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Bernanke in K.C., Jim Lehrer moderates
The PBS show can be seen online here, part 1
part 2 tuesday night, part 3 wednesday night
http://video.pbs.org/video/1197094127
NewsHour With Jim Lehrer New
Part 1 of a three-part forum with Federal Reserve chairman Ben Bernanke at the Federal Reserve Bank of Kansas City. Bernanke fields questions from audience members. Jim Lehrer moderates. PBS Mon, Jul 27 7:00 PM
The full transcript can be found here....
http://www.pbs.org/newshour/bb/business/july-dec09/bernanke_07-27.html
otcbargains, Not I....eom
Calling all volunteers to test swine flu shots
http://finance.yahoo.com/news/Calling-all-volunteers-to-apf-3675908348.html?x=0&sec=topStories&pos=main&asset=&ccode=
NIH calls for thousands of volunteers to test whether new swine flu vaccine works and is safe
By Lauran Neergaard, AP Medical Writer
On Thursday July 23, 2009, 12:24 am EDT
WASHINGTON (AP) -- The race is on: The government and vaccine makers are seeking thousands of volunteers, from babies to the elderly, to roll up their sleeves for the first swine flu shots -- to test whether a new vaccine really will protect against this novel virus before its expected rebound in the fall.
On Wednesday the National Institutes of Health tapped a network of medical centers around the country to begin a series of studies, with the first shots to go into the arms of healthy adults, of any age, in early August. If there are no immediate safety concerns, such as allergic reactions, testing quickly would begin in children as young as 6 months.
The tests, plus additional research from vaccine manufacturers, are key as the government decides whether to offer swine flu vaccine to millions of Americans starting in mid-October -- assuming that enough is produced by then -- still a big question as the vaccine is proving hard to manufacture. Health authorities in other countries are looking to the U.S. studies, too, as they make their own plans.
It's crucial to test all ages. Unlike regular winter flu that is most dangerous to people over 65 and under 2, this new swine flu that has quickly spread around the globe seems to disproportionately target school-age children, teenagers and young adults.
Will the results come in time? "It's going to be very, very close," Dr. Anthony Fauci, director of NIH's National Institute of Allergy and Infectious Diseases, told The Associated Press.
"We are racing to provide them as much information as we possibly can," said Dr. Karen Kotloff of the University of Maryland School of Medicine, who is helping to lead the NIH study. She said doctors and other health workers already were asking about enrolling in the study themselves.
It promises to be a confusing fall, as doctors struggle to administer vaccine against the regular winter flu and tell patients to stay tuned for when and if they can later return for another shot or two of swine flu vaccine.
The test plan: All volunteers will get two swine flu shots, given 21 days apart. By early September, blood tests should show how much immune protection the initial dose triggered -- and if a low-dose shot worked or a higher dose was needed. It will take another month to get information on the second shot.
Will parents want to enroll very young children? The NIH chose study hospitals with experience in testing vaccines on the very young, and "it's not a radically different vaccine from what they already get anyway," Fauci said.
The new swine flu strain is part of the H1N1 family of influenza viruses. We're used to that family. Some human strain of H1N1 has been included in regular influenza vaccine for 33 years, Fauci said -- and the seasonal flu vaccine has a safe record for all ages. Yet because its a unique H1N1 strain, with genes that originated in swine, scientists worry that it may be harder than usual for a vaccine to trigger protection.
The swine flu vaccine "falls somewhere between a completely new vaccine and a strain change we do every year without clinical trials," said Dr. John Treanor of the University of Rochester, a government vaccine adviser.
As for safety, the studies will track the typical vaccine side effects -- redness, swelling, fever, allergic reactions -- and any unexpected immediate reaction.
"We expect this vaccine to be no different than seasonal (flu) vaccine. It ought to be extremely safe," said Dr. William Schaffner, a vaccine specialist at Vanderbilt University.
But the studies won't be large enough to catch any very rare side effect. The last mass vaccination against a different swine flu, in the U.S. in 1976, was marred by reports of paralyzing Guillain-Barre syndrome. Scientists could never prove whether that link was real or coincidence, but all flu vaccine today comes with a warning about Guillain-Barre -- and the government has pledged intense monitoring for rare reactions if mass swine flu vaccinations go forward.
Included in the NIH studies are vaccines made by France-based Sanofi-Pasteur and CSL Ltd. Also Wednesday, CSL began a much smaller study of its vaccine in Australia, where the company is based.
All five U.S. providers of flu vaccine -- including Britain's GlaxoSmithKline, Swiss-based Novartis AG and maker of the only nasal-spray vaccine, Maryland-based MedImmune -- also will conduct their own studies in several thousand more volunteers. Thursday, the Food and Drug Administration will review their testing plans.
The NIH's study sites:
--University of Maryland School of Medicine, Baltimore.
--University of Iowa, Iowa City, Iowa.
--Saint Louis University, St. Louis.
--Baylor College of Medicine, Houston.
--Children's Hospital Medical Center, Cincinnati.
--Emory University, Atlanta.
--Group Health Cooperative, Seattle.
--Vanderbilt University, Nashville, Tenn.
Children's Mercy Hospital in Kansas City, Mo., and Duke University Medical Center in Durham, N.C., will partner with two sites for part of the research.
To search for "H1N1 influenza vaccine" trials: http://www.clinicaltrials.gov
mokew,
I see it more as a reverse head and shoulders, with the left shoulder in late Nov., the neckline forming (left side) 1st part of Jan and (right side)1st part of May, head being just shy of mid Mar..
As of now no real "defined" right shoulder which should be similar to the left,but perfection does not always come in a chart.
The SPX has tried to break through the neckline in June and appears to be at that same resistance now, 950ish. so we may not see a well defined right shoulder "OR" it has not happened yet.
Volume plays a "key role" in a reverse head and shoulders pattern, and volume has dropped off since the forming of the right side neckline.
Head and shoulders bottom is refer to as a inverse/reverse head and shoulders.
AJMO
10 month daily chart
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=10&dy=0&id=p89539804796
CIT reaches $3 billion rescue deal with bondholders: WSJ
SAN FRANCISCO (MarketWatch) -- CIT Group Inc. has reached a $3 billion rescue-financing agreement with key bondholders that will allow the business lender to avoid bankruptcy and restructure outside court, according to a media report Sunday.
The deal was expected to be announced on Monday, The Wall Street Journal reported in its online edition late Sunday.
The news followed reports over the weekend that CIT had been trying to negotiate rescue financing with a group of bondholders to avoid bankruptcy.
The 101-year-old lender to small- and medium-sized businesses could have filed for bankruptcy as early as Monday if it hadn't reached a deal.
A report by Dow Jones Newswires, also citing unnamed sources, said the plan being considered would involve new funds for CIT instead of a rollover of existing debt. The report said Morgan Stanley has been hired to advise CIT in the restructuring.
Evercore Partners Inc. also was hired as a bankruptcy adviser.
http://www.marketwatch.com/story/cit-in-talks-with-bondholders-on-rescue-reports
Patty, well done.....eom
NASA lost its original moon landing videotapes,
http://www.cbsnews.com/stories/2009/07/16/tech/main5165277.shtml
WASHINGTON, July 16, 2009
NASA Refurbishes Video of Moon Landing
With Original Video Grainy, Space Agency Enhances Video Copies of Apollo 11 Landing
AP) With the help of Hollywood, those historic, grainy images of the first men on the moon never looked better. NASA unveiled refurbished video Thursday of the July 20, 1969, moonwalk restored by the same company that sharpened up the movie "Casablanca."
*****NASA lost its original moon landing videotapes and after a three-year search, officials have concluded they were probably erased. That original live video was ghostlike and grainy.*****
NASA and a Hollywood film restoration company took television video copies of what Apollo 11 beamed to Earth 40 years ago and made the pictures look sharper.
NASA emphasized the video isn't "new" - just better quality.
"There's nothing being created; there's nothing being manufactured," said NASA senior engineer Dick Nafzger, who's in charge of the project.
But some details seem new because of their sharpness. Originally, Armstrong's face visor was too fuzzy to be seen clearly. The refurbished video shows his visor and a reflection in it.
The $230,000 refurbishing effort is only three weeks into a months-long project, and only 40 percent of the work has been done. But it does show improvements in four snippets: Armstrong walking down the ladder, which includes the face visor image; Buzz Aldrin walking down the ladder; the two astronauts reading a plaque they left on the moon; the planting of the flag on the moon.
The original videos beamed to earth were stored on giant reels of tapes that each contained 15 minutes of video, along with 13 other channels of live data from the moon. In the 1970s and 1980s, NASA had a shortage of the tapes and erased about 200,000 of those tapes and reused them. That's apparently what happened to the famous moon landing footage.
Nafzger praised the restored work for its crispness. The restoration company, Lowry Digital of Burbank, California, also refurbished "Star Wars" and James Bond films, along with "Casablanca."
The company noted that the latter film had a pixel count 10 times higher than the moon video, meaning the moon footage was fuzzier than that vintage movie and more of a challenge in one sense.
But the moon video also was three continuous hours, not chopped up like movies are, which made some of the work easier, said Lowry president Mike Inchalik.
Of all the video the company has dealt with, he said, "This is by far and away the lowest quality."
The restoration used four video sources: CBS News originals; kinescopes from the National Archives; a video from Australia that received the transmission of the original moon video; and camera shots looking at a TV monitor.
