Showing posts with label financial. Show all posts
Showing posts with label financial. Show all posts
Worst bank closures: 106 banks shut down in 2009
Clues of More Financial Hardtimes Ahead?
This year’s bank closures are the worst since 1992 during the savings and loan crisis. A total of 106 banks have been shut down by regulators of the Federal Deposit Insurance Corp (FDIC) this year. Because of the closures, it will cost FDIC about 25 billion dollars to shore up the banking system. The cost could reach $100 billion by year 2013. Just this weekend 7 banks have been shut down:
“1. Flagship National Bank, Bradenton, Florida. The FDIC entered into a purchase and assumption agreement with First Federal Bank of Florida, Lake City, Florida, to assume all of the deposits of Flagship National Bank. As of August 31, 2009, Flagship National Bank had total assets of $190 million and total deposits of approximately $175 million. In addition to assuming all of the deposits of the failed bank, First Federal Bank of Florida agreed to purchase essentially all of the assets. Total cost to the FDIC: $59 million.
2. Hillcrest Bank Florida, Naples, Florida, was closed by the Florida Office of Financial Regulation. The FDIC entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida, to assume all of the deposits of Hillcrest Bank Florida. As of October 1, 2009 , Hillcrest Bank Florida had total assets of $83 million and total deposits of approximately $84 million. Stonegate Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of Hillcrest Bank Florida. In addition to assuming all of the deposits of the failed bank, Stonegate Bank agreed to purchase $28 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition. Total cost to the FDIC: $45 million.
3. Partners Bank, Naples, Florida, was closed by the Office of Thrift Supervision. The FDIC entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida, to assume all of the deposits of Partners Bank. As of September 30, 2009, Partners Bank had total assets of $65.5 million and total deposits of approximately $64.9 million. Total cost to the FDIC: $28.6 million.
4. American United Bank of Lawrenceville, Georgia, whose deposits will be assumed by Ameris Bank, of Moultrie, Georgia. As of August 11, 2009, American United Bank had total assets of $111 million and total deposits of approximately $101 million. Ameris Bank will pay the FDIC a premium of 1.02 percent to assume all of the deposits of American United Bank. In addition to assuming all of the deposits of the failed bank, Ameris Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $44 million.
5. First Dupage Bank, Westmont, Illinois, was closed today by the Illinois Department of Financial & Professional Regulation -- Division of Banking. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Midwest Bank, Itasca, Illinois, to assume all of the deposits of First Dupage Bank. The sole branch of First Dupage Bank will reopen on Saturday as a branch of First Midwest Bank. As of July 31, 2009, First Dupage Bank had total assets of $279 million and total deposits of approximately $254 million. In addition to assuming all of the deposits of the failed bank, First Midwest Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $59 million.
6. Riverview Community Bank, Otsego, Minnesota, was closed today by the Minnesota Department of Commerce. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Central Bank, Stillwater, Minnesota, to assume all of the deposits of Riverview Community Bank. As of August 31, 2009, Riverview Community Bank had total assets of $108 million and total deposits of approximately $80 million. In addition to assuming all of the deposits of the failed bank, Central Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $20 million.
7. Bank of Elmwood, Racine, Wisconsin, was closed today by the Wisconsin Department of Financial Institutions. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Tri City National Bank, Oak Creek, Wisconsin, to assume all of the deposits of Bank of Elmwood. Bank of Elmwood had total assets of $327.4 million and total deposits of approximately $273.2 million. Tri City National Bank did not pay the FDIC a premium for the deposits of Bank of Elmwood. In addition to assuming all of the deposits of the failed bank, Tri City National Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $101.1 million. “---ConsumersAffairs.com (10/24/09, Bosworth, M.)
Bank officials expect more closures to extend till 2012. Taking the option to close in order to avoid public panic, many smaller banks are hard hit by delinquency in loan payments, falling home values, and worsening unemployment of about 10%.
As a result of bank failures, the insurance fund of the FDIC is in danger of being depleted. Financial analysts believe the projected recovery between 2010 to 2013 will not be as robust as the optimism expressed by the Obama administration. (Photo Credit: Debtfree/ Daniloff) =0=
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A slow recovery from recession is still a threat according to Dr. Doom
Nouriel Roubini, the economics guru of NYU who accurately predicted the morbid economic meltdown still warns of a double dip recession in spite of the rosy forecast made this week by the chairman of the board of governors of the US Federal Reserve Ben Bernanke--- that there are indicators that the recession is wearing away.
