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Lack Of Faith In Us Dollar Causes Movement In Thirteen States To Mint Alternative Currency

Saturday, February 4th, 2012

A growing number of states are seeking shiny new currencies made of silver and gold.

Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place.

“In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System … the State’s governmental finances and private economy will be thrown into chaos,” said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year.

Unlike individual communities, which are allowed to create their own currency – as long as it is easily distinguishable from U.S. dollars — the Constitution bans states from printing their own paper money or issuing their own currency. But it allows the states to make “gold and silver Coin a Tender in Payment of Debts.”

To the state legislators who are proposing state-issued currencies, that means gold and silver are fair game, said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.

The state gold rush: Utah became the first state to introduce its own alternative currency when Governor Gary Herbert signed a bill into law last March that recognized gold and silver coins issued by the U.S. Mint as an acceptable form of payment. Under the law, the coins — which include American Gold and Silver Eagles — are treated the same as U.S. dollars for tax purposes, eliminating capital gains taxes.

Since the face value of some U.S.-minted gold and silver coins — like the one-ounce, $50 American Gold Eagle coin — is so much less than the metal value (one ounce of gold is now worth more than $1,700), the new law allows the coins to be exchanged at their market value, based on weight and fineness.

Local currencies: In the U.S., we don’t trust

“A Utah citizen, for example, could contract with another to sell his car for 10 one-ounce gold coins (approximately $17,000), or an independent contractor could arrange to be compensated in gold coins,” said Rich Danker, a project director at the American Principles Project, a conservative public policy group in Washington, D.C.

South Carolina Republican Representative Mike Pitts proposed a currency system that would allow people to use any kind of silver or gold coin — whether it’s a Philippine Peso or a South African Krugerrand — based on weight and fineness. Pitts said in the bill, which currently has 12 co-sponsors, that the state is facing “an economic crisis of severe magnitude.”

Republican representatives from Washington State followed suit in January, introducing a bill that would also allow any gold and silver coins to be considered legal tender based on metal values. Minnesota, Iowa, Georgia, Idaho and Indiana are also considering similar proposals.

Many of the bills would make it possible for residents to exchange the physical coins for goods and services, so you could use coins to buy anything from groceries to a car as long as the store chooses to accept them.

However, most people aren’t going to walk around with such valuable coins in their pockets, said Vieira. Plus, calculating the value of the coins — especially if they come from different parts of the globe and are of different sizes and shapes — will get tricky.

It’s more likely that the states will create electronic depositories and accounts for the coins to make transactions easier, when and if the initial bills are passed, he said.

Utah Gold & Silver Depository is already developing a system where customers could use debit cards linked to their gold holdings. When customers swipe their debit cards to make transactions, physical gold and silver coins would be transferred between accounts in privately-owned depositories (or vaults) based on the market value of the metals.

Before deciding on a specific form of currency, some states — including Minnesota, Tennessee, Virginia and North Carolina — are considering proposals that would first require a committee to review their alternative currency plan.

The future of U.S. currency: The states’ proposals have been gaining steam among Tea Partyers and Republicans, many of whom also endorse a nationwide return to the gold standard, which would require the U.S. dollar to be backed by gold reserves.

Tea Party “father” Ron Paul is sponsoring the “Free Competition in Currency Act,” which would allow states to introduce their own currencies, and rivalNewt Gingrich is calling for a commission to look at how the country can get back to the gold standard.

But it will be the individual states that could really get the ball rolling, said Vieira. Even if several of the current proposals get killed, the introduction of so many bills at the state level is drawing national attention to the issue, he said.

Funny money: 11 local currencies

Of all the state proposals circulating right now, Republican-controlled states including South Carolina, Georgia, Idaho and Indiana have the best chance of passing their proposed bills this year, said American Principles Project’s Danker. If just one or two states implement an alternative currency, it could have a Domino effect, he said.

“I think we could get a couple passed in this legislative session, and that would show this is mainstream, popular and it would be a justification for more of the risk-averse states for doing this,” he said.

There are, of course, many people who think the recent push for alternative state currencies should be stopped in its tracks. David Parsley, a professor of economics and finance at Vanderbilt University, said he thinks state-issued currencies are a “terrible” idea.

“Having 50 Feds” could debase the U.S. dollar and even potentially lead the country into default, he said. “The single currency in the United States is working just fine,” said Parsley. “I have no idea why anyone would want to destroy something so successful — unless they actually wanted to destroy the country.”

