The International Forecaster
December 23, 2010
|Germans never wanted to be in the EU and nor did they want to be in the euro zone, which entailed giving up their beloved D-mark.|
Germany is supplying a great deal of money to the EU’s bailout of Greece and Ireland and perhaps Portugal, Spain, Belgium or even Italy. The German people are against the bailout and they have told their leadership that they refuse to contribute any further. We have friends in Wiesbaden and the 42-year old father of the family, university educated, took 1-1/2 years to find a job making less than he had before. The position is in Cologne, about two hours away by car on the Autobahn, so he has to stay at a hotel during the week and gets to be with his family on weekends. We are sure the family doesn’t like the arrangement nor do they relish bailing out other members of the EU and euro zone. Germans never wanted to be in the EU and nor did they want to be in the euro zone, which entailed giving up their beloved D-mark. Germany tells us unemployment is 8%. In checking out their numbers we find this hard to believe, especially in Eastern Germany. As we see it, even though Germany is the economically and financially strongest nation in the EU and the euro zone, all is still not peaches and cream. In this coming year German resolve will be tested to the maximum, as they consider thinking outside the box politically and in many other ways. Europe and Germany are going through a realization that there is life beyond Marxism, fascism and liberalism and a time is soon coming when classical free-market finance and economics will take their rightful place not only among the Germans but all thinking people of the world. It is time for Europeans to break out of the mode and again achieve the remarkable things they have in the past.
After WWII Germany believed a middle way was the path for their future so they chose socialism, the halfway house between communism and fascism. Under much pressure from the West they extended that into the future by being the leading part of the European Union and later the euro zone, both of which the German’s were hesitant to join, particularly the euro zone. Over the past 50 years they accepted multiculturalism in the form of Turkish Muslims, which has resulted in a touch and go relationship. It must be said that relationship has worked out better than that of other European countries.
We lived in Germany during this process in the 1950s. The Marshall Plan and the discipline of the labor unions allowed Germany to perform an economic miracle in the rebuilding of Western Germany. This success spread throughout Europe. Prosperity and Peace were the result along with the assistance and presence of the American military, which we were part of there for several years.
Evaluation of the EU and the euro zone was a megalomaniac effort foisted upon Europe to bring about a stepping-stone for world government and a world currency. What was created was an unnatural anthropological disaster, which you now see being unravelled. The concept of the merging of tribes, an amalgamation, or Balkanization of peoples has not homogenized and never will, even if by force. This is also the result of one interest rate for all despite different states of development and different economic and financial structures.
The Soviet Empire is now gone as is Pax Americanus. The plan mainly designed by the UK and Britain is now after 65 years in serious trouble and will probably finally end up in failure. Again, the villain is one interest rate fits all.
Six countries are on the edge of insolvency: Greece, Ireland, Portugal, Belgium, Spain and Italy. We have strikes, demonstrations and riots in many of these countries and it is going to get worse before it gets better. The original plan for Europe is coming unglued irrespective of who is to blame. Millions are living on welfare and unemployment and the most employable have a hard time keeping their jobs and if they lose them it is very difficult to find another job. In addition, the large amount of Muslims is overwhelming England and the Continent. Low indigenous birth rates and out of control breeding by Muslims guarantee in years to come the destruction of what once was European culture. The Muslims absolutely refuse to assimilate. Europe has more problems than simply financial failure.
Sovereign default is nothing new – it goes back to the fourth century BC in Greece and here we are 2,400 years later in the same predicament.
Last week Germany signalled its distaste to extending government – financed aid for debt mired EU partners. That means all EU nations have to participate if they want to keep fighting the crisis in this manner. Germany did endorse an ECB boost in capital. In addition, the latest idea is to create a euro bond, which hasn’t a hope of success, because it would engender a further loss of sovereignty. The EU continues to move in the wrong direction such as further economic integration, which the Germans certainly do not want. Other socialist – one-world types – have told the Germans they are unpatriotic for not paying most of the bills created by these spendthrift near-do-wells. Germany is making all the right noises concerning the euro, but most Germans want the D-mark back. Europe has pushed Germans as far as they are willing to go. Worldwide investors are bailing out of bonds issued by countries in financial trouble in Europe. The ECB is buyer of last resort. The beat goes on as banks worldwide refuse to play the new world order game and continues to bury the ECB. They do not get it, yet, the dream of world government is over. No nation or investor wants to be left holding the bag.
