Stock Market Crash Expected In 2008 To Be Worse Than 1929

[Soldier4Christ]

Bank reserves category goes negative
Fed: We are concerned but not alarmed

A new report from the Federal Reserve has confirmed the non-borrowed reserves of U.S. banks plummeted to a negative $18 billion at a recent accounting, reflecting an apparently worsening situation from the negative $8.8 billion reported at the end of January.

The numbers appeared particularly alarming in that the Fed, going back to1959, never before had reported that the non-borrowed reserves of depository institutions had been in the red.

But experts said the assumption bank assets had deteriorated so badly that financial institutions would be bankrupt if the Fed did not provide billions in liquidity to prop up bank balance sheets is alarmist.

Econometrician John Williams, in his subscription newsletter ShadowStats.com, said the negative numbers are a result of how the Fed has chosen to account for lending at a new Federal Reserve discount window, identified as the term auction facility, or TAF.

Technically, a close examination of the Fed data reveals TAF borrowing hit $60 billion in the two-week period ending Feb 13, while required bank reserves were $40 billon, a large part of the explanation why non-borrowed bank reserves were recorded as a negative $18 billion.

In other words, banks still have $40 billion in required reserves, an amount that has remained stable since the beginning of 2007.

Still, Williams reports the appearance of the negative numbers in this report, while not a cause of alarm, should be a cause of concern.

"That lending dwarfs total reserves suggests the banking system remains unstable in its still-unfolding solvency/liquidity crisis," Williams wrote.

If the crisis in bank assets and reserves was over, Williams argues, TAF lending would be at zero, not exploding at the current rate of some $20 billion per month, and banks again would be willing to lend to each other in the overnight markets, the normal method banks used to adjust reserve requirement shortfalls.

As long as the Fed remains willing to provide an almost unlimited amount of liquidity to its TAF auction facility, banks should be able to continue meeting reserve requirements, even if the amount of borrowing from the Fed is at levels previously not experienced.

In a technical note, reported by the Wall Street Journal, the Fed attempted to dispel concern as a "false alarm" by arguing, "The negative level of non-borrowed reserves is an arithmetic result of the fact that TAF borrowings are larger than total reserves."

Put simply, the concern among financial experts is the continuing crisis in mortgage assets, reflected in banks having to discount the value of Collateralized Mortgage Obligations in their asset portfolios.

Collateralized Mortgage Obligations, or CMOs, are securities put together when Wall Street firms package mortgage loans sold by originating financial institutions, features which then are sold back to the financial institutions.

As defaults and foreclosures have grown in the mortgage market, these losses have to be reflected in the CMOs which bundled the mortgage loans together.

Then, as financial institutions bring the CMOs to market and find their value has decreased, these losses must be reflected in the banks writing off the CMO losses, in turn reducing the estimated market value of their assets by the amount of CMO losses written-off.

Testifying before the Senate Committee on Banking, Housing, and Urban Affairs on Feb. 14, Federal Reserve Chairman Ben S. Bernanke acknowledged his continuing concern about the adequacy of bank assets.

He noted some banks have responded to recent losses in their asset portfolios by raising additional capital.

"Notwithstanding these positive factors," Bernanke said, "the unexpected losses and the increased pressure on their balance sheets have prompted banks to become protective of their liquidity and balance sheet capacity and, thus, to become less willing to provide funding to other market participants, including other banks."

Bernanke also noted banks were becoming more restrictive in lending to businesses and households, a factor Bernanke saw as contributing to a worsening outlook for the economy in recent months.

[Barbara]

This news is more on the upside...still I wonder if we'll take advantage of it or leave it unexplored like the Alaskan oil fields:

Massive Oil Deposit could Increase US Reserves by 10X

from Next Energy News, February, 2008

"America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed...The Bakken Formation in North Dakota could boost America's Oil Reserves by 10 times...In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving an accurate resource assesment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951. The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels were present but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20 to $40 a barrel.

It was not until 2007, when the EOG resources of Texas started a frenzy when they drilled a single well in Parshall N.D. that is expected to yield 700,000 barrels of oil, that real excitement and money started to flow in North Dakota. Marathon Oil is investing $1.5 billion and drilling 300 new wells in what is expected to be one of the greatest booms in Oil discovery since Oil was discovered in Saudi Arabia in 1938.

