As expected, another government fiasco in the first week of a new program referred to as the "CASH FOR CLUNKERS" special program. You know what it is....another government stupid program.

Of course it is not able to be administered, and it was a farce. Dealers and consumers are apparently already stiffed due to the fact that it was to operate till November while the money has already run out.

Dealers have unprocessed cars, unprocessed deals and have often had to cancel sold deals due to government ineptness.

And this program only was a tiny one time $1 billion deal. Imagine the $1 trillion the government wants to manage on your health care.....!!!!! YIKES!!!!!!!

Stupid is as stupid does!

As I saw the reports of this latest screwing by the government of dealers and consumers, I passed by a new CADILLAC car dealership that was opened just a few years ago in my town.

It was really a very good looking business and it replaced a decrepit old and abandoned factory building that was an eyesore for years.

The site was purchased by an independent businessman, an owner of several other dealerships and was quite an improvement in our town. he invested MILLIONS into the land and building, the manpower and the related costs to start this business.

In the last two months GM "GOVERNMENT MOTORS" TOLD HIM THAT THEY WERE CANCELING HIS DEALERSHIP as part of the reduction of 1,500 Cadillac dealers down to 500 nationwide.

Thanks Mr. Obama....your ineptness will result in 50 people losing their jobs and the entrepreneur losing millions! Furthermore our town will have an abandoned building right in the center of town near its entrance.


Screwed twice: first closing of the dealership, and second by not allowing a clunker to be taken in trade.


Free markets have a funny way of adjusting to all situations. They take into account realities and guess at the future.

In the case of our TREASURY and its necessary sales of TRILLIONS in NOTES and BONDS to finance the future spending and deficits, the potential is clear that these will be sales at a pace never done before.

Think about it this way...if you have funds to invest, do you want a higher interest rate later, or a low interest now?

Answer: higher rate!

Thus in the longer term, everyone knows that the USA has to borrow enormous amounts and will compete for the money in any economic recovery with PRIVATE business which will be offering interest rates that are better.

The interest rates will climb due to the irresponsible spending and this will hurt the economy, businesses of every size and consumers as well.

No matter what is being told to the news media, do not lose sight of the future facts; the government HAS TO borrow a lot of money that will be looking to be invested into the best and highest yield.

Today, Treasuries fell for a second day after the government’s record $39 billion auction of five-year notes drew a higher-than-forecast yield, renewing concern the deluge of U.S. debt being sold will overwhelm investor demand.

The notes drew a yield of 2.689 percent, compared with a forecast of 2.635 percent in a survey of eight of the Federal Reserve’s primary dealers. Indirect bidders, a class of investors that includes foreign central banks bought 36.7 percent of the notes, down from 62.8 percent of the securities at the June sale, the highest since December 2004.

“You’re starting to see customers pull back from the market,” said Thomas L. di Galoma, head of U.S. rates trading at Guggenheim Capital Markets LLC, a New-York based brokerage for institutional investors. “It’s been a fundamental shift in central bank buying.”

The yield on the benchmark 10-year note rose two basis points to 3.72 percent at 1:16 p.m. in New York. The yield climbed to 3.76 percent on July 27, the highest level since June 22.

The existing five-year note yield rose eight basis points to 2.68 percent, after dropping as low as 2.55 percent.

The sale is the biggest offering of the notes since the Treasury began issuing five-year notes in 1953, according to the Department’s Bureau of the Public Debt. Last month’s $37 billion sale of the securities was the previous record.


The bid-to-cover ratio, which gauges demand by comparing total bids with amount of securities offered was 1.92, compared with an average of 2.2 at the last 10 auctions. It was the third of four auctions totaling $115 billion that is the largest amount of so-called coupon securities sold in a single week.

At the June 24 auction, the notes drew a yield of 2.7 percent, the highest since October. The so-called bid-to-cover ratio was 2.58 last month, the highest since October 2007. The average indirect bid for the past 10 auctions is 36.8 percent.

The five-year note sale will be followed by a $28 billion offering of seven-year securities tomorrow. The government sold $42 billion of two-year debt yesterday and $6 billion of 20-year Treasury Inflation Protected Securities on July 27.

The U.S. raised $1.02 trillion this year selling Treasury securities to help finance a recovery from the recession, government data show. In its next round of auctions, the U.S. will sell three-, 10- and 30-year securities on three consecutive days beginning Aug. 11. WATCH OUT FOR THOSE YIELDS AS INDICATORS.

Revised Estimate

Goldman Sachs Group Inc. said the U.S. will sell about $2.9 trillion of debt in the two years ending September 2010, cutting its estimate for Treasury auctions by 28 percent, as the economy improves (oh yeah).

President Barack Obama will sell a net $1.9 trillion of debt in the current fiscal year that ends Sept. 30, Goldman said in its report late yesterday. In March it forecast $2.7 trillion. Goldman, also a primary dealer, trimmed its projection for sales the next fiscal year to $1 trillion from $1.35 trillion.

Forecasters say the U.S. federal deficit will be $1.725 trillion for this fiscal year and $1.4 trillion in the following 12 months.

I say no way, it will be way bigger due to all the government mandates, taxes and forced programs all of which will bring in less revenue to the Treasury than forecast.

‘Certainly a Concern’

Two-year notes fell yesterday after the debt sold at a higher-than-forecast yield. Indirect bidders bought 33 percent of the notes, compared with 68.7 percent at the June auction, the most in at least six years.

“The lack of indirect bid was certainly a concern for the front-end,” said Dan Orlando, head of U.S. government bond trading at primary dealer Deutsche Bank Securities Inc. in New York.

The difference in yield, or spread, between two- and 10- year notes fell to as low as 2.53 percentage points, the narrowest in two weeks.

The Fed has bought $222.719 billion in U.S. debt since its purchases began on March 25. The central bank the Fed is scheduled to buy notes due from May 2012 to November 2013.

Treasuries lost 0.5 percent this month, compared with a 0.3 percent advance for German government bonds, according to Merrill Lynch & Co. indexes.

The financial crisis, which started with the collapse of the U.S. property market in 2007, has triggered $1.52 trillion of writedowns and credit losses at banks and other institutions and sent the global economy into its first recession since World War II. The government and the Fed have spent, lent or committed more than $12 trillion in a bid to revive the economy and credit markets.

Scary times ahead.


As usual we get no signals to work with from the IMF and its leadership.

It is good news that financial markets are doing better but 2009 will still be a bad year for the world economy, International Monetary Fund Managing Director Dominique Strauss-Kahn said on Wednesday.

In an interview with France 24 television, he also said the U.S. dollar was likely to remain the world's reserve currency and called the return to generous bonuses for workers in U.S. banks scandalous.

"It's good that financial markets are doing better. It's good that companies are starting to have better results. But 2009 will be a bad year," he said.

"We are only halfway through. The rest of the year will not be good. And the pick-up that we see really only exists as of 2010. So we mustn't get wrapped up in it."

Even when the economy has recovered, unemployment will remain high and rise for some time, he said. Asked whether the IMF's Special Drawing Rights (SDRs), an international reserve asset, could replace the U.S. dollar as the world's main reserve currency, he said: "We are far, very far from having a situation in which the supremacy of the dollar would be contested."

"The that that the United States is the most powerful economy and so while we can still think about a different system I do not think that the IMF's SDRs would be in a position to replace the immense mass of dollars circulating in the world which are used for international payments," he added.

Asked whether he was concerned about large bonuses which encouraged the kind of risk-taking that helped lead to the financial crisis, he said: "Frankly, I'm scandalised by what I'm seeing."

And does he want to have a say on what business and their directors and COMPANIES DO as far as compensation and bonuses?

Jealous again?

let's take a look at the IMF books and salaries first...what do you say?

Recent bumper profits for banks including Goldman Sachs (GS.N) and JP Morgan (JPM.N) have raised concerns among politicians that banks have not sufficiently changed their business practices in the wake of the financial crisis.


Why I Pay with Two-Dollar Bills

I recently decided that I am going to pay for as many things as is practicable using only two-dollar bills. I will now attempt to explain my purely symbolic gesture and the reactions I have received so far.

A few weeks ago I determined that I should be doing something to express my dissatisfaction with current monetary policy, and get people interested in the topic. Inflation was my main concern. I tossed around a few ideas of how to get others interested. I needed to do something dramatic enough to get attention, and interesting, or eccentric, enough to prompt people to educate themselves about monetary policy and price inflation. But how could I both express my discontent and get people to learn that the Fed's printing of trillions is disastrous?

My first idea was to pay for everything with one-dollar bills. Theoretically, this was to alert people to the declining value of the dollar; after all, it takes a surprisingly large stack of ones to pay for most purchases now. I quickly rejected this idea for obvious reasons. Ones are ubiquitous and it is not particularly unusual for people to pay with them. My next crazy idea was to pay with pennies. Clearly, this was an even worse idea than paying with dollar bills. It would definitely get attention, but who wants to carry around a giant — and very heavy — bag full of pennies?

My next plan was to refuse to accept ten-dollar bills. After all, Hamilton is on the ten and his mercantilist policies are largely responsible for the current American version of neomercantilism. But who the heck cares if I don't want tens? Plenty of people don't want tens for various reasons and I certainly don't want to have to give everyone a long boring speech as to why I won't take their tens in order to make my point. No, I needed something that wouldn't require a captive audience or a long explanation.

