Saturday, February 7, 2009

Weekend Reading

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Stories below I did not have time to get to during the week - peruse at your leisure if any are of interest...

NYT: Welfare Aid Isn't Growing as Economy Falls Off

Despite soaring unemployment and the worst economic crisis in decades, 18 states cut their welfare rolls last year, and nationally the number of people receiving cash assistance remained at or near the lowest in more than 40 years.

Michigan cut its welfare rolls 13 percent, though it was one of two states whose October unemployment rate topped 9 percent. Rhode Island, the other, had the nation’s largest welfare decline, 17 percent.

The program’s structure — fixed federal financing, despite caseload size — may discourage states from helping more people because the states bear all of the increased costs. By contrast, the federal government pays virtually all food-stamp costs, and last year every state expanded its food-stamp rolls; nationally, the food program grew 12 percent.


The Daily Beast: Why I'm Selling My Virginity (hey, it's finance related - it's an economic transaction)

They say you should value having sex for the first time. That's why I'm auctioning my virginity online - and the bidding is up to $3.8 million.


USA Today: Federal Payrolls Keep Growing Despite Downturn

Companies are cutting jobs by the tens of thousands. State and local governments are penny-pinching, too. So what about Uncle Sam? Tough times for him as well? Not exactly. In fact the number of federal workers is on the rise.

"All of a sudden, it's a much older clientele calling up saying they're interested in government work because they lost their jobs, their companies merged, their companies went bankrupt and they're looking for stability," said Ross Harris, sales and marketing director for the site. "The perception is that federal work is more stable — that there aren't as many layoffs."


The Big Money/Slate: Fighting Over Money - What CNBC Has in Common with Professional Wrestling. I love this piece, it is so dead on - the screaming and "conflict" on this channel along with the historical cheerleading has really been a let down. But that's cable TV - yelling and conflict sells.

The recession makes everyone tense, but nowhere does that tension seem to break out as regularly as it does on CNBC, where frustration and recriminations over fraud, risk, and lost trillions repeatedly roll into a boil-between the on-air talent.

The constant carping, acting out, and cartoonish behavior has been anything but bad for CNBC's brand. In fact, it is part of a conscious strategy to take what was once a staid place where the markets themselves starred and turn it into a free-for-all with heroes and villains and a running back story sort of like professional wrestling.

The daily diet of shouting and good-natured trash talking looks less like wrestling than football or, at least, any given weekend's coverage of football. In fact, CNBC's programming day is a bit like Super Bowl Sunday. Squawk Box is the pregame show, Power Lunch handles the half-time entertainment, and Fast Money is the postgame strut in which players trade war stories and chest bumps and constantly try to one-up each other.


WSJ: Nations Rush to Establish Trade Barriers. As predicted... humans are humans.

Countries grappling with global recession have enacted a wave of barriers to world commerce since early last month, scrambling to safeguard their key industries -- often by damaging those of their neighbors.

The European Union has warned the U.S. that proposed "Buy American" provisions in planned stimulus spending could break trade rules. Meanwhile, EU nations have reversed direction and tightened their own trade rules, for instance by resuming subsidies to dairy farmers' exports and effectively barring Chinese screws and bolts from their market, while accusing China of dumping them below cost.

The U.S. is planning retaliatory tariffs on Italian water and French cheese to punish the EU for restricting imports of U.S. chicken and beef. India is proposing to increase tariffs on foreign steel at the request of its steel industry.

Economists and trade analysts say the current rash of trade constraints could make it harder for global economic growth to recover from the current downturn. Global trade is expected to shrink by more than 2.1% this year after growing by 6.2% in 2008, according to the WTO.


Reuters: Models are Going for Half Price. Models of what you ask? The human kind. Even in Milan! The horror. (I love the quote at the end - the priorities in this world are awesome)

But at the haute couture shows in Paris, the leggy blondes in silk dresses who advertise a life of luxury are finding their world turned inside out by the economic crisis. "Half price! It's half-price everywhere, in Milan, even in New York," cried Anna Chyzh, a 23-year-old from Kiev who had just changed out of a Stephane Rolland haute couture gown into jeans and was headed to the next show.

