Misery Index: The Obama Depression - "Private sector doing just Fine"

[Soul Crusher]

Price of Field Corn at an All-Time High
WHAG-TV via MSNBC ^ | 6/8/2011 | WHAG-TV

________________________ ________________________ _______



FREDERICK, MD - One local industry that is peaking during this down economy is field corn. According to the Maryland Office of Economic Development, the price of a bushel of the cash crop is the highest its ever been.

Eddie Mercer's 4,500 acre farm has been his livelihood for nearly 45 years and he says he has never seen the price of corn reach this level.

"This is the ultimate high," says Eddie Mercer, President and Owner of Eddie Mercer Agri-Services Inc. "The most time we've ever sold corn is maybe in the $5, but never in the $8 range."

A local agriculture expert says there are a few reasons for this never-seen-before boom. Most striking is the grain industry's globalization. There's a demand for corn all over the country and the world, and Frederick County is a major exporter.

[Snip]

The corn and livestock industries are linked. As corn goes up, so will the price of meats, and ultimately, that cost is passed on to the consumer.

"The livestock people, whether is poultry, hogs, or beef, cannot sustain a loss, you know, for an indefinite periods," says Mercer.

Mercer may be enjoying being in the green right now, but he's concerned for his friends in the business of raising livestock.


(Excerpt) Read more at msnbc.msn.com ...

[Soul Crusher]

HOLY COW: Robert Shiller Could Easily See Another 25% Drop In Home Prices
TBI ^ | 6-9-2011 | Gregory White



HOLY COW: Robert Shiller Could Easily See Another 25% Drop In Home Prices

Gregory White
Jun. 9, 2011, 12:24 PM



If home prices fall another 10 to 25%, that "wouldn't surprise me at all," Robert Shiller told Reuters Insider today.

Shiller says that the recovery is at risk right now, and a further rise in unemployment would hint that another recession was imminent.

Today, initial jobless claims rose again, coming in higher than analyst expectations.

Shiller says he doesn't see "any evidence" that real estate is coming out of its bearish cycle, that began in 2006.

The latest Case-Shiller data indicating that a housing double-dip was already in place.


(Excerpt) Read more at businessinsider.com ...

[Soul Crusher]

Bailout Costs Double as Taxpayers Pick Up the Bill [Your Wallet and Your Life]
Center for Fiscal Accountability ^ | 2011-06-07 | Soren Kreider
Posted on June 9, 2011 4:54:09 PM EDT by 92nina

When the federal government stepped in to prevent Fannie Mae and Freddie Mac from collapsing in 2008, it stuck the taxpayers with a hefty bill. Since 2008, the federal government has sunk $162.4 billion into these government sponsored enterprises (GSEs) without any form of taxpayer protection. But the true magnitude of the cost this bailout has foisted upon the taxpayer is actually far greater, according to a report released by the Congressional Budget Office (CBO) last week.

By putting Fannie Mae and Freddie Mac into conservatorship, the federal government effectively became the owner of both entities. Yet the government’s accounting practices still treat these mortgage giants as outside entities and thus their liabilities do not appear in the government’s ledger. When the CBO eliminated the accounting gimmicks and treated the costs of these GSEs just as they would other government agencies, the true cost of this taxpayer funded bailout rose to $317 billion.

After playing a prominent role in the financial collapse of 2008, Fannie and Freddie continue to benefit from the public largesse. When the government acts as an insurer of last resort, it eventually falls to the taxpayer to foot the bill. The 2008 bailout cost taxpayers $317 billion and the continued operation of Fannie and Freddie is only compounding this cost by adding another $4 billion to that tally every year. Should the housing market decline below the CBO’s rather optimistic baseline, the true cost will continue to increase...

(Excerpt) Read more at fiscalaccountability.org ...

[Soul Crusher]

30% Of People With A 401(k) Have Taken Out A Loan Against It: New All Time Record
zero hedge ^ | 6/7/11 | Tyler Durden
Posted on June 10, 2011 3:31:19 AM EDT by Nachum

About a year ago Zero Hedge posted an article titled: "Record Number Of Americans Using Retirement Funds As Source Of Immediate Cash" after a report by Fidelity uncovered that "plan participants with loans outstanding against their 401(k) accounts had reached 22 percent versus 20 percent a year earlier." It is now time to revisit this very important topic because if recent press reports are true, last year's record number has just increased by another 50%. "On "The Early Show" Thursday, financial journalist and Newsweek columnist Joanne Lipman said, "Right now we have 30 percent of people who have 401(k)s have loans against their 401(k)s, which is a historic high. And the problem is, it's growing like crazy: By 2014, we're expecting to see 30 million people take loans against their 401(k)s." The raiding of the last ditch piggybank is on, and who can blame them? With banks setting the example of always reverting to the Discount Window (or the Excess Reserve stash as is now trendy) when in trouble, ordinary working Americans are merely following in the footsteps of their financially more "literate" betters. Unfortunately, unlike the "depositor" institutions, nobody will replenish these funds should they not be repaid and the retirement money is gone for good.

CBS News explains why raiding your 401(k) is so easy a caveman can do it:

Sheri Chaney Jones, of Columbus, Ohio, started a consulting business in October and borrowed from her 401(k) to help pay her bills.