Then it dawned on me. Why not pay with two-dollar bills? After all, Thomas Jefferson is featured on the two, and as all Jeffersonians and Austrians know, Jefferson had a deep hatred of central banks and inflation. (Not to mention that his vice president shot and killed Hamilton.) What's more, two-dollar bills are something of an oddity.

The front of the bill is the oldest design still in production. The reverse features Trumbull's Declaration of Independence. The two-dollar bill serves my purpose well because, as Austrian economists have taught us, price inflation is the result of the Federal Reserve printing money. The two is rarely printed, making only about one percent of all notes! One series was printed in 1976 to commemorate the bicentennial, another series was printed in 2003, and the last series in 2006. The two is perfect: it is not widely circulated and most people regard it as something of a curiosity. As of 2007, there were only about $1.5 billion worth of two-dollar bills in circulation, and many of those have been hoarded away.

My mind was made up. The two-dollar bill was the perfect way to spread my message without being intrusive or a mere annoyance. Paying this way is just odd enough to get people to say "why twos?" Furthermore, twos are easy enough to use so that paying with them is not a major burden. The symbolism of Jefferson being on the least-printed Federal Reserve note in existence further sweetened the deal. So it was time to put my plan into action.

Obviously, the first step in paying for as many things as practicable with two-dollar bills was obtaining said bills. I headed down to my local Wachovia, where I do my banking. When I asked the teller for two-dollar bills, I received the expected (and desired) look of utter bewilderment. She then scrounged around, asking all the other tellers for any twos that they had. She took a quick trip to the back in her quest to satisfy my strange request. She did the best she could, returning with only $18 worth. Then the efficacy of my plan was confirmed, as she asked the question that I most wanted to hear.

After counting them out for me she said "Why do you want twos?"

I was thrilled, but I never showed my inner delight. I replied "I just prefer them."

After all, this article had not yet been written and I knew that she didn't want to hear a long rant about inflation and the Federal Reserve. Nor did I want to give such a lecture. As I prepared to leave the bank, the ever-helpful teller said she would start saving twos for me.

Later that week, I purchased a copy of Meltdown by Tom Woods at the Mises bookstore. As I shelled out the two-dollar bills, our librarian said, "You are going to pay me in twos?" Perfect. It was working better than I could have hoped! I just told him that they had my favorite president on them. After all, the Mises librarian already knows about the Fed and inflation.

The next week, when I went back to my bank to cash a check, I once again requested two-dollar bills. There was a different teller, and once again I was delighted to receive a bewildered look. Once again there was a scramble to find enough twos to satisfy my strange request. Alas, there were none in the entire bank! After profuse apologies, she informed me that they would be getting some twos in very soon. Then she asked the question that I was so anxious to hear again. I replied the same way as to the previous teller.

Now I am able to pay with twos just about everywhere I go. I do discriminate, so to speak; I try to save my twos for small local businesses. My thinking is that these places are more likely to recirculate them throughout the small college town where I live — and are more likely to inquire about my eccentric payment method. Once this article runs, when I am asked why I am requesting or paying with so many two-dollar bills, I will be able to say, "If you google 'why pay with two-dollar bills,' you will find out exactly why."

The true point of this experiment is to encourage people to educate themselves about our current inflationist monetary policy. My hope is that my readers will begin to request two-dollar bills from their banks and direct people to this article. There is no need to brow beat a captive audience with economic mumbo jumbo, just say, "Google 'why pay with two-dollar bills.'" If they are curious enough, it will lead them to use the wonderful resources available at to shake off the heavy chains of complacency that facilitate this stealthy crime.

Briggs Armstarong-Misses Daily


Hooray, the government in the USA and the UK has formally announced that the recession is over! Let's all celebrate by charging up our credit cards and using our available lines of credit against our homes!

Oh oh, I just noticed along with millions of others that my charge cards are still near that limit set for each of them, and due to that fact, the credit card companies have notified me that now, due to that fact, my interest rate will be increasing on some of them to ridiculous amounts.

I do not understand it. They want me to keep as high a balance as possible, but then penalize me for doing so by raising the interest rates? I guess I did not take the time to read the 10 page small print (Willy Wonka movie contract comes to mind) information and disclosure statement that is sent every few months with a large notice stating new rules.

So I looked at my line of credit provided by my generous "home equity line of credit" extended to me in 2004 which I have not yet used.

I forgot that in 2008, I received a letter advising me that it was canceled since my home was re-valued by them and that line evaporated as a result.

I then looked at my about to be thrown out junk mail. It contained a GET THIS VISA CARD NOW offer printed just for me, with my name even imprinted on a faux visa card inside the mailing.

This card COULD be mine for real, and all I had to do is call the number listed or fill out an on-line application for a QUICK response...and instant response. I noticed that I was already pre-qualified to contact them at any time.

So I decided to fill out the on-line application instead of talking on the phone to "Raznish" and trying to understand which of the 500 Indian dialects he was using, in attempting to talk with me.

The on-line application page started with a bold headline that informed me that I was already pre-qualified. That was comforting news to me, after the bad experience I had with my credit cards and their news and the home equity line file.

The application form was very encouraging and further informed me that my line of credit was GUARANTEED to be provided to me and that I was already pre-qualified (in case I forgot that I was) for a line of instant credit of $300-$10,000, just for filling in the application.

I saw that $10,000 figure and I was sure excited. I filled in my name, that is all it needed. I thought, wow, the easiest application I ever had!

I clicked the APPLY NOW button, and before I could blink, I was approved!

I was immediately informed that my new VISA card, that I was pre-approved for, was already waiting to be sent out, all I needed now is to provide them with my address and a $99 processing fee...and it would be sent to me. No questions asked!

However, I still was not sure of that $10,000 credit line, so I kept clicking on all types of boxes on that web site.

Finally, a copy of the Agreement that I automatically agreed to abide by if I sent them the $99 processing fee appeared and I had to read its many pages.

It said, in the small type of course, that my card was initially going to have a $200 line of credit, and that was all I would get until some time in the future that they may decide at their sole opinion to increase it.


Further down in the "AGREEMENT", the small print also informed me that there would be a $99 annual fee for the privilege of having this particular VISA card, and that this fee would also be automatically charged to this new card right away.

So, now let's see. the line of automatic credit was $200, and from that line of credit they would charge the $99 processing fee and the $99 annual card fee immediately upon issuance, leaving me a $2 credit availability to spend on anything I wanted. There was also a $39 over limit fee, and a $39 late payment fee.

So as I attempted to celebrate the end of the recession as announced by government officials around the globe by charging something, buying something for the family, I was thwarted in my attempts to celebrate this auspicious occasion.

That was my personal non-scientific attempt to take advantage of the end of the recession.

I heard from several friends who called my attention to the fact that the recession ended, so I asked them how they celebrated the end of the recession. They basically responded with a puzzled..."what do you mean?"

"How are you celebrating the end, the end of the recession?", I asked.

There were no answers to my puzzling question, but my question seemed to kindle a sort of questioning of the announcement beyond its headline.

Nobody was celebrating apparently.

Without celebrating, how will the economy be stimulated, then?

I'm curious, anybody out there celebrating, yet?


Just when you thought that the government was done handing out your money to bankrupt auto companies, deadbeat homeowners, extending unemployment benefits for people NOT really looking to find a job, covering bad loans by bankers, paying bonuses to investment bankers, it still had one more handout of a few more billion dollars to give away if you qualify, or course. Good luck with qualifying for this new government handout. As usual there are plenty of rules that are not evident in the title of the program.

That hand out is not for you the taxpayer who pays bills on time and did not get or qualify for any handouts at the expense of others.

Another administration genius thought up the idea to give up to $4,500 to people who own "clunkers": old rusty gas guzzlers ( mostly that do not really work or drive, to be credited to the purchase of a new car.

Never mond that most of the people will not qualify to buy a new car due to low crdit scores, but it is another program of giving away needless money that creates a larger federal deficit.

Americans will get a new incentive to trade-in their gas-guzzling cars today when a government rebate program that offers cash vouchers to people who trade in their cars for new fuel-efficient vehicles officially starts.

The Car Allowance Rebate System, informally called "Cash for Clunkers," was passed by Congress in June to help jump-start struggling auto sales and to improve the environment.

But some critics say the program may be economically and even environmentally counter-productive.

It will be administered by the National Highway Traffic Safety Administration through participating new car dealers who can handle the paperwork when you buy the vehicle.

Information about the program is available at

Here's how it works: If you own a 1984 or newer vehicle that has been insured and registered to you for the past year and gets a "combined" 18 miles to the gallon or less, you can qualify. The car must also be drivable.

If you trade it in for a car that gets an additional four more miles per gallon or more, your reward is a $3,500 voucher, which can be used toward purchasing a new car.

If you switch to a vehicle that gets 10 miles-per-gallon or more in fuel efficiency, then the government gives you $4,500.

To see if your used car has a qualifying miles-per-gallon rating, the Department of Energy has set up a Web site with the official used car mileage ratings.

Many auto dealerships have accepted cars for the program since July 1, but the program officially begins today, when the National Highway Traffic Safety Administration will release the system's final guidelines.

