Monday, July 26, 2010

Gloomy Times

Our monthly finance report follows the continuing story of month to month; the economy is still sluggish and could get worse.

EMPLOYMENT - "Between December 2007 -- the official first month of the recession -- and December 2009, the U.S. economy lost more than eight million jobs," write CEPR's John Schmitt and Tessa Conroy. "Even if the economy creates jobs from now on at a pace equal to the fastest four years of the early 2000s expansion, we will not return to the December 2007 level of employment until March 2014.
"And, by the time we return to the number of jobs we had in December 2007, population growth will have increased the potential labor force by about 6.5 million jobs. If job growth matched the fastest four years in the most recent economic expansion, the economy would not catch up to the expanded labor force until April 2021."

Here's a dramatic chart from CEPR showing the total number of jobs lost since the recession began:

BUSINESS BURST -- NEW ON NEWSSTANDS -- “FORTUNE Global 500: The World's Largest Corporations,” by total revenues for fiscal year: 1. Wal-Mart Stores 2. Royal Dutch Shell 3. Exxon Mobil 4. BP 5. Toyota Motor 6. Japan Post Holdings 7. Sinopec 8. State Grid 9. AXA 10. China National Petroleum 11. Chevron 12. ING Group 13. General Electric 14. Total 15. Bank of America Corp. 16. Volkswagen 17. ConocoPhillips 18. BNP Paribas 19. Assicurazioni Generali 20. Allianz 21. AT&T 22. Carrefour 23. Ford Motor 24. ENI 25. J.P. Morgan Chase & Co.

STUDENT LOANS - The share of borrowers who default on their student loans is bigger than the federal government's short-term data suggest, with thousands more facing damaged credit histories and millions more tax dollars being lost in the long run.

According to unpublished data obtained by The Chronicle of Higher Education, one in every five government loans that entered repayment in 1995 has gone into default. The default rate is higher for loans made to students from two-year colleges, and higher still, reaching 40 percent, for those who attended for-profit institutions.

Borrowers who default on their student loans face significant personal and financial burdens. They become ineligible for additional federal aid and may have their wages and tax refunds seized by the government. Their negative credit records make it harder for them to obtain car loans, mortgages, and credit cards, and even apartments or jobs. When they can get loans, they pay higher interest rates.

But it's the high rates of default at for-profit institutions that are likely to get the most attention from members of Congress, who have recently raised concerns about the cost and quality of for-profit higher education. Fifteen years into repayment, two out of every five loans made to students who attended two-year for-profit colleges are in default.

SPORTS BLINK - Sports Illustrated names the “Fortunate 50” -- “50 highest-earning American athletes”: For the seventh consecutive year, has compiled a list of the 50 top-earning American athletes by salary, winnings, endorsements and appearance fees. The average earnings of those on the list have reached an all-time high of $26.2 million (up 11 percent from '09).” The top 10: 1. Tiger Woods, $90,508,163 … 2. Phil Mickelson, $61,660,757 … 3. Floyd Mayweather Jr., $60,250,000 … 4. LeBron James, $45,779,912 … 5. Alex Rodriguez, $37,000,000 … 6. Shaquille O'Neal, $37,000,000 … 7. Kobe Bryant, $33,034,375 … 8. Derek Jeter, $31,000,000 … 9. Peyton Manning, $30,800,000 … 10. Dwayne Wade, $27,779,912.

NYT, 'Next Big Battle in Washington: Bush's Tax Cuts,' by David Herszenhorn: 'An epic fight is brewing over what Congress and President Obama should do about the expiring Bush tax cuts, with such substantial economic and political consequences that it could shape the fall elections and fiscal policy for years to come. Democratic leaders, including Mr. Obama, say they are intent on letting the tax cuts for the wealthy expire as scheduled at the end of this year. But they have pledged to continue the lower tax rates for individuals earning less than $200,000 and families earning less than $250,000 - what Democrats call the middle class. Most Republicans want to extend the tax cuts for everyone, and some Democrats agree, saying it would be unwise to raise taxes on anyone while the economy remains weak. If no action is taken, taxes on income, dividends, capital gains and estates would all rise. The issue ... will move to the top of the agenda when lawmakers return to Washington in September from their summer recess, just as the midterm campaign gets under way in earnest.'

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week for: Rick Blix…famous artist, Bill Bradley, Sandra Bullock, Ken Burns, Peggy Fleming, Dorothy Hamill, Mick Jagger, Martina McBride, J.K. Rowling, Arnold Schwarzenegger, Alessandro Suffredini…famous nephew.

GOOD BYE – To Daniel Schorr, a great journalist and humanitarian.

TRAVEL – The Eastern Sierras of California, nothing is better: Red Rock Canyon to the Alabama Hills to Mount Whitney to Inyo National Forest to the Mammoth Lakes Basin – Olancha to Lone Pine to Independence to Big Pine to Bishop to Crowley Lake to Tom’s Place to Convict Lake to Mammoth Lakes – wow!

FINALLY – It is the purpose of this blog to inform, offer insight and opinion. Our goal is not to pass judgment on individuals or organizations.

Beginning this month though we will honor, on a monthly basis, those who go beyond the call of duty to humiliate themselves; it will be called the JACKASS AWARD. This inaugural month we have two very deserving winners.

The Bell California City Council – who this past week showed how truly out of touch with reality municipal government can be. It would be wise of every citizen to review the pay scales of their public officials (especially the pensions).

Alden Reimonenq – who this past week showed how truly out of touch with reality higher education can be. Do these people have a clue????

Congratulations to the City of Bell California City Council and Alden Reimonenq for winning our inaugural Rink Rats JACKASS Award for the month of July.

Next week: A midsummer night’s dream.

Until next Monday, Arrivederci.

Claremont, CA
July 26, 2010

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