Both Nafzger and Inchalik said they went to extremes to enhance the video as conservatively as possible.
a couple of neat interactive charts,
http://www.msnbc.msn.com/id/31910726/ns/us_news-the_elkhart_project/
The Adversity Index, from msnbc.com and Moody's Economy.com, measures the economic health of 381 metro areas and all 50 states.
and
DATA-Predicting the end of the recession
News Icon Walter Cronkite Dies at 92
NEW YORK (July 17) -- Walter Cronkite, the premier TV anchorman of the networks' golden age who reported a tumultuous time with reassuring authority and came to be called "the most trusted man in America," died Friday. He was 92.
Cronkite's longtime chief of staff, Marlene Adler, said Cronkite died at 7:42 p.m. at his Manhattan home surrounded by family. She said the cause of death was cerebral vascular disease.
Adler said, "I have to go now" before breaking down into what sounded like a sob. She said she had no further comment.
Cronkite was the face of the "CBS Evening News" from 1962 to 1981, when stories ranged from the assassinations of President John F. Kennedy and the Rev. Martin Luther King Jr. to racial and anti-war riots, Watergate and the Iranian hostage crisis.
It was Cronkite who read the bulletins coming from Dallas when Kennedy was shot Nov. 22, 1963, interrupting a live CBS-TV broadcast of the soap opera "As the World Turns."
Cronkite was the broadcaster to whom the title "anchorman" was first applied, and he came so identified in that role that eventually his own name became the term for the job in other languages. (Swedish anchors are known as Kronkiters; In Holland, they are Cronkiters.)
"He was a great broadcaster and a gentleman whose experience, honesty, professionalism and style defined the role of anchor and commentator," CBS Corp. chief executive Leslie Moonves said in a statement.
CBS has scheduled a prime-time special, "That's the Way it Was: Remembering Walter Cronkite," for 7 p.m. Sunday.
His 1968 editorial declaring the United States was "mired in stalemate" in Vietnam was seen by some as a turning point in U.S. opinion of the war. He also helped broker the 1977 invitation that took Egyptian President Anwar Sadat to Jerusalem, the breakthrough to Egypt's peace treaty with Israel.
He followed the 1960s space race with open fascination, anchoring marathon broadcasts of major flights from the first suborbital shot to the first moon landing, exclaiming, "Look at those pictures, wow!" as Neil Armstrong stepped on the moon's surface in 1969. In 1998, for CNN, he went back to Cape Canaveral to cover John Glenn's return to space after 36 years.
"It is impossible to imagine CBS News, journalism or indeed America without Walter Cronkite," CBS News president Sean McManus said in a statement. "More than just the best and most trusted anchor in history, he guided America through our crises, tragedies and also our victories and greatest moments."
He had been scheduled to speak last January for the 50th anniversary of the U.S. Space & Rocket Center in Huntsville, Ala., but ill health prevented his appearance.
A former wire service reporter and war correspondent, he valued accuracy, objectivity and understated compassion. He expressed liberal views in more recent writings but said he had always aimed to be fair and professional in his judgments on the air.
Off camera, his stamina and admittedly demanding ways brought him the nickname "Old Ironpants." But to viewers, he was "Uncle Walter," with his jowls and grainy baritone, his warm, direct expression and his trim mustache.
When he summed up the news each evening by stating, "And THAT's the way it is," millions agreed. His reputation survived accusations of bias by Richard Nixon's vice president, Spiro Agnew, and being labeled a "pinko" in the tirades of a fictional icon, Archie Bunker of CBS's "All in the Family."
Two polls pronounced Cronkite the "most trusted man in America": a 1972 "trust index" survey in which he finished No. 1, about 15 points higher than leading politicians, and a 1974 survey in which people chose him as the most trusted television newscaster.
Like fellow Midwesterner Johnny Carson, Cronkite seemed to embody the nation's mainstream. When he broke down as he announced Kennedy's death, removing his glasses and fighting back tears, the times seemed to break down with him.
And when Cronkite took sides, he helped shape the times. After the 1968 Tet offensive, he visited Vietnam and wrote and narrated a "speculative, personal" report advocating negotiations leading to the withdrawal of American troops.
"We have been too often disappointed by the optimism of the American leaders, both in Vietnam and Washington, to have faith any longer in the silver linings they find in the darkest clouds," he said, and concluded, "We are mired in stalemate."
After the broadcast, President Johnson reportedly said, "If I've lost Cronkite, I've lost middle America."
In the fall of 1972, responding to reports in The Washington Post, Cronkite aired a two-part series on Watergate that helped ensure national attention to the then-emerging scandal.
"When the news is bad, Walter hurts," the late CBS president Fred Friendly once said. "When the news embarrasses America, Walter is embarrassed. When the news is humorous, Walter smiles with understanding."
More recently, in a syndicated column, Cronkite defended the liberal record of Democratic presidential candidate John Kerry and criticized the Iraq war and other Bush administration policies.
But when asked by CNN's Larry King if that column was evidence of media bias, Cronkite set forth the distinction between opinion and reporting. "We all have prejudices," he said of his fellow journalists, "but we also understand how to set them aside when we do the job."
Cronkite was the top newsman during the peak era for the networks, when the nightly broadcasts grew to a half-hour and 24-hour cable and the Internet were still well in the future.
As many as 18 million households tuned in to Cronkite's top-rated program each evening. Twice that number watched his final show, on March 6, 1981, compared with fewer than 10 million in 2005 for the departure of Dan Rather, Cronkite's successor.
A vigorous 64 years old, Cronkite had stepped down with the assurance that other duties awaited him at CBS News, but found little demand there for his services. He hosted the shortlived science magazine series "Walter Cronkite's Universe" and was retained by the network as a consultant, although, as he was known to state wistfully, he was never consulted.
He also sailed his beloved boat, the Wyntje, hosted or narrated specials on public and cable TV, and issued his columns and the best-selling "Walter Cronkite: A Reporter's Life."
For 24 years he served as on-site host for New Year's Day telecasts by the Vienna Philharmonic, ending that cherished tradition only in 2009.
After the terrorist attacks of Sept. 11, 2001, Cronkite was selected to introduce the postponed Emmy awards show. He told the audience that in its coverage of the attack and its aftermath, "television, the great common denominator, has lifted our common vision as never before."
Cronkite joined CBS in 1950, after a decade with United Press, during which he covered World War II and the Nuremberg trials, and a brief stint with a regional radio group.
At CBS he found a respected radio-news organization dipping its toe into TV, and it put him in front of the camera. He was named anchor for CBS's coverage of the 1952 political conventions, the first year the presidential nominations got wide TV coverage. From there, he was assigned to such news-oriented programs as "You Are There" and "Twentieth Century." (He also briefly hosted a morning show, accompanied by a puppet named Charlemagne the Lion.)
On April 16, 1962, he replaced Douglas Edwards as anchor of the network's "Evening News."
"I never asked them why," Cronkite recalled in a 2006 TV portrait. "I was so pleased to get the job, I didn't want to endanger it by suggesting that I didn't know why I had it."
Copyright 2009 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2009-07-17 20:27:17
Treasury cancels plans to hire cartoonist
By ANNE FLAHERTY, Associated Press Writer Anne Flaherty, Associated Press Writer – Fri Jul 17, 1:52 pm ET
WASHINGTON – The Treasury Department is scrapping plans to hire a cartoonist to lighten the mood of its employees who manage the nation's $1.2 trillion debt, after a senator questioned its merits.
The cartoonist would have been hired by Treasury's Bureau of Public Debt, which accounts for borrowed federal spending, at a time Congress is embroiled in a debate about increased government spending.
"Our training staff felt that at a time when employees are working extra hours, it might have been helpful," said Kim Treat, a spokesman for the bureau.
But the effort was canceled because it had become "more of a distraction than an opportunity," he said.
In a federal solicitation issued earlier this month, the bureau said it was looking for a contractor to conduct two, three-hour presentations for its employees on the benefits of humor in the workplace and the connection between humor and stress relief.
The contractor would have to be able to "create cartoons on the spot" about jobs at the bureau, the solicitation stated.
Treat said the solicitation was intended to collect more information, including how much it would cost, and that no money had been allocated toward the effort. The bureau's annual budget is $187 million.
The office of Sen. Byron Dorgan, D-N.D., contacted the bureau after the solicitation was posted on The Drudge Report.
"Of all the agencies, the Bureau of Public Debt should know that there is very little that is funny about today's economic conditions," Dorgan said in a statement released Friday.
http://news.yahoo.com/s/ap/us_treasury_cartoonist
US, Swiss ask for delay in UBS secrecy case
"The precedent this case may set is of immediate relevance to all financial institutions with global operations," the Institute of International Bankers and other financial organizations said in a recent court filing."
By CURT ANDERSON, AP Legal Affairs Writer Curt Anderson, Ap Legal Affairs Writer – 26 mins ago
The U.S. and Swiss governments and banking giant UBS AG indicated Sunday they were seeking a settlement and asked a federal judge to delay high-stakes hearings on the Internal Revenue Service's effort to identify thousands of suspected American tax evaders.
The one-page motion, filed in Miami less than 24 hours before the hearings were to begin Monday, said postponement is needed "to allow the two governments to continue their discussions seeking a resolution of this matter."
Unless a deal is reached beforehand, the filing asks that the hearing be rescheduled for Aug. 3.
U.S. District Judge Alan S. Gold did not immediately rule on the request, but judges routinely allow parties in civil cases extra time to settle out of court.
In a statement, the U.S. Justice Department said any agreement would have to require that UBS provide "information on a significant number of individuals with UBS accounts."
"If an alternative resolution is not reached, the Department of Justice will continue to vigorously pursue enforcement of the summons through the court," the statement said.