As a result of this mayhem the ECB wants to provide unlimited liquidity for commercial banks, which caused these problems in the first place. They simply cannot give up the ghost. Hundreds of elitist controlled banks are going to go under and there is little that can be done to save them. This is succinctly pointed out in the case of Ireland and what the bankers have done to the Emerald isle.
There is no question that almost all of Europe is bankrupt, but so are the US and UK. German politicians dare not push the German public too far for fear of seeing Germans in the streets in reaction to being forced to bail out Europe’s banks single handedly. Do they really want to put up two or three trillion for a bailout, hardly? What is very concerning is on top of the fiscal mess will Germany be subjected to a false flag terrorist attack as many other countries have? We see some things beginning that we have seen in America, the removal of freedoms from the German people. If this continues we could see Germany sliding into areas we haven’t seen since the early 1930s.
As expected we are witnessing Republicans refusing to cut spending in order to obtain an extension of the Bush tax cuts, and the funding of health care reform. There were only some 96 changes in Congress and 1/3rd of them were resignations. The supposed irate public returned the worst of the worst to the House and the Senate. As a result you can expect even more corruption and scandals, as America sinks further into the great dark pit. Reform of health care could have been de-funded, but these whores are going to allow it to continue and in that process destroy the American medical system. Probably 1/3rd of doctors will retire or leave the country or find other professions. The affect on the availability of medical care will be staggering, as will the rationing of medical care, which will mean all older people and those with chronic problems will be allowed to die, as all useless eaters will be removed from society. What you are going to see will be horrible.
The death tax will be back in vogue to destroy American businesses, so further concentration can take form as the corporatist fascist government moves further to control America’s services and industry. This result was as usual the result of secret meetings with the financial hand of the elitists hidden from view. It wasn’t bad enough to see this happen but there is absolutely no effort to stop runaway spending that will be in part funded by such actions. In just 2011 we’ll see $75 to $100 billion in new spending. We can promise you your politicians are not listening to you, but to the elitists who control them with their money. The Republican pre-election pledges are a joke, already long forgotten. If you extend the new spending it could be as much as $200 billion and the loss in jobs as a result of some cutbacks in tax breaks could cost 80,000 jobs a year. As major corporations continue to lay off workers, and are sitting on almost $2 trillion in cash, they will now be allowed to write off 100% of capital investments for a year. They will also continue to get research and development tax credits. The pork continues to flow and the generations of taxpayers to come will have to pay for it.
A big question is how effective will the $858 billion stimulus package be? This is a bill that started out as an extension of the Bush tax cuts and morphed into a pork laden stimulus program. There is no question in our minds that Republicans and Democrats knew long before joint meetings, what this bill would become. If we add $600 billion that is in the process of being spent by the Fed between now and June the Fed we have $1.458 being spent to keep the economy from faltering. We expect that Fed spending will exceed that level by 9/30/11 moving up to a net $1.4 billion in the creation of money and credit by the Fed. The result should be GDP growth of 2 to 2-1/2 percent for the fiscal year. From what we have seen of the contraction in the credit market recently we could see stimulus being used to reduce debt, or go into savings. The market has put too much faith into a stronger recovery, as has the public and business, which could very well be disappointed. The current firm market could last into February and surprise us, but the rest of 2011 could produce downward market pressures. Present professional bullish statistics could prove a hindrance as well, as the majority is almost always wrong. As a result of this and other things gold, silver and commodities probably will do quite well.
The spending bill is still up for grabs as we write, as is the debt ceiling. That means Republicans may have gone as far as they are willing to go on spending for now and may pursue cuts in other areas. If that is the case the market would not react favorably. That leaves the economy’s liquidity in the hands of the Fed, which is always more than happy to comply, an on demand money machine. They’ll be needed if a budget battle occurs and we believe conservative freshmen congressmen and women will lead it.