How much of an impact can this discovery have on the United States?

The US imported about 14 million barrels of oil per day in 2007, which means US consumers sent about $340 billion over seas building palaces in Dubai and propping up unfriendly regimes aroung the world. If 200 billion barrels of oil are recovered at $90 a barrel in the high plains the added wealth to the US economy would be $18 trillion dollars which would go a long way in stabilizing the US trade deficit and could cut the cost of oil in half in the long run."



 

[Soldier4Christ]

Most likely environmentalists will put a stop to it as they did to the rich Alaskan deposit. Even with the new technology industry experts say it will be necessary to flare, or burn, natural gas from production for a year or so. Since flaring is a major source of greenhouse gas emissions it is likely that environmentalists and others will object to drilling there.

[nChrist]

Hello Sister Barbara,

I hadn't heard this. This is exciting news, and I appreciate you sharing it with us. It would be wonderful if we could declare our energy independence and be free of the evil associated with oil. I think it would make all of us very sad to see how the money we spent for oil in the past has been used. "OIL" is a three-letter dirty word right now, and I'd love to see that changed.

Love In Christ,
Tom

 

[Barbara]

Hi Pastor Roger and blackeyedpeas!

It is exciting news. But if Pastor Roger is right, the environmentalists seem to have alot of pull in our country's political arena and could very well interfere. They must be backed by money to have such pull - but whose money? You'd think the money hungry politicians would be anxious to explore the financial boom that would certainly follow the development of these events, and probably ward off the financial slump this country is in, wouldn't you?

Politics.....

[Soldier4Christ]

They must be backed by money to have such pull - but whose money?

Actually it is our money that is paying for it all. Money that big wigs like George Soros is pulling out of our pockets. Soros and others like him stand to make big money on one of the biggest rip offs in industry that is called carbon credits. Soros himself is one of the biggest money makers on sugar cane produced ethanol. A web search on him will show that he has his hands in more things where he stands to profit from environmentalism. Many of our current politicians are in his pocket and stand to make a lot of money right along with him.

[Soldier4Christ]

 THE INFLATION SOLUTION
Gov't CPI data "corrupt beyond belief", commodities up 50% since 2006!
Swiss America Special Report

The government reports the consumer price index (CPI) rose a whooping 4.1% in 2007 -- the highest in 17 years!

Today the retail consumer price index (CPI) increased 0.4% in January, driven by 0.7% gains in both energy and food prices. "Core" inflation rose by .3%.

Last month the wholesale producer price index (PPI) rocketed 6.3% in 2007 -- the fastest pace in 26 years! Yet the government reports "core" inflation up only 2.4% last year. How can that be?

"We who eat and drive suspect government stats are rotten at the core. Worse yet, the real world rate of inflation is likely TWICE as high as reported," says Swiss America CEO Craig R. Smith.

"This inflation data has undergone systematic adjustments that render it corrupt beyond belief. An alternative measure of inflation, calculated by private sources, is provided by the Commodities Research Bureau (CRB). Anyone can clearly see that the CRB’s take on inflation differs wildly from the view espoused by officialdom – having risen from sub-300 to 450 [50 % increase] in 25 months," reports Financial Sense University.

No wonder everyone from Paul Harvey... to Ben Bernanke... to OPEC is worried about runaway inflation! After years of being told "Inflation is NO problem!" now even government stats can't hide it!

Common sense tell us the true rate of inflation is much higher than 2, 3 or 4% -- which is what many economic experts and government leaders still maintain today. (What planet do these guys live on anyway?)

[Soldier4Christ]

Spike In Unemployment Benefits Seekers
Department Of Labor Reports Rise In Jobless Claims, Further Evidence Of Economic Slowdown

More new people signed up for unemployment benefits last week, fresh evidence that a general economic sluggishness in the country is spilling over into the job market.

The Labor Department reported Thursday that new applications for unemployment benefits rose by 19,000 to 373,000 last week. The increase was larger than many economists were expecting. They were forecasting claims to rise to around 350,000 last week.

Fallout from a housing bust and credit crunch is sapping the economy's strength. The economy barely grew - at 0.6 percent - in the final quarter of last year and is expected to be even weaker in the current January-to-March period. With the economy slowing, companies have been reluctant to hire and want to keep their existing work forces lean.