"It was extremely easy,' she told CBS News, adding that her financial planner told her "she was seeing more and more people" do it, "because the banks were not giving loans out traditionally to small businesses anymore."

"It's not right for everyone," Jones noted, " but it is your money, you can borrow from it tax-free, you do pay yourself back at interest, but a very low interest, much lower than maybe a traditional bank."

Just like Wall Street sellside research, delusions are rampant:

"What I feel optimistic about," Jones says, "is that I will be able to grow this business to not only pay myself back at the current interest, but continue to contribute more toward the 401K than I would have if I would have stayed where I was."

And for those wondering why doing a 401(k) raid is the worst possible idea:

"It's a big, big problem," she remarked to co-anchor Chris Wragge, "and it's one that's really been under the radar. And the big problem is that, if you lose your job, you have to pay that loan back within 60 days. So suddenly, you have no income, you owe all this money back, and the fact is that most people are unable to pay it back.

"There was a survey recently that found that 70 percent of people who lose their jobs are unable to pay back the loan and go into default. And the number is even higher ... for young people -- it's closer to 80 percent."

It gets worse: "If you go into default," Lipman pointed out, "you've just raided as a piggybank your 401(k), you don't have retirement funds and you owe taxes and penalties."

Step aside HELOCs, here comes the pension money for iPad exchange:

Still says Lipman, "There are certain times when it makes sense. If you're secure in your job, if there is a one-time expense -- let's say you need money for a down payment on a home, that's fine. You know, that makes sense. Or for education, for medical expenses. You know, that can make a lot of sense. Because you are paying yourself back. And if you can stay on track, you're fine with that.

"But the problem is, when you use it as a piggybank. When people are using this to pay for a vacation, to pay for a home that's perhaps larger than they can afford - that's where we really get into trouble."

Luckily, Americans have demonstrated beyond a reasonable doubt that when it comes to abusing rainy day capital to satisfy trivial material needs, there is nothing to worry about. Nothing at all.

[Soul Crusher]

Home  > Business  > Chicago Breaking Business
CME Group eyes Illinois exit; Emanuel confident it will stay
    Share428(305)

A sign in front of the Chicago Mercantile Exchange. (AP file photo/M. Spencer Green, file)

By Kathy Bergen and John Byrne
Tribune reporters
3:46 p.m. CDT, June 9, 2011

The company that owns Chicago's two leading futures exchanges is weighing whether to move some operations from Illinois, citing the state's corporate tax rate increase.

"We're investigating what would be in the best interests of our shareholders," Terrence Duffy, executive chairman of CME Group Inc., said at the firm's annual meeting Wednesday, noting that such a move would not mean CME would abandon its presence in Chicago, home to its markets for more than a century.

Related
PHOTOS: Illinois companies eyeing an exit

PHOTO: Terry Duffy

STORY: CME cites regulatory uncertainty for weak stock

STORY: CME Group expands product offerings in UK

STORY: CME Group on the offensive in challenge to Liffe's rates
See more stories »
Topics
Shareholders
State Income Tax
Companies and Corporations
See more topics »

The state in January raised the corporate income tax rate temporarily to 7 percent from 4.8. Corporations also pay a 2.5 percent tax on income, called the personal property replacement tax, which is collected by the state and flows to local governments. The two rates taken together come to 9.5 percent, the third-highest rate in the U.S., according to the Tax Foundation, a non-partisan Washington-based research group.

Mayor Rahm Emanuel said he talked to Duffy and other company officials Thursday morning, and he's confident CME Group will remain in Chicago. "I know their frustration. They acknowledged the city has been great to them, and the city is a place that they've prospered," he said.

"I'm confident they will see that what has been a successful relationship will continue to be a successful relationship," Emanuel said at a news conference at Harold Washington College's downtown campus to announce new presidents for five City Colleges of Chicago campuses.

"CME has grown and been successful in Chicago, and it has grown and been successful while Chicago has grown and been successful," Emanuel said. "And I believe we have many years ahead of both of us, as a city and the financial institution the Chicago Mercantile Exchange, growing ahead. And I'm confident they will see what has been a successful relationship will continue to be a successful relationship."

Emanuel added it's too soon to say whether he will head to Springfield to try to persuade lawmakers to make changes in the tax rate. "We're not at that point," he said. "I understand their frustration, we're not at that point."

The company estimates the hike will cost it about $50 million a year. At the meeting, Duffy said he has spoken with Illinois Gov. Pat Quinn about the tax increase.

Gov. Quinn was unclear if he has meet with Duffy on the issue, calling him a "good friend" and saying they engage in an "ongoing conversation and dialogue."

"I really believe that the best place for these markets is right here in Illinois, in Chicago," Quinn said. "I am sure we can work together. I do that with all kinds of businesses, large and small...If somebody has a particular issue or concern or interest in something, we sit down with them and work it out."

Quinn said he is willing to discuss incentives to keep the company here, but warned that it must be a "two way street."

"The taxpayers of Illinois are just not going to subsidize private companies unless they give something back to the people of Illinois," Quinn said. "Jobs and economic growth (are) very important. A commitment to new investments and doing new things...it really is a negotiation where companies agree that they will do things for the people of Illinois."

CME's threat comes at a time when other Illinois companies, including Caterpillar and Sears Holdings Corp., have raised the possibility of leaving Illinois. Other states have tried to dangle lucrative incentive packages to lure companies, and Illinois has offered up many incentives  to successfully retain big companies including Motorola Mobility. The result has resembled a national bidding war for some of Illinois' top companies.

