Existing home sales decline:

Sales of existing homes fell in March as a severe slump in housing showed no signs of abating. The median price of a home fell compared with the price a year ago.

According to the report, sales were off 19.3% as compared to a year ago, and median prices were off 7.7%.

Carlton Towers, a 127-unit apartment building that's located at the corner of Sutherland Avenue and Forest Park Boulevard in Bearden.
...
will be renamed 414 Forest Park - will likely aim for a young-ish audience,

...Existing tenants will get a chance to stay in the building, but they'll have to dig into their wallets.

Taylor said average rents currently average about $690 a month, not including utilities, but will jump to around $830 a month after the renovations are completed.

There are many elderly people that live in Carlton Towers. How many of them will be able to cough up the approx. 20% rent increase? The location is perfect for them since it is centrally located with sidewalks and easy access to grocery stores, drug stores, etc. I am not sure this change is something to be boasting. I know, I know, free market! Wouldn't it have been nice if the owners allowed for attrition based on normal turnover? Who? What? The greatest generation? Nah.

Job Market 2009 - video powered by Metacafe

Free market!!!

It's just a little surprising these 2 guys don't feel a little guilty about accepting this $19 million in stock when so many of their customers won't be able to keep their homes.

"It's perverse for Bank of America to reward the principal architects of the bad business practices that caused this housing crisis," Sen. Charles Schumer, D-N.Y, said in a statement.

It's even a little more ridiculous that BOA is willing to pay one of these guys $28 million to "stay with the company".

Why would they want him to stay? That's like asking George Bush to stay for a second term. Oh, wait. The majority of Americans apparently did ask him to stay. Are we a "Confederacy of Dunces"?

We're in trouble now.

Chief Executive Howard Schultz told the company's annual meeting there was no "silver bullet" for fixing Starbucks, whose stock has dropped 40 percent over the last 12 months.

A $5 cup of coffee is no longer affordable? MacDonald's now in competition with Starbucks? What's happening in this country?

Then there's Borders Books.

Shares tumbled more than 17 percent, or $1.23, to $5.87 at the open of trade.

Borders has lost market share both to online companies and to discounters like Wal-Mart Stores Inc.

Borders is looking to put themselves up for sale. People buy their books at Wal-Mart? Or is it really that people are reading books less?

Barnes & Noble is doing better, but...

Barnes & Noble Inc., the nation's largest bookseller, reported a 9 percent decline in fourth-quarter profits Thursday amid a challenging retail environment.

Oh, twiddly dee... Too bad you can't get a cup of coffee over the Internet.

Bank of America 4Q profits plunge

Hurt by the deepening credit crisis, Bank of America Corp. said Tuesday its fourth-quarter earnings fell 95 percent, and Wachovia Corp. reported its earnings tumbled 98 percent.

Net income at Bank of America, the nation's second-largest bank, dropped to $268 million, or 5 cents per share, in the three months ended Dec. 31 from $5.26 billion, or $1.16 per share, a year ago.

But don't feel too sorry for BofA. Yet. Earnings in 2007 were $14.98 billion, v. $21.13 billion in 2006. Looks like the party was over in the fourth quarter, though, which does not bode well for our economy going forward.

World stocks down

It would appear that the rest of the world agrees with my assessment of the usefulness/likely effectiveness of the economic stimulus package Bush is proposing. Those with money in stocks should probably be glad that our markets are closed today. Perhaps with a little distance, we can avoid the 400+ point hit that was likely to happen here if we had been open for business today.

Is there still anyone out there who thinks it is a good idea to have the Gross Old Perverts party in charge of the economy? (of course there are. They are the willfully blind people that we call "republicans")

CAFKIA

Bush backs $145 billion economic plan

Stocks fall after Bush announces plan

AP reports:

Oil prices soared to $100 a barrel Wednesday for the first time ever, reaching that milestone amid an unshakeable view that global demand for oil and petroleum products will continue to outstrip supplies.

I used to think the government should tax gas until it was $5 or more per gallon. Now I think they should subsidize it until it's only ten cents a gallon. The sooner we burn it all up, the sooner we will have to find better alternatives.

According to figures released by the Tennessee Department of Labor and Workforce Development on Friday, Knox County's unemployment rate for November was 3.7%, the second lowest in the state and lower than the overall state unemployment rate of 4.9%.

Knox County unemployment was up .4% since October 2007, and unchanged year over year from November 2006.

November unemployment in the City of Knoxville was 5.1%, up .5% from October 2007 and unchanged from November 2006.

November unemployment for the Knoxville Combined Statistical Area (CSA) was 4.2%, up .4% from October 2007. The Knoxville CSA includes Harriman (Roane Co.), Knoxville, LaFollette (Campbell Co.), Morristown, Newport (Cocke Co.), and Sevierville (Sevier Co.) areas.

