TRYING TO FIND LIGHT AT THE END OF THE RAINBOW-PUNDITS GRASPING AT STRAWS TO FIND POSITIVE SIGNS OF ECONOMIC RECOVERY



It seems that every sign of anything moving up in any statistical reports is being looked at or interpreted as a sign of a recovery.

There are of course seasonal and other factors to consider. November and December for instance, typically allow temporary hiring to take place, and retail sales pick up due to the gift buying season. So seeing an uptick in these statistics is really stretching it a bit to say that the recovery is here!

Housing starts are up.....due to the unprecedented tax credits for home buyers and due to the significant reduction in the price of new homes being available. Also, the statistics do not consider or compare if the home being built consists of 900 square feet for sale at $100,000, or 9,000 square feet for sale at $1,000,000. There is a significant difference if we are building 900 square foot homes or 9,000 square foot homes.

The most important bottom up recovery has to take place in key industries which are a sign of life for the rest of the economy such as steel production, manufacturing, autos, housing, and other heavy industries.

There appears to be no such trend. Even Nevada casinos are mothballing rooms due to lack of demand in what was considered a recession proof industry.

Every piece of pending or planned legislation in Congress is attacking industry and business, especially small business which is the major employer in the country. There is absolutely no reason for businesses to expand right now, and in fact the opposite is true---productivity is being increased....with less employees, not with added employees.

The economy is weak enough to keep inflation in check but strong enough to increase the pace of home construction and raise hopes for a sustained recovery (ha).

That was the picture sketched Wednesday by government data showing an economy growing, however slowly.

Higher energy prices sent overall consumer prices higher in November. But after stripping out volatile energy and food prices, inflation disappeared last month. That gives the Federal Reserve, ending a two-day meeting Wednesday, leeway to hold its key interest rate at a record low to aid the recovery.

At the same time, home construction rebounded in November after a setback in October. And applications for new building permits -- a gauge of future activity -- rose more than economist had predicted. A housing recovery is critical to the overall economy.

Also Wednesday, the government said its broadest measure of foreign trade posted a sharp increase in the July-September quarter, signaling higher demand for foreign goods. That, too, is seen as a sign of a strengthening economy.

yes, but not the USA economy!

The current account is the broadest measure of trade because it includes not only trade in goods and services but also investment flows among countries.

For last month, the Consumer Price Index, the most closely watched inflation barometer, rose 0.4 percent. That was up from a 0.3 percent increase in October, the Labor Department reported. But "core" inflation, which excludes energy and food, was flat, signaling that inflation isn't rising through the economy. It was the first time core inflation was unchanged after 10 straight monthly increases.

"Aside from the surge in energy prices ... there were few signs of any inflationary pressures," said Paul Ashworth, economist at Capital Economics Ltd.

In the months ahead, companies will likely find it hard to raise prices because consumers are expected to remain cautious, the job market is weak and the recovery is sluggish.

Fed Chairman Ben Bernanke says he thinks slack in the economy -- meaning idle plants and the weak job market -- will keep inflation in check. The Fed is expected Wednesday afternoon to announce that it's leaving interest rates at a record low. It may also strike an upbeat note about the economy's progress.

The government said energy prices rose 4.1 percent last month, reflecting more expensive fuel oil and gasoline. Energy prices, though, are already in retreat. Oil prices are down about 10 percent this month.

Food prices, meanwhile, edged up 0.1 percent for the second straight month. Falling prices for dairy products and nonalcoholic drinks helped blunt small increases for meat, cereals and baked goods, and fruits and vegetables.

Elsewhere, prices for clothing fell as retailers struggled to lure shoppers. Costs for recreation and for shelter dipped. But prices for airline fares, new cars, medical care and tobacco products all rose.

The uptick in inflation last month, however slight, ate into Americans' already-weak wages. Average weekly earnings, adjusted for inflation, dipped 0.7 percent from November 2008, according to a separate Labor Department report Wednesday. It was the first such drop this year.

On Tuesday, the government said its Producer Price Index, which measures the costs of goods before they reach stores, jumped 1.8 percent in November. That was more than double the gain analysts had expected. Higher-priced energy products and trucks drove the increase.

In the Commerce Department's report on housing starts, it said construction of new homes and apartments rose 8.9 percent in November to a seasonally adjusted annual rate of 574,000 units. The gain represented strength in all areas of the country, though the rise was slightly lower than economists had expected.

Applications for new building permits rose 6 percent, a stronger showing than predicted. Again there is no distinction as to the price of the homes which are being built, I bet their value is much lower than traditionally.

The government is spending an unprecedented amount to prop up the housing market. The money includes about $111 billion by year's end to shore up mortgage finance companies Fannie Mae and Freddie Mac -- plus roughly $15 billion for a tax credit for homebuyers.

In addition, the tax credit is being extended until spring at a cost of $8.5 billion. And the cost of bailing out Fannie and Freddie could ultimately soar as high as $300 billion, according to Barclays Capital.

Separately, the Fed has helped keep mortgage rates down by spending $1.25 trillion to buy mortgage-backed securities. These purchases are expected to be completed by spring.

For the third quarter, the current account deficit in goods grew to $132.1 billion, up from $115.5 billion in the second quarter. At the same time, the U.S. surplus in services -- such as airline travel, shipping and financial services -- widened to $34.8 billion from $34.2 billion.

Exports of products rose 7.2 percent, driven by automotive products, heavy capital goods and consumer products. But imports of goods rose at a faster rate, led by foreign oil and autos.

The rise in exports has been helped by a decline of about 10 percent in the value of the dollar against major currencies. A weaker dollar makes American products cheaper for foreigners to buy, and the value of our savings accounts and other assets denominated in US Dollars is worth less.

FOOLS RUSH IN TO EMBRACE 10% UNEMPLOYMENT RATE AS "SIGN" OF AN ECONOMIC IMPROVEMENT-NOT!



Wow, national unemployment is now only 10%...or 17.2% real unemployment! This is good news?

Contrary to the top line reporting, taking a real analysis in reading the reports, the job losses continue in the highest paying jobs like manufacturing and construction! They are growing, not falling, contrary to the fortune tellers who see some type of magical economic turnaround.

To use my company as an example, we routinely add 15-20 employees during November and through the end of December to help during the busy season...after these two months we do not need them anymore. This year, we actually hied for these $10 an hour jobs with no other benefits 10 of the people who are laid off from MANAGEMENT POSITIONS!

In the past we hired housewives, now we got people with management degrees and experience. We will be offering them an opportunity to stay on in a fully commission position if they want to continue in January.

This is why the unemployment went down in November. It will spike up in january and onwards.

In the state I am located in, it remains very high due to unions controlling many of the factories in the area, I am non-union and thus am actually still profitable.

If under the new health plan I would be forced to provide health benefits, I would not hire these workers.

LACK OF BUSINESS EXPERIENCE BY PRESIDENTIAL ADVISORS MOST APPARENT IN THE CURRENT ADMINISTRATION


Recently released information revealed that about 8% of the Presidential advisers who advise him on all matters including economic matters, have ANY previous business experience! Yet, these advisers, are advising!

Apparently, no president in the last 100 years had anything close to this anemic statistic...no wonder we are diving head-first into financial/fiscal government and business disaster.

What can they advise on relating to business? They were never in a business, never operated a business, never made a payroll, etc..

So far the only advice was to raise taxes on the employers and high earning individuals (who pay literally all the taxes anyway right now.) This is not an economic policy, but rather income re-distribution that does nothing to create jobs.

At present about 115 million people are employed by small business at 5 million individual firms.

The needs of these firms are totally overlooked, as evidenced by the fact that the CHAMBER OF COMMERCE, was not represented at the JOB SUMMIT called by the President.

Based on the present state of economic affairs, and the lack of experience by the Presidential advisers, expect that the next 3 years will be very challenging for businesses, employees and the economy.

PRIVATE EMPLOYERS CAN NOT COMPETE WITH PUBLIC EMPLOYEE GROUPS WHO ARE HIGHLY OVERPAID AND LACK PRODUCTIVITY


Pay Excesses

* Federal civilian wages averaged $79,197 in 2008, more than 50% greater than that of the average private sector employee’s wages of $49,935.
* Pay in the public sector climbed 53.7% from 2000 to 2008 for federal civilian workers while wages in the private sector rose just 28.5% over the same time period.
* The U.S. government issued employee bonuses of some $370 million last year.
* The average state and local government employee earns 29% more than the average private sector employee.
* More than 40% of city employees In Vallejo, California, had salaries greater than $100,000 in 2008. In May 2008, Vallejo filed for bankruptcy.
* Taxpayers support some hefty teacher salaries in Illinois. For example:
o a physical education teacher earning $163,000 (more than 400 earn in excess of $100,000)
o an English teachers earning $164,000 (more than 300 earn in excess of $100,000)
o a driver education teacher earning $170,000 (94 earn in excess of $100,000)
* In New York, state agency workers collected more than $459 million in overtime, with one aide clocking in 2,455 extra hours, nearly tripling her base salary from $38,500 to $110,841.

