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March 17, 2009

Commentary: Obama A Leader Who Actually Leads

What a welcome change to feel like someone is running the country instead of running it into the ground.

President Obama has done more in eight weeks than George W. Bush did in eight years — unless you include starting a couple of wars.

While the armchair quarterbacks second guess the new president, he gets up every day and does things, lots of things.

Whether it’s creating commissions for women and girls, ordering the investigation of President Bush’s use of signing statements, or jamming a huge stimulus package through Congress, the man is working his tail off. And he seems to be loving every minute of it. It’s almost as though our president was born to do exactly what he’s doing. He’s leading, and boy, is that refreshing.

I remember many times when Bush was in office wondering who the hell was running the country. Then he would appear somewhere in front of a handpicked audience to utter some banalities or say something utterly stupid and I would be reminded. I don’t miss him.

That’s not to say President Obama hasn’t stubbed his toe here and there. Signing that omnibus spending bill with all those earmarks in it after campaigning so hard against pork was probably a mistake. The opportunity was right there to send that bill back to Congress with a note that read, “I told you I am against earmarks and I meant it. Now do it over and send me something clean.” Nancy Pelosi‘s head would have probably exploded, but the American people would have been ready to crown him king.

There are serious questions about whether Tim Geithner has what it takes to solve the banking crisis. Either nationalize the big ones in trouble or let them fail. It doesn’t seem that just continuing to hand them money is working.

Better background checks on some of his appointees would have saved him some embarrassment. There’s no excuse for asking someone like Tom Daschle with his problems to do anything.

But the point, I guess, is this: President Obama is attacking our country’s problems on several fronts. He’s got ambitious ideas on how to solve them, and he communicates a sense of calm and confidence to the rest of us as he goes about his business. Will all his ideas work? Of course not. But if you throw enough stuff at the wall, some of it will stick.

And at least I don’t go to bed at night worried that I’ll wake up in the morning to find out we’re about to invade someone.

Commentary by Jack Cafferty:

http://www.cnn.com/2009/POLITICS/03/17/cafferty.obama/index.html

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March 15, 2009

Russia’s Richest Oligarchs Losing Billions and Billions

Moscow has lost the title of billionaire capital of the world.  New York is now the billionaire capital with London coming in second.  Russian billionaires lost more than $250B and approximately two thirds of its billionaires due to the world financial crisis.

In 2008 there were 87 Russians billionaires with a total estimated wealth of $471.4B.  Today there are 32 Russian billionaires with an estimated wealth of $102.1B.

In 2008 there were 1,125 billionaires worldwide; today there are only 793.

Russia’s descent into its economic predicament began when the heavily oil-dependent economy was hit by falling crude prices. Russia’s stock market is down by 67% over the past year and their currency, the ruble, has depreciated 29% against the dollar.

Russia’s government has already spent $250 billion to prop up its currency so that it can avoid a sharp devaluation of the ruble. Russia has even helped private businesses refinance their foreign debt so that foreigners don’t take over several Russian businesses. Even with help from the government dozens of Russians fell from billionaire ranks, including the very wealthy investment banker Ruben Vardanian who owns Troika Dialog.  He allegedly got a substantial cash injection from the state owned Sberbank.

Even Russia’s richest woman Yelena Baturina has financial problems.  Baturina had a vision of building one of the most outrageous buildings in Moscow called ‘Project Orange’an avant garde complex shaped like slices of fruit, with a tinted facade that would cast an orange glow over the Moscow River.  Last week Ms. Baturina applied for about $1.4 billion in government loan guarantees for her construction company. In 2008 Ms. Baturina’s wealth was estimated at $4.2 billion.

The credit crunch has brought Russian real estate to a halt. Russian’s Donald Trump — Kirill Pisarev — and his partner, Yuri Zhukov each lost 90% of their wealth as shares of their real estate firm lost nearly all of its value. Russian analysts say that real estate is expected to remain the worst part of the Russian market, impacted by the dramatic slowdown in property sales and construction.

March 7, 2009

March 7, 2009: President Obama’s Weekly Address – Reforms Will Save Americans $40 Billion Each Year

President Barack Obama used his March 7, 2009 weekly address to detail his plans to fix our ailing economy, noting that reforming healthcare is necessary to ensure our long term fiscal health.  While ending this crisis will not be quick or easy, the President’s plans will take the swift, bold, and responsible actions needed for the United States to emerge stronger and more prosperous than before. And that is why reforming healthcare, jumpstarting job creation, restoring lending, relieving responsible homeowners, and making hard choices are all so critically important right now.

