Obama recession update

[notoc]

I probably won't do it anymore.  To be honest, I only do it because it gives IM2 a wedgie.

I know you do ... and I was labouring my points somewhat, and for that I do apologise.

[Mornac]

US Home Foreclosures Rise in January, More Seen
10 Feb 2011

U.S. home foreclosures jumped 12 percent last month, but the sharp divide between states  suggests the industry remains backlogged by investigations into the foreclosure process.
According to a report from real estate data firm RealtyTrac, lenders foreclosed on 78,133 properties in January, up 12 percent from the month before, but down 11 percent from January a year ago.

Bank seizures at states with non-judicial foreclosure processes jumped 23 percent, while states with a judicial process saw a decrease of 7 percent.

"It suggests the system is still frozen up. We should have seen a much larger increase in both overall activity and bank repossession," said Rick Sharga, senior vice president at RealtyTrac.

"The numbers will inevitably go up, it's just a question of will it be sooner or will it be later."

The number of foreclosure filings, which includes default notices, scheduled auctions and bank repossessions, rose 1 percent to 261,333 in January. Compared to January last year, filings are down 17 percent.

The report also showed 1 in every 497 houses received a foreclosure filing during the month. Five states -- California, Florida, Michigan, Arizona and Illinois -- continued to account for more than half of all foreclosure filings.

California alone accounted for more than one quarter.

Nevada, Arizona and California also had the highest foreclosure rates. Nevada had the country's highest foreclosure rate for the forty-ninth month in a row. One in every 93 Nevada homes received a foreclosure filing in January, more than five times the national average, RealtyTrac said.

Ongoing foreclosures are a major headwind for a market that is already struggling with a glut of unsold houses. Data from Zillow Inc earlier in the week showed the number of single-family homes where the mortgage is worth more than the home increased to 27 percent in the fourth quarter from 23.2 percent the previous quarter, suggesting more potential foreclosures to come.

http://www.cnbc.com/id/41505006

[Mornac]

February 10, 2011

Get ready for higher food prices

By David Hendee
WORLD-HERALD STAFF WRITER

Nate Kahler and Tim Tieken, employees at the Exeter co-op, unload corn to be stored at the co-op during the harvest in south-central Nebraska in October.


Warnings of higher food prices headed for American supermarkets and restaurants were swallowed easily across much of farm country Wednesday.

The big gulp came when the U.S. Department of Agriculture reported that global demand had pushed U.S. corn supplies to their lowest point in 15 years.

The price of corn, which has doubled over the past six months, affects most food products in supermarkets. It's used to feed the cattle, hogs and chickens that fill the meat aisles.

It is the main ingredient in Cap'n Crunch and Doritos. Turned into syrup, it sweetens most soft drinks and many foods.

Corn also is part of the agricultural blend that fuels the economies of Nebraska, Iowa and other farming states. Iowa is the nation's top corn-producing state; Nebraska is third.

Shoppers could see higher grocery bills as early as three months from now, though most of the impact won't be felt for another six months, said Scott Irwin, an agricultural economics professor at the University of Illinois.

Chicken prices are among the first to rise because the bird's life span is so short that higher feed costs get factored in quickly, he said. Price hikes for hogs take about a year and cattle two years. Prices on packaged foods take six or seven months to rise.

Tyson Foods, the nation's biggest meat company, said chicken, beef and pork prices are expect to rise this year, if only slightly, as producers seek to cover costs.

ConAgra Foods Inc. — the Omaha-based producer of brands including Healthy Choice, Banquet and Chef Boyardee — is raising prices on some of its products because of higher costs for corn and fuel, said Teresa Paulsen, a spokeswoman.

The price rally has bolstered the financial fitness of America's crop and livestock operators over the past eight months. Midwestern cropland is yielding record values. Rural banks and equipment makers report record profits.

“We're seeing record income levels for the ag community and ... wealth accumulation that cannot be denied,” said Bruce Johnson, an agricultural economist at the University of Nebraska-Lincoln. “We've moved into a whole new level.”

Said Bruce Babcock, an agricultural economist at Iowa State University: “Farmers are going to be earning quite a bit more money.”

Jason Henderson, Omaha branch executive for the Federal Reserve Bank of Kansas City, said farmers are buying more tractors, pickup trucks, grain bins and land.

“And they also come to Omaha to shop and go to events,” he said.

But it hasn't been simply a spending spree, Henderson said. Farmers are paying down debt and fewer are seeking loan renewals or extensions.

“It's a good time to be an ag banker,” said Brian Esch, president of McCook National Bank in southwest Nebraska. “But I have concerns over what this means for consumers. If one guy is selling at a record profit, someone is buying at a record level.”

Corn prices have risen over the past six months from $3.50 a bushel to nearly $7.

