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 FOR IMMEDIATE RELEASE                                          Contact: Drew Granchelli

                                                                                                                Contact #: (617) 202-4109
                                                                                           andrew.granchelli@newmancom.com

“The Financial Physician” Hits XM Radio

Lou Scatigna Takes Popular Financial Show to National Spotlight

Louis Scatigna, financial guru known to tens of thousands of devoted radio listeners in New Jersey as “The Financial Physician,” will kick off the national version of his popular weekly call-in show on Sirius-XM Satellite Radio on Sunday August 30 from 6-7pm ET. The August 30 edition of “The Financial Physician” will also mark the 500^th episode of the program on 1160 WOBM-AM in New Jersey. “The Financial Physician” will be heard on XM’s “Talk Radio” station, channel 165, following The Glenn Beck Program.

Scatigna’s weekly “The Financial Physician,” already a successful radio talk show, features live call-ins on 1160 WOBM -AM, broadcasting to southern New Jersey. During the show, Scatigna employs his special approach to money, treating finances like medicine. He stops the bleeding, performs triage, assesses the symptoms, renders his diagnosis, and then provides his Rx. Scatigna is able to shed light on many potential financial catastrophes through this no nonsense approach to money.  

“It’s exciting to take ‘The Financial Physician’ to the national level on Sirius-XM Satellite Radio,” said Scatigna. “I have been helping clients cure their own financial issues for nearly 30 years, and for 500 episodes of my radio show on 1160 WOBM-AM. There are a lot of folks around the country, especially these days, who can identify with the financial problems others are facing. Each week I’ll help callers, and many other listeners like them, diagnose and solve their financial ailments.”

The Financial Physician: How to Cure Your Money Problems and Boost Your Financial Health, the first book from Lou Scatigna, is due out from Career Press on December 15. 

More information on Lou Scatigna, The Financial Physician, is available at: HYPERLINK "http://www.thefinancialphysician.com/"www.thefinancialphysician.com.

For more information, or to schedule an interview with Lou Scatigna, please contact Drew Granchelli: 617-202-4109;  HYPERLINK "mailto:andrew.granchelli@newmancom.com" andrew.granchelli@newmancom.com  

For more information or to schedule an interview with the author, please contact 

Newman Communications at (617) 254-4500.

1,000 Banks to Fail In Next Two Years: Bank CEO

The big banks are "too big to fail" and the smaller banks are "too small to bail". The small banks are paying the price for the crazy risk taking of the big banks. The FDIC will no doubt have to be bailed out by the government with printed dollars.-Lou

The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May.

“We’ve already lost 81 this year,” Kanas told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They're smaller companies.” (See the accompanying video for the complete interview.)

Failed banks tend to be smaller and private, which exacerbates the problem for small business borrowers, said Kanas, who became CEO of BankUnited when his firm bought the bank and is the former chairman and CEO of North Fork bank.

“Government money has propped up the very large institutions as a result of the stimulus package,” he said. “There’s really very little lifeline available for the small institutions that are suffering.”

This comes at a time when the FDIC has established new rules on bank sales. Private equity, for instance, would have to hold double the capital of their competitors in order to buy such an institution, said Kanas.

“This will have somewhat of a chilling effect on our participation,” he said. “As a result of having to keep higher capital levels, we’ll see lower prices coming from that sector.”

Of the 81 failed banks this year, two have been successfully acquired by private equity, he said. Kanas’ private equity firm bought UnitedBank, the failed Florida-based bank, from the FDIC in May. Regulators also allowed the sale of IndyMac Bank of California earlier this year.

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National Radio Show Launch This Sunday

The first national broadcast of "The Financial Physician" radio show is this Sunday 6pm ET on Sirius/XM Satellite Radio Talk Channel 165. If your a Sirius XM subscriber please join me every Sunday 6 PM for my national broadcast.

This Sunday also marks the 500th broadcast of my radio show on WOBM-Am 1160 in New Jersey. Join me at 11Am for this special program.-Lou

What About The 9 Billion Hit Since June 30th?

