CNBC: Future of Financials
Discussion of Housing Bubble, US Dollar, Debt, Trade Deficit, Oil, Gold, Consumer Spending, Central Banks, Inflation, Outsourcing and the Bleak Future of the US economy
This Blog and/or the articles contained within have been referenced, linked or quoted in: Businessweek online, WSJ Online, Dollar Collapse, Safehaven, Silverbear Cafe, Financial Armageddon, Yahoo & Google Finance -- among many other blogs & web-pages... Thanks for stopping in for a read!
``No company in America is having an easy time doing bank deals right now,'' Murren said in an interview. ``There will be some banks that can't commit because they have a lot of exposure in the area or don't like the pricing.''
``Wall Street firms are scrutinizing their extension of credit, particularly to the gaming industry, where the sentiment is pretty weak,'' said Michael Paladino, an analyst at Fitch Ratings in New York.
The amount of commercial and industrial loans from banks, plus short-term commercial paper, fell almost 3 percent during the past year to $3.27 trillion, according to data compiled by the Federal Reserve.
Building the 76-acre ``city-within-a-city,'' is costing Las Vegas-based MGM and Dubai about $100 million each per month.
The Las Vegas casino industry has been struggling with revenue falling 16 percent in May, the fifth straight monthly decline, amid near-record gasoline prices and rising unemployment in the U.S., according to the Nevada Gaming Control Board.
Moody's Investors Service announced earlier this month that MGM Mirage's ratings were on review for a possible downgrade, in part because of the uncertainty of CityCenter's financing.
The review was part of a series of moves affecting Moody's ratings of several casino companies that operate in Las Vegas, driven by declining gambling revenue.
Taxable revenue from deals down 12 months out of 14 -- Nevada's economy continued to sputter in May as business sales of taxable goods dropped 1.5 percent from May 2007, according to a report released Tuesday by the state Department of Taxation.
Through the first 11 months of the fiscal year, sales in Nevada are off 2.1 percent from the same period a year earlier. The report was just more bad news for a state already reeling from growing unemployment and falling gaming revenues.
Since the Legislature concluded its special session on June 27 by cutting state spending by $275 million, the Nevada unemployment rate has risen to a 14-year high of 6.4 percent and gaming has gone through its worst month in at least 10 years, with gaming tax receipts dropping 22 percent.
The country's economic downturn hampered efforts to diversify Southern Nevada's economy in the last year.
Numbers from local agencies designed to attract new businesses to the Las Vegas Valley reported dips in the number of companies moving to the area, and recorded drops in the economic impact of corporate growth here.
The Nevada Development Authority, a nonprofit that lures companies to Las Vegas, helped bring in or expand 30 companies and 1,401 new jobs in fiscal 2007, which ended June 30. That's down from 56 companies and 2,725 new jobs in fiscal 2006.
Vegas Housing Market Continues Slipping -- Steepest decline in the Nation!
The Las Vegas housing market continues to slip. A nationwide housing index shows prices in Sin City fell 28.4 percent in the month of May.
One realtor said she is readjusting prices right now.
The Valley is full of for sale signs, for those who are selling, the news is not good. The Case-Schiller Housing Index shows home prices fell by the steepest rate ever in May and Las Vegas is down 28.4 percent.
Two out of three homes are being sold after foreclosure, bringing down median sales prices.
"It’s a buyer’s market for sure. "
I moved here from Jersey. I'm going to rent first but seriously look hard in this area," said resident Bert Potts.
The housing index has not reported an overall rise in home prices in any month since August 2006.
Nationwide, the 10-city index has fallen 16.9 percent, the biggest decline in its 21-year history.
The steepest decline is in Las Vegas.
The Starbucks index is pointing down in Las Vegas. Starbucks Corp., the coffee-shop chain stung by a slowdown in sales as strapped consumers shy away from $4 lattes, is staging the biggest retreat in its 37-year history, closing 600 of 11,168 U.S. company-owned and licensed stores.
