Entries Tagged as 'Economy'

Apple – Double or Nothing?

Yesterday Apple announced another record quarter in sales.  In fact, iPhone sales doubled in Q4 2009 (a good holiday present for Apple).

Tomorrow Apples announces a new tablet computer (at least that’s the rumor of what they will announce).

Google has a lot of ground to catch up with Apple in the phone market, and it certainly doesn’t appear that Apple is going to just stand by and wait for them.

I guess the one thing that Apples numbers show is that there is money to be made in economic hard times if you’ve got something people want.

Originally posted 2010-01-26 01:00:44.

Occupy Wall Street

Occupy Wall Street
Occupy Wall Street
By Adam Zyglis, The Buffalo News

Originally posted 2011-10-10 02:00:28.

Ups and Downs

Just as the trucking industry tells us that delivery volume has been steadily increasing since the beginning of the years; retailers tell us that consumers are beginning to spend less.

And the Commerce Department announced that the recession was deeper than previously estimated.

Who’s doing the estimates?

Anyone with any sense knew the economy was in bad shape, and that it would likely take a number of years before there was any real improvement, and potentially a decade before we truly recovered.

You have to ask yourself are the people in Washington DC and on Wall Street stupid — or do they just think the American public are so stupid they will believe anything?

Personally I feel this is a catastrophic event in World history that requires leadership to acknowledge it’s severity and begin making long term plans for recovery while creating short term safety nets to keep society afloat.

Just one more sign that anyone who’s been in office in this country isn’t part of the solution — they’re part of the problem.

INCUMBENTS

Originally posted 2010-08-05 02:00:45.

US Auto Makers

The “Big Three” US automobile manufacturers are quick to tell you they’re not looking for a bail out, they’re looking for bridge loans.

Well… what’s the difference between a bridge loan to a business that’s likely to fail and giving them money for bad assets?

NADA!

It really doesn’t matter what the wording is, bail out, bridge loan, give away… it’s all the same.  The money from hard working American tax payers being given to companies that have made bad decisions and are looking for someone else to pay the price.

And why isn’t part of the $700B we’ve already approved being used?

Why are we gutting a fund that’s been setup to help create automobiles that move us toward energy independence?

Like so many Americans are asking — Where’s my bail out?

It’s great the congress is grilling the auto makers before they hand out more money — but why didn’t they hold Wall Street to the same standards?

This whole thing is very suspect… I mean all the American who are out of work, are we going to extend unemployment benefits for as long as it takes to turn the economy around?  They certainly didn’t contribute to these short sighted decisions… they don’t get $15 million in compensation per year…

I think before any more of the $700B is handed out, or before we approve more money for short sighted businesses we need to lay down a road map that helps us understand how the average American who’s been hit hard by these events is going to survive.

Maybe we need Twisted Sister to sing “We’re not going to take it…” at the opening of ever congressional hearing and session!

Originally posted 2008-12-10 12:00:05.

The Nightmare Continues…

With the bailout of Fannie Mae and Freddie Mac continuing to drain tax coffers, the first quarter 2010 reported a substantial increase in home owners who missed at least one mortgage payment.

Below are three articles by The Associated Press (with complete links to NPR).


Mortgage Delinquencies, Foreclosures Break Records
by The Associated Press

The number of homeowners who missed at least one mortgage payment surged to a record in the first quarter of the year, a sign that the foreclosure crisis is far from over.

More than 10 percent of homeowners had missed at least one mortgage payment in the January-March period, the Mortgage Bankers Association said Wednesday. That number was up from 9.5 percent in the fourth quarter of last year and 9.1 percent a year earlier.

Those figures are adjusted for seasonal factors. For example, heating bills and holiday expenses tend to push up mortgage delinquencies near the end of the year. Many of those borrowers become current on their loans again by spring.

Without adjusting for seasonal factors, the delinquency numbers dropped, as they normally do from the winter to spring.

More than 4.6 percent of homeowners were in foreclosure, also a record. But that number, which is not adjusted for seasonal factors, was up only slightly from the end of last year.

Stocks slid Wednesday as investors remain concerned with the European debt crisis. The rising number of mortgages also drew some attention. The Dow Jones industrial average fell more than 160 points in early trading.

Jay Brinkmann, the trade group’s chief economist, said the foreclosure crisis appears to have stabilized. Seasonal adjustments may be exaggerating the change from the previous quarter, he added.

“I don’t see signs now that it’s getting worse, but it’s going to take a while,” he said. “A bad situation that’s not getting worse is still bad.”

The number of American homeowners who have missed at least three months of payments or are in foreclosure has surged to around 4.3 million, Brinkmann estimated.

The Obama administration’s $75 billion foreclosure prevention program has barely dented the problem. More than 299,000 homeowners had received permanent loan modifications as of last month. That’s about 25 percent of the 1.2 million who started the program since its March 2009 launch.

About 277,000 homeowners, or 23 percent of those enrolled, have dropped out during a trial phase that lasts at least three months.

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. But homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

Those borrowers made up nearly 37 percent of new foreclosures in the first quarter of the year, up from 29 percent a year earlier.

