Emeritus News-Mobile Home Page-Daily Updates on Issues and Public Policy

More from the Emeritus Newsroom- The Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve System (Federal Reserve) today announced that the deadline for submitting requests for review under the Independent Foreclosure Review has been extended. The new deadline, July 31, 2012, provides an additional three months for borrowers to request a review if they believe they suffered financial injury as a result of errors in foreclosure actions on their homes in 2009 or 2010 by one of the servicers covered by enforcement actions issued in April 2011.

The deadline extension provides more time to increase awareness of how eligible people may request a review through the Independent Foreclosure Review process and to encourage the broadest participation possible.

As part of enforcement actions issued in April 2011, the OCC, Federal Reserve, and the Office of Thrift Supervision required 14 large mortgage servicers to retain independent consultants to conduct a comprehensive review of foreclosure activity in 2009 and 2010 to identify borrowers who may have been financially injured due to errors, misrepresentations, or other deficiencies in the foreclosure process. If the review finds that financial injury occurred, the borrower may receive compensation or other remedy.

Borrowers are eligible for an Independent Foreclosure Review if they meet the following basic criteria:

Participating mortgage servicers include: America's Servicing Company, Aurora Loan Services, BAC Home Loans Servicing, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, CitiMortgage, Countrywide, EMC, Everbank/Everhome Mortgage Company, Financial Freedom, GMAC Mortgage, HFC, HSBC, IndyMac Mortgage Services, MetLife Bank, National City Mortgage, PNC Mortgage, Sovereign Bank, U.S. Bank, Wachovia Mortgage; Washington Mutual, Wells Fargo; and Wilshire Credit Corporation.

The National Consumer Law Center believes the review process gives too much power to mortgage servicers. NCLC Attorney Alys Cohen testified before a U.S. Senate Banking, Housing and Urban Affairs subcommittee on December 13, 2011. Cohen told the committee, “The foreclosure review process as proposed by the Office of the Comptroller of the Currency is opaque, leaves too much control in the hands of the mortgage servicers—the firms that created the mess in the first place—and threatens to strip further rights from homeowners,” asserted Cohen during her testimony. Due to the OCC’s history of siding with banks over consumers and the potential for homeowner injury, the National Consumer Law Center recommends that the Consumer Financial Protection Bureau take over implementation of the process". Full text of NCLC press release, click here.

DID THE STIMULUS WORK ?

Click here for YouTube video from the Center for American Progress (4 Minutes)- 02/15/2012

MUST READ: WHY FEDERAL SAFETY NET CRITICS DEPEND ON IT

BERNANKE URGES MORE STATES START LAND BANKS TO GET FORECLOSED HOMES OFF THE MARKET / FED CHIEF SAYS EXCESS SUPPLY HURTS NEIGHBORHOODS

More from the Emeritus Newsroom- In a speech today before the 2012 National Association of Homebuilders, International Builders' Show in Orlando, Florida, Fed Chief Ben Bernanke did not sugar coat the facts.

He told the audience that roughly 2 million homes have entered the foreclosure process, and many of these homes have been put up for sale, crowding out much of the need for new building. Looking ahead, he said, "...the relatively high rate of foreclosures is likely to continue for a while, putting additional homes on the market and dislocating families and disrupting communities in the process".

Bernanke added, "At the same time, a number of factors are constraining demand. Household formation has been down, particularly among young adults. High unemployment and uncertain job prospects may have reduced the willingness of some households to commit to home ownership. Availability of mortgage credit is an important constraint, to which I will return later. Additionally, housing may no longer be viewed as the secure investment it once was thought to be, given uncertainty about future home prices and the economy more generally. Not surprisingly, the large imbalance of supply and demand has been reflected in a drop in home values of historic proportions. Nationally, house prices have plunged about 30 percent in nominal terms from their peak and nearly 40 percent in real, or inflation-adjusted, terms".

He suggested that more states develop land banks to get home owners into vacant homes. Bernanke says, "Land banks are typically governmental entities that have the ability to purchase and sell real estate, clear titles, and accept donated properties. Properties may be rehabilitated as rental or owner-occupied housing or, in extreme cases, demolished, depending on the needs of individual markets. While land banks are a promising option, only some states have passed legislation to establish land banks, and most existing land banks lack the resources to keep pace with the number of low-value properties in the current inventory. It is, of course, critical that local governments pursuing land banking, or similar strategies, have staff members with the appropriate skills as well as adequate oversight to ensure that public funds are employed efficiently'".

Bernanke also called for more rental programs to keep home owners in their homes rather than evicting them.

U-S ATTORNEY GENERAL HOLDER ANNOUNCES $25 BILLION SETTLEMENT IN MORTGAGE FRAUD CASES

More from the Emeritus Newsroom- Federal and state officials today announced a settlement designed to help more than two million home owners affected by fraudulent mortgage practices by five major financial institutions and their mortgage servicers.

At a morning news conference, Attorney General Eric Holder explained that the Departments of Justice, along with Housing and Urban Development – 49 state attorneys general and other federal agencies – have reached a landmark $25 billion agreement with the nation’s five largest mortgage servicers: Bank of America, JPMorgan Chase & Co., Wells Fargo & Company, Citibank, and Ally Financial, which was formerly GMAC.

According to Holder, the agreement reflects a commitment – at both the federal and state levels – to ensure justice, and to recover losses, for victims of reckless and abusive mortgage practices. "In addition to addressing many of the most egregious mortgage loan servicing abuses that our investigations have uncovered, this agreement establishes significant new homeowner protections to help prevent future misconduct. It also provides substantial financial assistance to victim borrowers. In fact, it is the largest joint federal-state civil settlement in history".

Holder said the settlement does not end investigations into wrongdoing. "Although every American can be encouraged by today’s settlement and the progress it achieves, I realize more work must be done. That’s why we have taken steps to ensure that the claims we are releasing through this settlement will not interfere with our ability to move current investigations and prosecutions forward – and to advance the work of the Financial Fraud Enforcement Task Force". Holder also added, "Furthermore, the agreement does not prevent any claims by any individual borrowers who wish to bring their own lawsuits".

Holder claims a probe of bank practices revealed, "... servicers pushed borrowers into foreclosure, even though federal regulations required the servicers to try other alternatives first. These failures didn’t just hurt borrowers who might have been able to afford modified mortgages. They fueled the downward spiral of our economy – and of communities nationwide. They eroded faith in our financial systems. And they punished American taxpayers, who have had to foot the bill for foreclosures that could have been avoided".

Under the agreement, mortgage servicers also will be required to dedicate substantial resources – approximately $20 billion – to provide relief and assistance to struggling homeowners and neighborhoods. And the agreement includes specific provisions that will enhance protections – and help ensure justice – for U.S. service members and their families. Holder also focused on the problems beyond the five institutions who were part of today's agreement, stating, "I also want to note that, with this settlement, we aren’t just holding mortgage servicers accountable for wrongs they committed. We are using this opportunity to fix a broken system, and to lay the groundwork for a better future. Our nation’s leading mortgage servicers will be required to follow a new set of standards, which will be overseen by an independent monitor – and will be enforceable in federal court".

According to a special website, that has been set up to help home owners, the financial help mechanisms will be performed over a three year period, so borrowers will not immediately know if they are eligible for relief. Borrowers from states who did not sign the settlement will NOT be eligible for any of the relief directly to homeowners. Borrowers from Oklahoma will not be eligible for any of the relief directly to homeowners because Oklahoma elected not to join the settlement. The settlement provides assistance for:

HOW ZUCKERBERG CAN AVOID THE TAX MAN BUT LADY GAGA CAN'T

STATES FACE DEADLINE FOR SETTLEMENT ON MORTGAGE LAWSUITS

OBAMA PROPOSES EXPANSION OF HOME REFINANCING TO INCLUDE MORTGAGES OWNED BY INVESTORS

More from the Emeritus Newsroom - In addition to helping home owners with Freddie Mac and Fannie Mae backed mortgages, President Obama today proposed expansion of the administration's refinancing programs along with a home owners "Bill of Rights".

