Ask yourself one question. Who benefits the most if the oil stays in the ground? The answer is easy. Its the oil companies who want to control the supply to keep prices high.
The number of newly laid off people signing up for jobless benefits last week climbed to its highest point in more than six years as companies cut back given the faltering economy.
The Labor Department reported Thursday that new applications filed for unemployment insurance rose by a seasonally adjusted 7,000 to 455,000 for the week ending Aug. 2. The increase left claims at their highest level since late March 2002.
A program to locate people eligible for jobless benefits played a role in the increase, a Labor Department analyst said. However, the analyst couldn't say how much of a role.
The latest snapshot of layoff filings was worse than analysts expected. They were forecasting new claims to drop to around 430,000.
U.S. consumers - fortified by the government's rebate checks - boosted their borrowing in June at the fastest pace in seven months.
The Federal Reserve reported Thursday that consumer credit increased at a brisk annual rate of 6.7% in June. That was up from a 3.8% growth rate in May. It marked the biggest increase since November when consumer borrowing grew at a 8.2% pace.
Debt rung up by consumers rose by $14 billion in June from the previous month to a total of $2.59 trillion. That was more than the $6.4 billion over-the-month increase economists were forecasting.
Demand for non-revolving credit used to finance cars, vacations, education and other things, went up at a rate of 6.6% in June, marking a sizable pickup from May's sluggish 1.5% pace.
Meanwhile, consumers' appetite for revolving credit, which is primarily credit cards, increased at a rate of 6.8% in June, a moderation from a 7.6% growth rate logged in May. Consumers have been forced to charge more of their purchases on credit cards as banks have tightened lending standards on other types of loans.
How exactly are they supposed to pay ths back at the incredibly high interest rates charged on credit cards? The answer is they are not. They will just continue to pay interest to these credit card companies and never get ahead. The death of the American Middle class is almost complete.
Consumer prices jumped at the sharpest rate in more than a quarter century during June, and consumers coping with soaring costs received their smallest income gain in a year, the government said on Monday.
The Commerce Department said personal incomes edged up 0.1 percent after rising 1.8 percent in May. June's rise was the smallest since April 2007, when income was flat.
On a year-over-year basis, prices rose 4.1 percent in June, up from 3.5 percent in May, for the biggest annual gain since May 1991.
An inflation gauge tied to consumer spending jumped 0.8 percent in June, its steepest gain since a 1 percent rise more than 27 years ago, in February 1981.
You would think with the continual news of a sinking economy that the race for president would be over. We have one candidate who voted to support Bush policies over 90% of the time or we have another candidate who understood the War in Iraq would be a colossal disaster and yet the race is neck and neck. Never underestimate the stupidity of the American electorate. If this country votes to continue these failed economic policies then don't be suprised when we have an economic collapse like Argentina.
The number of Americans who have seen their full-time jobs chopped to part time because of weak business has swelled to more than 3.7 million — the largest figure since the government began tracking such data more than half a century ago.
This is the result of an economy built on a house of cards that has finally come crashing down. The middle class are surviving on credit that many are unable to pay back.
The loss of pay has become a primary source of pain for millions of American families, reinforcing the downturn gripping the economy. Paychecks are shrinking just as home prices plunge and gas prices soar, furthering the austerity across the nation.
"I either stop eating, or stop using anything I can," said Marvin L. Zinn, a clerk at a Walgreens drugstore in St. Joseph, Mich., who has seen his take-home pay drop to about $550 every two weeks from about $650, as his weekly hours have dropped to 37.5 from 44 in recent months.
Mr. Zinn has run up nearly $2,000 in credit card debt to buy food. He has put off dental work. He no longer attends church, he said, "because I can’t afford to drive."
If you think this can not happen to you, you are sadly mistaken. How did we get here? We got here by electing the most destructive administration in our history. They destroy everything i their path except of course for their cronies who have enjoyed unprecedented financial gain at your expense. Why is this next election even close? Do we all want a repeat of the Great Depression? I can tell you our economic fundamentals are the closest to depression era statistics since that awful period in our history.
We have a negative savings rate for the first time since the Depression. The most home foreclosures in our history and we are now the largest debtor nation on earth. We are also considered a pariah nation by billions all over the earth. This is the destruction that has been perpetuated by this criminals. Just remember John McCain voted over 90% of the time for Bush Administration policies that got us into this mess. Do you really think he will be any better? Wake Up America before it really is too late.
The next president will inherit a record budget deficit of $482 billion, according to a new Bush administration estimate released Monday.
The administration said the deficit was being driven to an all-time high by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession.