"We want to be in Chicago but are concerned about the corporate tax increases," a CME spokesman said Thursday morning. The CME owns the Chicago Mercantile Exchange, the Chicago Board of Trade and theNew York Mercantile Exchange.

A CME move would send shockwaves through the local economy. Of the company's 2,600 employees, about 2,000 work in Illinois. But the presence of the exchanges has a broad ripple effect, with some estimating it's the source of another 60,000 to 100,000 jobs in law, accounting, trading and banking companies.

CME Group has four facilities in Illinois, including its corporate headquarters at 20 S. Wacker Drive; the Board of Trade building, which has a consolidated trading floor for the two Chicago exchanges; back offices at 550 W. Washington St.; and a data center in Aurora.

The company has received $15 million in city assistance to help with the renovation of its Board of Trade building.

CME Group reported $951 million in profits last year on about $3 billion in revenue.

Dow Jones Newswires contributed.zvyc8571

    Share428(305)
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Comments (305)Add / View comments | Discussion FAQ
RufusVonDufus at 2:12 AM June 10, 2011
The welfare crowd and the thieving politicians are bringing all of the big cities down.    Chicago will, in the near future, resemble Detroit today!    There is no getting around it as long as such a large percentage of tax revenue goes to welfare and theft by those elected scum.    Count on it.    Let them keep plopping out 10 kids and coming from Mexico and there is no solution.
ejhickey1 at 1:48 AM June 10, 2011
In spite of the fact that Illinois has a high percentage of college graduates and five major universities in the down area, our state is still $200 billion in debt and we have at least an $8 billion deficit for this fiscal year. we are still way behind in a paying vendors that provided services to the State.  Our electoral turnout is disgracefully low and the people who do vote elect bums. (remember Todd Stroger)  if that wasn't bad enough, chicago is now suffering a plague of recreation mob muggings.   Somehow all that intellectual firepower has not made this city and state a better place to live.  
Another_Passerby at 12:12 AM June 10, 2011
Now you're treading on sacred ground! Even Rice has a football team! (Sort of...)
Actually, 60,000 to 100,000 jobs in law, accounting, trading and banking would fit pretty smoothly into Houston or Dallas/Fort Worth. Because of the population difference, Texas already has almost twice as many lawyers as Illinois. We're also a major port, commodities and trading region -- though our trading industries are generally more physical commodity trading than electronic. Because of the port and energy industries, Houston is an extremely international commodities trading city with businesses from all over the world having local offices. Moving the exchange here would only supplement what we already have.

Chicago became the center of commodities trading in the US because of the beef industry, the surrounding farm states, the centralized location around railroads and access to the Great Lakes shipping lanes. Those reasons are far less compelling in a global economy. Houston or New York are both better fits in modern times. New York would be ideal because of the other exchanges and because the port there is so large, though New York's taxes are so high that Houston is a better option for any for-profit company.
Maybe after we get the CME we can go after the NYSE...

[Soul Crusher]

The Handling of the Economic Crisis May Lead to Civil Unrest
ZeroHedge.com ^ | 6/9/11 | George Washington
Posted on June 10, 2011 1:09:15 AM EDT by Kartographer

Reality is beginning to break through. Gas and grocery prices are on the rise, home values are down, and vast majorities think the country is on the wrong track. The result is sadness and frustration, but also an inchoate rage more profound than the sign-waving political fury documented during the elections last fall.

-SNIP- •Director of National Intelligence Dennis C. Blair said:

"The global economic crisis ... already looms as the most serious one in decades, if not in centuries ... Economic crises increase the risk of regime-threatening instability if they are prolonged for a one- or two-year period," said Blair. "And instability can loosen the fragile hold that many developing countries have on law and order, which can spill out in dangerous ways into the international community."***

"Statistical modeling shows that economic crises increase the risk of regime-threatening instability if they persist over a one-to-two-year period."***

“The crisis has been ongoing for over a year, and economists are divided over whether and when we could hit bottom. Some even fear that the recession could further deepen and reach the level of the Great Depression. Of course, all of us recall the dramatic political consequences wrought by the economic turmoil of the 1920s and 1930s in Europe, the instability, and high levels of violent extremism.”

Blair made it clear that - while unrest was currently only happening in Europe - he was worried this could happen within the United States.

(Excerpt) Read more at zerohedge.com ..

[Soul Crusher]

Weekly jobless claims “unexpectedly” rise again? (Status Quo. figures remain above 400K for 8 Weeks)
Hotair ^ | 06/09/2011 | Ed Morrissey
Posted on June 9, 2011 11:00:08 AM EDT by SeekAndFind

For the eighth week in a row, the number of initial jobless claims remained in the 420K range, according to the Department of Labor’s report today. Last week saw a slight increase of just 1,000 to the number of new claims from the previous week, which got revised upward by 4,000 from the previous week’s initial report:

In the week ending June 4, the advance figure for seasonally adjusted initial claims was 427,000, an increase of 1,000 from the previous week’s revised figure of 426,000. The 4-week moving average was 424,000, a decrease of 2,750 from the previous week’s revised average of 426,750.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending May 28, a decrease of 0.1 percentage point from the prior week’s unrevised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending May 28 was 3,676,000, a decrease of 71,000 from the preceding week’s revised level of 3,747,000. The 4-week moving average was 3,719,250, a decrease of 29,000 from the preceding week’s revised average of 3,748,250.

