KeNo's Housing and Economic Portal: Monday November 21 Housing and Economic stories

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MF Bankruptcy Causes Biggest Foreign Bank Liquidity Scramble To 'Fed Safety' Ever - (www.zerohedge.com) When Lehman filed for bankruptcy in that fateful week of September 2008, one thing caught everyone's attention: the epic surge in the Fed Reverse Repos originated by "foreign official and international accounts": essentially cash placed at the Fed by foreign institutions in exchange for collateral, primarily in the form of Treasurys, as well as other securities. This is nothing but an immediate cash parking in a 'safe place', which withdraws overall liquidity from the market, and as has been noted elsewhere, serves as an indirect gauge of banking system funding stress. In the week of September 24, this number soared from $46.6 to $93.7 billion, a $44 billion increase, or the single biggest jump in the history of the series. Well, as the chart below demonstrates, what happened with MF Global caught foreign banks, which as we have noted over the past several weeks have been dumping US Treasury and MBS paper, entirely by surprise as they scrambled to withdraw the last traces of available liquidity from the market, and to place as much of it as possible within the safety (and we use the term loosely) of the Fed. In the just released H.4.1 update, foreign Reverse Repos with the Fed soared from $81.3 billion to $124.5 billion, the most ever, and a weekly surge of $43.2 billion, the second largest ever, second only to the Lehman collapse.

Most of the Unemployed No Longer Receive Benefits - (www.nytimes.com) The jobs crisis has left so many people out of work for so long that most of America's unemployed are no longer receiving unemployment benefits. Early last year, 75 percent were receiving checks. The figure is now 48 percent — a shift that points to a growing crisis of long-term unemployment. Nearly one-third of America's 14 million unemployed have had no job for a year or more. Congress is expected to decide by year's end whether to continue providing emergency unemployment benefits for up to 99 weeks in the hardest-hit states. If the emergency benefits expire, the proportion of the unemployed receiving aid would fall further. The ranks of the poor would also rise. The Census Bureau says unemployment benefits kept 3.2 million people from slipping into poverty last year. It defines poverty as annual income below $22,314 for a family of four. Yet for a growing share of the unemployed, a vote in Congress to extend the benefits to 99 weeks is irrelevant. They've had no job for more than 99 weeks. They're no longer eligible for benefits.

How Occupy Wall Street Cost Me My Job - (www.gawker.com) Joining the Occupy Wall Street protests has its dangers. You could get pepper-sprayed or end up in handcuffs. Or, as Brooklyn-based journalist Caitlin Curran explains, your boss could see a photo of you holding up a sign at a protest and fire you the next day. It all started with an article on The Atlantic's web site. Conor Friedersdorf's piece "Occupy Wall Street's Greatest Strength Is Neutering It," echoed what many people are wondering about the movement: what are they fighting for?

Debunking the "paid back the TARP" myth - (www.nakedcapitalism.com) This Institute for New Economic Thinking interview with economist Ed Kane discusses how systemic risk should be measured. Kane argues that taxpayer are essentially disadvantaged bank shareholders, getting the downside and none of the bennies, like dividends or capital gains. He argues that banks should be paying taxpayers for the privilege of having them and their counterparties rescued, and that is over $300 billion a year.’ And that isn’t the only freebie banks are getting. For instance, the near zero interest rates are tantamount to a tax on savers (when per above, the banks should be making payments). Some have estimated the cost to savers is over $350 billion a year.

America ignores long-term unemployment at its peril - (www.telegraph.co.uk) 80,000 jobs were created in October, and the tally for August and September was revised upwards by a total of 102,000. According to the Bureau of Labor, people have been hired at a rate of 125,000 a month for the last year. There was a decline, too, in the long-term unemployed – a group you belong to in the US if you’ve been without work for more than six months. That figure fell 366,000 to 5.9m. But don’t expect Americans to be celebrating. That’s not only because October’s figures don’t immediately change an extremely difficult jobs market. 13.9m people are still unemployed and a further 8.9m are having to settle for part-time work. It runs deeper. The high level of unemployment America has had since the financial crisis is a wound to its self-esteem. This is a country that built itself on being able to offer work to those who can’t find it where they’re from. And if they do have it, there's always been the promise of better paid and more interesting work on offer in the US. I was talking to a businessman this week who had built a company that now employs more than 20,000 people. The mention of the unemployment rate prompted an almost physical reaction in him as if a bad smell had entered the room. And nowhere is the assault on the US psyche stronger than in the scale of long-term unemployed this downturn has created.