LANSING, Mich. (AP) - Seasonally unadjusted unemployment rates increased in 13 of Michigan s 17 regional labor markets in December, state officials said Friday.
Total employment and labor force levels declined in most regions. Seasonal job losses occurred mainly in construction and government. Retail trade jobs increased.
Regional unemployment rates are not seasonally adjusted, but national and state unemployment rates are adjusted to remove seasonal influences such as production cycles, holidays, model changeovers in the auto industry and climate conditions.
Michigan s seasonally adjusted jobless rate in December was 7.6 percent, highest in the nation.
Regional unadjusted jobless rates for December ranged from a low of 4.7 percent in Ann Arbor to a high of 10.8 percent in northeast lower Michigan, according to the Bureau of Labor Market Information & Strategic Initiatives.
The state s major labor market areas, their seasonally unadjusted jobless rates for December and the change since November:
-- Ann Arbor, 4.7 percent, unchanged from 4.7 percent.
-- Battle Creek, 6.7 percent, up from 6.6 percent.
-- Bay City, 7.2 percent, up from 6.8 percent.
-- Detroit-Warren-Livonia, 8 percent, up from 7.2 percent.
-- Flint, 8.3 percent, unchanged from 8.3 percent.
-- Grand Rapids-Wyoming, 6 percent, up from 5.9 percent.
-- Holland-Grand Haven, 5.8 percent, up from 5.6 percent.
-- Jackson, 7.6 percent, up from 7.5 percent.
-- Kalamazoo-Portage, 5.7 percent, up from 5.5 percent.
-- Lansing-East Lansing, 5.7 percent, up from 5.5 percent.
-- Monroe, 6.5 percent, unchanged from 6.5 percent.
-- Muskegon-Norton Shores, 7 percent, down from 7.1 percent.
-- Niles-Benton Harbor, 7.1 percent, up from 6.8 percent.
-- Saginaw-Saginaw Township North, 7.4 percent, up from 7.1 percent.
-- Upper Peninsula, 8 percent, up from 7.2 percent.
-- Northeast Lower Michigan, 10.8 percent, up from 9.5.
-- Northwest Lower Michigan, 8.3 percent, up from 7.7 percent.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Friday, January 25, 2008
Sector Glance: Big Tech down
NEW YORK (AP) - Shares of some of the biggest technology companies headed lower Friday, as the economic uncertainty and tepid outlooks from some of the sector s biggest names worried investors.
Computer and gadget maker Apple Inc. declined nearly 3 percent amid a downturn in the broader market. On Tuesday, Apple posted solid results for its fiscal first quarter but issued a disappointing outlook that sent its shares 11 percent lower. On Friday, Apple was set to close the week down more than 18 percent.
Shares of computer maker Dell Inc. also declined amid fears of a slowdown in PC sales. On Wednesday BMO Capital Markets analyst Keith Bachman lowered his outlook for global PC unit growth to 9.75 percent from 11.2 percent.
"We believe PC sales are highly correlated to GDP, and as a result of a weak economic environment, will be lackluster in (in the first half of 2008) particularly in the United States," the analyst wrote.
Here is how some key technology stocks performed Friday:
Apple Inc., fell $5.59, or 4.1 percent, to $130.01.
Google Inc., declined $8.09 to $591.81.
Yahoo Inc., rose 25 cents to $21.94.
Dell Inc., lost $1.03, or 4.9 percent, to $20.06.
Microsoft Corp., gave up 31 cents to $32.94.
Hewlett-Packard Co., shed $1.15, or 2.6 percent, to $43.74.
Cisco Systems Inc., dropped 91 cents, or 3.6 percent, to $24.20.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Computer and gadget maker Apple Inc. declined nearly 3 percent amid a downturn in the broader market. On Tuesday, Apple posted solid results for its fiscal first quarter but issued a disappointing outlook that sent its shares 11 percent lower. On Friday, Apple was set to close the week down more than 18 percent.
Shares of computer maker Dell Inc. also declined amid fears of a slowdown in PC sales. On Wednesday BMO Capital Markets analyst Keith Bachman lowered his outlook for global PC unit growth to 9.75 percent from 11.2 percent.
"We believe PC sales are highly correlated to GDP, and as a result of a weak economic environment, will be lackluster in (in the first half of 2008) particularly in the United States," the analyst wrote.
Here is how some key technology stocks performed Friday:
Apple Inc., fell $5.59, or 4.1 percent, to $130.01.
Google Inc., declined $8.09 to $591.81.
Yahoo Inc., rose 25 cents to $21.94.
Dell Inc., lost $1.03, or 4.9 percent, to $20.06.
Microsoft Corp., gave up 31 cents to $32.94.
Hewlett-Packard Co., shed $1.15, or 2.6 percent, to $43.74.
Cisco Systems Inc., dropped 91 cents, or 3.6 percent, to $24.20.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Fannie and Freddie expansion not certain
WASHINGTON (AP) - A component of the House s proposed economic stimulus package intended to direct aid to the troubled housing market could run into trouble in the Senate.
Republican senators are gearing up to resist -- or scale back -- a provision that would give a bigger role to government-sponsored mortgage-finance companies Fannie Mae and Freddie Mac, saying it poses too much risk to the U.S. financial system.
