Saturday January 1 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

New Jersey Pension Gap Hits $54 Billion - (blogs.wsj.com) New Jersey’s pension gap grew to $53.9 billion in the last fiscal year, up from $45.8 billion, thanks to market losses and a lack of state funding, according to figures released Thursday. Gov. Chris Christie’s administration said the gap, which reflected the state’s investment positions as of June 30, highlighted the need for proposed cuts to current public workers’ pensions. The $53.9 billion figure reflects the difference between the retirement benefits the state has promised to roughly 780,000 state and local workers over the next few decades and the amount on hand to pay those benefits. In addition, an accounting practice called “smoothing” allows the state to factor market gains and losses over several years — meaning pension funds, on paper, are still feeling the effect of the 2008 market crash. Christie, a Republican, wants to reverse a 9% pension bump workers received in 2001 under a Republican administration. Unions argue their members have an irrevocable right to benefits they have earned. The governor has challenged the unions to meet him in court.

Board votes to outsource parking operations at Grand Rapids airport - (www.mlive.com) Airport leaders unanimously selected a private firm to take over parking operations at Gerald R. Ford International Airport today, despite impassioned pleas by employees who will now have to reapply for their jobs and likely face pay and benefit cuts. The vote to select Chicago-based Standard Parking to manage parking came after several parking employees that are now employed by Kent County spoke during the public comment period. The group questioned the fairness of the process and asked the board to delay the vote and give them more time to negotiate to keep their current jobs. Finance Director Brian Picardat and airport leaders said the decision was difficult and based on a projected savings of $1.5 million over five years, even after a wage concession offered by current parking employees was factored in. In an article just prior to the decision, the Grand Rapids Press noted ... Parking agents who do maintenance and assist customers can make between $14 to $19 an hour, not including tips. Those jobs also come with nearly a 33 percent medical and fringe benefit package.

Crisis in Public Sector Pension Plans - (www.mercatus.org) Pension plans operated by state governments on behalf of their employees are underfunded by an estimated $452 billion according to official reports, with total liabilities of $2.8 trillion and total assets of $2.3 trillion in 2008. However, many economists argue that even these daunting liabilities are understated. Current public sector accounting methods allow plans to assume they can earn high investment returns without any risk. Using methods that are required for private sector pensions, which value pension liabilities according to likelihood of payment rather than the return expected on pension assets, total liabilities amount to $5.2 trillion and the unfunded liability rises to $3 trillion. The ability of governments to pay for the retirement benefits promised to public sector workers runs up against the reality of limited resources. The state reports that its pension systems are underfunded by $44.7 billion, when liabilities are discounted at the 8.25 percent annual return that New Jersey predicts it can achieve on funds' investment portfolios.

Alabama Town’s Failed Pension Is a Warning - (www.nytimes.com) This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry. Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full. Prichard stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow. The declining, little-known city of Prichard is now attracting the attention of bankruptcy lawyers, labor leaders, municipal credit analysts and local officials from across the country. They want to see if the situation in Prichard, like the continuing bankruptcy of Vallejo, Calif., ultimately creates a legal precedent on whether distressed cities can legally cut or reduce their pensions, and if so, how. “Prichard is the future,” said Michael Aguirre, the former San Diego city attorney, who has called for San Diego to declare bankruptcy and restructure its own outsize pension obligations. “We’re all on the same conveyor belt. Prichard is just a little further down the road.”

Still no money for Prichard pensioners - (www.fox10tv.com) From March 2010.... A bankruptcy court judge has given the City of Prichard two more months to figure out how they will pay retired city workers. Prichard pensioners have gone six months without a pension check. Prichard is operating under the protection of Title IX Bankruptcy, and for many people, that means no promised pension payments. After six months with no pay, Prichard pensioners put their faith into the courts. They hoped a judge would force the city to pay some, if not all, of the pension money it owes. However, the bankruptcy court judge said the city is not obligated to pay the retired workers just yet. The judge gave the city two more months to restructure the budget and present it to the courts. The city got more time, but unfortunately reality has already set in for Bobby Holifield and his family. "You can't begin to know the stress of this. My daughter is in college right now, my son just graduated from high school, he wanted to go to college. My daughter had to miss last semester in college and she will have to miss this semester. I can't afford to pay it. My son wants to go to technical school; I can't afford to pay for it. It makes me feel like a failure more than anything, when I did my part. I worked 32 years to get my pension. They owe it to me, it's not something I'm asking them to give me," Holifield said.