Called Dr. Doom for his precise economic forecasts, Roubini shared his thought-provoking opinion in an article he wrote in Ft. com (Financial Times) on Sunday August 23, 2009 entitled “The risk of a double dip recession is rising.”
Unlike many optimists who want to have a rapid V-shaped recovery, Roubini thinks a U-shaped slow healing from the economic downturn is more likely to occur, probably within a two-year period.
Among the Roubini's reasons for a sluggish recovery are the rising unemployment in US and other parts of the world topping 10% till next year. A crisis in solvency prevents banks to lend and the private sector to invest. Consumers are cutting on expenses. The financial system has still to recover from the damage and losses incurred during the meltdown. Energy and food prices are still rising. There is less profits with high risk of debts and defaults as companies avoid expanding their investments and hiring more workers. (Photo Credit: canoraa) =0=
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After a “life of splendor” Madoff’s wife is sued to turn in $45 million
A trustee representing the victims of the notorious Ponzi artist Bernie Madoff sued the swindler’s wife Ruth. Irving Pickard, the appointed trustee of U.S. Bankruptcy Court in New York, claimed Madoff’s wife who led a “life of splendor” got $44.8 million in six years prior to her husband’s financial downfall. He wanted the money to be seized for the benefit of the scam victims.
"While Madoff's crimes have left many investors impoverished and some charities decimated, Mrs. Madoff remains a person of substantial means. The inequity between Mrs. Madoff's continuing financial advantages and the economic distress of Madoff's customers compels the trustee to bring this action."----CNNMoneey.com (07/29/09, Smith, A.)
After federal authorities seized the assets of Bernie Madoff, his wife who was not charged of a crime, was left with $2.5 million. Her swindler-husband who pleaded guilty of bilking his trusting clients in a decades-long $65 billion pyramid scheme is serving a sentence of 150 years in the Butner Federal Correctional Institution in North Carolina. The huge financial fraud left thousands of investors in financial ruin.
The money involve in this Madoff crime reminds us that America has become dishonest and extravagant in its spending. There are many US citizens who live a high life way beyond their means at the expense of others. They are not used to simple living. It augurs badly on their adaptability in the face of financial hardship.
One can just point to the billions and trillions being spent by the government that many cannot fully understand. With mismanagement and lack of accountability, it is likely to compromise the financial future of taxpayers and the next generation.
The budget deficit of the country is at an alltime high that even China is starting to question USA's ability to pay. The extravagant spending of the Obama administration doesn't match his rhetoric of belt-tightening and cost-cutting---his campaign promise during the election. There is a time when America is thought to be too big to fail, but in times of economic crisis, even the strong can slump down on his knees. (Photo Credit: NY Post) =0=
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King Ponzi schemer Bernard Madoff gets max of 150 years in jail
After irate testimonies from his victims, the financial whiz Bernard Madoff who defrauded his clients of some $65 billion in a Ponzi scheme, the largest in recorded history, was sentenced to 150 years in prison. It was the maximum that could be handed for a crime of such magnitude. The sentence was far more than the 12 years his lawyer asked for the reviled deceitful defendant. He stole huge money from trusting investors all across the globe right under the noses of government regulators.
US District Judge Denny Chin of the Manhattan Federal Court in New York handed the verdict to the cheers of a crowd that included his disgruntled clients from all across the social economic spectrum----investors from all races--- rich and poor, young and old, known and incognito who have lost their life savings and humiliated in a spurious money operandi masterminded by Madoff.
"Here, the message must be sent that Mr. Madoff's crimes were extraordinarily evil," Chin said. "This kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll."---Judge Denny Chin (06/29/09, New York Daily News (06/29/09, Zambito, T, Martinez;Siemaszko, C.)
Some of Madoff’s Victims
------------------------------------------Description---------------------Amount
Fairfield Greenwich Advisors-----investment firm--------------$7,500,000,000
Banco Santander------------------Spanish bank-----------------$2,870,000,000
Bank Medici-------------------------Austrian bank----------------$2,100,000,000
HSBC--------------------------------- British bank-------------------$1,000,000,000
BNP------------------------------------French bank-------------------$431,170,000
New York University------------------University--------------------$24,000,000
Korea Teachers Pension----------Korean Pension Fund---------$9,100,000
Marc Rich------------------------------fugitive financier--------------Not available
Yeshiva University---------------------NY private university--------$14,500,000
Int’l Olympic Committee--------------Olympic organizer----------$4,800,000
Zsa Zsa Gabor-------------------------actress------------------------$10,000,000
Diocese of St. Thomas--------------Cath. Church (Virgin Is)-----$2,000,000
Source: http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html
In a statement Madoff’s wife Ruth who was not charged of a crime spoke of her shame and embarrassment, saying she too was betrayed. Most of those who followed the case, including the victims believe, Madoff who lived an extravagant life, got what he deserved.
