Lecanto, U.S.A. –If you’re one of the millions of American families struggling financially, the Season of Giving only spotlights how little you can give—and how much your kids are focused on taking. But it’s not pure selfishness. Gregory Downing says kids are disconnected from harsh economic realities partly because they’re sheltered from the truth, and partly because parents themselves aren’t in reality about the fundamental shift our world has undergone.

“Everything about the way we build wealth and think about money has changed, Yet we’re still living like people who are able to work 40 years for the same company and retire comfortably with the gold watch.” says Downing, author of Entrepreneur Unleashed: Wealth to Stand the Test of Time as well as an upcoming book on providing a financial legacy for kids.

A real estate investment business owner and motivational speaker, Downing says parents must teach kids the basics of entrepreneurship. Generating multiple streams of income is the only logical path to financial freedom in a global economy where it’s now the norm for college grads to move back home jobless and saddled with debt.

To remove our kids’ sense of entitlement and “employee” mindsets, parents can minimize gift buying, concentrate on the “togetherness” aspect of the holidays, and—after the tree comes down—call a family forum. Here’s what you might say:

Be honest about your financial situation: If you’re bringing home half the income you once earned and you now have to buy your own health insurance, spell this out for kids, urges Downing. They can handle the truth.

Lay out the family finances in business terms: ”Get out your pay stubs or tax returns and a month’s worth of bill statements and walk through them all,” suggests Downing. “Say, ‘Here are our revenues for the upcoming year. Here are our operating expenses. Here are our profits.’ Not only will this be an educational experience for the kids, it may be one for you as well.”

First, ask kids for cutback suggestions: Ask them “Where might we as a family save money? How can you help?” Implement their ideas if you can. This gives kids a sense of control over their destinies and forces them to prioritize the activities they value.

Then, broach the subject of kids as contributors: They can at least fund their own non-essentials (think video games and prom dresses) and start saving for college.

“You can position it as a fun experience that may bring the family together,” Downing says. “Tell them the economy is forcing us to do what Americans do best—be innovative and create our own future.”

Ask them to think up ways they might earn income:  If your child loves to read, perhaps she could start a business reading books to the elderly, Downing suggests.

“Once the business gets off the ground, your child can take it to the next level,” he says, adding that it’s critical to teach kids the value of creating streams of income that are not linked to their time. “Perhaps she could franchise her ‘reading to the elderly’ service by subcontracting reading gigs to other kids.”

Make the connection between wealth and giving: Explain that, generally, those who give of their time and/or money invite abundance into their lives.

Now, plan for the future: Set family goals in all areas that matter to you—financial, but also spiritual, educational, health & fitness, and so forth.

Downing advises, “Meet every 30 days to monitor everyone’s progress. You’ll be amazed by how this keeps kids—and parents—energized and focused and keeps the family close and moving in the right direction.”

This last step is critical, says Downing. It clarifies your values and makes sure you’re all doing things—say, working twice a month at the animal shelter—that teach kids what really matters in life.

“When kids are really ‘giving back’ they won’t have that desperate need to acquire the right clothes or high-tech trinkets to fill some spiritual void,” he concludes.

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Omaha, U.S.A. — According to the Securities and Exchange Commission’s recent report on financial literacy in the United States, many individuals would do well to take a refresher course just to cover the basics. And when it comes to more complex financial issues such as 401k and retirement planning, the average investor is not in a position to either make informed decisions on their own or have an enlightened conversation with their broker if they have one. “The SEC’s report points to subjects that are not even on the radar of conventional sources of investment knowledge,” says George Morgan, the Executive Director of The Buttonwood Center for Investor Education.

So how can a person know if they aren’t financially literate or aren’t asking the right questions of their broker? “You really have to take some time to educate yourself,” says Morgan. “If you’re going it alone, be on the lookout for educational financial planning classes in your area. If you are working with a broker, your questions should include things such as what is an appropriate return on your investment, as well as asking about alternative ways of investing.”

Morgan, a retired broker himself, recently ran into a married couple who were former clients. ”They told me about their current broker and what a great job he is doing. They described how this new broker met with them on a regular basis and that so far this year, they had a return they were very pleased with. If they had known the right questions to ask, their returns might have been significantly higher and the amount of money they paid to the broker could have been considerably lower.”

Morgan’s new book, Extra Lettuce: Manage Your 401k Now to Avoid Flipping Burgers Later, easily explains how to take control of your personal finances and manage retirement funds in order to best plan for your golden years.

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Illinois, U.S.A. — The National Insurance Crime Bureau (NICB) says progress is being made in identifying and removing thousands of vehicles damaged beyond repair by Sandy. The estimate of 230,000 insurance claims for vehicle damage in the areas affected by Sandy remains unchanged at this time. Many of those vehicles were flooded and are being towed to holding areas where they will be loaded on car haulers and taken to facilities to be crushed.

On December 5, NICB officials visited holding areas in Brooklyn where more than 7,000 new vehicles awaiting delivery to dealerships had been parked when Sandy flooded the area with more than three feet of water. All but 800 cars had been removed. The vehicles suffered extensive damage as the wind and water shoved them into each other and flooded their electronic systems, damaging them beyond repair.

“New York City Police and the other law enforcement agencies around the area were understandably focusing on other emergencies and disaster efforts initially,” said NICB New York Region Operations Director Thomas Lohmann. “Now they have begun to address the issue of dealing with thousands of flooded and damaged vehicles, and they are doing an outstanding job of getting these vehicles towed to holding areas where they can be identified and accounted for prior to being scrapped. They are also going after towing companies that have taken cars off the street without permission, and are submitting outrageous towing and storage bills to insurance companies. Some may be holding the vehicles in an attempt to increase storage fees, or actually claim title to the vehicle after it sits at their facility for an extended time.”

NICB member insurance companies have provided extra resources to tow damaged vehicles and dispose of them, and are working with NICB to ensure all of the Vehicle Identification Numbers (VINs) of these vehicles are reported to the National Motor Vehicle Title Information System (NMVTIS) at www.vehiclehistory.gov.

NICB’s efforts are focused on making sure these damaged vehicles are identified. Using VINCheck(SM), consumers can enter the VIN of a vehicle they are interested in purchasing to see if it has ever been declared as salvage. VINCheck, available free of charge at www.nicb.org, provides access to information from insurance companies representing nearly 90 percent of the insured, private passenger market. It was created in the aftermath of Hurricane Katrina.

“Despite everyone’s best efforts, there will be cases where damaged vehicles are cleaned up, dried out and sold by unscrupulous dealers or individuals who know how to beat the system,” said NICB President and CEO Joe Wehrle. “No one should be driving a car that’s been sitting in four feet of water. It’s unsafe. But people who will sell you a car like that aren’t worried about your safety.”

NICB is also warning victims of Sandy to be on the lookout for contractors who may try to take advantage of the situation by offering to do repairs in return for an advance payment or insurance check. Unscrupulous contractors may take the money and run, inflicting more financial damage and suffering on the victim.

Image Courtesy : SVLuma / Shutterstock.com

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Dallas, U.S.A. — Baby Boomers are not saving enough for retirement because they are spending too much on mortgage debt and carrying this and other debts into their near-retirement years, according to a new study from the National Center for Policy Analysis (NCPA).

“Unfortunately, a greater percentage of pre-retirees will be dragging mortgage debt into their retirement years,” said National Center for Policy Analysis (NCPA) Senior Fello Pam Villarreal. “This is a time when major debts should be pared down. Instead, many are taking out longer mortgages and home equity loans, spending more on interest payments and are, overall, buying too much house.”

In How Are Baby Boomers Spending Their Money?, Villarreal found that for 55 to 64 year olds in particular, mortgage interest comprises a larger share of their expenditures than for the same age group 20 years ago, despite the fact that interest rates have fallen over time.

Additionally, education expenditures have increased significantly for 45 to 64 year olds, some of this resulting from loans of their adult children.

“Baby boomers need to recognize their limitations when it comes to spending on their adult children,” said Villarreal. “Fifty-nine percent of these parents are providing financial support to adult children who are no longer in school. Nearly one-third have paid off student loans for their children.”

Villarreal said while individuals must adapt a mindset of saving, a key part of the solution is changing government tax policies that encourage consumption and punish saving.

To find more information in How Are Baby Boomers Spending Their Money, click in here http://www.ncpa.org/pdfs/st341.pdf

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California, U.S.A. — Farmers and ranchers are feeling the heat as a result of this summer’s dry and hot weather, considered the worst American drought in nearly 50 years as detailed in an article in the August issue of Food Nutrition & Science.

Corn has been hit particularly hard, as the drought hit the region when corn was passing through its critical pollination state. Farmers are hopeful about soybeans, which mature later in the season. As a result, consumers can expect to see an increase in food prices especially in 2013. Since mid-June, futures prices for corn increased 60 percent and 24 percent for soybeans.

