Daily Digest - Feb 6
- It's Not Going to Be OK (Hat Tip CM)
- Toyota shuts down all but one assembly line (Hat Tip PineCarr & CM)
- US credit card delinquencies at record high
- Bonus Babies: The Big Tarp Recipients and their Booty (Table)
- Neel Kashkari on the Market Crisis & Asset Relief, FORA.tv
- Unemployment Chart
- New jobless claims jump more than expected to 626K (Hat Tip WendyT)
- New Home Sales and Recessions (Chart)
- Existing Home Inventory, Monthly (Chart)
- Citigroup Hides Mystery Meat in Balance Sheet (Hat Tip CM)
- Lawmaker says SEC hindering House's Madoff probe (Hat Tip CM)
- Depletion and Abundance (Hat Tip Christopher Peters)
- Madoff House Hearings (Video)
- Counties threaten tax revolt against Calif. budget (Hat Tip CM)
- Comptroller: Illinois facing a $9 billion deficit (Hat Tip CM)
"The puzzle to me is the lack of social unrest," Wolin said when I asked why we have not yet seen rioting or protests. He said he worried that popular protests will be dismissed and ignored by the corporate media. ... "Every day we hear how much longer the recession will continue. They are already talking about beyond next year. The economic difficulties are more profound than we had guessed and because of globalization more difficult to deal with. I wish the political establishment, the parties and leadership, would become more aware of the depths of the problem. They can't keep throwing money at this. They have to begin structural changes that involve a very different approach from a market economy. I don't think this will happen."
TOYOTA CITY, Japan (CNN) -- On what was to be a historic day halting all of Toyota's Japanese assembly lines, the automaker announced late Thursday that it kept one line running.
The late news sent copy editors and reporters to their laptops erasing headlines like "historic shutdown," but it did little to quell the pain for the tens of the thousands of workers idled across Japan as nearly every Toyota line stopped producing autos and auto-related equipment.
US credit card delinquencies hit a record high in January, and further deterioration is likely as the economy slows down and unemployment rises, Fitch Ratings says.
Payments at least 60 days late rose almost half a percentage point last month to a record 3.75 per cent, said Fitch. Credit card lenders also wrote off loans to delinquent borrowers at close to record levels, and such "charge-offs" were expected to breach records in the coming months.
In an already dismal labor market, and there's no relief in sight for workers as mass layoffs persist. The Labor Department reported Thursday that the number of newly jobless workers seeking benefits rose last week to a seasonally adjusted 626,000, from the previous week's upwardly revised figure of 591,000. The latest total is far more than analysts' expectations of 583,000.
That's also the highest since October 1982, when the economy was in a steep recession, though the work force has grown by about half since then.
The numbers reflect the large spate of layoffs announced last month by companies from all sectors of the economy, including Caterpillar Inc., Pfizer Inc. and Microsoft Corp. The layoffs continued Thursday with cosmetics maker Estee Lauder Cos. saying its fiscal second-quarter profit fell 30 percent and it plans to begin a four-year restructuring plan that will include cutting 2,000 staffers, or 6 percent of the work force. The company will also continue its hiring freeze.
Economists expect the government to issue a grim report Friday that will show the unemployment rate rose to 7.5 percent in January, up from 7.2 percent in December. That would be the highest rate in 17 years.
Feb. 5 (Bloomberg) -- Even now, Citigroup Inc.'s bosses can't get over their delusions of grandeur.
You can see their shiny optimism in a $44 billion balance-sheet item called deferred-tax assets, which is a fancy term for pent-up losses that the bank hopes to use later to cut its tax bills.
That figure tells you Citigroup's executives, in spite of their bank's near-collapse, are still forecasting future profits as far as the eye can see. They have every incentive to do this, too. If they ever turned pessimistic, the assets might go poof.
While you won't find any mention of deferred taxes in Citigroup's latest earnings release, this may be the most important asset on the bank's books today. It also looks the fishiest, at more than three times what it was a year ago, and more than double the company's $19 billion stock-market value.
House lawmakers on Wednesday accused the Securities and Exchange Commission of impeding their probe into the agency's failure to uncover the alleged $50 billion Bernard Madoff fraud.
The clash between lawmakers and high-ranking SEC officials at a House Financial Services subcommittee hearing came after the man who waged a decade-long campaign to alert the regulators to problems in Madoff's operations denounced the agency for its inaction. Whistleblower Harry Markopolos also said he had feared for his physical safety and would turn over new evidence that Madoff had not acted alone.
In loud, angry exchanges, lawmakers threatened to issue subpoenas to SEC officials to compel their testimony in the case.
Depletion and Abundance are just two sides of the same coin. We're no longer speaking of the future when we talk about climate change and peak oil. So now the project is to accept depletion, and still find a good and abundant way of life, not just for ourselves, but for those who will come after us. We can do this - it is one heck of a challenge, but we have to find a way, so we will. That's what this site is for - finding a way forward.
SACRAMENTO - California counties are throwing another wrinkle into the state's cash crisis as Gov. Arnold Schwarzenegger and legislative leaders try to agree on a way to erase a $42 billion budget deficit.
Several counties are considering some form of tax revolt - either filing lawsuits or delaying tax payments to the state - because the governor has proposed withholding payments to them for as long as seven months in a move to preserve cash.
SPRINGFIELD, Ill. - Newly installed Illinois Gov. Patrick Quinn met with the state's chief fiscal officer this morning and got a sobering welcome: Illinois will be looking at a $9 billion deficit by mid-year if nothing changes.
"The bottom has dropped out," state Comptroller Dan Hynes told reporters in the Statehouse today, restating what he'd earlier told Quinn during their meeting.
Hynes said the latest calculations show Illinois' current budget deficit is between $4 and $5 billion, and will hit a record $9 billion during the next fiscal year if nothing is done. As much as $3 billion of that could be recouped through the pending federal stimulus package, but even at that, the state will be paying its bills late or not at all without either drastically reduced spending or increased revenue.