Hot Pursuit of Customers: The Real Reason More People are Turning to Payday Loans – As one who studies the advertising and marketing plans of payday and title loan companies, I was interested in two Wall Street Journal articles published this week on the topic of payday loans, one claiming that Dodd-Frank has pushed many consumers into the hands of payday lenders, and another describing how hard payday lenders are working to steal customers from banks. Since many payday loan customers do not fully understand the terms of the loans, it isn’t that hard to steal customers from banks. Payday loans, often at least ten times more expensive than credit cards, are easier to get. The lenders are far friendlier to customers and have more locations and business hours. Plus, have you seen the advertising? It makes it sound easy and even fun to take out a 500% loan. Payday loan industry experts now claim that their toughest business challenge going forward is not collecting on bad loans but finding enough new customers to keep the hundreds of thousands of stores afloat.
As CMBS Delinquencies Hit All Time Record, Wall Street Looks For Greater Fools | zero hedge – After we read earlier that according to CRE experts TREPP, CMBS delinquencies have hit an all time record, we were confident that somehow Wall Street would do everything in its power to offload as much toxic crap from its books (and if inventory was missing, it would do its darnedest to create some) as possible, and start selling the most worthless piece of paper imaginable (see Howard Davidowitz). Sure enough, not much searching confirmed just that: per Bloomberg "Deutsche Bank AG, UBS AG and JPMorgan Chase & Co. are preparing the year’s first bond sales tied to commercial property loans, according to people familiar with the transactions. Deutsche Bank and UBS are teaming up to issue as much as $2.5 billion in commercial mortgage-backed securities linked to loans on office buildings, shopping malls and hotels in what would be the largest offering of its kind since the market froze in June 2008, according to a person familiar with the deal. JPMorgan plans to sell $1.5 billion in similar debt, a person familiar with that sale said."
U.S. Home Foreclosures May Top 100,000 In January – Over the holidays, many lenders put foreclosures on hold. But that temporary freeze is over now. Industry watchers are expecting thousands of foreclosed properties to hit the market in the weeks and months ahead. Home foreclosure sales slowed down at the end of 2010 for two reasons: the regular holiday foreclosure freezes, and the remnants of the so-called robo-signing scandal. In the fall, many lenders put evictions on hold while they reviewed their foreclosure procedures. Rick Sharga of RealtyTrac says that’s behind us now — and the pace of foreclosure is about to pick up. "I’d be really, really surprised if we didn’t see a probably record quarter in the first quarter of this year," he says. Sharga expects banks to repossess close to 100,000 homes in January alone.
Sorry ADP, Not Everyone Believes the Economy Created 297,000 Jobs – CNBC – That big positive surprise this morning from the ADP jobs report was nice while it lasted — which was all of about 30 seconds by market standards. Unfortunately, a number of traders and economists aren’t willing to take seriously the report that ADP and Macroeconomic Advisors put out suggesting the economy created 297,000 jobs over the past month. A quick straw poll this morning showed a lot of disbelief in the ADP numbers, and the report did virtually nothing to move the stock market, though futures pared some losses immediately after the release. But don’t expect many major revisions for Friday’s Labor Department report, expected to show nonfarm job increases of 140,000 jobs and an unchanged unemployment rate of 9.7 percent.
‘Bad’ science still rampant in US justice system – The story of an American man cleared of a rape and robbery conviction by DNA evidence after spending 30 years in jail made headlines across the world on Tuesday. But despite advances in science and technology, such exonerations are rare, and experts say the US criminal justice system remains riddled with problems that arise from outdated practices and, quite simply, bad science. Perhaps the worst offender is the police lineup. Research shows that 75 percent of all wrongful convictions that are later cleared by DNA evidence start with eyewitness mistakes.
Recession Recovery? Not Around Here –The recession is getting worse, not better, in the heart of the Central Valley, according to a new study released Monday by the Craig School of Business at Fresno State. For the first time since initiating the survey in September 2010, the San Joaquin Valley “Business Conditions Index” has sunk below growth neutral, says th survey’s author, Ernie Goss of the Goss Institute for Economic Research in Denver. The survey of individuals making company purchasing decisions in firms in Fresno, Madera, Kings and Tulare counties indicates that growth for the first half of 2011 will be weak. The index, a leading economic indicator for the area, is produced using the same methodology as that of the national Institute for Supply Management.