Obama told and audience at the James Lee Community Center in Falls Church, Virginia, this morning,

"....the programs that we put forward haven’t worked at the scale that we hoped. Not as many people have taken advantage of it as we wanted. Mortgage rates are as low as they’ve been in half a century, and when that happens, usually homeowners flock to refinance their mortgages -- so a lot of people take advantage of it and save a lot of money. But this time too many families haven’t been able to take advantage of the low rates, because falling prices lock them out of the market. They were underwater; made it more difficult for them to refinance.Then you’ve got all the fees involved in refinancing. And a lot of people just said, you know what, even though I’d like to be, obviously, cutting down my monthly payment, the banks just aren’t being real encouraging.So last year we took aggressive action that allowed more families to participate. And today we’re doing even more. This is the main reason I’m here today. As I indicated at the State of the Union last week, I am sending Congress a plan that will give every responsible homeowner in America the chance to save about $3,000 a year on their mortgage by refinancing at historically low rates. (Applause.) No more red tape. No more runaround from the banks. And a small fee on the largest financial institutions will make sure it doesn’t add to our deficit. I want to be clear: This plan, like the other actions we’ve taken, will not help the neighbors down the street who bought a house they couldn’t afford, and then walked away and left a foreclosed home behind. It’s not designed for those who’ve acted irresponsibly, but it can help those who’ve acted responsibly. It’s not going to help those who bought multiple homes just to speculate and flip the house and make a quick buck, but it can help those who’ve acted responsibly. What this plan will do is help millions of responsible homeowners who make their payments on time but find themselves trapped under falling home values or wrapped up in red tape".

Broad Based Refinancing to Help Responsible Borrowers Save an Average of $3,000 per Year: The President’s plan will provide borrowers who are current on their payments with an opportunity to refinance and take advantage of historically low interest rates, cutting through the red tape that prevents these borrowers from saving hundreds of dollars a month and thousands of dollars a year. This plan, which is paid for by a financial fee so that it does not add a dime to the deficit, will:

o Provide access to refinancing for all non-GSE borrowers who are current on their payments and meet a set of simple criteria.
o Streamline the refinancing process for all GSE borrowers who are current on their loans.
o Give borrowers the chance to rebuild equity through refinancing.

• Homeowner Bill of Rights: The President is putting forward a single set of standards to make sure borrowers and lenders play by the same rules, including:

o Access to a simple mortgage disclosure form, so borrowers understand the loans they are taking out.
o Full disclosure of fees and penalties.
o Guidelines to prevent conflicts of interest that end up hurting homeowners.
o Support to keep responsible families in their homes and out of foreclosure.
o Protection for families against inappropriate foreclosure, including right of appeal.

• First Pilot Sale to Transition Foreclosed Property into Rental Housing to Help Stabilize Neighborhoods and Improve Home Prices: The FHFA, in conjunction with Treasury and HUD, is announcing a pilot sale of foreclosed properties to be transitioned into rental housing.

• Moving the Market to Provide a Full Year of Forbearance for Borrowers Looking for Work: Following the Administration’s lead, major banks and the GSEs are now providing up to 12 months of forbearance to unemployed borrowers.

• Pursuing a Joint Investigation into Mortgage Origination and Servicing Abuses: This effort marshals new resources to investigate misconduct that contributed to the financial crisis under the leadership of federal and state co-chairs.

• Rehabilitating Neighborhoods and Reducing Foreclosures: In addition to the steps outlined above, the Administration is expanding eligibility for HAMP to reduce additional foreclosures, increasing incentives for modifications that help borrowers rebuild equity, and is proposing to put people back to work rehabilitating neighborhoods through Project Rebuild.

As for the home owners "Bill of Rights" Obama referred to, the President explained it as being, " one straightforward set of common-sense rules of the road that every family knows they can count on when they’re shopping for a mortgage. No more hidden fees or conflicts of interest. No more getting the runaround when you call about your loan. No more fine print that you used to get families to take a deal that is not as good as the one they should have gotten. New safeguards against inappropriate foreclosures. New options to avoid foreclosure if you’ve fallen on hardship or a run of bad luck. And a new, simple, clear form for new buyers of a home".

Obama also proposed turning more foreclosed homes into rental housing. And he said, We’re working to make sure people don’t lose their homes just because they lose their jobs. These are steps that can make a concrete difference in people’s lives right now".

Earlier this week, there was more evidence home values continue downward in most metropolitan areas. Analysts blame the lingering downward conditions on unemployment, foreclosures, bureaucratic obstacles and unstable credit markets. The Case-Shiller Index of U.S. home prices, showed declines of 1.3`% for both the 10- and 20-City Composites in November over October 2011. See Story from 01/31/2012 below.

FEDERAL DEFICIT IN QUICK DECLINE

More from the Emeritus Newsroom- The Congressional Budget Office (CBO) projects a $1.1 trillion federal budget deficit for fiscal year 2012 if current laws remain unchanged. Measured as a share of the nation’s output (gross domestic product, or GDP), that shortfall of 7.0 percent is nearly 2 percentage points below the deficit recorded in 2011, but still higher than any deficit between 1947 and 2008. Over the next few years, projected deficits in CBO’s baseline decline markedly, dropping to under $200 billion and averaging 1.5 percent of GDP over the 2013–2022 period.

Outlays in CBO’s baseline projections decline modestly relative to GDP over the next several years before turning up again later in the decade. The modest declines are the result of an expanding economy and statutory caps on discretionary appropriations. The aging of the population and rising costs for health care drive increases in spending in later years.

Projected spending in CBO’s baseline averages 21.9 percent of GDP over the 2013–2022 period. That figure is less than the 23.2 percent CBO estimates for 2012, but it remains elevated by historical standards. As a share of GDP, discretionary spending is projected to decline to its lowest level in the past 50 years by 2022, but that decline will be partially offset by increases in spending for mandatory programs, which are projected to climb from 13.3 percent of GDP in 2013 to 14.3 percent in 2022. Driven by higher interest rates and additional accumulation of debt, net interest costs will grow significantly—from 1.4 percent of GDP this year to 2.5 percent in 2022.

HOME VALUES CONTINUE TO SINK IN MOST METRO AREAS

More from the Emeritus Newsroom- Data through November 2011, released today by S&P Indices for its
S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed declines of 1.3`% for both the 10- and 20-City Composites in November over October. For a second consecutive month, 19 of the 20 cities covered by the indices also saw home prices decrease. The 10- and 20-City Composites posted annual returns of -3.6% and -3.7% versus November 2010, respectively. These are worse than the -3.2% and -3.4% respective rates reported for October. In addition to both Composites, 13 of the 20 MSAs saw their annual returns decrease compared to October’s data. New York and Tampa saw no change in annual returns in November; while Charlotte, Cleveland, Denver, Minneapolis and Phoenix saw their annual rates improve. At -11.8% Atlanta continued to post the lowest annual return. Detroit and Washington DC were the only two cities to post positive annual returns of +3.8% and +0.5%, respectively, in November. While positive, both cities saw these annual rates fall versus October’s data.

“Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices
continue to fall. Weakness was seen as 19 of 20 cities saw average home prices decline in November over
October,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “The only positive for
the month was Phoenix, one of the hardest hit in recent years. Annual rates were little better as 18 cities and both Composites were negative. Nationally, home prices are lower than a year ago. The 10-City Composite was down 3.6% and the 20-City was down 3.7% compared to November 2010. The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand.

PENSION BENEFIT GUARANTY CORPORATION BLASTS AMERICAN AIRLINES FOR MISINFORMING EMPLOYEES ABOUT PENSIONS

More from the Emeritus Newsroom-The Pension Benefit Guaranty Corporation pushed back on misleading statements it claims, American Airlines has made to employees. The PBGC says American Airlines management is telling their workers and retirees not to worry, but they should," said J. Jioni Palmer, PBGC's director of communications.

A recent letter to employees from management downplayed the serious consequences of what could happen if the company terminated its pension plans, Palmer said. The letter ignored that PBGC doesn't insure retiree health benefits, which are usually canceled when companies terminate pension plans.

The American letter also downplayed the pension cuts that would occur if American's plans are terminated and PBGC benefits are substituted. Although the figure appears nowhere in the management letter, the airline itself estimates that some 13,000 current or retired employees will have their pensions cut.

American's recent statements, through its lead bankruptcy counsel and in employee communications, have signaled the airline's intent to dump its retirement obligations on the PBGC. "American said nothing's been decided yet, but didn't even bother to pretend that it was trying to preserve its employees' pensions," Palmer said.

Since the airline sought Chapter 11 protection on Nov. 29, 2011, the agency has been working to try to preserve American's pension plans. PBGC has repeatedly stated that the airline must be preserved, but that if it can do so while preserving its plans, that would be better both for PBGC and American's employees. PBGC noted that other airlines had reorganized successfully without terminating their plans.

