D-Short

In Unemployment Rate Dips to 8.6% as 487,000 Drop Out of Labor Force I presented some quick facts on the drop in the unemployment rate.

• In the last year, the civilian population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.
• In November, those “Not in Labor Force” rose by a whopping 487,000. If you are not in the labor force, you are not counted as unemployed.
• Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Labor Force and Unemployment Rate Adjusted for Population Growth

Reader Tim Wallace responded with a very nice set of graphs and commentary. Wallace writes:

In the entire history of the labor force data, only in 1951, 1961, 1964, and 2009 did the labor force “shrink”. It also “shrank” in 2011 off 2010. Also note that from 1964 to 2007, only in 1991 at 631,000, 1995 at 723,000 and 2002 at 801,000 did the labor force fail to add more than 1,000,000 people. However, in 2008 the labor force only expanded by 776,000. This was followed by a loss of 826,000 in 2009, a trivial gain of 155,000 in 2010 and a loss of 67,000 in 2011. If you look at the average labor force growth from 1948 to 2007 of 1,579,000 the labor force should have expanded by 6,316,000 2008-2011. Instead the labor force expanded by a mere 38,000! Thus, 6,278,000 people are unaccounted for in the unemployment numbers based on historical averages. The final graph takes the adjusted data and calculates the unemployment number off the adjusted workforce and those that actually have jobs. The unemployment numbers using this historical trend method show the following numbers for November in these years: Unemployment Rate Adjusted for Population Growth 2007 4.7% 2008 7.3% 2009 11.7% 2010 12.4% 2011 12.2% I am sure it is just coincidence, but it is interesting to note that the flat lining of the labor force began in earnest with the Obama administration. Tim

The reason why banks do this is to manipulate numbers and show they are profitable. They cut their biggest expense which is human resources. It fixes the book short term but hurts the company in the long run since they will not be able to grow. This is not a true profit but just a smoke and mirrors trick.

Now that our same government has decided to crack down on their fraudulent practices, one of the major banks announce they will cut more jobs.  This is after they suckered in Warren Buffett into a $5 billion private investment.  Seriously, if the bank is simply insolvent, the FDIC needs to step in and liquidate this bank.  The odd part is the bank executives are all still getting paid million of dollar compensations even though the company is laying off troops of employees.  Yes, people who are invested in BofA deserve a haircut and should be forced to take losses.

RTTNews:

Financial giant Bank of America Corp. (BAC: News ), which is struggling with souring mortgage losses, is in talks to cut roughly 40,000 positions over a period of years as part of its initiatives for cost cutting, known as Project New BAC, reports said Friday, citing people familiar with the plans.

Job cuts may total about 10 percent of the bank’s total employee count of 288,000 in the next two to three years. Chief Executive Brian Moynihan reportedly said that the bank will cut assets as well, to make it easier to manage. He is expected to discuss the details of restructuring on Monday at a conference held by Barclays Capital in New York or during the bank’s next earnings conference call in October.

Moynihan recently had said that its time to simplify and streamline the organization, and make sure business processes are relevant with a smaller, more focused company.

It was reported earlier that the officials had set a preliminary goal of cutting expenses by 20 percent in consumer banking.

On September 6, Bank of America announced reshuffling and restructuring its operations management, and appointed David Darnell and Tom Montag to the newly-created positions of co-chief operating officers. The Bank said the first phase of change is nearing conclusion and expects significant expense reductions as a result. The reorganization is expected to align the bank’s operating units with its three core customer groups: individuals, companies, and institutional investors.

The bank’s Project New BAC was started in April 2011 with the primary objective of alignment of leaders with customer groups and simplifying the organization.

BAC closed Thursday’s regular trading session at $7.20, down $0.28 or 3.74 percent. In pre-market activity, shares are currently trading at $7.27, up $0.07 or 0.97 percent.

Now that our same government has decided to crack down on their fraudulent practices, one of the major banks announce they will cut more jobs.  This is after they suckered in Warren Buffett into a $5 billion private investment.  Seriously, if the bank is simply insolvent, the FDIC needs to step in and liquidate this bank.  The odd part is the bank executives are all still getting paid million of dollar compensations even though the company is laying off troops of employees.