The case seeking the identities of some 52,000 wealthy American clients suspected of hiding $15 billion at UBS has already sent shock waves through the international banking system.
Bankers fear a ruling against UBS would disrupt cross-border commerce, force people to withdraw huge sums of money from financial entities with offshore offices and play havoc with international tax treaties. Experts say some other foreign banks are asking American clients to close out accounts for fear they may be targeted next.
"The precedent this case may set is of immediate relevance to all financial institutions with global operations," the Institute of International Bankers and other financial organizations said in a recent court filing.
The UBS case has persuaded hundreds of taxpayers with offshore accounts to come clean with the IRS under a voluntary disclosure program. The program allows most people to pay a fine and back taxes without facing criminal prosecution, said tax attorney Robert McKenzie with the Arnstein & Lehr firm.
"The IRS would like to continue the specter of fear that this UBS case has created," McKenzie said. "This strategy is working. The level of calls I'm receiving is picking up, not going down."
UBS, which previously admitted wrongdoing in a more limited U.S. tax case, is resisting turning over the names that have been protected by centuries-old Swiss bank secrecy laws.
"Honoring the IRS summons would require UBS to violate Swiss criminal law, and we simply cannot comply," said Oswald Gruebel, UBS chief executive officer, in a letter to bank offices worldwide. "This matter should be resolved between governments according to established frameworks."
The Swiss government escalated the dispute last week by threatening to block release of the UBS account names if Gold rules for the IRS.
One of Europe's biggest banks, UBS has about 34,000 permanent and contract employees at 381 locations in the U.S., according to the company.
The IRS in February filed what are called "John Doe summonses" seeking U.S. taxpayer identities from UBS, shortly after the Zurich-based bank reached a deferred prosecution agreement with the Justice Department over its tax evasion practices. UBS agreed then to identify 300 people — some of whom are now facing criminal charges — and admitted it wrongly used sham offshore entities, false paperwork and questionable client recruitment.
UBS also paid a $780 million penalty.
"Until its activities were discovered, UBS — on U.S. soil — regularly violated U.S. law, and actively helped its customers violate U.S. law," said Justice Department tax attorney Stuart Gibson, the lead U.S. lawyer on the case.
The 300 names were released under an exception to Swiss banking secrecy law when clients deliberately defrauded tax authorities, as opposed to failing to declare all assets.
Abusive tax shelters and hidden offshore accounts cost the U.S. government an estimated $100 billion a year in lost tax revenue, according to Sen. Carl Levin, D-Mich., chairman of the Senate Permanent Subcommittee on Investigations.
The Justice Department has brought several other UBS-related tax cases in South Florida, including a November 2008 indictment charging former bank executive Raoul Weil with conspiring to defraud the government. Weil, who ran UBS cross-border and private banking operations, is a fugitive living in Switzerland, and his lawyer has insisted he is innocent.
In June 2008, former UBS banker Bradley Birkenfeld pleaded guilty to a similar charge — he helped a California billionaire evade taxes — and has been cooperating extensively with federal prosecutors and the IRS. He has not yet been sentenced.
Dow Jones Equity REIT Index
http://www.chartoftheday.com/20090710.htm?A
Chart of the Day
For some perspective on the all-important US real estate market, today's chart illustrates the 2004 to 2009 trend of the Dow Jones Equity REIT Index. As today's chart illustrates, the unwinding of the real estate/credit bubble initially (early 2007 to mid-2008) occurred at a fairly moderate pace. That pace accelerated (mid-2008 to early 2009) as major financial institutions began to collapse. When all was said and done, the peak to trough decline of the Dow Jones Equity REIT Index ended up being 75.8%. Since the trough of early 2009, REITs have rallied and are currently up 38% (though remain 66% below the 2007 peak). As today's chart illustrates, the Dow Jones Equity REIT Index remains within the confines of a moderate downward sloping trend channel and currently trades near resistance.
350 commercial enterprises file for bankruptcy daily
"There is always this dynamism in the small-business community: Businesses are always dying, and new businesses are always getting started," McCracken says. "Usually more start than fail, but my sense is that now it has flip-flopped. And it's alarming."
http://www.usatoday.com/money/smallbusiness/2009-06-30-small-businesses-bankruptcy_N.htm
7/2/2009 10:35 AM
Entrepreneurship and new small businesses are supposed to lead us out of the recession, just as they have in prior downturns, right?
Sure. Your neighbor's grand idea will persuade a bank to lend her start-up money; she'll open for business in six weeks; and money will immediately flow from customers to her to her employees. Taxes will be paid, and the national economic engine will hum effortlessly in no time.
If only.
Today shows a different reality: Commercial bankruptcies are surging. Fewer people are starting small businesses, and firms already open are struggling under changing consumer habits, a lack of funding options and tougher bankruptcy laws. If a nationwide trend seen since January holds true, more than 300 businesses will file for bankruptcy — today alone.
Cafe Boulevard, for 12 years a popular European-style restaurant in Dayton, Ohio, hasn't been able to endure the downturn.
FIND MORE STORIES IN: Barack Obama | General Motors | Donald Trump | David Hicks | Equifax | Chrysler | Tax | Chapters
Rising gas and food prices, increased competition and an ill-timed expansion cut profits. Local unemployment made matters worse, because the regulars no longer showed up. In April, the restaurant's owner, Eva Christian, was one of 8,149 U.S. business owners who filed for bankruptcy-court protection.
She didn't close the cafe. Instead, Christian is trying to retain her employees while she works with creditors.
"When I decided to file for Chapter 11 bankruptcy, I felt crushed," Christian says. "But my attorney said that Donald Trump did it, and GM did it, and Delta did it. It gives people the opportunity to bounce back."
The first five months of this year have shown a 52% increase in the total number of commercial bankruptcy filings (36,106) compared with the same period last year (23,829), according to the Automated Access to Court Electronic Records. On average thus far in 2009, some 350 commercial enterprises file for bankruptcy daily — an increase of 240% from 2006, the first year after the bankruptcy law was changed.
Small companies hardest hit
Major corporate failures, like GM and Chrysler, flash across front pages and websites. But the vast majority of commercial bankruptcies, which are not separated by size of firm by data keepers, are filed by entrepreneurs and small-business owners, says Robert Lawless, professor of law at University of Illinois.
Troubling for the economy, say Lawless and Todd McCracken, president of the National Small Business Association, is the double-whammy of fewer start-ups and increasing bankruptcies.
"There is always this dynamism in the small-business community: Businesses are always dying, and new businesses are always getting started," McCracken says. "Usually more start than fail, but my sense is that now it has flip-flopped. And it's alarming."
Lawless agrees.
"In the past, small-business formation increased in a recession because people had self-employment thrust upon them," he says. "One avenue out of economic hard times — self-employment — has become less attractive, because the bankruptcy law is less forgiving" and there are fewer options for those entrepreneurs to get bank loans or to find funding elsewhere.
Trickle-down effect hurts
Small business is considered the backbone of the economy. In the past, new businesses led economic recoveries, McCracken says. Small businesses — those with fewer than 500 employees — make up half of the gross domestic product and account for most job growth.
Problems from the devastated housing market, overall recession and suffering major industries all funnel down to small businesses, especially those that supply the troubled corporations.
"When you have the GMs of the world filing for bankruptcy, they are canceling contracts and discharging debts that they owe to their suppliers," says B. William Ginsler, a bankruptcy lawyer in Portland, Ore. "And those are small businesses that are less solvent than larger corporations."
The transportation industry, which includes the auto and airline businesses, has sparked the biggest run-up in small-business bankruptcy filings, according to new data from an Equifax bankruptcy study. After transportation, the construction, manufacturing and retail industries are the major causes, the study says.
While not always the case, the line from one faltering company to another can be direct.
Just before the economic slump, Cafe Boulevard's Christian opened a second restaurant in Dayton called Cena. Cena's outlook is bleak, because a nearby General Motors assembly plant is closing, and NCR is moving its headquarters from Dayton to Georgia.
"It was bad timing to expand into a second restaurant," Christian says.
Household spending cutbacks reach far, too. Dual-income families who are now single-income may no longer need or be able to afford child care, so many of those services are going out of business, says Lester Thompson, a bankruptcy lawyer in Dayton. Sporting goods stores and lawn-mowing services also have struggled.
Small-business bankruptcy filings jumped the most in the Los Angeles and Chicago metro areas, according to Equifax. But even smaller areas of the country are experiencing a big increase.
David Hicks, a bankruptcy lawyer in Omaha, says he has seen an increase in business struggles related to the auto industry and the mortgage crisis. Among them are owners of used car lots and housing contractors.
In South Carolina, bankruptcy attorney Jane Downey has worked with dry cleaners and gourmet sandwich shops.
Robert Chernicoff, a bankruptcy lawyer in Harrisburg, Pa., says one client who recently filed for Chapter 11 bankruptcy is the owner of a new small strip mall, Shoppes at Silver Spring. Mall owners counted on about eight tenants. It's in a good location, Chernicoff says, but the economic downturn caused some tenants to back out, and it has taken longer to find new ones.
Chapter 7 vs. 11 vs. 13
Many small businesses owe so much money to creditors that there is no future. Such owners often file for Chapter 7 bankruptcy and shut their businesses for good. Chapter 7 allows sole proprietors to discharge their debt and for corporations to have an orderly liquidation.
Those who want to reorganize a business or sell it as a going concern may file for Chapter 11. Chapter 13 is a similar but less costly and time-consuming option that is limited to individuals who have a certain amount of debt.
