By Julie Hirschfield Davis for The Associated Press
Big banks, scrambling to prevent the government from forcing them to rewrite mortgages for struggling homeowners, are using their lobbying clout to press the Obama administration and Congress to scale back a key measure to rescue borrowers from foreclosures.
The legislation, expected to pass the House on Thursday, would let bankruptcy judges reduce the principal and interest rate on a home loan. That essentially would require mortgage companies to let debt-strapped homeowners reduce their monthly payments rather than lose their main residences.
Obama called for it last week as part of his housing rescue plan. Democrats and consumer advocates regard it as crucial to slowing the rapid rate of foreclosures.
But the mortgage industry contends the measure will impose steep and unpredictable costs on its companies, which will be forced to pass them along to borrowers in the form of higher fees and interest rates. The industry spent millions last year on a successful lobbying effort to kill the bill, which almost all Republicans oppose. Opponents call it the "cram-down."
Thursday, February 26, 2009
Jobless Claims Keep on Rising...
By Christopher S. Rugaber for the Associated Press
New jobless claims rose more than expected last week and the number of laid-off Americans continuing to receive unemployment benefits topped 5.1 million, fresh evidence the recession is increasingly forcing employers to shed jobs.
The Labor Department said Thursday that first-time requests for unemployment benefits jumped to 667,000 from the previous week's figure of 631,000. Analysts had expected a slight drop in claims.
The 667,000 new claims are the most since October 1982, though the labor force has grown by about half since then. The four-week average of initial claims, which smooths out fluctuations, rose to 639,000, the highest in more than 26 years.
New jobless claims rose more than expected last week and the number of laid-off Americans continuing to receive unemployment benefits topped 5.1 million, fresh evidence the recession is increasingly forcing employers to shed jobs.
The Labor Department said Thursday that first-time requests for unemployment benefits jumped to 667,000 from the previous week's figure of 631,000. Analysts had expected a slight drop in claims.
The 667,000 new claims are the most since October 1982, though the labor force has grown by about half since then. The four-week average of initial claims, which smooths out fluctuations, rose to 639,000, the highest in more than 26 years.
Tuesday, February 24, 2009
Arianna Tells the Scary Truth Again!!!!! You Better Think Twice Before Sliding the Plastic!!!!
by Arianna Huffington for the Huffington Post
Hot on the heels of the banking crisis, the employment crisis, and the mortgage/foreclosure crisis, the country is on the verge of experiencing a credit card crisis.
According to the Federal Reserve, the total outstanding credit card debt carried by Americans reached a record $951 billion in 2008 -- a number that will only climb higher as more and more people reach for the plastic to make ends meet. What's more, roughly a third of that is debt held by risky borrowers with low credit ratings.
Credit card defaults are on the rise and are expected to hit 10 percent this year. This will obviously drive many banks closer to failing their stress tests -- but it will have an even greater impact on the lives of people who find themselves sinking deeper and deeper into debt.
It's a particularly vicious economic circle: every day, Americans, faced with layoffs and tough economic times, are forced to use their credit cards to pay for essentials like food, housing, and medical care -- the costs of which continue to escalate. But as their debt rises, they find it harder to keep up with their payments. When they don't, banks, trying to offset losses in other areas, then turn around and hike interest rates and impose all manner of fees and penalties... all of which makes it even less likely consumers will be able to pay off their mounting debts.
And that's not the end of the economic downward spiral. As more and more Americans default on their credit card debt, banks will find themselves faced with a sickening instant replay of the toxic securities meltdown from the mortgage crisis. In another example of Wall Street "creativity," credit card debt is routinely bundled together into "credit-card receivables" and sold to investors -- often pension funds and hedge funds. Securities backed by credit card debt is a $365 billion market. This market motivated credit card companies to offer cards to risky borrowers and to allow greater and greater amounts of debt.
As these borrowers continue to default, banks and the investors who bought their packaged debt will take a serious hit. And how are the credit card companies trying to offset the rise in bad debts? By raising rates on the rest of their customers -- making it likely that more of them will end up defaulting, causing even more losses for the banks. And round and round and round we go.
And such is the paradoxical nature of the meltdown that Americans keep being encouraged to go back to spending in order to get the economy rolling again. But the problem is, more and more Americans are broke. So the only way they can spend is to charge it, running up balances on credit cards that are structured in a way that makes it harder and harder to pay them off.
Getting dizzy yet?
