I don't know what to think when I read articles like the one below. There are no protests in the streets, nobody seems to really care, and nobody seems to want to make it all better...
Enjoy the article anyway...
States' jobless funds are being drained in recession
By Peter Whoriskey
Washington Post Staff Writer
Tuesday, December 22, 2009; A01
The recession's jobless toll is draining unemployment-compensation funds so fast that according to federal projections, 40 state programs will go broke within two years and need $90 billion in loans to keep issuing the benefit checks.
The shortfalls are putting pressure on governments to either raise taxes or shrink the aid payments.
Debates over the state benefit programs have erupted in South Carolina, Nevada, Kansas, Vermont and Indiana. And the budget gaps are expected to spread and become more acute in the coming year, compelling legislators in many states to reconsider their operations.
Currently, 25 states have run out of unemployment money and have borrowed $24 billion from the federal government to cover the gaps. By 2011, according to Department of Labor estimates, 40 state funds will have been emptied by the jobless tsunami.
"There's immense pressure, and it's got to be faced," said Indiana state Rep. David Niezgodski (D), a sponsor of a bill that addressed the gaps in Indiana's unemployment program. "Our system was absolutely broke."
The Indiana legislation protected the aid checks, Niezgodski said, but it came after a give-and-take this spring in which Gov. Mitchell E. Daniels Jr. (R) said the state had been providing "Rolls-Royce benefits" and several thousand union workers countered by protesting proposed cuts at the state capitol. In January, the legislature is slated to consider a bill to delay the proposed tax increases intended to refill the fund.
In Nevada, Gov. Jim Gibbons (R) and legislators have feuded over the unemployment program, which is $85 million in debt to the federal government, with Gibbons accusing the legislature of "callous disregard" for not setting a tax rate.
And last week, a state task force in Kentucky recommended cutting benefits about 9 percent and imposing a week's delay in their payment. The average benefit check there is about $309 a week. The task force also proposed raising taxes.
"There were some moments of high anxiety" during the negotiations between industry and labor groups, said Joseph U. Meyer, the state's acting secretary of education and workforce development. "But in the end, the realistic options became fairly apparent."
State unemployment-compensation funds are separated from general budgets, so when there is a shortfall, only two primary solutions are typically considered -- either cut the benefit or raise the payroll tax.
Industry and business groups often lobby against raising the payroll tax on employers, while unions and other worker groups protest benefit cuts.
"We want to make sure Kentucky remains competitive and also maintain an environment of fairness," Meyer said of the negotiations.
Nationally, the average tax is about 0.6 percent of payroll; the average weekly check is about $300.
The troubles the state programs face can be traced to a failure during the economic boom to properly prepare for a downturn, experts said.
Unemployment benefits are funded by the payroll tax on employers that is collected at a rate that is supposed to keep the funds solvent. Firms that fire lots of people are supposed to pay higher rates. The federal government pays for administrative costs, and in a recession, it pays for the extension of unemployment benefits beyond 26 weeks. But over the years, the drive to minimize state taxes on employers has reduced the funds to unsustainable levels.
"The benefits haven't grown -- that's not the problem," said Richard Hobbie, director of the National Association of State Workforce Agencies.
Even so, he said, he expects to see unemployment checks reduced.
A shortfall in a state unemployment fund, he said, "usually means cuts in eligibility or benefits."
In Virginia, the unemployment program has borrowed $89 million from the federal government, while Maryland has not borrowed, according to the federal data.
Wayne Vroman, an expert in unemployment insurance at the Urban Institute, said that entering the recession, state programs were on average funded at only one-third the level they should have been, according to generally accepted funding guidelines.
"If you fund a program adequately, you don't need to come to these kinds of difficult decisions," he said.
Before the recession, he said, the funding guidelines "were rarely honored."
While the amount of the states' loans from the federal government is expected to grow rapidly, it is not expected to add to the federal debt. "In the past, the federal government has always gotten its money back," Vroman said.
In the meantime, however, more states are struggling to fill the gap. West Virginia imposed a freeze on benefit levels this year, and legislators in South Carolina are considering one.
"We've obviously got problems with the fund," said South Carolina House Majority Leader Kenny Bingham (R), blaming the trouble in part on the state's unemployment rate of more than 12 percent.