“These types of crisis remind us how fragile America’s farming industry is,” says Phil Lempert, founder of Food Nutrition & Science and CEO of The Lempert Report and SupermarketGuru.com. “Although programs like the Federal Crop Insurance Program and Emergency Conservation Program will help expedite a recovery and hopefully stabilize prices, there are a lot of small family farms that don’t qualify and might have to shut down further deteriorating the farming landscape.”

Also in this month’s issue, results from a recent Penn State University study that shows people eat more vegetables when they are served a variety than when they are served any single type, even the most preferred one. The study found that filling half the plate with three different vegetables increased vegetable intake in both men and women by more than one half serving.

In addition an article on September’s Whole Grains Month and how supermarkets across the country will use in-store displays, brochures and other educations tools to encourage consumption.

Other informative articles, this month includes interviews with fresh produce Appalachian Mountain Farmers Melanie and Mike Fink and another with MaryEllen Mooney, partner/owner at Mooney Farms, about building sustainability into their strategies, operations and products.

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Washington, U.S.A. — The Concord Coalition has said that new projections by the Congressional Budget Office (CBO) underscore the need for Washington to commit to long-term fiscal reforms while dealing with this year’s looming budget decisions. Concord said the new numbers should also provide a sobering picture for this year’s candidates for federal office one that should temper election-year impulses to offer voters unrealistic promises.

“Once again, CBO’s projections show that if politicians don’t deviate from current policies, the country will continue down an unsustainable path that threatens to weaken the country, jeopardize our standard of living and leave our children and future generations with unmanageable levels of government debt,” said Robert L. Bixby, Concord’s executive director. “These numbers should frame this year’s political debates, and candidates from both parties would do well to spend some time studying their implications.”

“We need to put the country on a better fiscal path,” he added, “and candidates must clearly explain to voters — with specifics, not empty rhetoric — how they plan to do that. It will require setting priorities and making changes throughout the federal budget, and voters deserve to hear credible plans for doing this.”

CBO’s Update to the Budget and Economic Outlook estimates that the federal deficit for this fiscal year, which ends Sept. 30, will total $1.1 trillion. While that is down slightly from CBO’s March projection, it will be the fourth consecutive deficit of more than $1 trillion. In addition, federal debt held by the public would reach 73 percent of GDP, which CBO notes is the highest level since 1950 and is “about twice the share that it measured at the end of 2007, before the financial crisis and recession.”

The CBO prepared two sets of projections. The first — the CBO’s “baseline projections” — assumes that current laws will generally remain in effect. An alternative scenario, however, looks at what could happen if Congress changes certain laws to continue many current policies. This alternative scenario presents a far more troubling long-term picture. Using the new CBO numbers, The Concord Coalition today updated its own “Plausible Baseline,” which applies what Concord considers to be realistic assumptions about future policy decisions. These projections are close to the CBO’s alternative scenario.

The budget office notes that the outlook for budget deficits, federal debt and the economy are “especially uncertain now because substantial changes to tax and spending policies are scheduled to take effect in January 2013.” These changes have often been called the “fiscal cliff” because if Congress allows all of them to take effect at once, it could cause substantial short-term economic damage, perhaps triggering a recession.

Under Concord’s Plausible Baseline, deficits between 2013 and 2022 would be much higher, averaging over 5 percent of GDP rather than 1 percent. Debt held by the public would grow to 93 percent of GDP by 2022, the highest level since shortly after World War II. As the budget office points out, that is not a sustainable level of federal debt.

“The differences between the CBO baseline and either CBO’s alternative scenario or Concord’s Plausible Baseline are striking, and they highlight the importance of the policy decisions that elected officials must confront before the end of the year,” Bixby said.

“While it is important to support the economic recovery, Washington should also be laying the groundwork for the big fiscal reforms that are necessary to put the federal budget on a more responsible track over the long term. It is possible to do both, but this will require more thoughtful policy-making and greater bipartisanship than we have seen in Washington recently.”

• Choices over tax policy, account for the bulk of the difference between the CBO baseline and the more plausible scenarios within the 10-year budget window. Extending the 2001 and 2003 tax cuts, along with fixes to the Alternative Minimum Tax (AMT) and debt service costs would add $5.2 trillion to deficits over 10 years.
• In CBO’s baseline projections, mandatory spending will increase from 13.3 percent of GDP in 2013 to 14.4 percent in 2022. Nearly all of that increase would be due to the growth of just Social Security and Medicare — representing the effect of the baby boom generation entering retirement. CBO projects that by 2022 over half of the entire federal budget will be spent on just Medicare, Medicaid, and Social Security.
• For Medicare specifically, baseline growth is not attributable to health care inflation but instead to demographics.
• The mandatory spending category of income security, now higher than normal because of the recession, would drop by over 60 percent over the budget window (from 2.1 percent of GDP to 1.3 percent).
• Interest payments under the Concord Plausible Baseline would more than double, growing from 1.4 percent of GDP this year to 3.6 percent in 2022, and would cost over $5 trillion during the 10-year period.
• If the caps included in the Budget Control Act are adhered to, CBO projects that discretionary spending would decrease from 8.3 percent of GDP in 2012 to 5.6 percent by 2022 — the lowest level in the last 50 years.

For more about our plausible baseline visit:

http://www.concordcoalition.org/concord-coalition-plausible-baseline

Image Courtesy of  Third Way

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Atlanta, U.S.A. — The U.S. Small Business Administration announced on August 21 that federal economic injury disaster loans are available to small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private non-profit organizations of all sizes in Clay, Macon, Pickett, Robertson, Scott and Summer counties in Tennessee as a result of the drought that began on April 1, 2012.

“These counties are eligible because they are contiguous to one or more primary counties in Kentucky. The Small Business Administration recognizes that disasters do not usually stop at county or state lines. For that reason, counties adjacent to primary counties named in the declaration are included,” according to Frank Skaggs, director of SBA’s Field Operations Center East.

“When the Secretary of Agriculture issues a disaster declaration to help farmers recover from damages and losses to crops, the Small Business Administration issues a declaration to assist eligible entities affected by the same disaster,” said Skaggs.

Under this declaration, the SBA’s Economic Injury Disaster Loan program is available to eligible farm-related and nonfarm-related entities that suffered financial losses as a direct result of this disaster. With the exception of aquaculture enterprises, SBA cannot provide disaster loans to agricultural producers, farmers, or ranchers. Nurseries are eligible to apply for economic injury disaster loans for losses caused by drought conditions.

The loan amount can be up to $2 million with interest rates of 3 percent for non-profit organizations of all sizes and 4 percent for small businesses, with terms up to 30 years. The SBA determines eligibility based on the size of the applicant, type of activity and its financial resources. Loan amounts and terms are set by the SBA and are based on each applicant’s financial condition. These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits.

Applicants may apply online using the Electronic Loan Application (ELA) via SBA’s secure website at https://disasterloan.sba.gov/ela.

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Harrisburg, U.S.A. — Governor Tom Corbett announced that a public–private team from Pennsylvania, in partnership with Northeast Ohio and West Virginia, was awarded a $30 million federal grant from the Department of Defense to develop an Additive Manufacturing Innovation Institute (AMII).

The institute will develop a roadmap to increase domestic competitiveness through increasing the successful transition of additive manufacturing technology, advancing innovation and creating a workforce capable of meeting industry needs.

“My mission as Governor is centered on growing our economy and making sure there is a job for every Pennsylvanian that wants one,” said Corbett. “The announcement positions Pennsylvania as a leading location for the growth of a $6 billion industry and the potential for significant job creation.”

The awarded proposal was submitted by “Tech Belt” a partnership which includes a team from Pennsylvania, Northeast Ohio and West Virginia. Secretary C. Alan Walker of the Department of Community and Economic Development and Secretary Julia Hearthway of the Department of Labor & Industry, provided a joint letter of support for the application, including a pledge to provide a portion of the matching funds which helped to leverage the $30 million award.

AMII represents the largest statewide partnership in a single national initiative to date – combining industry, research and workforce development resources. The institute will partner with colleges, universities and community colleges to deliver new training and curricula to the workforce. Overall, the project will directly engage nearly 9,000 students, teachers and workers through course development and online outreach with companies and innovators.

“For too long, Pennsylvanians who earned a college degree have had to leave the state to find employment,” Corbett said. “This initiative will help to develop a relationship between schools and businesses to create jobs for graduates, right here at home.”

The National Center for Defense Manufacturing and Machining in Latrobe, Westmoreland County will serve as the lead for this advanced manufacturing initiative. The commonwealth will partner with the AMII in outreach and education efforts to PA manufacturers and will retain representation on the governing and technical advisory boards.

The Pennsylvania Team includes advanced manufacturing firms, Carnegie Mellon University, Lehigh University, Penn State University, Philadelphia University, Robert Morris University, and the University of Pittsburgh. The initiative will also engage community colleges, the Pennsylvania College of Technology, industry organizations and the PA manufacturing-focused Industrial Resource Centers.