OTHER STORIES:

Mortgage Rates May Have Hit Bottom - (www.nytimes.com)

New tax law packed with obscure business tax cuts - (www.google.com/hostednews/ap)

New Tax Law Packed With Goodies for Business - (www.cnbc.com)

For One Couple, A Mortgage Nightmare Has a Happy Ending - (www.cnbc.com)

China Raises Interest Rates as Inflation Accelerates - (www.bloomberg.com)

China Will Boost Regulation of Hot Money Inflows, PBOC’s Ba Says - (www.bloomberg.com)

Gasoline Prices Hit $3 a Gallon Nationwide - (www.reuters.com)

China's Central Bank Raises Interest Rates Again - (www.cnbc.com)

Friday December 31 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Buying a hillside house? Be careful - (www.ocregister.com) As the winter season ushers in heavy rains for Orange County, so too does the risk for geological problems – like landslides, flooding and general shifts in the foundation. From Yorba Linda to Laguna Beach, the county has its share of hillside homes – they sit on bluff tops, viewing the crashing waves below and are nestled into the foothills of mountains, boasting gorgeous, wooded canyon views. With the winter comes rain and heavy rains can lead to landslides--something that could impact many hillside homes in Orange County like these Laguna Beach homes. Get a copy of your property’s grading plan to understand how the tract was cut. The home could sit on cut soil, fill soil or a combination of both – which may create instability. Talk to your city – request property records. Look for cracks in walls, driveways, windows. Look for leaning trees and fences. If you live in a flat area, check out FEMA flood zones at msc.fema.gov. Homeowners and home shoppers itching for that perfect view, however, need to educate themselves on the land their home sits on or they'll be saddled with sticky geo issues. If you don't maintain and understand your property, it "can become your own worst enemy," said professional geologist and realtor Michael Lewis. "Do not wait until you are in escrow to exercise your discovery period," Lewis said. "With so much information available online and easy access to many city and county files – it is much easier now to make an educated decision about your land and home purchase and you can go into your negotiation of price holding all the same cards, and maybe more, than the seller has." When shopping for a home or maintaining the one you live in, things like cracked driveways, sagging slopes and cracked window panes should raise a red flag for you.

China's Army of Graduates Struggles for Jobs - (www.nytimes.com) Liu Yang, a coal miner’s daughter, arrived in the capital this past summer with a freshly printed diploma from Datong University, $140 in her wallet and an air of invincibility. Her first taste of reality came later the same day, as she lugged her bags through a ramshackle neighborhood, not far from the Olympic Village, where tens of thousands of other young strivers cram four to a room. Unable to find a bed and unimpressed by the rabbit warren of slapdash buildings, Ms. Liu scowled as the smell of trash wafted up around her. “Beijing isn’t like this in the movies,” she said. Often the first from their families to finish even high school, ambitious graduates like Ms. Liu are part of an unprecedented wave of young people all around China who were supposed to move the country’s labor-dependent economy toward a white-collar future. In 1998, when Jiang Zemin, then the president, announced plans to bolster higher education, Chinese universities and colleges produced 830,000 graduates a year. Last May, that number was more than six million and rising.

