Category Archives: Business/Economics

Business/Economics, Opinion, U.S.

Economy About to Crash? What Happened to Recovery? 10 Reasons

March 10, 2011.

“I think this is the beginning of something severe.” said chief investment strategist at Windham Financial Services, Paul Mendelsohn. He’s referring to the more than 220 point drop in the DOW, which got little to no mention in national TV news coverage on March 10. There’s a lot of legitimate reasons for investors getting out of the market, not just in the U.S., but world wide. Those reasons also prove that there is no economic recovery.

Reason 1: First time jobless claims, in the U.S., for state benefits went up, more than expected (again).

Reason 2: World wide unemployment is high. Most of the violence around the world involves unemployment. The current crisis in North Africa and the Middle East is due, in part, to high unemployment rates. In 2010 Macedonia took the top spot with an official unemployment rate of 33.8%. How can the global economy recover when there are so many people not making any money to buy things with?

Reason 3: U.S. trade deficit increased (again).

Reason 4: China’s trade deficit increased (a surprise).

Reason 5: Credit ratings for Greece and Spain decreased (again).

Reason 6: Oil prices remain high, and still look to go higher (it’s interesting how analysts predicted the increase in price, without even considering, or knowing, that there would be a “revolutionary” crisis affecting many oil producing countries, or did they, mmmm?)

Reason 7: Food prices are increasing, worldwide. The UN (United Nations) says it does not see any improvement in food supply worldwide. I have read that Chinese wheat farmers will have only enough harvest for subsistence in 2011, nothing left over to sell. Across the world the food supply (“supply” is the key word, because some areas have plenty of crops but they aren’t getting to market) situation is getting worse for a number of reasons, from climate change, to the cost of transportation, to lack of credit, to political/social instability. A new problem adding to food supply issues is that migrant workers are not working. This is due to things like anti-migrant attitudes in the U.S., and the increasing violence in North Africa and the Middle East.

Reason 8: Union busting in the United States. Why should this be considered a factor? Because the goal of union busting is to reduce pay and benefits for employees. If workers are going to be making even less than what they are now, then that’s less they’ll spend while shopping. Gee, isn’t the U.S. economy a “consumer” based economy, which would mean the more a worker spends the better it is for the economy?

Reason 9: Stagnant pay for 90% of U.S. workers. Recently the IRS (Internal Revenue Service) reported that their own study, into the wages and salaries of taxpayers, reveled that 90% of taxpayers had no increase in pay in the past 20 years (when adjusted for inflation). The study also showed that the top 5% of taxpayers saw a 33% increase in earnings over the same period (also adjusted for inflation). Basic economics states that for an economy to do well the money in the system needs to go through as many hands as possible. Clearly the money is staying at the top and not trickling down.

Reason 10: This is probably a very important sign that there is no U.S. economic recovery. The world’s largest bond fund, PIMCO’s Total Return Fund, dumped all its U.S. government bonds, then moved into cash/cash equivalent big time. Why is that important? PIMCO used to be the biggest holder of U.S. bonds. That’s because they trusted that the U.S. government could pay its debts. By selling ALL its U.S. bonds PIMCO is indicating that they don’t think the U.S. government can pay back its debts. PIMCO has actually told other investors to get out of U.S. bonds. Not good. The move into cash is a traditional investor’s way of preparing for the worst. How much did PIMCO move into cash? In January PIMCO’s cash holdings were about 5%, now they are at 23%, a big jump. PIMCO is now selling off mortgage backed securities, this indicates that PIMCO is expecting another drop in the housing market.

There are plenty of other reason to list, you can do your own homework. Some of my sources: Voice of America, Reuters, CNN, Russia Today, The Atlantic. Do your own research, I’m not getting paid for this.

Business/Economics, Idaho, U.S.

Proof that Congress is Above the Law: Insider Trading. Idaho Senator Crapo Involved

Ever wonder why our Federal government does little, or nothing, when it comes to finance reform, or investment reform?  Maybe it’s because they’re getting rich from insider trading.  And it’s legal for them, but not for us.

