An American Auto Bailout – For France?

ABC News by Johnathan Karl

View Original Article HERE

Attention U.S. taxpayers: You now own a piece of a French car company that is drowning in red ink.

That’s right. In a move little noticed outside of the business pages, General Motors last week bought more than $400 million in shares of PSA Peugeot Citroen – a 7 percent stake in the company.

Because U.S. taxpayers still own roughly one-quarter of GM, they now own a piece of Peugeot.

Peugeot can undoubtedly use the cash. Last year, Peugeot’s auto making division lost $123 million. And on March 1 – just a day after the deal with GM was announced – Moody’s downgraded Peugeot’s credit rating to junk status with a negative outlook, citing “severe deterioration” of its finances.

In other words, General Motors essentially just dumped more than $400 million of taxpayer assets on junk bonds.

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Legal skull-duggery in Greece may doom Portugal

The Telegraph by Ambrose Evans-Pritchard

View Original Article HERE

Europe has ring-fenced Greece's debt crisis for now but its escalating recourse to legal legerdemain has shattered the trust of global bond markets and may ultimately expose Portugal, Spain, and Italy to greater danger. MORE.......

CAUSE, EFFECT & THE FALLACY OF A RETURN TO NORMALCY

The Burning Platform - View original article HERE
The language in this piece is harsh and the message brutal. We strongly suggest you read and internalize it. Then, take the appropriate measures to protect yourself.

“Thousands upon thousands are yearly brought into a state of real poverty by their great anxiety not to be thought of as poor.” – Robert Mallett

I hear the term de-leveraging relentlessly from the mainstream media. The storyline that the American consumer has been denying themselves and paying down debt is completely 100% false. The proliferation of this Big Lie has been spread by Wall Street and their mouthpieces in the corporate media. The purpose is to convince the ignorant masses they have deprived themselves long enough and deserve to start spending again. The propaganda being spouted by those who depend on Americans to go further into debt is relentless. The “fantastic” automaker recovery is being driven by 0% financing for seven years peddled to subprime (aka deadbeats) borrowers for mammoth SUVs and pickup trucks that get 15 mpg as gas prices surge past $4.00 a gallon. What could possibly go wrong in that scenario? Furniture merchants are offering no interest, no payment deals for four years on their product lines. Of course, the interest rate from your friends at GE Capital reverts retroactively to 29.99% at the end of four years after the average dolt forgot to save enough to pay off the balance. I’m again receiving two to three credit card offers per day in the mail. According to the Wall Street vampire squids that continue to suck the life blood from what’s left of the American economy, this is a return to normalcy.

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Foreclosure Sales Flood Market.

SmartMoney by AnnaMaria Andriotis

View Original Article HERE

Foreclosures and other distressed properties account for more than a third of all home sales, and data released today suggests that figure may soon grow even bigger.

Lenders in January took back nearly 91,100 distressed properties, which includes foreclosures and short sales, up 29% from the previous month, according to data released this morning by LPS Applied Analytics, which tracks mortgage performance. In the next few months, experts say those homes will make their way back to the market to join the already high percentage of distressed homes being snatched up by buyers.

That addition of distressed properties will likely lead to further drops in home prices, says Tom Popik, research director at Campbell Surveys, a real estate research firm. Foreclosures and short sales accounted for roughly 35% of total existing home sales in January — up 16% from June, according to the National Association of Realtors. Over that period, the median home price fell 8.5% to $154,700. “Prices are going to continue to go down for a long time,” says Popik

To be sure, distressed properties tend to make up a greater share of overall sales in the winter when investors are the predominant buyers, says Walter Molony, a spokesman for the National Association of Realtors. Families typically purchase a home in the spring and summer before the new school year begins. And because families tend to avoid buying foreclosures, distressed properties make up a smaller market share of home sales during that time, he says.