Last month, Randy Wicker filed for Chapter 11 bankruptcy because his 15-year-old business, Earth Structures, had hit a significant rough spot after previously earning up to $8 million annually. His corporation, based in Spartanburg, S.C., primarily builds retaining walls for highway projects.
Earth Structures has worked on Department of Transportation projects, but those have nearly disappeared. Wicker and other contractors are now competing in the commercial market.
"More contractors are vying for less jobs," Wicker says.
"Maybe President Obama's effort to restore the highways with a stimulus plan will lead to more work for him," says Downey, his lawyer.
Lack of loans worsens problem
The credit crunch is a major contributor to the rise in filings.
Loan dollar volume from the U.S. Small Business Administration has increased 35% since the American Recovery and Reinvestment Act was passed on Feb. 17, according to the SBA. Even so, a National Federation of Independent Business trend report states that in May the percentage of business owners reporting that loans are harder to get rose to 16%, the highest reading since the 1980-82 recession.
Businesses can't easily rely on credit cards these days, either.
"What's happening now is that a lot of banks are retrenching and cutting back on lines of credit and credit card limits," McCracken says.
With that reality, and loath to dip into their retirement savings, struggling small-business owners have few options other than bankruptcy. When the bankruptcy law changed in 2005 it was mostly aimed at curbing abuse of personal bankruptcy filing. But it also singled out small businesses for harsher treatment, and those changes did not apply to larger corporations, Lawless says.
Small businesses that file for bankruptcy have a shorter time frame to reorganize, Hicks says. "And before, a judge could pull the plug on a small-business owner that was playing the system, or he could give a break to somebody who was legitimately trying to reorganize," he says. "Most of the discretion is now gone."
But the data show the change hasn't deterred small businesses from filing for bankruptcy.
"You can change the bankruptcy law all you want, but if we have a recession, lots of business are going to file," says John Pottow, professor of law at the University of Michigan Law School. "The increase is yet another sobering economic milestone."
Bankruptcy is still the only option for many small-business owners who are hanging by a thread.
"The failure of a small business doesn't have to be a lifetime sentence for the owner," says U.S. Bankruptcy Court Judge Lewis Killian, in Tallahassee. "Bankruptcy gives them the ability to go forward, to start up again and be successful."
“The commercial real estate time bomb is ticking,”
Published: July 10, 2009 3:00 a.m.
Real estate ‘time bomb’ feared
Alan Zibel
Associated Press
WASHINGTON – Owners of shopping malls, hotels and offices are defaulting on their loans at an alarming rate, and the commercial real estate market is not expected to hit bottom for three more years, industry experts warned Thursday.
“The commercial real estate time bomb is ticking,” said Rep. Carolyn Maloney, D-N.Y., who heads the congressional Joint Economic Committee.
Delinquency rates on commercial loans have doubled in the past year to 7 percent as more companies downsize and retailers close their doors, according to the Federal Reserve. Small and regional banks face the greatest risk of severe losses from commercial real estate loans.
The commercial real estate market’s fortunes are tied closely to the economy, especially unemployment, which hit 9.5 percent in June.
Funding for commercial loans virtually shut down last year as the financial system unraveled. Industry executives say financing is still extremely difficult to obtain, even for financially healthy properties.
Losses in securities backed by commercial property loans could be as high as $90 billion in the coming years, said Deutsche Bank analyst Richard Parkus. He said even more losses – up to $140 billion – are expected from construction loans made by regional and local banks, rather than those sold as securities held by investors.
“We believe the bottom is several years away,” Parkus told lawmakers.
Industry groups are pushing for the government to launch government programs to support commercial real estate loans.
lentinman:
Ohio may work differently, so cameras may be a good option. But here in Mass. if ones insurance lapses the insurance company notifies the registry of motor vehicles, and the rmv issues a notice to the owner.
But from there the rmv does nothing until either the vehicle owner gets pulled over or in an accident.
Same with tickets for moving violations, you get one (ticket) you have 10 days to pay or appeal, if neither is done, your license is revoked. But again there is no follow through until said person gets stopped or in an accident.
If these people cannot pay the insurance how can they pay a fine?
I understand that cameras at lights may somewhat serve as a deterrent, but they mostly keep the honest people honest.
Unfortunately those that choose not to abide by the laws continue to walk free.
Red light cameras now check for insurance, too
Tom Barlow
Jun 29th 2009 at 4:30PM
Drive without insurance? Then you'd better stay out of Ohio, where the state is considering a program that uses red-light cameras and insurance company databases to check passing traffic for uninsured motorists. The system would use license plate numbers to verify driver insurance. According to the Columbus Dispatch, officials in Chicago, who are considering the same system, from InsureNet of Novi, Michigan, think that such a program could generate $200 million in additional revenue for the Windy City.
When the system identifies an uninsured motorist, the driver would be sent a letter instructing him to take care of the problem. If he doesn't, a fine will soon follow. In Ohio, that fine is $125 for a first offense, $300 for a second and $550 for a third.
The system is already being provided to law enforcement, free of charge, so even those uninsured drivers who managed to dodge the cameras can be busted if they catch the attention of a local gendarme. The system can also provide them lien reports in real time.
I'm all for requiring drivers to carry insurance, but I'm not pleased by the prospect of insurance company databases being opened for InsureNet's searches. I can see how this would be a good deal for the insurance companies, because it will drive business their way. For the general public, however, this feels like another step toward a Big Brother future.
International Green Construction Code
(IGCC) Now in the Works
http://archrecord.construction.com/news/daily/archives/090630igcc.asp
The solution… IS the problem
http://www.sprott.com/Docs/MarketsataGlance/June_2009.pdf
Retailers Cut Back on Variety, Once the Spice of Marketing
Can't find your favorite toothpaste? Retailers are choosing for you.
Laura Heller
Jun 26th 2009 at 3:00PM
Just because your favorite shampoo or toothpaste disappears from the store shelf, doesn't mean it's discontinued. It might have been booted by your favorite store.
Retailers all over the country are reducing the number of products they carry, eliminating brands and in general being much more selective thanks to some pretty sophisticated software and the science behind it.
It's all based on the concept of "bounded rationality." That too much choice inhibits our ability to make a decision. In other words, 20 different kinds of jam is no better than six. In fact, it's worse. When faced with 20, a lot of people will just walk away empty handed. I did this recently when faced with what seemed like a bazillion types of caulk at a home improvement center. Just walked away. I'll take care of that problem another time.
There's also a finite amount of shelf space, even in a supercenter. How they allocate that space is tricky business.
Stores can carry anywhere from 50,000 to 200,000 thousand SKUs. There might be 12,000 new product introductions this year, but where to put them? And really, how many kinds of Oreo's do we actually need?
This story in today's Wall Street Journal (subscription required), details how stores have been trimming the total number of items (SKUs) they stock, like Walgreens cutting types of glue, Wal-Mart cutting tape measures and Kroger cutting cereal. There is a ton of science behind it including register totals, frequent shopper or loyalty card data, and inventory lists. The problem being, eliminating certain items may also eliminate some shoppers.
"The problem is, that no matter what SKU is on that shelf, someone is buying it," says retail consultant Neil Stern of McMillan/Doolittle. "Eliminating it is going to anger that customer. You have to be really careful. Is that SKU going to be the tipping point that makes them shop elsewhere?"
It was for me. I'm devoted to a particular variety of Colgate toothpaste, nothing else will do. When Target suddenly stopped carrying it, I panicked, then went online. I now order my toothpaste, and a lot of other things, from Drugstore.com. I still shop at Target but go less often and save a good amount on sales tax, but that's another topic for another post. For this customer, toothpaste was the tipping point.
Of course you can also appeal to the powers that be. Write an email to corporate or make a request to the store manager. Or shop elsewhere.
source
http://online.wsj.com/article/SB124597382334357329.html
The National foreclosure/sales trend
with many "If's"
May sales were not good at all and well below the YTD % of sales.
"IF" this continues, the trend is on a pace for 3,766,920 foreclosures nation wide with 828,998 being sold (22%)
National trend..May..........YTD
New Filings...321,480......1,569,550
Sales.................31,598........345,416
31,598 = 9.82% sales of May filings
345,416 = 22%..sales YTD
" If " the Massachusetts trend continues......there will be approximately 42,840 filings for the year with 9,891(23.09%) being sold. Not to encouraging IMO
Mass. trends...May...........YTD
New Filings...3,621.........17,850
Sales..................196...........4,122
196 = 5.41%
4,122 = 23.09%
http://www.realtytrac.com/states/Massachusetts.html
Architecture Billings Index
Shows No Significant Improvement in Business Conditions Inquiries for new projects remain favorable, but not translating into work
For immediate release:
Washington, D.C. – June 24, 2009 –
There has been a recent moderation in the downturn in design services billings, but the Architecture Billings Index (ABI) reveals that an economic recovery has stalled. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the May ABI rating was 42.9, nearly identical to the 42.8 mark in April. This score still indicates an overall decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 55.2, the third straight month with a score in the mid-50’s.
“The design and construction marketplace is extremely competitive right now,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Prospective clients are casting a wider net causing numerous firms to bid for the same project, which is why the high level of inquiries is not necessarily translating into additional billings for project work at many firms.”
Key May ABI highlights:
◦Regional averages: Northeast (48.3), Midwest (41.5), South (41.3), West (39.4)
◦Sector index breakdown: multi-family residential (45.5), mixed practice (44.5), commercial / industrial (43.1), institutional (38.0)
◦Project inquiries index: 55.2
About the AIA Architecture Billings Index
The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity. The diffusion indexes contained in the full report are derived from a monthly survey sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month. The regional and sector data is formulated using a three-month moving average.