Members of Congress participate in a 9-11 remembrance ceremony on the East Front steps of the U.S. Capitol in Washington on September 15, 2010. UPI/Roger L. Wollenberg Photo via Newscom

It is against the law to buy and sell stocks based on information that the general public is not privy too, unless you are a member of Congress, or a Congressional Staff member.  Can you say legalized corruption?  The Wall Street Journal recently reported that congressional staff members are making stock trades that are directly related to their jobs.  What a deal!  Your job is to create laws and policies, that regulate the investment industry, and as a result you to know all kinds of details that the public would never know and allows you to make trades based on that info!  And, you make it illegal for anyone else to do the same!

WASHINGTON - NOVEMBER 13: U.S. Sen. Mike Crapo (R-ID) listens during a hearing before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill November 13, 2008 in Washington, DC. The hearing was focused on 'Oversight of the Emergency Economic Stabilization Act: Examining Financial Institution Use of Funding Under the Capital Purchase Program.' (Photo by Alex Wong/Getty Images)
Senator Mike Crapo (R), Idaho

A staffer, Karen Brown, working for Idaho’s Senator Mike Crapo (R), is reported to have made several trade deals with Bank of America (a leading home fore-closer bank), making her an investment gain of 43%.  When asked by the Wall Street Journal about it, Senator Crapo said the trades were made by Mrs. Brown’s husband, and that she would be amending her disclosure forms to show that.  The problem with that answer is that, as of October 23rd, Karen Brown’s latest disclosure forms shows her making additional Bank of America stock purchases.

This year, Represenative Brian Baird (D), of Washington, tried to get Congress to pass a bill that would make it illegal for them to do insider trading.  In the House of Representatives only 9 members endorsed the bill.  In the Senate no one endorsed it.  That should tell you that they all need to be fired!

Business/Economics, International, U.S.

From Russia to Coca Cola; Big Profits. From Coke to Russia; $1 Billion.

Coca-Cola reported a third quarter profit for 2010.  Russia being their biggest market, with 30% growth in the past year.  Coke’s North American market (Canada, United States and Mexico) had only 2% growth.  A very obvious sign, I think, of who has the money to spend.

Coca-Cola has figured out where the money is and has announced that it will invest $1 billion into their Russian operation, over the next five years.  Another obvious sign, to me, that the U.S. economy isn’t ’bout to recover soon.

Who loves ya baby?  Not the the United States.  From Russia with love.

Business/Economics, Idaho, U.S.

Pocatello, Idaho, Could be Site of New Super VA Clinic

A little history:  When I was a student/employee at Idaho State University, in Pocatello, Idaho, there was hope that the State of Idaho would use the old hospital to create a much needed medical school.  After all, the local economy was going down, a new owner of the hospital was building a new hospital and vacating the old one, and, the United States is suffering from not enough medical personnel.  But, our wise state leaders basically said no (some of those leaders are currently campaigning for re-election).

On to plan B.  The owners of the Portneuf Medical Center (PMC) announced that they have been working to convince the Federal Department of Veterans Affairs (VA), to turn the soon to be vacant old hospital (West Campus facility) into a Super VA Outpatient Specialty Clinic.

PMC West Campus, Pocatello, Idaho.

The new PMC hospital (East Campus facility) is complete, and they will be moving out of the old West Campus.  The new East Campus should be open by the middle of 2011.

PMC East Campus, Pocatello, Idaho.

Officials from the cities of Pocatello, and Chubbuck, as well as Bannock County officials, are working to help convince the VA to choose Pocatello.  What are the benefits?  Because of the War on Terror there is an increasing need for VA clinics and hospitals.  The old West Campus hospital would be ready made, no need to build a new facility, and, PMC says they will even leave medical equipment behind.  The location would mean that East Idaho, Montana and Wyoming veterans would not have to travel to Salt Lake City, Utah, for treatment.  Idaho State University, located right next to the West Campus, would be involved because they are already getting Department of Defense grants for several veterans programs.

