First let's hit the market:
"Persistent Fear Drives Stocks Down" by Edmund L. Andrews and Jeremy W. Peters/New York Times August 29, 2007
The stock market plunged late in the afternoon yesterday, registering its biggest drop in three weeks as investors were hit by fresh worries over declining consumer confidence, falling house prices, shrinking profits on Wall Street and uncertainty about the Federal Reserve.
Stocks were down most of the day, but the biggest drop came in the last half-hour of trading as computerized trading programs, which automatically sell when stocks fall by predetermined percentages, amplified the gloomy mood that had prevailed from the start. The Dow Jones industrial average closed down 280.28... at 13,041.85. It was the steepest one-day decline in the Dow since Aug. 9, when it shed 387.18 points.
Analysts said there appeared to be no specific catalyst for the decline. Rather, investors received a steady drumbeat of discouraging news about the intertwined woes of the housing industry, the mortgage market, hedge funds and a broader credit crunch that the Federal Reserve might have difficulty alleviating in the short run without creating longer-term problems for the economy.
John Shinn, a senior economist at Lehman Brothers: “Concern about the credit issue is dominant across all the markets. Everything is dominated by concerns about the unknown.”
Two separate reports released yesterday showed that consumer confidence fell this month and that home prices nationwide continued their slide in June.
Later in the day, minutes from the Federal Reserve’s policy meeting on Aug. 7 showed that policy makers were keenly aware of escalating distress in financial markets and discussed the possibility of taking action 10 days before the Fed reduced the interest rate at which banks can borrow from its discount window.
But the Fed minutes also highlighted the central bank’s reluctance to simply soothe investors in the stock market, and offered no additional clues about the likelihood of a broader, more important cut in the Fed’s benchmark federal funds rate in the near future.
The Conference Board, in its monthly survey of 5,000 households, said its consumer-confidence index dropped sharply in August after surging in July to a six-year high.
Separately, a closely watched measure of home prices provided additional evidence that residential real estate could be poised for a substantial nationwide price decline for the first time in at least 50 years.
A significant nationwide drop in housing prices would aggravate the turmoil among mortgage lenders and firms that own mortgage-backed securities. Delinquency and foreclosure rates have already climbed sharply, particularly in subprime mortgages for home buyers with weak credit, but worries have widened to the so-called Alt-A mortgages made to people who have good credit ratings but have overstretched their borrowing.
Yesterday, Merrill Lynch cut its ratings on the shares of three Wall Street powerhouses, Lehman Brothers, Citigroup and Bear Stearns, to neutral from buy on concerns about their exposure to bad subprime loans. Their stock prices all fell: Lehman was down 6 percent, Citigroup 3.5 percent and Bear Stearns 3.4 percent.
The entire financial sector — which until recently was one of Wall Street’s strongest performers — has been particularly hard hit since credit markets started tightening sharply last month.
William E. Rhodes, chief investment strategist of Rhodes Analytics, a market research firm:
“It’s a difficult situation for financial firms right now. Financial firms prosper when there’s a lot of liquidity because they can conduct transactions. But right now there’s not very much liquidity.”
[Making money of shuffling paper. The basis of the US economy]
Policy makers noted that the markets for subprime mortgages had largely dried up, as investors became much more uncertain about the ability of borrowers to repay. Fed officials fretted that the downturn in housing “could well prove to be both deeper and more prolonged than had seemed likely.”
But the participants in the Fed meeting also took comfort that people with good credit were having little trouble getting conventional mortgages, noting that interest rates on 30-year fixed mortgages had declined slightly. And they remained confident at that time that increases in wages and salaries would continue to support consumer spending. Business investment looked to be on an upward track.
The central bank began changing its position just a few days later. First, it joined other central banks around the world by intervening in financial markets to prevent their benchmark interest rates on overnight lending from climbing above their official targets.
But the big move came on Aug. 17, when the central bank expanded the collateral it would accept from commercial banks and reduced the interest rate on borrowing from its discount window, a source of financing for banks that is usually reserved for temporary emergency purposes.
Fed policy makers are next scheduled to meet on Sept. 18, but it is unclear whether markets will remain calm enough in the meantime to allow them to delay any big decisions until that date."
Let's check Main Street then:
"Census Shows a Modest Rise in U.S. Income" by Abby Goodnough/New York Times August 29, 2007
The nation’s median household income grew modestly in 2006, the Census Bureau reported yesterday, even as the percentage of people without health insurance hit a high.
