Houses today are almost triple the size they were in 1950. The taxes, utilities and upkeep are about five times what they were back then. How are we able to afford all this? Well back in 1950 few moms went to work. Stay at home moms are now a rarity and our younger generation has paid the price.-LouFriday, May 22, 2009
Supersize My Home
Houses today are almost triple the size they were in 1950. The taxes, utilities and upkeep are about five times what they were back then. How are we able to afford all this? Well back in 1950 few moms went to work. Stay at home moms are now a rarity and our younger generation has paid the price.-Lou
PIMCO's Gross: U.S. at risk of losing top AAA rating
Bill Gross's comments yesterday afternoon sent the stock and bond market into a big decline. The dollar also fell to a year low and gold rose to $953/ounce.-LouPIMCO's Gross: U.S. at risk of losing top AAA rating
NEW YORK (Reuters) - Bill Gross, manager of the world's biggest bond fund, warned on Thursday the United States will eventually lose its top AAA credit rating, a fear that had already spooked financial markets on Thursday and could keep the dollar, stocks and bonds under heavy selling pressure.
The United States will face a downgrade in "at least three to four years, if that, but the market will recognize the problems before the rating services -- just like it did today," Gross told Reuters.
Gross, the co-chief investment officer of Pacific Investment Management Co. and manager of the Pimco Total Return Fund, which has $154 billion in assets, earlier had told Reuters via email that market declines on Thursday were due to investor fears that the United States is "going the way of the UK -- losing AAA rating which affects all financial assets and the dollar."
Standard & Poor's on Thursday lowered its outlook on Britain to "negative" from "stable," threatening the nation's top AAA rating. Britain faces a one in three chance of a ratings cut as debt approaches 100 percent of gross domestic product.
Read More:
Biggest Bank Failure of The Year
The FDIC could not even wait until Friday night, the traditional time for announcing bank failures. Let's see if there are more banks closed tonight. The cost to FDIC's insurance fund is $4.9 billion, almost half of the fund balance, time to tap into government funds.-Lou
BankUnited Shut Down, Sold To Private-Equity Group
The largest bank failure so far in 2009 is also notable because the failed bank's buyer is a consortium of private-equity firms.
BankUnited, FSB, based in Coral Gables, Fla., was closed by the Office of Thrift Supervision on Thursday, and the Federal Insurance Deposit Corporation was appointed receiver.
The bank was bought by a newly chartered federal savings bank named BankUnited. The BankUnited management team is headed by John Kanas, the former head of North Fork Bank. Ownership includes WL Ross & Co., Carlyle Investment Management, Blackstone Capital Partners V, Centerbridge Capital Partners, LeFrak Organization, The Wellcome Trust, Greenaap Investments and East Rock Endowment Fund.
BankUnited, was established in 1984, had $13.1 billion in total assets, 85 branches and had 1,083 employees. The FDIC estimates that this failure will cost its deposit-insurance fund $4.9 billion.
The bank was “critically undercapitalized and in an unsafe condition to conduct business. The bank reported losses of $1.2 billion in 2008 as loan quality continued to deteriorate,” according to a press release from the Office of Thrift Supervision.
Such strong language is unusual from the press releases sent by government agencies regarding bank closures. Also unusual was the Thursday action; most bank-failure announcements occur late Friday evening.
The FDIC immediately chartered BankUnited as a federal savings bank which will take over banking operations and all nonbrokered deposits of BankUnited, FSB.
The newly formed bank will take on $12.7 billion of the bank’s assets and $8.3 billion nonbrokered deposits, which should minimize disruptions for customers.
BankUnited will not assume the approximately $348 million in brokered deposits. The FDIC said it will pay the brokers directly, and that customers who placed money with brokers should contact them directly for more information.
This is the 34th bank insured by the FDIC to fail this year, and the third bank in the state of Florida to fail this year.
BankUnited Shut Down, Sold To Private-Equity Group
The largest bank failure so far in 2009 is also notable because the failed bank's buyer is a consortium of private-equity firms.
