Daily Digest

Daily Digest - January 2

Saturday, January 2, 2010, 10:45 AM
  • The Economic 'Experts' Who Stopped Making Sense
  • Will Americans Reclaim Our Nation in 2010 From the Thugs and Con Artists?
  • Firms Fight Big Banks Over $20 Billion In Frozen Notes
  • Mortgage Modification Plan Added To Housing Woes
  • Judge Rules Some State Furloughs Illegal
  • Amid Economic Ails, Ron Paul's Ideas No Longer Fringe
  • 2010's Perils And Potential
  • Beware The Turn Of The Calendar
  • Why The Fed's Next Act Could Be It's Hardest
  • DNC Likely To Do Away With Superdelegates
  • Three Reasons Home Prices Are Heading Lower
  • The Hidden Depression In The Great Recession
  • Airlines Struggle Anew With Flier Frustrations
  • Nationwide, Public-Transit Passengers Face Rough Ride
  • DC First To Impose Fee On Plastic, Paper Bags
  • 2009 Business News Quiz
  • Outsourcers Go Global
  • For Some In Japan, Home Is A Bunk In A 'Capsule Hotel'


The Economic 'Experts' Who Stopped Making Sense (re-post, SolidSwede)

If there is one thing this crisis ought to have taught us, it is that those apparently "in the know", and in power, often have just as little clue about what is going on as the rest of us. The public looked to the politicians; the politicians looked to the economists; the economists looked to their mathematical models. The upshot was the financial crisis.

Will Americans Reclaim Our Nation in 2010 From the Thugs and Con Artists? (hucklejohn)

Will Americans reclaim our nation in 2010 from the thugs and con artists, or put our heads down and stay subservient while the little we have left in the way of money, resources and dignity is stolen by the giant banks, insurance companies and carbon trading players?

Firms Fight Big Banks Over $20 Billion In Frozen Notes (M.W.)

Hundreds of businesses are fighting to recover billions of dollars tied up in frozen auction-rate securities, a year after Wall Street firms agreed to $60 billion in settlements over the collapsed market for the investments. Some 400 companies that sank their free cash into the investments, hold more than $20 billion of auction-rate securities that can't be sold.

Mortgage Modification Plan Added To Housing Woes (M.W.)

The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.

Judge Rules Some State Furloughs Illegal (M.W.)

California Gov. Arnold Schwarzenegger acted illegally by placing tens of thousands of state employees on unpaid furloughs three days a month, an Alameda County judge said Thursday in a ruling that could require the financially reeling state to cough up months of back pay.

Amid Economic Ails, Ron Paul's Ideas No Longer Fringe (M.W.)

For three decades, Ron Paul's extreme brand of libertarian economics consigned him to the far fringes even among conservatives. No longer. With the economy still struggling and political divisions deepening, Paul's ideas are not only gaining a wider audience but also are helping to shape a potentially historic battle over economic policy -- a struggle that will affect everything including jobs, growth and the nation's place in the global economy.

2010's Perils And Potential (M.W.)

When one looks at the real inflation numbers (CPI at 8.77%) one sees that, in fact, we have extreme stagflation. That is, we are on the threshold of a hyperinflationary Great Depression. Net/Net, even considering the deflationary forces at work, we still have high inflation. It is convenient that the official numbers hide the wealth confiscating effect of the Fed's policies on small businesses, small banks, and the middle class.

Beware The Turn Of The Calendar (M.W.)

There are only 3 possibilities with respect to meeting 2010 funding needs. Of the three alternatives, what is best economically is worst politically. This natural conflict between good economics and good politics is not unusual. Things are going to get interesting, and probably very quickly.

Why The Fed's Next Act Could Be It's Hardest (M.W.)

For more than a year, central bankers from Washington to Warsaw have kept the world economy on life support by pumping massive amounts of liquidity into the global financial system. Now comes the hard part: Removing the tubes without killing the patient.

DNC Likely To Do Away With Superdelegates (M.W.)

