Food Stamp Recipients at Record 41.8 Million Americans in July, U.S. Says
The number of Americans receiving food stamps rose to a record 41.8 million in July as the jobless rate hovered near a 27-year high, the government said.
http://www.bloomberg.com/news/2010-10-05/food-stamp-recipients-at-record-41-8-million-americans-in-july-u-s-says.html
Recipients of Supplemental Nutrition Assistance Program subsidies for food purchases jumped 18 percent from a year earlier and increased 1.4 percent from June, the U.S. Department of Agriculture said today in a statement on its website. Participation has set records for 20 straight months.
Unemployment in September may have reached 9.7 percent, according to a Bloomberg News survey of analysts in advance of the release of last month’s rate on Oct. 8. Unemployment was 9.6 percent in July, near levels last seen in 1983.
http://www.bloomberg.com/news/2010-10-05/food-stamp-recipients-at-record-41-8-million-americans-in-july-u-s-says.html
Showing posts with label National Socialism. Show all posts
Showing posts with label National Socialism. Show all posts
Saturday, October 09, 2010
New York state residents first full-year decline in income in more than 70 years
New York state residents first full-year decline in income in more than 70 years
The recession put a 3.1 percent dent in the personal incomes of New York state residents, who endured their first full-year decline in more than 70 years, according to a report released Tuesday.
http://www.cnbc.com/id/39531849/
Paychecks or net earnings tumbled 5.4 percent, while dividends, interest and rent slid 8.4 percent, to a grand total of nearly $908 billion, the state comptroller's report said.
Not only did New Yorkers' personal incomes fall "almost twice" as much as they did in the nation as a whole, but they have yet to recover to pre-recession levels, Comptroller Thomas DiNapoli said.
The drop occurred even though the job-destroying recession was milder in New York than in the rest of the country.
http://www.cnbc.com/id/39531849/
The recession put a 3.1 percent dent in the personal incomes of New York state residents, who endured their first full-year decline in more than 70 years, according to a report released Tuesday.
http://www.cnbc.com/id/39531849/
Paychecks or net earnings tumbled 5.4 percent, while dividends, interest and rent slid 8.4 percent, to a grand total of nearly $908 billion, the state comptroller's report said.
Not only did New Yorkers' personal incomes fall "almost twice" as much as they did in the nation as a whole, but they have yet to recover to pre-recession levels, Comptroller Thomas DiNapoli said.
The drop occurred even though the job-destroying recession was milder in New York than in the rest of the country.
http://www.cnbc.com/id/39531849/
Wednesday, September 01, 2010
Dow Logs Worst August in 9 Years
Dow Logs Worst August in 9 Years
By JONATHAN CHENG And KRISTINA PETERSON
http://online.wsj.com/article/SB10001424052748703467004575463152437588596.html?mod=WSJ_hpp_LEFTWhatsNewsCollection
Stocks limped to their worst August since 2001, battered by a wave of discouraging data that cast doubt on the faltering economic recovery.
Investors now enter September, a month that has been historically challenging for the stock market, against a backdrop of broad uncertainty, including slow growth and deflation fears.
The Dow Jones Industrial Average battled to a stalemate on Tuesday, rising 4.99 points, or 0.05%, to finish at 10014.72. The blue-chip index's 4.3% drop for the month was the worst since a dismal May, and the measure's first down August in five years. The Dow had rallied 7.1% in July.
September Slump Superstitions August is typically a positive month for stocks, whereas September declines tend to come as companies begin issuing warnings ahead of third-quarter results and mutual-fund managers get back to work after the typically light volume in the summer.
The Standard & Poor's 500-stock index fell 4.7% for August, while the Nasdaq shed 6.2%. Small-capitalization stocks, a leading indicator of the economy, took an even bigger hit. The Russell 2000 index of small-cap stocks posted its worst August in 12 years, falling 7.5%.
Other barometers of economic activity are flashing warning signals, too. Technology stocks were the weakest performers on Tuesday, taking a hit after technology-research firm Gartner cut estimates for computer sales, reinforcing growing concern about the outlook for the sector.
read more:
http://online.wsj.com/article/SB10001424052748703467004575463152437588596.html?mod=WSJ_hpp_LEFTWhatsNewsCollection
By JONATHAN CHENG And KRISTINA PETERSON
http://online.wsj.com/article/SB10001424052748703467004575463152437588596.html?mod=WSJ_hpp_LEFTWhatsNewsCollection
Stocks limped to their worst August since 2001, battered by a wave of discouraging data that cast doubt on the faltering economic recovery.
Investors now enter September, a month that has been historically challenging for the stock market, against a backdrop of broad uncertainty, including slow growth and deflation fears.
The Dow Jones Industrial Average battled to a stalemate on Tuesday, rising 4.99 points, or 0.05%, to finish at 10014.72. The blue-chip index's 4.3% drop for the month was the worst since a dismal May, and the measure's first down August in five years. The Dow had rallied 7.1% in July.
September Slump Superstitions August is typically a positive month for stocks, whereas September declines tend to come as companies begin issuing warnings ahead of third-quarter results and mutual-fund managers get back to work after the typically light volume in the summer.
The Standard & Poor's 500-stock index fell 4.7% for August, while the Nasdaq shed 6.2%. Small-capitalization stocks, a leading indicator of the economy, took an even bigger hit. The Russell 2000 index of small-cap stocks posted its worst August in 12 years, falling 7.5%.
Other barometers of economic activity are flashing warning signals, too. Technology stocks were the weakest performers on Tuesday, taking a hit after technology-research firm Gartner cut estimates for computer sales, reinforcing growing concern about the outlook for the sector.
read more:
http://online.wsj.com/article/SB10001424052748703467004575463152437588596.html?mod=WSJ_hpp_LEFTWhatsNewsCollection
Tuesday, August 24, 2010
Economy Caught in Depression, Not Recession
Economy Caught in Depression, Not Recession
Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.
http://www.cnbc.com/id/38831550
Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.
But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.
Rosenberg calls current economic conditions "a depression, and not just some garden-variety recession," and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered "euphoric response."
"Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times," he said.
The 1929-33 recession saw six quarterly bounces in GDP with an average gain of 8 percent, sending the stock market to a 50 percent rally in early 1930 as investors thought the worst had passed.
"False premise," Rosenberg said. "And guess what? We may well be reliving history here. If you're keeping score, we have recorded four quarterly advances in real GDP, and the average is only 3%."
more:
http://www.cnbc.com/id/38831550
Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.
http://www.cnbc.com/id/38831550
Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.
But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.
Rosenberg calls current economic conditions "a depression, and not just some garden-variety recession," and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered "euphoric response."
"Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times," he said.
The 1929-33 recession saw six quarterly bounces in GDP with an average gain of 8 percent, sending the stock market to a 50 percent rally in early 1930 as investors thought the worst had passed.
"False premise," Rosenberg said. "And guess what? We may well be reliving history here. If you're keeping score, we have recorded four quarterly advances in real GDP, and the average is only 3%."
more:
http://www.cnbc.com/id/38831550
Tuesday, August 10, 2010
The Obama presidency increasingly resembles a modern-day Ancien Régime: extravagant and out of touch with the American people
The Obama presidency increasingly resembles a modern-day Ancien Régime: extravagant and out of touch with the American people
Nile Gardiner is a Washington-based foreign affairs analyst and political commentator. He appears frequently on American and British television and radio, including Fox News Channel, CNN, BBC, Sky News, and NPR
http://blogs.telegraph.co.uk/news/nilegardiner/100050002/the-obama-presidency-increasingly-resembles-a-modern-day-ancien-regime-extravagant-and-out-of-touch-with-ordinary-people/
What the great French historian Alexis de Tocqueville would make of today’s Obama administration were he alive today is anyone’s guess. But I would wager that the author of L’Ancien Régime and Democracy in America would be less than impressed with the extravagance and arrogance on display among the White House elites that rule America as though they had been handed some divine right to govern with impunity.
