September 2009

Ron Bloom to be new Obama Manufacturing Adviser

The Obama administration has appointed Ron Bloom to be the new manufacturing adviser. He was head of the auto bail out task force.

Most interesting is he worked for the United Steelworkers Union, but has our classic Harvard MBA.

Since February, Mr. Bloom has been a senior adviser to Treasury Secretary Timothy F. Geithner. He sits on the president’s automotive industry task force. The White House said Mr. Bloom would continue that position and would expand his role to coordinate the administration’s manufacturing policy with the Commerce, Treasury, Energy and Labor departments.

The White House said Mr. Bloom would work with the National Economic Council to help lead policy development and strategic planning for “the president’s agenda to revitalize the manufacturing sector.”

90% of Residential Loans U.S. taxpayer backed

Buried in a Washington Post article:

90 percent of all new home loans are funded or guaranteed by taxpayers

taxpayers are on the hook for most of the loans that are still being made if they go bad. And they are also on the line for any losses in the massive portfolios of old loans at Fannie Mae and Freddie Mac, which own or back more than $5 trillion in mortgages.

Gets better. WaPo is reporting a high risk of default (Are we surprised with a 9.7% official unemployment rate?)

There is growing evidence that many loans being guaranteed by the government have a significant risk of defaulting. Delinquencies are spiking. And the Federal Housing Administration, another source of government support for home loans, is quickly eating through its financial cushion as losses mount.

Zombie companies haunt stock market rally

Casino capitalism has returned to Wall Street with a vengeance.

Lehman shares peaked last week at 32 cents, having spent much of the year at less than 5 cents. When the rally in Lehman began in late August, trading volume soared above 100m shares on one day, compared with virtually no activity earlier in the year.

You read that right - Lehman Brothers.

Four Stimulus Breaks Due To Run Out At End Of Year

Some of these programs will be renewed. Some won't. It's hard to know at this point which one's will and which ones won't.

-- Cobra subsidy: Workers who are terminated between Sept. 1, 2008, and Dec. 31, 2009, and are eligible to stay in their group health plan at their own expense under the law known as Cobra can get the government to pay 65 percent of their premium for up to nine months, as long as they are not eligible for Medicare or any other group health plan.

Surge in homeless schoolchildren

This sort of story just breaks my heart.

While current national data are not available, the number of schoolchildren in homeless families appears to have risen by 75 percent to 100 percent in many districts over the last two years, according to Barbara Duffield, policy director of the National Association for the Education of Homeless Children and Youth, an advocacy group.
There were 679,000 homeless students reported in 2006-7, a total that surpassed one million by last spring, Ms. Duffield said.
...
“It’s hard enough going to school and growing up, but these kids also have to worry where they’ll be staying that night and whether they’ll eat,” said Bill Murdock, chief executive of Eblen-Kimmel Charities, a private group in Asheville that helps needy families with anything from food baskets and money for utility bills to toiletries and a prom dress.

Wall Street Ghouls

Are you ready for the latest craze in the Wall Street Casino? As the NY Times is reporting Wall Street Pursues Profits in Bundles of Life Insurance.

After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one.

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

This is Unacceptable - Job Market not to "Recover" until 2014!

This is absolutely pathetic. According to Moody's Projections, the job market isn't supposed to recover, i.e. hit 5% official unemployment rate until 2014. That's 6+ years since the start of this recession of December 2007!

2014: The year Moody's Economy.com predicts the unemployment rate will finally dip toward 5 percent, considered to be the "normal" level.

750,000 people have given up looking for work, a record since this data was tracked, 1994.

The average length of time looking for a job? 24.9 weeks, the longest since 1948.

Due to population growth (read immigration) the U.S. must create 125,000 jobs every single month just to keep up.

From MSNBC:

Britain and US derail global deal to limit banker bonuses

It seems somewhat ironic that the two nations with the most bankrupt financial systems are the ones leading the offensive against reform.

Attempts to clamp down on bankers' bonuses to prevent another global financial crisis were in disarray last night as Britain and America opposed proposals by other European Union nations.
France led calls for a cap on individual bonuses but Britain and America, while backing common rules to prevent excessive bonuses, argued that a "pay policy" would be unworkable. They suspect that bankers would find loopholes such as incorporating bonuses into pay.

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