The U.S. economy skidded to a near halt in the final quarter of last year, clobbered by dual slumps in housing and credit that caused people and businesses to spend and invest more sparingly.

The Commerce Department reported Thursday that the gross domestic product increased at a scant 0.6 percent pace in the October-to-December quarter. The reading - unchanged from an initial estimate a month ago - underscored just how much momentum the economy has lost. In the prior quarter, the economy clocked in at a brisk 4.9 percent pace.

Economists had thought the newly released fourth-quarter GDP would have been bumped up to a 0.8 percent growth rate.

The housing picture looked even more bleak in the new report.

Builders slashed spending on housing projects by a whopping 25.2 percent on an annualized basis in the fourth quarter, the biggest cut in 26 years.

And, even though economic growth slowed, inflation picked up - an ominous mix that could spell further trouble for the economy.

The National Association for Business Economics expects economic growth in the current January-to-March quarter to slow to a meager 0.4 percent pace. Some analysts believe the economy's performance could be even worse and actually shrink during this period. Under one rough rule, the economy would have to contract for six months in a row for the country to be viewed as in a recession.

With risks lurking that the problems could intensify and further hurt the economy, Federal Reserve Chairman Ben Bernanke made clear he stands ready to lower a key interest rate again. The Fed, which started cutting interest rates to bolster the economy in September, has turned much more aggressively recently. In eight days in January, the Fed slashed rates by 1.25 percentage points - the biggest one-month reduction in a quarter-century. Rates are expected to move lower at the Fed's next meeting on March 18.

Bernanke, however, is hopeful that previous rate reductions and the $168 billion economic aid plan of tax rebates for people and tax breaks for business will energize the economy in the second half of 2008.

A gauge of inflation linked to the GDP report showed that "core" prices - excluding food and energy - grew at a rate of 2.7 percent in the fourth quarter. The inflation reading - although unchanged from the government's initial estimate - showed that inflation had picked up sharply from the third quarter's 2 percent pace.

The inflation figure is above the Fed's comfort zone - the upper bound of which is a 2 percent inflation rate.

With inflation rising as the economy slows, fears are increasing that the country may be headed for a bout of stagflation. That's a scenario the country hasn't experienced since the 1970s.

Even though Bernanke has made clear the Fed's top priority - for now - is trying to get the economy back on track, he also says he remains mindful of inflation risks, especially from high energy prices.

Oil prices have reached new record highs, galloping past $100 a barrel in recent days. High energy prices can spread inflation by boosting the costs of a wide variety of other goods and services and can put a further damper on overall economic growth by crimping consumer spending.

Consumers boosted their spending at just a 1.9 percent pace in the fourth quarter. That was down slightly from the government's previous estimate and marked a pullback from the third quarter's 2.8 percent growth rate. Consumer spending accounts for a big share of overall economic activity and thus is a major factor in how the economy fares.

Business spending on equipment and software grew at a 3.3 percent pace in the final quarter of last year. That was lower than the government's initial estimate and marked a deceleration from the third quarter's 6.2 percent growth rate.

There was a bright spot in the report, however. Sales of U.S. goods and services to other countries grew at a 4.8 percent pace in the fourth quarter, better than previously estimated. U.S. exports have been helped by the declining value of the U.S. dollar, which makes U.S. goods less expensive on foreign markets. The U.S dollar dipped to another record low on Thursday in Europe.

For all of 2007, the economy grew by 2.2 percent, the weakest showing in five years. That estimate also was not changed from an earlier reading.

Fallout from a housing bust and credit crunch is sapping the economy's strength. The economy barely grew - at 0.6 percent - in the final quarter of last year and is expected to be even weaker in the current January-to-March period. With the economy slowing, companies have been reluctant to hire and want to keep their existing work forces lean.

[Soldier4Christ]

US STOCKS-Wall St slides on GDP, Fed warning on banks

Stocks sank Thursday as investors fretted over a rise in unemployment claims and the prospect of more bank failures. The Dow Jones industrial average fell 112 points, breaking its four-day winning streak.

Federal Reserve Chairman Ben Bernanke said in testimony to Congress that while large U.S. banks will likely recover from the recent credit crisis, other banks are at risk of failing. Three small U.S. banks have already failed since the summer, when the lending industry started losing billions of dollars as mortgage defaults soared.

