they would have a say in any future new world economic order.

Brown is using a four-day tour of the Gulf to call on oil-rich Middle Eastern countries to be among the biggest donors to the IMF's coffers to rescue failing nations, which at $250 billion have already been depleted by emergency cash calls from Iceland, Hungary and the Ukraine totaling some $30 billion.

...Brown has attempted to win favor with Arab states by stressing they have not been represented enough on international bodies and promising them a seat at the table amid discussions by world leaders "grasping toward new world order."

"I believe that your country has a crucial role to play and your voice must be heard," Brown told business leaders in Saudi Arabia..."

Yahoo News

The Senate has passed the financial bailout bill

The Senate has reached the needed 60 votes to pass their version of the financial bailout bill.

95 Democrats in the House voted against bailout bill!

Nearly 100 Democrats in the House of Representatives voted against the financial bailout bill yesterday.  Fifteen Democrats in California from the home state of the Speaker of the House, Nancy Pelosi, even voted against the bill.

Thirteen Democrats on the House Financial Services Committee voted against the bill, too!  And seven Democrats on the Homeland Security Committee voted against the bill, including its chairman!

Rep. Barney Frank, D-Mass., one of the main congressional negotiators, and chairman of the House Financial Services Committee failed to get his democratic team on his own banking committee on board with the bill!.  Now that's telling.

Yet, all we hear the Democrats on TV do is to spew their partisan venom against the Republicans.

Final vote

Financial bailout vote in House taking place now

The first financial bailout vote is taking place in the House of Representatives now.  The vote is split and could take an hour or two to complete.  Meanwhile, the Dow is going down over 600 points, at one point,  because the vote isn't going in the direction for bailout approval.

We all need to remind ourselves who have been in charge of both houses of Congress, the chief legislative and regulatory making bodies of our government, these past two years,  but who blame the Republicans at ever turn - the Democrats.

It might be a mistake to forget this fact.

Update 1:07 PM CT:  The financial bailout bill as it is currently written has failed in the House

Update 2:01 PM CT:  Reports are out now that the U.S. House may have passed it had it not been for Nancy Pelosi who spoke before the house during the vote blaming everything on the Bush Administration - 12 Republicans apparently switched their votes!

The Democrats are on TV are now denying this and are blaming the Republicans for putting their hurt feelings ahead of the country.

The Dow is now down by 635 points.

Update 4:05 PM:  Republicans blame Pelosi.  Meanwhile Obama calls for (sic) calm from Colorado...

What caused our economic crisis?

What has caused the near melt-down of our economy?  Ths video may give us some insight but I don't know if all of it is true so watch it with that caveat.  At the end there is a vote for McCain/Palin moment.

Economic crisis brings out partisan criticism of John McCain

Here we are in the mist of the biggest economic crisis since the great depression and we hear from the Democrats, including Sen. Majority Harry Reid,  how it's all John McCain's fault for coming to Washington. 

Give me a break.

Lawmakers agree on economic plan?

  

Doug Mills/The New York Times

Historic meeting with President Bush took place this afternoon to work out a plan to keep our economy from collapsing.

Update:  6:00 PM CT:  Reports are coming out of Washington now that the meeting ended badly with no deal.  Some say it was a disaster.  No doubt, Obama will blame McCain.

Refugees in the U.S. cost taxpayers

FYI:

Since 2000, approximately 50,000 refugees have entered the United States each year from various regions of the world.¹ Although persons with immigrant status are legally required to be vaccinated before entering the United States, this requirement does not extend to U.S.-bound persons with refugee status.* After 1 year in the United States, refugees can apply for a change of status to that of legal permanent resident, at which time they are required to be fully vaccinated in accordance with recommendations of the Advisory Committee on Immunization Practices (ACIP).^2-3 A potentially less costly alternative might be to vaccinate U.S.-bound refugees overseas routinely, before they depart from refugee camps. To compare the cost of vaccinating refugees overseas versus after their arrival in the United States, CDC analyzed 2005 data on the number of refugees, cost of vaccine, and cost of vaccine administration. This report summarizes the results of that analysis, which suggested that, in 2005, vaccinating 50,787 refugees overseas would have cost an estimated $7.7 million, less than one third of the estimated $26.0 million cost of vaccinating in the United States. Costs were calculated from the perspective of the U.S. health-care system. To achieve public health cost savings, routine overseas vaccination of U.S.-bound refugees should be considered.

