4 SIGNS THAT AMERICA IS FOLDING AS PHAROAH DID UNDER DIVINE CHASTISEMENT

WASHINGTON – Within the vast pool of 15.4 million unemployed workers, a split is emerging: The number of long-term jobless — those out of work six months or longer — is growing, while the number of short-term unemployed is declining.

The trend highlights a considerable challenge for the economy and policymakers: finding a way for the millions of Americans laid off last fall and early this year to get back to work.

The data, buried in Friday’s unemployment report, are stark: The number of Americans out of work for 27 weeks or more reached 5.9 million last month, the most on records dating from 1948. That’s 18 percent more than just three months ago, when the total was just below 5 million.

The tally of those out of work for 14 weeks or less, however, has dropped to 6.3 million from 7.1 million in August, a decline of about 11 percent.

Looking at it another way, the long-term jobless now make up 38.3 percent of the unemployed population, not that far from the 41.1 percent accounted for by those out of work for 14 weeks or less. (The rest are in the 15-to-26 weeks bracket.)

That’s a sharp change from August, when the short-term unemployed made up nearly half the total, while the longer-term jobless were only a third.

In some ways, the dichotomy is good news, in that it reflects a slowdown in layoffs. The Labor Department said Friday that employers cut a net total of 11,000 jobs in November, down from 111,000 the previous month. The unemployment rate dropped to 10 percent from 10.2 percent in October, the first decline since July.

That gives analysts hope the economy could begin generating jobs in the next few months, after shedding 7.2 million in the past two years.

Still, “new hiring may not be picking up all that much,” said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank. “So what you’re seeing is less people thrown into unemployment.”

And without more jobs, the long-term unemployment problem is likely to linger. Federal Reserve Chairman Ben Bernanke has expressed concern that people caught in long spells of unemployment could see their skills atrophy.”

#2.)”

Dec. 5 (Bloomberg) — Treasury Secretary Timothy Geithner disputed claims by Goldman Sachs Group Inc. executives that the bank could have survived the financial crisis without government help and said it and other Wall Street firms should show some restraint in handing out bonuses this year.

“It is very important that we change the way these executives are paid, the form of compensation, this year,” Geithner said in an interview yesterday for Bloomberg Television’s “Political Capital with Al Hunt,” which is being aired throughout the weekend. “We have to end that era of irresponsibly high bonuses.”

President Barack Obama has blamed compensation tied to excessive risk-taking for fueling the deepest financial crisis since the Great Depression. The administration has named a special master to approve compensation packages at firms that have received the biggest government bailouts.

Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co.’s investment bank are set to pay record combined bonuses this year, according to analysts’ estimates. Goldman set a Wall Street pay record in 2007 when its compensation totaled $20.2 billion, including $68.5 million for chairman and chief executive officer Lloyd Blankfein.

Blankfein told Vanity Fair magazine in an article published online this week that he thought the company could have survived the financial turmoil on its own without government help. Goldman’s president, Gary Cohn, was more definitive. “I think we would not have failed,” he told the magazine. “We had cash.”

Geithner, 48, took issue with that, saying that the entire financial system was at risk at the height of the crisis, including Wall Street’s big institutions.

‘Classic Bank Run’

“None of them would have survived” had the government stood aside and let the crisis run its course, he said. “The entire U.S. financial system and all the major firms in the country, and even small banks across the country, were at that moment at the middle of a classic run, a classic bank run.”

New York-based Goldman Sachs, the fifth-largest U.S. bank by assets, accepted $10 billion from the Treasury and other forms of government support last year. It has since returned the funds with interest, as have firms including Bank of America Corp., JPMorgan Chase and Morgan Stanley.

Geithner said that most of the money the federal government injected into banks through the Troubled Asset Relief Program will likely be paid back. “We now estimate that we’re probably going to have $175 billion in repayments from the banking system by the end of next year,” he said.

Goldman spokesman Lucas van Praag said the firm recognized that it would have failed had the financial system broken down.