This puts the last two weeks at more or less the same level as the weeks before. The 420-430K level appears to be the “new normal” for 2011, a little below the 440-460K level of 2010 but above the 380K range we saw in the first quarter of this year. Whatever initially pushed the claim levels upward in April was not a fluke, but instead a real retreat on job creation in the economy.

The only people surprised by what is essentially a status-quo report are the economists at Reuters, where they break out the U word again … and again … and again (via Steve Eggleston):

The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, according to a report on Thursday that could reinforce fears the labor market recovery has stalled.

Initial claims for state jobless benefits increased 1,000 to 427,000, the Labor Department said. However, economists polled by Reuters had forecast claims dropping to 415,000 from a previously reported count of 422,000.

Exactly what drove them to predict a drop in the jobless-claims rate? The only reason I can think that one could have “expected” a drop in claims is because the week in question had a major holiday (Memorial Day), which tends to suppress claims. It’s worth considering that next week may actually be worse for that reason.

However, if Reuters’ Wizengamot expected a drop for economic reasons, I’d really like to know what those were. There hasn’t been a positive economic indicator for weeks, inventories are at record levels, and gas prices are sapping discretionary income. What positive news would have boosted hiring, as Reuters’ economists expected?

Or, for that matter, Bloomberg’s?

U.S. initial jobless claims unexpectedly rose last week, a sign that the labor market is struggling to gain traction.

Jobless claims increased by 1,000 to 427,000 in the week ended June 4, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 419,000, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments decreased. …

The median forecast was based on a survey of 49 economists. Estimates ranged from 400,000 to 430,000. The Labor Department revised the prior week’s figure to 426,000 from the 422,000 initially reported.

[Soul Crusher]

German Rating Agency Feri Downgrades US Government Bonds: AAA to AA!
Zero Hedge ^ | June 10, 2011



The first Western downgrade of US government bonds is a fact! The German credit rating agency Feri lowered its rating on US debt by a full notch, from AAA to AA.

Here is the German press release: Feri Downgrades US Gov Debt AAA to AA

The English translation:


Homburg, 8 June 2011 - The Bad Homburg Feri EuroRating & Research AG downgraded the first credit rating agency's credit rating for the United States from AAA to AA. Feri analysts justify the downgrade by the continuing deterioration of the creditworthiness of the country due to high public debt, inadequate fiscal measures, and weaker growth prospects.
"The U.S. government has fought the effects of the financial market crisis primarily by an increase in government debt. We do not see that there is sufficient attention being paid to other measures, "said Dr. Tobias Schmidt, CEO of Feri Rating & Research AG. "Our rating system shows a deterioration in economic health, so the downgrading of the credit ratings of U.S. is warranted."

For the third consecutive year the deficit of the United States is in double digit percentages relative to gross domestic product (GDP). "Deficits of such magnitude are not a sustainable fiscal policy. We would reconsider the rating when the U.S. government creates a long-term sustainable budget," said Schmidt.

Feri Rating is listed on the Federal Financial Supervisory Authority (BaFin) as an EU credit rating agency approved and created with more than 20 years experience in sovereign ratings. Every month, the Feri analysts evaluate sovereign credit ratings from the perspective of a foreign investor based on the ability and willingness of countries to repay their debts. The credit ratings have eleven possible gradations between "AAA" (best credit) and "Default".

[Soul Crusher]

An Unemployment Catastrophe
By Rich Lowry
http://www.realclearpolitics.com/articles/2011/06/10/an_unemployment_catastrophe_110159.html





Pres. Barack Obama is given to cute vehicular metaphors about the state of the economy. We were "in a ditch," then got out and hit a "bump in the road." This is studiously folksy. It also vastly understates the nature of our situation.

President Obama is presiding over an unspooling social catastrophe in the form of unemployment, and especially long-term unemployment. For all those people who are chronically unemployed, it's as if they have been hit by the proverbial car and then backed over by it again and again.

According to the Wall Street Journal, nearly a third of the unemployed - 4 million people - have been out of work for more than a year. Almost half of the unemployed have been out of a job for more than six months, a figure higher than during the Great Depression. They may wonder when it was exactly that we got out of "the ditch."

The statistics tell a dire, but incomplete, story. We were built to work. When we want to and can't, it is an assault on our very personhood. A Rutgers University study of the unemployed a few years ago found, unsurprisingly, "that they experienced anxiety, helplessness, depression, stress and sleeping problems after losing their jobs."

The insidious thing about long-term unemployment is that it builds on itself - the longer you are without a job, the harder it is to get one. The Bureau of Labor Statistics finds that the chance of someone unemployed for less than five weeks finding a job in the next month is about 30 percent. For someone unemployed 27 weeks or more, it's just 10 percent.

For an economy so famously on the mend that it experienced "recovery summer" last year, the trend has been in the wrong direction. A Pew study notes that the number of people unemployed for a year or more increased by 25 percent from December 2009 to December 2010.

