Retail sales plunge 2.7% in December

The consumer continues to retrench. Since consumer spending represents 70% of the economy, these numbers indicate the economy will contract much more.-Lou

Retail sales plunge 2.7% in December

By Rex Nutting

WASHINGTON (MarketWatch) - Stung by weak demand and falling prices, U.S. seasonally adjusted retail sales plunged 2.7% in December, the Commerce Department estimated Wednesday.

Excluding the 0.7% decline in auto sales, retail sales recorded their biggest drop since record-keeping began in the early 1990s, falling 3.1%. Excluding gasoline and autos, sales fell 1.5%, the largest drop since September 2001. Retail sales have fallen for six months in a row, the longest decline on record.

Sales in October and November were revised lower. Chain stores have reported further weakening in early January as the recession began its second year. December's sales were down a record 9.8% compared with the previous December.

Double dipping rises despite outrage

Even if you don't live in Florida you have to be outraged by this. No wonder taxes and tuition is so high-Lou

Double dipping: Ire, but higher

By Lucy Morgan,

TALLAHASSEE — This year some of Florida's public officials are giving a whole new meaning to the phrase "home for the holidays.'' It's a new crop of double dippers, taking advantage of a loophole in state law that allows them to "retire'' by taking 30 days off and return to work in their old jobs with a salary and a pension.

Many also collect a lump-sum "retirement'' payment that can reach hundreds of thousands of dollars. At least 25 of those spending December at home were re-elected in November — sheriffs, property appraisers, court clerks and tax collectors, six circuit judges and one state attorney.

None announced their "retirement'' plans before voters cast their ballots, and most have not made any public announcement of the resignation letters they have written to Gov. Charlie Crist.

Earlier this year when the St. Petersburg Times began looking at double- and even triple-dippers, the state retirement system had about 8,000 members collecting paychecks and pensions at the same time. By June that number had risen to 9,397, and it's still growing.

Read Article Here:
http://www.tampabay.com/news/politics/article950391.ece

State Pensions’ $865 Billion Loss Affects New Workers

A combination of stock market losses, a surge in baby boomer retirements and retirees increased longevity are about to blow up pension plans. Many retirees are going to receive letters alerting them that their retirement checks will be cut as much as 50% over the next two years. One of more distressing situations arising from the financial crisis. Couple that with the coming inflation problem and we may see a vast number of older folks impoverished, truly sad indeed.=Lou

State Pensions’ $865 Billion Loss Affects New Workers

By Adam L. Cataldo

Jan. 13 (Bloomberg) -- State governments from Rhode Island to California have run up estimated pension-fund losses of $865.1 billion, forcing some to cut benefits for new hires.

Assets for 109 state funds declined 37 percent to $1.46 trillion over the 14 months ended Dec. 16, according to the Center for Retirement Research at Boston College. The Standard & Poor’s 500 Index of stocks fell 41 percent in the period.

Read Article Here:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aV0VZMxdImVQ&refer=home

Pakistani Nuclear Security Worries U.S. Officials

The biggest threat to world security is Pakistan.-Lou

Pakistani Nuclear Security Worries U.S. Officials

Preventing Pakistan's nuclear arsenal from falling into extremist hands is a more important security priority for the United States than stabilizing Afghanistan and Iraq, according to a Bush administration report delivered to the team preparing for Barack Obama's presidency, the New York Times reported yesterday.

"Only one of those countries has a hundred nuclear weapons," the report's lead author said. Concerns persist over Islamabad's ability to protect the arsenal, according to the Times.

U.S. intelligence officials have briefed Obama on the possibility that some Pakistani scientists with radical Islamic sympathies have sought to join the ranks of the nation's nuclear elite.

Read Article Here:

http://www.globalsecuritynewswire.org/gsn/nw_20090112_6900.php

Citi reportedly to unveil major re-organization

I'm sure the U.S. government is making Citigroup do this, after all we put up $300 billion to keep them from blowing up. Perhaps the name of the combined Citigroup and Morgan Stanley brokerage unit should be "Citi Morg"!-Lou

Citi reportedly to unveil major re-organization
Financial-supermarket strategy may be replaced by focus on banking

By Alistair Barr, MarketWatch

SAN FRANCISCO (MarketWatch) -- Citigroup Inc. will reportedly unveil a major re-organization that will end its efforts to build a global financial-services supermarket, according to media reports.

Citigroup said earlier Tuesday that it's talking with Morgan Stanley about a combination of the two companies' brokerage businesses. The deal could be set up as a joint venture. Morgan Stanley may pay $2.5 billion to Citi for a majority stake and have the option to buy the rest of the unit later, reports say.

Read Article Here:
http://www.marketwatch.com/news/story/Citi-give-up-financial-supermarket/story.aspx?guid=%7b47DFDEBB-1325-4B92-904C-F38B4588F5C0%7d&print=true&dist=printMidSection

Treasury: deficit hits new record in just 3 months

Trillion dollar deficits will be with us for years to come, how could that be good for the dollar?.-Lou

Treasury: deficit hits new record in just 3 months

WASHINGTON (AP) - The Treasury Department says the federal government already has run up a record deficit of $485.2 billion in just the first three months of the current budget year.