Chrysler Group LLC announced Wednesday it would match the government's incentive program for most of its 2009 Chrysler, Dodge and Jeep models. The automaker will offer consumers an additional $3,500 to $4,500 rebate or zero precent financing on top of the money they will already receive from the federal government.

But before any consumer takes part in this program, there are some pitfalls and guidelines to watch out for.

The concept is noble: Get less fuel-efficient, more emissions-producing cars off the road and stimulate new car sales all at once. But critics say it doesn't go far enough with its fuel efficiency requirements and could end up being a subsidy for big SUVs and trucks.

Believe it or not, even some environmentalists are against the new law. They point out that it will end the lives of perfectly serviceable vehicles with years of life left. One way to be green is to get a more carbon-friendly car. Another way to be green is to "recycle" a car by buying used.

From a strictly consumer standpoint, some experts contend the Cash for Clunkers program is not a great deal. Yes, if you are bent on buying brand new, you will save money. But the savings are nothing compared with how well you can do by buying a used car.

New cars typically depreciate 20 to 30 percent in just the first year, according to the auto Web site By year three, their value is down an average of 45 percent!

Edmunds says the average sale price of a brand new car is $27,800, whereas the average price of a used car is $13,900. That's a savings of roughly $14,000 achieved simply by letting somebody else be the chump who buys the brand new vehicle!

Still want to be green? There are plenty of 3-year-old vehicles with excellent fuel economy. The technology hasn't changed much in the past few years. It's also a great time to buy used because cars and trucks are incredibly reliable these days. They can easily chug along for 200,000 miles with few problems.

So go ahead, get your share of the federal handout cash, if you can possibly qualify.


It would seem that we would want our country to grow, our economy to expand and bring more wealth to Americans. But not if Senator Lautenberg (Democrat-New Jersey) has his way! This genius has introduced a bill to remove from the roads by the year 2020 at least 10% of all truck traffic!

How do we get our products ordered on line, or how do we get the fresh fruits and vegetables delivered? DUMMY.....

What is it about these politicians who are so destructive to our way of life?

Not only will there be lots more people by 2020 who will need goods delivered, but the illegal aliens alone will likely add another 25 million to our population.

This bill is nothing else other than lunacy.

The former chairman of the American Trucking Association, Ray Kuntz testified before the Senate calling this proposal ridiculous, and a job killer as well.

Let's remember well this job killer, and vote him out while insisting that he cut back his own hot air consumption by 10%.


Who writes this stuff? Unemployment is slowing, everything is improving, signs of less of a crisis? There is nothing in the news that would cause the conclusions that economic things are improving.

As we talk to clients who run small businesses, those on the front lines, there is nothing in the wind that appears to be improving for them. Their bankers are not lending, their credit lines are being pulled or decreased, and their personal credit card lines that are unused or available are being decreased to the outstanding balance.

So, what is it that is showing signs of improvement.

The government is strong arming the congressional delegations to approve crazy cap and trade legislation that they have not read and now wants to force on everyone an expensive and intrusive health care "reform" that will do away with all private health care policies by 2013!

The president outwardly lies on TV stating that there will be a private option, but that is NOT in the proposed bill. The president has further stated that he does not know what is in the bill, but that bill is about to destroy health care as we know it.

The additional cost burden will not only cost jobs, but those individuals who will not want to have health coverage, must buy it or face a TAX penalty equal to 2.5% of their income! Employers must pay 8% of the their employees salary as a penalty.

Are these policies going to stimulate job growth or economic stimulation? NOT!

The number of newly laid-off workers seeking jobless benefits rose last week, though the government said its report again was distorted by the timing of auto plant shutdowns.

Unemployment insurance claims have declined steadily since the spring, but most private economists and the Federal Reserve expect jobs to remain scarce and the unemployment rate to top 10 percent by year-end.

Elsewhere, the housing market showed more signs of life as sales of previously occupied homes rose for the third straight month in June, according to the National Association of Realtors.

The Labor Department said Thursday that its tally of initial claims for unemployment insurance rose by 30,000 to a seasonally adjusted 554,000. That was above analysts' estimates of 550,000.

The increase follows two straight weeks of sharp drops largely because automakers didn't lay off as many workers as expected in early July. General Motors and Chrysler temporarily shut down many of their plants earlier than usual this year, in May and June, after filing for bankruptcy protection and restructuring their companies.

A department analyst said the government's seasonal adjustment process expected claims to drop sharply last week, after the normal pattern of auto layoffs was complete. But that didn't happen, causing seasonally-adjusted claims to rise.

Still, some economists saw positive signs in the report. The four-week average of claims, which smooths out fluctuations, dropped to 566,000, its lowest level since January.

"The trend in jobless claims is still downward," Joseph Lavornga, chief U.S. economist at Deutsche Bank, wrote in a note to clients.

But Lavornga also said the unemployment rate likely will keep rising as long as initial claims remain above 400,000. He expects the jobless rate to increase to 9.6 percent this month, from a 26-year high of 9.5 percent in June.

The financial markets shrugged off the news. The Dow Jones industrial average added about 130 points in late-morning trading and broader indices also rose.

Still, weekly claims remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007. The lowest level this year was 488,000 for the week ended Jan. 3.

The total jobless benefit rolls, meanwhile, fell by a more-than-expected 88,000 to 6.2 million, the lowest level since mid-April. And the four-week moving average of claims, which normally smooths out some volatility, fell by 19,000 to 566,000.

But the number of people on emergency extended state and federal programs continued to rise. Unemployment insurance recipients can receive up to 53 weeks of additional benefits from the emergency programs, on top of the 26 weeks typically provided by the states.

When the extended benefit rolls are included, more than 9.1 million people received jobless benefits for the week of July 4, the latest data available.

On the housing front, home sales rose more than expected to a seasonally adjusted annual rate of 4.89 million last month, from a downwardly revised pace of 4.72 million in May. Home sales last rose for three straight months in early 2004, during the housing boom.

But prices are expected to keep falling well into next year because of a backlog of foreclosures that have yet to come on to the market. The median sales price was $181,800 last month, down 15 percent from last year but up from $174,700 in May.

The recession, which started in December 2007 and is the longest since World War II, has eliminated a net total of 6.5 million jobs. The unemployment rate in June rose to 9.5 percent, a 26-year high.

More job cuts were announced this week, many by major airlines.

Houston-based Continental Airlines Inc. reported a quarterly loss of $213 million and said it would slash 1,700 more jobs on top of 1,200 already announced. Southwest Airlines Co., which has never laid off workers, announced that 1,400 employees -- about 4 percent of its work force -- took offers of cash and travel benefits to leave the Dallas-based company.

Among the states, New York reported the largest increase in initial claims, with 12,504, which it attributed to higher layoffs in the construction and transportation industries. The next largest increases were reported by North Carolina, Florida, Missouri and Tennessee. The state data lags initial claims by one week.

Since New York is slated to have the highest combined tax rate in the country, no wonder it was the leader in lost jobs!

Also, please take note that not everyone who gets laid off or loses their job files for unemployment benefits. The numbers do not ever fully reflect the real unemployment rate, which economists estimate to be closer to 16.5%!


When my parents came to America in 1961, (legally I might add) my dad was subject to and received the then minimum wage of $1 an hour. After deductions, I think his take home pay was about $35 weekly.

On those wages we paid for an apartment, bought clothes and food and went to the movies regularly; we were able to also buy a used 1955 Pontiac to visit the beach on the weekends and to go fishing.

No doubt minimum wages are tough on those receiving them, but statistically they typically no longer apply to the head of a family and are likely to be for retired part timers looking for something to do, teenagers in their first jobs and illegal or semi-legal alien workers. Also many workers that have become school dropouts and have not created a pathway to better work are in this category.

Many states already mandate higher hourly wages.

Business never really considers the minimum wage as something to use as a basis for wage rates. It pays a wage sufficient to attract the workers that are needed, and it is not unusual for businesses to pay and advertise much higher wages for even menial jobs when there is a need to provide the service and retain good employees.

So, what is the point of a minimum wage ?

The last time it was increased, 41% of employers cut hours worked for these employees, and 28% stopped adding workers, while 24% reduced the workforce of these workers.

In these economic times, does it make sense to now fire 24% of the workers who are now employed in these jobs?


Gov. Sarah Palin has signed a joint resolution declaring Alaska's sovereignty under the Tenth Amendment to the Constitution – and now 36 other states have introduced similar resolutions as part of a growing resistance to the federal government.

Just weeks before she plans to step down from her position as Alaska governor, Palin signed House Joint Resolution 27, sponsored by state Rep. Mike Kelly on July 10, according to a Tenth Amendment Center report. The resolution "claims sovereignty for the state under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the Constitution of the United States."

Alaska's House passed HJR 27 by a vote of 37-0, and the Senate passed it by a vote of 40-0.

According to the report, the joint resolution does not carry with it the force of law, but supporters say it is a significant move toward getting their message out to other lawmakers, the media and grassroots movements.

Alaska's resolution states:

Be it resolved that the Alaska State Legislature hereby claims sovereignty for the state under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the Constitution of the United States.