In an Associated Press article from earlier this month, it was reported American Airlines contributed only $6.5 million of the $100 million that it was supposed to pay into employee pension plans. The underpayment raised tensions between the company, which filed for bankruptcy protection in November, and federal pension-protection officials.

"This is a disturbing development, as the airline has more than $4 billion in cash," said J. Jioni Palmer, a spokesman for the Pension Benefit Guaranty Corp., which insures certain types of retirement plans. "American's actions hurt the financial health of the pension plans, and undermine the retirement security of American's workers and retirees". More in this article from the Sacramento Bee, click here.

MORE SIGNS ECONOMY WILL BE SLOW CLIMB IN 2012

More from the Emeritus Newsroom- Weekly initial jobless claims continue to average below 400,000, despite a rise the past week. Orders for durable goods, products expected to last three years or longer, rose 3 percent last month, according to the Commerce Department today. Orders for core capital goods, which are viewed as a good measure of business investment, rose 2.9 percent in December, to a record month of $68.9 billion. The Conference Board said its index of leading economic indicators rose 0.4 percent last month (7 of 10 indicators were up), following a revised 0.2 percent increase in November and a revised 0.6 percent gain in October.

In the week ending January 21, the advance figure for seasonally adjusted initial claims was 377,000, an increase of 21,000 from the previous week's revised figure of 356,000. The 4-week moving average was 377,500, a decrease of 2,500 from the previous week's revised average of 380,000. The advance seasonally adjusted insured unemployment rate was 2.8 percent for the week ending January 14, an increase of 0.1 percentage point from the prior week's unrevised rate.

INTERNATIONAL MONETARY FUND PREDICTS TOUGH WORLD WIDE ECONOMY FOR 2012

More from the Emeritus Newsroom- As promised, the International Monetary Fund released their World Economy 2012 projections. In short, the projections include,

IMF says global recovery expected to stall, risks to intensify
Euro area expected to fall into mild recession, rest of world to slow
Comprehensive package needed to restore financial stability
Countries should avoid too rapid tightening of fiscal policy

Overall, according to the IMF, activity in the advanced economies is now projected to expand by just 1.2 percent in 2012—a downward revision of ¾ percentage points relative to the forecast last September—picking up to a still tepid 1.9 percent the next year. The global growth outlook for this year is 3.3 percent.

“Given the depth of the 2009 recession, these growth rates are too sluggish to make a major dent in very high unemployment,” the IMF said.

Despite a substantial downward revision of ¾ percentage point, developing Asia is still projected to grow most rapidly at 7½ percent on average in 2012–13.

Economic activity in the Middle East and North Africa is expected to accelerate in 2012-13, driven mainly by the recovery in Libya and the continued strong performance of other oil exporters. Most oil-importing countries in the region face muted growth prospects due to longer than expected political transition and an adverse external environment.

The impact of the global slowdown on sub-Saharan Africa has to date been limited to a few countries, most notably South Africa, and the region’s output is expected to expand by about 5½ percent in 2012.

The adverse spillover effects are expected to be the largest for central and eastern Europe, given the region’s strong trade and financial linkages with the euro area economies.

The impact on other regions is expected to be relatively mild, as macroeconomic policy easing is expected to largely offset the effects of slowing demand from advanced economies and rising global risk aversion. For many emerging and developing economies, the strength of the forecasts also reflects relatively high commodity prices.

Full IMF article on projections, click here. Click here for IMF YouTube video of announcement. 01/24/2012

INTERNATIONAL MONETARY FUND HEAD SAYS WORLD ECONOMY COULD HAVE A "1930'S MOMENT", IF EUROPE DOES NOT SOLVE FINANCIAL PROBLEMS

More from the Emeritus Newsroom- The most serious warning about potential economic disaster ahead, came today from Christine Lagarde, Managing Director of the International Monetary Fund. Speaking to a foreign affairs meeting in Berlin today, Lagarde said the IMF will lower growth forecasts for most parts of the world, but cautioned, "Even these lower forecasts assume a constructive policy path that is by no means assured".

Lagarde sees Europe as the sticking point to worldwide recovery this year, claiming that Germany will have to invest more in the region.

Lagarde warned, "...what we must all understand is that this is a defining moment. It is not about saving any one country or region. It is about saving the world from a downward economic spiral. It is about avoiding a 1930s moment, in which inaction, insularity, and rigid ideology combine to cause a collapse in global demand. The longer we wait, the worse it will get. The only solution is to move forward together. Our collective economic future depends on it".

STUDY FINDS BLACK BANKRUPTCY FILERS DISPROPORTIONATELY FILE CHAPTER 13 & ARE LEFT WITH MOUNTING DEBT

More from the Emeritus Newsroom- A survey by three researchers finds race is a determining factor in determining whether bankruptcy filers receive total forgiveness of their debt or whether they are required to repay it either partially or in full.

The study, by Jean Braucher, University of Arizona; Dov Cohen, University of Illinois and Robert M .Lawless
University of Illinois, says black filers are more likely to be urged by attorneys to select Chapter 13 bankruptcy, as opposed to Chapter 7 or Chapter 11. The authors say Chapter 13 offers some legal advantages that can be used to allow debtors to keep possession of property such as a home or an automobile. It is widely believed among consumer bankruptcy specialists that a client’s desire to save a home is the most common reason for filing Chapter 13, because Chapter 13 offer certain advantages such as the ability to make up arrearages over time (Porter, 2011). A second reason that Chapter 13 might be preferred is that, although the attorney’s fees are higher, the fees can be paid over time through the Chapter 13 plan whereas lawyers usually require that clients come up with cash in advance for the fees for a chapter 7 case. The study also found that those filing Chapter 13 are less likely to complete the process, leaving them with mounting debts, which filers have a better chance of eliminating in a Chapter 7 filing.

Chapter 13 bankruptcy filings are much more popular in the south and have been for 150 years, according to the study, which traces the trend back to economic patterns following the civil war, when banks and businesses were trying to get debtors to pay, spinning the concept as a moral choice, to HONOR their debts under court structured enforcement. The study also leans to legal culture in areas where Chapter 13 is most popular. Also, Chapter 13 is viewed more favorably by attorneys and bankruptcy judges in those areas. Ultimately, the study suggests, it is attorney influence with the client, as the biggest reason why Chapter 13 is more popular in certain federal bankruptcy court districts, mostly the south.

KODAK FILES BANKRUPTCY / WILL KEEP OPERATING / TRYING TO SHED $245+ MILLION IN PENSION COSTS

INEQUITIES OF CUTTING PROGRAMS FOR THE POOR WHILE CONTINUING LOWER TAX RATES ON INVESTMENT INCOME FOR THE RICH - FAMILIES USA VIDEO, CLICK HERE FOR YOUTUBE PLAYBACK (3 MINUTES)

A MUST SEE!!! SEVEN LIES ABOUT THE U-S ECONOMY - FORMER LABOR SECRETARY ROBERT REICH & MOVEON.ORG, CLICK HERE FOR YOUTUBE PLAYBACK (3 MINUTES)

WHY MITT ROMNEY'S UNRELEASED TAX RETURNS ARE A BIG DEAL

CBO REPORT SAYS RAISING SOCIAL SECURITY ELIGIBILITY AGE WILL BOOST ELDERLY HEALTH CARE COSTS

More from the Emeritus Newsroom- The Congressional Budget Office says raising the eligibility age for Social Security would help the federal budget, but could be devastating for seniors.

In its summary, the CBO says raising the ages at which people can collect Medicare and Social Security would reduce federal spending and increase federal revenues by inducing some people to work longer. However, raising the eligibility ages for those programs also would reduce people's lifetime Social Security benefits and cause many of the people who would otherwise have enrolled in Medicare to face higher premiums for health insurance, higher out-of-pocket costs for health care, or both.

The CBO report projects that inducing people to work longer and raising any of the ages of eligibility would increase the size of the workforce and the economy. Although the magnitude of those effects is difficult to predict, CBO estimates that:

PEW SURVEY FINDS MORE AMERICANS SEE INEQUALITY BETWEEN RICH AND POOR

More from the Emeritus Newsroom- A new Pew Research Center survey of 2,048 adults finds that about two-thirds of the public (66%) believes there are “very strong” or “strong” conflicts between the rich and the poor—an increase of 19 percentage points since 2009.

Not only have perceptions of class conflict grown more prevalent; so, too, has the belief that these disputes are intense. According to the new survey, three-in-ten Americans (30%) say there are “very strong conflicts” between poor people and rich people. That is double the proportion that offered a similar view in July 2009 and the largest share expressing this opinion since the question was first asked in 1987.