The U.S. will have a reserve of 675 million bushels left over in late August, when this year's harvest begins. That's roughly 5 percent of all corn that will be consumed, the lowest surplus level since 1996.

“There is going to be enough corn for food, for feed, for fuel and for export opportunities,” Tom Vilsack, the U.S. agriculture secretary, said at a Washington press conference.

Babcock, the Iowa State economist, said the U.S. mandate to increase the use of renewable fuels like ethanol is a major reason why the nation's corn supply is so low. About a quarter of the nation's corn crop is consumed by the production of ethanol. The ethanol industry's projected corn orders this year have risen . . . after record-high production in December and January, USDA said.

“We've created a hungry business that is dependent on corn, even high-priced corn,” Babcock said.

Johnson, the UNL economist, said global supply and demand are the root causes behind low U.S. corn stocks.

“Ethanol is a factor, but it's not the driver,” he said.

Johnson said the declining value of the dollar not only has fueled greater agricultural export demand, but also has driven up the price of oil. That, in turn, has propelled higher prices for corn-based ethanol.

The agricultural economies of Nebraska and Iowa will continue to grow into greater prominence as global food providers, economists said.

Johnson said rising population numbers globally and greater demand in major developing countries for higher-protein diets have strengthened the Midlands' agricultural market.

Farm cash receipts — led by corn and other crops — doubled in Nebraska from 2000 through 2010. Crop receipts alone ended the decade in the $9 billion range, up from a 2000 total of $3 billion.

Nebraska's net farm income hit a record $4.25 billion last year, according to preliminary estimates. The 2010 level would be nearly 65 percent above the 10-year historical average, Johnson said.

Although farm income represents only about 6 percent of Nebraska's $75 billion personal income total, it has a major impact on local and regional economies, Johnson said.

“There is no question that agriculture buffered the state from going into a deeper recession these last few years, and it has helped pull us out of the recession faster than other areas,” he said. “Agriculture has been our pack horse.”

http://www.omaha.com/article/20110210/NEWS01/702109884/0#get-ready-for-higher-food-prices

[johnhp]

Mornac: the only American shocked by supply and demand.

[IM2]

MSP,

You waste all your time giving me wedgies when you should be standing up to the racists you appease so that your grandchildren don't have to ride on the back of buses.

Bush was called what he was called because of the things he did. Your use of hte name Hussein is not because its his middle name. You are trying to infer he is not american.  This was not done to Bush, so your whining about people calling him names for startting a war based upon a lie  or several lies has no merit.

foodserver,

Bush won on (debt ceiling extension) a 52-48 party-line vote. Not a single Senate Democrat voted to raise the limit, opposition that's now complicating White House efforts to rally bipartisan support for a higher ceiling.

Republicans have a remarkable ability to not remember all of the crap they pull while  always seemingly able to remember only the things done by others. When you guys can grow up and admit that your side fucks up, we can hold decent adult discussions.  When I say this, I don't mean backhanded assaults on democrats. I mean full admittance to policies your side had that were mistakes. But  since thats not going to happen, we will always have stupid ass childish name calling sessions becauase your side never wants to admit when they are wrong.

When Bush was there initially there was no reason to raise the fucking debt ceiling. The prior adminstration had left a projected surplus. You republicans seem to forget this. So then Bush wished to extend a debt ceiling so he would have endless spending abilty to finance the lie of a war he started. Such is why democrats did not vote for it. But of course this is not mentioned by any republican, its just democtats did not vorte for a debt ceiling then, and now why are they for it.

When your side is able to explain the whole story, when your side decides that the use of fact is very important in any decision making priocess, then your side will have grown up also.

Until that time republicans are like a bunch of fucking pre schoolers. It's always the other guy who was wrong.

[Mornac]

Fannie, Freddie bailout: $153 billion ... and counting

By Chris Isidore, senior writer
February 11, 2011

NEW YORK (CNNMoney) -- When the dust settles, the federal bailout of Fannie Mae and Freddie Mac will be the most expensive government rescue of the financial crisis -- it already stands at $153 billion and counting.

Even as the Obama administration unveiled its plan for reforming the firms, experts agree taxpayer losses are going to continue to climb, no matter what Congress eventually decides to do with them.

The Federal Housing Finance Agency, the government body that oversees the two mortgage giants, has estimated that losses through 2013 will require Treasury to pour another $68 billion to $210 billion into the firms on top of the money already used to prop-up the firms and the housing market.

"Regardless of what they do, even if they were to change their status tomorrow, none of that will change the losses that will be coming due on their existing book of business," said Guy Cecala, publisher of Inside Mortgage Finance, an industry trade publication.