For years, credit card companies have been fattening their bottom lines with an ever-widening array of fees. Late fees, cash-advance fees, over-the-limit fees. In 2007, lenders collected over $18 billion in penalties and fees. JPMorgan Chase, the nation's top credit card lender, recently began charging many of its customers $10 a month for carrying a large balance for too long a time -- that's on top of the interest they are already collecting on those balances.
And interest rates are escalating. Earlier this month, Citibank warned customers that if they miss a single payment, they could see their interest go up to 29.99 percent (so nice of them to shave off the .01 to keep it from being 30 percent, isn't it?). The company also recently raised rates by 3 percent on millions of non-payment-missing customers. Citibank is not alone: Capital One raised its standard rate on good customers by up to 6 points, and American Express raised rates by 2-3 percent on the majority of its customers.
Sen. Chris Dodd, chairman of the Senate Banking Committee, accuses the banks of "gouging," saying, "the list of questionable actions credit card companies are engaged in is lengthy and disturbing."
Perhaps he should send the bankers a Bible bookmarked to Deuteronomy 23:19: "thou shalt not lend upon usury to thy brother." Indeed, Sen. Bernie Sanders told me last week that he is working on "anti-usury" legislation.
For their part, the bankers have tried to cloak their behavior with corporatespeak. A Citibank spokesman called the rate hikes the result of "severe funding dislocation," and said, "Citi is repricing a group of customers in our Citi-branded consumer credit card business in the U.S. to appropriately manage these risks." An AmEx spokeswoman chalked up its rate hike to "the cost of doing business."
Making such pronouncements particularly galling is the fact that many of the banks summarily raising interest rates and piling on the penalties have received billions in bailout money. Our money. We gave Citi $45 billion, Bank of America $45 billion, JPMorgan $25 billion, AmEx $3.4 billion, Capital One $3.6 billion, and Discover $1.2 billion. In fact, American Express, Capital One, and Discover all converted to bank holding companies to make themselves eligible for bailout funds.
Yet that money seems to have been delivered with no strings attached. Banks cash their bailout checks, then turn around and gouge their most vulnerable customers. Priceless.
One of the ironies of the credit card crisis is that the financial industry laid the foundation for much of the trouble we are seeing with its full-throated -- and deep-pocketed -- support of the cynically named Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a truly loathsome piece of legislation that opened the door to many of the banking abuses we are witnessing. It made it much tougher for Americans to file for bankruptcy -- even the millions of hardworking Americans whose bankruptcy is the result of a serious illness (fully half of all bankruptcies are the result of crushing medical expenses). It also did nothing to rein in the kinds of lending abuses that frequently turn manageable debt into unmanageable personal financial catastrophes.
The financial industry spent $100 million lobbying to get the bill passed -- and millions more in campaign contributions. The result was a sweetheart law for the financial industry -- with 18 Senate Democrats voting for it.
And the banking lobbyists are at it again.
There are currently several bills in Congress designed to roll back some of the worst provisions of the 2005 legislation. In the Senate, Chris Dodd has introduced The Credit Card Accountability, Responsibility and Disclosure Act ("the Credit CARD Act"). In the House, there is Rep. Carolyn Maloney's Credit Cardholders' Bill of Rights.
The banking industry is pushing back hard. But wait, you might ask, aren't the banks broke? So where'd they get the money to lobby against credit card reform?
From us. There may not be much transparency about the hundreds of billions of taxpayer dollars doled out through the TARP program, but we know where at least some of the money has gone: into making sure that none of the Bankers Gone Wild behavior that led to the current disaster is curtailed.
In December, the Fed approved new rules that will, among other things, limit arbitrary rate increases on credit cards, cap some fees, and require the credit card companies to more clearly disclose the often confusing -- if not downright misleading -- terms customers are agreeing to. But these rules won't go into effect until July 2010.
Why would the Fed make rules that won't go into effect for a year and a half? We can't afford to wait until then.
Congress needs to tell the bankers that their Beltway credit has been denied and pass laws reforming the credit card mess -- before the credit card blaze turns into another economic conflagration.
Hot on the heels of the banking crisis, the employment crisis, and the mortgage/foreclosure crisis, the country is on the verge of experiencing a credit card crisis.
According to the Federal Reserve, the total outstanding credit card debt carried by Americans reached a record $951 billion in 2008 -- a number that will only climb higher as more and more people reach for the plastic to make ends meet. What's more, roughly a third of that is debt held by risky borrowers with low credit ratings.
Credit card defaults are on the rise and are expected to hit 10 percent this year. This will obviously drive many banks closer to failing their stress tests -- but it will have an even greater impact on the lives of people who find themselves sinking deeper and deeper into debt.