Be it further resolved that this resolution serves as Notice and Demand to the federal government to cease and desist, effective immediately, mandates that are beyond the scope of these constitutionally delegated powers.

While seven states – Tennessee, Idaho, North Dakota, South Dakota, Oklahoma, Alaska and Louisiana – have had both houses of their legislatures pass similar decrees, Alaska Gov. Palin and Tennessee Gov. Phil Bredesen are currently the only governors to have signed their states' sovereignty resolutions.

The resolutions all address the Tenth Amendment that says: "powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

The Tenth Amendment Center also reported that Florida State Sen. Carey Baker, R-Eustis, introduced a memorial earlier this month urging "Congress to honor the provisions of the Constitution of the United States and United States Supreme Court case law which limit the scope and exercise of federal power."

"Now more than ever, state governments must exercise their Constitutional right to say no to the expansion of the federal government's reckless deficit spending and abuse of power," Sen. Baker said. "With this resolution, our Legislature can send a message to Washington that our state's rights must be respected."

The full text of Florida's memorial is available on the Tenth Amendment Center website.

As WND reported, South Carolina's proposal, S. 424, is titled: "To affirm South Carolina's sovereignty under the Tenth Amendment to the United States Constitution over all powers not enumerated and granted to the federal government by the United States Constitution."

Essentially it's a reminder that the United States is made up of individual states; it's not a federal authority broken up into political subdivisions.

In South Carolina, the proposals remains pending in the state Senate, where Sen. Lee Bright said he still hopes that it will be adopted this year.

The proposal there notes specifically that the "federal government was created by the states … to be an agent of the states," and the states currently "are treated as agents of the federal government," many times in violation of the Constitution.

Bright told WND the movement is spreading from state to state as fast as lawmakers discover it.

Michael Boldin, a spokesman for the Tenth Amendment Center, said his organization has created a posting for all such proposals to be tracked.

Among the states where such proposals at least have been considered are Louisiana, Colorado, Wisconsin, Florida, Illinois, West Virginia, North Carolina, North Dakota, Ohio, Nevada, Oregon, Alabama, Mississippi, Pennsylvania, Idaho, New Mexico, South Dakota, Virginia, Kentucky, Alaska, Indiana, Tennessee, Arkansas, Minnesota, South Carolina, Georgia, Kansas, Texas, New Hampshire, Massachusetts, Missouri, Iowa, Montana, Michigan, Arizona, Washington and Oklahoma.

In Louisiana, it passed the Senate in May and the House in June.

In Idaho, it passed the House in March and the Senate in April.

In North Dakota, it passed the House and Senate both in April, with the House a short time later adopting changes made by the Senate.

In South Dakota, it was approved by both houses of the Legislature and under that state's rules does not need the governor's signature.

In May, Rep. M.J. "Manny" Steele, a Republican in South Dakota, wrote that he believes up to $11 trillion is being wasted in the coming years by Washington's efforts "to duplicate and micromanage our states' affairs."

He said states should manage their own affairs and not be dependent on a federal cash cow to make ends meet. Likewise with industries, he said, citing federal cash dumps on the banking, insurance and automobile industries.

Steele told WND his dollar estimate was based on what President Obama himself has allocated in the coming years to spend on stimulus packages, industry bailouts and the like.

"If we would just let the market take care of these things," he said.

His letter noted that Alaska, Georgia, Idaho, Missouri, North Dakota, Oklahoma and South Carolina legislatures joined South Dakota's in passing some statement on the Tenth Amendment this year. The results vary based on state procedures, however. In Oklahoma, the governor vetoed the plan and it was launched on its second trip through the legislature and has been passed by the House.

"Over the course of decades, there have been increasing federal mandates and acts designed to effectively step in and legislate the affairs of our various states from Washington D.C.," Steele said. "Federal usurpation into state affairs severely limits the ability of state governments to operate according to their citizens' wishes."

federal mandates are especially bothersome due to the various STIMULUS related mandates that will become the responsibility of individual states that accept federal STIMULUS money, AND WILL BE FORCED TO KEEP UP THE FINANCIAL RESPONSIBILITIES AFTER THE STIMULUS MONEY ENDS.

Unlike the out of control spending of the federal government, states are required to balance their budgets, so unfunded Federal mandates are causing individual states to provide more and more money as their burden while the FEDS claim credit for the money.

"HANDS OFF!", say the states. It's about time for another revolution as the FEDS usurp the power of the states more and more.


The government will help homeowners stay in their homes-NOT!

Not if the homeowner lost his job, not if the homeowners can not pay a set amount, not if he is too far behind, not if the homeowner does not meet the income guideline, not if the homeowner this and that ,etc... As usual, all the government sponsored programs have nice headlines or names for the help program, but in reality few people qualify for confusing requirements for eligibility or it is too little too late.

Wells Fargo & Co., the biggest U.S. home lender this year, said bad loans jumped in the second quarter as the recession made it harder for borrowers to keep up with payments. The bank dropped 6.6 percent in New York trading.

Assets no longer collecting interest climbed 45 percent to $18.3 billion as of June 30 from the first quarter, the San Francisco-based bank said today in a statement. The increase was disclosed as Wells Fargo reported second-quarter net income soared 81 percent to a record $3.17 billion.

Wells Fargo added to credit reserves amid a 26-year high in unemployment and rising commercial real estate delinquencies. While the acquisition of Wachovia Corp. in January bolstered deposits and home lending, the bank must stanch losses from defaults in California and option adjustable-rate mortgages, ranked among the riskiest loans issued during the housing boom.

“We’re not out of the woods in terms of credit quality,” said Jennifer Thompson, an analyst at Portales Partners LLC in New York. She has a “hold” rating on Wells Fargo, because “with the company more exposed to some higher-risk markets, I’d rather wait for a better entry point,” Thompson said.

Wells Fargo, whose biggest shareholder is Warren Buffett’s Berkshire Hathaway Inc., fell $1.68 to $23.67 at 9:31 a.m. in New York Stock Exchange composite trading, and sold for as little as $23.51. The bank declined 14 percent this year through yesterday.

Profit for the quarter equaled 57 cents per diluted share, compared with $1.75 billion, or 53 cents, a year earlier, the bank said. Revenue almost doubled to $22.5 billion.

Wachovia Loans

The increase in bad assets, including a $5.3 billion rise in loans that aren’t accruing interest, was tied to Wachovia mortgages, the cost of modifications, the difficulty of liquidating holdings, and the deterioration of commercial real estate, Wells Fargo said.

The cost of loans written off as uncollectible jumped 35 percent from the first quarter to $4.39 billion, including $984 million of Wachovia assets, more than double the previous period. The charge-offs widened to 2.11 percent of loans from 1.54 percent in the first quarter, exceeding the 1.85 percent estimate of Sterne Agee & Leach Inc. analyst Adam Barkstrom.

Wells Fargo took writedowns on Wachovia’s riskiest loans at the time of the takeover through so-called purchase accounting. The company said today that losses increased in the portion of the Wachovia portfolio that hadn’t been viewed as impaired at the time.

TARP Repayment

The bank said it generated $14.2 billion toward satisfying the Federal Reserve’s Supervisory Capital Assessment Program, surpassing the $13.7 billion requirement. The process will be completed at the end of the third quarter, Wells Fargo said.

Wells Fargo is the last of the top four U.S. banks to post results. Bank of America Corp., the biggest U.S. lender, said last week that second quarter profit fell 5.5 percent on higher loan losses. JPMorgan Chase & Co., the second-largest U.S. bank reported its first profit increase since 2007 on record investment-banking fees. Citigroup Inc. had a loss, excluding a $6.7 billion gain from selling control of the Smith Barney brokerage unit, as consumer and business loan defaults rose.

Of the four, only New York-based JPMorgan has repaid its bailout funds distributed by the Treasury last year. Wells Fargo said last month it will repay its $25 billion loan “at the earliest practical date.”

Credit Reserves

The lender probably won’t be able to pay back the funds within the next year to 18 months unless it raises more capital, wrote Sanford C. Bernstein & Co. analyst John McDonald, in a report this week.

Wells Fargo added $700 million to build credit reserves, a decline from the first quarter’s $1.3 billion increase. The company incurred a $565 million special assessment fee from the Federal Deposit Insurance Corp. along with a merger-related and restructuring expense of $244 million.

Mortgage originations in the U.S. surged 40 percent in the second quarter to $625 billion, according to estimates from Inside Mortgage Finance publisher Guy Cecala. Wells Fargo reported mortgage banking income of $3 billion in the quarter on $129 billion of originations.

In California, unemployment hovered at a record 11.6 percent in June, compared with a nationwide average of 9.5 percent. Six of the state’s cities are among the 10 with the highest foreclosure rates in the U.S., according to RealtyTrac Inc., an Irvine, California-based company that keeps data on repossessed homes.

“Credit quality is going to get worse,” said Thompson at Portales Partners. “The question is how much does it deteriorate and in what categories.”

It does not take a genius to figure out that loans will continue to go bad as long as people who own homes lose their jobs.

Banks have been at times helpful in lowering interest rates on existing mortgages, however, often the way to get a better loan rate on an existing mortgage is to first default on it. If a homeowner is current, he has little chance of restructuring or modifying his loan, since the bank has no incentive to cut its profit on a "good" loan.