There are some developments that are positive and one is the awakening of the public to what the Fed has been up too. The positioning of Rep. Ron Paul in the House and Bernard Sanders in the Senate should present formidable opposition to the elitists who run the Fed from Wall Street. More than 60% of Americans want to get rid of the Fed and that is positive. The Fed’s purchases of bonds over the last few years has suppressed interest rates and increased bond prices. Those low rates make quantitative easing easier. This monetization heads straight through the open doors of Wall Street to produce ever more leveraged profits in derivatives, options, foreign exchange, stocks and commodities and shorting gold and silver, in what is now nothing more than a vast casino. In this process the Fed stands by to absorb the losses in behalf of the American taxpayer. When it looks like the Fed cannot handle it anymore then the elitist think tanks can supply war on demand as a diversion to cover up financial problems. In all likelihood that will be accompanied by the call for currency controls in and out of the country and rules regarding restriction of travel. We lived in currency blocked Zimbabwe (Rhodesia) and South Africa and so we know what it is like. We found it similar to living in a financial prison. You have to understand the corporatist fascist mind. It believes all of the wealth of the country and its citizens belongs to the fascists.
If IRA’s, 401Ks, pension plans and government retirement plans are not taken over in whole or in part, then you can expect these plans to be forced to acquire a certain percentage of Treasury, Agency and toxic bonds. Foreign travel will have so many rules, like the TSA, that people will refuse to use planes, trains and buses. There may even be price controls that won’t work. The use of cash will be discouraged as government phases in credit and debit card usage. They may go even so far as to demand the return of foreign investments to the US. If Americans do not comply they may confiscate these assets. Remember, they believe all your assets belong to them.
If you want to understand why Wall Street, banking and corporate America think the way they do, just look at the poor Keynesian education they get. They cannot see the forest for the trees. Look at Bernanke, he has never worked in the real world in his life. Does he understand what he is doing and its consequences, of course he does. Keynesianism has been a failure over and over again, as the economic and monetary model for corporatist fascism. This is the path Mr. Bernanke has chosen, as did Sir Alan Greenspan. We were in the vanguard of exposing what has been going on in the US and world economy for many years, since 1960. Finally a few are speaking up today, but we need hundreds and thousands more to assist us. Due to the lack of those who will expose what is going on we have to do this at 75 years old. The reason we continue is to let people know, who will listen, what a precarious situation we are in. The elitists are in a very precarious position, but they are not going to tell you that. They have lost total control but yet, still have partial control. There will be concern, but do not expect panic. We have got to show them that they can be beaten and that is exactly what we have to do. The system has to be purged of its excesses and malinvestment. That is a painful process that everyone must endure, whether they like it or not. That means no more fiat currencies, only gold backed currencies.
Fed extends swap lines, scheduled to expire on January 1, 2011, through August 1, 2011. The swap arrangements are with the Banks of Canada, England, Japan, Switzerland and ECB. The extension is to improve liquidity in the global currency markets and minimize risk that global strains could spread to the US. The swap lines with the banks are similar to arrangements that had previously been in place.
Led by declines in employment-related indicators, the Chicago Fed National Activity Index decreased to – 0.46 in November from –0.25 in October. Three of the four broad categories of indicators that make up the index deteriorated from October to November, with only the production and income category improving. http://www.chicagofed.org/digital_assets/publications/cfnai/2010/cfnai_december2010.pdf
$2tn debt crisis threatens to bring down 100 US cities Overdrawn American cities could face financial collapse in 2011, defaulting on hundreds of billions of dollars of borrowings and derailing the US economic recovery. Nor are European cities safe Florence, Barcelona, Madrid, Venice: all are in trouble
Since 1937, 619 local US government bodies, mostly small utilities or districts, have filed for bankruptcy, Bloomberg News recently reported. US cities tend to default more than European municipalities as they usually rely on bonds issued to investors, which enter into a default if the creditor misses payments. European towns, by contrast, traditionally depend on bank loans and government bailouts. http://www.guardian.co.uk/…
State Budgets: The Day of Reckoning (CBS’s “60 Minutes”)
“The most alarming thing about the state issue is the level of complacency,” Meredith Whitney, one of the most respected financial analysts on Wall Street and one of the most influential women in American business, told correspondent Steve Kroft…
“It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States, and certainly the largest threat to the U.S. economy,” she told Kroft.
