AP Reports, “Rising unemployment accelerates foreclosure crisis”, Economy continues downward spiral. Credit Default Rates Up.

WASHINGTON – Relentlessly rising unemployment is triggering more home foreclosures, threatening the Obama administration’s efforts to end the housing crisis and diminishing hopes the economy will rebound with vigor.

In past recessions, the housing industry helped get the economy back on track. Home builders ramped up production, expecting buyers to take advantage of lower prices and jump into the market. But not this time.

These days, homeowners who got fixed-rate prime mortgages because they had good credit can’t make their payments because they’re out of work. That means even more foreclosures and further declines in home values.

The initial surge in foreclosures in 2007 and 2008 was tied to subprime mortgages issued during the housing boom to people with shaky credit. That crisis has ebbed, but it has been replaced by more traditional foreclosures tied to the recession.

Unemployment stood at 9.5 percent in June and is expected to rise past 10 percent and well into next year. The last time the U.S. economy was mired in a recession with such high unemployment was 1981 and 1982.

But the home foreclosure rate then was less than one-fourth what it is today. Housing wasn’t a drag on the economy, and when the recession ended, the boom was explosive. (The economic recovery of the 1980’s was fueled by Reagan’s tax cuts and a shrinking of Government – a formula we won’t see from this Administration).

No one is expecting a repeat. The real estate market is still saturated with unsold homes and homes that sell below market value because they are in or close to foreclosure.

“It just doesn’t have the makings of a recovery like we saw in the early 1980s,” says Wells Fargo Securities senior economist Mark Vitner, who predicts mortgage delinquencies and foreclosures won’t return to normal levels for three more years.

Almost 4 percent of homeowners with a mortgage are in foreclosure, and 8 percent on top of that are at least a month behind on payments — the highest levels since the Great Depression.

In the last 12 months, 15% of mortgages have had forclosure completed.

http://news.yahoo.com/s/ap/20090716/ap_on_re_us/us_foreclosure_crisis_unemployment

Obama’s Trillion Dollar Mortgage Modification Program, which he promised would help 9,000,000 (9 Million), has in fact provided temporary relief to less than 75,000 (Seventy Five Thousand). Many of the 75,000 have, after receiving a modification, now slipped into foreclsoure anyway. 

Credit card defaults keep climbing

Default rates in May continue to rise as borrowers struggle with the weak job market.

NEW YORK (CNNMoney.com) — Banks continue to write off credit card debt as consumers hurt by record high unemployment default at an increasing rate.

Regulatory forms filed this week by some of the nation’s largest banks showed default rates on credit cards rose in May. The default rate is a measure of loans that the bank does not expect to be repaid.

“Data from May showed continued signs of stress for card issuers, reflective of worsening unemployment trends and deteriorating macro [economic] conditions,” analysts at Bernstein Research said in a report Tuesday.

Bank of America the nation’s largest bank, said its default rate jumped to 12.5% in May from 10.5% the month before. Other major banks, including Citigroup, JPMorgan Chase and Capital One also reported increases in May default rates.

http://money.cnn.com/2009/06/16/news/companies/credit_card_losses/index.htm?section=money_latest

Despite 90 Day Mortgage Moratorium in 2009 – Foreclosures Up 15%

Foreclosures rise 15 percent in first half of 2009

Foreclosures keep soaring as unemployment becomes main cause of housing woes

ap

WASHINGTON (AP) — The number of U.S. households on the verge of losing their homes soared by nearly 15 percent in the first half of the year as more people lost their jobs and were unable to pay their monthly mortgage bills.

The mushrooming foreclosure crisis affected more than 1.5 million homes in the first six months of the year, according to a report released Thursday by foreclosure listing service RealtyTrac Inc.

The data show that, despite the Obama administration’s plan to encourage the lending industry to prevent foreclosures by handing out $50 billion in subsidies, the nation’s housing woes continue to spread. Experts don’t expect foreclosures to peak until the middle of next year.

Foreclosure filings rose more than 33 percent in June compared with the same month last year and were up nearly 5 percent from May, RealtyTrac said.

“Despite all the efforts to date, we clearly haven’t got a handle on how to address the situation,” said Rick Sharga, RealtyTrac’s senior vice president for marketing.

More than 336,000 households received at least one foreclosure-related notice in June, according to the foreclosure listing firm’s report. That works out to one in every 380 U.S. homes.

http://finance.yahoo.com/news/Foreclosures-rise-15-percent-apf-516022846.html?x=0

Since the election in November one home in every 76 has received at least one foreclosure notice.

Obama Administration Fudging The Unemployment Count 07/15/09 – 522,000 or 667,000 – Why is the Government Underreporting by 20%?