But the numbers could go even higher if the economy performs worse than the White House predicts.
Also you need to remember that this deficit DOES NOT include the wars in Iraq and Afghanistan which are handled as supplemental expenses and are not included in the numbers.
This administration has destroyed the economic security for the next generation. We will soon see the baby boomers retiring without the pensions that their parents enjoyed. We will see a huge jump in the elderly living in poverty but the rich will have grown even richer. When will the American people wake up and understand that the middle class has become the working poor with a credit line and with credit so hard to come by soon they will just be the working poor. War, lies, poverty and corruption will be the words that define the Bush administration and we as a country will be paying the price for the next generation.
The Congressional Budget Office on Tuesday estimated that a government plan to stabilize mortgage giants Fannie Mae and Freddie Mac could cost government coffers an average of $25 billion.
CBO's $25 billion cost estimate is an average based on "the path of housing prices in the next several months." They considered three scenarios: prices stabilize, grow modestly or decline steeply.
The CBO report came out a day or two before the House is expected to debate and vote on a rescue plan proposed by Treasury Secretary Henry Paulson last week. Paulson asked Congress to give the Treasury broad, but temporary powers intended to provide a liquidity and capital "backstop" for the two government-sponsored enterprises (GSEs).
Paulson requested that the Treasury be allowed to offer Fannie and Freddie an unlimited line of credit for 18 months and be given authority to buy stock in the companies if necessary.
Where is the credit line for the average taxpayer who can't make ends meet? Where is the ability to file bankrupcy and start over. Oh thats right those laws were changed to benefit the credit card companies.
Why is it that some companies are deemed too large to fail? Why aren't those companies deemed too large to fail held to a higher standard if they may be coming to the government for a bailout? These companies know that they can do almost anything even skirt legal standards and NOTHING will ever happen to them. You and I will be forced to open our wallets and bail them out while those at the top of those companies are allowed to keep there excessive bonuses.
It is time that government bailouts come at a price for these companies. We must demand the bailout be a loan at prevailing interest rates and we must demand that those at the top help finance the bailout with lower profits. The goverment should become a major stockholder and should share in any future profits.
The Labor Department reported that soaring costs for gasoline and food pushed inflation at the wholesale level up by a bigger-than-expected 1.8% in June, leaving inflation rising over the past year at the fastest pace in more than a quarter-century.
Over the past 12 months, wholesale prices are up 9.2%, the largest year-over-year surge since June 1981, another period when soaring energy costs were giving the country inflation pains.
Phil Gramm doesn't understand the suffering of the average American and he is Mccain's chief economic advisor. He is also responsible for a great deal of legislation that did away with oversight. Imagine him as the Treasury Secretary under McCain. That should send chills down the spine of all middle and lower class Americans.
These people do not have your best interests at heart. They are there solely to facilitate the destruction of the middle class. The understand that without a middle class it is much easier for a ruling class to take and hold power. It has been the middle class that has kept our democracy strong. Kill the middle class and you will kill the democracy but hey that's exactly what they want.
Consumers boosted their borrowing in May, mostly reflecting heavy credit card use to finance their purchases.
The Federal Reserve reported Tuesday that consumer credit increased at an annual rate of 3.6% in May, roughly the same pace as logged in the prior month.
The pickup pushed total consumer debt up by $7.8 billion to $2.57 trillion. That was a bit more brisk than the $7 billion over-the-month increase economists were expecting.
The increase was led by much stronger demand for a category called revolving credit, which is primarily credit cards. Use of revolving credit rose at a 7.1% pace in May, a month where a flow of tax rebates helped to energize consumer spending. In April, consumers cut back on such credit at a 0.5% pace.
What this reports tell us is that the middle and lower classes are depending on high interest credit cards to meet the ever rising cost of living. Most consumers are at or close to maxing out on their credit and do not have the ability to pay more than the minimum payment. The credit cards companies will see ever greater profits while the middle and lower classes will be choked by high interest payments on this debt. This cycle can only mean that a recovery from this economic mess is nowhere in sight.
So we have a housing market in the toilet, a stock market in bear territory and a worsening job market that will be in turmoil until 2009. Can things get any worse?
Economists are forecasting that the unemployment rate retreated slightly in June after May's big spike. But few believe that is a sign that the battered labor market is at or even near the bottom.
When the Labor Department releases its June employment report Thursday, economists expect the unemployment rate to fall to 5.4% from 5.5% last month.
But job losses are also expected to continue. Economists are predicting that employers cut 60,000 positions from U.S. payrolls in June, up from the 49,000 job loss reported in May.