JAMA

Daily amount Americans spend on fuel

April 2008 was by far the most expensive month ever for the U.S. in terms of fuel consumption.

• Numbers in OPIS’ monthly Transportation Fuel Index (TFI) show that Americans footed a $37.4-billion bill on motor gasoline in April 2008. That compares with $34.9-billion in March, and represents an increase of more than $6.5-billion from April 2007.  The five year difference finds motorists paying more than $21-billion than they paid in April 2003.
• The month ended with consumers paying about $1.337-billion each day at the pump, a record level.
• The increases were almost entirely due to stiff wholesale price increases due to the rising price of global crude. U.S. wholesale gasoline values rose 38cts gal during the month, and retail climbed 32cts gal. The larger retail increases were partially attributable to the switch from less expensive Winter blends of gasoline to less volatile Summer specifications. That transition has now been accomplished in most states, OPIS notes.
• Gasoline was the marquee product, but the numbers for diesel and jet fuel also eclipsed previous records. Average diesel prices ended the month at $4.237 gal, up 23.4cts gal.
• Jet fuel price appreciation was also staggering. The average price for jet fuel in March was $3.172 gal. The average price for jet fuel last month was $3.41 gal, an increase of 6.8% on the month and of nearly 67% from April 2007.

Source:  OPIS Transportation Fuel Index

Rising food prices is a global crisis, says UN Secretary General

A big rise in food prices world-wide is at crisis level.  What's next?

UN Secretary General Ban Ki-moon said the U.N and all members of the international community are very concerned, and immediate action is needed.

He spoke to reporters at U.N. offices in Austria, where he was meeting with the nation's top leaders for talks on how the United Nations and European Union can forge closer ties.

"This steeply rising price of food — it has developed into a real global crisis," Ban said, adding that the World Food Program has made an urgent appeal for additional $755 million.

...In Haiti, the poorest country in the Americas, protests have brought down the government and killed six, while in Cameroon at least 24 have died in protests linked partly to rising living costs.

Governments of several food-growing countries, worried about domestic shortages, have imposed export curbs, spooking markets at a time when world inventories are down sharply.

Japan announced $100 million in emergency food aid on Friday and World Food Program's executive director said on Thursday the cost of feeding the world's hungry had spiked nearly 40 percent amid spiralling food costs and oil prices.

Reuters

The cost of rice has doubled in a year

Not good news:

Rice advanced above $25 for the first time as Wal-Mart Stores Inc.'s Sam's Club warehouse unit restricted purchases of some types of rice in the U.S.

The cereal, the staple food for half the world, has more than doubled in the past year as China, Vietnam and India curbed exports to safeguard domestic supplies. Sam's Club limited customers to four bags of jasmine, basmati and long-grain white rice per visit in all U.S. stores where allowed by law, company spokeswoman Kristy Reed said by e-mail.

Consumers have started hoarding rice as supplies shrink. Thailand, which ships one third of the world's exports, may restrict sales, a World Bank official said this week. Wheat, corn and soybeans gained to records this year, spurring social unrest in countries including Haiti and Egypt.

``We have been neglecting our basic rice production infrastructure and research and development for 15 years,'' said Robert Zeigler, director-general of the International Rice Research Institute in the Philippines. ``National hoarding really doesn't help the market,'' he told Bloomberg Television.

The U.S. warehouse clubs are trying to protect business customers, like smaller restaurants, caterers, nursing homes and day-care centers, said Jim Degen, principal of J.M. Degen & Co., a food industry advisory firm based in Templeton, California.

...UN Secretary-General Ban Ki-Moon said April 20 rising food costs may hurt economic growth and threaten political security.

Bloomberg

Is there a looming food shortage worldwide?

From BBC World News

Food rationing in America? It's happening

Oh, oh:

Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing. Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.

At a Costco Warehouse in Mountain View, Calif., yesterday, shoppers grew frustrated and occasionally uttered expletives as they searched in vain for the large sacks of rice they usually buy.

"Where's the rice?" an engineer from Palo Alto, Calif., Yajun Liu, said. "You should be able to buy something like rice. This is ridiculous."