Benefits Disparity

* When wages and benefits are combined, federal civilian workers averaged $119,982 in 2008, twice the amount of $59,909 which workers in the private sector averaged for wages/benefits.
* The value of benefits for federal civilian workers averaged $40,000/year, four times the value of benefits that the average private sector employee receives.
* Only 12%of retirees from the private sector have defined benefit pensions to supplement Social Security. Their average annual pension is $13,083, and they are not eligible for full Social Security benefits until their late 60s.
* BUT…. The majority of public sector workers have pension plans that allow them to retire 10-25 years earlier with benefits many times the retirement payout that Social Security would provide.
* In San Jose, California, 256 retired officers and firefighters and 34 other city workers collect $100,000+ pensions, and all city retirees get free healthcare.
* Florida taxpayers foot the bill for $1.44 billion in the past year toward healthcare coverage for state employees who also enjoy perks like free college classes and financial consulting.

Double-Dipping/Spiking/Pension Abuse

* More than 4,000 state employees are double-dipping in Arizona.
* In Florida, a police commander in Delray Beach retired at age 42 earning $90,000 a year. He now collects a pension of $65,000 and earns a salary from his new job at a nearby beach.
* There are at least 9,000 public employees and 200 elected officials double dipping in Florida.
o A Miami-Dade community college president got a lump sum of $893,286 and earns $441,538 annually, in addition to his $14,631/month pension.
o An Indian River State College president got a lump sum of $585,000 and earns $286,470 annually, in addition to his $9,823/month pension.
o A Northwest Florida State College president got a lump sum of $553,228 and earns $228,000 annually, in addition to his $8,803/month pension.
* In Connecticut, there were 29 retirees collecting a six-figure pension and still collecting a paycheck as of 2008.
* In San Francisco, California, the prevalence of “spiking”, or boosting pension benefits via final work year promotions, has resulted in over half of the police and firefighters in the past decade earning pensions in excess of the wages they earned while actively working.
* In Arkansas, there are at least 144 employees on the state payroll who have retired and returned to the same job after less than two months since June 2001.
* Public school teachers in New York are able to retire at 55 with pensions sometimes larger than their annual salaries by cashing in unused sick and vacation time. Nearly 700 former NY teachers and administrators receive pensions over $100,000.
* The highest paid city official in California was earning more than $500,000 as a city administrator when he was arrested. He was charged with embezzlement of city funds. Still, he continued earning a $500,000/year pension, even as he waited for his trial.
* Several New York state employees are collecting pensions despite being convicted of crimes. Some examples include:
o A Buffalo detective convicted of stealing from suspected drug dealers and sentenced to 30 months is collecting a $54,751 pension.
o A state comptroller convicted of defrauding the government and indicted in a kick-back scheme involving state pension investments is still collecting a $166,467 pension.
o A teacher convicted of sexually abusing members of the Boy Scout troop he led and sentenced to 50 years is still collecting a $52,073 pension.
o A detective convicted of orchestrating mob hits and sentenced to life is collecting a $63,000 pension.

Employment Situation

* The private sector lost some 5.2 million workers while government grew by 238,000 workers between July 2008 and July 2009.
* Since the recession began in December 2007, private sector employment has declined 5.74 percent, while government payroll has grown 0.83 percent.

Growing Debt and Unfunded Liabilities

* The total public debt is now at $11.8 trillion.
* Interest payments alone on debt came to $452 billion in 2008.
* The Congressional Budget Office states that by next year America’s debt will exceed 60% of its Gross Domestic Product (GDP). In 2023, our debt will exceed 100% of the GDP.
* The unfunded liability for Social Security is $17.5 trillion in 2009, according to the National Center for Policy Analysis. Medicare Part A is underfunded by $36.7 trillion, Part B by $37.0 trillion and Part D by $15.6 trillion, bringing the total unfunded liability for Social Security and Medicare to some $106.8 trillion!
* The unfunded liability for state and local pension plans was pegged at $400 billion, but American Enterprise Institute scholar Andrew Biggs estimates the actual amount of unfunded liability is more than $3.5 trillion if analyzed in the same manner as private sector plans.

Government’s Decisions for Dealing with Budget Shortfalls

* Colorado has proposed to free 3,100 inmates six months early and end the oversight of some parolees to save almost $19 million toward the state’s $318 million budget deficit.
* Arizona legislators are considering selling their own headquarters, the state fairgrounds and some 30 other state-owned properties to meet their budget shortfall. They could make about $735 million on the combined sales but would then lease back the properties, costing $1.2 billion over the next 20 years.
* In Texas, the city of Dallas will likely cut funds to public parks, libraries and recreation centers, resulting in less maintenance, fewer books, shorter hours and program cancellations.
* In Illinois, the city of Chicago made a $1.15 billion deal to privatize the city’s parking meters via a 75-year lease to ease Chicago’s budget deficit, but that money will be exhausted in 2010.
* Indiana privatized its toll roads to Australian and Spanish investors in 2006 for the next 75 years for a lump sum payment of $2.8 billion, but the one-time infusion of cash, meant to cover the state’s highway funding deficit without new taxes, will only cover the shortfall for 10 years.

The above are just a few examples of the more than 2,000 entries in The Free Enterprise Nation database.

TRUE UNEMPLOYMENT IS REALLY HIGH, NOT LIKELY TO COME BACK-CHINA, INDIA CHEAP LABOR WILL DOMINATE MANUFACTURING DUE TO LOW COST LABOR




Do not be fooled by unemployment numbers as reported. As experts debate the potential speed of the US recovery, one figure looms large but is often overlooked: nearly 1 in 5 Americans is either out of work or under-employed.

According to the government's broadest measure of unemployment, some 17.5 percent are either without a job entirely or underemployed. The so-called U-6 number is at the highest rate since becoming an official labor statistic in 1994.

The number dwarfs the statistic most people pay attention to—the U-3 rate—which most recently showed unemployment at 10.2 percent for October, the highest it has been since June 1983.

The difference is that what is traditionally referred to as the "unemployment rate" only measures those out of work who are still looking for jobs. Discouraged workers who have quit trying to find a job, as well as those working part-time but looking for full-time work or who are otherwise underemployed, count in the U-6 rate.

With such a large portion of Americans experiencing employment struggles, economists worry that an extended period of slow or flat growth lies ahead.

"To me there's no easy solution here," says Michael Pento, chief economist at Delta Global Advisors. "Unless you create another bubble in which the economy can create jobs, then you're not going to have growth. That's the sad truth."

Pento warns that forecasts of a double-dip ("W") or a straight up ("V") recovery both could be too optimistic given the jobs situation.

Instead, he believes the economy could flatline (or "L") for an extended period as small businesses struggle to grow and consequently rehire the workers that have been furloughed as the U-3 unemployment rate has doubled since March 2008.

As that trend has happened, the U-6 rate has expanded at an even more dramatic pace. Economists cite several reasons for the phenomenon.

For one, more workers are becoming discouraged as real estate—the focal point for the expansion in the earlier part of the decade—has collapsed and taken millions of directly related and ancillary jobs with it.

Many workers believe those jobs aren't coming back, and have thus quit looking and added themselves to the broader unemployment count.

"In the earlier part of this decade, 40 percent of all new jobs created were in real estate. Attorneys, mortgage brokers, agents, construction—they were all circled around housing," Pento says. "We've had a jobless recovery in the last two recessions. This is going to be the third jobless recovery in a row."

Another factor that may be leading people onto the rolls of those no longer looking for jobs is the government's accommodative extensions of jobless benefits.

"Workers are unemployed for a much longer span than we've seen historically," says David Resler, chief economist at Nomura Securities International in New York. "Part of that may be affected by the longer availability of benefits. It reduces the incentives for an urgent job search."

The U-6 rate debuted in January of 1994 at 11.8 percent, while the U-3 was at 6.6 percent. The measure hit a low of 6.9 percent in April 2000 while U-3 sat at 3.8 percent.

While the current methodology only dates back 15 years, a former U-6 gauge was in existence previously and peaked at 14.3 percent in 1982. Economists predict the current measure would fall just below that number using the same methodology.

"We're in the process of discovering how severe this recession and the long-run impact on certain industries will be and what that will do to overall employment," Resler says. The U-6 rate "portends a very slow, sluggish recovery."

If that holds and the US economy stays weak, that presents challenges for investors.

"People focus too much on that 10 percent number and not on the larger number," says Kevin Mahn, chief investment officer at Hennion & Walsh in Parsippany, N.J. "There's a humongous inventory of people out there looking for work and have been looking for work for a long time. Where are those jobs going to come from?"

High unemployment and the resulting pressure on consumers is driving many investors to look for opportunities overseas and in other assets.

Walsh says that trend is going to continue, with clients going to foreign markets, real estate investment trusts, certain bonds—anywhere that can offer profits above the slow-growth mire of US-based investments.

"If full employment is 4 percent, people are wondering how we're going to get from 10 (percent) to 4. Well, try getting from 17 to 4. We may not get back to full employment for a decade," Mahn says. "As an investor, that causes me to look for different places now. Maybe you can't just put money in US large caps and ride out this recovery."

The future economic growth will come from nations such as China and India which have significant future consumer needs. However, these consumers will not be buying expensive USA produced products. They will be buying low priced items made in.....China and India!

Therefore any forward looking business will start a factory not in the USA, but rather in China or India, where wages are under $1 per hour. This is just common sense.

TREASURY NOW IN SAME POSITION AS HOMEOWNERS WHO TOOK ON TOO MUCH DEBT: HIGHER RATES WILL HURT THE BUDGET DEFICIT AND CAUSE PROBLEMS




Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means.

The surge in borrowing over the last year or two is widely judged to have been a necessary response to the financial crisis and the deep recession, and there is still a raging debate over how aggressively to bring down deficits over the next few years. But there is little doubt that the United States’ long-term budget crisis is becoming too big to postpone.

Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.

The competing demands could deepen political battles over the size and role of the government, the trade-offs between taxes and spending, the choices between helping older generations versus younger ones, and the bottom-line questions about who should ultimately shoulder the burden.

“The government is on teaser rates,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates lower deficits. “We’re taking out a huge mortgage right now, but we won’t feel the pain until later.”

So far, the demand for Treasury securities from investors and other governments around the world has remained strong enough to hold down the interest rates that the United States must offer to sell them. Indeed, the government paid less interest on its debt this year than in 2008, even though it added almost $2 trillion in debt.

The government’s average interest rate on new borrowing last year fell below 1 percent. For short-term i.o.u.’s like one-month Treasury bills, its average rate was only sixteen-hundredths of a percent.

“All of the auction results have been solid,” said Matthew Rutherford, the Treasury’s deputy assistant secretary in charge of finance operations. “Investor demand has been very broad, and it’s been increasing in the last couple of years.”

The problem, many analysts say, is that record government deficits have arrived just as the long-feared explosion begins in spending on benefits under Medicare and Social Security. The nation’s oldest baby boomers are approaching 65, setting off what experts have warned for years will be a fiscal nightmare for the government.

“What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”

The current low rates on the country’s debt were caused by temporary factors that are already beginning to fade. One factor was the economic crisis itself, which caused panicked investors around the world to plow their money into the comparative safety of Treasury bills and notes. Even though the United States was the epicenter of the global crisis, investors viewed Treasury securities as the least dangerous place to park their money.

On top of that, the Fed used almost every tool in its arsenal to push interest rates down even further. It cut the overnight federal funds rate, the rate at which banks lend reserves to one another, to almost zero. And to reduce longer-term rates, it bought more than $1.5 trillion worth of Treasury bonds and government-guaranteed securities linked to mortgages.

Those conditions are already beginning to change. Global investors are shifting money into riskier investments like stocks and corporate bonds, and they have been pouring money into fast-growing countries like Brazil and China. Why buy a bond that pays literally no interest?

The Fed, meanwhile, is already halting its efforts at tamping down long-term interest rates. Fed officials ended their $300 billion program to buy up Treasury bonds last month, and they have announced plans to stop buying mortgage-backed securities by the end of next March.

Eventually, though probably not until at least mid-2010, the Fed will also start raising its benchmark interest rate back to more historically normal levels.

The United States will not be the only government competing to refinance huge debt. Japan, Germany, Britain and other industrialized countries have even higher government debt loads, measured as a share of their gross domestic product, and they too borrowed heavily to combat the financial crisis and economic downturn. As the global economy recovers and businesses raise capital to finance their growth, all that new government debt is likely to put more upward pressure on interest rates.

Lenders to these debt burdened borrowers want to see a reasonable interest rate paid on the debt instruments that they are buying!

Even a small increase in interest rates has a big impact. An increase of one percentage point in the Treasury’s average cost of borrowing would cost American taxpayers an extra $80 billion this year — about equal to the combined budgets of the Department of Energy and the Department of Education.

But that could seem like a relatively modest pinch. Alan Levenson, chief economist at T. Rowe Price, estimated that the Treasury’s tab for debt service this year would have been $221 billion higher if it had faced the same interest rates as it did last year.

The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years. On top of that, the Treasury has to refinance, or roll over, a huge amount of short-term debt that was issued during the financial crisis. Treasury officials estimate that about 36 percent of the government’s marketable debt — about $1.6 trillion — is coming due in the months ahead.

To lock in low interest rates in the years ahead, Treasury officials are trying to replace one-month and three-month bills with 10-year and 30-year Treasury securities. That strategy will save taxpayers money in the long run. But it pushes up costs drastically in the short run, because interest rates are higher for long-term debt.

Adding to the pressure, the Fed is set to begin reversing some of the policies it has been using to prop up the economy. Wall Street firms advising the Treasury recently estimated that the Fed’s purchases of Treasury bonds and mortgage-backed securities pushed down long-term interest rates by about one-half of a percentage point. Removing that support could in itself add $40 billion to the government’s annual tab for debt service.

This month, the Treasury Department’s private-sector advisory committee on debt management warned of the risks ahead.

“Inflation, higher interest rate and rollover risk should be the primary concerns,” declared the Treasury Borrowing Advisory Committee, a group of market experts that provide guidance to the government, on Nov. 4.

“Clever debt management strategy,” the group said, “can’t completely substitute for prudent fiscal policy.”

There is no prudent fiscal policy in the USA right now, and not likely to be any as the Congress considers nothing but anti-business high tax policies.

ECONOMY IS GOING INTO THE CRAPPER-RESCUE PLANS ARE NONSENSE DEVISED BY ECONOMIC ILLITERATES-I AM GETTING OUT WHILE I STILL CAN!



As a small business owner over the last 30 years, I have seen it all, but I have never experienced the sheer economic illiteracy as is being exhibited right now, and as best as I can tell into the next 3 years of the present administration.

In the middle of one of the worst economic slow-downs, the economic illiterates, and their initials are Barney F., Nancy P., Harry R., Chuck S., Joseph B.,....and on and on, are learning nothing, and are charging forward with policies that will surely destroy all entrepreneurial enterprises and new business development.

I previously thought of keeping the business and handing it to my children to operate, but the struggle that it has been in the last year, the "kids" do not want the struggle.

My company has had to deal with an OSHA matter requiring us to put in unnecessary handicap access ramps and a variety of needless "changes" and "safety updates" to our building. This $79,000 cost was financed by borrowing against our credit line.

Then one of the employees was diagnosed with cancer, and the policy for the business was increased by $300,000 annually!

The local county increased the tax on our building to $84,000 from $59,000, and added reporting burdens on a variety of issues that are meaningless.

Our customers are paying their bills slower so we had to borrow against our credit line to meet our payroll and now we are at the limit of our credit line.

I will not be able to borrow more, since there is no more collateral to provide to the bank.

With the looming threat of added costs for compliance, for health care and government mandates on the horizon, there is no point for me to personally expose myself financially to continue the business above its present lines of credit.

Therefore, at the end of this year, I am planning an auction sale of the business assets and property since there is no buyer that can get financing.

Washington is killing business, and is not listening to the people who actually run businesses, like me.

I am lucky, I am getting out while I still can.

UNEMPLOYMENT CLIMBING JUST AS PREDICTED-FORECASTS OF RECOVERY HAVE NO BASIS IN FACT-THEY ARE JUST WISHFUL THINKING



The unemployment rate is likely to go higher. AND WHY NOT, THE GOVERNMENT IS DOING ABSOLUTELY NOTHING TO STOP IT. We have economic illiterates in Washington calling the shots, and announcing new taxes, employer mandates, and higher operating costs for everyone though crazy things like a cap and trade tax!

Nearly 16 million people can't find jobs even though the worst recession since the Great Depression has apparently ended. Many economists worry that persistently high unemployment could undermine the recovery by restraining consumer spending, which accounts for 70 percent of the economy.

The Labor Department said Friday that jobless rate rose to 10.2 percent, the highest since April 1983, from 9.8 percent in September. The economy shed a net total of 190,000 jobs in October, less than the downwardly revised 219,000 lost in September, but more than economists expected.

The jump in the jobless rate reflects a sharp increase in the tally of unemployed Americans, which rose to 15.7 million from 15.1 million. The net loss of jobs occurred across most industries, from manufacturing and construction to retail and financial. That tally is based on a separate survey of businesses.

Economists say the unemployment rate could climb as high as 10.5 percent next year because employers remain reluctant to hire. WHO ARE THESE ECONOMISTS...MENTAL PATIENTS? That rate will be reached in December of 2009!

Counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent, the highest on records dating from 1994.

We need explosive growth to take the unemployment rate down, and there is nothing in the works by our clueless government to make that happen. Tax cuts, a tax holiday will assure growth, nothing else!

Persistently high unemployment is likely to become a political liability for President Barack Obama and Democrats in Congress. Most realistic economists expect the jobless rate will remain high and growing through next November, when congressional elections are held.

When unemployment topped 10 percent in the fall of 1982, President Ronald Reagan's Republican Party lost 26 seats in the House.

One sign of how hard it still is to find a job: the number of Americans who have been out of work for six months or longer rose to 5.6 million, a record. They comprise 35.6 percent of the unemployed population, matching a record set last month.

Congress sought to address the impact of long-term unemployment this week by approving legislation extending jobless benefits for the fourth time since the recession began. The bill would add 14 to 20 extra weeks of aid and is intended to prevent almost 2 million recipients from running out of unemployment insurance during the upcoming holiday season. Obama is expected to quickly sign the legislation. This will only provide LESS incentive for the unemployed to find jobs.

October was the 22nd straight month the U.S. economy has shed jobs, the longest on records dating back 70 years. The report showed job losses remain widespread across many industries. Manufacturers eliminated a net total of 61,000 jobs, the most in four months. Construction shed 62,000 jobs, down slightly from the previous month.

Retailers, the financial sector and leisure and hospitality companies all continued to reduce payrolls. The economy has lost a net total of 7.3 million jobs since the recession began in December 2007.

The average work week was unchanged at 33 hours, a disappointment because employers are expected to add more hours for current workers before they begin hiring new ones.

Still, economists expect jobs likely will remain scarce even as the economy improves. Diane Swonk, chief economist at Mesirow Financial, said that small businesses, a primary engine of job creation, still face tight credit and don't have the cash reserves to support extra workers.