Las Vegas is taking the biggest hit, losing 16 of the once-trendy cafes, or 10 per cent of its total.
The Nevada city's gambling-driven growth in the 1990s proved irresistible to Starbucks, which has about 155 outlets there today, according to the store locator on the company's website. The surge and contraction at Starbucks mirror the Las Vegas economy, said Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada in Las Vegas
"We've gone from having a better unemployment situation than the national economy to one that is slightly less," Schwer said.
LOSING THEIR SOLES
Sparse foot traffic this week in the Las Vegas Convention Center suggests fewer people than usual made tracks to town for one of the shoe industry's biggest conventions.
Thanks to an economic kick in the shins from increased manufacturing costs and decreased consumer spending, folks flogging footwear this week at the World Shoe Association Show say it's unlikely the 35,000 or so people who typically attend the semiannual event made the trip this time.
People who did make it say they weren't surprised attendance is down because manufacturers and retail buyers -- especially small, specialty companies -- are finding it hard to make ends meet.
"Customers owe money to their suppliers. They don't want to run into them," said Neal Marks of Hazan Shoes Inc., maker of affordable, stylized dress shoes sold in stores such as Mastroianni Fashion in the Las Vegas Valley.
What people will do for money:
LAS VEGAS -- As the economy continues to stagnate, more and more women are looking for ways to make ends meet -- and some are eying their eggs.
As TV station KVVU in Las Vegas reported, women across the country have been heading to fertility clinics to donate their eggs. Some say it's altruism, but others are more frank.
Melissa, who declined to give her last name, admitted the main reason she's donating eggs is because she's struggling financially.
"My husband has had me stay home for the last five years. I stayed home for my children, so the money definitely benefited my family," she said.
The Center For Egg Options in Illinois, the number of women donating has increased significantly since April.
"There's no reason to think that suddenly there's 30 percent more people who have suddenly had this inner feeling to help out people. And what's changed? It’s the economy," said fertility specialist Ed Marut.
Fertility centers have also a surge repeat donors and surrogates.
Dr. Bruce Shapiro, of the Fertility Center of Las Vegas, said compensation is $3,000 to $5,000, but he said he hopes the economy is not the main reason more women are donating.
"We really try to have people who donate for altruistic reasons. That's the best of all worlds," Shapiro said.
He said it is a fairly simple process that takes about three weeks.
"It's more invasive than donating sperm, but still, it's painless, and there's more time involved, but we try to make it as smooth a process as possible," Shapiro said.
He said the side effects of donation usually include some aches and cramps, similar to those of a woman's period.
For the second year in a row, Las Vegas' volunteerism is ranked one of the worst in the nation. The study by the Corporation for National and Community Service puts Las Vegas at number 49 out of 50 major cities.
We may be one of the worst in the nation, but some organizations believe volunteer rates have actually improved. But with the local economy the way it is, one agency, who needs a large commitment from their volunteers, may be hurting more than others.
It's only been five months, but for Desiree Tarr, being a Big Sister to 8-year-old Victor is a priority.
"You always think about the extra hours you could put in at work to get the extra money so you can be where you were before, but I think it is important to remember that you still need to give back," she said.
Like most volunteers with Big Brothers Big Sisters of Southern Nevada, she dedicates her time and money to making sure Victor has a good mentor.
"Gas prices is hard because he lives pretty far from me," she said.
This organization says they've seen a 50-percent drop in volunteers in the last year.
"Definitely, because people's focuses are on themselves, on the finances. They have less time and room to look at doing for the community," said Courtney Frank of Big Brothers Big Sisters of Southern Nevada.
Back in June, I told you about Lindsey Williams - who was an ordained Baptist minister in Alaska during the energy crisis of the 70's. Lindsey was present in several "Top Level meetings" when the largest oil field ever discovered in North America was celebrated (Gull Island Oil Field)-- only to become "Classified" the next day and never tapped/put to use.