This would be the sixth consecutive month of job losses.
One reason for the expected decline in unemployment at the same time that overall job losses are increasing is that the unemployment reading jumped in May due to a large number of teenagers looking for summer jobs.
Many of those teens likely gave up job search efforts in June, which will reduce the number of people counted as unemployed. It's also worth pointing out that even if the unemployment rate dips to 5.4%, that's still up from 5% in April.
And some economists even think the unemployment rate increased in June, due to the flooding in much of the Midwest.
Rich Yamarone, chief economist at Argus Research, said he believes unemployment could inch up to 5.6% in the month.
But putting aside the monthly blips in the unemployment rate, there is no denying that the job market is weak. Several economists see more job losses ahead as employers pull back on hiring plans due to soft demand for their products.
The job market has been weak for some time. Finding high paying middle class jobs is becoming harder and harder. Is there anyone that works for a large company that is not dealing with processing or accounting done in Mumbai or other areas outside the United States? How do our lawmakers pay them back for shipping our jobs overseas? They give them tax incentives to do it.
When will the middle class wake up and realize that it is their political ineptitude that allows this corrupt system to flourish? When will they stand up and say enough is enough? When will they realize that paying a larger share of taxes on a higher income is better than a lower rate on lower income? In the end there will still be more money for everyday needs and a federal deficit that will not kill the economic future of the next generation. Will we again let these politicians use fear and loathing to get us to vote against our own best interests?
This election could be the start of the rebirth of the greatest country on earth or it could be the final nail in the coffin of what was the envy of the world. The choices are clear, the policies of the two Presidential candidates are so different that a decision should be easy. If you let them scare you with terrorism or play to your prejudices then we will all lose and the future of this nation will be one of militarism and poverty for the masses. That is not what our founding fathers had in mind.
U.S. home prices posted record declines in April, extending a painful losing streak for U.S. home prices.
The S&P/Case-Shiller 20-city Home Price Index fell to a record low of 15.3% on a year-over-year basis, and was down 1.4% from March. The 10-city index was down 16.3% year-over-year and 1.6% for the month.
The 20-city index is based on data going back 19 years, while the 10-city index is 21 years old.
There is one sliver of hope. Although every city surveyed posted year-over-year price drops, the month-to-month pace of declines did slow in many cities. And eight metro areas actually posted gains from March to April.
Bright spots Hard-hit Cleveland was the biggest winner, with prices up 2.9%. Charlotte, N.C. posted a slight gain of 0.2%, up for the second straight month, while Dallas prices were up 1.1% in April, also up for the second month in a row.
"There might be some regional pockets of improvement, but on an annual basis the overall numbers continue to decline," said David Blitzer, Chairman of the Index Committee at Standard & Poor's.
Indeed, there are anecdotal reports that investors have begun to snap up distressed Cleveland properties at very low prices, according to Dean Baker, Co-Director of the Center for Economic and Policy Research, a Washington-based think tank.
"The data suggests that Cleveland has found a bottom," he said, "although it's just one month's data and I wouldn't make too much of it."
Also on Tuesday, the Office of Federal Housing Enterprise Oversight (OFHEO) reported that its monthly house price purchase index was down 4.6% year-over-year in April.
While the closely-watched Case-Shiller index tracks the sale prices of the same homes over the years, OFHEO's index only tracks sales of homes with mortgages insured by Freddie Mac and Fannie Mae. These loans were for $417,000 or less, until Fannie and Freddie's loan limits were raised in early March.
The overall price declines reported by Case-Shiller have been remarkably consistent over the past two years. Prices on the 20-city index have dropped for 21 straight months, since July 2006. The 10-city index has fallen every month since June 2006.
Declines accelerating What's more, recent drops have been particularly steep. The 20-city index fell 2.2% in March, 2.6% in February and 2.3% in January, and is now it down another 1.4%.
"In the bubble markets, we continue to see very rapid rates of price declines," said Baker. "If anything, it may be accelerating."
Las Vegas prices plunged 26.8% compared with April of 2007, the worst drop among the 20 cities Case-Shiller covers. Prices there fell 2% in April.
Other hard hit cities include Miami (down 26.7% year-over-year and 4.1% in April), Phoenix (25% and 3.4%) and Los Angeles (23.1% and 2.2%).
"Bubble markets are now trapped in a vicious negative cycle," said Mark Zandi, chief economist for Moody's Economy.com, "with foreclosures driving prices down, which leads to more foreclosures."