His clients had been hurting since the discovery of the fraud. The 71 year-old former Nasdaq chairman apologized for his wrongdoing which ruined the finances of many. After a 6-minute statement of regret, the king of Ponzi was led by gurards to a solitary maximum security seclusion at the Manhattan Federal jail. More investigation had to be done to uncover the money trail in the confusing gargantuan scam. (Photo Credit: GiganticPanda) =0=
RELATED BLOGS: "Bernard Madoff, accused top Ponzi scheme artist is allowed bail" Posted by mesiamd at 1/13/2009; "Ponzi wiz Bernard Madoff sent to prison" Posted by mesiamd at 3/13/2009
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California inches close to bankruptcy
Affected by the biggest recession gripping the country, the state of California has failed to come up with a budget, bringing the golden state near financial insolvency. The state is spending like crazy more than it can generate income. Government revenue is down by 27%. Business has been slow forcing companies to down-size or stop operation.
If no budget is agreed upon, the state is expected to run out of money by the end of July.
“It will run out of cash within weeks if it does not balance its books, leaving it little option but to postpone a variety of payments, according to State Controller John Chiang, who estimated last week that California was "less than 50 days away from a meltdown of state government."---Reuters (06/15/09, Christie, J; Gevirtz, L.)
California's income has dwindled with rising joblessness rate of 11% and unchecked housing crisis making it hard to close the budget gap of about $24 billion. One option is to cut spending --- the curtailment of entitlements and welfare programs including health insurance.
Budget cuts may be needed by putting teachers, firefighters and police officers out of work and stopping medical-care services. More taxes could be levelled on the residents to generate income. Unlike in the past, Californians are learning to live within their means just lilke Americans across the country. (Photo Credit: Jose Antonio Galloso) =0=
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US jobless rate slows, but still high at 8.9%
Banking on hope that USA is on its way to economic recovery, the Obama administration takes consolation in having less than the expected joblessness for the month of April. The US Labor Department reveals that unemployment rate last month has risen to 8.9%, the highest ever since 1983.
Many of the jobs filled are vacancies in the government bureaucracy and less from employment generated by the private sector. This is in spite of the bail-outs given to shore up the ailing financial health of big businesses. The companies which asked for help from the US government have hardly been rehabilitated.
"This was another bad report. There was a significant deterioration in the labor market again. The job loss is large, it is widespread, it is affecting every industry sector and every demographic group," Commissioner of the Bureau of Labor Statistics," Keith Hall said.---Voice of America News.com (08/09/09, Tate, D)
The data showed 539,000 jobs were lost in April, bringing the total number of unemployed to 13.7 million, up from 13.2 million in March. The half a million job loss was lower than what economic experts earlier predicted. It was unclear why the worrisome employment recond didn’t dampen Wall Street which ended in a positive territory as the week ended.
Americans are soberly waiting for the Obama "magic" to take effect. It's too early to say whether the US economy is on the road to recovery. The huge bail-out money infused into the financial market can't be a guarantee. Americans have learned a hard lesson from the reckless spending prior to the recession. Basically, the ordinary US citizen is on his own, just hoping that those who manage the economy of the country will come out doing the right thing. (Photo Credit: Ben Heine) =0=
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Fearless economic forecasts
Dominique Strauss-KhanIn a warning delivered by IMF Managing Dir. Dominique Strauss-Khan during a conference of African finance ministers and central bank governors, the International Monetary fund (IMF) speaks of the deepening global financial crisis and the possibility that the world's economic growth will be zero.
The financial meltdown can cause massive suffering, social displacement, and chaos in vulnerable countries.
The effects of the downturn may not be fast in reaching Africa, but Srausse-Khan said, “continued deleveraging by the world's financial institutions, combined with a collapse in consumer and business confidence, is depressing domestic demand across the world."----Philstar (03/10/09)
Warren Buffet
On the other hand, American billionaire Warren Buffet who has the common sense of living "below his means" believes America will bounce back even though “it has fallen off a cliff.” The “Oracle of Omaha” who predicted the worst case scenario in the last 6 months, watches a nation swept with a housing slump, high unemployment, and inflation. He sees lack of confidence, confusion, and fear are defining consumer behavior at this time.—The Washington Times/ AP (03/09/09, Funk J)
Harry S. Dent
Similar gloomy predictions have been made by American economist Harry S. Dent in his book “The Great Depression Ahead : How to Prosper in the Crash Following the Greatest Boom in History.” The book is a good read. He speaks of this year as a bad season---ushering economic turmoil that none of the current generation has seen.
