Mortgage application volume falls 14.2 percent as rates rise

Mortgage application volume fell 14.2 percent during the week ending April 18, according to the Mortgage Bankers Association's weekly application survey.

The MBA's application index fell to 637.6 from 743.4 the previous week.

Refinance volume fell 20.2 percent, while purchase volume declined 6.4 percent. Refinance applications accounted for 49.2 percent of total applications compared with 53.5 percent a week earlier.

The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.

Read the full story here.

This article addresses the declining amount of mortgage applications being completed which shows the declining housing market. This article also addresses the rising interest rates of items which prevent some from purchasing or investing. Both of these factors show the declining United States's economy which many hope will not last much longer.

GRADE THIS POST

US stocks head for moderately lower open

Stocks appeared headed for a moderate decline Wednesday as investors awaited another round of first-quarter earnings reports and hoped the numbers would help determine where the economy is headed.

Boeing Co. said its first-quarter earnings rose 38 percent and that its revenue advanced 4.1 percent. The company affirmed its 2008 profit forecast.

Some results arriving Wednesday painted a lackluster picture of certain sectors. Bond insurer Ambac Financial Group reported it swung to a loss of $1.66 billion from a profit of $213.3 million a year earlier. The loss came in part because of charges for bonds backed by soured mortgages. The stock is down about 9 percent in premarket, electronic trading.

Health insurer WellPoint Inc. posted a 25 percent decline in its first-quarter profit and lowered its full-year forecast because of higher medical costs.

Read the full story here.

This article addresses the continued decline in the stock market which can be attributed and can contribute to the declines in the United States's economy. This article also addresses Wall Street's concern with how long this recession will last. This article simply delineates numerous stocks that declined which are an example of the declining US economy.

GRADE THIS POST

Student Loan Turmoil Stresses Families

Paying for college is rarely easy, but this year parents and students could have a tougher time securing the necessary financing.

More than 55 lenders who originate 13% of college loans have dropped out of the federal student loan program in recent months, prompting concern that some students may not be able to finance their education. Financial firms say they are leaving because subsidy cuts enacted by Congress last year, combined with the Wall Street credit crunch that has made it costlier for them to sell the loans to investors, have slashed the market's profitability.

The departures come at a time when lenders are also tightening their standards for private student loans, a smaller but growing segment of the industry.

Read the full story here.

This article addresses the continued decrease in availability of student loans for those students entering college. Many lenders have left the federal student loan program because of the "continuing credit crunch on Wall Street." Because of the concern and the continued worry that more lenders will drop out of the program, the federal government is willing and prepared to step in and provide assistance where and when it is necessary. This shows that the decline in the United States's economy has not only affected the housing market and other prices, but it has also affected the ability for students to further their education because the finances are not available.

GRADE THIS POST

Fears of Long Recession Rising

There is little debate about whether the U.S. economy is in a recession. The question is how painful and long the downturn will be.

There is a growing fear among some economists that the recession will be particularly bad.

"We just can't believe it's going to be short. The question is how bad can it get? The situation is moving more towards severe than towards mild," said Allen Sinai, chief global economist for Decision Economics.

Read the full story here.

This article addresses the concern of the United States's economy and being in a recession. The article states that there is little argument that the US is actually in a recession, but the concern arises when the thought of how long we will be in this recession is mentioned. The article delineates all of the various influences of the recession and the things that have contributed to the downward spiral of the United States's economy.

GRADE THIS POST

Assessment Complete

Former Fed Chief: Inflation Isn't Dead

Former Federal Reserve Chairman Paul Volcker, famous for helping whip sky-high inflation in the early 1980s, said Tuesday that rising prices should again be a subject of concern for the U.S. economy.

Speaking before the Economic Club of New York, Volcker said today's economic conditions are not as severe as they were during his tenure, but still suggested caution about the threat of inflation. He also warned that the weak dollar is a major problem.

"We are at a point where we have to worry about [inflation]," said Volcker, who was appointed Fed head in 1979 by President Jimmy Carter before stepping down in 1987.

Read the full story here.

This article addresses the former Federal Reserve Chief, Paul Volcker's statement that the United States should be aware and mindful of the continued rise in prices, and steps should be taken to combat this problem. His concerns included the threat of inflation and the weakness of the dollar. Volcker's statements simply reaffirm what many have begun to believe: the United States is facing an economic crisis, and something must be done to reverse or at least begin to change this. The leaders must lay aside any criticism they have received, and must focus on bettering the economy to get the United States back on its feet.

GRADE THIS POST

As Income Gap Widens, Recession Fears Grow

Poor and middle-class families are entering the recession in a precarious situation due in part to declining or stagnant income growth, a study released Wednesday has found.