Homeowners have been counseled to first skip a few payments and then the bank will modify the loan....of course this means that the bank may be getting a payment to do so from the government...a way to get money from the taxpayers to redistribute to others.

Is this the way to save the homeowners in the USA, by having others pay their mortgages?


With the public’s trust in his handling of health care tanking (50%-44% of Americans disapprove), the White House has launched a new phase of its strategy designed to pass Obamacare: all Obama, all the time. As part of that effort, Obama hosted a conference call with leftist bloggers urging them to pressure Congress to pass his health plan as soon as possible.

During the call, a blogger from Maine said he kept running into an Investors Business Daily article that claimed Section 102 of the House health legislation would outlaw private insurance. He asked: “Is this true? Will people be able to keep their insurance and will insurers be able to write new policies even though H.R. 3200 is passed?” President Obama replied: “You know, I have to say that I am not familiar with the provision you are talking about.” (quote begins at 17:10)

This is a truly disturbing admission by the President, especially considering that later in the call, Obama promises yet again: “If you have health insurance, and you like it, and you have a doctor that you like, then you can keep it. Period.” How can Obama keep making this promise if he is not familiar with the health legislation that is being written in Congress? Details matter.

We are familiar with the passage IBD sites, and as we wrote last week, the House bill does not outright outlaw private individual health insurance, but it does effectively regulate it out of existence. The House bill does allow private insurance to be sold, but only “Exchange-participating health benefits plans.” In order to qualify as an ?Exchange-participating health benefits plan,? all health insurance plans must conform to a slew of new regulations, including community rating and guaranteed issue. These will all send the cost of private individual health insurance skyrocketing. Furthermore, all these new regulations would not apply just to individual insurance plans, but to all insurance plans. So the House bill will also drive up the cost of your existing employer coverage as well. Until, of course, it becomes so expensive that your company makes the perfectly economical decision to dump you into the government plan.

President Obama may not care to study how many people will lose their current health insurance if his plan becomes law, but like most Americans, we do. That is why we partnered with the Lewin Group to study how many Americans would be forced into the government “option” under the House health plan. Here is what we found:

* Approximately 103 million people would be covered under the new public plan and, as a consequence, about 83.4 million people would lose their private insurance. This would represent a 48.4 percent reduction in the number of people with private coverage.
* About 88.1 million workers would see their current private, employer-sponsored health plan go away and would be shifted to the public plan.
* Yearly premiums for the typical American with private coverage could go up by as much as $460 per privately-insured person, as a result of increased cost-shifting stemming from a public plan modeled on Medicare.

It is truly frightening that the President of the United States is pressuring Congress in an all-out media blitz to pass legislation that he flatly admits he has not read and is not familiar with. President Obama owes it to the American people to stop making promises about what his health plan will or will not do until he has read it, and can properly defend it in public, to his own supporters.

Quick Hits:

* Thanks to a steep drop from conservative and moderate Democrats, a plurality of Americans (49%-47%) now disapprove of President Obama’s handling of the economy.
* The Mayo Clinic on the House health bill: “Although there are some positive provisions in the current House Tri-Committee bill … the proposed legislation misses the opportunity to help create higher-quality, more affordable health care for patients. In fact, it will do the opposite. … The real losers will be the citizens of the United States.”

* The Senate health bill gives the Health and Human Services secretary the authority to develop ?standards of measuring gender? — as opposed to using the traditional “male” and “female” categories — in a database of all who apply or participate in government-run or government-supported health care plans.

Above is from the Heritage Foundation.

By the way, the FEDERAL HEALTH CARE programs will remain for the politicians, of course.

Scary times are coming this the change we voted for?


Reva’s cheeky snub-nosed, two-door hatch­back, which seats two in the front and two in the rear, sells for Rs300,000 ($6,132, €4,383, £3,775) in India and £7,000 in Britain. It can run at 8,000 revolutions per minute. This translates into surprisingly quick acceleration – as fast as a conventional car.

The Reva is simple to drive, with no clutch or gears. Maintenance is low – the car has only 1,000 parts, a fifth the number of a conventional vehicle.

After 2½ hours plugged into an ordinary socket, Reva’s eight, six-volt EV lead acid batteries will be 80 per cent charged, although a full charge takes nine to 10 hours. This will power the car for a distance of 80km.

this range is not enough to make the Reva a contender overseas for a family’s main car.

But just reaching this point has been an exhausting journey. After finishing at Stanford in 1993, Mr Maini teamed up a year later with Lon Bell, an inventor friend of his father’s who was involved in early work on the airbag.

The company spent the next seven years researching electric cars and produced 10 patents. Particularly important was its development of the “brain”, or energy management system, of the Reva. The brain regulates the flow of power from the batteries to the motor and other systems. When the charge in the battery falls below a certain level, the car automatically switches to “preserve power” mode to ensure the driver has plenty of warning and does not become stranded.

In 2001, the joint venture released its first battery-powered cars in India and the UK, where they are called the G-wiz. In 2006, Draper Harper Jurvetson, a Silicon Valley early-stage venture capital firm, became a partner. The group has also attracted funding from the Global Environment Fund. Total investment to date from all parties has been $50m-$60m.

To reduce overheads and cut down on management time, Mr Maini has kept the technology behind the Reva in-house while farming out manufacturing of components to contractors.

He says working in India comes with its own challenges. In spite of the country’s plethora of software engineers, it is harder to find experts with the skills to develop an automotive product from the ground up. But, he says, Indian engineers are more innovative in getting round day-to-day obstacles and more cost conscious. “We find ways to get to our objective,” Mr Maini says.

Now, with oil prices high and the world becoming determined to tackle climate change, Mr Maini believes the time has come for his product.

The company has sold only about 3,000 vehicles to date, but he expects sales of up to 2,000 this year, half of them in India and the rest in at least 20 overseas markets, which include Norway, Spain and the Philippines. This would be three to four times the volume of last year, and Mr Maini predicts growth will be of this order for the next few years. “We’ve gone through the slow, testing phase. Now it’s time to take off,” he says.

Chetan MainiThe election of a more environmentally conscious government in the US has reopened North America as a possible market. In Europe, governments are offering incentives to buy electric cars.

In India, however, government policy on electric cars remains muddled. New Delhi has raised and lowered taxes on electric cars in an ad hoc way and there is no co-ordination between the states.

Mr Maini maintains that India needs to take a more entrepreneurial view in its industrial policies. Green technologies play to India’s skills in low-cost engineering, he says, and cleaner energy will be critical to the country’s goal of delivering higher living standards to its 1.1bn people.

Analysts remain sceptical of Reva’s chances of becoming a mass consumer item without help from large corporate rivals, and are particularly wary of a claim that, with the right policies, electric vehicles could account for 10 per cent of Indian passenger car sales by 2015.

For one thing, the Reva faces stiff competition in the petrol-driven mini-car segment from the recently released Tata Nano, the world’s cheapest car, which sells for as little as Rs100,000.

Vikas Sehgal, a Chicago-based partner at Booz & Co, an industry consultant, says: “By 2015, we are looking at India becoming a 2.7m-units-per-year car market. So to sell nearly 300,000 hybrid cars is not possible without Tata or Maruti [Suzuki] or Hyundai – together they have a 90 per cent market share – going the battery-operated way.”

“The world can no longer afford conventional cars,” Mr Maini says. “From an automotive point of view, if you’re not part of the solution, you’re part of the problem.”

Is it just another politically correct hyped car that is not realistic for the population?


It seems that every time the market makes a big move up, the forecasts immediately change to paint a rosy picture of the economy "just around the corner". Just who are these forecasters, these crystal ball readers?

Well it is clear that they are NOT business owners who are trying to make a go of their business. The 1,000 page Health Care bill that will do everything magical for us all, and nobody has yet read, alone is enough to kill any economic growth.

The morons in Washington, you know who they are collectively, the folks who have brought health care for Indian Reservations and the Veterans Hospitals and rebuilt New Orleans-yes those same folks, now are planning to charge an 8% fee to employers who do not offer a health care benefit to employees.

I got news for you, employers will figure out ways to NOT employ workers, since that 8% added cost of payroll is a staggering amount to a business.

Most businesses do not make 8% of their sales as profits. Most businesses, especially small businesses scrape by with the owner generally being the last to get paid when times are tough.

Here is just the basic cost of a worker's taxes that an employer now pays in addition to the salary: employer's portion of Social Security, Medicare, unemployment insurance federal, unemployment insurance state, workman's compensation, and depending on the city or state a variety of employee related taxes for the privilege of having employees.

Yesterday a blaring headline revealed that a high earner in New York City would be subject to at least a 57% combined tax rate, and that excludes any local real estate, and all the other add-on taxes for services and utilities and use of every type.

Why would someone want to live there....MOVE OUT NOW to a low tax state!

So to all those "predictors" of the economic miracle which is just around the corner, I would like to make a bet.....put all your savings of this bet against me. If the economy turns around during this administration, by 2012, you get all my money, and if it does not, I get all your money. How's that?

The course of action taken by the new administration is so insidious and destructive to the economy, there is little chance that any growth will take place between now and 2012, except in the ranks of bloated government agencies. The individual states will have the opposite results, as they have to present balanced budgets, They will not be able to balance them through hard choices, instead, they will raise taxes, which again will cause the vicious cycle of unemployment for the private workforce.