Nouriel Roubini
Nouriel Roubini, professor of NYU’s Stern School of Busicness believes the US recession could last up to 36 months. With no hope of ending the recession this year, "Dr. Doom" said,, "Growth is going to be close to zero and unemployment rate well above 10 percent into next year."----CNBC (03/09/09, Wells, J)
Pres. Barack Obama
But President Barack Obama offers bright economic forecasts with his proposed $3.55 trillion budget. He predicts that the economy will shrink by only 1.2%, and will recover in 2010 with a growth of 3.2%. However, non-partisan analysts believe this is overly-optimistic.---McClatchy Newspapers (02/26/09, Hall, K)
The public is less upbeat than Obama, but people are willing to give him the benefit of the doubt. Midway in the 100-day honeymoon period after assuming presidency, he gets a 67% approval rating, a very good grade at this time when Americans are fearful and disconsolate over the financial ruin they are dealing.(Photo Credit: Atsibatsi)=0=
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In spite of a collapsing financial world, $18.4 billion were spent for greedy bonuses in Wall Street
If there is consolation to American taxpayers damaged by the economic meltdown, Pres. Barack Obama criticized billions of astounding spending. He decried as "shameful" and "irresponsible" the $18.4 billion bonuses distributed during the past year for workers in Wall Street. Yes! In spite of a 44% cut on yearend perks given to the money merchants, the amount clearly shows the extravagance and greed of the people who are partly to blame for the financial crisis. A staggering $18.4 billion was spent as giveaways in spite of the $700 billion bail-out they asked and handed over by the government because of a crumbling economy.
This news doesn’t help the effort to bring back trust in the system. The disclosure speaks of top officials still engaged in reckless spending, some using large amounts of money in the shadows to continue their vice.
Amidst joblessness, home sales slump, and poor stock performance, Obama is facing the challenge of making the public believe. Congress has just approved the $825 billion “stimulus package” which is basically another big spending to mitigate the damaging effects of the financial mess. More enraged Americans fear that unless transparency and ethical practice in business is restored, there is little reason to hope that confidence will come back and the economy will be fixed in due time. (Photo Credits: Epicharmus x 2)=0=
Iceland’s government fails as the economic crisis worsens
After attempts to reverse Iceland's financial crisis since October last year, Reykjavik's government has collapsed amid street protests from citizens who set fires and hold noise barrages with pots and saucepans. Having lost trust in government, angry Icelanders protest a mismanaged economy, worsening joblessness, and rising cost of goods.
Prime Minister Geir Haarde couldn’t quell the public’s disappointment after Iceland’s currency lost its value and banks failed that mirrored the financial troubles in Wall Street and many countries in Europe.
“The IMF announced in November it would pump about $827 million into the Icelandic economy immediately, with another $1.3 billion coming in eight installments. Iceland's Nordic neighbors -- the governments of Finland, Norway, Denmark and Sweden -- announced they would lend Iceland another $2.5 billion.”---CNN.com/europe (01/25/09, Nyeberg, P)
Calling for an earlier election in May, Haarde, who had been afflicted with cancer, resigned and announced he wouldn’t run for another election. Fearing national bankruptcy, he dissolved the coalition government he headed--- formed by the Social Democrat party and Independence party.
With the government’s future uncertain, the island-country’s figurehead President Olafur Ragnar Grimsson said he would consult with Iceland's four main political parties before asking that an interim government is formed.
Similar economic and political troubles are happening in many parts of the world as well. Hard hit are the economies of the United States (USA) and Great Britain which have embarked on their respective financial remedies. The outlook of the crisis at this time is grim even if economic bail-out packages at the expense of taxpayers have been laid out. Nobody seems to know how and when the financial mess will end. Ordinary citizens are left confused and fearful of what next will happen. (Photo Credit: Nele en Jan; Jon Palma)=0=
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Obama psyches the Americans of grim economic times
I don’t know of anyone who hasn’t been affected by the financial crisis caused by the meltdown of business in America. The most pitiful are the people who honestly saved and invested only to find out their portfolio has failed. They don’t have the luxury of youth and time to recoup the loss. Those who rely on fixed income may find themselves without money if retirement and pension don't pay. The jobless and hungry are easily agitated. Economic hardship is a perfect recipe for social unrest. With the public's high expectations on the new administration, it's dangerous if Barack Obama fails.