Additive manufacturing takes a technology leap from current manufacturing approaches by offering more efficient methods of forming metal and other materials into highly complex shapes and parts. This emerging manufacturing technology will be applicable to a number of industry sectors, including: aircraft, oil and gas production equipment, robotics, electronics, medical devices, and “smart” structural materials.

Image Courtesy of  RegierungBW

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Washington, U.S.A. — For those new to the U.S. tax system, filing taxes can be a confusing and intimidating process. For Hispanics, barriers such as language, fraud and misinformation add to the list of complications.

To help address Spanish-speaking taxpayer’s needs for trustworthy and credible help, the Hispanic Access Foundation has expanded its outreach and educational campaign in partnership with H&R Block, the world’s largest tax services provider, to reach more than 3 million additional Latinos.

The campaign “Preparate Para Un Futuro Mejor” (Prepare Yourself for a Better Future) emphasizes the importance of building an accurate tax history and gives Hispanics tools to protect against fraud and misinformation in the tax preparation process.

“This campaign has already helped thousands of Hispanics with issues such as fears about immigration status, situations of fraud and trusting unskilled tax preparers,” said Maite Arce, executive director of HAF. “The demand for help is so immense there was no hesitation in expanding to more cities. This is a critical need for Hispanics and for the long-term prospects of this country as a whole.”

Hispanic buying power is expected to reach $1.5 trillion in 2015, according to a recent Nielsen report. Additionally, the U.S. Census estimates that Hispanic business-owners contribute more than $70 billion to the nation’s economy. While there is no concrete number, estimates place the number of Hispanics not filing taxes in the millions.

“For the majority of Hispanics, it’s not a question of not wanting to pay taxes, but rather a lack of understanding and fear of the process. With access to quality information in their language and to bilingual tax experts, they can build their knowledge about taxes,” said Arce. “H&R Block and its more than 2,500 bilingual offices nationwide make them an ideal partner to help this population.”

Throughout the campaign, HAF and H&R Block will work with faith-based and community leaders to discuss tax issues, participate in community events and promote informational tax seminars called “Tax Talks.”

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Boston, U.S.A. — The Council of Microfinance Equity Funds (CMEF), a membership organization of the leading microfinance equity investors, announced the release of a new, enhanced version of its corporate governance manual, “The Practice of Corporate Governance in Microfinance Institutions.”

Given the importance of good governance to the microfinance industry, the CMEF’s Governance Guidelines, first released in 2005, have recently been updated and expanded to include more in-depth discussions of social-performance management, risk and crisis management, responsible exits, aligning incentives and formal documentation.

“Good governance is the ability of board members to monitor the status of the organization, make good strategic decisions, and hold executives accountable for their execution,” said Elisabeth Rhyne, managing director of the Center for Financial Inclusion at Accion International. “Ultimately, that comes down to the quality of the board members, the culture and practice of the board and the power relationships among board members and executives.”

Experts acknowledge that the need for good governance has grown increasingly important for microfinance institutions (MFIs), especially in the wake of widespread financial crises. Microfinance consultant Daniel Rozas affirms in “Weathering the Storm,” a paper released by the Center for Financial Inclusion in 2011, that “Good governance is the ultimate backstop for crisis prevention and management.”

The CMEF Governance Guidelines are meant to provide candid, precise and practical guidance in the field of corporate governance specifically tailored to MFIs, and to offer concrete instruction to MFI boards. However, many of the recommendations in the guidelines, such as how to structure an effective board, are applicable to all types of financial institutions, MFIs have a number of distinguishing characteristics that affect the implementation and operation of governance.

The Governance Guidelines address how MFIs can best maintain a focus on social outcomes, and how MFIs in transition to private or deposit-taking institutions can develop ideal governance structures. Good governance is not automatic, and MFIs must continually work to develop good governance over time. The CMEF hopes that these Governance Guidelines will serve as a useful tool for MFIs in the development of good governance practices.

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Scottsdale, U.S.A. — Nowhere is the law of supply and demand felt more strongly than in the U.S. labor market. While U.S. unemployment decreased from 9.3 percent to 8.8 percent for the 12-month period ending April 2012 (according to BLS.gov), it was not enough to boost salary budget increases and, subsequently, employee wages.

Pay increase budgets at U.S. employers have picked up slightly from all-time lows in 2009, going from an average (mean) of 2.2 percent to 2.8 percent in 2012, according to the 39th annual “WorldatWork 2012-2013 Salary Budget Survey.” But the movement does not appear to be coming from organizations awarding larger pay increases. Instead, it stems from fewer organizations reporting 0-percent increases, or frozen salary budgets. The number of 0-percent responses has declined from 33 percent of employers in 2009 to this year’s figure of just 5 percent.

“There is an inverse relationship between the spike in organizations budgeting 0 percent and the overall average salary budget increase,” explained Alison Avalos, a Certified Compensation Professional (CCP) and research manager for WorldatWork. “Picture an iceberg thawing and its reflection in the water, with the portion of organizations freezing pay increase budgets represented by the portion of the iceberg visible above the water.

When pay budget freezes spiked in 2009, overall mean and median salary budget increases plummeted, pulled down by the zero values. The overall average salary budget seems to be holding steady at close to 3 percent, but the growth is not because employers are being aggressive with salary increase budgets. It is mostly because the number of 0-percent responses has declined in the three years since the recession.”

With average (mean) salary increase budgets below 3 percent for the fourth consecutive year, managers may be tempted to skip differentiating employee performance altogether. But with such modest salary budgets, pay for performance should actually be more heavily underscored, according to Kerry Chou, a Certified Compensation Professional (CCP) and practice leader at WorldatWork.

“In order to accomplish this, you need to effectively allocate available salary dollars, which could mean low or no raises for marginal performers. And while this isn’t a pleasant conversation for managers to have, in the long run it’s easier than losing your stars to the competition and then spending far greater sums to find replacements. A small pie can still be a great dessert; you just need to serve bigger pieces to fewer guests.”

Other Key Salary Budget Survey Findings:

Major Metropolitan Area Data

Companies located in or reporting data for employees in Detroit reported the lowest overall average salary increase budget at 2.6 percent for 2012, while Houston-area employers reported the highest, topping 3 percent. Most metropolitan areas reported average salary budget increases ranging from 2.7 percent to 2.9 percent for 2012, and 2.9 percent to 3.1 percent for 2013. To see the impact of the slight rise, consider a company with a $100 million payroll. Two-tenths of one percentage point equals $200,000 in additional pay increases.

Industry Data                                                                      

Pay increase budgets for public administration hit an all-time low of 1.3 percent in 2010 and 2011, but have risen to 1.7 percent in 2012. Conversely, the mining industry is far above national figures, with average 2012 salary budget increases at 4 percent.

Variable or Incentive Pay

The percentage of organizations using vari­able pay grew to 82 percent this year, up from 79 percent in 2011. A combination of awards based on organization/unit success and individual performance continues to be the most prevalent type of variable pay program.

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Washington, U.S.A. — Generation Opportunity, one of the largest grassroots organizations connecting with Millennials through advanced social media outreach and traditional, boots-on-the-ground organizing, announces non-seasonally adjusted (NSA) 18-29 unemployment rate data for July.

The youth unemployment rate for 18-29-year-olds specifically for July 2012 is 12.7 percent (NSA). Additional notes: the youth unemployment rate for 18-29-year-old African Americans for July 2012 is 22.3 percent (NSA); the youth unemployment rate for 18-29-year-old Hispanics for July 2012 is 14.0 percent (NSA); and the youth unemployment rate for 18–29-year-old women for July 2012 is 12.6 percent (NSA).

The declining labor participation rate has created an additional 1.715 million young adults that are not counted as “unemployed” by U.S. Department of Labor (BLS) because they are not in the labor force, meaning that those young people have given up looking for work due to the lack of jobs.

If the labor force participation rate were factored into the 18-29 youth unemployment calculation, the actual 18-29 unemployment rate would rise to  16.7 percent (NSA).

Generation Opportunity President Paul T. Conway, former Chief of Staff of the US Department of Labor and former Chief of Staff of the US Office of Personnel Management (OPM), issued the following statement in response to the July 2012 jobs numbers:

“This unemployment number is another indicator of the far greater, more fundamentally devastating, and still under-reported story impacting young Americans. For nearly three and half years, young Americans have experienced historically high unemployment levels – levels that are among the highest since the end of World War II – that tell the story of millions of delayed dreams and careers of the next greatest generation.

“Instead of aggressively embracing policies that liberate businesses to create more jobs, the President and his appointees have pursued an agenda that suffocates economic opportunity under the weight of more spending, higher debt, more regulations, and higher taxes. For young Americans, the message from their government is clear – we are not responsible if our destructive policy decisions eliminate your plans for full-time meaningful jobs in a career path of your choice. Even worse, elected officials in Washington are proving themselves to be coldly distant from the human costs of unemployment, the personal stresses and frustrations that come from the uncertainty surrounding unemployment.