Where the Jobs Aren’t – Manufacturing, construction labor forces faltering. Oklahomans looking for jobs in the manufacturing and construction industries will continue to have a tough time this year. Those sectors are still struggling to recover from the recession and are expected to continue shedding jobs in 2011, according to local experts. The Oklahoma Employment Security Commission predicts a two-year loss of 12,650 manufacturing jobs and 5,100 construction jobs for the period ending in mid 2011. Many of those jobs will never be replaced, because manufacturers have automated and updated equipment, so they can operate with fewer workers
Hunger Up Across Utah as Recession Lingers and Food Pantries Feel the Pinch – The Utah Food Bank has seen a 40 percent increase in the number of hungry people asking for help, compared to last year. And while a national study says that actual hunger and what it calls "food insecurity" may be declining since a mid-recession high in late 2009, the needs remain fairly astounding. An estimated 16.67 percent of households struggled to feed their families during the first half of 2010."We are continuing to see an increase in requests for food assistance," said Jessica Pugh, spokeswoman for the food bank, which supplies 150 food pantries and agencies across the Beehive state. "More families than ever are requesting food assistance. People have had hours cut back in terms of regularly paying jobs. Or they have had seasonal jobs that ended. It is a tough time for so many families throughout Utah
‘Need’ is Not a Seasonal Condition – The Salvation army says 2010 was a banner year for the wrong reason. More of the needy "needing" help than ever. "I’ve seen a lot of the economic trends of the country, seen some recessions over the last 30 years and this one certainly is deep and it’s effected the service of the salvation army obviously having to do a lot more service then we’ve had to in the past," said Major Mark Martsolf with the Olathe Salvation Army. Major Martsolf said ‘need’ is not seasonal. The Salvation Army says it saw a 40 percent increase in services in 2010 metro wide.
NJ Public Pension Slugfest Reporting Omits 15 Years of Governors Stealing From Workers – Yves Smith – If you live in the world according to the mainstream media, the row between state executives and unions is all about (by implication) greedy unions trying to preserve their perquisites when budget “realities” demand that they suffer. Consider this excerpt from a recent article New York Times article about the fight in New Jersey: Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. Um, the “wounded economy” trashed the state budget? Funny how the article fails to point fingers at the real perp, which is the global financial crisis, brought to you by your friendly TBTF banks. Funny, their staff and executives got record bonuses in 2009. So maybe the unions have the wrong strategy. They need to screw up in a particularly destructive manner. The shell game started in 1995 with Christine Todd Whitman. As Bob Herbert reported:
Why Did America Have A 90% Income Tax Under Eisenhower? – Michael Hudson is interviewed on the Real News Network. He reviews the reasoning behind income tax policy in the 20th century, a good lesson in financial history. Interestingly, he says that data show tax cuts have been followed by slow growth in the US. He also says that "every recovery since World War II has taken place with a larger and larger proportion of debt to income."
FDIC sues 109 bank execs for negligence – US banking regulators have authorised lawsuits against 109 bank officials so far as they seek to recover at least $US2.5 billion in losses connected to recent bank failures. The Federal Deposit Insurance Corp said the suits target bank directors and officers for "either gross or simple negligence." It is seeking to recoup money for its deposit insurance fund, which backs customer accounts. The FDIC has previously said it was pursuing such legal actions but now has unveiled a website with updated numbers. The website will be updated monthly with a running tally of the amount of lawsuits authorised and how much the agency is seeking to recover. So far, however, the FDIC has only filed suits against directors and officers from two banks.
US oil spill: Bad management led to BP disaster – The companies involved in the Gulf of Mexico oil spill made decisions to cut costs and save time that contributed to the disaster, a US panel has concluded. In a chapter of its final report, to be published next week, the presidential commission said the failures were "systemic" and likely to recur. BP did not have adequate controls in place to ensure safety, it found. The April blast aboard the Deepwater Horizon rig killed 11 people and caused one of the worst oil spills in history. The Macondo well, about a mile under the sea’s surface, eventually leaked millions of gallons of oil into the Gulf of Mexico, damaging hundreds of miles of coastline before it was capped in July.
FIR against Pandit threatens to lock Citi global brass in Indian litigation – Police have registered a first information report against the Citibank global top brass, including India-born chief executive Vikram Pandit, on the basis of a complaint filed by an investor in a fraudulent scheme run by a relationship manager of the bank. Banking analysts said the senior officials of Citigroup may find it hard to wriggle out of litigation in India. However, a clause in the bank’s articles of association may offer some protection to Pandit and others. “The FIR was registered following a complaint by a high networth individual who was cheated. A probe is still on as many more people seem to be involved in the scam,” said Gurgaon police commissioner S.S Deswal. Besides Pandit, the names of Citibank chairman William R. Rhodes, chief financial officer John Gerspach and chief operating officer Douglas Peterson (based in New York) figure in the FIR.