Grand Theft Economics
Raw Story
Fri, 20 Nov 2009 12:31 EST
© Unknown
The US public debt topped 12 trillion dollars for the first time in history, Treasury officials disclosed Tuesday, moving past a key barrier that raised hackles in Congress.
Treasury data showed Monday's outstanding debt at 12.031 trillion dollars, up from 11.999 trillion on Friday.
The ballooning debt reflects the massive deficit spending by the government in an effort to revive an ailing economy over more than one year.
The public debt topped 10 trillion dollars in September 2008.
The debt is quickly approaching the statutory limit of 12.104 trillion dollars, meaning Congress would have to raise the ceiling to prevent a shutdown of government operations.
David Streitfeld
The New York Times
Thu, 19 Nov 2009 07:00 EST
© Joe Raedle/Getty Images
Policy changes in insurance, while introduced on a temporary basis, are becoming so popular that they could prove difficult to undo
San Francisco - In January, Mike Rowland was so broke that he had to raid his retirement savings to move here from Boston.
A week ago, he and a couple of buddies bought a two-unit apartment building for nearly a million dollars. They had only a little cash to bring to the table but, with the federal government insuring the transaction, a large down payment was not necessary.
"It was kind of crazy we could get this big a loan," said Mr. Rowland, 27. "If a government official came out here, I would slap him a high-five."
In its efforts to prop up a shattered housing market, the government is greatly extending its traditional support of real estate, including guaranteeing the mortgages of middle-class and even upper-class buyers against default.
Reuters
Thu, 19 Nov 2009 10:29 EST
New York - Budget shortfalls poses a direct threat to millions of U.S. jobs, many in the private sector, as state and local governments lay off workers and cut spending on contracts and other business services, a think tank said on Thursday.
State and local governments will have to raise taxes and cut spending in the current and next two fiscal years to cover shortfalls totaling $469 billion, according to an Economic Policy Institute report.
The think tank -- where White House adviser Jared Bernstein spent years developing ideas found in the $787 billion economic stimulus plan he oversees -- said the U.S. government must give states and cities $150 billion in direct budget relief to save between 1.1 million and 1.4 million jobs.
"Given the fragility of the economy, already high unemployment and the magnitude of the budget shortfalls, it is clear that we cannot afford inaction," the report said, calling the gaps "a ticking time bomb for the economy."
Andre Damon
World Socialist Website
Fri, 20 Nov 2009 10:21 EST
© Unknown
The number of home loans in the US that are either in foreclosure or at least one payment past due reached one in seven last month, a record high, according to a survey released Thursday by the Mortgage Bankers Association.
The survey found that nearly 10 percent of mortgage holders were at least one payment behind on their mortgages, while 4.47 percent of them were in foreclosure. Both of these are the highest figures on records dating back to 1972.
About 7 million households are behind on payments or in foreclosure.
These figures present just one indicator of the worsening conditions facing US workers caught up in the longest economic downturn since the Great Depression. The number of people behind on their mortgage payments has doubled since last year, as has the percentage in foreclosure, according to the survey.
The foreclosures were spread throughout all borrower categories, with high-quality, fixed-rate mortgages showing the fastest growth in delinquencies, not the sub-prime mortgages that initiated the foreclosure crisis.
Charlie Weston
Independent.ie
Fri, 20 Nov 2009 06:18 EST
At least 77,500 households are in arrears on their mortgages and rent payments.
This is more than twice previous estimates of the numbers of people struggling to keep a roof over their heads. It is a clear sign that the country is now gripped by a mortgage and rental crisis, experts said.
Also, one in five households are struggling to pay credit card bills, credit union loans and overdrafts. Higher-income families are more likely to owe money to credit card companies and to be overdrawn.
The major study of incomes and living standards by the Central Statistics Office indicates that thousands of homeowners and those who rent are so deep in debt that many are at risk of losing their homes.
The frightening figures underscore the mortgage misery in the country and stress the need for a rescue scheme for heavily indebted families, mortgage experts said.