BankUnited, FSB, based in Coral Gables, Fla., was closed by the Office of Thrift Supervision on Thursday, and the Federal Insurance Deposit Corporation was appointed receiver.
The bank was bought by a newly chartered federal savings bank named BankUnited. The BankUnited management team is headed by John Kanas, the former head of North Fork Bank. Ownership includes WL Ross & Co., Carlyle Investment Management, Blackstone Capital Partners V, Centerbridge Capital Partners, LeFrak Organization, The Wellcome Trust, Greenaap Investments and East Rock Endowment Fund.
BankUnited, was established in 1984, had $13.1 billion in total assets, 85 branches and had 1,083 employees. The FDIC estimates that this failure will cost its deposit-insurance fund $4.9 billion.
The bank was “critically undercapitalized and in an unsafe condition to conduct business. The bank reported losses of $1.2 billion in 2008 as loan quality continued to deteriorate,” according to a press release from the Office of Thrift Supervision.
Such strong language is unusual from the press releases sent by government agencies regarding bank closures. Also unusual was the Thursday action; most bank-failure announcements occur late Friday evening.
The FDIC immediately chartered BankUnited as a federal savings bank which will take over banking operations and all nonbrokered deposits of BankUnited, FSB.
The newly formed bank will take on $12.7 billion of the bank’s assets and $8.3 billion nonbrokered deposits, which should minimize disruptions for customers.
BankUnited will not assume the approximately $348 million in brokered deposits. The FDIC said it will pay the brokers directly, and that customers who placed money with brokers should contact them directly for more information.
This is the 34th bank insured by the FDIC to fail this year, and the third bank in the state of Florida to fail this year.
Thursday, May 21, 2009
Dollar Breaking Down, Gold Rising
Click On Charts To Enlarge
The top chart is the U.S. dollar index, the bottom one is gold. As you can plainly see the dollar has been under severe pressure the last few days. Gold has been moving up in inverse fashion as well it should. There is concern that the United States may lose it's AAA rating. Treasury yields are moving higher in response and look to want to go higher. This is a serious situation that may be the start of and inflationary dollar crisis. The stock market is down close to 200 points as well.-LouMy Book In Career Press's Fall Catalog
Career Press Fall 2009 New titles
Scroll down to page 5 to see my book description in my publisher's fall catalog. Or click on top hyper-link to view larger catalog-Lou
Paid Vacation Act
More government out of control. Who is Congress to demand businesses give a certain amount of paid vacation? Why not become Socialist Europe where they get two months vacation and their economies stink. I love this picture though-Lou
Alan Grayson to introduce Paid Vacation Act
Rep. Alan Grayson was standing in the middle of Disney World when it hit him: What Americans really need is a week of paid vacation. So on Thursday, the Florida Democrat will introduce the Paid Vacation Act — legislation that would be the first to make paid vacation time a requirement under federal law.
The bill would require companies with more than 100 employees to offer a week of paid vacation for both full-time and part-time employees after they’ve put in a year on the job. Three years after the effective date of the law, those same companies would be required to provide two weeks of paid vacation, and companies with 50 or more employees would have to provide one week.
The idea: More vacation will stimulate the economy through fewer sick days, better productivity and happier employees. “There’s a reason why Disney World is the happiest place on Earth: The people who go there are on vacation,” said Grayson, a freshman who counts Orlando as part of his home district. “Honestly, as much as I appreciate this job and as much as I enjoy it, the best days of my life are and always have been the days I’m on vacation.”
Day of reckoning looms for the U.S. dollar
I have been warning for sometime that there will be a currency crisis most likely later this year where confidence in the U.S. dollar is lost. Quantatative easing (money printing) coupled with huge budget deficits will result in the dollar collapsing especially against gold. We are begining to see the start of the decline. The result will be massive inflation and shortages of basic supplies as inflation expectations lead people to begin to hoard items that they fear will be more expensive in the future. Commodity prices have been on a tear lately as dollars begin to flow toward all things tangible. Oil prices are at $62 a barrel almost double what they were just a few months ago. Gold looks like it wants to go over $1,000/ounce, this time for good.-Lou
Day of reckoning looms for the U.S. dollar
The U.S. dollar's day of reckoning may be inching closer as its status as a safe-haven currency fades with every uptick in stocks and commodities and its potential risks - debt and inflation - are brought under a harsher spotlight.