The risky subprime adjustable-rate loans that kicked off the foreclosure crisis are making up a smaller share of new foreclosures. They made up 14 percent of new foreclosures in the January-March period, down from 27 percent a year earlier.


Fannie Mae Seeks $8.4B From U.S. After $13B Loss
by The Associated Press

Fannie Mae has again asked taxpayers for more money after reporting a first-quarter loss of more than $13 billion.

The mortgage finance company, which was rescued by the government in September 2008, said it needs an additional $8.4 billion from the government to help cover mounting losses.

Fannie Mae says it lost $13.1 billion, or $2.29 per share, in the January-March period. That takes into account $1.5 billion in dividends paid to the Treasury Department. It compares with a loss of $23.2 billion, or $4.09 a share, in the year-ago period.

The rescue of Fannie Mae and sister company Freddie Mac is turning out to be one of the most expensive aftereffects of the financial meltdown. The new request for aid will bring Fannie Mae’s total to $83.6 billion. The total bill for the duo will now be nearly $145 billion.

Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Freddie and Fannie, lifting an earlier cap of $400 billion.

Fannie and Freddie play a vital role in the mortgage market by purchasing mortgages from lenders and selling them to investors. Together the pair own or guarantee almost 31 million home loans worth about $5.5 trillion. That’s about half of all mortgages.

The two companies, however, loosened their lending standards for borrowers during the real estate boom and are reeling from the consequences.

With the housing market still on shaky ground, Obama administration officials say it is still too early to draft any proposals to reform the two companies or the broader housing finance system.

But Republicans argue the sweeping financial overhaul currently before Congress is incomplete without a plan for Fannie and Freddie. They propose transforming Fannie and Freddie into private companies with no government subsidies, or shutting them down completely.

The legislation “touches nearly every corner of the economy,” Alabama Sen. Richard Shelby said in the GOP weekly radio and Internet address over the weekend. “But these major contributors to the crisis are left unscathed,” he added, singling out Fannie Mae and Freddie Mac.


Freddie Mac Seeks $10.6B In Aid After 1Q Loss
by The Associated Press

Freddie Mac is asking for $10.6 billion in additional federal aid after posting a big loss in the first three months of the year. It’s another sign that the taxpayer bill for stabilizing the housing market will keep mounting.

The McLean, Va.-based mortgage finance company has been effectively owned by the government after nearly collapsing in September 2008. The new request will bring the total tab for rescuing Freddie Mac to $61.3 billion.

Freddie Mac said Wednesday it lost $8 billion, or $2.45 a share, in the January-March period. That takes into account $1.3 billion in dividends paid to the Treasury Department. It compares with a loss of $10.4 billion, or $3.18 a share, in the first quarter last year.

The company, however, cautioned that new accounting standards make it difficult to compare the most recent quarter with the year-ago period. In the first quarter of this year, Freddie Mac was forced to bring $1.5 trillion in assets and liabilities onto its balance sheet, causing the company’s net worth to plunge by $11.7 billion.

Nevertheless, the company’s CEO Charles Haldeman said, “We are seeing some signs of stabilization in the housing market, including house prices and sales in some key geographic areas.”

He cautioned, though, that the housing market “remains fragile with historically high delinquency and foreclosure levels, and high unemployment among the key risks.”

Created by Congress, Freddie Mac and sibling company Fannie Mae buy mortgages from lenders and package them into bonds that are resold to global investors. As the housing bubble burst, they were unable to raise enough money to stay afloat, and the government effectively nationalized them.

Freddie’s new request will bring the total taxpayer tab for both companies to about $126 billion.

With the housing market still on shaky ground, Obama administration officials argue that it is still too early to draft any proposals to reform the two companies or the broader housing finance system.

But Republicans argue that the sweeping financial overhaul currently before Congress is incomplete without a plan for Fannie and Freddie. Senate Republicans propose transforming Fannie and Freddie into private companies with no government subsidies, or to shut them down completely.


The deficit was $1.2 – $1.3 trillion when Obama took the reigns; some projections put it to be as high as $10 trillion in 2020… and while I’m not a fan of Obama, much of that was set in motion before he tripped over his own feet.

Originally posted 2010-05-20 02:00:51.

Keep Wall Street Occupied

A friend of mine put this together; and I think it’s very good advice…

I’ll add a couple points:

  • Mail over 13 oz requires you drop it off in person
  • Mail over 5mm thick is charged a higher postage rate (regardless of weight).
  • I’d discourage you from spending a penny on sending anything to a bank (not just because of the cost, but because of the environmental impact to produce and distribute anything); find your non-recyclable items around your house and use those to send a message — just be careful, some items are prohibited from sending via the US Postal Service — A Customer’s Guide to Mailing.
  • You may want to include in your note to remove your name and address from their mailing list (they already have all that information, they got the mail to you right — so you don’t really have to worry).
  • Don’t do business with banks — especially “big banks”.  Choose a credit union or a local bank for your needs.  If you have credit card services from a “big bank” make sure they are paying you back to use their card (they still make money, but at least you get something), never pay a membership fee or yearly fee for credit cards, and never carry a balance on a credit card at a “big bank”.

