Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (48592)	3/24/2006 1:10:52 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

I am neutral on gold. I have not had a position for some time. Mish

To: NOW who wrote (48592)	3/24/2006 1:48:23 PM
From: mishedlo	Respond to of 116555

Bush urges civility as Congress girds for immigration battle sptimes.com By Associated Press Published March 24, 2006 -------------------------------------------------------------------------------- WASHINGTON - Anticipating turbulent debate over immigration, President Bush urged Congress on Thursday to grapple with the emotional issue in a way that avoids pitting groups against each other. The Senate is to take up immigration next week, and the president and the leader of his party are starting out with different ideas about the best way to address the estimated 12-million illegal immigrants already in the country. Bush has asked Congress to create a program to allow foreigners to gain legal status in the United States for a set amount of time to do specific jobs. When the time is up, they would be required to return home without an automatic path to citizenship. Bush said Thursday his message is: "If you are doing a job that Americans won't do, you're welcome here for a period of time to do that job." Immigration is a divisive issue for the country, and Republicans in particular. It splits two main GOP constituent groups - businesses and social conservatives. The president is working hand-in-hand with employers who want cheap labor to clean hotel rooms, pick crops and do other tasks that they say keep their businesses competitive. Senate Majority Leader Bill Frist, R-Tenn., said that he understands those economic issues but that his focus is on the main concern voiced by the social conservatives - national security. "The most important thing is that we keep our borders safe, we keep America safe," said Frist spokeswoman Amy Call. "It's obvious there are drugs, there are criminals coming through those borders. There are also people from known terrorist organizations coming through those borders." The public appears to be more on the side of tougher border control. Three-quarters of respondents to a Time magazine poll in January said the United States is not doing enough to keep illegal immigrants from entering the country. About the same amount said they favor a guest worker program for illegal immigrants, but 46 percent said those workers should have to return first to their native countries and apply. About 50 percent favored deporting all illegal immigrants. Frist's bill sidesteps the question of temporary work permits and would tighten borders, add Border Patrol agents and punish employers who hire illegal immigrants. He has left open the possibility of replacing his legislation with a measure from the Senate Judiciary Committee that includes a guest worker program. Senate Minority Leader Harry Reid, D-Nev., supported by labor unions, has said he will do all he can, including filibuster, to block Frist's legislation. The president's spokesman would not say whether Bush was referring to such comments or the filibuster threat when he called for a "serious debate" that respects people of all backgrounds. "When we discuss this debate, it must be done in a civil way," Bush said. "It must be done in a way that brings dignity to the process. It must be done in a way that doesn't pit people against another." While the Senate Judiciary Committee considers the issue Monday, Bush will attend a citizenship ceremony in Washington. Supporters of tighter border controls planned protests Monday in Washington and Boston.

To: NOW who wrote (48592)	3/24/2006 2:03:12 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