“Millennials deserve better from their government, especially in light of what they have already contributed to this country. They are the generation that witnessed the 9/11 terror attacks on US soil, bravely responded to fight two wars overseas, selflessly helped rebuild New Orleans and other Gulf Coast communities after Hurricane Katrina, and offered their personal support to those most impacted by the economic collapse. Yet, each day they awake to an economic reality, which includes record high unemployment and limited opportunities. Their message to all candidates is clear – we want to get on with our lives and realize our dreams. However, if the solutions you offer equal less jobs and more debt for our country, you will fail to win our enthusiasm and our vote.”

Generation Opportunity commissioned a poll with the polling company, inc./WomanTrend (April 16 – 22, 2011, +/- 4% margin of error) and a highlighted result for all young Americans ages 18-29 appears below:

• 77% of young people ages 18-29 either have or will delay a major life change or purchase due to economic factors:
• 44% delay buying a home;
• 28% delay saving for retirement;
• 27% delay paying off student loans or other debt;
• 27% delay going back to school/getting more education or training;
• 26% delay changing jobs/cities;
• 23% delay starting a family;
• 18% delay getting married.
• Just 31% of 18 – 29-year-olds approve of President Obama’s handling of youth unemployment.

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Washington, U.S.A. –The Senate Commerce Committee held a hearing on S. 1832, the Marketplace Fairness Act, a bill that levels the playing field between brick-and-mortar and Internet-only retailers. The Senate hearing featured testimony by Sens. Mike Enzi (R-WY), Dick Durbin (D-IL) and Lamar Alexander (R-TN), and caps a month of intense activity on Capitol Hill as Democratic and Republican lawmakers work to close the sales tax loophole that enables online sellers to bypass collecting state sales taxes.

“We are very encouraged by the growing momentum in Congress to fix the outdated and blatantly unfair sales tax system that is hurting brick-and-mortar retailers across the country,” said Michael Kercheval, president and CEO of the International Council of Shopping Centers (ICSC). “Today’s Senate hearing demonstrates that Congress is serious about getting the federal government out of the way so that states can enforce their own tax laws,” added Kercheval.

“This system doesn’t work for consumers. It doesn’t work for businesses. And it sure doesn’t work for state and local governments,” said Senator Durbin. Senator Enzi dismissed claims that the bill is tantamount to a new tax. “The bill does not tax Internet services.  The bill does not raise taxes—it collects what is owed by the purchasing individual.”

“Critics of the legislation repeatedly claim that this constitutes a new tax for online retailers.  Nothing could be further from the truth, said Betsy Laird, ICSC senior vice president of global public policy. “It is not a new tax—taxes are already due on online purchases in 45 states.  Online retailers would merely be required to collect and remit sales taxes just like local brick-and-mortar stores do,” added Laird.

If enacted, the legislation will save consumers the burden of self-reporting use taxes. According to a recent national survey conducted by ICSC, 86% of consumers prefer to pay sales tax on online purchases at the point-of-purchase rather than at the end-of-year on their tax forms.

Both S. 1832, the Marketplace Fairness Act and H.R. 3179, the Marketplace Equity Act, do what the Supreme Court suggested was fitting for Congress to do—grant states the authority to compel sales tax collection on online purchases made by consumers in their state. It would end the competitive advantage pure e-retailers currently enjoy by not charging sales tax and improve the sales tax system to better reflect the realities of the 21st century marketplace.

ICSC has promoted sales tax fairness for over a decade, advocating that a “sale is a sale” regardless of whether the purchase takes place on Main Street, at shopping centers, via mail-order or over the Internet.

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McLean, U.S.A. — Freddie Mac released the results of its Primary Mortgage Market Survey showing fixed mortgages rates breaking their streak of record-breaking lows and moving higher on mixed Eurozone and domestic economic data. Before this week, the average rate on the 30-year fixed had fallen to or matched record-low levels in 13 of the past 14 weeks.

News Facts

• 30-year fixed-rate mortgage (FRM) averaged 3.55 percent with an average 0.7 point for the week ending August 2, 2012, up from last week when it averaged 3.49 percent. Last year at this time, the 30-year FRM averaged 4.39 percent. 15-year FRM this week averaged 2.83 percent with an average 0.6 point, up from last week when it averaged 2.80 percent. A year ago at this time, the 15-year FRM averaged 3.54 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.75 percent this week with an average 0.6 point, up from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 3.18 percent.
• 1-year Treasury-indexed ARM averaged 2.70 percent this week with an average 0.4 point, down from last week when it averaged 2.71 percent. At this time last year, the 1-year ARM averaged 3.02 percent.
• Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

“Recent announcements of additional debt relief for the Eurozone and mixed domestic economic indicators added upward pressure on Treasury yields as well as mortgage rates this week. The U.S. economy grew at a 1.5 percent annualized rate in the second quarter, slower than the 2.0 percent growth in the first quarter with consumer spending in June unchanged from May. However, consumer confidence rose in July for the first time in five months according to The Conference Board.

“Housing data were also assorted. The S&P-500 Case Shiller 20-City Composite Index rose for the fourth consecutive month in May with 18 of the cities experiencing positive growth. Nonetheless, pending home sales fell 1.4 percent in June, below the market consensus forecast of a 0.3 percent increase, and May’s figure had a downward revision.” - Frank Nothaft, vice president and chief economist, Freddie Mac.

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Austin, U.S.A. — In another example of how Texas is leading the nation’s economic recovery, the real estate market continues to show marked improvements over last year, according to the 2012-Q2 edition of the Texas Quarterly Housing Report issued today by the Texas Association of Realtors. Featuring 13 percent more single family home sales than the same quarter of the prior year and a median price that was seven percent higher than 2011-Q2, the results demonstrate that Texas’ economic recovery is robust and widespread throughout the state.

“The momentum we saw in the first quarter of this year is continuing and we’re seeing that now not only in increased sales volume, but also in a strong increase in the median price,” said Joe Stewart, chairman of the Texas Association of Realtors. “That is good news for Texas homeowners who have been thinking of moving up, but who have remained on the sidelines because they’re concerned about earning full value for their current home.”

In the second quarter of 2012, 67,334 single family homes were sold in Texas, which is 13.04 percent more than the second quarter of 2011. In addition, the median price in the second quarter of 2012 was $161,400, which is 7.45 percent more than 2011-Q2.

“One of the most noteworthy aspects of this quarter’s results is the consistency across markets,” said Jim Gaines, Ph.D., an economist with the Real Estate Center at Texas A&M University. “Occasionally, statewide results can be dominated by trends in Texas’ largest markets due to the large volume of real estate transactions they represent. However, in this case, the increases in both sales volume and median price are seen throughout most of the 48 Texas markets included in the report.”

In addition to improvements in sales volume and median price in the second quarter of 2012, the “months inventory” figure improved. Indicating the balance between supply and demand in the real estate market, the Texas market featured 5.9 months of inventory in 2012-Q2, which is 2.2 months less than 2011-Q2. The Real Estate Center cites 6.5 months of inventory as a market in which demand is balanced with supply.

Gaines explained, “At 5.9 months of inventory, Texas is bordering on a sellers’ market. However, I think that is due as much to a decrease in supply – from fewer foreclosures, lack of new speculative home building and apprehensive homeowners not listing properties – as it is to increasing demand. Nonetheless, homebuyers should expect competition for desirable properties.”

Chairman Stewart concluded, “Texas has been leading the economic recovery and these results are more proof that our state is one of the nation’s best places to own a home. Now, we must protect the high quality of life that fueled that recovery and work on absorbing the growth of our state. That is the focus of the Texas Association of Realtors as we once again begin preparing to advocate for Texas homeowners during the 83rd session of the Texas Legislature in 2013.”

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San Bernardinom, a small Californian city, is the third city in the state forced to opt for bankruptcy in the last few weeks. This highlights the fact that the economic crisis is not over yet.

The elected officials of the 210,000 people in the city have authorized their city’s attorney to seek federal bankruptcy protection. The city is unable to pay the vendors, although a lot of measures have been taken like selling assets or cutting spending, and opting for bankruptcy has been the only possible solution.

The city is facing a budget shortfall of $45 million. City officials said the problem is weak property and sales tax revenue combined with escalating pensions and a loss of state redevelopment funds.

Stockton, a California city with almost 300,000 people was the first that filed bankruptcy on June 29. The second one was the small city of Mammoth Lakes this July 3.

The California Governor Jerry Brown didn’t want to speculate concerning other possible bankruptcy cases, instead declaring that the real problem is that the country, the states and the cities have lived beyond their means, and he specified that these finances were “means created by a mortgage bubble, by greed, by mistakes, by people not knowing what the hell they were doing, and millions of people have been hurt.”

Jim Spiotto, a Chicago attorney who tracks municipal bankruptcies, said that since Congress added chapter 9 to the bankruptcy code in 1937 to allow municipalities to seek protection, about 640 entities have filed. For Spiotto, bankruptcy is considered a measure of last resort because it carries the danger of increasing the city’s borrowing costs.

