Meltdown - The Global Financial Crisis?

The global financial crisis (GFC) or global economic crisis is commonly believed to have begun in July 2007 with the credit crunch, when a loss of confidence by US investors in the value of sub-prime mortgages caused a liquidity crisis. This, in turn, resulted in the US Federal Bank injecting a large amount of capital into financial markets. By September 2008, the crisis had worsened as stock markets around the globe crashed and became highly volatile. Consumer confidence hit rock bottom as everyone tightened their belts in fear of what could lie ahead.

The sub-prime crisis and housing bubble
The housing market in the United States suffered greatly as many home owners who had taken out sub-prime loans found they were unable to meet their mortgage repayments. As the value of homes plummeted, the borrowers found themselves with negative equity. With a large number of borrowers defaulting on loans, banks were faced with a situation where the repossessed house and land was worth less on today's market than the bank had loaned out originally. The banks had a liquidity crisis on their hands, and giving and obtaining loans became increasingly difficult as the fallout from the sub-prime lending bubble burst. This is commonly referred to as the credit crunch. Read more.......

Obama, Democrats hail deal to slash unemployment benefits

In the midst of the deepest economic crisis since the Great Depression, with long-term unemployment at record highs, the Obama administration has forged a bipartisan agreement with the Republicans that will sharply reduce the duration of jobless benefits.

The deal reached Tuesday by members of a House-Senate committee would extend through December a payroll tax cut and continue emergency unemployment benefits. It includes provisions that will cut off the financial lifeline for hundreds of thousands of unemployed workers and their families.

Presented by the Obama administration and the media as a boon to hard-pressed working Americans, the measure is in reality a cruel and punitive assault on the working class—in the first instance, those most severely impacted by nearly four years of mass unemployment.

It is expected that the agreement will be finalized, passed by both houses of Congress and signed into law by Obama by the end of the week. According to press reports, over the course of 2012 it will reduce the maximum duration of extended jobless benefits from the current 99 weeks to 73 weeks in those states with the highest unemployment levels. The 73-week maximum will apply only to states where the official jobless rate is above 9 percent. Read more.....

Extreme poverty in US has more than doubled since 1996

A policy brief recently issued by the National Poverty Center (NPC) reveals that the number of households in the US living on less than $2 a day per person has increased by 130 percent since 1996, from 636,000 to some 1.46 million today.

This means that some 4 million people in “the richest country on earth” (according to US capitalism’s apologists) are surviving on less than $60 a month each, i.e., essentially on no income whatsoever.

The policy brief, authored by H. Luke Shaefer, University of Michigan, School of Social Work, and Kathryn Edin, Harvard University, Kennedy School of Government, studies the results of the fifteen years since the 1996 “welfare reform” signed into law by President Bill Clinton, which fatally slashed the social safety net.

“This reform,” the authors comment, “has been followed by a dramatic decline in cash assistance caseloads, from an average of 12.3 million recipients per month in 1996 to 4.4 million in June 2011; only 1.1 million of these beneficiaries are adults. Read more...

MORE GOOD NEWS: GDP Revised Up Across The Board

New data out of the Bureau of Economic Analysis shows the U.S. economy expanded at a much faster pace than originally reported, jumping 20 basis points to 3.0 percent.

Economists polled by Bloomberg forecast no change from the first reading of 2.8 percent, and more than 35 percent predicted a further revision lower.

"The upward revision to fourth-quarter GDP growth reflected an upward revision to consumer spending for services that was partly offset by a downward revision to consumer spending on goods, mainly nondurable goods. In addition, business investment was revised up, largely reflecting an upward revision to structures, and imports were revised down." the BEA said in a statement.

Personal consumption was revised 20 basis points higher as well, to an annualized rate of 2.1 percent. The GDP Price Index was corrected to a 0.9 percent jump, from earlier estimates of 0.4 percent. The Price Index gauges inflation during the year. Read more.....

The 10 Best Cities To Buy Bank-Owned Properties

One in every four homes sold in the fourth quarter of 2011 was a foreclosed property.

Some of the best deals for buyers in the foreclosure market are real estate owned (REO) properties. These properties are taken over by banks after unsuccessful sales at foreclosure auctions.

We drew on RealtyTrac data to put together a quick guide of the 10 metropolitan areas where homebuyers are getting the best deals on REO sales.

The metro areas are ranked by the size of the discount offered by REOs relative to homes sold under normal conditions.

Note: The data is for metro areas with at least 500 REO sales during the fourth quarter. Read more......

CNBC's New Star Kelly Evans Reveals A Brand New Bullish Economic Indicator

CNBC's newest star reporter Kelly Evans made her debut appearance on the financial news network this morning on "Squawk Box."

Evans, who previously wrote the “Ahead of the Tape” column and hosted the daily "News Hub" program for The Wall Street Journal, introduced a new (well, it's new to us) economic indicator -- "The Dentist Indicator."

Basically, she said, her dentist is seeing way more new patients than normal -- a phenomenon that happens when people get jobs, and go back to the dentist for the first time in awhile with health insurance. Watch and learn in the video clip.......

Is college worth the cost?

With tuition hikes, compounding student loans, and scarce entry-level jobs, an increasing concern for high school graduates is whether college is worth the cost.

The value of college, however, runs deeper than potential post-graduation employment. Colleges and universities were designed for more than job training programs: They were designed to produce educated and informed citizens:

Al Gini is a professor of business ethics and chair of the department of management at Loyola University Chicago. He is also the co-founder and associate editor of Business Ethics Quarterly, and the author of several books, including My Job, My Self and Seeking the Truth of Things: Confessions of a (catholic) Philosopher. Read more....