Candians worried about clear title to US foreclosures - (www.nationalpost.com) As the Canadian dollar flirted with parity and the U.S. housing bubble burst, many Canadians headed south of the border to pick up a property bargain. A number of these properties had been subject to foreclosure. Questions have been raised recently about the conduct of some foreclosures and a number of banks have halted foreclosures while the transactions are investigated. “Worst case scenario is people who have already bought a foreclosure,” says David Altro of David A. Altro & Associates, a member of the Florida bar and a Quebec notary. “If they are anxious that the title isn’t good, hire a lawyer to do a title examination to see whether the foreclosure action was properly done.” If you are still contemplating the purchase, check the title carefully. “Make sure you pay to have the title checked. Some of these foreclosed properties did not have clear title to begin with,” says Carol Bezaire, vice-president, tax and estate planning at MacKenzie Financial in Toronto. “The house was in [the seller’s] name but the title was held by someone else.”

NY Brokers Prepare for Wall Street's Bonus Season - (www.nytimes.com) In real estate, this is the season to obsess about the bonus season. Wall Street bonuses, in the pre-housing-crash years, were a major economic engine driving sales in the city from January through the spring. They can be a broker’s bread and butter — brioche with brie, really, when you’re talking about multimillion-dollar bonuses and multimillion-dollar apartments. But since the economy melted down, bonuses have been up, down and spinning all around. Anticipation has had brokerages and developers panting one minute and totally depressed the next. And the speculation this year over bonuses has been unusually intense; the question of Congress’s extending or eliminating Bush-era tax breaks that have been in place for much of the last decade has only fueled conjecture. Will bonus payouts come early this year so the recipients can avoid potential tax increases?

Time For Real-Estate Watchdogs To Start Howling Again - (blog.niemanwatchdog.org) You might not know it from reading the news, but the nation’s housing prices are in free fall again. For the many Americans who have (or had) most of their wealth tied up in their homes, the consequences of this will be profound. The effect on nationwide consumption will inevitably be severe. In fact, there are some not inconceivable scenarios in which the housing market could just take the economy down with it again. Despite the fact that the nation is officially in a period of economic recovery, the latest data show that home prices are diving. One recent survey pegged the decline at 0.7 percent per month; another found prices down 5.8 percent between August and October. One analysis found home values will likely drop more than $1.7 trillion this year, on top of the $1.05 trillion drop in 2009. That would bring the loss in wealth to $9 trillion since the June 2006 market peak, when the housing stock was valued at about $24 trillion. And many market analysts expect prices to drop 10 percent or more in 2011.

OTHER STORIES:

What's Causing U.S. Personal Spending to Drop: Job Losses, Fear or Both? - (www.pbs.org)

Australia is different - (www.australianhousehunters.com.au)

Housing Market on Edge as Lenders Get Tougher - (online.wsj.com)

Fewer U.S. Houses Were Under Water -- Because Foreclosures Rose - (www.bloomberg.com)

Wells Fargo cuts 137 East SF Bay jobs - (www.contracostatimes.com)

Virginia house sales plunged 41% in November, compared to November 2009 - (www.dailypress.com)

US role in housing market makes it harder to predict end of crisis - (www.philly.com)

Fed Research Paper Concludes Loan Modifications "May Increase Strategic Defaults" - (www.Mish)
Will Obama's tax deal hurt housing prices? - (www.curiouscapitalist.blogs.time.com)

Mortgage-Bond Slump No Fun for Housing as Rates Increase: Credit Markets - (www.bloomberg.com)

America's Economic Illness: We've Got a Bad Case of Baumol's Disease - (www.dailyfinance.com)

Thursday December 30 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Cincinnati Threatens to Outsource Entire Police Department - (Mish at globaleconomicanalysis.blogspot.com) Cincinnati, like every union-plagued city in the country is having huge budget problems over untenable union wages and pension benefits. Big problems call for big actions. I am pleased to report that several thinking members on the Cincinnati City Council proposed to outsource the entire police department to the local sheriff's association. Unfortunately, the mayor nixed the idea. The Cincinnati Enquirer reports City-county police merger proposed: Three Cincinnati City Council members floated a proposal Wednesday to shift city police patrols to the Hamilton County Sheriff’s Office as a way to help plug a $60 million deficit in the city budget and avoid 275 police and firefighters layoffs. But just as quickly as council members Roxanne Qualls, Wendell Young and Jeff Berding pitched the plan – which Hamilton County Sheriff Simon Leis supports – it seemingly died. Council currently does not have enough votes to override a threatened veto by Mayor Mark Mallory, who in a letter to Leis said he sees the proposal as “a brazen and shameless attempt at union-busting” that he will never support.