As a result, in the public’s evaluations of divisions within American society, conflicts between rich and poor now rank ahead of three other potential sources of group tension—between immigrants and the native born; between blacks and whites; and between young and old. Back in 2009, more survey respondents said there were strong conflicts between immigrants and the native born than said the same about the rich and the poor

While the survey results show a significant shift in public perceptions of class conflict in American life, they do not necessarily signal an increase in grievances toward the wealthy. It is possible that individuals who see more conflict between the classes think that anger toward the rich is misdirected. Nor do these data suggest growing support for government measures to reduce income inequality.

In fact, other questions in the survey show that some key attitudes toward the wealthy have remained largely unchanged. For example, there has been no change in views about whether the rich became wealthy through personal effort or because they were fortunate enough to be from wealthy families or have the right connections.

A 46% plurality believes that most rich people “are wealthy mainly because they know the right people or were born into wealthy families.” But nearly as many have a more favorable view of the rich: 43% say wealthy people became rich “mainly because of their own hard work, ambition or education,” largely unchanged from a Pew survey in 2008.

GAO SAYS TROUBLED ASSET RELIEF PROGRAM (TARP) ADMINISTRATIVE COSTS ONLY HALF OF $70 BILLION APPROVED BY CONGRESS

More from the Emeritus Newsroom- A report from the Government Accountability Office shows administrative costs for the Troubled Asset Relief Program (TARP) will be about half of what congress approved. The agency says many TARP programs continue to be in various stages of unwinding and some programs, notably those that focus on the foreclosure crisis, remain active.

Also, the GAO claims some of the programs that the Department of the Treasury continues to unwind, such as investments in American International Group, Inc. (AIG), require Treasury to actively manage the timing of its exit as it balances its competing goals. For other programs, such as the Capital Purchase Program (CPP)—which was created to provide capital to financial institutions—Treasury’s exit will be driven primarily by the financial condition of the participating institutions. Consequently, the timing of Treasury’s exit from TARP remains uncertain.

The report explains that Treasury continues to manage the various TARP programs using OFS staff, financial agents, and contractors. Overall OFS staffing has declined slightly for the first time as staff responsible for managing TARP investment programs and those in term-appointed leadership positions have departed. However, staff in some offices within OFS have increased—for example, in the Office of Internal Review, which helps to ensure that financial agents and contractors comply with laws and regulations. Through September 30, 2011, about half of Treasury’s 116 contracts remained active, along with 14 of the 17 financial agency agreements. Treasury has continued to strengthen its management and oversight of contractors and financial agents and conflict-of-interest requirements. In response to a GAO recommendation, OFS has finalized a plan to address staffing levels and expertise that includes identifying critical positions and conducting succession planning, in light of the temporary nature of its work.

Treasury and CBO project that TARP costs will be much lower than the amount authorized when the program was initially announced. Treasury’s fiscal year 2011 financial statement, audited by GAO, estimated that the lifetime cost of TARP would be about $70 billion—with CPP expected to generate the most lifetime income, or net income in excess of costs. OFS also reported that from inception through September 30, 2011, the incurred cost of TARP transactions was $28 billion.

RICHEST AND POOREST MEMBERS OF CONGRESS / WEALTH GAP BETWEEN CONGRESS AND THEIR CONSTITUENTS GROWS

More from the Emeritus Newsroom- According to the group, OpenSecrets.org, 250 members of congress are millionaires, which fits the criticism that only the wealthy can afford to run for office. Unfortunately, in its original calculations, the The Center for Responsive Politics, which supports OpenSecrets, mistakenly estimated Sen. Herb Kohl, (D-WI) , to have a negative net worth. Realizing their error, the group recalculated to find that Sen. Kohl was, in fact, the fifth richest member of congress, worth more than $173 million and certainly, one of the most liberal.

The group claims that Rep. Darrell Issa (R-Calif.) ranks as the wealthiest member of the 112th Congress, according to the Center's analysis of 2010 financial disclosures. Issa's minimum estimated net worth in 2010 was $195 million, while his maximum estimated net worth was more than $700 million. That gives Issa an average net worth of $448 million.

Meanwhile, Rep. Jared Polis (D-Colo.) ranks as the wealthiest House Democrat. Polis, who has spent about $7 million of his own money on his campaigns since 2007, has an average estimated net worth of $143 million.

That's not good enough to rank him as the No. 2 wealthiest member of Congress though. In fact, it only ranks him as No. 6* wealthiest current lawmaker.

Rep. Michael McCaul (R-Texas), Sen. John Kerry (D-Mass.), Sen. Mark Warner (D-Va.) and Sen. Herb Kohl (D-Wis.),* the owner of the Milwaukee Bucks NBA team, all rank higher.

McCaul's average estimated net worth in 2010 stood at $380 million, while Kerry's stood at about $232 million, Warner's at about $193 million and Kohl's at about $174 million.

Kerry's sizeable net worth is thanks, largely, to the assets of his wife Teresa Heinz Kerry.

OpenSecrets says all members of Congress are required to report not only their own holdings but also that of their spouses and any dependents. However, calculating the exact value of many of their investments is impossible.

The top bracket of assets held by senators' spouses is simply "more than $1 million," so many lawmakers' families' net worth are likely undervalued. For instance, some estimate that Heinz Kerry's net worth may exceed $1 billion.

Notably, Sen. Bob Corker (R-Tenn.), who places as the No. 13* richest member of Congress with an average estimated net worth of about $60 million, ranks as the wealthiest Senate Republican.

OpenSecrets reports, at the other end of the spectrum, a handful of members of Congress are definitely in debt.

No matter how you slice the information on the congressional disclosure forms for Sen. Debbie Stabenow (D-Mich.), for instance, her net worth is below zero. Her maximum net worth is a negative $15,000, while her minimum net worth is a negative $50,000.

A similar predicament afflicts Reps. Mario Diaz-Balart (R-Fla.), John Conyers (D-Mich.), Louis Gohmert (R-Texas), Steve Fincher (R-Tenn.) and Alcee Hastings (D-Fla.).

Notably, Hastings, whose minimum estimated net worth is $7.3 million in debt and whose maximum estimated net worth is $2.1 million in debt, ranks as the poorest member of Congress, by the Center's tally.

That said, members of Congress might be more financially well off than we can see. The annual filings do not include the values of government retirement accounts, personal property -- such as cars or artwork -- that not for investment or any non-income-generating property, such as their primary residences.

Moreover, because of the forms' broad ranges for assets and liabilities, it's impossible to know whether some members of Congress are in the black or in the red.

HOW PROGRAMS FOR THE POOR ARE AFFECTED BY AUTOMATIC SPENDING CUTS - BROOKINGS INSTITUTION VIDEO (5 MINUTES), CLICK HERE - 12/31/2011

LATEST STATS ON WORKER PAY AND BENEFITS FROM LABOR DEPARTMENT / PLUS! RATED MUST READ! FORMER OBAMA ADMINSTRATION ECONOMIST JARED BERNSTEIN, "MIDDLE CLASS FAMILIES WERE LOSING GROUND EVEN WHEN THE ECONOMY WAS GOOD"

More from the Emeritus Newsroom- Survey results released today by the Department of Labor's, Bureau of Labor Statistics, shows government workers continue to get lower pay, as a percentage of their total compensation, but do better than workers in the private sector when benefits are included.

Employer costs for employee compensation averaged $30.11 per hour worked in September 2011, the U.S. Bureau of Labor Statistics reported today. Wages and salaries averaged $20.91 per hour worked and accounted for 69.4 percent of these costs, while benefits averaged $9.21 and accounted for the remaining 30.6 percent. Total employer compensation costs for private industry workers averaged $28.24 per hour worked in September 2011.

Employer Costs for Employee Compensation (ECEC), a product of the National Compensation Survey, measures employer costs for wages, salaries, and employee benefits for nonfarm private and state and local government workers.

Relative importance of employer costs for employee compensation, September 2011

Compensation Civilian Private State and local

component workers industry government

Wages and salaries 69.4% 70.5% 65.2%

Benefits 30.6 29.5 34.8

Paid leave 6.9 6.7 7.4

Supplemental pay 2.4 2.8 0.8

Insurance 8.9 8.1 12.0

Health benefits 8.4 7.6 11.6

Retirement and savings 4.6 3.6 8.4

Defined benefit 2.8 1.6 7.6

Defined contribution 1.8 2.0 0.8

Legally required 7.8 8.3 6.1

Former Obama administration economist Jared Bernstein, in an article published online today, claims the consistent stagnation of wages and benefits earned by the middle class in recent years, have only amplified the income gap between the top 1% of wage earners and the remaining 99%. Bernstein article, click here.