Frank Tang and Jan Harvey
Reuters
Wed, 18 Nov 2009 04:08 EST
© Reuters//Ilya Naymushin
An employee takes gold ingots to be weighed in a room for final weighing and packaging at the Krastsvetmet plant in the Siberian city of Krasnoyarsk November 16, 2009
Gold rose to a record high above $1,150 an ounce on Wednesday as stronger-than-expected U.S. consumer prices and a steadily weakening dollar stirred inflation fears.
Market sentiment also improved after news that billionaire hedge fund manager John Paulson is launching a new gold fund, including $250 million of his own personal investment.
Doubts about a nascent economic recovery and worries about the consequence of unprecedented quantitative easing also increased gold's appeal as a safe haven.
"There is a lurking concern in the background that still exists," said Bill O'Neill, partner at LOGIC Advisors, noting that investors were worried about the vulnerability of banks and the financial system.
Jim Puzzanghera
Los Angeles Times
Thu, 19 Nov 2009 23:44 EST
A House committee voted Wednesday to give the government extraordinary new power to break up large financial firms that pose a potential risk to the economy.
The proposal by Rep. Paul E. Kanjorski (D-Pa.) would allow regulators to break up such big companies before their failure becomes imminent. It goes beyond the powers requested by the Obama administration to seize large firms on the brink of failure should their collapse threaten to damage the wider financial system.
"I recognize this is extraordinary power. Hopefully it will never have to be used," Kanjorski said. It would be used only if other regulatory measures did not reduce the potential threat of "huge, megalopolis-like" companies failing, he said.
Comment: Is this a government take over, or a parachute for those financial entities who have spent up free tax dollars? Too big to fail still seems to be in effect.
Melly Alazraki
bloggingstocks.com
Thu, 19 Nov 2009 23:34 EST
© Unknown
French bank Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years,
The Telegraph reports.
In a 68-page report titled "Worst-Case Debt Scenario," SocGen explains that the rescue packages over the past year have merely transferred private liabilities onto government shoulders, creating a fresh set of problems. Debt levels, public or private, are too high as a share of GDP. The deleveraging process will take years.
SocGen says that under the bear-case scenario, the dollar would continue to decline and global equities would retest the March lows. Property prices would slide again and oil prices would fall back to $50 in 2010. Public debt would explode within two years, with worldwide state debt reaching $45 trillion. Further, the aging population will make it harder to erode debt through growth. As for the U.S., it could take nine years to reduce debt/income ratios to the safe levels of the 1980s.
John Galt
Shenandoah Blog
Wed, 18 Nov 2009 17:50 EST
The following story is a potential fictional time line for the day the dollar died. I hope not to instill fear or loathing but to give everyone some perspective on a POSSIBLE outcome which does not really take much of a reach to come to any conclusion. Despite popular belief and promises from those who wish to rob you of your savings and investments, the collapse of the dollar might just be an event measured in hours, not days as their control is not what it seems.....
* * * * * *
Mike was less than an hour from home in Minnesota after dropping his load off in Fargo but knew he needed to top his tank off this Sunday evening to insure his rig would make it home. He pulled into the Petro Truck Stop just outside of Fargo and hopped out of the cab into the bitter twenty below temperatures which he could not believe had already hit at ten o'clock at night. He slid his fuel card into the pump waiting for the next prompt when the "SEE ATTENDANT" message flashed in the screen. He blustered, figured it was another card problem and whipped out his Master Card and slid it in after the pump reset and again the "SEE ATTENDANT" message flashed up. "What the hell is going on?" he thought to himself as he wandered into the long line of drivers boisterously yelling at managers and clerks alike.
Agence France-Presse
Tue, 10 Nov 2009 02:10 EST
A grand jury in the southeastern state of Atlanta indicted eight people Tuesday in a credit card fraud ring that stole nine million dollars in 280 cities around the world, the Justice Department said.
Five of the indicted are Estonians. One of them, the suspected mastermind of the scheme, is in prison in Estonia awaiting extradition to the United States, the department said.
One is Russian and another is Moldovan; the nationality of the eighth has not been disclosed.
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