It's a particularly vicious economic circle: every day, Americans, faced with layoffs and tough economic times, are forced to use their credit cards to pay for essentials like food, housing, and medical care -- the costs of which continue to escalate. But as their debt rises, they find it harder to keep up with their payments. When they don't, banks, trying to offset losses in other areas, then turn around and hike interest rates and impose all manner of fees and penalties... all of which makes it even less likely consumers will be able to pay off their mounting debts.
And that's not the end of the economic downward spiral. As more and more Americans default on their credit card debt, banks will find themselves faced with a sickening instant replay of the toxic securities meltdown from the mortgage crisis. In another example of Wall Street "creativity," credit card debt is routinely bundled together into "credit-card receivables" and sold to investors -- often pension funds and hedge funds. Securities backed by credit card debt is a $365 billion market. This market motivated credit card companies to offer cards to risky borrowers and to allow greater and greater amounts of debt.
As these borrowers continue to default, banks and the investors who bought their packaged debt will take a serious hit. And how are the credit card companies trying to offset the rise in bad debts? By raising rates on the rest of their customers -- making it likely that more of them will end up defaulting, causing even more losses for the banks. And round and round and round we go.
And such is the paradoxical nature of the meltdown that Americans keep being encouraged to go back to spending in order to get the economy rolling again. But the problem is, more and more Americans are broke. So the only way they can spend is to charge it, running up balances on credit cards that are structured in a way that makes it harder and harder to pay them off.
Getting dizzy yet?
For years, credit card companies have been fattening their bottom lines with an ever-widening array of fees. Late fees, cash-advance fees, over-the-limit fees. In 2007, lenders collected over $18 billion in penalties and fees. JPMorgan Chase, the nation's top credit card lender, recently began charging many of its customers $10 a month for carrying a large balance for too long a time -- that's on top of the interest they are already collecting on those balances.
And interest rates are escalating. Earlier this month, Citibank warned customers that if they miss a single payment, they could see their interest go up to 29.99 percent (so nice of them to shave off the .01 to keep it from being 30 percent, isn't it?). The company also recently raised rates by 3 percent on millions of non-payment-missing customers. Citibank is not alone: Capital One raised its standard rate on good customers by up to 6 points, and American Express raised rates by 2-3 percent on the majority of its customers.
Sen. Chris Dodd, chairman of the Senate Banking Committee, accuses the banks of "gouging," saying, "the list of questionable actions credit card companies are engaged in is lengthy and disturbing."
Perhaps he should send the bankers a Bible bookmarked to Deuteronomy 23:19: "thou shalt not lend upon usury to thy brother." Indeed, Sen. Bernie Sanders told me last week that he is working on "anti-usury" legislation.
For their part, the bankers have tried to cloak their behavior with corporatespeak. A Citibank spokesman called the rate hikes the result of "severe funding dislocation," and said, "Citi is repricing a group of customers in our Citi-branded consumer credit card business in the U.S. to appropriately manage these risks." An AmEx spokeswoman chalked up its rate hike to "the cost of doing business."
Making such pronouncements particularly galling is the fact that many of the banks summarily raising interest rates and piling on the penalties have received billions in bailout money. Our money. We gave Citi $45 billion, Bank of America $45 billion, JPMorgan $25 billion, AmEx $3.4 billion, Capital One $3.6 billion, and Discover $1.2 billion. In fact, American Express, Capital One, and Discover all converted to bank holding companies to make themselves eligible for bailout funds.
Yet that money seems to have been delivered with no strings attached. Banks cash their bailout checks, then turn around and gouge their most vulnerable customers. Priceless.
One of the ironies of the credit card crisis is that the financial industry laid the foundation for much of the trouble we are seeing with its full-throated -- and deep-pocketed -- support of the cynically named Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a truly loathsome piece of legislation that opened the door to many of the banking abuses we are witnessing. It made it much tougher for Americans to file for bankruptcy -- even the millions of hardworking Americans whose bankruptcy is the result of a serious illness (fully half of all bankruptcies are the result of crushing medical expenses). It also did nothing to rein in the kinds of lending abuses that frequently turn manageable debt into unmanageable personal financial catastrophes.
The financial industry spent $100 million lobbying to get the bill passed -- and millions more in campaign contributions. The result was a sweetheart law for the financial industry -- with 18 Senate Democrats voting for it.
And the banking lobbyists are at it again.
There are currently several bills in Congress designed to roll back some of the worst provisions of the 2005 legislation. In the Senate, Chris Dodd has introduced The Credit Card Accountability, Responsibility and Disclosure Act ("the Credit CARD Act"). In the House, there is Rep. Carolyn Maloney's Credit Cardholders' Bill of Rights.