The two firms have already made many improvements in underwriting standards over the last two years, making most new loans they finance and guarantee more profitable and less risky, Cecala said.

"But that new business only goes so far, because it's still dwarfed by the loans made five to 10 years ago," he said.

Cecala thinks the losses may end up coming in a bit below FHFA's estimates, but other experts believe those estimates may be too conservative.

"The losses depend very much on housing prices, and I don't see the situation in the housing market getting very much better," said Peter Wallison, senior fellow at the American Enterprise Institute, a conservative think tank.

"As long as home prices continue to decline or even stay the same, the losses to Fannie and Freddie, and to the taxpayers, will continue to climb."

Congress essentially approved a blank check in July 2008 to back losses at the two firms, and in September of that year the government stepped in and took them over after finding that losses on the mortgages they bought during the the housing bubble had overwhelmed their net worth.

But while the government has kept the firms alive by pumping money into them since then, there has been no plan on reforming their operations going forward.

Friday the Obama administration unveiled its plan to slowly wind down Fannie and Freddie and have banks and the private sector provide the financing for home loans. But the administration plans call for some continued role for the government in promoting mortgage lending and home ownership.

Critics of the plan would like to see the government removed from the mortgage finance market altogether. But even advocates of that position say it will take a period of years to phase in that change.

And no one expects the legislative battle between the administration and Republicans in Congress over the future of the firms to be an easy one.

"The politics suggests to me there will be a standoff until the issue is settled following the election of 2012," said Wallison.

And working through all the bad loans could take even longer.

"You have to take your time and go through those loans and suffer the losses," said Cecala. He estimated that will take at least two or three years, maybe many more.

Ironically, many of the losses that Fannie and Freddie are expected to post in the next few years will go to pay Treasury a 10% dividend on the preferred stock it received in exchange for the bailouts.

Both firms are essentially borrowing money from Treasury to have the cash they need to repay Treasury. The dividend payments Treasury receives limits the losses to taxpayers.

FHFA estimates that between 40% to 90% of those additional bailout costs will simply be used to pay that dividend.

The National Association of Realtors is lobbying to end what it calls a "punitive dividend" and Jaret Seiberg, analyst at Concept Capital's Washington Research Group, said that structure is unworkable.

"The problem is it's impossible for them to tackle their current problem if they can't rebuild the capital base, and they can't do that paying that dividend level," he said.

http://money.cnn.com/2011/02/11/news/companies/fannie_freddie_losses/index.htm

[Mornac]

Obama's FY2012 Budget: Taxes, Taxes, and More Taxes

Ryan Ellis
February 14, 2011
     
President Obama released his budget this morning.  Rather than focusing on Washington’s over-spending problem, the budget calls for higher taxes on families and small businesses to pay for even more government spending.  Under the Obama budget, tax revenues will grow from 14.4% of GDP in 2011 to 20% of GDP in 2021.  By comparison, the historical average is only 18% of GDP.

Tax hike lowlights include:

•Raising the top marginal income tax rate (at which a majority of small business profits face taxation) from 35% to 39.6%.  This is a $709 billion/10 year tax hike

•Raising the capital gains and dividends rate from 15% to 20%

•Raising the death tax rate from 35% to 45% and lowering the death tax exemption amount from $5 million ($10 million for couples) to $3.5 million.  This is a $98 billion/ten year tax hike

•Capping the value of itemized deductions at the 28% bracket rate.  This will effectively cut tax deductions for mortgage interest, charitable contributions, property taxes, state and local income or sales taxes, out-of-pocket medical expenses, and unreimbursed employee business expenses.  A new means-tested phaseout of itemized deductions limits them even more.  This is a $321 billion/ten year tax hike

•New bank taxes totaling $33 billion over ten years

•New international corporate tax hikes totaling $129 billion over ten years

•New life insurance company taxes totaling $14 billion over ten years

•Massive new taxes on energy, including LIFO repeal, Superfund, domestic energy manufacturing, and many others totaling $120 billion over ten years

•Increasing unemployment payroll taxes by $15 billion over ten years

•Taxing management capital gains in an investment partnership (“carried interest”) as ordinary income.  This is a tax hike of $15 billion over ten years

•A giveaway to the trial lawyers—not letting companies deduct the cost of punitive damages from a lawsuit settlement.  This is a tax hike of $300 million over ten years

•Increasing tax penalties, information reporting, and IRS information sharing.  This is a ten-year tax hike of $20 billion.
Add it all together, and this budget is a ten-year, $1.5 trillion tax hike over present law.  That’s $1.5 trillion taken out of the economy and spent on government instead of being used to create jobs.

The “tax relief” in the budget is mostly just an extension of present law, and also some refundable credit outlay spending in the tax code.  There is virtually no new tax relief relative to present law in the President’s budget.