She put her degree in political science on hold a year ago to work full-time and shares part of her fees with her family. "There is still more money in this than almost any other job. I earn more than my parents -- it's kind of sad, they went to school and have worked for years," she told Reuters.


Reuters: 9 Year old Whiz Kid in Signapore Writes iPhone Application

While most children his age sketch on paper with crayons, nine-year old Lim Ding Wen from Singapore, has a very different canvas -- his iPhone. Lim, who is in fourth grade, writes applications for Apple's popular iPhone. His latest, a painting program called Doodle Kids, has been downloaded over 4,000 times from Apple's iTunes store in two weeks. The program lets iPhone users draw with their fingers by touching the iPhone's touchscreen and then clear the screen by shaking the phone.


USA Today: As Recession Ravages their Assets, the Rich Retrench. It is different this time folks.

The rich may not be quite so different than you and me these days: They, too, have less money. Their fortunes have fallen along with the prices of stocks, oil and real estate. Luxury condos on Florida beaches languish; champagne sales are down; private jets sit idle.

Times may be tough for the wealthy, but they're tougher for those who serve and sell to them. "Business may be a bit off this year," allows Doug Turner, president of Millionaire's Concierge in Fort Lauderdale, which offers everything from VIP concert tickets to $13,000 rides in fighter jets for the wealthy. The rich are cutting non-essential items, and that hurts his business. "Everything I sell, you don't need," he says.

And retailers who cater to the wealthy are slashing prices. In tony department stores such as Bergdorf Goodman during Christmas, shoppers could find handbags marked down 40% or more. Big chains such as Saks Fifth Avenue and Bloomingdale's were chopping prices 50% or more. "It was unbelievable," says Faith Hope Consolo, chairman of the Prudential Douglas Elliman Real Estate's retail sales and leasing division. "Luxury never had sales before Christmas before."

In Vail, Colo., the luxury ski resort, lodging occupancy is down over previous years, says Chris Romer, vice president of sales and marketing for the Vail Valley Partnership. But many of the bookings were made at the last minute, in large part because of special offers: lower prices, extra days, free meals.


Bloomberg: Hovnanian CEO Gets Bonus as Company Value Drops 76%. Well not *everything* is different this time. Our cult of CEO situation just never changes.

Hovnanian Enterprises Inc., New Jersey’s largest homebuilder, gave its chief executive officer a 20 percent pay raise in 2008, including an almost $1 million performance bonus, as the company lost three-quarters of its market value.

Ara Hovnanian, who runs the Red Bank, New Jersey-based company his father founded 50 years ago, received compensation of almost $10.3 million last year after getting $8.5 million in 2007, according to a filing with the Securities and Exchange Commission.


USA Today: Many Laid Off Workers Find Health Insurance Out of Reach. Nothing is wrong with the system... nope, not in the richest country on earth. Lose your job, lose your healthcare. Sounds viable. As a certain wing of the political spectrum loves to shrill - these people clearly are just not working hard enough; if they worked harder they would get healthcare.

Most low-income people who lose their jobs are also without health insurance, a report released Friday concludes. A study by the advocacy group Families USA says 54% of the nation's unemployed cannot afford private insurance and also are not covered under Medicaid. The report focuses on middle-class and lower-income workers with annual incomes of about $44,100 for a family of four, or about double the poverty level.

"Most laid-off workers can't afford COBRA coverage and do not qualify for public health safety-net programs," said Ron Pollack, executive director of Families USA. "As a result, millions of middle-class and lower-income workers become uninsured."

In 43 states, Pollack said, Medicaid is simply unavailable for adults who don't have children — unless they are permanently disabled. "Even if those adults are penniless, they are ineligible," the report said.

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