Foreclosures account for a much larger proportion of sales than they did a year ago, he said, and that pulls down the numbers. "But just because the average home in your market is down 25%," he said, "doesn't mean that your house is down 25%."
Still, plummeting prices could derail some of the foreclosure prevention efforts underway across the nation. As home prices fall, that wipes out home equity, often leaving homeowners underwater, with mortgages worth more than their homes.
Some 10 million homeowners are now underwater, according to Economy.com, and that number will continue to grow as home prices plummet.
Underwater borrowers have higher rates of foreclosure than those with some home equity, since they can't tap their homes for cash in case of an emergency. And some owners are simply walking away from homes that have lost so much value rather than continuing to make expensive payments every month.
The flood of foreclosures may be darkening an already bleak picture, said Zandi, "but the market is very bad right now."
If you feel poorer lately its not just a feeling it is a reality. We are facing an economic perfect storm that has the ability to wreak havoc for the next few years as we try to dig our way out of the mess left behind by the awful policies of this administration.
They allowed the financial industry to regulate itself and as usual the American people are left holding the bag while those at the helm of these financial firms walked away with millions. Once again the little guy gets screwed while the rich laugh all the way to the bank after robbing the middle and lower classes.
President George W. Bush urged Congress on Wednesday to end a ban on offshore oil drilling, responding to consumer anxiety over soaring gasoline prices with a plan sure to anger environmentalists.
Bush said opening federal lands off the U.S. coast -- where oil drilling has been banned by both a presidential executive order and a congressional moratorium -- could yield about 18 billion barrels of oil.
That would meet current U.S. consumption for about 2-1/2 years, but it would likely take a decade or more to find the oil and produce it.
Still want to drill and destroy the only environment that we have to get a short term fix a decade from now or do you want to develop alternate sources of energy that could replace oil? That will never happen as long as oil men and their flunkies roam the halls of Congress and get installed as President of the United States.
Saved by Senate Republicans, big oil companies dodged an attempt Tuesday to slap them with a windfall profits tax and take away billions of dollars in tax breaks in response to the record gasoline prices that have the nation fuming.
GOP senators shoved aside the Democratic proposal, arguing that punishing Big Oil won't do a thing to lower the $4-a-gallon-price of gasoline that is sending economic waves across the country. High prices at the pump are threatening everything from summer vacations to Meals on Wheels deliveries to the elderly.
To make matters worse they made sure that alternate sources of energy would lose their tax breaks.
Shortly after the oil tax vote, Republicans blocked a second proposal that would extend tax breaks that have either expired or are scheduled to end this year for wind, solar and other alternative energy development, and for the promotion of energy efficiency and conservation. Again Democrats couldn't get the 60 votes to overcome a GOP filibuster.
The GOP will continue to stand in the way of economic progress that could help the average family until there is a filibuster proof Democratic majority. Remember this come November and make them a permanent minority party if not an instinct party. If you are a middle class American and vote for more of this shit then you are worse than stupid, you are suicidal. Disgusting absolutely disgusting.
There are about 1.5 million more unemployed job hunters now than at this time a year ago, the U.S. Bureau of Labor Statistics said Friday. An estimated 8.5 million unemployed people are looking for work.
Joblessness in May soared to 5.5 percent, up from 5 percent in April, reaching its highest rate since October 2004.
Every time you turn around the economic news worsens. Families across the country are afraid of what tomorrow holds.
"The numbers are consistent with an economy on the edge of recession, if not in one," said Frank Lenk, chief economist at the Mid-America Regional Council in Kansas City. "Since payroll employment data tends to get revised downward once all the data is collected, it might be worse than the current data suggests."
The statistics bureau's report did, indeed, issue revised employment counts for March and April, indicating that employers had 15,000 fewer workers on their payrolls in April and 15,000 fewer on their March payrolls than initially estimated for those months.
The jobs report indicated that the January-May period this year represents the first time since February-June 2003 that national payrolls declined for five consecutive months.
John McCain will be having some sleepless nights digesting this report. Remember he recently said people were better off now then they were seven years ago. Sure they are John for your rich lobbyist friends. The rest of us are screwed.
Oil prices shot up nearly $11 a barrel and settled Friday at a record $138.54 on geopolitical jitters, a dollar decline and a forecast that oil would hit $150 by July 4.
Friday's spike in the July contract for light crude on the New York Mercantile Exchange marks the largest single-day increase in oil prices on record. The contract hit an intraday record of $139.12, breaking the previous trading record of $135.09.
"The bulls are running rampant and the bears have panicked," said oil industry analyst Stephen Schork, editor of the Schork Report. "It's pure hysteria, absolute panic," he added.