Why? To control oil supplies and establish a dollar pricing agreement w/OPEC -- so OPEC would recycle those dollars, and buy our national debt and establish US Dollay Hegemony, as the country who controls oil and oil pricing, controls the world.
Here's a link to the videos and post: The Non-Energy Crisis--Lindsey Williams
For those of you unaware, recently (due to subject sensitivities) Mr. Williams' life was threatened and he was forced to shut down his web-site and stop selling his books and CDs.
Well, I just ran across a new article over at Silverbear Cafe that picks up where the videos above left off.
The Energy Non-Crisis (Bob Chapman).
Key extracts below, but I highly urge you to read the entire article.
At the urging of Dr. Stanley Monteith of Radio Liberty, Lindsey called back the same oil executive who had warned him about the danger he would be in if he continued to disseminate certain information - to ask if in fact there was any information that he could in fact convey to the public without upsetting the powers that be. The oil executive, who Mr. Williams had known for years, gave Mr. Williams some startling revelations which he could safely reveal to the general public. As you know, the Illuminati are arrogant enough to reveal some of their plans because they believe there is nothing we can do about it.
Basically, Mr. Williams was told that over the next twelve months, from mid-2008 to mid-2009:
(1) news of super giant oil fields, ready to produce, would be announced for two locations, in the Northern Slopes of Russia and in Indonesia, which oil fields would together contain more oil reserves than the entire Middle East;
(2) that this news would drive oil prices down to $50/barrel;
(3) that OPEC countries, especially in the Middle East, would be bankrupted by this price decrease;
(4) that this would cause the financing of our foreign trade and current account deficits through purchases of treasury paper by foreign nations with their surplus oil profits to collapse, leading to the collapse of the dollar;
(5) that the collapse of the dollar would cause unprecedented financial strife and turmoil in the US, and that it would take many years for the US to recover from this financial debacle;
(6) that they (big oil) support John McCain for President; and
(7) that US domestic oil reserves would never be tapped, and that any legislation which might allow domestic reserves to be tapped would not be allowed to pass, leaving the US dependent on foreign oil forever.
The DOW fell another 240 points today on weak financials and rising oil. Since the peak of 14,093 reached on October 12 last year, the index is down ~ 3,000 points or 21.4% - but we're not done yet!
Keep an eye on 10,800, as it's the next downside resistance - followed by 10,680. I expect them both to be broken - however timing is the only uncertainty.
With that said, tomorrow we will see data released from the International Council of Shopping Centers showing major retail chain sales data -- Note: Consumer Spending is 70% of the US economy.
Additionally, Monthly Consumer Confidence data will be released tomorrow -- a survey of consumer attitudes on present economic conditions and their expectations of future conditions.
I just checked opening futures for tomorrow, along with current Overseas markets: They are currently a sea of red.
Changing gears a bit:
Last Saturday I told you about two new bank failures that took place over the weekend - One being First National Bank of Nevada: Two more bank failures this weekend! .
Certainly, that was big news, but what I think may be even BIGGER news is: Andrew McCain, son of Republican nominee, John McCain, has resigned from Silver State Bank's board of directors this weekend -- McCain's son resigns from two Boards of Directors
Would a banking failure under son McCain's leadership look bad for dear old dad's election prospects? Hmmm...
Well, I suggest you keep an eye on Silver State Bank. Word on the street is they are not doing well.
Take a look at Bankrate and Safe and Sound ratings for Silver State Bank, Henderson Nevada: One Star (The Lowest Possible Rating) and 5G (Lowest Possible Rating).
I can only imagine the FDIC is working disaster/cleanup plans and decided it's probably time for Andrew to get out of the picture before the bomb goes off.
Politics at it's democratic best - gotta love it!
I was checking links on my blog again today and found the earlier link I had to this video was dead. It's becomming pretty common and every month or so, I have to go find a new link to this video, as Google keeps moving and/or deleting.