"Implying that some banks may fail stirs concerns for any investor who's familiar with financial and economic history," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "Investors have been very edgy about credit market conditions and banks' financial conditions. Very edgy. And this doesn't remove that edginess."
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Earlier, stocks had fallen in response to a Labor Department report that first-time unemployment claims rose last week by 19,000 to 373,000, the highest level since late January.

Scott Wren, equity strategist for A.G. Edwards & Sons, said he still believes there's less than a 50 percent chance of a recession, but that it's clear employers are cautious about hiring.

"To consistently see claims up near 400,000, that's pretty telling often-times of a recession," he said.

Following four straight days of gains in the Dow — its longest run of gains so far this year — the blue-chip index sank 112.10, or 0.88 percent, to 12,582.18.

Broader stock indicators also lost ground. The Standard & Poor's 500 index declined 12.34, or 0.89 percent, to 1,367.68, and the Nasdaq composite index lost 22.21, or 0.94 percent, to 2,331.57.

Bernanke offered up some positive comments in his testimony — that most banks will bounce back from their mortgage troubles, that inflation should ease, and that the United States is nowhere near the stagflation scenario of the 1970s. When stagflation is present, the economy remains weak as inflation accelerates.

But Wall Street was skeptical of Bernanke's fairly upbeat take on the economy — particularly as oil and gold hit new records — and latched onto his admission that more banks could fail.

"Bernanke is about as skillful a Fed chairman as I have seen," said Johnson, whose more than four-decade career spans six Fed chairmen. "But these times require a very, very skillful chairman. I don't believe I've seen times as challenging as these."

Crude oil jumped $2.95 to settle at a record $102.59 a barrel on the New York Mercantile Exchange.

Gold prices also spiked to an all-time trading high of $975 an ounce.

Government bonds rose as stocks slumped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, sank to 3.67 percent from 3.85 percent late Wednesday.

Meanwhile, corporate news was gloomy. Sprint Nextel Corp. posted a $29.5 billion loss in the fourth quarter after losing customers and writing down the remaining value of its Nextel Communications buy. It also slashed its dividend. Sprint tumbled 86 cents, or 9.6 percent, to $8.09.

Thornburg Mortgage Inc. plunged after the lender said it has received margin calls — calls for immediate repayment of debt — on a portfolio of securities backed by alt-A mortgages. Alt-A loans are those given to customers with little credit history or minor credit problems.

Thornburg fell $1.78, or 15.4 percent, to $9.76.

And investors remain jittery about the prospect of more problems emerging in the struggling financial sector. A few weeks after French bank Societe Generale revealed a $7 billion loss due to the actions of a rogue trader, New York-based futures and options broker MF Global Ltd. said Thursday it lost $141.5 million after a broker traded more wheat contracts than allowed.

MF Global dropped $8.09, or 27.6 percent, to $21.19.

After the market closed Thursday, Dell Inc. reported a quarterly profit decline that was worse than Wall Street expected. Dell shares fell more than 2 percent in aftermarket trading.

The Russell 2000 index of smaller companies fell 10.72, or 1.50 percent, to 705.72.

Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where volume came to 1.46 billion shares.

Overseas, Japan's Nikkei stock average fell 0.75 percent. Britain's FTSE 100 fell 1.75 percent, Germany's DAX index fell 1.92 percent, and France's CAC-40 fell 1.97 percent.

[Soldier4Christ]

Bush Insists There Is No Recession

President Bush on Thursday said he is concerned about the slowdown in the U.S. economy, but he maintained the country is not in a recession.

"I'm concerned about the economy because I'm concerned about working Americans," he said during a White House news conference. "There's no question the economy has slowed down. I don't think we're headed into a recession."

Bush said his administration acted quickly to stimulate the economy with a pro-growth package that will have refund checks going out to consumers in May. The plan sends rebates ranging from $300 to $1,200 to millions of people and gives tax incentives to businesses.

"We'll see the effects of this pro-growth package," Bush said.

[Soldier4Christ]

Like most recessions in the recent past the government is always slow in calling it a recession, sometimes to the point that the recession was already over when it was declared. The 2001 recession was announced by NBER in November 2001, which later turned out to be the trough. Thus the recession ended the month it was announced by the NBER. In July 1981 NBER declared an end to a six-month recession (January to July 1980) in the last year of Jimmy Carter's presidency. For the 1981-82 recession during President Reagan's first term, NBER announced the July 1981 peak in January 1982, and the November 1982 trough in July 1983

[Soldier4Christ]

Home foreclosures climb to record high
More owners falling behind on payments – 'Clearly it's the worst it's been'

U.S. home foreclosures soared to an all-time high in the final quarter of last year and are likely to keep on rising, underscoring the suffering of distressed homeowners and the growing danger the housing meltdown poses for the economy.

