Archive for the ‘Economics’ Category
(ENVIRONMENT) READ: Gizmos’ Energy Draw Alarms Experts…
(Newser Summary) – All around the house, electronic gadgets are blinking, buzzing, computing—and drawing on an immense amount of energy, the New York Times reports. Worldwide, they take up 15% of household power, and will likely consume three times as much by 2029, making it harder to combat global warming. Two hundred and thirty nuclear plants would be needed to fuel that demand, the International Energy Agency says.
Most experts say regulations are needed to limit gadgets’ energy draw, but manufacturers have resisted such mandates. A federal attempt to limit the power draw of TVs—flat-screens are the biggest energy offender—died in the 1990s due to industry opposition. But Congress has done it before, limiting the energy use of appliances like refrigerators and washers. “Standards are one of the few ways to cheaply go after big chunks of energy savings,” one advocate says.
Source: New York Times
(ECONOMICS) READ: Cash-strapped States Are Hoping You’ll Sin, But There’s Not Enough Sinners!…
Source: ESQUIRE
The Las Vegas of 2009 has become much more reliant on high-end customers looking to splurge.
It’s never quite accurate to describe Las Vegas as a ghost town. Even at five in the morning on a Tuesday, it’s liable to be more lively than your average main street or shopping mall. But when I arrived there for a brief getaway last November, it was not the same bustling town I’d been used to. My flight from Houston was barely a third full. There was no line at the taxi stand, and my cabbie told me that several of his friends had recently been laid off from construction work on a variety of new developments, many of which had been halted in midstream after financing dried up. And when I arrived at Las Vegas Boulevard in the heart of the Strip, I found as many locals handing out postcards for dodgy escort services as tourists.
None of this, I suppose, should have been surprising: November was the nadir of the worst recession since the Second World War. Nevertheless, conventional wisdom has long held that gambling is recession-proof. In Las Vegas, it’s been anything but. Gaming revenues received by local casinos were down 12 percent in 2008 as compared with a year earlier. (This figure and all others in this article are reported on an inflation-adjusted basis.) And 2009 will be even worse: So far, revenues are off almost 15 percent from 2008’s already depressed figures. The recession, then, appears set to cost Las Vegas more than a quarter of its business.
This is sobering news not just for those who have purchased property in Las Vegas — economist Tyler Cowen recently stated that the real estate market would not recover there for another twenty years — but also for cash-strapped state legislatures that are turning to casino gambling as a way to raise revenue. Delaware, which already offers horse racing and slot machines, now plans to extend its law to permit table games like blackjack and, more controversially, sports betting. In July, Ohio governor Ted Strickland signed an executive order to permit slot machines at horse tracks, while California began to allow offtrack betting on horse races for the first time. Philadelphia will soon become the largest American city to permit casino gambling within city limits, although play will initially be limited to slot machines. And in Texas — where, ironically, no legal game of Texas hold ’em is available — gaming advocates are hoping that Kay Bailey Hutchison will defeat gambling-averse incumbent Rick Perry in next year’s governor’s race, which would empower the state legislature to consider casino gambling there.
But desperate state governments looking to casinos to bail them out of their budget nightmares are likely to be disappointed. The same may be the case with trying to tap other “sins” for revenue. Nationally, sales of alcohol for off-premises consumption were down significantly last year, an unprecedented 9.3 percent in the fourth quarter, according to the Commerce Department. The largest previous drop had been just 3.7 percent, between the third and fourth quarters of 1991.
Alcohol consumption can at least be expected to bounce back a bit — right? — but a lot of the potential customers of the new casinos may be tapped out. The year 2008 was the first time in history that total casino gaming revenues declined throughout the United States (by about 5 percent according to industry estimates). In most jurisdictions, gambling revenues max out quickly. In Atlantic City, for example, which opened for business in 1978, gaming revenues were no higher in 2008 than they were in 1986, and 2009 is on pace to be the slowest year since 1983. Gambling revenues peaked in 2002 in Illinois, in 2000 in Mississippi, and in 2006 in Detroit, which had only begun to permit gambling ten years earlier. The boom years in Vegas, when revenues nearly doubled, between 1989 and 2006, might have led states to misread casino gambling’s upside potential.
