State tax revenue decline again in the third quarter

The pumpers on CNBC  and the Obama administration may be telling you that the recession is over but tax receipts don’t lie. And the recent report shows that state and local tax revenues fell in the third quarter of 2009 by more than 6.7 percent. What is even worse is this comparison is Year over Year compared with 2008 which means states are actually worse off than they were in 2008 when the economy was falling off a cliff. I know the New Year brings new hope and I would love to see the economy improve as most Americans because we are an optimistic bunch. But as I once heard Joe Saluzzi say “Hope is not a Strategy”.

50% of Americans who enter college never graduate

As the new year approaches I will be diving deeper into the education system in America and where our strengths and weaknesses are. In my post a few days ago I said one of the reason that American students are failing behind is just plain laziness.

This post today briefly looks at the dropout rate for american students which is an astounding 50%. Now, this has been the rate for nearly two decades so this stat is not new, but what is disturbing is why so many people enter college and do not finish. Although the reasons can stem from, students not being mature enough , not getting enough support or guidance I want to focus on the money.

In America our solution to everything seems to be “Throw more money at it”. As the article states President Barak Obama wants to pledge 12 Billion dollars to help students afford community college. It is my contention that one of the main problems for this high dropout rate stems from the creation of the student loan federal aid programs created by Jimmy Carter which guaranteed student loans. Although this was intended to help poor students afford the ”american Dream” colleges and Universities across the country saw this as a blank check to raise tuition fees year after year. From  1979-2009 the average college tuition cost has seen a 200% increase. And these students who dropout are still saddled with the loan debt and no degree. I will have more on this topic in the new year and I will also be introducing my thoughts on the diminishing role of 4 year universities in the future, more technical and trade schools and a new debt crisis that will be looming in the student loan area.

Bankrupt FDIC is currently guaranteeing 6.1 Trillion in bank deposits.

I know, Sheila Blair in her infinite incompetence will continue to go on television and tell the American Public that the FDIC is well capitalized, has guarantees from the Treasury for up to 500 Billion and that no american has ever lost money that the FDIC has insured.

But as you may or may not know the FDIC is broke and a few weeks ago asked the largest U.S. Banks to pay 3 years of insurance totaling 45 Billion in upfront fees. This does not inspire confidence when it is estimated that 300-500 banks will fold through 2010-2012. In addition if you look at the above chart you will see that the FDIC is currently guaranteeing 6.1 Trillion dollars worth of deposits when they have a negative balance! How safe do you really thing your money is?

Initial unemployment claims drop but for the wrong reasons.

The BLS may be reporting that the unemployment rate is falling as they revise and manipulate numbers but the fact of the matter is that the employment claims are going down only through revisions and the fat that people are rolling off the regular unemployment compensation and moving into emergency claims.In Early December the number of Americans on emergency unemployment benefits was an astounding  4.2 million! I expect this number to rise in the coming months as more people use up their regular unemployment benefits and are forced to move to emergency benefits.

More  anecdotal evidence of the lower initial unemployment claims the BLS keeps touting is the fact that many people cannot get through to make the claims. One example can be found here as unemployment claims surge and crash the network in Connecticut as unemployed people try to get through.

As I have said earlier in my unemployment post that I expect unemployment levels to stay in the double digits for the next decade. Although I see a slight improvement early in 2010 it will end 2010 above ten percent (And maybe higher). This is due to the continuing credit contraction that will kill many small businesses in the second half of the year. We shall see.

Bruce Sprinsteen “Santa Claus is coming to town”

The Boss. Merry Christmas !

Why is America failing? Because we have become fat and lazy.

Kara Miller a Babson College professor recently was quoted as saying nearly all of her C, D and F students were Americans while her foreign students from China, India and even Latin America were at the top of the class.

Although not every American student is lazy (I believe the best and the brightest still come from the U.S. even if the numbers are dwindling) the article does raise some interesting points regarding the state of the American Student and what lies in store for America.

Currently more than 60% of all graduates  in computer science and engineering are foreign born students. The reason I bring up these tow fields is because as we head into and ever increasing computer and technically driven world these will be the degrees that afford the lucrative jobs. The liberal arts degrees and humanities degrees will become less important. I will have more on the future of education and the jobs of the future in a future post.

The message is simple, America is losing ground to other nations (Especially Asia and South East Asia) and we need to get hungry again if we want to compete in the 21st century. Or perhaps we have already seen our peak and like the Roman empire (and all empires) we are in our decline. (But I don’t buy that….at least not yet!)

Black teen unemployment hits 50%

In November Black teen unemployment hit an astounding 49.4 percent. That is nearly 5 times higher than the national unemployment rate.

There are many reasons why the employment level for blacks is so much higher than whites. Although the traditional reasons (Racism and prejudice) play a small part this reason is quickly fading into history. The real reason for the high level of black unemployment boils down to education and lack of marketable skills.

In addition (or as a product of lack of education) is the high level of incarceration rates among black men in america which contributed to employers reluctance to higher black  men. I read a few years back (Before the Depression began) that in NYC where I live 50% of ALL black men are unemployed. I can only assume it is even higher now.

I will have more stories on the black and hispanic situation in America in coming posts. For those who think that since we have a black President that Blacks have arrived I will have some eye-opening stats in the coming months.

Larry Summers nearly destroys Harvard, United States is next.

Recently Harvard university had to pay more than 1 Billion dollars to the State of Massachusetts to exit swap agreements that were created in 2004 under Larry Summers tenure at Harvard.

The swaps were bonds for construction loans that locked in a rate of 2.25% and bet on the notion that interest rates would rise. However, as the credit crunch intensified the Federal reserve slashed interest rates to 0%, the value of the bond plummeted and Harvard had to set aside cash.

This is just one of the many foolish things Mr summers has done in his career.I will have more on this fool who says the resession is over in the coming months but  you can read his bio here. The scary thing about all of this is this man who has been wrong on the economy and had made numerous financial blunders is now President Barack Obama’s Chief Economic advisor. Americans should be very afraid.

Shadow housing inventory climbs 55% to 1.7 million

Bloomberg is reporting that housing Shadow inventory because of foreclosure and delinquency climbed about 55 percent to 1.7 million at the end of September. This is no surprise as the HAMP modification efforts begin to fail and go into foreclosure as well as foreclosure moratoriums beginning to expire. 2010 should see an overall increase of foreclosures than in 2009.

Bob Marley Friday “Get up Stand up”

Voted the most influential artist of the 20th century for good reason. The man who put Reggae Music on the map mr Bob Marley.