HOLY HELL, IT'S BEEN A ROUGH WEEK IN THE FINANCIAL WORLD

ILLINOIS SHERIFF: NO FORECLOSURE EVICTIONS ON MY WATCH

From CNN: Sheriff Thomas J. Dart said Wednesday he is suspending foreclosure evictions in Cook County, which had been on track to reach a record number of evictions, many because of mortgage foreclosures.

He said many of the evictions involve renters who are paying their rent on time but are being thrown out because the landlord has fallen behind on mortgage payments.

Mortgage companies are supposed to identify a building's occupants before asking for an eviction, but sheriff's deputies routinely find that the mortgage companies have not done so, he said.

"These mortgage companies only see pieces of paper, not people, and don't care who's in the building," Dart said. "They simply want their money and don't care who gets hurt along the way. "On top of it all, they want taxpayers to fund their investigative work for them. We're not going to do their jobs for them anymore. We're just not going to evict innocent tenants. It stops today."

Dart said he wants the judiciary or the state Legislature to establish protections for those most harmed by the mortgage crisis.

In 1999, Cook County had 12,935 mortgage foreclosure cases; in 2006, 18,916 cases were filed and last year, 32,269 were filed. This year's total is expected to exceed 43,000.

"The people we're interacting with are, many times, oblivious to the financial straits their landlord might be in," Dart said. "They are the innocent victims here and they are the ones all of us must step up and find some way to protect."

The Illinois Bankers Association opposed the plan, saying that Dart "was elected to uphold the law and to fulfill the legal duties of his office, which include serving eviction notices."

The association said Dart could be found in contempt of court for ignoring court eviction orders.

HELL NO!

AIG hits up the Feds for more money. Really???

The New York Federal Reserve is lending up to $37.8 billion to American International Group to give the troubled insurer access to much-needed cash.

In exchange, AIG is giving the New York Fed investment-grade, fixed-income securities that it had previously lent out to other institutions for a fee. Those institutions are now returning these securities and want their money back.

The new program, announced Wednesday, is on top of the $85 billion the federal government agreed to lend to AIG last month to prevent the global company from collapsing. AIG said last Friday it had drawn down $61 billion.

The lending program is a way for AIG to get funding for its businesses, said a New York Fed spokesman. The system is similar to lending facilities the Fed provides to banks, which can also exchange collateral for cash.

The latest announcement does not jeopardize the government's ability to recoup its loan to AIG, experts said.

"AIG will repay the loan," said Stewart Johnson, portfolio manager at Philo Smith, an investment bank specializing in insurance. "It's just a matter of how much of themselves they will have to sell."

BITCH FIGHT BANK BRAWL

Wachovia is the bank in the middle with Citi and Wells Fargo as the suitors. May the best man, er, bank win!

BAILOUT DETAILS

Alright, to be better informed, here is an article detailing some of the "sweeteners" added to the plan in order to ensure its passing. Lots of good stuff too.

http://seattlepi.nwsource.com/national/1153ap_meltdown_tax_breaks.html

JON STEWART ON THE BUSH BAILOUT SPEECH

Jon Stewart compares the Iraq WMD speech to the more recent Bush bailout speech. Genius!

WAMU FILES FOR BANKRUPTCY PROTECTION

According to Bloomberg: Washington Mutual Inc., a holding company for the savings and loan that became the biggest U.S. bank to fail, filed for bankruptcy protection along with its unit WMI Investment Corp.

WaMu, the 119-year-old Seattle-based thrift, filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware, according to a release from Business Wire. The Delaware bankruptcy Web site was closed for site maintenance. Ian Campbell, a spokesman for the bankrupt holding company with Abernathy MacGregor Group, said he couldn't provide further details.

RESCUE PLAN COULD COST HALF-TRILLION DOLLARS

From MSNBC: 

WASHINGTON - Treasury Secretary Hank Paulson briefed congressional leaders Thursday night on plans to address the "illiquid assets" on U.S. financial institutions' balance sheets, possibly including the creation of a government facility to take on financial firms' bad debts.

The proposal to create a massive facility to buy mortgage-backed securities could cost as much as a half-trillion dollars and would involve the purchase of both private-label and government-guaranteed mortgages, according to an administration official.

The plan would have two parts. The largest part would be the purchase of private-label (those underwritten by Wall Street) mortgages by some as-yet unnamed vehicle. Financing would occur through the sale of treasuries, the official said. That part of the plan would require congressional approval. The idea is to hold the securities to maturity. The average mortgage has a life of about 7 years.