It is the kind of impunity that has been highlighted on the world stage this week by Michelle Obama’s hugely costly trip to Spain, which has prompted a New York Post columnist Andrea Tantaros to dub the First Lady a contemporary Marie Antoinette. As The Telegraph reports, while the Obamas are covering their own vacation expenses such as accommodation, the trip may cost US taxpayers as much as $375,000 in terms of secret service security and flight costs on Air Force Two.
The timing of this lavish European vacation could not have come at a worse moment, when unemployment in America stands at 10 percent, and large numbers of Americans are fighting to survive financially in the wake of the global economic downturn. It sends a message of indifference, even contempt, for the millions of Americans who are struggling just to feed their families on a daily basis and pay the mortgage, while the size of the national debt balloons to Greek-style proportions.
While the liberal-dominated US mainstream media have largely ignored the story, it is all over the blogosphere and talk radio, and will undoubtedly add to the President’s free falling poll ratings. As much as the media establishment turn a blind eye to stories like this, which are major news in the international media, the American public is increasingly turning to alternative news sources, including the British press, which has a far less deferential approach towards the White House.
The First Lady’s ill-conceived trip to Marbella and the complete disregard for public opinion and concerns over excessive government spending is symbolic of a far wider problem with the Obama presidency – the overarching disdain for the principles of limited government, individual liberty and free enterprise that have built the United States over the course of nearly two and a half centuries into the most powerful and free nation on earth.
It is epitomised above all by the President’s relentless drive towards big government against the will of the American people, and the dramatic increases in government spending and borrowing, which threaten to leave the US hugely in debt for generations. It is also showcased by Barack Obama’s drive towards a socialised health care system, which, as I’ve noted before, is “a thinly disguised vanity project for a president who is committed to transforming the United States from the world’s most successful large-scale free enterprise economy, to a highly interventionist society with a massive role for centralized government.”
There is however a political revolution fast approaching Washington that is driven not by mob rule but by the power of ideas and principles, based upon the ideals of the Founding Fathers and the US Constitution. It is a distinctly conservative revolution that is sweeping America and is reflected in almost every poll ahead of this November’s mid-terms. It is based on a belief in individual liberty, limited government, and above all, political accountability from the ruling elites. The Obama administration’s mantra may well be “let them eat cake”, as it continues to gorge itself on taxpayers’ money, but it will be looking nervously over its shoulder as public unease mounts.
http://blogs.telegraph.co.uk/news/nilegardiner/100050002/the-obama-presidency-increasingly-resembles-a-modern-day-ancien-regime-extravagant-and-out-of-touch-with-ordinary-people/
Nile Gardiner is a Washington-based foreign affairs analyst and political commentator. He appears frequently on American and British television and radio, including Fox News Channel, CNN, BBC, Sky News, and NPR
http://blogs.telegraph.co.uk/news/nilegardiner/100050002/the-obama-presidency-increasingly-resembles-a-modern-day-ancien-regime-extravagant-and-out-of-touch-with-ordinary-people/
What the great French historian Alexis de Tocqueville would make of today’s Obama administration were he alive today is anyone’s guess. But I would wager that the author of L’Ancien Régime and Democracy in America would be less than impressed with the extravagance and arrogance on display among the White House elites that rule America as though they had been handed some divine right to govern with impunity.
It is the kind of impunity that has been highlighted on the world stage this week by Michelle Obama’s hugely costly trip to Spain, which has prompted a New York Post columnist Andrea Tantaros to dub the First Lady a contemporary Marie Antoinette. As The Telegraph reports, while the Obamas are covering their own vacation expenses such as accommodation, the trip may cost US taxpayers as much as $375,000 in terms of secret service security and flight costs on Air Force Two.
The timing of this lavish European vacation could not have come at a worse moment, when unemployment in America stands at 10 percent, and large numbers of Americans are fighting to survive financially in the wake of the global economic downturn. It sends a message of indifference, even contempt, for the millions of Americans who are struggling just to feed their families on a daily basis and pay the mortgage, while the size of the national debt balloons to Greek-style proportions.
While the liberal-dominated US mainstream media have largely ignored the story, it is all over the blogosphere and talk radio, and will undoubtedly add to the President’s free falling poll ratings. As much as the media establishment turn a blind eye to stories like this, which are major news in the international media, the American public is increasingly turning to alternative news sources, including the British press, which has a far less deferential approach towards the White House.
The First Lady’s ill-conceived trip to Marbella and the complete disregard for public opinion and concerns over excessive government spending is symbolic of a far wider problem with the Obama presidency – the overarching disdain for the principles of limited government, individual liberty and free enterprise that have built the United States over the course of nearly two and a half centuries into the most powerful and free nation on earth.
It is epitomised above all by the President’s relentless drive towards big government against the will of the American people, and the dramatic increases in government spending and borrowing, which threaten to leave the US hugely in debt for generations. It is also showcased by Barack Obama’s drive towards a socialised health care system, which, as I’ve noted before, is “a thinly disguised vanity project for a president who is committed to transforming the United States from the world’s most successful large-scale free enterprise economy, to a highly interventionist society with a massive role for centralized government.”
There is however a political revolution fast approaching Washington that is driven not by mob rule but by the power of ideas and principles, based upon the ideals of the Founding Fathers and the US Constitution. It is a distinctly conservative revolution that is sweeping America and is reflected in almost every poll ahead of this November’s mid-terms. It is based on a belief in individual liberty, limited government, and above all, political accountability from the ruling elites. The Obama administration’s mantra may well be “let them eat cake”, as it continues to gorge itself on taxpayers’ money, but it will be looking nervously over its shoulder as public unease mounts.
http://blogs.telegraph.co.uk/news/nilegardiner/100050002/the-obama-presidency-increasingly-resembles-a-modern-day-ancien-regime-extravagant-and-out-of-touch-with-ordinary-people/
Sunday, August 01, 2010
Failure generation : Will Washington's Failures Lead To Second American Revolution?
Will Washington's Failures Lead To Second American Revolution?
By ERNEST S. CHRISTIAN AND GARY A ROBBINS
Posted 07/30/2010 06:30 PM ET
http://www.investors.com/NewsAndAnalysis/Article/542171/201007301830/Will-Washingtons-Failures-Lead-To-Second-American-Revolution-.aspx
The Internet is a large-scale version of the "Committees of Correspondence" that led to the first American Revolution — and with Washington's failings now so obvious and awful, it may lead to another.
People are asking, "Is the government doing us more harm than good? Should we change what it does and the way it does it?"
Pruning the power of government begins with the imperial presidency.
Too many overreaching laws give the president too much discretion to make too many open-ended rules controlling too many aspects of our lives. There's no end to the harm an out-of-control president can do.
Bill Clinton lowered the culture, moral tone and strength of the nation — and left America vulnerable to attack. When it came, George W. Bush stood up for America, albeit sometimes clumsily.
Barack Obama, however, has pulled off the ultimate switcheroo: He's diminishing America from within — so far, successfully.
He may soon bankrupt us and replace our big merit-based capitalist economy with a small government-directed one of his own design.
He is undermining our constitutional traditions: The rule of law and our Anglo-Saxon concepts of private property hang in the balance. Obama may be the most "consequential" president ever.
The Wall Street Journal's steadfast Dorothy Rabinowitz wrote that Barack Obama is "an alien in the White House."
His bullying and offenses against the economy and job creation are so outrageous that CEOs in the Business Roundtable finally mustered the courage to call him "anti-business." Veteran Democrat Sen. Max Baucus blurted out that Obama is engineering the biggest government-forced "redistribution of income" in history.
Fear and uncertainty stalk the land. Fed Chairman Ben Bernanke says America's financial future is "unusually uncertain."
A Wall Street "fear gauge" based on predicted market volatility is flashing long-term panic. New data on the federal budget confirm that record-setting deficits in the $1.4 trillion range are now endemic.
Obama is building an imperium of public debt and crushing taxes, contrary to George Washington's wise farewell admonition: "cherish public credit ... use it as sparingly as possible ... avoiding likewise the accumulation of debt ... bear in mind, that towards the payment of debts there must be Revenue, that to have Revenue there must be taxes; that no taxes can be devised, which are not ... inconvenient and unpleasant ... ."