WASHINGTON – The number of newly laid-off Americans signing up for unemployment benefits last week, and those using this safety net over a longer period, both plunged. But the government figures released Thursday were clouded by difficulties adjusting for temporary shutdowns at auto plants. READ “The reported numbers plunged” the real numbers, the count of the actual unemployed did not – Please read on.

The Labor Department said new applications for unemployment insurance dropped by a seasonally adjusted 47,000 to 522,000, the lowest level since early January. Economists polled by Thomson Reuters expected claims to rise to around 575,000The Labor Department is adjusting the number and reporting some number “other than the true number” of individuals claiming benefits. Please read on ….

A department analyst said the drop in new claims didn’t point to improvements in economic conditions. The second straight weekly decline reflected problems adjusting layoffs for temporary shutdowns at General Motors and Chrysler plants to retool for new models.

The unadjusted figures for last week actually showed that new claims rose by 86,389 last week, which would push the total to 667,534. The actual number is 110,000 more than anticipated by economists and 145,000 more than the number being reported by the Government. After upwqard revisions, this week would represent the 30 straight week where “actual new unemployment claims” toppped 600,000.

So why do the headlines state “unemployment drops” ……… pure political theatre …. the Obama Administration will employ any trick to stall reporting a National Unemployment Rate of 10%. (the true numbers posted over the last 3 weeks would indicate that the National unemployment  rate is currently at 10.2%).

Weekly claims remain far above the roughly 325,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007. The lowest level this year was 488,000 for the week ended Jan. 3. The January 3 number was revised upward twice – as the number, 488,000, was proven to be another “underreport”.

Those adjustment difficulties also were behind a big drop reported for people continuing to draw unemployment benefits, the analyst said.

The truth … the number of unemployed actually increased by 620,000 …..

Telling lies about the real unemployment numbers – to make oneself look good politically ….. just more of the same  old style politics …..

Read the original story here: http://news.yahoo.com/s/ap/20090716/ap_on_bi_go_ec_fi/us_economy

British Commodity Trading Firm Admits Manipulation Of International Oil Prices

Oil brokerage PVM names rogue trader behind oil spike

Reuters

By David Sheppard David Sheppard Fri Jul 3, 8:40 am ET

LONDON (Reuters) – PVM Oil Futures Limited said on Friday Steve Perkins, a senior broker based at the firm’s London office, was responsible for unauthorized trades earlier this week which landed the firm with a loss of nearly $10 million.

The London-based brokerage said Perkins had taken the positions in Brent crude futures early on Tuesday.

The heavy buying during the Asian trading day when volumes tend to be lower caused global crude prices to spike to their highest level this year. Traders and analysts initially struggled to explain the price move.

Brent was trading at about $66 a barrel on Friday, down from the high of $73.50 struck on Tuesday.

After discovering the trades, PVM said in a statement on Thursday it had closed them out “in an orderly fashion,” resulting in losses approaching $10 million.

It said its brokers were not authorized to take positions in the crude oil markets. Oil brokers generally help to match up trading counter-parties such as banks and hedge funds rather than dealing themselves.

PVM confirmed Perkins was a Brent crude futures broker, but declined to discuss his possible motivation for the unauthorized trades. (political or financial or both)

The brokerage said on Thursday PVM was conducting a full investigation and it had informed the Financial Services Authority (FSA), Britain’s regulatory body, as well as the InterContinental Exchange (ICE) (ICE.N), where the majority of Brent futures trade takes place.

PVM is the world’s largest independent broker, trading more than 100 million barrels of over-the-counter and oil futures a day on average. The company said it had met all margin calls caused by the unauthorized trades and was conducting business as usual.

In May, the FSA banned a former Morgan Stanley (MS.N) trader who built up a hefty unauthorized oil futures position following a long liquid lunch, before hiding the deals overnight.

REGULATION

Excessive speculation in oil and commodities markets has been high on the regulatory agenda since crude prices soared to a record of nearly $150 a barrel last July.

PVM head David Hufton has been an outspoken critic of oil market speculation, describing some exchanges as “electronic oil casinos” that boost the price of oil.

Oil analysts said this week’s events could add further ammunition to those already pushing for tighter regulation on futures exchanges and over-the-counter markets following last year’s price surge and the global financial crisis.

The U.S. government wants to boost oversight of commodity markets and expand the power of the Commodities Futures Trading Commission (CFTC), including looking at tightenening the number of speculative positions any one firm or trader can hold.

Analysts said the FSA was expected to follow any moves to reduce position limits taken by its U.S. counterpart in commodity markets.