Asked why people aren’t paying attention, Whitney said, “‘Cause they don’t pay attention until they have to.”…And nowhere has the reckoning been as bad as it is in Illinois, a state that spends twice much as it collects in taxes and is unable to pay its bills.
Last week the Dow gained 0.7%, S&P rose 0.3%, the Nasdaq 100 rose 0.1% and the Russell 2000 rose 0.3%. Consumers rose 1.4%; utilities 1.1%, as banks fell 1.7% along with broker/dealers off 0.4%. Cyclicals gained 1.1%, while transports fell 0.9%. High tech fell 0.2%, semis 0.3%, Internets 1.4%, as biotechs jumped 10.1%. Gold bullion gave back $10; the USDX rose 0.4% to 80.36.
The two-year T-bill fell 4 bps to 60, the 10-year T-notes rose 1 bps to 3.33% after having traded as high as 3.54%. The German 10-year bund rose 6 bps to 3.01%.
Freddie Mac’s 30-year fixed rate mortgage jumped 22 bps to 4.83%, the 15’s surged 21 bps to 4.17%, the one-year ARMs rose 8 bps to 3.35% and the 30-year jumbos jumped 17 bps to 5.63%.
Fed credit jumped $22.8 billion to a record $2.374 trillion. It is up 7.2% annualized and 8.4% yoy. Fed foreign holdings of Treasury and Agency debt fell $3.6 billion to $3.337 trillion. Custody holdings for foreign central banks have increased $381.7 billion ytd, or 13.4%, and up 13.2% yoy.
M2 narrow money supply added $1.0 billion to a record $8.813 trillion. It is up $280 billion ytd or 3.5% annualized. Year-on-Year M2 rose 3.0%.
Total money market fund assets fell $33.2 billion to $2.803 trillion; yoy it has fallen 14.3%.
Total commercial paper fell $26.3 trillion to $981.7 billion, that is the first time we have seen it below $1 trillion.
Yields on top-rated tax-exempt securities due in 30 years climbed twice as fast as those on U.S. Treasuries, reaching the highest level in almost 16 months. ‘Nobody’s bidding,’ Tony Shields, a principal in the public-finance department at Williams Capital Group said There’s ‘an avalanche of bid-wanteds, and there is just not enough liquidity to accommodate this much sell-side pressure.’”
“Federal Reserve policy makers indicated that signs of economic strength won’t deter them from pumping money into the financial system so long as unemployment remains elevated. The Federal Open Market Committee said… growth is ‘insufficient to bring down unemployment’ and inflation has ‘continued to trend lower.’ U.S. central bankers affirmed a plan to buy $600 billion of bonds through June and renewed their pledge for an ‘extended period’ of low interest rates.”
“A slump in government-backed mortgage bonds that’s sent yields to the highest level since May is threatening a recovery in the U.S. housing market… Yields on Fannie Mae-guaranteed securities that most affect loan rates jumped as high as 4.21% yesterday, an increase of 1 percentage point from an all-time low in October… Higher loan rates ‘won’t be fun’ for a fragile housing market, said Scott Simon, head of mortgage bonds at… Pacific Investment Management Co. ‘If you were looking at buying a house a few weeks ago, the same house, to you, looks as much as 9% more expensive,” he said.”
The gift that keeps on giving: Congressman Paul says Fed transparency is his goal “And then they can still hide behind the law if I want to demand every transaction with foreign banks,” he said, adding that it would benefit Americans to know who was getting bailed out.
A key cooperating witness working for the U.S. in a major insider-trading investigation made more than 60 calls with corporate managers, seeking to gather evidence for the government, a person familiar with the probe says. The activity by the witness who was identified by prosecutors in a complaint unveiled
Thursday only as “CW-2″ suggests that the insider-trading investigation could grow significantly from the initial charges.
Investors who forget what they paid for shares of stock will get help starting next year, courtesy of the Internal Revenue Service.
That’s when the U.S. tax-collection agency will require brokerages to track the cost basis on equities bought after Jan. 1, and send taxpayers and the government an annual form recording it when investors sell shares.
