Grand Theft Economics
Carolyn Said
San Francisco Chronicle
Wed, 11 Nov 2009 16:27 EST
© Unknown
Once it seemed like a radical idea: Let delinquent borrowers stay in their homes as renters after foreclosure.
Last week it gained legitimacy when housing giant Fannie Mae said it would do just that, offering one-year leases at market rates to people who sign over their homes as a deed in lieu of foreclosure. Voluntarily surrendering homes instead of having the lender repossess them doesn't wallop the borrowers' credit as much.
Fannie Mae wouldn't say how many homeowners it expects to qualify for the program, but it has backed plenty of struggling borrowers. The total "nonperforming" loans in its portfolio hit $198.3 billion in the third quarter, it said in financial results released last week.
Now housing advocates and some political leaders say the concept should be expanded further. They hope the government will prod banks to follow Fannie Mae's lead, and they propose leases of three to five years followed by the option to buy back the home. With millions of homeowners nationwide behind on mortgage payments, the potential pool could be enormous.
Sangwon Yoon
Reuters
Wed, 11 Nov 2009 07:17 EST
Jewish American math teacher Goldie Burdetsky never expected to find herself working the front desk of a hotel in southern Israel alongside management interns young enough to be her children.
"I mean, for God's sakes, I have a master's degree in education," said the 55-year-old New Yorker. "I expected to be able to find a teaching job in the U.S. without any problems. But I couldn't."
Burdetsky decided to escape the dire economic situation back home, by coming to Israel on a program that offers Jews free housing, Hebrew classes, training, and work experience -- all of which translate into temporary financial respite.
As the unemployment rate in the U.S. climbed to a 26-year high of 10.2 percent last month, growing numbers of young and adult American Jews were arriving in Israel to inexpensively "wait out" the economic lull.
In an attempt to lure diaspora Jews to make Israel their permanent home, the Israeli government and Jewish organizations offer a multitude of scholarships and travel grants, allowing many to spend up to six months in Israel almost for free.
Xinhua
Wed, 11 Nov 2009 07:30 EST
Credit Agricole S.A. banking group, France's third largest bank by market value, reported a 21-percent decline in net income for the July-September period on Wednesday.
The Paris-based bank had net income of 289 million euros (432.3million U.S. dollars), a 21 percent drop from 365 million euros (547 million dollars) in the same period last year, the bank said.
The bank's investment branch lost 99 million euros (148.3 million dollars) in the quarter due to write-downs on asset-backed securities and debt and loan obligations.
Meanwhile, Credit Agricole suffered a 417 million euros (624.9 million dollars) loss from international retail banking, although the French retail network grew 63 percent to 222 million euros (332.7 million dollars).
Barry Grey
World Socialist Website
Tue, 10 Nov 2009 07:08 EST
Last Wednesday the Federal Reserve Board's policy-making Federal Open Market Committee announced it was holding its target federal funds interest rate to the current level of zero to 0.25 percent. While that decision had been widely anticipated, there was much speculation that the Fed would employ language in its announcement to indicate that it would soon begin to raise interest rates.
In the event, the Fed repeated its recent mantra of keeping interest rates "exceptionally low" for "an extended period of time." A change in the formula from "an extended period of time" to "for some time" would have been seen as a signal that the Fed was preparing to shift from its policy of near-zero rates.
The Fed's signal of no early end to its extraordinarily cheap credit policy sent stock markets surging. Since the Fed announcement last Wednesday, the Dow Jones Industrial Average has surged hundreds of points, despite Friday's dire Labor Department report of an official US jobless rate of 10.2 percent. On Monday, the Dow Jones Industrial Average gained 205 points, closing at a 13-month high of 10,227.
PhysOrg
Tue, 10 Nov 2009 21:00 EST
© Adobe
Adobe logo
Adobe Systems, known for its Photoshop editing program and Acrobat document software, announced on Tuesday it was cutting some 680 jobs worldwide, about nine percent of its workforce.
Adobe, in a filing with the US Securities and Exchange Commission (SEC), said it would incur between 65 million dollars and 71 million dollars in restructuring charges because of the layoffs.