These are numbers as of the end of June. In just the last 2 weeks the FDIC took a $7 billion hit. Since June 30th the fund has lost over $9 billion. The FDIC is virtually broke and will be hitting up the taxpayers very shortly. This is only the 3rd inning of the banking crisis, many more banks will be failing in the months to come. Stay within FDIC limits in all your accounts.-Lou

FDIC Insurance Fund Shrinks to $10.4 Billion

WASHINGTON (WSJ)-- The Federal Deposit Insurance Corp.'s fund that protects more than $4.5 trillion in U.S. bank deposits fell to just $10.4 billion at the end of June, as the banking industry continues to struggle with souring loans and regulators brace for pain in trying to clean up the mess.

The level of the FDIC's fund, the lowest since the savings and loan crisis, almost guarantees that the government will have to hit the banking industry with another special fee to recapitalize its reserves. Officials could also consider borrowing up to $100 billion from the Treasury Department, but government officials have avoided this option so far.

The FDIC was created specifically for times such as these," FDIC Chairman Sheila Bair said. "No matter how challenging the environment, the FDIC has ample resources to continue protecting depositors as we have for the last 75 years."

The deposit insurance fund topped $45.2 billion a year ago.

The agency said it had 416 banks on its "problem" list at the end of the second quarter, up from 305 at the end of March. Banks on the problem list are considered a higher risk of failure and face tougher regulatory scrutiny. The FDIC said the total assets of banks on the problem list was $299.8 billion, which suggests that Citigroup Inc. and some of the country's other largest banks, remained off the list.

..........The FDIC also said borrowers are falling behind on loans at record levels and across most major loan categories. The number of loans at least 90 days past due climbed for a 13th consecutive quarter, while the percentage of loans at least three months overdue hit 4.35%, the highest level recorded since the FDIC began collecting this data 26 years ago.

"Deteriorating loan quality is having the greatest impact on industry earnings as insured institutions continue to set aside reserves to cover loan losses," Ms. Bair said.
The biggest problem areas continued to be property-related loans, suggesting the housing market is still under stress despite some recent good news. The FDIC said residential mortgage loans at least 90 days past due climbed 12.7% in the quarter, construction and development loans at least three months behind increased 16.6%.

Quote of the Day

'The nearest thing to eternal life we will ever see on this earth is a government program.' -

Ronald Reagan

How The Fed Is Monetizing the Debt

For some time I have been wondering why interest rates have not been rising in the U.S. Treasury market given the huge issuance of new debt. One would think that a drastic increase in supply would result in lower prices and higher yields. In a normal market that would be the case but there are no normal markets anymore.

Chris Martenson has a great article detailing how the Fed is monetizing (funding U.S. debt with printed money) using a "backdoor" method in an effort to cover up their actions. Buying Central Banks agency bonds (Fannie Mae & Freddie Mac) and enabling them to reinvest in U.S Treasurys is the same thing as the Fed just printing money and buying the bonds themselves.

The dollar is doomed.-Lou

From Chris Martensens "The Shell Game - How the Federal Reserve is Monetizing Debt":

The US government has record amounts of Treasuries to sell.

Foreign central banks, which have a big pile of agency bonds in their custody account, would like to help but want to keep things somewhat under the radar to avoid scaring the debt markets.

The Federal Reserve does not want to be seen directly buying US government debt at auctions (and in fact is not permitted to, but many rules have been 'bent' worse during this crisis), because that could upset the whole illusion that there is unlimited demand for US government paper, but it also desperately wants to avoid a failed auction.

For various reasons, the Federal Reserve cannot just up and start buying all the Treasury paper that becomes available in record amounts, week after week, month after month. Instead, it uses this three-step shell game to hide what it is doing under a layer of complexity:

Shell #1: Foreign central banks sell agency debt out of the custody account.

Shell #2: The Federal Reserve buys those agency bonds with money created out of thin air.

