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1.State IOUs loom as foes' battle lines harden (www.latimes.com)
Budget hopes fade and officials prepare to issue scrip to creditors. The governor calls lawmakers' inaction on the budget 'inexcusable' and orders a special emergency session of the Legislature........
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2.Debt Deflation in America: What the Jump in the U.S. Savings Rate Really Means (www.globalresearch.ca)
Happy-face media reporting of economic news is providing the usual upbeat spin on Friday’s debt-deflation statistics. The Commerce Department’s National Income and Product Accounts (NIPA) for May show that U.S. “savings” are now absorbing 6.9 percent of income.
I put the word “savings” in quotation marks because this 6.9% is not what most people think of as savings. It is not money in the bank to draw out on the “rainy day” when one is laid off as unemployment rates rise.
The statistic means that 6.9% of national income is being earmarked to pay down debt – the highest saving rate in 15 years, up from actually negative rates (living on borrowed credit) just a few years ago. The only way in which these savings are “money in the bank” is that they are being paid by consumers to their banks and credit card companies........
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3.Bernanke Threatens Economic Collapse If Fed Audited (www.prisonplanet.com)
Federal Reserve chairman Ben Bernanke unleashed an alarming veiled threat of financial terrorism when he was questioned by Rep. Duncan on Thursday about his response to the fact that a majority of Congress co-sponsoring Ron Paul’s H.R. 1207 bill to audit the Federal Reserve.
Bernanke clearly regarded the bill’s intent as hostile to the institution he represents:
“My concern about the legislation is that if the GAO is auditing not only the operational aspects of the programs and the details of the programs but making judgments about our policy decisions would effectively be a takeover of policy by the Congress and a repudiation of the Federal Reserve would be highly destructive to the stability of the financial system, the Dollar and our national economic situation.” video -
4.Is the Fed Juicing the Stock Market? (www.globalresearch.ca)
Why has the stock market been on a 3-month tear when the economy is undergoing the worst economic contraction since the Great Depression? The S&P 500 has shot up 40% from its low on March 9 and the Dow Jones Industrials have followed close behind. Is this a typical bear market rally or is the invisible hand of the Fed goosing the markets?
Everyone seems to agree that the Fed's multi-trillion dollar quantitative easing (QE) is the jet-fuel that's put stocks into orbit. But how is the money filtering into the market? read more
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5.Worldwide Depression: Review of Global Markets (www.globalresearch.ca)
As you have already seen this is a worldwide depression and no one will escape. Europe’s economy is already in a shambles as is the US economy. Inflation will rage all over the world, because every nation has created massive amounts of money and credit as demanded by US and British elitists. They have all overmedicated the patient. As the Broadway hit play of many years ago told us, we are going to have to go through a “Period of Adjustment.” Some nations will get off easier than others. There will be no decoupling and many nations could have revolutions.
Government spending and increased debt has been taken on by all countries and to in part pay for that taxes will rise everywhere. Deficits will hit records as far as the eye can see. You can’t have massive spending, massive debt and massive tax increases and expect to have growth. It is impossible.
Thus far government has been able to paper over the systemic meltdown in the financial area. They still haven’t dealt with off balance sheet and derivative losses. Even with the trillions poured into these entities it has not been enough to solve their problems and over the next few years that will become obvious........
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6.One in Four Mortgage Defaults Are “Strategic”: People Who Could Make Their Payments Are Choosing to Default Instead (blacklistednews.com)
It is easier to dump a home loan if a friend has done so too
HOUSE prices in America have fallen so far that as many as one in five households have mortgage debt greater than the value of their homes. In a few states, borrowers are not liable for the shortfall between an unpaid loan and the resale value of the home it is secured upon. Even where borrowers are on the hook, lenders often find it too costly to pursue unpaid debts. So some homeowners may be tempted to default and escape the burden of negative equity.
How widespread is this practice? New research* based on a survey of 1,000 homeowners suggests that one in four mortgage defaults are “strategic”—by people who could meet their payments but who choose not to. The main drivers of strategic default are the scale of negative equity, and moral and social considerations. Few would opt to renege on their mortgage if the equity gap were below 10% of their home’s value, the authors find, partly because of the costs of moving. But one in six would bail out if loans were underwater by a half........
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7.States brace for shutdowns (www.latimes.com)
Reporting from Indianapolis and Denver -- The last time Indiana missed its deadline for passing a budget and had to shut down the government was during the Civil War.
But on Monday, as lawmakers raced to hammer out an agreement over school funding, state agencies began preparing 31,000 workers to be temporarily out of a job. Republican Gov. Mitch Daniels has warned residents that most of the state's services -- including its parks, the Bureau of Motor Vehicles and state-regulated casinos -- would be shuttered unless a budget is passed today.
Indiana is one of five states -- along with Arizona, California, Mississippi and Pennsylvania -- bracing for possible shutdowns this week as time runs out for lawmakers to close billion-dollar gaps in their fiscal 2010 budgets.
Of the 46 states whose fiscal year ends today, 32 did not have budgets passed and approved by their governors as of Monday afternoon, according to the National Conference of State Legislatures........