Bloomberg explained that in California “five of its 39 Chapter 9 petitions were made by cities or counties: Orange County in 1994, and the cities of Desert Hot Springs in 2001, Vallejo in 2008, and Stockton and Mammoth Lakes in the past month.”

San Bernardino, Stockton and Mammoth Lakes are not the only cases of city bankruptcy around the nation. Cities like   Harrisburg, Pennsylvania, Jefferson County, Alabama, and Central Falls, Rhode Island are on the same situation. For these cities bankruptcy is a great problem. The jobs in the public sector are threatened so a lot of people could loose their jobs, and also some vital services like the police could loose economic support and employees and would  not be able to fulfill their jobs as they did in the past.

The difference between a company and a city bankruptcy is that companies in this situation have the option to break up, cities do not have this option because this would be unconstitutional, so they must find another solution.

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New York, U.S.A. – Mortgage rates moved slightly the week of July 19, with the average rate on the benchmark 30-year fixed mortgage rate ticking higher to 4.25 percent, according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.39 discount and origination points.

To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/.

The average 15-year fixed mortgage rate was down modestly to 3.42 percent, while the jumbo 30-year fixed mortgage held at 4.77 percent. Adjustable mortgage rates were also mixed, with the average 5-year ARM inching higher to 3.15 percent and the 10-year rate slipping to 3.66 percent.

The movement in mortgage rates has tempered in the past two weeks, following a run-up from the February lows. The better tone of economic data and the decreased likelihood of any additional stimulus from the Federal Reserve are now baked into the current level of rates. Going forward, it will take either faster job growth indicative of further strengthening in the economy, or a disappointment in corporate earnings and consumer spending that renews worries about the economy, to drive rates decidedly in one direction or another. Mortgage rates are closely related to yields on long-term government bonds.

The last time mortgage rates were above 6 percent was November 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.25 percent, the monthly payment for the same size loan would be $983.88, a difference of $258 per month for anyone refinancing now.

Survey results

• 30-year fixed: 4.25% — up from 4.23% last week (avg. points: 0.39)
• 15-year fixed: 3.42% — down from 3.44% last week (avg. points: 0.4)
• 5/1 ARM: 3.15% — up from 3.14% last week (avg. points: 0.34)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. The majority of the panelists, 77 percent, expect mortgage rates to move higher in the coming week. Just 15 percent forecast a decline in mortgage rates, and 8 percent predict mortgage rates will remain more or less unchanged in the next seven days.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI.

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During this year’s State of the Union speech in January, President Obama announced the creation of a special unit of prosecutors and state attorney generals which would investigate abusive lending and packaging of risky mortgages. President Obama stated: ”This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.” Yet no significant results have been announced by the task force and no criminal charges have been filed against any top financial institution executive.

Two of Americans’ most important banks, Wells Fargo and Bank of America, have already agreed to pay large amounts of money to compensate for their discriminatory practices, but these damages do not seem to be enough to convince them to discontinue these practices.

In a speech in September 2008, when Barack Obama was only a presidential candidate, he declared: “The era of greed and irresponsibility on Wall Street and in Washington has led us to a financial crisis as serious as any since the Great Depression. The lack of oversight in Washington and on Wall Street is exactly what got us into this mess in the first place.” Some thought this meant the government could enforce a more aggressive policy against Wall Street.

Bank of America acquired Countrywide Financial in 2008, but this  acquisition had a negative impact. The New York Times explains that, “In December 2011, the Justice Department announced that Bank of America had agreed to pay $335 million to settle allegations that Countrywide discriminated against black and Hispanic borrowers during the housing boom. This was the largest residential fair-lending settlement in history.” But no criminal charges were filed against any executive of the company.

US Attorney General Eric Holder stated: “The settlement provides $335 million in compensation to victims of Countrywide’s discrimination during a period when Countrywide served as one of the nation’s largest single-family mortgage lenders and originated more than 4 million residential mortgage loans.”

Bank of America denied their responsibility in this issue, one of their spokesman’s Dan Frahm said that “we reached this settlement to resolve issues about Countrywide’s alleged historic practices that occurred before Bank of America acquired the company.  Bank of America’s practices are not at issue.”

Angelo Mozilo, Former Chief executive of Countrywide Financial, had been investigated in Los Angeles by federal prosecutors, who, after two years of investigation, dropped the case after concluding that Mr. Mozilo did not engage in criminal conduct while directing Country Wide Financial.

Just a few weeks ago the Department of Justice announced that Wells Fargo had agreed to pay $175 million to settle allegations that it discriminated against minority borrowers (Hispanic and African-Americans). The economic compensation the bank has agreed to give does not seem like a lot of money compared to their second quarter profits which are $4.6 billion.

The Department of Justice accused Wells Fargo for charging higher mortgage rates and fees against African-American and Latino customers, and the bank agreed to pay $175 million to settle allegations. But like Bank of America, Wells Fargo denied any wrongdoing and no executive from the company was taken to Court.

Assistant Attorney General for the Civil Rights Division Thomas Perez declared that “this is a case about real people – African American and Latino – who suffered real harm as a result of Wells Fargo’s discriminatory lending practices.” The Assistant Attorney General explained that “”if you were African-American or Latino, you were more likely to be placed in a subprime loan or pay more for your mortgage loan, even though you were qualified and deserved better treatment.”

Mike Heid, president of Wells Fargo Home Mortgage, said in a statement that “Wells Fargo is settling this matter because we believe it is in the best interest of our team members, customers, communities and investors to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country’s housing recovery.”

So would seem hope is fading for those who believed that President Obama would be the one to finally end discriminatory practices in the banking industry. None of the banks accused have accepted any wrongdoing and they only accepted the economic compensation to avoid contested litigation, but no criminal charges have been filed.

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Alexandria, U.S.A. — On July 18, State Budget Solutions (SBS), a nonprofit organization advocating for fundamental reform of state finances, released a groundbreaking report on the true scope of the state and local public pension crisis. The SBS analysis found that the average public employee pension plan is only 41 percent funded while total unfunded liabilities as of 2011 are at least $4.6 trillion.

“State Budget Solutions’ pension study shows that our country is trillions of dollars in debt, and this is a hole that will overtake local and state governments if immediate action is not taken,” said Bob Williams, President of State Budget Solutions. “There is no option for status quo or incremental adjustments. Drastic reforms, innovations and political courage are needed to put our states and municipalities back on the path to fiscal survival.”

Recent reports have claimed that pensions were only underfunded by $885 billion as of 2010. That number was calculated with accounting guidelines of the Governmental Accounting Standards Board (GASB). However, GASB ignores accounting standards used by economists requiring that assumed return on pension fund investments be based on the fact that pension benefits are guaranteed. Public pension funds calculate future debt based on politicians’ guesses about how much investments will earn and grow. Current GASB pension accounting standard follow that practice, and new standards set to go into effect by 2015 modify it.

Taxpayers must make up any difference between pension fund investment performance and promised benefits. However, governments do not have to include pension debt in their budgets.

State Budget Solutions’ report uses fair market value and risk-free investment returns to determine that the actual unfunded liabilities are $4.6 trillion. That more accurately reflects the value of promised benefits taxpayers must fund whether investments perform or not.

“Failing to understand the scope of the pension crisis sets taxpayers up for a bigger catastrophe in the future. Without government action, states, counties, cities and towns all over America will go bankrupt. That means essential public services must be cut, dedicated government workers laid off, disrupting or eliminating public health, safety and education,” said Williams. “It is vital to reform public pensions now. Real reform must be based on actual numbers instead of the optimistic outlook presented by using unrealistic assumptions.”

The calculations were done by Andrew G. Biggs, a former principal deputy commissioner of the Social Security Administration, associate director of the National Economic Council and director of research at the Congressional Institute. He has a doctorate from the London School of Economics and now is a resident scholar at the American Enterprise Institute.

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New York, U.S.A. – In the new issue of Philanthropy Management, a panel of experts from the philanthropic sector agreed that charitable giving is often hampered by misdirected government tax policies.

Sam MacDonald, charity taxation expert for Farrer & Co., a London-based law firm, told Philanthropy Management, “There’s a point where the logic of taxing charities falls down. Taxing the assets of a legitimate charity takes money from a public good and recycles it to deliver what is purportedly another public good. It can be difficult to see what benefit has been achieved.”

Government taxation of charities tends to reduce the philanthropic sector’s ability to address social needs that are often not covered by government, according to Richard Schwartz, Philanthropy Management‘s editor. “This calls into question the ability of tax authorities to assess the consequences of their policies,” he commented.

The panel considered the position shared by Stanford University’s Robert Reich that charitable giving is a form of consumption and should be taxed as such. Schwartz and other panelists questioned this thinking, noting that it equates consumption with activities that can contribute to, and strengthen, society.

Members of the panel observed that the US and UK have consistently enjoyed a high level of giving, according to a Charities’ Aid Foundation study. Perhaps not coincidentally, they also offer the most generous tax relief among developed nations. Germany was mentioned as an example of a country that offers minimal tax relief and has a much lower degree of giving as a percentage of GDP.