Still, as banks reclaim more foreclosed properties and put them back on the market, experts say homeowners are likely to feel the impact of a nearby foreclosure on their own property’s value. On average, home property values drop about 1% when they’re within one-eighth of a mile from a residence that’s received a foreclosure filing, according to the Woodstock Institute, which researches foreclosures, and the Georgia Institute of Technology. When the home is sold – whether in an auction or taken back by the lender – homes within a quarter mile lose up to around 4% of their value, which they’ll need between two and five years to recoup, according to a separate study in the Journal of Real Estate Finance and Economics.

For homeowners, more foreclosure sales in their neighborhood can lead to losing home equity at a time when millions already owe more on their home than it’s worth. Less equity will make it harder to borrow against homes for renovations, repairs, or other purposes, says Spencer Cowan, vice president at the Woodstock Institute.

Real estate pros say those who want to sell will likely end up getting less for their property than they expected. That’s because they’ll be competing with foreclosed homes that sell at a roughly 29% discount on average, according to RealtyTrac.com. Of course, these homes may stand out to buyers who prefer to buy a move-in ready home or at least one that doesn’t require extensive repairs like most foreclosures do.

What’s bad news for sellers, of course, is good news for buyers. In particular, experts say the spike in foreclosures means buyers have more leverage to negotiate a price on a non-distressed sale if it’s in a market where a significant number of homes are in foreclosure. They may also be able to purchase a foreclosed home at a relatively low price (though they’ll likely have to pump money into it for repairs).

During the last quarter of 2011, foreclosure sales in Las Vegas accounted for 59% of all home sales – among the highest in the country — according to RealtyTrac.com. Those homes sold for an average discount of 19%. In Sacramento, foreclosures made up 50% of all sales and sold at a 25% discount. But while they may get a deal, buyers shouldn’t count on turning a profit quickly especially if foreclosures continue to rise in the area dragging property prices further down.

One Month to Go Until We Have the World's Highest Corporate Tax Rate

Americans for Tax Reform - View Original Article HERE

Just one month from today, the United States will have the highest corporate income tax rate in the developed world, surpassing Japan.

Just one month from today, Japan will lower their corporate income tax rate from 39.5 to 35 percent. When they do so, the United States will officially have the dubious distinction of possessing the highest corporate income tax rate in the developed world, a federal/state integrated rate of 39.2 percent.

To put that in perspective, the average in the developed world (OECD) is only 25 percent. Our six major trading partners--Canada, Mexico, the United Kingdom, Japan, Germany, and France--will all have a lower rate than we will have. As a result, capital and jobs will continue to flow overseas, rather than staying here to create jobs, increase wages, fund pensions, invest in new business, or grow nest eggs.

Country	Corporate Income Tax Rate
United States	39.2%
OECD Average	25%
Canada	27.6%
Mexico	30%
Japan	35%
Germany	30.2%
France	34.4%

President Obama last month proposed a plan to raise net taxes, but in the process lower the U.S. corporate rate to about 32 percent. That simply isn't worth it. In exchange for a jobs-killing net tax hike, the Obama plan would still leave us with a tax rate higher than the OECD average, and higher than all our major trading partners except Japan and France. No thanks, Mr. President.

Inflation: Not as low as you think

CBSNews.com by Kathy Kristof
View Original Article HERE

Forget the modest 3.1 percent rise in the Consumer Price Index, the government's widely used measure of inflation. Everyday prices are up some 8 percent over the past year, according to the American Institute for Economic Research.

The not-for-profit research group measures inflation without looking at the big, one-time purchases that can skew the numbers. That means they don't look at the price of houses, furniture, appliances, cars, or computers. Instead, AIER focuses on Americans' typical daily purchases, such as food, gasoline, child care, prescription drugs, phone and television service, and other household products.


The institute contends that to get a good read on inflation's "sticker shock" effect, you must look at the cost of goods that the average household buys at least once a month and factor in only the kinds of expenses that are subject to change. That, too, eliminates the cost of housing because when you finance your home with a fixed-rate mortgage, that expense remains constant until you refinance or move.


The group maintains that this index better measures the real-world impact of price changes, particularly for people on a budget. And, largely as the result of the recent run-up in gas prices, this "everyday price index" (EPI) suggests that Americans are being pinched far more tightly than the official inflation measure would have you believe.