The Mortgage Bankers Association, in a quarterly snapshot of the mortgage market released today, said the proportion of all mortgages nationwide that fell into foreclosure shot up to a record high of 0.83 percent in the October-to-December quarter. That surpassed the previous high of 0.78 percent set in the prior quarter.

"Clearly it's the worst it's been," chief association economist Doug Duncan said in an interview with The Associated Press.

In Washington state, the foreclosure rate in the quarter was 0.38 percent.

The report also showed that more homeowners nationwide fell behind on their monthly payments. The delinquency rate for all mortgages climbed to 5.82 percent in the fourth quarter. That was up from 5.59 percent in the third quarter and was the highest since 1985. Payments are considered delinquent if they are 30 or more days past due.

In Washington state, the delinquency rate was much lower. Just 3.23 percent of mortgages were past due. (Numbers for specific counties were not available.)

Nationwide, homeowners with tarnished credit who have subprime adjustable-rate loans were the hardest hit. Foreclosures and late payments for these borrowers also swelled to all-time highs in the fourth quarter.

The percentage of subprime adjustable-rate mortgages that entered the foreclosure process soared to a record of 5.29 percent in the fourth quarter. That was up from 4.72 percent in the prior quarter, which had marked the previous high.

At the same time, 2.9 percent of Washingtonians with subprime adjustable-rate loans entered foreclosure. However this type of loan represents a fraction of the mortgages in Washington state. There are a total of 65,155 subprime adjustable-rate loans on the books in Washington, compared with about 1 million prime loans, the Mortgage Bankers Association reported.

Nationally, late payments by people with subprime adjustable-rate loans skyrocketed to a record high of 20.02 percent in the fourth quarter, up from 18.81 percent — the previous high — in the third quarter.

The association's survey covers almost 46 million home loans nationwide.

"Mortgage credit quality is deteriorating fast," said Mike Larson, a real-estate analyst at Weiss Research.

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The worsening foreclosure and late-payment figures come as fears grow that the country is teetering on the edge of a recession or in one already.

The wave of foreclosures threatens to deepen the already severely depressed housing market. The homes people are forced out of add to the big glut of unsold homes already on the market. That forces even more cutbacks by homebuilders, taking a big bite out of national economic activity. Harder-to-get credit, meanwhile, has thwarted would-be home buyers, aggravating problems in the housing market.

Homeowners with spotty credit histories or low incomes who took out higher-risk subprime adjustable-rate mortgages have suffered the most distress as the housing market went from boom to bust. Initially low interest rates that reset to much higher rates have clobbered these borrowers. With home values dragged down by the slump, many borrowers were left with mortgages that eclipsed the value of their homes.

"Declining home prices are clearly the driving factor behind foreclosures, but the reasons and magnitude of the declines differ from state to state," Duncan said.

In a separate report, Americans' percentage of equity in their homes has fallen below 50 percent for the first time on record since 1945, the Federal Reserve said.

Homeowners' percentage of equity slipped to a downwardly revised 49.6 percent in the second quarter of 2007, and declined further to 47.9 percent in the fourth quarter — the third straight quarter it was under 50 percent. That marks the first time homeowners' debt on their houses exceeds their equity since the Fed started tracking the data in 1945.

Even with relief efforts under way by industry and the government, Federal Reserve Chairman Ben Bernanke earlier this week warned that foreclosures and late payments on home mortgages are likely to rise "for a while longer."

Duncan, at the Mortgage Bankers Association, agreed. "We expect some increases in the next couple of quarters," he said. The economic slowdown, harder-to-get credit and lofty energy prices are adding to the strains, he said.

Against this backdrop, Bernanke called for additional relief and urged lenders to help distressed owners by lowering the amount of their loans. "This situation calls for a vigorous response," Bernanke said in a speech Tuesday.

Bernanke's recommendation for lenders to reduce the amount owed on troubled home loans goes beyond the position staked out by the Bush administration. The Fed chief, however, didn't go as far as to endorse some proposals embraced by Democrats on Capitol Hill.

