Posted by admin on June 25, 2009 under Jokers..., Uncategorized | 
WASHINGTON (AP) – June. 25,2009 – The Federal Reserve sought Wednesday to defuse fears that the trillions it’s spending to revive the economy could spark inflation later on. But Wall Street didn’t seem to buy it.
Fed Chairman Ben Bernanke and his colleagues said that despite an easing of the recession, the economy remains frail enough to keep inflation at bay.
Fed policymakers held a key bank lending rate at a record low of between zero and 0.25 percent and pledged to keep it there for “an extended period”‘ to help brace the economy. The Fed made no new commitment to expand its purchases of government bonds and mortgage securities, to try to drive down rates on consumer debt. That rattled bond investors who fear the prospect of higher interest rates.
But Wall Street zeroed in on the Fed’s new observations about the risks of deflation and inflation.
Fed policymakers dropped language they had used in the statement at their last meeting in April that the weak economy could trigger deflation — a destabilizing and prolonged bout of falling prices and wages. This also spooked bond investors, who took the Fed’s decision not to mention deflation to mean inflation might arise later.
The Fed acknowledged that energy and other commodity prices have risen recently. But policymakers predicted that idle factories and the weak employment market would make it hard for companies to Read more of this article »
Posted by admin on June 16, 2009 under Uncategorized |
June 11, 2009 – The recession likely will end in September and be followed by a mild recovery, according to the new USA TODAY/IHS Global Insight economic outlook index.
But despite Federal Reserve Chairman Ben Bernanke’s recent talk of the economy’s “green shoots,” few are confident prosperity is near. And the Fed’s “beige book” report released Wednesday, a look at the nation’s regional economies, says that the economy remained generally weak in April and May.
“We’re two to three months away from an upturn,” says Nariman Behravesh, chief economist for IHS Global Insight.
David Wyss, chief economist for Standard and Poor’s, agrees: “We see a bottom in the fall, but there’s a lot of risk attached to that.”
The economic outlook index used to predict the recession’s end is a composite of 11 forward-looking economic and financial indicators that predicts future GDP growth, adjusted for inflation. For each indicator, it uses an average of the latest three months relative to an average over the past year.
Seven of the index indicators were positive in the May report. Three positive signs:
• The interest rate yield curve is steepening. Yields on Treasury securities typically rise from the shorter-term Treasuries to longer-term ones. When the percentage-point difference between long-term and short-term Treasury securities yields increases, it’s a sign that demand for credit is growing – or that the Federal Reserve is keeping short-term rates low. Either way, a steepening yield curve often portends future economic growth.
• Big-ticket item orders are up. In April, orders for non-defense capital goods – durable items used to make roads, buildings or machinery – were up slightly. Orders are still far below year-ago levels, but they are no longer falling dramatically.
• We’re officially in a bull market. Because investors try to forecast corporate earnings 12 to 18 months in advance, stock prices have a very good record of predicting future economic activity. The stock market rose strongly in April and May.
One worry: another financial crisis triggered by the collapse of a major financial institution. Wyss says he’s less worried about U.S. banks than he is about European ones, which have been struggling with loan losses in Eastern Europe.
Because of lingering credit woes for companies, Behravesh thinks the new economic recovery will be sluggish.
“Consumers continue to be cautious,” he says. “We’re not out of the woods yet.”
Copyright © 2009 USA TODAY. All rights reserved.
Posted by admin on June 9, 2009 under Uncategorized |
PANAMA CITY BEACH, Fla. (AP) – June 9, 2009 – The small motel is sandwiched between two sandy yellow towers. The two-story salmon structure often is shrouded in the shade cast by its neighbors, the 25-story yellow and teal Wyndham Vacation Resorts to the west and the 23-story Ocean Reef Condominiums to the east.
A small sign juts out over Front Beach Road; red letters spell “PEEKS” against a blue backdrop.
The “K’’ and the “S’’ lights fade occasionally, leaving the owners with an undesirable alternative to the motel’s actual name.
Peek’s Motel is a throwback to Panama City Beach’s past, a small family owned place like the many that once dotted the shoreline. James and Florence Peek moved from Montgomery, Ala., and opened it in 1953, and their son, Jerry, 55, took over 13 years ago.
But Jerry Peek is in trouble.
His property taxes have soared this decade, and he hasn’t been able to keep up. Peek owes more than $166,000 in back taxes, and if he doesn’t pay by this fall, he probably will lose the motel.
Peek isn’t alone on Bay County’s delinquent tax rolls. Released this month, the rolls are 25 percent larger than they were last year, just another effect of the overheated real estate market that helped to topple Florida’s economy and set off the current global economic crisis.
“It’s reaching the point where I’m about to throw some tea in the bay, and I’m sure I’m not the only one who feels that way,” said Peek, who estimated his business has dropped off 30 percent over the last few years while his taxes continued to spike.
“It’s a slow death spiral,” he said.
The delinquent tax rolls, released every May, list parcels on which taxes are owed for the previous year. There are 10,366 parcels on this year’s rolls, nearly 25 percent more than the 8,389 parcels last year. The rolls, representing almost $21.5 million including penalties and fees, span 76 pages of newsprint.
Bay County Tax Collector Peggy Brannon called the larger list of delinquencies “a sign of the times that is magnified throughout the state” when the list was released earlier this month.