What we’ve witnessed, indeed, is something of a race to the bottom. Shortly after President Reagan signed the Indian Gaming Regulatory Act in 1988, which expressly permitted Indian tribes to open casinos under tribal-state compacts, states like Mississippi, Illinois, and Colorado — seeing no reason to split their profits with the Seminoles or the Cherokee — decided to permit their own state-run facilities. Neighboring states, worried about losing their customers across state lines, then followed suit: Louisiana a year after Mississippi, Indiana and Missouri three years after Illinois, Michigan two years after Ontario, Canada. Meanwhile, the Indian tribes continued to up the ante, their casino revenuesapproximately tripling from 1997 to 2006.
Read more: http://www.esquire.com/features/data/nate-silver-sin-tax-1009?src=rss#ixzz0Rm0Qi3Kb
(CRIME/WORLD) READ: Peru Flooding US With Counterfeit Bills…
About $8 million in fake greenbacks found in U.S., another $18 million in Peru
(Newser Summary) – American officials have seized some $8 million in high-quality counterfeit US bills made in Peru, reports the Los Angeles Times. South American raids have uncovered another $18 million. The massive number of fake bills costs businesses and individuals millions, and threatens to undermine confidence in US currency, warn officials. “It’s a form of economic terrorism,” said a Secret Service agent.
Early this year, US officials launched a special task force to train Peruvian police and bankers to identify and capture counterfeiters. Columbia used to print about 70% of fake dollars passed in the states until a similar crackdown cut production to about 5%—which still accounts for millions of fake bills. Police action may have driven some Columbian counterfeiters to Peru. Human “mules” bring the money across borders, often with it strapped to their bodies.
Source: Los Angeles Times
(POLITICS) NYT: Government Pays Legal Bills For Executives That Defrauded The Government…
Source: NYtimes/The Huffington Post
PRECISELY one year ago, we lucky taxpayers took over Fannie Mae and Freddie Mac, the mortgage finance giants that contributed mightily to the wild and crazy home-loan-boom-turned-bust. In that rescue operation, the Treasury agreed to pony up as much as $200 billion to keep Fannie in the black, coughing up cash whenever its liabilities exceed its assets. According to the company’s most recent quarterly financial statement, the Treasury will, by Sept. 30, have handed over $45 billion to shore up the company’s net worth.
It is still unclear what the ultimate cost of this bailout will be. But thanks to inquiries by Representative Alan Grayson, a Florida Democrat, we do know of another, simply outrageous cost. As a result of the Fannie takeover, taxpayers are paying millions of dollars in legal defense bills for three top former executives, including Franklin D. Raines, who left the company in late 2004 under accusations of accounting improprieties. From Sept. 6, 2008, to July 21, these legal payments totaled $6.3 million.
With all the turmoil of the financial crisis, you may have forgotten about the book-cooking that went on at Fannie Mae. Government inquiries found that between 1998 and 2004, senior executives at Fannie manipulated its results to hit earnings targets and generate $115 million in bonus compensation. Fannie had to restate its financial results by $6.3 billion.
Almost two years later, in 2006, Fannie’s regulator concluded an investigation of the accounting with a scathing report. “The conduct of Mr. Raines, chief financial officer J. Timothy Howard, and other members of the inner circle of senior executives at Fannie Mae was inconsistent with the values of responsibility, accountability, and integrity,” it said.
That year, the government sued Mr. Raines, Mr. Howard and Leanne Spencer, Fannie’s former controller, seeking $100 million in fines and $115 million in restitution from bonuses the government contended were not earned. Without admitting wrongdoing, Mr. Raines, Mr. Howard and Ms. Spencer paid $31.4 million in 2008 to settle the litigation.