The banking industry is pushing back hard. But wait, you might ask, aren't the banks broke? So where'd they get the money to lobby against credit card reform?
From us. There may not be much transparency about the hundreds of billions of taxpayer dollars doled out through the TARP program, but we know where at least some of the money has gone: into making sure that none of the Bankers Gone Wild behavior that led to the current disaster is curtailed.
In December, the Fed approved new rules that will, among other things, limit arbitrary rate increases on credit cards, cap some fees, and require the credit card companies to more clearly disclose the often confusing -- if not downright misleading -- terms customers are agreeing to. But these rules won't go into effect until July 2010.
Why would the Fed make rules that won't go into effect for a year and a half? We can't afford to wait until then.
Congress needs to tell the bankers that their Beltway credit has been denied and pass laws reforming the credit card mess -- before the credit card blaze turns into another economic conflagration.
Thursday, February 19, 2009
Thursday, February 12, 2009
Happy Birthday!!!!
The Scholar Family would like to acknowledge the birthdays of two absolutely amazing individuals, Abraham Lincoln, the 16th President of the United States, and Charles Darwin, the most famous Naturalist ever. Today, February 12th marks the 200th birthday of both of these incredible men. May they both be remembered and cherished forever!!!!!
Arianna Gives Us the Truth Once Again!!! AMAZING!!!
By Arianna Huffington for the Huffington Post
The battle lines over how to deal with the banking crisis have been drawn. On the one side are those who know what needs to be done. On the other are those who know what needs to be done -- but won't admit it. Because it is against their self-interest.
Unlike the conflict over the stimulus package, this is not an ideological fight. This is a battle between the status quo and the future, between the interests of the financial/lobbying establishment and the public interest.
What needs to be done is hard but straightforward. As Martin Wolf of the Financial Times sums it up: "Admit reality, restructure banks and, above all, slay zombie institutions at once."
This tough love for bankers is being promoted by everyone from Nouriel Roubini, Paul Krugman, and Ann Pettifor to Niall Ferguson, the Wall Street Journal, and Milton Friedman's old partner, Anna Schwartz, the co-author of his seminal work, A Monetary History of the United States, 1867-1960. "They should not be recapitalizing firms that should be shut down," says Schwartz. "Firms that made wrong decisions should fail."
The plan laid out -- or, more accurately, sketched out -- this week by Tim Geithner makes it very clear that he is on the wrong side of the issue, more worried about the banking industry than the American people. Like Hank Paulson before him, Geithner appears more concerned about saving particular banks than saving the banking system. No real shocker there. As Henry Blodget points out on HuffPost, it's hard to be surprised that Geithner is sticking with the Paulson plan "inasmuch as he was likely the one who created it."
The big problem is Geithner is acting as if the crisis we are facing is a crisis of liquidity when, in fact, it's a crisis of insolvency. As Ann Pettifor puts it on HuffPost: "Much of Wall Street is effectively insolvent. It's not that these banks lack cash or capital -- it's just that they're never going to meet all their financial liabilities -- i.e. repay their debts. Ever."
Trying to prop these zombies up, as Geithner seems intent on doing, will lead to what Roubini calls "a royal rip-off of the taxpayer" and the risk of "turning a U-shaped recession into an L-shaped near-depression."
President Obama has made it unambiguous that he understands what is at stake -- both for the country, and for himself politically. On Tuesday, he said that if his economic plan doesn't work, "a few years from now, you'll have a new president."
And we know that many within his administration -- including senior advisor David Axelrod - favor a strategy that may be harder on Wall Street but will more quickly revive the U.S. economy.
So it's time to take off the kid gloves Geithner and Larry Summers are using to handle Wall Street and pull the plug on Geithner's deeply flawed plan.
And let's not be distracted by the shiny objects of the financial crisis -- corporate jets, redecorated offices, CEO bonuses, etc. -- as happened to the members of the House Financial Services at yesterday's hearing.
These are important issues, to be sure -- worthy of public outrage, Congressional grilling, and presidential action. But the central task at hand is cleaning up the toxic assets -- and the toxic thinking -- that have contaminated America's banking system.
Being diverted from that is like obsessing over the cut on your finger while the Great White shark that has already bitten off your leg is about to finish you off.
Wednesday, February 11, 2009
California's Pain Is Onlt Going to Worsen!!!
By Jim Carlton and Bobby White for the Wall Street Journal
As Sacramento squabbles over the state's $42 billion deficit, Californians are getting a bitter taste of what's to come after the steep budget cuts that are inevitable when legislators and Gov. Arnold Schwarzenegger finally hammer out a deal.