Brokerages already are required to report the proceeds from sales of securities to the IRS. Next year, they’ll also have to provide information on the purchase price, known as the cost basis, of stocks.
“We’ve been really hammering it home with our clients,” said Brian Keil, director of cost basis and reporting at San Francisco-based Charles Schwab Corp. “We expect our clients are going to get a 1099-B form in 2012 and they could have an outcome that they don’t expect.”
Investors who buy shares of the same company on different dates or prices will see the biggest change, said Eric Smith, a spokesman for the IRS. They’ll need to identify which shares they’re selling before the sale settles, which typically means within three days for stocks.
About 46 percent of U.S. households owned equities in 2010, including stocks, mutual funds, exchange-traded funds and variable annuities, according to the Investment Company Institute, a Washington-based mutual-fund trade group.
Nigeria withdrew corruption charges against former vice president Dick Cheney and companies including Halliburton after the company agreed to pay a fine and repatriate funds, a spokesman for the Economic and Financial Crimes Commission said.
Halliburton, where Cheney was chief executive until 2000, offered to pay $120 million in fines and repatriate an additional $130 million to Nigeria, he said. A person who answered a call to Halliburton’s Houston office said no one was available to comment.
Nigerian prosecutors filed bribery charges on Dec. 8 against Cheney; Albert “Jack’’ Stanley, former chairman of KBR Inc., a former unit of Halliburton; current KBR chairman William Utt; and Halliburton chief executive David Lesar, according to court documents. Companies charged include Technip SA of France; Snamprogetti SpA, a unit of Eni SpA; KBR; and JGC Corp. of Japan.
Nigeria, Africa’s biggest crude oil producer, alleges that the companies, which were part of group known as TSKJ, paid $180 million in bribes to Nigerian officials between 1994 and 2004 to win a $6 billion liquefied natural gas plant contract.
Di Giovanni Gianni, a spokesman for Eni, said by e-mail that the company has no comment, while Gabriela Segura, a KBR spokeswoman, didn’t immediately respond to an e-mail seeking comment.
KBR agreed in February 2009 to pay a $402 million fine in the United States after admitting it bribed Nigerian officials, and Halliburton paid $177 million to settle allegations by the US Securities and Exchange Commission without admitting wrongdoing.
The estate of Jeffry Picower agreed to forfeit $7.2 billion that the investor got from Bernard L. Madoff’s Ponzi scheme, bringing the amount collected by authorities for victims of the fraud to $9.8 billion.
Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, sued Picower in May 2009, claiming he withdrew $7.2 billion more than he invested. Picower died in October 2009 at age 67. Picard and U.S. Attorney Preet Bharara, who is probing the Madoff fraud, yesterday announced the settlement with Picower’s widow, Barbara.
“I commend Barbara Picower for agreeing to turn over this truly staggering sum, which really was always other people’s money,” Bharara said at a news conference in New York. “This settlement provides a significant measure of hope to the many victims of Bernard Madoff’s horrific crimes.”
Picard said that investors in Madoff’s Ponzi scheme, the largest in U.S. history, lost $20 billion in principal. Account statements at the time of Madoff’s arrest in December 2008 showed total balances of $65 billion. Picard, who filed hundreds of lawsuits seeking $50 billion, has now recovered $9.8 billion.
Picower began investing with Madoff in the late 1970s, controlling dozens of accounts. He had a heart attack and drowned in his swimming pool in Palm Beach, Florida.
The settlement “honors what Jeffry would have wanted,” Barbara Picower said in a statement by her lawyer, William Zabel of Schulte Roth & Zabel LLP.
Regulators shuttered six banks holding a total of $1.23 billion in assets, including three in Georgia and one each in Arkansas, Minnesota and Florida, as real-estate losses drive this year’s bank failures to 157.
Florida has lost 29 lenders this year while 21 banks in Georgia were seized, the Federal Deposit Insurance Corp. said today in statements on its website. Regulators have closed 322 banks since the start of 2008. Today’s six closures cost the FDIC’s deposit-insurance fund a total of $267.6 million.