Transcript of President Obama’s remarks:

Yesterday, we learned that the economy lost another 651,000 jobs in the month of February, which brings the total number of jobs lost in this recession to 4.4 million.  The unemployment rate has now surpassed 8 percent, the highest rate in a quarter century.

These aren’t just statistics, but hardships experienced personally by millions of Americans who no longer know how they’ll pay their bills, or make their mortgage, or raise their families. 

From the day I took office, I knew that solving this crisis would not be easy, nor would it happen overnight.  And we will continue to face difficult days in the months ahead.  But I also believe that we will get through this — that if we act swiftly and boldly and responsibly, the United States of America will emerge stronger and more prosperous than it was before. 

That’s why my administration is committed to doing all that’s necessary to address this crisis and lead us to a better day.  That’s why we’re moving forward with an economic agenda that will jumpstart job creation, restart lending, relieve responsible homeowners, and address the long-term economic challenges of our time:  the cost of health care, our dependence on oil, and the state of our schools.

To prevent foreclosures for as many as 4 million homeowners — and lower interest rates and lift home values for millions more — we are implementing a plan to allow lenders to work with borrowers to refinance or restructure their mortgages.  On Wednesday, the Department of Treasury and Housing and Urban Development released the guidelines that lenders will use for lowering mortgage payments.  This plan is now at work.

To restore the availability of affordable loans for families and businesses — not just banks — we are taking steps to restart the flow of credit and stabilize the financial markets.   On Thursday, the Treasury Department and the Federal Reserve launched the Consumer and Business Lending Initiative — a plan that will generate up to a trillion dollars of new lending so that families can finance a car or college education — and small businesses can raise the capital that will create jobs.

And we’ve already begun to implement the American Recovery and Reinvestment Act — a plan that will save and create over 3.5 million jobs over the next two years — jobs rebuilding our roads and bridges, constructing wind turbines and solar panels, expanding broadband and mass transit.  And because of this plan, those who have lost their job in this recession will be able to receive extended unemployment benefits and continued health care coverage, while 95 percent of working Americans will receive a tax break beginning April 1st.

Of course, like every family going through hard times, our country must make tough choices.  In order to pay for the things we need — we cannot waste money on the things we don’t. 

My administration inherited a $1.3 trillion budget deficit, the largest in history.  And we’ve inherited a budgeting process as irresponsible as it is unsustainable.  For years, as Wall Street used accounting tricks to conceal costs and avoid responsibility, Washington did, too.

These kinds of irresponsible budgets — and inexcusable practices — are now in the past.  For the first time in many years, my administration has produced a budget that represents an honest reckoning of where we are and where we need to go.

It’s also a budget that begins to make the hard choices that we’ve avoided for far too long — a strategy that cuts where we must and invests where we need.  That’s why it includes $2 trillion in deficit reduction, while making historic investments in America’s future.  That’s why it reduces discretionary spending for non-defense programs as a share of the economy by more than 10 percent over the next decade — to the lowest level since they began keeping these records nearly half a century ago.  And that’s why on Wednesday, I signed a presidential memorandum to end unnecessary no-bid contracts and dramatically reform the way contracts are awarded — reforms that will save the American people up to $40 billion each year.

Finally, because we cannot bring our deficit down or grow our economy without tackling the skyrocketing cost of health care, I held a health care summit on Thursday to begin the long-overdue process of reform.  Our ideas and opinions about how to achieve this reform will vary, but our goal must be the same:  quality, affordable health care for every American that no longer overwhelms the budgets of families, businesses, and our government.

Yes, this is a moment of challenge for our country.  But we’ve experienced great trials before.  And with every test, each generation has found the capacity to not only endure, but to prosper — to discover great opportunity in the midst of great crisis.  That is what we can and must do today.  And I am absolutely confident that is what we will do.  I’m confident that at this defining moment, we will prove ourselves worthy of the sacrifice of those who came before us, and the promise of those who will come after. 

Thank you.

March 6, 2009

Economy: 651,000 Jobs Lost In February. Unemployment Rate Reaches 8.1%

unemployment-cartoon-get-a-job The U.S. economy lost 651,000 jobs in February, the fourth month in a row where job losses were near or above 600,000 and the unemployment rate climbed to 8.1%, the highest rate in over 25 years.

Of the 4.4 million jobs lost since the recession began in December 2007, more than half vanished in the last four months. Experts believe that our unemployment rate will get close to 9% in 2010 while some say it might be closer to 10%.  The Federal Reserve doesn’t expect the unemployment rate to fall below 7% until 2011.

Job losses are prevalent across most businesses with only education and health services reporting job growth.

