Daily Digest

Daily Digest - January 13

Wednesday, January 13, 2010, 12:01 PM
  • US Mortgage Originations Seen Plummeting
  • NY Leads States Seeking Federal Bailout on Costs for Medicare, Medicaid
  • Obama Wants $33 Billion More for War
  • U.S. Judge Freezes Argentine Central Bank Accounts
  • Greek Markets Rattled as EU Says Deficit Forecasts ‘Unreliable’
  • Los Angeles County Budget: "A Crisis of Gargantuan Proportions"
  • Comments from Dallas Federal Reserve Bank President Richard Fisher
  • U.S. Consumers Seeing Smaller Discounts
  • One in Eight Americans Receives Food Stamps
  • OPEB Solution Remains Elusive for West Virginia Lawmakers
  • Celente on 2010: Wave of Terror, Internet revolt & War on migration
  • Over 2,000 People Apply for 20 Job Openings at General Mills
  • Job Seekers Still Outnumber Openings by More than Six to One
  • Strategic Mortgage Defaults: A Growing Trend
  • $47 Billion Loan Resets to Place Added Stress on RMBS Market
  • Demand Overwhelms Program to Prevent Homelessness
  • Private Equity Fundraising Hits Six-Year Low
  • Stimulus Added or Created up to 2 Million Jobs in 2009, White House Says

Economy

US Mortgage Originations Seen Plummeting

U.S. residential mortgage originations will plunge 40 percent this year to the lowest level in a decade as home refinancing demand sinks with rising mortgage rates, the industry's main trade group said. Lenders will underwrite $1.28 trillion in home loans this year, down from $2.11 trillion in 2009, the Mortgage Bankers Association said in its annual forecast on Tuesday. That would be the lowest since $1.14 trillion in 2000. The forecast was downgraded from December, when the MBA predicted originations would fall about 24 percent.

NY Leads States Seeking Federal Bailout on Costs for Medicare, Medicaid

The governor of New York and other big states are in talks to get the federal government to take over health care costs for the elderly poor who get benefits through Medicare and Medicaid.  The savings to New York alone would total the projected deficit for the next fiscal year of about $8 billion.

Obama Wants $33 Billion More for War

The Obama administration plans to ask Congress for an additional $33 billion to fight unpopular wars in Afghanistan and Iraq, on top of a record request for $708 billion for the Defense Department next year, The Associated Press has learned. The extra $33 billion would mostly go toward the expansion of the war in Afghanistan.

U.S. Judge Freezes Argentine Central Bank Accounts

A U.S. judge has frozen accounts held in the United States by Argentina's Central Bank, deepening a legal and political row over the Argentine government's plan to use foreign reserves to repay debt.

Greek Markets Rattled as EU Says Deficit Forecasts ‘Unreliable’

Greek stocks and bonds tumbled after the European Commission said “severe irregularities” in the nation’s statistical data leave the accuracy of the European Union’s largest budget deficit in doubt.

Los Angeles County Budget: "A Crisis of Gargantuan Proportions"

The proposed cuts are "terrifying to all of us," said Supervisor Gloria Molina in today's board meeting. The proposed elimination of CalWORKS alone would end state support to 165,000 families with 318,000 children in the county, she stated. While the county has already made significant cuts and bridged some programs though a "rainy day" fund, "it's a rainy day fund, but not one that can withstand a tsunami that is coming from Sacramento," said Supervisor Michael Antonovich.

Comments from Dallas Federal Reserve Bank President Richard Fisher

Fisher did not talk about current monetary policy in remarks prepared for delivery to the Waco, Texas Business League -- instead focusing on future policy. He warned that if Congress takes away the Fed's independence, it will inevitably lead to inflationary policies of the likes of Weimar Germany or Argentina. Contrary to Fed Chairman Ben Bernanke's recent assertions that past monetary policy had little to do with the financial crisis, Fisher said the Fed had contributed to the crisis by keeping interest rates "too low, too long." But he said that does not justify subordinating policy to more congressional control.

U.S. Consumers Seeing Smaller Discounts

U.S. consumers found smaller post-Christmas discounts in stores this year, which could weigh on January spending as many remain worried about their financial situation, a survey showed on Tuesday.

One in Eight Americans Receives Food Stamps

Some 37.9 million people -- one in eight Americans -- received food stamps to help buy food at latest count, the government said on Tuesday as enrollment set a record for the ninth month in a row. The Food Research and Action Center, an anti-hunger group, said enrollment of one in eight Americans "is the highest share of the U.S. population" ever in the program, which was renamed the Supplemental Nutrition Assistance Program in mid-2008.