“We’re over the hump in terms of number of failures and the average size, and potentially in the cost of them,” Bert Ely, a banking consultant in Alexandria, Virginia, said in an interview. The crisis is “far from over but we’re making headway.”
This week’s failures may be the final closures for 2010 because regulators seldom shut down banks on holiday weekends, Ely said. The next two Fridays are Christmas Eve, a market holiday in the U.S., and New Year’s Eve.
More than 500 banks may fail before the cycle that started in 2007 comes to a close, “given the severity of the problems and the prolonged nature of the recovery,” Ely said.
The FDIC said last month that its list of “problem” banks — those at heightened risk of failure — rose 3.7 percent to 860 in the third quarter, the most in 17 years. Banks on the confidential list had $379.2 billion in assets as of Sept. 30, down from $403 billion at the end of the second quarter.
Payrolls decreased in 28 U.S. states and the unemployment rate climbed in 21, showing most parts of the world’s largest economy took part in the November labor- market setback.
North Carolina led the nation with 12,500 job cuts last month, followed by Massachusetts with 8,600 dismissals, and Ohio with 7,800, figures from the Labor Department showed today in Washington. Joblessness increased most in Georgia and Idaho, while workers in Nevada faced the highest rate in the country at 14.3 percent.
The report is consistent with figures on Dec. 3 that showed unemployment increased last month for the first time since August. The Federal Reserve’s pledge to buy an additional $600 billion of Treasuries by June and the $858 billion bill passed by Congress extending all Bush-era tax cuts for two years may help boost growth and cut unemployment.
The report shows “an uneven distribution of improvement with some disappointing results,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “We’ve seen pretty clear evidence that demand is starting to improve and with the tax program that was passed last night it should further accelerate. That increased demand is going to pull forward further improvements in employment.”
Senate Democrats deflected an initiative by Republicans yesterday that would have forced US and Russian negotiators to reopen an arms treaty reducing stockpiles of nuclear warheads.
But the 37-59 vote against an amendment by Senator John McCain, Republican of Arizona, exposed doubts about whether President Obama can win Senate ratification of the treaty before a new, more Republican Congress assumes power in January.
Treaties require a two-thirds majority of those voting in the Senate, or 67 votes if all 100 senators vote.
Led by McCain, Obama’s GOP opponent in the 2008 presidential election, Republicans tried to strike words from the treaty’s preamble that they say would allow Russia to withdraw from the pact if the United States developed a missile defense system in Europe.
The treaty is a foreign policy priority for Obama, who signed it in April with Russian President Dmitry Medvedev.
It would limit each country’s strategic nuclear arsenal to 1,550 warheads, down from the current ceiling of 2,200, and establish a system for monitoring and verification. US weapons inspections ended a year ago with the expiration of the 1991 arms control treaty.
Obama used his weekly radio and Internet address yesterday to call for ratification.
He also tried to allay GOP doubts with a letter yesterday to Senate minority leader Mitch McConnell, Republican of Kentucky, pledging to carry through with planned US missile defense facilities in Romania and Poland that would be capable of intercepting a missile from Iran aimed at the United States.
The treaty has received the backing of current and former military and national security officials, as well as former Republican President George H.W. Bush.
Democrats said a reference in the treaty’s preamble on missile defense systems is nonbinding and has no legal authority. In his letter, Obama said the United States disagrees with Russian statements about the threat that a missile defense poses to the strategic balance between the two countries.
“If you change it, it requires this treaty to go back to the Russian government, and then we don’t have any treaty,’’ said Senator John F. Kerry, the Massachusetts Democrat who chairs the Senate Foreign Relations Committee. Republican critics said Russia is using the treaty to continue its opposition to a US missile defense shield.
The use of food stamps has increased dramatically in the U.S., as the federal government ramps up basic assistance to meet the demands of an increasingly desperate population.
The number of food stamp recipients increased 16% over last year. This means that 14% of the population is now living on food stamps. That’s about 43 million people, or about one out of every seven Americans.
In some states, like Tennessee, Mississippi, New Mexico and Oregon, one in five people are receiving food stamps. Washington, D.C. leads the nation, with 21.5% of the population on food stamps.