...Due to the limited availability of rice, we are limiting rice purchases based on your prior purchasing history," a sign above the dwindling supply said.

Shoppers said the limits had been in place for a few days, and that rice supplies had been spotty for a few weeks. A store manager referred questions to officials at Costco headquarters near Seattle, who did not return calls or e-mail messages yesterday.

Spiking food prices have led to riots in recent weeks in Haiti, Indonesia, and several African nations. India recently banned export of all but the highest quality rice, and Vietnam blocked the signing of a new contract for foreign rice sales.

"I'm surprised the Bush administration hasn't slapped export controls on wheat," Mr. Rawles said. "The Asian countries are here buying every kind of wheat." Mr. Rawles said it is hard to know how much of the shortages are due to lagging supply and how much is caused by consumers hedging against future price hikes or a total lack of product.

New York Sun

Americans spent about $247.7-million more each day on gasoline in March 2008 than they did in March 2007!

Unbelievable.  Is this figure right?  Unfortunately, it probably is.  Americans have to spend nearly $250 million more per day for gas than just a year ago!  Since the Iraq war started that figure has risen to an astonishing $626 million per day spent on gas which is not available for spending or savings. 

This is seriously bad:

Retail and wholesale fuel prices shattered all previous records last month, and products used in the transportation sector began April with numbers up as much as 238% from five years ago. The wholesale and retail fuel price comparisons are included in the detailed OPIS Transportation Fuel Index (TFI) released this morning: http://www.opisnet.com/tfi.asp.

OPIS TFI Highlights:

• Americans spent about $247.7-million more each day on gasoline in March 2008 than they did in March 2007. OPIS estimates that the increase from five years ago is now $626-million per diem.
• Wholesale diesel prices ended March at an all time high of $3.288 gal, and the average retail diesel price was $4.019 gal. The largest increases - - of nearly 50cts gal - - occurred in northeastern states, but every region saw price advances of at least 41.8cts gal.
• The average nationwide price for wholesale jet fuel in March 2008 was $3.172 gal, up 42.4cts gal from February 2008 and up an incredible $2.235 gal from March 2003, or 238.7%.
• Regional retail gasoline increases on a month-to-month basis ranged from 13.6% in New England to 26.4% in western states. Wholesale gasoline prices were up some 33.1% in the month, suggesting that the uptrend in pump prices will persist into early April.

Housing debt exceeds equity for first time since 1945!

Bad news for Americans:

Americans' percentage of equity in their homes fell below 50 percent for the first time on record since 1945, the Federal Reserve said Thursday.

Homeowners' portion of equity slipped to downwardly revised 49.6 percent in the second quarter of 2007, the central bank reported in its quarterly U.S. Flow of Funds Accounts, and declined further to 47.9 percent in the fourth quarter — the third straight quarter it was under 50 percent.

That marks the first time homeowners' debt on their houses exceeds their equity since the Fed started tracking the data in 1945.

The total value of equity also fell for the third straight quarter to $9.65 trillion from a downwardly revised $9.93 trillion in the third quarter.

Home equity, which is equal to the percentage of a home's market value minus mortgage-related debt, has steadily decreased even as home prices jumped earlier this decade due to a surge in cash-out refinances, home equity loans and lines of credit and an increase in 100 percent or more home financing.

Economists expect this figure to drop even further as declining home prices eat into the value of most Americans' single largest asset.

AP

Nation's top government financial watchdog, David M. Walker, resigns!

U.S. Comptroller, David Walker, will resign soon and become President and Chief Executive of the Peter G. Peterson Foundation, a new think tank.  Walker still had 5 years left on his 15 year term.  He was compelled to leave, I guess, due to the inaction of our seriously dysfunctional Congress.

The news foundation he will head will call attention to critical social, economic and environmental problems threatening the nation's economy and imperil the American way of life for future generations.  It might just take a foundation like this to help make changes and improvements in our government.  I hope they are successful.

One of government's chief internal watchdogs resigned yesterday, as Comptroller General David M. Walker, an outspoken gadfly and frequent witness on Capitol Hill, announced his plans to lead a new foundation focused on U.S. fiscal responsibility.