A deal reached Thursday between House Speaker Nancy Pelosi and Republican Leader John Boehner of Ohio -- and endorsed by the White House -- would allow the two companies for one year to purchase home loans up to 75 percent larger than the current limit of $417,000 in areas of the country with expensive home prices such as California and the Northeast.
House lawmakers are still negotiating on how high that limit should be, with Democrats pushing for nearly $730,000 and Republicans advocating $625,000, a Boehner spokesman said Friday.
But at least two key Senate Republicans argue that it would be a mistake to change the limit at all without establishing a new regulator with the power to reduce the companies massive mortgage portfolios, now worth a combined $1.5 trillion. Multibillion-dollar accounting scandals at Fannie and Freddie in recent years brought demands for tighter government supervision and cuts in the companies holdings.
Sen. Mel Martinez, R-Fla., a former housing secretary in the Bush administration, said a better compromise would be to extend loan limits for a much shorter period: 90 to 120 days. Then, those limits would expire unless lawmakers pass a long-delayed oversight bill, he said.
"For a long time we have known these entities needed stronger regulation," Martinez said in an interview Friday. "They have the implicit guarantee of the federal government...If these companies were to go under, the Treasury would be in a terrible fix."
Sen. Richard Shelby of Alabama, the senior Republican on the Senate Banking Committee, agreed. Raising the loan limits without stronger regulation "enables thinly capitalized entities with recent accounting problems to provide a high-risk benefit to the wealthiest Americans without any real consideration of the need to do so or of the risks it presents to the taxpayer," Shelby spokesman Jonathan Graffeo said in an e-mail.
At least one Democrat was sympathetic to that argument. Sen. Tom Carper, D-Del., said he supports a six-to eight-month extension for the loan limit to prevent sapping momentum for a bill overhauling regulation of the companies.
Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, told reporters at a briefing with Treasury Secretary Henry Paulson on Friday that he plans to move forward with a bill to strengthen regulation of Fannie and Freddie.
The two companies were created by Congress to pump money into the home-mortgage market by buying home loans from banks and other lenders and bundling them into securities for sale on Wall Street. Together they hold or guarantee about $4.9 trillion in home-mortgage debt.
The government agency that regulates Fannie and Freddie, the Office of Federal Housing Enterprise Oversight, said in a statement Thursday that raising the limits for Fannie and Freddie without providing stronger government oversight "would be a mistake." Fannie and Freddie both support the change.
While Senate leaders want to send the economic stimulus package to the White House by Feb. 15 for President Bush s signature, Democrats were considering adding more spending for the unemployed, food stamp recipients and states suffering budget crunches. If Democrats push for changes, that could give Republicans a chance to do so as well.
President Bush urged Congress on Friday to quickly pass an economic stimulus package void of extraneous spending, saying only quick action will kickstart the sputtering economy. "I strongly believe it would be a mistake to delay or derail this bill," Bush said.
Shares of Fannie Mae fell $2.39 or 7 percent, to close at $31.80, while shares of Freddie Mac fell $2.42, or 7.6 percent, to close at $29.58, as investors worried about the companies risks from rising mortgage defaults.
Nevertheless, Banc of America Securities analyst Robert Lacoursiere said in a research report Friday that Fannie and Freddie "are positioned to benefit" from higher loan caps. "The current stock prices reflect greater (mortgage losses) than will ultimately be realized," he said.
----
Associated Press Writer Andrew Taylor contributed to this report.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Republican senators are gearing up to resist -- or scale back -- a provision that would give a bigger role to government-sponsored mortgage-finance companies Fannie Mae and Freddie Mac, saying it poses too much risk to the U.S. financial system.
A deal reached Thursday between House Speaker Nancy Pelosi and Republican Leader John Boehner of Ohio -- and endorsed by the White House -- would allow the two companies for one year to purchase home loans up to 75 percent larger than the current limit of $417,000 in areas of the country with expensive home prices such as California and the Northeast.
House lawmakers are still negotiating on how high that limit should be, with Democrats pushing for nearly $730,000 and Republicans advocating $625,000, a Boehner spokesman said Friday.
But at least two key Senate Republicans argue that it would be a mistake to change the limit at all without establishing a new regulator with the power to reduce the companies massive mortgage portfolios, now worth a combined $1.5 trillion. Multibillion-dollar accounting scandals at Fannie and Freddie in recent years brought demands for tighter government supervision and cuts in the companies holdings.
Sen. Mel Martinez, R-Fla., a former housing secretary in the Bush administration, said a better compromise would be to extend loan limits for a much shorter period: 90 to 120 days. Then, those limits would expire unless lawmakers pass a long-delayed oversight bill, he said.
"For a long time we have known these entities needed stronger regulation," Martinez said in an interview Friday. "They have the implicit guarantee of the federal government...If these companies were to go under, the Treasury would be in a terrible fix."
Sen. Richard Shelby of Alabama, the senior Republican on the Senate Banking Committee, agreed. Raising the loan limits without stronger regulation "enables thinly capitalized entities with recent accounting problems to provide a high-risk benefit to the wealthiest Americans without any real consideration of the need to do so or of the risks it presents to the taxpayer," Shelby spokesman Jonathan Graffeo said in an e-mail.
At least one Democrat was sympathetic to that argument. Sen. Tom Carper, D-Del., said he supports a six-to eight-month extension for the loan limit to prevent sapping momentum for a bill overhauling regulation of the companies.
Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, told reporters at a briefing with Treasury Secretary Henry Paulson on Friday that he plans to move forward with a bill to strengthen regulation of Fannie and Freddie.
The two companies were created by Congress to pump money into the home-mortgage market by buying home loans from banks and other lenders and bundling them into securities for sale on Wall Street. Together they hold or guarantee about $4.9 trillion in home-mortgage debt.
The government agency that regulates Fannie and Freddie, the Office of Federal Housing Enterprise Oversight, said in a statement Thursday that raising the limits for Fannie and Freddie without providing stronger government oversight "would be a mistake." Fannie and Freddie both support the change.
While Senate leaders want to send the economic stimulus package to the White House by Feb. 15 for President Bush s signature, Democrats were considering adding more spending for the unemployed, food stamp recipients and states suffering budget crunches. If Democrats push for changes, that could give Republicans a chance to do so as well.
President Bush urged Congress on Friday to quickly pass an economic stimulus package void of extraneous spending, saying only quick action will kickstart the sputtering economy. "I strongly believe it would be a mistake to delay or derail this bill," Bush said.
Shares of Fannie Mae fell $2.39 or 7 percent, to close at $31.80, while shares of Freddie Mac fell $2.42, or 7.6 percent, to close at $29.58, as investors worried about the companies risks from rising mortgage defaults.
Nevertheless, Banc of America Securities analyst Robert Lacoursiere said in a research report Friday that Fannie and Freddie "are positioned to benefit" from higher loan caps. "The current stock prices reflect greater (mortgage losses) than will ultimately be realized," he said.
----
Associated Press Writer Andrew Taylor contributed to this report.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Consumers at heart of stimulus plan
ST. LOUIS (AP) - The success of the federal $150 billion emergency economic stimulus plan will hinge on whether American consumers do what they do best -- spend, spend, spend.
The stimulus has been debated in Washington for more than a week as the economic outlook worsened, and now Americans are armed with specifics: Individuals will get up to $600, working couples $1,200 and those with children $300 more per child.
President Bush and leaders in Congress hope people will spend those rebates -- a flat-screen television, maybe, or a trip to Disneyland -- to help revive an economy sagging from bad mortgage lending and a lack of confidence in the stock market.
One problem: The spending habits of Americans, many of whom used the rising value of their homes during the real-estate boom like a piggy bank, may be changing as housing prices tumble and credit dries up.
So many consumers, like Jennifer Galligos of St. Louis, may put the money into savings or use it to pay down debt instead. The 24-year-old accountant is married and has a 5-year-old son, so she and her husband could get up to $1,500 in rebate money.
"I d probably put something like that in a CD or another investment," Galligos said during her lunch break Friday. "It s not often that I get a chance to save something."
The National Foundation for Credit Counseling urged consumers Friday to use the money to pay down debt and past-due bills. But the group also recommended spending the money on home repairs or remodeling that might cut down on future energy bills.
The stimulus package isn t a done deal yet. While approved by Bush and leaders in the House, it goes to the House floor for full approval next week, and later to the Senate. Democrats there are already promising to try to amend it.
Consumer spending accounts for roughly 70 percent of the U.S. economy, so putting money in the hands of shoppers is an easy way to boost economic output -- at least in the short run.
"I think it will have a positive effect -- I think it s a good package. But I don t think it s going to be enough to avoid a recession," said Steve Fazzari, a professor of economics at Washington University in St. Louis.
The rebate isn t likely to create the kind of broad economic resurgence that happened after the recession of 2001, Fazzari said. Historically low interest rates then created a boom in home refinancing. That put more money in consumers pockets and lowered mortgage payments. But most home owners have already refinanced, and tightening credit markets make another mortgage bonanza unlikely, he said.
"I expect that there ll be some spending out of this rebate. But it s true that households are going to be facing a tougher financial position at any time since the early 1980s," Fazzari said.
There s evidence that much of the rebate could find its way into cash registers, even if it s not immediate.
When similar rebates of about $300 per person were paid out in 2001, two-thirds of the cash was spent within six months, according to one paper published by the National Bureau of Economic Research, a private research group that serves as the national arbiter on such matters.
Tom Wirtz, an information technology manager from Pewaukee, Wis., has five kids between the ages of 5 and 16 as well as a 19-year-old. Describing his current financial situation as "comfortable," he said he plans to save half of his $2,700 check and use the rest for home improvements.
"I support it," Wirtz said of the rebate plan. "It s a good way to stimulate the economy and return money to the people who earned it."
In Salt Lake City, Munn Powell is used to funding a family of six on a bit of an economic roller coaster. A self-employed videographer, his income varies yearly and usually drops when times get tough.
"After 9-11, it was a measurable drop," said Munn, 37, who s a father to 3-year-old twins, a 6-year-old boy and an 8-year-old girl.
Under the Bush stimulus plan, the family would qualify for about $2,400. Munn says he hasn t discussed a possible rebate with his wife of 12 years, Cristy, but said the family has a fairly set financial plan.
"I imagine we d be somewhat conservative with any little windfall," said Munn, who just finished a spending splurge remodeling his basement. "Honestly, it s probably going to back into our reserves. That s probably not what Bush is hoping for."
Associated Press writers Dinesh Ramde in Milwaukee and Jennifer Dobner in Salt Lake City contributed to this report.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
The stimulus has been debated in Washington for more than a week as the economic outlook worsened, and now Americans are armed with specifics: Individuals will get up to $600, working couples $1,200 and those with children $300 more per child.