The state owes about $654 million to the federal government for unemployment payments.
"We're not trying to cut benefits," he said. But "if you jack rates up, those business that are struggling to hang on, you make things more difficult."
Tuesday, December 22, 2009
Wednesday, December 9, 2009
Tiger, Tiger
Hey. Here is a great analysis of the Tiger Woods story from a different angle. I found it to be more believable than the one in the mainstream press...
Give it a read...
http://deadspin.com/5416948/chaos-in-tigerland-a-deadspin-investigation-into-the-sexual-habits-of-pro-athletes
See, I told ya...
Give it a read...
http://deadspin.com/5416948/chaos-in-tigerland-a-deadspin-investigation-into-the-sexual-habits-of-pro-athletes
See, I told ya...
Debt in the UK shocks the citizens...
I found this article on Marketwatch's website. It was of course quickly removed... But it is still amazing... Enjoy...
Dec. 4, 2009
U.K. government bank rescue cost $1.4 trillion
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- The British government aid to banks totalled 850 billion pounds ($1.4 trillion), according to a report by the country's National Audit Office released Friday.
The report tabulated both the cost of buying up shares in lenders Royal Bank of Scotland (NYSE:RBS) and Lloyds Banking Group (NYSE:LYG) as well as providing 250 billion pounds of guarantees, 280 pounds of insurance on toxic assets, 200 billion pounds of Bank of England loss indemnification and 40 billion pounds of loans. Treasury's net cash outlay for purchases of shares in banks and lending to the banking sector, including Northern Rock which was nationalized in September 2007, will amount to about 117 billion pounds.
How much the taxpayer will lose from the assistance remains in doubt, it said, though the Treasury estimated last April that the loss will range between 20 billion and 50 billion pounds.
And lending to businesses through 2010 by the partly state-held banks, RBS and Lloyds, isn't likely to meet targets.
But the NAO report said the taxpayer has received something for the money -- it said there's been no disorderly failure of U.K. banks and no retail depositor has lost money.
The British government in October 2008 rescued RBS and HBOS, which is now a unit of Lloyds Banking Group, with secret assistance that was only revealed last week.
The U.K. also nationalized Northern Rock, and then sold some of Bradford & Bingley and resolved problems at the U.K. operations of stricken Icelandic banks.
The government also racked up 107 million pounds in advisory fees -- mostly to the law firm Slaughter & May and accounting groups PricewaterhouseCoopers, Ernst & Young, KPMG and BDO Stoy Hayward.
It also paid 15.4 million pounds to Credit Suisse (NYSE:CS) , 7.4 million pounds to BlackRock (NYSE:BLK) , 5.3 million pounds to Deutsche Bankm (NYSE:DB) , 5 million pounds to Citi (NYSE:C) , 4.5 million pounds to Goldman Sachs (NYSE:GS) and 1.5 million pounds Morgan Stanley (NYSE:MS) . RBS and Lloyds will pick up the tab on just under 100 million pounds of those fees, the report said.
So much debt - So little time
Dec. 4, 2009
U.K. government bank rescue cost $1.4 trillion
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- The British government aid to banks totalled 850 billion pounds ($1.4 trillion), according to a report by the country's National Audit Office released Friday.
The report tabulated both the cost of buying up shares in lenders Royal Bank of Scotland (NYSE:RBS) and Lloyds Banking Group (NYSE:LYG) as well as providing 250 billion pounds of guarantees, 280 pounds of insurance on toxic assets, 200 billion pounds of Bank of England loss indemnification and 40 billion pounds of loans. Treasury's net cash outlay for purchases of shares in banks and lending to the banking sector, including Northern Rock which was nationalized in September 2007, will amount to about 117 billion pounds.
How much the taxpayer will lose from the assistance remains in doubt, it said, though the Treasury estimated last April that the loss will range between 20 billion and 50 billion pounds.
And lending to businesses through 2010 by the partly state-held banks, RBS and Lloyds, isn't likely to meet targets.
But the NAO report said the taxpayer has received something for the money -- it said there's been no disorderly failure of U.K. banks and no retail depositor has lost money.
The British government in October 2008 rescued RBS and HBOS, which is now a unit of Lloyds Banking Group, with secret assistance that was only revealed last week.