Experts said the rise in income was mainly a reflection of an increase in the number of family members entering the workplace or working longer hours. Average wages for men and women actually declined for the third consecutive year.
Jared Bernstein, a senior economist at the Economic Policy Institute, a liberal policy group in Washington: “There’s lots of evidence that more people are working. The important theme going on here is a labor market that’s definitely offering people more work and more hours, but at lower wages.”
The slight improvements in household income and a drop in the poverty rate came during a period of job growth, particularly toward the end of 2006, and declining inflation as a result of falling oil prices. But in 2007, the economy has begun weakening because of the national housing slump, and inflation has jumped.
Some Republicans seized on the new data as evidence that Bush administration policies had been good for people’s pocketbooks.
President Bush, in a statement, said the news was a sign that Congress should not raise taxes: "[The data confirm] that more of our citizens are doing better in this economy, with continued rising incomes and more Americans pulling themselves out of poverty.”
But others saw a mixed picture, with household incomes still below their peak before the last recession in 2001.
Robert Greenstein, executive director of the Center on Budget and Policy Priorities, another liberal research group: “Too many low- and middle-income families are not sharing in the gains. These figures are inconsistent with claims that the policies of recent years have produced an outstanding economic track record.”
And the new data on the rise in the number of those uninsured prompted advocates for the poor to step up their call for Congress to reauthorize the State Children’s Health Insurance Program, which provides subsidized insurance to children of the working poor. Mr. Bush has threatened to veto measures proposed by the House and Senate.
Although median household income rose by seven-tenths of a 1 percent over all, the only statistically significant increase was in white households. It was the first real increase for white households, after adjusting for inflation, since 1999, census officials said.
[Bet it was RICH white households, too!]
In the meantime, the poverty rate fell in 2006 for the first time this decade. But Hispanics were the only ethnic group with a statistically significant drop, to 20.6 percent from 21.8. The number of whites, blacks and Asians living in poverty was virtually unchanged.
About 24 percent of blacks lived in poverty in 2006, compared with 8.2 percent of whites and 10.3 percent of Asians.
Elderly people appeared to have gained the most. Their poverty rate was the lowest since 1959, when the government began collecting such data. Some experts predicted that this trend would continue as hundreds of thousands of affluent baby boomers age in the next few decades.
Over all, the nation’s median household income rose to $48,201 in 2006, from $47,845 in 2005. It was the second consecutive year in which income rose slightly faster than inflation, after five years of decline.
Douglas J. Besharov, a resident scholar at the American Enterprise Institute, a conservative research group, said that while the year-to-year increase in household income was small, the broader picture over the last few decades was more promising and more important:
“Over all, a lot of groups have done better over the last 40 years.”
[Fuck the past, buddy! They are coming to take the house!]
The West was the only region to experience a drop in the number and percentage of people in poverty last year. The South continued to have the highest poverty rate.
Among large cities, Plano, Tex., a Dallas suburb, had the highest median household income in 2006, while Cleveland, Miami, Buffalo and Detroit had the lowest. Among smaller cities, Youngstown, Ohio, and Syracuse had some of the lowest incomes.
Census officials attributed the rise in the uninsured — to 47 million from 44.8 million in 2005 — mostly to people losing employer-provided or privately purchased health insurance. The percentage of people who received health benefits through an employer declined to 59.7 percent in 2006, from 60.2 percent in 2005.
The percentage of people with government-provided health insurance also dropped, to 27 percent from 27.3 percent.
Mr. Bernstein of the Economic Policy Institute: “While the employer-based system slowly unravels, the public system isn’t quite stepping up to the plate to pick up the slack, and therein lies the problem.”
[But we have got billions to spend on war!]
Mr. Besharov agreed, but said, as many critics do, that census figures did not accurately count the number of uninsured. He also said it was important to remember that employers were struggling with major increases in the cost of providing health benefits:
“Employers are really feeling a bite here, and so as much as possible, they’re trying to limit these increases and push them onto the employees. That means a lot of people drop their coverage.”
[Awwww, poor employers who are setting profit records.
This after it was reported today that American CEOs make in one day what it takes a worker to earn.
Pfffffttttt!
Just over half of household income was concentrated in the top 20 percent of Americans in 2006, about the same as in 2005. Households in the lowest 20 percent, on the other hand, accounted for only 3.4 percent of the nation’s household income.
Manhattan had the greatest income disparity between rich and poor residents outside Puerto Rico, according to an analysis of the data conducted for The New York Times by the sociology department of Queens College. It was followed by Apache County, Ariz., which is rural and largely American Indian, and the District of Columbia.