The job market is now segregated by levels of educational attainment, but long-term joblessness disregards schooling. Once they are unemployed, about 30 percent of college graduates, high-school graduates, and high-school dropouts are out of a job for more than a year. It doesn't matter what sector of the economy they come from. "More than 20 percent of unemployed workers in every non-agricultural industry," Pew writes, "have been out of work for a year or more."

So here is a wide-ranging blight that affects not just people's incomes right now, but their sense of self-respect and their futures. Yet it's often been an afterthought for the president. He has repeatedly said he was going to "pivot to jobs." How could he ever have pivoted off of them? To paraphrase Rahm Emanuel, a crisis is a terrible thing not to address.

Given the history of recessions driven by financial meltdowns, it was inevitable we'd have a lingering unemployment problem. All the more reason to gear every possible policy toward augmenting job growth. Once he passed his ramshackle social-spending bill called the "stimulus," though, Obama devoted most of his attention to re-engineering key sectors of the American economy - health care, finance, energy - regardless of the economic consequences.

His economic measures were supposed to be timely and temporary, but they either didn't work or were temporary indeed. We've been left with a fragile economy in the near term, while in the longer term a growing debt, unsustainable entitlements, and a senseless tax code - all of which Obama either hasn't addressed or has made worse - threaten the vitality of the country.

Democrats may want next year's election to be about Medicare; Republicans may have thought it would be about debt. But if current conditions hold, it will instead be about unemployment and the associated economic travails of stagnant wages, falling home values, and rising prices. There is no more natural theme in our politics than "putting America back to work." Next year, Obama could be vulnerable to it. It's the flashing red light of his reelection.

Rich Lowry is the editor of National Review.

[Soul Crusher]

Federal data shows troubling unemployment, underemployment trends (Hope-change alert!)
Daily Caller ^ | 6/11/11 | Neil Munro


http://dailycaller.com/2011/06/10/federal-data-shows-troubling-unemployment-underemployment-trends


________________________ ________________________ ________________________ __________

Less than half of African-American men now have full-time jobs, and less than half of all white men will have full-time jobs in 2018, according to post-2000 trends hidden in federal population and workforce data.

There are roughly 14 million people formally labeled as unemployed, but “there’s probably 22 million to 23 million people who are unemployed, mal-employed or underemployed,” said Andrew Sum, an economics professor at Northeastern University in Boston.

The hidden data shows that “we’ve got an overwhelming job gap that effects men more than women, less-educated men more then better-educated men, and the group aged 25 to 29 the most,” he said.

One startling result, he said, is that only 43 percent of African-American men aged 18 to 29 have a full-time job.

This trend is obvious to T. Willard Fair, head of the Urban League of Greater Miami. He recently advertised two janitorial jobs via the unemployment office in his local town Liberty City. The city is 85 percent African-American, yet “only 2 of the 33 applicants were African-American,” he said. “The remainder were Hispanics or Haitians.”

“People want to work, and if they can find jobs, they would take those jobs … [but] blacks are no longer even applying for those kinds of jobs, or have concluded they’re not going to get those jobs,” he said.

There’s recently been a run of bad news about unemployment trends. That’s damaged the White House’s poll ratings, but the federal government’s unemployment estimate — now 9.1 percent — counts only a portion of the nation’s non-working population. That’s because the 9.1 percent counts only people who have sought work in the last four weeks, and have failed to find employment of 35 hours or more per week.

[dario73]

Regarding the vehicular metaphors used by the failure, he mentioned that the current economy was like getting hit by a truck. Jon Stewart had a field day with that comment.

[Soul Crusher]

Many of us won’t be able to retire until our 80s
MarketWatch ^ | June 9, 2011 | Robert Powell


________________________ ______________________-



You’ll probably have to work much longer than you anticipated. We all think it’s a panacea. If you don’t have enough money saved for retirement, you’ve got a few ways to close the gap between what you have and what you need in your nest egg: Save more, invest more aggressively, and/or work longer.

Well, it turns out that working longer is indeed an option, according to the Employee Benefit Research Institute latest study. The only problem is that the latest research shows that you’ll have to work much longer than you anticipated. In fact, many Americans will have to keep on working well into their 70s and 80s to afford retirement, according to the study, titled “The Impact of Deferring Retirement Age on Retirement Income Adequacy.”

...

The new normal .

Now the reality about EBRI’s findings is that many Americans — who are able to continue working and whose skills are still in demand — are already working past age 65.

...

And the new normal isn’t that people are working past age 65, rather it’s this: They are also hunting for second jobs


(Excerpt) Read more at marketwatch.com ...

[Soul Crusher]

China ratings house says US defaulting
Yahoo/AFP ^ | June 10, 2011 | AFP

________________________ ______________________



A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order.


"In our opinion, the United States has already been defaulting," Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.


Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies -- eroding the wealth of creditors including China, Guan said.


(Excerpt) Read more at ca.news.yahoo.com ...

[Soul Crusher]

US Stocks Routed, DJIA Headed For Longest Slump Since 2002
WJS ^ | 6/10/11 | Brendan Conway

________________________ ____________________-

Another dose of anguish about the global economic recovery sent the Dow Jones Industrial Average below 12000 and put the blue-chip index on track for a sixth straight weekly decline, its longest slump since 2002.

The Dow sank 133 points, or 1.1%, to 11992 heading into the final hour of trading Friday, falling below 12000 for the first time since mid-March. The Standard & Poor's 500-stock index shed 12, or 1.1%, to 1277. The broad index has notched six weeks of declines, the longest losing streak since 2008.


