Moonhowlings

Ben Bernanke, the 56-year old chairman of the Federal Reserve,  has been chosen as Time Magazine’s Person of the Year 2009.  He is credited with saving the economy.  The Federal reserve is the central bank of the U.S.  It is perhaps the most important and least understood financial force shaping America, and thus, the world economy.

Richard Stengel, managing editor of Time, had the following to say:

History is composed not only of what happened but of what didn’t happen. The latter, of course, is impossible to really know. We do know what happened to the U.S. and world economies during the past year, and it wasnt pretty. We know the damage caused by the plague of subprime mortgages and the fallout from risky investment vehicles that bankers invented but did not understand, and we know that we ourselves probably borrowed and spent more than we should have. What we don’t know is what the economy and our lives would look like if a few individuals had not acted on our behalf and had simply sat on their hands. We don’t know what didn’t happen, but I’m convinced that the economy would look much, much worse

The following 4 individuals were runners up:  General McCrystal, Nancy Pelosi, Usain Bolt, and the Chinese worker. 

People have different feelings about Bernanke.  What we all have to agree on is we have no clue what would have happened had another financial road been taken.

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During the Tuesday BOCS yesterday, many citizens came forward during Citizens Time to urge the supervisors to restore  a transportation system for the seniors of Prince William County.  Last July 1 the county ended a bus program that  transported  senior citizens between Woodbridge and Manassas senior citizen centers, to doctors and hospitals , and to  other spots around town.  Economic downturn and shortage of revenue was given as the reason.

 The senior centers provide a hot lunch and companionship for those who participate.  Many seniors go to the centers to see friends, do activities and to be with people their own age.  Replacement vouchers have been allocated for those seniors who don’t drive and who make less than $30,000 a year.  Unfortunately, the vouchers only cover about 6 outings.  According to News and Messenger:

As county revenue continues to decline, the county’s staff slashed more than $150,000 from its $254,116 senior center and adult day care transportation budget. The move forced officials to eliminate four positions, as well as sell a small fleet of 15-passenger vans used to transport seniors.

With the remaining funds, the county created a pilot voucher system that allows seniors to use taxi cabs or local transit buses to do routine tasks, such as go to the doctor, get prescriptions filled or go grocery shopping.

The board allocated $30,000 in additional funding to the new program, for a total of $130,000. Officials limited voucher recipients to those over age 55 who cannot drive, and to those who make less than $30,000 per year, or couples that make less than $40,000 annually.

The vouchers, ranging in value from $1 to $5, are few, many said. And once they are gone, there is no way for them to get to the senior center.

  Read more…

Two new spokes-characters for the White House will be Elmo and Big Bird.  These two along with thousands of scientists and video game programmers will be recruited to help improve math and science education in middle school and high school.

President Obama will announce this new initiative  called Educate to Innovateon Monday.  Discovery Communications, Sesame Street, Sally Ride, various CEOs will all be involved.  The initiative is a partnership with foundations and industry.  This is going to be big and will certainly rival the push in math and science back in the early 60s which was a response to Sputnik. 

Full Story New York Times

President Obama heads to Wall Street this Monday to urge financial reform. Financial regulatory systems need an overhaul to avoid the abuses and failures that led to near economic disaster last year.

Most of the focus this past summer has been on health care reform which is also part of our national financial woes. However, the banking, mortgage and insurance industries need to come back to being blips on the radar if serious reform is to take place and future disasters are to be avoided.

According the Washington Post:

He will urge members of the financial community “to take responsibility, not only to support reforming the regulatory system but also to avoid a return to the practices on Wall Street that led us to the financial crisis,” an administration official said Sunday.

Building up to that message, Treasury Secretary Timothy F. Geithner said recently that “greater urgency” is needed to push through regulatory reform and insisted that “fundamental change is necessary.” National economic adviser Lawrence H. Summers said in an interview that “this crisis will leave a legacy of strengthened regulation.”

Interestingly enough, while the job market hovers just under 10% unemployment, and retail spending is still flatlining, the stock market has gone up on average 45% since March. September which historically is the poorest month for stock gains hasn’t been that bad. Since September 1, the Dow has risen nearly 300 points. According to Bulls and Bears (Fox News) the average Joe 6 pack is just poking a toe back into the water and is investing in the stock market again after the melt down that began last September.

