Recession-Hit Areas Lag for Years Afterward

According to the Booking Institution’ s Hamilton Project, research has shown that communities hit hardest during the recession potentially falter behind the rest of the country for many years to afterward. A few democrats from the Clinton administration created a policy to improve the parts of the economy that was, and are still, effected by the late recession.
Unfortunately for those “ under-water” home-owners, the policy may not offer a solution to the mortgages needing to paid, especially those that are over the value of their homes, $10,000 may not suffice for those individuals.
The proposal consisted of loans provided by government-sponsored banks to individuals who are looking to move and have been laid off for the last 5 years. On the downside the government would be spending between the $500 million to $800 million annually according to the University of Chicago’ s Jen Ludwig.
The government is making a valiant effort to help the US out of this crisis but it doesn’ t seem to be enough to shake the country back into place. Hopefully this policy will be a viable crutch to a recovering economy.

Housing Starts Jump 10.5 Percent, Single Family Starts Up 4.3 Percent

After falling considerably in the months following the expiration of the home buyer tax credit, housing starts rose 10.5 percent in August. This brings the annualized sales pace to 598,000 units, the highest level since April. As with housing activity in general, housing starts have been very volatile over the past half year due to the effects of the home buyer tax credit. Housing starts rose in the early part of the year through April, then fell off heavily in the months following. August displayed a rebound and starts were up 2.2 percent from a year prior.

The increase over the month was heavily driven by the volatile multi-family unit component, which rose 32.2 percent over the month. Still, the single family component grew significantly, rising 4.3 percent over the month, after falling heavily for the prior three months. Unlike total starts, single family starts remain down 8.9 percent from a year prior.

New building permits, which tend to lead future starts, rose 1.8 percent. However, this was entirely due to an increase in multi-family unit permits. Single family permits declined by 1.2 percent.

NBER Officially Declares Technical End of Recession - June 2009

The National Bureau of Economic Research, the organization in change of officially declaring peaks and troughs in the business cycle, made the official declaration that the economic contraction that began in December 2007 came to an end in June 2009. The recession lasted 18 months, making it the longest of any post WWII recession. The longest prior recessions lasted 16 months, which were those of 1973-75 and 1981-82.
This is good news, if the National Bureau of Economic Research is correct. Only time will tell though. Hopefully the expectation that the recession is over will cause people to spend more and actually end the recession.

http://www.youtube.com/watch?v=1tcR19y7GPM

For three decades the Fed has kept inflation low. However, now they are worried that we will drop into deflation.
The Fed has kept interest rates at very low levels yet this has not helped the economy like they had hoped. Letting inflation raise to higher than normal levels in the future might help.
Many worry that the U.S. will slip into the same economic trouble that Japan has had since the '90s.
Critics did agree that the recent purchase of mortgage backed securities has helped.

How Blockbuster Failed at Failing

This article is about Blockbuster video, and how it is failing. There is no secret to why Blockbuster is failing, because of technology. This video store use to be a monopoly of video rentals, but now it seems like it is on the outside looking in. Netflix and Red box seem to be taking over, not to mention the cable companies that can use movies to increase their revenue as well. Moving forward, Blockbuster filed for bankruptcy on September 23, but because of lenders were able to erase a billion dollars worth of debt. There is no question blockbuster is behind in the technology race, as Red box has three times as more Kiosks, and Netflix has had a six year head start and better bargains. Moving forward, Blockbuster has to find a way to compete with these companies, or they will be in even more trouble that they are already in.

U.S. Deficit Totals $1.29 Trillion In 2010

The US budget deficit for 2010 is the second largest in modern record. On Friday the Treasury reported that the nation's deficit fell from $1.42 trillion last year to $1.29 trillion now. The federal government collected higher taxes and spent less on housing and financial aid. The government's tax intake rose $2.16 trillion or 2.7% in fiscal 2010.

FDIC Shutters 132nd Bank, Sixth In Missouri

The Premiere Bank of Jefferson City, Missouri was closed by regulators Friday. On Saturday it was reopened as branches of Providence Bank, as reported by the Federal Deposit Insurance Company. The tally of US bank failures this year is now at 132. The FDIC estimates the failure of this bank will cost the deposit-insurance fund $406.9 million.

CPI: Inflation rate stays uncomfortably low

The consumer price index is slightly over last years rate but still uncomfortably low for the Fed's liking (it rose 1.1% since last September). The results continue to point toward the Fed buying additional long-term treasury bonds -- capital is still too cheap. The CPI report was significant because policymakers used the data to determine Social Security beneficiaries in 2011. However, due to the negligent amount of inflation, they will not receive a cost of living increase.

Treasury Takes No Action on Chinese Currency

The Treasury has made the decision once again to remain undecided. They have delayed a decision to label China a "currency manipulator," despite China's announcement in June that it would allow the exchange rate to move higher. The Treasury announced that it wanted to see global leaders meet at the G-20 before it came to a concrete decision. This also puts the decision off until after the midterm elections, which will allow candidates to campaign on the issue. In September, the House passed a bill authorizing the Commerce Department to impose duties on imports from nations with undervalued currencies. This is merely another example of how politicized the economy ha become. Many would argue that this is dangerous because it takes the focus off of actual necessary economic decisions and policies.

The true costs of bad loans

The mortgage crisis has exposed the fundamental flaws of the overall mortgage system. With thousands of foreclosures occurring throughout the United States daily, the process of foreclosing on a house has developed into a major undertaking for financial institutions. In there effort to streamline the process companies have cut corners in protocol and paperwork, but this week investigations nationwide have forced many companies stop all foreclosure procedures. The slowing of foreclosure only grows the number of houses that need to be sold which holds back the market from finding the true equilibrium price only delaying recovery.