MUST SEE VIDEO: ECONOMIST PAUL KRUGMAN HONORED BY ECONOMIC POLICY INSTITUTE

WHY A COLLEGE DEGREE DOESN'T MEAN A MIDDLE CLASS LIVING

FEDERAL RESERVE SAYS ECONOMY HAS IMPROVED SLOWLY/MODERATELY

More from the Emeritus Newsroom- The Federal Reserve's Beige Book report, released today concludes, overall economic activity increased at a slow to moderate pace since the previous report across all Federal Reserve Districts except St. Louis, which reported a decline in economic activity. District reports indicated that consumer spending rose modestly during the reporting period. Motor vehicle sales increased in a number of Districts, and tourism showed signs of strength. Business service activity was flat to higher since the previous report. Manufacturing activity expanded at a steady pace across most of the country. Overall bank lending increased slightly since the previous report, and home refinancing grew at a more rapid pace. Changes in credit standards and credit quality varied across Districts. Residential real estate activity generally remained sluggish, and commercial real estate activity remained lackluster across most of the nation. Single family home construction was weak and commercial construction was slow. Districts mostly reported favorable agricultural conditions. Activity in the energy and mining sectors increased since the previous report.

The Fed also says hiring was generally subdued, although some firms with open positions reported difficulty finding qualified applicants. Wages and salaries remained stable across Districts. Overall price increases remained subdued, and some cost pressures were reported to have eased.

All the Federal Reserve districts reported wages and salaries remained stable, although some exceptions were noted. In Cleveland, wage pressures emerged for truck drivers as the pool of available drivers shrank relative to job openings. Manufacturing wage growth strengthened in Richmond, while hiring stabilized and the average workweek was unchanged. Some wage growth was noted among the highly skilled trades in Atlanta. In Minneapolis, wages increased sharply at some fast food restaurants in western North Dakota. Kansas City reported that some energy and information technology firms raised wages for skilled workers; Dallas reported the same for airlines and a few construction-related manufacturers. San Francisco noted persistent upward pressure on benefit costs, especially for employee health care.

LATEST CBO REPORT SAYS STIMULUS ACT WAS MORE EFFECTIVE AGAINST RECESSION THAN EARLIER ESTIMATES

More from the Emeritus Newsroom- A Congressional Budget Office report confirms earlier estimates that the American Recovery and Reinvestment Act, was effective, preventing the recession from deepening. The report also provides a more defined picture that ARRA was more effective than first thought. The agency has compiled several reports, since the act was passed, to provide analysis on the positive and negative effects, each quarter.

The CBO, in its report released Tuesday, claims, that ARRA’s policies had the following effects in the third quarter
of calendar year 2011 compared with what would have occurred otherwise:
 They raised real (inflation-adjusted) gross domestic product (GDP) by between 0.3 percent and 1.9 percent,
 They lowered the unemployment rate by between 0.2 percentage points and 1.3 percentage points,  They increased the number of people employed by between 0.4 million and 2.4 million, and  They increased the number of full-time-equivalent jobs by 0.5 million to 3.3 million. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers.) The effects of ARRA on output peaked in the first half of 2010 and have since diminished, CBO estimates. The effects of ARRA on employment are estimated to lag slightly behind the effects on output; CBO estimates that the employment effects began to wane at the end of 2010 and have continued to do so throughout 2011. Still, CBO estimates that, compared with what would have occurred otherwise, ARRA will raise real GDP in 2012 by between 0.1 percent and 0.8 percent and will increase the number of people employed in 2012 by between 0.2 million and 1.1 million.

RISING TREND OF YOUNG ADULTS REMAINING/MOVING BACK WITH PARENTS

More from the Emeritus Newsroom- Between 2005 and 2011, the proportion of young adults living in their parents’ home increased, according to the U.S. Census Bureau. The percentage of men age 25 to 34 living in the home of their parents rose from 14 percent in 2005 to 19 percent in 2011 and from 8 percent to 10 percent over the period for women. These statistics come from America’s Families and Living Arrangements: 2011, a series of tables from the 2011 Current Population Survey providing a look at the socioeconomic characteristics of families and households at the national level.

“The increase in 25 to 34 year olds living in their parents’ home began before the recent recession, and has continued beyond it,” said the author, Rose Kreider, a family demographer with the Fertility and Family Statistics Branch.

Similarly, 59 percent of men age 18 to 24 and 50 percent of women that age resided in their parents’ home in 2011, up from 53 percent and 46 percent, respectively, in 2005. It should be noted that college students living in a dormitory are counted in their parents’ home, so they are included in these percentages.

In general, the percent of all households that contain just one person has risen over the last half of the 20th century and into the 21st century. The percentage of such households rose from 13 percent in 1960 to 28 percent in 2011. While the percentage may not differ significantly from one year to the next, the overall trend has been an upward one. The percentage did decline, however, from 2008 to 2010.

Of the 74.6 million children younger than 18 in 2011, most (69 percent) lived with two parents, while another 27 percent lived with one parent and 4 percent with no parents. Of those children who lived with two parents, 92 percent lived with two biological or two adoptive parents.

Among the children who lived with one parent, 87 percent lived with their mother.

Of the children living with no parents present, 57 percent lived with at least one grandparent.

In 2011, 10 percent of children under 18 lived with at least one grandparent. Seventy-eight percent of these children also lived with at least one parent.

Of the 67.8 million opposite sex couples who lived together, 89 percent were married couples, while the remaining 11 percent were unmarried.

In 2011, married couples with children made up 20 percent of all households, half what they were in 1970 (40 percent). (See Figure 3.)

In 2011, 23 percent of married couple family groups with children younger than age 15 had a stay-at-home mother. This proportion decreased in the last few years during the recession. In 2007 — before the recession began — the corresponding figure was 24 percent. Full text of report, click here. 11/03/2011

HOME OWNERS WHO SUSPECT WRONGDOING IN THEIR FORECLOSURES CAN ASK FED FOR REVIEW

More from the Emeritus Newsroom- Home owners who suspect their foreclosures to have been fraudulent can submit their case for federal review. The Office of the Comptroller of the Currency will be in charge of the review. Home owners who had foreclosure actions filed against them between January 1, 2009 and December 31, 2010 are scheduled to receive letters from their mortgage services, required by an agreement between federal investigators and 14 of the largest servicers, last April. The letters are to be sent this month and next. If home owners suspect fraud in their case, but did not receive a letter, they can make contact with independent consultants at no charge, by calling 1-888-952-9105 or through a special website, www.independentforeclosurereview.com . The deadline for home owner review requests is April 30th, 2012.

If the independent consultant finds wrongdoing in a home owner's foreclosure case, the homeowner will receive compensation as determined by the review.

FEDERAL INVESTIGATORS: $700-$900 MILLION IN CUSTOMER ACCOUNTS MISSING AS M-F GLOBAL FILES BANKRUPTCY

FEDS MOVE TO PREVENT COMPANIES FROM ABANDONING PENSIONS

More from the Emeritus Newsroom- The Pension Benefit Guaranty Corporation has announced it is suing Bendix Commercial Vehicle Systems LLC for $16.6 million to cover pension debt from the closing of its Frankfort, Ky., plant. the PBGC says federal law requires companies to provide financial protection when more than 20 percent of a pension plan's members lose their jobs in a shutdown. All the Frankfort plant's 63 workers were displaced after it closed in December 2007.

"Bendix continues to ignore its legal responsibility to these workers," said PBGC Director Josh Gotbaum. "We've tried to work with them in good faith, but now we have no choice except to take them to court. Make no mistake: PBGC will use every legal means to protect pensions."

PBGC filed its lawsuit in the US District Court in Cleveland on Sept. 16, 2011 after Bendix declined to meet its obligations. The action against Bendix is the first time PBGC has had to go to court to compel a company to cover pension obligations from a plant closing. Until now, companies that closed plants have worked with PBGC to settle their pension debts. Since 2007, PBGC has obtained more than $1 billion in additional protection for pension plans covering more than 120,000 workers and retirees. PBGC is hopeful the issue will be resolved soon without further court action. Bendix, which supplies brakes and vehicle control systems for trucks and commercial vehicles is headquartered in Elyria, Ohio, and owned by Knorr-Bremse AG of Munich, Germany.