A recent meeting with officials in Washington D.C. revealed that funding has become an issue, even with the fact that the VA wouldn’t have to build anything.  I think the residents of Idaho need to get behind this plan, especially since the Idaho National Guard (including members from Montana and Oregon) is currently serving another War on Terror tour of duty.

Business/Economics, Idaho, U.S.

Beat the Food Crisis, Go Native. Free Seeds?

Our civilized society has taken too many things for granted, like where our food comes from.  Mass produced by big farms, using lots of chemicals, and even genetic modification.  Those chemicals and modifications are supposed to help our traditional crops produce more, and handle extreme weather.

Mother Nature already has plants that can do that, they’re called Native Plants, and you can eat them (not all of them, of course).  How do you know which native plants you can eat?  You can check your local bookstore, or public library, for local books on the subject.  You can check the internet, under native plants and whatever state you live in.

Can We Eat It? City Creek, Pocatello, Idaho.

In Idaho an organization has formed that is pushing for the use of native plants in landscaping (because they can save water and are fire resistant), and native plants you can eat.  The Boise based Idaho Native Plant Society even sponsors plant sales and seed exchanges.

Don’t think of snatching some native plants out of the wild, believe it or not, there is such a thing as plant poaching.

There’s a seed bank that has spent decades searching the world for food plants that do well in Idaho’s climate. They have lots of high altitude crops, Siberian Tomatoes, and Tomatoes developed by the University of Idaho (I think the company used to be in Idaho, but relocated to Arizona. You can still order the seeds).

Want to start a garden but don’t have the money?  Texas based The Dinner Garden gives away seeds.  They admit that they are backlogged trying to meet requests for seeds.  Their website says they have a partner in Kimberly, Idaho.

Business/Economics, Idaho, U.S.

Idaho part of Growing Concern over Unemployment Fraud commited by Employers, Or are they?

The use of third party administrators (law firms) by employers, to challenge unemployment claims, is not only on the rise, but,  just like the mortgage fiasco, is starting to look like many cases are fraudulent.

Early this year, the Idaho Department of Labor sent a letter of complaint to one of the biggest third party administrators (TPA), Talx.  Talx, a division of Equifax,  represents Walmart, Home Depot, Marriot, Best Buy, FedEx and even PBS.

It was a PBS program, called Need to Know, that reported the growing problem of TPAs working to deny unemployment benefits for those who qualify.  Unemployment benefits are paid out to people who are laid off (and continue to meet requirements to keep getting the benefits, until they find a new job), or to people who’ve gone through a legal process which proves the were fired unjustly.  What’s happening is that many unemployment  benefits are being denied because the employers are falsely claiming the employee was fired, when they were laid off.  Or, in the case of wrongful firings, the TPAs are appealing those cases, even when it is obviously the fault of the employer.

The resulting court cases are, of course, partly paid for by taxpayers.

Some states claim that Talx intentionally delays unemployment claims, floods courts with protest letters and lies about how an employee lost their job.  In May, the Idaho Department of Labor announced that agreements were made with Talx.  Those agreements seem weak to me:

  • Collaboration on training for Idaho employers on the state unemployment insurance system;
  • Modification of documents used by both TALX and the state in the unemployment claims process;
  • Development of performance expectations subject to ongoing review and analysis

These are things that should already be the norm.  Also, Idaho’s unemployment system, Idaho Job Service, is actually paid for by employers, and employers actually get money back for having low unemployment payouts (at least that’s how it was explained to me, by a Job Service employee who’s job it was to refund the employer’s money).

There was supposed to be a follow up meeting between Talx and the Idaho Dept. of Labor, in July, but I haven’t found any info on it.

Business/Economics, Idaho, U.S.

Bad Loans, Mortgage Notes, Foreclosures all part of possibly the biggest Scam in U.S. History

A mortgage Note is the document that proves who holds the mortgage on the home that’s being bought.  There’s more and more evidence that the big banks can’t find those notes.  That includes Notes on homes that have already been foreclosed.  Another problem is that, in states that require court involvement, the judges never asked for proof of the Note.