Government Action

“If the financial system collapsed, we would have collapsed too,” he said. “We believe that government action averted a major systemic problem.”

He added that Goldman acted on its own to raise capital amid the turmoil. “We had cash and funding that would have allowed us to survive for quite a long time,” he said.

Geithner said that even institutions that have repaid the government should show restraint in paying out bonuses, arguing that Wall Street’s compensation practices had encouraged excessive risk-taking.

“We want to see fundamental constraints in how senior executives are paid,” the Treasury secretary said.

He said he wants compensation at financial institutions to be tied more to their long-term performance, rather than to short-term gains. Should those gains prove ephemeral, the bonuses would be clawed back, he added.

“The basic problem we face across the system is that executives were paid for taking imprudent risks,” Geithner said.

The Federal Reserve has said it will review the 28 largest banks to ensure that compensation doesn’t create incentives for excessively risky investments. It also offered guidelines on making pay more tied to risk management.

To contact the reporters on this story: Rich Miller in Washington rmiller28@bloomberg.net; Christine Harper in New York at charper@bloomberg.net.

Last Updated: December 5, 2009 00:00 EST”

#3.)”

WASHINGTON (Reuters) – More than one-quarter of homeowners receiving help under a U.S. government foreclosure prevention plan are behind on their new mortgage payments, a Treasury Department survey has found.

Some 650,000 borrowers are participating in the trial phase of the Obama administration’s Home Affordable Modification Program, a $75 billion taxpayer-financed program launched this year.

Most home loan modifications result in lower monthly payments, although some lead to reduced principal on mortgages.

Trial modifications were initially for three months, but the Treasury added 60 days, effectively making them last five months.

Homeowners must submit more detailed documentation before they can have their loan modifications made permanent.

A Treasury Department survey of large mortgage servicers found “over 73 percent of borrowers are current in their trial plan payments,” Assistant Treasury Secretary Herbert Allison told a congressional oversight panel.

That leaves about 27 percent who are delinquent on the payments.

Allison provided written answers to questions raised at an October hearing before the Congressional Oversight Panel, which monitors the government’s foreclosure prevention plan and other financial rescue efforts.

Allison said that “while not all eligible borrowers will convert to permanent modifications, it is too early to estimate a failure rate, diagnose causes and predict future success rates.”

Experts say the conversion rate to permanent loans is the key to determining the program’s ultimate success or failure.

The Treasury has not published figures on how many trial loan modifications have been made permanent, but it said it will start doing so this month.

The next monthly report on the program will be released next week, Treasury Department spokeswoman Meg Reilly said.

This week Treasury officials threatened to fine mortgage lenders unless they speed efforts to give hard-pressed homeowners a permanent break on monthly payments.—–

According to a report from the congressional oversight panel, only 1,711 permanent mortgage modifications had been offered as of September 1, an indication of how reluctant banks seemed to move beyond trial offers.

(Reporting by Lisa Richwine; Editing by Xavier Briand)

Copyright 2009 Reuters News Service. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.”

#4.)

Eight of Ten Americans Want to Audit the Fed

Doug Bandow
Campaign For Liberty
Sunday, Dec 6th, 2009 

Explains Rasmussen Reports: 

Federal Reserve Board Chairman Ben Bernanke on Thursday voiced his opposition to legislation calling for regular audits of the Fed’s monetary policies, but 79% of Americans think auditing the Fed is a good idea. 

A new Rasmussen Reports national telephone survey shows that just seven percent (7%) of adults oppose auditing the Federal Reserve and making those results available to the public. Fourteen percent (14%) are not sure. 

The new findings mark a four-point increase in support for auditing the Fed from July. The audit – to be conducted by the General Accounting Office, Congress’ investigative agency – was first proposed by Republican Congressman Ron Paul and is now part of the House’s version of a bill putting more regulatory controls on the financial sector. The Senate is more skeptical of the audit proposal. 

Moreover, twice as many Americans oppose as support the reappointment of Ben Bernanke.  After nearly a century, it’s time to make the Federal Reserve accountable for its policies.” 

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