President Bush and leaders in Congress hope people will spend those rebates -- a flat-screen television, maybe, or a trip to Disneyland -- to help revive an economy sagging from bad mortgage lending and a lack of confidence in the stock market.
One problem: The spending habits of Americans, many of whom used the rising value of their homes during the real-estate boom like a piggy bank, may be changing as housing prices tumble and credit dries up.
So many consumers, like Jennifer Galligos of St. Louis, may put the money into savings or use it to pay down debt instead. The 24-year-old accountant is married and has a 5-year-old son, so she and her husband could get up to $1,500 in rebate money.
"I d probably put something like that in a CD or another investment," Galligos said during her lunch break Friday. "It s not often that I get a chance to save something."
The National Foundation for Credit Counseling urged consumers Friday to use the money to pay down debt and past-due bills. But the group also recommended spending the money on home repairs or remodeling that might cut down on future energy bills.
The stimulus package isn t a done deal yet. While approved by Bush and leaders in the House, it goes to the House floor for full approval next week, and later to the Senate. Democrats there are already promising to try to amend it.
Consumer spending accounts for roughly 70 percent of the U.S. economy, so putting money in the hands of shoppers is an easy way to boost economic output -- at least in the short run.
"I think it will have a positive effect -- I think it s a good package. But I don t think it s going to be enough to avoid a recession," said Steve Fazzari, a professor of economics at Washington University in St. Louis.
The rebate isn t likely to create the kind of broad economic resurgence that happened after the recession of 2001, Fazzari said. Historically low interest rates then created a boom in home refinancing. That put more money in consumers pockets and lowered mortgage payments. But most home owners have already refinanced, and tightening credit markets make another mortgage bonanza unlikely, he said.
"I expect that there ll be some spending out of this rebate. But it s true that households are going to be facing a tougher financial position at any time since the early 1980s," Fazzari said.
There s evidence that much of the rebate could find its way into cash registers, even if it s not immediate.
When similar rebates of about $300 per person were paid out in 2001, two-thirds of the cash was spent within six months, according to one paper published by the National Bureau of Economic Research, a private research group that serves as the national arbiter on such matters.
Tom Wirtz, an information technology manager from Pewaukee, Wis., has five kids between the ages of 5 and 16 as well as a 19-year-old. Describing his current financial situation as "comfortable," he said he plans to save half of his $2,700 check and use the rest for home improvements.
"I support it," Wirtz said of the rebate plan. "It s a good way to stimulate the economy and return money to the people who earned it."
In Salt Lake City, Munn Powell is used to funding a family of six on a bit of an economic roller coaster. A self-employed videographer, his income varies yearly and usually drops when times get tough.
"After 9-11, it was a measurable drop," said Munn, 37, who s a father to 3-year-old twins, a 6-year-old boy and an 8-year-old girl.
Under the Bush stimulus plan, the family would qualify for about $2,400. Munn says he hasn t discussed a possible rebate with his wife of 12 years, Cristy, but said the family has a fairly set financial plan.
"I imagine we d be somewhat conservative with any little windfall," said Munn, who just finished a spending splurge remodeling his basement. "Honestly, it s probably going to back into our reserves. That s probably not what Bush is hoping for."
Associated Press writers Dinesh Ramde in Milwaukee and Jennifer Dobner in Salt Lake City contributed to this report.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Families using food stamps rises in Iowa
DES MOINES, Iowa (AP) - The number of households on food stamps more than doubled since 2000 as did the amount of money spent on the federally funded food assistance program, state officials said.
In 2000 the average number of households each month on food stamps was 52,785. The annual cost of the program was $100.8 million. Last year the number of households grew to 109,652 and the annual cost of the program ballooned to $273.2 million, according to Iowa Department of Human Services figures.
The state Bureau of Research and Statistics released figures Friday.
The report shows dramatic increases in the number of households and the number of individuals using food stamps. An average of 241,340 individuals received food stamps each month last year, about 48 percent more than the 124,384 that received the benefits in 2000.
The average benefit paid monthly to each recipient also increased from $67.50 in 2000 to $94.34 last year, a 28 percent increase.
Iowa Department of Human Services spokesman Roger Munns attributed much of the growth to a number of changes in the food assistance program that makes application and use easier.
In 2003, Iowa did away with the paper coupons removing the stigma once associated with standing in a grocery line counting and handing over paper food stamps. Now, users have a plastic card that they swipe through credit card machines at grocery stores.
"It permits a food stamp customer to appear like anyone else running a debit card through the machine," Munns said. "Before, when you pulled out the coupons you advertised to the world, I am poor. That was a barrier to some people applying."
The plastic cards also ended food stamps thefts and the inefficiency of printing and mailing the coupons.
The DHS also eliminated monthly reporting and now requires recipients to document job status and other qualifying factors every six months.
In addition, the department simplified application forms and allows recipients to apply through a toll-free telephone number or on the Internet. Previously, applicants had to go to a county DHS office to apply in person.
Munns said he believes much of the increased participation is due to the changes and effort to get as many eligible recipients signed up.
"The government has decided that it is a good public policy not to have hunger. Until that policy is changed, we re going to do our best to administer the law," Munns said. "You can argue whether there ought to be a program, but that s beyond our scope. What we know is that this program exists and it is our job to be as efficient as possible in delivering it."