AMERICA'S MOST AFFORDABLE PLACES TO RETIRE

According to MSNBC, Columbus, Ohio is the most affordable place to retire because of it's reasonably priced housing prices relative to income. Dallas and Houston are second and fourth because of affordability and the warmer climate. Additionally, both places still have a solid economy. Click the link above for more of the list. 

Maybe I'll end up in Dallas after all.

AIRLINES LIMITING AMOUNT OF FUEL FOR FLIGHTS? EEK!

From the Seattle PI:

WASHINGTON – Pilots are complaining that their airline bosses, desperate to cut costs, are forcing them to fly uncomfortably low on fuel.

Safety for passengers and crews could be compromised, they say.

The situation got bad enough three years ago, even before the latest surge in fuel prices, that NASA sent a safety alert to federal aviation officials.

No action.

Since then, pilots, flight dispatchers and others have continued to sound off with their own warnings, yet the Federal Aviation Administration says there is no reason to order airlines to back off their effort to keep fuel loads to a minimum.

n March, for example, an airline pilot told NASA that he landed his regional jet with less fuel than required by FAA regulations. "Looking back," he said, "I would have liked more gas yesterday." He also complained that his airline was "ranking" captains according to who landed with the least amount.

A month earlier, a Boeing 747 captain reported running low on fuel after meeting strong headwinds crossing the Atlantic en route to John F. Kennedy International Airport in New York. He said he wanted to stop to add fuel but continued on to Kennedy after consulting his airline's operations manager, who told him there was adequate fuel aboard the jet.

When the plane arrived at Kennedy, the captain said, it had so little fuel that had there been any delay in landing, "I would have had to declare a fuel emergency" – a term that tells air traffic controllers that a plane needs immediate priority to land.

FAA regulations require airliners to take off with enough fuel to reach their destinations or an alternate airport, plus 45 additonal minutes of flight. The regulations also say it's up to dispatchers and pilots to decide the size of fuel loads, with pilots making the final call.

Spare fuel beyond the minimum required by FAA is often added to airliners to allow for weather or airport delays. That adds weight, which burns more fuel and increases a plane's operating cost. A Washington-to-Los Angeles flight by an Airbus 320 with 150 passengers burns about 29,500 pounds, or 4,300 gallons, of fuel. That costs about $14,600. Adding an additional 1,500 pounds, about 219 gallons, would cost about $750 more.

GROWING INSECURITY GRIPS LOW-WAGE WORKERS

Low-wage workers in the United States are gripped by increasing financial insecurity as they inch along an economic tightrope made riskier by pervasive job losses and rising prices. Many struggle to pay for life's basics -- housing, food and health care -- and most report having virtually no financial cushion should they stumble.

Still, they remain inspired by the American dream, with most saying they are more apt to move up economically than slip backward even if they are frustrated now. Most also expect better for their children.

This complex picture of low-wage workers emerges from a survey conducted by The Washington Post, the Henry J. Kaiser Family Foundation and Harvard University. The nationwide poll, conducted June 18 to July 7, included 1,350 randomly selected people between ages 18 and 64 who work at least 30 hours a week and earned no more than $27,000 last year.

Nearly quarter of adults
These low-wage workers account for nearly one-quarter of all U.S. adults. They care for the elderly in nursing homes or for the very young in day-care centers. They stock store shelves, do administrative work in offices, staff reception desks in hospitals and man assembly lines in factories. Not only do they receive low pay, but their jobs frequently come with no health-care coverage, vacations or even sick days. Yet, the vast majority said they like or even love their jobs and they believe in the power of hard work to transform lives.

The two major presidential candidates and members of Congress have largely turned their attention to middle-class Americans, whose anxiety is rising as the national economy falters on falling housing prices, tightening credit and rising inflation.

"A lot of issues that have long confronted low-wage workers are now increasingly facing middle-income workers," who more than ever face the prospect of jarring income declines, and the lack of health care and pensions to support them, said Beth Shulman, a scholar with the Russell Sage Foundation's Future of Work Project.

If those growing concerns translate into political action to bolster the social safety net, she said, it would disproportionately help low-wage workers. "I don't think we want to live in a country where people are working and doing what they are supposed to do but yet they can't get the basics," Shulman said.

