KeNo's Housing and Economic Portal: Thursday August 20 Housing and Economic stories

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Official says China's jobless situation 'very grave' despite improving economy - (www.latimes.com) China's jobless situation is "very grave," with millions out of work due to the global crisis and the threat that unemployment might rise despite recent improvements in the economy, the government said Tuesday. Beijing is trying to create jobs for laid-off workers, new college graduates, migrants and others, said Wang Yadong, deputy director of job promotion at the Ministry of Human Resources and Social Security. "The employment situation in China is still very grave. We are still under enormous pressure to provide employment services," Wang said at a news conference. Officials have warned that China's recovery is not firmly established despite an acceleration in economic growth last quarter to 7.9 percent over a year earlier, up from 6.1 percent the previous quarter. That was boosted by Beijing's 4 trillion yuan ($586 billion) stimulus, which is pumping money into the economy through building highways and other public works that have created construction jobs. "To make things worse, the financial crisis has still not bottomed out," Wang said. "There is still a great potential risk of unemployment." Employment is especially sensitive for the communist government, which bases its claim to rule on delivering economic gains and worries about unrest among jobless workers. As many as 30 million migrants lost jobs when factories closed as global demand for exports collapsed last year, according to the government. It has given no details of overall unemployment and how many new jobs have been created. Wang said Beijing is confident it can keep official urban unemployment below 4.5 percent this year after it hit 4.3 percent in the first two quarters. That rate measures only a narrow segment of the economy, focusing largely on big and state-owned companies, and it is unclear whether it shows anything about overall employment. Wang said the government would continue trying to boost domestic demand to spur job growth. About 3 million recent university graduates, or one-third of the total, are unemployed, Wang said. Many come from the urban elite of businesspeople and professionals who benefited most from China's economic reforms, and Beijing is trying to retain the support of their families by promising to make finding jobs for them a priority. Some 3 percent of the 67 million rural migrants who returned to cities following the Spring Festival holiday in February are still looking for jobs, according to Wang

Recovery doubts as UK injects more cash - (www.ft.com)

Central bank pumps £50bn into economy - (www.ft.com) Fresh doubts about the strength of the UK economic recovery emerged on Thursday after the Bank of England’s rate-setting committee surprised markets by voting to pump an extra £50bn ($84bn) into the economy. The bank’s monetary policy committee voted to extend its so-called quantitative easing programme of buying government and corporate bonds from £125bn to an unexpectedly large £175bn, while holding interest rates at 0.5 per cent. After the meeting, Mervyn King, governor of the Bank and Alistair Darling, chancellor of the exchequer exchanged letters about the expansion of the asset purchase facility – the government programme of gilt and corporate bond acquisitions. The decision came despite an array of brighter economic data this week, with upbeat survey results suggesting that the economy was emerging from recession. But the central bank said the “recession appears to have been deeper than previously thought” in the UK, although it noted that the pace of contraction had moderated. News of the decision saw sterling tumble as investors scaled back expectations of recovery. The pound lost more than a cent against the dollar and almost as much against the euro in minutes and failed to recover. It traded at $1.677 against the dollar and at 85.5p against the euro in late London trade. The European Central Bank also kept rates on hold as it made clear it had no intention of stepping up action to combat continental Europe’s recession.

GM gets booster charge for electric-vehicle program – (www.latimes.com) Instead of awarding money to new, innovative electric car and battery firms, the Obama administration decides to dump more cash to union-loaded dinosaur firms like GM and Ford to pay off his constituents. Americans should boycott bailed out GM and allow it to fail. The automaker is awarded the largest share of $2.4 billion in federal grants for the development of battery-powered vehicles. The new chairman of General Motors Co. drove the much-anticipated Chevy Volt plug-in hybrid prototype for the first time Tuesday. The next day, the federal government put up nearly $400 million to help him build it. After the first board meeting of the reborn, privately held GM, Edward E. Whitacre Jr. emphasized the company's commitment to becoming profitable, staying ahead of rivals and developing new technologies, particularly electric-powered vehicles like the Volt. "We have to move in that direction," the former head of AT&T Inc. told reporters in a conference call early Wednesday. "It's the right way to go." A few hours later, the Obama administration announced $2.4 billion in grants for the development of battery-powered vehicles, with the greatest share going to GM and firms it works with to build the Volt. GM, which has already received about $50 billion in federal loans to help it restructure and guide it through its recent bankruptcy, will receive about $250 million in grants, more than any other automaker. Roughly $146 million of that is earmarked for the Volt program, with $105 million more going to the production of future electric vehicles. Compact Power Inc., a unit of South Korean firm LG Chem, got a $151-million grant to manufacture the Volt's batteries. "GM brings more than a decade of company investment and experience in electric-drive vehicles to this project," GM Chief Executive Fritz Henderson said. "We appreciate the opportunity to quicken the development of this important work." GM's domestic competitors, Ford Motor Co. and Chrysler Group, were awarded $30 million and $70 million, respectively. A Phoenix company partnering with Nissan Motor Co., Electric Transportation Engineering Corp., got $99 million, while the top individual recipient was auto supplier Johnson Controls Inc., which received $299 million to build a battery plant in Michigan.