So who will howl about financial regulation? Probably those who are being regulated and need it the most. What are some reforms that contributors on anti see a need for?

[ UPDATE:  TEXT OF PRESIDENT OBAMA'S ADDRESS TO WALL STREET]

We have looked at enough stupid. Let’s look at SMART for a while.

I like Warren Buffett. Anyone that rich or who has a fund that functions like Berkshire Hathaway deserves to be listened to. I listened to him last fall when our country sat on the brink of financial disaster. Now he has posted some strong words in the op ed section of the NY Times. I don’t think Buffett is political–he is just old, wise and rich.

IN nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.

Read more…

Crab season begins April 1. However, the crab processing plants in Dorchester County, Maryland might not be opening, thus contributing even more to the recession. There simply are not enough workers to staff the crab plants. Chesapeake Bay area watermen are pleading with Congressman Frank Kratovil to do something about the situation.

For the past 10 years or so, the workers have come from Mexico and Central America on special visa for seasonal work. Now government red tape is causing so much of a delay that the entire industry might be affected.

So why don’t local folks take these jobs? Kids are working elsewhere. Crab processing is dangerous work and it used to be generational work. Kids would go with parents and other family members and learn to process crab. Nowadays, you have to be at least 16 years old with parent permission to even go in the plants. Most of the American crab pickers are now senior citizens.

At first, there were enough temporary worker visas — not just for crab picking, but for landscaping, construction and other seasonal businesses. But as Americans became concerned about immigrants taking residents’ jobs, Congress began limiting the number of H2B visas and creating other obstacles for businesses that depend on temporary workers.

This year, the H2B program was limited at 66,000 temporary visas. None of those went to the people who had been working in Dorchester County’s crab processing plants.

According to WJZ.com, a Baltimore TV station, the crab industry out of the Bay is on the verge of collapse while Maryland congresspersons scramble to save the day.

Read more…

Part 2 of the NY Times series, Remade in America continues looking at the plight of the newest immigrants. According to the NY Times:

The United States has experienced the greatest surge in immigration since the early 20th century, with one in five residents a recent immigrant or a close relative of one.

The series moves from Prince William County to Morristown, Tennessee where the source of income comes from the furniture industry and the poultry industry. The industrial city in eastern Tennessee has seen a huge increase in immigration the since around 2000. The population is now about 10% Latino, some legal and some illegal. It is estimated that about half of the Latino population is here illegally.

The recession has hit this area very hard. The resources available to citizens and legal residents do not exist for the undocumented immigrants who must fend for themselves. Most help comes from local churches. Remarkably, most do not want to leave. Most do not want to return to their country of origin (most in Morristown are from Mexico) because they feel their country holds nothing for them.

Instead, as the recession deepens, illegal immigrants who have settled into American towns are receding from community life. They are clinging to low-wage jobs, often working more hours for less money, and taking whatever work they can find, no matter the conditions.

Despite the mounting pressures, many of the illegal immigrants are resisting leaving the country. After years of working here, they say, they have homes and education for their children, while many no longer have a stake to return to in their home countries.

“Most of the things I got are right here,” Mr. López said in English, which he taught himself to speak. “I got my family, my wife, my kids. Everything is here.”

This area has a 2-tiered blue collar system.

Hispanic immigrants — many hired through temporary staffing agencies that offered no vacation pay or health coverage — were on the bottom, in jobs where they faced little competition from Americans.

The audio slide show summarizes the plight of several different immigrants. Strange how things change when we put a face on a situation.

Apparently Businessweek has even heard of Prince William County’s dirty little secret. In a March 6 article entitled, “ Signs of Life from the Real Estate Market,” Prince William County is highlighted as being abuzz with real estate buyers. That was the good news. Read on hear the bad news:

Across the country in Prince William County, Va., outside Washington D.C., buyers are out in force. The market, where subprime loans and boom-time construction were rampant, was badly damaged in the downturn. Making matters worse, a controversial law in Prince William County that allowed police officers to enforce immigration laws helped drive out many of the Central American immigrants who came in to work on building the new homes during the boom. Many of those immigrants who moved to neighboring Fairfax County allowed their Prince William County homes to go into foreclosure, said John McClain, senior fellow at George Mason University’s Center for Regional Analysis.