MarketWatch:
If it is true, it would be another sign of desperation. The Charlotte Observer reports that Bank of America (NYSE: BAC) could lay-off 30,000 people over several years.

The bank has come under new pressure as the government announced a suit against 17 financial firms which it claims misrepresented the risk of mortgage-back securities they sold to Fannie Mae and Freddie Mac. The total losses from these was $200 billion. The possibility that the government can recoup of all that is unknown.

Bank of America (NYSE: BAC) has been rumored to need over $100 billion in new capital. There have also been rumors that the firm could be taken over by JP Morgan (NYSE: JPM) or another large American bank. B of A has attacked these as false, but its share price has done little to allay fears. The stock fell to $6.01 three weeks ago. Warren Buffett invested $5 billion in the bank which cause share to rally. Subsequent bad news pushed shares, which had recovered to $8.39, back to $7.25. The stock’s 52-week high is $15.31.

Bank of America can continue to deny it will need to raise large sums of money, an act which would nearly wipe out common shareholders. The firm’s stock says many investors have bet otherwise

Now, a few years after the fact after our corrupt politicians bailed out their lobby heavy “friends”, the US regulator has decided to sue the major banks.  I say get it done.  We need to get our money back, and if these companies fail in the process, so be it.  They don’t deserve to stay in business if they can’t pay their bills.  These are the same bailed out banks that are foreclosing on Americans everyday and use deceptive practices in loan modifications and predatory lending.

LA Times:

The Federal Housing Finance Agency suits, which are expected to be filed in the coming days in federal court, are aimed at Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others, according to three individuals briefed on the matter.

The suits stem from subpoenas the finance agency issued to banks a year ago. If the case is not filed Friday, they said, it will come Tuesday, shortly before a deadline expires for the housing agency to file claims.

The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

In July, the agency filed suit against UBS, another major mortgage securitizer, seeking to recover at least $900 million, and the individuals with knowledge of the case said the new litigation would be similar in scope.

Private holders of mortgage securities are already trying to force the big banks to buy back tens of billions in soured mortgage-backed bonds, but this federal effort is a new chapter in a huge legal fight that has alarmed investors in bank shares. In this case, rather than demanding that the banks buy back the original loans, the finance agency is seeking reimbursement for losses on the securities held by Fannie and Freddie.

The impending litigation underscores how almost exactly three years after the collapse of Lehman Brothers and the beginning of a financial crisis caused in large part by subprime lending, the legal fallout is mounting.

Besides the angry investors, 50 state attorneys general are in the final stages of negotiating a settlement to address abuses by the largest mortgage servicers, including Bank of America, JPMorgan and Citigroup. The attorneys general, as well as federal officials, are pressing the banks to pay at least $20 billion in that case, with much of the money earmarked to reduce mortgages of homeowners facing foreclosure.

And last month, the insurance giant American International Group filed a $10 billion suit against Bank of America, accusing the bank and its Countrywide Financial and Merrill Lynch units of misrepresenting the quality of mortgages that backed the securities A.I.G. bought.

Bank of America, Goldman Sachs and JPMorgan all declined to comment. Frank Kelly, a spokesman for Deutsche Bank, said, “We can’t comment on a suit that we haven’t seen and hasn’t been filed yet.”

But privately, financial service industry executives argue that the losses on the mortgage-backed securities were caused by a broader downturn in the economy and the housing market, not by how the mortgages were originated or packaged into securities. In addition, they contend that investors like A.I.G. as well as Fannie and Freddie were sophisticated and knew the securities were not without risk.

Investors fear that if banks are forced to pay out billions of dollars for mortgages that later defaulted, it could sap earnings for years and contribute to further losses across the financial services industry, which has only recently regained its footing.

Bank officials also counter that further legal attacks on them will only delay the recovery in the housing market, which remains moribund, hurting the broader economy. Other experts warned that a series of adverse settlements costing the banks billions raises other risks, even if suits have legal merit.

The housing finance agency was created in 2008 and assigned to oversee the hemorrhaging government-backed mortgage companies, a process known as conservatorship.