Increased food assistance use echoes recently released statistics that shows poverty on the rise in Iowa.
From 2000 to 2005, the state s poor population increased to 10.8 percent from 8.3 percent, according to U.S. Census Bureau figures released earlier this month.
In addition, median incomes were up 7.8 percent in Iowa over the five years, while inflation rose about 13 percent. Iowa s median income of $43,610 in 2005 needed to be $4,000 higher to keep pace with inflation. Child poverty in Iowa was up 29 percent to 97,700 children.
A report released last July by the Drake University Agriculture Law Center showed that about 11 percent of Iowa households had low food security in 2003-2005, compared with 8 percent in 1996-1998. Those households describing their situation as very low food security rose from 2.6 percent to 3.5 percent for the same period.
Low food security was defined as a limited or uncertain availability of nutritionally adequate and safe food or uncertain availability to get food in socially acceptable ways. Very low food security was defined in the report as the recurrent and involuntary lack of access to food.
Mike Owen, a spokesman for the Iowa Policy Project, in Iowa City, a nonprofit think tank, said the trends indicate more Iowans are finding it harder to keep up financially.
"If you look across other measures you can see that poverty is up, lack of health insurance is up and food insecurity is up," he said. "This would indicate there are growing numbers of Iowa families that are finding it harder and harder to make ends meet."
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
In 2000 the average number of households each month on food stamps was 52,785. The annual cost of the program was $100.8 million. Last year the number of households grew to 109,652 and the annual cost of the program ballooned to $273.2 million, according to Iowa Department of Human Services figures.
The state Bureau of Research and Statistics released figures Friday.
The report shows dramatic increases in the number of households and the number of individuals using food stamps. An average of 241,340 individuals received food stamps each month last year, about 48 percent more than the 124,384 that received the benefits in 2000.
The average benefit paid monthly to each recipient also increased from $67.50 in 2000 to $94.34 last year, a 28 percent increase.
Iowa Department of Human Services spokesman Roger Munns attributed much of the growth to a number of changes in the food assistance program that makes application and use easier.
In 2003, Iowa did away with the paper coupons removing the stigma once associated with standing in a grocery line counting and handing over paper food stamps. Now, users have a plastic card that they swipe through credit card machines at grocery stores.
"It permits a food stamp customer to appear like anyone else running a debit card through the machine," Munns said. "Before, when you pulled out the coupons you advertised to the world, I am poor. That was a barrier to some people applying."
The plastic cards also ended food stamps thefts and the inefficiency of printing and mailing the coupons.
The DHS also eliminated monthly reporting and now requires recipients to document job status and other qualifying factors every six months.
In addition, the department simplified application forms and allows recipients to apply through a toll-free telephone number or on the Internet. Previously, applicants had to go to a county DHS office to apply in person.
Munns said he believes much of the increased participation is due to the changes and effort to get as many eligible recipients signed up.
"The government has decided that it is a good public policy not to have hunger. Until that policy is changed, we re going to do our best to administer the law," Munns said. "You can argue whether there ought to be a program, but that s beyond our scope. What we know is that this program exists and it is our job to be as efficient as possible in delivering it."
Increased food assistance use echoes recently released statistics that shows poverty on the rise in Iowa.
From 2000 to 2005, the state s poor population increased to 10.8 percent from 8.3 percent, according to U.S. Census Bureau figures released earlier this month.
In addition, median incomes were up 7.8 percent in Iowa over the five years, while inflation rose about 13 percent. Iowa s median income of $43,610 in 2005 needed to be $4,000 higher to keep pace with inflation. Child poverty in Iowa was up 29 percent to 97,700 children.
A report released last July by the Drake University Agriculture Law Center showed that about 11 percent of Iowa households had low food security in 2003-2005, compared with 8 percent in 1996-1998. Those households describing their situation as very low food security rose from 2.6 percent to 3.5 percent for the same period.
Low food security was defined as a limited or uncertain availability of nutritionally adequate and safe food or uncertain availability to get food in socially acceptable ways. Very low food security was defined in the report as the recurrent and involuntary lack of access to food.
Mike Owen, a spokesman for the Iowa Policy Project, in Iowa City, a nonprofit think tank, said the trends indicate more Iowans are finding it harder to keep up financially.
"If you look across other measures you can see that poverty is up, lack of health insurance is up and food insecurity is up," he said. "This would indicate there are growing numbers of Iowa families that are finding it harder and harder to make ends meet."
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Lawmakers lay into UK authorities for Northern Rock fiasco
LONDON (Thomson Financial) - An influential group of MPs today laid into the three UK authorities in charge of financial stability for failing their duties during the Northern Rock crisis last summer and called for wide ranging reforms, including a new post at the Bank of England.
The cross party Treasury Select Committee said the Treasury, Bank of England and Financial Services Authority were all found wanting when the UK s 6th largest bank got into difficulties and that their shortcomings contributed to the first run on a UK bank since Victorian times.
"There was a significant failure of the Triparties arrangements in September 2007, and lessons must be learned from that failure," the MPs said.
The committee is now recommending a "radical shake-up" at both the BoE and FSA to better protect the UK s financial stability. It recommends a new office of Deputy Governor of the Bank of England and Head of Financial Stability is established to handle failing banks and take responsibility for a new deposit protection fund.