For the unemployed, the dream’s a nightmare - (www.ibtimes.com) Work hard and play by the rules and you'll get ahead. That's been an article of faith, since at least the birth of this nation, in what has come to be called the American dream. That's now a shattered dream for millions of Americans, according to a new study released by Rutgers University. "This recession is not as bad as the Great Depression, but it's a close cousin," said Carl Van Horn, director of Rutgers' John J. Heldrich Center for Workforce Development, and co-author with Cliff Zukin and Jessica Godofsky of The Shattered American Dream: Unemployed Workers Lose Ground, Hope, and Faith in their Futures. "This study reveals what happens when you have a long, tough recession," Van Horn said. "It changes people's thinking and people's attitudes. There is now an air of resignation and pessimism." According to government figures, close to 10 percent of the American workforce is unemployed. The actual ratio is higher, experts say, because many people have stopped looking for work and go uncounted. The Rutgers report notes that 8.5 million jobs have been lost in what is being called the Great Recession.

Opening the Bag of Mortgage Tricks - (www.nytimes.com) ALL the revelations this year about dubious practices in the mortgage servicing arena — think robo-signers and forged signatures — have rightly raised borrowers’ fears that companies handling their loans may not be operating on the up and up. But borrowers aren’t the only ones concerned about potential mischief. Investors who hold mortgage securities are increasingly worried that servicers may be putting their interests ahead of those who own the loans. A servicer might, for example, deny a loan modification to a borrower because it also owns a second mortgage on the same property and doesn’t want to write down that asset, as required in a modification. Levying outsize default fees is another tactic — the fees typically go to the servicer, not the lender, but they can still propel a property into foreclosure more quickly. And foreclosures aren’t a good outcome for investors. Last week, a jury in federal district court in Reno, Nev., awarded a group of 50 mortgage investors $5.1 million in punitive damages against defendants in a loan servicing case. Although the numbers in the case aren’t large, its facts are fascinating. Indeed, the case exposed some of the tricks of the servicers’ trade.

NJ Turnpike Authority Privatizes Toll Collection - (www.app.com) More than 200 union members and leaders packed the New Jersey Turnpike Authority's meeting Wednesday to oppose a plan to outsource toll collectors' jobs on the Garden State Parkway and Turnpike to private contractors next spring. "Over the years, the union has worked together to help the Turnpike solve its problems," said Franceline Ehret, president of Local 194 of the International Federation of Professional and Technical Engineers, which represents 1,200 authority employees. "We urge you to hold off putting out the request for proposal and allow us to work it out." Ehret and other speakers said outsourcing will take what are now middle-class jobs and reduce them to minimum-wage jobs, which would negatively affect the state and local tax bases and the economy. Authority officials said the union will have a chance to submit a proposal as a private contractor.

Newly Built Ghost Towns Haunt Banks in Spain - (www.nytimes.com) It is a measure of Spain’s giddy construction excesses that 250 row houses carpet a hill near this tiny rural village about an hour by car outside of Madrid. Most of these units have never sold, and though they were finished just three years ago, they are already falling into disrepair, the concrete chipping off the sides of the buildings. Vandals have stolen piping, radiators, doors — anything they could get their hands on. The Bank of Spain says the banks have about $240 billion in “problematic exposure” out of $580 billion invested in real estate and construction, a situation, they say, the banks are capable of handling. The boom and bust of Spain’s property sector is astonishing. Over a decade, land prices rose about 500 percent and developers built hundreds of thousands of units — about 800,000 in 2007 alone. Developments sprang up on the outskirts of cities ready to welcome many of the four million immigrants who had settled in Spain, many employed in construction.

