On November 3rd, regardless of the vote, it'll be back to the "new normal," even here...and it just seems to get uglier with every passing day, even when -- as the sad, old one-liner tells us -- one is "so poor they can't even afford to pay attention."
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"RUINING CHRISTMAS: 1.2 Million Will Lose Benefits By Year's End Unless Congress Acts," Arthur Delaney, HuffPo, 10/22/10.
From the National Employment Law Project: "1.2 Million Workers Out in the Cold for the Holidays If Congress Fails to Renew Federal Jobless Benefits that Expire November 30th," via Calculated Risk, 10/22/10: "Report: 1.2 Million Workers could lose Unemployment Benefits next month."
Report: 1.2 Million Workers could lose Unemployment Benefits next month
10/22/2010 04:07:00 PM
A new analysis released by the National Employment Law Project today reveals that 1.2 million workers will be cut off of federal jobless benefits by year's end if Congress fails to renew the federal emergency extensions that expire on November 30th.
Of the 1.2 million workers at risk of losing federal benefits, 387,000 are workers who were recently laid-off and are now receiving the six months (26 weeks) of regular state benefits. After exhausting state benefits, these workers would be left to fend for themselves in a job market with just one job opening for every five unemployed workers and an unemployment rate that has exceeded nine percent for 17 months in a row--with no federal unemployment assistance whatsoever.
This doesn't include the '99ers - the workers who have exhausted all available unemployment benefits.
"The Young, the Old, the Unemployed," Mike Konczal, New Deal 2.0, 10/21/10. Netroots Nation discussion group leader and economist Mike Konczal reviews a comparative analysis of unemployment in December 2007 versus September 2010, by Roosevelt Institute intern Charlie Eisenhood...
The Young, the Old, the Unemployed
New Deal 2.0
Thursday, October 21st, 2010
...What jumps out for me? College educated 20-24 year olds have the highest percentage increase in unemployment. This should go against a structural unemployment story, as college educated people have the `freshest' skills and incredibly high mobility. It's worth pointing them out in particular because if their careers hit a rough spot, hysteresis sets in and they'll have serious wage losses years down the road (see this classic White House blog post on the subject by Peter Orszag). Their situation is also important because the crisis is often seen as a small deal for college educated workers.
The other thing that jumps out at me is that the unemployment rate for everyone 55-64 has more than doubled. One thing we aren't talking about enough is that someone who is 60 and has been unemployed for a year isn't going to find a decent job again. Other ways of looking at the labor search outcomes of 55-64 year olds are even more worrying. Why don't we temporarily lower the retirement age, conditional on a bunch of hoops? Why don't we give them some relief, rather than raising the retirement age (a subject likely to be at the center of the December debate), when 55-64 year olds have had such a large increase in unemployment?
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HOUSING/MORTGAGES/FORECLOSURE CRISIS: Further answering rhetorical questions I've asked in diary headlines over the past few weeks (SEE: "Will The Foreclosure Fraud Crisis Undermine Our 'Recovery?'," and "Guess who's going to pay the bill for the foreclosure crisis?," and this, "Has The Mortgage/ Foreclosure Fraud Crisis Gone Surreal?") at least according to one reliable source, the housing market has (indeed) virtually and comprehensively collapsed over the past 60 days, according to the most up-to-date analysis of residential real estate selling prices (see below).
Despite outdated reports of "stable" sales that were "aged" before they were even published over the summer and through September, north of 40% of all mortgageholders (a little shy of double the number of folks that owed more on their homes than they were worth, just 90 days ago), or roughly one-third of all homeowners, are -- or will soon be -- underwater. (I've been discussing the effects of this this projection by Deutschebank and Barclay's in my diaries for over a year, and catching hell for it; now it is happening.) To say this bodes very poorly for our "recovery," in general, is an understatement; since being underwater in one's "own" home dramatically increases the odds that a person will default on their mortgage.
Looked at another way, every 5% drop in home values is very conservatively equivalent to $500,000,000,000 (a half-trillion dollars) in lost equity for U.S. homeowners (Main Street), as well as the "mark-to-make-believe" valuations of the portfolios of banks, our government (and/or the Federal Reserve), and mortgage investors (Wall Street), combined. (That's downright ominous, IMHO.)
Clear Capital: "Sudden and Dramatic Drop in U.S. Home Prices," Calculated Risk, 10/22/10.