At present the BoE has two deputy governors, one specifically in charge of financial stability, currently held by John Gieve who also sits of the Board of the FSA.
It is not clear how any new office will affect the status quo but it is worth noting that Gieve came in for some severe criticism during his appearance before the committee and was accused of sleeping at the wheel while the Northern Rock fiasco unfolded.
The committee s chairman, John McFall told Thomson Financial News that how the new role is established should be down to a management review of the system currently in place and added that he does not know how it will eventually affect Gieve.
"There is a need for creative tension within the regulatory system and so these powers and responsibilities should not be granted to the Financial Services Authority," the committee said.
In the words of the Committee s chairman, John McFall: "This individual should be one of the principal channels of advice to the Chancellor of the Exchequer on financial stability."
This new position would also exercise new regulatory powers relating to banks, effectively circumventing the FSA.
Indeed, the FSA came in for some of the harshest criticism.
The MPs deemed that while Northern Rock s directors were the main reason behind its failure, the FSA "systematically failed in its regulatory duty to ensure that Northern Rock would not pose a systemic risk".
However once the Tripartite Authorities took control of the situation they failed to properly coordinate how the situation was handled.
"A key weakness of the Tripartie authorities was the failure, or absence of, a coherent communications strategy," they said.
The MPs said planning must be clear enough to show who will speak on behalf of the authorities if a similar situation re-emerges.
"A strong coordinating influence form one office will surely help this," said McFall.
The committee also said the authorities did not prepare properly for the public announcement that Northern Rock needed an emergency loan from the BoE, and should have made the announcement much earlier.
They also said there was insufficient planning for the announcement that the government would guarantee Northern Rock deposits, which was the key to eventually ending the run on the bank.
In order to prevent such an event occurring again, the MPs recommend a simple and transparent deposit protection scheme, to be funded by participating banks.
Additionally, the committee s chairman, McFall, himself a member of ruling Labour party, issued this warning to the government:
"If the government wants a fair wind for their reforms to the Tripartite arrangements in parliament, they must take seriously the cross-party recommendations in this report, which represent the will of parliament." "The report removes party politicking from an issue which affects every citizen each and every time they use the services of a bank," added McFall. rachel.armstrong; sivakumar.sithraputhran@thomson.com rar/ss/ajb COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News. MMMM
The cross party Treasury Select Committee said the Treasury, Bank of England and Financial Services Authority were all found wanting when the UK s 6th largest bank got into difficulties and that their shortcomings contributed to the first run on a UK bank since Victorian times.
"There was a significant failure of the Triparties arrangements in September 2007, and lessons must be learned from that failure," the MPs said.
The committee is now recommending a "radical shake-up" at both the BoE and FSA to better protect the UK s financial stability. It recommends a new office of Deputy Governor of the Bank of England and Head of Financial Stability is established to handle failing banks and take responsibility for a new deposit protection fund.
At present the BoE has two deputy governors, one specifically in charge of financial stability, currently held by John Gieve who also sits of the Board of the FSA.
It is not clear how any new office will affect the status quo but it is worth noting that Gieve came in for some severe criticism during his appearance before the committee and was accused of sleeping at the wheel while the Northern Rock fiasco unfolded.
The committee s chairman, John McFall told Thomson Financial News that how the new role is established should be down to a management review of the system currently in place and added that he does not know how it will eventually affect Gieve.
"There is a need for creative tension within the regulatory system and so these powers and responsibilities should not be granted to the Financial Services Authority," the committee said.
In the words of the Committee s chairman, John McFall: "This individual should be one of the principal channels of advice to the Chancellor of the Exchequer on financial stability."
This new position would also exercise new regulatory powers relating to banks, effectively circumventing the FSA.
Indeed, the FSA came in for some of the harshest criticism.
The MPs deemed that while Northern Rock s directors were the main reason behind its failure, the FSA "systematically failed in its regulatory duty to ensure that Northern Rock would not pose a systemic risk".
However once the Tripartite Authorities took control of the situation they failed to properly coordinate how the situation was handled.
"A key weakness of the Tripartie authorities was the failure, or absence of, a coherent communications strategy," they said.
The MPs said planning must be clear enough to show who will speak on behalf of the authorities if a similar situation re-emerges.
"A strong coordinating influence form one office will surely help this," said McFall.
The committee also said the authorities did not prepare properly for the public announcement that Northern Rock needed an emergency loan from the BoE, and should have made the announcement much earlier.
They also said there was insufficient planning for the announcement that the government would guarantee Northern Rock deposits, which was the key to eventually ending the run on the bank.
In order to prevent such an event occurring again, the MPs recommend a simple and transparent deposit protection scheme, to be funded by participating banks.
Additionally, the committee s chairman, McFall, himself a member of ruling Labour party, issued this warning to the government:
"If the government wants a fair wind for their reforms to the Tripartite arrangements in parliament, they must take seriously the cross-party recommendations in this report, which represent the will of parliament." "The report removes party politicking from an issue which affects every citizen each and every time they use the services of a bank," added McFall. rachel.armstrong; sivakumar.sithraputhran@thomson.com rar/ss/ajb COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News. MMMM
NY Fed issues subprime mortgage figures
ALBANY, N.Y. (AP) - The subprime mortgage meltdown is taking a toll in New York, with New York City and Long Island feeling the brunt, according to data released Friday.