...Walker was an outspoken critic of the costs of the wars in Iraq and Afghanistan, Social Security, Medicaid and Medicare spending -- issues on which the Democratic-led Congress, and Republicans before it, have had trouble building consensus.

...Walker's resignation takes effect March 12. He will lead the Peter G. Peterson Foundation, a new think tank whose mission, according to its Web site is "to enhance public understanding of the nature and urgency of selected key sustainability challenges that threaten America's future," including "unsustainable" growth in entitlement spending, and energy consumption.   Washinton Post

Resources:

Fiscal Wake Up Tour  GAO  (Related Presentations from the former Comptroller General)

David Walker: U.S. fiscal irresponsibility worse than terrorism. (video)  zTruth

The Peter G. Peterson Foundation

America's Financial Future Part I  by David M. Walker:

America's Financial Future - Part II

Inflation highest in 26 year!

More bad news for the economy:

Wholesale inflation last year shot up by the largest amount in 26 years while retailers suffered their worst December shopping season in five years as mounting economic woes caused consumers to put away their wallets.

The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.

Meanwhile, retail sales fell by 0.4 percent in December, the worst showing in six
months, the Commerce Department reported. Consumer confidence has plunged, reflecting the worsening housing slump and a lingering credit crisis.

For inflation, the year ended on a more positive note, with wholesale prices falling
by 0.1 percent in December. That reflected decreasing costs last month for gasoline and other energy products. It was a significant slowdown after prices had soared by 3.2 percent in November, which had been the biggest one-month increase in 34 years.

...Federal Reserve Chairman Ben Bernanke last week sent a strong signal that the Fed is more worried at the moment about weak growth than inflation, given a series of weaker-than-expected data in recent weeks.

Citigroup to layoff thousands

More bad news for the economy:

Citigroup plans to announce a writedown of as much as $24 billion and layoffs that could total as much as 24,000 due to subprime and credit-related losses, CNBC has learned.

The plans will be unveiled Tuesday by Citigroup's new CEO, Vikram S. Pandit, after the banking giant reports fourth-quarter earnings. At the same time, Citigroup could also announce that it is cutting its dividend payment.Citigroup is likely to cut between 17,000 and 24,000 positions over the course of the year through a combination of layoffs, attrition and selling off businesses as part of Pandit's cost-cutting plan, sources said. Previously, it was estimated that the layoffs could reach 20,000.    Source  CNBC

Income shifting away from most of us to a few in Amerca

"Just under two-thirds (63%) of the gain in household income from 2003 to 2005 went to just 5% of the nation’s wealthiest households."

From the Economic Policy Institute:

Earlier this week Congressional Budget Office (CBO) updated its authoritative data series on household incomes (1979-2005).  The new data—highly regarded as a particularly complete source of information on this important topic—reveal a sharp increase in income inequality over the past few years. In fact, the increase in income inequality (both pre-and post-tax) as measured by the change in the shares of income going to different income classes, was greater from 2003 to 2005 than over any other two-year period covered by the CBO data.  Over these years, an amazing $400 billion in pre-tax dollars was shifted from the bottom 95% of households to those in the top 5% (all income data in this report are inflation adjusted and in 2005 dollars).  In other words, had income shares not shifted as they did, the income of each of the 109 million households in the bottom 95% would have been $3,660 higher in 2005.

...The CBO data reveal the severe depth of our inequality problem.  Though overall tax reductions during this period have meant slightly faster post-tax income growth for households in each income group, it has made little difference to the overall picture of inequality and has even exacerbated unequal outcomes over this period.

The problem is particularly stark in recent years.  Before the current problems in housing and financial markets developed, the overall economy grew solidly over this recovery, with notably strong productivity growth.  As the CBO data reveal, aggregate household income grew $1.1 trillion in the 2003-05 period (see appendix table).  But these gains have failed to flow broadly throughout the income scale, and the extent of their concentration at the top of the income scale is historically unique.  Just under two-thirds (63%) of the gain in household income from 2003 to 2005 went to just 5% of the nation’s wealthiest households.

Such concentration of income is unsustainable in a democratic society.  The distribution mechanisms that have historically worked to ensure much more equitable outcomes appear to be wholly inoperative.  Fixing them must be at the heart of any serious economic policy discussion. 