“The high unemployment rate caused the high participation rate,” said Dottie Rosenbaum from the Center for Budget and Policy Priorities, a think tank.
But it’s not just the nation’s stubbornly high unemployment rate of 9.8% that’s driving the increase in food stamp use. Some states are expanding their definitions of poverty to include more people.
At the same time, the 2009 American Recovery and Reinvestment Act boosted annual funding to the nationwide food stamp program, known as the Supplemental Nutrition Assistance Program, by $10 billion.
The average recipient receives $133 in food stamps per month, according to the U.S. Department of Agriculture. That amount varies from state to state; in Hawaii the average is $216, while it’s $116 in Wisconsin.
But the Recovery Act funding increased the maximum food stamp benefit by 13.6%, which translates to about $20-24 dollars per person per month.
The U.S. government considers food stamps to be effective stimulus for the economy, because the recipients usually spend them right away.
Idaho saw the biggest increase in its food stamp program, with a spike of 39% compared to last year, followed by Nevada, at 29%, and New Jersey, at 27%.
New Jersey’s food stamp program expanded at least in part because the state raised its poverty level in April, according to Nicole Brossoie of the state Department of Human Services. That let the state add 35,000 people to its food stamp rolls, an increase of 5%.
Also, Brossoie said that program has been made more accessible to poverty-stricken residents.
“Through newsletters, posters, counseling and other outreach, the stigma associated with food stamps has diminished and more individuals and families are seeking assistance,” she said.
The government is also beefing up unemployment benefits. The unemployed will get a 13-month extension to file for additional unemployment benefits, which can last as long as 99 weeks in states hit hardest by job loss.
As the job market continues to dog the economy, the increase in food stamp funding is set to remain in place for nearly three years.
Dottie Rosenbaum said the hike in food stamp benefits is set to expire Nov. 1, 2013. Typically, food stamp funding increases every year to match inflation. But if Congress does not extend the stimulus funding beyond the 2013 cutoff, then food stamp benefits will revert to their original levels, but still be adjusted for inflation.
She said the budget office is forecasting a potential drop of $49 a month in food stamp benefits for a family of three, or $59 for a family of four, if the stimulus program is not continued.
President Obama, while signing a child nutrition bill on Dec. 13, said he was working with members of Congress to extend the food stamp funding. [All of the control and operation of the Food Stamp Operation is controlled by JPMorgan Chase and is one of their largest profit centers.]
Metro Phoenix bankruptcy filings have hit an all-time record this year, with another month of filings still to go.
The filings, a major indicator of economic stress, reflect the dual effects of the housing and financial meltdowns on the Arizona economy.
Still, there are signs the worst could be over. For example, bankruptcies both for metro Phoenix and the state have dropped in seven of the past eight months.
Another 2,501 consumer and business filings logged in November pushed the year-to-date total for metro Phoenix to 28,849, according to the U.S. Bankruptcy Court in Phoenix. That exceeds the 28,277 filings recorded for all of 2005, when thousands of people rushed to seek protection before a tightening in the federal bankruptcy laws took effect.
This year’s total through November also tops the 25,104 filings for all of 2009.
“My guess is that 2011 will be equal or greater for filings than 2010, but it’s just a gut feeling,” said Diane L. Drain, a Phoenix bankruptcy attorney.
Forty-eight percent of workers in the financial services industry consider changing jobs if annual bonuses disappoint, said recruiter Astbury Marsden, which advises companies in Europe and Asia.
Forty-five percent of the 1,122 bankers surveyed said they expected bonuses to be higher this year than last, the London- based recruitment firm said in an e-mailed statement today. Collective bonuses are likely to be less than the 7.3 billion pounds ($11.3 billion) paid last year.
“Employers could see unprecedented levels of staff attrition,” Jonathan Nicholson, managing director at Astbury Marsden, said in the statement. “We could see large numbers of staff defect to rivals.”
Pay in the sector increased 17 percent this year to compensate for reduced bonuses, the recruiter said. Forty-five percent of the workers anticipating a higher bonus this year expect it will amount to 47 percent of their base salary, according to the survey.
This article was posted: Thursday, December 23, 2010 at 8:51 am