The program, Need to Know, on the Public Broadcasting Service (PBS), interviewed Michael Hudson, an author who revealed how the big banks were intentionally trapping people in bad home loans.  Hudson says The big banks are using the same tactics in foreclosing.  He also says that many of the foreclosures involve home buyers who were looking to refinance their loans to save money, instead they were set up to fail.

OAKLAND, CA - APRIL 26: Homeowners wait to meet with Wells Fargo employees during a free workshop for customers who are facing mortgage payment challenges April 26, 2010 at the Oakland Convention Center in Oakland, California. Over 1,000 people who are in risk of slipping into foreclosure were scheduled to attend the mortgage workshop in hopes of getting loan modifications to avoid losing their homes. (Photo by Justin Sullivan/Getty Images)

The problem with the Notes is that the big banks quickly sold off the bad loans, and there doesn’t seem to be any record keeping regarding the Notes.  In many cases, mortgages were sold several times over to other banks, and as investment schemes.  Hudson says the push to foreclose is a way of making more money for the big banks.  In other words the bad loans, the reselling of mortgage loans, and now the foreclosures, are all part of a big money making scam by corporate America.

MIAMI - OCTOBER 01: A pre-foreclosure sign is displayed outside a home on October 1, 2009 in Miami, Florida. Declining home prices, low mortgages rates and government stimulus programs have helped push up the number of pending home sales according to the National Association of Realtors, as they rose by 6.4 per cent in August and were up by 12.4 per cent from a year ago. (Photo by Joe Raedle/Getty Images)

Michael Hudson says the Federal government has done almost nothing about this probable crime against American home buyers.  It’s the states that have taken the most action.  But each state has their own foreclosure laws, which seem to be adding to the mess.  Hudson says that the reason why President Obama isn’t ordering a halt to foreclosures, is that he could be held politically responsible for any crash in the housing market.  That would suggest that the current housing market is actually being driven by the foreclosures.

LAS VEGAS - MARCH 21: Countrywide Home Loans home mortgage consultant Al Lizarralde (L) and RE/Max Central realtor Brenda Zablockis leave a bank-owned house during a RE/MAX Central bus tour of foreclosed homes March 21, 2009 in Las Vegas, Nevada. RE/MAX Central of Las Vegas co-owner Ruth Ahlbrand said the Las Vegas area has been one of the top three worst foreclosure markets and one of the top three worst markets for slumping home prices in the United States since late 2007. Ahlbrand said the real estate group began giving tours for prospective buyers three times a week in February 2008, in an effort to clear inventory of foreclosed properties. (Photo by Ethan Miller/Getty Images)

Another article, in the Executive Intelligence Review, says that this is all part of the dying last gasp of our country’s financial system.  For too long investments have been sold, that were on paper only, no real assets.  So the bad loan scandal was how the big banks set things up to grab some real assets, and the foreclosure scandal is how the big banks are cashing in those assets to pay off the investors.

Business/Economics, International

Food Crisis: Drought, Floods, now Locust in Australia

Australia is struggling to keep it’s lucrative agriculture industry booming.  Some areas of Australia are dealing with the worst drought on record.  Other areas are dealing with floods, and now Locust.