And many companies are squeezing more production from their existing work forces. Productivity, the amount of output per hour worked, jumped 9.5 percent in the third quarter, the Labor Department said Thursday.

That's the sharpest increase in six years and followed a 6.9 percent rise in the second quarter. The increases enable companies to produce more without hiring extra people.

The Federal Reserve said earlier this week that it will keep a key interest rate at a record low level of nearly zero for an "extended period" to support the economy.

The central bank said economic activity has "continued to pick up," but Fed Chairman Ben Bernanke and his colleagues warned that rising joblessness and tight credit could restrain the rebound in the months ahead.

While the unemployment rate hasn't yet topped the post-World War II high of 10.8 percent set in December 1982, many experts say this recession is worse and this rate will easily be topped soon.

The unemployment rate was much lower when the recession began -- 4.9 percent in December 2007, compared with 7.2 percent in July 1981, when a brutal downturn started. That means the current job cuts have been much steeper to get to the 10 percent mark.

And the work force, on average, is older now as the baby boomers have aged and fewer teenagers are out looking for work. Gary Burtless, an economist at the Brookings Institution, notes that older workers are more likely to be employed than younger ones. As a result, it takes a tougher job market to push the rate to 10 percent.

"This may be the toughest employment situation we've seen in the postwar era," Mark Gertler, an economics professor at New York University, said in an interview earlier this week.

No kidding, genius!

FAKE PROSPERITY EQUALS FAKE ECONOMY-REAL FACTS SHOW GREATER PRODUCTIVITY WITH LESS WORKERS!-SLACKERS ARE FIRED AND NOT RE-HIRED


Today a report came out showing the the nation's productivity was up significantly in the last quarter....what a surprise! NOT!

It is only normal and natural for employers to try and make do with less employees, yet still put out the same amount of goods/services, etc....We all know how slacking on the job accounts for probably at least 30% of the real time at work, so getting rid of the slackers, still produces the work or goods, but at less cost, since there are less employees doing the same work.

Duh!!!!

Employers will be finding out that the remaining employees are more than capable of producing the same output of goods and services, and they will not hire new people.

So where is the recovery?

Let's face it, the unemployed are typically the less productive employees, and they are out, thus the remaining employees, the non slackers produce more.

When will they hire the slackers? Never...or others may hire them when times improve.

USA IS A WORLD LEADER IN TAXING, TAXING AND MORE TAXING-WORLD STATISTICS SHOW USA AS LEADER IN MOST CATEGORIES OF TAXES


As our elected officials ponder additional ways to tax every type of income or asset owned by anybody, or as Hillary Clinton put it..."we tax everything that moves or does not move...", these grim statistics show that the USA is a tough place to do business.

Our tax bite is at or near the top of the world statistics, and therefore it is unlikely that this bodes well for the future economic recovery. A recovery needs to be primed by lower taxes to lure investors and entrepreneurs into investing in new businesses, new plants, etc., and the statistics below are a grim reminder of why the recovery will be longer than predicted.

We are a rich country compared to others, but our government seeks to take a larger and larger total of the wealth of its businesses and citizens, which is not good for its future growth.


AMERICAN TAXATION STATS: Top Stats All Stats

View this page with: Just Stats Sources Definitions Both
Components of taxation > Corporate income tax u6.7% [20th of 28]
Components of taxation > Goods and service tax 17.6% [30th of 30]
Components of taxation > Personal income tax 37.7% [5th of 30]
Components of taxation > Property tax 10.1% [3rd of 18]
Contribution by middle 40% 28.4% [13th of 14]
Contribution by poorest 30% 6.3% [9th of 14]
Contribution by richest 30% 65.3% [3rd of 14]
Customs and other import duties > % of tax revenue 1.82 % Time series [48th of 82]
Customs and other import duties > current LCU 25316000000 Time series
Highest marginal tax rate, corporate rate > % 35 % Time series [9th of 108]
Highest marginal tax rate, individual > on income exceeding, US$ 326,450 $ Time series [1st of 93]
Highest marginal tax rate, individual rate > % 35 % Time series [27th of 102]
Tax revenue > % of GDP 11.2 % Time series [65th of 98]
Tax revenue > current LCU 1391230000000 Time series
Taxes on goods and services > % value added of industry and services 0.67 % Time series [84th of 89]
Taxes on income, profits and capital gains > % of revenue 55.26 % Time series [2nd of 98]
Total tax rate > % of profit 46 % Time series [87th of 171]
Total tax wedge > Single worker 30% [21st of 29]
Total tax wedge > Single-income family 19.4% [21st of 29]
Total taxation as % of GDP 29.6 % of GDP [17th of 18]

WARREN BUFFET TURNING SENILE OR JUST STUPID? HE STATED THAT 90% INCOME TAX RATE DOES NOT EFFECT THE ECONOMY-SHUT UP THAT STUPID ADVICE ALREADY!



Every morning I walk my lovable dog, and then the doggie and I turn on the TV and watch the morning financial reports while we have our breakfast. wE WERE BOTH SHOCKED TO SEE AND HER THE STORY THIS MORNING. This particular morning financial channel has formed a strange adoration of Warren Buffet and even when he says something really stupid, they fawn all over his statements.

This morning they of course carried the announcement that BURLINGTON NORTHERN agreed to be acquired by BERKSHIRE HATHAWAY, and then decided to have the "Oracle of Omaha" spit out some words of wisdom for us all to take note.

One of the hosts and guests asked if the way to stimulate the economy would be to lower the overall tax rates ( an obvious and universally recognized way to to so), but Buffet, clearly indicating either that he was clearly senile or just finally admitted to being stupid, stated that he remembered 90% tax rates, and that they did not affect his decision to make money.

Hearing this "advice" from the Oracle, we both spit out our food in shock.

Ok Warren, I can understand how when you have a net worth of $40 billion, you could care less how much of your token salary is appropriated by the government, but the rest of us can not accept a 90% tax rate as being just fine. (Warren takes a $100,000 salary for the last 27 years, by the way, so at 90% tax he would be left with $10,000 to live on, which I do not believe would be enough to support any type of lifestyle, much less pay for his medicare and drugs).

Your advice is just plain stupid ( I know that you supported the election of Mr. Obama who would agree with you that a 90% income tax is just fine) and I would hate to have you being in charge of the country. We would all be on the government dole sine your ideas would bankrupt us all!

In case you do not remember, in addition to the federal tax, we also have a state tax, county and city taxes, real estate taxes, sales taxes, telephone taxes, Social security taxes, unemployment taxes, gasoline taxes, taxes, taxes and more taxes that can be listed on this page.

Also, just a note of interest....It is true that your firm has made money and some of your decisions resulted in making money for the company. But, a monkey with a dart, throwing it at the newspaper in 1987, and buying the DJIA COMPONENTS DID BETTER THAN YOU, and did not have to hold the stock for 50 years. In addition, buying your stock in the last few years resulted in a loss of 30%-40% as well.

So how would you propose that we pay all these taxes and still buy groceries, pay the mortgage or the car payment? Oh, and how do we start a business and have any motivation to make a profit which would be taxed at 90%????

Pandering just looked so stupid to a financial channel that became famous for one of its morning commentators in supporting the tea party, anti-tax movement.

Hey Warren, it's time to retire, really.....and distribute the excess funds at Berkshire to its true owners, the stockholders so they too can enjoy their retirement without your further advice to give it all up in taxes.

GOVERNMENT ACTIONS ARE A SURE REASON WHY THE ECONOMY WILL NOT RECOVER THIS YEAR OR 2010 OR UNTIL SMALL BUSINESS IS INCENTIVIZED



Every week, some government bureaucrat appears on a TV show snippet and predicts that we are on a recovery...we are out of the recession, or the depression, etc..

There are no real reasons provided for this optimistic prediction other than usually some reference to some daily rumor about there being a sale at Macy's or some such, and therefore more people were seen shopping that weekend.

On a recent shopping trip I noticed that retailers were posting their job openings right on their doors, rather than in the help wanted section of the papers. The retailers said that they were saving money and that they had plenty of takers without doing more advertising. No wonder newspapers are complaining about smaller revenues.

Every job posting was for a part-time position, and it was seasonal, or temporary!

Nothing represented a long term job created or saved. It was make do work that was not to last and would not represent real employment.

Think about it...if you were an employer, what government action that was announced to date, would cause you to hire more or new employees permanently?

What government action would you credit with wanting to provide your new hired employees with health benefits for instance? The threat of fines, and added 8% health care costs to be paid by the employers are looming, and therefore why would an employer consider hiring more people?

As an aside, we looked at the reality of what an 8% TAX on payrolls for the purposes of health care would do to a typical employer. Surprisingly, it would be clear that ALL employees would be dumped into the public pool.

Let's use some simple estimates to demonstrate why ALL employees would be dumped into the "public option" pool; the government plan.

take for example a person earning a hypothetical $10 an hour, gross wages and working 40 hours a week. That would represent a wage cost of $400 a week.

Under that scenario, the employer would be charged 8% of that payroll cost, or $32 for the week for the health care tax. That translates to $140.80 a month (4.4 weeks), and is the alternative to the employer provided health care.

THERE WILL BE A STAMPEDE TO GET THIS PROGRAM, there will be absolutely no chance of a private company providing this "health-care" at this cost, thus everyone now working anyplace will be shifted into the government option by EVERY employer!

Wow, what a deal...health care for $140 a month!