About The American Institute of Architects
For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. By using sustainable design practices, materials, and techniques, AIA architects are uniquely poised to provide the leadership and guidance needed to provide solutions to address climate change. AIA architects walk the walk on sustainable design. Visit www.aia.org/walkthewalk.
http://www.aia.org/press/releases/AIAB080266
.
States Turning to Last Resorts in Budget Crisis
June 21, 2009
In Hawaii, state employees are bracing for furloughs of three days a month over the next two years, the equivalent of a 14 percent pay cut. In Idaho, lawmakers reduced aid to public schools for the first time in recent memory, forcing pay cuts for teachers.
And in California, where a $24 billion deficit for the coming fiscal year is the nation’s worst, Gov. Arnold Schwarzenegger has proposed releasing thousands of prisoners early and closing more than 200 state parks.
Meanwhile, Maine is adding taxes on candy and ski tickets, Wisconsin on oil companies, and Kentucky on alcohol and cellphone ring tones.
With state revenues in a free fall and the economy choked by the worst recession in 60 years, governors and legislatures are approving program cuts, layoffs and, to a smaller degree, tax increases that were previously unthinkable.
All but four states must have new budgets in place less than two weeks from now — by July 1, the start of their fiscal year. But most are already predicting shortfalls as tax collections shrink, unemployment rises and the stock market remains in turmoil.
“These are some of the worst numbers we have ever seen,” said Scott D. Pattison, executive director of the National Association of State Budget Officers, adding that the federal stimulus money that began flowing this spring was the only thing preventing widespread paralysis, particularly in the areas of education and health care. “If we didn’t have those funds, I think we’d have an incredible number of states just really unsure of how they were going to get a new budget out.”
The states where the fiscal year does not end June 30 are Alabama, Michigan, New York and Texas.
Even with the stimulus funds, political leaders in at least 19 states are still struggling to negotiate budgets, which has incited more than the usual drama and spite. Governors and legislators of the same party are finding themselves at bitter odds: in Arizona, Gov. Jan Brewer, a Republican, sued the Republican-controlled Legislature earlier this month after it refused to send her its budget plan in hopes that she would run out of time to veto it.
In Illinois, the Democratic-led legislature is fighting a plan by Gov. Patrick J. Quinn, also a Democrat, to balance the new budget by raising income taxes. And in Massachusetts, Gov. Deval Patrick, a Democrat, has threatened to veto a 25 percent increase in the state sales tax that Democratic legislative leaders say is crucial to help close a $1.5 billion deficit in the new fiscal year.
“Legislators have never dealt with a recession as precipitous and rapid as this one,” said Susan K. Urahn, managing director of the Pew Center on the States. “They’re faced with some of the toughest decisions legislators ever have to make, for both political and economic reasons, so it’s not surprising that the environment has become very tense.”
In all, states will face a $121 billion budget gap in the coming fiscal year, according to a recent report by the National Conference of State Legislatures, compared with $102.4 billion for this fiscal year.
The recession has also proved politically damaging for a number of governors, not least Jon Corzine of New Jersey, whose Republican opponent in this year’s race for governor has tried to make inroads by blaming the state’s economic woes on him. Mr. Schwarzenegger, who sailed into office on a wave of popularity in 2003, will leave in 2011 — barred by term limits from running again — under the cloud of the nation’s worst budget crisis. And the bleak economy has played a major role in the waning popularity of Gov. David A. Paterson of New York.
Over all, personal income tax collections are down by about 6.6 percent compared with last year, according to a survey by Mr. Pattison’s group and the National Governors Association. Sales tax collections are down by 3.2 percent, the survey found, and corporate income tax revenues by 15.2 percent. (Although New Jersey announced last week that a tax amnesty program had brought in an unexpected $400 million — a windfall that caused lawmakers to reconsider some of the deeper cuts in a $28.6 billion budget they were set to approve in advance of the July 1 deadline.)
As a result, governors have recommended increasing taxes and fees by some $24 billion for the coming fiscal year, the survey found. This is on top of more than $726 million they sought in new revenues this year.
The proposals include increases in personal income tax rates — Gov. Edward G. Rendell of Pennsylvania has proposed raising the state’s income tax by more than 16 percent, to 3.57 percent from 3.07 percent, for three years — and tax increases on myriad consumer goods.
“They have done a fair amount of cutting and will probably do some more,” said Ray Scheppach, executive director of the governors association. “But as they look out over the next two or three years, they are also aware that when this federal money stops coming, there is going to be a cliff out there.”
Raising revenues is the surest way to ensure financial stability after the stimulus money disappears, Mr. Scheppach added, saying, “You’re better off to take all the heat at once and do it in one package that gets you through the next two, three or four years.”
While state general fund spending typically increases by about 6 percent a year, it is expected to decline by 2.2 percent for this fiscal year, Mr. Pattison said. The last year-to-year decline was in 1983, he said, on the heels of a national banking crisis.
The starkest crisis is playing out in California, where lawmakers are scrambling to close the $24 billion gap after voters rejected ballot measures last month that would have increased taxes, borrowed money and reapportioned state funds.
Democratic legislative leaders last week offered alternatives to Mr. Schwarzenegger’s recommended cuts, including levying a 9.9 percent tax on oil extracted in the state and increasing the cigarette tax to $2.37 a pack, from 87 cents. But Mr. Schwarzenegger has vowed to veto any budget that includes new taxes, setting the stage for an ugly battle as the clock ticks toward the deadline.
“We still don’t know how bad it will be,” Ms. Urahn said. “The story is yet to be told, because in the next couple of weeks we will see some of the states with the biggest gaps have to wrestle this thing to the ground and make the tough decisions they’ve all been dreading.”
In one preview, Gov. Tim Pawlenty of Minnesota, a Republican, said last week that he would unilaterally cut a total of $2.7 billion from nearly all government agencies and programs that get money from the state, after he and Democratic legislative leaders failed to agree on how to balance the budget.
In an example of the countless small but painful cuts taking place, Illinois announced last week that it would temporarily stop paying about $15 million a year for about 10,000 funerals for the poor. Oklahoma is cutting back hours at museums and historical sites, Washington is laying off thousands of teachers, and New Hampshire wants to sell 27 state parks.
Nor will the pain end this year, Ms. Urahn said, even if the recession ends, as some economists have predicted. Unemployment could keep climbing through 2010, she said, continuing to hurt tax collections and increasing the demand for Medicaid, one of states’ most burdensome expenses.
“Stress on the Medicaid system tends to come later in a recession, and we have yet to see the depth of that,” Ms. Urahn said. “So you will see, for the next couple years at least, states really struggling with this.”
Obama pushes for less risky home loans
But critics say his plan would wring innovation out of the mortgage market
updated 2 hours, 44 minutes ago
WASHINGTON - If President Barack Obama gets his way, consumers who take out mortgages would automatically get a "plain vanilla" loan — such as a traditional 30-year fixed-rate mortgage — unless they opted for a riskier variety.
Obama's plan to revamp financial regulation aims to protect borrowers from the confusing and high-risk mortgages that fed a pandemic of delinquencies and foreclosures, led to the worst financial crisis in decades and thrust the nation into a deep recession.
Obama is expecting opposition to the plan, and cautioned Saturday in his radio address, "While I'm not spoiling for a fight, I'm ready for one."
Government officials want to make the process of getting a mortgage as simple and abuse-free as signing up for a retirement savings plan: A growing number of companies now automatically enroll new employees in 401(k) plans unless they opt out.
For mortgage brokers, though, the plan threatens to shrink the fee income some have received from encouraging the use of adjustable-rate, interest-only and other sometimes risky loans.
Obama's plan to overhaul financial regulation, unveiled last week, would create a Consumer Financial Protection Agency to monitor consumer financial products and revamp the entire home-loan process.
It's the administration's latest step to tackle the aftermath of the housing bust. The administration in March launched a $50 billion plan to give the lending industry financial incentives to modify mortgages to lower payments.
But that plan is off to a slow start. Many housing counselors say it hasn't made much of a difference nationwide because lenders have been slow or reluctant to cooperate. As of mid-June, about 50,000 borrowers were enrolled in three-month trial modifications under the plan, according to the Treasury Department. The administration initially had said up to 4 million households could be helped.
Critics in the mortgage industry are denouncing Obama's plan for government-approved mortgages. Some call it a paternalistic intrusion that would restrict borrowers' options and make loans harder to get and potentially more expensive.
Guy Cecala, publisher of Inside Mortgage Finance, a trade publication, called the idea "un-American." He said it would make the U.S. mortgage market heavily regulated, like those of Germany or France, where consumers have fewer options.
"We're a free-enterprise country," Cecala said. "We encourage innovation. This is certainly not going to encourage innovation. It will stifle it."
But others in the industry are open to the idea. A good mortgage broker should always show a borrower plenty of options, including the traditional 30-year fixed-rate loan, and explain the risks clearly, said Kevin Iverson, a mortgage broker with Reed Mortgage Corp. in Denver.
During the lending boom, unscrupulous brokers "were selling bad products because it was one of the ways people made more money," Iverson said. They focused on closing deals fast, he said, rather than building customer relationships that would endure for years.
Click for related content
Obama ready for fight on financial overhaul
Housing market may return to normal in 2012
If the Obama plan for simplifying the mortgage process is approved, here's how it might work:
The government would give its seal of approval to a handful of mortgage types — a standard 30-year fixed-rate mortgage and perhaps a few varieties of adjustable-rate loans. For a loan to get the "vanilla" label, the lender would have to verify borrowers' income and have them set aside money for property tax and insurance.
