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Sunday, November 18, 2012

Economic Stories of Relevance in Today's World -- November 18, 2012

Economists cut U.S. Q4 growth forecasts: survey - Reuters - November 8, 2012 - Forecasters cut their expectations for U.S. economic growth in the fourth quarter, though the labor market was seen holding on to recent improvement, a survey released on Friday showed.                  Economists expect the economy to grow at an annual rate of 1.8 percent in the current quarter, down from the previous estimate of 2.2 percent growth, according to the Philadelphia Federal Reserve's fourth-quarter survey of 39 forecasters.                      While that left estimates for gross domestic product for the year unchanged at 2.2 percent, growth in 2013 looked modestly weaker with economists forecasting 2 percent, down from 2.1 percent.

The Worst Economic Numbers In More Than A Year - The Economic Collapse Blog - Michael - November 15th, 2012 - With everything else that is going on in the world, a lot of people have failed to notice that we are seeing some of the worst economic numbers that we have seen in more than a year.  For example, it was announced on Thursday that initial claims for unemployment benefits have hit their highest level in a year and a half.  Hopefully this is just a temporary blip in the data, because initial unemployment claims tend to have a very strong correlation with the overall performance of the economy.  We also continue to see poverty statistics rise.  According to government statistics released earlier this month, the number of Americans living in poverty and the number of Americans on food stamps are both at all-time record highs.  Meanwhile, the Dow and the S&P 500 are both down more than 5 percent since the election and the U.S. government rolled up 22 billion dollars more debt in October 2012 than it did in October 2011.  The unfortunate truth is that things are not getting better.  The U.S. economy continues to become weaker and more unstable, and there are a whole lot of reasons to be very pessimistic about our economic situation as we move into the winter months.                       Let's take a closer look at some of the troubling economic numbers that have been released in recent days...

Warren Buffett Guts the News - Manassas News & Messenger and, top Prince William news sources, closing down - Washington Post Local - Tom Jackman - November 14, 2012 - When investor and newspaper fan Warren Buffett bought the Media General newspaper chain last year, there was hope for all of them, including the Manassas News & Messenger and the Richmond Times-Dispatch.But Buffett’s company announced today it is shutting down the News & Messenger after 143 years, as well as its highly informative Web site, It is the only paper in the Media General chain being shuttered by World Media Enterprises, a division of Buffett’s Berkshire Hathaway Inc.                    This is horrendous news for everyone in Prince William County and those who care about Prince William news. The News & Messenger and InsideNoVA are the definitive source of news in Prince William. Their reporters and editors work extremely hard to cover government, breaking news, high school sports, the latest lottery winners, everything.               InsideNoVA also has a Facebook page with more than 26,000 followers, and when they post stories there they get plenty of reaction . Reaction that isn’t standard anonymous-crazy comments because people must use their Facebook accounts to post, which makes a lot of sense.                        World Media chairman Terry Kroeger told me this morning there was ”a lot of competition for the ad dollars.” I whined and complained about losing the biggest news source in a county of 400,000 people. “It is too bad,” Kroeger said. “We didn’t see a way to take the negative financial momentum and turn it positive. We didn’t take this lightly. We worked very hard to develop their plans, and we just could not get there.”                     I pointed out that InsideNoVA had a large following on Facebook and seemed to be working well in the digital world. “They put a lot of emphasis on their digital products,” Kroeger said, “so their print circulation fell even further.” The print circulation is about 10,000.                        When Buffett bought the 63 papers in the Media General chain, he said: “In towns and cities where there is a strong sense of community, there is no more important institution than the local paper. The many locales served by the newspapers we are acquiring fall firmly in this mold and we are delighted they have found a permanent home with Berkshire Hathaway.”                     This is actually the closing of two newspapers, since the Potomac News and the Manassas Journal Messenger merged in 2008. World Media said all 33 people working for the paper and Web site would lose their jobs, along with 72 others in the Media General corporate structure.                        There are a lot of talented and hard-working journalists at the News & Messenger and InsideNoVA and they deserve our respect and thanks. They didn’t deserve to be shut down after 143 years of public service.

Feds gave battery firm $1M on day of bankruptcy filing
- USA Today - By Nathan Bomey, Detroit Free Press - November 17, 2012 - Electric car battery maker A123 Systems received a $946,830 check from the U.S. Energy Department on the day it filed for Chapter 11 bankruptcy last month -- providing more ammunition for critics who say the Obama administration is blindly funding failed clean energy companies.                     The Waltham, Mass.-based company also told two U.S. senators in a letter this week that it may seek more money from the $249.1-million Energy Department stimulus award it won in 2009. A123's Oct. 16 check was the latest payment as part of the original grant, which is distributed incrementally as the company meets certain benchmarks. A123 has received $133.3 million of the grant so far based on its investments in new battery plants in Livonia and Romulus, Mich....                       Meanwhile, A123 also came under scrutiny from a federal trustee charged with providing oversight in bankruptcy cases for the size of its proposed performance bonuses for senior executives. The original bonuses, priced at a total of $2.4 million to $4.2 million for 10 employees, were reduced by 12.5% by a bankruptcy judge.               A123, formed a decade ago with intellectual property from the Massachusetts Institute of Technology, promised to add thousands of jobs in Michigan after winning the federal grant -- as well as more than $125 million in tax credits and grants from the Michigan Economic Development Corp. in 2008 and 2009.