When these top executives left Fannie, the company was obligated to cover the legal costs associated with shareholder suits brought against them in the wake of the accounting scandal.
Now those costs are ours. Between Sept. 6, 2008, and July 21, we taxpayers spent $2.43 million to defend Mr. Raines, $1.35 million for Mr. Howard, and $2.52 million to defend Ms. Spencer.
“I cannot see the justification of people who led these organizations into insolvency getting a free ride,” Mr. Grayson said. “It goes right to the heart of what people find most disturbing in this situation — the absolute lack of justice.” READ MORE
(READ): California Garage Sale: State Holds Giant Garage Sale To Raise Funds…
Source: The Huffington Post/AP
SACRAMENTO, Calif. — Gov. Arnold Schwarzenegger is hoping that the “Great California Garage Sale” will turn government clutter like surplus prison uniforms and office furniture into cash to bulk up the state’s depleted finances.
On offer as the state clears out clutter are nearly 600 state-owned vehicles and thousands of pieces of office furniture, computers, electronics, jewelry, pianos, even a surf board, a food saver and an Xbox 360 gaming system.
State officials estimate the giant two-day yard sale being held at a state warehouse will bring in hundreds of thousands of dollars. In addition to clearing out office products, the state is also selling unclaimed property from state parks and items confiscated by law enforcement, said California Department of General Services spokesman Eric Lamoureux.
The prison department contributed dental chairs and surplus prison shirts and jeans.
“This is a win-win for the state and for shoppers,” Schwarzenegger said in a statement Tuesday announcing that a selection of items also would be sold on eBay and Craigslist. “Together we are eliminating waste and providing great deals in this tough economy.” Read More
(READ): Bernanke Victimized by Identity Fraud Ring…
Source: Newsweek
If ever there were living proof that identity theft can strike the mighty and powerful as well as hapless consumers, look no further than the nation’s chief banker: Ben Bernanke. The Federal Reserve Board chairman was one of hundreds of victims of an elaborate identity-fraud ring, headed by a convicted scam artist known as “Big Head,” that stole more than $2.1 million from unsuspecting consumers and at least 10 financial institutions around the country, according to recently filed court records reviewed by NEWSWEEK.
Last summer, just as he was dealing with the first rumblings of the financial crisis on Wall Street, Bernanke learned that a thief had swiped his wife’s purse—including the couple’s joint check book. Days later, someone started cashing checks on the Bernanke family bank account, the documents show. “It’s fair to say he was not pleased,” said one close associate of Bernanke, who asked not to be identified discussing what the Fed chairman considers a private matter. Read More
(READ): Big Business Wants to Put Global Warming on Trial…
Source: Newser.com/Los Angeles Times
Reporting from Washington – The nation’s largest business lobby wants to put the science of global warming on trial.
The U.S. Chamber of Commerce, trying to ward off potentially sweeping federal emissions regulations, is pushing the Environmental Protection Agency to hold a rare public hearing on the scientific evidence for man-made climate change.
Chamber officials say it would be “the Scopes monkey trial of the 21st century” — complete with witnesses, cross-examinations and a judge who would rule, essentially, on whether humans are warming the planet to dangerous effect.
“It would be evolution versus creationism,” said William Kovacs, the chamber’s senior vice president for environment, technology and regulatory affairs. “It would be the science of climate change on trial.”
The goal of the chamber, which represents 3 million large and small businesses, is to fend off potential emissions regulations by undercutting the scientific consensus over climate change. If the EPA denies the request, as expected, the chamber plans to take the fight to federal court.
The EPA is having none of it, calling a hearing a “waste of time” and saying that a threatened lawsuit by the chamber would be “frivolous.”
EPA spokesman Brendan Gilfillan said the agency based its proposed finding that global warming is a danger to public health “on the soundest peer-reviewed science available, which overwhelmingly indicates that climate change presents a threat to human health and welfare.”