(Reporting by David Sheppard; additional reporting by Alex Lawler in London and Yaw Yan Chong in Singapore; editing by William Hardy)

http://news.yahoo.com/s/nm/20090703/bs_nm/us_pvm_trade_4   http://www.reuters.com/article/governmentFilingsNews/idUSL336867120090703   http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6628545.ece  

So much for all the talk about how increasing oil prices are an indication of the recovering U.S. economy. The price increases have nothing to do with supply and demand. Specualtors, both financial and political are manipulating the price of oil and gasoline. Additional regulation is fine but the real answer lays in “Drill Baby Drill”, develop all of America’s Oil, Gas and Nuclear potential. What happened to last year’s election time “pledge”, when even the Democrats promised to “Drill Baby Drill”. Can’t believe a damn thing they say can we …..  isn’t it ironic that today marks the 1 year anniversary of $145 a barrel crude – http://money.cnn.com/2009/07/02/markets/year_oil/index.htm

In Decemebr 2008 the price of crude dipped to $33.87 a barrell. http://money.cnn.com/2009/07/02/markets/year_oil/index.htm

The Crisis In Honduras – The Timeline March 23, 2009 to July 3, 2009

The following was taken from Real Clear Politics … follow the links to read the full stories.

July 3, 2009

Wrong Again

By Oliver North

WASHINGTON — It took the Obama administration eight days to figure out whether Iranians being gunned down for protesting a fraudulent election and demanding basic civil liberties deserved to be acknowledged by the president of the United States. It took the O-Team less than eight hours to side with Cuba’s Fidel Castro, Venezuela’s Hugo Chavez and Nicaragua’s Daniel Ortega over the ouster of Manuel Zelaya in Honduras.

As we now have come to expect, Mr. Obama got it wrong again, but this time, nobody noticed. The U.S. news media, preoccupied with the sudden demise of Michael Jackson, ignored the event in Central America. For those who care about things more important than the passing of a “pop music legend,” here’s the rest of the story:

Manuel Zelaya, a wealthy rancher and agribusiness executive and a self-described “poor farmer,” won a four-year term as Honduran president in November 2005, with 49.8 percent of the vote. Article 374 of the Honduran Constitution bars the nation’s chief executive from serving consecutive terms. Apparently, one term wasn’t enough for Zelaya, a protégé of Venezuela’s strongman, Hugo Chavez, and Nicaragua’s phobic anti-American leader, Daniel Ortega.

Late last year, as the Honduran economy tanked and unemployment grew to nearly 28 percent, Zelaya forced Elvin Santos, the country’s elected vice president, to resign and began holding conversations with Chavez and Ortega on how to hold on to power. In lengthy Chavez-like populist speeches, he denounced the U.S. and wealthy landowners and linked himself with leftists in the Honduran labor movement. On March 23, he issued an executive decree directing a national referendum on a Venezuela-style constituent assembly to rewrite the country’s constitution in time for presidential and legislative elections in November. The Obama-Clinton State Department was mute about all of this.

Unfortunately for Zelaya’s aspirations, the Honduran Constitution requires that amendments be passed by a two-thirds vote of the country’s unicameral Congress during two consecutive sessions. By late May, the Honduran Congress, the Honduran Supreme Court, the commissioner for human rights, and the Honduran electoral tribunal all had overwhelmingly declared the referendum unconstitutional. Zelaya ignored the people’s representatives, had ballots printed in Venezuela, and announced that the vote would take place June 28. Again, the O-Team was silent.

In keeping with the rule of law, Honduran Attorney General Luis Alberto Rubi took the case to court. The Honduran Supreme Court ruled the referendum to be illegal and ordered the ballots to be confiscated. Late on June 23, Zelaya countermanded the court order and directed the army to distribute the ballots. Gen. Romeo Vasquez, the chief of staff of the Honduran military, sought legal opinions and decided not to distribute them. The following day, Zelaya accepted the resignation of the minister of defense, Edmundo Orellana, and fired Vasquez.

The Honduran Supreme Court unanimously ruled the Vasquez firing illegal and reinstated him June 25. That prompted Zelaya and a group of supporters to seize the ballots and issue another executive decree, which directed government officials to set up 15,000 polling stations at schools and community buildings across the country. In response to a request from Attorney General Rubi, the Honduran Congress — controlled by Zelaya’s own Liberal Party — opened an investigation into the president’s mental stability and fitness to govern. Zelaya replied with a two-hour broadcast harangue, in which he claimed: “Congress cannot investigate me, much less remove me or stage a technical coup against me, because I am honest. I’m a free president, and nobody scares me.”