Source: CNN

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Too Poor To Care For Families, Parents Abandon Children

Wednesday, January 11th, 2012

Greece’s financial crisis has made some families so desperate they are giving up the most precious thing of all – their children.

One morning a few weeks before Christmas a kindergarten teacher in Athens found a note about one of her four-year-old pupils.

“I will not be coming to pick up Anna today because I cannot afford to look after her,” it read. “Please take good care of her. Sorry. Her mother.”

In the last two months Father Antonios, a young Orthodox priest who runs a youth centre for the city’s poor, has found four children on his doorstep – including a baby just days old.

Another charity was approached by a couple whose twin babies were in hospital being treated for malnutrition, because the mother herself was malnourished and unable to breastfeed.

Cases like this are shocking a country where family ties are strong, and failure to look after children is socially unacceptable – they feel to Greeks like stories from the Third World, rather than their own capital city.

One of the children cared for by Father Antonios is Natasha, a bright two-year-old brought to his centre by her mother a few weeks ago.

The woman said she was unemployed and homeless and needed help – but before staff could offer her support she had vanished, leaving her daughter behind.

“Over the last year we have hundreds of cases of parents who want to leave their children with us – they know us and trust us,” Father Antonios says.

“They say they do not have any money or shelter or food for their kids, so they hope we might be able to provide them with what they need.”

Requests of this kind were not unknown before the crisis – but Father Antonios has never until now come across children being simply abandoned.

Handouts
One woman driven by poverty to give up her child was Maria, a single mother who lost her job and was unemployed for more than a year.

“Every night I cry alone at home, but what can I do? It hurt my heart, but I didn’t have a choice,” she says.

She spent her days looking for work, sometimes well into the evening and that often meant leaving eight-year-old Anastasia alone for hours at a time. The two of them lived on food handouts from the church. Maria lost 25kg.

In the end she decided to put Anastasia into foster care with a charity called SOS Children’s Villages.

“I can suffer through it but why should she have to?” she asks.

She now has a job in a cafe, but makes just 20 euros (£16) a day. She sees Anastasia about once a month, and hopes to take her back when her economic situation improves – but when that might be she has no idea.

SOS Children’s Villages’ director of social work, Stergios Sifnyos, says the charity is not accustomed to taking children from families for economic reasons and does not want to.

“The relationship between Maria and Anastasia is very close. You can say you cannot see any problem, [any reason] why this child has to be far away from her mother,” he says.

“But it’s very difficult for her to feel comfortable to take back the child when she is not sure she will [still] have a job the next days.”

‘Act of violence’
In the past when SOS Children’s Villages took children into its care, the cause was mostly drug and alcohol addiction in the family. Now the main factor is poverty.

Another charity, The Smile of a Child, also focused in the past on cases involving child abuse and neglect. It too is now catering for the destitute of Athens.

Its chief psychologist Stefanos Alevizos, says that when a parent puts a child into care, the child feels its entire foundations have been shaken.

“They experience the separation as an act of violence because they cannot understand the reasons for it,” he says.

But The Smile of a Child’s Sofia Kouhi says the biggest tragedy, in her eyes, is that those parents who ask for their kids to be taken into care may be the ones who love their children the most.

“It is very sad to see the pain in their heart that they will leave their children, but they know it is for the best, at least for this period,” she says.

Father Antonios disagrees.

He believes that no matter how poor parents may be, the child is always better off with its family.

“These families will be judged for abandoning their children,” he says.

“We can provide a child with food and shelter, but the truth is that the biggest need any child has is to feel the love of its parents.”

The names of children in this report have been changed to protect their identities.

Source: BBC

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Greeks Seek Refuge From Collapse in Rural Living

Sunday, May 15th, 2011

High in the hills of Arcadia, in a big stone house on the edge of this village overlooking verdant pastures and a valley beyond, a group of young Athenians are busy rebuilding their lives.

Until recently Andritsaina was not much of a prospect for urban Greeks. “But that,” said Yiannis Dikiakos, “was before Athens turned into the explosive cauldron that it has become. We woke up one day and thought we’ve had enough. We want to live the real Greece and we want to live it somewhere else.”

Piling his possessions into a Land Rover and trailer, the businessman made the 170-mile journey to Andritsaina last month. As he drove past villages full of derelict buildings and empty homes, along roads that wound their way around rivers and ravines, he did not look back.