If you haven't already watched, I HIGHLY encourage you to do so - before it gets removed forever:
Hat tip to Patrick
Nervous US Banking System - Friday, July 25, 2008 - FreeMarketNews.com
1. Paulson appears on Face The Nation and says "Our banking system is a safe and a sound one." If the banking system was safe and sound, everyone would know it (or at least think it). There would be no need to say it.
2. Paulson says the list of troubled banks "is a very manageable situation". The reality is there are 90 banks on the list of problem banks. Indymac was not one of them until a month before it collapsed. How many other banks will magically appear on the list a month before they collapse?
3. In a Northern Rock moment, depositors at Indymac pull out their cash. Police had to be called in to ensure order.
4. Washington Mutual (WM), another troubled bank, refused to honor Indymac cashier's checks. The irony is it makes no sense for customers to pull insured deposits out of Indymac after it went into receivership. The second irony is the last place one would want to put those funds would be Washington Mutual. Eventually Washington Mutual decided it would take those checks but with an 8 week hold. Will Washington Mutual even be around 8 weeks from now?
Well, it certainly looks as if Treasury Secretary Paulson has understated the problem:
Two more banks fail Friday; FDIC sells deposits
Mutual of Omaha Bank takes over accounts of California, Nevada lenders
SAN FRANCISCO (MarketWatch) -- Two more banks were shut down by federal regulators late Friday, who sold the banks' deposits to Mutual of Omaha Bank. It brings to seven the number of bank failures so far this year.
The Federal Deposit Insurance Corp. said it was appointed receiver of First National Bank of Nevada, based in Reno, Nev., and First Heritage Bank of Newport Beach, Calif. - both units of First National Bank Holding Co., of Scottsdale, Ariz.
The Office of the Comptroller of the Currency, a division of the Treasury Department, said First National Bank of Nevada "was undercapitalized and had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices," according to a report in the online edition of The Wall Street Journal.
First National Bank of Nevada had 25 branches, 15 in Arizona and 10 in Nevada, some of which came from its June 30 merger with the First National Bank of Arizona.
First Heritage Bank, which specializes in commercial banking, operated three locations in the Los Angeles area. It had a first-quarter net loss of $1.9 million, according to a regulatory filing.
FDIC will retain most of First National's loan portfolio, Mutual of Omaha Bank said in a statement on its Web site.
The FDIC said the failures would likely cost the FDIC's deposit insurance fund roughly $862 million. The failed banks had combined assets of $3.6 billion, .03% of the $13.4 trillion in assets held by the 8,494 institutions insured by the FDIC.
"We would first like to reassure all customers of First National Bank of Nevada and First Heritage Bank that all their deposits are safe and accessible," Jeffrey R. Schmid, Mutual of Omaha Bank's chairman and chief executive, said in a statement. "Their deposits will automatically transition to Mutual of Omaha Bank and we will be open for business on Monday morning."
Earlier this month, IndyMac Bancorp Inc. became the biggest casualty of the subprime mortgage crisis over the weekend, as federal regulators shut down the troubled Pasadena, Calif.-based savings bank in one of the largest U.S. bank failures ever.
So, how safe is your bank and what happens when the FDIC runs out of money?
Note: The FDIC only had (before ~10% loss to IndyMac) $53 Billion (in insurance funds) backing total FDIC insured deposits of ~ $4.5 Trillion.
What happens then, when FDIC insurance is depleted - Another Gvt bailout?
As I stated in an earlier post ( Washington Mutual and National City Lead to Steepest EVER Bank Stock Decline) "Why not -- the Gvt will have already taken over Fannie and Freddie by then, so what's a few more trillion shared among the broke citizens of an already insolvent country."
So, is YOUR bank safe and do you have enough cash on hand in the event it closes? What if the FDIC goes broke and it takes 6-months or better to get your hyperinflated FDIC insurance money - compliments of our printing presses and another Gvt bailout? Are you prepared?
All the best
Though I like to consider myself a "realist" (who has been right with many calls), lots of folks tend to label me a "doom and gloomer".