Clear Capital: "Sudden and Dramatic Drop in U.S. Home Prices"
by CalculatedRisk on 10/22/2010 12:58:00 PM
...I thought I'd pass along this alert today: Clear CapitalTM Reports Sudden and Dramatic Drop in U.S. Home Prices
"Clear Capital's latest data through October 22 shows even more pronounced price declines than our most recent HDI market report released two weeks ago," said Dr. Alex Villacorta, senior statistician, Clear Capital. "At the national level, home prices are clearly experiencing a dramatic drop from the tax credit-induced highs, effectively wiping out all of the gains obtained during the flurry of activity just preceding the tax credit expiration."
This special Clear Capital Home Data Index (HDI) alert shows that national home prices have declined 5.9% in just two months and are now at the same level as in mid April 2010, two weeks prior to the expiration of the recent federal homebuyer tax credit. This significant drop in prices, in advance of the typical winter housing market slowdowns, paints an ominous picture that will likely show up in other home data indices in the coming months.
... if previous correlations between the Clear Capital and S&P/Case-Shiller indices continue as expected, the next two months will show a similar downward trend in S&P/Case Shiller numbers.The most recent Case-Shiller numbers were for July (actually a three month average of May, June and July). The August numbers will be released next Tuesday (an average of June, July and August) - so there is a significant lag in the numbers.
What does this mean for Wall Street and a public already in the throes of a foreclosure fraud crisis? Well, for starters, talk of liquidating our two most insolvent too-big-to-fail ("TBTF") firms, Bank of America and Citigroup, has come to the fore, perhaps moreso (or, more sincerely) now than even during the market crash in late 2008.
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WALL STREET: One of the big three credit ratings agencies, Fitch, has just placed most major U.S. banks on a "negative watch," in-turn feeding a major move in the credit default swaps sector (thus feeding a shorting frenzy which may--if allowed to continue unaddressed and in its own right--morph into a self-fulfilling prophecy), and shorting, in general, very similar to what we experienced in the lead-up to the market crash in early Fall 2008.
This ratings shift, although years overdue, is particularly devastating for Bank of America, and Citigroup, the two most insolvent TBTF banks in our country, and the largest and fourth-largest (or, is it fifth-largest?) U.S. banks by assets, respectively. Meanwhile, as talk abounds about the Federal Reserve's impending second round of quantitative easing ("QE"), the reality is becoming more and more apparent that, with every passing day, QE2 will be as much about a second round of (even stealthier) Wall Street bailouts as it is about anything else.
"Here We Go: Fitch Places Bank Of America, All US Banks On Rating Watch Negative," from Zero Hedge, on 10/22/10, reminding us of how the political whims of credit-ratings firms still working in concert with Wall Street's objectives -- the sector that was a significant part of everything that's still wrong with a financial services sector gone wild -- still have a gun to our economy's head, to this day...
Here We Go: Fitch Places Bank Of America, All US Banks On Rating Watch Negative
Zero Hedge 10/22/2010 13:05 -0500
Here we go - the rating agencies are now officially in the game. Next up - collateral calls and other nasty stuff: "Today, Fitch Ratings issued a number of separate press releases placing on Rating Watch Negative most U.S. bank and bank holding companies' Support Ratings, Support Floors and other ratings that are sovereign-support dependent. The two companies mostly impacted by this announcement are Bank of America Corporation and Citigroup, Inc." BBB+ coming up...
"Foreclose on the Foreclosure Fraudsters, Part 1: Put Bank of America in Receivership," William Black, L. Randall Wray, Huffington Post, 10/23/10 (This is what should happen, IMHO. But, more than likely, we'll see something like this -- formal control of Wall Street shifting to the still, mostly-unregulated shadow banking system -- play out: "Blackrock CEO Seeking Partner To Buy 35% BofA Stake Per Charlie Gasparino."
Yes, while our Party may still lack an understanding of how (per Rahm Emanuel's widely-publicized quote) not to "let a perfectly good emergency go to waste," the one thing you may still count on Wall Street to do is to remember exactly how to take advantage of an opportunity to subvert the system and loot Main Street whenever it arises!
Then of course, there are quite legitimate questions about the ulterior motives of those in our own Party: "Obama Administration: "Nothing to See Here" on Foreclosure Crisis."
Obama Administration: "Nothing to See Here" on Foreclosure Crisis
Friday, October 22, 2010 6:00AM
The Obama Administration is entirely predictable. It ever and always sides with large corporate interests, while trying to create the impression that it is actually concerned for the welfare of the average citizen. Admittedly, the occasionally tough talk with little follow through feeds a perverse spectacle of plutocrats sulking, pouting, and claiming that they are really, really badly treated.
Yesterday, the Financial Times reported "Foreclosure crisis tops Obama agenda" and described a closed door meeting scheduled with top officials. This mountain of effort so far seems to be producing a molehill, apparently by design. Team Obama is resorting to another of its well ingrained bad habits, of using PR as the preferred solution for all policy problems.
