Friday, October 05, 2007

Unemployment Rate Up To 4.7%

Jobs report shows September gains in line with forecasts, while earlier job loss wiped away; unemployment rate up to 4.7%.
Job growth was back on track in September, according to a government report that showed both a solid gain in Americans with jobs in the month, and revised away the job loss reported a month earlier.

U.S. payrolls showed a net gain of 110,000 workers in the month, according to the Labor Department report. That's roughly in line with the forecast of a 100,000 gain by economists surveyed by

The Labor Department also now estimates that August had a gain of 89,000 jobs, a big upward revision from the originally reported 4,000 job loss in August. That earlier reading had shaken the markets and stirred concerns of a recession as it was the first job loss in four years. The July reading was also revised higher.

Still, even with the job gains, the unemployment rate rose to 4.7 percent in September from the 4.6 percent reading in August. That increase was in line with what economists had forecast.

The weak August report had opened the door for the Federal Reserve to cut its benchmark interest rate by a half-percentage point in September, the first cut in four years, as it attempted to stave off an economic slowdown.

Friday's report could be a key to whether the central bank cuts rates again on Oct. 31, when its next meeting concludes.
What I always hate about these sunny reports is that there is no mention that the economy needs job growth of 150,000 per month to keep up with new people entering the work force. It also does not include people who have exhausted their unemployment benefits but are still not employed. It does not include the number of people who are under-employed. Those are people that are working but without full time hours but who are seeking full time employment.

Job creation under this administration has been less than stellar and the jobs that have been created in large part are low wage jobs without sufficient benefits including health care. That could be one reason that nearly 50 million people have no health care.

This administration has created a large population of working poor while the rich have gotten extremely rich and the middle class has been decimated.

Thursday, October 04, 2007

Unemployment Claims Soar

Federal government says 317,000 applied for unemployment benefits in most recent week, a potential sign that labor market is slowing due to housing slump.
The number of newly laid off workers filing claims for unemployment benefits shot up last week by the biggest amount in four months.

The Labor Department reported a total of 317,000 applications for unemployment benefits last week, an increase of 16,000 from the previous week. It was the biggest gain since jobless claims rose 18,000 during the week of May 9.

The rise was bigger than analysts had expected and could be a further sign that the labor market is slowing under the impact of the worst slump in housing in 16 years and a severe credit crunch that roiled global markets in August.
The housing slump is just starting and as projects already underway are finished the unemployment numbers in the construction industry could rise.

What we are experiencing is the beginning of a recession as a result of horrible economic policies that have decimated the value of the dollar, killed our middle class and put five million additional people into poverty. The redistribution of wealth that has occurred since the 1980's has come home to roost. With negative savings rates not seen since the depression, how are people supposed to weather the storm? The answer is most can not afford any layoff and with the potential of even more in the coming months the pain being felt by many American families will only grow. It is time for sensible economic policies that benefit everyone not just those at the upper echelons of society.

Wednesday, October 03, 2007

Bush Gives The Middle Finger To Nations Poor Children

If you needed any further proof that this President is out of touch with reality, here it is.
President Bush on Wednesday vetoed legislation expanding a children's health insurance program by $35 billion over five years.

Bush quietly exercised the veto at 10 a.m. before leaving the White House for a trip to Lancaster, Pennsylvania, to discuss the federal budget and taxes.

Congress sent the legislation expanding the State Children's Health Insurance Program, or SCHIP, to the White House on Tuesday.

"It is our hope and the will of the American people that the president will sign the bill into law on behalf of the future. It is right for no less than 10 million reasons -- our children," Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi said in a joint statement.

The Senate voted 67-29 Thursday to expand the program. Bush has said it's a step toward universal coverage, which he opposes on philosophical grounds.

The program would double -- from 4 million to 8 million -- the number of children covered.

Eighteen Republicans joined all of the Democrats in voting to expand the program from its annual budget of $5 billion to $12 billion for the next five years.
The additional costs were to be largely paid for by additional taxes on cigarettes unlike the endless war which is borrowed funds and will have to be paid for by the same children he just refused health care.

President Bush is the worst President in United States history. 2009 can not come soon enough. Lets hope there is something left to salvage. The only silver lining is that George W. Bush is driving the Republican Party off the cliff.

Tuesday, October 02, 2007

Vote Vets Responds To Rush Limbaugh

While watching this understand that Rush Limbaugh never served in the military. He avoided service due to a cyst on his fat ass. Why does this drug addled gas bag still have a daily radio show? Where is the Republican outrage at his comments just days after they condemned for questioning General Petraeus.

