2011 Budget Shortfall – A budget shortfall as high as $25 billion is projected as lawmakers head into the 2011 legislative session, according to estimates from economists and the comptroller’s office. Texas writes budgets biennially, or in two-year terms, so the shortfall affects the 2012-2013 state budget. Leadership in the Texas Legislature, which is dominated by fiscal conservatives, is not expected to support attempts to raise taxes to fill the multibillion-dollar hole. But social service advocates say the state’s safety net system can’t afford any further budget cuts.
End of the Recession? Who’s Kidding Whom? – The media are telling us that the economic “crisis” is over, and that the world-economy is once more back to its normal mode of growth and profit. On December 30, Le Monde summed up this mood in one of its usual brilliant headlines: “The United States wants to believe in an economic upturn.” Exactly, they “want to believe” it, and not only people in the United States. But is it so? First of all, as I have been saying repeatedly, we are not in a recession but in a depression. Most economists tend to have formal definitions of these terms, based primarily on rising prices in stock markets. They use these criteria to demonstrate growth and profit. And politicians in power are happy to exploit this nonsense. But neither growth nor profit is the appropriate measures.
Hedge Funds Raise Crude Bets to Four-Year High
– Hedge funds raised bullish bets on crude oil to the highest level in more than four years on speculation that futures will climb as the U.S. recovers from the deepest recession since the 1930s. The funds and other large speculators increased net-long positions, or wagers on rising prices, by 4.6 percent in the seven days ended Dec. 28, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the biggest total in records going back to June 2006. Futures advanced as high as $92.58 yesterday after the Institute for Supply Management’s U.S. factory index climbed to 57 in December, the fastest pace in seven months. Fuel demand increased to the highest since May 2008 in the week ended Dec. 24, Energy Department figures showed last week. “Crude oil prices are up, and people expect them to keep going up,”
Financial Armageddon: A Figment of the Bulls’ Imagination…
Based on a recent survey of more than 2,400 hiring managers and human resource professionals across industries and company, CareerBuilder.com, the largest online employment website, is predicting a "healthier" employment picture this year
. Here are a few of the key findings [italics mine
]: Twenty-four percent of employers plan to hire full-time, permanent employees in 2011, up from 20 percent in 2010 and 14 percent in 2009
. Seven percent plan to decrease headcount, an improvement from 9 percent in 2010 and 16 percent in 2009. Fifty-eight percent anticipate no change in their staff levels while 11 percent are unsure. Call me a cynic (for the umpteenth time), but the fact that less that less than a quarter
of employers plan to boost full-time hiring this year — a measly four percentage-point increase from last year —
doesn’t sound especially "healthy" to me.
Financial Armageddon: Here We Are
– Instead of squandering trillions on reckless imperialism and pointless wars, giveaways and bailouts for the rich, ill-conceived public works projects, bloated and dysfunctional bureaucracies, and a safety net that’s sown the seeds of its own demise, shouldn’t we have been saving for and investing in something that matters — our nation’s infrastructure? Unfortunately, as the following reports make clear, it looks like the bills are now coming due at a time when the public purse is almost bare. Third World America, here we come
US mortgage foreclosures rise sharply –
US mortgage foreclosures jumped in the third quarter as fewer borrowers qualified for loan modifications that would have reduced their monthly payments, bank regulators have said. The rise in repossessions and decline in loan modifications are further signs that problems in the US housing market are persisting, in spite of forecasts by some analysts of a recovery before the year-end.The number of homes entering foreclosure rose 31 per cent compared with the second quarter and 3.7 per cent compared with the year-earlier period, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said. These newly foreclosed homes will add to a growing backlog of 1.2m properties already in some stage of repossession, a 4.5 per cent increase over the second quarter and 10 per cent more than the previous year. As of the end of the third quarter, 187,000 homes completed the foreclosure process, a 14.7 per cent increase over the second quarter and a 57.5 per cent jump from the same period a year ago. As these properties come on the market, they are expected to depress home prices by between 5 per cent and 10 per cent over the next year,
GM Continues To Stuff Dealers With Its Cars –
GM just reported its December
sales numbers to a reaction that led all women in Phil LeBeau’s presence to order what he is having. The uberbullish take home message from the report: "General Motors dealers reported 223,932 total sales in December, a 16-percent increase from a year ago for the company’s four brands. The gain was driven by solid retail sales which were 27 percent higher than a strong December a year ago. For the calendar year, total sales for GM’s four brands increased 21 percent to 2,202,927, while retail sales rose 16 percent for the year. GM’s four brands sold 118,435 more vehicles this year than the company did with eight brands in 2009, and will gain total and retail market share for the year." And on the surface this is pretty: after all the comparison is between a number of 193,824 from a year ago, and 223,932 as of December. But shouldn’t the comparison actually be between 385,000 and 511,000? These are the numbers that show what GM’s dealer inventory was for the months of December 2009 and 2010. In other words, there was an increase of 30k in sales… accompanied by a 125k increase in "stuffed" vehicles held at dealers.
Is Fannie bailing out the banks? –Why yes, say critics of the giant banks. They charge that Monday’s rally-stoking mortgage-putback deal between Bank of America (BAC) and Fannie Mae and Freddie Mac is nothing more than a backdoor bailout of the nation’s largest lender. It comes courtesy, they say, of an administration struggling to find a fix for the housing market while quaking at the prospect of another housing-fueled banking meltdown. Monday’s arrangement, according to this view, will keep the banks standing — but leave taxpayers on the hook for an even bigger tab should a weak economic recovery falter. Sound familiar? "The administration is trying to weave a path between two bad alternatives," "They want to bail out the big banks without doing apparent damage" to the sagging U.S. budget position. Pinto says truly holding BofA responsible for all the mortgage mayhem tied to its 2008 purchase of subprime lender Countrywide would likely drive it into the arms of the Federal Deposit Insurance Corp., which has enough problems to deal with.