Ashraf Laidi, chief market strategist at CMC Markets, said Wednesday a "serious case of dollar damage" was underway.
"We long warned about the day of reckoning for the dollar emerging at the next economic recovery," Mr. Laidi said in a note.
Mr. Laidi said economic recovery would weigh on the greenback as real demand for commodities, coupled with improved risk appetite, caused investors to seek higher yields in emerging markets and commodity currencies. This would draw investment away from the U.S. dollar, which was dragged down by growing debt and the risk quantitative easing would eventually spark a surge in inflation.
The U.S. dollar slid against most major currencies Wednesday, hitting a five-month low of US$1.3775 against the euro and pushing the Canadian dollar up US1.21¢ to a seven-month high of US87.69¢.
John Curran, the senior corporate dealer at Canadian Forex, said the U.S. dollar would likely fall further in the next week, with the Canadian dollar likely reaching about US88.35¢, at which point it could break higher to test the US92.35¢ level.
"The U.S. dollar is continuing to slide as investor appetite is gaining momentum," Mr. Curran said. "People are getting comfortable about taking on a little more risk."
Read More:
Standard & Poor's cuts U.K. outlook to negative from stable
This is what happens when you debase your currency,is U.S. next?-LouStandard & Poor's cuts U.K. outlook to negative from stable
LONDON (MarketWatch) -- Standard & Poor's on Thursday lowered its credit outlook on the U.K. to negative from stable in view of the country's swelling debt, which may expand even as the economy recovers.
The move by Standard & Poor's raises the prospect not only of a credit-rating downgrade in Britain but a lowering of the outlook in the U.S., which has taken a similar path of big spending and quantitative easing to escape the credit-led recession.
"I think there will be a downgrade on the U.K. and I think there will be a downgrade on the U.S. outlook from one of the Big Three" credit-rating firms, said Stephen Gallo, head of market analysis at Schneider Foreign Exchange.
The British pound sputtered after the report, sliding as much as 1% after the news, though the currency is still trading near the highs of the year.
The FTSE 100 stock-market index weakened after the report, sliding 2.1%.
Yields on 10-year British government bonds, known as gilts, rose 4 basis points to 3.62%. Yields move in the opposite direction to prices.
S&P kept the country's AAA rating intact, but the outlook signals that the country's credit rating could be lowered within the next two years.
S&P already has lowered the ratings of other European countries, including those of Spain, Ireland, Greece and Portugal. The Daily Telegraph newspaper had reported in April that S&P was mulling its position on the U.K.
Read More:
http://www.marketwatch.com/story/sp-cuts-uk-outlook-to-negative-from-stable
Wednesday, May 20, 2009
Democrats seek financial rescue of minority-owned broadcasters
On one hand the socialists in Washington want to stifle conservative talk radio with the "Fairness Doctrine" and on the other they want to subsidized failing liberal broadcasting. More government gone wild.-Lou
Democrats seek financial rescue of minority-owned broadcasters
High-ranking House Democrats are urging the Treasury Department to prop up minority-owned broadcasters suffering from a lack of capital and lost advertising revenue amid the economic slump.House Majority Whip James Clyburn (D-S.C.) is leading an effort to convince Treasury Secretary Timothy Geithner to take “decisive action” by extending credit to this sector of the broadcasting industry.Clyburn and other senior members, including House Financial Services Committee Chairman Barney Frank (D-Mass.) and Ways and Means Committee Chairman Charles Rangel (D-N.Y.), argue that minority-owned broadcasters are sound businesses, but that the recession could undermine the government’s efforts to diversify the airwaves.A number of members from the Congressional Black Caucus signed the letter, too.
While many jobs are at stake, a more important principle — the government’s fundamental interest in promoting a diversity of voices, including service to underserved communities — is severely threatened,” the members write in a draft of a letter that was scheduled to be sent Tuesday.