Shell #3: Foreign central banks use that very same money to buy Treasuries at the next government auction

The Federal Reserve has effectively been monetizing far more US government debt than has openly been revealed, by cleverly enabling foreign central banks to swap their agency debt for Treasury debt.

This is not a sign of strength and reveals a pattern of trading temporary relief for future difficulties.This is very nearly the same path that Zimbabwe took, resulting in the complete abandonment of the Zimbabwe dollar as a unit of currency. The difference is in the complexity of the game being played, not the substance of the actions themselves.

The shell game that the Fed is currently playing does not change the basic equation: Money is being printed out of thin air so that it can be used to buy US government debt.

When the full scope of this program is more widely recognized, ever more pressure will fall upon the dollar, as more and more private investors shun the dollar and all dollar-denominated instruments as stores of value and wealth. This will further burden the efforts of the various central banks around the world as they endeavor to meet the vast borrowing desires of the US government.

One possible result of the abandonment of these efforts is a wholesale flight out of the dollar and into other assets. To US residents, this will be experienced as rapidly rising import costs and increasing costs for all internationally-traded basic commodities, especially food items. For the rest of the world, the results will range from discomforting to disastrous, depending on their degree of dollar linkage

Here is the link to Chris Martensen's interesting article

Chart Of The Day

Click on chart to enlarge

This is one scary chart folks. Foreign investment into U.S. assets is plunging. As a matter of fact there are now net outflows of foreign capital. Can a dollar crisis be far off?-Lou

Half Of Americans Are Broke

A scary situation indeed. Half of all American workers do not have enough savings to support their families for 1 month. This is because Americans are consumers, addicted to debt and spending. Although these people do not hav enough savings to last just one month, most have big screen TVs, drive new cars, have large cable bills and have cell phones. We all need to prioitize our financial lives and build up some emergency savings. Tough times are here to stay, we must be prepared for it.-Lou

34 Percent of U.S. Workers Surveyed Have Only One Week or Less of Savings to Cover Expenses if Laid Off from Work

MAYNARD, Mass.--(BUSINESS WIRE)--Despite the fact that most financial advisors caution workers to save the equivalent of six months’ salary in preparation for troubled economic times, a recent Monster Meter Poll reveals more than one-third of U.S. workers surveyed on Monster.com admit they have only one week or less of savings to cover living expenses if they were to be laid off from work. Monster.com is the leading global online career and recruitment resource and flagship brand of Monster Worldwide, Inc.

Over a one week period beginning July 6 and running through July 13, more than 16,000 visitors to Monster.com participated in the Monster Meter Poll question “If you were laid off without severance, how long would your savings cover your living expenses?” Thirty-four percent of U.S. workers report their savings would last one week or less if they were laid off, compared to 20 percent who say their savings would last six months or longer, according to a nationwide poll conducted by Monster.com®.

“In a recent Monster.com Career Advice article, Laid Off? Six Steps to Manage Your Finances, most financial advisors suggest saving the equivalent of six months’ salary to tide you over if you lose your job,” said Norma Gaffin, director of career content, Monster.com. “However, experts also agree, workers will likely need more savings, especially if they have a family and are the primary wage earner.”

If You Were Laid Off Without Severance, How Long Would your Savings Cover Your Living Expenses?

One Week or Less: 34%
2-4 Weeks: 16%
1-2 Months: 16%
3-5 Months: 14 %
6 Months or Longer: 20%

According to a recent Marketplace public radio broadcast, the size of the suggested emergency savings pot has evolved in recent years. “For a long time, the rule of thumb was to set aside 3 to 6 months of easily accessible savings. That number is now 6 months to 1 year.” Additionally, finance experts featured in SmartMoney.com’s article – 4 Smart Money Moves for a Down Economy – also advise workers to watch every dime by creating and sticking to a budget.

