KeNo's Housing and Economic Portal: Monday February 8 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Sixty-Seven Cleveland Police Officers Laid Off - (www.officer.com) Layoffs notices officially took effect for 160 Cleveland firefighters, police officers and emergency medical technicians on Monday. The city’s public safety director said the cutbacks of 67 cops could be rescinded. "The Fraternal Order of Police, the union that represents all police supervisors will devote tomorrow. And I am hopefully, actually very confident, that they’ll make some contract concessions. Because, if they do, the series of demotions and reassignments that we’ve done can be receded and they can be rescinded very, very quickly," Martin Flask said. Seventeen ambulances were on the street Monday and that’s two more than budget cuts called for. Six emergency technicians have lost jobs. With a $23 million shortfall in the city budget, only concessions by unions can bring back those laid off. Firefighters are expected to vote again on an agreement by the end of the week, which would restore 38 positions.

Boston Police could lay off 200 - (www.boston.com) The Boston Police Department could be forced to lay off as many as 200 police officers because of cuts in state funding, wiping out hiring efforts that strengthened the force after homicides hit a 10-year high in 2005, according to two officials. It would be the first time in 27 years and only the second time in history that the city lays off police officers. City budget officials, anticipating large reductions in state funding in the current and coming budget years, have instructed city departments to submit draft budgets with cuts of between 7 and 10 percent. The two officials, who were briefed on budget deliberations and spoke on the condition of anonymity, warned that the Police Department cannot avoid significant layoffs if it is forced to make deep budget cuts. Layoffs may mean that the current academy class of 29 police recruits would receive pink slips on graduation day in May. The remaining layoffs would have to come from the ranks of about 2,241 officers, including 37 recruits who joined the force in November. Also facing layoffs under the draft budgets are Boston firefighters and teachers.

Tulsa Police Officers Laid Off - (www.fox23.com) Tulsa Police Chief Ron Palmer gave 155 officers pink slips today, amid city budget problems. The officers laid off are the lowest-ranking officers who were most recently hired. They will be getting 2 weeks’ severance pay, along with any unused comp time and vacation time. Many of the officers had to go to work today and will be on the job until the layoffs take effect next Friday. The layoffs represent nearly 20% of the total TPD force. The officers' last day of work will be January 29th. The layoffs will bring the police force to 653. That is the fewest number of officers Tulsa has had in more than 20 years. Chief Palmer, who announced his resignation today, delivered the news to the officers affected at the police academy. "One of my last duties is probably one of my most unpleasant duties, that is telling these kids they’re going to be laid off next week," said Palmer.

Wal-Mart cuts more than 10,000 Sam's Club staffers - (www.sfgate.com) Wal-Mart Stores Inc. will cut about 11,200 jobs at Sam's Club warehouses as it turns over the task of in-store product demonstrations to an outside marketing company. The move is an effort to improve sales at Sam's Club, which has underperformed the company's namesake stores in the U.S. and abroad. The cuts represent about 10 percent of the warehouse club operator's 110,000 staffers across its 600 stores. That includes 10,000 workers, mostly part-timers, who offer food samples and showcase products to customers. The company also eliminated 1,200 workers who recruit new members. Employees were told the news at mandatory meetings on Sunday morning. "In the club channel, demo sampling events are a very important part of the experience," said Sam's Club CEO Brian Cornell in a phone interview with The Associated Press. "Shopper Events specializes in this area and they can take our sampling program to the next level." Shopper Events, based in Rogers, Ark., currently works with Wal-Mart's namesake stores on in-store demonstrations. Sam's Club is looking to the company to improve sampling in areas such as electronics, personal wellness products and food items to entice shoppers to spend more.

Governor's approval rating 27% - (www.sfgate.com) Fifty-nine percent of voters also say Schwarzenegger will leave the state in worse shape than when he won office in 2003, after Gov. Gray Davis was recalled. California voters are overwhelmingly unhappy with Gov. Arnold Schwarzenegger and the state Legislature, according to a poll being released today. Just 27 percent of the 1,232 registered voters surveyed in a telephone poll this month approved of the job Schwarzenegger is doing, and only 16 percent approve of Sacramento lawmakers, according to the Field Poll. The bleak view of Sacramento politicians is shared by Democrats and Republicans and across demographic groups, poll director Mark DiCamillo said. "It's a pretty dismal report, and there are really no real changes from what we saw last October," he said. "What's sort of overhanging these ratings is the huge budget deficit that the state has to deal with and the public is aware of. They are sort of bracing themselves for what is coming. ... And they fault legislative leaders and the governor for getting us into this situation."