On Sunday, just hours before the referendum was to begin, the Honduran army, acting on a warrant issued by the Honduran Supreme Court, arrested Zelaya and sent him, in his pajamas, into exile in Costa Rica. The Honduran Congress affirmed Zelaya’s departure and, in accord with the constitution, named Roberto Micheletti, who had been president of the Congress, as interim president of the country.

http://www.realclearpolitics.com/articles/2009/07/03/wrong_again_97287.html

June 30, 2009

Honduras Fires Its Runaway President

Early on June 28, members of the Honduran military temporarily arrested President Manuel Zelaya. Within minutes he was on a plane bound for Costa Rica. In San Jose, Zelaya denounced the military’s intervention as a “coup d’etat” and a “brutal kidnapping.” The military’s actions, while swift and arbitrary, came after President Zelaya defied virtually every Honduran political and legal institution and propelled his citizens to the verge of polarizing violence. Zelaya’s swift removal from Honduras probably saved many lives.

In less than six hours, Honduras’s congress removed Zelaya as president for repeated violations of Honduras’s laws and constitution, as well as for his failure to observe resolutions of Honduran courts. In short, the congress fired the sitting President for multiple acts of institutional insubordination. The congress then named its speaker, Robert Micheletti, to serve as chief executive until after national elections in November. The military has begun a return back to the barracks.

The events of June 28 mark the culmination in a series of confrontations between Zelaya and virtually all of Honduras’s political and judicial institutions, including the congress, the supreme court, the two major political parties (including his own), and the military. At issue was Zelaya’s effort to convene a non-binding public referendum that, he believed, would open the doors for major constitutional revision. Given that the Honduran constitution does not grant its president the power to convene such referenda, there is no question that, while the response of the Honduran military may have been rash, President Zelaya was fired for a legitimate reason.

Zelaya’s March to the Left

President Zelaya won election by the slenderest of margins in 2005. A series of corruption charges involving state contracts and manipulation of public services–particularly in telecommunications (Hondutel)–hounded the Zelaya government, which began its term with earnest promises of fiscal probity and transparency.

With regard to foreign policy, Zelaya in August 2008 signed on as a member of the Bolivarian Alternative of the Americas (ALBA), a political and economic bloc controlled by senior members Venezuela and Cuba. Zelaya sought and received assistance from Venezuela via the oil-financing facility Petrocaribe and moved for closer ties with Castro’s communist-revolutionary regime.

The Obama Administration wants to reverse the events of June 28. It believes restoring political order and protecting the fundamentals of the Inter-American Democratic Charter via handing the problem off the Organization of American States (OAS) will work easily and promote the smooth, orderly return of President Zelaya. The facts on the ground, however, do not lend themselves to such a tidy and optimistic scenario. There is a grave danger that by acting against the new constitutional arrangement order established by the Honduran congress, supreme court, and military, bloodshed and political chaos are likely to follow. 

Chávez’s Intervention Portends Bloodshed

There is little doubt that President Zelaya was emboldened to challenge the institutions of Honduras by the support of Hugo Chávez and other ALBA members. On June 25, ALBA members issued a public statement claiming that a coup was already underway, and they backed the June referendum, despite lack of institutional support. In short, they endorsed Zelaya’s defiant and reckless strategy.[3]

On June 28, Chávez stepped up his interventions by directing calls to campesino leaders in Honduras to encourage resistance, putting his military on alert, calling on the Honduran soldiers to disobey their superiors, and vowing to topple the new government. “If they swear in Micheletti [or any other], we will overthrow them!” he proclaimed.[4] Chávez also threatened to give a lesson to the military “gorillas” who do not respect Honduras’s constitution.[5]

The relentless intervention of Chávez will serve only to harden the Honduran opposition, demonstrate that Zelaya is heavily compromised and dependent on foreign backing, and support tactics that can easily lead to potentially dangerous provocations. Demonstrations and resistance encouraged by Chávez and others threaten to make a shamble of institutional order in Honduras.

Recommendations

  • Recognize the new Honduran government. Messy as it is, the Obama Administration should recognize the new interim government, as constitutional order has been preserved.
  • Restore public order. The Obama Administration should work with the OAS and other international missions to promote national reconciliation and an end to polarization.
  • Resist Chávez and ALBA intervention. The Chavistas consistently pushed Zelaya toward confrontational politics; now they threaten intervention. The Obama Administration must move to neutralize this negative and highly dangerous thrust.

Chávez Democracy

The events unfolding in Honduras remain confused. Yet it appears the primary institutions of the nation–congress, the supreme court, the Supreme Electoral Tribunal, and the military as the guardian of public order–have spoken. While these institutions may have acted precipitously, the bottom line is that President Zelaya was fired for cause. The U.S. can ill afford to open the door to a counter-intervention by Hugo Chávez, one that would deliver Honduras into the Chávez brand of “democracy.”

http://www.realclearpolitics.com/articles/2009/06/30/honduras_fires_its_runaway_president_constitutional_order_is_preserved_97235.html

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