Panelist David Altschuler, chairman of the Board of the One to One Children’s Fund, suggested that government services and philanthropy are not mutually exclusive. “Somehow we need to find a way to work more closely together, whether fiscally or in partnership,” he said. Charles Keidan, director of the Pears Foundation, concurred that there is no reason why public-private partnerships shouldn’t exist, but cautioned that nonprofits should not undertake initiatives that are “the proper role of government.”

About Philanthropy Management

Philanthropy Management, an Asset International publication, focuses on the financial, operational and strategic services provided to foundations, endowments and other large-scale grant makers by banks, asset managers and other professional advisors. Edited by Richard Schwartz, it is distributed globally to more than 11,000 senior executives within the largest grant making entities in the Americas, Europe, Asiaand Middle East, including foundations and endowments, family foundations and family offices.

Philanthropy Management aims to provide philanthropic institutions with a broader and more refined range of tools, resources and research to measure their own success and the impact of the advisors they use. Please visit philanthropy-management.com.

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San Francisco, U.S.A. — Visa, MasterCard and U.S. financial institution defendants have signed a memorandum of understanding to enter into a settlement agreement to resolve the Class Plaintiffs’ claims in the multi-district interchange litigation (MDL). The claims originally were brought by a class of U.S. retailers in 2005.

Visa also has reached an agreement in principle to resolve the claims brought against Visa by a group of individual retailers (the Individual Plaintiffs) in the same MDL litigation. The proposed settlement payments for both the Class and Individual claims would be approximately $6.6 billion, of which Visa’s share would represent approximately $4.4 billion. Visa’s share will be paid from the litigation escrow account established pursuant to Visa’s Retrospective Responsibility Plan. More information on the plan is available in the Company’s filings with the Securities and Exchange Commission at www.sec.gov.

The settlement agreement with the Class Plaintiffs includes, among other terms:

• A comprehensive release from participating class members for liability arising out of claims asserted in the litigation, and a further release to protect against future litigation regarding interchange and the other U.S. rules at issue in the MDL litigation.
• Distribution to class merchants of an amount equal to 10 basis points of default interchange across all credit rate categories for a period of eight consecutive months, which otherwise would have been paid to issuers and which effectively reduces credit interchange for that period of time. This effective reduction will be distributed by a process designed to ensure that all class retailers, large and small, are able to receive the reduction. The eight-month period for the reduction would begin within 60 days after completion of the court-ordered period during which individual class members may opt out of this settlement, or approximately mid-2013.
• Modifications to Visa’s rules to permit retailers to impose a surcharge on credit transactions subject to a cap and a level playing field with other general purpose card competitors. The rule changes on surcharging likely would be implemented in early 2013.
• Agreement that Visa will meet with merchant buying groups that seek to negotiate interchange rates collectively (e.g., independent drug stores). Visa retains discretion to accept or reject a proposal based on whether the Company believes it is commercially reasonable.

For the quarter ending June 30, 2012, Visa intends to record a litigation charge of approximately $4.1 billion, which will increase its total FAS 5 reserve for the litigation covered by the Retrospective Responsibility Plan from $285 million to approximately $4.4 billion, to reflect the Class Plaintiffs’ Settlement Agreement and management’s current estimate to resolve the Individual Plaintiffs’ claims.

Additional information about these settlements can be found on Form 8-K filed with the U.S. Securities and Exchange Commission and available at www.sec.gov, as soon as accepted and processed by the SEC.

“We believe settling this case is in the best interests of all parties,” said Joseph W. Saunders, Chairman and Chief Executive Officer of Visa Inc. “We are comfortable with the terms, which we do not anticipate will impact our current guidance. Visa is well positioned to help drive the migration to electronic payments in the U.S. and globally.” Consistent with commitments Visa made at the time of its restructuring, the settlements are subject to approval by Visa USA voting members representing two-thirds of membership proportion.

“This agreement should remove the distraction of litigation for all parties,” said Joshua R. Floum, General Counsel of Visa Inc. “We will go forward with a focus on helping retailers grow their businesses and providing them with efficient and valuable payment options.” Visa remains in a “quiet period” which will extend until the Company’s fiscal third quarter 2012 earnings are released on July 25, 2012.

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Houston, U.S.A. — The night of July 11, following a month of protests and one-day strikes across the city of Houston, hundreds of Houston janitors walked off the job in the first city-wide janitors’ strike since 2006. The janitors have called the strike to protest employer’s malicious conduct. With hundreds of striking workers already rallying in downtown Houston, the strike is expected to escalate and could possibly spread to other cities.

Cleaning contractors have begun using healthcare coverage as another tactic to intimidate and threaten workers. Three contractors – Pritchard, Aztec and Eurest – have stopped making contributions to the workers’ health and welfare fund. Meanwhile, two others – GCA and ISS – have stopped withholding worker contributions to the fund, a potential indication that they too plan on not contributing to the health and welfare fund. The net result of this activity has been a sense of panic among the workers that their healthcare coverage is in peril. This morning, SEIU Local 1 filed unfair labor practice charges against each of the cleaning contractors.

Janitors have called a city-wide strike to protest the employer’s conduct in response to workers’ attempt to improve wages and benefits. Janitors kicked off their strike with picket lines outside key downtown buildings last night.

The janitors’ campaign has already generated a great deal of local and national support, including activist and actor Danny Glover, Congressman Al Green (D-TX) and Congresswoman Sheila Jackson Lee (D-TX), NAACP President Benjamin Todd Jealous, among others. Last month, Houston janitor Adriana Vasquez confronted JP Morgan Chase CEO on Capitol Hill, asking him why he denied the janitors cleaning his buildings a living wage, garnering broad national attention.

“Enough is enough,” said Maria Lopez who cleans the Greenway Plaza complex, owned Crescent/Barclays, in Houston. “I work hard every day, cleaning 88 toilets across 11 floors, to support my daughter– I am striking today to stand up for my right to fight for a better life.”

“The story of Houston’s janitors is the story of every hard-working man and woman in this country who has stood up and fought for a better life for their family from the historic Bread and Roses strike to the Flint sit down strikes,” stated Elsa Caballero, Texas State Director SEIU Local 1. “At a moment when our country has begun to confront the staggering implications of income inequality, Houston’s janitors are on the frontline, fighting for justice.”

Houston janitors clean the offices of some of the richest corporations in the world, including profitable corporations like Chevron, Hines, Shell Oil, and JP Morgan. Despite record profits and inflated CEO pay, janitors who clean Houston’s office buildings are paid less than $9,000 a year—less than half the poverty level. And janitors are not alone. About 1 in 5 workers in the Houston area is paid $10 an hour or less, and rates of poverty and food insecurity in the city are steadily climbing. Meanwhile, Houston-based Fortune 500 companies saw their profits increase 30% in the past year.

“I appeal to all people of good will to be in solidarity with the janitors as they seek a modest increase of pay. I appeal to the owners of these magnificent buildings in downtown Houston, the Galleria and Greenway Plaza areas to take up the cause of those who clean their buildings,” Archbishop Joseph Fiorenza, Archbishop Emeritus of Galveston-Houston, said at a recent prayer vigil for the janitors. “Above all, human dignity must be honored and respected as much as we would respect any worker contributing to the welfare of Houston.”

The Houston commercial real estate market is the best performing market in the US in terms of demand. Average commercial rental rates in Houston are higher than rates in Chicago, for example, where janitors are paid more than 3 times much annually as Houston janitors. Even in Detroit—where vacancy rates are higher and rental rates are lower than Houston—janitors are paid more than $2 an hour more than Houston janitors.

“Let’s be clear, we will not stand by in silence while the hard-working men and women who clean some of Houston’s most exclusive, most profitable real estate continue to make poverty wages,” continued Caballero.

Image Courtsy of  SEIU International

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New Haven, U.S.A. — New analysis from Continuity Control suggests that amid the spectacular rise of regulations, half of the nation’s 7,000 community banks are barely surviving today.

Through examination of FDIC data, Continuity Control, a financial technology company built to help community banks and credit unions meet their growing compliance requirements, has determined that the rise in operating expenses for smaller banks is greatly complicating their ability to achieve an acceptable Return on Assets (ROA).

The firm reports that these banks were forced to deal with 157 rule alerts issued in just the last year, 58 of which came down in the last six months. All together, the analysis shows 762 rule alerts were issued by the individual regulatory agencies over the last five years, with hundreds of subsequent updates.

Continuity Control has added more than 100 new controls to its platform since the beginning of the year in effort to help community financial institutions keep pace.

According to Andy Greenawalt, the firm’s Co-Founder and CEO, the costs attached to the rise of regulatory requirements are pushing the majority of community banks to a ‘compliance tipping point.’