Read More:
http://thehill.com/business--lobby/democrats-seek-financial-rescue-of-minority-owned-broadcasters-2009-05-19.html
Democrats seek financial rescue of minority-owned broadcasters
High-ranking House Democrats are urging the Treasury Department to prop up minority-owned broadcasters suffering from a lack of capital and lost advertising revenue amid the economic slump.House Majority Whip James Clyburn (D-S.C.) is leading an effort to convince Treasury Secretary Timothy Geithner to take “decisive action” by extending credit to this sector of the broadcasting industry.Clyburn and other senior members, including House Financial Services Committee Chairman Barney Frank (D-Mass.) and Ways and Means Committee Chairman Charles Rangel (D-N.Y.), argue that minority-owned broadcasters are sound businesses, but that the recession could undermine the government’s efforts to diversify the airwaves.A number of members from the Congressional Black Caucus signed the letter, too.
While many jobs are at stake, a more important principle — the government’s fundamental interest in promoting a diversity of voices, including service to underserved communities — is severely threatened,” the members write in a draft of a letter that was scheduled to be sent Tuesday.
Read More:
http://thehill.com/business--lobby/democrats-seek-financial-rescue-of-minority-owned-broadcasters-2009-05-19.html
click on chart to enlargeI posted this chart so you can see how the current bear market (blue line) rally is similar to the bear market rally following the 1929 crash (gray line). There were a number of significant bullish pops in the market during the depression but the primary trend was still down. I believe this market will closely mirror that of the thirties, be careful.-Lou
Florida's Largest Bank About To To Be Seized By Regulators?
This could be the largest bank failure since IndyBank last year and may wipe out much of the FDIC's remaining capital, stay tuned.-Lou
BankUnited Bidders Said to Be Told Bank to Be Seized
May 19 (Bloomberg) -- Bidders for BankUnited Financial Corp., the ailing Florida bank, were told by U.S. officials that regulators plan to put the lender into receivership before selling its assets, according to people familiar with the auction.
May 19 (Bloomberg) -- Bidders for BankUnited Financial Corp., the ailing Florida bank, were told by U.S. officials that regulators plan to put the lender into receivership before selling its assets, according to people familiar with the auction.
WL Ross & Co. and private-equity firms including Carlyle Group and Blackstone Group LP submitted a bid today to buy BankUnited Financial Corp. assets, according to people with knowledge of the offer, who declined to be identified because the talks are confidential. Goldman Sachs Group Inc. and Toronto-Dominion Bank also made a joint bid, Dow Jones Newswires reported, citing unidentified people.
Blackstone and Carlyle, the world’s two biggest leveraged buyout firms, are among those eager to snap up banks on the cheap after global losses from the credit crisis topped $1.4 trillion. BankUnited, with about $14 billion in assets, lost money for three straight quarters amid surging defaults on option adjustable-rate mortgages. Regulators earlier this year declared the Coral Gables-based company “critically undercapitalized” and ordered it to find a buyer.
“The FDIC will try to line up buyers before taking over a lender,” said Patricia McCoy, who teaches banking and securities regulation at the University of Connecticut School of Law in Hartford, referring to the Federal Deposit Insurance Corp. “In receivership, the operating assumption is that the common equity will be reduced to zero.”
Shareholders at Risk?
Federal regulators may take BankUnited into receivership as early as this week, the people said, a step that could wipe out shareholders. The group with the winning offer may then take over the lender, Florida’s largest, from the government.
The FDIC has been named the receiver for 33 banks that have failed this year, and found buyers for all but five. In the case of BankUnited, whose primary regulator is the Office of Thrift Supervision, the OTS would be responsible for closing the bank and placing it in receivership, while the FDIC would be responsible for the sale.
BankUnited spokeswoman Melissa Gracey didn’t return a call or an e-mail. Representatives for the private-equity firms, Goldman Sachs and Toronto-Dominion declined to comment.
“We don’t comment on open and operating institutions,” said FDIC spokesman David Barr. OTS spokesman Bill Ruberry declined to comment.
BankUnited fell 21 percent to 70 cents in Nasdaq Stock Market trading at 4:10 p.m. The stock traded as high as $32.95 in December 2004
How can this happen in America?
