Saturday, January 31, 2009

Republicans May Filibuster the Stimulus Package

First the House of Representatives passed the stimulus package without one Republican vote. Now it seems they may just filibuster the package in the Senate.

When will people realize that they stand for nothing. President Obama in a show of bipartisan cooperation included broad tax cuts in this legislation. The prblem is that for these people the tax cuts are never enough. Ask yourselves how the tax cuts for the rich have worked out for us? Every day thousands are losing their jobs with no end in sight. Our country is headed towards another Great Depression and all they can do is stand in the way. The reasons are simple. They are hoping that the package will fail. This is purely politics and the good of the American people does not play into the equation.

What do you expect from a party that is being led by an impotent fat drug addled gas bag who has said that he hopes Obama fails.

Just remember if President Obama fails, we all fail. Its time to relegate the Republican Party to the dust bin of history.

Thursday, January 29, 2009

New home sales fall by 37.8% from 2007 levels to lowest level on record

Sales of new homes fell by 37.8 percent from 2007 sales. Total sales in 2008 were 482,000 compared to 776,000 (the total sold in 2007), according to Mission Residential. The median new home price dropped by 9.3 on a a year-over-year basis.

These numbers may actually be skewed higher because the monthly sales data does not reflect cancellations, which means sales are probably lower and actual inventories higher. Because of these adjustments the actual supply on the market jumped to 12.9 months in December. Don't expect home builder stocks to recover any time soon.

Richard Moody, Chief Economist for Mission Residential says "new home prices will remain under steady downward pressure, and new residential construction may bottom later this year but will remain weak through 2010." Low-priced foreclosures are adding to the market stresses that home builders face. "To the extent that low mortgage rates and sales incentives, such as buyer's tax credits, do facilitate sales, those sales are increasingly titled towards existing homes," Moody added.

There is some good news. Builders do appear to have a handle on building starts. Now that starts of new homes have dropped well below the sales rate, the front end of the pipeline is under control. But, completions of new homes intended for sale are still running well ahead of sales. So the breaks are not fully in place yet. Until builders can turn the tide and shorten inventory supply we won't see a turnaround in the building industry.

Tuesday, January 27, 2009

You Were Just Terminated - Now What?

Just yesterday lay offs totaling over 70,000 were announced by companies from a broad range of industries. What will happen now to those displaced and what is the short and long term damage to our economy?

In the short term the loss of those jobs means financial hardship for the families that are losing a paycheck. and a double whammy to the local, state and federal governments. Now the government must start paying out unemployment insurance and lose the payroll tax deductions associated with those jobs. You have to wonder how an economy that is shedding so many jobs will ever be able to recover from a hole that seems to just get deeper by the day. The last time jobs were being shed at this rate was in the early 1980's and back then the prospects for future job growth were still intact.

Since that time we have lost our manufacturing base, our Unions have been decimated and our gap between rich and poor has grown exponentially. White collar jobs are now disappearing at an alarming rate, being replaced by cheap but educated labor in countries such as India and the Philippines. Even our service sector jobs when possible are being outsourced to these foreign lands. Are we seeing the final death knell for the American Middle Class? I would say the answer is yes unless we act forcefully and soon. We must reverse this trend to the lowest common denominator and fight to restore our middle class. Without a vibrant middle class we will become just another country where the rich control everything and the poor are jut lucky to get by. The problem is how can we restore this nation to its former glory?

One way is to pass the Employee Free Choice Act. We must give the American worker all tools necessary to fight for a living wage. We must demand that public funds are never given to companies that outsource our jobs. We must encourage small company creation with tax incentives and tax those companies heavily that ship our jobs overseas. We must change the corporate culture that the future stops at the next quarterly earnings report.

How about charging tariffs for labor performed out of the country for customers that live in the country? How about having fair trade and using tariffs to offset the cost of lower labor abroad? There are common sense steps we can take to level the playing field.

Events this week show us that these companies could care less about us but that their executives are still enriching themselves at taxpayer expense. Can someone tell me why the handouts to Merrill Lynch and Citigroup have not been called in?

It is time for drastic action by the American workforce or soon we will all be fighting over those jobs that supposedly Americans will not do.