Mr. Bernstein attributed the drop in wages to the waning bargaining power of workers, and said it was disappointing, given that 2006 was the fifth year of economic recovery since the recession of 2001.
But Mr. Besharov said immigration could be to blame: "Wages are pretty weak, not the least because we have a lot of immigrants in this country willing to work a little more than everyone else.”
[No wonder they aren't serious about the borders!!
Cheap, no-benie Labor!!
How about the shit system itself being the problem?
What's the news room got to say?]
A Sobering Census Report: Americans’ Meager Income Gains
The economic party is winding down and most working Americans never even got near the punch bowl.
The Census Bureau reported yesterday that median household income rose 0.7 percent last year — it’s second annual increase in a row— to $48,201. The share of households living in poverty fell to 12.3 percent from 12.6 percent in 2005. This seems like welcome news, but a deeper look at the belated improvement in these numbers — more than five years after the end of the last recession — underscores how the gains from economic growth have failed to benefit most of the population.
The median household income last year was still about $1,000 less than in 2000, before the onset of the last recession. In 2006, 36.5 million Americans were living in poverty — 5 million more than six years before, when the poverty rate fell to 11.3 percent.
And what is perhaps most disturbing is that it appears this is as good as it’s going to get.
Sputtering under the weight of the credit crisis and the associated drop in the housing market, the economic expansion that started in 2001 looks like it might enter history books with the dubious distinction of being the only sustained expansion on record in which the incomes of typical American households never reached the peak of the previous cycle. It seems that ordinary working families are going to have to wait — at the very minimum — until the next cycle to make up the losses they suffered in this one. There’s no guarantee they will.
[The pauperizing of America, in preparation for martial law!]
The gains against poverty last year were remarkably narrow. The poverty rate declined among the elderly, but it remained unchanged for people under 65. Analyzed by race, only Hispanics saw poverty decline on average while other groups experienced no gains.
The fortunes of middle-class, working Americans also appear less upbeat on closer consideration of the data. Indeed, earnings of men and women working full time actually fell more than 1 percent last year.
This suggests that when household incomes rose, it was because more members of the household went to work, not because anybody got a bigger paycheck. The median income of working-age households, those headed by somebody younger than 65, remained more than 2 percent lower than in 2001, the year of the recession.
Over all, the new data on incomes and poverty mesh consistently with the pattern of the last five years, in which the spoils of the nation’s economic growth have flowed almost exclusively to the wealthy and the extremely wealthy, leaving little for everybody else.
Standard measures of inequality did not increase last year, according to the new census data. But over a longer period, the trend becomes crystal clear: the only group for which earnings in 2006 exceeded those of 2000 were the households in the top five percent of the earnings distribution. For everybody else, they were lower.
This stilted distribution of rewards underscores how economic growth alone has been insufficient to provide better living standards for most American families. What are needed are policies to help spread benefits broadly — be it more progressive taxation, or policies to strengthen public education and increase access to affordable health care.
Unfortunately, these policies are unlikely to come from the current White House. This administration prefers tax cuts for the lucky ones in the top five percent.
[Gonna give your cut back then, Times' pukes?
And about that health care:]
"47 million Americans are uninsured; 11.7 % Census data fuel attacks by Democrats" by John Donnelly/Boston Globe August 29, 2007
WASHINGTON -- A record 47 million Americans did not have health insurance last year, while the percentage of children without insurance rose for a second consecutive year, according to US Census Bureau data released yesterday, leading Democrats to charge that the Bush administration has ignored a growing, more vulnerable population.
The census data found that, compared with 2005, the number of uninsured Americans rose 5 percent last year to 47 million, due in large part to cutbacks in employer-sponsored health coverage. It also found that 11.7 percent of US children under 18 lacked health insurance, compared with 10.9 percent in 2005.
Nationally, the percentage of uninsured children had fallen over a five-year period beginning in 1999 because of the expansion of Medicaid and the State Children's Health Insurance Program, or SCHIP. Medicaid generally covers people living below the official income poverty line, set at $20,650 for a family of four.
[That's the poverty line for a FAMILY of FOUR?
Little LOW, don't you think? You try living off it, rich pukes!]
The census data showed that 8.7 million American children were uninsured last year -- 1 million more than in 2004, according to the data.
[But Bush is going to veto the kid's health bills.]
