Posted tagged ‘Credit Crisis’

Dow Plunges To 12-Year Low

February 23, 2009

Investors unable to extinguish their worries about a recession that has no end in sight lowered stocks again today.

The Dow  tumbled 251 points to its lowest close since Oct. 28, 1997.

From the Associated Press:

All the major indexes slid more than 3 percent. The Dow is just over 100 points from 7,000.

“People left and right are throwing in the towel,” said Keith Springer, president of Capital Financial Advisory Services.

Investors pounded most financial stocks even as government agencies led by the Treasury Department said they would launch a revamped bank rescue program this week. The plan includes the option of increasing government ownership in financial institutions without having to pour more taxpayer money into them.

Although the government has said it doesn’t want to nationalize banks, many investors are clearly still concerned that this could be a possibility as banks continue to suffer severe losses because of the recession. They’re also worried that banks’ losses will keep escalating as the recession sends more borrowers into default.

“The biggest thing I see here is the incredible pessimism,” Springer said. “The government is doing a lousy job of alleviating fears.”

The Treasury and other agencies issued a statement after The Wall Street Journal reported that Citigroup is in talks for the government to boost its stake in the bank to as much as 40 percent. Analysts said the market, which initially rose on the statement, wanted more details of the government’s plans.

“It’s only a very partial picture of what we may get,” said Quincy Krosby, chief investment strategist at The Hartford. “This proverbial lack of clarity is damaging market psychology.”

Meanwhile, technology stocks fell after The Journal reported that Yahoo Inc.’s new chief executive plans to reorganize the company. But the selling came across the market as pessimism about the recession and its toll on companies deepened.

“There’s no where to hide anymore,” said Jim Herrick, director of equity trading at Baird & Co.

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TIME Magazine Article (I’m In It)

February 19, 2009

We’re in the print issue dated March 2 and should be in stores soon!!! Kate Winslet is on the cover, just FYI!

UPDATE: I’m on the COVER too in a small picture in the top right corner next to the March 2, 2009 date 🙂

But if you want a peek, the article is available online now.

Its a brief 2-3 paragraph mention near the end of the article but it’s still great to be a part of an article in TIME Magazine.

I’ve got a link to it below and the full text of the article and an “OK” picture of us (no kids though) 🙂

I love the “worried” look on my face! The only thing I wish could have been included in this article is how much my in-laws were a help to us. I feel as though the section is too slanted to how we helped them when in reality, we helped each other. They were very instrumental in making things work and I don’t want to come across as looking as though we supported them. This is not the case. We supported each other 🙂

Now we can be as famous as Casey Anthony! Without the drama that comes with it of course!!

Credit: Mark Richards

Credit: Mark Richards

From TIME:

Jennifer Bliss was no fledgling lawyer when she moved back in with her parents. At 39, she had burned through her retirement funds after losing her law-firm job in July 2007. She gave the bank the keys to the home she was unable to sell in Grand Rapids, Mich., and last November, she packed up her two Great Danes and moved about 60 miles, to Lansing, to live with her mother and stepfather. “This has been awful,” says Bliss, who has sent out some 600 résumés nationwide looking for legal work or a managerial position in another field. “I went to law school to have a solid profession so that I wouldn’t wind up in a situation like this.”

The term boomerang children used to refer to young adults moving back in with their parents, but the recession is forcing people in their 30s and 40s and older–often with a spouse and kids in tow–to bunk in with the ‘rents until they regain their financial footing. Since the recession began in December 2007, the U.S. has lost 3.6 million jobs. An AARP survey released in May found that more than a third of retirees have had to help a child pay bills in the past year. And the number of multigenerational households has increased from 5 million in 2000 to 6.2 million in 2008, according to AARP. Cramped quarters, wounded pride and general anxiety about the global economic crisis do not the most pleasant living situation make. But there are ways to ease the transition.

Talk about expectations. And be sure to discuss one another’s needs up front, says Brian Carpenter, a psychology professor at Washington University in St. Louis, Mo. Failure to do so can lead to a lot of friction. That’s what happened when Michael Gallagher, 40, moved in with his mother in Los Angeles in October 2007 after he was downsized from his job as an audio engineer. “When he came home to live, I was thinking ‘family,’ and he was thinking ‘roommate,'” says BJ Gallagher, 59, an author and a video producer. “I would feel bad when he wouldn’t say hello when he walked in the door.” At the same time, her son felt she was checking up on him and “lurking” around, she says. “We both ended up disappointed and annoyed until we discussed it and dealt with it.”