Barely two weeks before Obama is to be inaugurated as president, his campaign promises don’t jibe well with the gloomy realities of the times. His dire warnings prepare the spooked public of the bumpy road ahead. Spending is needed more than what the government originally told the people.
Obama can only say in grim and gray terms on how he'll solve the economic problem, but he doesn't give specifics. The cost of the stimulus package he asks the congress on Thursday, January 8, 2009 hasn't been determined, but experts say it should not be more than $1 trillion dollars. The federal budget deficit is huge and critics warn of deeper pain if the government shoulder the money woes of private entrepreneurs.
There's no guarantee that the bail-out of the banking system, the auto manufacturers, and housing industry will work. The economy is rife with dreary predictions of worsening unemployment, bankruptcies,and unrelenting housing slump. Americans are confused and want transparency in the transactions which put their life savings and taxes in line.
At a Glance, January 8, 2009:
540,000 unemployed projected for Jan. '09 (up from 492,000 in Dec. '08)
4.5 million workers on unemployment aid
2.4 million jobs lost in 2008
1.2 trillion dollars Federal Budget deficit
1 trillion dollars---estimated stimulus package needed
As of January 8, 2009, the joblessness is expected to have risen from 492,000 to 540,000 based on the number of newly-laid off people seeking state unemployment aid. The approximate number of workers taking unemployment benefits is at 4.5 million, many of whom are finding hard to get jobs.
Assuming that 500,000 additional jobs have been lost last month, it is estimated that at least 2.4 million jobs disappeared in 2008. Business downsizing and closures continue. The trend will be more elucidated on Friday, January 9, 2009 when the Department of Labor releases the most current employment report. The federal budget deficit is expected to reach $1.2 trillion this year, about 3X bigger than the previous year.
Like most Americans, I want Obama to succeed. Casting away politics, I feel it's in our interest that the economy bounces back on its track. Yet, the public is suspicious and worried; their confidence is at its deepest low. In spite of bipartisan support, many aren’t optimistic that a quick recovery will come. Obama is asking for more government infusion of money, a stage for a possible run-away spending that isn’t in his "change" and "yes, we can" campaign plan.
The uncertainty which fuels this lack of confidence is magnified by the ugly economic picture. Even if the public keeps quiet, the cultural and social environment which made the people endure and outlast the Great Depression in the 1930's might be slipping away--- at worst, it might be nonexistent. Today's Americans belong to a different generation of innovators. Whether the values of trust, honesty, and fair play have been eroded to impair recovery, nobody seems confident to answer.
There's real fear as there's hope. But many are shocked that the rules of governance and citizenship are quickly being changed to suit a social agenda whose end they don't know. They aren’t used to live in poverty or be dictated upon on how they will use their money. Even if they pride themselves of resiliency, industry, and independence, the overall picture isn't good. (Photo Credit: bscott2007)=0=
RELATED BLOG: "Dr. Doom’s economic crystal ball & the need to say the truth"
Posted by mesiamd at 10/30/2008
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Michael Jackson's white sequined glove for sale
King of Pop Michael Jackson had known what economic downturn means early on. Before the money crunch of Wall Street hugged the news, Michael already met his own financial rut. Because of insolvency, Neverland, his fabled private 2,800-acre (1,100 hectares) amusement park in Los Olivos, California was a subject of foreclosure proceedings. Last month he had to settle out of court with a Bahraini prince on a lawsuit of a failed music deal. This is on top of a child molestation case he had ot endure a few years back.
The 50-year old reclusive music star is now about to tap cash from his personal effects. It was announced that the famous beaded white glove he used in the “Billie Jean” video will be put out for sale along with other items. To woo the highest bidder, the glittery glove and some 2,000 pieces of his memorabilia will be auctioned to realize cash, part of which will be used to support charities.
Jackson’s story continues to befuddle his fans. His life tells of a tragi-comic tale of a ride in a world that is often solicitous, but at times--- harsh and forbidding. Looking at the state of things, what is clear is money problem affects not only the poor but the super rich as well. (Photo Credit: www. Bongo News.com) =0=
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Longer recession blues as more jobs are lost in USA
As the first week of December ends, Americans are bracing for bleaker economic news today as the report of joblessness from last November will be released by the Labor Department. From October’s 6.5%, the unemployment rate is expected to rise to about 6.8% as more pink slips for laid-off workers, estimated to be about 320,000, are issued as the Christmas holiday closes in.