The rally highlighted concerns that retail gas prices, which have surged near a nationwide average of $4 a gallon, will continue to crimp consumer spending and fuel inflation.
I know many people who have no choice but to drive to work since Public transportation is not an option and they are suffering.
I remember when they said oil would not hit $100.00 per barrel. That now seems like a bargain. This will have a devastating effect on the economy and will push us into a deep and lasting recession. Our standard of living is already on the decline. When will we finally recognize that these insane conservative economic policies are destroying this country and its people? Will we let them fool us again in 2008 and vote against our own best interests?
The economic situation in this country and I am sure soon around the world is frightening. The rich have made their millions and the rest of us can now all go to hell.
The largest debtor nation on earth has a population also addicted to debt. When will we reverse this trend and start living within our means? The answer to that could be frightening. I beleive the rise in this number is the result of Americans trying to get fixed income loans to pay off ridiculpusly high interest rates on revolving credit. The American middle class is now the working poor with a credit line. A line that most are near the end of.
More than one million homes are now in foreclosure, the highest rate ever recorded, according to a trade group which warned Thursday that number will continue to climb.
The Mortgage Bankers Association's first quarter report showed that a record 2.5% of all loans being serviced by its members are now in foreclosure, which works out to about 1.1 million homes. That's up from the 2% of loans, or about 938,000 homes, that were in foreclosure at the end of 2007.
The report also showed that 448,000 homes, or about 1% of loans being serviced, began the foreclosure process during the first quarter. That's up from about 382,000 homes, or 0.83%, that entered foreclosure in the last three months of 2007.
The seasonally-adjusted rate of homeowners behind on their mortgage payments also hit a record high. Nearly 3 million home loans, or 6.4%, have missed at least one payment, while about 737,000 are at least three months past due, but not yet in foreclosure.
Have you noticed that Wall Street just keeps going higher with executives at top firms earning hunderds of millions of dollars. It shows the complete disconnect between the rich and the rest of us struggling to get by.
Millions dollar apartments are selling like hot cakes in Manhattan while the middle class, forced to live in the suburbs because they can't afford even a simple one bedroom in the city, are seeing the value of their homes declining and their ability to pay their mortgages in serious doubt.
"The figures aren't surprising, but they're pretty ugly nonetheless," said Michael Larson, real estate analyst with Weiss Research. "We're talking higher delinquencies and foreclosures pretty much across the board."
And he doubts that there's much reason to expect the foreclosure crisis to abate until next year at the earliest, adding that it could be a couple of years or more before foreclosure rates retreat to more normal historical averages.
"It's the same story we've been seeing for a while now - we had too much reckless lending, and buyers who got over-extended," he said. "We've had an unprecedented decline in home prices on a nationwide basis, which is public enemy number one for mortgage loans. And now you've got an overall economy that has slowed adding to this toxic stew."
Where are those who participated in this reckless lending? They are counting their millions while those they swindled are close to homelessness. Does this sound like America to you?
Americans saw their net worth decline by $1.7 trillion in the first quarter - the biggest drop since 2002 - as declines in home values and the stock market ravaged their holdings.
Meanwhile, the amount of equity people have in their homes fell to 46.2%, the lowest level on record.
The net worth of U.S. households fell 3% to $56 trillion at the end of March, according to the Federal Reserve's flow of funds report, which was released Thursday.
The value of real estate assets owned by households and non-profits declined by $305 billion, while financial assets fell by $1.3 trillion, led mainly by a $556 billion drop in stocks and a $400 billion decline in mutual funds.
The first quarter's decline follows a $530 billion drop in wealth in the fourth quarter of 2007.
The economic damage done to the middle class has been so pronounced that those who were solidly middle class are now just scraping by and those in the lower middle class are now the working poor. Unfortunately that group is growing by the day while the rich are getting richer.
We have the oportunity to start to rebuild the American middle class but it will take participation by all voting age Americans to effect the change that is necessary to restore sane fiscal policies that move people from poverty to middle class. Ignorance could literally mean death.
The ADP data release comes ahead of the government's monthly jobs report due on Friday, one of the biggest events on the monthly economic calendar. A Reuters poll shows analysts expect that to show non-farm payrolls fell by 58,000 in May.
Economists' median expectation for the May ADP jobs figure was for a drop of 30,000 jobs, according to a Reuters poll.
However, a separate survey showed U.S. companies' planned layoffs rose 15 percent in May from April to the highest monthly total since December 2005.
What this report does not tell us is if these 40,000 jobs are more service sector jobs which pay less and offer less benefits or are these decent middle class jobs? My guess is that they are not since those jobs seem to be a thing of the past.