Incomes, on average, have declined by 2.5% among the bottom fifth of families since the late 1990s, while inching up by just 1.3% for those in the middle fifth of households, according to an analysis by the Center on Budget and Policy Priorities and the Economic Policy Institute, two liberal think tanks.

The wealthiest slice of Americans, however, saw their incomes rise by 9%.

Read the full story here.

This article addresses the continued growth in the gap of incomes. This article also addresses the continued rise in prices and inflation and the continued debt of families and the depreciation of the value of homes. This shows the continued struggle of the United States's economy which is evident in more than one area of the economy.

GRADE THIS POST

Weak retail sales may spur more warnings

NEW YORK (Reuters) - If there was any question of how much an early Easter would hurt sales at already-struggling U.S. retailers, J.C. Penney Co Inc (JCP.N) gave a resounding answer last month with a quarterly profit warning.The mid-tier department store operator, which counts half of American families as its customers, said earnings for its first quarter, which began on February 3, could miss initial forecasts by as much as 38 percent after sales through Easter came in well below expectations.
Investors are now bracing for more profit warnings on Thursday, when major U.S. retailers, including Wal-Mart Stores Inc (WMT.N), Gap Inc (GPS.N) and Kohl's Corp (KSS.N), report their final sales figures for March.
"We think it's possible that Nordstrom (JWN.N), Macy's (M.N) and Kohl's (KSS.N) could confess and warn of softer first-quarter earnings per share on Thursday," JPMorgan analyst Charles Grom wrote in a research note.A Macy's spokesman declined to comment. The company no longer reports monthly sales and said in February that it would stop providing quarterly earnings forecasts.
Officials at Kohl's and Nordstrom were not immediately available for comment.

Read more at http://news.yahoo.com/s/nm/20080408/bs_nm/usa_retailsales_dc;_ylt=Al7YCUlkbthhSCLUAcoqGJN34T0D

It is already apparent that stores have not been meeting a desired number of sales and J.C. Penny, among several others, claims that the predicted quarterly sales have already been off by 38 percent. Last year, J.C. Penney said March sales at department stores open at least a year, or same-store sales, rose 10.6 percent on strong demand for clothing. Specialists claim that shoppers have spent less due to "high gasoline prices, soaring food costs, dropping home values, a credit market crunch and a weakening job market". Some say that the declining sales record is being caused by the colder weather and low demand for warmer weather clothing and if so, then the sales record for March 2008 could be the worst in 23 years.

Google paid clicks data are generating debate

SAN FRANCISCO - New data confirming slowing growth in Google Inc.'s paid clicks renewed debate Thursday on Wall Street over whether the Internet search company's revenue can quickly adjust to changes it made in how it generates clicks.

Citing data that comScore Inc. released after the market closed on Wednesday, analysts said growth in Google's click-through rate has nearly ground to a halt.

Google's stock dropped $16.09, more than 3.5 percent, to $442.10 in afternoon trading.

The click-through rate grew 3 percent in February compared to a year earlier, and January saw no increase compared to January 2007. Several months earlier, the rate was growing 25 percent to 40 percent compared to a year earlier. The new data is in line with click-through declines Google reported last quarter.

Google, which gets paid when users click on a sponsored ad that comes up as the result of a Google search, has reported steadily rising per-click revenue.

"Click" here for the full story

Because of how vastly used Google is, advertisers paid large bucks to have there high motion, eye popping or just plain regular ads on Google webs sites, such as blogs, You-tube, etc. Everytime a web site visitor clicks on an ad Google rating go up and more advertisers will pay more to place there ads on Google sites. Google will also pay site and blog owners if there site generates clocks galore. The click rate has recently level off and Google are saying that they are going to lower it themselves in order to generate more meaningful clicks. This encourages better ads which consumers will investigate further and possibly buy from; Google wants to discourage the ads which lead to more ads, which get in the way of web viewers desired content. Basically Google wants to sift out the ads and self-clickers that corrupt the click and pay system.

Grade this post

Rising rice prices spark concerns across Asia

MANILA, Philippines - Philippine activists warn about possible riots. Aid agencies across Asia worry how they will feed the hungry. Governments dig deeper every day to fund subsidies.

A sharp rise in the price of rice is hitting consumer pocketbooks and raising fears of public turmoil in the many parts of Asia where rice is a staple.

Part of a surge in global food costs, rice prices on world markets have jumped 50 percent in the past two months and at least doubled since 2004. Experts blame rising fuel and fertilizer expenses as well as crops curtailed by disease, pests and climate change. There are concerns prices could rise a further 40 percent in coming months.