Some world-famous parks like Pfeiffer Big Sur State Park may not open this year. After-school programs in low-income areas are being scuttled, putting high-risk teens on the street just as police forces are being cut. Schools are closing classrooms, and some highway projects have ground to a halt. The state may not be able to monitor some sex offenders as required under law.
A budget deal may restore some of the missing funds. But everyone knows that not all monies will flow again after a deal, and Californians increasingly fear they are seeing a hint of their future.
Other states face budget cuts too, but California's budget mess stands out for its size. Its deficit is projected at $42 billion by mid-2010. Since Gov. Schwarzenegger declared a fiscal emergency 14 weeks ago, he and lawmakers have been deadlocked over how to close the gap. Democrats want tax increases and moderate spending cuts; Republicans seek deep cuts and no tax increases; the governor wants a combination.
The governor's office warned Tuesday that if no budget deal is reached by Friday, the state would send layoff warnings to 20,000 workers. Gov. Schwarzenegger also said he intends to cut 10,000 jobs through layoffs and attrition to save $750 million over 17 months.
Meanwhile, the state is raising money in unprecedented ways. The treasurer's office said Tuesday that it is close to selling $200 million in general-obligation bonds to the Bay Area Toll Authority, a municipal agency, to fund public-works projects around the San Francisco Bay area.
While Sacramento talks, money is drying up in places like Contra Costa County, where 40,000 families have applied for 350 available slots for Section 8 vouchers -- a federal subsidy that allows low-income families to rent in the private market. "The level of desperation is just heartbreaking," said Joseph Villareal, executive director of the Contra Costa Housing Authority.
The California State University system -- the nation's largest -- faces new cuts after already seeing reduced class offerings, increased classroom sizes and delays in students being able to graduate after a series of budget cuts in recent years.
Things could get worse as more budget cuts loom. The state may not be able to monitor sex offenders as required under a 2006 law that calls for sex offenders to be on GPS monitoring for life and to live more than 2,000 feet from schools and parks. In January, corrections officials said they were monitoring all 6,622 paroled sex offenders with GPS devices, after Gov. Schwarzenegger set aside $106 million in last year's budget for the program. But because the law contained no revenue-raising mechanism, authorities say it is unclear whether they will have funds to continue monitoring.
As Sacramento squabbles over the state's $42 billion deficit, Californians are getting a bitter taste of what's to come after the steep budget cuts that are inevitable when legislators and Gov. Arnold Schwarzenegger finally hammer out a deal.
Some world-famous parks like Pfeiffer Big Sur State Park may not open this year. After-school programs in low-income areas are being scuttled, putting high-risk teens on the street just as police forces are being cut. Schools are closing classrooms, and some highway projects have ground to a halt. The state may not be able to monitor some sex offenders as required under law.
A budget deal may restore some of the missing funds. But everyone knows that not all monies will flow again after a deal, and Californians increasingly fear they are seeing a hint of their future.
Other states face budget cuts too, but California's budget mess stands out for its size. Its deficit is projected at $42 billion by mid-2010. Since Gov. Schwarzenegger declared a fiscal emergency 14 weeks ago, he and lawmakers have been deadlocked over how to close the gap. Democrats want tax increases and moderate spending cuts; Republicans seek deep cuts and no tax increases; the governor wants a combination.
The governor's office warned Tuesday that if no budget deal is reached by Friday, the state would send layoff warnings to 20,000 workers. Gov. Schwarzenegger also said he intends to cut 10,000 jobs through layoffs and attrition to save $750 million over 17 months.
Meanwhile, the state is raising money in unprecedented ways. The treasurer's office said Tuesday that it is close to selling $200 million in general-obligation bonds to the Bay Area Toll Authority, a municipal agency, to fund public-works projects around the San Francisco Bay area.
While Sacramento talks, money is drying up in places like Contra Costa County, where 40,000 families have applied for 350 available slots for Section 8 vouchers -- a federal subsidy that allows low-income families to rent in the private market. "The level of desperation is just heartbreaking," said Joseph Villareal, executive director of the Contra Costa Housing Authority.
The California State University system -- the nation's largest -- faces new cuts after already seeing reduced class offerings, increased classroom sizes and delays in students being able to graduate after a series of budget cuts in recent years.