According to a survey of businesses 660,000 jobs were lost in the private-sector in February. Goods-producing industries (i.e. car dealerships, department stores, coffee shops — businesses that provide tangible things that you can see, feel, touch or walk out of the store with) lost 276,000 jobs, while services (i.e. CPAs, Electricians, Nail Salons/Hair stylists/Spas, Dog Groomers — businesses that provide services) lost 375,000 jobs. Construction employment fell by 104,000 in February making it a total of 904,000 jobs lost in the construction industry since the recession began.

The unemployment rate for African-Americans rose to 13.4% in February, which is the highest rate it’s been since December 1993. Unemployment of young people and students rose to 21.6% because young people and students are now competing with unemployed adults for the same jobs.

Many Americans who still have jobs are under employed working an average workweek of 33.3 hours for the third straight month instead of 40 hours which is considered full-time.

The number of workers experiencing long spells of joblessness — defined by the government as 27 weeks (almost 7 months) without work — has risen to 2.9 million in February, up 1.6 million since the start of the recession in December 2007.

The number of persons working part-time who would rather be working full time jumped by 787,000 in February to reach 8.6 million. This group of workers has risen by nearly 4 million since the recession began and these workers are most likely not to have health insurance.

February 23, 2009

Jobs in Dubai Desert Dries Up And Foreign Workers Flee!

palm-island-dubai 

If it can happen in Dubai, it can happen anywhere.  It’s a confirmation that international finances are horrendous when Dubai’s economy dries up!  

Dubai is one of the seven emirates and the most populous city of the United Arab Emirates (UAE). It is located along the southern coast of the Persian Gulf on the Arabian Peninsula.

Ian, a foreign worker, is a 38-year-old Englishman who moved to Dubai 2 years ago to take a job as an engineer. He lived in Dubai and became very confident that Dubai’s fast-growing economy would continue for at least a decade so he purchased a condominium for almost $300,000 with a 15-year mortgage.

90 percent of the Dubai population is made up of foreign workers.  Management teams were recruited with big salaries and with promises of an extraordinary financial future and guaranteed jobs.  Ian was laid off 2 weeks ago and is desperately searching for a job since he doesn’t know what else to do because he owns property there. If he can’t pay off his mortgage he could end up in debtors’ prison.

With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have left maxed-out credit cards inside the cars with notes of apology taped to the windshield.

The main problem is that the jobless in Dubai lose their work visas and then must leave the country within a month. That in turn reduces spending, creates housing vacancies and lowers real estate prices – a downward spiral that has left parts of Dubai once hailed as the economic superpower of the Middle East looking like a ghost town. Tens of thousands have left, real estate prices have crashed and scores of Dubai’s major construction projects have been suspended or canceled.

Last month local newspapers reported that Dubai was canceling 1,500 work visas every day. Real estate prices, which rose dramatically during Dubai’s six-year boom, have dropped 30 percent or more over the past two or three months in some parts of the city. Many used luxury cars are for sale, sometimes being sold for 40 percent less than the asking price two months ago according to car dealers. Dubai’s roads, usually congested with traffic this time of year are now mostly traffic free.

Dubai at first seemed to be a refuge, relatively insulated from the panic that began hitting the rest of the world last fall. The Gulf is cushioned by vast oil and gas wealth so some who lost jobs in New York and London began applying and accepting jobs there.

But Dubai, unlike Abu Dhabi or nearby Qatar and Saudi Arabia does not have its own oil.  Dubai built its reputation on real estate, finance and tourism. Now many expatriates are talking about Dubai as though it has been a con game all along. Sensational rumors have been spreading that Palm Jumeira (Palm Island) – the artificial island that is one of this city’s trademark developments is sinking.

Ian says he doesn’t know what to believe anymore and he is becoming a little panicked as he continues looking for a job, hoping that he finds one before his 30 days runs out.

It was reported earlier today by the Dubai Department of Finance that The Central Bank has pledge the first US$10 billion of what will eventually be a US$20 billion bond program to help Dubai meet its financial obligations so that the government can continue with its development plans. This will provide the Dubai Government with the necessary liquidity to substitute the funds that have dried up globally in the last 12 months and help them to meet all their upcoming financial obligations.

Dubai’s government and government-owned corporations have an estimated US $80 billion in combined bonds and other outstanding loans to help finance the breakneck growth and economic diversification that have made it a developmental model for the Middle East.

 

 

February 22, 2009

President Obama’s Housing Plan Will STEADY The Market For All of Us

happy house President Obama proposed a housing plan last Wednesday that will help to start clearing a path that will end the foreclosure crisis we’re in.  It’s not perfect but it’s a GOOD start!

