April 2009

Ability for Bankruptcy Judges to Modify Mortgages Defeated in the Senate

The Senate just voted down an amendment to allow bankruptcy judges to modify home mortgages in bankruptcy.

The U.S. Senate rejected a measure that would let bankruptcy judges cut mortgage terms to help borrowers avoid foreclosure, a victory for banks and credit unions that said the legislation would increase loan costs.

Blackmailers, Banking and Who's Holding the Money

Deep Throat: "No, I have to do this my way. You tell me what you know, and I'll confirm. I'll keep you in the right direction if I can, but that's all. Just... follow the money".

The trail of money will usually confirm where a crime has been, or is about to be, committed.

Take for instance former Illinois Governor Rod Blagojevich when he stated

the state will suspend business with Bank of America Corp. until the lender restores credit to the shuttered Republic Windows & Doors company in Chicago where workers are staging a sit-in.

Having crossed BofA the next day his scandal broke (midtowng posted a very good article on this)

Who is the bankers bank? The Federal Reserve. And who is the latest person to cross the bankers bank? Ken Lewis.

American Capitalism Has Failed: A New Manifesto - Part 1

We need a new economic system because the old has failed. American Capitalism has failed so many people in so many ways. We need to transform our economy to one that works for the most people possible. We need a new form of capitalism.

What is the state of American capitalism today? As Professor James Galbraith has stated American capitalism is not what we are told by politicians, media or textbooks: benign competition leads to a greater good for most people. We are far from that. The defining feature of American capitalism today is predation – where a class of people – the oligarchs – feed off the demise of people not within this class. This oligarchy, or as Professor Galbraith calls them the predatory class, has control over the government and the capital in our economic system.

There are other features of American capitalism:

1) Financial sector that is too big.

IMF: Financial Bailout Will Cost U.S. Taxpayers $1.9 trillion

IMF released a report that attempts to quantify the U.S. bailout costs.

Efforts to stabilise the financial system could end up costing US taxpayers about 13.3 per cent of annual output, or $1,900bn over the next five years, according to analysis by the International Monetary Fund.

That is a nice chunk of change. Financial Times performed a nice little calculation for us.

The dollar estimate, calculated by the Financial Times, equates to about $6,200 (€4,650, £4,200) per head of the population.

I have not verified the correctness of Financial Times' calculation because I am writing this article and I dont' want my blood pressure to increase anymore then it is right now.

Check out this little piece of information.

Thomas Frank's Lament

It was surely a surprise when the WSJ hired Thomas Frank to write an opinion column. Anyone who has read either of his bestsellers, What's The Matter With Kansas? or The Wrecking Crew understands that his view of American politics just doesn't fit in with the other editorial page writers there. I, for one, am very happy he is writing there and his column today should be required reading for every citizen who cares about the future of this country.

Why Congress Won't Investigate Wall Street
Republicans and Democrats would find themselves in the hot seat.

Housing bailout being extended to people who never intended to pay back the money

I can see the wisdom in setting up a program to help out people who got scammed and suckered into mortgage's they couldn't afford.
But there is no way we should be bailing out speculators and irresponsible people who simply wanted to live large off the boom.

The Obama administration sought to expand its $50 billion plan to reduce home foreclosures, announcing a new program on Tuesday to help troubled homeowners modify second mortgages or piggyback loans.

Under the new plan, the Treasury Department will offer cash incentives and subsidies to lenders who agree to substantially reduce the monthly payments on second mortgages or forgive those loans entirely.
...

Western Europe's economies in epic decline

The headlines today are filled with reports of how America's economy declined by a 6.1% annual rate in the first quarter. Far worse than expected.

But that's nothing compared to Ireland's economy, which is shrinking at a rate no industrialized nation has seen since the Great Depression.

(Bloomberg) -- Ireland’s economy may shrink almost 12 percent in the three years through 2010, the biggest decline of any industrialized country since the Great Depression of the 1930s, the country’s Economic & Social Research Institute said.

Gross domestic product may decline 8.3 percent this year, the Dublin-based institute said in its quarterly report today, more than double the contraction it forecast in December.
...

Advanced Skilled American Engineers Forced to Declare Bankruptcy

Now this should come as no surprise. Anyone involved with anything scientific knows the U.S. Science, Technology, Engineering and Mathematics Professionals have been getting the financial and career shaft for years now.

The San Jose Mercury New is reporting an alarming increase in career long technical professionals are being forced into bankruptcy.

A growing number of high-tech professionals are filing for bankruptcy, joining real estate, finance and construction workers who were in the first wave of bankruptcies last year.

Overall filings were up 50 percent to 2,399 in the first three months of this year over the first quarter of 2008, according to records of the U.S. Bankruptcy Court in San Jose. The court covers Santa Clara, Monterey, San Benito and Santa Cruz counties.

U.S. offshore outsources 22,000 "Green Jobs" in 2009

Remember the Stimulus and how we're all going to recover by getting those new shiny green jobs? Guess what, companies are offshore outsourcing them in droves:

The US firms have offshored 22,000 green technology jobs to India since January 1, 2009, Doug Brown, co-author of the influential 2009 Green Outsourcing Report, informed TNIE.

“We see the (green job offshoring) trend increasing as the US and the UK outsourcing buyers are seeking lower cost in labour and energy consumption. There are few suppliers who match credentials and outcomes of Indian firms,” he said.

The annual industry study by Brown-Wilson Group, which surveyed 4,000 global firms, was released last week.

GM Layoffs will Boost Unemployment Through the Roof

I just has a truly frightening experience. During a conversation about the auto industry one of my colleagues who researches the auto industry told me that according to his calculations, the GM shutdown is going to send 250,000 off the job in Ohio.

This includes only the multiplier effect at auto suppliers, not any macro economic effect. For example, job losses at retail stores resulting from drops in spending are not included, nor are any further drops from other problems.

As it stands now Ohio unemployment stands at 9.7%.

Overall, the Ohio labor force stands at 5.95 million.

Currently, 578,000 are out of work, up from 409,000 in October of 2008.

Adding another 250,000 to those out of work, bumps the total number of unemployed to 838,000.

Divide this number by the labor force, and you get an unemployment rate of 13.9%, a 44% increase over the present rate.

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