Overall, the average rate of subprime mortgage foreclosures throughout the state is 9.7 percent, according to figures from the Federal Reserve Bank of New York.
That s about 2 percentage points above the national average, said Richard Deitz, a senior economist at the bank s Buffalo branch.
However, with the exception of certain pockets -- including the mid-Hudson Valley and the Capital District -- the foreclosure rate in upstate has generally been about 2 percentage points below the national average. That includes the major metropolitan areas of Buffalo, Rochester and Syracuse, Deitz said.
"Upstate just didn t have much of a housing boom," Deitz said. "It didn t catch much of the upside and probably isn t catching as much of the downside."
Subprime mortgages are a class of loans for borrowers with low credit ratings that became popular during the torrid housing market of the early 2000s. They typically have higher interest rates or rates that start low and then adjust to a higher rate after a fixed period of time.
Lately there has been a growing number of subprime mortgage defaults amid a cooling market that is leaving some buyers stuck with balances exceeding the worth of their home and others who had low introductory interest rates now facing higher rates they can t afford.
The figures released Friday show that there are 141,934 subprime loans for owner occupied houses statewide.
The zip code with the highest number of subprime loans covers parts of Canarsie and Flatlands in Brooklyn. Of the 1,930 subprime mortgages sold for homes there, 12.2 percent are in foreclosure, according to the bank s figures.
Brentwood on Long Island has the second highest number, with 1,782 loans and a 12.5 percent foreclosure rate. Bay Shore is third, with 1,484 loans and a 13.4 percent foreclosure rate.
Walker Valley in Ulster County shows the highest foreclosure rate, 57.1 percent, but that only accounts for seven mortgages. Other upstate communities show high foreclosure rates -- including Ashland in Greene County at 50 percent -- on relatively small numbers of loans.
Gene Tricozzi, president of the New York Association of Mortgage Brokers, said New York and Long Island have been harder hit because housing values there rose much more sharply than the rest of the state.
"We just didn t see that kind of appreciation in most other parts of the state," he said.
Lenders also have been tightening their standards, making it more difficult for borrowers who might be in over their heads to find buyers -- particularly on Long Island, where most lenders now require 10 percent down payments rather than the 5 percent they previously had accepted, Tricozzi said.
That s making it difficult for homeowners who want to get out of their mortgages to find buyers, he said.
The bank also released subprime mortgage default figures for New Jersey and Connecticut on Friday. They show an average foreclosure rate of about 8 percent in New Jersey and about 7 percent in Connecticut.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Overall, the average rate of subprime mortgage foreclosures throughout the state is 9.7 percent, according to figures from the Federal Reserve Bank of New York.
That s about 2 percentage points above the national average, said Richard Deitz, a senior economist at the bank s Buffalo branch.
However, with the exception of certain pockets -- including the mid-Hudson Valley and the Capital District -- the foreclosure rate in upstate has generally been about 2 percentage points below the national average. That includes the major metropolitan areas of Buffalo, Rochester and Syracuse, Deitz said.
"Upstate just didn t have much of a housing boom," Deitz said. "It didn t catch much of the upside and probably isn t catching as much of the downside."
Subprime mortgages are a class of loans for borrowers with low credit ratings that became popular during the torrid housing market of the early 2000s. They typically have higher interest rates or rates that start low and then adjust to a higher rate after a fixed period of time.
Lately there has been a growing number of subprime mortgage defaults amid a cooling market that is leaving some buyers stuck with balances exceeding the worth of their home and others who had low introductory interest rates now facing higher rates they can t afford.
The figures released Friday show that there are 141,934 subprime loans for owner occupied houses statewide.
The zip code with the highest number of subprime loans covers parts of Canarsie and Flatlands in Brooklyn. Of the 1,930 subprime mortgages sold for homes there, 12.2 percent are in foreclosure, according to the bank s figures.
Brentwood on Long Island has the second highest number, with 1,782 loans and a 12.5 percent foreclosure rate. Bay Shore is third, with 1,484 loans and a 13.4 percent foreclosure rate.
Walker Valley in Ulster County shows the highest foreclosure rate, 57.1 percent, but that only accounts for seven mortgages. Other upstate communities show high foreclosure rates -- including Ashland in Greene County at 50 percent -- on relatively small numbers of loans.
Gene Tricozzi, president of the New York Association of Mortgage Brokers, said New York and Long Island have been harder hit because housing values there rose much more sharply than the rest of the state.
"We just didn t see that kind of appreciation in most other parts of the state," he said.
Lenders also have been tightening their standards, making it more difficult for borrowers who might be in over their heads to find buyers -- particularly on Long Island, where most lenders now require 10 percent down payments rather than the 5 percent they previously had accepted, Tricozzi said.
That s making it difficult for homeowners who want to get out of their mortgages to find buyers, he said.
The bank also released subprime mortgage default figures for New Jersey and Connecticut on Friday. They show an average foreclosure rate of about 8 percent in New Jersey and about 7 percent in Connecticut.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
EconoLog
NEW YORK (AP) - Is the U.S. economy slipping into recession? Economists, analysts and investors are increasingly recognizing the possibility. Following are some comments Friday assessing the state of the economy, and what may happen if it slides into a recession:
-- Caterpillar Inc. said a recession "seems to be taking place." The industrial and construction equipment maker said even without a recession, it expects North American sales to "remain depressed" this year.