“Athens has failed its young people. It has nothing to offer them any more. Our politicians are idiots … they have disappointed us greatly,” said Dikiakos, who will soon be joined by 10 friends who have also decided to escape the capital.

They are part of an internal migration, thousands of Greeks seeking solace in rural areas as the debt-stricken country grapples with its gravest economic crisis since the second world war.

“It’s a big decision but people are making it,” said Giorgos Galos, a teacher in Proti Serron on the great plains of Macedonia, in northern Greece. “We’ve had two couples come here and I know lots in Thessaloniki [Greece's second biggest city] who want to go back to their villages. The crisis is eating away at them and they’re finding it hard to cope. If they had just a little bit of support, a little bit of official encouragement, the stream would turn into a wave because everything is just so much cheaper here.”

The trickle into Proti Serron might have gone unnoticed had the village not also been the birthplace of the late Konstantinos Karamanlis who oversaw the nation’s entry into the then European Economic Community in 1981. An alabaster white statue of the statesman in the village square is adorned with the words: “I believe that Greece can change shape and its people their fate.”

Nearly sixty years after they were uttered, a growing number of Greeks, at least, are beginning to wonder whether the old man was right. The drift towards the bright lights of the big cities were by Karamanlis’ own admission one of the great barometers of the country’s transition from a primarily agricultural society into an advanced western economy.This week, as the IMF and EU debated ways of trying to re-rescue Greece and observers openly wondered whether the country would have to leave the euro, Greece appeared more adrift than ever, tossed on a high sea of mounting anger and civil disobedience from people who have lost trust in their politicians, and at the mercy of markets that refuse to believe it can pull itself back from the brink of bankruptcy. “The reality is that these people, they are in deep shit,” the managing director of the IMF, Dominique Strauss-Kahn said recently. “If we had not come they would have fallen into the abyss. Two weeks later the government would not have been able to pay civil servants’ wages.”

Ironically, it is the medicine doled out under last year’s draconian EU-IMF €110bn (£96bn) rescue programme, implemented to modernise a sclerotic economy, that has made their lot worse. Twelve months of sweeping public sector pay and pension cuts, massive job losses, tax increases and galloping inflation have begun to have a brutal effect. GDP is predicted to contract by 3% this year – making Greece’s the deepest recession in Europe.

In Athens, home to almost half of Greece’s 11 million-strong population, the signs of austerity – and poverty – are everywhere: in the homeless and hungry who forage through municipal rubbish bins late at night; in the cash-strapped pensioners who pick up rejects at the street markets that sell fruit and vegetables; in the shops now boarded and closed and in the thousands of ordinary Greeks who can no longer afford to take family outings or regularly eat meat.

“We’ve had to give up tavernas, give up buying new clothes and give up eating meat more than once a week,” said Vasso Vitalis, a mother-of-two who struggles with her civil servant husband to make ends meet on a joint monthly income of €2,000.

“With all the cuts we estimate we’ve lost around €450 a month. We’re down to the last cent and, still, we’re lucky. We’ve both got jobs. I know people who are unemployed and are going hungry. They ask family and friends for food,” she sighed. “What makes us mad is that everybody knew the state was a mess but none of our politicians had the guts to mend it. It was like a ship heading for the rocks and now the rocks are very near.”

Greeks also know that with their economy needing another financial lifeline, and few willing to lend to a country in such a parlous state, it will also get much worse before it gets better.

“In the past, the future always implied hope for Greeks but now it implies fear,” said Nikos Filis, editor of the leftwing Avgi newspaper. “Until this week people thought that with all the measures the crisis would be over in a year or two. Now with the prospect of yet more austerity for more aid, they can’t see an end in sight.”

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US Homes 11.5% Vacant

Tuesday, March 29th, 2011

High residential vacancies are killing many housing markets, as foreclosed homes sit on the market and depress sale prices and property values.

The national vacancy rate at 11.4% according to a release Tuesday from the Census Bureau.

“Vacant homes equal more downward pressure on home prices,” said Brad Hunter, chief economist for Metrostudy, a real estate information provider.

Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%).

The way the census calculates the vacancy rates, however, is problematic. It includes properties such as ski lodges, beach houses and pied-à-terres that many real estate statisticians would not.