Rewarding Bad Actors - (www.nytimes.com) Americans are angry at Wall Street, and rightly so. First the financial industry plunged us into economic crisis, then it was bailed out at taxpayer expense. And now, with the economy still deeply depressed, the industry is paying itself gigantic bonuses. If you aren’t outraged, you haven’t been paying attention. But crashing the economy and fleecing the taxpayer aren’t Wall Street’s only sins. Even before the crisis and the bailouts, many financial-industry high-fliers made fortunes through activities that were worthless if not destructive from a social point of view. And they’re still at it. Consider two recent news stories. One involves the rise of high-speed trading: some institutions, including Goldman Sachs, have been using superfast computers to get the jump on other investors, buying or selling stocks a tiny fraction of a second before anyone else can react. Profits from high-frequency trading are one reason Goldman is earning record profits and likely to pay record bonuses. On a seemingly different front, Sunday’s Times reported on the case of Andrew J. Hall, who leads an arm of Citigroup that speculates on oil and other commodities. His operation has made a lot of money recently, and according to his contract Mr. Hall is owed $100 million. What do these stories have in common? The politically salient answer, for now at least, is that in both cases we’re looking at huge payouts by firms that were major recipients of federal aid. Citi has received around $45 billion from taxpayers; Goldman has repaid the $10 billion it received in direct aid, but it has benefited enormously both from federal guarantees and from bailouts of other financial institutions. What are taxpayers supposed to think when these welfare cases cut nine-figure paychecks? But suppose we grant that both Goldman and Mr. Hall are very good at what they do, and might have earned huge profits even without all that aid. Even so, what they do is bad for America. Just to be clear: financial speculation can serve a useful purpose. It’s good, for example, that futures markets provide an incentive to stockpile heating oil before the weather gets cold and stockpile gasoline ahead of the summer driving season. But speculation based on information not available to the public at large is a very different matter. As the U.C.L.A. economist Jack Hirshleifer showed back in 1971, such speculation often combines “private profitability” with “social uselessness.”

Shoeshine man faces more red tape - (www.sfgate.com) Another case of governments behaving badly and deserving to have funding removed. Larry Moore, the formerly homeless shoeshine guy, can't seem to get a break. He's beat alcoholism, homelessness, and poverty, but there's no beating City Hall. After shelling more than $400 for a permit for his shoe shine stand - with the help of some heartfeltsupportfrom generous San Franciscans - Moore was told last week that he had an outstanding warrant for trespassing and owed another $400. Moore said he was also lectured about the location of his stand -- it was 16 inches out of place -- and warned that he might have to move it. Larry Moore, the shoeshine guy, is facing more red tape. ''Here's someone who is trying to get himself straightened out and they are giving him a hard time,'' said Loren Lopin, an attorney who has been helping him out. ''How many more barriers are we going to put in front of this guy?'' Lopin wanted to get to the bottom of this, and called and officer at the Southern Station permit department, who was utterly unsympathetic. Although it is standard procedure that someone with an outstanding warrant must clear it to get a permit, anyone who has spent any time in the city knows that trespassing/loitering/sleeping on the sidewalk warrants are routinely dismissed. Many, if not most, of those are handled by a homeless advocate and the accused does not even have to appear. It may work out for Moore. He's been getting lots of help from everyone from police officers, to Department of Public Works officials, to the Mayor's Homeless Coordinator, Dariush Kayhan. ''I am willing to help Larry if I can,'' Kayhan said. ''This should just be a bump in the road for him, not a barrier.''

Police: Suicide victim despondent over money - (www.sfgate.com) man found dead in the bushes in a San Mateo shopping center parking lot apparently killed himself, police said Tuesday. The body of Jack Quon, 41, was found by a passer-by at the Borel Square shopping center on Bovet Road at 8 a.m. Sunday near his 2003 BMW sport utility vehicle. Police at first believed that someone had stabbed Quon between 12:30 and 2 a.m. Sunday, said San Mateo police Capt. Kevin Raffaelli. But an investigation revealed that Quon had been despondent over "severe financial problems" and had stabbed himself, Raffaelli said. A weapon was recovered at the scene, police said. On Monday, a relative received a package sent by Quon that contained a note "explaining his intent to end his life," Raffaelli said. Police confirmed that Quon had sent the package on Saturday. Quon leaves behind a wife and four young children.

L.A.'s homeless lose out in settlement - (www.sfgate.com) The city attorney stood on the roof of a homeless shelter high above the human misery of Skid Row in April and announced a $1.6 million settlement from a hospital accused of dumping about 150 mentally ill patients on the streets below. Rocky Delgadillo trumpeted the penalty, castigated those who took advantage of society's most vulnerable and praised the Union Rescue Mission's chief executive as an inspiration for the investigation that led to the settlement. What seemed like a big payday for the shelter and other nonprofits that have fought homelessness, mental illness and drug abuse on Skid Row for years, however, turned out to be no such bonanza. Instead, the lion's share went to an organization in Pasadena - a suburb a dozen miles away - to provide grief counseling to schoolchildren. Shelters ask why: Months later, the shelters say they can't figure out why Delgadillo, who recently finished his term of office and is slated to run for state attorney general, let $900,000 go outside the community they serve. The Mission and three other Skid Row providers received $50,000 apiece, and another group got $100,000. Another $400,000 in fines went to the city and county. While Delgadillo was still in office, his staff declined to discuss how Hathaway-Sycamores Child and Family Services came to reap the award. His office rejected a California Public Records Act request by the Associated Press on the grounds that negotiations in the case were secret. When contacted by the Associated Press, Delgadillo said donating to Hathaway-Sycamores was a preventive approach to what ails Los Angeles' youth and will prevent them from "ending up in a cemetery, jail or on Skid Row." 'Uphill battle': Delgadillo said Skid Row providers face "an uphill battle" in rehabilitating homeless people, so funding the children's mental health organization was "much better than a passive, Band-Aid, back-end approach." College Hospital, which paid the settlement, didn't know of Hathaway-Sycamores before the settlement, and the medical provider was "not the ultimate decisionmaker in regards to the selection of charities or amounts," the hospital's lawyer Glenn Solomon said.