November unemployment for the Knoxville Metropolitan Statistical Area (MSA) was 3.9%, up .4% from October 2007 and unchanged from November 2006. The Knoxville MSA includes Anderson, Blount, Knox, Loudon, and Union counties.

The total estimated workforce in the Knoxville MSA is 358,660. Knox County's workforce is 227,150, and the City of Knoxville's workforce is 96,530.

The lowest unemployment was in Williamson County, at 3.6%. The highest unemployment was in Marshall County at 8.9%, followed by Pickett Co. at 8.8%.

From an interesting article in Mother Earth News.

Global non-renewable energy resources in terawatt/hours:

• Coal: 6,000,000
• Natural Gas: 1,500,000
• Uranium 235: 1,500,000
• Oil: 1,000,000
• Tar Sands: 800,000
• Total: 10,800,000

Global annual renewable energy sources in terawatt/hours:

• Direct Solar Radiation: 350,000,000
• Wind: 200,000
• Ocean/Thermal: 100,000
• Biofuels: 50,000
• Geothermal: 10,000
• Tidal/Wave: 5,000

According to the article, total world energy consumption in 2004 was 130,971 terawatt hours, and is projected to grow to 205,686 terawatt hours by 2030.

The article also says:

• "The total amount of energy produced by burning all the coal on the planet would only be equivalent to the solar energy that strikes the Earth every six days."

• "The entire recoverable world oil reserve is equivalent to the solar energy that strikes the Earth in one day."

• "The recoverable world reserve of fissionable uranium is equivalent to less than 1 1/2 days of the energy striking the Earth from the nuclear reaction of the sun."

I haven't been able to verify any of the author's numbers, but if they are even close it boggles the mind. You should read the whole article, and ask why we aren't seriously pursuing a distributed solar economy.

All signs point to another ugly day in the stock markets. It seems like this happens every time Bush opens his mouth to yammer about how great the economy is.

(And yes, I realize the stock markets are not the economy, but they are a gauge of smart money confidence in the economy.)

Some of it is related to their mortgage business, and some of it's on paper because they won't be able to use all of their accumulated tax credits because they are expected to keep losing money.

I'm sure it has nothing to do with making a product that America no longer wants or can afford.

Meanwhile, Toyota posted record profits.

A couple of headlines that should concern you:

• Oil rises to record above $98 a barrel

• New record low for dollar

The effects of the housing bust are rippling through the economy according to this Newsweek report:

The collateral damage is spreading. Because home sales and moves stimulate purchases of appliances, electronics and furniture, the giant chains that catered to house flippers and renovators have reported recessionlike results. In the second quarter, same-store sales were down 5.2 percent at Home Depot and 4.3 percent at Sears.

[..]

The National Marine Manufacturers Association said it expects pleasure-boat sales, down 6 percent in 2006, to fall 10 percent more in 2007, largely due to the housing woes.

[..]

In July, auto sales were down 12 percent from the year before. When CNW Research asked consumers who were putting off plans to buy new cars why they were doing so, 17.6 percent cited housing issues like falling home equity or rising mortgage payments.

Here's more disturbing info from the article:

• Nearly 180,000 homes fell into foreclosure in July, up 93 percent from a year ago.

• Sales of new single-family homes were off 22.3 percent in June from a year earlier.

• Sales of existing homes were off 9 percent in July.

• There is 9.6 months worth of housing inventory for sale, more than double the 2005 level.

• A national housing price index fell 3.2 percent between June 2006 and June 2007, "the largest sustained decline in year-over-year prices since 1991" according to a Yale economist.

• Employment in housing-related industries has declined 119,400 since August 2006.

Friday, "The Bank of England provided emergency funding to mortgage lender Northern Rock PLC on Friday after the bank, citing the global credit squeeze triggered by the U.S. subprime mortgage crisis, said it was unable to line up short-term loans from other financial institutions. "
...
Bankers warned against making parallels between Northern Rock and troubled Countrywide Financial Corp. in the United States_ which is releasing 13,000 employees and has been forced to borrow billions of dollars as it struggles to weather a wicked downturn in the U.S. housing market.

Monday, "he British Broadcasting Corp. reported Sunday that customers had withdrawn nearly 2 billion pounds ($4 billion) from Northern Rock accounts, though CEO Adam Applegarth refused to give a figure."

I can understand the concerns of the British. It may be a little premature to withdraw funds. Although, they (the British) have been around a lot longer and experienced a lot more than we.

Let's hope this all dies down soon.

Either way, here's a link to an FDIC document discussing FDIC insured deposits for banking. There is a disclaimer indicating the document is not a legal interpretation of the law for FDIC insurance, and suggests a review of the Federal Deposit Insurance Act and the FDIC's regulations. Gee, that's reassuring.