10 fastest-growing U.S. cities

These are often summer homes or second homes, but census lumps them together with homes that have been sold but not occupied, empty homes for sale or rent, and homes used by migrant workers. Basically, anything other than a primary residence is considered vacant.

“You can only live in one home,” said William Chapin of the Census Bureau’s Housing Statistics Branch. “If you own five homes that you occasionally live in, four of them will be counted as vacant.”

But Paul Bishop, the vice president for research for the National Association of Realtors, countered that these properties aren’t vacant in the usual sense of the term. “A vacation home is hardly the same situation as a foreclosed home that has been taken back by the bank,” he said.

In Maine, more than two-thirds of the 160,000 vacancies were vacation homes in 2009; Vermont had a similarly high concentration.

Compare them with Connecticut, which has a vacancy rate of just 7.9%, the lowest of all the states. If you back out the vacation properties from the statistics, the states have very similar vacancy rates: 6.1% for Connecticut and 7% for Maine.

Some states have high vacancy rates even after backing out the second homes: Florida’s is about 10%; Arizona’s is 10.7%; and Nevada’s 11.4%.

Besides Connecticut, the other states with lowest vacancy rates are California, Iowa, Illinois, Virginia and Washington, all at 9.2% or lower.\

Source: CNN

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New Home Sales Hit Record Low

Thursday, March 24th, 2011

Purchases of new U.S. homes unexpectedly declined in February to the slowest pace on record and prices dropped to the lowest level since December 2003, adding to evidence the industry is floundering.

Sales decreased 16.9 percent to a 250,000 annual pace, figures from the Commerce Department showed today in Washington. Economists surveyed by Bloomberg News projected a gain to a 290,000 rate, according to the median estimate. The median price fell 8.9 percent from the same month in 2010.

Builders are struggling to compete with existing homes as foreclosures add to the overhang of unsold properties and drive down values. The figures underscore the Federal Reserve’s view that the housing market “continues to be depressed” even as the rest of the economy improves.

“We’ve got this tug of war going on where we’ve got this very weak housing sector and a manufacturing sector that’s doing fine,” said Brian Jones, an economist at Societe Generale in New York, whose 240,000 forecast was the lowest in the Bloomberg survey. “The new and existing home sales numbers were abysmal. You could say that part of it was attributable to unusually harsh weather.”

Previously owned home purchases dropped 9.6 percent in February, figures from the National Association of Realtors showed two days ago. The median home price fell to a 9-year-low, while the supply of unsold properties rose.

Home sales estimates of 77 economists surveyed by Bloomberg News ranged from 240,000 to 325,000.

Stocks Fall

Stocks rose as higher metal prices lifted shares of commodity producers. The Standard & Poor’s 500 Index climbed 0.3 percent to 1,297.54 at the 4 p.m. close in New York. The yield on the benchmark 10-year note was little changed at 3.33 percent.

The Commerce Department revised January purchases up to 301,000 from a previously reported 284,000 rate. Purchases in February declined to record lows in three of the four U.S. regions. Sales slumped 57 percent in the Northeast, 28 percent in the Midwest and 15 percent in the West. The South showed a 6.3 percent decrease.

The median sales price dropped to $202,100 in February from $221,900 a year earlier, today’s report showed. Last month’s median price was the lowest since $196,000 in December 2003. The share of homes sold for $500,000 or more fell in February, matching January 2009 as the lowest on record.

The supply of homes at the current sales rate rose to 8.9 month’s worth from 7.4 months in January. There were 186,000 new houses on the market at the end of February, the same as a month earlier.

More Timely

New-home sales are considered a more timely barometer than purchases of previously owned homes, which account for about 90 percent of the housing market. Existing-home purchases are calculated when a contract closes.

Builders are putting off new construction as housing inventory builds. Housing starts fell in February to a 479,000 annual rate, the lowest level since April 2009, and construction permits slumped to a record low, Commerce Department figures showed last week.

The number of homes in foreclosure rose to a record 2.2 million in January, according to Lender Processing Services Inc. in Jacksonville, Florida. About 23 percent of homeowners with mortgages had negative equity in the fourth quarter, meaning their home-loan balances were higher than the value of their properties, CoreLogic Inc., a research company in Santa Ana,California, said in a March 8 report.

Hovnanian Homes

Hovnanian Enterprises Inc. (HOV), the largest homebuilder in New Jersey, reported on March 1 a first-quarter loss after a drop in sales and the absence of a tax benefit that boosted results a year earlier. The loss was $64.1 million, or 82 cents a share, for the quarter ended Jan. 31, the Red Bank-based company said in a statement.