The company said it expects the federal government and the Federal Reserve to shepherd a recovery in the economy by cutting interest rates or taking other measures. If the government takes appropriate action, the company said this year could mark the "bottom of this U.S. machinery cycle."
-- Canaccord Adams analyst Richard Wyman attributed a resurgence in oil prices to abating fears of a recession, tempered by the federal government s $150 billion "stimulus package."
"Fears of an economic slowdown began to diminish after the announcement," he said.
-- In a report on W.W. Grainger Inc., Goldman Sachs analysts said the company is at risk of losing some profit over the next six months, in light of the firm s expectation for a mild, six-month recession.
-- "While the U.S. economy may already be in recession or heading toward one, many of Ametek Inc. s end-markets continue to appear to have legs, " an Oppenheimer note on the electronic instruments manufacturer said.
-- Bear Stearns analyst Gurinder Kalra cut estimates on most chip companies to "reflect the macroeconomic headwinds."
-- A Banc of America report on the chemicals sector, titled "What Recession?", observed that "if we are in a nascent U.S. recession, most chemical producers are not feeling it."
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
-- Caterpillar Inc. said a recession "seems to be taking place." The industrial and construction equipment maker said even without a recession, it expects North American sales to "remain depressed" this year.
The company said it expects the federal government and the Federal Reserve to shepherd a recovery in the economy by cutting interest rates or taking other measures. If the government takes appropriate action, the company said this year could mark the "bottom of this U.S. machinery cycle."
-- Canaccord Adams analyst Richard Wyman attributed a resurgence in oil prices to abating fears of a recession, tempered by the federal government s $150 billion "stimulus package."
"Fears of an economic slowdown began to diminish after the announcement," he said.
-- In a report on W.W. Grainger Inc., Goldman Sachs analysts said the company is at risk of losing some profit over the next six months, in light of the firm s expectation for a mild, six-month recession.
-- "While the U.S. economy may already be in recession or heading toward one, many of Ametek Inc. s end-markets continue to appear to have legs, " an Oppenheimer note on the electronic instruments manufacturer said.
-- Bear Stearns analyst Gurinder Kalra cut estimates on most chip companies to "reflect the macroeconomic headwinds."
-- A Banc of America report on the chemicals sector, titled "What Recession?", observed that "if we are in a nascent U.S. recession, most chemical producers are not feeling it."
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Lawmakers lay into UK authorities for Northern Rock fiasco
LONDON (Thomson Financial) - An influential group of MPs today laid into the three UK authorities in charge of financial stability for failing their duties during the Northern Rock crisis last summer and called for wide ranging reforms, including a new post at the Bank of England.The cross party Treasury Select Committee said the Treasury, Bank of England and Financial Services Authority were all found wanting when the UK s 6th largest bank got into difficulties and that their shortcomings contributed to the first run on a UK bank since Victorian times. "There was a significant failure of the Triparties arrangements in September 2007, and lessons must be learned from that failure," the MPs said. The committee is now recommending a "radical shake-up" at both the BoE and FSA to better protect the UK s financial stability. It recommends a new office of Deputy Governor of the Bank of England and Head of Financial Stability is established to handle failing banks and take responsibility for a new deposit protection fund.At present the BoE has two deputy governors, one specifically in charge of financial stability, currently held by John Gieve who also sits of the Board of the FSA.It is not clear how any new office will affect the status quo but it is worth noting that Gieve came in for some severe criticism during his appearance before the committee and was accused of sleeping at the wheel while the Northern Rock fiasco unfolded.The committee s chairman, John McFall told Thomson Financial News that how the new role is established should be down to a management review of the system currently in place and added that he does not know how it will eventually affect Gieve. "There is a need for creative tension within the regulatory system and so these powers and responsibilities should not be granted to the Financial Services Authority," the committee said. In the words of the Committee s chairman, John McFall: "This individual should be one of the principal channels of advice to the Chancellor of the Exchequer on financial stability."This new position would also exercise new regulatory powers relating to banks, effectively circumventing the FSA. Indeed, the FSA came in for some of the harshest criticism. The MPs deemed that while Northern Rock s directors were the main reason behind its failure, the FSA "systematically failed in its regulatory duty to ensure that Northern Rock would not pose a systemic risk".However once the Tripartite Authorities took control of the situation they failed to properly coordinate how the situation was handled."A key weakness of the Tripartie authorities was the failure, or absence of, a coherent communications strategy," they said.The MPs said planning must be clear enough to show who will speak on behalf of the authorities if a similar situation re-emerges. "A strong coordinating influence form one office will surely help this," said McFall.The committee also said the authorities did not prepare properly for the public announcement that Northern Rock needed an emergency loan from the BoE, and should have made the announcement much earlier. They also said there was insufficient planning for the announcement that the government would guarantee Northern Rock deposits, which was the key to eventually ending the run on the bank.In order to prevent such an event occurring again, the MPs recommend a simple and transparent deposit protection scheme, to be funded by participating banks.Additionally, the committee s chairman, McFall, himself a member of ruling Labour party, issued this warning to the government:"If the government wants a fair wind for their reforms to the Tripartite arrangements in parliament, they must take seriously the cross-party recommendations in this report, which represent the will of parliament." "The report removes party politicking from an issue which affects every citizen each and every time they use the services of a bank," added McFall. rachel.armstrong; sivakumar.sithraputhran@thomson.com rar/ss/ajb COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News. MMMM
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