The agency also is fighting efforts by Friendly's to end the pensions of its almost 6,000 workers and retirees in bankruptcy.

Based in Wilbraham, Mass., Friendly Ice Cream Corp. filed for bankruptcy protection on Oct. 5. The company also announced it was closing 63 restaurants. Friendly's is owned by Sun Capital Partners. Sun Capital intends to use the bankruptcy process to abandon the pension plan, but keep its ownership of Friendly's.

"It looks like Friendly's and Sun Capital are trying to make their employees and retirees bear the brunt of the company's restructuring; the employees deserve better," said PBGC Director Josh Gotbaum.

If the bankruptcy court allows Friendly's and its owners to abandon the pension plan, PBGC will pay pension benefits to Friendly's employees. However, because of limits set by federal law, retirees might get reduced pensions.

Gotbaum said PBGC works to preserve both businesses and their pensions. Many companies have gone through bankruptcy with their pensions ongoing. In fact since 2009, PBGC has worked with some 40 companies to preserve the pensions of more than 300,000 Americans.

"Time after time, PBGC has worked successfully with companies and their creditors to make sure that the bankruptcy process recognizes the rights of pensioners, too," Gotbaum said. "We want to make sure that Friendly's employees and retirees don't get left out."

ECONOMY DOUBLES EXPANSION IN THIRD QUARTER

More from the Emeritus Newsroom- According to the Bureau of Economic Analysis, real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the third quarter of 2011 (that is, from the second quarter to the third quarter) according to the "advance" estimate. In the second quarter, real GDP increased 1.3 percent. The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The"second" estimate for the third quarter, based on more complete data, will be released on November 22, 2011. The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, and federal
government spending that were partly offset by negative contributions from private inventory investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP in the third quarter primarily reflected accelerations in PCE and in
nonresidential fixed investment and a smaller decrease in state and local government spending that were partly offset by a larger decrease in private inventory investment.

FEDERAL HOUSING FINANCE AGENCY ANNOUNCES NEW PROGRAM FOR UNDERWATER HOME OWNERS

More from the Emeritus Newsroom- The FHFA, effective today, has changed eligibility requirements of it's the Home Affordable Refinance Program (HARP), one of several under the Making Home Affordable Program initiative introduced in 2009, as part of the Troubled Asset Relief Program (TARP), to cut foreclosures due to homeowner sowing more than their homes were worth. Effective today, there is no cap on how much a homeowner owes on his mortgage to qualify, thereby removing a cap that such mortgages had to be 25% more the worth of the home. However, it has been able to help only a fraction of homeowners facing foreclosure, or those likely to be in that category. A March 2010 Inspector General report, found a year into the program, only 168,708 modifications became permanent out of more than one million trial modifications. The total number of homeowners saved from foreclosure on various programs, including HARP, remains less than a million.

 Eliminate certain risk-based fees for borrowers who refinance into shorter-term
mortgages and lowering fees for other borrowers;
 Remove the current 125 percent current loan-to-value (LTV) ratios ceiling for fixed-rate mortgages backed by
Fannie Mae and Freddie Mac;
 Waive certain representations and warranties that lenders commit to in making loans
owned or guaranteed by Fannie Mae and Freddie Mac;
 Eliminate the need for a new property appraisal where there is a reliable AVM
(automated valuation model) estimate provided by the Enterprises; and
 Extend the end date for HARP until Dec. 31, 2013 for loans originally sold to the
Enterprises on or before May 31, 2009.

The agency claims, as of August 31, 2011, nearly 894,000 borrowers had refinanced through HARP. Four to five million homeowners are estimated to be in or soon will be facing foreclosure. HARP is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. This program will continue to be available to borrowers with loans sold to the Enterprises on or before May 31, 2009 with current loan-to-value (LTV) ratios above 80 percent.

The Inspector General for TARP suggested, in their July 2011 Quarterly Report, that in light of the unusually high degree of long-term unemployment that has marked this financial crisis, more than one year ago, in its April 2010 Quarterly Report to Congress, the Treasury reconsider the length of the minimum term of its unemployment forbearance program known as the Home Affordable Unemployment Program (“UP”). As of June 30, 2011, UP provided payment forbearance for a minimum of three months for unemployed borrowers with the amount forborne added to the balance of the mortgage. The basis for SIGTARP’s recommendation was a concern that UP’s three-month minimum forbearance term would not go far enough to assist the average unemployed homeowner effectively. The average length of unemployment at the time of SIGTARP’s recommendation, according to the Bureau of Labor Statistics, was 31.2 weeks, the longest recorded since its measurement began in 1948. Nearly 43% of unemployed workers had been out of work for 27 weeks. Since that time, the average length of unemployment has increased to 39.9 weeks, as reported in June 2011, with 42% of unemployed workers out of work for 27 weeks.

Adding to homeowners fears about the program are widely reported fraud schemes involving home refinancing. One of the most notable involves a lawsuit in New Jersey against CitiMortgage. The suit, filed by Juan and Elizabeth Silva, claims that CitiMortgage intentionally set up its loan modification program to fail, and that Citimortgage instituted its HAMP program in order to feign compliance with TARP's conditions, although it never had any intention to allow widespread loan modifications for homeowners.

CITIGROUP AGREES TO PAY $285 MILLION IN BOGUS MORTGAGE BACKED SECURITIES SCANDAL

More from the Emeritus Newsroom- After years of negotiations the Securities and Exchange Commission reached agreement with Citigroup's U.S. broker-dealer subsidiary to settle charges of defrauding investors of about $1 billion in collateralized debt obligation (CDO) tied to the U.S. housing market. Citigroup then bet against those same investors, who bought the CDOs, as the housing market showed signs of distress. The CDOs defaulted within months, leaving investors with losses while Citigroup made $160 million in fees and trading profits.

The SEC alleges that Citigroup Global Markets structured and marketed a CDO called Class V Funding III and exercised significant influence over the selection of $500 million of the assets included in the CDO portfolio. Citigroup then took a proprietary short position against those mortgage-related assets from which it would profit if the assets declined in value. Citigroup did not disclose to investors its role in the asset selection process or that it took a short position against the assets it helped select.

Citigroup has agreed to settle the SEC’s charges by paying a total of $285 million, which will be returned to investors.

SOCIAL SECURITY RECIPIENTS TO GET 3.6% RAISE

More from the Emeritus Newsroom- The Social Security Administration announced this morning that recipients will be getting a raise for the first time since 2009.

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012, according to SSA.

The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2011.

Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $110,100 from $106,800. Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increase in the taxable maximum.

Information about Medicare changes for 2012, when announced, will be available at www.Medicare.gov. For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.

The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola. 10/19/2011

WORKERS REAL EARNINGS CONTINUE TO STAGNATE/DROP

More from the Emeritus Newsroom- Wage stagnation is being overcome by inflation in the latest report from the Bureau of Labor Statistics. The BLS says real average hourly earnings for all employees fell 0.1 percent from August to September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. A 0.2 percent increase in average hourly earnings was more than offset by a 0.3 percent increase in the Consumer Price Index for All Urban
Consumers (CPI-U).Real average weekly earnings rose 0.2 percent over the month, as a result of the 0.3 percent increase in the average workweek and the decrease in real average hourly earnings. Since reaching a recent peak in
October 2010, real average weekly earnings have fallen 2.0 percent.

Real average hourly earnings fell 1.9 percent, seasonally adjusted, from September 2010 to September
2011. This decrease combined with a 0.3 percent increase in average weekly hours resulted in a 1.7
percent decrease in real average weekly earnings during the same period.Real average hourly earnings for production and nonsupervisory employees fell 0.2 percent from August to September, seasonally adjusted. A 0.2 percent increase in average hourly earnings was more than offset by a 0.4 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).Real average weekly earnings rose 0.1 percent over the month, as a result of the 0.3 percent increase in the average workweek and the decrease in real average hourly earnings. Since reaching a recent peak in October 2010, real average weekly earnings have fallen 2.2 percent.Real average hourly earnings fell 2.4 percent, seasonally adjusted, from September 2010 to September 2011. The decrease in real average hourly earnings combined with a 0.3 percent increase in average weekly hours resulted in a 2.0 percent decrease in real average weekly earnings during this period.