A key feature of the 2008 presidential primaries may be on its way out.

Three Reasons Home Prices Are Heading Lower (M.W.)

Most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up. Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%.

The Hidden Depression In The Great Recession (M.W.)

The story of the Great Depression is often told in pictures: photographs of bank runs and bread lines continue to pack a punch, almost 80 years after they were first snapped. But the Great Depression's position as our absolute standard for economic disaster carries an unintended consequence: The power of its images seem to overwhelm -- and minimize -- the economic troubles of our own time. After all, if it doesn't look like a Depression, how tough could things be?

Airlines Struggle Anew With Flier Frustrations (M.W.)

Executives at carriers that survived the 2001 terrorist attacks, soaring fuel prices and a rough economy are now scrambling to find ways to minimize the impact of the Christmas Day bombing attempt on consumers’ travel plans in the new year. More financial troubles for the industry, which lost $3 billion in 2009, and cut 30,000 employees, could lead to further cost cuts and fewer flights.

Nationwide, Public-Transit Passengers Face Rough Ride (M.W.)

Public transportation will be more crowded and more expensive this year as big-city transit systems across the country respond to severe budget pressures. Funding from state and local governments -- a key part of budgets for transit systems -- has been cut and ridership is down overall, prompting transit officials to trim service and raise fares at a time when many customers are pinched themselves.

DC First To Impose Fee On Plastic, Paper Bags (M.W.)

Starting January 1st, the District of Columbia became the first major city in the nation to impose a surcharge on disposable paper and plastic bags commonly used at grocery and retail stores. Customers who tote their purchases home in the ubiquitous bags will now be required to pay 5 cents for each one they use. The fees will go to a fund for cleaning up the city's Anacostia River.

2009 Business News Quiz (M.W.)

How well did you follow developments in the world of finance over the last 12 months?

Outsourcers Go Global (M.W.)

India's IT sector, born out of the forces of globalization, is undertaking some globalization of its own. In search of new sources of rapid growth, the country's outsourcing giants are aggressively expanding beyond their usual stomping grounds into the developing world, setting up programming centers, chasing new clients and hiring local talent from Santiago, Chile to China's far-west metropolis of Chengdu.

For Some In Japan, Home Is A Bunk In A 'Capsule Hotel' (M.W.)

When Capsule Hotel Shinjuku opened two decades ago, Japan was just beginning to pull back from its bubble economy, and the hotel’s tiny plastic cubicles offered a night’s refuge to salarymen who had missed the last train home. Now, Hotel Shinjuku's capsules, no larger than 6 1/2 feet long by 5 feet wide, and not tall enough to stand up in, have become an affordable option for some people with nowhere else to go as Japan endures its worst recession since World War II.


saxplayer00o1's picture
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Re: Daily Digest - January 2

"This year’s rally wasn’t enough to restore money lost in two bear markets after the Internet bubble collapsed in 2000 and more than $1.7 trillion in global bank losses sent the index to a 38 decline in 2008. The S&P 500 posted an average decrease of 0.9 percent a year since 1999 including dividends, the first negative return for a decade since data began in 1927, according to S&P analyst Howard Silverblatt."

"Motor travel was expected to increase in 2009 after a jump in prices at the pump and the economic downturn led drivers to cut back a year earlier. In 2008, U.S. highway officials didn't record a year-over-year increase for the first time in 25 years.

But a tally of miles driven by U.S. passenger and commercial vehicles for the 12 months ending in October, the latest available, indicates that drivers still avoided their cars in 2009.

In fact, it is possible that final 2009 numbers from the Federal Highway Administration will show that Americans drove fewer miles than in 2008."

"Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallison, a former general counsel at the Treasury who is now a fellow at the American Enterprise Institute.

“The situation is they are losing gobs of money, up to $400 billion in mortgages,” Wallison said in a Bloomberg Television interview. The Treasury Department recognized last week that losses will be more than $400 billion when it raised its limit on federal support for the two government-sponsored enterprises, he said."

