Posts Tagged ‘81’

Liberals Say Recession Behind Us While Small Businesses Go Belly Up

December 28, 2009

This is from the Liberal Angle Times, a.ka. the Los Angeles Times.  Hence, one needs to have a constant angle-straightener as one reads.

Small-business bankruptcies rise 81% in California
With credit tight and consumers still pinching their pennies, many business owners find they can’t go on. More prime mortgages default in 3rd quarter

By Nathan Olivarez-Giles
December 22, 2009

The Obama administration’s new plan to give a boost to small businesses reflects continued trouble in that sector, which is facing new failures even as much of the nation’s economy is stabilizing. [If you want to tak about a new failure, talk about Barack Obama, then everything else pretty much falls into place.  The problem with the “much of the economy is stabilizing” thesis is that 3/4ths of all jobs in this country come from small businesses, which are obviously getting hammered.  The liberal rationale that we are recovering is part of the reason that we will have a double-dip recession and a jobless recovery.  You can’t fix a problem if you don’t first acknowledge you genuinely have one].

As credit lines have shrunk and consumers have cut back on spending, thousands of small businesses have closed their doors over the last year. The plight of struggling firms has been aggravated by the reluctance of banks to lend money, said Brian Headd, an economist at the Small Business Administration’s office of advocacy
. [Obama demonizes banks even as he claims they have a responsibility.  Well, which is it?  Are they demons selfishly doing their own thing, or are they legitimate and important institutions that have performed an important role in society?  Furthermore, banks say they aren’t lending because Obama has tightened up on them way too much, such that they CAN’T lend.  Bottom line: Obama – through demonizing and regulating – has done nothing but make a bad situation far worse].

“While bankruptcies are up, overall, small-business closures are up even more,” Headd said. [Small businesses have been crying out in agony about everything Obama has done.  ObamaCare will punish them; raising taxes “on the rich” will punish them; cap-and-trade and various other energy taxes and measures will punish them; card check will punish them; hiking up the inheritance tax in 2011 will punish them.  Obama has done nothing to help these businesses and everything to hurt them.  And then we wonder why they’re going extinct].

California has been particularly hard hit. The latest data show small-business bankruptcies up 81% in the state for the 12 months ended Sept. 30, compared with the previous year. Filings nationwide were up 44%, according to the credit analysis firm Equifax Inc. [We were told last year by Obama that this was the worst economy since the Great Depression.  And now small businesses bankruptcies have nearly DOUBLED under his management?  If we were facing the Great Depression last year when small business bankruptcies were up 44%, what are we facing now, when they are 81%].

The actual number of small businesses in trouble is probably higher, experts said, because many owners file for personal bankruptcy rather than seek protection for the business. [Well, that’s just great.  The actual numbers are even worse than twice as bad as they were last year.  Sounds to me like the economy must be doing fine].

Dennis McGoldrick, a bankruptcy lawyer in Torrance, said his clients are all stuck in similar situations — capital is hard to come by, customers are tough to attract and debt is piling up.  [Clearly, Obama’s first full year in office has been a rousing success.  But least these small businesses owners are becoming more like the federal government, with massive debt piling up.  It’s good to be more like the wonderful and marvelous Barack Obama, isn’t it?].

“We can’t keep up,” McGoldrick said. “There’s more people that want to come in every day than I can see.”
[Bankruptcy lawyers: jobs Obama has “created or saved.”].

Cecily McAlpine, who filed for bankruptcy protection for her Cold Stone Creamery franchise this spring, said the experience was humiliating but she had no choice.  [Plan to come back in 2012, Cecily.  Someone who isn’t just a clueless community organizer, and who has an actual idea how a functioning economy works, will be president then].

Receipts at the fledgling Compton ice cream shop plunged dramatically during the recession, and by late 2008 she was paying her employees out of her pocket.

“When the refrigerator died, that was it; I’d just had it,” McAlpine said. “That was the day I broke. I just started throwing stuff away.”

McAlpine recently withdrew her bankruptcy filing after selling all the store equipment and paying off her creditors. She is slowly paying off some back-rent and utility debt, and will officially dissolve her business in the next couple of weeks, she said.

“I still feel scarred and like a loser,” she said. “Even though I’m not in it anymore, it’s still there.” [Yes, but the liquidation companies have jobs that Obama “created or saved.”  And that’s the important thing].