Opinion polls suggest that in the November mid-term elections, voters will replace the present Democratic majority in Congress with opposition Republicans — but that will not necessarily stop Obama.
A President Obama intent on achieving his transformative goals despite the disagreement of the American people has powerful weapons within reach. In one hand, he will have a veto pen to stop a new Republican Congress from repealing ObamaCare and the Dodd-Frank takeover of banks.
In the other, he will have a fistful of executive orders, regulations and Obama-made fiats that have the force of law.
Under ObamaCare, he can issue new rules and regulations so insidiously powerful in their effect that higher-priced, lower-quality and rationed health care will quickly become ingrained, leaving a permanent stain.
Under Dodd-Frank, he and his agents will control all credit and financial transactions, rewarding friends and punishing opponents, discriminating on the basis of race, gender and political affiliation. Credit and liquidity may be choked by bureaucracy and politics — and the economy will suffer.
He and the EPA may try to impose by "regulatory" fiats many parts of the cap-and-trade and other climate legislation that failed in the Congress.
And by executive orders and the in terrorem effect of an industrywide "boot on the neck" policy, he can continue to diminish energy production in the United States.
By the trick of letting current-law tax rates "expire," he can impose a $3.5 trillion 10-year tax increase that damages job-creating capital investment in an economy struggling to recover. And by failing to enforce the law and leaving America's borders open, he can continue to repopulate America with unfortunate illegals whose skill and education levels are low and whose political attitudes are often not congenial to American-style democracy.
A wounded rampaging president can do much damage — and, like Caesar, the evil he does will live long after he leaves office, whenever that may be.
The overgrown, un-pruned power of the presidency to reward, punish and intimidate may now be so overwhelming that his re-election in 2012 is already assured — Chicago-style.
• Christian, an attorney, was a deputy assistant secretary of the Treasury in the Ford administration.
• Robbins, an economist, served at the Treasury Department in the Reagan administration.
http://www.investors.com/NewsAndAnalysis/Article/542171/201007301830/Will-Washingtons-Failures-Lead-To-Second-American-Revolution-.aspx
By ERNEST S. CHRISTIAN AND GARY A ROBBINS
Posted 07/30/2010 06:30 PM ET
http://www.investors.com/NewsAndAnalysis/Article/542171/201007301830/Will-Washingtons-Failures-Lead-To-Second-American-Revolution-.aspx
The Internet is a large-scale version of the "Committees of Correspondence" that led to the first American Revolution — and with Washington's failings now so obvious and awful, it may lead to another.
People are asking, "Is the government doing us more harm than good? Should we change what it does and the way it does it?"
Pruning the power of government begins with the imperial presidency.
Too many overreaching laws give the president too much discretion to make too many open-ended rules controlling too many aspects of our lives. There's no end to the harm an out-of-control president can do.
Bill Clinton lowered the culture, moral tone and strength of the nation — and left America vulnerable to attack. When it came, George W. Bush stood up for America, albeit sometimes clumsily.
Barack Obama, however, has pulled off the ultimate switcheroo: He's diminishing America from within — so far, successfully.
He may soon bankrupt us and replace our big merit-based capitalist economy with a small government-directed one of his own design.
He is undermining our constitutional traditions: The rule of law and our Anglo-Saxon concepts of private property hang in the balance. Obama may be the most "consequential" president ever.
The Wall Street Journal's steadfast Dorothy Rabinowitz wrote that Barack Obama is "an alien in the White House."
His bullying and offenses against the economy and job creation are so outrageous that CEOs in the Business Roundtable finally mustered the courage to call him "anti-business." Veteran Democrat Sen. Max Baucus blurted out that Obama is engineering the biggest government-forced "redistribution of income" in history.
Fear and uncertainty stalk the land. Fed Chairman Ben Bernanke says America's financial future is "unusually uncertain."
A Wall Street "fear gauge" based on predicted market volatility is flashing long-term panic. New data on the federal budget confirm that record-setting deficits in the $1.4 trillion range are now endemic.
Obama is building an imperium of public debt and crushing taxes, contrary to George Washington's wise farewell admonition: "cherish public credit ... use it as sparingly as possible ... avoiding likewise the accumulation of debt ... bear in mind, that towards the payment of debts there must be Revenue, that to have Revenue there must be taxes; that no taxes can be devised, which are not ... inconvenient and unpleasant ... ."
Opinion polls suggest that in the November mid-term elections, voters will replace the present Democratic majority in Congress with opposition Republicans — but that will not necessarily stop Obama.
A President Obama intent on achieving his transformative goals despite the disagreement of the American people has powerful weapons within reach. In one hand, he will have a veto pen to stop a new Republican Congress from repealing ObamaCare and the Dodd-Frank takeover of banks.
In the other, he will have a fistful of executive orders, regulations and Obama-made fiats that have the force of law.
Under ObamaCare, he can issue new rules and regulations so insidiously powerful in their effect that higher-priced, lower-quality and rationed health care will quickly become ingrained, leaving a permanent stain.
Under Dodd-Frank, he and his agents will control all credit and financial transactions, rewarding friends and punishing opponents, discriminating on the basis of race, gender and political affiliation. Credit and liquidity may be choked by bureaucracy and politics — and the economy will suffer.
He and the EPA may try to impose by "regulatory" fiats many parts of the cap-and-trade and other climate legislation that failed in the Congress.
And by executive orders and the in terrorem effect of an industrywide "boot on the neck" policy, he can continue to diminish energy production in the United States.
By the trick of letting current-law tax rates "expire," he can impose a $3.5 trillion 10-year tax increase that damages job-creating capital investment in an economy struggling to recover. And by failing to enforce the law and leaving America's borders open, he can continue to repopulate America with unfortunate illegals whose skill and education levels are low and whose political attitudes are often not congenial to American-style democracy.
A wounded rampaging president can do much damage — and, like Caesar, the evil he does will live long after he leaves office, whenever that may be.
The overgrown, un-pruned power of the presidency to reward, punish and intimidate may now be so overwhelming that his re-election in 2012 is already assured — Chicago-style.
• Christian, an attorney, was a deputy assistant secretary of the Treasury in the Ford administration.
• Robbins, an economist, served at the Treasury Department in the Reagan administration.
http://www.investors.com/NewsAndAnalysis/Article/542171/201007301830/Will-Washingtons-Failures-Lead-To-Second-American-Revolution-.aspx
Wednesday, July 28, 2010
Home ownership the lowest since 1999 : worst housing crash since the Great Depression
About 18.9 million homes in the U.S. stood empty during the second quarter as surging foreclosures helped push ownership to the lowest level in a decade.
http://www.bloomberg.com/news/2010-07-27/vacancies-climb-as-u-s-home-ownership-falls-to-lowest-level-in-a-decade.html
The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.6 million in the year-earlier quarter, the U.S. Census Bureau said in a report today. The ownership rate, meaning households that own their own residence, was 66.9 percent, the lowest since 1999.
Lenders are accelerating foreclosures as borrowers fall behind in mortgage payments after the worst housing crash since the Great Depression. A record 269,962 U.S. homes were seized in the second quarter, according to RealtyTrac Inc. Foreclosures probably will top 1 million this year, the Irvine, California- based data company said in a July 15 report
http://www.bloomberg.com/news/2010-07-27/vacancies-climb-as-u-s-home-ownership-falls-to-lowest-level-in-a-decade.html
http://www.bloomberg.com/news/2010-07-27/vacancies-climb-as-u-s-home-ownership-falls-to-lowest-level-in-a-decade.html
The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.6 million in the year-earlier quarter, the U.S. Census Bureau said in a report today. The ownership rate, meaning households that own their own residence, was 66.9 percent, the lowest since 1999.
