Thursday March 1 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

ART CASHIN: The Unemployed Are Now Going On Disability And It's Costing The Government Billions - (www.businessinsider.com) In this morning's Cashin's Comments, Art Cashin points to some disturbing research regarding the recent bump in disability benefit applications: I’m Sick Of Being Unemployed - A couple of strange and rather disquieting reports circulated among the Friends of Fermentation yesterday. The topic was unemployment or, more specifically, where do those people go who have stopped looking for work. Their absence is credited with distorting the unemployment rate and making it lower than most expect or believe. The reports I allude to, contended that many went on disability. In fact, they projected that nearly 25% of those not actively seeking a job had applied for, and been accepted, by disability - mostly Social Security. One of the reports came from a site called SoberLook.com (a perfectly logical place for the Friends of Fermentation to be browsing). The Sober report quoted extensively from a report by JPMorgan. I was unable to locate the original JPM report but we’ll assume that Sober quoted from it correctly. Anyway, here’s a bit from SoberLook:

Moody’s Downgrades Europe Sovereigns - (www.bloomberg.com) Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal and revised its outlook on the U.K.’s and France’s top Aaa ratings to “negative,” citing Europe’s debt crisis. Spain was downgraded to A3 from A1 with a negative outlook, Italy was downgraded to A3 from A2 with a negative outlook and Portugal was downgraded to Ba3 from Ba2 with a negative outlook, Moody’s said. It also reduced the ratings of Slovakia, Slovenia and Malta. “The uncertainty over the euro area’s prospects for institutional reform of its fiscal and economic framework” and the resources that will be made available to deal with the crisis, are among the main drivers of Moody’s action, the ratings company said.

Volcker Rule Draws Barrage of Lobbying From Banks After Details Released - (www.bloomberg.com) The world’s largest banks demanded a wish list of changes to a proposed U.S. ban on proprietary trading, seeking to escalate the lobbying effort against the Volcker rule five months before it takes effect. In scores of comment letters filed yesterday, bankers and their trade associations said the so-called Volcker rule would increase risk, raise investor costs, hurt U.S. competitiveness and be vulnerable to legal challenge. “The proposal, if implemented in its current form, will overly restrain our customer-facing market-making business and our risk-mitigating hedging activities to the detriment of our customers,” Colm Kelleher, co-president of Morgan Stanley (MS)’s institutional securities group, and Jim Rosenthal, the firm’s chief operating officer, wrote in a letter posted to the Commodity Futures Trading Commission’s website. “Moreover, we believe that the proposal, if implemented as is, would have severe negative consequence for the markets and the U.S. financial system.”

Obama budget would double bank tax size - (www.washingtonpost.com) President Obama's budget plan calls for a bank tax twice as big as the one he proposed last year, a further sign he wants to make anti-Wall Street sentiment a major part of his re-election campaign. The bank tax, also known as the "Financial Crisis Responsibility Fee," first appeared in Obama's 2011 budget and was projected to raise $90 billion over 10 years. A year later, in the wake of the mid-term elections and accusations from executives that Obama was "anti-business," the White House cut the proposal by two-thirds to just $30 billion.

MEGAN McARDLE: Here's Why The GM Turnaround Is Failing – (www.businessinsider.com) This despite the fact that the company’s major Japanese competitors had been crippled by a tsunami and a nuclear meltdown. Business journalists often joke that some struggling firm could be saved only by “an act of God,” but in the case of GM’s stock price, even that hasn’t been enough. Which has to raise the question: Was the company really saved? Did it finally have its “Come to Jesus” moment? Or was this just one more temporary detour in the company’s erratic amble toward perdition? Historical precedent offers strong reasons to worry that GM might continue to backslide. Though casual glosses usually present the company’s history as a steady decline from the mighty 1960s to the debacle of 2008, in fact, there were quite a few moments when GM—and Detroit more generally—­appeared to have mended its ways. In 1994, during one of those moments, the reporter Paul Ingrassia published a book calledComeback: The Fall and Rise of the American Automobile Industry. In his 2010 book, Crash Course, he sounds older and wiser:

OTHER STORIES:

EU’s Van Rompuy Welcomes China’s Interest in Aiding Europe - (www.bloomberg.com)

Schaeuble Pressures Greece With View Europe Better Prepared for a Default - (www.bloomberg.com)

Eurozone wrangles over Greek bond-swap deal – (www.google.com/hostednews/ap)

BOJ Adds Stimulus, Sets 1% Inflation Target - (www.bloomberg.com)

Euro zone industrial output falls in December - (www.reuters.com)

Greek Economy Shrinking Rapidly - (online.wsj.com)

Williams: Fed must keep policy throttle 'wide open' - (www.reuters.com)