(Excerpt) Read more at online.wsj.com ...

[Soul Crusher]

Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The
Zero Hedge ^ | 6/12/11 | Tyler Durden
Posted on June 12, 2011 3:13:59 AM EDT by Nachum

Courtesy of the recently declassified Fed discount window documents, we now know that the biggest beneficiaries of the Fed's generosity during the peak of the credit crisis were foreign banks, among which Belgium's Dexia was the most troubled, and thus most lent to, bank. Having been thus exposed, many speculated that going forward the US central bank would primarily focus its "rescue" efforts on US banks, not US-based (or local branches) of foreign (read European) banks: after all that's what the ECB is for, while the Fed's role is to stimulate US employment and to keep US inflation modest. And furthermore, should the ECB need to bail out its banks, it could simply do what the Fed does, and monetize debt, thus boosting its assets, while concurrently expanding its excess reserves thus generating fungible capital which would go to European banks. Wrong. Below we present that not only has the Fed's bailout of foreign banks not terminated with the drop in discount window borrowings or the unwind of the Primary Dealer Credit Facility, but that the only beneficiary of the reserves generated were US-based branches of foreign banks (which in turn turned around and funnelled the cash back to their domestic branches), a shocking finding which explains not only why US banks have been unwilling and, far more importantly, unable to lend out these reserves, but that anyone retaining hopes that with the end of QE2 the reserves that hypothetically had been accumulated at US banks would be flipped to purchase Treasurys, has been dead wrong, therefore making the case for QE3 a done deal. In summary, instead of doing everything in its power to stimulate reserve, and thus cash, accumulation at domestic (US) banks which would in turn encourage lending to US borrowers,

(Excerpt) Read more at zerohedge.com ...

[Soul Crusher]

US Is in Even Worse Shape Financially Than Greece: Gross
Published: Monday, 13 Jun 2011 | 10:33 AM ET Text Size By: Jeff Cox
CNBC.com Staff Writer


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When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco's Bill Gross told CNBC Monday.

 
Much of the public focus is on the nation's public debt, which is $14.3 trillion. But that doesn't include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Taken together, Gross puts the total at "nearly $100 trillion," that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won't find a solution overnight.

"To think that we can reduce that within the space of a year or two is not a realistic assumption," Gross said in a live interview. "That's much more than Greece, that's much more than almost any other developed country. We've got a problem and we have to get after it quickly."

Gross spoke following a report that US banks were likely to scale back on their use of Treasurys as collateral against derivatives and other transactions. Bank heads say that move is likely to happen in August as Congress dithers over whether to raise the nation's debt ceiling, according to a report in the Financial Times.

The move reflects increasing concern from the financial community over whether the US is capable of a political solution to its burgeoning debt and deficit problems.

"We've always wondered who will buy Treasurys" after the Federal Reserve purchases the last of its $600 billion to end the second leg of its quantitative easing program later this month, Gross said. "It's certainly not Pimco and it's probably not the bond funds of the world."

Pimco, based in Newport Beach, Calif., manages more than $1.2 trillion in assets and runs the largest bond fund in the world.

Gross confirmed a report Friday that Pimco has marginally increased its Treasurys allotment—from 4 percent to 5 percent—but still has little interest in US debt and its low yields that are in place despite an ugly national balance sheet.

"Why wouldn't an investor buy Canada with a better balance sheet or Australia with a better balance sheet with interest rates at 1 or 2 or 3 percent higher?" he said. "It simply doesn't make any sense."

Should the debt problem in Greece explode into a full-blown crisis—an International Monetary Fund bailout has prevented a full-scale meltdown so far—Gross predicted that German debt, not that of the US, would be the safe-haven of choice for global investors.

[Soul Crusher]

Money & Company
Consumer Confidential: Pie chain goes bankrupt, Timberland bought, Arby's sold
 () (5)(8)June 13, 2011 | 10:44 am  Here's your make-my-day Monday roundup of consumer news from around the Web:

http://latimesblogs.latimes.com/money_co/2011/06/consumer-confidential-marie-callender-pie-bankrupt-restaurant-perkins-timberland-vf-arbys-wendys.html




--Some bitter-tasting pie: Restaurant owner Perkins & Marie Callender's has filed for bankruptcy protection, brought down by tough competition, the weak economy and rising food costs. The owner of the Perkins Restaurant & Bakery and Marie Callender's chains says it plans to close 65 stores and cut 2,500 jobs, or about 20% of its work force of 12,350. The company cites the weak economic climate, particularly in California and Florida, where many of its restaurants are located, for the bankruptcy filing. Documents filed with the U.S. Bankruptcy Court in Delaware indicate the company can't afford to build new restaurants and upgrade existing ones, so it loses traffic to better-funded rivals. The two chains were "adversely affected by the languishing economy, including declines in consumer confidence and sluggish consumer spending and increased commodity costs," CEO J. Trungale said in a statement in November.










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I thought we were in recovery? 

[Soul Crusher]

Perkins, Marie Callender restaurants in Chapter 11
Denver Channel 31 ^ | 6/13/2011


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The owner of the Perkins and Marie Callender's restaurant chains filed for bankruptcy Monday with plans to close 65 of its 600 locations and cut 2,500 jobs, according to court documents.