OTHER STORIES:

As Hiring Falters, More Workers Become Temporary - (www.nytimes.com)

Kicking the Can Down the Road - (www.frontlinethoughts.com)

Congress races to keep the lights on ... again - (money.cnn.com)

$2.8 trillion - stimulus price tag - (money.cnn.com)

Explaining the Crisis With Dogma - (www.nytimes.com)

Two States Sue Bank of America Over Mortgages - (www.nytimes.com)

Debt Pyramid Scheme Now the Norm in U.S. - (www.bloomberg.com)

Smaller stocks hit it big this year - The Buzz - (money.cnn.com)

AOL buys four-day-old startup - (money.cnn.com)

Lehman suit shreds auditors' teflon coating - (money.cnn.com)

Wednesday December 29 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

The Weak Get Weaker as Muni Bonds Are Sold Off - (online.wsj.com) Amid the recent selloff in the municipal-bond market, investors are increasingly differentiating between state and local governments with strong finances and those facing big fiscal woes. That trend could have significant implications for holders of bonds issued by weaker state and local governments, some of which are already paying higher interest rates and have seen the prices of their bonds decline in value. The growing gap between what the strongest and weakest government issuers pay to borrow brings unpleasant echoes of the European debt crisis, where escalating yields paid by countries such as Greece and Ireland made their fiscal situations untenable. For muni investors, the scenario could prove similar—a series of rolling crises as the spotlight goes from one troubled issuer to the next. Underlying this dynamic are issuers struggling not just with budget woes but with higher borrowing costs that end up inflating budget deficits. That prompts still more borrowing and also can result in ratings downgrades that can further raise borrowing costs.

This Bonus Season on Wall Street, Many See Zeros - (www.nytimes.com) Bonus season is fast approaching on Wall Street, but this year the talk does not center just on multimillion-dollar paydays. It’s about a new club that no one wants to join: the Zeros. Drawn from a broad swath of back-office employees and middle-level traders, bankers and brokers, the Zeros, as they have come to be called, are facing a once-unthinkable prospect: an annual bonus of ... nothing. “It’s going to a cause a lot of panic on Wall Street,” said Richard Stein of Global Sage, an executive search firm. “Everybody is talking about it, but they’re actually concerned about it becoming public. I would not want to be head of compensation at a Wall Street firm right now.” In some ways, a zero bonus should not come as a surprise to many bankers. As a result of the 2008 financial crisis, Wall Street firms like Goldman Sachs and banks like Citigroup raised base pay substantially in 2009 and 2010. They were seeking to placate regulators who had argued that bonuses based on performance encouraged excessive risk.

ECB raises fears over Irish rescue package - (www.ft.com) The European Central Bank has expressed concern that Ireland’s rushed bank rescue package may interfere with the Frankfurt institution’s operations to provide funds in support of the eurozone financial system. The euro’s monetary guardian has “serious concerns” that flaws in the Irish bail-out legislation would usurp the ECB’s rights over the collateral proffered as security for liquidity, according to a position paper posted on the ECB’s website. The warning reflects ECB fears of the risks involved in providing liquidity to Ireland’s banks. The most recent data show Irish banks having €136bn ($179bn) in loans outstanding from the ECB – a quarter of the total in the eurozone – and €45bn in emergency liquidity assistance from the Irish central bank. To obtain liquidity, eurozone banks have to put up assets as collateral.

France’s AAA Grade at Risk as Rating Cuts Spread: Euro Credit - (www.bloomberg.com) France risks losing its top AAA grade as Europe’s debt crisis prompts a wave of downgrades that threatens to engulf the region’s highest-rated borrowers, with Belgium also facing a possible cut. Moody’s Investors Service said Dec. 15 it may lower Spain’s rating, citing “substantial funding requirements,” and slashed Ireland’s rating by five levels on Dec. 17. Standard & Poor’s is reviewing its assessments of Ireland, Portugal and Greece. Costs to insure French government debt rose to a record today with the country’s credit default swaps more expensive than lower-rated securities from the Czech Republic and Chile. “Every sovereign may get penalized in the year ahead,” said Toby Nangle, who helps oversee $46 billion as director of asset allocation at Baring Asset Management in London. “It would be a big deal if France was to have its AAA rating stripped. I don’t think the likelihood of a downgrade is reflected in the market.”