“We need confidence to go up,” Chief Executive Officer Ara Hovnanian said March 2 during a call with analysts. “We need employment numbers to get better, and I think that’ll attract traffic as well as customers.”

While signs such as stronger manufacturing and exports indicate the world’s largest economy is gaining momentum, Fed Chairman Ben S. Bernanke and his fellow policy makers reaffirmed plans to buy $600 billion of Treasuries through June to “promote a stronger recovery” after their second meeting of the year on March 15.

Bernanke told Congress during a March 2 testimony that until more people want homes, “there’s no demand for construction to build houses and so the construction industry is quite reduced.”

Source: Bloomberg

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New York Mayor Warns Of Layoff Of 21,000 Teachers

Sunday, January 30th, 2011

New York City could lose $1 billion in education aid from the state, forcing the nation’s largest school system to cut more than 21,000 teachers, Mayor Michael Bloomberg said Friday.

As Gov. Andrew Cuomo prepares to unveil his first budget proposal since taking office on New Year’s Day, Mr. Bloomberg and his new schools chancellor, Cathie Black, are bracing for what could be devastating cuts to city schools.

On his weekly radio show Friday, Mr. Bloomberg stressed that he has yet to receive word of a definitive budget proposal from the governor. “Scuttlebutt is that the education budget will be cut statewide, and New York City’s share of that would be a billion-dollar cut,” he said.

If the governor proposes a $1 billion cut and the Legislature approves it, the mayor estimated the city would be forced to cut 15,000 teachers, most of which would be accomplished through layoffs. That’s on top of plans, outlined by the mayor in November, to cut 6,166 teachers in the fiscal year beginning July 1.

In total, the administration is facing the specter of losing 21,000 teachers in the coming months, most through layoffs. An aide to the mayor warned that these numbers would probably change as negotiations with lawmakers over the state and city budgets begin in earnest in the coming weeks.

The city’s Department of Education currently employs roughly 75,000 teachers.

Josh Vlasto, a spokesman for Mr. Cuomo, said it’s “premature to speculate about the budget” that the governor will release Tuesday. He declined to comment further.

A seniority rule in state law requires that the teachers hired most recently be the first to face layoffs. As a result, city officials estimate that every teacher hired during the past five years would be let go if the state moves forward with a $1 billion cut in aid to city schools.

Mr. Bloomberg said this tenure rule means the city will “have to part company with some of the best teachers.” And because new teachers are typically employed in communities that are struggling the most, these layoffs would “disproportionately hurt the schools with more minorities,” he said.

The mayor and his new chancellor have launched an intense lobbying campaign to persuade the state to change the law regarding last in, first out.

On Friday, Ms. Black said she would “fight tooth and nail to keep the best teachers in the classrooms. It cannot be about whether a teacher has been in the system for two years or 22 years.”

If the seniority law remains in place, parts of the South Bronx could lose 27% of their teachers due to the prevalence of rookie teachers in the area, she said. Other more affluent neighborhoods would lose half that.

“The budget situation is very dire, and any major cutbacks are going to translate into real job losses,” said Ms. Black, adding that she and the mayor will fight as hard as they can to avert as many teacher layoffs as possible.

But Michael Mulgrew, president of the United Federation of Teachers, criticized the mayor and Ms. Black for focusing attention on the seniority issue.

“It seems the mayor and chancellor know a lot about how they want to fight for how to do layoffs—and not fight for the children of New York City to not do layoffs,” Mr. Mulgrew said.

“No matter what happens, if we do layoffs, kids are going to get hurt,” said Mr. Mulgrew, who argued that the state should maintain a tax on people earning more than $200,000 that is set to expire at year-end.

Mr. Mulgrew said the seniority laws are in place to guard against layoff decisions based on age, race, gender or cronyism. “Perhaps the mayor likes cronyism,” he said, a pointed reference to his controversial selection of Ms. Black, a former media executive with no prior experience in education.

City Council Member Robert Jackson, chairman of the council’s Education Committee, described the possibility of reducing the number of teachers by 21,000 as “absolutely insane, crazy.” These types of cuts would be “devastating” and “just outrageous,” he said.

