Political Economy category archive

Oh, wait (emphasis added):

Foreclosure prevention specialists in the area (southeastern Virginia–ed.) said the majority of the clients they see facing foreclosure have been put into that position because of a job loss.

“Very few of the ones we’re seeing now are people who were put into loans they couldn’t afford,” said John Allen, a vice president of The Up Center, a Norfolk organization that provides foreclosure prevention counseling. “It’s almost always job loss, or reduction in hours, or something revolving around that.”

But, after all, they are Wall Street Executives.

They wear expensive suits, look good in meetings, and write nice memos.

They are entitled.

. . . after a year in which Wall Street firms paid $18.4 billion in bonuses while accepting more than $50 billion in government bailouts, many experts say the system may have finally blown itself apart.

“The system is broken,” said Warren Batts, former chief executive of Tupperware Corp., Premark International and Dart Industries who used to sit on the boards of Allstate Corp., Sears, Roebuck and Co. and Sprint. “It needs some guiding principles.”

Without such guideposts, executive pay has run amok. CEOs made 344 times more the average worker in 2007, according to a survey from United for a Fair Economy, which targets economic inequality. That’s up from less than 150-to-one in 1992.

Read the whole thing.

Pop!

Home prices in the U.S. dropped the most on record in the first quarter from a year earlier as banks sold seized homes and foreclosures in California and Florida dominated sales.

The median price fell 14 percent to $169,000, the National Association of Realtors said today. Prices dropped in 134 of 152 metropolitan areas, with the deepest declines in Cape Coral-Ft. Myers, Florida, and the San Francisco and San Jose areas.

What Digby said:

The fiscal zombies said nothing when George W Bush passed out the surplus to all their wealthy friends just 8 years ago and then blindly cheered on an unnecessary, hugely expensive war. No, they waited until the economy was in total meltdown to insist that everyone (but them) needs to “sacrifice.” I don’t know where they get the chutzpah, but it seems to be in endless supply.

Your weekly Presidential address:

Text here.

The credit card banks:

Read more »

FDIC sets up shop in Florida, Because the southeastern banking system is so, you know, healthy.

The Federal Deposit Insurance Corporation (FDIC) today announced it will open a temporary satellite office in Jacksonville, Florida, to manage receiverships and to liquidate assets from failed financial institutions primarily located in the eastern states.

(snip)

Throughout its history, the FDIC has used these offices to keep temporary asset resolution staff closer to the concentration of failed bank assets they oversee. As the work diminishes, the temporary satellite offices are closed.

Follow the links for the full analyses:

Part 1:

GDP is already performing more poorly than the Fed’s stress test.

The worse case scenario for unemployment is the most realistic possibility.

Home prices are already closer to the Fed’s worst case scenario than the median baseline forecast.

Bottom line: the worst case scenario is the most realistic scenario.

Part 2:

Let’s move to the latest report from the Treasury Department. It indicates several problems.

Via Diversity Inc.

New unemployment claims drop to only 601,000 for last week, but the total number of persons collecting benefits continues to set a new record every week.

They are running out of persons to supply-sideline.

Initial jobless claims decreased by 34,000 to 601,000 in the week ended May 2, the fewest since late January, from a revised 635,000 the prior week, the Labor Department said today in Washington. The number of people collecting benefits climbed to 6.35 million the prior week, the 14th consecutive record, showing companies are still not hiring even as staff reductions abate.

John Cole on wanker bankers, Chrysler, and Fiat:

So when you read the bleatings of some hedge fund manager echoed on every wingnut blog, just remember, no laws have been broken, nothing unethical has taken place, and they only have themselves to blame. Which is, of course, why they are squealing so loudly.

And one final thing. I adore hearing about the sanctity of contracts, because it just cracks me up. Where was all this concern about the sanctity of contracts when the entire Republican caucus was trying to destroy every auto union contract out there? Where was this overabiding concern for the sanctity of contracts every time the autoworkers have made concessions the last couple of decades? Why are there hundreds of thousands of lawyers out there spending every day trying to litigate their client out of contracts or trying to litigate more favorable terms for their clients? Just plain silliness.