Brazil Frets as Panamericano Exposes Weak Credit Hitting Stocks - (www.bloomberg.com) The first investigation into Brazil’s asset-backed securities industry, rising consumer delinquencies and the biggest rout of a bank stock in more than a decade are opening cracks in the country’s financial system. Funding costs for smaller banks have climbed since a Nov. 9 bailout of Banco Panamericano SA triggered the probe, pushing average yields on certificates of deposit to 12.9 percent from 11.8 percent. The market for selling loan portfolios has dried up, and funds of asset-backed commercial paper have had 2.3 billion reais ($1.3 billion) in redemptions since the rescue, according to Brazil’s capital markets association. The stress in Brazil’s credit markets is damping euphoria among investors that helped the Bovespa index gain 81 percent since December 2008. The index is the only benchmark stock index in the Americas to decline this year.

OTHER STORIES:

Sugar Climbs to 29-Year High on Supply Concerns; Cocoa Advances - (www.bloomberg.com)

Cotton Jumps Daily Limit to Record as Demand Outlook Improves - (www.bloomberg.com)

Treasuries Pare Gains as Stocks Recover, Fed Ends Buying for Day - (www.bloomberg.com)

Most U.S. Stocks Rise on Analyst Recommendations, Energy Rally - (www.bloomberg.com)

Yields Flatten QE2 Critics With Curve Showing Fed End - (www.bloomberg.com)

U.S. Gasoline Rises to $2.99 a Gallon, Lundberg Says - (www.bloomberg.com)

Oil May Rally to $94 If Support at $87 Holds: Technical Analysis - (www.bloomberg.com)

Sugar and coffee hit multi-year highs - (www.ft.com)

Number of the Week: Cash for Shares - (online.wsj.com)

BOE Forecast to Raise Interest Rate Within Six Months, CBI Says - (www.bloomberg.com)

UK mortgage lending at 10-year low in November - (finance.yahoo.com)

Tuesday December 28 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Christie Says ‘Day of Reckoning’ Has Arrived for State Budgets - (www.bloomberg.com) New Jersey Governor Chris Christie said U.S. states face a “day of reckoning” as they contend with looming budget deficits in the wake of the longest recession since the 1930s. Christie, who cut $1.3 billion in aid to schools and municipalities this year to close a $10.7 billion deficit, said states’ pension and debt costs have grown to be “unsustainable.” Benefits, education and health care will be reduced in many states, he said in an interview aired last night on CBS Corp.’s “60 Minutes.” “The day of reckoning has arrived,” said Christie, 48, a first-term Republican. Areas such as education and pensions “were third rails of politics. We are now left with no alternatives.” The recession caused the biggest nationwide decline in state tax receipts on record, according to the nonpartisan Center on Budget and Policy Priorities in Washington. States have filled more than $425 billion in funding gaps since fiscal 2009; the combined imbalance is likely to reach $140 billion in the next budget year, the center said.

Top Spine Surgeons Reap Royalties, Medicare Bounty - (online.wsj.com) Norton Hospital in Louisville, Ky., may not be a household name nationally. But five senior spine surgeons have helped put it on the map in at least one category: From 2004 to 2008, Norton performed the third-most spinal fusions on Medicare patients in the country. The five surgeons are also among the largest recipients nationwide of payments from medical-device giant Medtronic Inc. In the first nine months of this year alone, the surgeons—Steven Glassman, Mitchell Campbell, John Johnson, John Dimar and Rolando Puno—received more than $7 million from the Fridley, Minn., company. Medtronic and the surgeons say the payments are mostly royalties they earned for helping the company design one of its best-selling spine products. Corporate whistleblowers and congressional critics contend such arrangements—which are common in orthopedic surgery—amount to kickbacks to stoke sales of medical devices. They argue that the overuse of surgical hardware ranging from heart stents to artificial hips is a big factor behind the soaring costs of Medicare, the government medical-insurance system for the elderly and disabled.