Recognizing the problems of business owners like McAlpine, the Obama administration has proposed using federal stimulus money to help funnel more loans to small businesses. The White House has also asked Congress to eliminate capital gains taxes for one year on new investments in small-business stock, and called for a new tax incentive to encourage small businesses to hire more employees.  [I don’t know if Obama recognizes the problem or not.  What I do know is that funneling more money to the federal government in the form of the Small Business Administration is far from a solution to the problem.  Most small businesses avoid the SBA like a plague, due the political correctness, red tape, byzantine regulations, and DMV atmosphere of the place].

On Dec. 14, Obama called a meeting of executives of Wells Fargo & Co., Citigroup Inc., Bank of America Corp. and nine other large banks, and told them that they owed it to the nation to make more loans to small businesses and help rebuild the economy.  [Obama owes it to the nation to resign and allow the economy to recover by itself.    Aside from that, a) calling in executives to stand hat-in-hand while Obama partly demonizes and partly lectures them is not going to solve anything, particularly when b)  it’s the small community banks that do most of the loaning to small business].

In California, the need is great.  [But the other 49 states are doing just dandy].

Over the last year, the Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas have led the nation in small-business bankruptcy filings, said Tim Klein, a spokesman for Equifax.  [And what’s really scary about that is that California generally leads the nation as the trendsetter.  And this isn’t a very good trend, is it?].

About 19,000 small businesses filed for bankruptcy in California during the 12 months ended Sept. 2009, up from 10,500 the previous year.  [Like I said, pretty much double under Obama.  I remember Obama promising that unemployment wouldn’t go over 8% if we passed his stimulus that had all these “shovel ready projects.”  But that’s done and gone; now I’m ready to buy Obama’s next lie].

During September alone, 2,229 small businesses filed for protection, up from 1,503 filings in September 2008, the firm reported.  [Well, that’s good.  At least the trend is getting worse.  You can look at the upward sloping bankruptcy graph and convince yourself that it means progress.  Or maybe you can look at it and pretend you’re a mountain climber].

Kathleen March, a bankruptcy lawyer in Los Angeles, said she often pushes her clients to file for personal bankruptcy instead of a business filing because it’s easier
.  [Oh, yeah.  I’d forgot that earlier part about, “The actual number of small businesses in trouble is probably higher, experts said, because many owners file for personal bankruptcy rather than seek protection for the business.”  Scratch that part about “pretty much double.”  It’s actually far worse than “pretty much double,” but we just don’t know how much worse it actually is.

Many people also close down their businesses thinking that will solve their problems, only to find their companies’ debt lives on, March said. [Obamanomics: the gift that keeps on giving and giving].

“The norm is if you’re running a small business, you will have to either cosign or personally guarantee the significant debts,” she said. “The business itself can shut down, but the people cosigned all the debts. So, the individuals are then saddled with these huge debts.” [Yes, but loan collectors count as jobs that have been “saved or created.”].

A client who owned a surf shop was paying for business expenses from the client’s own funds long before filing for personal bankruptcy, she said.

“In this economy, anything that isn’t a necessity is a tough business to be in,” March said. “And the majority of my clients have waited too long to file for bankruptcy and in the process made things worse on themselves financially as a result.” [Well, that’s just great, because we can count on a whole lot more small businesses going belly up as all those other clients who’ve waited start floating with their bellies up.  That’s change you can believe in].

What these business owners really need is a nice sharp tax increase to make them even more profitable.

There.  If the LA Times article comes preset with a sharp leftward angle, a good hard pull to the right ought to straighten it out.

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Is This Economic Recovery? ‘1,000 Banks To Fail In Next Two Years’

August 31, 2009

Studies galore have demonstrated the bias of the media.  They have documented that more than 80% of supposedly objective journalists are Democrats.  And they have documented that their personal bias shaped their professional bias, with the media overwhelmingly favoring their “first love,” Barack Obama in the presidential campaign.

Their bias runs to even the smallest and most seemingly trivial matters, on the apparent theory that there is nothing to small to use to attack and undermine a Republican: journalists who stumbled all over themselves to praise Obama’s strenuous exercise rituals and his “chiseled pectorals” found Bush’s exercise “obsessive” and “creepy.” The media wouldn’t even allow President Bush to golf without attacking him for abandoning his duties, whereas they don’t attack Obama – even though he’s playing gold far more often than Bush did – and even golfing with a CEO of a firm in the midst of a tax corruption investigation.