“The governor has to look at whether or not the whole system is going to collapse,” said Mr. Jackson, pledging to fight to restore the budget cuts. “Class size will be up to 35, 40 kids in a class, if you have to cut 21,000 teaching positions. I can’t imagine it, quite frankly.”

On Friday, the mayor said he’s sympathetic to the governor, who is scrambling to combat a deficit of roughly $10 billion.

“Andrew Cuomo was brought in to balance the budget. He didn’t create the situation. But he’s got to deal with it,” he said. “And it’s Medicaid and education—two things everybody says don’t cut. But those are the things where all the money is.”

“But it’s going to hurt,” Mr. Bloomberg added. “Unless we can find something else, it’s going to cost us an awful lot of jobs.”

Mr. Bloomberg is scheduled to present his preliminary budget for the upcoming fiscal year by mid-February. The mayor is looking to fill a gap of $2.4 billion. But as his budget director, Mark Page, testified last month, that gap could swell to $4.4 billion depending on how much aid Albany cuts to the city.

Source: Wall Street Journal

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California To Close Parks And Cut Library Funding

Thursday, January 27th, 2011

After spending a century building the nation’s largest and most majestic state park system, Californians are poised to do something unprecedented: Retreat from that legacy and start closing parks.

Years of budget cuts in the California State Parks system have resulted in widespread reductions in park hours, crumbling facilities and reduced staffing. But in the past few years, lawmakers have rejected widespread closures proposed by former Gov. Arnold Schwarzenegger.

Now, however, the climate has changed. Gov. Jerry Brown’s budget requires another $22 million in cuts to the parks budget – a pittance compared with the $25 billion state budget deficit, but a number that even strong parks supporters say is unlikely to be achieved without shuttering parks.

Brown also wants cuts of $30 million to local libraries and $32 million to local fairs.

“I think they are going to have to close parks,” said Traci Verardo-Torres, vice president of governmental affairs for the California State Parks Foundation, the nonprofit advocate for parks. “This is uncharted territory.”

Voters rejected a foundation-sponsored ballot measure in November that would have added $18 to annual vehicle registrations to pay for park operations. Its passage would have prevented closures.

Now, officials at the Parks Department are preparing a list of closures to accommodate the $22 million cut.

Likely targets among the state’s 278 parks will be those with the least visitation and annual revenue, said Roy Stearns, a spokesman and deputy director of the department.

Unlike a list developed in 2008 and later abandoned after a public and political outcry, the new list will take a long view. Parks that provide ample access for the disabled may be kept open regardless of other factors. Those with major concessionaire contracts might be kept off the list to avoid legal trouble.

And parks with unique historical treasures could be kept open, despite low attendance, to ensure public access to lessons from the state’s past.

“It’s a more complicated equation, but we think it’s a more thorough and balanced look at how to reshape the park system for the foreseeable future,” said Stearns.

“The governor has said, in all his talks, that it’s time for a tough budget in tough times,” he added. “People need to really understand the magnitude of what’s happening in California.”

The proposed closure list should be released by mid-February, Stearns said. He declined to say how many parks might be on it.

He said plans are being made to place closed parks in a “caretaker” status, ensuring regular visits by park rangers or maintenance personnel.

That will be essential to avoid vandalism and theft, both of which are already growing problems in the park system, as documented by The Bee in a series of stories last year that reviewed data on park crime and maintenance problems.

Park advocates fear occasional visits won’t be enough to avoid trouble.

At Malakoff Diggins State Historic Park in the wilds of Nevada County, illegal marijuana farmers are already pressing right up against the park borders. Without daily activity in the park, Wes Nelson of the Malakoff Diggins Park Association fears the worst.

“I’m pretty positive, unfortunately, that we’ll be on that list,” said Nelson, president of the nonprofit association that assists the park. “Our concern is the safety of the park and its artifacts if the closure does happen.”

Malakoff’s remote location results in low attendance. As a result, the park was targeted for closure in 2008.

Yet an environmental education program at the park for local schoolchildren is already booked for the summer.

Another vulnerable property is Fremont Peak State Park near Hollister. Its remote location and 3,200-foot elevation offer a unique vantage point for stargazing. In 1986, volunteers built an observatory with a 30-inch telescope atop the peak, and stargazing events became a major park attraction.

Last year, when the park was closed most weekdays to save money, break-ins and vandalism became such a problem that officials were forced to restore regular hours to avoid increasing costs of damage to the park.