“Without a dramatic improvement in efficiencies for handling regulatory compliance or a sudden drop in regulations, we could see 2,000 bank failures across the U.S. over the next few years,” said Mr. Greenawalt. “I believe the community banking industry, which serves as the backbone of communities across the country, is under real threat.”

Continuity Control’s analysis of FDIC data also indicates that a “broad swath” of the worst performing banks must move quickly to reengineer their operations to function with reduced overhead and an efficient regulatory operations platform.

“With a new plan of attack and the right technology, executives willing to make hard choices about change can improve their banks’ efficiency ratios,” says Mr. Greenawalt, “to the point that they’re competitive with the megabanks. A necessary element of that improvement will be the ability to operate in this complex regulatory environment with minimal overhead.”

The only complete compliance platform for community financial institutions, Continuity Control was recognized as one of the five most interesting companies in financial services at FinovateSpring 2010 and recently named among the “10 Tech Companies to Watch” by Bank Technology News.

Image Courtesy of  I-5 Design & Manufacture

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London, United Kingdom — June proved to be a bullish month for stock markets, with investors buying back into the market after three previous months of declines as Central Banks looked to stimulate a slowing global economy.

In June, the FTSE 100 gained 251 points or 4.7%. However, having hit resistance at the 5700 level at the end of last week, will the FTSE’s charge start to run out of steam? By close of play in the UK on Friday (July 6), all the major indices were firmly in the red, with the Dow Jones leading the way as it fell by over 150 points (over 1%) by 4.40pm (BST). Major indices in the UK and Europe recorded falls too, with the FTSE 100 shedding 30 points and Germany’s DAX 30 sliding by over 125 points to close the week at 5662.6 and 6410.1 respectively.

Luckily for some, spread betting is a viable alternative to conventional trading, making it possible for traders to profit from rising as well as falling markets – an excellent option during volatile market conditions such as the present.

More falls expected this week?

Last Friday’s dip in market sentiment was caused largely by the release of worse than expected non-farm payroll data in the US, which showed the country’s unemployment rate remaining unchanged at 8.2% in June but the number of new jobs was disappointing, with a total of 80,000 new payrolls being added to the economy against expectations of 90,000. Private payrolls also failed to recover, adding just 84,000 jobs against expectations of 102,000.

In the UK, meanwhile, the Barclays Libor scandal continued to fray nerves after the Serious Fraud Office launched an official investigation into the rate-fixing controversy.

Globally too, sentiment was sombre, with International Monetary Fund chief Christine Lagarde revealing that the IMF will be revising its growth forecast for the global economy lower from the current 3.5%.

With spread betting, it is possible to profit irrespective of whether the markets are moving up or down, meaning that traders can net a profit even when markets are on the decline.

All you have to do is determine whether you expect market prices to rise or fall in the coming days. If  prices are expected to rise, one should take a long position and if the prices are expected to fall, one should go short.

Spread betting is a leveraged product which can result in losses greater than the initial deposit. Individuals should be sure that they fully understand the risks.

*Spread betting is exempt from UK stamp duty and Capital Gains Tax (CGT). However, tax laws are subject to change and depend on individual circumstances.

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Washington, U.S.A. — Housing market confidence among Americans continues to trend in a positive direction despite stalling optimism about the economy and personal finances, according to results from Fannie Mae’s June 2012 National Housing Survey. Results indicate flattening economic trends may be contributing to waning consumer expectations about their personal financial situation. Nevertheless, Americans’ continued positive sentiment about housing appears to remain buoyed by low house prices and interest rates at historically low levels.

“While consumers remain cautious about the general economy, their attitudes toward the housing market continue to improve,” said Doug Duncan, senior vice president and chief economist of Fannie Mae. “Although this positive trend may be short-lived if the general economy falters, one might ask whether consumers are increasingly seeing the current environment as a unique opportunity to buy a home while home prices remain depressed, rental costs are increasing, and interest rates are near historic lows.”

Respondents expect home prices to increase 2 percent in the next year, on average, and 35 percent of Americans say that home prices will go up in the next twelve months (also the highest level recorded since the survey began in June 2010). In turn, the share of consumers who say they would buy if they were going to move increased by 6 percentage points this month (the highest level seen in the survey’s two-year history).

At the same time, 36 percent of Americans think the economy is on the right track (down 2 percentage points since May) and 57 percent think the economy is on the wrong track (up 1 percentage point). The percentage of respondents who expect their financial situation to remain the same over the next year dropped by 4 percentage points from last month to 42 percent, while only 18 percent say their household income has improved (also down 4 percentage points).

Survey highlights

Homeownership and Renting:

• Average home price expectation hit 2.0 percent this month, a 0.6 percent increase from May and the highest value recorded since the survey began in June 2010.
• Thirty-five percent of respondents say that home prices will go up in the next 12 months, the highest level recorded since the survey’s inception.
• Thirty-seven percent of those surveyed think mortgage rates will go up in the next 12 months, a 4 percentage point decrease from last month.
• The percentage who say it is a good time to buy increased slightly to 73 percent, matching the highest level recorded since the survey began two years ago, while the percentage who think it is a good time to sell remained at 15 percent.
• On average, respondents expect home rental prices to increase by 4.0 percent over the next 12 months, generally steady since May.
• Forty-eight percent of respondents think that home rental prices will go up in the next 12 months, while 5 percent think they will go down.
• Sixty-nine percent of respondents said that they would buy if they were going to move, a 6 percentage point increase from last month and the highest level recorded since the survey’s inception.
• The percentage of respondents who would rent decreased from 32 percent to 27 percent, the lowest number to date.

The Economy and Household Finances:

• The upward trend of confidence that the economy is on the right track stalled this month, leveling at 36 percent.
• The percentage of respondents who expect their personal financial situation to stay the same over the next 12 months decreased by 4 percentage points to 42 percent, while those who expect their situation to get better steadied at 43 percent.
• Eighteen percent of respondents say their household income is significantly higher than it was 12 months ago, a 4 percentage point decrease and the lowest value seen since November 2011.
• Household expenses remained stable this month, with 55 percent reporting that their expenses stayed about the same as they were 12 months ago.

The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,001 Americans via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence.

Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.

The Fannie Mae Monthly National Housing Survey site has detailed findings from the June 2012 survey, as well as a podcast providing an audio synopsis of the survey results and technical notes on survey methodology and questions asked of respondents associated with each monthly indicator. Also available on the site are quarterly survey results, which provide a detailed assessment of combined data results from three monthly studies.

The June 2012 Fannie Mae National Housing Survey was conducted between June 4, 2012 and June 21, 2012. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

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Princeton, U.S.A. — A recent ORC International survey of American adults has found that awareness of the Occupy Wall Street movement is unchanged since the intense media coverage of the movement’s events through fall and winter of 2011 but that support for the movement has declined.

ORC International updated a series of questions about Occupy Wall Street asked in late 2011 and found that seventy-one percent of Americans remain aware of the movement, even while media coverage has significantly declined. Protesters have largely dispersed from the parks and fronts steps of the world’s financial capitals.

The continued awareness is in part to the ongoing social dialogue that continues by both supporters and protesters of the movement. According to ORC’s social analytics product, Social Buzz, Occupy Wall Street conversations continue to steadily appear with an average of 156,000 posts daily in the social universe since mid-December. This is mostly driven by specifically timed events including the six month anniversary to re-occupy Zuccotti Park in New York City on March 17-18, mass arrests on March 22, and a May Day Protest.

Overall agreement with the movement’s position regarding the financial inequities continues to hold steady at thirty percent since the fall, however, those who disagree has risen seven percentage points to twenty-eight percent over the past six months.

While levels of coverage in both social media and traditional media have varied, the combination has continued to keep this movement in front of the American public. Long-term sustainability of the movement, however, remains a question.

The poll was conducted using ORC International’s CARAVAN service from June 9-11, 2012. The poll interviewed 1005 US Adults by telephone.

ORC International is a leading global research firm with offices across the U.S.A., Europe and Asia Pacific. The company has been a partner of CNN on the CNN/ORC International poll since 2006 and is a founding member of the CASRO.

Image Courtesy of  Atomische • Tom Giebel

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New York, U.S.A. – Nearly six in ten Americans (59%) have cut back on non-essential spending since the beginning of 2012 due to high gasoline prices, according to new research released on May 21st 2012 by Bankrate.com.

“Despite the fact that oil prices are currently near six-month lows, consumers are still clearly feeling the impact of elevated gas prices in an environment of stagnant wages,” said Greg McBride, CFA, Bankrate.com’s senior financial analyst.

As of April 30th (just before the data was collected), the national average price for a gallon of regular gasoline was $3.83. In May 2011, when the national average price for a gallon of regular gasoline was $3.96, Bankrate.com found that 63% of American households were cutting their non-essential spending due to high gas prices.

Bankrate.com also released its May 2012 Financial Security Index results today. For the first time since polling began in Dec. 2010, the index registered greater than 100, meaning that consumers are feeling better about their financial security than 12 months prior for the first time. Consumers are feeling better relative to one year ago in four of the index’s five categories: job security, debt, net worth and overall financial situation. Savings is the lone sore spot, with consumers that are less comfortable with their savings outnumbering those that are more comfortable by a margin of greater than two to one.