So it really shouldn’t surprise anyone that the media would show its bias in big matters such as the economy.

University of Maryland senior research scientist John Lott Jr. says news coverage of the economy is slanted. Lott writes, “Over 78 percent more negative news stories discussed a recession when the economy — under a Republican president was soaring than occurred under a Democrat when the economy was shrinking.”

Lott — who researched 12,500 newspaper and wire service articles from 1985 through 2004 — also found that Democratic presidents got positive headlines 15 percent more of the time than Republican presidents for the same economic news.

Of his findings Lott writes, “The media’s focus on the negative side of everything surely helps explain people’s pessimism… Indeed, research has indicated that media bias is real.”

The media helped Obama fearmonger the economy when he wanted them to fearmonger the economy to push through his stimulus; but now they’re are trying to talk up the economy when Obama wants them to talk up the economy.  They are dutifully reporting that the recession seems to be over.

But it isn’t.  And it won’t be.

1,000 Banks to Fail In Next Two Years: Bank CEO
Published: Thursday, 27 Aug 2009
By: Natalie Erlich

The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May.

“We’ve already lost 81 this year,” Kanas told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They’re smaller companies.” (See the accompanying video for the complete interview.)

Failed banks tend to be smaller and private, which exacerbates the problem for small business borrowers, said Kanas, who became CEO of BankUnited when his firm bought the bank and is the former chairman and CEO of North Fork bank.

“Government money has propped up the very large institutions as a result of the stimulus package,” he said. “There’s really very little lifeline available for the small institutions that are suffering.”

This comes at a time when the FDIC has established new rules on bank sales. Private equity, for instance, would have to hold double the capital of their competitors in order to buy such an institution, said Kanas.

“This will have somewhat of a chilling effect on our participation,” he said. “As a result of having to keep higher capital levels, we’ll see lower prices coming from that sector.”

Of the 81 failed banks this year, two have been successfully acquired by private equity, he said. Kanas’ private equity firm bought UnitedBank, the failed Florida-based bank, from the FDIC in May. Regulators also allowed the sale of IndyMac Bank of California earlier this year.

“We are seeing more people step up and lobby bids in this situation,” he said. “We’re seeing more players mostly as a result of being attracted to the sector. I’m not so sure that will continue now that the rules have been ratchet it up.”

Meanwhile, much of the commercial realty problem resides in the regional and small community banks, said Kanas, because larger banks haven’t fueled that sector in the past.

“The market is expecting about the way we were expecting,” he said. “Unfortunately, we’re not seeing any evidence of a recovery in the real estate market in the southern Florida market,” he said.

It’s rather interesting that there’s a strong argument that Obama’s regulations are actually hurting our recovery, but Obama doesn’t have to worry about that message getting out to the public.  His secret, clearly,  is completely safe with the mainstream media.

The FDIC – the government entity which is supposed to step in if a bank goes bankrupt – is itself on the verge of going bankrupt:

March 4 (Bloomberg) — Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.

And think about it: one thousand banks failing over the next two years is to the notion of “economic recovery” what a giant asteroid hurtling toward us from space is to the statement “things are looking up for us.”  But again, the mainstream media is so focused on talking up the economy that they don’t have much time for such distractions.

What’s going to happen to unemployment?  The media made such a big deal about a temporary 1/10th of one percent drop in the unemployment rate.  But the longer term trend isn’t good.  It isn’t good at ALL:

Banks Stronger But Outlook Clouded by Job Loss: Whitney

Unemployment is likely to rise to 13 percent or higher and will weigh on the economy for several years, countering government efforts to stabilize the banking industry, analyst Meredith Whitney told CNBC.

While Whitney raised her short-term outlook for banks, causing stocks to open in positive territory after pointing lower earlier, she said the long-term outlook for the economy remains murky.

Consumers will not be able to spend as they continue to lose jobs and credit conditions stay tight, she said in a live interview. The result will provide a vivid display of how critical housing and lending are to economic growth. Unemployment is currently at 9.5 percent but is expected to keep rising.

We underestimate how much the whole economy is dependent on the mortgage industry, and that has to change,” Whitney said. “This is what happens when you delay the inevitable. We’re buying time here, but we’re not restructuring the economy.”