AMERICANS INCOME WON'T REACH PRE-RECESSION TILL 2021

More from the Emeritus Newsroom- A Wall Street Journal survey of economists projects Americans' income levels won't reach those of pre-recession till 2021. The survey found that from 2000 to 2010, median income in the U.S. declined 7% after adjusting for inflation, according to Census data. That marks the worst 10-year performance in records going back to 1967. On average, the economists expect inflation-adjusted incomes to rise over the next decade, but the 5% projected gain isn't enough to reach prerecession levels.

“Standards of living in the U.S. will continue to decline as we deleverage and emerging markets make over as the growth engine of the global economy,” says Julia Coronado of BNP Paribas.

The WSJ survey also shows Incomes are being held down by persistently high unemployment and tepid economic growth, and the situation isn’t expected to improve much in the foreseeable future. “What might be the locomotive?” asks Edward Leamer of UCLA Anderson Forecast. Typical drivers of economic recovery haven’t been robust. Housing remains stuck at recessionary levels with home prices expected to be nearly flat next year while construction is stuck at recessionary levels. Manufacturing and consumer spending have improved over the course of the recovery but haven’t been rising at levels that would lead to vigorous expansion. Meanwhile, growing global concerns could depress export markets.

REAL INCOME DOWN MOST AMONG SINGLE PARENT FAMILIES

More from the Emeritus Newsroom- A report from two former Census Bureau researchers examines household income trends during the recent recession lasting from December 2007 to June 2009, and two full years of the “economic recovery” beginning in June 2009 up through June 2011. The reports show there has been no recovery in terms of household income. To the contrary, it shows that median household income has continued to decline up through June 2011.

A breakdown of the changes by groups shows a more significant effect among single parent households.

During this period income declined for all but a few groups in the population, and some of the largest declines occurred for groups with incomes well below the overall median annual household income.
Highlights of the income declines between June 2009 and June 2011 include the following:
 Real median annual household income for family households with a male or female head and no spouse present (many with children in the household) declined by 7.3 percent (from $39,321 to $36,465) compared to a decline for married-couple households of 4.5 percent (from $76,783 to $73,324).
 Real median annual household income for households with a head under 25 years old declined by 9.5 percent (from $32,123 to $29,060) compared to a decline for households with a head 45 to 54 years old of 5.5 percent (from $65,911 to $62,315).
 Real median annual household income for households with a head looking for work or on layoff (unemployed) declined by 18.4 percent (from $41,037 to $33,487) compared to a decline for households with a head working full-time of 5.1 percent (from $72,104 to $68,454).
 Real median annual household income for households with a Black (not Hispanic) head declined by 9.4 percent (from $35,072 to $31,784) compared to a decline for households with a White (not Hispanic) head of 4.7 percent (from $59,111 to $56,320). The decline for households with a Hispanic head was 4.9 percent (from $41,945 to $39,901).

CENSUS BUREAU SAYS HOME OWNERSHIP STILL AT SECOND HIGHEST LEVEL DESPITE WORST DROP SINCE 1940

More from the Emeritus Newsroom - As the Census Bureau continues to vet more information from the years in recession, revealing more interesting facts about home ownership.

First, according to the agency, home ownership rate is the second highest on record, behind only 2000, since home ownership data collection began in 1890. However, the rate decreased by 1.1 percentage points to 65.1 percent between 2000 and 2010.

Second, the decrease amounts to the largest since the period from 1930 to 1940.

The Census Bureau report shows the national housing inventory increased by 15.8 million units, or 13.6 percent, from 2000 to 2010. The housing inventory increased in all states during the decade but grew faster in the South and West than in the Midwest and Northeast. The South grew 17.9 percent to 50.0 million units and the West grew 17.3 percent to 28.6 million units. In contrast, the Midwest grew by 9.3 percent to 29.5 million units and the Northeast grew by 6.6 percent to 23.6 million units.

All of the states with the largest percentage increases in housing units were in either the West or the South: Nevada (41.9 percent), Arizona (29.9 percent), Utah (27.5 percent), Idaho (26.5 percent), Georgia (24.6 percent), Florida (23.1 percent), North Carolina (22.8 percent), Colorado (22.4 percent), Texas (22.3 percent) and South Carolina (21.9 percent).

No states in either the Midwest or the Northeast experienced a percentage change in housing inventory greater than the national increase of 13.6 percent. In the Northeast, housing units in Pennsylvania (6.0 percent), New York (5.6 percent) and Rhode Island (5.4 percent) increased less than both the nation and the Northeast as a whole (6.6 percent). West Virginia had the lowest percentage increase of any state at 4.4 percent.

LARGEST INCREASE IN MODERN HISTORY OF AMERICANS MOVING IN WITH EXTENDED FAMILY

More from the Emeritus Newsroom- It has been established for months that increasing numbers of the unemployed are moving in with other family members. Now a study from the Pew Research Center has established the problem has reached its worst point in modern times.

In general terms, according to Pew, between 2007-2009, the number of Americans living in multi-generational households, spiked from 46.5 million to 51.4 million.

The study found the potential benefits of living in multi-generational households are greatest for the groups that have been most affected by the Great Recession. Among the unemployed, the poverty rate in 2009 was 17.5% for those living in multi-generational households, compared with 30.3% for those living in other households. Members of other economically vulnerable groups -- young adults, Hispanics and blacks -- who live in extended families also experience sharply lower poverty rates than those in other households.

The largest increase was among adults ages 25 to 34 who live with their parents.In 2009, a record 51.4 million Americans lived in a multi-generational household. These households included one-in-six Americans (16.7%) and more than one-in-five (21.1%) adults ages 25 to 34.

The share of Americans living in multi-generational households has grown by a third since 1980, when it was 12.1%. The growth, chronicled in a previous report by the Pew Research Center, represents a sharp reversal of the pattern from 1940 to 1980.

From 2007 to 2009, the number of Americans living in multi-generational households grew by nearly 5 million, a 10.5% increase at a time when the overall population grew only 1.8%. About half of the increase since 2000 in the number of Americans living in multi-generational households took place from 2007 to 2009. The rate of growth was also twice the rate that had prevailed from 1980 to 2006.

By contrast to the sharp increase in multi-generational households, the number of Americans who live in households that are not multi-generational—such as those including a parent and a child younger than 25, married couples with or without children younger than 25, unrelated adults or someone living alone—grew less than 1% from 2007 to 2009.

THOSE WHO HAVE JOBS ARE PUTTING MORE IN THEIR 401K

More from the Emeritus Newsroom- Mercer, a business consulting firm, is out with it's latest Workplace Survey, which shows a complicated link between how workers think about their economic future, and what they are saving. According to the survey, "...US benefit plan participants are dramatically more pessimistic about their economic expectations than just one year ago.

“In 2010, most participants saw the economy improving but not their own personal situation – a highly unusual divergence,” said Suzanne Nolan, Partner and Director of Marketing and Communications for Mercer’s US Outsourcing business. “This year’s results reflect a stunning reversal in terms of a highly negative view of the economy but a renewed commitment to and accountability for their own retirement planning.”

The Mercer survey also found that the percentage of participants expecting a recession has nearly doubled (42% versus 23% in 2010, see Table 1). Participants have internalized this gloomy economic outlook with a record number of participants fearing job loss (45%, up from 36% in 2010) and planning to delay retirement (44% up from 35% in 2010).

Strangely, according to the survey, over the past year, 41% of participants claimed to have increased their 401(k) contribution rate (up from 31%), 40% reallocated existing portfolios (up from 33%) and 38% reallocated their future contributions (up from 29%).* In the coming year, participants also plan to contribute more to their 401(k) plans and a slightly higher percentage expect to contribute the tax-deferred maximum (11%, up from 8% in 2010).

WHY THE MIDDLE CLASS MUST FIGHT BACK

MORE THAN $600 MILLION WASTED ON PAYMENTS TO DEAD RETIREES FROM OFFICE OF PERSONNEL MANAGEMENT

More from the Emeritus Newsroom- An Inspector General's report for the Office of Personnel Management (OPM) says it presented their findings, " ... to demonstrate the need to stop the flow of improper payments from the Federal Government’s Civil Service Retirement and Disability Fund (CSRDF) to deceased annuitants and survivors (annuitants), averaging $120 million annually over the last five years. While we are concerned with all post-death improper payments, our paramount concern is with the improper payments resulting when an annuitant’s death is not reported or detected and payments continue, sometimes for many years".