Things could get worse as more budget cuts loom. The state may not be able to monitor sex offenders as required under a 2006 law that calls for sex offenders to be on GPS monitoring for life and to live more than 2,000 feet from schools and parks. In January, corrections officials said they were monitoring all 6,622 paroled sex offenders with GPS devices, after Gov. Schwarzenegger set aside $106 million in last year's budget for the program. But because the law contained no revenue-raising mechanism, authorities say it is unclear whether they will have funds to continue monitoring.
Friday, February 6, 2009
WE THE PEOPLE ARE THEIR SHAREHOLDERS NOW!!!!!
By Ryan Grim for Huffington Post
Wall Street bankers, with their $18 billion in bonuses, private jets and gaudy conferences, are causing headaches for the GOP.
President Obama has proposed capping compensation for executives at banks that take taxpayer bailout money at $500,000. Republicans hate the idea -- a position puts them uncomfortably on the side of people currently about as popular as child-porn producers and subprime mortgage brokers.
Senate Minority Whip Jon Kyl (R-AZ) blamed the "tone deaf" bankers for creating the political environment that allows Obama to call for a cap.
"Because of their excesses, very bad things begin to happen, like the United States government telling a company what it can pay its employees. That's not a good thing in America," Kyl told the Huffington Post.
"What executives have done is troubling, but it's equally troubling to have government telling shareholders how much they can pay the executives," said Sen. Mel Martinez (R-FL).
Sen. James Inhofe (R-OK) said that he is "one of the chief defenders of Obama on the Republican side" for the president's efforts to reach across the aisle. But, said Inhofe, "as I was listening to him make those statements I thought, is this still America? Do we really tell people how to run [a business], and who to pay and how much to pay?"
Wall Street bankers, with their $18 billion in bonuses, private jets and gaudy conferences, are causing headaches for the GOP.
President Obama has proposed capping compensation for executives at banks that take taxpayer bailout money at $500,000. Republicans hate the idea -- a position puts them uncomfortably on the side of people currently about as popular as child-porn producers and subprime mortgage brokers.
Senate Minority Whip Jon Kyl (R-AZ) blamed the "tone deaf" bankers for creating the political environment that allows Obama to call for a cap.
"Because of their excesses, very bad things begin to happen, like the United States government telling a company what it can pay its employees. That's not a good thing in America," Kyl told the Huffington Post.
"What executives have done is troubling, but it's equally troubling to have government telling shareholders how much they can pay the executives," said Sen. Mel Martinez (R-FL).
Sen. James Inhofe (R-OK) said that he is "one of the chief defenders of Obama on the Republican side" for the president's efforts to reach across the aisle. But, said Inhofe, "as I was listening to him make those statements I thought, is this still America? Do we really tell people how to run [a business], and who to pay and how much to pay?"
Thursday, February 5, 2009
This is the purest example of GREED!!! These Execs Should Work for Nothing!!!
By AFP for Raw Story
Wall Street and the business community gave a lukewarm response Wednesday to the US administration's plan to cap executive pay, fearing it may lead to a talent exodus and delay recovery in the finance sector.
The reaction came after President Barack Obama announced that executives of finance firms taking government bailouts would have their annual salaries limited to 500,000 dollars, a move aimed at protecting taxpayer interests.
The salary limit is "still a hefty sum to be sure, and the spirit of the order certainly has popular appeal, but it's a slippery slope when the government puts restrictions on how much an individual can earn in the private sector," said Patrick O'Hare of the independent research firm Briefing.com.
"Also, the order itself strikes us as a disincentive for financial firms to reach out for aid, which will just prolong the recovery for the sector and the economy."
Douglas McIntyre at the financial website 24/7 Wall Street said the limits could make it more difficult for troubled banks to retain their best executives.
"Wall Street may keep most of its bankers if they face pay cuts, but it is the top five or 10 percent who make these companies really profitable, and they will soon be on their way to greener pastures if this measure is enacted," McIntyre said.
Don Lindner, a compensation specialist with the human resources association WorldatWork, said the new restrictions could mean a "huge cut in pay" for many top executives.
"They might leave to find jobs where they are paid more, that's my concern, that the restrictions are so deep that the leadership won't stay," Lindner told AFP.
Still, Lindner said the matter is "a complex issue" and that "just like any other investor, I think the federal government has every reason and responsibility to protect its investment."
But he argued that the move "may have some consequences," such as "not being able to get the kind of leadership the organizations need to recover quickly."
Wall Street and the business community gave a lukewarm response Wednesday to the US administration's plan to cap executive pay, fearing it may lead to a talent exodus and delay recovery in the finance sector.
The reaction came after President Barack Obama announced that executives of finance firms taking government bailouts would have their annual salaries limited to 500,000 dollars, a move aimed at protecting taxpayer interests.