We’re looking a situation in which nearly half of American homes will be “underwater” – with the mortgages being higher than then homes are worth – by 2011.

And Obama’s policies are not helping to actually deal with the core problem facing the mortgage industry.

The dire assessment comes amid a slight stabilization in the U.S. housing market after three years of price drops, according to the National Association of Realtors.

The report states that the drop in home prices is fueling a vicious cycle of foreclosures as it eliminates homeowner equity and gives borrowers an incentive to walk away from their mortgage.

But, the foreclosed homes are not coming onto the market because people are finding out they can stay living in them and not pay their mortgage, according to Kudrle.

“The Obama administration is putting so much pressure on the banks and lenders to slow down the foreclosure process to try and keep people in their homes,” Kudrle said. “We have people who have not made a payment for 12 to 18 months and the bank still hasn’t come in to foreclose.”

That’s not a policy that is going to correct our financial woes; it’s just a delaying tactic that will ultimately make a bad problem far, far worse by postponing and in fact stockpiling the coming misery.

Government Supported Enterprises (GSEs) Fannie Mae and Freddie Mac – created by a Democrat-congrolled Congress and long run by connected Democrats – have been at the epicenter of the mortgage meltdown fiasco.

Peter Wallison predicted a future Fannie Mae and Freddie Mac failure in 1999 in a New York Times article, saying of Fannie Mae’s enormous financial exposure and risky policies:

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.” . . .

Franklin Raines, Jamie Gorelick, Jim Johnson, Daniel Mudd.  That’s just part of your list of Democrats who ran Fannie Mae into the ground and profited wildly in doing so.  The Wall Street Journal cites the first three names for disgrace in the Fannie Mae Enron-scheme they produced.  The fourth figure, Fannie CEO Daniel Mudd, showed just how far to the left Fannie Mae was politically when he said to THE most radically liberal wing of the Democrat Party – the Congressional Black Caucus – the following:

So many of you have been good friends to Fannie Mae and our mission. You’ve been friends through thick and thin. We have indeed come upon a difficult time for Fannie Mae…  In many ways I want to tell you today you are also the conscience of Fannie Mae.

President Bush tried SEVENTEEN TIMES to create tighter regulation of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.

Bush’s efforts led to two major Republican efforts to push through regulations that would have limited the mess that Fannie and Freddie could create, but their every move was fiercely resisted by Democrats.  The first time, Barney Frank – leading the Democratic effort to shield Fannie and Freddie from necessary regulatory reform in 2003, said:

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Again, in 2005, Republicans tried and failed to establish necessary regulatory reforms of Fannie Mae and Freddie Mac at a time when reforms could have averted the 2008 disaster.  Again Democrats unanimously rose up to block any such effort.  John McCain warned:

If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

But Democrats refused to heed the warnings.  And when the economy DID collapse BECAUSE of their refusal to deal with the GSEs that they had politically-benefited from, the very people who created the disaster in the first place poised themselves to benefit from it by demagoguing Republicans whose greatest sin was not being strong enough in their efforts to stand up and stop Democrats from advancing a ruinous agenda.

Think about it: seventeen calls for regulatory reform of the housing mortgage industry, all resisted by Democrats.  Two major efforts at regulatory reform, both blocked by fierce and united Democrat opposition.  And then Democrats demonized Republicans for refusing to enact regulations.  That’s called ‘chutzpah.’  And when the mainline media reported it as if it were somehow true, it was called ‘propaganda.’

In only a couple short years in the Senate, Barack Obama racked up the 2nd highest total in campaign contributions from Fannie Mae and Freddie Mac (2nd only to fellow Democrat and Senate Finance Chairman Chris Dodd).  Barack Obama was second in receipts of campaign contributions from corrupt Wall Street leveraging companies such as Lehman Brothers behind only Hillary Clinton.  Lehman Brothers profited and profited by playing the insane Wall Street insiders game until it went belly up from its own bloated practices.  And somehow that parasitic leech of a company was under the impression that financing one Barack Hussein Obama’s political career would be good for it’s greedy special interests.

And now we’re in such good hands to fix the mess that Democrats almost exclusively created.

And hey, don’t worry.  If anything bad happens, you can count on the mainstream media to honestly and objectively keep you informed — NOT.