The higher prices have already sparked protests in the Philippines, where a government official has asked the public to save leftover rice. In Cambodia, Prime Minister Hun Sen ordered a ban on rice exports Wednesday to curb rising prices at home. Vietnamese exporters and farmers are stockpiling rice in expectation of further price increases.

Prestoline Suyat of the May One Labor Movement, a left-wing workers group, warned that "hunger and poverty may eventually lead to riots."

Full Story

The current situation in Asia is a dangerous and volitale one. With rising gasoline prices and the falling U.S. dollar (which directly affects various Asian currencies), the over priced rice is greatly affecting the Asian area. Rice cash crop countries are put under heavy stress because disease and overall rising global prices have crippled there normal supply of rice. Because rice is the main food in Asia, many are starving and threatening to riot. The demand for rice has remained the same but the sharp decrease in supply has left Asia in a deadly shortage.

Grade this post

New Home Sales Hit 13-year Low

New home sales fell to their lowest level in 13 years in February, according to a key government report on the battered housing market released Wednesday.

February sales came in at a seasonally-adjusted annual rate of 590,000, the Census Bureau report showed, down 1.8% from a revised 601,000 in January and down 29.8% from a year earlier.

Read the full story here.

This article addresses the continued decline of housing prices and the housing market as a whole in the United States. This article also asserts that despite continued price declines, the number of homes sold continues to decrease. This shows the struggle of the United States's economy in multiple facets, including the housing market. According to the article, in order to stabilize the market, prices must continue to decline into 2009. These struggles show the decline of the US economy as a whole, and it is the government's duty to do whatever it takes to stabilize the economy.

GRADE THIS POST

Diesel: The Truck Stops Here

The kid who delivers your pizza may be charging you an extra buck for gas, but for the guy that trucked the tomatoes, hauled the dough or milked the cows, passing along the fuel increase isn't as easy as pie.

From truckers and farmers to loggers, construction workers and fishermen, skyrocketing diesel prices are pushing what many consider the backbone of the American economy right up to the breaking point.

Read the full story here.

This article addresses the effects of rising diesel prices on many businesses. Many businesses are forced to pay the high prices unless they want to complete shut down because they must use the gas to do what they are supposed to. However, because of serious competition, business owners are not able to raise their prices to consumers because they would lose business if they did so. The rise in diesel prices is attributed to the rising demand for diesel. Many business owners have done all that they can to cut back on prices, and for many of them there is no plan b or anything to fall back on. So what will they decide to do?

GRADE THIS POST

Starbucks Must Pay $100 Million in Back Tips!

March 22nd (Starbucks) Thursday a Superior Court Judge ordered Starbucks to pay its California baristas over $100 million back in tips that Starbucks had paid to shift supervisors. Baristas was entitled to $86 million in back tips plus interest, as well as setting this San Diego Superior Court Judge Patricia Cowett also issued an injunction preventing Starbucks' shift supervisors from sharing in future tips. There was a state law broke in which the managers and supervisors were sharing in employee tips.

Of course the Starbucks Corporation spokes woman, Valerie O'Neil, said the company planned an immediat appeal, calling the ruling "fundamentally unfair and beyond all common sense and reason." 

The lawsuit was filed in October 2004, it finally gained ground in 2006, and included 100,000 former and current baristas in Starbuck's California stores. The corporation earned more than $672 million on revenue of $9.4 billion during its fiscal 2007, which ended September 30. The coffee company also took issue with the brevity of Cowett's ruling, saying the judge failed to notice the unfairness to shift supervisors

Mayfield, I Bet you wont Click Here!

Starbucks needs to start to treat their baristas with the respect they deserve. Not paying them the full tips they are earning is very wrong. They have to do all the dirty work of the store and don't get all what they have earned, that is cruel. The supervisors need to start showing the respect to these hard workers, if they don't they should be let go and investigated even harder. Starbucks will start to struggle financially if they do not fix this problem soon.

The 10 biggest blunders ever in business

A wise man once said that those who fail to learn from history are doomed to repeat it.

Entrepreneurs will need every drop of hard-earned wisdom to navigate the coming year — by all accounts, a challenging one, with a deepening credit crisis and potential recession.

With those dangers and the above adage in mind, we canvassed the last four centuries for the biggest business blunders of all time, in terms of wealth destroyed and opportunity lost.

The stories span industries from technology to real estate. Market miscalculations, short-term thinking and rotten ethics are the broad themes. Taken together, the collective devastation of these miscues in current dollar value creeps into the trillions.

To be fair, some of these blunders were more unforeseen — and the blunderers more naturally disadvantaged — than others.