Yes, I feel our global economy is destined for significant change as the tectonic financial turmoil wreaks havoc on the world's financial systems, and I also feel the US will likely bear the brunt of this economic calamity.
The Fed's bailout/intervention and easy money policies will eventually lead to a failure in the world's reserve currency (US Dollar) and ultimately the massive inflation wave caused by these policies (and currency failure) will cause our American standard of living to fall precipitously - while our global position of dominance is lost. Timeline for this to take place: unknown, but not too far off.
Anyway, I'm starting to get off track here... My point is: I agree that my viewpoint (expecially to those unfamiliar/ignorant to these topics) is overwhelmingly negative, but I'm merely relaying the indicators that I see from reading my tea-leaves - and thus far, they have been pretty accurate.
With that said, I read quite a bit and constantly run across articles and authors who are much more "doom and gloom" than I (at least from my perspective).
A prime "doom & gloom" theme that I've run across as of late, and would like to get your thoughts on, is:
By November 08 we will experience a full-blown economic crisis, and a state of emergency (martial law) will likely have to be declared, elections suspended, and democracy as we know it replaced by something far different...
What are your thoughts on this issue? I'd really like to hear them... Do you think things could actually get this bad this quickly? Possibly a preordained/orchestrated political agenda - to keep a hold on power?
Let's hear what you're thinking - please don't sugar coat, but try to refrain from the religious bashing thing (it's counterproductive).
Looking forward to reading your comments.
Very good video montage put together by one of my regular readers -- thanks Tim!
Ron Paul talks about the bailout out of the housing industry and how it really just destroys the dollar and adds enormously to the debt. Also, slipped into the bill, was the stipulation that ALL credit card transactions must now be reported to the IRS.
The bad news just keeps pouring in for the once thriving, and once believed to be, "bullet-proof" Nevada economy.
Though I've been warning folks of the looming downturn since early 2006: Las Vegas—A House of Cards Bound to fall, many disregarded the info and/or considered me a nutcase.
Anyway, since that time, I've been trying to keep readers abreast of the unraveling situation as I see it.
A few of my situational awareness posts:
Las Vegas housing downturn is leading the Nation:
Nevada Tops in Foreclosures AND Price Declines!
Home to 15 of the top 20 zip codes hardest hit by the housing/foreclosure meltdown:
Las Vegas Tops Foreclosure List
Four years of housing gains lost in one:
We Ain't seen nothin Yet
Fewer flights mean less tourists and less gaming revenue:
Airlines: More problems for Las Vegas Strip
Las Vegas Gaming revenue is falling fast -- faster than post 9/11:
Las Vegas: Gaming Revenue down > 16%
Casino layoffs have just started:
The Las Vegas Economic Downturn Has Started
Vegas locals flat broke:
Las Vegas: All flash and no cash
High-end Auto Repo Business is booming:
Las Vegas Economic Downturn Increasing "High-line" Auto Repos.html">
Local Banks are having difficulty coping:
Local Banks Effected by Las Vegas Real Estate Crisis
Well, if the situation weren't dire enough already, it's now being reported that Nevada is among the top three in the nation for state revenue declines:
Nevada's fiscal woes among worst in nation
CARSON CITY -- As if you needed more bad news, Nevada's economic downturn now ranks as one of the worst among the 50 states.
A National Conference of State Legislatures report released Wednesday found that tax revenue in Nevada fell by 7 percent in the fiscal year that ended June 30 compared to the previous year.
Nevada ranked No. 3 among the 17 states that reported revenue declines, led by a 7.5 percent drop in Oregon and a 7.3 percent decline in Florida.
Twenty-eight states, including Nevada, expect further declines in the current fiscal year, according to the NCSL report. Nevada already has approved measures to reduce spending by $800 million in the current fiscal year.
"We are all going through the same problems," said Ben Kieckhefer, a spokesman for Gov. Jim Gibbons.