The U.K. also nationalized Northern Rock, and then sold some of Bradford & Bingley and resolved problems at the U.K. operations of stricken Icelandic banks.
The government also racked up 107 million pounds in advisory fees -- mostly to the law firm Slaughter & May and accounting groups PricewaterhouseCoopers, Ernst & Young, KPMG and BDO Stoy Hayward.
It also paid 15.4 million pounds to Credit Suisse (NYSE:CS) , 7.4 million pounds to BlackRock (NYSE:BLK) , 5.3 million pounds to Deutsche Bankm (NYSE:DB) , 5 million pounds to Citi (NYSE:C) , 4.5 million pounds to Goldman Sachs (NYSE:GS) and 1.5 million pounds Morgan Stanley (NYSE:MS) . RBS and Lloyds will pick up the tab on just under 100 million pounds of those fees, the report said.
So much debt - So little time
Tuesday, December 1, 2009
Damn, I forgot to buy the gun...
Great information from Bloomberg. Enjoy...
Arming Goldman With Pistols Against Public: Alice Schroeder
Commentary by Alice Schroeder
Dec. 1 (Bloomberg) -- “I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.
I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter” it believes some of the bankers I inquired about do have pistol permits. The NYPD also said it will be a while before it can name names.
While we wait, Goldman has wrapped itself in the flag of Warren Buffett, with whom it will jointly donate $500 million, part of an effort to burnish its image -- and gain new Goldman clients. Goldman Sachs Chief Executive Officer Lloyd Blankfein also reversed himself after having previously called Goldman’s greed “God’s work” and apologized earlier this month for having participated in things that were “clearly wrong.”
Has it really come to this? Imagine what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology. Talk that Goldman bankers might have armed themselves in self-defense would sound ludicrous, were it not so apt a metaphor for the way that the most successful people on Wall Street have become a target for public rage.
Pistol Ready
Common sense tells you a handgun is probably not even all that useful. Suppose an intruder sneaks past the doorman or jumps the security fence at night. By the time you pull the pistol out of your wife’s jewelry safe, find the ammunition, and load your weapon, Fifi the Pomeranian has already been taken hostage and the gun won’t do you any good. As for carrying a loaded pistol when you venture outside, dream on. Concealed gun permits are almost impossible for ordinary citizens to obtain in New York or nearby states.
In other words, a little humility and contrition are probably the better route.
Until a couple of weeks ago, that was obvious to everyone but Goldman, a firm famous for both prescience and arrogance. In a display of both, Blankfein began to raise his personal- security threat level early in the financial crisis. He keeps a summer home near the Hamptons, where unrestricted public access would put him at risk if the angry mobs rose up and marched to the East End of Long Island.
To the Barricades
He tried to buy a house elsewhere without attracting attention as the financial crisis unfolded in 2007, a move that was foiled by the New York Post. Then, Blankfein got permission from the local authorities to install a security gate at his house two months before Bear Stearns Cos. collapsed.
This is the kind of foresight that Goldman Sachs is justly famous for. Blankfein somehow anticipated the persecution complex his fellow bankers would soon suffer. Surely, though, this man who can afford to surround himself with a private army of security guards isn’t sleeping with the key to a gun safe under his pillow. The thought is just too bizarre to be true.
So maybe other senior people at Goldman Sachs have gone out and bought guns, and they know something. But what?
Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and -- oh yes -- the other banks. People “were unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism. But if we had a complete meltdown, it could lead to people questioning the basis of the system.”
Torn Curtain
There you have it. The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firm’s revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses.
This slip-up let the other bailed-out banks happily hand off public blame to Goldman, which is unpopular among its peers because it always seems to win at everyone’s expense.
Plenty of Wall Streeters worry about the big discrepancies in wealth, and think the rise of a financial industry-led plutocracy is unjust. That doesn’t mean any of them plan to move into a double-wide mobile home as a show of solidarity with the little people, though.
Cool Hand Lloyd
No, talk of Goldman and guns plays right into the way Wall- Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.
And if the proles really do appear brandishing pitchforks at the doors of Park Avenue and the gates of Round Hill Road, you can be sure that the Goldman guys and their families will be holed up in their safe rooms with their firearms. If nothing else, that pistol permit might go part way toward explaining why they won’t be standing outside with the rest of the crowd, broke and humiliated, saying, “Damn, I was on the wrong side of a trade with Goldman again.”