Perkins & Marie Callender Inc. became the latest food company to fall victim to a sluggish recovery and soaring food prices. Last week, chicken producer Allen Family Foods tumbled into bankruptcy.

Perkins Restaurant & Bakery, which offers all-day breakfasts, plans to emerge from bankruptcy by giving ownership of the chain to holders of the company's unsecured debt, led by funds managed by Wayzata Investment Partners.

The bankruptcy will wipe out the investment of private equity firm Castle Harlan Inc., which acquired the Perkins chain in 2005 for $245 million.

The Marie Callender Restaurant & Bakery chain, known for pies and home-style meals, was added a year later for $140 million.

Joseph Trungale, who has been president of Perkins & Marie Callender's Inc. since 2004, said in court documents that the company was hard hit by a weak economy in states that suffered the worst of the U.S. housing crash, particularly Florida and California.

He also blamed competitors able to free up money to invest in new locations in their own bankruptcy filings.

In recent years, Uno Chicago Grill pizza, Fuddruckers, Charlie Brown's Steakhouse and Sbarro's have used bankruptcy to shed debt and revive their businesses.

Perkins was founded in 1958 as a pancake house in Ohio. Marie Callender founded the chain that bears her name in 1948 in Orange County, Calif., as a wholesale pie business. Combined, the two chains employed about 12,000 before Monday's job reduction announcement.

The Memphis-based company listed total assets at $290 million and liabilities at $440.8 million in its Chapter 11 petition. Eleven of its affiliates were included in the bankruptcy filing.

It said it had about $103 million in secured notes debt and $190 million in unsecured notes outstanding. It plans to borrow up to $21 million to fund its operations while in bankruptcy.

Last year's sales were about $507 million.

As part of the bankruptcy, the company sold its Marie Callender trademarks to ConAgra Inc. ConAgra had licensed the name for Marie Callender frozen foods it produced.

The bankrupt company received a license to continue to use the name in connection with its restaurants and baked goods.

The case is in re: Perkins & Marie Callender's Inc., U.S. Bankruptcy Court, District of Delaware, No. 11-11795.


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Obama:  "I have a bigger plane and entourage than in 2008" 

[Soul Crusher]

Retail sales fall for first time in 11 months
Marketwatch ^ | 6.14.11 | Greg Robb

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WASHINGTON (MarketWatch) — Sales at U.S. retailers decreased 0.2% in May to a seasonally adjusted $387.1 billion, the Commerce Department estimated Tuesday, further evidence that the economy has hit a soft patch.

This is the first decline in sales since last June. But details of the report were not all weak. While auto sales were down as expected, there was

some strength in building materials and miscellaneous stores. See full report.

Compared with May 2010, sales are up 7.7%.

Sales rose an downwardly revised 0.3% in April, compared with a 0.5% increase originally reported.


(Excerpt) Read more at marketwatch.com ...

[Soul Crusher]

1.9 Million Fewer Americans Have Jobs Today Than When Obama Signed Stimulus
Tuesday, June 14, 2011
By Matt Cover
http://cnsnews.com/news/article/after-28-months-stimulus-spending-19-mil


In this Nov. 4, 2010 photo, a sign turning away potential job-seekers is seen outside of a construction site in New Orleans. (AP Photo/Patrick Semansky)

(CNSNews.com) – Twenty-eight months after Congress passed President Obama’s signature economic stimulus law, and nearly one year after he declared the summer of 2010 to be “Recovery Summer,” 1.9 million fewer people are employed.

In February 2009, the Bureau of Labor Statistics (BLS) reported that 141.7 million people were employed. By the end of May 2011 – the last month for which data are available – that number had fallen to 139.8 million, a difference of 1.9 million.

While the number of people with jobs has increased slightly from its low point during the recession – 137.9 million in December 2009 – those 1.9 million jobs have been lost despite $800 billion in stimulus spending.

This does not mean that the economy is not creating jobs, but rather that it is not creating jobs fast enough to keep up with a combination of layoffs and people entering the job market for the first time.

In a Washington Post op-ed, former White House chief economist Larry Summers noted that the percentage of the population that has a job has not improved, even though the economy is technically in recovery.

“From the first quarter of 2006 to the first quarter of 2011, the U.S. economy’s growth rate averaged less than 1 percent a year,” Summers wrote. “The fraction of the population working remains almost exactly at its recession trough, and recent reports suggest that growth is slowing.”



White House chief economic advisor Larry Summers. (AP Photo/Mark Lennihan, File)

The fraction of the population with a job has in fact fallen in the 28 months since Congress passed the stimulus – down from 60.3 percent in February 2009 to 58.4 percent in May 2011.

The economy cannot create jobs fast enough to keep pace with layoffs and recent high school and college graduates seeking employment. If the trend continues, as Summers notes may happen, the economy will suffer further in the future as college graduates delay entry into the labor force, reducing their lifetime productivity.

“Beyond the lack of jobs and incomes, an economy producing below its potential for a prolonged interval sacrifices its future,” argued Summers. “Huge numbers of new college graduates are moving back in with their parents this month because they have no job or means of support.”

As both Summers and the BLS data make clear, the economy is not creating new jobs fast enough to make up for layoffs and new graduates, calling into question Obama’s oft-repeated claim that the economy is recovering and creating jobs.