The salary limit is "still a hefty sum to be sure, and the spirit of the order certainly has popular appeal, but it's a slippery slope when the government puts restrictions on how much an individual can earn in the private sector," said Patrick O'Hare of the independent research firm Briefing.com.
"Also, the order itself strikes us as a disincentive for financial firms to reach out for aid, which will just prolong the recovery for the sector and the economy."
Douglas McIntyre at the financial website 24/7 Wall Street said the limits could make it more difficult for troubled banks to retain their best executives.
"Wall Street may keep most of its bankers if they face pay cuts, but it is the top five or 10 percent who make these companies really profitable, and they will soon be on their way to greener pastures if this measure is enacted," McIntyre said.
Don Lindner, a compensation specialist with the human resources association WorldatWork, said the new restrictions could mean a "huge cut in pay" for many top executives.
"They might leave to find jobs where they are paid more, that's my concern, that the restrictions are so deep that the leadership won't stay," Lindner told AFP.
Still, Lindner said the matter is "a complex issue" and that "just like any other investor, I think the federal government has every reason and responsibility to protect its investment."
But he argued that the move "may have some consequences," such as "not being able to get the kind of leadership the organizations need to recover quickly."
Joe, Joe, Joe!!! Seriously, Enough Already!!! You are Worse than Pathetic!!! It is not Even Comical Anymore!!!
Visit msnbc.com for Breaking News, World News, and News about the Economy
And this guy here. Good old Samuel Wurzelbacher aka "Joe the Plumber". This guy is without a doubt dumber than a box of rocks. Who would really take him seriously??? Oh, I forgot, the Grand Old Party!!! By the way Samuel, you are right!!! We don't deserve you. We don't deserve more conservative individuals holding public service offices whose policies based on a rather stale ideology have failed miserably . We have more than enough!!!
Give It Up DICK!!!! You're Finished!!!!!
Visit msnbc.com for Breaking News, World News, and News about the Economy
626,000 Jobless Claims, the Highest in 26 Years!!!
By Christopher S. Rugaber for the Associated Press
New jobless claims jumped far more than expected last week in an already dismal labor market, and there's no relief in sight for workers as mass layoffs persist.
The Labor Department reported Thursday that the number of laid-off workers seeking jobless benefits rose last week to a seasonally adjusted 626,000, from the previous week's upwardly revised figure of 591,000. The latest total is far more than analysts' expectations of 583,000.
That's also the highest since October 1982, when the economy was in a steep recession, though the work force has grown by about half since then.
The number of people that remained on the unemployment compensation rolls increased slightly to nearly 4.8 million, the most since records began in 1967.
As a proportion of the work force, the number of people receiving unemployment benefits is at the highest level since August 1982. But that doesn't include an additional 1.7 million people receiving unemployment insurance through an extension of benefits Congress approved last year, which brings the total to about 6.5 million.
The extension provides up to 33 additional weeks of benefits, on top of the 26 weeks typically provided by states.
The numbers reflect the rapid deterioration in the labor market in recent weeks as companies from a wide range of sectors have announced tens of thousands of layoffs and displaced workers find it even more difficult to land a new job.
New jobless claims jumped far more than expected last week in an already dismal labor market, and there's no relief in sight for workers as mass layoffs persist.
The Labor Department reported Thursday that the number of laid-off workers seeking jobless benefits rose last week to a seasonally adjusted 626,000, from the previous week's upwardly revised figure of 591,000. The latest total is far more than analysts' expectations of 583,000.
That's also the highest since October 1982, when the economy was in a steep recession, though the work force has grown by about half since then.
The number of people that remained on the unemployment compensation rolls increased slightly to nearly 4.8 million, the most since records began in 1967.
As a proportion of the work force, the number of people receiving unemployment benefits is at the highest level since August 1982. But that doesn't include an additional 1.7 million people receiving unemployment insurance through an extension of benefits Congress approved last year, which brings the total to about 6.5 million.
The extension provides up to 33 additional weeks of benefits, on top of the 26 weeks typically provided by states.
The numbers reflect the rapid deterioration in the labor market in recent weeks as companies from a wide range of sectors have announced tens of thousands of layoffs and displaced workers find it even more difficult to land a new job.
Wednesday, February 4, 2009
SCHIP Gets Signed!!!
The children’s health program is critical as states begin to run out of money for children’s health care, and every time the national unemployment rate goes up one point, 700,000 more children lose their coverage. “I find it amazing that we have spent so much time debating it,” said Sen. Sanders on the Senate floor on Wednesday. “The United States of America remains the only country in the industrialized world where this debate would take place. We’re spending weeks discussing an issue that every other country in the industrialized world has long resolved.” The senator, a member of the Senate health committee, pointed out that, even after the children’s health care bill passes, 3 million kids will remain without health insurance.