Unknowingly, the government does not even realize that ALL employers will opt for this option since it is cheaper, way cheaper than anything that can be purchased in the FREE market health insurance industry.

However, keep in mind that to those employers who now do not provide the insurance coverage and MUST then pay the tax to cover their employees, they will certainly offset this cost though either layoffs equal to at least 8% of the workforce or some other means...so what has just happened?

Employers do not want to add employees, and those that have them and do not have insurance will first reduce them by the amount of the added tax for health care.

ANOTHER SMART MOVE BY THE GOVERNMENT....OH, AND SINCE EVERYONE WILL BE SHIFTED TO THE GOVERNMENT OPTION, AND THAT OPTION WILL PAY medicare rates to the medical community, expect about half of the hospitals to close, or not take the patients....
Canada fro our health care?

Dream on....another great idea from our elected officials.

RETAILERS BREATHE A SIGH OF RELIEF AS CIT STAYS IN BUSINESS; VENDORS WHO SUPPLY 300,000 RETAILERS MAY HAVE A LIFELINE...-TAXPAYERS SHAFTED AGAIN



CIT, a key lender that helps retailers stock their shelves is adding to the industry's worries ahead of the critical holiday shopping season.

CIT Group Inc. filed for Chapter 11 bankruptcy protection Sunday in New York after months of struggling to avoid collapse. The company provides badly needed credit to thousands of small and mid-sized businesses, and is a critical part of the flow of capital in the retail sector.

CIT stressed that its lending operations will continue to operate as it proceeds through bankruptcy with the hope of shedding $10 billion in debt. Chairman and CEO Jeffrey M. Peek said the company's prepackaged reorganization plan "will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy."

But retail groups and analysts warn that the case will likely add to the instability in the retail sector. CIT is an important source of capital, working with 2,000 vendors that supply merchandise to more than 300,000 stores. About 60 percent of the apparel industry depends on CIT for financing.

In the last few weeks, the nation's stores have begun filling their floors with holiday merchandise, but they still need a reliable source of lending to prevent shipping disruptions and to restock after the holidays. Even one day that vendors are cut off from much-needed financing could create a bottleneck, resulting in shipments of merchandise left on docks or in vendors' warehouses.

CIT expects to emerge from bankruptcy by the end of the year, but a dragged-out case or any glitches could further disrupt the already tight credit markets for retailers, said Joe Alouf, a partner with Eaglepoint Advisors, a crisis management company that is partly owned by Kurt Salmon Associates.

"CIT is the 600-pound gorilla in the industry," Alouf said.

Craig Sherman, vice president of government affairs at the National Retail Federation, thinks the industry "dodged a bullet on the holiday season" for the most part, because most merchandise is in stores' distribution centers. However, he said CIT's woes could throw a wrench in ordering for the important 2010 spring season. NRF officials say that as stores prepare for a rebound in consumer spending next year, access to credit is very important.

Harold Reichwald, co-chair of law firm Manatt, Phelps & Phillips' banking group, said that CIT's case will likely force the company's customers to look elsewhere for financing.

"If I was a small businessman, I would say to myself, 'I have to find alternatives,'" Reichwald said. "In this marketplace, there isn't a lot of alternatives."

CIT's Chapter 11 filing is one of the biggest in U.S. corporate history, following Lehman Brothers, Washington Mutual, WorldCom and General Motors. The bankruptcy filing shows $71 billion in finance and leasing assets against total debt of $64.9 billion. The move wipes out current holders of its common and preferred stock, meaning the U.S. government will likely lose the $2.3 billion in taxpayer funds it sunk into CIT last year to prop up the company.

The government could have lost billions more, however, had it not declined to hand over more aid to the company earlier this year. Treasury Department spokesman Andrew Williams said Sunday that the government will be closely monitoring the bankruptcy proceedings, but acknowledged that "recovery to preferred and common equityholders will be minimal."

CIT had been trying to fend off disaster for several months and narrowly avoided collapse in July. It had struggled to find funding as sources it previously relied on, such as short-term debt, evaporated during the credit crisis. The company pulled back sharply on lending to businesses as it tried to preserve cash. According to its most recent quarterly earnings report, the company originated just $4.4 billion worth of new business during the first six months of 2009, compared with $11.3 billion in the first half of 2008.

The company received $4.5 billion in credit from its own lenders and bondholders last week, reportedly made a deal with Goldman Sachs to lower debt payments and negotiated a $1 billion line of credit from billionaire investor and bondholder Carl Icahn. But the company failed to persuade bondholders to support a debt-exchange offer, a step that would have trimmed at least $5.7 billion from its debt burden and given CIT more time to pay off what it owes.

Ever since CIT's troubles flared up last summer, the retail industry has carefully monitored the lender, with many vendors scrambling to find alternative financing at rivals like Rosenthal & Rosenthal. But finding a replacement hasn't been easy because competitors can only take on so many more clients. Moreover, while large publicly traded companies with sales of more than $2 billion have found the credit market loosening up in recent months, small and medium-based companies have largely found themselves shut out, Alouf said.

The big question is how long CIT will remain under court protection. A prepackaged bankruptcy, which has the support of major bondholders, speeds up the process of restructuring CIT's debt and could help it exit court protection in a matter of months. A swift exit by the holidays could alleviate some retailers' worries.

But, when CIT is active again, will it be able to support financing vendors who sell to troubled retailers?

Factoring works when the customer pays its bills timely, pays timely to CIT which then decides if that vendor can continue to sell goods to that retailer to receive factoring advances.

In my 40 plus year of being involved in the retail industry, I have never seen a larger constriction in available credit, especially since CIT has absorbed so many other factors over the years.

The prepackaged plan allows CIT to restructure its debt while trying to keep badly needed loans flowing to thousands of mid-sized and small businesses. The plan keeps CIT's operations alive and makes it possible for the company to exit bankruptcy by year's end.

But here's the bad news: While senior debt holders will only lose 30% of their investment, we, the U.S. taxpayer, will lose the entire $2.3 billion we lent the company this summer.

William Black, professor at the University of Missouri-Kansas City School of Law is dumbfounded. "We put ourselves on the hook in a completely inept way where we lose first. We lose entirely as the taxpayers."

Black, a former top federal banking regulator, blames Treasury Secretary Timothy Geithner for negotiating such a bad deal on behalf of the American public.

His argument goes as follows:

The government was in no way obligated to lend the struggling CIT money and, in fact, initially refused to provide it bailout funds. More importantly, being the lender of last resort, the government should have guaranteed we'd be the first to get paid if CIT eventually filed Chapter 11. By failing to do so, "it's like he [Geithner] burned billions of dollars again in government money, our money, gratuitously," says Black.

Black believes the problem stems from regulators' fears that if the banks recognize a loss on the bad assets it will create a domino effect that will wipe out the entire financial system.

"If that's true we've got to get rid of capitalism," he warns, "because if we can't recognize losses in a capitalist system we have no future."

REAL FREE MARKET REWARDS FORD MOTOR WITH A PROFIT; IS THIS A SURPRISE OR JUST "PAYBACK" REALITY-----GO BUY A FORD AND HELP THEM MORE!



Ford Motor Company on Monday posted a surprise third-quarter profit of $997 million and said it had its first profitable quarter in North America in more than four years. Why should it be considered a surprise to make a profit, just because the government sponsored companies competing with them will never show a profit?

The carmaker also said it increased its cash reserves by $2.8 billion during the quarter, ending September with $23.8 billion.

For all of 2009, Ford, the only Detroit automaker to avoid bankruptcy this year, has had a profit of more than $1.8 billion. It reported $834 million of income in the first half of the year.

nOT BEING RUN BY AND DICTATED TO BY THE IDIOTS IN GOVERNMENT REALLY WORKS!

Its goal has been to break even or earn a full-year profit by 2011. On Monday the company said in a statement that it “now expects to be solidly profitable in 2011, excluding special items, with positive operating-related cash flow.” It did not indicate whether a fourth-quarter or full-year profit is expected this year.

Earnings of $357 million in North America broke a streak of 17 consecutive quarterly losses in that region. In the third quarter of 2008, Ford lost $2.6 billion in North America, where sales by all automakers have fallen significantly.

“Our third quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy,” Ford’s chief executive, Alan R. Mulally, said in the statement. “Our solid product lineup is leading the way in all markets. While we still face a challenging road ahead, our One Ford transformation plan is working and our underlying business continues to grow stronger.”

The company posted an after-tax operational profit of $873 million, or 26 cents a share, beating even the most optimistic of forecasts by Wall Street analysts. Its overall profit is equal to 29 cents a share.

The profit occurred even as third-quarter revenue fell 3 percent, to $30.9 billion,. The company said it now expected to reduce its annual structural costs by $5 billion this year, $1 billion more than its original target.

“Positive cash flow, a stronger balance sheet and a third-quarter operating profit are evidence that Ford is meeting the global economic challenges,” Lewis Booth, Ford’s chief financial officer, said in the company’s statement.

Also on Monday, the United Automobile Workers union is expected to announce that its members soundly rejected a deal to help Ford further cut its labor costs. The deal generally would have matched concessions that workers at Chrysler and General Motors approved in the spring.

Ford workers ratified a deal in March that saves the company an estimated $500 million a year, but this time many expressed anger at being asked to make more sacrifices at a time when the company’s finances and market share are improving.

But Ford easily won approval of a separate deal from its 7,000 union workers in Canada over the weekend. The Canadian Automobile Workers union said 83 percent voted in favor of that deal, which freezes wages until 2012 and allows Ford to close its 41-year-old assembly plant in St. Thomas, Ontario.