"Yet what struck us is the when this chart is presented from 2007 until today. Something unusual emerges. An absolute chart of the money spent by the government superimposed with the total insured unemployed is presented below:

What becomes obvious is that a correlation which used to be almost 1.000 has diverged massively, and now the relative outlays surpass what the government highlights are the number of people actually collecting benefits by 32%! This implies two things: either the average unemployment monthly paycheck has surged, which is not the case, or there is some gray unemployment area which is not disclosed by the government, and which accounts for a shadow unemployed insurance economy."

Damnthematrix's picture
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Re: Daily Digest - January 2

Colorado's minimum wage becomes 1st in US to drop

Dec 31, 4:01 PM (ET)


DENVER (AP) - Colorado's minimum wage will drop slightly in the new year - the first decrease in any state's minimum wage since the federal minimum was adopted in 1938.

Colorado's wage is falling 3 cents an hour, from $7.28 to the federal level of $7.25. That's because Colorado is one of 10 states that tie the state minimum wage to inflation. The goal is to protect low-wage workers from having unchanged paychecks as the cost of living goes up.

But Colorado's provision also allows wage declines, and the state's consumer price index fell 0.6 percent last year, so the minimum wage is going down.

The lower consumer price index, attributed to lower fuel prices, would have forced the wage down 4 cents an hour, But no state can go below the federal minimum of $7.25.

Thirteen other states and the District of Columbia will keep a minimum wage higher than the federal minimum, according to the U.S. Labor Department. Alaska will join them Friday when its minimum wage rises 50 cents to $7.75.

Colorado's drop is small - but those among the estimated 48,000 residents earning the minimum shook their heads at the possibility of pay cut.

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Re: Daily Digest - January 2

Voters sign petition against Iceland bailout repayments


More than a quarter of voters in Iceland have signed a petition asking their president to veto a bill to repay more than $6 billion, lost by savers in Britain and the Netherlands when an Icelandic bank collapsed.

Hundreds of people gathered at President Olafur Ragnar Grimsson's official residence on the windswept tundra outside Reykjavik as campaigners presented him with a petition.

The Bill to refund investors in the bank Icesave was passed by parliament earlier this week but the President is yet to sign it into law.

Icesave, an online subsidiary of the Landsbanki Bank that had to be rescued in October 2008 as the global credit crunch hit, had attracted savers due to its high interest rates.

The British and Dutch governments turned to Reykjavik for the money to be returned and an initial compensation deal was approved by Iceland's parliament in August.

But amendments negotiated by Social Democratic Prime Minister Johanna Sigurdardottir in order to get the deal through parliament were rejected by Britain and the Netherlands.

The dispute threatened to sink Iceland's efforts to quickly join the European Union, forcing Ms Sigurdardottir to return to the parliament with a new bill in line with the initial deal.

The measure foresees staggering the payment of the 3.8 billion euros ($6 billion) through to 2024. The total figure is equivalent to nearly 40 per cent of the country's annual gross domestic product.

The petition calls for a referendum warning that the payments would be a costly burden on Icelanders for generations to come.

However Iceland's bid to join the European Union will depend on the measures it takes to rectify the damage done by the banking crisis.

The President's decision on whether to veto the bill will be a difficult one.

SagerXX's picture
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Re: Daily Digest - January 2
Damnthematrix wrote:

The President's decision on whether to veto the bill will be a difficult one.

Are you kidding me?  I'd veto straight up.  Go ahead, vote me out of office.  You'll thank me (or tell me I was right) in about 2-3 years....

Dang.  To be the prez of a progressive country that was mostly geothermal-powered?  I wish I had those problems....

Yah, I know, I wouldn't see the sun 7-1/2 months of the year, but still....

Viva anyhow -- Sager

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Re: Daily Digest - January 2


Interview with John Perkins (Confessions of an Economic Hitman) & Russ Baker on power of corporations, and a glimmer of hope on how to break that power.

http://www.blip.tv/file/2837830/ (video)


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