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Clunkers Program Advances Asian Automakers

Nice to know that U.S, taxpayers paid $3 billion to help the Asian automakers take a larger piece of the U.S. car market. Next is cash for appliances. Does the U.S. make any appliances anymore?-Lou

Japanese, Koreans gain most from cash for clunkers

WASHINGTON (Reuters) - Japanese and South Korean automakers registered the biggest market share gains in the U.S. government's "cash for clunkers" program that ended this week with bankruptcy related inventory shortages hurting General Motors Co GM.UL and Chrysler.
Toyota Motor Corp, Honda Motor Co Ltd, Nissan Motor Co Ltd, Hyundai Motor Co capitalized on the program's goal of pushing consumers away from gas guzzling sport utilities and pickups, to more efficient cars and trucks, preliminary sales figures showed on Wednesday.

Overseas manufacturers dominate in car sales, while U.S. companies have been stronger in the light truck segment. Cars outsold trucks 2-1 under the "clunker" initiative.

Ford Motor Co was the only domestic manufacturer to hold its own in market share compared with its performance so far this year, while GM slipped and Chrysler stumbled noticeably.
GM spokesman Greg Martin said the company, which slowed production significantly during the spring and its early summer bankruptcy, recorded brisk sales of Malibu, Cobalt and other car models in the first weeks of the program.

"We were running thin going into the summer to begin with and, as the program went on, inventory levels play(ed) a part," Martin said.

Ford was the only domestic manufacturer with top-selling models in the "clunkers" program.
Transportation Department figures on the "clunkers" incentive, which offered consumers up to $4,500 when they traded in their older vehicles for more fuel efficient new models, showed on Wednesday that total sales amounted to just under 700,000 with $2.87 billion in rebates.

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Geithner: Auditing The Fed Is A Line We Don't Want To Cross

A visibly uncomfortable Geithner attempts to dismiss the question by saying “I’m sure people understand that you want to keep politics out of monetary policy.” When Geithner is again pressed on the issue, he makes the startling assertion that conducting an audit of the Federal Reserve is a “line that we don’t want to cross,” stating that such a move would be “problematic for the country.”-Lou

Government Out Of Control

A measly $ 1 million

$1 Billion Dollars

$1 Trillion Dollars (each square is a billion)

When large numbers are thrown around it's easy to lose site over how much money is really involved. To most of us a million dollars seems like a lot of money, after all it's a thousand thousand. Just picture what a thousand piles of ten $100 bills would look like. A billion is a thousand million, now we are talking some major dough, a thousand piles of a million bukeroos, sweet. A trillion is a thousand billion or 1 million piles of a million bucks. So a 1.5 trillion dollar deficit means our government is spending 1,500,000 million more dollars than it is taking in. Try to picture what 1 1/2 million piles of a million dollars is. And they are doing it at least two years in a row for a total of 3 million million dollars. This is pure insanity and some wonder why I am so concerned about the value of the U.S. dollar and believe an inflationary storm is on the horizon.-Lou

$1.5 trillion deficits eyed for '09, '10

Washington Times August 29, 2009

The U.S. budget deficit will exceed $1.5 trillion both this year and next year, the White House Office of Management and Budget projected Tuesday in its Mid-Session Review.

Both the OMB and the nonpartisan Congressional Budget Office (CBO), which issued a separate report Tuesday, estimated that the U.S. unemployment rate would average about 10 percent next year.

The budget deficit for fiscal 2010, which begins Oct. 1, is projected to total $1.502 trillion, nearly a quarter of a trillion dollars higher than the White House forecast in May, when it released its detailed 2010 budget.

In 2011, the projected deficit of $1.12 trillion would top $1 trillion for the third year in a row.
For the 2010-2019 period, cumulative budget deficits are expected to exceed $9 trillion, averaging more than $900 billion per year. That's nearly double the $459 billion budget deficit recorded in fiscal 2008, which set the previous record before fiscal 2009.

The $9 trillion in cumulative budget deficits over 10 years is about $2 trillion higher than the Obama administration projected in February and May, but it is in line with March and June estimates by the CBO.