“Just in recent days, household names like AT&T Inc., DuPont, JPMorgan Chase & Co., as well as jet engine maker Pratt & Whitney, a subsidiary of United Technologies Corp., and mining company Freeport-McMoRan Copper & Gold Inc. announced layoffs.”---AP (12/05/08, Aversa, J)
It is said that since the start of the year 1.2 million jobs have been lost. It is feared that this can further aggravate the financial woes being suffered by the three big US auto companies: General Motors Corp (GM,) Chrysler LLC and Ford Motor Co.
Partly due to confusion, anger, and lack of knowledge, ordinary Americans are divided if bail outs of these companies are the solution to the problem. Capitol Hill is still weighing in whether to give the $34 billion asked for by the auto industry managers for their company's survival.
The guarantee of tax-payers’ money to rescue these failing companies are the last that Americans want, but they seem to have little options. With a national debt of about $10.7 trillion dollars, America still talks big about money and spending. There are those who have been not been roused to the reality that the economy is truly in bad shape.
But, the conscientious public is thinking whether the nation can afford the extravagance, greed, and recklessness its leaders and citizens have been used to. In spite of assurances, the competence and ethical integrity of those running America are now being questioned. The issue of confidence in the American system is causing ripples in business circles worldwide.
As predicted by many business analysts, USA is likely to be stuck for a long haul in a deep recession whose post-war average duration is 10 months, the longest at 16 months. This December marks the 12th month of the current recession whose existence has been muddled for sometime by economic experts until just recently.
At the disclosure of the recession, President-elect Barack Obama announces a 2.5 million job generation plan which may cost the government $500 billion to finance. The staggering amount make the ordinary citizens dizzy as the new administration is headed for a glittery inaugural bash in January 20, 2009.
Confidence on America's leaders has been under the cloud of doubt since the down-turn of the stock market and the failure of banking and housing industries. Next comes the the auto industry. The fall-out of these economic troubles to the world in spite of optimistic assurances isn’t completely known, but many are hurting and many more are going to be hurt. (Photo Credits: wwww.fortunewatch.com) =0=
RELATED BLOGS: "Mr. Fix & the tall challenge to keep USA & the world to believe that we can quickly come out of the financial mess" Posted by mesiamd at 11/22/2008; "Like Filipinos, Americans Have Money Troubles Too!" Posted by mesiamd at 7/16/2008
Mr. Fix & the tall challenge to keep USA & the world to believe that we can quickly come out of the financial mess
It is said that when a new president gets elected in the United States, Wall Street gets exuberant and the market becomes cocky. Renewed confidence and optimism bring an upward trend in stocks trading in America and the rest of the world. The upward trend hasn’t happened in President-elect Barack Obama, the Mr. Fix expected by many to deliver the world from this troubling economic mess.
Since the Great Depression (1930’s to the 1940’s,) America suffers from the worst financial downturn. On Friday, November 21, 2008, on midday trading, the Dow Jones Industrials (DJI) tumbled 67.47 points further, or 0.89 percent, to 7,484.82. The Standard & Poor's 500 Index (.SPX) lost 8.85 points, or 1.18 percent, to 743.59. The Nasdaq Composite Index (.IXIC) was down 17.82 points, or 1.35 percent, at 1,298.30.
In spite of the $700 billion bailout, the market continues to slide. With the public confused of what is going on, economic planners need more money for bailouts to keep the economy on track and stable. There are those who seriously doubt whether this will work as instability and business losses continue. Financial leaders like Ben Shalom Bernanke of the Federal Reserve and Henry Paulson of the Treasury have a short window period to work on before the full blown effects of the crisis appear early next year.
Joblessness at 6.5%, the highest since 1994, is expected to top 8.5% in 2009. It feeds the fire of uncertainty, raising doubts on the usefulness of helping the floundering US auto and banking industry.
More business close-downs are feared. The housing market has almost screeched into a halt leaving many homes in foreclosures. American auto manufacturers brace for bankrupcies. The public is spooked by advisories of store closings. Americans are angered and worried. The usual honeymoon period given to an incoming administration may not last long as the impatient public can’t wait for the magical fruition of Obama’s promise during the campaign. A scramble to form a government cabinet to help the new president shows signs of old hands from the Clinton administration which make people to ask if it’s the same traditional politics that will be at play. Without guarantee of success, there is palpable anxiety over leaders with checkered past trying to reprogram the nation’s socio-economic direction.