Despite the rise in the numbers of uninsured, the census figures found that the percentage of those classified as poor fell to 12.3 percent, from 12.6 percent in 2005, the first significant decline since 2001. Median household income rose nearly 1 percent to $48,200, still less than its peak in 1999."
[Already covered that, so let's see what the world says about our markets]
"Calls Grow for Foreigners to Have a Say on U.S. Market Rules" By Heather Timmons and Katrin Bennhold/New York Times August 29, 2007
Politicians, regulators and financial specialists outside the United States are seeking a role in the oversight of American markets, banks and rating agencies after recent problems related to subprime mortgages.
[Sort of like a prelude to global government, as we all beg for a bailout as we are kicked out of our homes.]
Their argument is simple: The United States is exporting financial products, but losses to investors in other countries suggest that American regulators are not properly monitoring the products or alerting investors to the risks.
Peter Bofinger, a member of the German government’s economics advisory board and a professor at the University of Würzburg: “We need an international approach, and the United States needs to be part of it.”
While regulators in the United States have not been receptive to the idea in the past, analysts said that Europe and Asia had more leverage now. Washington might have to yield if it wants to succeed in imposing bilateral regulations on government-owned investment funds from emerging economies.
Mr. Bofinger said: “America depends on the rest of the world to finance its debt. If our institutions stopped buying their financial products, it would hurt.”
[That's the system these lying, thieving, economic chieftans have set up!]
Half a dozen American banking and financial regulators — including the Securities and Exchange Commission and the Federal Reserve Board — had no comment. Several noted that they were not the sole regulators of the subprime market.
In general, Washington’s reaction has been that it wants “no form of oversight,” said Kenneth Rogoff, an economics professor at Harvard and a former chief economist of the International Monetary Fund.
Banks and investment funds from China to France suffered losses after buying mortgage-related securities and complex financial products based on them in the United States.
In many cases, investors were caught by surprise because American rating agencies had given the products top ratings, leading buyers to believe there was little risk. International investors are also asking why American lenders were allowed to give mortgages to home buyers who could not repay them.
The United States and Britain are the source of the bulk of the world’s sophisticated financial products, like the ones that broke down recently.
[What does that mean, anyway?
We are best at shuffling paper and making it seem it's worth something?]
United States regulators are aware of the problem. Regulators have found that credit standards were loosened for home loans, and that borrowers in some cases did not understand or qualify for the loans they were given.
[After the horse has got out the barn, now they notice!
Your fault, Amurkn!]
The subprime mortgage loans that started the crisis were primarily from the United States, the situation obviously raises questions about market regulation.
In the United States, much of the focus is on rating agencies, which are paid by banks for rating products, and which sometimes attached investment-grade ratings to securities that turned out to be not up to that standard.
[I can label my own worth? Fork over the million, pal, and I'm gone!]
Joseph Mason, a finance professor at Drexel University in Philadelphia, and Josh Rosner, the managing director of the research firm Graham Fisher, have pushed for more oversight of rating agencies:
“It’s not just the U.S. regulators that failed, though they did fail. [International regulators have] thrown the keys to the rating agencies, [which have been left in charge of the safety and soundness of bank capital, insurance and pension money]."
[Like giving the teen-aged boy the car keys on a Saturday night, huh, reader?
When does the call come?]
Analysts said they expected it would be months before the extent of the problem became clear. Dick Bryan, a professor of economics at the University of Sydney:
"[As geographical boundaries are broken down], a problem in one location is a problem everywhere. There is the need to challenge the sovereignty of national regulators. Why should the rules of lending in the U.S. be left to U.S. regulators when the consequences go everywhere?”
[See? GLOBALIST GOALS to ruin national sovereignty!
And I didn't recall having much of a say, asshole, when this whole CORPORATE GLOBALISM thing got set up!
Listen to these assholes!
They fuck things up, then they say we gotta come in and fix it!
Keep your fucking shitters out of my sovereignty, greedy globalist shitfucks!!!!]
Soon after the 1997 Asian financial crisis, President Bill Clinton and a number of regulators and politicians pushed to remake the global financial system. But the impetus faded as markets stabilized.
[Yes, fat-fuck murderer Clinton in on it, too. Sorry, stinkfuck liberals]
Economists now expect an increase in international regulation, particularly because Washington has raised questions about the need to impose standards on large investment funds controlled by countries like Russia and China.
[HOLY CRAP! What HYPOCRISY!!!
We've got a den of thieves over here promoting bullshit paper transfers, and we are scolding Russia and China?
World War III right ahead!]