Donna Butts, executive director of Generations United, an intergenerational advocacy group based in Washington, says it’s a good idea to create an approximate timetable for achieving specific goals (à la “get a job,” “move out”).

Build in privacy. If possible, everyone should have at least some space of his or her own. For instance, when Michael Gallagher took over the part of his mother’s house that she had been using as an office, she moved her computer and video equipment into a much smaller room adjoining her bedroom. “We each needed our own space. There was no way around that,” BJ says of the rearranging she did to accommodate her son.

Share household expenses. Pay parents rent, or help with bills, and take over chores like mowing the lawn. “This way, everyone is helping in some way, and no one feels taken advantage of,” says Elizabeth Carll, a psychologist in Huntington, N.Y., who is an expert on dealing with stress. Bliss does all the cooking and cleaning. Michael Gallagher buys his own food, and beyond that, his mother says, he has “paid in trade” by persuading her to have the hip replacement she had needed for a while and by taking care of her postsurgery.

Grandparents rule. In late 2006, John Kreuzer, 30, and his wife moved from Portland, Ore., into his in-laws’ house in San Jose, Calif., because he got a p.r. job in Silicon Valley. They decided to keep staying there–with their two little kids–because Kreuzer’s father-in-law was laid off. As the job market got tighter, it just made sense for everyone to share living expenses in such a high-cost area, Kreuzer says.

Along the way, there have been differences of opinion when it comes to child-rearing. Kreuzer has explained to his children that they must abide by their grandparents’ rules, e.g., no roughhousing indoors. “My in-laws really help out with the kids while my wife and I are working,” he says. “I know that once we move out, my children will miss their time together with Grandma and Pop-Pop.”

Once we move out? That brings up one last point.

Be realistic. The economy has to turn around someday, and in the meantime, rents are falling.

In March, Kreuzer and his family are moving into a nearby town house with rent so cheap, he can continue to help his in-laws pay their monthly bills.

Michael Gallagher also found a killer deal on a rental. He moved out of his mom’s place in November, but she has yet to rearrange her stuff. “I’m not moving anything back just yet,” she says. “With this awful economy, he could boomerang right back in here.”

Barack Obama Signs Stimulus Bill

February 17, 2009

President Barack Obama finally signed a much hyped $787 billion economic stimulus bill into law today.

Time to see if this will help stimulate an economy that needs all the help it can get!

From USA Today:

President Obama called his $787 billion stimulus package the “most sweeping economic recovery act in our history” as he signed legislation in Denver Tuesday to create works projects and tax cuts designed to stimulate the sagging economy.

“I don’t want to pretend that today marks the end of our economic problems,” Obama said. “But today does mark the beginning of the end … the beginning of what we need to do to provide relief” for families that can’t pay their billls.

Before the signing Obama toured a solar panel installation project at the Denver Museum of Nature & Science in order to highlight the “green jobs” projects that are part of the stimulus package.

The bill will create or save 3.5 million jobs.

“We’re putting Americans to work, doing the work that America needs done,” the president said before signing the legislation.

From Reuters:

Obama, who has described the package as one part of a plan to solve his country’s economic ills, was expected to lay out a strategy on Wednesday to stem home foreclosures and address the housing crisis that sparked the financial sector meltdown.

Meanwhile financially strapped General Motors Corp (GM.N) and Chrysler LLC raced to finish restructuring plans that must be submitted to the Obama administration by the end of the day as part of efforts to keep America’s biggest carmakers afloat. [ID:nLH623622]

Obama, speaking in Denver where he visited a solar power installation, has staked his political reputation on the package, a mixture of tax cuts and spending projects, saying its success will determine his success as president.

“We’re putting Americans to work doing the work that America needs done in critical areas that have been neglected for too long … work that will begin real and lasting change for generations to come,” Obama said.

The White House has said it will take about a month for the money to start flowing from the package. Some economists, however, believe the measures will come too late to have an effect in 2009, when many forecasters predict full-year output will contract.

