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Economy - Economics USA

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The Washington Post

The Department of Housing and Urban Development has left elderly borrowers vulnerable to abusive lending practices because of shortcomings in programs that offer reverse mortgages, according to a report released yesterday by the Government Accountability Office. Reverse mortgages, which are usually backed by HUD's Federal Housing Administration, enable seniors to withdraw equity from their homes. The loan and the accumulated interest do not have to be paid back until the owner dies or sells the home. But the upfront costs are substantial....

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Washington Post

Sen. Daniel K. Inouye's staff contacted federal regulators last fall to ask about the bailout application of an ailing Hawaii bank that he had helped to establish and where he has invested the bulk of his personal wealth.   The bank, Central Pacific Financial, was an unlikely candidate for a program designed by the Treasury Department to bolster healthy banks. The firm's losses were depleting its capital reserves. Its primary regulator, the Federal Deposit Insurance Corp., already had decided that it didn't meet the criteria for receiving a favorable recommendation and had forwarded the applica

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Business Insider

The new hallucination for most strapped McMansion owners is that they'll "rent the house for a year and then sell when the market comes back." The happy theory here is that, yes, prices are temporarily depressed, but when the green shoots really take hold, we'll go roaring right back to 2006 levels again. Most real-estate agents will be eager to tell you that they agree with this theory. What they won't be able to tell you, as Mark Hanson of the Field Check Group points out, is why.

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Financial Times

California is preparing to issue IOUs to its creditors this week as it grapples with an unprecedented cash crunch and prepares to begin its new fiscal year deep in the red.   Once the US’s richest state, California now has the dubious distinction of having the worst credit rating in the country.   It is facing a budget deficit of $24bn (€17bn, £14.5bn) yet Arnold Schwarzenegger, its governor, and the state assembly cannot agree on a budget that would address the shortfall.   California’s fiscal year ends on Wednesday but as the state’s cash reserves are empty, IOUs will be issued to a range of creditors, including contractors, such as information technology companies and the food service groups that cater for prisons.   “On Wednesday we start a fiscal year with a ­massively unbalanced spending plan and a cash shortfall not seen since the Great Depression,” said John Chiang, the state ­controller.   “Unfortunately, the state’s inabilit

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Washington Post

If a new General Motors emerges from bankruptcy as planned, U.S. financial aid for the company will expand to nearly $50 billion, but neither the government nor the company is forecasting how much of the public money will be repaid.

It's sure to be a stretch. For the United States to fully recover its investment, the value of General Motors stock will have to reach levels it has never before attained.


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Boston Herald

U.S. District Court Judge Denny Chin sentenced Bernard Madoff to the maximum 150 years in prison today for running the biggest Ponzi scheme in history, calling the crime: “extraordinarily evil.”

“Symbolism is important,” Chin told Madoff at a New York sentencing hearing.

Earlier, Madoff spoke for the first time about the scam, telling Chin: “I will live with the pain and torment (of hurting people) for the rest of my life.”

“I cannot offer an excuse for my behavior,” Madoff said. “How to do excuse deceiving investors? How do you excuse lying to your sons? How do you excuse lying to your two brothers? How do you excuse lying to a wife who stood by me for 50 years.

“There is no excuse for that,” Madoff told the court. “I made a terrible mistake. . . . I’ve left a legacy of shame for my children and grandchildren. I will live with the pain and torment the rest of my life.”

Then, the scammer turned to victims in the courtroom and

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June 27 (Bloomberg) -- The dollar declined the most against the euro in a month and dropped versus the yen after China repeated its call for a new global currency.

The Swiss franc declined against the euro and dollar this week as foreign-exchange analysts said the central bank sold its currency three times to support the economy. The greenback fell against most of its major counterparts after the People’s Bank of China said yesterday the International Monetary Fund should manage more of members’ foreign-exchange reserves.

“The dollar’s status as a reserve currency is being questioned,” said Benedikt Germanier, a foreign-exchange strategist in Stamford, Connecticut at UBS AG, the second- largest currency trader. “There are reasons to sell the dollar.”

The U.S. currency fell 0.9 percent to $1.4056 per euro this week from $1.3937 on June 19, the swiftest depreciation since the five days ended May 29. The dollar fell 1.1 percent to 95.18 yen f

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This is a series of pictures which is gives a visual representation on what a Trillion dollars looks like.  It is a series of slides that goes from 100 "dollars" all the way up to ONE TRILLION dollars.  A Trillion Dollars is 1 followed by 12 zeros.  to get an idea on how large a Trillion really is, take a guess now as to how many YEARS a trillion seconds is the answer will be provided at the end of the slide show.  From all of us to all of you...ENJOY!!  And while you are enjoying the pictures consider that your governmental overlords have indebted your children and your children's children to the tun of 50 TRILLION dollars.  Be sure to share this with as many people as you possibly can!

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The point I am making is that the industry is obviously been run by sharps who have now forced the creation of new legislation to protect consumers from abusive practice. Anyway, this is the tip of the iceberg of what has happened to our formerly robust financial system. What makes it particularly stupid, unless someone shows me different, is that the credit industry cannot go to the courts to successfully collect at all. Thus if credit card holders went of a mass revolt, the industry would not be able to ever recover. It is very much in their interest to coddle their customers who actually enjoy the service and will work hard to keep it in good order.

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