Lenders are accelerating foreclosures as borrowers fall behind in mortgage payments after the worst housing crash since the Great Depression. A record 269,962 U.S. homes were seized in the second quarter, according to RealtyTrac Inc. Foreclosures probably will top 1 million this year, the Irvine, California- based data company said in a July 15 report
http://www.bloomberg.com/news/2010-07-27/vacancies-climb-as-u-s-home-ownership-falls-to-lowest-level-in-a-decade.html
Friday, July 23, 2010
The Tax Tsunami On The Horizon
The Tax Tsunami On The Horizon
Posted 07/21/2010 06:41 PM ET
http://www.investors.com/NewsAndAnalysis/Article/541131/201007211841/The-Tax-Tsunami-On-The-Horizon.aspx
Fiscal Policy: Many voters are looking forward to 2011, hoping a new Congress will put the country back on the right track. But unless something's done soon, the new year will also come with a raft of tax hikes — including a return of the death tax — that will be real killers.
Through the end of this year, the federal estate tax rate is zero — thanks to the package of broad-based tax cuts that President Bush pushed through to get the economy going earlier in the decade.
But as of midnight Dec. 31, the death tax returns — at a rate of 55% on estates of $1 million or more. The effect this will have on hospital life-support systems is already a matter of conjecture.
Resurrection of the death tax, however, isn't the only tax problem that will be ushered in Jan. 1. Many other cuts from the Bush administration are set to disappear and a new set of taxes will materialize. And it's not just the rich who will pay.
The lowest bracket for the personal income tax, for instance, moves up 50% — to 15% from 10%. The next lowest bracket — 25% — will rise to 28%, and the old 28% bracket will be 31%. At the higher end, the 33% bracket is pushed to 36% and the 35% bracket becomes 39.6%.
But the damage doesn't stop there.
The marriage penalty also makes a comeback, and the capital gains tax will jump 33% — to 20% from 15%. The tax on dividends will go all the way from 15% to 39.6% — a 164% increase.
Both the cap-gains and dividend taxes will go up further in 2013 as the health care reform adds a 3.8% Medicare levy for individuals making more than $200,000 a year and joint filers making more than $250,000. Other tax hikes include: halving the child tax credit to $500 from $1,000 and fixing the standard deduction for couples at the same level as it is for single filers.
Letting the Bush cuts expire will cost taxpayers $115 billion next year alone, according to the Congressional Budget Office, and $2.6 trillion through 2020.
But even more tax headaches lie ahead. This "second wave" of hikes, as Americans for Tax Reform puts it, are designed to pay for ObamaCare and include:
The Medicine Cabinet Tax. Americans, says ATR, "will no longer be able to use health savings account, flexible spending account, or health reimbursement pretax dollars to purchase nonprescription, over-the-counter medicines (except insulin)."
The HSA Withdrawal Tax Hike. "This provision of ObamaCare," according to ATR, "increases the additional tax on nonmedical early withdrawals from an HSA from 10% to 20%, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10%."
Brand Name Drug Tax. Makers and importers of brand-name drugs will be liable for a tax of $2.5 billion in 2011. The tax goes to $3 billion a year from 2012 to 2016, then $3.5 billion in 2017 and $4.2 billion in 2018. Beginning in 2019 it falls to $2.8 billion and stays there. And who pays the new drug tax? Patients, in the form of higher prices.
Economic Substance Doctrine. ATR reports that "The IRS is now empowered to disallow perfectly legal tax deductions and maneuvers merely because it judges that the deduction or action lacks 'economic substance.'"
A third and final (for now) wave, says ATR, consists of the alternative minimum tax's widening net, tax hikes on employers and the loss of deductions for tuition:
• The Tax Policy Center, no right-wing group, says that the failure to index the AMT will subject 28.5 million families to the tax when they file next year, up from 4 million this year.
• "Small businesses can normally expense (rather than slowly deduct, or 'depreciate') equipment purchases up to $250,000," says ATR. "This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be 'depreciated.'"
• According to ATR, there are "literally scores of tax hikes on business that will take place," plus the loss of some tax credits. The research and experimentation tax credit will be the biggest loss, "but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs."
• The deduction for tuition and fees will no longer be available and there will be limits placed on education tax credits. Teachers won't be able to deduct their classroom expenses and employer-provided educational aid will be restricted. Thousands of families will no longer be allowed to deduct student loan interest.
Then there's the tax on Americans who decline to buy health care insurance (the tax the administration initially said wasn't a tax but now argues in court that it is) plus a 3.8% Medicare tax beginning in 2013 on profits made in real estate transactions by wealthier Americans.
Not all Americans may fully realize what's in store come Jan. 1. But they should have a pretty good idea by the mid-term elections, and members of Congress might take note of our latest IBD/TIPP Poll (summarized above).
Fifty-one percent of respondents favored making the Bush cuts permanent vs. 28% who didn't. Republicans were more than 4 to 1 and Independents more than 2 to 1 in favor. Only Democrats were opposed, but only by 40%-38%.
The cuts also proved popular among all income groups — despite the Democrats' oft-heard assertion that Bush merely provided "tax breaks for the wealthy." Fact is, Bush cut taxes for everyone who paid them, and the cuts helped the nation recover from a recession and the worst stock-market crash since 1929.
Maybe, just maybe, Americans remember that — and will not forget come Nov. 2.
http://www.investors.com/NewsAndAnalysis/Article/541131/201007211841/The-Tax-Tsunami-On-The-Horizon.aspx
White House predicts budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends
White House predicts budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends
By ANDREW TAYLOR, Associated Press Writer Andrew Taylor, Associated Press Writer – Fri Jul 23, 3:12 pm ET
http://news.yahoo.com/s/ap/20100723/ap_on_bi_ge/us_budget_deficit_2
WASHINGTON – New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.
That's actually a little better than the administration predicted in February.
The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, presently averaging 9.5 percent, would average 9 percent next year under the new estimates.
The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012 — a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don't think the unemployment rate will drop to those levels until well into this decade.
The gaping deficits are of increasing concern to voters. But Obama and Democrats controlling Congress are mostly taking a pass on deficit reduction this year as they await possible recommendations from Obama's deficit commission.
While there's a slight improvement in the deficit for the current year, next year's predicted $1.42 trillion worth of red ink — that's 37 cents of borrowing for every dollar spent — is looking worse. It's about $150 billion more than previously predicted, because of still-slumping tax revenues.
White House budget director Peter Orszag said the numbers represent a "fiscal situation that requires attention."
Deficits have skyrocketed since the recession took hold in 2008 and Congress responded with a massive bailout of the financial system and last year's $862 billion stimulus measure.
Associated Press writer Jeannine Aversa contributed to this report.
http://news.yahoo.com/s/ap/20100723/ap_on_bi_ge/us_budget_deficit_2
By ANDREW TAYLOR, Associated Press Writer Andrew Taylor, Associated Press Writer – Fri Jul 23, 3:12 pm ET
http://news.yahoo.com/s/ap/20100723/ap_on_bi_ge/us_budget_deficit_2
WASHINGTON – New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.
That's actually a little better than the administration predicted in February.
The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, presently averaging 9.5 percent, would average 9 percent next year under the new estimates.
The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012 — a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don't think the unemployment rate will drop to those levels until well into this decade.
The gaping deficits are of increasing concern to voters. But Obama and Democrats controlling Congress are mostly taking a pass on deficit reduction this year as they await possible recommendations from Obama's deficit commission.
While there's a slight improvement in the deficit for the current year, next year's predicted $1.42 trillion worth of red ink — that's 37 cents of borrowing for every dollar spent — is looking worse. It's about $150 billion more than previously predicted, because of still-slumping tax revenues.
White House budget director Peter Orszag said the numbers represent a "fiscal situation that requires attention."
Deficits have skyrocketed since the recession took hold in 2008 and Congress responded with a massive bailout of the financial system and last year's $862 billion stimulus measure.