He said there is no magic tax that can snap Nevada and other states out of the economic doldrums. Gibbons remains committed in his opposition to any tax increase, Kieckhefer said.
"When the economy is struggling, it is not a good time to raise taxes," he added. "We need to cope with the revenue we have and weather the storm. If there were a recession-proof tax that didn't hurt people, then someone at MIT would have thought of it."
Kieckhefer said Nevada faces a special problem because of its tourist-based economy.
"It is not surprising that we are faced with economic problems when the national economy experiences a downturn," he said.
Since November, Nevada has cut spending in its two-year budget that ends next June 30 by $1.2 million. That is equivalent to 17.7 percent of its $6.8 billion two-year budget.
There's no end in sight to the bad news and (I believe) this bad dream will soon turn into a nightmare -- when the casino layoff's begin in earnest.
Note: I honestly get no joy out of seeing my local economy fall apart and watch neighbors/co-workers and friends lose their homes, jobs and previous way of life, but I do get a sense of "I-told-you-so".
What really bothers me though is: If a simple telecommunications manager and lay-economist (me) could plainly see this train wreck coming over two years ago, why couldn't the so-called "experts" see it -- and possibly do something to better prepare?
The Dollar made some gains along with equities yesterday, while commodities and metals fell.
So, can one now assume the dollar crisis is over? NOT a Chance!
Then why the uptick and how long should we expect it to last?
The strengthening dollar can likely be attributed to coordinated global dollar intervention by the central banks of the world -- to prevent a full-blown dollar rout and stave off rapidly spiraling inflationary pressures. Bernanke even stated such in his congressional testimony last week: "Dollar intervention may be justified in Disorderly Times."
In a nutshell: By supporting/manipulating the dollar, short traders are forced to cover, thus causing the dollar to rally and energy prices to fall. When used in conjunction with other instruments in the PPT arsenal (i.e. large gold and energy shorts) the effect can be pronounced.
Timesonline: Ben Bernanke highlights fight against inflation
The dollar rebounded from Tuesday's record lows as Mr Bernanke combined his own emphasis on the Fed's determination to rein-in inflation by again brandishing the threat that Washington could intervene to halt the slide in the US currency.
In a new signal of growing concern at the Fed that the dollar's rapid decline on foreign exchanges is stoking inflationary pressures by driving up America's import bills, Mr Bernanke fired a fresh warning at the markets, making clear that currency intervention remains a weapon at the disposal of the US central bank and Treasury.
“Market intervention is a policy that's been undertaken a few times. I think it's something that should be done only rarely, but there may be conditions in which markets are disorderly where some temporary action is justified,” he said.
Forbes: Time is now for intervention to prop dollar:
Intervention by the U.S. Federal Reserve, undertaken in concert with the European Central Bank and other global economic powers, could be an inflexion point for the dollar after its 6 year fall.
And with the falling dollar playing a substantial role in rising oil prices, official action to back the currency could provide relief for consumers and ease the pressure from inflation, both in the United States and globally.
It would also be a very useful and timely insurance policy against any run on the dollar should global holders of U.S. debt take fright at what may be a massive bill, and proportionally huge supply of new U.S. debt, to backstop Fannie and Freddie and sort out problems in U.S. real estate and banking.
"This is a situation crying out for intervention and leadership," said Nick Parsons, head of market strategy at nabCapital in London.
The Bush administration has long argued that the value of the dollar should be set in the free and unfettered market, though where exactly a free market can be found I am increasingly unclear.
The serial bailouts, first of Bear Stearns and now Fannie Mae and Freddie Mac, have robbed that argument of much of its moral and intellectual authority, though probably not all of its emotional appeal.
So, with that understood, how long should we expect the rally to last?
My bet is: we may see 74-75 as a rebound high for the US Dollar index, but the rally will probably end not later than August 5th... On that day, people will finally realize that Bernanke's hands are tied and can not/will not raise interest rates AT ANY TIME this year. Shortly thereafter, dollar selling will once again commence in earnest -- ultimately overtaking the efforts of our global central bank interventionists.