SECURING SOCIAL SECURITY Senator Mike Crapo March 23, 2006 americanchronicle.com Common sense approaches. Collaborative, creative problem-solving. As a lifelong Idahoan, Mike Crapo has learned that, in many cases, a willingness to listen make an effective leader and lawmaker. Currently in his second term as a Senator for Idaho, his responsibilities, activities and accomplishments to date are a testament to his Idaho roots and values. During the recent debate in the Senate over the federal budget, Senator Jim DeMint (R-South Carolina) and I introduced an amendment that would stop the United States government from raiding the so-called Social Security Trust Fund. I highlight the term "Trust Fund" because it's misleading. Every year the federal government uses the surplus deposited into the Old Age Survivors and Disability Income (OASDI), more commonly referred to as Social Security, to cover expenses incurred in other government programs. Now, instead of money there is an ever-increasing pile of IOUs issued by the government to all taxpayers. With the number of workers paying for retirees steadily declining--40 workers paid for one retiree in the 1940s, three pay for one right now, and 2.2 will pay for one in about 20 years--you can likely guess what those IOUs are worth and where the system is headed. To the detriment of future taxpayers, the amendment was defeated by a vote of 53-46. Because of the way Social Security is set up, Congress can cut benefits at any time, change the structure of the program, or raise taxes even further. These are not unlikely scenarios-Congress will face tough choices in coming years because the government has not set aside any money to pay out future benefits. Considering the outcome of the failed vote on the amendment, the majority of the Senate seems predictably intent upon placing current budget priorities ahead of the sober reality of much higher tax rates for our children and grandchildren. These rates will be necessary to raise enough revenue to fund Social Security in twenty or thirty years. The DeMint-Crapo amendment would have: 1) Stopped Social Security surpluses from being spent on other government programs; 2) Ensured Social Security surpluses were only used for Social Security benefits; 3) Provided a voluntary option for younger Americans to obtain legally binding ownership of a portion of their benefits; 4) Made no changes to the benefits of those Americans born before January 1, 1950. When we consider the questionable future of Social Security solvency, it is good to bear in mind the original intent of the program. A recent Washington Post article said it best: "The point of Social Security was to subsidize those who couldn't work, not those who could. The program's founding document said it would support old people who were 'dependent,' 'beyond the productive period' and 'without means of self-support.'" Even though the system was designed to be a safety net, we need to make sure that it is a viable one that fulfills its important obligation to seniors. I, for one, do not want to saddle my children and grandchildren with sky-high taxes. Furthermore, I believe that individuals have the right to make decisions about their own money. Many twenty and thirty-year-olds today have doubts about whether there will be any Social Security when they retire. This begs the question: do we fix the system now, when we can make incremental changes, or do we leave the burden for coming generations to bear when it becomes a catastrophic financial crisis? The choice is truly ours to make. Allowing the federal government to continue to cut benefits, raise taxes or both is a risky proposition. Setting aside personal benefits now is a concrete solution.

To: NOW who wrote (48592)	3/24/2006 2:09:02 PM
From: mishedlo	Respond to of 116555

Many Recent Homeowners Lack Any Equity While Housing Peaks news.yahoo.com For many who bought a home in the last three years, one question hung over the whole process: Am I buying at the market peak? As the housing market shows distinct signs of cooling, despite continued double-digit price gains, those who did buy at the peak may find their mortgages underwater. A recent study estimates that 9.4% of all mortgage borrowers as of September had no or negative equity in their homes. That jumped to 29% of owners who took out first mortgages last year. So borrowers with about $800 billion in mortgages owe more than their homes are worth, says First American Real Estate Solutions. Borrowers with adjustable-rate mortgages face higher payments, especially those paying special "teaser" rates. In the past, they could simply refinance, perhaps getting a new teaser rate. But they won't be able to if their homes are worth less than the mortgage. First American estimates that $297 billion worth of 2004-05 adjustable-rate first mortgages could end up defaulting -- resulting in $110 billion in lender losses. "It won't break the economy and it won't break the real estate market, but if you're involved as a lender or borrower, it could be painful to you," said study author Christopher Cagan, director of research and analytics at the unit of title insurer First American. (NYSE:FAF - News) Typically, a small share of homeowners will have negative equity. That's especially true in the first few years, when loan payments are comprised mostly of interest. But recent trends have increased the risks. Looser lending criteria and pricey homes have spurred more borrowers to trim down payments. That's bumped up many loan-to-price ratios to over 95%. Plus, the surge in option ARMs has created a slew of borrowers who can choose not to even pay the full interest for an initial period. Last week, Washington Mutual (NYSE:WM - News) disclosed 47% of its option ARMs at year-end carried negative amortization, meaning unpaid interest is tacked onto the loan's balance. That hasn't mattered as home prices kept climbing, boosting homeowners' equity. U.S. home prices rose 13% in 2005, the second straight year of double-digit gains. That's why some economists question First American's findings. The estimate that nearly 30% of 2005 borrowers have negative equity "seems like a huge number," said Jan Hatzius, a Goldman Sachs economist who closely tracks the housing market. First American assumed no borrower paid down any principal, included home equity lines with first mortgages, and assumed homeowners maxed out their lines. The choices should paint an "intermediate scenario" of the national negative equity picture, Cagan said. Home sales have fallen sharply in recent months, notably in once-hot markets like Southern California. Prices have come down from their late 2005 peaks, but so far are still up vs. a year earlier. But if prices fell 10%, the share of '05 homeowners with no or negative equity would surge to nearly 48%, First American estimates. The incentive to just walk away from your home rises when the loan exceeds the value of the house. "It's only when equity turns negative that charge-off risks become appreciable," said Richard DeKaser, National City Corp. chief economist. Indeed, more homeowners have recently found themselves unable to make their payments. Mortgage delinquencies rose to 4.70% in the fourth quarter, up 32 basis points from a year earlier, said the Mortgage Bankers Association. Excluding the effects of Hurricane Katrina, delinquencies hit 4.55%, the most since the second quarter of 2004. Subprime delinquencies rose to 11.63%. More loans made during the housing boom are entering the peak period for delinquencies, said MBA. More of those are adjustable-rate mortgages, which face much-higher short-term rates. Meanwhile, energy prices have risen sharply. In the early '90s, external shocks like spiking oil prices and defense cuts caused sharp housing slumps in Texas, California and Hawaii. Many underwater borrowers just turned in their keys to the bank. But solid hiring and bigger wage gains should support home prices and let most people make their monthly mortgage payments.