Robert Reich:

Why, one may ask, is Obama taking on yet another huge fight by taking aim at foreign tax havens? Yes, it’s unfair that multinationals pay an average tax rate of only 2 percent on their foreign revenues, and it’s unfair that some wealthy Americans are avoiding taxes altogether by parking their fortunes abroad. But, hey, these have been true for decades.</blockquote>

Later on in the post, he offers theories on why Mr. Obama is picking this fight. They boil down to health care.

May 5, 2009 | Posted by: Frank | Posted in: Political Economy | Bookmark this post

Pennsylvania has run out of unemployment compensation money, because so many persons have been supply-sidelined.

It’s now borrowing money to pay unemployment benefits.

Via Susie.

The lead in this story misses the point of the legislation (emphasis added):

Propelled through the House by antibusiness sentiment in tough economic times, legislation putting new reins on the credit card industry now goes to the Senate, where the bill’s prospects appear promising.

It’s not anti-business sentiment.

It’s anti-pickpocket sentiiment.

Still well over 600,000 new unemployed workers:

First-time filing for state unemployment benefits fell in the latest week, a possible sign that the worst of the recession may be over.

For the week ended April 25, initial claims fell 14,000 to 631,000.

It marked the lowest level for first time claims in two weeks.

MarketWatch theorizes that this is good news, because it’s not as bad as the numbers from the last two weeks.

Like losing a foot is not as bad as losing a leg, I guess.

Late on dustbiter watch this weekend:

The Georgia Department of Banking and Finance took over American Southern Bank, based in Kennesaw, Ga., while the Michigan Office of Financial and Insurance Regulation took control of Michigan Heritage Bank, based in Farmington Hills, Mich. First Bank of Idaho, based in Ketchum, was closed by the Office of Thrift Supervision. First Bank of Beverly Hills, based in Calabasas, Calif., was closed by the California Department of Financial Institutions. The FDIC was appointed receiver of all four banks.

The result of all that wealth creation.

The Labor Department reported Thursday that first-time claims for state unemployment benefits rose in the most recent week, as ongoing claims reached yet another record high.

Initial jobless claims rose a seasonally adjusted 27,000 to 640,000 in the week ended April 18. The four-week average of initial claims fell 4,250 to 646,750. The four-week average is considered a better gauge of labor market conditions than the volatile weekly figures because it smoothes out one-time distortions caused by holidays, bad weather or strikes.

Felons’ prospects to be all they can be down (emphasis added).

As the United States on Friday marks the sixth anniversary of the Iraq war, these are boom times for military recruiters. The number of people walking into recruiting offices has grown as the economy withers. And while patriotism continues to be a motivation for some recruits, many also see the military as a job with generous benefits and little prospect of layoffs.

(snip)

Many applicants who might think of the military as a last resort are finding out that criminal behavior, even while they were juveniles, prevents them from joining. The number of waivers for people with blemished records is dropping as the military meets its recruiting goals.

Via Harry Shearer.

White elephants at auction.

At the luxury beach community The Peninsula on the Indian River Bay, where residents are pampered with a Jack Nicklaus-designed golf course and a wave pool, the tide of recession-driven frugality has pushed one builder toward a less-opulent vision.

Faced with the reality that luxury homes aren’t the hot properties they once were, Virginia-based builder Miller & Smith has decided to clear the slate with a May auction, with opening bids at $200,000 for houses that once listed for $890,000 — a 71 percent difference.

According to the story, not only is it a gated community, it is a “double-gated” community (in a part of the world where, frankly, security is not much of an issue). Looking at the pictures, I had to wonder why anyone would want houses like that if they didn’t have a wait staff to take care of them.

This is wankery via real estate.

After all, they discontinued Oldsmobile and no one noticed (emphasis added):

Buick’s U.S. sales peaked in 1984 at 941,611, according to trade publication Automotive News. By 2008, that total had dwindled to 137,197 units, a 26 percent drop from a year earlier. The brand had about eight models earlier this decade.

One of the main reasons GM has pushed to keep Buick is its popularity in China, the people said. Sales surged almost tenfold from 2000 through last year to 280,255, consulting firm IHS Global Insight Inc. said. . . .

Buyers there coveted Buicks because they were the cars in which Communist Party leaders were chauffeured. Buick sells nine models in the world’s most-populous country, where dealerships include private clubs and other customer perks associated with higher-end luxury brands in the U.S.

Not only that, I learned from the first link that Chrysler discontinued Plymouth and I didn’t notice.