The package includes working class tax cuts, infrastructure spending, help for the poor and unemployed and investment in alternative energy.

Obama has predicted that the stimulus plan will save or create more than 3.5 million jobs over the next two years.

Though a major success for his young presidency, the stimulus debate in Congress laid bare bitter divisions over how to boost an economy suffering a rising jobless rate of 7.6 percent and a banking crisis that has nearly frozen lending.

Only three Republicans voted for the measure in the 100-seat Senate, and no Republicans broke ranks to support it the House, arguing it had too much spending and not enough tax breaks. The final plan was split into 36 percent for tax cuts and 64 percent in spending and other provisions.

TIME Magazine in February?

January 30, 2009

Well, I may finally get my shot at fame and fortune! Well, more than likely it will be neither but still this could be a pretty cool event in my life.

I took a little time away from the Caylee/Casey Anthony case (as well as all the other topics that I cover in my spare time) to be interviewed a few months back by a reporter at TIME Magazine.

Well, it turns out the article is going to be published (fingers crossed) for the February 9 issue! Not 100% sure yet if it will be in print or just online but either way, I’m looking forward to it.

Without ruining the story, it’s about families who have come together to find ways to survive the downturn of the economy. As most of you know, my wife and our two children moved in with my in laws in November, 2006. We’ve lived together since then and it has been very beneficial to us all. Bills and rent are paid and the in laws get to see their grand kids every day. Nothing wrong with that.

We have a photo shoot scheduled for 9 a.m. (PT) tomorrow so that should be exciting. I’ll have to give an update when I find out confirmation on the issue date. I’ve been told February 9, but we’ll see…

Anyways…Hope you all have a great night! And make sure to check out TIME when our inclusion appears 🙂

Citigroup Backs Off Purchase of $50 Million Corporate Jet

January 27, 2009

Citigroup, which received a large taxpayer-funded rescue last year, canceled plans to buy a $50 million executive jet after news of the new plane drew rebukes from politicians.

They also lost $7,300 of my credit card debt which was transferred to another bank. I have not been happy with Citibank in quite some time. They raised my APR from 9.9% to 15.99% for the reason that “they were losing too much money”. I requested numerous times to have my APR lowered but was turned down each time. (Until last week when after I transferred my balance, I had my rate dropped to 12.99%).

Goodbye Citi…you will not be missed by me!

From MSNBC:

The bank is under heavy pressure from regulators and elected officials after receiving $45 billion of capital from the U.S. government last year, including a $20 billion emergency infusion in November.

On Monday, Citigroup said it was going through with plans to buy a $50 million jet, which a person familiar with the matter said was a Dassault Falcon 7X. The bank said the new plane would cut its costs and it was financing the purchase by selling older jets.

But on Tuesday, a spokesman said Citigroup has no intention of taking delivery of any new aircraft.

On Tuesday, CNBC said it has learned that the Treasury Department put pressure on Citi not to accept the plane. Citing sources, CNBC said someone in the department called the bank to express “disappointment” in Citi’s original decision to take delivery. The call was said not to be from new Treasury Secretary Tim Geithner.

Citigroup had ordered the executive jet in 2005, and was scheduled to receive it later this year. The bank said on Monday that canceling the deal would force it to pay millions of dollars of penalties.

The jet quickly became a lightning rod of criticism. A White House spokesman said President Barack Obama does not believe “that’s the best use of money” by companies receiving taxpayer assistance.

Obama To Broaden Financial Bailout

January 9, 2009

Barack Obama’s economic team is broadening the mission of the $700 billion bailout for the financial sector, aiming to unfreeze credit for homeowners, consumers, small businesses and local governments.

From the Associated Press:

The overhaul is aimed at the $350 billion remaining in the Troubled Asset Relief Program and comes amid mounting criticism from lawmakers and watchdogs that the Bush administration has administered the money in an inconsistent way and has not made banks accountable for the money.

The head of a congressional panel overseeing the $700 billion bailout program said Friday that lawmakers need to “take a very hard look” at how banks have used the money and she welcomed Obama’s attempts to better define the program’s mission.