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8.Weak economy scares off hosts for foreign exchange students (www.sacbee.com)
Exchange programs for international high school students are finding American families reluctant to open their homes because of the weak economy.
ASSE International Student Exchange Programs and other study-abroad organizations have seen a dramatic decrease in interested host families over the past two years, said ASSE President Bill Gustafson.
His organization, which has placed students in the Sacramento area, still needs to find families for roughly 25 percent of students enrolled in their program."People are more reluctant to obligate themselves to host a student," Gustafson said. "People are obviously insecure and unsure about their employment. If they are employed, their income could be reduced." read more
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9.Sacramento parks feel budget ax (www.sacbee.com)
Recreational swimming is being eliminated at five popular public pools, 13 day camps run by the city are closing, and restrooms at most of the public parks are being shut – all part of the city of Sacramento's massive budget cuts.
The changes in city parks and recreation programs will take effect Monday.Besides the five swimming pools being closed, open swim time will be reduced by a day a week at the other public pools, city officials said Monday.
City officials said most of the cuts could have been avoided if negotiators and union representatives had been able to agree on cash-saving salary concessions. An agreement had not been reached by Monday, although union officials said last week they would be open to talking.
The cuts are part of the city's effort to eliminate a $50 million deficit for the 2009-10 fiscal year, which begins Wednesday........
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10.Struggling cities cancel Fourth of July fireworks (www.latimes.com)
Reporting from Euclid, Ohio -- Mayor Bill Cervenik has spent a lifetime celebrating the Fourth of July curled up on a blanket in this city's Memorial Park beneath bursts of fireworks across a darkened Ohio sky.
People have long considered the fireworks a treasure of this Cleveland suburb, where flags fly year-round in neighborhoods of bungalows and stores post signs for passersby to "support our troops."
But the fireworks and singing along to "The Star-Spangled Banner" on a warm summer night -- and the police and firefighters needed to manage the 30,000 people who turn out -- don't come cheap.
So this year, Euclid will have no fireworks. "I'm 55 years old and I can't remember not going to one of these," Cervenik said........
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11.Personal bankruptcies surge in Southern California (www.latimes.com)
Going legally broke has made a big comeback -- especially in the Los Angeles area -- despite a mid-decade revision to the U.S. Bankruptcy Code intended to curb filings.
The number of Southern Californians seeking bankruptcy protection nearly doubled in 2008 from 2007 in the U.S. Bankruptcy Court's seven-county California Central District, by far the biggest increase in the nation........
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12.Bank failure list tops 45 - Jun. 26, 2009 (money.cnn.com)
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13.US states’ budget crisis sets stage for new attack on the working class (www.globalresearch.ca)
By Tuesday, many US state governments must pass budgets for the coming fiscal year. The state capitals are now the scene of bitter feuding among governors and legislators over how the deficits will be met. But there is unanimity that the working class must foot the bill.
Forty-six states confront significant deficits, and their collective shortfall for 2010 stands at more than $130 billion. This comes after a $104 billion deficit in 2009, for a two-year total of $234 billion in red ink—$91 billion more than President Barack Obama’s stimulus package allocated to all municipalities and the 50 states for the next two years........
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14.Five More Banks Seized by Regulators (cryptogon.com)
Five U.S. banks with total assets of about $1.04 billion were seized by regulators, pushing this year’s tally of failures to 45 as a recession drives up unemployment and home foreclosures.
Community Bank of West Georgia, in Villa Rica, Georgia; Neighborhood Community Bank of Newnan, Georgia; Horizon Bank of Pine City, Minnesota; MetroPacific Bank of Irvine, California; and Mirae Bank of Los Angeles were closed yesterday by state regulators, according to statements from the Federal Deposit Insurance Corp. The FDIC was named receiver of the four banks.
Wilshire Bancorp’s Wilshire State Bank will take over all of Mirae’s $362 million in deposits, and will purchase $449 million of assets, the FDIC said in a statement.
Sunwest Bank of Tustin, California, acquired most of MetroPacific’s $73 million in deposits and $80 million in assets, the FDIC said. Stearns Bank of St. Cloud, Minnesota, bought Horizon Bank’s $69.4 million of deposits. Stearns will purchase $84.4 million of Horizon’s assets, the FDIC said........ -
15.An interactive map of vanishing employment across the country. - By Chris Wilson - Slate Magazine (www.slate.com)
When Did Your County's Jobs Disappear?
The economic crisis, which has claimed more than 5 million jobs since the recession began, did not strike the entire country at once. A map of employment gains or losses by county tells the story of how those job losses first struck in the most vulnerable regions and then spread rapidly to the rest of the country.
As early as August 2007, for example—several months before the recession officially began—jobs were already on the decline in southwest Florida; Orange County, Calif.; much of New Jersey; and Detroit, while other areas of the country remained on the uptick.
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16.O.C. sheriff warns of fallout from budget cuts (www.latimes.com)
When supervisors this week went to slice $1.2 billion from Orange County's budget for the coming fiscal year, they tried to spread the pain from one end of county government to the other. But the $28 million that is being cut from law enforcement will be impossible to hide, says Sheriff Sandra Hutchens.