Borrowers would still be able to get mortgages that don't pass the government's vanilla test. But they would be warned about the risks.
The Obama administration faces a tough fight over its financial overhaul plan. Powerful trade groups like the American Bankers Association, for example, oppose creating a consumer financial protection agency. Even lobbying groups open to the idea of a consumer-products regulator question whether the government should suggest which mortgages are best for consumers.
"We don't want to stifle innovation, and we don't want to stifle competition," said John Courson, president of the Mortgage Bankers Association.
Traditional fixed-rate loans fell out of favor during the housing boom. They dropped from a 75 percent market share in 2002 and 2003 to around 50 percent in 2004 and 2005, according to Inside Mortgage Finance. But with the housing bubble burst and mortgage rates near historic lows, fixed-rate loans — 30-year, 15-year and other types — now account for about 95 percent of the market.
Previous efforts in Congress to crack down on mortgage abuses have fallen short. Even regulatory proposals on seemingly simple issues, like reducing the paperwork to get a loan, have devolved into battles among industry factions.
Supporters say a new consumer regulator is sorely needed. They point to academic research suggesting that consumers, faced with a difficult choice about their personal finances, tend to choose the path of least resistance. As a result, they often make poor decisions.
That's particularly true with mortgages, which require signing numerous complex documents. Many borrowers say they didn't understand the loans they signed up for during the housing boom. Some say they were surprised when their rates adjusted to much higher payments.
"These loans are so complicated that the consumers can't figure out what's going on," said Bill Apgar, senior adviser for mortgage finance at the Department of Housing and Urban Development.
The Obama plan includes other elements likely to produce drawn-out lobbying fights. For example, administration officials want to curb the fees that brokers and lenders receive tied to inflated mortgage rates.
Brokers argue such fees are a legitimate way for borrowers to afford a loan without having to come up with thousands of dollars in closing costs, because the fees can be spread over the life of a loan. They also intend to fight a plan to have their compensation linked to whether a borrower winds up defaulting.
"There's no reason that we should have to assume that risk," said Marc Savitt, president of the National Association of Mortgage Brokers. He argues that brokers merely submit loans to lenders and don't influence whether the loans are approved.
Brokers have already seen their market share dwindle, from more than 60 percent of new loans at the peak of the market to less than 20 percent now, said David Olson, president of Access Mortgage Research in Columbia, Md.
If mortgage broker fees were eliminated, "that would be the complete kiss of death" for mortgage brokers, Olson said. "That's really how they make their money."
'Cash for clunkers' bill passes Senate
car dealers cheer
(222,222 folks get to divi up the 1 Billion @ 4,500.00 each or 285,714 folks @ 3,500.00 each,
this should bring the auto mfg.'s quickly out of BK)
Lita Epstein
Jun 19th 2009 at 8:30AM
Filed under: Company News, Economy
Car dealers, unions, trade groups and automakers got their wish Thursday as the "cash for clunkers" bill passed the Senate and headed for President Obama's desk. Since Obama pushed for the bill as a way to stimulate car sales, he's expected to quickly sign it. The bill has a $1 billion price tag.
After the bill is signed, the National Highway Traffic Safety Administration will finalize the rules in 30 days and then consumers may be eligible for a voucher worth up to $4,500 to be spent on a new car. The amount of the voucher will depend on the fuel efficiency of the new car and the increased efficiency compared to the old one.
Eligible trade-in vehicles must be 1984 models or newer and must have an average fuel economy of no more than 18 miles to the gallon. The new car or truck must get better gas mileage than the one traded in. The amount of the voucher depends on the difference in fuel efficiencies between the old and new car. For example, to get the maximum $4,500 voucher the new car would have to get at least 10 more miles per gallon than the old car. If the new car gets at least four miles per gallon more, the voucher amount is $3,500.
Automotive trade groups have been lobbying for months to get the legislation passed. The bill sponsors tacked it onto legislation for a spending bill to fund troops in Iraq and Afghanistan in order to expedite it through the Senate. It had already passed the House of Representatives.
Republican Sen. Judd Gregg tried to strip the measure from the bill. He said during floor debate, "Let's not add a billion dollars of unnecessary debt." Senator Carl Levin (D-Mich) said the program "will provide a much-needed boost to the automobile industry."
A similar program helped beef up Germany's car sales. At the end of the first month of the program in Germany, sales were up 21 percent from the previous year. During that same period, U.S. sales slumped 41 percent.
In other good news, GM told 60 of the 1,000 dealers slated for elimination that they would not loose their dealerships. GM announced the reversals after it corrected financial information used to evaluate which stores to keep. GM did not name the individual dealerships that would saved.
Lita Epstein has written 25 books including Trading for Dummies and Reading Financial Reports for Dummies.
'veteran_trader'
I'm not a premium subscriber so I can't help you , but you can get a two week free trial if your interested.
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http://investorshub.advfn.com/boards/board.aspx?board_id=2346
Household Real estate assets % of GDP
http://wcw.bignose.org/index.php?/archives/339-Flow-of-funds-owners-equity-update.html
Massachusetts Miracle or Massachusetts Miserable:
June 9, 2009
Briefing Paper no. 112
Massachusetts Miracle or Massachusetts Miserable: What the Failure of the "Massachusetts Model" Tells Us about Health Care Reform
When Massachusetts passed its pioneering health care reforms in 2006, critics warned that they would result in a slow but steady spiral downward toward a government-run health care system. Three years later, those predictions appear to be coming true:
**Although the state has reduced the number of residents without health insurance, 200,000 people remain uninsured. Moreover, the increase in the number of insured is primarily due to the state's generous subsidies, not the celebrated individual mandate.
**Health care costs continue to rise much faster than the national average. Since 2006, total state health care spending has increased by 28 percent. Insurance premiums have increased by 8–10 percent per year, nearly double the national average.
**New regulations and bureaucracy are limiting consumer choice and adding to health care costs.
**Program costs have skyrocketed. Despite tax increases, the program faces huge deficits. The state is considering caps on insurance premiums, cuts in reimbursements to providers, and even the possibility of a "global budget" on health care spending—with its attendant rationing.
**A shortage of providers, combined with increased demand, is increasing waiting times to see a physician.
With the "Massachusetts model" frequently cited as a blueprint for health care reform, it is important to recognize that giving the government greater control over our health care system will have grave consequences for taxpayers, providers, and health care consumers. That is the lesson of the Massachusetts model.
Full text of Briefing Paper no. 112
http://www.cato.org/pub_display.php?pub_id=10268
Congress to consider 'cash for clunkers' plan
Consumers could receive rebates for trading in gas-guzzling cars and trucks under House plan
Ken Thomas, Associated Press Writer
On Tuesday June 9, 2009, 6:46 am EDT
WASHINGTON (AP) -- Consumers could receive rebates of up to $4,500 for turning in their gas-guzzling cars and trucks for more fuel-efficient vehicles under a House proposal.
President Barack Obama has urged Congress to approve consumer incentives for new car purchases as part of the government's efforts to reorganize General Motors Corp. and Chrysler LLC through the bankruptcy courts.
The House proposal set for a floor vote Tuesday is aimed at stimulating car sales during a bleak period for the auto industry while increasing the nation's fleet of cars that get more miles to the gallon. GM and Chrysler have received billions of dollars in government aid, but the entire auto industry has watched car sales plummet during the past year. In May, overall sales were 34 percent lower than a year ago.
The vehicle scrappage bill has been under negotiations for months as lawmakers try to find a solution that boosts car sales while providing environmental benefits. Proponents have pointed to similar programs in Europe that have enhanced auto sales.
Separately, House and Senate appropriators were discussing providing $1 billion to a supplemental war funding bill for the "cash for clunkers" program, which aims to generate about 1 million new auto sales. Since the yearlong vehicle program is expected to cost $4 billion, lawmakers would attempt to find the additional money later this year.
Under the House bill, car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 miles per gallon. The value of the voucher would grow to $4,500 if the mileage of the new car is 10 mpg higher than the old vehicle. The miles per gallon figures are listed on the window sticker.
Owners of sport utility vehicles, pickup trucks or minivans that get 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV is at least 2 mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle. Consumers could also received vouchers for leased vehicles.
Rep. Betty Sutton, D-Ohio, the bill's chief sponsor, said the bill showed that "the multiple goals of helping consumers purchase more fuel efficient vehicles, improving our environment and boosting auto sales can be achieved." Sen. Debbie Stabenow, D-Mich., has backed a similar version in the Senate, which has the support of automakers and their unions.
But a group of senators led by California Democrat Dianne Feinstein want an alternative version that would require consumers to trade up for more fuel-efficient cars and trucks to qualify. They complained that even a 2009 Hummer H3T, which gets 14 mpg in city driving and 18 mpg on the highway, could qualify for the incentives under the House bill.
Under Feinstein's plan, a passenger car owner's trade-in would need to get 17 mpg or less to qualify and only new passenger cars getting at least 24 mpg would be eligible. Owners could receive a $2,500 voucher for a new car that gets at least 7 mpg more than their old car. The voucher would increase to $3,500 for new cars with a 10 mpg improvement and $4,500 for new cars with a 13 mpg increase in fuel efficiency.
Old trucks, minivans and SUVs also would need to get 17 mpg or less under Feinstein's approach, and the new trucks, minivans and SUVs would need to get at least 20 mpg. The vouchers for the larger vehicles would also range from $2,500 to $4,500. The Feinstein plan would also provide a $1,000 voucher for the purchase of a used passenger car with a mileage of at least 24 mpg and a used truck or SUV with a mileage of at least 20 mpg.