In fact, by citing figures from the first quarter of 2006, Summers is understating the economy’s poor performance. According to BLS data, the number of people with jobs peaked at 146.6 million in November 2007, meaning that over the entire recession – which officially began in December 2007 – the number of people employed has fallen by 6.8 million.

[Soul Crusher]

Rosenberg Says 99 Percent Chance of Recession
Townhall.com ^ | June 14, 2011 | Mike Shedlock




In a Bloomberg video David Rosenberg, chief economist at Gluskin Sheff & Associates, says there is a 99% Chance of Another Recession by 2012. Rosenberg also talks about the outlook for the U.S. economy.


(Excerpt) Read more at finance.townhall.com ...

[Soul Crusher]

NY Fed manufacturing gauge contracts in June [unexpectedly]
Reuters ^ | June 15, 2011 | by Leah Schnurr

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A gauge of manufacturing in New York State showed the sector unexpectedly contracted in June, falling below zero for the first time since November 2010 in another sign the economic slowdown could become more protracted, the New York Federal Reserve said in a report on Wednesday.

The New York Fed's "Empire State" general business conditions index fell to minus 7.79 from positive 11.88 the month before. Economists polled by Reuters had expected a gain to 12.50.

The new orders and shipments indexes also deteriorated. New orders tumbled to minus 3.61 from 17.19, while shipments dropped to minus 8.02 from 25.75.

Employment gauges also worsened, with the index for the number of employees falling to 10.20 from 24.73 and the average employee workweek index weakening to minus 2.04 from 23.66.


(Excerpt) Read more at reuters.com ...

[Soul Crusher]

Retuers: Data shows troubling mix of weakness, inflation
Reuters ^ | June 15, 2011 | By Lucia Mutikani

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A closely watched measure of consumer prices logged its biggest rise in nearly three years in May and a regional factory gauge contracted this month, showing the economy facing a troubling mix of weakness and inflation.

The Labor Department said on Wednesday its Consumer Price Index, excluding food and energy, increased 0.3 percent, the largest gain since July 2008.

"I assume people will look at this as another reason the recovery is stalling, giving more fodder to the double dip (recession) theory," said Paul Radeke, vice president at KDV Wealth Management in Minneapolis.


(Excerpt) Read more at reuters.com ...


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Hope & Change!   

[Soul Crusher]

More small businesses plan to reduce jobs: report
Yahoo Finance ^ | June 15, 2011 | Aaron Smith

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Small business owners have a grim outlook on the economy, with a gathering number planning to reduce jobs over the next three months, according to survey results from an industry group.

The percentage of independent businesses planning to increase employment in the next three months fell to 13% in May, compared to 16% in April and 18% in March, according to the National Federation of Independent Business.

At the same time, the percentage of small businesses planning to reduce their work force has increased to 8% in May, compared to 6% in the month before, the group said.

The group said that, on a seasonally adjusted basis, the businesses see a small net decline in employment.

The survey's index of small business optimism slipped 0.3 point in May to 90.9, the third consecutive monthly decline.

The chief culprit appears to be weak sales. Some 23% of small business owners reported that sales were higher in the last three months, but 36% said that sales were lower, according to the survey.

"Corporate profits may be at a record high, but businesses on Main Street are still scraping by," wrote NFIB chief economist Bill Dunkelberg in the report. "The failure to understand why small business owners are not hiring or investing has resulted in a set of policies that have not been very effective, and Main Street is suffering."

Earlier this month, on June 6, the U.S. Labor Department reported that the unemployment rate ticked up slightly in May to 9.1%, compared to 9% the prior month.

The economy gained 54,000 jobs in May, but that's compared to a gain of 232,000 the month before, indicating that job growth is slowing.


(Excerpt) Read more at finance.yahoo.com ...



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OBAMA = FAIL   

[Soul Crusher]

Unemployment applications drop, but remain high
Yahoooooo! ^ | 06-16-2011 | Christopher S. Rugabe





Fewer people applied for unemployment benefits last week, though applications remain elevated

Fewer Americans applied for unemployment benefits last week, though applications remain above levels consistent with a healthy economy.

The Labor Department said Thursday that unemployment benefit applications fell 16,000 to a seasonally adjusted 414,000, the second drop in three weeks. That's a positive sign that layoffs are slowing.

Still, applications have been above 400,000 for 10 straight weeks, evidence that the job market is weak compared to earlier this year.

Applications had fallen in February to 375,000, a level that signals sustainable job growth. They stayed below 400,000 for seven of nine weeks. But applications surged in April to 478,000 -- an eight-month high -- and they have declined slowly since then.

The four-week average, a less volatile measure, was unchanged.

The elevated level of applications suggests that companies pulled back on hiring in the face of higher gas and food prices, which have cut into consumer spending. Hiring has slowed sharply since applications rose.

Employers added only 54,000 net new jobs in May, much slower than the average gain of 220,000 per month in the previous three months. The unemployment rate rose to 9.1 percent from 9 percent.

The economy needs to generate at least 125,000 jobs per month just to keep up with population growth. At least twice that many are needed to bring down the unemployment rate.

But economists forecast the nation will add only about 1.9 million jobs this year, according to an Associated Press Economy survey earlier this week. That's only about 150,000 per month and is lower than a previous estimate two months ago.


(Excerpt) Read more at finance.yahoo.com ...