Does nobody see this coming?


If you are a small manufacturer or wholesaler especially in the area of retail financing, it is likely that your financing company is CIT. This financing giant has pushed aside or acquired many so called FACTORING finance companies that is has become the major gorilla in the business.

In that position, it has become the only choice for manufactures and wholesalers who sell merchandise to retailers, and then factor their accounts. This allows CIT to purchase the invoices that are outstanding to the customers of these businesses, and provide instant advances against such invoices, thus providing fast cash to the business.

All types of manufactures use factors. some of the biggest names in the business of clothing manufacturing sell their invoices routinely to factors. Liz Claiborne, Tommy Hilfiger, etc., all factor their accounts.

The factor relies on the credit of the customer, a retailer such as WAL-MART or PENNEY or MACY is the customer on whose credit the factor relies for payment, and thus it does not care about the credit standing of its customer, who simply gets its money faster, by receiving the factor's advance.

This area of financing appeared to be solid until CIT posted large losses and turned itself into a BANK to get federal funding, like other banks.

Now what?

Just add this to all retailer's troubles already in the making, and add that to the troubles of reduced revenues of the manufacturers and importers who are already suffering.

There are other FACTORS, but where do you think that those other FACTORS get their financing from?

You guessed it, generally from banks that have themselves been recipients of the FEDERAL funds, and who may be tightening their lending to their clients, the FACTORS themselves!

The vicious circle of "lending dominoes" has stated its downward spiral.

In our own contacts with lenders and the deals that they are financing, credit remain tight for middle market businesses.

Lenders are demanding personal guarantees from principal stockholders on business debt from even well established and profitable businesses, and new loans are closely scrutinized and collateral demands have increased.


All, emphasis added, ALL economic growth in AMERICA has been fueled and been possible due to the establishment of credit markets. The ability to borrow money to buy or expand businesses, and to finance new business ventures has been the driving force in AMERICA.

We were the leaders of developing "BUY ON TIME" pay later, etc., which fueled the economy. If you want that big screen TV set, or a new set of appliances, you simply "charged it."

Just like you "charged it", so does a business, especially small and middle market businesses.

When they get a big order, they may need to buy the materials to make the product that was ordered, and factor may be willing to advance the funds for the purchase of the materials, which a bank may not be willing to do.

So now you have the real story of why CIT may cause the collapse of many businesses and start a domino effect throughout the apparel industry, where FACTORING is the only means of financing the vital vendors.

Financial difficulties at commercial lender CIT Group Inc. will hurt small businesses that depend on credit to fund their growth and operations, though many of CIT's units serve an important function and are unlikely to disappear if the company restructures in bankruptcy court.

The company, which lends to small- and medium-sized businesses, is scrambling to devise a plan to assure clients and investors it can work its way out of a deepening liquidity crunch, the Wall Street Journal reported on Sunday.

On Saturday, the paper reported that CIT was preparing for a possible bankruptcy filing.

CIT said on Friday it is in active talks with the U.S. government to gain access to a key lending program, but there is no guarantee the Federal Deposit Insurance Corp FDIC will allow CIT to join the Temporary Liquidity Guarantee Program.

The government has made it clear that a possible bankruptcy by CIT is not seen as a systemic risk to the financial system, the Wall Street Journal reported, since other lenders including JPMorgan Chase & Co or Deutsche Bank AG can take on many of the same loans in which CIT specializes.

Oh sure, they want new risky loans like a hole in the head.

"I don't think it (a possible bankruptcy) would have a wide impact. We're not talking about a systemic issue," said on Sunday a restructuring adviser with extensive experience working with companies in the financing sector. The adviser declined to be named due to the sensitivity of the topic.

A U.S. Treasury Department spokesman declined to comment on Saturday when asked if the administration might consider coming to CIT's aid.

If the company does restructure its operations in bankruptcy court, some clients could suffer, though its most important units will survive.

"CIT has been an important provider of credit to not only retailers and retail suppliers, but a vast array of businesses for over 100 years," said Scott Avila, a partner for corporate restructuring adviser CRG Partners, which is not doing business with CIT. "So whatever restructuring they go through, I expect CIT or some portion of CIT to continue in the future."

In particular, CIT's factoring business is vital to the retail industry and unlikely to disappear, but its competitors may not have as much access to the needed credit markets to provide replacement financing to all clients of CIT..

Factors buy the right to collect on the invoice of a retailer or other company at a discount to the value of the invoice. Then the factor assumes the risk that the invoice will not be paid.

Still, there could be some pain to the company's smallest clients in the retail industry.

"It's a difficult lending environment, and those small retailers that have seen sales slow to a minimum already may have a hard time securing lending sources until spending picks up," said Melinda Crump, a spokeswoman for Sageworks Inc, which tracks and collates the financials of thousands of privately held U.S. companies, in an email.

Businesses that require substantial working capital depend on credit. Changes in financing options could force small businesses into tough choices such as having to fund a portion of their growth from cash flow until other sources of lending were to become available, she said.

Among its services, CIT provides financial products and advice to small and middle market businesses. It has more than $60 billion in finance and leasing assets and operates in more than 50 countries across 30 industries.

The lender became a banking company in December and obtained $2.33 billion of funds from the federal Troubled Asset Relief Program.

But it has lost close to $3.3 billion since the end of 2007, and in a May regulatory filing said it had $10 billion of funding needs to address in the year ending March 31, 2010.

On Wednesday, Fitch Ratings downgraded CIT deeper into "junk" status, a move that affected $35 billion of CIT debt.

Another rescue in the making?


It seems the government is never short of great ideas to spend our money by now proposing giving it to people who are behind in their mortgage payments. So if you are a responsible person paying on your mortgage as scheduled, you are out of luck. Only if you are a dead-beat will you get government help to pay your mortgage and do not have to pay it yourself.

They also have a new idea of allowing seriously delinquent homeowners to stay in their home for years by paying a "fair" rent amount. The home will be proposed to be sold to presumably to an investor who would acquire (would be forced to accept) the former homeowner as a tenant. It is not clear if the government would also provide the tenant with additional subsidy to pay the "rent", but it sure looks like it.

The government insists on spending as much as possible of the previously allocated "rescue" funds of every type and has dreamed up this idea now. It sounds "fair and equitable" but does the government have to rescue everyone who can not pay his bills?

The next question has to be whether it would be fair to simply provide a certain set minimum cash payment to everyone so that everyone earns the same amount, so that all is "fair" to those that earn less than others.

This system was in place in the Eastern European countries where if you were a doctor, or a window washer, you got paid a similar salary....was that a smashing success?

U.S. officials are weighing a plan to let borrowers who have fallen behind on mortgage payments avoid eviction by renting their home instead, sources familiar with the administration's thinking said on Tuesday.

Under one idea being discussed, delinquent homeowners would surrender ownership of their homes, but would continue to live in the property for several years, the sources told Reuters.

A U.S. Treasury spokeswoman said late on Tuesday that "we are constantly reviewing new ways to help struggling homeowners and stabilize the housing market. This is just one idea among many that has been considered, but no decisions are imminent on the matter."

Officials have been frustrated as red tape and rising interest rates have slowed a housing rescue plan announced in February that was meant to refinance the mortgages of 5 million borrowers and lower monthly payments for 4 million more.

A housing crisis of record defaults began in 2006 at the end of a five-year housing boom of easy lending. But the current crisis is being driven as much by climbing unemployment.

Since one in five homeowners owe more than their property is worth, they have little cushion if they lose their job or face another crisis, said Jay Brinkmann, the chief economist for the Mortgage Bankers Association.

"Foreclosure is a double trigger -- does someone have a job and do they owe more than a home is worth?" Brinkmann asked.

On Monday, an administration official told Reuters that the Treasury Department is mulling new ways to save jobless homeowners from foreclosure as it continues to expand its mortgage aid.

The official told Reuters it was reasonable for policy-makers to consider terms for loan forbearance -- letting borrowers delay, defer or skip payments -- and that they should be in keeping with other aid for the unemployed.

Two years ago, a liberal economist floated the idea that struggling homeowners could become long-term renters. Dean Baker, a researcher with the Center for Economic Policy Research in Washington, says his idea still has merit and overcomes the key moral hazards of helping troubled homeowners.

"It is a very simple, clean way to help these people," said Baker, who has discussed his idea with White House officials.

Under Baker's plan, a bankruptcy judge would help determine a fair rent for the property. Banks would be able to sell the occupied homes, but the renter's lease would remain in effect.

"Borrowers would lose their stake in the home so it is hard to say that they've gotten a windfall," he said.

Officials are mulling several ideas on how to swap a homeowner's loan for a rental lease without disrupting mortgage markets.

The government could pay mortgage service companies cash to take part in the program -- or encourage lenders to sell the homes to a third party that would write rental agreements -- under two scenarios under consideration.

Many non-profit agencies manage affordable properties and might be interested in partnering in such a rental program, said John Taylor, the president of the National Community Reinvestment Coalition.

"It could be a 'win-win' for the homeowner, the lender who has a troubled borrower and the non-profit," he said.

Right, it's a win win for the dead-beat, not the rest of the taxpayers who are having their money re-distributed without their permission.