Among the initiatives promoted by the administration is allowing some homeowners with certain subprime home loans to freeze their interest rate for five years.

California and Florida continued to represent a disproportionate share of the country's new foreclosures. The two states accounted for 30 percent of mortgages starting the foreclosure process, the association said. "In states like California, Florida, Nevada and Arizona, overbuilding of new homes created a surplus that will take some time to work through," Duncan said. That glut has pushed down house prices, he said.

The fallout afflicts neighborhoods, too.

"Foreclosures not only create personal and financial distress for individual homeowners but also can significantly hurt neighborhoods where foreclosures cluster," Bernanke said.

[Soldier4Christ]

With recession looming, be prepared for layoff
You may feel secure now, but you never know when pink slip is coming

The dreaded “R” word – recession – has been dominating business headlines for months now. More and more economists are predicting bleak economic conditions and weak job growth in the coming months.

On Friday, it was reported that employers slashed 63,000 jobs in February, the most in five years. Do you need any more signs that we are teetering on the verge of recession?

Even if you feel secure in your job at this moment in time, here’s a sobering thought: Because of forces beyond your control, you could be hit with an unexpected layoff at almost any moment.
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For this reason, it’s always a good idea to plan ahead for potential financial emergencies before they strike. The following tips can help.

1. Establish an emergency fund. Set aside enough money to cover your basic living expenses for three to six months. This should give you the ability to pay your rent or mortgage, buy food and repay debts. Consider socking this money away in an online-only, high-yield money market account or a short-term certificate of deposit. For more details about how to choose such an account and earn more interest on your dough, read this past “10 Tips” column  on the subject.

2. Live within your means. Try hard not to spend excessively on items and services you don’t truly need. This will make it even easier to build up that emergency fund once and for all. For additional ideas about how to establish an emergency fund, this past “10 Tips” column about how many middle-class families are being squeezed financially could be of help to you.

3. Use credit cards with great caution. Especially if you have a hunch that a layoff might be looming, be extra careful with credit. A credit card can keep you in denial about your true financial situation. Accumulating debt will only add to your stress – and you don’t need any more stress, whether you lose your job or not.

4. Talk about money with your partner. Even when things are going well, it’s common for one partner to be completely unaware that the other partner has different financial priorities and goals. A layoff – or the specter of a layoff – can put the spotlight on such differences and lead to terrible fights. To avoid this, talk honestly and set goals together about how to cope in the coming weeks and months.

5. Tackle high-interest debt. Before a layoff ever strikes, make sure you’re not letting debt hang around for months on a high-interest credit card. Transfer that debt to cards with lower interest rates, or consider paying it off with money from a small closed-end loan from your bank or credit union. Then over the next three months or so, you can concentrate on paying back that lower-interest loan.

6. Network, network, network. Always make a point of getting to know as many people as you can in your line of work. By having plenty of friends and contacts in your industry, you’ll stand a better chance of finding work quickly if you lose your job.

7. Line up a line of credit while you’re still employed. If you own a home and you can see that a job loss might be coming, consider opening a home-equity line of credit and keeping it open. Don’t tap into the line of credit at all; just know that it’s there in case a real emergency hits. Some lenders – but not all – charge an annual maintenance fee in the $75 to $100 range for keeping a line of credit open, but that can be worth it for the peace-of-mind factor.

8. Pursue disability coverage before you lose your job. Personal disability coverage is an important thing to have – and it’s also important to secure coverage based on your current level of income. Apply for such coverage while your income is at its highest. This would involve supplementing the group coverage you may have through your job with individual coverage. If you buy additional coverage on your own, you can take it with you when you change jobs, and it will be tax-free. Comprehensive disability coverage can be very costly, but you can find accident-only disability policies for as little as $25 a month. At least you’d have that much coverage during a bout of unemployment; once you get back on your feet, you could make sure you have disability insurance that covers both accidents and illnesses. For more details about individual disability coverage, visit this About Disability Insurance site and this Insurance Information Institute site.

9. Pursue higher education while you can. Do you work for a large company that offers a “Corporate U,” or for an employer that helps cover education costs at schools in your area? Tap into that resource so you can improve your skills and bolster your resume. Hundreds of corporate university classes have been accredited, meaning you could get college credit for them if you ever enroll in a degree program.