Read more: http://www.atr.org/obamas-fy-budgetbr-taxes-more-a5844#ixzz1DxjjfxOE

[IM2]

If Mornac has such a problem with the current president why doesn't he move back to france?

[Mornac]

Obama Budget Doubles National Debt to $26.3 Trillion in 10 Years

February 14, 2011
By Matt Cover

(CNSNews.com) – If the federal budget released by President Barack Obama today is implemented, it will double the national debt over the next 10 years. The current national debt is $13.56 trillion (end of FY 2010). By the end of 2021, that debt would rise to $26.3 trillion under the White House budget.

The figures reflect the effects of Obama’s fiscal year 2012 budget priorities, particularly a federal deficit that never falls below $500 billion in any year between 2010 and 2021.

The national debt [2]– both debt held by the public and debt held by “government accounts” (the Social Security trust fund chief among them) – was $13.56 trillion on Sept. 30. 2010, the end of fiscal year 2010.   (The national debt today, Deb. 14, 2011, is $14.08 trillion.)

In 2021, the national debt will have risen to $26.3 trillion [3], increasing by $1 trillion every year until 2021. Obama’s budget does not contain any plans for balancing the federal budget or reducing the national debt.

http://cnsnews.com/news/article/obama-budget-nearly-double-national-debt

[makesenseplease]

MSP,

You waste all your time giving me wedgies when you should be standing up to the racists you appease so that your grandchildren don't have to ride on the back of buses.

Bush was called what he was called because of the things he did. Your use of hte name Hussein is not because its his middle name. You are trying to infer he is not american.  This was not done to Bush, so your whining about people calling him names for startting a war based upon a lie  or several lies has no merit.

foodserver,

Republicans have a remarkable ability to not remember all of the crap they pull while  always seemingly able to remember only the things done by others. When you guys can grow up and admit that your side fucks up, we can hold decent adult discussions.  When I say this, I don't mean backhanded assaults on democrats. I mean full admittance to policies your side had that were mistakes. But  since thats not going to happen, we will always have stupid ass childish name calling sessions becauase your side never wants to admit when they are wrong.

When Bush was there initially there was no reason to raise the fucking debt ceiling. The prior adminstration had left a projected surplus. You republicans seem to forget this. So then Bush wished to extend a debt ceiling so he would have endless spending abilty to finance the lie of a war he started. Such is why democrats did not vote for it. But of course this is not mentioned by any republican, its just democtats did not vorte for a debt ceiling then, and now why are they for it.

When your side is able to explain the whole story, when your side decides that the use of fact is very important in any decision making priocess, then your side will have grown up also.

Until that time republicans are like a bunch of fucking pre schoolers. It's always the other guy who was wrong.

Explain to me how calling the president by his given name (the name his parents put on his birth certificate) infers that Mr. Obama is not an American.

Do you know something that's unknown to the rest of America?

For the record, I don't "infer".  I say exactly what I mean to say.

[johnhp]

Explain to me how calling the president by his given name (the name his parents put on his birth certificate) infers that Mr. Obama is not an American.

Do you know something that's unknown to the rest of America?

For the record, I don't "infer".  I say exactly what I mean to say.

Don't try to be clever by half.  Referring to someone by either their full name or their middle name is certainly not a conventional manner of address in the US.  It is a petty asshole move.

[makesenseplease]

Don't try to be clever by half.  Referring to someone by either their full name or their middle name is certainly not a conventional manner of address in the US.  It is a petty asshole move.

This, of course is a flat out lie.

Presidents Grant, Cleveland, Coolidge, and Wilson were always called by their middle names.

Presidents Adams,  Harrison were called by their full names.

I won't bother to list the presidents who were known by their nick-names.

 

[johnhp]

This, of course is a flat out lie.

Presidents Grant, Cleveland, Coolidge, and Wilson were always called by their middle names.

Presidents Adams,  Harrison were called fu their full names.

I won't bother to list the presidents who were known by their nick-names.

 

There are always exceptions to the convention initiated by the person.  No one referred to President Grant as Ulysses even though he preferred Hiram.  They called him Ulysses because he adopted that name after a mistake made by a congressman.  The point is that HE chose the reference.

That is the point: we refer to people by their first names unless THEY choose otherwise.

[makesenseplease]

There are always exceptions to the convention initiated by the person.  No one referred to President Grant as Ulysses even though he preferred Hiram.  They called him Ulysses because he adopted that name after a mistake made by a congressman.  The point is that HE chose the reference.

That is the point: we refer to people by their first names unless THEY choose otherwise.

This is the point: You sir, are full of shit.

[Pepsi]

This is the point: You sir, are full of shit.

He's exactly right on this middle name discussion (in my humble opinion).