Associated Press writer Jeannine Aversa contributed to this report.
http://news.yahoo.com/s/ap/20100723/ap_on_bi_ge/us_budget_deficit_2
Wednesday, July 14, 2010
Failure Generation: Obama faces growing credibility crisis
By Edward Luce in Washington
http://www.ft.com/cms/s/0/434315b2-8ea6-11df-8a67-00144feab49a.html
Published: July 13 2010 18:51 | Last updated: July 13 2010 18:51
Robert Gibbs, Barack Obama’s chief spokesman, got into hot water this week for daring to speak the truth – that the Democrats could lose control of the House of Representatives in November. But it could be even worse than that.
Contrary to pretty much every projection until now, Democratic control of the Senate is also starting to coming into question. While Mr Obama’s approval ratings have continued to fall, and now hover at dangerously close to 40 per cent according an ABC-Washington Post poll published on Tuesday, the fate of his former colleagues in the Senate looks even worse.
EDITOR’S CHOICE
Opinion: ‘Hell no’ is not a platform for power - Jul-13In depth: The Obama presidency - May-23Obama attacked over business regulation - Jul-12Video: Donohue on business regulation - Jul-12Global Insight: US financial reform - Jul-12White House taps Lew for budget office - Jul-13In the past few days polls have shown Republican challengers taking the lead over previously safe Democratic incumbents, such as Barbara Boxer in California and Russ Feingold in Wisconsin. Indeed, given the uniformly negative direction in the numbers, it is now quite possible the Republicans could win the Senate seats formerly held by both President Obama in Illinois, and Joe Biden, vice-president, in Delaware.
Add to that the continuing woes of Harry Reid, the Senate Democratic majority leader, in Nevada, where the Republican party’s recent nomination of Sharron Angle, a far-right and highly eccentric Tea Party supporter, appear to have had no positive effect on Mr Reid’s prospects, and the Grand Old party has a good shot at taking control of both houses of Congress. Worse for Mr Obama, political scientists say that at this stage in the calendar, there is almost nothing he can do about it.
“If you ask me where the silver lining is for President Obama, I have to say I cannot see one,” says Bill Galston, a former Clinton official, who has been predicting for months the Democrats could lose the House. “Just as BP’s failure to cap the well has been so damaging, Obama’s failure to cap unemployment will be his undoing. There is nothing he can do to affect the jobless rate before November.”
see more :
http://www.ft.com/cms/s/0/434315b2-8ea6-11df-8a67-00144feab49a.html
Monday, July 05, 2010
WAYNE ALLYN ROOT: Barack Obama: The great jobs killer
WAYNE ALLYN ROOT: Barack Obama: The great jobs killer
As former President Ronald Reagan might have said, "Obama, there you go again."
The current occupant of the White House claims to know how to create jobs. He claims jobs have been created. But so far the score is Great Obama Depression 2.2 million lost jobs, Obama 0 -- a blowout.
Obama is as hopeless, helpless, clueless and bankrupt of good ideas as the manager of the Chicago Cubs in late September. This "community organizer" knows as much about private-sector jobs as Pamela Anderson knows about nuclear physics.
It's time to call Obama what he is: The Great Jobs Killer. With his massive spending and tax hikes -- rewarding big government and big unions, while punishing taxpayers and business owners -- Obama has killed jobs, he has killed motivation to create new jobs, he has killed the motivation to invest in new businesses, or expand old ones. With all this killing, Obama should be given the top spot on the FBI's Most Wanted List.
Meanwhile, he has kept the union workers of GM and Chrysler employed (with taxpayer money). He has made sure that most government employee union members got their annual raises for sleeping on the job (with taxpayer money). He made sure that his voters got handouts mislabeled as "tax cuts" even though they never paid taxes (with taxpayer money). And he made sure that major campaign contributors collected billions off government stimulus (with taxpayer money).
As far as the taxpayers -- the people who actually take risks with our own money to create small businesses and jobs and pay most of the taxes -- we require protection under the Endangered Species Act.
You won't find proof of the damage Obama is doing on Wall Street, but rather on Main Street. My friends are all part of the economic engine of America: Small business. Small business creates 75 percent of new jobs (and a majority of all jobs). I called one friend who was a wealthy restaurant owner. He says business is off by 60 percent. He's drowning in debt. He won't last much longer. His wealth is gone.
I called another friend in the business of home improvement. He says business is off 90 percent from two years ago. My contractor just filed personal bankruptcy. She won't be building any more homes. The hair salon where I've had my hair cut for years closed earlier this year. Bankrupt. But here's the clincher -- ESPN Zone just closed all their restaurants across the country. If they can't make it selling cheap food and overpriced beer with 100 big screens blaring every sporting event on the planet to a sports-crazed society, we are all in deep, deep trouble.
I've polled all my friends who own small businesses -- many of them in the Internet and high-tech fields. They all agree that in this new Obama world of high business taxes, income taxes, payroll taxes, capital gains taxes, and workers compensation taxes, the key to success is to avoid employees. The only way to survive as a business owner today is by keeping the payroll very low and by hiring only independent contractors or part-time employees provided by temp agencies.
The days of jobs in the private sector with big salaries, full benefits, and pensions are over. We've all seen where those kinds of jobs get you as a business owner -- in Bankruptcy Court or surviving on government welfare like GM and Chrysler. Or in the case of government itself -- completely insolvent, but surviving by ripping off taxpayers and fraudulently running printing presses at the Fed all day and night to print money by the trillions.
Unfortunately, small businesses don't have the power to impose taxes or print money. So unlike government, we'll just have to cut employees and run lean and mean.
It has now become clear that, outside of the burgeoning field of Census takers, there will be no major increase in new jobs for years to come. Outside government, Obama has created a wasteland of economic ruin and depression that looks much like the landscape of Mel Gibson's first movie "Mad Max." Without a printing press in Obama's world, you're just plain out of luck.
The days of believing the Obama propaganda about a jobs recovery are over. The trillion-dollar corporate handouts (neatly named "stimulus") may have kept big business in the money for the past 18 months, and artificially propped up the stock market, but small business is the real canary in the coal mine.
My small business-owning friends aren't creating one job. Not one. They are shedding jobs. They are learning to do more with fewer employees. They are creating high-tech businesses that don't need employees. And many business owners are making plans to leave the country. In a high-tech world where businesses can be run from anywhere, Obama has a problem. His one-trick pony -- raise taxes, raise taxes, raising taxes -- is chasing away the business owners he desperately needs to pay his bills.
So who is going to pay Obama's taxes? Not his voters. They want government to pay them. Who is going to create Obama's jobs? Not his voters -- they've never created a job in their lives.
So what is Obama going to do? Maybe he can get Pamela Anderson on the line.
Wayne Allyn Root, a former vice presidential nominee for the Libertarian Party, writes from Henderson. His column appears every other week.
Find this article at:
http://www.lvrj.com/opinion/barack-obama--the-great-jobs-killer-97758294.html
As former President Ronald Reagan might have said, "Obama, there you go again."
The current occupant of the White House claims to know how to create jobs. He claims jobs have been created. But so far the score is Great Obama Depression 2.2 million lost jobs, Obama 0 -- a blowout.
Obama is as hopeless, helpless, clueless and bankrupt of good ideas as the manager of the Chicago Cubs in late September. This "community organizer" knows as much about private-sector jobs as Pamela Anderson knows about nuclear physics.
It's time to call Obama what he is: The Great Jobs Killer. With his massive spending and tax hikes -- rewarding big government and big unions, while punishing taxpayers and business owners -- Obama has killed jobs, he has killed motivation to create new jobs, he has killed the motivation to invest in new businesses, or expand old ones. With all this killing, Obama should be given the top spot on the FBI's Most Wanted List.
Meanwhile, he has kept the union workers of GM and Chrysler employed (with taxpayer money). He has made sure that most government employee union members got their annual raises for sleeping on the job (with taxpayer money). He made sure that his voters got handouts mislabeled as "tax cuts" even though they never paid taxes (with taxpayer money). And he made sure that major campaign contributors collected billions off government stimulus (with taxpayer money).
As far as the taxpayers -- the people who actually take risks with our own money to create small businesses and jobs and pay most of the taxes -- we require protection under the Endangered Species Act.