SEC's Acting General Counsel Andy Vollmer Gets Drilled By Rep. Gary Ackerman, Cites Executive Privelege!!!
WHAT A JOKE!!!! They can't accept the fact that they completely screwed up!!! So now they have to hide behind executive privelege!!! The era of profound irresponsibility once again rears its ugly head!!!!
Obama Caps Exec Pay to $500,000 for Companies Accepting Federal Bailout Money
At about a minute into the story, the reporter states something extremely disturbing!!! Some critics speculate that this salary cap will deter some institutions from seeking federal bailout funds even though they know that the government is the only entity that can provide them with the levels of assistance necessary to stay afloat.
This leads me to believe that GREED is not only spelled with capital letters in this country but with extremely bold font and underlined!!! If companies stop seeking federal aid because the execs feel they should make more than $500,000 during the worst economic time since the Great Depression, then that is the essence of greed, selfishness, irresponsibility, and utter stupidity!!! And they want tax cuts on top of that??? WOW!!!!
The government is the only hope for a large portion of private corporate recovery and execs of these companies know this. When you're "too big too fail" you're also too big to run and hide. Responsibility will find you!!! And it has (in the form of the people). Institutions must now completely abandon any and all shady business practices and operate fairly and honestly, and do whatever is necessary, that includes making financial sacrifices, to once again reach stable levels.
Up to this point, ways of combatting some of the problems have been via layoffs. A significant number of these pink slips could have probably been avoided if the overall salary rates between the highest paid and lowest paid employees were more balanced. But i guess modern corporate American structure now mirrors the societal ambitions of the conservative party when it comes to the issue of destroying the middle class. Companies are paying the lowest salaries they can get away with (aside from not supplying ample benefit packages) to people performing jobs perceived to be anything less than management positions (hence middle and lower class). On the other hand, jobs viewed as top level positions (high class) accompany enormous and, in many cases, ridiculous salaries. This structure promotes the rich getting rich and a nasty game of social darwinism throughout the rest of corporate America.
In regards to the salary cap that President Obama is placing on execs whose companies accept federal financial aid, I'm sure the conservative argument is a rather telegraphed one. It is something to the effect of: "Why should the government control the salaries of private corporations. That goes completely against the fundamentals of capitalism. America is the land of the free. And therefore the sky should be the limit for everything in the private sector. BLAH BLAH BLAH..."
Don't even attempt to sling that crap!!! When the taxpayers are supporting this bailout we are your new board of directors as well as your shareholders!!! And just in case these execs forgot, WE THE PEOPLE are government!!! This has been after all the biggest robbery in the history of the world. Don't think for a minute that the American people will continue to have the wool pulled over their eyes while borderline criminal behavior takes place.
Once Again Senator Sanders Defining True Publice Service!!!!
Visit msnbc.com for Breaking News, World News, and News about the Economy
Tuesday, February 3, 2009
More Wasteful Spending with Taxpayer Bailout Dough!!!
By Daniel Wagner and Matt Apuzzo for the Associated Press
Wells Fargo & Co., which received $25 billion in taxpayer bailout money, is planning a series of corporate junkets to Las Vegas casinos this month.
Wells Fargo, once among the nation's top writers of subprime mortgages, has booked 12 nights at the Wynn Las Vegas and its sister hotel, the Encore Las Vegas beginning Friday, said Wynn spokeswoman Michelle Loosbrock. The hotels will host the annual conference for company's top mortgage officers.
The conference is a Wells Fargo tradition. Previous years have included all-expense-paid helicopter rides, wine tasting, horseback riding in Puerto Rico and a private Jimmy Buffett concert in the Bahamas for more than 1,000 employees and guests.
Wells Fargo & Co., which received $25 billion in taxpayer bailout money, is planning a series of corporate junkets to Las Vegas casinos this month.
Wells Fargo, once among the nation's top writers of subprime mortgages, has booked 12 nights at the Wynn Las Vegas and its sister hotel, the Encore Las Vegas beginning Friday, said Wynn spokeswoman Michelle Loosbrock. The hotels will host the annual conference for company's top mortgage officers.
The conference is a Wells Fargo tradition. Previous years have included all-expense-paid helicopter rides, wine tasting, horseback riding in Puerto Rico and a private Jimmy Buffett concert in the Bahamas for more than 1,000 employees and guests.
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