No Iraq Supplemental Until Course Change

President Bush will not get an Iraq war supplemental spending bill until he changes course on the war, House Appropriations Chairman David Obey (D-Wis.) said Tuesday. The powerful lawmaker also voiced his support for a “war tax.”
“As chairman of the Appropriations Committee I have absolutely no intention of reporting out of committee anytime in this session of Congress any such request that simply serves to continue the status quo,” Obey told reporters.

He wants a war spending bill to end U.S. involvement in combat operations by January 2009, allow more rest time for troops between deployments and start a “diplomatic surge.”

Obey also came out in favor of Rep. James McGovern’s (D-Mass.) war tax proposal.

“If you don’t like the cost, then shut down the war,” Obey said in a news conference.

The tax would be intended to raise roughly $150 billion for the war. It would be a surtax of 2 to 15 percent of income tax. A 2 percent surtax means that a person who would otherwise pay $100 in taxes would pay $102.
Finally some rational thinking from one of our lawmakers. Until everyone has a vested interest in this war it will continue unabated. Americans have been asked to sacrifice nothing for the supposed greatest challenge of our lifetime. It is time for everyone to put up or shut up on Iraq.

Pending Home Sales At Record Low

Realtors report shows sharp drop in homes under contract, as mortgage lenders shut off financing needed to close deals.
The meltdown in the mortgage market in August dried up the supply of homeowners looking to sell, as an industry group reported the lowest recorded level of homes under contract.

The National Association of Realtors' pending home sales index fell to a record low of 85.5 from an upwardly revised 91.4 reading in July. That broke the previous low of 89.8 in September 2001, the period in which the terrorist attack shook buyer confidence. The trade group started the index in 2001.

This time the hit to home sales came from buyers having trouble finding the financing they needed to buy homes, coupled with the reluctance of some buyers to jump into the battered market.

"Fewer contracts were being written because of mortgage availability issues, and a separate internal survey of our members shows more than 10 percent of sales contracts fell through at the last moment in August, primarily the result of canceled loan commitments," said a statement from Lawrence Yun, senior economist for the group. "The volume of activity we're seeing today is below sustainable market fundamentals because some creditworthy people are trying to buy homes but can't because of the credit crunch."
Most lending institutions have raised the standards by which people can qualify for a loan. Those raised standards have made many people ineligible for the same loan that they could have qualified for during the rise of the housing market. The market which has a glut of homes will continue to see prices decline until this credit issue is resolved.

The pain in the housing industry is far from over and the indutries which rely on the houisng market will continue to face similar recessionary prewsures.

Monday, October 01, 2007

More Banks Could Join The Red-Flag Parade

After warnings by Citi and UBS, JPMorgan and others could follow with bad news of their own, though retail banking could lessen the pain.
Citigroup and UBS may not be the only banks breaking bad news to investors this month.

Analysts warn that other retail banks that report quarterly earnings in October, including JPMorgan Chase and Washington Mutual, could suffer similar pains.

Before Monday's opening bell, Citigroup warned that its third-quarter earnings could fall 60 percent because of its exposure to subprime-backed mortgage securities.

That announcement came just hours after Swiss-banking giant UBS said it would take a take a writedown of $3.4 billion and post a loss in the third quarter because of subprime-related losses.
The ones who will really get hurt by these results are the employees of these firms. I predict you will see layoffs at all these firms as they try to turn their financial results around. The workers who didn't create the problem will need to pay the price for the executive who knowingly created loans that they knew could not be paid back. As usual those who suffer most are those that deserve it least.

Bankruptcy 'tweak' could save 600,000 homes

Consumer group pushes for change to bankruptcy law; others worry about negative impact on mortgage-debt markets.
One consumer group estimates that 600,000 foreclosures could be avoided over the next two years by making a simple change to the bankruptcy code.

The Center for Responsible Lending (CRL) calls it a tweak, but it could be a significant change for homeowners and the market for mortgage-backed securities.

CRL's proposal - reflected in a House bill recently introduced - would make changes to the regulations for Chapter 13 bankruptcies, which don't wipe out debts, but rather establish a repayment plan.

Under current law, when a person files for Ch. 13 bankruptcy, judges cannot reduce mortgage debt owed on a person's primary residence, although they may modify mortgages on investment property or second homes.

Under the House bill, the bankruptcy judge would have the option of reducing what the homeowner owes the lender. Say a homeowner's property is worth less than what he owes. The judge could reduce the principal to match the home's current market value as well as reduce the loan's interest rate.