(Alice Schroeder, author of “The Snowball: Warren Buffett and the Business of Life” and a former managing director at Morgan Stanley, is a Bloomberg News columnist. The opinions expressed are her own.)
Click on “Send Comment” in the sidebar display to send a letter to the editor.
To contact the writer of this column: Alice Schroeder at aliceschroeder@ymail.com.
I love this stuff...
Arming Goldman With Pistols Against Public: Alice Schroeder
Commentary by Alice Schroeder
Dec. 1 (Bloomberg) -- “I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.
I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter” it believes some of the bankers I inquired about do have pistol permits. The NYPD also said it will be a while before it can name names.
While we wait, Goldman has wrapped itself in the flag of Warren Buffett, with whom it will jointly donate $500 million, part of an effort to burnish its image -- and gain new Goldman clients. Goldman Sachs Chief Executive Officer Lloyd Blankfein also reversed himself after having previously called Goldman’s greed “God’s work” and apologized earlier this month for having participated in things that were “clearly wrong.”
Has it really come to this? Imagine what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology. Talk that Goldman bankers might have armed themselves in self-defense would sound ludicrous, were it not so apt a metaphor for the way that the most successful people on Wall Street have become a target for public rage.
Pistol Ready
Common sense tells you a handgun is probably not even all that useful. Suppose an intruder sneaks past the doorman or jumps the security fence at night. By the time you pull the pistol out of your wife’s jewelry safe, find the ammunition, and load your weapon, Fifi the Pomeranian has already been taken hostage and the gun won’t do you any good. As for carrying a loaded pistol when you venture outside, dream on. Concealed gun permits are almost impossible for ordinary citizens to obtain in New York or nearby states.
In other words, a little humility and contrition are probably the better route.
Until a couple of weeks ago, that was obvious to everyone but Goldman, a firm famous for both prescience and arrogance. In a display of both, Blankfein began to raise his personal- security threat level early in the financial crisis. He keeps a summer home near the Hamptons, where unrestricted public access would put him at risk if the angry mobs rose up and marched to the East End of Long Island.
To the Barricades
He tried to buy a house elsewhere without attracting attention as the financial crisis unfolded in 2007, a move that was foiled by the New York Post. Then, Blankfein got permission from the local authorities to install a security gate at his house two months before Bear Stearns Cos. collapsed.
This is the kind of foresight that Goldman Sachs is justly famous for. Blankfein somehow anticipated the persecution complex his fellow bankers would soon suffer. Surely, though, this man who can afford to surround himself with a private army of security guards isn’t sleeping with the key to a gun safe under his pillow. The thought is just too bizarre to be true.
So maybe other senior people at Goldman Sachs have gone out and bought guns, and they know something. But what?
Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and -- oh yes -- the other banks. People “were unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism. But if we had a complete meltdown, it could lead to people questioning the basis of the system.”
Torn Curtain
There you have it. The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firm’s revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses.
This slip-up let the other bailed-out banks happily hand off public blame to Goldman, which is unpopular among its peers because it always seems to win at everyone’s expense.
Plenty of Wall Streeters worry about the big discrepancies in wealth, and think the rise of a financial industry-led plutocracy is unjust. That doesn’t mean any of them plan to move into a double-wide mobile home as a show of solidarity with the little people, though.
Cool Hand Lloyd
No, talk of Goldman and guns plays right into the way Wall- Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.
And if the proles really do appear brandishing pitchforks at the doors of Park Avenue and the gates of Round Hill Road, you can be sure that the Goldman guys and their families will be holed up in their safe rooms with their firearms. If nothing else, that pistol permit might go part way toward explaining why they won’t be standing outside with the rest of the crowd, broke and humiliated, saying, “Damn, I was on the wrong side of a trade with Goldman again.”
(Alice Schroeder, author of “The Snowball: Warren Buffett and the Business of Life” and a former managing director at Morgan Stanley, is a Bloomberg News columnist. The opinions expressed are her own.)
Click on “Send Comment” in the sidebar display to send a letter to the editor.
To contact the writer of this column: Alice Schroeder at aliceschroeder@ymail.com.
I love this stuff...
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