Construction Spending in the U.S. Unexpectedly Climbs
By Bob Willis and Courtney Schlisserman
June 1 (Bloomberg) -- Spending on construction in the U.S. unexpectedly rose in April as the housing slump eased and more commercial projects got under way.
The 0.8 percent gain was the biggest since August and followed a revised 0.4 percent increase the prior month, the Commerce Department said today in Washington. Residential construction climbed 0.6 percent and work on power plants and factories propelled commercial construction up.
Federal and local government spending will ramp up as funding from the $787 billion fiscal stimulus package filters through to worksites. Borrowing rates near historic lows and improving business and consumer confidence may help stem the worst housing slump since the Great Depression.
“Residential construction may be bottoming,” said Steven Wood, president of Insight Economics LLC in Danville, California. “Over the next several quarters, federal stimulus dollars may support public construction activity despite weak state and local government funding.”
Other reports showed manufacturing contracted in May at the slowest pace in eight months and consumer spending fell in April.
Stocks rallied and Treasury securities fell amid signs the worst of the recession is over. The Standard & Poor’s 500 index was up 2.3 percent to 940.54 at 10:48 a.m. in New York. The yield on the 10-year note soared to 3.63 percent from 3.46 percent late in the day on May 29.
Projected to Drop
Economists projected construction spending would drop 1.5 percent, according to the median estimate of 45 economists surveyed by Bloomberg News. Forecasts ranged from a decline of 2.5 percent to a gain of 0.1 percent.
Non-residential construction, including public projects, increased 0.8 percent. Compared with a year earlier, it was up 2.5 percent.
Public construction decreased 0.6 percent, restrained by declines in the building of schools, water-supply and sewage- treatment plants. Such projects may increase in coming months as funds from the government’s infrastructure stimulus spending filter through to worksites.
Spending on structures fell at a 42 percent rate in the first quarter, while residential outlays dropped at a 39 percent pace, the government reported last week. The economy shrank at a 5.7 percent rate, after a 6.3 percent decline in the fourth quarter.
Billings
Architects in the U.S. reported billings dropped in April at a slower rate than the prior month as federal funding started to flow, the American Institute of Architects said last month.
The Architecture Billings Index fell to 42.8 in April from 43.7 in March, when it posted its biggest gain since August 2006. Still, billings have been falling since January 2008, the last time the index was above 50, the dividing point between contraction and growth.
“A growing number of architecture firms report potential projects arising from federal stimulus funds,” said AIA Chief Economist Kermit Baker in a statement on May 20.
General Growth Properties Inc. on April 16 filed the biggest real-estate bankruptcy in U.S. history, as the global credit freeze blocked it from refinancing some of the of the $27.3 billion of debt it amassed on its way to becoming the nation’s second-biggest shopping mall owner.
“We intend to emerge as a leaner company,” General Growth President Thomas Nolan said in an interview. “We want to come out as a less leveraged company. Our business model remains strong.”
Homebuilders are still reeling. D.R. Horton Inc., the largest U.S. homebuilder by market value, on May 5 reported a quarterly loss that exceeded analysts’ estimates as orders plummeted 45 percent from a year earlier.
“Market conditions in the homebuilding industry are still challenging,” Chairman Donald Horton said in a statement.
To contact the reporters on this story: Bob Willis in Washington at bwillis@bloomberg.net; Courtney Schlisserman in Washington at cschlisserma@bloomberg.net
All GM haulted as expected, will be interesting to see if they allowed it to reopen and whether it goes to the pink sheets.
This is not your run of the mill chapter 11, it is manipulated by the government. Not that I have a direct financial interest but it should be interesting to watch it play out, setting a presedence for the future....??
http://www.nasdaqtrader.com/Trader.aspx?id=TradeHalts
The chart for the article below can be found here, along with the article.
http://www.financialsense.com/editorials/casey/2009/0528.html
The Second Crash – On the Way and Unstoppable
- The Casey Files -
by Doug Hornig
May 28, 2009
Tuesday, October 9, 2007 started as a nice day in New York City. A lovely early fall day, with the temperature still a balmy 80° at 2:00 in the morning. By evening, though, the temperature had dropped twenty degrees, the clouds had rolled in, there was thunder and rain.
As with the weather, there were some hints of trouble here and there on Wall Street. But all in all, things could not have seemed better. Little did we know, the stormy end of 10/9/07 signaled a very large bubble that had just popped.
That was the day when the Dow Jones Industrial Average hit its historic peak. From there, it was all downhill -- slowly but steadily at first, and then violently after last August -- until the Dow bottomed (for now) on March 9 of this year. Over that span, the index lost 54% of its value.
It’s been a crushing blow to just about everyone. But it’s already being referred to as the crash. As if the unpleasantness were now all behind us. More likely, in the future it will be seen as, simply, the first crash.
Don’t believe it? In a moment you will.
But let’s quickly recall what’s already happened. During the late, great housing boom, interest rates were at microscopic levels, while bankers were encouraged to grant home loans on little more than a wink and a nudge. In order to inflate their balance sheets, those bankers resorted to all sorts of gimmicky, adjustable rate mortgages (ARMs), whose common feature was an interest rate that would eventually reset. That is, it would balloon somewhere down the road. And those most likely to come quickly to grief were the riskiest borrowers, who held loans known as “subprime.”
“But not to worry,” borrowers were told. “Betting on ever-rising home prices is the safest wager in the whole wide world. If you have problems with cash flow when the ARM resets, your house will be worth a lot more, so you can simply sell it and walk away with a nice chunk of change in your pocket.” Uh-huh.
The bankers themselves were a little more concerned about the deterioration of their portfolios. They took out insurance in the form of credit default swaps (CDSs). These were a brand-new invention in world financial history, allowing mortgages to be sold and resold until they were leveraged 20 times over. They became the shakiest part of a huge global derivatives market, with a nominal value in the tens of trillions of dollars.
For a while, this Ponzi scheme even worked. But then, as they had to, the ARMs began resetting, and there were defaults. Then more of them. Because at the same time, the housing market was cooling off and the economy was stalling out. More and more people were trapped in a situation where they owed more on their home than they could sell it for. Many simply mailed their keys to the bank and moved on.
All of this wreaked havoc in the derivatives market. Sellers of these exotic packages could no longer establish what they were worth. Buyers couldn’t determine a fair price and so stopped buying. As the ripples spread through the world financial system, trust disappeared and liquidity dried up.
Now consider that the base cause for all that dislocation was the subprime sector. And how big is that? Not very. Subprime mortgages account for only about 15% of all home loans. Their influence has been way out of proportion to their numbers, because of derivatives. Here’s the good news: the subprime meltdown has about run its course. These loans were resetting en masse in 2007 and the first eight months of ’08. Now they’re pretty much done.
And the bad news? No one in the mainstream media seems to be asking what should be a pretty obvious question: What about loans other than subprime? Truth is, the banks didn’t just trick up their subprime loans. ARMs were the order of the day – across the board.
From the beginning of 2007 through September of 2008, subprime loans were resetting like crazy. Those are the ones people were walking away from, sending a shockwave from defaults and foreclosures smack into the middle of the economy. Now they’re gone.
The ARM market got very quiet between December 2008 and March 2009, hitting a low that won’t be seen again until November of 2011. Small wonder a few “green shoots” have poked their heads above ground. But in April, resets began to increase and will reach an intermediate peak in June. After that, they tail off a little, going basically flat for the next ten months.
It’s not until May of 2010 that the next wave really hits. From there to October of 2011, the resets will be coming fast and furious. That’s 18 months of further turmoil in the housing market, and the beginning is still nearly a year away! (Although the months in between are likely to be no picnic, either.)
While it isn’t subprime ARMs that are resetting this time, neither are they prime loans. Those eligible for prime loans wisely tended to stay away from ARMs in the first place, as indicated by the relatively small space they take up on each bar.
No, the next to go are Alt-A’s , Option ARMs and Unsecuritized ARMs. Alt-A’s are loans to the folks who are a small step up from subprime. Unsecuritized loans are a 50-50 proposition; either the borrowers were good enough that they weren’t thrown into the CDS pool, or they were so risky no one would insure them.
Those two are bad enough. But Option ARMs are the real black sheep, loans with choices on how large a payment the borrower will make. The options include interest-only or, worse, a minimum payment that is less than interest-only, leading to “negative amortization”—a loan balance that continually gets bigger, not smaller. Imagine what happens with those when the piper calls.
Once the carnage begins, will it be as bad as the subprime crisis? That’s the $64K question. Perhaps not. For one thing, subprime loans were a much larger chunk of the market when they started going south. For another, there’s been a lot of refinancing as interest rates dropped; that should help ease the default rate. And the government has massively intervened, with measures designed to prop up those who would otherwise lose their homes.
On the other hand, we’re in a severe recession, which wasn’t the case when the subprime crisis started. More people will be unable to meet payments. And the housing market has continued to decline, pressuring both marginal homeowners and banks that can’t sell foreclosed properties.
Is the stock market’s next 10/9/07 on the way? Yes. Which day will it be? That’s unknowable. It could be in a week, or not for another year.
But make no mistake about it, the second crash is coming. It can’t be prevented, no matter what desperate measures Obama and his hapless financial advisors come up with. All we can hope for is that, with a little luck, it won’t be as severe as the first one. But it will last longer. We aren’t even in the middle of the woods yet, much less on the way out.