OPEB Solution Remains Elusive for West Virginia Lawmakers

West Virginia's Legislature may start its regular session without a proposed solution to the ongoing dispute over public retiree costs.

Celente on 2010: Wave of Terror, Internet revolt & War on migration

What does the new year and new decade have in store for the World? Is the financial crisis over? Will Afghanistan be won and terrorism be beaten at home? Are people fed up with America's politics and media? To answer these questions and more, RT spoke to the renowned Trends Forecaster Gerald Celente.

Over 2,000 People Apply for 20 Job Openings at General Mills

A chance at 20 job openings at a Cedar Rapids cereal factory overwhelmed General Mills with about 2,400 applicants over the weekend. Job applicants waited in line for hours.

Job Seekers Still Outnumber Openings by More than Six to One

In another sign that the labor market is not out of the woods yet, the number of job openings fell again in November, according to a government report released Tuesday. With 15.3 million people out of work and employers hesitant to hire, job seekers still outnumber openings by more than six to one, the greatest differential since the Labor Department began tracking job openings in December 2000.

Strategic Mortgage Defaults: A Growing Trend

As many homeowners find their property values underwater, some are finding relief by deliberately walking away from their mortgages and choosing to pay other debts first. A consulting company working for financial institutions, Oliver Wyman estimates that 16% of current foreclosures are of mortgage borrowers intentionally walking away, choosing to pay other debts first and stick it to the bank. Other financial firms estimate the rise in walkaways is as high as one in four. The walkaways are concentrated in five of the worst states impacted by the foreclosure crisis, California, Florida, Arizona, Nevada and Hawaii.

$47 Billion Loan Resets to Place Added Stress on RMBS Market

Many prime and Alt-A mortgage borrowers that are currently making interest-only (IO) monthly payments are in for a rude awakening over the next year as these loans reset to full principal and interest payments, according to a new study from Fitch Ratings. “Sixty-day delinquency rates have risen over 250 percent in the 12 months following previous recasts for prime and Alt-A loans,” Slump explained. According to Fitch’s analysis, while only 3.3 percent of prime loans are 60 or more days delinquent prior to recast, delinquencies the year after recast increased to 9.3 percent.

Demand Overwhelms Program to Prevent Homelessness

On top of the estimated 672,000 who are already homeless on any given night in the U.S., the alliance expects the recession to push 1.5 million more people into the streets. Those predictions appear to be accurate because ever since the HPRP funds became available in the fall, local social service agencies that provide the cash have been overwhelmed by requests for help.

Private Equity Fundraising Hits Six-Year Low

In 2009, 331 private-equity funds raised $95.8 billion, down 68 percent from $299.9 billion raised by 508 funds in 2008, according to Dow Jones LP Source. The market should rebound this year, "but 2010 will not see a return to levels seen before the economic downturn," said Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst.

Stimulus Added or Created up to 2 Million Jobs in 2009, White House Says

The Obama administration credits the $787-billion program with a substantial effect on employment. Still, the U.S. economy lost a net 4 million jobs last year even with the stimulus..... "This is truly a stunning effect" of the Recovery Act, Christina Romer, chairwoman of the president's Council of Economic Advisors, said in a conference call with reporters.

15 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4149
Re: Daily Digest - January 13

"Germany’s economy has shrunk by more than what economists forecasted last year. According to the Federal Statistics Office Destatis, Germany's economy contracted by 5%, exceeding the forecasts of a 4.8% contraction from the 2008 levels."

"The Portuguese and Greece economies may face a “slow death” as they dedicate a higher proportion of wealth to paying off debt and investors demand a premium to hold their bonds, Moody’s Investors Service said.

While the two countries can still avoid such a scenario, their window of opportunity ”will not be open indefinitely,” Moody’s said in a report today from London."

"Fresno County Sheriff Margaret Mims said today she will close up to three floors of the jail and release up to 500 inmates early to help her close a budget deficit. The changes would take effect Feb. 8.

Mims said a shortage of sales tax revenue has given her a $3.9 million budget gap for the fiscal year ending June 30. That figure is lower than what Mims reported last week. She said she has identified a variety of other revenue to offset anticipated deficits. Those include asset forfeiture funds and planned promotions and hires."

"The percentage of wealthier homeowners who are delinquent two months or more on prime, jumbo mortgages tripled in 2009to nearly ten percent, according to the latest data from Fitch Ratings.