Full Story

It is interesting that this article has emerged during this point in time. With the market down and oil prices only increasing, entrepreneurs are certainly not emerging from every street corner. Even with the recent interest cut by the Fed, many are reluctant to take that risk due to inflation and the general aggregate surplus after the past expansion. Hopefully, the author will not have another business blunder come from this volitale market.

Grade This Post

A revolution at the Federal Reserve

Bernanke reinvents central bank to avoid catastrophe

The current financial crisis—perhaps the biggest since the Great Depression—has turned Federal Reserve Chairman Ben Bernanke into a reluctant revolutionary. The quiet academic who wanted to make the post of Fed chairman less heroic is leading a dramatic expansion of the central bank's role. In the process, he is setting the stage for the next big boom—or bubble.

In the short run, Bernanke is waging a war to keep the financial markets from collapsing. The biggest move so far: On Sunday, Mar. 16, the Fed brokered the fire sale of troubled investment bank Bear Stearns to JPMorgan Chase and announced that it would be willing to lend directly to major Wall Street brokers, which have never before had access to loans from the central bank.

The two moves represented a new level of direct Fed involvement in the financial markets and made it clear that Bernanke would take any step needed to prevent a financial catastrophe. These maneuvers should work, says Julian Jessop, chief international economist of London-based research firm Capital Economics. "At the end of the day, the Fed can provide a lot of support," he says. "It certainly won't prevent a sharp downturn, but it should prevent a debt deflation spiral."

Full Story

Are Bernanke's actions actually helping the economy? By helping the Bear Stearns financial corporation, he is just keeping the weak afloat. The mass surge of money he is pumping into the economy is simply increasing inflation; therefore, consumers and bankers are slow to release their own money because they know that they are paying more for things than they normally would. The picture is best displaying Bernanke in front of red because his actions

destroying the U.S. dollar like any foreign communist would do. His actions are far too extreme to render a stable economy immediately after this "R" word is over.

Grade This Post

Social Security's Running Out of Time

March 19 (Social Security) Social Security is beginning to run out of time. The talk of social security is okay until 2040 is utter nonsense. The real problem is going to happen in about a decade or so. This problem will start when they start to take in less money then they give out.

The $2.3 Trillion trust fund owned by Social Security is nothing but Treasury securities. Treasury securities are the safest thing you can hold in a retirement account but Social Security's Treasuries won't help cover the program's shortfall. The shortfall comes because having one arm of the government (The treasury) loan another part of the government (Social Security) money does not cover all of the governments bills. Say for example that Social Security calls the Treasury and says they need $15 billion of securities to cover benefit checks. The only way that they can pay them this money is for the rest of the government to cut their spending by $15 billion. Them cutting spending, collecting more taxes, and borrowing money from another country are all things that they could do to pay for the Social Security bill. These are also things we would do with no trust fund. Therefore, the trust fund we have in our government is not making it any easier for the government to pay for Social Security's shortfalls. 

It read it all click here

The whole idea of Social Security being okay until 2040 is bull. The real problem is gonna come in about a decade. Therefore the government needs to find a way to help this problem other than a trust fund because the trust fund is already doing much of nothing for them. If they do not fix this problem people who have been paying social security since they got their first job and expecting to use it in about a decade are going to be screwed. This will be unfair to every American who does not receive what they deserve in about a decade. 

Mega Brands Plummets After Recalling Magnetic Toys

March 17 (Bloomberg) -- Mega Brands Inc., the world's second-biggest maker of snap-together blocks for children, fell as much as 14 percent in Toronto trading after recalling about 2.4 million magnetic toys.
Mega Brands lost 66 cents to C$4.45 as of 2:05 p.m. in Toronto Stock Exchange trading, the lowest intraday price since Nov. 22. The shares lost 18 percent this year before today.
The MagnaMan Action Figures and Magtastik and Magnetix Jr. Pre-School Magnetic Toys contain magnets that can detach and be swallowed by children, Mega Brands said today in a statement. The company said it is cooperating with the U.S. Consumer Product Safety Commission in the voluntary recall.

Read more at http://www.bloomberg.com/apps/news?pid=20601082&sid=a24kWKe3mGDI&refer=canada.

Mega Brand Incorporated fell about 14 percent after recalling 2.4 million magnetic toys causing Mega Brands to lose 66 cents to C$4.45 in the Toronto Stock Exchange trading. The toys were recalled because of more than 44 reports filed about the magnets coming detached and harming children. The consumers were allowed to return the magnetic play toys for a replacement resulting in over $7 million in merchandise- a major fallback for the second largest producer of childrens snap-together toys.