Rick Morales, president of the Fremont Peak Observatory Association, has mixed emotions about the state’s budget troubles. A former state park ranger, he helped get the observatory built when he worked in the park.

“It kind of saddens me. But as I age, I get a little more conservative politically,” he said. “Maybe this period of time, when we really have to look at what government needs to provide and doesn’t, maybe we’ll all be better for it with the government shrunk a little bit.”
Source: Sacramento Bee

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As Times Get Tougher Postal Service Closes Branches

Monday, January 24th, 2011

The U.S. Postal Service plays two roles in America: an agency that keeps rural areas linked to the rest of the nation, and one that loses a lot of money.

Now, with the red ink showing no sign of stopping, the postal service is hoping to ramp up a cost-cutting program that is already eliciting yelps of pain around the country. Beginning in March, the agency will start the process of closing as many as 2,000 post offices, on top of the 491 it said it would close starting at the end of last year. In addition, it is reviewing another 16,000—half of the nation’s existing post offices—that are operating at a deficit, and lobbying Congress to allow it to change the law so it can close the most unprofitable among them. The law currently allows the postal service to close post offices only for maintenance problems, lease expirations or other reasons that don’t include profitability.

The news is crushing in many remote communities where the post office is often the heart of the town and the closest link to the rest of the country. Shuttering them, critics say, also puts an enormous burden on people, particularly on the elderly, who find it difficult to travel out of town.

The postal service argues that its network of some 32,000 brick-and-mortar post offices, many built in the horse-and-buggy days, is outmoded in an era when people are more mobile, often pay bills online and text or email rather than put pen to paper. It also wants post offices to be profitable to help it overcome record $8.5 billion in losses in fiscal year 2010.

A disproportionate number of the thousands of post offices under review are in rural or smaller suburban areas, though the postal service declined to provide any estimate on how many beyond those slated to begin closure in March might ultimately close or which ones are being targeted. “We want to make the smartest decisions possible with the smallest impact on communities,” Dean Granholm, vice president for delivery and post office operations, said in an interview. He said the agency is identifying locations that are operating at a deficit and looking “for the opportunity to start the process of closing.”

In addition to reducing employees—it has cut staffing by a third since 1999— the postal service has sought for years to deal with financial woes by raising rates or cutting services, such as a proposal to drop Saturday delivery. It has also talked in the past about closing a much smaller number of post offices. But while closures have been “on the table” in the past, this push is the agency’s most serious yet, Mr. Granholm said, and is drawing widespread interest from a cost-cutting Congress. Still, shutting down post offices is often politically unpopular: elected officials in several communities have already written the Postal Regulatory Commission protesting planned closures.

Eighty-three specific post offices were approved for closing during the three months ending Nov. 15, more closings than in any quarter in the agency’s history, according to the postal service. In addition, 408 post offices where service has been suspended for various reasons won’t reopen amid the fiscal crisis, Mr. Granholm said.

Some of those suspensions are being contested by the Postal Regulatory Commission, independent from the postal service and reporting to Congress, which is investigating whether the postal service has been illegally using reasons such as lease expirations to close small, underused branches. The agency has denied wrongdoing.

While paring down is a common survival tactic for organizations these days, efforts by the postal service to do so routinely raise alarms because many citizens see post offices as an essential public service. Postal service dates to the founding fathers, with Benjamin Franklin serving as the first U.S. postmaster general and the Constitution explicitly authorizing Congress to establish post offices. Critics in Washington argue the postal service should reduce what they say is too much spending on employee benefits before resorting to closures.

Source: Wall Street Jorurnal

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Housing Market Worse Than During Great Depression

Monday, January 17th, 2011

Home prices fell for the 53rd straight month in November, taking the decline past that of the Great Depression for the first time in the prolonged housing slump, according to Zillow.com.

Prices have fallen 26 percent since their peak in 2006, exceeding the 25.9 percent drop registered in the five years between 1928 and 1933, the housing data company reports.

The word comes on the heels of figures showing banks repossessed more than one million homes in the U.S. last year — and they’re expected to take back even more this year.

On “The Early Show” Thursday, Jason Cochran, Editor-at-Large at AOL’s WalletPop.com, discuss what it all means for buyers, sellers, mortgage-seekers, people mulling refinancing or doing home improvements, and others:

He says this is, as you might expect, a great time to buy. Foreclosures and short sales made up a significant portion of homes sold in last year’s latter stages. Foreclosed houses sell on average for almost a-third less than non-foreclosures. January is a particularly good time for buyers, especially in Northeast. Sales slow to a crawl, so buyers are in a good position.