The U.A.W. deal would have frozen wages for newly hired workers until 2015, combined some job classifications and barred the union from going on strike to demand higher pay or benefits. In rejecting the deal, workers gave up a $1,000 bonus that Ford would have paid them in March.

Many in the U.A.W. undoubtedly were affected by Ford’s efforts to portray itself as different from G.M. and Chrysler since those companies each borrowed billions of dollars from the federal government and filed for Chapter 11 protection.

Ford has been having more success than its cross-town rivals at attracting customers, and its newest vehicles are winning commendations from third-party sources like the magazine Consumer Reports, which last week declared Ford’s quality to be “as dependable — or better than — some of the industry’s best.”

The company’s sales in the United States are down 22 percent this year through September, the smallest decline among the six largest automakers; the industry is down 27 percent over all.

As recently as two years ago, Ford was widely regarded as the laggard of the Detroit Three. (That unwelcome distinction now is held by Chrysler, which intends to outline its future plans with its Italian partner, Fiat, on Wednesday.)

Last year, Ford lost $14.6 billion, the most in its history. Mr. Mulally initially joined the leaders of G.M. and Chrysler in pleading with members of Congress to aid their companies, but Ford later decided to forgo emergency loans.

Yeahhhhh, now let's all go out and buy a FORD!!!!!!

Despite its improvements, Ford remains heavily in debt. It borrowed $23.5 billion in 2006, a move initially viewed as an ominous sign of its future prospects but which turned out to be extremely fortunate after the credit markets collapsed

HOW IS THE STIMULUS MONEY BEING SPENT? QUICKLY AND GOING, GOING...GONE!!!!



Stimulus: How Fast We're Spending Nearly $800 Billion
by Christopher Flavelle and Jeff Larson, ProPublica

The success of the federal stimulus program may hinge on the speed with which the government is able to distribute the billions authorized by Congress. Unlike some other estimates of the cost of the stimulus, which are based on spending projections, we took our numbers from the actual budget authority issued by Congress — $792 billion and change. We'll be tracking the progress of stimulus payments made by federal agencies weekly.
Agency Spent (Thousands) In Process (Thousands) Left to Spend (Thousands) Total (Thousands) Spent (%) Progress
Railroad Retirement Board $140,773 $59 $15,568 $156,400 90.01%
Social Security Administration $13,266,217 $13,766 $1,947,017 $15,227,000 87.12%
Department of Labor $30,806,605 $24,277,856 $15,493,539 $70,578,000 43.65%
Veterans Affairs $502,071 $409,956 $488,973 $1,401,000 35.84%
Department of Justice $1,253,176 $2,717,235 $31,589 $4,002,000 31.31%
Health and Human Services $34,965,330 $20,663,733 $67,163,937 $122,793,000 28.48%
Department of Education $22,611,465 $45,015,964 $30,610,571 $98,238,000 23.02%
National Endowment for the Arts $10,771 $38,984 $244 $50,000 21.54%
Department of Agriculture $5,585,294 $1,919,204 $20,076,502 $27,581,000 20.25%
Small Business Administration $117,661 $261,027 $351,312 $730,000 16.12%
Housing and Urban Development $1,721,104 $9,642,123 $2,311,773 $13,675,000 12.59%
Corporation for National and Community Service $23,993 $132,566 $44,441 $201,000 11.94%
US Agency for International Development $4,052 $16,007 $17,940 $38,000 10.66%
Department of Transportation $4,490,494 $25,474,967 $18,154,539 $48,120,000 9.33%
Smithsonian $2,168 $19,459 $3,373 $25,000 8.67%
Army Corps of Engineers $391,846 $1,929,392 $2,278,762 $4,600,000 8.52%
Department of Commerce $591,574 $758,397 $6,566,028 $7,916,000 7.47%
General Services Administration $305,067 $1,515,861 $4,036,072 $5,857,000 5.21%
Department of the Interior $152,366 $758,395 $2,094,239 $3,005,000 5.07%
Department of Homeland Security $123,839 $1,271,773 $1,359,389 $2,755,000 4.50%
Department of State $26,353 $118,311 $457,335 $602,000 4.38%
NASA $37,836 $428,112 $536,052 $1,002,000 3.78%
Environmental Protection Agency $267,872 $6,870,556 $81,573 $7,220,000 3.71%
Department of Defense $267,562 $3,101,137 $4,066,301 $7,435,000 3.60%
Department of Energy $1,130,780 $17,229,697 $26,864,523 $45,225,000 2.50%
Department of the Treasury $1,243,994 $2,597,750 $85,371,256 $89,213,000 1.39%
National Science Foundation $30,941 $2,370,703 $600,356 $3,002,000 1.03%
TOTALS $120,071,204 $169,552,990 $291,023,204 $580,647,400 20.68%

This chart and other stories are part of Eye on the Stimulus, our blog dedicated to tracking the stimulus from bill to building.

ANOTHER $14 BILLION GIVEAWAY (TO RETIRED PEOPLE THIS TIME) COURTESY OF TAXPAYERS-SO WHAT ELSE IS NEW, IT'S ONLY MONEY!



A Drop in the Wrong Bucket
by David Leonhardt provided by
The New York Times

If you wanted to help the economy and you had $14 billion to bestow on any group of people, which group would you choose:

a) Teenagers and young adults, who have an 18 percent unemployment rate.

b) All the middle-age long-term jobless who, for various reasons, are not eligible for unemployment benefits.

c) The taxpayers of the future (by using the $14 billion to pay down the deficit).

d) The group that has survived the Great Recession probably better than any other, with stronger income growth, fewer job cuts and little loss of health insurance.

The Obama administration has chosen option d) -- people in their 60's and beyond.

The president has proposed sending a $250 check to every Social Security recipient, which sounds pretty good at first. The checks would be part of his admirable efforts to stimulate the economy, and older Americans are clearly a sympathetic group. Next year, they are scheduled to receive no cost-of-living increase in their Social Security benefits.

Yet that is largely because they received an artificially high 5.8 percent increase this year. For this reason and others, economists are generally recoiling at the proposal.

President Obama's own economic advisers raised objections, as my colleague Jackie Calmes has reported. Isabel Sawhill of the Brookings Institution told me she thought the idea was crazy -- and then noted she was in her 70s. Rosanne Altshuler, co-director of the Tax Policy Center in Washington, says that the checks "seem to be pure pandering to seniors."

Indeed, the politics are attractive. People over 65 vote in large numbers. Saying no to them is never easy.

And therein lies a problem that's much larger than one misguided $14 billion proposal.

With the economy gradually improving, members of Congress and White House officials are just starting to think more seriously about the budget deficit. Fifty-three senators voted down a narrow health care bill last week, with many citing its potential impact on the budget. On Monday, Christina Romer, the chairwoman of Mr. Obama's Council of Economic Advisers, gave a speech in which she said the deficit was "simply not a problem that can be kicked down the road indefinitely."

Just about everybody agrees that solving the deficit depends on reducing the benefits that current law has promised to retirees, via Medicare and Social Security. That's not how people usually put it, of course. They tend to use the more soothing phrase "entitlement reform." But entitlement reform is just another way of saying that we can't pay more in benefits than we collect in taxes.

"If the long-term issue is entitlement reform," says Joel Slemrod, a University of Michigan economist, "the fact that the political system cannot say no to $250 checks to elderly people is a bad sign."

The first Social Security check was mailed in 1940 to Ida May Fuller, a retired legal secretary in Ludlow, Vt. It was for $22.54. Every month for the next 10 years, Ms. Fuller received a check for that same amount. The original Social Security legislation had not included an inflation adjustment, which meant benefits did not keep up with the cost of living. A decade later, Ms. Fuller's checks were worth about 40 percent less in real terms than when she started receiving them.

Congress finally increased benefits in 1950 and then continued to do so in fits and starts, sometimes faster than inflation, sometimes slower and usually in an election year. President Richard M. Nixon and a Democratic Congress brought some order to this process in 1972, by automatically tying benefits to the movement of an inflation index in the previous year.

The changes were part of the transformation, during the middle decades of the 20th century, in how this country treated the elderly. In the 1930s, they had little safety net and frequently struggled to meet their basic needs. Four decades later, they were the only group of Americans with guaranteed health care and a guaranteed income. All in all, it was certainly for the good.

But by the 1970s, you could start to see the early signs of excess. In their bill, Mr. Nixon and Congress included a little bonus: the increase in Social Security payments could never be less than 3 percent, no matter what inflation was. In the 1980s, Congress reduced the floor to zero -- meaning that benefits would be held constant if prices fell -- but the principle remained the same: heads, it's a tie; tails, Social Security recipients win.

This year, the coin finally came up tails.

With oil prices plunging and other prices falling, last year's high inflation (which led to the 5.8 percent increase in Social Security payments) has turned into deflation. Overall prices have dropped 2.1 percent in the last year, according to the relevant price index.

Social Security payments, however, will remain as they were, which means that recipients are already set to receive an effective raise, even without Mr. Obama's $250 checks. No matter what happens with that proposal, 2010 will be the first year since at least the Nixon era that the buying power of an individual worker's Social Security goes up.

Compare that to what's happening with minimum-wage workers in Colorado. Their wage is also tied to inflation, but it has no floor. So it will fall slightly next year, to keep pace with prices.