Originally posted 2011-10-30 02:00:24.

Fannie Mae and Freddie Mac

Thus far the collapse of the US housing market and [near] failure of Frannie Mae and Freddie Mac have cost US tax payers $145B… and it’s far from over.

The New York Stock Exchange have announced that the two companies will be delisted from the exchange next month (the stocks had been trading at the $1 per share mark — the minimum threshold to remain on the exchange — for over two years (since before the federal government took control of the companies).

The Federal Housing Finance Agency states that the delisting “does not constitute any reflection on either [company’s] current performance or future direction.”

Right…

Fannie and Freddie were created by an act of Congress decades ago… as private companies.  They buy mortgages from banks, re-sell them to investors, and guarantee to pay off the loans if borrowers default.

And, of course, for the last decade they’ve been buying junk mortgages that banks irresponsibly made to people who couldn’t possible afford them on vastly over-valued property.

Of course, the bank’s weren’t the losers; the shareholders of Fannie Mae and Freddie Mac largely lost their proverbial shirts — but the tax payers bailed out the banks (and continue to fund Fannie and Freddie — and they continue to lose money).

Congress will have to decide how to handle this mess.  A GAO report last fall included these points.

  1. Create a government agency to buy mortgages and re-sell them to investors. This would eliminate the profit motive that, some critics say, drove Fannie and Freddie to take the risks that led to their demise. It would also continue to subsidize the mortgage market, making it easier for Americans to buy homes. On the other hand, the government would still be putting lots of taxpayer money at risk to subsidize the housing market.
  2. Reconstitute Fannie and Freddie as government-sponsored enterprises, similar to the way they were before. This might be accompanied by new rules limiting the risks the companies can take. Still, this would bring back the problematic ambiguities of having private, government-sponsored companies.
  3. Dramatically reduce the government’s role in the mortgage business. In this model, there would essentially be no replacement for Fannie and Freddie. But the government might still take some role, such as selling insurance to cover mortgage default. This would reduce (but not eliminate) the risk to taxpayers, but it might also make it more difficult for people to get mortgages.

Originally posted 2010-06-18 02:00:20.

What’s Happening to MY $700B?

Oh, that’s right, we all spend seven hundred billion dollars so often I should be more specific… that would be the $700B “we” Americans authorized under the Emergency Economic Stabilization Act

The October 29, 2008 report is up on the US Treasury Site now — you should take a look at it to see who’s getting your money.

Some comments:

  • You’ll notice the list includes several financial institutions who have purchased or are attempting to purchase the distressed assets of smaller banks; I guess we know where they’re getting the money.
  • It’s really convenient that they were able to get just the right number of mortgage instruments together to be valued at an even billion each (hell I can’t remember the last time my credit card bill was an even dollar).

If I sound a little leery of what the “usual suspects” are doing with my money — I am… I want to make sure I get it back (with INTEREST), and I certainly don’t want anyone to expect me to pay for any of these financial institutions mistakes and poor judgment — I’ve already lost 36% of my retirement account, and I haven’t seen any government bailout for that!

http://www.ustreas.gov/initiatives/eesa/transactions.shtml

Originally posted 2008-11-14 08:00:52.

Hidden Evil

Many of my friends and I have engaged in intellectual discussions about the evils of society and what most needs to be fixed.

Views of what’s evil, though, largely depend on your perspective — social liberals might call something evil that a fiscal conservative feels is simply just; and vice-versa.

If you’re a conspiracy buff you’ll enjoy reading through the TheHiddenEvil.com.  Volume I contains a number of factoids, and draws interesting conclusions (I’m certainly not going to say I agree with any or all of them).  Volume II builds on Volume I to make some fairly remarkable assertions — of maybe they’re just hard to believe (or hard to read without a giggle or two at least).

With disinformation an accepted practice of government, organized religion, and business it’s always hard to say definitively what is true and what is a shade of gray.

Originally posted 2010-01-22 02:00:23.

The solution to illegal immigration

Wow, it looks like the GOP really knew what they were doing by driving the economy into the toilet.

I guess the GOP realized that they weren’t really getting any traction on protecting American jobs from illegal immigrants through circumventing the law and harassment, so they just decided to make the economy in the United States worse than most every where else in the world…

…and it’s working!

Reports from the Pew Hispanic Center indicate that the number of illegal immigrants entering this country per year has been steadily dropping since 2007.

Maybe this is why the Republican’s have seemingly resisted all the efforts to get the economy back on track.

Region 2009 2008 Change
South Atlantic 1,950 2,550 -600
Florida 675 1,050 -375
Others combined 1,050 1,200 -160
Mountain 1,000 1,200 -160
Nevada 180 230 -50
AZ-CO-UT 700 825 -130

Source: Pew Hispanic Center

The South Atlantic consists of Delaware, the District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia. The Mountain region consists of Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming.

Originally posted 2010-09-03 02:00:34.