Debt Pyramid Scheme Now the Norm in America: Roger Lowenstein - (www.bloomberg.com) The tax compromise that the president, after protracted bargaining with Congress, signed into law Friday represents the worst of each party’s principles. Democrats agreed to forgo their insistence on raising taxes to narrow the widening budget deficit. Republicans forgot (again) that they are supposedly the party of smaller government. In effect, each party stuck to the portion of its principles that will be popular with the electorate right now -- and dismissed the part that would be unpopular. The Washington compromise is symptomatic of the disease infecting government at many levels. It is known as short-termism. The better course would have been the simplest one: Let the Bush tax cuts -- on every income group -- expire. Democrats (I am one) have generally supported raising tax rates only on the rich. I never liked that approach because it’s an attempt to curry favor with the majority of the public by saying, “The deficit is not your problem; it’s only the problem of wealthy people.” It sends a misleading, as well as divisive, message that, for the majority of Americans, incremental government services, such as stimulus spending or rising health-care expenditures, are free.

A bad year for California - (www.marketwatch.com) For 2010 at least, that seems to be the lesson as six of the Golden State’s metro areas fell to the bottom 10 in MarketWatch’s annual survey of the best U.S. cities for business. All six are roughly two hours away from California’s shores, with most in the San Joaquin Valley, between the state’s coastal mountain range and the Sierra Nevada mountain range. A sixth city, Riverside, lies between metropolitan Los Angeles and the Coachella Valley that includes Palm Springs. Along with Riverside, Fresno, Stockton, Modesto, Sacramento and Bakersfield sunk to the bottom of the pack. And jobs are the main culprit. “If you’re looking at unemployment and job growth, it was not a good year for California,” said Stephen Levy, director of the Center for Continuing Study of the California Economy. California holds the third-highest unemployment rate in the nation at 12.4%, but four of those cities are at the very top of that list. Stockton is the worst of the cities in the survey with a 16.6% jobless rate, followed by Modesto at No. 2 with 16.2%, Fresno at No. 3 with 15.2% and Bakersfield at No. 4 with 15.1%.

Google TV Faces Delays Amid Poor Reviews - (www.nytimes.com) Google TV has just enacted its first programming cancellation. The Consumer Electronics Show next month in Las Vegas was meant to be the great coming-out party for Google’s new software for televisions, which adds Web video and other computer smarts to TV sets. Although Google already has a deal with Sony for its Internet TVs, other television makers — Toshiba, LG Electronics and Sharp — were prepared to flaunt their versions of the systems. But Google has asked the TV makers to delay their introductions, according to people familiar with the company’s plans, so that it can refine the software, which has received a lukewarm reception. The late request caught some of the manufacturers off guard. And it illustrates the struggles Google faces as it tries to expand into the tricky, unfamiliar realm of consumer electronics, and drum up broad interest in a Web-based TV product that consumers want.

OTHER STORIES:

Municipal Budget Cuts May Reduce U.S. GDP, Goldman Sachs Says - (www.bloomberg.com)

As Hiring Falters, More Workers Become Temporary - (www.nytimes.com)

This Bonus Season on Wall Street, Many See Zeros - (www.nytimes.com)

NYC May See $1.7 Billion Budget Surplus This Year - (www.cnbc.com)

Boeing Shares Slump on Report of Dreamliner Delay - (www.cnbc.com)

Christmas Gets More Costly as U.S. Retailers Avoid Panic - (www.bloomberg.com)

Regional US banks looking to mergers - (www.ft.com)

Oil Heads to $100: Good for Investors, Not Consumers - (www.cnbc.com)

S&P Muni Expert Takes on Meredith Whitney - (www.cnbc.com)

Temps May Become a Larger Part of the Workforce - (www.cnbc.com)