To: NOW who wrote (48592)	3/24/2006 3:16:46 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Virulent Drug-Resistant TB Strain Emerges [This is probably far far more dangerous than any threat from bird flue - Mish] By Thomas H. Maugh II, Times Staff Writer March 24, 2006 A "virtually untreatable" form of tuberculosis — resistant to at least five classes of antibiotics — is quickly emerging across the globe, according to a federal report released Thursday. The total number of infections by the new strain is still relatively small, but researchers fear that it will spread rapidly in the TB incubators of Eastern Europe, India and China. In 2004, the strain accounted for 11% of drug-resistant TB cases in industrialized countries, up from 3% in 2000. "The time to act is now to prevent a new pandemic," said Dr. Marcos Espinal, executive secretary of the World Health Organization's Stop TB Partnership. The data on the new TB strain, published in the U.S. Centers for Disease Control and Prevention's Mortality and Morbidity Weekly Report, come at a time when the prevalence of TB in the United States has reached its lowest point since record-keeping began in 1953 — 4.8 cases per 100,000. That translates to 14,516 cases in 2005, a 3.8% decline from the previous year, according to a second study in the report. Even that good news has its dark side, says Dr. Kenneth G. Castro, assistant surgeon general and director of the CDC's Division of Tuberculosis Elimination. "This decrease is one of the smallest declines in more than a decade," suggesting that efforts to control the infection have reached a plateau, he said Thursday in a telephone conference. Tuberculosis rates declined 3% in California to a historic low of 2,900 cases in 2005, according to Dr. Mark Horton, the state public health officer. The rate in California was 7.9 cases per 100,000 people, nearly double the national rate, with more than 75% of the cases occurring in people born in other countries. Los Angeles County had the highest number of cases, 906. San Diego County had 320, Orange County 224 and Riverside County 75. Two hundred Californians died last year of TB. The evolution of drugresistant strains of Mycobacterium tuberculosis is a result of TB patients failing to complete the six-month course of therapy and of physicians failing to prescribe the proper therapy, Castro said. The so-called multidrugresistant strains began appearing in the early 1980s. The term refers to bacteria that are resistant to the two first-line therapies normally used to treat the disease, the antibiotics isoniazid and rifampin. "We let our guard down" with the emergence of multidrug-resistant strains "and we paid dearly for it," Espinal said. The new strain, which researchers call "extensively drug-resistant TB," is resistant not only to those two drugs, but to at least three of the six classes of drugs used for second-tier therapy — aminoglycosides, polypeptides, fluoroquinolones, thioamides, cycloserine and para-aminosalicylic acid. Physicians use those drugs to treat multidrug-resistant cases, but the drugs' use is worrisome because they are more toxic, more expensive and less effective. A course of therapy for multidrug-resistant TB may require two years instead of six months and may even involve surgery to remove severely affected parts of the lung. Treating patients with extensively drug-resistant TB is even more difficult. The normal death rate for patients with TB is about 5% to 6%, and fatalities occur mostly among patients who wait too long to seek therapy. The mortality rate is about 20% among those with multidrug-resistant TB and at least 33% among those with extensively drugresistant TB, Castro said. Worldwide, about 9 million people become ill with tuberculosis each year and 1.7 million die of it. latimes.com