Gadsden County Tax Collector Dale Summerford is the lead collector in the Florida Tax Collectors Association for property tax matters. In April, the association conducted an informal survey that 27 counties responded to, showing increased tax rolls across the state, ranging from 4 percent to as high as 22 percent. None showed increases as high as the 23.6 percent in Bay County.
“This is the worst that I’ve seen it,” Summerford said.
These larger rolls could mean trouble for local governments that count on that money.
“The thing that’s going to be the real telltale proof for the local governments is how successful will the tax certificate sales be,” Summerford said.
The certificate sale is under way on the tax collector’s Web site. Investors, typically representing larger companies, bid on the interest they will receive when the taxes are paid.
The bid is conducted reverse-auction style, starting at 18 percent. The lowest bidder wins and pays the property tax owed plus 3 percent for the certificate, which essentially is a lien on the property. When the property owner pays the taxes, he or she also pays the interest, so the certificate holder gets the tax money back, plus the interest.
Tax certificate sales usually come close to selling out. But like anything else in this economy, they have slowed recently.
Bay County sold all but 148 certificates in 2005, but 361 went unsold in 2006, followed by 771 in 2007, requiring a second auction.
“The money is just not out there for these investment firms to buy those certificates,” said Summerford, who noted investors are shying away from development properties in delinquency. If a developer goes bankrupt, the certificate-holder doesn’t see a return on investment.
Pasco County held its certificate sale earlier this month, and a record $2.6 million in certificates was left over.
“That’s $2.6 million that their local governments will not receive at this time. That’s what we’re concerned about,” Summerford said.
In Bay County, developers take up large chunks of the tax rolls, with lines of properties listed under the same name or limited liability company. Several contacted by The News Herald declined to give their names when describing their problems.
“I’m a building contractor in this economy,” one said when asked why he didn’t pay his taxes. “What else am I supposed to do?”
Another developer put it simpler: “Look, it’s do I pay my taxes, or do I eat?”
Jerry Peek is stocky and tan, with short salt-and-pepper hair and a trim mustache.
“I was pretty much conceived and raised here,” Peek said with a halting chuckle.
Peek hasn’t had much to laugh about lately.
“In all honesty, this place is worth what it was 12 years ago,” Peek said. The 54-room motel broke the $1 million assessment value mark in 2001, when its value was raised to $1,157,285 (an increase of $223,512). Peek paid $16,791 in property taxes that year. But the increases were just beginning.
Peek’s Motel’s assessed value has jumped 517 percent since 2001. The value was hiked from $1.69 million in 2004 to $2.16 million in 2005, stayed the same in 2006, was bumped to $3.9 million in 2007, and topped out at $5.98 million in 2008.
“This part of Florida was discovered in 2004 and 2005, and with all the condo developers coming in, paying premium prices for gulf-front property, it drove up the value dramatically,” Bay County Property Appraiser Dan Sowell said. “We didn’t like it either. We just did what the law mandated that we do. But I can certainly appreciate the difficulty of budgeting for those types of increases.”
Those types of increases are a thing of the past, thanks to Amendment 1, passed by the state Legislature in January 2008, which enacted a 10 percent cap on assessment increases on non-homestead properties. (Homestead properties are already capped at 3 percent). There is legislation that will go on the November 2010 ballot that could drop that cap to 5 percent.
That legislation came too late for Peek, though. As his property value soared, so did his taxes. Peek owed about $50,000 in 2006 and 2007 each, and $65,000 last year. He hasn’t paid any of it, and each year a certificate has been sold on the motel.
If the taxes have not been paid, certificate holders can request an auction of the property after two years to recoup their money. One of the motel’s certificate holders requested a sale in April. A title search is under way to determine if there are any other liens on the property. Once that is complete, the Clerk of Courts office will schedule a sale.
When that sale could happen is unclear because the clerk’s office is swamped with auction requests, which have tripled since last year.
“I have stacks on my desk,” said Rita Kelly, manager of the recording division. “We’ll be very busy.”
Peek is left with some tough choices. He could raise rates, but with sales numbers declining, that might be suicide.
“We’re an old motel; we can’t charge $200 per night,” said Peek, who charges $109 and $119 per night in season. He described his clientele as “old-school.”
“They’re here because they don’t want to go up 21 floors to get to their room. … They’re blue-collar. A lot of our clientele is unemployed right now. They all work at mills, and they’ve seen their hours cut.”
Other options include selling or taking out a mortgage. The latter seems the most likely outcome, Peek said.
“We haven’t had a mortgage on this place in 50 years,” he lamented.
Peek faces the possibility of losing the motel and giving up his dream of passing it on to his son J.R., 29, who helps him run the place. Another problem, with a decidedly larger taxing agency, also clouds Peek’s financial picture.
The IRS says it was underpaid in inheritance taxes when Peek took the motel over for his deceased parents. Peek said he paid $80,000 about four years ago, then the IRS came back saying it was owed $1.2 million.
“It’s just another nail in the coffin,” Peek said. “We’re about to be taxed out of business.”
Copyright 2009 The Associated Press, Will Hobson
WASHINGTON (AP) – June. 25,2009 – The Federal Reserve sought Wednesday to defuse fears that the trillions it’s spending to revive the economy could spark inflation later on. But Wall Street didn’t seem to buy it.
Interesting post from Deal Junkie -