Bottom line: I still feel 70 will be taken out later this year.
US Dollar Index Daily Chart
US Dollar Index Weekly Chart
All the stops have been pulled for a swift Fannie and Freddy rescue.
Note: A federal Bailout w/taxpayer money won't solve anything and regardless of gvt. actions, neither company will ever be restored to what they once were, nor will housing recover anytime soon.
SEC Emergency Order Leads to Dramatic Drop in Short-Selling of Fannie Mae and Freddie Mac Securities
Business Intelligence Firm Reports 90 Percent Reduction in Short Selling
According to market statistics analyzed by S3 Matching Technologies, the SEC's emergency order to enhance investor protections against "naked" short selling in 17 financial institution securities has reduced short sells by about 70 percent for the targeted symbols, and 90 percent of short selling of Fannie Mae and Freddie Mac securities. S3, which processes trades for the country's largest brokerages, compared short sells of Monday, July 14, prior to the SEC order, and Monday, July 21, the first day the emergency rule was implemented.
"Looking at the data from our clients," said Jack Holt, CEO of S3 Matching Technologies, "it seems clear the market responded to what regulators wanted. Short sells, 'naked' or not, have accounted for a little over 1 percent of our clients' total volume. 2/3rds of that short sell volume disappeared on the first day the rule went into effect. For Fannie Mae and Freddie Mac, it's more dramatic at 90 percent."
Previously CEO of Goldman Sachs and currently head of our Free Market Economy's Plunge Protection team, US Treasury Secretary Paulson Talking Up Housing Bill
Bush Drops Veto Threat on Housing Bill
Lawmakers Agree on Outline of Pact That Includes Relief for Fannie, Freddie
The White House said Wednesday that President George W. Bush has dropped his opposition to the housing package. House and Senate leaders have largely hammered out a compromise deal on a mammoth package that would permit the government to bolster Fannie Mae and Freddie Mac in an emergency, overhaul supervision of the housing-finance giants and allow the government to insure up to $300 billion in refinanced mortgages.
Lawmakers plan to raise the public-debt limit as part of the legislation to $10.6 trillion from $9.8 trillion. Congress must vote to increase the limit to account for additional borrowing, something it is loath to do, although it would have had to take that step this year even without the rescue plan for Fannie and Freddie, Democratic aides said.
Wall Street's laughing all the way to the bank
The credit crisis really puts the free in free market. The freest market is supposed to be the United States, and the evidence in favour of that argument is mounting. It's just not what you think. Free, in this case, means a free ride for a select group of people. Wall Street never looked so good, or bad, depending on your perspective.
According to the New York State Comptroller's Office, the big banks paid $33.2-billion in bonuses in 2007, down only slightly from 2006, an even more splendid year for subprime origination. During the past four years, bonuses closed in on $100-billion, not far off the writeoffs and the stimulus package.
It's pretty clear what's happening. Ultimately, the people are borrowing to pay Wall Street bonuses. After all, these handsome rewards are based on the earnings of the banks, but they're not real earnings, since the assets that produced them are subsequently written off.
So, what are "we the people" doing about the outragous lies, incompetent leadership, market manipulation and intentional wrongdoing of many in the financial industry?
Financial Crisis Protest - New York, April 25, 2008; people are finally waking up and taking action:
Stop the Bailouts
Petition To STOP THE BAILOUTS! -- Please sign!
Just returned home this evening...
Though the trip started out a little rough (Virgin America had a broken plane, so we waited in the airport bar for 4 hours), we had an absolutely fantastic time.
We took lots of pictures, so allow me to share a few... Note: I've never done this before (share personal pictures), so I hope it's not too corny!
Entering Napa Valley
Wine Tour at Clos Du Val -- Beautiful Place!
Amazing how small the grapes were
San Francisco: Golden Gate Bridge -- It was COLD!
Lost in San Francisco