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Economy - Economics USA

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McClatchy News

Delinquency and foreclosure rates for U.S. mortgages continued to rise in the second quarter, with loans to the most qualified borrowers going bust at an unnerving clip, especially in hard-hit states such as Florida and California.

The numbers reported by the Mortgage Bankers Association show clearly that rising job losses are worsening the nation's housing troubles and threaten the Obama administration's efforts to keep owners from losing their homes.

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AP

California Assembly Speaker Karen Bass plans to strip the most controversial provisions from a Senate-approved plan that would have trimmed the state's prison population by 27,000 inmates.  The Assembly version would keep about 10,000 more inmates behind bars and leave the state with a new, nearly $200 million budget hole, Bass said early Friday.

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AP

Penny-pinching Americans are getting cold feet at the checkout — thinking twice about spending and ditching items before they're rung up.  They're leaving sweaters in the dress department, dumping cookies near the grocery cashier and waiting until the last minute to judge needs versus wants. Online, shoppers are consumers are abandoning their virtual carts as they search for better deals.

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The dollar will probably go up. Still, we’d stay away…   Here is Warren Buffett’s view:   “Last fall, our financial system stood on the brink of a collapse that threatened a depression. The crisis required our government to display wisdom, courage and decisiveness. Fortunately, the Federal Reserve and key economic officials in both the Bush and Obama administrations responded more than ably to the need. 

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“If we cannot return to fiscal integrity because the public prefers profusion and prodigality over balanced budgets, we cannot escape paying the price, which is even lower incomes and standards of living for all.”  Hans F. Sennholz “The prerequisite for more economic equality in the world is industrialization.  And this is possible through increased capital investment, increased capital accumulation.”  Ludwig Von Mises “The Resources that government extracts from the private sector to pay for itself are resources that are not available for the private sector to use in producing more goods and services.  When the federal government takes money out of our pockets, we have less money to spend or save.  When the federal government takes money from business, it has less money to use for investment, research, o

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Yahoo

The number of U.S. workers filing new claims for jobless benefits unexpectedly rose last week, a government report showed on Thursday, fanning worries of an anemic recovery from the worst recession in 70 years. Reuters - Attendees at a job fair line up to gather information about a prospective employer in a Washington hotel, ... Initial claims for state unemployment insurance benefits rose 15,000 to a seasonally adjusted 576,000 in the week ended August 15 from 561,000 the prior week, the Labor Department said. Analysts polled by Reuters had forecast new claims slipping to 550,000 last week from a previously reported 558,000.

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APFN

This Bank Holiday is no 'Holiday' at all, but one similar to that engineered by FDR in March, 1933 which finished the collapse of the World's economy. Another forced “bank holiday” will likely lead to a formal devaluation of the already broadsided U.S. dollar. But devalue against what? The euro? Doubtful. Gold? Maybe, but highly doubtful - or, devalued against the IMF basket of currencies, which is more likely. When I posed the question of the actual reality of such an event occurring to several of my sources including those within several Federal Agencies (CIA, FBI, Attorney Generals office, DHS) I received the following statement almost verbatim from each and every one of them - "The way it will come down is that starting 8/24, no later than Labor Day, groups of banks will be closed in certain regions of the country for a week or so. They will open again, and then other groups of banks in different regions will be closed; and on and on it will go, until

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East Valley Tribune

Standard and Poor's Rating Service revised its outlook of the state's credit from stable to negative. Company analysts said that was based on a variety of factors, ranging from lower than anticipated tax collections to the failure of the Legislature and Gov. Jan Brewer to enact a budget for the fiscal year that began July 1.

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NewsReal

Former judge Andrew Napolitano said on Glenn Beck’s Fox News TV program that the federal government is involved in Ponzi schemes far bigger than recently convicted embezzler Bernard Madoff (whose actions crippled left-wing philanthropies) ever imagined. Everything the government runs is bankrupt: Medicare is broke; Medicaid is broke; the Post Office is broke; Amtrak is broke; Social Security is a bigger Ponzi scheme and bigger fraud than anything Madoff ever dreamed of and it is broke. The government consumes wealth; private industry produces wealth. The government and private enterprise are the opposite: If private enterprise fails to produce what consumers want or fails to return a profit to investors, it goes out of business.

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American Banking News

And remember Proof - The FDIC is Broke! Now snippets from the article... Spin it any way you want to, the risk to U.S. banks, the economy and homes in the U.S. is far from over, as recent data show, properties in the U.S. are still at risk to the tune of over $3 trillion ($3.4 trillion). And re-sets for most of them are coming due over the next couple of years. As of June 30, close to 33 percent of all properties that are mortgaged are underwater, or in a negative equity position, according to data released from First American CoreLogic. “Negative equity continues to be the dominant driver of the mortgage market because it leads to foreclosures in the event a borrower experiences some kind of economic shock such as a job loss, illness or other adverse situation. Given that negative equity did not increase this quarter and home prices declines are moderating or flattening, we may be at the p

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The Business Insider

Comment mine Notice they gave them plenty of time to do just that! This isn't suprising, but it's annoying. U.S. banks keep raising credit card rates, increasing their profit even though they've enjoyed steep discounts on their own borrowing, courtesy of Uncle Sam. CNNMoney.com: The Pew Safe Credit Cards Project said Monday the median lowest advertised credit card rate rose to 11.99% in July from 9.99% in December. At the same time, the group said, the profit banks made on credit card debt rose 46%. ...The study said the rate banks charge on credit card loans on top of what it costs to borrow from the Federal Reserve rose to 8.74% in July from 5.99% in December. That came as banks' borrowing costs were cut in the wake of the Fed slashing its benchmark interest rate to a range near zero percent. The real issue is that on Thursday, Obama's new credit card rules go into force. These rules limit the card companies' ability to unilaterally raise rates.