I know many people who are suffering financially. They work long hours with awful commutes and can still not make ends meet. Where are the family values people, who like to tell us all how to live, on this issue? They are too worried about gay marriage and abortion to do anything remotely resembling advocacy work for the middle class. The middle class is fast disappearing and no one seems to be doing anything about that. How many parents do you know that hardly see their children? Its kind of hard to see them when you are working two jobs and still struggling to get by.
Stocks tumbled Monday on new worries about the financial sector after S&P cut its debt rating on a number of banks, and Wachovia and Washington Mutual announced management shakeups.
The Dow Jones industrial average lost about 135 points, or 1%. The broader Standard & Poor's 500 index lost 1% and the Nasdaq composite lost 1.2%.
Both Wachovia and Washington Mutual announced management changes in the morning, sparking early stock declines despite a pair of better-than-expected economic reports.
The broad stock declines accelerated in the afternoon after S&P said it was cutting its debt rating on Merrill Lynch, Lehman Brothers and Morgan Stanley to "negative" from "stable" and cut its long-term outlook on JP Morgan Chase and Bank of America. The changes followed S&P's conclusion of its review of the securities industry.
It is very worrisome that some of the biggest names in the banking and brokerage industry are having their debt rating lowered. What S7P is saying is that they have doubts about these large institutions ability to pay their long term debts. Those who think this financial crisis are over are sadly mistaken.
Only time will tell how bad this crisis will become but for now I would pay close attention to the financial news and have a plan in case of the worst happening. This crisis could have been averted with strict oversight and regulation but the Republican Congress felt it was best to let industry police itself. We all can see how successful that strategy has been.
U.S. home prices dropped at the sharpest rate in two decades during the first quarter, a closely watched index showed Tuesday. It's a somber indication that the housing slump continues to deepen.
Standard & Poor's/Case-Shiller said its national home price index fell 14.1% in the first quarter compared with a year earlier, to its lowest level since its inception in 1988. The quarterly index covers all nine U.S. Census divisions.
The narrower indices also set record declines. The 20-city index tumbled 14.4% during the quarter, the lowest since that index was started in 2001. The 10-city index plunged 15.3%, a record in its 20-year history.
"There are very few silver linings that one can see in the data. Most of the nation appears to remain on a downward path," said David Blitzer, chairman of S&P's index committee.
Nineteen of the 20 metro areas surveyed reported annual declines, with 15 of them posting record lows. Six metro areas lost more than 20%.
Las Vegas had the worst quarterly performance, falling 25.9%, followed by Miami and Phoenix. Only Charlotte, N.C., stayed above water, gaining less than 1% over the previous year.
With this report you can be sure that the rate of foreclosures will only grow. Even those paying their mortgages may decide its not worth it to struggle to pay for a home now worth less than the purchase price.
Many people have seen their equity taken away with these falling prices. Real estate was always supposed to be a safe investment, it has now turned into a national nightmare. Those who created this mess are laughing all the way to the bank as the the rich get richer and the poor get poorer.
The Federal Reserve on Wednesday slashed its U.S. economic growth forecast for 2008 and signaled that mounting concerns over inflation would make further interest rate cuts unlikely.
"Several members noted that it was unlikely to be appropriate to ease policy in response to information suggesting that the economy was slowing further or even contracting slightly in the near term," the Fed said in minutes from its April 29-30 policy meeting.
Fed officials said that cutting benchmark interbank lending rates by a quarter percentage point to 2 percent at their last meeting was "a close call," reinforcing the impression that policy-makers may be putting further interest rate moves on hold.
"If you had any doubt that the Fed is signaling a pause, that doubt is gone," said Christopher Low, chief economist at FTN Financial in New York.
So the Federal Reserve is now out of options to try to spur this economy. With oil hitting record highs daily and people suffering economically all they can do is sit by and watch as we enter what I believe will be a deep and protracted recession.
The oil speculators are getting rich while the average family is having an even harder time making ends meet. Where are the lawmakers to stop this rampant speculation? Washington is broken and it is going to take citizen action to take back our country from the special interest groups that are fast turning us into a third world nation.
These days, more and more people are saying "Charge it."
Finding themselves strapped for cash and unable to use their home as an ATM, Americans are increasingly turning to credit cards to cover gas, groceries and other living expenses.
But many find themselves struggling to pay the burgeoning bills at a time when even the basic needs are growing costlier.