10. Investigate your health insurance policy. Be clear on what your health plan covers, and figure out how much it would cost to extend your employer’s group insurance coverage through the federal program COBRA. Be aware that you would have to pay both the employer and employee shares of the premiums – ouch – but at least you’d get to keep the same coverage.

[Soldier4Christ]

Gasoline prices hit new high, seen jumping more

U.S. average retail gasoline prices have reached a new high of almost $3.20 per gallon and will likely jump another 20 to 30 cents in the next month, worsening the pain of consumers struggling to make ends meet in an economic downturn.

Gasoline prices are rising sharply as refiners, who have kept prices down in order to compete for sales, become more willing to pass on their higher costs of crude oil, according to an industry analyst on Sunday.

The national average for self-serve regular unleaded gas was nearly $3.20 a gallon on March 7, up about 9.44 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of about 7,000 gas stations. The price has risen 64 cents per gallon in the past 12 months.

"The price increase was entirely due to the higher costs of crude oil," said survey editor Trilby Lundberg.

Although the latest price represents a nominal all-time high, when adjusted for inflation it is a smidgen below the record of $3.18 per gallon reached on May 18, 2007, Lundberg said.

Lundberg said things will likely get worse, with prices at the pump rising 20 to 30 cents per gallon in the next month as refiners begin passing on to customers more of their higher costs for crude oil.

"Should prices indeed rise 20 to 30 cents, they would vastly exceed previous prices on an inflation-adjusted basis," Lundberg said.

Refiners since last spring have deliberately refrained from passing on their higher costs for crude oil, in order to compete for sales, she said.

"But refiner profit margins have become so slim that they will now raise prices to recover their lost margins," said Lundberg. Likewise, she said retailers will also be less willing to hold back from passing on their higher costs to drivers.

Moreover, prices will also rise because of the return to daylight savings time and the approach of warmer weather, Lundberg said.

"Spring demand growth will soak up the current surplus of U.S. gasoline and put more pressure on prices," Lundberg said.

At $3.58 a gallon, the San Francisco Bay Area had the highest latest average price for self-serve regular unleaded gas on March 7, while the lowest price was $2.95 in Cheyenne, Wyoming.

The average U.S. diesel price was $3.80 a gallon in the latest survey, up 22 cents a gallon from two weeks ago, and $1.02 higher than this time last year.

[Soldier4Christ]

Does The Latest Jobs Report Confirm A Recession?

There is a debate right now in the financial world concerning whether or not the U.S. has entered into a recession, but who is right? Does the government’s latest jobs report, which showed that employers eliminated 63,000 jobs last month, confirm the recession?

Ultimately no one knows exactly when we “officially” enter a recession or not. The government certainly won’t admit to it if we are, and they are going to do their very best to delay any mention of it. To identify whether or not we are truly in a recession, we have to look at the GDP. A recession is defined as two straight quarters with negative GDP growth. The problem is that those numbers are reported so far behind, and then later adjusted (typically for the worse), that by the time we can know what the real numbers are we’ll quite possibly have been in the recession for some time.

The job report came as a surprise to most people, as the official estimates anticipated an increase of around 25,000 jobs. Typically in a recession, jobs are a trailing indicator. It takes some time for businesses to start feeling the effects of a recession which ultimately lead to layoffs. The fact that jobs are declining would typically back up the argument that a recession is already here.

The difference in this jobs report, though, is that the unemployment rate actually fell (to 4.8 percent), which means that people were leaving the work force entirely. The baby boomers are beginning to retire, and so we are entering a period where this will be a common phenomenon. The question we have to ask is whether these jobs will be replaced. If companies are forcing employees into early retirement, or removing the jobs altogether, then it will still have the same net effect as typical job reductions. However, if these companies will eventually replace these retirees with new people, then the outcome is a little different.

My gut tells me that the first possibility (forced early retirement) is very prevalent. I have felt for sometime that we are looking at an unavoidable recession, and to me this is just the first round of “nice layoffs.” I suspect that there will be much harsher ones still to come.

So while this latest jobs report does not “officially” tell us a recession is here (as only the GDP numbers can do that), one can begin to see the writings on the wall. My advice is to start planning for a recession (save your money, “what if” you lose your job, etc), because if you plan and it doesn’t come you are much better off then if you didn’t plan and it does come.