Read the report for a complete picture (see link at top).

Home Prices Fall Again

The rate of the decline in home prices is accelerating and spreading.  The gauge of 10 major metropolitan areas nationwide showed that home prices fell an average of 6.7% year-over-year, the biggest decline since the index was started in 1987. The previous record decline had been 6.3% in April 1991.

In the last five years economists note, homeowners have taken out money from their home equity which has helped drive our economy.  Will the decline in home prices and the accompanying loss of home equity purchasing power affect the economy in the months and years to come?

"The decline in home prices accelerated and spread to more regions of the country in October, according to a series of private indexes released Wednesday.

Prices fell 6.1 percent from October 2006 in 20 large metropolitan areas, according to Standard & Poor’s/Case-Shiller indexes, compared with a 4.9 percent decline in September. All but three of the 20 regions saw real estate values fall, and even the three places — Seattle, Portland, Ore., and Charlotte, N.C. — where prices were up from a year ago saw prices fall from a month earlier.

...Prices are dropping fastest in the Midwest, which has been hit hard by job losses in manufacturing, and in California, Florida and the Southwest, where the housing boom was at its frothiest. Prices have fallen the most in Miami (12.4 percent from a year ago), Tampa (11.8 percent) and Detroit (11.2 percent). Prices are also falling in the nation’s two largest metropolitan areas — Los Angeles (8.8 percent) and New York (4.1 percent).

The quickening decline in home prices could hurt the broader economy by leading to more foreclosures as homeowners have more difficulty refinancing mortgages and by sapping consumer spending as Americans feel less wealthy. But economists also noted that a faster descent from boom-era prices would allow the housing market to right itself sooner by removing vacant homes from the market."

Income Gap in America: Worst Since the 1920s

It has become quite apparent that the richest Americans control a larger and larger percentage of the nation's wealth. It's a figure that most Americans have to be sick about.  President Bush says it is because most Americans lack the proper skills.  When will Americans say enough, we are done and mean it?

According to new data from the Internal Revenue Service, the wealthiest 1 percent of Americans earned a record-breaking 21.2 percent of all income in 2005, reported today in the Wall Street Journal. Up sharply from 19 percent in 2004, and surpasses the previous high of 20.8 percent set in 2000, at the peak of the previous bull market stocks, the Journal reports.

The bottom 50 percent earned 12.8 percent of all income, down from 13.4 percent in 2004 and a bit less than their 13 percent share in 2000, according to the Journal.

"In an interview yesterday with The Wall Street Journal, President Bush said, "First of all, our society has had income inequality for a long time. Secondly, skills gaps yield income gaps.  The IRS data show that the median tax filer's income -- half earn less than the median, half earn more -- fell 2% between 2000 and 2005 when adjusted for inflation, to $30,881. At the same time, the income level for the tax filer just inside the top 1% grew 3%, to $364,657.  Wall Street Journal

The IRS data confirms the growing concerns most Americans have for their future earning power and security.  A nation that consistently only increases the earnings of its top tier earners is a failed nation.

Median Home Price: the largest year over year decline in 37 years

From Market Watch:

"This is just hideous," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics. "This is more evidence that it's going to be a long and -- for a lot of people -- a painful process," said Mike Schenk, economist for the Credit Union National Association. "The soft housing market will be with us for a long time, at least 18 months."

The median sales price fell 7.5% to $225,700 compared with a year earlier, the largest year-over-year decline in 37 years..."

Some experts believe the housing market will continue to worsen for some time to come. 

..."Chief Executive Officer (of KB Home) Jeffrey Mezger said in the statement he expects ``housing industry conditions to continue to worsen through the end of the year and into 2008.'' KB Home reported its second consecutive quarterly loss after $690 million in pretax expenses to write down land and inventory.

``The writedown was much bigger than anyone had been expecting,''' said Dan Poole, who helps manage $31 billion at National City Private Client Group in Cleveland. ``If there's good news out there, it's few and far between.''

Foreclosures Up 93% from one year ago!

Rueters reports U.S. foreclosures were up 9% from June and a whopping 93% from one year ago!  States that once enjoyed a hot housing market are feeling the pain the most.  I guess this is taking the place of the dot com bust.  I wonder what will be the next hot thing?