We all are very familiar with the term, "stupid is as stupid does." This adequately describes our congress as it seeks another stimulus to jump start the economy.

This thinking is the dumbest idea yet conceived by the geniuses in Washington.

Government does NOT produce anything, and whatever it does produce, usually means that it takes from somebody's wallet.

There is no possibility that the wild out of control spending of money that the government does not have, financed solely by over-borrowing and causing the largest deficits in the history of the world will cause any stimulation of the economy.

It is a fact that only the private business sector can create true economic growth and then those profits are channeled into consumer purchases. In the USA, our economy is 70% consumer driven, we are a consuming nation...we consume a lot of everything because we have the disposable income to do so.

However, it was the President himself who in the last 6 months has constantly used the words CRISIS, DEPRESSION, WORST RECESSION, WORST ECONOMY, WORST , WORST everything he helped create the panic that ensued.

Like dominoes, the various sectors of the economy fell and impacted each of the other sectors as they fell on each other. For instance going out to restaurants causes them to order less meat or fish or poultry which in turn causes their distributor to order less and that goes all the way back to the producer who produces less cows, chickens or needs to catch less fish, or pays less for all the products.

The government does not have the slightest idea that it is private entrepreneurs and small business that employ people. Big businesses buy from small suppliers, and the small suppliers are important to them.

The stimulus funds will not be impacting in any meaningful way the small or medium employer. In fact the opposite is occurring as small business profits are being threatened by every means possible through planned and announced taxes, or onerous requirements for everything ranging from mandatory health care to electricity usage.

Dealing with private businesses and business owners for over 30 years, this is the first time that business owners feel that the future is uncertain. Nobody wants to make any large commitments to acquire new machinery or to make long term plans. There are no plans to hire any new employees, and those who quit are not being replaced.

This is not how business wants to think.

In high tax states like California, Illinois and New York (which are technically bankrupt as States), the combined taxes paid by a higher income businessman could reach or even exceed 65%-70%, thus leaving little to invest in continuing the business. The myriad of taxes beyond the federal and state and local income taxes range include onerous property taxes, additional employee taxes, unemployment taxes, inventory taxes, license taxes, permits, fuel taxes, and on and on.

Nobody wants to start a business if only 30% of its profits will be retained by the hard working owner, with the government which realistically provides nothing in return takes 70%.

The stimulus dollars are not going to help the small business. Building reads or making federal buildings energy efficient will not help employ more people, and even it that does have the desired effect, what happens when the money is spent-unemployment for those people?

In looking an an example of such government largess as the USA is now experiencing, it is best to compare the present policy to that of Japan in the last decade. This identical policy, but on a smaller scale caused a recession to linger for a decade.

This is no small recession. These current events are no small and passing events which will miraculously improve the economy and it will magically again pop up.

The government is to blame as it was for the start of the crisis. The government itself issued a report that said the housing bubble and crash was caused by the government. Their policies which allowed weak borrowers to buy homes that they could not afford precipitated the crisis. It was not caused by greedy businesses or brokers. The government was more than happy to provide the guarantees of shaky debt of FANNIE and FREDDIE.

More regulation will not be the cure for anything, we have plenty of regulators and commissions and investigative agencies. We have directors and assistant directors, and oversight boards of every type.

The president's popularity is plummeting since the quick fixes he had planned though the incredible deficit spending are not making any dents in the economy.

The stock market has no real reason to go up-why would it is its stock components are showing earnings weakness for the future. The stock market decline will cause a further loss of wealth, and thus put more pressure on consumers to spend less, since they have less wealth to spend.

Consumers are not spending, they are saving!

Bank deposits in the last 8 months have increased by $1 trillion dollars. Consumers did not spend...after all the president accused us of spending too much, but then HE spends too much on our behalf. Mixed signals at best, but then again we are dealing with the first president who never had a job in the private sector, as such.

FORGET THE SECOND STIMULUS, TRY A TAX BREAK. Realistically, this administration has no idea of such a cure, it will continue to try and cover its deficits by greater taxes. Do not expect any economic recovery, just more misery, and more unemployment with a prediction now easily going to 11%-12% by year end and worse yet in 2010 as the domino effect takes hold.


As usual another "Robinhood" government program will take up to $4,500 from taxpayers and give it to certain buyers of new cars which meet high mileage standards. But as usual, the conditions attached to the qualifications to receive such funds are, as expected mostly government legalese and nonsense.

The idea sounds good...remove gas guzzlers off the streets and give the buyers an incentive to buy a new car that is more fuel efficient. Sounds good, but in reality it is nonsense and will be filled with abuse.

let's assume that the less efficient cars are "clunkers". Who drives such clunkers, wealthy owners of non-efficient Hummer automobiles? No, clunkers are driven by people who can only afford clunkers....duh, no surprise there.

So how does someone who is driving a beat up $500 car, with no insurance, model year 1987 for instance, with four bald tires, a noisy muffler and an 8 cylinder smoke spewing engine buy a new car?

No credit, no Obama mandates for bank loans.

No credit, no ability to use that $4,500 voucher.

Even if that buyer had credit, the requirement of having to have insurance on the car for at least a year and having it properly registered and licensed would be a further impediment to the sale, don't you think?


President Obama Approves the Billion-Dollar "Cash for Clunkers" Act

President Barack Obama signed into law on June 24 a measure that directs $1 billion toward rebates for U.S. residents who trade in their cars or trucks for new, more fuel-efficient vehicles. Although unofficially called the "Cash for Clunkers" Act, that title is somewhat misleading, as the trade-in vehicle must be less than 25 years old and drivable, and it must be registered and insured for the full year before the trade-in date. Instead, the Consumer Assistance to Recycle and Save Act focuses on fuel economy, requiring most trade-in vehicles to have a combined fuel economy of 18 miles per gallon (mpg) or less. On the other hand, the trade-in vehicle must be destroyed by the dealer, so people won't be trading in their new Hummers just to cash in on the rebate. The law is essentially focused on those driving inefficient, aging vehicles with little or no market value, encouraging them to buy or lease new, more fuel-efficient vehicles. The new vehicles must also have a manufacturer's suggested retail price of not more than $45,000, so people buying high-end cars can't cash in on the rebate. Rebates will be awarded directly to dealers, who will pass on the savings to their customers.

The U.S. Department of Transportation (DOT) calls the new program the Car Allowance Rebate System (CARS). It requires any newly purchased or leased cars to have a combined fuel economy of at least 22 mpg, while sport utility vehicles and small and medium-sized pickup trucks and vans (collectively called "category 1 trucks") must have a combined fuel economy of at least 18 mpg. But to earn the rebate, new cars must have a combined fuel economy at least 4 mpg higher than the traded-in vehicle. That will earn a $3,500 rebate, but to earn the full $4,500 rebate, the new cars must have a combined fuel economy at least 10 mpg higher than the traded-in vehicle. Category 1 trucks earn the $3,500 rebate for a fuel economy improvement of at least 2 mpg and a $4,500 rebate for a fuel economy improvement of 5 mpg or more.

Those looking to purchase or lease a new large pickup or van must be trading in a large pickup or van or an even larger work truck. The new large pickup or van must have a combined fuel economy of at least 15 mpg. The vehicles will earn the $3,500 rebate for a fuel economy improvement of at least 1 mpg and earn the $4,500 rebate for a fuel economy improvement of 2 mpg or more. Any heavy work truck traded in for a large pickup or van can earn a $3,500 rebate, regardless of the fuel economy, but the work truck must be a vehicle from model year 2001 or earlier. That same restriction applies to work trucks traded for new work trucks, but such trade-ins can only earn the $3,500 rebate if the new work truck is of a similar size or smaller than the old work truck. The act only allows $75 million for rebates on work truck trade-ins, but that still allow for trade-ins of more than 21,400 work trucks.

Depending on the average size of the rebates, the act provides enough funding for rebates on roughly a quarter million trade-ins. The rebates will be in effect through the end of October, or until dealers provide $1 billion in rebates, whichever comes first. The act requires the DOT's National Highway Traffic Safety Administration (NHTSA) to issue final regulations by July 24, putting the act into effect on that date. To support that extremely tight timeline, the NHTSA plans to publish a summary of the act in the Federal Register in the near future. Technically, the rebate takes effect on July 1, but the NHTSA recommends that dealers wait until the final rule is issued to be sure that they don't provide ineligible rebates. The NHTSA plans to include a list of participating dealers on the CARS Web site, and also plans to list eligible vehicles, but until it does so, you can check the official fuel economy of vehicles on the Web site. See the DOT press release and see the act, the NHTSA summary, and other information on the new CARS Web site.
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Every free economy, a functioning economy, needs a strong system of laws, especially in the bankruptcy area. The USA has a well established and very functional system of established principles which deal with creditor and debtor rights through the Bankruptcy Courts.

None of this mattered to the new administration which torpedoed all existing rules of creditor classes, preferences and secured creditor protections. Where will this all end, a dictatorship which dismisses all the rules and laws?

Looks like it....!

Simply put, when a business like GM obtains a loan that is secured by assets, those creditors who loaned the money want to make sure that their lien on the assets pledged for that loan are not in any jeopardy. That is why they loaned the money.