The rest of the original principal would then be treated as unsecured. That means it becomes a lower priority for repayment than the borrower's secured debt, such as the newly reduced principal on his home. Unsecured debts may be discharged.
This is exactly what should be done. The homeowner gets some reprieve on what is owed and can negotiate a better loan and the bank avoids a costly foreclosure. Look for the pro business crowd to scream loudly that this will ruin the market but what other options are available? They should have been screaming when these lending institutions were making loans to people without proper documentation. Its amazing how quiet the business community is when they are making huge profits off the backs of those that can least afford it. It is time for them to feel the same pain as those they tricked into these awful loans.

Sunday, September 30, 2007

New Plans For Iran

Read this New Yorker article from Seymour Hersh.
In a series of public statements in recent months, President Bush and members of his Administration have redefined the war in Iraq, to an increasing degree, as a strategic battle between the United States and Iran. "Shia extremists, backed by Iran, are training Iraqis to carry out attacks on our forces and the Iraqi people," Bush told the national convention of the American Legion in August. "The attacks on our bases and our troops by Iranian-supplied munitions have increased. . . . The Iranian regime must halt these actions. And, until it does, I will take actions necessary to protect our troops." He then concluded, to applause, "I have authorized our military commanders in Iraq to confront Tehran's murderous activities."

The President's position, and its corollary-that, if many of America's problems in Iraq are the responsibility of Tehran, then the solution to them is to confront the Iranians-have taken firm hold in the Administration. This summer, the White House, pushed by the office of Vice-President Dick Cheney, requested that the Joint Chiefs of Staff redraw long-standing plans for a possible attack on Iran, according to former officials and government consultants. The focus of the plans had been a broad bombing attack, with targets including Iran's known and suspected nuclear facilities and other military and infrastructure sites. Now the emphasis is on "surgical" strikes on Revolutionary Guard Corps facilities in Tehran and elsewhere, which, the Administration claims, have been the source of attacks on Americans in Iraq. What had been presented primarily as a counter-proliferation mission has been reconceived as counterterrorism.

The shift in targeting reflects three developments. First, the President and his senior advisers have concluded that their campaign to convince the American public that Iran poses an imminent nuclear threat has failed (unlike a similar campaign before the Iraq war), and that as a result there is not enough popular support for a major bombing campaign. The second development is that the White House has come to terms, in private, with the general consensus of the American intelligence community that Iran is at least five years away from obtaining a bomb. And, finally, there has been a growing recognition in Washington and throughout the Middle East that Iran is emerging as the geopolitical winner of the war in Iraq.
Perpetual war for perpetual profit seems to be the goal of this administration. With the rise of private armies, contracted by the United States government and paid for by its citizens, war is ever more likely. The cycle starts with no bid government contracts for these firms who then donate campaign funds to sympathetic lawmakers who in turn provide even more no bid contracts. The problem with all this is that if there is no conflict then there is no contract. War is necessary to continue making a profit. It is that fact that threatens our entire country. It is time to stop the privatization of our armed forces.

NetBank Shut Down By Federal Regulators

NetBank Inc., an online bank with $2.5 billion in assets, was shut down by the government on Friday because of an unsustainable level of mortgage defaults.
It was the largest thrift to fail since the tail end of the savings and loan crisis more than 14 years ago. Federal regulators appointed the Federal Deposit Insurance Corp. as a receiver for Alpharetta, Ga.-based NetBank.

While dozens of mortgage companies have closed due to soaring defaults of home loans made to borrowers with weak, or subprime, credit, those problems previously had occurred among non-bank lenders, such as New Century Financial Corp. NetBank is federally regulated.

Loose mortgage standards in recent years - especially among lenders catering to subprime borrowers - have resulted in a spike in home loan defaults.

The FDIC said Friday that $1.5 billion of NetBank's insured deposits will be assumed by ING Bank, part of Dutch financial giant ING Groep NV.

NetBank, which had no physical branches, sustained significant losses last year "primarily due to early payment defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls and failed business strategies," the Office of Thrift Supervision said in a statement.
Why does this matter? In the scheme of things NetBank is a very small player but why it failed could be the start of a domino effect that could rival the problems of the savings and loan industry of the early 1990's.

We should all be watching the financial results of our own banks to see what they are putting in reserve for bad loans. As the foreclosures continue to climb many small banks could be in the same position as NetBank and face closure. Will the American people be forced to once again bail out an industry that caused their own financial problems? The answer most likely is yes because without a bailout many of us could see our life savings lost in a financial meltdown.