The report is yet another sign that the housing crisis and the negative equity it has caused is climbing upscale to some of the wealthiest neighborhoods in America. Should the trend continue, foreclosure yard sales will become commonplace in the cul de sacs and gated neighborhoods of the nation’s most exclusive communities."

 

...........Notes:

Thanks to Headless for the Gerald Celente video in the DD

Please read the CM blog about the Federal Reserve's "profits" ("Time for an audit") . The news was posted on the 11th.

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1208
Re: Daily Digest - January 13

Bank CEOs: Sorry for risky behavior, bad decisions

Quote:

Wall Street executives said Wednesday they underestimated the severity of the 2008 financial crisis and apologized for risky behavior and poor decisions. They also defended their bonus and compensation practices to a skeptical commission investigating what caused the collapse. 

An apology about as heartfelt and meaningful as an "I love you" coming from a prostitute Money mouth

- Nickbert

 


Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Re: Daily Digest - January 13

An apology about as heartfelt and meaningful as an "I love you" coming from a prostitute Money mouth

A good analogy since you have to pay extra for that.

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4149
Re: Daily Digest - January 13

"Jan. 13 (Bloomberg) -- California’s credit rating on $64 billion of general obligation bonds was cut by Standard & Poor’s today as the most-populous U.S. state faces renewed strains over how to close a $20 billion budget deficit.

Gabriel Petek, a San Francisco-based analyst who monitors the state for Standard & Poor’s, said the rating was lowered one level, to A- from A. He said the company has a negative outlook on California debt, a sign that its standing could decline further. The rating on other securities tied to the state, including bonds backed by leases, was reduced as well, he said."

"Jan. 13 (Bloomberg) -- The U.S. registered its largest December budget deficit on record as higher unemployment reduced revenue and the government spent money to help the economy recover.

The excess of spending over revenue rose to $91.9 billion last month, compared with a deficit of $51.8 billion in December 2008, the Treasury Department announced today in Washington in its monthly budget statement. The U.S. has posted a record 15 straight monthly deficits. "

"The deficit will probably exceed $1 trillion for the second consecutive fiscal year, according to estimates by White House and congressional budget officials. The economy lost 7.2 million jobs since the recession started two years ago and the unemployment rate was 10 percent in December, close to a 26-year high.

To help reduce the deficit and recoup losses from the Troubled Asset Relief Program, President Barack Obama plans to raise as much as $120 billion through a fee on financial institutions, an administration official said yesterday. "

Mike Pilat's picture
Mike Pilat
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 929
Re: Daily Digest - January 13

I posted this on another thread, but I believe it deserves a repost here:

Has anyone had a chance to see Mish's article on the St. Louis Fed's latest paper?

Read MISH's article here: http://globaleconomicanalysis.blogspot.c...

Then read the St. Louis Fed paper here: http://research.stlouisfed.org/wp/2010/2...

The title of the paper is: On The Social Cost of Transparency in Monetary Economies - I'm not kidding

As if that wasn't flagrant enough, we can see there are calculus equations in the paper describing the value of making decisions at night while the consumer is asleep. This article reminds me very clearly of O.J. Simpson's If I Did It. I've read parts of that book before it was "unreleased" and I can tell you I am certain that he murdered Nicole, as if I wasn't already. If this type of paper does not convince us that the FED is engaging in a lot of surreptitious activity ("for our good" of course) then I don't know what will.

If the FED is indeed acting as an agent on my (our) behalf as a taxpayer, then I want accountability. Oh, that's right, the FED doesn't need my taxes to fund itself...then what motivation does it have to act as my agent???

My blood is boiling.

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - January 13

Major Tax Policy Changes to Affect How Much You Keep (get ready)

http://www.cnbc.com/id/34846693

It will only get worse IMHO as we tax our way to Depression 2.0.

 

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2244
Re: Rob Kirby references Chris, Crash Course, and CC Chart

Oh Nickbert, thanks for the laugh!

Hey all, Rob Kirby has a great reference to Chris's Crash Course in an article dated January 11th, 2010, "Clear Thought In Confusing Times or What Makes Irredeemable Fiat Money Inherently Unstable"

at http://www.thetreeofliberty.com/vb/showthread.php?p=868392.  (I am not sure if this is where it was originally posted).  Check it out!.  Here's a clip:

"What Makes Irredeemable Fiat Money Inherently Unstable?

To gain a fuller explanation as to why irredeemable fiat money is so inherently unstable, folks would be doing themselves a favor to familiarize themselves with Chris Martenson’s Crash Course in its entirety, an audio-video primer on the shortcomings of fiat money. Chapter 4 of the Crash Course explains the faultiness of compound interest – the reality that it must ALWAYS end in geometric / infinite money growth – which is inconsistent / incompatible with the reality that we live in a finite world:

Chart compliments of Chris Martenson

Make no mistake folks; what Chris Martenson has identified in the graphic above really is occurring in the real world."