The next shoe to drop in housing

Investors are now shunning mortgage-backed securities issued by government sponsored enterprises Fannie Mae and Freddie Mac, which have been critical in keeping the real estate market from completely falling apart.

Some fear this development will make it harder for people, even those with strong credit histories, to get a home loan.

"Even if you have good credit, you don't know if they are going to give you a loan or not," said Joseph Mason, a senior fellow at the Wharton School of the University of Pennsylvania.

And for those who can still get a loan, the tremors in the mortgage-backed securities market has made loans more expensive for borrowers. As the prices of mortgage-backed securities have fallen, their yields have risen, leading to higher mortgage rates.

The national average rate on a 30-year fixed-rate mortgage was 5.96% Thursday, after jumping to 6.08% earlier this week, according to Bankrate.com. Rates on a 30-year fixed mortgage were about 5.90% a week ago. A borrower looking for a 5-year adjustable-rate mortgage would pay 5.71% today, up from around 5.03% a week ago.

click here for full article

The real estate market has been close to falling apart for sometime and the two enterprises that have kept the market somewhat stable, Fannie Mae and Freddie Mac, are being ignored by investors. This development will make it harder for people, even those with strong credit histories, to get a home loan. For those people who can somehow receive a loan, the price of receiving that loan will be more expensive. Because mortgage-backed securities have fallen, yields have risen, therefore, mortgage rates are higher.

Grade this post

Caution: Crumbling Wall Street earnings ahead

The analysts have been preparing us for months. This quarter's Wall Street bank earnings are going to be bad - real bad.

Bear Stearns is in the center of the bulls eye. On Friday, the brokerage firm said a serious liquidity crisis had prompted it to secure an emergency loan from rival JPMorgan Chase. Bear's stock plummeted 47% and ended the week imperiled.

Far from winding down, as some of the optimistic had predicted last year, the credit crisis has engulfed even more sectors of the financial services industry since the start of 2008. Investors now are second-guessing the value of debt backed by student loans, municipal bonds, commercial real estate and even mortgages issued by Fannie Mae and Freddie Mac. On top of this, the trading of leveraged loans, a popular way for companies with weak credit ratings to finance the high-flying corporate buyouts of recent years, has lost its appeal.

As the contagion spread, analysts started furiously lowering earnings expectations. Goldman (GS, Fortune 500), which had largely escaped the subprime mortgage bloodbath of 2007, started the year with analysts predicting first-quarter earnings would come in at $5.64, on average, according to Thomson Financial. Now, the average earnings estimate is $2.59.

The weak overall market is not making it any easier for the Wall Street firms. Mergers and initial public offerings have dried up, eliminating a source of lucrative fees the companies could have used as a buffer against loan losses. Also, last year's strong first-quarter performance will make next week's announcements look even worse.

click here for full article

When this quarter's earnings are reported later next week it will be clear how bad the market is doing at the moment. It was previously predicted that this credit crisis was going to slowly come to an end, but since the start of the new year, the crisis is affecting more people and more financial services. Due to the fact that the overall market is weak, the situation is even more dire. When the reportrs come out next week, they will apppear even more severe than they are because of last year's strong first-quarter performance. One example of this earning issue is Goldman (GS, Fortune 500), which had largely escaped the troubles of 2007. They started the year with analysts predicting first-quarter earnings would come in at $5.64, on average, according to Thomson Financial. Now, the average earnings estimate is $2.59.

Grade this post

Talbots reports loss, plans more store closures

The Talbots Inc. said Wednesday it has slowed its growth plans for this year and will close about 20 underperforming Talbots brand stores in light of the economic challenges to the company.
The news comes on the heels of Talbots' previous announcement that it will shut 78 Talbots kids and men's stores, and the company's preliminary year-end and fourth-quarter earnings.
The Hingham, Mass.-based specialty retailer (NYSE: TLB) of women's classic fashions reported a $171 million loss in sales for the fourth quarter in 2007, which ended Feb. 2, 2008. Sales for the full year 2007, however, increased 2.5 percent to $2.289 billion, up from $2.231 billion in 2006.
Talbots operates a Wichita store, in Bradley Fair at 21st St. North and Rock Road.

Read more at http://www.bizjournals.com/wichita/stories/2008/03/10/daily17.html

Talbots Incorporated plans to close 20 of their stores that have been doing poorly with sales-- a lesser amount than they previously announced. The CEO claims that 2007 was a difficult year for Talbots financially and that the company will focus on transitioning and repairing in 2008 as part of a 3 year project. In 2008, they plan to open only 48 stores versus the 75 stores opened in 2007.