PARKES, AUSTRALIA - JANUARY 26: A lamb stands in a dry paddock on the 10,000 acre property owned by the Orr family on January 26, 2010 in Parkes, Australia.The Orr family received 13 inches of rain in 2009 and have been hand feeding stock for approximately 8 years. Drought in New South Wales has increased by 1%, the state is now believed to be 95% marginally or fully in drought despite some rain during the Christmas period. (Photo by Lisa Maree Williams/Getty Images)
Parkes, Australia, dealing with drought.WANGARATTA, AUSTRALIA - SEPTEMBER 06: Floodwaters surround Painters Island Caravan Park on September 6, 2010 in Wangaratta, Australia. Many parts of Victoria were devastated by flood waters when heavy winds and rains inundated the area causing the worst flooding in over a decade. The State Emergency Service has ordered the evacuation of several cities and are warning residents that the threat is not yet over. (Photo by Scott Barbour/Getty Images)
Wangaratta, Australia, dealing with floods.
This is a major threat to Australia’s economy.  Their economy is based mainly on service industry, but, it’s their agriculture industry that’s boosting their economy.  Australia has profitable agriculture trade deals with other countries, that’s helping Australia see a 1.20% growth rate this year.  It’s also helping to keep their unemployment rate around 5.10%.
Margaret River Western Australia. 13/01/2010 Voyager Estate Winery www.voyagerestate.com.au Netting protects the crop from Silvereyes Photo Roger Parker
Margaret River, Australia, using Locust nets.

The struggles against Mother Nature in Australia will add to the growing price of agriculture commodities, and the looming Food Crisis.

Business/Economics, International

Senate Passes Retirement Reforms People say Strikes will Continue

The French Senate passed the controversial bill to increase the retirement age, as well as other rules.  At last count there were 250 amendments to the bill.  President Sarkozy issued a directive which allowed the Senate to vote without further deliberation.

General view inside the French Senate where debate on the government's pension reform bill continues in Paris October 22, 2010. French unions hardened their stance on Friday ahead of a final vote on the French government's pension reform raising the retirement age which is expected later in the day. REUTERS/Charles Platiau (FRANCE - Tags: POLITICS EMPLOYMENT BUSINESS CIVIL UNREST)

Most university students, and union members, voted to continue strikes.

French university students raise their hands to vote during the General Assembly at the Tolbiac University in Paris October 22, 2010. Elsewhere refinery labour unions hardened their stance ahead of a final vote on French government's pension reform expected later in the day. REUTERS/Julien Muguet (FRANCE - Tags: POLITICS EDUCATION BUSINESS)
Striking workers of French oil giant Total vote to continue the strike during a general assembly in the oil refinery of Donges, near Nantes, October 22, 2010. French police cleared access to the main refinery supplying fuel to Paris early on Friday as unions hardened their stance ahead of a final vote on French government's pension reform expected later in the day. REUTERS/Stephane Mahe (FRANCE - Tags: EMPLOYMENT BUSINESS CIVIL UNREST ENERGY)

Part of the reforms include the number of years a worker must contribute to the retirement plan; increased to 41.5.  The French reforms are still not as drastic as other countries, such as Greece or the United Kingdom (Britain).

Business/Economics, Idaho, U.S.

Details about Allstate Chubbuck Call Center jobs

It seems the local East Idaho television news didn’t tell the story clearly concerning the Allstate Customer Information Center (CIC), planned to be built in Chubbuck, Idaho.

It is not part of the Pine Ridge Mall property.  It will be built on a vacant lot that is part of the Home Depot plaza, aka The Crossings.  The vacant lot was originally intended for smaller retail spaces, but, no contracts were signed so it sat vacant for several years.

The Crossings, Hawthorne Road, Chubbuck, Idaho.

In reading several articles in the Idaho State Journal newspaper, it became clear that the claimed 500-600 jobs is just an optimistic goal.  Only 25 people will be hired in February 2011.  More people will be hired closer to the opening date, and the total amount of employees will depend on how many calls the CIC gets.

For those worried about making sales calls, Chubbuck Mayor Steve England says there will be no “soliciting calls”.  However, employees will be required to get a state insurance license.  Sorry, state law.  Also, employees will have to get a license from every state they handle calls from.  Allstate says part of their training will include prepping for the license exam.

Training will be 6 weeks, plus one week for the license prep.  Allstate encourages college courses, and, after one year of employment, they will reimburse employees for college courses that pertain to the job.

Pay will start at $27,000 per year.  The maximum you could get is $50,000.  There are no details about how you could get the maximum, other than bonuses, but the number of licenses you have, and college courses, probably factor in.