Is The 29 Hour Work Week Coming As Employers Seek To Escape The Obamacare Mandate? - CNSNews - Craig Bannister - November 12, 2012 - Businesses with 50 or more employees who average at least 30 hours of work a week will be subject to the Obamacare insurance coverage mandate.                Companies are reportedly planning large layoffs due to the implementation of Obamacare.                   But, companies can potentially avoid being subject to Obamacare's insurance requirements by limiting employees’ weekly hours to less than the 30 hour level defined by Obamacare as “full-time.”               A little-known section in the ObamaCare health reform law defines “full-time” work as averaging only 30 hours per week, a definition that will affect some employers who utilize part-time workers to trim the cost of complying with the ObamaCare rule that says businesses with 50 or more full-time workers must provide health insurance or pay a fine.                 “The term ‘full-time employee’ means, with respect to any month, an employee who is employed on average at least 30 hours of service per week,” section 1513 of the law reads.  (Scroll down to section 4, paragraph A.)                     That section, known as the employer mandate, requires any business with 50 or more full-time employees to provide at least the minimum level of government-defined health coverage to those employees. In other words, a business must provide insurance if it has 50 or more employees working an average of just 30 hours per week, which is 10 hours per week fewer than the traditional 40-hour work week.                     Thus, by cutting employees’ hours to ensure they average less than the 30 per week, employers could potentially avoid the cost of providing the minimum insurance levels mandated by Obamacare.

Job Cuts Announced At Wake Forest Baptist Medical Center - WFMY (Greensboro, NC) - November 14, 2012  - Cost-cutting at Wake Forest Baptist Medical Center will cause 950 full-time positions to be eliminated by June 30, 2013, the healthcare provider announced Wednesday.            In a news release, WFBMC said about half of the layoffs will come from "vacant, temporary and contract labor positions, as well as normal attrition and retirements." As many as 475 current employees -- about 3.5 percent of the company's workforce -- will get pink slips.               While the staff reductions won't be complete until next summer, 76 employees are being laid off this week. WFBMC says those workers will still get their full pay and benefits through Jan. 4, 2013. Everyone who is being laid off will get severance pay.             The medical center says the job cuts "will not affect nurse-to-patient ratios [or] the quality of patient care."

Banks told by Fed to test for 12% unemployment - Marketwatch - Ronald D. Orol - November 15, 2012 - The Federal Reserve is asking 30 big banks to make sure their capital can withstand a deep recession in which the unemployment rate rises to 12%.               The Fed, which first required big banks to conduct “stress tests” in 2009, laid out three scenarios lenders have to test against. The goal is to ensure that the firms have enough capital to continue operations during stressful economic times.             The Fed stressed they were not making economic forecasts “but rather hypothetical scenarios designed to assess the strength of financial institutions in stressful economic environments.”                   In addition to considering an unemployment rate of roughly 12% — up from 7.9% in October — in the most severe recession scenario, banks must evaluate how their capital buffers would withstand real GDP declining by around 5%.                 Banks will also have to test for equity prices that would fall by more than 50% over the course of the recession, with house prices declining more than 20% and with commercial real estate prices falling by a similar amount.                     While harsh, the Fed stress test isn’t necessarily as bad as conditions actually were during the so-called Great Recession from late 2007 to 2009. The unemployment rate rose from 4.7% before the recession started in Nov. 2007 to as high as 10%, the economy shrank as much as 8.9% during one quarter, and home prices have tumbled by roughly a third from their peak....

ROUBINI: Perfect Storm Or Not, 2013 Looks Awful
- Business Insider - Lucas Kawa - November 16, 2012 -
...The perfect storm is not my baseline scenario. My baseline scenario is one of low economic growth in advanced economies and recession in some of them, like the euro zone, like the U.K., like Japan but not recession in the U.S., slower economic growth in emerging markets; that’s the baseline.                 But there could be a situation in which you could have a perfect storm that would happen if there is a fiscal cliff in the United States that tips the US into a recession, if the euro zone crisis gets worse and there is an exit of Greece that is disorderly, if the landing of China becomes a hard landing of China, and four, if we really had a war in the Middle East between Israel and Iran and oil prices go to $200/barrel...

Census: U.S. Poverty Rate Spikes, Nearly 50 Million Americans Affected - CBS News/AP - November 15, 2012 - As President Barack Obama is set to begin his second term, new statistics on America’s poverty rate indicate that nearly 50 million Americans, more than 16 percent of the population, are struggling to survive.                New figures released by the Census Bureau this week found a spike in poverty numbers last year, going from 49 million in 2010 to 49.7 million last year. The numbers may come as a surprise to Congress, which estimated in September that the poverty rate would drop to 46.2 million. One of the most startling findings showed that almost 20 percent of American children continue to live in poverty.                   The Associated Press reports that the new figures are based on an updated formula devised by the Census Bureau to help give the government a better understanding for how to use safety-net programs.                 The numbers found that Hispanics and people living in urban areas had a higher chance of struggling to make it financially. Poverty among full-time and part-time workers also saw a jump from its 2010 number...

Ceilings, Cliffs and TAG - 3 Immediate Risks - - Lance Roberts - November 16, 2012 -

1 in 7 people now on Food Stamps in America

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