I remember when Bill Maher and Jon Stewart used to bash Bush. During the first year of Obama’s term, they use to say give Obama time (like most Obamabots), but now they know he is just as incompetent as Bush or maybe even worse. I think he was recently called Jimmy Carter 2.0.  Both comedians now know their presidential pick is a failure and now acknowledge it is OK to make fun of him like most of our corrupt politicians (see video below).

My biggest disappointment in his administration is his criticism on Bush and his abusive spending that got us into this bad recession. Yet, President Obama has taken it upon himself to be as fiscally irresponsible and has made it a goal to wastefully outspend his predecessor. The new 3 stooges Obama, Geithner, and Bernanke are no different than the original stooges Bush, Paulson and Bernanke.

Even though transparency has been a continued theme preached by President Obama and his administration, we continue to see the actions from deliberate planning out of public sight. I am specifically talking about the numerous FRAUD bailouts that reward companies for failing, the outlandish budgets that continue to increase the federal deficit which further harms our economy, and manipulated stress tests that have negotiated results by the banks to show them in a better light. Simply put, President Obama is just the democrat version of President Bush.

Did you fall in love with Obama? Why??

Huffington Post

I truly believe that I speak for so many young progressives that would be proponents for peace, clean food and water, and a government that actually helps and cares for its citizens.

After 8 years of GWB and the lies about WMDs, 9-11, Monsanto, Iraq…etc…anyone coming from the other party looked like a better choice. I was somehow still under the illusion that the Democratic Party would work for the people and not corporate/banking/defense industry interests.

I cried when Obama won. I really thought it was a new dawn for the US and the world as a whole. I was so ashamed of the Bush administration… all the violence and greed just made me ashamed to be from the US. Somehow though I still thought that there was a difference between the two parties.

I have to thank Mr. Obama for waking me up to this truth. When he showed support for Monsanto and big agribusiness, the continued (and escalated) warmongering, and even the continued selling-out of the American taxpayer to the Federal Reserve, the lightbulb went off in my head — they are all simply employees.

On the other hand, Dr. Ron Paul seems to be the only candidate that is talking about the big pink elephant in the room. The money wasted on war, the fact that our nation has been sold to international banks, and that the federal government is becoming a monster overtaking state autonomy.

I never would have thought that the day would come where I would actually consider voting for someone else than a democrat. I want the world to be clean and healthy paradise planet for the next generations and for those that are living here now. I want the freedom to be able to buy clean food and drink unfluoridated water. I feel that its not asking too much, but the current administration continues to take away these rights.

Ron Paul seems to be the only option, and the furthered bashing of him by the mainstream media shows that they see him as a threat. I seriously hope that his time will come in 2012.

Peace and Prosperity to the US and EVERY person on the planet! Here is to sanity in 2012.

Will the markets go up or down on Monday? Nobody knows and all we can do is wait and see, right? Yes, but you can also try to look at the data to figure out which is the likely scenario to play out. What I personally like to look at is the historical data which can be easily found for free on stock charts. The site even puts in the technicals so you don’t have to do it yourself or learn how to. Instead, now you can look at the charts and make your decision accordingly.

I posted the charts for 8/19/2011 below for the 3 major indexes. Hope it helps you. Cheers!

Politicians are the best liars. That is why you should never believe in them. Makes no difference whether they are Democrats or Republicans because they all break their promises. Were you one of the ignorant people who fell in love with Obama because of his promises 3 years ago? It’s OK if you did, that just means love made you blind to the truth and you got played yet again.

Seriously, at the time I was so happy we were getting rid of our old president and could do no worse. The problem was and is we picked the wrong guy to take his place. I must say in the last 11 years, America has become worse under the leadership or lack of it under Presidents Bush and Obama.  Obama is now being compared to being Jimmy Carter 2.0 which is not a compliment.

I watched the debates and listened to Obama back then. He was like many other BSers I met in my life. A smooth talker with no substance. He had no record to stand on. When you asked his supporters what he had accomplished back then you were met with the same dumbfounded look and stupidity as they stammered to recall something. Why all my friends and relatives seem to think he could accomplish anything at the highest level of politics was beyond me. In reality, Obama’s greatest accomplishment to date was winning the election. That’s where it ends in my opinion.

I occasionally get an Obama-bot on my blog trying to defend him but after all of Obama’s broken promises that has become an impossible task. The kool-aid has worn off, and the reality we live in today has sobered most Americans.