Cochran adds that sellers obviously remain on the other side of the housing coin.

So many foreclosures on the market stiffen competition, but those can take a while to close, so if your house isn’t in foreclosure, you may attract buyers who need a place right away. Home buying tax credits expired, taking some wind out of the sails. You may also be more likely to attract cash buyers since the mortgage process is so painful right now.

Advice: MAKE YOUR HOME STAND OUT. You’re competing against bargain-bin houses! You must be proactive in making sure yours is up-to-date with repairs.

Some sellers are going through real estate agents to pitch people who looked at the house but didn’t bid — it’s called a “reverse offer” — and it’s happening more and more. Others are tossing in extra inducements: “Get a free flat-screen TV if you buy my house!” “I’ll pay your closing costs,” etc. One Connecticut couple is throwing in their Florida townhouse in with the sale of their $615,000 house!

Source: CBS News

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2010 Worst Year For Bank Failures Since 1992

Wednesday, December 29th, 2010

More banks failed in the United States this year than in any year since 1992, during the savings-and-loan crisis, according to the Federal Deposit Insurance Corp.

Amid high unemployment, a struggling economy and a still-devastated real estate market, the nation is closing out the year with 157 bank failures, up from 140 in 2009. As recently as 2006, before the bubble burst, there were none.

Now, there are more on the horizon.

The FDIC’s list of “problem” banks – those whose weaknesses “threaten their continued financial viability”- stood at 860 as of Sept. 30, the highest since 1993. Historically, about a fifth of banks on the watch list end up failing.

Bank failures have left the FDIC insurance fund in the red, but the agency predicts that it will have more than enough money to meet the anticipated cost of failures through 2014.

As the financial crisis of recent years recedes, the FDIC has been predicting that 2010 will be the high-water mark for bank implosions.

“Going forward, the FDIC looks to see fewer failures,” agency spokesman Greg Hernandez said.

Some industry observers agreed.

“I think we’re over the hump of the problem but far from the end,” banking consultant Bert Ely said.

Gary B. Townsend, president of Hill-Townsend Capital, said the industry is not just out of the woods, “we are far beyond the woods.”

By one measure, the trouble is already abating. On average, the banks that failed this year were much smaller than those that failed last year.

The banks that failed this year had assets totaling $92.1 billion, a decrease of 45.7 percent from the $169.7 billion in assets of the banks that failed in 2009.

“These are very small institutions,” Townsend said. “The total assets that they represent is insignificant compared to the financial system as a whole. It’s quite manageable.”

Ordinarily, failed banks continue to operate virtually seamlessly. Typically, they are taken over by other banks in transactions arranged by regulators. Federal deposit insurance, for which the Federal Deposit Insurance Corp. was named, protects depositors from losses up to the insurance limits.

Since the closure of IndyMac Bank jolted the system in 2008, even uninsured deposits have been protected in more than 90 percent of failures, Ely said. Although depositors may be unaffected, borrowers can suffer disruptions to their credit lines, he said.

Bank failures are generally lagging indicators of economic trouble. The economy can be on the mend by the time struggling banks succumb.

Some of the nation’s largest banks survived as a result of government assistance and are not included in the tally of failures. In 2009, for example, aid went to eight banks, including Countrywide and Bank of America. Their combined assets totaled $1.9 trillion.

The list of failed institutions at the FDIC is filled with community banks that would not be considered “too big to fail.”

The loans that brought them down were predominantly commercial loans, Hernandez said, which sets them apart from the banking giants whose problems were rooted in home mortgages.

About half of the the 2010 failures involved banks headquartered in four states: California, Florida, Georgia and Illinois.

The list included four Maryland banks: Bay National Bank and Ideal Federal Savings Bank of Baltimore, K Bank of Randallstown, and Waterfield Bank of Germantown. There was one in Virginia, Imperial Savings and Loan of Martinsville, and none in the District.

As of Sept. 30, the FDIC insurance fund for bank deposits had a balance of negative $8 billion. But that doesn’t include reserves such as premiums collected in advance from the banking industry.

Also, as of the third quarter, the agency was predicting that bank failures would cost $52 billion through 2014. The FDIC has the ability to cover that, Hernandez said.

Source: Washington Post

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