Proximity to D.C. Helps
The good news now is that inventories of unsold homes are shrinking because of the accelerating sales, though homeowners who could afford to have also likely taken their properties off the market, McClain said. In January, 3,346 homes were on the market compared to 5,355 in January, 2007, McClain said. In January, 647 homes sold in Prince William County compared to 312 a year earlier. Home prices, however, fell 34%.

One factor that could help Prince William County toward recovery is its proximity to Washington D.C., one of the few local economies with relatively good prospects thanks to its federal government and defense contractor jobs. Woodbridge, Va., in Prince William County, came in at No. 14 in our ranking. Woodbridge sales jumped 32% in the fourth quarter while median home prices dropped 18% to $215,500, according to First American CoreLogic.

The drop in inventory and the rise in sales are “good signs” for Prince William County, McClain said.
“We are at that point with that trend [in Prince William County] where the economics have to kick in,” McClain said. “Prices have to stabilize and then start up again.”
Erick Blackwelder, associate broker with Exit Realty in Woodbridge, said buyers have flocked to the market and have already bought many of the foreclosed homes that were in good shape. The remaining foreclosures are largely “junk,” he said.

“It started in April 2008,” Blackwelder said. “It was like all of a sudden, somebody flicked on a light switch and there were buyers galore.”

How many people would find Prince William County an attractive place to relocate after reading an article like this one? “To make matters worse….” seems to say it all.

Full Story

Someone just sent me that latest from Virginia Education Association Director of Government Relations Robley Jones. Good news for the schools:

The significance of President Obama’s American Recovery and Reinvestment Act (ARRA) is just beginning to sink in. Bush bailed out the banks and Obama has bailed out the schools! U.S. Department of Education ARRA funding for the 2009-2010 school year for Virginia includes the following:

State Fiscal Stabilization $1,202,770,052
Title I – $165,311,666
Ed. Technology – $10,801,292
IDEA Part B – $261,415,033
IDEA Part B, Pre-School – $9,470,492
Grand Total – $1,696,587,551

Dr. Frank Barham, the Executive Director of the Virginia School Board Association wisely sent a message to school board members across the state last night offering that, “Our [VSBA] advice is that you implement no RIF policies, amend or adopt new budgets until you get the printout from the state in the next few weeks.”

Please urge your superintendent and school board to follow Dr. Barham’s advice.

I am not sure what all this means but it tells school boards and superintendents to hold off on major decisions until the ink dries.

It looks like almost $1.7 billion dollars is being pumped into Virginia schools. I suppose what would be critical is when and how the money will be divvied up. PWC Schools are short $57 million. Will our notoriety for having the most foreclosures in the state give us a bigger piece of the pie?

Here is the perfect opportunity, for Corey, to implement his new found direction, away from the divisiveness of immigration and towards rebuilding our community.  In the Washington Post today, the article focuses on the business license requirements in Prince William County.

Supervisor Martin E. Nohe (R-Coles), a small-business owner who expressed reservations about the business license requirement last year, said it could put Prince William at a competitive disadvantage because people in other counties can apply for their certification online or by mail.

“Anything that makes it harder to do business or adds an additional burden to small-business owners is fundamentally unfair,” he said.

Prince William’s ordinance went into effect July 1. The county issued 286 licenses last year. In January, it issued 148 licenses.

Mark Klein, another accountant whose clients are upset about the new law, said the policy strikes him as anti-business and is inconsistent with the county’s objective to promote economic growth.

As we can so easily recall, only yesterday, Corey was sharing his new found direction for the county.

Stewart’s approach is to push Republicans away from their emphasis on social issues and back in the direction of pocketbook concerns. Stewart, once the leading voice on tackling immigration, now carries a mantra of lower taxes to gatherings of statewide Republicans, to lawmakers in Richmond and to the board chambers where he helps guide county policy. And he has championed it in a manner unfamiliar to many who clashed with him on immigration.