The only question here is whether the powers that be are so out of touch that they regard the foreclosure crisis version of extend and pretend as a viable strategy, or whether they are simply using it to buy time. And if the latter, is the object to get more breathing room while they do a proper diagnosis or simply to keep things on an even keel through the elections? Presumably, any bank-favoring measures would be radioactive right now, while voters will lack immediate recourse after November 2. Indeed, in a DC version of Br'er Rabbit's pleas not to be thrown in the briar patch, expected Republican gains could serve as a very useful excuse for the Administration to rescue the banks once again: "Congress made us do it".
A very good account by Shahien Nasiripour and Arthur Delaney at the Huffington Post lays bare the Administration's dubious logic...
And, amidst all of the now-overwhelming investor and homeowner litigation currently well on its way to flooding the courts, below is a list of my most recent diaries on these two very intertwined subjects:
NYT Lead: "Battle Lines Forming in Clash Over Foreclosures" 10/21/10
Mtge. Fraud Bill Escalates As Stiglitz "Bashes" Bernanke's QE 10/19/10
Has The Mortgage/ Foreclosure Fraud Crisis Gone Surreal? 10/18/10
Is Wall St. Imploding, Again? Krugman: It's "very, very bad." 10/15/10
Guess who's going to pay the bill for the foreclosure crisis? 10/13/10
Krugman Nails It: Dem's Economic Policy Messaging Failure 10/11/10
40+/- States' AG's May Announce Joint Foreclosure Probe 10/9/10
Will Elizabeth Warren Enter The Foreclosure Fraud Fray? 10/6/10
Will The Foreclosure Fraud Crisis Undermine Our "Recovery?" 10/5/10
Plunging Into The Abyss: "America's Deepening Moral Crisis" 10/4/10
Wall Street Spawn Still Spew Spin On TARP/Bailout ... Again! 10/1/10
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THE U.S. STOCK MARKET AND GOING FULL CIRCLE, BACK TO MORE WELFARE FOR THE RICH: As Naked Capitalism pointed out the other day, "70% of all stock market trades are held for an average of 11 seconds."
Sincerely, doesn't this single, factual headline, IMHO, totally debunk virtually all of the propaganda that our nation's stock markets are operating freely and rationally, or being run fairly in any way, shape or form? Think about it!
So, while we continue to hear references to a second round of Wall Street bailouts, which still masque the true extent of systemic insolvency running rampant throughout our financial services industry, to this day; and, while we're now hearing, once again, of "stealthy," forced mergers (see BofA-Blackrock story, linked up above) with dying, TBTF behemoths (that should've been put down years ago) throughout the MSM, the reality is that, as I noted it in my diary from this past Tuesday, the entire concept of a second round of Federal Reserve-managed Quantitative Easing is really just another massive Wall Street bailout for the corporatocratic oligarchs.
Perhaps what frosts my butt most, however, is the fact that--while our country witnesses record income inequality, poverty and ongoing joblessness--we are now hearing about impending austerity on Main Street.
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JUST IN TIME FOR THE HOLIDAYS, IT'S BEGINNING TO LOOK LIKE IT'S "SAVAGE AUSTERITY" FOR MAIN STREET COME NOVEMBER 3RD: Running in tandem with the narrative concerning the Catfood Commission, we're hearing that, across-the-board (not to mention across the pond) "savage austerity" is what's in store for the U.S. economy soon after November 2nd, according to Citigroup's leading international strategist. (SEE: "Willem Buiter: The US Must Prepare For Savage Austerity.") And, Great Britain's already there, according to Paul Krugman. (SEE: "British Fashion Victims.")
So, it's a good thing we have the mid-terms to preoccupy us...because the last thing we need is another reminder, at least right now, that many of us are just too damn poor to even pay attention!
Yes, let's wait until November 3rd to get back to reality...
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A weekend must-read, IMHO...
Rolling Stone's Matt Taibbi will be out with a new book on November 2nd. Rolling Stone has an Exclusive Excerpt: America on Sale, From Matt Taibbi's `Griftopia'
America is quite literally for sale, at rock-bottom prices, and the buyers increasingly are the very people who scored big in the oil bubble. Thanks to Goldman Sachs and Morgan Stanley and the other investment banks that artificially jacked up the price of gasoline over the course of the last decade, Americans delivered a lot of their excess cash into the coffers of sovereign wealth funds like the Qatar Investment Authority, the Libyan Investment Authority, Saudi Arabia's SAMA Foreign Holdings, and the UAE's Abu Dhabi Investment Authority.
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