For many low-wage workers, financial struggles persist and anxiety is high even when the economy is humming. Most of them occupy an uneasy and often overlooked place on the nation's economic spectrum, hovering above poverty but still grasping for the relative comfort of the middle class.

Over the coming weeks, the Washington Post will examine the lives of low-wage Americans. The stories will explore how they juggle their finances and bolster their spirits to cope with their economic struggles; how they adapt when the dream of a middle-class life fades; the factors that propel the optimism of others in the face of increasingly tall odds, and why, more often than not, they believe their fortunes are unaffected by the policies crafted by politicians in Washington.

Low-wage workers tend to be younger, less apt to be Republican and are less likely to be registered to vote, own homes or be married than the overall population. Most call themselves working class. About half live in households that earn no more than double the poverty-level income, which would be about $42,000 a year for a family of four.

(Source)

OIL PROFITS ARE DOWN. UH HUH...

July 31 (Bloomberg) -- Exxon Mobil Corp., the world's biggest oil company, posted a smaller increase in second-quarter profit than analysts estimated after production dropped the most in at least a decade.

Net income rose 14 percent to $11.7 billion, or $2.22 a share, from $10.3 billion, or $1.83, a year earlier, the Irving, Texas-based company said today in a statement. Per-share profit excluding costs related to a ruling in the Valdez oil-spill case was 26 cents lower than the average of 12 analyst estimates compiled by Bloomberg.

Production tumbled 7.8 percent after assets were seized in Venezuela, Nigerian workers went on strike and record prices triggered contract clauses that give oil-rich governments a bigger share of output. U.S. crude futures rose above $140 a barrel for the first time, allowing Exxon Mobil to achieve the highest profit ever for a U.S. company without one-time gains.

``If oil prices are going up $20 and $30 a barrel a quarter like they have been, it hides a lot of flaws,'' said Brian Gibbons, an analyst at New York-based CreditSights Inc. ``The question on everyone's mind is, how do these guys expect to grow production given the restrictions on access to reserves?''

Click here for more. 

WELLS FARGO STILL SHINES

July 16 (Bloomberg) -- Wells Fargo & Co., the biggest bank on the U.S. West Coast, reported second-quarter profit that topped analysts' estimates on record revenue, sending the shares up as much as 12 percent and buoying U.S. stock futures.

Net income dropped 23 percent to $1.75 billion, or 53 cents a share, from $2.28 billion, or 67 cents, a year earlier, the San Francisco-based bank said today in a statement. That beat the 50-cent average estimate of 21 analysts surveyed by Bloomberg. Revenue increased 16 percent to $11.5 billion.

Gains in credit card fees and insurance revenue softened the impact of bad home loans at Wells Fargo, which raised its quarterly dividend 10 percent. While earnings have declined for three straight quarters, Chief Executive Officer John Stumpf has kept the bank profitable even as Citigroup Inc. and Washington Mutual Inc. racked up losses and lenders Countrywide Financial Corp. and IndyMac Bancorp Inc. disappeared.

"They've got a nice balance of businesses,'' said William Frels, chief executive officer of Mairs & Power Inc., which manages $4.5 billion in St. Paul, Minnesota, and owns Wells Fargo shares. ``They're very well-managed.''

Wells Fargo jumped $2.47, or 12 percent, to $22.98 in early trading after falling 4.9 percent yesterday on the New York Stock Exchange. The shares dropped 32 percent this year through yesterday, compared with a 41 percent decline for the Standard & Poor's 500 Financials Index.

The company is the first of the five biggest U.S. banks to post formal second-quarter results. JPMorgan Chase & Co., ranked third, is scheduled to report tomorrow, and Citigroup, the industry's biggest, discloses earnings the next day.

Avoiding Subprime

Wells Fargo, the second-biggest U.S. mortgage lender, has said it avoided subprime loans, which caused more than 100 companies to close, be sold or halt operations since the beginning of 2007. Bank of America Corp. became the biggest home lender this month when it completed a rescue of Countrywide by purchasing the Calabasas, California-based company.

Last month, analyst Vivek Juneja of JPMorgan reduced his 2008 and 2009 profit estimates at Wells Fargo because of the likelihood of additional loan loss reserves. The percentage of loans no longer collecting interest rose to 1 percent from 0.8 percent in the previous quarter and 0.5 percent a year earlier.

The company set aside $7.52 billion for bad loans, compared with $6 billion at the end of March. The bank said in April that the $6 billion allowance was the highest in 10 years.