You won't find proof of the damage Obama is doing on Wall Street, but rather on Main Street. My friends are all part of the economic engine of America: Small business. Small business creates 75 percent of new jobs (and a majority of all jobs). I called one friend who was a wealthy restaurant owner. He says business is off by 60 percent. He's drowning in debt. He won't last much longer. His wealth is gone.
I called another friend in the business of home improvement. He says business is off 90 percent from two years ago. My contractor just filed personal bankruptcy. She won't be building any more homes. The hair salon where I've had my hair cut for years closed earlier this year. Bankrupt. But here's the clincher -- ESPN Zone just closed all their restaurants across the country. If they can't make it selling cheap food and overpriced beer with 100 big screens blaring every sporting event on the planet to a sports-crazed society, we are all in deep, deep trouble.
I've polled all my friends who own small businesses -- many of them in the Internet and high-tech fields. They all agree that in this new Obama world of high business taxes, income taxes, payroll taxes, capital gains taxes, and workers compensation taxes, the key to success is to avoid employees. The only way to survive as a business owner today is by keeping the payroll very low and by hiring only independent contractors or part-time employees provided by temp agencies.
The days of jobs in the private sector with big salaries, full benefits, and pensions are over. We've all seen where those kinds of jobs get you as a business owner -- in Bankruptcy Court or surviving on government welfare like GM and Chrysler. Or in the case of government itself -- completely insolvent, but surviving by ripping off taxpayers and fraudulently running printing presses at the Fed all day and night to print money by the trillions.
Unfortunately, small businesses don't have the power to impose taxes or print money. So unlike government, we'll just have to cut employees and run lean and mean.
It has now become clear that, outside of the burgeoning field of Census takers, there will be no major increase in new jobs for years to come. Outside government, Obama has created a wasteland of economic ruin and depression that looks much like the landscape of Mel Gibson's first movie "Mad Max." Without a printing press in Obama's world, you're just plain out of luck.
The days of believing the Obama propaganda about a jobs recovery are over. The trillion-dollar corporate handouts (neatly named "stimulus") may have kept big business in the money for the past 18 months, and artificially propped up the stock market, but small business is the real canary in the coal mine.
My small business-owning friends aren't creating one job. Not one. They are shedding jobs. They are learning to do more with fewer employees. They are creating high-tech businesses that don't need employees. And many business owners are making plans to leave the country. In a high-tech world where businesses can be run from anywhere, Obama has a problem. His one-trick pony -- raise taxes, raise taxes, raising taxes -- is chasing away the business owners he desperately needs to pay his bills.
So who is going to pay Obama's taxes? Not his voters. They want government to pay them. Who is going to create Obama's jobs? Not his voters -- they've never created a job in their lives.
So what is Obama going to do? Maybe he can get Pamela Anderson on the line.
Wayne Allyn Root, a former vice presidential nominee for the Libertarian Party, writes from Henderson. His column appears every other week.
Find this article at:
http://www.lvrj.com/opinion/barack-obama--the-great-jobs-killer-97758294.html
Investors fear rising risk of US regional defaults
Investors fear rising risk of US regional defaults
By Nicole Bullock in New York
http://www.ft.com/cms/s/0/fb933f08-885b-11df-aade-00144feabdc0.html
Published: July 5 2010 19:30 | Last updated: July 5 2010 20:21
Investors are worried that the risk of default for US local governments is growing, amid signs that some regions are facing the same type of difficulty in curbing pension and budget deficits as some eurozone countries.
The yield attached to some forms of infrastructure municipal bonds has risen relative to US Treasury bonds because of fears that cash-strapped local governments will struggle to repay these loans.
Absolute borrowing costs for regional governments remain relatively low in historical terms because of the Federal Reserve’s ultra-loose monetary policy. But any swings in municipal yields will be watched closely by investors, since they suggest that the fiscal anxieties about the eurozone could now infect the US.
“The risk in the second half of the year is that investor attention switches from Europe to the US,” said Robert Parker, senior adviser at Credit Suisse Securities, who singled out parts of California, as well as towns and cities in Illinois, Michigan and New York state as among the most vulnerable.
“You will see investor concern about the viability of those cities and therefore you will see, inevitably, further spread widening in the municipal bond market.”
If these market swings are sustained, they could push up borrowing costs for local governments, which, in turn, could exacerbate the squeeze on local authority finances and place more stress on the federal budget.
“There is more of a perceived risk to munis now,” said Laura LaRosa, director of fixed-income at Glenmede, a private investment manager.
US states faced budget deficits of $89bn for fiscal 2011, which began for most of them on July 1, according to the National Conference of State Legislatures. That is after shortfalls of more than $300bn since 2008.
Local municipalities can default and, depending on the state, file for bankruptcy. Should a state come to the brink, which is not expected at this time, many believe that it would be likely to receive federal support. The sharpest swings in the muni market have been seen in the $100bn so-called “Build America bonds” – or Babs – a type of US muni debt that has characteristics similar to corporate bonds. This sector has attracted a fresh investor base, which is now demanding greater compensation for risk.
Risk premiums, or spreads on Babs relative to Treasuries, have risen to 228 basis points, according to an index from Barclays Capital. The spreads have climbed from a low of 161bp in early May to their highest level since Barclays started compiling the index last October.
Absolute yields have risen to 6.03 per cent from 5.97 per cent.“The problems in the eurozone have driven up fixed-income yields overseas – on banks, utilities and sovereigns,” said Matt Fabian, a managing director at Municipal Market Advisors. “Babs compete directly against those issuers for buyers.”
The cost of insuring against default for munis also has risen. However, this part of the derivatives market is rather illiquid, and the mainstream part of the muni market has not seen as dramatic a swing as the Babs sector, partly because this is dominated by a traditional base of investors. These include local buyers who receive tax breaks when they buy US muni bonds, and who have historically been relatively loyal.
The muni sector has been known for its relatively few defaults and debt service is high in the pecking order of bills that states must pay. However, the threat of default has come to the fore as some states struggled to balance budgets after years of lower revenue and as federal stimulus is tapering off.
http://www.ft.com/cms/s/0/fb933f08-885b-11df-aade-00144feabdc0.html
By Nicole Bullock in New York
http://www.ft.com/cms/s/0/fb933f08-885b-11df-aade-00144feabdc0.html
Published: July 5 2010 19:30 | Last updated: July 5 2010 20:21
Investors are worried that the risk of default for US local governments is growing, amid signs that some regions are facing the same type of difficulty in curbing pension and budget deficits as some eurozone countries.
The yield attached to some forms of infrastructure municipal bonds has risen relative to US Treasury bonds because of fears that cash-strapped local governments will struggle to repay these loans.
Absolute borrowing costs for regional governments remain relatively low in historical terms because of the Federal Reserve’s ultra-loose monetary policy. But any swings in municipal yields will be watched closely by investors, since they suggest that the fiscal anxieties about the eurozone could now infect the US.
“The risk in the second half of the year is that investor attention switches from Europe to the US,” said Robert Parker, senior adviser at Credit Suisse Securities, who singled out parts of California, as well as towns and cities in Illinois, Michigan and New York state as among the most vulnerable.
“You will see investor concern about the viability of those cities and therefore you will see, inevitably, further spread widening in the municipal bond market.”
If these market swings are sustained, they could push up borrowing costs for local governments, which, in turn, could exacerbate the squeeze on local authority finances and place more stress on the federal budget.
“There is more of a perceived risk to munis now,” said Laura LaRosa, director of fixed-income at Glenmede, a private investment manager.
US states faced budget deficits of $89bn for fiscal 2011, which began for most of them on July 1, according to the National Conference of State Legislatures. That is after shortfalls of more than $300bn since 2008.
Local municipalities can default and, depending on the state, file for bankruptcy. Should a state come to the brink, which is not expected at this time, many believe that it would be likely to receive federal support. The sharpest swings in the muni market have been seen in the $100bn so-called “Build America bonds” – or Babs – a type of US muni debt that has characteristics similar to corporate bonds. This sector has attracted a fresh investor base, which is now demanding greater compensation for risk.