Now, I understand that there are arguments on the other side of the issue. Lawrence Summers, Mr. Obama's top economics aide, pointed out that the stimulus bill included one-time $250 payments for Social Security recipients, which were sent out this year, but tax cuts for workers both this year and next year. "We're correcting an anomaly," he told me.

Others will argue that the elderly simply need help. Some have been the victim of age discrimination. Too many still live in poverty. All of them are likely to see their Medicare premiums rise in 2010. This recession has spared no group.

But older Americans really have survived the recession better than most.

Many of them started buying assets years if not decades ago, meaning they were not the main victims of the stock and housing bubbles. They had a cushion. In addition, relatively few of them work in manufacturing or construction, the hardest-hit industries.

Just consider: The real median income of over-65 households rose 3 percent from 2000 to 2008. For households headed by somebody age 25 to 44, it fell about 7 percent.

Economic policy, like most everything else, is about making choices. Mr. Obama is choosing the elderly, rich and poor, to be more worthy of $14 billion in government checks than struggling workers or schoolchildren. Republicans have pandered in their own ways, choosing to oppose just about any cut in Medicare and, in effect, to stick your grandchildren with an enormous tax bill.

In a way, I understand where the politicians are coming from. We voters may say that we are in favor of cutting the deficit, but usually mean it in only the theoretical sense. Who wants their own benefits cut? For that matter, who is even willing to have their Social Security checks hold steady?

CONSUMER CONFIDENVCE INDEX; MUST YOU REALLY ASK? IT IS PREDICTABLY IN THE TOILET



Americans' confidence about the U.S. economy fell unexpectedly in October as job prospects remained bleak, a private research group said Tuesday, fueling speculation that an already gloomy holiday shopping forecast could worsen.

The Consumer Confidence Index, released by The Conference Board, sank unexpectedly to 47.7 in October -- its second-lowest reading since May.

Forecasters predicted a higher reading of 53.1.

A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.

The index has seesawed since reaching a historic low of 25.3 in February and climbed to 53.4 in September.

Economists watch consumer confidence because spending on goods and services by Americans accounts for about 70 percent of U.S. economic activity by federal measures. While the reading doesn't always predict short-term spending, it's a helpful barometer of spending levels over time, especially for expensive, big-ticket items.

Recent economic data, from housing to manufacturing, has offered mixed signals but some evidence that an economic recovery might be slow.

But on Tuesday, the figures showed that shoppers have a grim outlook for the future, The Conference Board said, expecting a worsening business climate, fewer jobs and lower salaries. That's particularly bad news for retailers who depend on the holiday shopping season for a hefty share of their annual revenue.

"Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays," said Lynn Franco, director of The Conference Board's Consumer Research Center.

Economists expect holiday sales to be at best flat from a year ago, which saw the biggest declines since at least 1967 when the Commerce Department started collecting the data.

The Consumer Confidence Index survey, which was sent to 5,000 households, had a cutoff date of Oct. 21.

The news came on the heels of rosier data about the nation's housing market.

The Standard & Poor's/Case-Shiller home price index, which studies real estate transactions in 20 major cities, showed home prices rose in August, the third straight monthly increase and a sign that a housing recovery might be taking hold.

The measure showed the home price index climbed 1 percent from July to a seasonally adjusted reading of 144.5. While prices are down 11.4 percent from August a year ago, the annual declines have slowed since February.

Prices are at levels not seen since August 2003 and have fallen almost 30 percent from the peak in May 2006.

The latest index shows a widespread turnaround with prices rising month-over-month in 15 metro areas since June.

How long will prices climb as there is a lack of financing for the homes?

How will consumers have confidence when their neighbors are not working?

SUCKER RALLY OR REAL GOOD NEWS RALLY? WHERE IS THE GOOD NEWS THAT CAN SUSTAIN OR CONTINUE THE RALLY?



Jeremy Grantham: Sucker's Rally Almost Over

Jeremy Grantham of Boston-based GMO called the crash. He also called the rally. He also called a whole bunch of stuff before that--although, as he is the first to admit, like other value folks, he does have the habit of being early.

Not this time, though.

Within days of the March low, Jeremy published "Reinvesting While Terrified," in which he observed that it was time to bet the farm. He soon called for a stimulus-fueled rally that would take the S&P 500 to 1000-1100, which is where we are now. He also laid out his expectation that the market would then move sideways for 7 years.

Well, we've hit the high of Jeremy's sucker's rally prediction. Stocks are now once again significantly overvalued (Jeremy puts the overvaluation at 25%, with fair value on the S&P 500 at 860). He thinks the market can go a bit higher but that it will break down next year. He's looking for a "painful" pullback of at least 20%. A new low is not likely, but not out of the question.

The idea behind my forecast six months ago was that
regardless of the fundamentals, there would be a sharp
rally [to S&P 1000-1100]. After a very large decline and a period of somewhat
blind panic, it is simply the nature of the beast. Exhibit 1
shows my favorite example of a last hurrah after the first
leg of the 1929 crash.

After the sharp decline in the fall of 1929, the S&P 500
rallied 46% from its low in November to the rally high of
April 12, 1930. It then, of course, fell by over 80%. But
on April 12 it was once again overpriced; it was down
only 18% from its peak and was back to the level of June
1929. But what a difference there was in the outlook
between June 1929 and April 1930! In June, the economic
outlook was a candidate for the brightest in history with
effectively no unemployment, 5% productivity, and
over 16% year-over-year gain in industrial output. By
April 1930, unemployment had doubled and industrial
production had dropped from +16% to -9% in 5 months,
which may be the world record in economic deterioration.
Worse, in 1930 there was no extra liquidity fl owing
around and absolutely no moral hazard. “Liquidate the
labor, liquidate the stocks, liquidate the farmers”2 was
their version. Yet the market rose 46%.

How could it do this in the face of a world going to hell?
My theory is that the market always displayed a belief
in a type of primitive market efficiency decades before
the academics took it up. It is a belief that if the market
once sold much higher, it must mean something. And
in the case of 1930, hadn’t Irving Fisher, arguably the
greatest American economist of the century, said that
the 1929 highs were completely justifi ed and that it was
the decline that was hysterical pessimism?

Hadn’t E.L. Smith also explained in his Common Stocks as Long Term Investments (1924) – a startling precursor to Jeremy Siegel’s dangerous book Stocks for the Long Run (1994) – that stocks would always beat bonds by divine right? And there is always someone of the “Dow 36,000” persuasion to reinforce our need to believe that as markets decline, higher prices in previous peaks must surely have meant
something, and not merely have been unjustified bubbly bursts of enthusiasm and momentum.

Today there has been so much more varied encouragement for a rally than existed in 1930. The higher prices preceding this crash (that were far above both trend and fair value) had lasted for many years; from 1996 through 2001 and from 2003 through mid-2008. This time, we also saw history’s greatest stimulus program, desperate bailouts, and clear promises of years of low rates. As mentioned six months ago, in the third year of the Presidential Cycle, a tiny fraction of the current level of moral hazard and easy money has done its typically great job of driving equity markets and speculation higher.

In total, therefore, it should be no surprise to historians that this rally has handsomely beaten 46%, and would probably have done so whether the actual economic recovery was deemed a pleasant surprise or not. Looking at previous “last hurrahs,” it should also have been expected that any rally this time would be tilted toward risk-taking and, the more stimulus and moral hazard, the bigger the tilt. I must say, though, that I never expected such an extreme tilt to risk-taking: it’s practically a cliff! Never mess with the Fed, I guess. Although, looking at the record, these dramatic short-term resuscitations do seem to breed severe problems down the road. So, probably, we will continue to live in exciting times, which is not all bad in
our business.

Economic and Financial
Fundamentals and the Stock
Market Outlook

The good news is that we have not fallen off into another
Great Depression. With the degree of stimulus there
seemed little chance of that, and we have consistently
expected a global economic recovery by late this year
or early next year. The operating ratio for industrial
production reached its lowest level in decades. It should
bounce back and, if it moves up from 68 to 80 over three
to fi ve years, will provide a good kicker to that part of
the economy. Inventories, I believe, will also recover. In
short, the normal tendency of an economy to recover is
nearly irresistible and needs coordinated incompetence to
offset it – like the 1930 Smoot-Hawley Tariff Act, which
helped to precipitate a global trade war. But this does not
mean that everything is fi ne longer term. It still seems a
safe bet that seven lean years await us.

Corporate ex-financials profit margins remain above
average and, if I am right about the coming seven lean
years, we will soon enough look back nostalgically at
such high profits.

Price/earnings ratios, adjusted for even
normal margins, are also significantly above fair value
after the rally. Fair value on the S&P is now about 860
(fair value has declined steadily as the accounting smoke clears from the wreckage and there are still, perhaps, some smoldering embers). This places today’s market (October
19) at almost 25% overpriced, and on a seven-year horizon
would move our normal forecast of 5.7% real down by
more than 3% a year.

Doesn’t it seem odd that we would be measurably overpriced once again, given that we face a seven-year future that almost everyone agrees will be
tougher than normal? Major imbalances are unlikely to
be quick or easy to work through. For example, we must
eventually consume less, pay down debt, and realign our
lives to being less capital-rich. Global trade imbalances
must also readjust...