Hutchens said investigators will be lost, emergency call dispatchers eliminated, crime lab positions slashed and an entire floor of the women's jail sealed off......
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17.What Brought America to its Economic Knees (www.economyincrisis.org)
Video
On June 13, Craig Harrington was featured on the Rick Smith show. Listen to the above interview as Craig Harrington discusses America's trade policies, its financial leadership and the path our economy is currently traversing.
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18.At Least 19 States May Have to Shut Down Some Services (blacklistednews.com)
NEW YORK - One week and counting. An unprecedented number of states have only days left to pass their fiscal 2010 budgets.
At least 19 states are still hammering out their spending plans as the recession wreaks havoc with their finances and sparks fights between governors and lawmakers. If spending plans aren't approved, state workers may not receive their paychecks and some government offices may shut down.
"A lot of states are coming down to the wire," said Todd Haggerty, research analyst for the National Conference of State Legislatures. "More than what's typical. The unprecedented economic situation is creating a lot of difficulty this year."
Some 46 states end their fiscal years on June 30 and all but one require balanced budgets be adopted.......
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19.Treasuries Rise After U.S. Auctions $27 Billion of 7-Year Notes (www.bloomberg.com)
June 25 (Bloomberg) -- Treasuries rose after the final of three government debt auctions this week drew higher-than- forecast demand, bolstered by expectations that the Federal Reserve will keep interest rates unchanged through the year.
Ten-year notes initially gained after a report showed the number of Americans filing for unemployment benefits unexpectedly rose. Treasuries strengthened as the Fed bought $3.249 billion of long-maturity debt as part of program to cap borrowing costs. The seven-year notes drew a yield of 3.329 percent, lower than forecast, and more than double the amount of bids than the last auction in May from a category of investors that includes central banks........
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20.Are Workers Being Undermined in the Economic Crisis? (www.economyincrisis.org)
Both public and private entities are using the economic crisis “as an excuse to further attack and undermine workers and their incomes,” according to Dave Lindorff, a Philadelphia-based journalist and columnist.
Writing for the political Web site Counterpunch, Lindorff claims that, by focusing on bolstering their bottom lines, both public and private entities are thwarting any economic recovery spurred by the $787 billion stimulus package.
That unwillingness to use the stimulus money as it was intended is seriously hampering the buying power of average consumers and only serves to worsen the crisis........ -
21.Warren Buffett to CNBC: U.S. Economy In "Shambles" .. No Signs of Recovery Yet - Warren Buffett Watch (www.cnbc.com)
In a live interview on CNBC today, Warren Buffett said there has been little progress over the past few months in the "economic war" being fought by the country. "We haven't got the economy moving yet," he told Becky Quick.
READ THE FULL CNBC INTERVIEW TRANSCRIPT
While the economy is a "shambles" and likely to stay that way for some time, he remains optimistic there will eventually be a recovery over a period of years.
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22.Fed's Inspector General Elizabeth Coleman Missing Trillions of Taxpayers' Dollars (www.wanttoknow.info)
...Do you know how much one trillion dollars is? It's over $3,000 for every man, woman, and child in the U.S. If you only count taxpayers, it's equivalent to $7,000 for every taxpayer. Yet Coleman acknowledges the Fed is not missing just $1 trillion, but many trillions of taxpayers' dollars. In the video clip she says she knows nothing about nine trillion dollars ($9,000,000,000,000) that is claimed to be unaccounted for. That's $63,000 for each taxpayer. It's also three times the amount of the entire annual federal budget of the United States missing in action! These numbers are simply staggering, yet they are getting amazingly little media coverage........
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23.Grasping Reality with Both Hands (delong.typepad.com)
How to Get The Fed Out Of Its 'Box': When the Federal Open Market Committee meets this Tuesday and Wednesday, the Federal Reserve will face a serious dilemma. Since the last committee meeting six weeks ago, the 10-year U.S. Treasury yield has risen by around 70 basis points (0.70%), with the result that the interest rate on 30-year mortgages has risen by a similar amount. The rise in long-term interest rates is particularly worrisome, because it has the potential to choke off economic recovery and lead to further deterioration in the housing market. That would put an already weakened financial system under stress. Does the situation call for the Fed to expand its purchases of Treasury bonds to lower long-term interest rates?
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24.California doomsday: State could run out of cash (news.yahoo.com)
SACRAMENTO, Calif. – To hear Gov. Arnold Schwarzenegger and state finance officials tell it, July 28 is California's last stand before fiscal Armageddon.
Top financial officers say that's when the state will run out of cash to pay its daily expenses unless lawmakers pass a balanced budget.
Schwarzenegger has warned that government will come to a "grinding halt." The state controller describes "a meltdown." -
25.Even cops losing their jobs in recession (news.yahoo.com)
CHICAGO – As hundreds of jobs in Chicago's police department go unfilled, officers who once patrolled the streets with partners are riding alone in what some cops bitterly call "rolling coffins."
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