The deficit is on track to surpass $1 trillion for all of fiscal 2009 and some economists believe it could go much higher.

The Treasury says the deficit for December totaled $83.6 billion, a sharp deterioration from a year ago when the government managed a surplus of $48.3 billion.

All the red ink is occurring because of the massive spending on the $700 billion financial rescue program and a prolonged recession which has depressed tax revenues.

Bank Index Hits November Lows

click on chart to enlarge

Although the stock market in general is well of the November lows, bank stocks have broken down and are now testing lows again. Citigroup and JP Morgan's shares look especially weak. Despite all the bailouts, the banking system still is very shaky.-Lou

Zimbabwe introduces $50 billion note

This is what happens when you create massive amounts of money to battle economic weakness.-Lou

Zimbabwe introduces $50 billion note

Story Highlights:

Zimbabwe grappling with hyperinflation estimated at 231 million percent
As of Friday, one U.S. dollar was trading at around ZW$25 billion
The country slashed 10 zeros from the amount of its worthless currency in August
RBZ has allowed most goods and services to be charged in foreign currency

HARARE, Zimbabwe (CNN) -- Zimbabwe's central bank will introduce a $50 billion note -- enough to buy just two loaves of bread -- as a way of fighting cash shortages amid spiraling inflation.

The country's acting finance minister, Patrick Chinamasa, made the announcement in a government gazette released Saturday.

Although Chinamasa did not give the date on which the $50 billion and new $20 billion notes would come into circulation, an official at the Reserve Bank of Zimbabwe said the notes would be distributed to all banks by the end of Monday.

Zimbabwe is grappling with hyperinflation now officially estimated at 231 million percent, and its currency is fast losing its value. As of Friday, one U.S. dollar was trading at around ZW$25 billion.

When the government issued a $10 billion note just three weeks ago, it bought 20 loaves of bread. That note now can purchase less than half of one loaf.

Read Article Here:
http://cnn.site.printthis.clickability.com/pt/cpt?action=cpt&title=Zimbabwe+introduces+%2450+billion+note+-+CNN.com&expire=-1&urlID=33563311&fb=Y&url=http%3A%2F%2Fwww.cnn.com%2F2009%2FWORLD%2Fafrica%2F01%2F10%2Fzimbawe.currency%2Findex.html&partnerID=211911

Quote Of The Day

The problem with socialism is that you eventually run out of other people’s money. –Margaret Thatcher

Vintage pro-inflation propaganda

Interesting video during made during the depression explaining why inflation is good. Perhaps Steven Spielberg is working on a contemporary version.-Lou

http://au.youtube.com/watch?v=99Dzdc1H0wM

Financial Funnies

Financier Madoff stays in penthouse

It amazes and infuriates me that this guy stays out of jail while waiting trial. Obviously, the judge did not have any money invested with Madoff-Lou

Financier Madoff stays in penthouse, avoids jail
Judge say money manager Madoff can remain free on bail in penthouse with more restrictions

Monday January 12, 2009

NEW YORK (AP) -- A judge allowed disgraced money manager Bernard Madoff to remain free on bail Monday, rejecting an attempt by prosecutors to send him to jail for mailing more than $1 million in jewelry to family and friends over the holidays.

The decision is sure to outrage investors who have been clamoring for Madoff to be sent to jail for allegedly carrying out the largest financial fraud in history - a scheme authorities say he has described as a Ponzi scheme.

If bail had been revoked, Madoff would have been forced from the comfort of his $7 million penthouse where he has been under house arrest and await trial living in a jail cell with nothing but bunkbeds, a sink and toilet.

Read Article Here:
http://finance.yahoo.com/news/Financier-Madoff-stays-in-apf-14033202.html/print

This week's "The Financial Physician" radio show now available.

Listen Here:
http://wobmam.com/personalities_lou_scatigna.html

FDIC Faces up to $10B Whack on IndyMac Loans

FDIC will go to congress for a massive bailout as many more banks fail in 2009-Lou

FDIC Faces up to $10B Whack on IndyMac Loans

New York Post

THE Federal Deposit In surance Corp. may not have fully washed its hands of IndyMac Bank.

Despite the agreement to sell of the once-troubled bank last week to a group of private-equity investors for $1.6 billion, the FDIC may be facing up to $10 billion in previously-unknown liabilities linked to mortgages IndyMac has sold to Fannie Mae, The Post has learned.

Such a haircut to the FDIC's $34.6 billion insurance fund would leave Sheila Bair's agency less able to deal with the number of bank failures expected this year.

Read Article Here:
http://www.nypost.com/seven/01112009/business/fdic_faces_up_to_10b_whack_on_indymac_lo_149620.htm