While profit is declining amid the mortgage crisis, Wells Fargo is diversifying by bolstering its insurance and credit cards units. In May, Wells Fargo bought Flatiron Credit Co., which finances insurance premiums, and the bank has been building its credit-card business.

Revenue Growth

Those areas provide ``the basis for continued revenue growth as the mortgage banking segment faces a tough market in 2008,'' wrote Standard & Poor's credit analyst Victoria Wagner, in a report last month. ``Wells Fargo's franchise is well managed and well-positioned.''

Insurance revenue climbed 27 percent in the quarter to $550 million and credit card fees rose 14 percent to $588 million, the company said.

Wells Fargo increased its quarterly dividend 10 percent to 34 cents a share. Competitors including Washington Mutual Inc. and Citigroup have slashed their payouts as losses mount.

Billionaire Warren Buffett's Berkshire Hathaway Inc. boosted its stake in Wells Fargo in the first quarter by 1.4 million shares to 290.7 million, according to data compiled by Bloomberg. The Omaha, Nebraska-based firm owns 8.8 percent of Wells Fargo, making Berkshire the biggest stakeholder, according to Bloomberg data.

California ranked second among U.S. states in June for foreclosures, with one filing for every 192 households, according to RealtyTrac Inc. Foreclosures nationwide increased 53 percent that month from a year earlier.

The world's biggest financial firms have reported more than $400 billion of losses and writedowns tied to the U.S. housing slump, according to Bloomberg data, with $4.9 billion coming from Wells Fargo.

(SOURCE)

Starbucks releases first store closure list

None in Washington or Seattle, yet. 

Starbucks said last week that it would close 600 underperforming U.S. stores, but did not specify which ones. The move is expected to affect 12,000 employees.

The closures will be spread out until 2009. The Seattle coffee chain is suffering from a lagging economy and rising food and gas prices.

"Poor real estate decisions that were made, coupled with a very troubled economy, convinced us that these stores would not reach acceptable levels of profitability," Chief Executive Howard Schultz wrote in a memo to employees earlier this week. "We have been criticized by some observers for not publicizing the complete list of store closures at the time of the announcement. Out of respect, we felt that it was important to first inform our partners (employees) in the stores targeted for closure."

Each month, after closure dates have been communicated to employees, Starbucks will update its list.

The company is expected to start offering new products, including health drinks, next week.

Click here for the rest of the article.

Apple Stores Have IPhones; AT&T Is Mostly Sold Out

Almost all of Apple Inc.'s stores in the U.S. reported they will have the iPhone 3G to sell, a day after thousands lined up to buy the handset and emptied most of AT&T Inc.'s inventory.

Apple, which has 187 stores in 38 states, will have the $199, 8-gigabyte model in black and 16-gigabyte versions in black and white at the majority of its shops today, according to a tally posted last night on Apple's Web site.

The iPhone 3G, a new version that works with speedier third- generation networks, went on sale yesterday in the U.S. and 21 other countries. Apple's partners in the U.K., Germany, Canada and Japan said many shops ran out on the first day. AT&T, Apple's exclusive U.S. partner, said most of its 2,000 stores were out of supplies and that it expected new inventory within days.

"The Apple retail store likely has your iPhone 3G in stock,'' Cupertino, California-based Apple told visitors on its Web site. ``Shipments of iPhone 3G arrive most days.''

Apple was out of all three models at 16 stores, including its outlets in Los Gatos, California; Victor, New York; Cherry Hill, New Jersey; Madison, Wisconsin; and Knoxville, Tennessee. Apple's lone stores in Nebraska and in Iowa were out of supplies, leaving buyers there with no iPhones to buy today.

Shoppers seem to prefer the black, 16-gigabyte model, which sells for $299, based on the online tally. Customers must sign up for a two-year contract with AT&T at the time of purchase.

Click here for the rest of the article. 

C-NOTE: NO NEED TO BUY BLACK IF YOU PLAN TO BUY A PROTECTIVE SKIN, AS MOST PEOPLE WOULD. I BOUGHT WHITE BECAUSE I LOVE THE WHITE ONE, BUT WITH MY SKIN ON IT YOU CAN'T TELL WHAT COLOR IT IS. SO BUY WHAT'S AVAILABLE. 

SHOULD I MOVE TO TEXAS (AGAIN)?

While the rest of the country is experiencing a huge "economic downturn", Texas might just be the place to be. Have a look.

MAJOR TURBULENCE AHEAD FOR OUR AIRLINES!

Uh-oh, our airlines are in trouble. Big trouble.

America's aviation system could be at risk of collapsing by the beginning of next year.

That warning from aviation experts has prompted some industry leaders to call for re-regulation, something considered almost heresy until now. Others are urging Washington to do more to rein in the oil speculators pushing up fuel costs.

But there is agreement among airline officials and analysts that Washington and the two presidential candidates need to recognize the severity of the crisis and take some action now to avert an economically crippling collapse in the near future.

"Unless something is done to move toward some kind of fix, we're going to see every one of our major airlines in bankruptcy," says Robert Crandall, former chairman of American Airlines. "If that isn't enough of a crisis to alert everybody, then I don't know what it will take."

As a result of the spike upward in oil prices, almost every major airline is now losing millions of dollars each quarter.

Unless the price of oil comes down, most are expected to run out of cash by the end of this year or the beginning of next. In a bid to stave off bankruptcy, they're already retrenching. They plan to lay off an estimated 25,000 employees, park hundreds of planes, and cut the number of flights they offer.

Click here for more of the article.

Continental cuts 3,000 jobs, grounds 67 airplanes

NEW YORK (CNNMoney.com) -- The crisis facing the airline industry, propelled by out-of-control fuel costs, claimed another victim on Thursday. Continental Airlines said it is eliminating about 3,000 jobs, or 6.7% of its staff, and grounding 67 mainline aircraft in an attempt to cut costs amid record oil and fuel prices.

The airline - the nation's fourth-largest by miles flown by paying passengers - said it was facing the worst industry conditions since the terrorist attacks of Sept. 11, 2001. "The airline industry is in a crisis: Its business model doesn't work with the current price of fuel and the existing level of capacity in the marketplace," said Larry Kellner, Continental's chairman and chief executive officer, and President Jeff Smisek in a letter to employees. "We need to make changes in response."

In recognition of the company's crisis Smisek and Kellner said they would not be paid the remainder of their 2008 salaries and will refuse payment under the company's annual incentive program.

CREDIT CARD REHAB?

I have a question to throw out there to my friends in cyberspace. I'm not sure how familiar any of you are with the Student Loan Rehab program, but I went through it. Basically, it's when you default on your student loans and you either contact or get contacted by Direct Loans or an "agency" representing them. Trust me though, it's really the road to recovery - a road full of bumps but worth it nonetheless. Here's the skinny, and I'm summarizing:

1. You send them statements about what you earn.
2. They tell you what they need you to pay (up to 15% of your "disposable" earnings).
3. You set up payment arrangements with them.
4. You pay for 9 consecutive months.
5. Your loan then goes back to Direct Loans.
6. You are in good status as though you were never late.

You can go here to get more information.

After all of that, my question is this: 

With the current mortgage crisis and now the resulting (or concurrent) credit card situation, why don't credit card companies offer the same kind of program? If you work out a deal with them and you pay them on time or even a larger monthly payment during the "rehab" period, you then go to current status as though you were never late. I ask this question because it is unclear to me what the incentive is (other than it being the right thing to do, I say that without judgement either way) when if you try to pay off your credit card, your credit will be adversely affected while you are paying and once paid off, for 7 years after that. Could that be why so many people declare bankruptcy and just say, "fuck it"? 

I would like to hear what success stories people out there have had with credit card debt and how they made sense of all of this.

Disclaimer time: I'm not having credit card issues right now, but I know many people are so I felt this could benefit those people; also, I'm not an economist so don't quote me on any specifics I've mentioned - I just know what worked for me and my student loans.

Another WTF Moment - Countrywide

The two top executives at struggling Countrywide Financial Corp., the nation's largest mortgage lender, are slated to receive a combined $19 million in payouts, a regulatory filing shows.

The payments are part of the company's pending takeover by Bank of America.

Countrywide CEO Angelo Mozilo is set to receive $10 million in stock, and President David Sambol will get about $9 million, according to documents Bank of America filed this week with the Securities and Exchange Commission.

Mozilo and Sambol, along with ex-Citigroup chief Charles Prince, came under fire this month by members of the House Oversight and Government Reform Committee, who chastised the executives for helping foster the current mortgage crisis.

Between 2002 and the close 2006, these three execs were paid $460 million - yes, $460 million! That's a whole lot of houses huh?

Read the rest here on CNN.