This I found on Jim Sinclair's website www.jsmineset.com (one of my favorites) How can this happen in America? My heart goes out to this guy-Lou
Letter from a Dodge dealer May 19, 2009
letter to the editor
My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.
We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.
I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.
On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.
Our facility was recently totally renovated at Chrysler’s insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.
HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?
THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY
This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.
This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.
HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?
I beseech your help, and look forward to your reply. Thank you.
Sincerely,
George C. Joseph President & Owner Sunshine Dodge-Isuzu
Letter from a Dodge dealer May 19, 2009
letter to the editor
My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.
We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.
I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.
On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.
Our facility was recently totally renovated at Chrysler’s insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.
HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?
THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY
This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.
This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.
HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?
I beseech your help, and look forward to your reply. Thank you.
Sincerely,
George C. Joseph President & Owner Sunshine Dodge-Isuzu
Obama's new rules will transform US auto fleet
The U.S. government is now being controlled by environemental extremists who want to control all that you do. This dictatorial decree will further hurt the dying auto industry by forcing them to make smaller cars that Americans do not want to buy. Cars will cost thousands more by some estimates. This will also put your family at risk as smaller cars are more dangerous. Little by little this administartion is taking your freedoms away. -Lou
Obama's new rules will transform US auto fleet
DETROIT (AP) - Some soccer moms will have to give up hulking SUVs. Carpenters will still haul materials around in pickup trucks, but they will cost more. Nearly everybody else will drive smaller cars, and more of them will run on electricity. The higher mileage and emissions standards set by the Obama administration on Tuesday, which begin to take effect in 2012 and are to be achieved by 2016, will transform the American car and truck fleet.
The new rules would bring new cars and trucks sold in the United States to an average of 35.5 miles per gallon, about 10 mpg more than today's standards. Passenger cars will be required to get 39 mpg, light trucks 30 mpg.
That means cars and trucks on American roads will have to become smaller, lighter and more efficient.
Eric Fedewa, vice president of global powertrain forecasting for the auto consulting firm CSM Worldwide in Northville, Mich., said the changes will make pickup trucks so much more expensive that they will be used almost exclusively for work.
And instead of a minivan or SUV, more parents will haul their families in much smaller vehicles with three rows of seats - something more like the Mazda 5 small van, he said. The Mazda 5 gets about 28 mpg on the highway.
Read More:
Tuesday, May 19, 2009
GM bankruptcy plan eyes quick sale to gov't
This is totally outrageous, what are we the Soviet Union? This is all about Obama taking care of his buddies at the UAW. The union will wind up the majority owner of GM. They already own a big chunk of Chrysler. Let's see if I have this right, the unions bankrupt the auto manufacturers with their outrageously generous labor contracts and then the government keeps the companies alive with billions in taxpayer funds. Then the government owns the good part of the company, forgives taxpayer loans and the unions have a nice new auto company to own and bankrupt again. Do you think the government would bail out these companies if unions were not involved? Government is out of control, this country is headed for it's own bankruptcy.-LouGM bankruptcy plan eyes quick sale to gov't
NEW YORK, May 19 (Reuters) - General Motors Corp's plan for a bankruptcy filing involves a quick sale of the company's healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.
The source, who would not be named because he was not cleared to speak with the media, did not specify a purchase price. The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.
The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.
GM has about $6 billion in secured debt, including a secured revolving credit and bank debt.
The government's plans include giving stakes in the new company to GM's union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company's plans.
In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.
The government has given GM until June 1 to restructure its operations to lower its debt burden and employee costs.
If those talks failed, the company has said it would follow rival Chrysler LLC into bankruptcy.
Setting up a new company to buy the healthy assets is aimed at reassuring consumers who might not be willing to make a major purchase from a bankrupt company, fearing it would not honor warranties or provide service.
The board of the new company would be established with the tacit approval of the government. Fritz Henderson, who took the helm of GM earlier this year after the government pushed out Rick Wagoner, would likely head the new company, the source said.
GM could not be immediately reached for comment.
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