California May Issue IOUs Again If Budget Not Fixed - (www.bloomberg.com) California Controller John Chiang said he may have to use IOUs for the second year in a row to pay some government bills unless politicians close the $20 billion budget deficit facing the most-populous U.S. state. Chiang, the elected Democrat who pays the government’s expenses, said in a letter to Governor Arnold Schwarzenegger and legislative leaders today that California faces another potential “cash crisis” in July if lawmakers can’t reach a budget agreement before the fiscal year ends June 30. By July 29, California will have $1.1 billion less than it needs to pay its bills should lawmakers stall, he said. “If solutions are slow to emerge and if they are neither credible nor sustainable, California will once again be unable to timely meet all of its payment obligations and my office will be forced to seek costly emergency financing, or conserve cash by delaying payments or issuing IOUs,” Chiang wrote. The state issued $2.6 billion of the vouchers last year to pay bills, resorting to promissory notes instead of cash for the second time since the Great Depression as Schwarzenegger and the Legislature were deadlocked over how to close an imbalance that totaled $26 billion at the time. The tactic allowed it to preserve cash for the highest-priority bills, including payments to bondholders, until an accord was reached and the state was able to sell debt to generate funds.

Fannie Mae, Freddie Mac Should Be Eliminated, Frank Says - (online.wsj.com) A top House Democrat on Friday said his committee was preparing to recommend "abolishing" mortgage-finance giants Fannie Mae and Freddie Mac and rebuilding the U.S. housing-finance system from scratch. "The remedy here is...as I believe this committee will be recommending, abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance," said Rep. Barney Frank (D., Mass.), the chairman of the House Financial Services Committee. His comments initially rippled through bond markets on concerns that the government might pull away from the mortgage market. Many believe that's unlikely and that any revamp would include continued government involvement. The government took over the companies in September 2008 as loan losses mounted. Some Republicans have argued that the companies should ultimately be reduced in size and privatized, while at other end of the spectrum, some analysts have recommended turning the companies into government agencies. But several industry groups and academics have suggested that the government is likely to continue playing at least some role in the future of the companies.

Debt Burden Now Rests More on U.S. Shoulders - (www.nytimes.com) THE United States government borrowed more money than ever before in 2009, but its largest lender — China — sharply reduced the amount it was willing to lend. The United States Treasury estimated this week that during the first 11 months of last year China raised its holdings of Treasury securities by just $62 billion. That was less than 5 percent of the money the Treasury had to raise. That raised its holdings to $790 billion, leaving it the largest foreign holder of Treasury securities — Japan is second at $757 billion and Britain a distant third at $278 billion. But China’s holdings at the end of November were lower than they were at the end of July. Not since 2001, when China was still a relatively minor investor in Treasury securities, had the country shown a decline in holdings over a six-month period. During the full year of 2009, the volume of outstanding Treasury securities owned by the public — as opposed to United States government agencies like the Federal Reserve or the Social Security Administration — rose by $1.4 trillion, a 23 percent gain, to $7.8 trillion. In dollar terms, that was the largest annual increase ever, but as a percentage increase it slightly trailed 2008. With this week’s release of the November estimate of foreign holdings, China is on course to lend just 4.6 percent of the money the government raised during the year. That compared with 20.2 percent in 2008 and a peak of 47.4 percent in 2006.

Hoschton Georgia Dissolves Police Department - (Mish at http://globaleconomicanalysis.blogspot.com) Hoschton, Georgia a city with a population of 1,612 is out of cash and voted to dissolve the police department. Please consider Jackson deputies to patrol Hoschton. The council voted 4-1 last week to scrap the city's three-man police department and its municipal court system in order to save about $360,000 a year. The police department will be completely dismantled by the end of the month. Open police cases will be transferred to the Jackson County Sheriff's Office and all court cases that are not resolved will be handled in Jackson County State Court. "We could no longer afford to fund public service as a duplicate service," said Mayor Erma Denney, who took office last month. "Every property owner in Hoschton has already been paying for public safety through the sheriff's office and always has been." Hoschton leaders have struggled for more than a year to balance residents' desire for autonomous city services with vehement opposition to property taxes, which Hoschton property owners have not had to pay for more than 30 years. The previous council shrank the department from seven officers to four between 2008 and late 2009.

OTHER STORIES:

Obama Gets Assurances Senate Will Back Bernanke, Official Says - (www.bloomberg.com)

Dodd, Gregg Predict Bernanke Will Win Confirmation Vote - (online.wsj.com)

Bernanke second term in doubt - (www.reuters.com)

Bernanke’s Bid for a Second Term at the Fed Hits Resistance - (www.nytimes.com)

Democrats May Split Up Health Bill to Smooth Passage - (www.bloomberg.com)

Populist backlash puts Federal Reserve Chairman Ben Bernanke under siege - (www.washingtonpost.com)

Bernanke under pressure - (www.ft.com)

White House fights for Bernanke support in Senate - (news.yahoo.com/s/ap)

A Rift at the Fed Over the Bailout of A.I.G. - (www.nytimes.com)

Obama facing huge economic challenges ahead - (finance.yahoo.com)

Obama scrambles to revive economic optimism - (news.yahoo.com/s/ap)