There are many commentaries of regret now in the media of why Obama has failed and disappointed many Americans’ expectations. I wonder where did these expectations come from? He had no real accomplishments before so why would you expect him to succeed?

St Louis Today commentary:

I was splashing around in Lake Michigan last week when the realization hit me like a wave — I was wrong about Barack Obama. I should have voted for Hillary Clinton in the Democratic primary three years ago.
At the time of the primary, the decision seemed easy. I saw in Obama the same qualities Jack Kerouac saw in Dean Moriarty in “On the Road.” He was ’something new, long prophesied, long a-coming.”
Hillary was not new. She represented the second act of “Billary,” and I had tired of that play long before it ended its eight-year run.
So I voted for Obama in the primary and then again in the general election. I even left the election night party at the Pageant — a party with an open bar and filled with state legislators, union guys and other acquaintances — to go to the Chase Park Plaza, where the Obama people were celebrating. I knew almost nobody at that second party, but I was there when the networks declared that Obama was the next president. People cried and hugged. I got teary myself. A black president. The times they are a-changing.
Indeed. They keep getting worse.
I heard a story on vacation that brought that home. A friend told me about a small company in Chicago that built auto parts. The company was about 50 years old and employed about 500 people. When the auto industry tanked, so did the company’s sales. Fortunately, the company had a long relationship with its bank and the bank was willing to work with it. Unfortunately, the bank was swallowed up by one of those too-big-to-fail banks that we had to bail out, and the megabank was not willing to work with the company. So it is out of business.
Admittedly, both the bailout and the merger occurred under the last administration, but the company was put down during this administration. What about all that change we were going to get?
It’s too easy to blame Republicans. Yes, they have blocked Obama at every turn, but that is the way of things in politics.
Frankly, there is nothing sinister with it. Conservatives and liberals have different visions. Of course one side is going to try to block the other. The blame, I think, lies with Obama. He is not strong enough to be an effective president.
Consider the debacle with the debt ceiling. The Democrats wanted to raise taxes on people making more than $250,000. The Republicans wanted to cut spending.
Obama said he’d go along with spending cuts if the Republicans would agree to some tax hikes. He was negotiating from a position of strength. The Republicans controlled only the House. The Democrats had the White House, the Senate and, more importantly, the people. Poll after poll showed that a majority of Americans favored raising taxes on the wealthy.
But it was Obama who backed down.
This was a fight he could have won. Consider hedge fund managers. On their earnings, they pay at the capital gains rate of 15 percent. According to a story last week in the Toronto Star, the top 25 hedge fund managers took home an average of $880 million last year. According to that same story, closing the loophole for hedge fund managers would save the Treasury $20 billion over 10 years.
Obama didn’t think he could win that argument? He didn’t just lose, either. He was pushed around. The speaker of the House wouldn’t return his calls. Obama whined a little and turned the other cheek.
Contrast his behavior with that of Bill Clinton, who had a similar tussle with Congress in November 1995. When an agreement could not be reached, Clinton stood his ground and allowed the government to shut down.
Obama did not have the fortitude for that. Maybe he was afraid the markets would react negatively if the debt ceiling was not raised. Guess what? The markets crashed anyway.
So here we are almost 2 1/2 years into his presidency. We’re still in Iraq, still in Afghanistan. The economy is still in the Dumpster. U.S. credit has been downgraded. We’ve got a half-baked health care reform law that is being challenged. The middle class is still getting crushed.
Why has Obama not lived up to the promise? He is clearly intelligent. For some reason, though, he was not ready for the rough and tumble of national politics.
Maybe his background is the reason. He went to a private prep school in Hawaii and then Columbia University, and Harvard for law. These were white-majority schools, to be sure, but also places with educated, enlightened people who were happy to see a black kid succeed. That is, I suspect, a big thing. Nobody ever wanted to see him fail until he became president.
Hillary had been tested. Eight years in the meat grinder. She’d have been a better president.

Read more: http://www.stltoday.com/news/local/columns/bill-mcclellan/article_a237aae3-40aa-5126-a65e-b82601b3069a.html#ixzz1UzAqXOv2