Heard from the Street - Tuesday 03/24/09

Silver Lake, California

The "Heard from the Street" report represents a series of short interviews regarding what Main Street in Southern California is thinking regarding, "How are you coping with the changing economy?"

Retired Network Staffer: Joan has seen alot of life and is now comfortably in retirement. She currently receives; social security, pension, 401k account (Less than it was) and has a husband with a few more work years in him. They are both healthy and own their own home. Yet Joan is concerned. She holds her purse tight to her chest and is worried about the future. Remembering the Great Depression as a little girl she fears we may be heading down the same painful path. Careful about all her purchases, Joan feels a need to be thrifty especially during these uncertain times.

Comment
Joan has made all the right move regarding her retirement. Yet she is clearly worried that her golden years might be spent under some dark economic clouds.

James Monachino

Treasury Department Releases Details on Public Private Partnership Investment Program

U S Treasury Fact Sheet

Public-Private Investment Program

View White Paper and FAQs at http://financialstability.gov/

The Financial Stability Plan – Progress So Far: Over the past six weeks, the Treasury Department has implemented a series of initiatives as part of its Financial Stability Plan that – alongside the American Recovery and Reinvestment Act – lay the foundations for economic recovery:

• Efforts to Improve Affordability for Responsible Homeowners: Treasury has implemented programs to allow families to save on their mortgage payments by refinancing, assist responsible homeowners in avoiding foreclosure through a loan modification plan, and, alongside the Federal Reserve, help bring mortgage interest rates down to near historic lows. This past month, the 30% increase in mortgage refinancing demonstrated that working families are benefiting from the savings due to these lower rates.
• 
  Consumer and Business Lending Initiative to Unlock Frozen Credit Markets: Treasury and the Federal Reserve are expanding the TALF in conjunction with the Federal Reserve to jump start the secondary markets that support consumer and business lending. Last week, Treasury announced its plans to purchase up to $15 billion in securities backed by Small Business Administration loans.
• 
  Capital Assistance Program: Treasury has also launched a new capital program, including a forward-looking capital assessment undertaken by bank supervisors to ensure that banks have the capital they need in the event of a worse-than-expected recession. If banks are confident that they will have sufficient capital to weather a severe economic storm, they are more likely to lend now – making it less likely that a more serious downturn will occur.
• 
  The Challenge of Legacy Assets: Despite these efforts, the financial system is still working against economic recovery. One major reason is the problem of "legacy assets" – both real estate loans held directly on the books of banks ("legacy loans") and securities backed by loan portfolios ("legacy securities"). These assets create uncertainty around the balance sheets of these financial institutions, compromising their ability to raise capital and their willingness to increase lending.

COMMENTS

Proceed with caution regarding this multi-phase marketing operation. The links are from the US Treasury so you can determine for yourself what you are dealing with.

We are now witnessing the circus big top. Only the finest and the best will be permitted in the tent to sell you the repackaged toxic assets that the original owners went broke on.

That doesn't mean there isn't opportunity to make a profit. But the key question is who is taking the risk and who is making the money. Folks, you may want to consider letting the bus go by a couple of times before you step on board and go for the ride. Don't worry about missing an opportunity. They have $$ trillions.

James Monachino

Heard from the Street - Friday 3/20/09

Teluca Lake, California

The "Heard from the Street" report represents a series of short interviews regarding what Main Street in Southern California is thinking regarding, "How are you coping with the changing economy?"

Middle Aged Businessman: It was sunset and a cool moist wind was blowing as we spoke. John has been a business owner for over 25 years. Obviously proud of that statement, he told me he was very concerned about the future. His head was balding and his eyes were alive with emotion. I am in a real jam. I have never seen business this bad, really Jim. I have maximized my credit cards to the limit. I can’t get any credit. Now I am living off my mother’s money. Voice quivering, I am not sure how long I can hang on. I don’t understand it, what happen?

Comment
John is worried about what comes next. So am I.

James Monachino

Heard from the Street: Glendale,Ca. - 03/19/09

New Series - Heard from the Street - Glendale, Ca.

Introduction

The "Heard from the Street" series will represent short interviews regarding what Main Street is thinking. The only question I will ask is, How are you coping with the changing economy? Since I am currently in a position that allows me to talk to 100's of poeple on the street each week through out the Los Angeles county area my belief is that readers might benefit from some of their insight.

Retired Veteran: Walking alittle slowly toward the store Dave has seen alot of crisis in his life. He currently has a liver transplant and is waiting for a kidney transplant courtesy of VA hospital. His strategy for coping with the current economic changes is to live within his means. Something he has done all his life. Upbeat and with a small smile he tries to maintain a positive attitude and is happy to see each day as it comes.

Comments
Dave did not appear to be a rich man in dress or manner but he clearly has the right idea.

Jim Monachino

Unemployment in U.S. Surges to 8.1% as Payrolls Slide

By Bob Willis -- March 6 (Bloomberg) --

HIGHLIGHTS

U.S. Unemployment Rate - jumped in February to 8.1 percent, the highest level in more than a quarter century.
Employers eliminated 651,000 jobs - the third straight month that losses surpassed 600,000 -- the first time that’s happened since the data began in 1939, Labor Department figures showed today in Washington.

• Representative Carolyn Maloney - Chairman of the congressional Joint Economic Committee said, "The magnitude of these losses indicates that additional measures will likely be needed,” & “As unemployment continues to rise, our foreclosure crisis will only grow worse.”
• Payroll Revisions - for January and December eliminated an additional 161,000 positions. The drop in January was revised to 655,000, and December’s to 681,000.
• Working Hours - The average work week held at 33.3 hours in February. Average weekly hours worked by factory workers dropped to 39.6 hours from 39.8 hours, while overtime also decreased to 2.6 hours from 2.8 hours. That brought the average weekly earnings up by $1 to $615.05.
  

COMMENTS

We are now looking for a break in the momentum of jobs being lost. Just trying to stabilize what we have. An as Washington DC burns our politicians fiddle. Entertainment talk show hosts are elevated to pseudo party leaders status and solutions to problems are being served up with 30 year old left overs.

• Appointments: New deal, new cards, represents a difficult task for the Obama administration. How do you find and secure new talent and fresh ideas - Through trial and error.
• Can't go Home: Folks, the financial landscape is in a paradigm shift. Opportunities are out there but you have to find the new trend lines. Unfortunately, we don't have the option of being able to do nothing and ride it out. Pay attention to the actual numbers not the projections. The projections will be flawed for quite a while due to model drift of assumptions that are now invalid and have not been updated. Major trend changes are always tough to navigate.

Finally, you have to protect yourself by trying to think for yourself. What is best for you and your family during this time of extended economic uncertainty. No politician, economist, or media representative can help you determine that answer.

James Monachino