Obama is in a bind. There is a growing belief that the recession will last longer than what has been experienced in recent history. Some are thinking that it can grow worse to precipitate the hapless conditions of the Great Depression. Though not much can be done by individual US citizens to prevent the worse, sensible measures like focusing on one’s job, belt-tightening in personal finance, and deciding wisely on investment strategies are recommended.
Global economies are suffering. The American sniffle has worsened and spread into a global pneumonia whose end result is basically unknown. A protracted economic malady is likely to bring instability and stagnation. It makes civil unrest and chaos more likely particularly in the poor countries where hunger is common.
Meanwhile, the public overwhelmingly craves that Obama comes victorious in reversing the ugly course of business. How best he can do it is subject to debate and entails vigilant waiting. While he prepares for his inauguration in January, Americans gripped with worry need to give him time and the benefit of the doubt. (Photo Credits: JSDart)=0=
RELATED BLOG: "Dr. Doom’s economic crystal ball & the need to say the truth" Posted by mesiamd at 10/30/2008
Refusing to take off from the campaign: a clue to Obama’s questionable decision making?
With Sen. Barack Obama gaining fresh lead over Sen. John McCain, the presidential candidate of the Democrats, in projecting that he can do multi-tasking if elected, repudiated McCain’s call to temporarily stop the campaign and postpone the political debate with Obama on Friday September 26, 2008 to help in solving the financial crisis that threatens collapse of the economy, the worst since the Great Depression. In a display of bipartisan leadership, McCain takes another smart move which if successful, will make Obama puny in governance and inexperienced in setting priorities. It’s from the backlash of the financial crisis on the Republicans that he earns a significant lead over McCain, a GOP member tied up by party affiliation with the Bush administration.
Obama wants to pursue votes instead of being with the legislators to tackle the $700 billion bail-out package proposed by the administration and objected to by the Democrats. But Obama,confident that he can do many tasks at the same time, agrees to meet with Pres.George W. Bush and McCain on this issue. The readiness of McCain to sacrifice losing an election to solve a high-profile economic issue is suggested by his decision. He halted his campaign including a stop on all his advertisements.
McCain comes along consistent with his campaign message of putting the country “first” above all other ambitions. But surely, the Democrats dismiss his decision as part of a McCain’s “photo op” with the congress. It remains to be seen whether the maverick in McCain will have windfall in his decision the same way he got in choosing Gov. Sarah Palin as his running mate. Certainly, the financial crisis is tops on the minds of Americans right now. Photo Credit: Mario Zucca; Afrael=0=
Obama takes a statistical lead on the 41st day before election; McCain suspends campaign and debate to address financial crisis
Presidential candidate Barack Obama gains 6 point lead over John McCain today September 24, 2008, 41 days before the November 4 election. Obama’s present advantage is probably a windfall from the blame the Republican party is getting from the financial meltdown bogging the market after Fannie Mae, Freddie Mac, Lehman Brothers, Bear Stearns, among others filed government protection from bankruptcy.
The genesis of the economic crisis is traced on long-standing corporate greed pervasive in Wall Street, the weak oversight by government regulators for many years, corruption, and the lack of accountability in the banking system, making both Democratic and Republican parties culpable.
In 2001, the Bush administration had pushed for a tightening of the mortagage lending, but Democrats like Cong. Barney Frank (D-MA) head of house financial services committee blocked the initiative.
Citing urgency of the matter, McCain,in a display of leadership, cancels a scheduled debate with Obama on Friday night, September 26, 2008, to focus in bringing a bipartisan solution to the crisis. A bail-out financial package is needed to be passed by the Congress to avert further damage in the economy.
At this time, Obama doesn't want to stop his campaign. He thinks he can do the campaigning and helping fix the economic crisis at the same time. The impasse in the proposed $700 billion bailout of the financial institutions need to be addressed quickly to avert full-blown economic collapse. (Photo Credit: Mario Zucca)=0=
2009 national budget, 100,000 jobs, & the Asian poverty line
P1.415 TrillionThe 2009 national budget, 15% higher than of 2008, has been approved by Pres. Gloria M. Arroyo and will be submitted to Congress. Manila Bulletin (08/26/08, Rosario,B)
24.5 Million
The number of Filipinos who fall below the “Asian poverty line” of $1.35/day spending, according to the Asian Development Bank (ADB.) An estimate of purchasing power and level of financial hardship, the Philippines’ percentage of people below the poverty line (29.5%) is better than India, Bangladesh,, and Cambodia, but worse than Pakistan, Indonesia, Vietnam and Sri Lanka . ABS CBN News.com/Newsbreak (08/27/08, Rimando,L)
1
The remaining flying C-130 Hercules plane the Philippine Air Force (PAF) has after the recent crash in Davao City; all pilots and crew remain missing and are presumed dead. Malaya (08/27/08, Chua, J.)