Adobe said the jobs being cut only involve employees who were with the San Jose, California-based company ahead of its October acquisition of Web analytics firm Omniture Inc.
Adobe, which employed 7,564 people worldwide at the end of August, also produces the Flash and Shockwave software used in many games and Internet applications.
Karl Denninger
Market Ticker
Tue, 10 Nov 2009 15:30 EST
Yet more BS Fedspeak, this time in the
mainstream media:
In separate speeches, Janet Yellen, president of the Federal Reserve Bank of San Francisco, and Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, warned that rising unemployment could crimp consumers, restraining the recovery. Consumer spending accounts for about 70 percent of economic activity.
That's because there is no real economic recovery at all.
So why is the stock market up so much?
Marcia Kramer
CBS 2 News
Tue, 10 Nov 2009 08:28 EST
Delivers Scary News To Legislature, Says Only Way To Fix Problem Is To Have Immediate Cuts To Education, Hospitals
Albany Gov. David Paterson called an unusual joint session of the Legislature Monday to implore recalcitrant lawmakers to close the state's huge budget gap before New York runs out of money.
To some lawmakers it's nothing more than a photo op to help Paterson get re-elected. But the governor is dead serious. He said if the Legislature doesn't cut the budget now the state could run out of money by next month.
"We're going to run out of cash in four and a half weeks. We are going to run out of money. Unless we do something about it, (it will) threaten generations," Paterson said.
And so began what is turning out to be a tense tug of war between Gov. Paterson and the Legislature.
Michael J. Moore and Ian Katz
Bloomberg
Tue, 10 Nov 2009 08:22 EST
Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.'s investment bank, survivors of the worst financial crisis since the Great Depression, are set to pay record bonuses this year.
The firms -- the three biggest banks to exit the Troubled Asset Relief Program -- will hand out $29.7 billion in bonuses, according to analysts' estimates. That's up 60 percent from last year and more than the previous high of $26.8 billion in 2007. The money, split among 119,000 employees, equals $250,400 each, almost five times the $50,303 median household income in the U.S. last year, data compiled by Bloomberg show.
The three will award more in stock and defer more cash payments under pressure from regulators to tie pay to long-term results, compensation experts said. They may still face public wrath over the size of bonuses after the government injected capital into all the major financial institutions following Lehman Brothers Holdings Inc.'s collapse in September 2008.
Nadine B. Hack
Blog Critics
Sat, 07 Nov 2009 21:41 EST
The 2002 Congress passed the Sarbanes-Oxley Act, which required public companies not just to have internal controls against fraud - something by law they had to do since 1977 - but through its Section 404 also mandated them to report on whether they maintained these controls.
As a board member who often chairs governance sub-committees, I have used Sarbanes-Oxley as the gold standard not just to guide procedures of for-profit but also of not-for-profit organizations. While the latter were not covered under Sarbanes-Oxley, I have advocated that non-profits who followed its guidelines would be at the cutting edge of best practices in good governance. A
New York Times article by Floyd Norris "Goodbye to Reforms of 2002" describes how congress already has substantially gutted Sarbanes-Oxley over the years and now plans to further remove most of its teeth.
David Knowles
Sphere.com
Fri, 06 Nov 2009 15:09 EST
Apparently, times aren't so tough all over.
According to a new study compiled by the Center for Responsive Politics, *237 members of the U.S. Congress, or 44 percent, are millionaires*.
"What's easy to see is that the economic reality of our elected officials is not reflective of the general population," said Dave Levinthal, who helped compile the study's findings.
Nationwide, only 1 percent of U.S. citizens qualify as millionaires.
Among the wealthiest members of Congress are Darrell Issa, R-Calif., whose net worth is estimated at $251 million, and Jane Harman, D-Calif., who boasts a net worth of around $244.7 million.
A slight majority of those elected to Congress are not millionaires. And some of the least well-off members include Alcee Hastings, D-Fla., and Jeff Fortenberry, R-Neb., both of whose net worth is less than zero, according to the RCP database.
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