The order of the day is to be very defensive. There will be few safe havens, but they do exist.
This is only a lull in the housing hurricane
MONDAY, MAY 25, 2009
http://online.barrons.com/article/SB124303112018248371.html
Posted by: roguedolphin
Housing's Big Picture Isn't Pretty
05/20/09
http://www.thestreet.com/story/10503387/1/schiff-housings-big-picture-isnt-pretty.html
"The authors of the Case-Shiller index had assigned the index a value of 100.0 in January of 2000. This figure does not represent a dollar value for home prices but is simply a benchmarking tool. In December 2008, after a severe 28% decline from its June 2006 peak of 226.29, the Case-Shiller 10 City index stood at 162.1. However, if home prices had followed the 3.4% annual 100-year trend line from December 1997 (when the index was at 82.3), then the index would have arrived at only 118.92 in December 2008."
"This would suggest that the index would need to decline an additional 27% to get back to the historical trend line. Extrapolating along the sunnier 50-year annual average increase would put the index at 132.2 by December 2008. This would still put the trend line 18.5% below current prices."
Regulators seize Florida's BankUnited FSB
On Thursday May 21, 2009, 6:54 pm EDT
WASHINGTON (AP) -- Regulators on Thursday shut down BankUnited FSB, a struggling Florida thrift whose closure is expected to cost the Federal Deposit Insurance Corp. $4.9 billion.
The failure of the Coral Gables, Fla.-based bank represents the second-largest hit to the FDIC's insurance fund so far -- the costliest was last year's seizure of California lender IndyMac, on which the FDIC is estimated to lose $10.7 billion.
BankUnited FSB is the 34th federally insured institution to be closed this year, and the biggest. The FDIC on Thursday took control of the bank, which called itself Florida's largest banking institution with about $13 billion in assets as of May 2.
The Office of Thrift Supervision, a Treasury Department agency, said Thursday that BankUnited FSB reported $1.2 billion in losses last year as defaults on loans piled up. The thrift "was critically undercapitalized and in an unsafe condition to conduct business," the agency said in a statement.
The bank has been sold to a group of investors led by John Kanas, the former head of North Fork Bank. It will re-open Friday as a newly chartered savings bank called BankUnited.
The new bank will assume $12.7 billion in assets and $8.3 billion of its total $8.6 billion in deposits. In addition, the FDIC and the new bank agreed to share losses on about $10.7 billion in assets.
Deposits will be insured by the FDIC, and customers can continue to use BankUnited FSB checks, ATM cards and debit cards, the FDIC said.
The failed bank's parent was BankUnited Financial Corp. It had 1,083 employees and 85 branches, all in Florida, mostly located along the state's southeast coast.
The 34 bank failures this year in the U.S. compare with 25 in all of last year and three in 2007. As the economy nationwide has soured, amid rising unemployment, tumbling home prices and soaring loan defaults, bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level in nearly a quarter-century -- $18.9 billion as of Dec. 31, compared with $52.4 billion at the end of 2007.
The FDIC expects that bank failures will cost the insurance fund around $65 billion through 2013.
The failure of IndyMac, which had $32 billion in assets, was the second-largest last year, trailing only the September failure of Washington Mutual Inc.
Thrifts have been the most troubled regulated institutions during the financial crisis and among the most spectacular failures. By law, they must have at least 65 percent of their lending in mortgages and other consumer loans -- making them particularly vulnerable to the housing downturn. Seattle-based thrift Washington Mutual was the biggest bank to collapse in U.S. history, with around $307 billion in assets. It was later acquired by JPMorgan Chase & Co. for $1.9 billion.
GMAC and Its Impact on Ford
by: Karl Denninger May 21, 2009
http://seekingalpha.com/article/139049-gmac-and-its-impact-on-ford?source=yahoo
Vino,
the sad part is the "implication" of Ihub and what may transpire as the investigation moves forward.
"carried out the market manipulation schemes with others he met through a penny stock web site InvestorsHub.com, which is operated by Matthew Brown of Aliso Viejo, Calif"
SEC ""alleges""
http://sec.gov/news/press/2009/2009-117.htm
SEC Charges Eight Participants in Penny Stock Manipulation Ring
FOR IMMEDIATE RELEASE
2009-117
Washington, D.C., May 21, 2009 — The Securities and Exchange Commission has charged eight participants in a penny stock manipulation ring that allegedly pumped the market prices of at least four stocks and generated more than $6.2 million in illicit profits when they dumped shares on the market.
The SEC alleges that Pawel Dynkowski, who resided in Newark, Del., carried out the market manipulation schemes with others he met through a penny stock web site InvestorsHub.com, which is operated by Matthew Brown of Aliso Viejo, Calif. Dynkowski, Brown, and other participants in the schemes often timed the manipulative trading to coincide with false or misleading press releases issued by the companies to hype the stock. The four companies were GH3 International, Inc., Asia Global Holdings, Inc., Playstar Corp., and Xtreme Motorsports of California, Inc.
“As we allege in our complaint, Dynkowski and his accomplices around the country met through the Internet and together spun a web of deception that gave investors the false impression that there was a real demand for these stocks,” said Scott Friestad, Deputy Director of the SEC’s Division of Enforcement. “Dynkowski went so far as to himself write some of the misleading press releases that pumped these penny stocks so they could line their own pockets with millions of dollars.”
The SEC’s complaint, filed in federal district court in Delaware, charges six others in addition to Dynkowski and Brown:
Jacob Canceli of Mission Viejo, Calif., who is a stock promoter.
Gerard J. D’Amaro of Pompano Beach, Fla., who is a stock promoter.
Joseph Mangiapane Jr. of Laguna Niguel, Calif, who was a registered representative at AIS Financial, Inc and is currently CEO of Rubicon Financial, Inc., which owned AIS Financial, Inc. during the relevant time period.
Nathan M. Michaud of Boston, Mass., who is a web site designer.
Marc J. Riviello of Redwood City, Calif., who was a registered representative at AIS Financial, Inc.
Adam S. Rosengard of Voorhees, N.J., who was a student at the University of Delaware during the relevant time period.
According to the SEC’s complaint, these fraudulent schemes generally followed the same pattern. In 2006 and 2007, Dynkowski and his accomplices received large blocks of shares to sell for the penny stock companies, and they received a portion of the proceeds from those sales. The companies put these shares in nominee accounts that Dynkowski and his accomplices controlled. The defendants pumped the market price of the stocks using wash sales, matched orders and other manipulative trading. After artificially inflating the market price of the stocks, Dynkowski and his accomplices then dumped the shares obtained from the issuers and divided the illicit proceeds.
For example, in the scheme involving Asia Global stock, the SEC alleges that Dynkowski personally saw to it that the manipulative trading was coordinated with misleading press releases from the company, and in some instances he wrote the press releases for Asia Global himself. According to the SEC’s complaint, Dynkowski instructed Brown on Aug. 24, 2006, to have Asia Global issue a press release hyping the company’s second quarter 2006 financial results and to “make it sound ENORMOUS.” On September 1, Asia Global issued a press release claiming that its profits for July 2006 were 745 percent greater than its profits for July 2005. Meanwhile, during that same week, Dynkowski and Brown sold 7.75 million shares from nominee accounts, resulting in illicit profits of more than $1.3 million.
Furthermore, according to the SEC’s complaint, Asia Global issued a press release on Feb. 6, 2007, claiming that its subsidiary had just received a license to produce 104 episodes of “Who Wants to Be a Millionaire” in China. The volume of trading in Asia Global increased by more than 65 percent, and Dynkowski and Brown, through orders submitted to Mangiapane and Riviello, were able to sell approximately 5.5 million shares held in nominee accounts, representing approximately 25 percent of the total volume that day. From February 2 through February 8, Dynkowski and Brown, through orders submitted to Mangiapane and Riviello, sold approximately 24.5 million shares held in nominee accounts, making illegal profits of more than $1.2 million.
The SEC’s complaint alleges violations of the antifraud, registration, and other provisions of the federal securities laws. The complaint seeks to have the court permanently enjoin each defendant from future violations, require disgorgement of ill-gotten gains with prejudgment interest, and impose financial penalties. Additionally, the Commission seeks to have certain defendants barred from participating in penny stock offerings.
The U.S. Attorney’s Office for the District of Delaware also today announced felony criminal charges against Dynkowski, Brown, Canceli, D’Amaro, Mangiapane, and Riviello.
The SEC thanks the U.S. Attorney’s Office for the District of Delaware; the Department of Homeland Security, Immigration and Customs Enforcement; the Internal Revenue Service – Criminal Investigations; and the Delaware State Police for their assistance in this matter.
The SEC’s investigation is continuing.
GM Finance Arm to Get a Fresh Bailout
It's coming to: the government is going to loan money to the government run car manufacturers (GMAC has agreed to finance Chrysler's buyers as well as GM's) so that the very car buyers, mostly taxpayers, are going to be loaning themselves the money to buy cars their 'representatives' designed and produced with their (the taxpayers money). Ponzi scheme??? Madoof was a piker!
http://online.wsj.com/article/SB124285476839840701.html
MAY 21, 2009
The Treasury Department is poised to inject more than $7 billion into GMAC, the first installment of a new government aid package that could reach $14 billion, according to people familiar with the matter. The injection is designed to firm up the company's balance sheet and allow it to grant loans for car purchases at General Motors and Chrysler.
The increasing infusion of taxpayer money into GMAC could turn the federal government into a large -- and potentially majority -- shareholder in the company, which is now owned by GM and a group led by private-equity firm Cerberus Capital Management.