"Whatever their cause, the administration is very concerned about these out-year deficits, and getting those deficits under control is a top priority of the administration," said OMB Director Peter R. Orszag. He added that the administration's fiscal 2011 budget, which will be released in February, will "include proposals to put the nation back on a fiscally sustainable path."
The budget deficit in fiscal 2009, which ends Sept. 30, is expected to total $1.58 trillion, well below the $1.84 trillion deficit that the White House projected in May.

However, the difference relates to the $250 billion "placeholder" that appeared in the Obama administration's earlier budget estimates for 2009. The "placeholder" was for additional funds for the bank-bailout program. In the end, the administration did not need those funds.

The federal debt held by the public, which totaled $5.8 trillion at the end of fiscal 2008, is expected to more than triple by the end of fiscal 2019, when it will approach $17.5 trillion, according to the administration's latest estimates.

"These numbers are simply alarming," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan budget-watchdog group. "Even as the economy appears to be stabilizing, we are seeing unmanageable levels of red ink for the foreseeable future."

The Senate's top Democrat on the budget was also concerned.

"These deficit levels confirm what I have said for months - that we are on an unsustainable fiscal course for the future," said Sen. Kent Conrad, North Dakota Democrat, who chairs the Senate Budget Committee

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Rhode Island Shutdown

States, cities and towns are in terrible fiscal shape, everyone's standard of living will be affected.-Lou

RI gov to shut down state government for 12 days

PROVIDENCE, R.I. (AP) - Rhode Island will shut down its state government for 12 days and hopes to trim millions of dollars in funding for local governments under a plan Gov. Don Carcieri outlined Monday to balance a budget hammered by surging unemployment and plummeting tax revenue.

The shutdown will force 81 percent of the roughly 13,550-member state work force, excluding its college system, to stay home a dozen days without pay before the start of the new fiscal year in July.

The closures come as the worst recession in decades has eliminated hundreds of millions of dollars in tax collections and pushed unemployment to 12.7 percent, the second-highest jobless rate in the nation behind Michigan.

Carcieri predicted the state's fiscal future could grow even bleaker.

"There are going to be inconveniences for the public, and there are going to be sacrifices, as I said, for state employees," Carcieri said at a Statehouse news conference. "These steps right now are unavoidable if the state is to live within its budget, live within its means."

The governor ordered the shutdown in an executive order but said he's willing to negotiate a different deal with state employee unions so long as it saves the same amount of money, roughly $22 million. But time is short: the first shutdown day has been scheduled for Sept. 4. Additional shutdown days have been scheduled every month through June.

Critical workers such as state police, prison guards and child abuse investigators still will report to work during the shutdown, Carcieri said. He ruled out raising taxes to balance the budget and said the state cannot lay off more workers since it deeply trimmed its work force last year.

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Cash For Appliances

Good grief, what's nest "Cash For Anything"? Forced consumerism is not the way to bring us out of the financial mess we find ourselves in. "Cash For Clunkers" is being hailed as a great success. But is putting people who have a running car with no monthly payments into a new one with a large payment a smart thing to do? Many of these cars will be repossessed in the months to come.-Lou

Latest in Stimulus: 'Cash for Refrigerators'

A $300 million cash-for-clunkers-type federal program to boost sales of energy-efficient home appliances provides a glimmer of hope for beleaguered makers of washing machines and dishwashers, but it's probably not enough to lift companies such as Whirlpool and Electrolux out of the worst down cycle in the sector's history.

Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. (Unlike the clunkers auto program, consumers won't have to trade in their old appliances.)

"These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy," Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and Environmental Protection Agency.

The money can't come soon enough for the home appliance industry, which is mired in an unprecedented sales slump that began when the housing market cooled in 2006. Since then that slump has worsened considerably. Shipments of washers, dryers, refrigerators, and ovens dropped 10% in 2008 and are down 15% through July, according to the Association of Home Appliance Manufacturers. "It's brutal," says Raymond James analyst Sam Darkatsh.

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A Marine Speaks For Many Of Us

This guy draws quite a response from the audience. His words refect the feelings of the majority of Americans at this time. The political temperature will hit the boiling point this fall-Lou