It is an established law, a much followed law that the secured creditor has a preference to the debtor's assets that is NOT IN QUESTION. It is simply that as an undisputed fact...the secured creditors have the claim on the assets that is NOT subject to being set aside.

However our government, in the same manner as Hugo Chavez, simply tossed aside the legitimate claims of secured creditors and instead usurped for itself and the labor unions an ownership interest in the business, while tossing aside the rights of the secured creditors.

A group of dissenting bondholders told a U.S. bankruptcy judge on Thursday that
General Motors Corp's (GMGMQ.PK: Quote, Profile, Research, Stock Buzz) proposed asset sale to the government should be blocked because it is not "a genuine

Calling GM's sale the first attempt at a "Chapter 11 nationalization," Michael Richman, a Patton Boggs bankruptcy attorney representing the group of dissenting GM bondholders,said the U.S. government had been "overbearing" in its rescue
of the automaker and was circumventing the law.

GM was in U.S. bankruptcy court in Manhattan on Thursday to
seek approval from Judge Robert Gerber for a proposed sale of
its best assets to a "New GM" funded by the U.S. government.

Over the course of the three-day hearing, the company's
lawyers, CEO Fritz Henderson, and a senior member of the Obama
administration's autos task force have argued that the sale is
GM's only option for survival.

If the deal is approved, New GM plans to be a company that
would have the best parts of the old company, a less-expensive
workforce and much less debt.

The "old GM," which would include unpopular brands and
unneeded factories, would be liquidated in bankruptcy court.

But Richman, representing a group that calls itself the
"Unofficial Committee of Family and Dissident GM Bondholders,"
argued that the sale had not been negotiated as a legitimate
sale to an independent party.

Instead, he said the government determined what would be
needed to make a "settlement offer" to "favored parties" and
then it decided on the price of the sale on the back end of the

Richman said "it's not credible" that the U.S. government
would turn on GM after providing the company with billions of
dollars in support. He asked the judge to "call the bluff" that
the government would walk away from the automaker if a deal is
not closed by July 10.

"The government came to GM with a financial rescue, not to
buy assets," Richman said.

The bondholder group has proposed GM pursue a fast-track
traditional Chapter 11 reorganization plan, in which creditors
would be entitled to vote, rather than the proposed asset

GM is asking Judge Gerber to approve the sale just one
month after filing for Chapter 11 bankruptcy, as no other
bidders have come forward to offer an alternative.

Under the terms of the deal, the U.S. Treasury would
provide $60 billion in financing to the new company, including
a proposed $50 billion that would give the U.S. Treasury a 60
percent stake in the company.

The United Auto Workers union would gain a 17.5 percent
stake; the Canadian government would own about 12 percent, and
GM bondholders are expected to obtain about 10 percent of the
new company.

A successful sale of GM's main assets would be the second
big victory for the Obama administration's auto task force. It
helped broker the sale of Chrysler LLC to a group led by
Italy's Fiat SpA (


It is common knowledge to everyone except the government, at least the US government, that government can not create jobs. It destroys jobs in the private sector through taxes and policies which cause businesses not to want to hire new employees.

For instance in the USA the new president who has never worked in a real business, never employed anyone, never had anything other that taxpayer supported jobs, is now in the process of planning the total destruction of the greatest economy in the world, while making speeches about how great will be its recovery.

The president is proposing increasing the taxes on employers, on small business, on the use of energy, on literally everything that we buy or use through the CAP and TAX bill, which at 1,300 pages was voted on by political drones who had no idea of its provisions.

For example contained in that bill is a provision relating to the sale of your present home. It has to meet an energy audit, and you have to either fix the drafty windows, replace old appliances, make it energy efficient, or it will not be able to be sold. Worse yet, a bank will not finance it for a buyer.

Will that help with home sales? remember most have been built at a time when such energy efficiency did not exist.

Employers cut a larger-than-expected 467,000 jobs in June and the unemployment rate climbed to a 26-year high of 9.5 percent. Workers also saw weekly wages fall, suggesting Americans will have little appetite to spend and the economy's road to recovery will be bumpy.

The Labor Department report, released Thursday, showed that even as the recession flashes signs of easing, companies likely will want to keep a lid on costs and be wary of hiring until they feel certain the economy is on solid ground.

June's payroll reductions were deeper than the 363,000 that economists expected and average weekly earnings dropped to the lowest level in nearly a year.

However, the rise in the unemployment rate from 9.4 percent in May wasn't as sharp as the expected 9.6 percent. Still, many economists predict the jobless rate will hit 10 percent this year, and keep rising into next year, before falling back.

All told, 14.7 million people were unemployed in June.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.5 percent in June, the highest on records dating to 1994.

"We were on the road of things getting less bad in the jobs market, and that has been temporarily waylaid," said economist Ken Mayland, president of ClearView Economics. "But this doesn't change my view that the recession will end later this year. We're probably two months away."

On Wall Street, the employment news pulled stocks lower. The Dow Jones industrials lost about 165 points in midday trading, and broader indices also fell. Overseas markets dropped after a report showed unemployment in Europe rose to a 10-year high in May.

Since the recession began in December 2007, the economy has lost a net total of 6.5 million jobs.

As the downturn bites into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive. Those include holding down workers' hours and freezing or cutting pay.

The average work week in June fell to 33 hours, the lowest on records dating to 1964.

"We are in some very hard and severe economic times," Labor Secretary Hilda Solis said in an interview. "The president and I are both not happy."

Still, Solis thought it was too early to consider a second government stimulus, saying more time is needed for the current one to take hold. "I do think the public needs to be patient," she said. "We know they are hurting."

Layoffs in May turned out to smaller, 322,000, versus the 345,000 first reported. But job cuts in April were a bit deeper -- 519,000 versus 504,000, according to government data.

Even with higher pace of job cuts in June, the report indicates that the worst of the layoffs have passed. The deepest job cuts of the recession came in January, when 741,000 jobs vanished, the most in any month since 1949.

For the second quarter, job losses averaged 436,000 a month. That was down from a monthly average of 691,000 in the first quarter. Economists predict the economy will continue to lose jobs through the rest of this year, although they hope at a slower pace.

And there was some other encouraging job news Thursday.

In a separate report, the department said the number of newly laid-off workers filing applications for unemployment benefits fell last week to 614,000, in line with economists' predictions. The number of people continuing to draw benefits unexpectedly dropped to 6.7 million.

Meanwhile, the Commerce Department said orders placed with U.S. factories rose 1.2 percent in May, the most in 11 months. The increase also was better than economists expected.

Still, job losses last month were widespread.

Professional and business services slashed 118,000 jobs, more than double the 48,000 cut in May. Manufacturers cut 136,000, down from 156,000. Construction companies got rid of 79,000 jobs, up from 48,000 the previous month. Retailers eliminated 21,000, up from 17,600. Financial activities cut 27,000, following 30,000 in May. The government cut 52,000 jobs, up from 10,000 the previous month. Leisure and hospitality cut 18,000 jobs, erasing a gain of the same size in May.

One of the few industries adding jobs: education and health services, which added 34,000 positions last month and 47,000 in May.

Mayland and other economists said a good chunk of June's job losses likely were affected by shutdowns at General Motors Corp. and fallout from the troubled auto industry, which should let up later this summer. The government said employment at factories making autos and parts fell by 27,000 last month.

Payroll losses and the unemployment rate are derived from two separate statistical surveys. The jobless rate probably would have moved higher if not for people dropping out of the labor force.

With the weakness in the job market, workers saw wages drop in June.

Average weekly earnings fell from $613.34 in May, to $611.49 in June, the lowest level in nearly a year and the first drop since March. That raises fresh questions about consumers' willingness to spend in the months ahead.

The worst crises in the housing, credit and financial markets since the 1930s have plunged the country into the longest recession since World War II.

Many think the jobless rate could rise as high as 10.7 percent by the second quarter of next year before it starts to make a slow descent. Some think the rate will top out at 11 percent. The post-World War II high was 10.8 percent at the end of 1982, when the country had suffered through a severe recession.

Federal Reserve Chairman Ben Bernanke predicts the recession will end this year, with many economists forecasting that the economy will start to grow again as soon as the current July-September quarter.

But recoveries after financial crises tend to be slow, which is why economists predict it will take years for the job market to return to normal. Some predict the nation's unemployment rate won't drop to 5 percent until 2013.

An elevated unemployment rate could become a political liability for President Barack Obama when congressional elections are held next year. The last time the unemployment rate topped 10 percent, the party of the president -- then Ronald Reagan's GOP -- lost 26 House seats in midterm elections in 1982.

So far, many people are saving -- rather than spending -- the extra money in their paychecks from Obama's tax cut, blunting its help in bracing the economy. Much of the economic benefit of Obama's increased government spending on big public works projects won't kick in until 2010, analysts say.

The White House last week said federal money was being shoveled out of Washington quickly, but states aren't steering the cash to counties that need jobs the most.

Large job cuts have continued this week. Newspaper publisher Gannett Co. said it plans to cut 1,400 jobs in the next few weeks, about 3 percent of the work force, as it faces a prolonged slump in advertising revenue. Farm machinery company Deere & Co. said 800 salaried employees, or 3 percent of its salaried work force, took a voluntary buyout offer.