You know the old saying Corey, ” you can’t turn the page, until you’ve read the one you are on”. It will be impossible to “turn the page on immigration”, unless and until, you deal with the consequences the various policies and your rhetoric have reaped upon our community. Repealing this measure is your chance to demonstrate your intentions to lead this county in a new direction, focusing on the issues that most of us care about–our long term fiscal health, our schools, and our ability to attract a great commercial base so that we are not dependent on our real estate taxes to thrive.

Today is the shopping day known as Cyber Monday.  It always falls on the first Monday after Thanksgiving. Unlike Black Friday, is not associated with bricks and mortar stores but instead, with online retail.

Obviously, Cyber Monday hasn’t been around long enough to pass the test of time, but it has been well- entrenched for the past decade.  Cyber Monday has evolved into a major marketing event and is highlighted  with sales, free shipping and other lucrative enticements. 

Let us know here of any special deals you find.  Free shipping is always attractive since shipping and handling  can add quite a bit to any purchase.  Electronics, music, toys and jewelry are big items.  Let us know what you find.  All good ideas are welcome.

Red Friday for the blood spilled today. Shopping just ain’t what it used to be. A Walmart employee was trampled to death in a stampede of shopper in Long Island today. Meanwhile, out in Palm Desert, CA, 2 men were killed in a Toys R Us.

On the economic front, the Dow Jones Industrial Average, aka the Dow was up 1300 points in 5 days which is an all time American record. It was the biggest point gain in the history of the US stock market.

What does all this mean? Is the end in sight as far as the recession? If people are out there trampling and killing others to buy things, there must not be a real shortage of money. Supposedly, the retailers did very well from first reports, even though customers were looking for deep discounts. Are people spending beyond their means? Are these same people those who haven’t paid off Christmas from last year?

Does anyone have an exciting Black Friday story to tell?

The BOCS Halloween Financial Retreat begins today. Instead of going to some swanky place to convene, to their credit, the PWC BOCS are staying put and doing their work right at County Complex.

Their task is daunting. Running a county on a $190 million dollar shortfall is not for the faint of heart nor for one with a personal agenda. Pre-released agenda documents pretty much spelled out how dire the situation is.

At root of the financial problem is the huge, disproportionate amount of foreclosures in PWC. Each foreclosure lowers the property values of the houses around it. Many people have seen an almost 50% drop in the value of their home in the past 2 years.

The loss of value of the homes naturally changes the property tax assessments. As if things weren’t bad enough, sales tax receipts have dropped for 5 months in a row. The county is hurting.

Each county department was directed to create a budget with 10%, 20%, and 30% cuts. Looking through the documents, there were some extremely severe cuts. All eyes will be on the public safety departments first.

According to the Washington Post:

Read more…

Dow 9,387.61 +936.42 (11.08%)
Nasdaq 1,844.25 +194.74 (11.81%)
S&P 500 1,003.32 +104.10 (11.58%)

Wow! What a day. We needed this. Is the stock market giving the finger to the economic crisis, sort of like it gave the finger to 9/11?

No, we aren’t out of the woods yet. The stock market is a reaction and a prediction of what investors think will be happening in the future. However, let’s hope the bottom is in the past and we are on an upwards climb and today’s rally was a sign of good things to come on the financial horizon.

[Update: Today was the largest single-day gain ever for the Dow]

Today’s Washington Post is just full of financial articles today. Section F, the business section, has so much information in it, your head will spin.

One article in particular that caught my eye was “Retirement Wreck: Are 401(k)s Still Viable for Saving? (F1). It discusses the gradual movement from defined-benefit plans, like social security and employer pensions to defined-contribution plans like 401(k), 403(b) where the employee has ownership of the plan and the risk, regardless of how little they know about investing or the stock market.

In the past 15 months Americans have lost around 2 trillion dollar’s worth of retirement savings housed in pensions and 401k-type plans. Ouch! 401k plans generally have more stocks in their portfolios than do pensions, so they have been hit the hardest.

Historically (or back as far as 1976), it has taken as short as 5 months to as long as 8 years to recover from a bear market. The article warns about letting fear take over. Those who panic and withdraw their funds face penalty and lock in their losses.

Is the advice solid? Who knows. It seems to be pretty much the same that the experts on TV like Suzie Orman and Ali Velshi advise us.

Click on the Washington Post link above for the entire article.