Risk premiums, or spreads on Babs relative to Treasuries, have risen to 228 basis points, according to an index from Barclays Capital. The spreads have climbed from a low of 161bp in early May to their highest level since Barclays started compiling the index last October.
Absolute yields have risen to 6.03 per cent from 5.97 per cent.“The problems in the eurozone have driven up fixed-income yields overseas – on banks, utilities and sovereigns,” said Matt Fabian, a managing director at Municipal Market Advisors. “Babs compete directly against those issuers for buyers.”
The cost of insuring against default for munis also has risen. However, this part of the derivatives market is rather illiquid, and the mainstream part of the muni market has not seen as dramatic a swing as the Babs sector, partly because this is dominated by a traditional base of investors. These include local buyers who receive tax breaks when they buy US muni bonds, and who have historically been relatively loyal.
The muni sector has been known for its relatively few defaults and debt service is high in the pecking order of bills that states must pay. However, the threat of default has come to the fore as some states struggled to balance budgets after years of lower revenue and as federal stimulus is tapering off.
http://www.ft.com/cms/s/0/fb933f08-885b-11df-aade-00144feabdc0.html
Sunday, June 06, 2010
Bill Gross : “debt super cycle.”
By Garfield Reynolds and Wes Goodman
June 4 (Bloomberg) -- President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=aa0cI64Gx.4E&pos=15
The CHART OF THE DAY tracks U.S. gross domestic product and the government’s total debt, which rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, based on forecasts by the International Monetary Fund. The lower panel shows U.S. annual GDP growth as tracked by the IMF, which projects the world’s largest economy to expand at a slower pace than the 3.2 percent average during the past five decades.
“Over the long term, interest rates on government debt will likely have to rise to attract investors,” said Hiroki Shimazu, a market economist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest publicly traded bank. “That will be a big burden on the government and the people.”
Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co. in Newport Beach, California, said in his June outlook report that “the debt super cycle trend” suggests U.S. economic growth won’t be enough to support the borrowings “if real interest rates were ever to go up instead of down.”
Dan Fuss, who manages the Loomis Sayles Bond Fund, which beat 94 percent of competitors the past year, said last week that he sold all of his Treasury bonds because of prospects interest rates will rise as the U.S. borrows unprecedented amounts. Obama is borrowing record amounts to fund spending programs to help the economy recover from its longest recession since the 1930s.
“The incremental borrower of funds in the U.S. capital markets is rapidly becoming the U.S. Treasury,” Boston-based Fuss said. “Do you really want to buy the debt of the biggest issuer?”
To contact the reporters on this story: Garfield Reynolds in Sydney at greynolds1@bloomberg.net; Wes Goodman in Singapore at wgoodman@bloomberg.net.
Last Updated: June 4, 2010 05:06 EDT
http://www.bloomberg.com/apps/news?pid=20601109&sid=aa0cI64Gx.4E&pos=15
Saturday, May 29, 2010
“Spain’s downgrade just adds to more uncertainty,”
U.S. Stocks, Oil, Euro Tumble; Dow Ends Worst May Since 1940
May 28 (Bloomberg) -- U.S. stocks slid, capping the worst May for the Dow Jones Industrial Average since 1940, while the euro slumped and Treasuries rose as a downgrade of Spain’s debt rating and escalating tensions on the Korean peninsula triggered a flight from riskier assets.
http://www.bloomberg.com/apps/news?pid=20601087&sid=apgUzNgFGKLA
The Dow tumbled 122.36 points, or 1.2 percent, to 10,136.63 at 4 p.m. in New York and lost 7.9 percent this month. The Standard & Poor’s 500 Index sank 1.2 percent to 1,089.41, led by financial shares on the Spanish downgrade and energy companies after U.S. President Barack Obama extended a moratorium on new deep-water drilling. Oil erased gains after rallying as much as 1.6 percent to more than $75 a barrel. Ten-year Treasury yields decreased 7 basis points to 3.3 percent. The euro slipped 0.7 percent to $1.2273.
Equities and commodities extended losses after Fitch Ratings stripped Spain of the AAA rating it’s held since 2003, saying the nation’s economic growth will slow as it attempts to cut its debts. Earlier losses followed disappointing U.S. economic data and a North Korean general’s warning of “all-out war” if any accidental clashes with South Korea break out.
“Spain’s downgrade just adds to more uncertainty,” said Quincy Krosby, chief market strategist for Newark, New Jersey- based Prudential Financial Inc., which oversees about $667 billion. “There are too many geopolitical events. We have a three-day weekend in the U.S., and traders will definitely want to lighten their books.”
‘All-Out War’
Losses in U.S. stocks widened earlier after North Korean Major General Pak Rim Su disputed the results of the international investigation that found his nation sank a South Korean warship. “Any accidental clash that may break out in the waters of the West Sea of Korea or in areas along the Demilitarized Zone will lead to all-out war,” he said, according to North Korea’s official news organization.
http://www.bloomberg.com/apps/news?pid=20601087&sid=apgUzNgFGKLA
May 28 (Bloomberg) -- U.S. stocks slid, capping the worst May for the Dow Jones Industrial Average since 1940, while the euro slumped and Treasuries rose as a downgrade of Spain’s debt rating and escalating tensions on the Korean peninsula triggered a flight from riskier assets.
http://www.bloomberg.com/apps/news?pid=20601087&sid=apgUzNgFGKLA
The Dow tumbled 122.36 points, or 1.2 percent, to 10,136.63 at 4 p.m. in New York and lost 7.9 percent this month. The Standard & Poor’s 500 Index sank 1.2 percent to 1,089.41, led by financial shares on the Spanish downgrade and energy companies after U.S. President Barack Obama extended a moratorium on new deep-water drilling. Oil erased gains after rallying as much as 1.6 percent to more than $75 a barrel. Ten-year Treasury yields decreased 7 basis points to 3.3 percent. The euro slipped 0.7 percent to $1.2273.
Equities and commodities extended losses after Fitch Ratings stripped Spain of the AAA rating it’s held since 2003, saying the nation’s economic growth will slow as it attempts to cut its debts. Earlier losses followed disappointing U.S. economic data and a North Korean general’s warning of “all-out war” if any accidental clashes with South Korea break out.
“Spain’s downgrade just adds to more uncertainty,” said Quincy Krosby, chief market strategist for Newark, New Jersey- based Prudential Financial Inc., which oversees about $667 billion. “There are too many geopolitical events. We have a three-day weekend in the U.S., and traders will definitely want to lighten their books.”
‘All-Out War’
Losses in U.S. stocks widened earlier after North Korean Major General Pak Rim Su disputed the results of the international investigation that found his nation sank a South Korean warship. “Any accidental clash that may break out in the waters of the West Sea of Korea or in areas along the Demilitarized Zone will lead to all-out war,” he said, according to North Korea’s official news organization.
http://www.bloomberg.com/apps/news?pid=20601087&sid=apgUzNgFGKLA
Tuesday, May 25, 2010
The government’s finances have been “substantially worsened by the credit crisis, recession, and government spending to address these shocks,”
By Mary Childs
http://www.bloomberg.com/apps/news?pid=20601087&sid=az1YD_O3PXz4
May 25 (Bloomberg) -- The U.S. government’s Aaa bond rating will come under pressure in the future unless additional measures are taken to reduce projected record budget deficits, according to Moody’s Investors Service Inc.
The U.S. retains its top rating for now because of a “high degree of economic and institutional strength,” the New York- based ratings company said in a statement today that was little changed from a credit opinion released in February. The outlook is stable, the statement said.
The government’s finances have been “substantially worsened by the credit crisis, recession, and government spending to address these shocks,” Moody’s analysts lead by Steven A. Hess wrote. “The ratios of general government debt to GDP and to revenue are deteriorating sharply, and after the crisis they are likely to be higher than the ratios of other Aaa-rated countries.”
Debt to revenue has more than doubled over the past three years and is now over 400 percent, which could lead to “potential stress” on finances, the report said.