Over the past year, the EPI is up just over 8 percent, according to the economics group. The biggest factor: Motor fuel and transportation costs are up 21.06 percent from year-ago levels. The cost of food, prescription drugs, and tobacco also have increased faster than the government's inflation measure, rising 3.56 percent, 4.21 percent, and 3.4 percent, respectively.


On the bright side, prices of household fuel (natural gas and electricity) and supplies have increased only 2.74 percent; recreation and personal care products are up less than 1 percent; and telephone or Internet services are down 0.66 percent.


Admittedly, the purchases that the EPI tracks make up slightly less than 40 percent of the average household budget. But Steven Cunningham, research and education director at AIER, says these items are what contribute to the "sticker shock at the gasoline pump and the supermarket check-out line."

Teens Getting Jobs To Help Their Families Make Ends Meet

CBS Sacramento

View Original Article and Video HERE

LOCKEFORD (CBS13) – Born out of necessity in this brutal economy there is now a different type of child support. This one involves teenagers looking for work in record numbers — trying to help their parents make ends meet.

But it’s easier said than done. The most recent numbers from the labor department show California’s unemployment rate at 11.1 percent. For teenagers in our state, the unemployment rate is at a staggering 35 percent. It’s the highest in the nation behind only Washington, D.C.

In the tiny town of Lockeford just east of Lodi, inside this small well-kept home, just off main street there’s a fight going on, but it’s not what you think. There are no punches being thrown. No blood being spilled, but there are tears being shed -– tears from a young woman in a battle she never thought she’d have to fight at such a young age.

“It’s pretty overwhelming,” said the Melissa Zarate.

The battle is survival in this gut-wrenching economy.

“Yeah, it makes me feel good because I can help my mom now,” said Melissa.

See, these are tears of joy, satisfaction and pride of a job well-done. It’s a job born out of necessity.

“I feel like I need to help my mom,” she says.

Eighteen-year-old Melissa is doing just that — by going to work.

The high school senior doesn’t make much working just 15 hours a week inside a Lodi thrift store, but nearly every penny of her paycheck (her first was for $128) is going toward fighting the battle so many families are facing. It’s going to help pay the bills

“Right now, I’m helping pay for gas and PG&E,” said Melissa.

Her mother, Martha, wasn’t thrilled about her oldest daughter feeling the need to get a job.

“I didn’t ask her to go to work. She wanted to go because she was seeing that I was struggling,” said Martha.

Being a single mother with four children is a tough road. It’s even tougher when you make $22,000 a year as a teachers’ assistant.

“Everything is so expensive; gas, food and clothes and just my income, it’s not enough for five in the family,” said Martha.

So Martha has decided to go back to school to study English. An A.A. degree will help increase her salary and keep her current job.

Yes, daughter Melissa is her tutor and her younger brother’s as well.

It’s a lot for an 18-year-old to handle.

“And I guess maybe it’s too much for her. I don’t know I’ve never asked her that question,” said Martha.

When asked if it is too much, Melissa says “no.”

Her answer is not surprising and her maturity is impressive. But the speed in which Melissa Zarate is being forced to grow up is a reflection of these tough times. And she’s not alone.

“In the last three years the number of young people coming in has doubled,” said Christine Welsch at SETA /Sacramento Works.

Christine is with a Sacramento-based group called SETA that helps young people find jobs. The reeling economy has given teenagers a real wake-up call.

“You wouldn’t think a 17-year-old would be even thinking about paying rent to their parents, but they’re feeling that burden,” said Christine.

Feeling the burden but meeting the challenge, Melissa says she wouldn’t have it any other way.

Remembering that first extra dollar she was able to give her mom was priceless.

“It felt good, yeah,” said Melissa.

She realizes that money matters, yes, but family matters more.

Because of the tough job market for teenagers, it took Melissa over a year to find her job. She says many of her friends who need work just can’t find it and their families continue to struggle.