P1 Billion
To bring home medals in future Olympics and to augment competitiveness, a proposed increase in the budget of the Philippine Sports Commission, double the previous amount of P500-600 million, was aired by Monico Puentebella, RP chief of Olympic Mission. Though not strictly implemented, Philippine Amusement and Gaming Board Corp (PAGC0R,) is mandated by law to give 5% of its gross income to the sports development. GMA TV News (08/26/08)
29 Cases
This reported new HIV cases/ month of 2007-2008 is higher than the 20/month of the previous years. Since 1984, a total of 3,305 HIV cases have been reported in the Philippines and 310 people have died from AIDS. These figures are low-prevalence statistics which can change into high prevalence or to an epidemic if HIV cases continue to rise. AFP (08/26/08)
24
Number of maids, including Filipinos, who died in Lebanon as reported by Human Rights Watch, the New York based the group who said that Overseas Foreign Workers (OFW’s) from countries like the Philippines, Sri Lanka and Ethiopia were forced to suicide by jumping out of buildings because of isolation, difficult working conditions and maltreatment from their employers. AFP (08/26/08)
P406.8 Billion
The amount paid by the Philippines for its loan between January to July this year, 0.6% less than the amount paid for the period of 2007. Lower by 6.9% from P249.88 billion, the principal debt payments totaled P232.6 billion. Interest payments totaled P174.22 billion, up 9.2 percent from P159.49 billion. PDI (08/28/08, Remo, M.)
74,581 Families
The number of families with 362,475 persons displaced as of August 27, 2008 in the war between MILF rebels and Philippine Government forces in Mindanao, said the National Disaster Coordinating Council (NDCC.) To escape the fighting, 33, 438 families (156,059 people) fled to 152 evacuation sites. At least 55 have died in the ongoing hostilities. GMA TV News (08/27/08)
100,000 Jobs
Bureau of Immigration (BI) Marcelino Libanan claimed this number of jobs which can be generated with the granting of indefinite visas for foreigners who can provide at least 10 gainful employment opportunities for Filipinos in their businesses. Manila Bulletin (08/28/09, Ramirez, J.)Photo Credit: Simmons,A.=0=
Bare Truth or Fairy Tale? (Is Little Red Riding Hood & The Wolf One And The Same?)
“Because tough choices were made, the global crisis did not catch us helpless and unprepared. Through foresight, grit and political will, we built a shield around our country that has slowed down and somewhat softened the worst effects of the global crisis. We have the money to care for our people and pay for food when there are shortages; for fuel despite price spikes. Neither we nor anyone else in the world expected this day to come so soon but we prepared for it.”
--- State of the Nation Address (SONA,) Pres. Gloria M. Arroyo, 2nd Regular Session of the 14th Congress Republic of the Philippines
28 July 2008
Like Filipinos, Americans Have Money Troubles Too!
In an article by Glen Curtis (Investopedia.com,) an interesting graph from US Bureau of Economic Analysis caught my attention. It’s a telling illustration of our floundering savings rate when the cost of living around us is skyrocketing. Waking up to a world threatened by economic uncertainty and global recession, Americans are unable to save enough for the future. They have pressure from poor countries who ask them (plus their rich counterparts in the developed world) to share and redistribute wealth worldwide to stave off scarcity and famine.
But like Filipinos, Americans are aching in their pockets too. They don’t save as much money as before.
Burdened by impulse buying, house mortgages, and rising costs of credit card debts, the average personal savings rate of Americans is negative 0.5% in 2005, a time when they dug deep into their savings and spent all their incomes. This was close the worst savings rate in 1933 at the height of the Great Depression when savings rate plunged to negative 0.7%.
Today, the US income savings rate is about 0.5%, far short of the recommended 10%, to protect from unexpected money troubles in the future. According to experts, a savings below 5% of income brings serious possibility of financial ruin. They advise an allowance of at least 6 months of salary savings to cushion for any unforeseen change in our cash needs---unemployment, loss in natural disasters, illness, divorce, death in the family to name a few.
More belt-tightening is required of us to avoid becoming a bankruptcy casualty. We need to work harder and longer. It’s important to know where we are in our finances so we can make the needed corrections before our money situation worsens.=0=
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