“This whole financial crisis in Europe has actually benefitted the U.S. government in its access to finance,” Hess said in a telephone interview. “The U.S. Treasury market has become once again, as it was during the recent financial crisis globally, the safe haven, and therefore lots of money flows into the U.S. Treasury market and that is a very positive.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=az1YD_O3PXz4
Friday, April 23, 2010
Goldman's White House connections raise eyebrows
WASHINGTON — While Goldman Sachs' lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman's chief executive visited the White House at least four times.
Read more: http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html#ixzz0lv4chbKS
White House logs show that Chief Executive Lloyd Blankfein traveled to Washington for at least two events with President Barack Obama, whose 2008 presidential campaign received $994,795 in donations from Goldman's employees and their relatives. He also met twice with Obama's top economic adviser, Larry Summers.
No evidence has surfaced to suggest that Blankfein or any other Goldman executive raised the SEC case with the president or his aides. SEC Chairwoman Mary Schapiro said in a statement Wednesday that the SEC doesn't coordinate enforcement actions with the White House or other political bodies.
Meanwhile, however, Goldman is retaining former Obama White House counsel Gregory Craig as a member of its legal team. In addition, when he worked as an investment banker in Chicago a decade ago, White House Chief of Staff Rahm Emanuel advised one client who also retained Goldman as an adviser on the same $8.2 billion deal.
Goldman's connections to the White House and the Obama administration are raising eyebrows at a time when Washington and Wall Street are dueling over how to overhaul regulation of the financial world.
Read more: http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html#ixzz0lv4chbKS
Read more: http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html#ixzz0lv4chbKS
White House logs show that Chief Executive Lloyd Blankfein traveled to Washington for at least two events with President Barack Obama, whose 2008 presidential campaign received $994,795 in donations from Goldman's employees and their relatives. He also met twice with Obama's top economic adviser, Larry Summers.
No evidence has surfaced to suggest that Blankfein or any other Goldman executive raised the SEC case with the president or his aides. SEC Chairwoman Mary Schapiro said in a statement Wednesday that the SEC doesn't coordinate enforcement actions with the White House or other political bodies.
Meanwhile, however, Goldman is retaining former Obama White House counsel Gregory Craig as a member of its legal team. In addition, when he worked as an investment banker in Chicago a decade ago, White House Chief of Staff Rahm Emanuel advised one client who also retained Goldman as an adviser on the same $8.2 billion deal.
Goldman's connections to the White House and the Obama administration are raising eyebrows at a time when Washington and Wall Street are dueling over how to overhaul regulation of the financial world.
Read more: http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html#ixzz0lv4chbKS
Wednesday, April 21, 2010
Goldmangate?
Read more: http://www.politico.com/news/stories/0410/36097.html#ixzz0ljawpunI
Rep. Darrell Issa, the top Republican on the House Oversight committee, is demanding a slew of documents from the Securities and Exchange Commission, asserting that the timing of civil charges against Goldman Sachs raises “serious questions about the commission’s independence and impartiality.”
Issa’s letter, addressed to SEC Chairwoman Mary Schapiro and signed by eight other House Republicans, asks whether the commission had any contact about the case, prior to its public release, with White House aides, Democratic Party committee officials, or members of Congress or their staff.
“[W]e are concerned that politics have unduly influenced the decision and timing of the commission’s controversial enforcement action against Goldman,” Issa writes.
Issa implied that the timing was a bit too convenient, saying President Barack Obama’s push on Wall Street reform “neatly coincided with the commission’s announcement of the suit.”
Read more: http://www.politico.com/news/stories/0410/36097.html#ixzz0ljagSXS7
Tuesday, April 06, 2010
Paul Volcker : The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax,
Volcker: Taxes likely to rise eventually to tame deficit
http://www.reuters.com/article/idUSTRE6355N520100406
NEW YORK
Tue Apr 6, 2010 7:57pm EDT NEW YORK (Reuters) - The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker said on Tuesday.
Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax "was not as toxic an idea" as it has been in the past and also said a carbon or other energy-related tax may become necessary.
Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. "If at the end of the day we need to raise taxes, we should raise taxes," he said.
(Reporting by Steven C. Johnson and Leah Schnurr; editing by Carol Bishopric)
http://www.reuters.com/article/idUSTRE6355N520100406
http://www.reuters.com/article/idUSTRE6355N520100406
NEW YORK
Tue Apr 6, 2010 7:57pm EDT NEW YORK (Reuters) - The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker said on Tuesday.
Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax "was not as toxic an idea" as it has been in the past and also said a carbon or other energy-related tax may become necessary.
Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. "If at the end of the day we need to raise taxes, we should raise taxes," he said.
(Reporting by Steven C. Johnson and Leah Schnurr; editing by Carol Bishopric)
http://www.reuters.com/article/idUSTRE6355N520100406
Monday, April 05, 2010
OBAMA'S ODD 17-MINUTE, 2,500-WORD RESPONSE TO WOMAN'S SIMPLE CLAIM OF BEING 'OVER-TAXED'...
by Anne E. Kornblut
http://voices.washingtonpost.com/44/2010/04/obamas-17-minute-2500-word-res.html
CHARLOTTE - Even by President Obama's loquacious standards, an answer he gave here on health care Friday was a doozy.
Toward the end of a question-and-answer session with workers at an advanced battery technology manufacturer, a woman named Doris stood to ask the president whether it was a "wise decision to add more taxes to us with the health care" package.
"We are over-taxed as it is," Doris said bluntly.
Obama started out feisty. "Well, let's talk about that, because this is an area where there's been just a whole lot of misinformation, and I'm going to have to work hard over the next several months to clean up a lot of the misapprehensions that people have," the president said.
He then spent the next 17 minutes and 12 seconds lulling the crowd into a daze. His discursive answer - more than 2,500 words long -- wandered from topic to topic, including commentary on the deficit, pay-as-you-go rules passed by Congress, Congressional Budget Office reports on Medicare waste, COBRA coverage, the Recovery Act and Federal Medical Assistance Percentages (he referred to this last item by its inside-the-Beltway name, "F-Map"). He talked about the notion of eliminating foreign aid (not worth it, he said). He invoked Warren Buffett, earmarks and the payroll tax that funds Medicare (referring to it, in fluent Washington lingo, as "FICA").
Always fond of lists, Obama ticked off his approach to health care -- twice. "Number one is that we are the only -- we have been, up until last week, the only advanced country that allows 50 million of its citizens to not have any health insurance," he said.
A few minutes later he got to the next point, which seemed awfully similar to the first. "Number two, you don't know who might end up being in that situation," he said, then carried on explaining further still.
"Point number three is that the way insurance companies have been operating, even if you've got health insurance you don't always know what you got, because what has been increasingly the practice is that if you're not lucky enough to work for a big company that is a big pool, that essentially is almost a self-insurer, then what's happening is, is you're going out on the marketplace, you may be buying insurance, you think you're covered, but then when you get sick they decide to drop the insurance right when you need it," Obama continued, winding on with the answer.
Halfway through, an audience member on the riser yawned.
But Obama wasn't finished. He had a "final point," before starting again with another list -- of three points.
"What we said is, number one, we'll have the basic principle that everybody gets coverage," he said, before launching into the next two points, for a grand total of seven.
His wandering approach might not matter if Obama weren't being billed as the chief salesman of the health-care overhaul. Public opinion on the bill remains divided, and Democratic officials are planning to send Obama into the country to persuade wary citizens that it will work for them in the long run.
It was not evident that he changed any minds at Friday's event. The audience sat politely, but people in the back of the room began to wander off.
Even Obama seemed to recognize that he had gone on too long. He apologized -- in keeping with the spirit of the moment, not once, but twice. "Boy, that was a long answer. I'm sorry," he said, drawing nervous laughter that sounded somewhat like relief as he wrapped up.
But, he said: "I hope I answered your question."
http://voices.washingtonpost.com/44/2010/04/obamas-17-minute-2500-word-res.html
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