"Other sources of money for a lot of Americans are drying up," said Dick Reed, regional counseling manager of Consumer Credit Counseling Service of Greater Atlanta, who sees more clients with mounting credit card debts these days. "Consumers just don't have a place to go to get money. They are digging themselves into a deeper hole not only to pay for normal living expenses, but to make minimum payments on outstanding debt."
I have often said that the American Middle Class as we knew it back in the 60's and 70's has been replaced by a working class with a credit line. This report solidifies that belief for me.
Those who are truly middle class are disappearing at an alarming rate. Just like our government that is borrowing what it needs to keep running so are average Americans.
Government and agency statistics illustrate this troubling trend. The Federal Reserve reported Wednesday that Americans' credit card debt jumped 6.7% in the first quarter of this year to $957.2 billion, This spike comes despite the fact that nearly one in three banks is tightening guidelines for credit cards.
In Atlanta, debtors calling the agency in the first quarter of this year had an average of $29,300 in unsecured debt, primarily on credit cards, up from $25,700 in 2007. They spent $335 on groceries and $242 on gas, on average, in April. A year earlier, those outlays averaged only $291 and $181, respectively.
For many people, racking up credit card debt is not a choice they want to make, experts say. Not too long ago, they could have tapped into the equity in their homes through loans or lines of credit or refinancing. But this debt, which usually carries lower interest rates, is no longer as widely available with the collapse of the housing market.
This is the result of a nearly uninterrupted 28 years of bad economic policies started by Ronald Reagan. The only period that saw a reversal of fortune was during the 90's and the economic boom of the Clinton administration. There philosophy was that a rising tide raises all boats. The Republican idea is that if you give the rich enough they will be gracious enough to piss some down on you. That is a failed concept and one that was helped along by the so called Reagan Democrats. They in effect helped to destroy their own economic futures.
The House on Thursday passed a contentious foreclosure-prevention package, which still faces a veto threat from the White House and an uncertain fate in the Senate.
In a 266-154 vote - with 39 Republicans voting in favor - lawmakers approved a proposal, sponsored by House Financial Services Chairman Barney Frank, D-Mass., to let the Federal Housing Administration (FHA) insure up to $300 billion in new loans over four years if lenders agree to reduce the mortgage principal.
To qualify, the lender would have to cut the debt to no more than 85% of a home's current appraised value. If the FHA-refinanced loans went into default, the FHA would pay the lender the remaining principal owed.
While 1.4 million loans are likely to be eligible for such a program, the Congressional Budget Office estimates such a measure would end up insuring 500,000 borrowers. The CBO estimates the FHA expansion program would cost taxpayers $1.7 billion.
"This bill is very time limited and limited in specifics to a subset of mortgages and meant to mitigate a market failure," Frank said during the floor debate on Thursday.
Opponents of the FHA expansion contend it's a bailout for lenders, investors and "speculators" who took on imprudent risk. And because participation in the program would be voluntary on the part of lenders, critics contend lenders would only unload their riskiest loans into the federally backed program.
Supporters note that the program is limited to loans for owner-occupied residents, not speculators. They also make the case that lenders and investors would be taking a loss on every loan, and that the borrower would be paying higher-than-usual premiums to the FHA to insure the loan and would share equity in their home with the government.
"No borrower who goes through this process will say at the end of it, 'Boy, that was fun. Where do I buy a ticket to get back on Space Mountain?" Frank said.
Supporters also say if the borrower still can't afford the loan when it's written down to 85% of appraised value, their loan won't qualify for the program. If the bill is a bailout for anyone, they say, it's a bailout for communities across the country, which suffer when home values and property taxes go down because of foreclosures.
Earlier on Thursday, the House passed a bill that would send states $15 billion to buy and fix up foreclosed properties - a measure the White House also opposes.
Frank's bill also includes elements intended to attract the support of Senate Republicans and the White House. Two key ones: modernization of FHA guidelines - for which both the House and Senate have already passed their own bills - and more stringent oversight of Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that guarantee the purchase and sale of home mortgages in the secondary market.
Nevertheless, late Tuesday, the White House issued a statement threatening to veto the bill in its current form. Analysts see the move as a tactical one intended to give Republicans more leverage in the negotiations.
That leverage is seen in the Senate, where Banking Committee Chairman Christopher Dodd, D-Conn., and ranking minority member Richard Shelby, R-Ala. are negotiating a housing package that could include GSE reform, FHA reform, and a Dodd FHA rescue proposal similar to Frank's.
When asked if Frank's proposal is something he could support, Shelby told CNN's Jeanne Meserve, "I'd have to evaluate it - how we're going to pay for it., what it's really going to do, do we really know if housing prices have bottomed out."