The disappearing American middle class is now too poor to even shop at Wal-Mart, as their CEO explained yesterday in discussing the company's disappointing earnings:

Lee Scott, Wal-Mart's chief executive, said the results were "not what we expected of ourselves".

"US consumers continue to be under difficult pressure economically," he said. "It is no secret that many customers are running out of money toward the end of the month."

President Bush, Aug. 9th: "The fundamentals of our economy are strong. Job creation is strong. Real after-tax wages are on the rise."

Meanwhile, the stock market is in freefall, with the DJIA losing nearly 1000 points (7%) since it's peak in late July, and nearly 500 points (3.5%) just in the last week.

After a series of happy talk articles in the paper a couple of weeks ago about what a great place East Tennessee is for boating and how much Sea Ray loves it here, and a more recent article last week noting some disappointing financial results but no indication of any related job cuts, the other shoe finally drops.

The KNS business section has an interesting article about Norfolk Southern's plans to upgrade 1400 miles of their rail system, and the possibility of an East Tennessee intermodal transfer terminal. The money quote:

Upgrading its freight lines from Louisiana to New Jersey would reduce highway congestion, reduce the cost of maintaining highways and reduce greenhouse emissions, [Norfolk Southern PR Manager Robin Chapman] said.

"We anticipate the entire project taking at least a million trucks off the highways annually throughout the system," Chapman said.

They're calling the $2 billion project the "Crescent Corridor."

I've got a new post up at Facing South about Florida's solar power incentives program and some other info about solar PV systems that you might find interesting.

Share prices (source: Yahoo Finance):

Finally.

The 2007 State New Economy Index by the Information Technology and Innovation Foundation and the Ewing Marion Kauffman Foundation examines a number of key indicators in every state to assess their ability to compete in the emerging global economy.

As Southern states fall all over each other to recruit new auto-manufacturing jobs with big incentives, the report suggests that much of the South is falling behind in a new economy that began taking shape in the post "mass-production and corporate economy" of the 1940's and 1950's.

Read more after the jump...

Nissan has completed a voluntary reduction in force at two Tennessee manufacturing plants that results in the loss of 775 jobs, a 12.5% reduction.

That just about nets out the 750 new employees hired by Nissan when the State of Tennessee paid them $200 million in incentives to move their corporate headquarters to the Nashville area last year. That's in addition to the $200 million the state spent on expansions at the Smyrna and Decherd plants two years ago.

On a related note, this report says states like Tennessee are chasing the wrong kinds of jobs with the wrong kinds of incentives.

Economy of the New Old South

On the Media has a great segment on one of my biggest pet peeves, stock market triumphalism. (Our own DOW Jones Pep Squad has been curiously silent on the latest news from Wall Street... hmmm.) Dean Baker explains that while a surging DOW can be good news for wage slaves, it can also be vewy, vewy bad.

Also on the show is an explanation of why cell phone technology sucks. Hint: market failure.

A new survey shows consumer confidence at a recent high:

Consumers’ economic outlook has skyrocketed during the past month, as seen in the RBC Expectations Index, which stood at 83.8 in January, a dramatic increase from December’s 55.0. This month’s index score represents the strongest level of optimism for future conditions in more than two years (in October 2004, the Expectations Index stood at 95.3).

An analyst says "This increase is likely derived in substantial part from the takeover of the new Congress," but also "likely stems from the continued tight labor conditions, evidenced by the current low unemployment rate of 4.5 per cent."

But then there's this:

The Commerce Department reported Thursday [Feb. 1] that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Depression.

For December, consumer spending rose a solid 0.7 percent, the best showing in five months, while incomes rose by 0.5 percent, both figures matching Wall Street expectations.

I guess it sort of correlates.

Bill held up over tax cuts.

Guess the Senate Dems will need a supermajority to get anything through the Senate. Which they would probably need anyway to override Bush's vetoes.

There is more work to be done to bust out the people's legislative logjam, starting in 2008.

UPDATE: Sen. Alexander and Sen. Corker both voted against cloture, i.e. for the filibuster. Aren't they supposed to be friends of the working people of Tennessee, where nearly 14% of the population lives in poverty?

Lost among all the yammering about idiot man-child's latest recipe for disaster was the news that the U.S. House of Representatives overwhelmingly voted to raise the minimum wage to $7.25 within two years. It passed 315 to 116, with 82 Republicans voting for it.

To their credit, the House passed a "no strings attached" bill. Senate Majority Leader Reid says it will have to be amended to include tax breaks for small business to get past the Senate and for Bush to sign it. He suggested Republicans would filibuster otherwise. Interesting.

Anyway, America may finally be on the road to recovery.