As one of the more noteworthy cases of overpayment, the IG's probe found a dead beneficiary's son who continued to receive benefits until 2008, 37 years after his father’s death in 1971. The improper payment in this case exceeded $515,000 and was reported to OPM when the son, who fraudulently received the payments, died. The improper payment was not recovered.
When compared to other Federal benefits programs, the improper payment rate is arguably low; however, the amount of post-death improper payments is consistently $100-$150 million annually, totaling over $601 million in the last five years. In addition, the balance due the Government related to these improper post-death payments during the last five years has risen much faster (70%) than total annuity payments (19%), and stronger steps must be implemented by OPM to identify and recover improper payments.

*Death Master File Match- Retirement Services committed to performing, in addition to the weekly match, an annual computer match between its annuity roll and the Social Security Administration’s (SSA) death records. The annual match was performed in 2005, 2009, and 2010, and is scheduled to be performed again in the Fall of 2011;

*Over 90 Project.- OPM sampled the annuity roll population over 90 years old (Over 90 Project) in September 2009, which at that time totaled 125,000, to confirm that the annuitants are still alive and appropriately receiving an annuity from the CSRDF. The sample consisted of 4,400 annuitants. Of this sample, six were determined to be deceased but were not identified during prior computer matches with SSA. In addition, as of the December 2010 report on this project, 144 annuitants in the sample had not responded to letters of inquiry from OPM and their annuities were placed in a suspended payment status. OPM is determining how best to proceed on these cases.

*Improved Death Reporting- To improve the timeliness of death reporting, OPM enhanced communications with annuitants and their family members through changes to mass mailings, the creation of video messages for the OPM website, and recorded telephone messages activated while placed on hold by OPM Call Center representatives.

FEDERAL RESERVE APPROVES LOWER LONG TERM INTEREST RATES TO STIMULATE ECONOMY

More from the Emeritus Newsroom- With tools to stimulate the economy sparingly used so as not to increase inflation, the Federal Reserve announced today it would be buying another $400 billion of U-S Treasury Securities by the end of June 2012. The Fed, in a statement today says it is making the move to put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

The Fed sized up the current economy saying, "Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased. Investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect some pickup in the pace of recovery over coming quarters but anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets. The Committee also anticipates that inflation will settle, over coming quarters.

MORE YOUNG FAMILIES FORCED INTO POVERTY

POVERTY IN U-S STRETCHES CHARITIES

HOW ELECTRONIC TRADING CONTINUES TO CHANGE STOCK MARKETS - VOICE OF AMERICA REPORT (4 MINUTES)

NUMBER OF AMERICANS IN POVERTY, WITHOUT HEALTH INSURANCE, RISES

More from the Emeritus Newsroom- The Census Bureau, this week, has released an avalanche of evidence documenting the rise of Americans in poverty, including the working poor, and the escalation of those without health insurance amid a decline in those covered by employer plans.

The U.S. Census Bureau announced today that in 2010, median household income declined, the poverty rate increased and the percentage without health insurance coverage was not statistically different from the previous year.

Real median household income in the United States in 2010 was $49,445, a 2.3 percent decline from the 2009 median.

The nation's official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009 ─ the third consecutive annual increase in the poverty rate. There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009 ─ the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published.

The number of people without health insurance coverage rose from 49.0 million in 2009 to 49.9 million in 2010, while the percentage without coverage −16.3 percent - was not statistically different from the rate in 2009.

This information covers the first full calendar year after the December 2007-June 2009 recession.

Race and Hispanic Origin (Race data refer to people reporting a single race only. Hispanics can be of any race.)

Race and Hispanic Origin (Race data refer to those reporting a single race only. Hispanics can be of any race.)

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TOP FINANCIAL-PENSIONS STORIES BELOW VIDEO LINKS / CLICK HERE TO RETURN TO HOME PAGE AND DIRECTORY

TOP FINANCIAL-PENSION STORIES

FEDERAL RESERVE EXTENDS DEADLINE FOR HOMEOWNERS WANTING INDEPENDENT REVIEW OF THEIR FORECLOSURES

DID THE STIMULUS WORK ?

Click here for YouTube video from the Center for American Progress (4 Minutes)- 02/15/2012

MUST READ: WHY FEDERAL SAFETY NET CRITICS DEPEND ON IT

BERNANKE URGES MORE STATES START LAND BANKS TO GET FORECLOSED HOMES OFF THE MARKET / FED CHIEF SAYS EXCESS SUPPLY HURTS NEIGHBORHOODS

U-S ATTORNEY GENERAL HOLDER ANNOUNCES $25 BILLION SETTLEMENT IN MORTGAGE FRAUD CASES

HOW ZUCKERBERG CAN AVOID THE TAX MAN BUT LADY GAGA CAN'T

STATES FACE DEADLINE FOR SETTLEMENT ON MORTGAGE LAWSUITS

OBAMA PROPOSES EXPANSION OF HOME REFINANCING TO INCLUDE MORTGAGES OWNED BY INVESTORS

FEDERAL DEFICIT IN QUICK DECLINE

HOME VALUES CONTINUE TO SINK IN MOST METRO AREAS

PENSION BENEFIT GUARANTY CORPORATION BLASTS AMERICAN AIRLINES FOR MISINFORMING EMPLOYEES ABOUT PENSIONS

MORE SIGNS ECONOMY WILL BE SLOW CLIMB IN 2012

INTERNATIONAL MONETARY FUND PREDICTS TOUGH WORLD WIDE ECONOMY FOR 2012

More from the Emeritus Newsroom- As promised, the International Monetary Fund released their World Economy 2012 projections. In short, the projections include,

Full IMF article on projections, click here. Click here for IMF YouTube video of announcement. 01/24/2012

INTERNATIONAL MONETARY FUND HEAD SAYS WORLD ECONOMY COULD HAVE A "1930'S MOMENT", IF EUROPE DOES NOT SOLVE FINANCIAL PROBLEMS

STUDY FINDS BLACK BANKRUPTCY FILERS DISPROPORTIONATELY FILE CHAPTER 13 & ARE LEFT WITH MOUNTING DEBT

KODAK FILES BANKRUPTCY / WILL KEEP OPERATING / TRYING TO SHED $245+ MILLION IN PENSION COSTS

INEQUITIES OF CUTTING PROGRAMS FOR THE POOR WHILE CONTINUING LOWER TAX RATES ON INVESTMENT INCOME FOR THE RICH - FAMILIES USA VIDEO, CLICK HERE FOR YOUTUBE PLAYBACK (3 MINUTES)

A MUST SEE!!! SEVEN LIES ABOUT THE U-S ECONOMY - FORMER LABOR SECRETARY ROBERT REICH & MOVEON.ORG, CLICK HERE FOR YOUTUBE PLAYBACK (3 MINUTES)

WHY MITT ROMNEY'S UNRELEASED TAX RETURNS ARE A BIG DEAL

CBO REPORT SAYS RAISING SOCIAL SECURITY ELIGIBILITY AGE WILL BOOST ELDERLY HEALTH CARE COSTS

PEW SURVEY FINDS MORE AMERICANS SEE INEQUALITY BETWEEN RICH AND POOR

GAO SAYS TROUBLED ASSET RELIEF PROGRAM (TARP) ADMINISTRATIVE COSTS ONLY HALF OF $70 BILLION APPROVED BY CONGRESS

RICHEST AND POOREST MEMBERS OF CONGRESS / WEALTH GAP BETWEEN CONGRESS AND THEIR CONSTITUENTS GROWS

HOW PROGRAMS FOR THE POOR ARE AFFECTED BY AUTOMATIC SPENDING CUTS - BROOKINGS INSTITUTION VIDEO (5 MINUTES), CLICK HERE - 12/31/2011

LATEST STATS ON WORKER PAY AND BENEFITS FROM LABOR DEPARTMENT / PLUS! RATED MUST READ! FORMER OBAMA ADMINSTRATION ECONOMIST JARED BERNSTEIN, "MIDDLE CLASS FAMILIES WERE LOSING GROUND EVEN WHEN THE ECONOMY WAS GOOD"

Relative importance of employer costs for employee compensation, September 2011

Compensation Civilian Private State and local

component workers industry government

Wages and salaries 69.4% 70.5% 65.2%

Benefits 30.6 29.5 34.8

Paid leave 6.9 6.7 7.4

Supplemental pay 2.4 2.8 0.8

Insurance 8.9 8.1 12.0

Health benefits 8.4 7.6 11.6

Retirement and savings 4.6 3.6 8.4

Defined benefit 2.8 1.6 7.6

Defined contribution 1.8 2.0 0.8

Legally required 7.8 8.3 6.1