When asked if it was possible Congress would end up doing nothing, Shelby said, "The best of me says we ought to try to work this project out, see if we can have GSE reform, see if we can have FHA reform, and see if we can reach some kind of accommodation on housing."
It should come as no surprise that the White House would object to helping the homeowner. 30 Billion for Bear Stearns is fine but trying to keep people from becoming homeless could be vetoed. There is a reason that this fool is the most unpopular President in history. Its too bad it took the majority of the American public all these years to see what was obvious from day one.
Home prices have posted another record decline, as most of the nation's largest markets suffered double-digit drops over last year, a survey released Tuesday shows.
The S&P Case/Shiller Home Price Index, which tracks 20 of the largest housing markets, showed prices plummeting by 12.7% in the 12 months ending February. That's the biggest fall since the index began tracking prices in 2000.
Of those 20 metro areas, 17 posted their largest year-over-year declines ever. Ten of the 20 cities posted double-digit dips.
The 10-city Case/Shiller index is down 13.6% year-over-year, the biggest drop since its launch in 1987.
Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac.
Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money.
Once again it will be taxpayer money used to bail out businesses that made bad business decisions. Can I send the government a bill for the lemon I bought some years back? If its good enough for corporations why not for the taxpayers? This bailout will make the bailout of the Savings and Loans seem like chump change.
This dwarfs how much it cost to help banks during the savings and loan crisis of the late 1980's and early 1990's. That cost taxpayers about $250 billion in today's dollars.
S&P added that saving Fannie and Freddie might cost so much that the federal government's AAA credit rating, the top possible rating, might even be at risk. If that was lost, then all federal government borrowing would become more expensive.
The long term damage that has been done to our economy is overwhelming. The treasury has been raided for the past seven years and the next generations will pay with a reduced standard of living. This all happened while the people sat by and did nothing.
The dollar sank to an all-time low against the euro Wednesday with new reports showing consumer prices heading higher and construction of new homes plunging in March to the lowest level in 17 years.
Inflation also rose overseas. The euro reached $1.5968 after the EU's statistical agency Eurostat said that annual inflation rose on higher prices for transport fuel, heating, dairy products and bread. It was the quickest rise in 16 years.
The problems effecting the United States economy are quickly spreading to other countries. What we all need to understand is how the sinking dollar is playing a major role in this worldwide downturn.
Oil is paid for in dollars. With a declining dollar it takes ever more dollars to purchase a barrel of oil. The higher oil prices are fueling a worldwide explosion in commodity prices. That in turn is leading to higher prices for everything including food.
Those higher food costs are causing political turbulence and riots throughout the world. I know that is a very simplistic explanation but it is one that can be easily understood by most people. How did we get to this place economically? A major part of this problem started with banks and mortgage companies that felt loaning huge sums to those that could not afford it was a good idea. Those bonds were sold worldwide and losses related to them just keep coming.
Those most hurt by those losses are the poor and middle class with the executives of those companies raking in millions. Does that sound at all fair? We need a fundamental change in our policies and our thinking. All too often people vote based on where they hope to be economically instead of where they are. that often makes getting where you want to go impossible. The middle class needs to understand that they are helping in their own demise.
The Labor Department reported Tuesday that its Producer Price Index, which measures wholesale prices, jumped 1.1% in March, the second biggest gain in the past 33 years and much higher than forecasts.
The so-called "core" PPI number, which excludes food and energy prices, rose a more modest 0.2%, in line with expectations.
See what I mean about eating or driving? Just cut those two things out and your finacial house will be fine. With obesity such a problem in the United States we should look at this as a sign from God. Since we won't stop eating so much on our own we are getting a helping hand from the Federal Reserve.
The Fed has slashed interest rates numerous times since last September to try to get the economy out of this severe funk. But so far, the most notable consequences of the rate cuts are a drastically weakened dollar and surging commodity prices.
Oil prices hit a new record high Tuesday, as did the prices per gallon of gas and diesel fuel.
In the past twelve months, sugar prices are up 27%. Corn prices have surged 67% and wheat prices have shot up 73%.
The argument that economists should look more at "core" inflation has to ring hollow with consumers who are taking a big financial bite every time they go food shopping and fill up their car's gas tank.
The economy is a mess yet John McCain is even in polls with Clinton or Obama. Have the American people lost their minds? Have they forgotten the peace and prosperity of the 90's. Are they really that stupid to want to continue these disastrous policies? We are closer to depression era financial conditions than at any time since the great depression. Wake up before its too late and everything that has taken so long to build will be forever ruined.