Environmentalists say the chamber’s strategy is an attempt to sow political discord by challenging settled science — and note that in the famed 1925 Scopes trial, which pitted lawyers Clarence Darrow and William Jennings Bryan in a courtroom battle over a Tennessee science teacher accused of teaching evolution illegally, the scientists won in the end.
The chamber proposal “brings to mind for me the Salem witch trials, based on myth,” said Brenda Ekwurzel, a climate scientist for the environmental group Union of Concerned Scientists. “In this case, it would be ignoring decades of publicly accessible evidence.”
In the coming weeks, the EPA is set to formally declare that the heat-trapping gases scientists blame for climate change endanger human health, and are thus subject to regulation under the Clean Air Act. The so-called endangerment finding will be a cornerstone of the Obama administration’s plan to set strict new emissions standards on cars and trucks. Read More
(READ): Broke, California Holds Huge Garage Sale…
Source: Newser.com/Los Angeles Times
(Newser Summary) – Just how bad has California’s budget crisis gotten? So bad that it’s holding what it’s calling the “Great California Garage Sale” this weekend, hoping to unload piles of junk and wasteful property that the state’s accrued over the years. Hundreds of items will be available, from BlackBerrys to desks to cars and CHiPs motorcycles, [Governor] Arnold Schwarzenegger has even signed some of the items to drum up interest.
A few things have already been listed on eBay and Craigslist, because California is hip like that. But what could be the most interesting untold story here, writes Andrew Malcom of the LA Times, is how California got some of this stuff in the first place. Among the weirder items: a surfboard, antique piano, and dentist chairs.
(READ): Next Clunkers You Can Cash In On? Appliances…
Source: Newser.com
(Newser Summary) – If you missed out on cashing in on that clunker in your driveway, your next chance may be no farther than the kitchen, USA Today reports. Stimulus funds that will give consumers rebates as high as $200 for replacing old, inefficient appliances with newer models are due to start flowing Oct. 15. Utilities in many states also offer rebates to customers who’ll recycle old refrigerators and freezers.
The $300 million program has multiple benefits: Consumers will see lower electric bills in addition to whatever they qualify for in rebates; retiring inefficient appliances will leave more power in the grid; manufacturers and retailers look likely to see the kind of boom that accompanied the cash-for-clunkers vehicle program; and old appliances that are often “environmental time bombs” will be disposed of safely or recycled.
(READ): ‘Recession Is Over’ In The UK…
Source: SKY News
The UK recession is at an end with business confidence enjoying a record recovery, according to one trade body.
The Institute of Chartered Accountants in England and Wales (ICAEW) said optimism among professionals had moved to its highest level for two years.
The Business Confidence Monitor survey found “a remarkable upturn” in confidence in the banking sector while positive signs in the housing market have also helped boost optimism for property firms.
The IT sector was the most optimistic, followed by banking, finance and insurance firms.
Overall, the confidence measure jumped from minus 28.2 to 4.8, the largest quarterly improvement since the survey began in 2003. Read More
(MEDIA) READ: The End of Network TV as We Know It…
Source: TruthDIG.com
The American television industry is in crisis, according to Advertising Age critic Bob Garfield, who figures prominently in The Wrap’s two-part look into the future of the industry. In fact, says Garfield, we’re seeing early signs of “the total collapse of the network television model.” —KA
The Wrap:
If anything, things could get a lot worse before they get better. Some observers are even beginning to question whether there will ever be a turnaround, predicting that the business model which has sustained broadcasters for close to 60 years has begun an irreversible decline. Read More
READ: Banks make $38bn from overdraft fees
Source: Financial Times: (Editors Note: This really doesn’t fit into the “Underreported News” Section but I just thought It was interesting and would like to share it with everyone.)
By Saskia Scholtes and Francesco Guerrera in New York
Published: August 9 2009 22:52 | Last updated: August 9 2009 22:52
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US banks stand to collect a record $38.5bn in fees for customer overdrafts this year, with the bulk of the revenue coming from the most financially stretched consumers amid the deepest recession since the 1930s, according to research. The fees are nearly double those reported in 2000. Read More
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