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The Golden Truth

I typically would like this blog to remain free from partisan political issues, other than as they relate directly to affecting the way information about finanicial issues get disseminated into marketplace - i.e. the Federal Rerserve should audited and Congress needs to pass a Bill to make this happen. However, I wanted to share an essay from The Daily Bell which reflects a message being sent all across the country by grassroots citizen movements and which is being ignored by almost all politicians in BOTH parties. Here's an excerpt: "The monetary elite that has tended to dominate the Western conversation in the past century has done all it could do to inculcate the masses with the idea that a strong and forceful democratic government is necessary for prosperity" I find it quite ironic how, increasingly, the left side of the political spectrum, who believes in big Government, is actually in bed with same crony/elitist bankers they so despise.

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The Market Ticker

Let's juxtapose two stories. First, from Bloomberg: Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival. Ok. Now how about this one? WASHINGTON (MarketWatch) -- Delinquency rates for loans and leases at U.S. banks increased to a record 6.49% in the second quarter from 5.58% in the first quarter, the Federal Reserve announced Monday. So let me see if I get this right. At 5% of non-performing loans a bank is at risk of being insolvent. But the entire banking system in The United States had its non-performing loan ratio increase from 5.58% in the first quarter to 6.49% in the second, a record, and higher than the 5% level at which the survival of a bank(ing system) is threatened with collapse. Hmmmm.... So should we take from this that the entire US Banking System is about to collapse?

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What we need to realize is that there WAS a regulatory structure in place that was attempting to stop bad management, including overpaying executives.  That regulatory structure is the free market, and when poor management brought these companies to the point of bankruptcy, Congress circumvented the wisdom of the free market, and inserted its own judgment at our expense.  And now because of that intervention, we will burdened with massive new regulations.  We can be certain this effort will fail.

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Mises Institute

In a recent New York Times column, Paul Krugman lamented our society's lavish rewards for bad actors. No, he wasn't criticizing the original cast of Star Trek. Rather, Krugman was bemoaning the hefty earnings that accrue to financial executives. Unfortunately, Krugman's critique is riddled with irrelevant paper citations and internal contradictions. The shocking abuses in today's financial markets would end immediately, if only the government would get out of the sector entirely. Has Krugman Been Paying Attention? Krugman conveniently ignores the role played by the Federal Reserve and the federal government in these shenanigans. Whether or not he endorsed the idea, Krugman was certainly aware that the Fed could engineer a housing bubble; is he now claiming that the Fed had nothing to do with it? And yes, it is outrageous that reckless Wall Street firms have gotten hundreds of billions (and possibly trillions, if there are defaults on the loans guaranteed by the

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Washington Post

The country's growing unemployment is overtaking subprime mortgages as the main driver of foreclosures, according to bankers and economists, threatening to send even higher the number of borrowers who will lose their homes and making the foreclosure crisis far more complicated to unwind. Economists estimate that 1.8 million borrowers will lose their homes this year, up from 1.4 million last year, according to Moody's Economy.com. And the government, which has already committed billions of dollars to foreclosure-prevention efforts, has found it far more difficult to help people who have lost their paychecks than those whose mortgage payments became unaffordable because of an interest-rate increase. "It's a much harder nut to crack, unemployment," said Mark A. Calabria, director of financial regulation studies at the Cato Institute. "It's much easier to bash lenders than to create jobs."

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CNS

Americans had to work from January 1 until August 12 this year just to cover the cost of government. That is 26 days more than they had to work last year to cover the cost of government. “Cost of Government Day” this year fell on Wednesday, August 12, according to Americans for Tax Reform, the conservative group that calculates when the day occurs. Cost of Government Day is the day in the year when the American people have earned enough income to pay the total cost of the spending and regulatory burden imposed by government at the federal, state, and local level.

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Nathan**Q**s Economic Edge

No, I’m not being over-dramatic. It is time to buckle the heck up. The resonant disconnect between reality and the pumping that is going on in the media and among supposed “experts” is at an all time historic, never been here before, Economic Mass Psychosis, HIGH. To Quote John Kenneth Galbraith, “The majority is always wrong.” Right now the majority believe we are exiting the crisis. They are just plain old fashioned WRONG – again. To prove my point, I’m going to show you the week in charts courtesy of the St. Louis Fed. This week, however, I’m issuing a WARNING.

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BlueLoriBlogSpot

I will get right to the point here read this from Chris Martenson and then make sure to check your bank to see if it is on the problem list and make sure to have funds on hand! I told you about this in Will Monday bring a run on the banks now I am telling you perhaps YOU better make a run on your bank you can check it out below. Here are the most important parts you need to know! All together, that adds up to $3.67 billion dollars in new costs to the Deposit Insurance Fund. The problem is that this turns out to be $3 billion more than currently exists in the Deposit Insurance Fund:

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