Additional Details:

• Job security: Consumers have felt more secure in four of the past five months
• Debt: The reading only changed slightly from one month ago, and consumers have felt more comfortable in three of the past five months
• Net Worth: Only one in five Americans report lower net worth than one year ago, a new low; half say their net worth is “about the same” as last year
• Overall Financial Situation: Consumers’ feelings have improved in six of the past seven months

The new survey was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here.

The PSRAI May 2012 Omnibus Week 1 obtained telephone interviews with a nationally representative sample of 999 adults living in the continental United States. Telephone interviews were conducted by landline (599) and cell phone (400, including 187 without a landline phone). Interviews were done in English by Princeton Data Source from May 3-6, 2012. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.6 percentage points.

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New York, U.S.A. – Bankrate.com’s monthly Financial Security Index hit a new high of 99.9 in April 2012, surpassing the previous high-water mark of 98.5 that was last recorded in May 2011 (the polls began in Dec. 2010). Americans’ attitudes regarding their net worth and overall financial situation also reached new highs this month. Sentiment regarding savings improved for a fifth consecutive month, and Americans’ comfort level with debt is at its highest point since June 2011.

Despite these positive developments, Americans are still wary of investing in stocks. The poll found that 76% of Americans are not more inclined to invest in the stock market despite near record low savings rates, and merely 18% of Americans are more inclined to invest in stocks today. Another soft spot is job security: 22% of Americans reported less job security than one year ago versus 20% that reported better job security.

“Overall, there are several positives that can be taken from this month’s report,” said Greg McBride, CFA, Bankrate.com’s senior financial analyst. “Americans are feeling better about the money they have in the bank and in their investment portfolios, and they’re also feeling better about what they owe. However, job security is still a pain point, and there are plenty of reasons to worry that we might be headed into a third straight weak summer for the economy. The trouble spots include jobs, high gas prices, the ongoing European debt crisis and more.”

A reading of 100 is considered the Financial Security Index’s baseline; any reading above 100 indicates improving financial security compared to one year ago, while any reading below 100 indicates decreasing financial security compared to last year.

Here are more details regarding the components of the Financial Security Index:

Overall Financial Situation

• Consumers’ feelings about their overall financial situation hit a new high, with 29% saying their overall financial situation is better today than it was 12 months ago, compared to 26% saying it is now worse.
• Those under age 50 are more likely to report a better overall financial situation, while those age 50 and up are more likely to report a worse financial situation than one year ago.

Net Worth

• With the stock market near four-year highs, more consumers report higher net worth compared to one year ago than at any time since polling began in Dec. 2010.
• Twenty-nine percent report higher net worth versus 23% that report lower net worth.
• Households with income of $50,000 or more are the most likely to report higher net worth than last year.

Savings

• The margin between those feeling worse about their savings and those feeling better about their savings has been nearly cut in half since Dec. 2011.
• Those under age 30 tend to be more comfortable with their savings, and those age 50 and up tend to be less comfortable with their savings compared to other age groups.

Debt

• Americans’ comfort level with debt is at its highest point since June 2011.
• More consumers report being more comfortable with their debt than less comfortable.
• Households with annual income of $50,000 or higher are more comfortable than other groups, while households with income under $30,000 are less comfortable.

Job Security

• Job security slipped following the disappointing March jobs report that was released on April 6.
• Only one in five (20%) Americans say they are more secure in their jobs compared to last year; 22% are less secure.

Investing in Stocks

• Those under age 30 are only slightly more inclined to invest in the stock market than the overall average (23% versus 18%), despite having the luxury of a long time horizon and having a greater burden of retirement savings than any previous generation.

The new study was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here: http://www.bankrate.com/finance/consumer-index/financial-security-poll-0412.aspx.

The PSRAI April 2012 Omnibus Week 1 obtained telephone interviews with a nationally representative sample of 1,000 adults living in the continental United States. Telephone interviews were conducted by landline (600) and cell phone (400, including 191 without a landline phone). Interviews were done in English by Princeton Data Source from April 5-8, 2012.

Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.6 percentage points.

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Wells Fargo and U.S. Bank have let foreclosed homes in black and Latino neighborhoods lapse into disrepair, while bank-owned homes in mainly white neighborhoods are better cared-for, according to housing advocates.

The National Fair Housing Alliance, a non-profit group, brought a formal complaint to the Department of Housing and Urban Development last week alleging that Wells Fargo violated the Fair Housing Act by failing to keep up homes in minority neighborhoods. Today, the group announced they are also filing a second complaint, against U.S. Bank.

Earlier this month, the group released a survey, which was funded in part by HUD, of more than 1,000 unoccupied, foreclosed homes across the country owned by unspecified banks. When a house is foreclosed upon, the bank that takes it over is responsible for maintaining it. The report cites evidence 2014 photos and interviews with neighbors 2014 showing houses becoming dilapidated under banks’ watch.

The complaint against Wells Fargo claims that among more than 200 homes surveyed, those in black and Latino neighborhoods were much more likely to have yards filled with trash, broken doors, damaged windows, and other signs of neglect. Fewer homes in those neighborhoods had “for sale” signs visible. For example, 68 out of 149 homes in black and Latino neighborhoods had damaged roofs, compared to only nine out of 69 properties in white neighborhoods.

The study looked at homes owned by Wells Fargo in Washington D.C., Baltimore, Philadelphia, Dallas, Miami, Atlanta, Oakland, Calif., and Dayton, Ohio.

A spokeswoman for Wells Fargo said in an emailed statement that the bank “conducts all lending-related activities in a fair and consistent manner without regard to race: this includes maintenance and marketing standards for all foreclosed properties for which we are responsible.” She also said that the bank has a dedicated department that maintains and markets foreclosed properties from loans that are within its portfolio. Since the complaint did not identify specific properties, she said, Wells Fargo has not been able to investigate its claims.

U.S. Bank did not immediately respond to our request for comment, and a spokesman for HUD declined to comment on the complaint.

The report also pointed out that there were simply fewer bank-owned foreclosed properties in white neighborhoods than in minority neighborhoods, an indication, it says, of the fact that African-American and Latino communities were disproportionately affected by the subprime mortgage crisis.

Numerous studies have shown that lenders targeted minorities for the riskiest loans, and often charged them more than similarly qualified white borrowers. A report from the Center for Responsible Lending found that black and Latino homeowners were twice as likely to lose their homes to foreclosure than white homeowners.

(The center was started with support from the Sandler Foundation, which is also the major funder of ProPublica.) In the biggest settlement to come out of the government post-bubble investigation of discriminatory lending practices, lender Countrywide (now owned by Bank of America) agreed to pay $335 million to settle a Department of Justice suit.

Nationally, banks or investors own roughly half a million foreclosed homes, and the Federal Reserve estimates this will increase to 1 million this year. Some banks and investors are looking to unload the properties en masse. Fannie Mae and Freddie Mac, who own about half the properties, are piloting a program for bulk sales of their foreclosed properties that requires they be offered as rentals. Other lenders are turning into landlords themselves.

by Cora Currier ProPublica, April 16, 2012, 5:10 p.m.

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The U.S., Japan and Australia are expected to escape recession over the next 12 months, with the U.S. economy now expected to expand by 2.9 percent over the period, according to the Spring Outlook report from Mellon Capital Management Corporation, part of BNY Mellon Asset Management.

Excluding the U.S., Japan and Australia, most developed countries are expected to experience a mild recession over the next year, with European countries at the highest risk, the report said.

“The U.S. economy is continuing to strengthen and we now put the probability of anemic U.S. growth at less than five percent,” said Lex Huberts, president of Mellon Capital. ”This is a significant improvement from September, when the probability was closer to 20 percent that the U.S. economy would grow at less than two percent over the next year.”

Mellon Capital generates its own proprietary measure of leading economic indicators (LEI), with an LEI level of slightly less than 100 indicating, in Mellon Capital’s view, a significant probability of a mild economic contraction.  All major developed countries except the U.S., Japan and Australia currently have readings below 100.  Southern peripheral countries in Europe have the lowest LEI, but France, Great Britain and Germany also appear weak, all below 99, signaling the likelihood of at least a mild recession, according to the report.

“Looking at our forward estimates of economic fundamentals, we are cautiously optimistic on stocks given the signs of economic recovery in the U.S., positive steps toward resolving the euro area debt crisis and the general stabilization of earnings forecasts in Europe,” said Huberts.  “However, tensions with Iran are a concern.”

The report also notes that Mellon Capital is moderately positive on commodities, favors emerging markets equities and favors the Australian dollar and Canadian dollar among developed market currencies at this time.

Gabriela Parcella, chief executive officer of Mellon Capital, said, “We are seeing growing interest in our global asset allocation and alternatives strategies as institutions increasingly recognize the opportunities for investing in the current economic environment.”

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