Yes, it will help some people who don’t “deserve” to be helped, just as the bank bailouts have helped Wall Street executives – none of whom deserved to be helped. Let us be reasonable, realistic and rational – there is NO perfect solution to this huge problem.  If you ask 100 of the greatest economic minds to come up with a solution for this crisis you will get 100 different answers that will each have merits and flaws.  

The ninety percent of us who were not naïve or fooled by the smooth-talk and blarney of greedy mortgage brokers under normal circumstances would never be asked to bail out the 10 percent that needs it — but these are not normal times.  If we don’t help those who are destitute right away we will all be pulled into a deep dark hole that none of us will be able to get out of anytime soon.  This is our choice plain and simple; help those who need help or continue to bitch, moan and do nothing and see our economy plunge to depths that will make today seem like the good times. Stopping the cycle of foreclosures is critical and is the only thing that will slow our country’s downward economic spiral and help the markets.

President Obama’s Housing Plan will help people who got plain-vanilla conforming mortgages and who have never fallen seriously behind on their monthly payments. They will most likely qualify to refinance at lower guaranteed interest rates — even if they owe as much as their house is worth.

It will also help people who have subprime mortgages or exotic loans, such as pay-option adjustable rate mortgages.  These folks might qualify to keep their current loans but will have them modified to make the payments more affordable.

The mortgage modifications in the plan include three essential elements that will bring us stability and help homeowners who have one home that they are living in. These mortgage modifications will only apply to the existing loans that have caused all the trouble we’re in.   These modifications will not apply to loans made in the future and will therefore not hurt the mortgage market.

The first element will help homeowners currently at risk of foreclosure. It would provide cash incentives to lenders in exchange for modifying a loan until the borrower can comfortably pay it. Lenders would receive the incentive for modifying the loan before it becomes delinquent.

The second element is for homeowners who are still making their mortgage payments on time but can’t refinance because they don’t have enough equity in their homes and owe more than their homes are worth. If a homeowner’s mortgage is held or guaranteed by Fannie Mae or Freddie Mac (which 2/3 are) the homeowner would be guaranteed a lower interest rate and allowed to refinance.

The third element allows Fannie Mae and Freddie Mac to expand their mortgage lending by pledging an additional $200 billion in government capital. Since private lenders are still refusing to make mortgage loans, it makes sense for the government to encourage Fannie Mae and Freddie Mac to lend and start the credit wheels rolling again.

The Obama administration is wisely taking advantage of the government’s new ownership of Fannie Mae and Freddie Mac by putting the two entities to work for the people of America. 

At the same time the Obama administration is offering aid to responsible homeowners who might be infuriated with the idea of helping “irresponsible” homeowners.  Our fellow citizens who read the fine print and made smart fiscal decisions by purchasing homes they could afford but were whacked by the housing bust will benefit from lower interest rates and other resources. This is the administration’s way of acknowledging that they see and hear the frustration of the masses and will extend a hand with some assistance to the responsible ninety percent.

The very capable and intelligent Shaun Donovan, Secretary of Housing and Urban Development believes that by doing all these things they will be able to stop most of the out of control foreclosure, stop property value from depreciating while simultaneously increasing property value across the nation by approximately $6,000.  This would be great since we’ve only seen housing prices decline these past two year.  Yeah for some growth!

President Obama still has to get some of these vital proposals through Congress. Republicans and financial service lobbyists has already declared a ferocious opposition to the proposal to change the bankruptcy law that would allow judges to modify distressed homeowners’ mortgages.

Now is not the time for selfishness – think of your fellow citizens in places like Nevada, Florida and California where foreclosures have reached a critical mass. In these and other states foreclosed properties are driving down the value of homes in communities, property taxes are not being paid, streets are not be cleaned, garbage not being picked up and teachers, police and fire men are being laid off.

It is predicted that if something isn’t done now, there could be as much as 8 million foreclosures over the next four years.

Americans are ready to move forward and start the healing of America.  Since President Obama announced his plan on Wednesday, mortgage lenders have already reported a dramatic increase in the number of calls from homeowners who want to refinance. LendingTree.com has said that refinancing volume shot up 88 percent over the previous week because of Obama’s plan.

The plan may not be perfect but it is a step in the right direction and will stop the foreclosure roller coaster and help credit to start flowing again.

What’s good for the people is usually not good for politics.  Let us do what’s good for the people and get beyond party politics, principles and philosophies so we can get stability in our financial markets. WE need stability, stability and more stability now.  Let us think more about WE as a nation and less of ME as an individual as WE go through this time of national crisis.

America is still the greatest country in the world, let’s work together and keep it that way!

 

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