We believed from the start that this market rally and
any out-performance of risk would have very little to do
with any dividend discount model concept of value, so
it is pointless to “ooh and ah” too much at how far and
how fast it has traveled. The lessons, if any, are that low
rates and generous liquidity are, if anything, a little more
powerful than we thought, which is a high hurdle because
we have respected their power for years. And what we
thought were powerful and painful investment lessons
on the dangers of taking risk too casually turned out to
be less memorable than we expected. Risk-taking has
come roaring back. Value, it must be admitted, is seldom
a powerful force in the short term. The Fed’s weapons
of low rates, plenty of money, and the promise of future
help if necessary seem stronger than value over a few
quarters. And the forces of herding and momentum are
also helping to push prices up, with the market apparently
quite unrepentant of recent crimes and willing to be silly
once again. We said in July that we would sit and wait
for the market to be silly again. This has been a very
quick response although, as real silliness goes, I suppose
it is not really trying yet. In soccer terminology, for
the last six months it is Voting Machine 10, Weighing
Machine nil!

Price, however, does matter eventually, and what will
stop this market (my blind guess is in the first few months
of next year) is a combination of two factors.

First, the disappointing economic and financial data that will begin
to show the intractably long-term nature of some of our
problems, particularly pressure on profit margins as the
quick fix of short-term labor cuts fades away. Second,
the slow gravitational pull of value as U.S. stocks reach
+30-35% overpricing in the face of an extended difficult
environment.

On a longer horizon of 2 to 10 years, I believe that
resource limitations will also have a negative effect (see
2Q 2009 Quarterly Letter). I argued that increasingly
scarce resources will give us tougher times but that we
are collectively in denial. The response to this startling
revelation, for the fi rst time since I started writing, was
nil. It disappeared into an absolutely black hole. No one
even bothered to say it was idiotic, which they quite often
do. Given my thesis of a world in denial, though, I must
say it’s a delicious irony.

So, back to timing. It is hard for me to see what will stop the
charge to risk-taking this year. With the near universality
of the feeling of being left behind in reinvesting, it is
nerve-wracking for us prudent investors to contemplate
the odds of the market rushing past my earlier prediction
of 1100. It can certainly happen.

Conversely, I have some modest hopes for a collective
sensible resistance to the current Fed plot to have us all
borrow and speculate again. I would still guess (a well-
informed guess, I hope) that before next year is out, the
market will drop painfully from current levels. “Painfully”
is arbitrarily deemed by me to start at -15%. My guess,
though, is that the U.S. market will drop below fair value,
which is a 22% decline (from the S&P 500 level of 1098
on October 19).

Unlike the really tough bears, though, I see no need for a
new low. I think the history books will be happy enough
with the 666 of last February. Of course, they would
probably be slightly happier with, say, 550. The point
is that this is not a situation like 2005, 2006, and 2007
when for the fi rst time a great bubble – 2000 – had not yet
broken back through its trend. I described that reversal
as a near certainty. I love historical consistency, and with
32 bubbles completely broken, the single one outstanding
– the S&P 500 – was a source of nagging pain. But that
was all comfortably resolved by a substantial new low for
the S&P 500 last year. This cycle, in contrast, has already
established a perfectly respectable S&P low at 666, well
below trend, and can officially please itself from here. A
new low (or not) will look compatible with history, which
makes the prediction business less easy.

ANOTHER GOVERNMENT INDUCED "PROBLEM" BLAMED ON BUSINESSES AGAIN: COMPENSATION INCENTIVES FORCED BY GOVERMENT, NOW DERIDED



You may all remember that back in the 90's, the big government lawmakers made it non-deductible for businesses to claim more than $1 million in salaries as a tax deduction.

The legislators sold this idea as one that was correct; give the incentive pay in stock.

Their thinking was that this would stop the big pay packages for executives. The executives then received and liked getting stock incentives instead. As businesses improved their profitability, they got more and more in stock values instead, like it should be.

The government said that this was the proper way to pay incentives.

Now the stock paid incentives that kicked in at various targeted big businesses, like AIG, Merrill, etc., are the new target of the government which set this program up in the first place.

Will the hypocrisy never end?

HOUSING RECOVERY, HOUSING IMPROVEMENT;THE MYTH VERSUS THE REALITY-THINGS WILL GET WORSE BEFORE THEY GET BETTER


There's been a lot of talk lately about a recovery in the housing market – even reports of bubbles re-inflating in certain markets.

Elizabeth Warren, chair of the Congressional Oversight Panel, isn't buying it.

"We see things getting worse in the housing market," Warren says, citing the pernicious effects of foreclosures, which rose 5% in the third quarter to a total of 937,840, according to RealtyTrac.

"The long-term impact of high foreclosure rates on our housing market and overall economy would be disastrous," Warren warns, citing estimates that 10 to 12 million U.S. homes could ultimately go into foreclosure. "We have to get foreclosures under control."

Why the sense of urgency? A single foreclosure property brings prices down an average of $5000 for every house in a two-block radius and costs investors an average of $120,000, she says.

In its most recent report, Warren's panel criticized the Treasury's foreclosure modification efforts as "inadequate" and "targeted at the housing crisis as it existed six months ago, rather than as it exits right now."

Specifically, the Treasury program is targeted at subprime borrowers hit with ballooning mortgage payments vs. prime borrowers hit by job losses. As for the "morality question" of whether the government should be bailing out homeowners, Warren says "I'm passed that," noting "there's plenty of unfairness to go around."

More importantly, "ultimately the American taxpayer -- thanks to Fannie, Freddie and FHA -- is going to stand behind many of these mortgage," she says. "We need to be thinking more globally what is cheapest possible way to bring this crisis to an end."

One solution: Force investors holders these mortgages who may be betting on a government bailout to take a haircut, as occurred with GM and Chrysler creditors.

"That's why they call it investing," Warren says. "You make profits in good times, take losses in bad times. That's the fundamental part of this [modification effort] that's missing."

Mortgages will get harder to obtain if the mortgage investors lose their government backing.

There are lower comps, lower apraisals, more forclosures, higher unemployment, higher gas prices, lower FICO scores, lower rents... sure housing is recovering... ...and Goldman sucks rakes in record profits. the disconnect between wall street and main street widens.

"One solution: Force investors holders these mortgages who may be betting on a government bailout to take a haircut" ------ Got any more solutions? Problem with this solution is that it's like trying to make a single strand of straw from a bale of hay. Who knows who the ultimate investors are? How will you get them all to agree? I suppose if it were considered to be an "involuntary conversion" it may possibly work. All solutions end with a lot of pain for someone (investors), and doing nothing ends in a lot of pain (in theory, homeowners). Either way, it's going to hurt. Meh, I think we're heading for some serious deflation. It looks like it may be inflation because of all the printing, but what would happen today if every loan on everyone's books were written off? That's extreme, but write-off's are happening in many areas of business. When that happens, people get laid off because there isn't that expected source of cash flow (debt repayment). Ugh, not pretty.
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JustinT
JustinT -

The American taxpayer has once again fallen for the catatonic tonic known as the stock market - Keep Your Eye On The DOW ------- Meanwhile, BIG Banks with their taxpayer-supported bail-outs and mega-volume computerized stock trading are once again sucking the last remaining wealth and life blood from John Q. Public, Joseph/ine Six-Pack, et.al. ------- BUT, nevermind that rubish, keep your eye on the DOW! ... you may someday know a BIG banker who can buy you a beer, or tip you for shining their shoes. Complicity is KING, and will save your soul!!! ------- BIG banks WIN, American TAXPAYER LOSES! ------- Yep, America taxpayer snoozes and loses
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RivrB
RivrB -

Those clowns on campidiot.com were right! Hyperdeflation is coming! 5 years from now nobody will be able to afford a $500 starter home!
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marx
marx -

Why buy a house when I can buy gold and an RV


It's simple. We can all take a page from the banksters accounting book. We can stop the Mark to Market value of our homes, just like Washington allowed their bankster buddies to do with their trillions of dollars crap assets.
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JARAA
JARAA -

wait a minute... why do we have to be thinking "globally"? that's how we lost the American jobs to outsourcing in the first place. forget about the international community and globalism... put America first for a change.
Mark
Mark -

Why all this focus on keeping house prices artificially high? This just makes it overly expensive for first-time home buyers. Houses had typically been about 2.5x income, and a return to that level should bring long-term stability to the market. All this governmemt (taxpayer) debt being added on to keep the market inflated is plain stupid for more reasons than I can list.
if they can turn a bad bank to a good bank .and turn a good bank to a bad bank .just think what they CAN /HAVE done to MORTGAGE LENDERS ..LITERALLY GET THEM TO CHANGE ALL THE MORTGAGE RULES FOR A SHORT SIGHTED "POLITICAL AGENDA "FOR THE PAST 20 YEARS AT LEAST.... try this BITE OFF MORE THAN YOU CAN CHEW....TILL YOU CHOKE...and hope barney and the crowd knows the Heimlich maneuver.,,you know what i mean .A KICK IN THE CHEST..


Why doesn't the Fed just change the term of Investor to Government Contractor? Just cause you invest in something doesn't mean your guaranteed to make money on the deal!
san -

What they did in the UK in the 1990s they doubled the term of your loan and if you were unemployed the government paid the interest on the loan because it was cheaper than kicking you out into rented property.

Warren your right, nothing is fair in all of this mess. The Rich will continue to be bailed out at the Taxpayers expense, and they will get Richer no matter what. When the dust settles the middle class will be no more. When all that is left is the haves and have-nots then the shooting and bloodshed will begin.

You can't artifically support asset prices Liz! She is just another bailout shill - smoother, more polished than the rest of the shills.

Interesting talk as other headlines are stating that there is a recovery.
 
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