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - January 13

Chavez Threatens to Seize Businesses, Devalues Currency by 50%

http://seekingalpha.com/article/182099-chavez-threatens-to-seize-businesses-devalues-currency-by-50?source=email

Argentina...N.Korea...Vietnam....whos next??

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - January 13
idoctor wrote:

Chavez Threatens to Seize Businesses, Devalues Currency by 50%

http://seekingalpha.com/article/182099-chavez-threatens-to-seize-businesses-devalues-currency-by-50?source=email

Argentina...N.Korea...Vietnam....whos next??

+1 & Like Machinehead said in a recent post.... Got Gold?

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2244
Re: Daily Digest - January 13

Saxplayer, great Celente video. Talk about sobering!

Then add the Venezualan currency devaluation.

Startin' to get antsy about the next shoe getting ready to drop (or dropping)!

 

 

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1208
Re: Daily Digest - January 13
Johnny Oxygen wrote:

An apology about as heartfelt and meaningful as an "I love you" coming from a prostitute Money mouth

A good analogy since you have to pay extra for that.

Nice one!  Laughing

- Nickbert

ckessel's picture
ckessel
Status: Martenson Brigade Member (Offline)
Joined: Nov 12 2008
Posts: 480
Re: Daily Digest - January 13
idoctor wrote:

Chavez Threatens to Seize Businesses, Devalues Currency by 50%

http://seekingalpha.com/article/182099-chavez-threatens-to-seize-businesses-devalues-currency-by-50?source=email

Argentina...N.Korea...Vietnam....whos next??

Idoctor,

Before this is over we will all take our turn ............ unless by some unfathomable chance we kiss the Fed goodby and tell them to send the bill to someone who cares!!!!    I do like DTMs option of everyone simply saying stick it on any given day and walking on the debts.

Coop

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - January 13

http://rawstory.com/2010/01/sec-suit-bank-america-failed-disclose-staggering-financial-losses/

SEC suit: Bank of America failed to disclose ’staggering financial losses’ to shareholders

12 Jan 2010

Federal regulators sued Bank of America Corp. on Tuesday, accusing the company of failing to disclose "staggering financial losses" at Merrill Lynch before shareholders approved a combination of the companies.

The lawsuit filed by the Securities and Exchange Commission in U.S. District Court in Manhattan sought an order requiring Bank of America to pay a civil penalty for not telling shareholders it was losing $15.3 billion in the fourth quarter of 2008.

Bank of America spokesman Robert Stickler called the charges "totally without merit."

He said the company believes it provided sufficient and appropriate disclosure to shareholders prior to their vote approving the combination.

"We look forward to presenting the facts in court," Stickler said. "What we would note is that there were no charges against individuals and no charges of fraud. We were pleased with that."

The SEC said the information about the losses should have been announced when it was learned after the companies publicly announced their deal in September 2008. They did not obtain shareholder approval until three months later.

Federal laws governing such transactions require that losses be revealed if they were not already reflected in Merrill's quarterly reports or other filings.

Robinson's picture
Robinson
Status: Bronze Member (Offline)
Joined: Apr 29 2009
Posts: 39
Chavez dont devaluate the currency, really overvaluate !!

Hi

I live in venezuela, i was following the chrismartenson web page from 2 year ago, and see the CC like 2 times.

Let me explain the real and fact situation in venezuela, remember dont trust the main media.

In Venezuela the government (Chavez) have a limitation for any one to obtain dollars, the government sell the dollar to 2.15  BS = 1 US$ to company importers with a lot of paper bureaucracy, any company also can obtain dollars in the black market 5.9 BS = 1 US$.

But every company sell the mercandise to US$ of black market, regardless of whether they have received government dollars to 2.15 or if purchased on the black market to 5.9.

The Government understood this and make the following change, official dollar 4,3 Bs = 1 US$, and the government also will sell dollars in the black market when needed to lower the price of this dollar upto 5.1 US$.

This results in that before the importer sold their imported goods, with a black dollar from 5.9 and now will sell their merchandise with a black dollar of 5.1 Bs

The fact is not a devaluation is an overvaluation. You can follow the black dollar price on the next page dolarpermuta.com.

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest - January 13

Robinson.....thanks & interesting. Can you buy Gold or Silver with your BS native currency? Can you own firearms?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments