Stock Market Crash Expected In 2008 To Be Worse Than 1929

[Soldier4Christ]

Mining giant Rio Tinto to cut 14,000 staff

Rio Tinto announced plans to cut 14,000 jobs on Wednesday, just weeks after a planned buyout by rival BHP Billiton collapsed.

 Rio Tinto made the announcement as part of a plan to cut its nearly $39 billion in corporate debt by an estimated $10 billion by the end of 2009. The company issued a gloomy forecast in October.

"Since that time, demand conditions have worsened further, and as a result the group's priorities have reoriented around conserving cash flow and reducing near-term borrowings," it said in a statement announcing the cuts.

The layoffs would include 5,500 direct employees and 8,500 contract jobs, the elimination of which would save about $1.2 billion a year, the company said. The layoffs would cost $400 million in severance packages, however.

BHP withdrew from its planned buyout in late November, citing a high level of debt the combined company would be required to service in "difficult" economic conditions and concerns about whether it would be able to sell off units Rio Tinto already had targeted for divestment.

Rio Tinto said it would consider selling off other elements of the company in an effort to raise more cash, but disclosed no details.

[Soldier4Christ]

More layoffs being announced (in addition to normal holiday layoffs):

National Football League 150

National Association of Home Builders 52

Boca Raton Community Hospital Florida 39

Wabash National Lafayette, Indiana 800

Mattson Technology Fremont, Ca 120

City of Toledo, OH 45

Signal International Pascagoula shipyards, Miss 250

City of Redding, Ca 14 (to start)

Dal-Tile (mosaic tile manufacturer) Gettysburg, PA 150

Dayton city, OH 232

These are just a few of the many more that are listed.

[Soldier4Christ]

Fifth Georgia bank closed, 24th nationwide failure in 2008

Regulators on Friday closed Haven Trust Bank, marking the 24th U.S. bank failure this year, and the fifth in Georgia.

The Federal Deposit Insurance Corp. was appointed receiver of the Duluth, Ga.-based bank, which had total assets of $572 million and deposits of $515 million as of Dec. 8.

The FDIC said Winston-Salem, N.C.-based BB&T has agreed to assume all of the bank's deposits, including those that exceeded the insurance limit, for $112,000. BB&T will also buy about $55 million of the failed bank's assets; the FDIC will retain the rest for later disposition.

The four branches of Haven Trust Bank will reopen on Monday as BB&T branches, and deposits will continue to be insured by the FDIC. Regular deposit accounts are now insured up to $250,000 as part of the financial rescue law enacted in early October.

The agency said depositors will continue to have full access to their money.

The FDIC estimated that the resolution of Haven Trust Bank will cost the federal deposit insurance fund $200 million.

The 24 U.S. bank failures so far this year compare with three for all of 2007 and are far more than in the previous five years combined. It's expected that many more banks won't survive the next year of economic turmoil. The pressures of tumbling home prices, rising foreclosures and tighter credit have been battering financial firms nationwide.

Of the roughly 8,500 federally insured banks and thrifts, the FDIC had 171 on its confidential list of troubled institutions as of Sept. 30 — a nearly 50% jump from the second quarter and the highest tally since late 1995.

[Soldier4Christ]

All these banks are having financial problems yet I belong to a Credit Union where all the members received a bonus this year because they did so well this year.

[Soldier4Christ]

OPEC losing game of dare with consumers

OPEC oil ministers dared the market into raising oil prices Wednesday by agreeing to their deepest output cut ever -- 2.2 million barrels a day.

What they got was a dare back -- oil fell below US$40 a barrel for the first time in four years. It settled in New York at US$40.06, down US$3.54.

Why is oil stuck in reverse?

For now, the consumer has replaced OPEC as oil's boss. It'll take a dramatic jump in demand to get the market to reverse course, said Rob Giegel, energy market specialist with MF Global Canada Co.

"This year everyone actually acted upon their musings of the past, and we saw a huge shift in consumer behavior in terms of more fuel-efficient vehicles, people starting to walk to work, people taking public transit," said Mr. Giegel, based in Calgary. "We have seen demand extinction, because a lot of these people will never go back."

The shift is reflected in inventory levels. The U.S. Energy Department said Wednesday supplies climbed for the 11th time in 12 weeks, by 525,000 barrels to 321.3 million barrels last week. Storage is so full that more supply is unaccounted for, said Mr. Geigel. Plenty, for example, is stored in tankers. Rates have come down so much they are being rented, filled up and parked, waiting for oil to rebound, he said.

OPEC's cut was deep, but not deep enough. Wednesday's cut, which comes into effect Jan. 1, raises to 4.2 million barrels a day the output OPEC has said it wants to take off the market since September. This would reduce its volumes by 15% or 24.845 million barrels a day.

"It seems like, despite the fact that the economies of producer nations are clearly in trouble, they don't have the temerity to actually go ahead and do the kind of cut that would be really interesting to traders to turn this around," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn.

But Leila Benali, Paris-based director of Middle East and Africa at Cambridge Energy Research Associates, said it's difficult for members to cut deeper.

"There is the question of who will take the burden," she said. "It's quite difficult to decrease production when prices are low, because it will mean less revenue for you."

OPEC isn't helping itself by mismanaging expectations, said Andrew Bradford, head of Canadian energy research at Raymond James Ltd.

"It's difficult to live up to the rhetoric that surrounds this," said the Calgary-based analyst.

The president of OPEC, Chakib Khelil, said in announcing the cut that: "I hope we surprised you." But Mr. Bradford said the market has been hearing about the pending cut for so long that Wednesday it focused on what could go wrong.

And there's plenty. OPEC members have such a poor track record of keeping their promises, the result is a lack of trust they will follow through.

"Can you institute a four million barrel-a-day cut over a four month period? My expectation is no. I don't know many precedents for that," Mr. Bradford said.

Even Russian talk about working with OPEC has turned out to be smoke and mirrors, since Russia doesn't have a national oil company to enforce the cuts and its proposed supply rollback is so marginal it's equivalent to declines in production that would have happened any way, he said.

It's tricky to curtail oil production when the world economy is in a tailspin. The risk is that higher prices will cause further pain. Indeed, the negative reaction from the U.S. and the Paris-based International Energy Agency shows OPEC has to be careful.

"OPEC has an obligation to keep the market well-supplied and to consider the health of the global economy, so efforts to limit the benefits of lower energy prices are short-sighted," said White House spokesman Tony Fratto.

Oil is still searching for a bottom, and we're not there yet. Analysts have been one-upping each other lately with calls of US$20, US$25, US$30 oil. Mr. Bradford believes the bottom is in the US$30-to-US$40 range because that's when significant Russian production comes under stress.

He sees such a low level as good news for a recovery in oil prices and energy equities.

"There is no precedent in fact in the modern era for oil prices to hit a bottom and just go sideways," he said. "They hit a bottom and [the rebound] is U shaped or V shaped. It starts moving up quite quickly."

[Soldier4Christ]

IMF warns: Economic riots
– police prepare for unrest
Paulson discussed worst-case scenario
at bailout meeting – declare martial law

Pentagon resources and U.S. troops may be used if needed to quell protests and bank runs during an economic crisis, the U.S. Army War College's Strategic Institute reported.

"Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security," the War College study states.

Incidents of economic collapse, terrorism and disruption of legal order could require deployment of forces within the U.S., it said.

A "strategic shock" could require the nation to use "military force against hostile groups inside the United States."

International Monetary Fund Managing Director Dominique Strauss-Kahn has warned that advanced nations could face civil unrest during distressful economic times

"(S)ocial unrest may happen in many countries – including advanced economies" if the economic crises are not properly dealt with, Strauss-Kahn said.

"He added that violent protests could break out in countries worldwide if the financial system was not restructured to benefit everyone rather than a small elite," London's Guardian reported.

In a recession where consumer spending is plummeting, foreclosures are rampant, workers are losing jobs, credit is tight and markets are strained, some are warning about a worst-case scenario.

Last month, trends forecaster Gerald Celente told Fox News that America will morph into the first "undeveloped" nation of the world by 2012. He said there will be a tax revolution marked by "food riots, squatter rebellion, tax revolts and job marches." He also said by 2012, the holidays will be more about getting food rather than gifts.

According to the Phoenix Business Journal, U.S. Sen. James Inhofe, R-Okla., and U.S. Rep. Brad Sherman, D-Calif., said Treasury Secretary Henry Paulson considered the prospect of civil unrest while he pushed for September's Wall Street bailout – even suggesting martial law might be essential.

Arizona Gov. Janet Napolitano, Barack Obama's pick for secretary of Homeland Security, would not provide comment to the Business Journal on the possibility of civil unrest during economic crisis. But state and local police indicated that they have trained for such an event.

"The Phoenix Police Department is not expecting any civil unrest at this time, but we always train to prepare for any civil unrest issue. We have a Tactical Response Unit that trains continually and has deployed on many occasions for any potential civil unrest issue," Phoenix Police spokesman Andy Hill said.

"We have well established plans in place for such civil unrest," Scottsdale Police spokesman Mark Clark told the Business Journal.

Maricopa County Sheriff Deputy Chief Dave Trombi concurred: "We're prepared."

Nick Dranias, director of constitutional government at the libertarian Goldwater Institute, told the Phoenix Business Journal declaration of martial law would allow U.S. armed forces to control civilian authorities.

While he said the Posse Comitatus Act limits the military's role in domestic law enforcement, he referenced a 1994 U.S. Defense Department Directive (DODD 3025) that gives military commanders authority during domestic emergencies to "save lives, prevent suffering or mitigate great property damage," according to the report.

"I don't think it's likely," he said. "But it's not impossible."

[Soldier4Christ]

With the government that we have I see it as very good possibility.

[HisDaughter]

What’s the worst that could happen?     

http://www.mlive.com/us-politics/index.ssf/2008/12/adviser_describes_worst_case_s.html


--------------------------------------------------------------------------------

What’s the worst that could happen?

That’s a question that James Rickards spends a lot of time pondering these days, as he sifts through the national security implications of the financial crisis facing the United States.

Rickards will lay out his worst case scenarios in a lecture sponsored by the Navy and the Office of the Secretary of Defense for Policy tonight. And his forecasts aren’t for the faint of heart.

Rickards calls it the “A to Z” problem: What are the threats that could make the U.S. economy look less like America and more like Zimbabwe? He sees them everywhere – in the Chinese ownership of vast amounts of American debt, in Russia’s increased centralization of its economy, in Al Qaeda’s long-established fascination with damaging the U.S. economy.

In many ways, Rickards is the ultimate bear. He’s not just thinking about whether the stock market will decline, but whether or not the stock market will survive.

All that puts Rickards decidedly outside mainstream economic and political thinking in America. But he does have an influential audience: the United States intelligence and defense communities.

Rickards is a regular adviser on financial issues to the office of the Director of National Intelligence, and he lends his financial advice to the national security community.

His lecture comes as part of an annual “Rethinking Seminar” produced by the Johns Hopkins University Applied Physics Laboratory. Rickards argues that government is not doing nearly enough to prepare for the worst. “Here’s the policy problem for the United States,” he said in an interview. “We have experts in defense and intelligence, and huge depth in capital markets experience at the Fed and at Treasury. But they’re separated by the Potomac River. And they’re not talking to each other.”

Rickards came by his economic experience the hard way. He was the general counsel at Long Term Capital Management, the hedge fund that collapsed in spectacular fashion in the late 1990s and nearly took the global economy along with it. That near-economic death experience gave him a healthy appreciation for risk. Today, he’s the senior managing director for research at Omnis, an applied research firm.

Four of the scenarios keep him up at night:

The Bait Effect

Terrorists, and al Qaeda in particular, are fascinated with the idea of destroying the U.S. economy. Rickards worries that the economic meltdown in the United States could serve as bait of sorts for a terrorist attack, as plotters calculate that a strike now could have a “force multiplier” effect because of the already skittish U.S. stock market.

The China Syndrome

The Chinese own more than $500 billion worth of U.S. Treasury bonds, and billons more in the debt of other U.S. entities such as those held by Freddie Mac and Fannie Mae. And a general sense of mutually assured financial destruction keeps them from wielding that debt like a weapon: if the Chinese dumped U.S. debt on the global market, their own holdings of U.S. debt would decline in value, the U.S. economy would be damaged, ultimately harming the Chinese economy by reducing American ability to buy more Chinese goods.

They’d have to be crazy to try it. But Rickards points out that governments don’t always do the rational thing. And in the meantime, their holdings give the Chinese incredible power over American decision making.

“It gives the Chinese de facto veto power over certain U.S. interest rate and exchange rate decisions,” Rickards explained. “For example, there’s a limit to how much dollar depreciation the Chinese would tolerate.”

That potentially closes off one American economic strategy: allowing the dollar to decline in value in order to help boost U.S. exporters. And China’s leverage is only growing as each federal bailout adds to the U.S. deficit.

The Existential Crash

A pessimist by nature, Rickards believes that many economic forecasters are wrong, and the recession will get far worse than predicted.

He sees an epic disaster scenario in which the U.S. gross domestic product declines by a staggering 35 percent over the next six to seven years. Crippling deflation could take hold. Unemployment, he says, could approach 15 percent.

That’s a calamitous rate, but it would not be an all time high: unemployment hit 25 percent during the Great Depression.

“The national security community needs to be conversant with this,” Rickards said. “In defense, intelligence, and national security, you earn your money by preparing for things that may be remote, but pose an existential threat if they come to pass.”

In this scenario, the possibilities for global unrest increase dramatically as a staggering United States retreats from foreign aid and global diplomacy and the list of dangerous failed states grows sharply.

The Alternate-Dollar Nightmare

“The Number One vulnerability is the dollar itself,” Rickards concluded. “We’re printing them and shoving them out the door, and the Fed is basically out of bullets. So why hasn’t the dollar collapsed? The short answer is, global investors don’t have any other choice.” That is, there simply aren’t enough Euro- or Yen-backed securities for investors to shift their money out of dollars and into some other currency.

But what if some kind of global coalition – say a trillion-dollar sovereign wealth fund allied with several countries around the world – banded together to create a gold-backed alternative to the dollar?

Rickards says investors – many of whom already resent that they have no alternative to the dollar – would sell American currency in huge numbers to take advantage of the new opportunity. “If that happens, that’s the end of the dollar,” Rickards said. “You’d have high unemployment, deflation, and interest rates would go up. It would take what already looks like a strong recession and make it a Great Depression or worse.”

Still, even Rickards sees a silver lining to all this. He looks around the world to the problems facing other countries such as Russia, China, Iran, and those in the Middle East.

“There are vulnerabilities for the United States, but also opportunities,” he said. “I’d rather be the United States than any of these other countries.”

[Soldier4Christ]

Bailed-out banks give billions in salaries, bonuses
Study finds executives at 116 institutions made average of $2.6 million last year

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

Rep. Barney Frank, chairman of the House Financial Services committee and a long-standing critic of executive largesse, said the bonuses tallied by the AP review amount to a bribe "to get them to do the jobs for which they are well paid in the first place.

"Most of us sign on to do jobs and we do them best we can," said Frank, a Massachusetts Democrat. "We're told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!"

The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help. Among the findings:

_The average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.

_Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million.

This year, Goldman will forgo cash and stock bonuses for its seven top-paid executives. They will work for their base salaries of $600,000, the company said. Facing increasing concern by its own shareholders on executive payments, the company described its pay plan last spring as essential to retain and motivate executives "whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels." Goldman spokesman Ed Canaday declined to comment beyond that written report.

The New York-based company on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.

_Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp. (COF) (COF), took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Va.-based company received $3.56 billion in bailout money on Nov. 14.

_John A. Thain, chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, took the reins of the company in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options.

Like Goldman, Merrill got $10 billion from taxpayers on Oct. 28.

The AP review comes amid sharp questions about the banks' commitment to the goals of the Troubled Assets Relief Program (TARP), a law designed to buy bad mortgages and other troubled assets. Last month, the Bush administration changed the program's goals, instructing the Treasury Department to pump tax dollars directly into banks in a bid to prevent wholesale economic collapse.

The program set restrictions on some executive compensation for participating banks, but did not limit salaries and bonuses unless they had the effect of encouraging excessive risk to the institution. Banks were barred from giving golden parachutes to departing executives and deducting some executive pay for tax purposes.

Banks that got bailout funds also paid out millions for home security systems, private chauffeured cars, and club dues. Some banks even paid for financial advisers. Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay personal financial planners.

At Bank of New York Mellon Corp. (BK), chief executive Robert P. Kelly's stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said.

Goldman Sachs' tab for leased cars and drivers ran as high as $233,000 per executive. The firm told its shareholders this year that financial counseling and chauffeurs are important in giving executives more time to focus on their jobs.

JPMorgan Chase chairman James Dimon ran up a $211,182 private jet travel tab last year when his family lived in Chicago and he was commuting to New York. The company got $25 billion in bailout funds.

Banks cite security to justify personal use of company aircraft for some executives. But Rep. Brad Sherman, D-Calif., questioned that rationale, saying executives visit many locations more vulnerable than the nation's security-conscious commercial air terminals.

Sherman, a member of the House Financial Services Committee, said pay excesses undermine development of good bank economic policies and promote an escalating pay spiral among competing financial institutions - something particularly hard to take when banks then ask for rescue money.

He wants them to come before Congress, like the automakers did, and spell out their spending plans for bailout funds.

"The tougher we are on the executives that come to Washington, the fewer will come for a bailout," he said.

[Shammu]

Financial Collapse May be as Significant as Fall of Berlin Wall
By Jenna Lyle
Christian Today Reporter
Tue, Dec. 23 2008 09:45 AM EST

The collapse of major banks and financial institutions may have as great an impact on the world as the fall of the Berlin Wall, says the Bishop of Gibraltar.

Bishop Geoffrey Rowell was speaking in an address during the installation of the new dean of Gibraltar’s Holy Trinity Cathedral, the Rev. Dr. John Paddock.

Reflecting on the present economic downturn, he said the dean had a role to play in speaking into the challenges of the day.

“Jeremiah was assured that the Lord had put his words into his mouth – there was a gift of speaking to the collapsing world of the Jewish people in Jeremiah’s own day,” he said.

"Our world today is a world of collapsing confidence, where a recession has come with the suddenness of a tsunami caused by the shaking of foundations beneath the sea.”

He predicted that the impact of the financial crisis would be far-reaching.

“The fall of Wall Street may be as significant as the fall of the Berlin Wall in changing the world, the Europe, in which we live,” he said. “The financial situation will certainly have an impact on the many to whom we minister in the diocese and therefore on the diocese itself.”

Paddock’s installation in the cathedral in Gibraltar was attended by representatives of the diocese and the community of Gibraltar, as well as the Governor of Gibraltar, who read a lesson, and the Roman Catholic Bishop of Gibraltar.

Rowell said that the dean, as senior priest in the diocese, had to be a voice of support as well as challenge for the diocese, and offer encouragement and care to the cathedral's congregation.

Financial Collapse May be as Significant as Fall of Berlin Wall

[Shammu]

Where'd the bailout money go? Shhhh, it's a secret
By MATT APUZZO, Associated Press Writer Matt Apuzzo
Dec 22, 9:52 am ET

WASHINGTON – It's something any bank would demand to know before handing out a loan: Where's the money going?

But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending the money or they simply refuse to discuss it.

"We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,'" said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to."

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest?

None of the banks provided specific answers.

"We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.

Some banks said they simply didn't know where the money was going.

"We manage our capital in its aggregate," said Regions Financial Corp. spokesman Tim Deighton, who said the Birmingham, Ala.-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.

The answers highlight the secrecy surrounding the Troubled Asset Relief Program, which earmarked $700 billion — about the size of the Netherlands' economy — to help rescue the financial industry. The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money.

There has been no accounting of how banks spend that money. Lawmakers summoned bank executives to Capitol Hill last month and implored them to lend the money — not to hoard it or spend it on corporate bonuses, junkets or to buy other banks. But there is no process in place to make sure that's happening and there are no consequences for banks who don't comply.

"It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry," said Elizabeth Warren, the top congressional watchdog overseeing the financial bailout.

But, at least for now, there's no way for taxpayers to find that out.

Pressured by the Bush administration to approve the money quickly, Congress attached nearly no strings on the $700 billion bailout in October. And the Treasury Department, which doles out the money, never asked banks how it would be spent.

"Those are legitimate questions that should have been asked on Day One," said Rep. Scott Garrett, R-N.J., a House Financial Services Committee member who opposed the bailout as it was rushed through Congress. "Where is the money going to go to? How is it going to be spent? When are we going to get a record on it?"

Nearly every bank AP questioned — including Citibank and Bank of America, two of the largest recipients of bailout money — responded with generic public relations statements explaining that the money was being used to strengthen balance sheets and continue making loans to ease the credit crisis.

A few banks described company-specific programs, such as JPMorgan Chase's plan to lend $5 billion to nonprofit and health care companies next year. Richard Becker, senior vice president of Wisconsin-based Marshall & Ilsley Corp., said the $1.75 billion in bailout money allowed the bank to temporarily stop foreclosing on homes.

But no bank provided even the most basic accounting for the federal money.

"We're choosing not to disclose that," said Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion.

Others said the money couldn't be tracked. Bob Denham, a spokesman for North Carolina-based BB&T Corp., said the bailout money "doesn't have its own bucket." But he said taxpayer money wasn't used in the bank's recent purchase of a Florida insurance company. Asked how he could be sure, since the money wasn't being tracked, Denham said the bank would have made that deal regardless.

Others, such as Morgan Stanley spokeswoman Carissa Ramirez, offered to discuss the matter with reporters on condition of anonymity. When AP refused, Ramirez sent an e-mail saying: "We are going to decline to comment on your story."

Most banks wouldn't say why they were keeping the details secret.

"We're not sharing any other details. We're just not at this time," said Wendy Walker, a spokeswoman for Dallas-based Comerica Inc., which received $2.25 billion from the government.

Heine, the New York Mellon Corp. spokesman who said he wouldn't share spending specifics, added: "I just would prefer if you wouldn't say that we're not going to discuss those details."

The banks which came closest to answering the questions were those, such as U.S. Bancorp and Huntington Bancshares Inc., that only recently received the money and have yet to spend it. But neither provided anything more than a generic summary of how the money would be spent.

Lawmakers say they want to tighten restrictions on the remaining, yet-to-be-released $350 billion block of bailout money before more cash is handed out. Treasury Secretary Henry Paulson said the department is trying to step up its monitoring of bank spending.

"What we've been doing here is moving, I think, with lightning speed to put necessary programs in place, to develop them, implement them, and then we need to monitor them while we're doing this," Paulson said at a recent forum in New York. "So we're building this organization as we're going."

Warren, the congressional watchdog appointed by Democrats, said her oversight panel will try to force the banks to say where they've spent the money.

"It would take a lot of nerve not to give answers," she said.

But Warren said she's surprised she even has to ask.

"If the appropriate restrictions were put on the money to begin with, if the appropriate transparency was in place, then we wouldn't be in a position where you're trying to call every recipient and get the basic information that should already be in public documents," she said.

Garrett, the New Jersey congressman, said the nation might never get a clear answer on where hundreds of billions of dollars went.

"A year or two ago, when we talked about spending $100 million for a bridge to nowhere, that was considered a scandal," he said.

Where'd the bailout money go? Shhhh, it's a secret

[nChrist]

It appears that the bottom line is we're watching evil and corruption devour everything in its path. It really is just this simple and is a path to chaos. By the way, chaos fits the devil's purpose perfectly. There isn't any explanation for what we're watching that makes any sense OTHER THAN the devil needs CONFUSION - he will get it. This is a sad message for this time of the year, but there is a GOOD MESSAGE that is less heard these days:  JESUS CHRIST IS THE ANSWER! The world wants this GOOD MESSAGE eliminated and replaced with the noise and confusion of this lost and dying world.

Regardless, JESUS CHRIST IS STILL THE ANSWER!

Love In Christ,
Tom

Ephesians 3:2-7 NASB  if indeed you have heard of the stewardship of God's grace which was given to me for you;  3  that by revelation there was made known to me the mystery, as I wrote before in brief.  4  By referring to this, when you read you can understand my insight into the mystery of Christ,  5  which in other generations was not made known to the sons of men, as it has now been revealed to His holy apostles and prophets in the Spirit;  6  to be specific, that the Gentiles are fellow heirs and fellow members of the body, and fellow partakers of the promise in Christ Jesus through the gospel,  7  of which I was made a minister, according to the gift of God's grace which was given to me according to the working of His power.

[Soldier4Christ]

U.S. Jobless Benefits Program Swells to 4.6 Million

The number of Americans collecting unemployment benefits surged to a 26-year high as the labor market worsened in a yearlong recession.

Initial jobless claims unexpectedly fell by 24,000 to 467,000 in the week that ended Jan. 3, the lowest level in almost three months, the Labor Department said today in Washington. The total number of people getting benefits rose a week earlier to 4.6 million, the most since 1982.

While the government projects a surge in firings in late December and early January, job cuts may have come earlier last year as sinking sales and the worst credit conditions in seven decades forced companies such as General Motors Corp. and Chrysler LLC to pare costs. The claims report came as President- elect Barack Obama warned the U.S. risks sinking deeper into an economic crisis without a stimulus package of about $775 billion.

“The labor market is just hemorrhaging here,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, who correctly forecast claims would fall. “Just look at the continuing claims numbers, they give you a better idea of what is going on. Nobody can find work once they’re fired.”

Consumer borrowing dropped by a record $7.9 billion in November to $2.57 trillion, the Federal Reserve said today in Washington. Households are scrambling to boost savings in the face of the deepening recession and amid an investor exodus from securities backed by credit-card and other loans.

Projected to Rise

Jobless claims were projected to rise to 545,000, according to the median projection of 35 economists in a Bloomberg News survey. Estimates ranged from 480,000 to 600,000. Claims in the prior week were revised to 491,000 from 492,000.

The government may report tomorrow the economy lost another 510,000 jobs in December, bringing the 2008 total to a six-decade high of 2.4 million, according to economists surveyed by Bloomberg. The unemployment rate probably jumped to 7 percent, the highest level since 1993.

Economists surveyed last month projected the rate will climb to 8.2 percent by the end of 2009, signaling job cuts are likely to keep rising. Martin Feldstein, a Harvard University professor and former adviser to President Ronald Reagan, yesterday predicted during an interview on Bloomberg Television that the jobless rate may eventually exceed 10 percent.

‘Dramatic Action’

“I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible,” Obama said in the address, delivered at George Mason University in the Washington suburb of Fairfax, Virginia. “If nothing is done, this recession could linger for years.”

Obama has pledged his plan will save or create 3 million jobs over the next two years.

The four-week moving average of claims, a less volatile measure, fell to 525,750 for the period ending Jan. 3, compared with 552,750 the prior week, today’s report showed.

Automakers were among companies shutting down operations last year earlier than the government anticipated, leading to a jump in claims when the figures are adjusted for seasonal variations. Those increases reverse in later weeks when the Labor Department’s computations project the firings will take place.

MFR’s Shapiro also said the numbers are being influenced by changing patterns in retail employment this year. Since merchants expected a drop in sales, they hired fewer workers and, as a result, now need to fire fewer seasonal employees than usual, he said.

Jobless Rate

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.4 percent. The unemployment rate, continuing claims and the state claims figures are reported with a one-week lag.

Thirty-two states and territories reported a decrease in new claims for the week ended Dec. 27, while 21 showed an increase.

Jobless claims reflect weekly firings and tend to rise as job growth -- measured by the monthly payroll report -- slows.

The economy entered a recession in December 2007, the National Bureau of Economic Research announced Dec. 1. Economists surveyed by Bloomberg early last month projected gross domestic product would shrink in the fourth quarter by 4.3 percent, the biggest decline since 1982, and would continue contracting through the first half of 2009.

Federal Reserve policy makers saw “substantial” risks to the economy last month as they cut the benchmark interest rate to a record low and pledged to expand emergency loans if necessary.

“Conditions in the labor market deteriorated considerably in recent months as most major industry groups shed jobs,” the Fed said this week as it released minutes of the Dec. 15-16 monetary policy meeting.

GM, Chrysler

As General Motors and Chrysler last month sought billions of dollars in loans to keep operating, the major U.S. automakers also idled or slashed production to clear out inventories.

Chrysler idled all 30 of its assembly plants on Dec. 17 for at least a month, while Ford said 9 of 15 North American factories would shut for the first week in January. GM announced output cuts Dec. 12 that affected 20 plants.

Firings are rippling from manufacturers and construction companies to service industries as demand falters.

EMC Corp., the world’s biggest maker of storage computers, said yesterday it will cut about 2,400 positions, about seven percent of its workforce.

Retailers including Talbots Inc. and Sears Holdings Corp. may close stores in the first half of the year, according to the International Council of Shopping Centers, as job losses and economic concerns keep consumers from the shops. Sales at stores open at least a year fell as much as 2 percent in November and December even as stores offered discounts of 65 percent or more.

[Soldier4Christ]

California controller to suspend tax refunds, welfare checks
John Chiang announces that his office will suspend $3.7 billion in payments owed to Californians starting Feb. 1, as a result of the state's cash crisis. Student grants are also affected.

State Controller John Chiang announced today that his office would suspend tax refunds, welfare checks, student grants and other payments owed to Californians starting Feb. 1, as a result of the state's cash crisis.

Chiang said he had no choice but to stop making some $3.7 billion in payments in the absence of action by the governor and lawmakers to close the state's nearly $42-billion budget deficit. More than half of those payments are tax refunds.

The controller said the suspended payments could be rolled into IOUs if California still lacked sufficient cash to pay its bills come March or April.

"I take this action with great reluctance," Chiang said at a news conference in his office. But he said that without action to close the deficit, "there is no way to make it through February unscathed."

The payments to be frozen include nearly $2 billion in tax refunds; $300 million in cash grants for needy families and the aged, blind and disabled; and $13 million in grants for college students.

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Illinois-based National Bank of Commerce closed
Cost of 1st failure of '09 to FDIC estimated at $97.1 million

FDIC, regulators shut down two banks

The Federal Deposit Insurance Corporation and state regulators on Friday shut down banks in Illinois and Washington - the first bank failures of the year and the 26th and 27th since the start of the current credit crisis.

Berkeley, Ill.-based National Bank of Commerce was shut down and he FDIC said Republic Bank of Chicago will assume all of National Bank of Commerce's deposits. The two locations of National Bank of Commerce will reopen Saturday as branches of Republic Bank, the FDIC said.

The last Illinois bank to fail was Eldred-based Meridian Bank, in October, the FDIC said.

National Commerce Bank had total deposits of $402.1 million as of Jan. 7, and total assets of $430.9 million, the FDIC said.

Republic Bank has agreed to buy roughly $366.6 million in National Commerce Bank's assets at a discount of $44.9 million.

The FDIC estimated that the cost of National Commerce Bank's failure to the Deposit Insurance Fund will be $97.1 million.

Also on Friday, the Bank of Clark County, Vancouver, Wash. was shut down and the FDIC was named receiver. The FDIC said Umpqua Bank based in Roseville, Ore., will assume the insured deposits.

Bank of Clark County had total assets of $446.5 million and total deposits of $366.5 million. At the time of closing, there were approximately $39.3 million in uninsured deposits held in approximately 138 accounts that potentially exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.

Umpqua will not assume the approximately $117.8 million in brokered deposits. The FDIC will pay the brokers directly for the amount of their insured funds.