Obama’s selection for Treasury secretary, Timothy Geithner, is developing a “comprehensive set of investment principles,” an Obama transition official said Friday. The official, speaking on the condition of anonymity because the plan has not yet been fleshed out, said the economic team will include measures to mitigate rising foreclosures and will place tougher conditions on financial institutions that receive the money, including limits on executive compensation.

With 11 days left before Obama is sworn in as the nation’s 44th president, the task of requesting Congress for access to the remaining funds will now likely fall on the new Obama administration.

Geithner is expected to face a confirmation hearing before the Senate next Thursday and he can count on being quizzed vigorously on his TARP proposals.

Though the Obama team is not offering any specifics, the mere fact that it is setting goals for the money won support from the head of a congressional panel that is charged with overseeing how the money is being spent.

“These are powerfully important initiatives,” said Harvard law professor Elizabeth Warren. “I’m very pleased that the incoming administration is focused on these issues.”

She offered no specific advice on how to free up more credit. “It’s going to take a variety of tools,” she said. “They may have to move through multiple approaches.”

2008: Caylee Anthony, Barack Obama and More…

January 2, 2009

First before I go any further in recapping 2008, I want to say thank you to the more than 275,000 people who have taken the time to stop by, read and leave a comment on my site. When I started this blog back in August, I never thought that I would reach 1,000 readers, much less nearly 300,000! It absolutely blows my mind!!!

As most of you already know, I only blog for fun during the spare time I have before work, after work and after the kids have gone to bed at night. I’m not a professional. I don’t break the news, I just pass along stories that I find of interest and hope to spark discussion amongst those who stop by the site. I did get interviewed by MSNBC for an article that came out this week. That was pretty cool, possibly the highlight of my year!

Judging by the number of people who have visited the site, it seems that a lot of you have many of the same interests that I have, and I appreciate you taking the time to read! 🙂 I have enjoyed reading each and every comment that has been left and every email that has been sent to me @ roaddawg33@aol.com. (I read them all and try to respond to all as well) Feel free to drop a line anytime via email or visit me on Twitter, Facebook or MySpace.

I would  have to say that the  most read stories I have posted this year have been about Casey and Caylee Anthony. This has been a truly sad story from the beginning. The loss of a little girl who none of us knew until July who it seems was taken by her own mother. (Yes, I believe that she did it and more than likely her family knew about it at some point in time).

I have said this before, and I’ll say it again: I wish that I never had to cover this story. I wish that Caylee Anthony was still alive, with a loving family, celebrating the holidays. I wish that she had the opportunity to grow up, go to school, get married and start a family of her own. Having a 3 and 1 year old is the greatest experience I’ve had in my life. I can’t understand how anyone would ever harm their own child. It makes ABSOLUTELY NO SENSE TO ME!

Unfortunately, not all people live with the same morals and values in this life. This has been a tragedy and I hope that closure will come with the trial in 2009 and those who were a part of the death of a sweet, innocent young child, will face the consequences that they deserve.

When I started the blog in August, I thought that I would only be covering politics, music and sports. I went to my fair share of concerts including: Carrie Underwood, Kenny Chesney, Brooks & Dunn, Gary Allan, LeeAnn Rhimes, Phil Vassar, Lonestar and Luke Bryan. All were great shows and I can’t wait for another lineup of great acts to come through the Bay Area in 2009. Thanks to KRTY for all the great shows at the Rodeo Club! Bring back Phil Vassar!!!! Best show of ’08.

The Olympics took up quite a bit of my time this summer, watching Michael Phelps run for 8 gold medals in Beijing. Misty May Treanor and Kerri Walsh also dominated Women’s Volleyball again this year (and Misty got her butt slapped by the President) and who can forget the US Dream Team taking home the gold!

The 2008 Presidential race was one for the ages! In the end, Barack Obama defeated his Republican counterpart John McCain in what could be considered a convincing fashion. Saturday Night Live made Tina Fey famous once again for her impressions of Alaska Governor Sarah Palin.

There’s been a lot more this year that I just don’t have time to mention: TechCrunch Vs. PR, The Economy and much, much more. You can take a look back through the archives and see what has been discussed. I know there has been a lot! Thanks again to everyone who has taken time out of their day to stop by Kreuzer’s Korner. I’ll try to keep you updated, as always, with the news that I find interesting next year!

Happy New Year Everyone! Here’s to a GREAT 2009!

John Kreuzer