Vinny’s Blog

So I got really frustrated last 2 days looking at how media is trying to convince people about the market rally and ignoring the writing on the wall. I mean just a few weeks ago FDIC was hiring staff because they expect some banks to fail.

The federal government is gearing up for a wave of bank failures. The FDIC is now hiring people out of retirement who were around during the last wave of failures 20 years ago. They’re the only ones who have any experience with how to handle the coming failures! Note that Clark said coming, not expected.

check this out it’s an interesting post (http://www.ajc.com/money/content/shared/money/stories/clark/0708/080226banks.html) and just remember you only have $100,000 worth of FDIC insurance. I don’t think it’s going to happen to a big bank but who knows which bank it would be. Bear was a big company, so is UBS

Then yesterday media went to the extent of saying that all is well and no more write downs are expected from banks and right under their noses I can find this article where FDIC has given notice (of 60 days) to a bank to come up with additional money otherwise their game is up.

Troubled bank and mortgage lender Fremont General said on Friday that Federal regulators had stepped in and given it 60 days to raise additional capital, or face a forced sale. Read the rest here.

http://www.housingwire.com/2008/03/28/fdic-steps-in-on-fremont-again-gives-bank-60-days-to-capitalize/

For some it was not even clear as to why I was so puzzled with all this. Well, depends how you read news. A 5th grader can also read the news but that does not mean he can understand it. You got to remember this is presidential election year and no matter what ruling party it is they do not want to hear ‘R’ word (- recession). It is almost a certain death to their party so, they will do anything to avoid such from happening now if they have to come out and announce it - do you have an idea how bad the situation may be that they had to do it ! May be I wasn’t clear yesterday but that was my angle.

Either case what ever you read these days just don’t believe in it right away. Do your research and draw your own conclusion.

For now, I have decided to ignore the market for next few daysand look else where. Well, we live in this wonderful state called NJ and as it turned out in last few days while I was trying to see where the markets are going a lot happened in NJ. In case you are not up-to-date allow me.

Governor of NJ has decided to cut services in NJ because they don’t have enough money. I hope you remember from my last post on NJ (http://www.diwakars.com/wordpress/?p=89)

that we have 30-33 billion $$ worth of debt. So only 2 things can happen either they increase your taxes or reduce services. Or they might find a better way - do both .reduce services and increase taxes “ which BTW I think is going to happen.

Now, talking about reducing services “ Governor proposed in the budget to cut Park Ranger’s Jobs and close parks.One in five New Jersey state parks, including seven of the most popular with nature lovers and history buffs from Greater Trenton, would be forced to close in summer as part of the cost-cutting detailed in Gov. Jon Corzine’s austere budget.Jersey’s Department of Environmental plans to close nine state parks entirely, slash services at three more, and reduce off-season hours at all 42 sites. At least 80 state parks workers would be laid off under the plan to read full article click the link. (http://www.trentonian.com/WebApp/appmanager/JRC/Daily;jsessionid=nxyqHzlplYYwT0rBqFrdGQGgJclLw8xT5X0LZrM0TfCJqbmq0nL5!-761963651?_nfpb=true&_pageLabel=pg_article&r21.pgpath=%2FTRN%2FNews&r21.content=%2FTRN%2FNews%2FTopStoryList_Story_1828497)

Now let me remind you we are the Garden State and as you will see that even after cutting parks etc we will still remain Garden State. Parkway will still be called Garden State Parkway.

Next the governor has decided to dissolve completely department of agriculture.

And turned out it did upset many farmers. So much so that a lot of them showed up at the statehouse in Trenton with their tractors and horses even pig lets. They were shouting and chanting “Save the Garden State.” “ Go ahead picture this in your mind. Yes this is all happening here in America in NJ in GARDEN STATE.

In the kind of soft spring rain that nurtures their fields and pastures, more than 500 farmers and their supporters rallied in front of the Statehouse yesterday to protest Gov. Jon Corzine’s plan to eliminate the state Department of Agriculture and scatter its duties throughout state government.

The protesters responded to calls to let Corzine know they were outside, shouting and chanting “Save the Garden State.” Another 25 tractors arrived from Burlington County and all the heavy vehicles blocked West State Street in front of the Statehouse. Some people brought horses, and two teenage Future Farmers carried their pig lets.

Read full article here.

http://www.nj.com/news/ledger/jersey/index.ssf?/base/news-10/120711456577830.xml&coll=1

Now if that was not enough truckers nationwide, NJ included, decided to go on protest of their own because of higher fuel prices.

RIDGEFIELD, N.J. — Tons of freight idled across the country Tuesday as independent truckers pulled their rigs off the road while others slowed to a crawl on major highways in a loosely organized protest of high fuel prices.

At a New Jersey Turnpike rest area in North Jersey, about 200 truck drivers carried signs and protested high fuel prices.

Clayton Boyce, spokesman for the American Trucking Association, said diesel prices are the worst he’s seen but said his organization does not support or condone the strike.

Jimmy Lowry, 51, of St. Petersburg, Fla., and others said it costs about $1 a mile to drive one of the big rigs, although some companies are offering as little as 87 cents a mile. Diesel cost $4.03 a gallon at the truck stop.

Needless to mention that Turnpike was backed up for several miles for several hours during and after the protest.

Read full article here http://www.wnbc.com/news/15762598/detail.html

And in the middle of all that action going on in NJ. NY decided to punish New Jersersians their own way by proposing congestion tax. If this goes through you would be paying even more to drive into NYC.

NEW YORK - Mayor Michael Bloomberg’s plan to charge drivers extra tolls in congested parts of Manhattan has won approval from City Council, taking it a tiny step closer to becoming reality.

http://www.msnbc.msn.com/id/23889057/

And that has NJ governor so upset - that he is now weighing a law suit against congestion tax on NY.

TRENTON, N.J. (AP) — Gov. Jon S. Corzine may take legal action against New York City’s plan to charge drivers extra tolls to enter congested parts of Manhattan.

Read full article here http://wcbstv.com/topstories/corzine.congestion.plan.2.689743.html

In the mean time NJ residents are so upset with their Governor (Mr. Corzine) they have decided to recall Mr Corzine they have gone to the extent of setting up a website which other but RecallCorzineNow.com

http://www.recallcorzinenow.com/ - Please go ahead and read, you can actually download a petition and sign and return if you want to join the race to recall the governor.

You must be a registered voter to do so.

Let me summarize this for you in the end try to picture this in your mind.State is in serious trouble due to fiscal deficit of approx $30-33 billion. Governor of NJ is trying to cut services “trying to close down some state parks and is trying to layoff park rangers also trying to close department of agriculture. Are you picturing all this ?Then 500 farmers in front of State house with Tractors, horses, pigs protesting the cuts and then 200 truck drives on Turnpike protesting against the higher fuel prices. In the mean time NY governor slapped in congestion tax to drive into NYC which obviously get to NJ most as many people drive to NYC from NJ. That has NJ governor so upset that he is weighing in filing a law suit against that. With what is going on in NJ and the way governor is handling the state has NJ residents are so upset that they have setup a website and are now collecting signatures on a petition to recall the Governor.And you the lonely soul are in the middle of all this trying to save your own job.

And just in case you haven’t had enough the budget proposal is also recommending charity cuts to hospitals.

The cut comes at a time when New Jersey hospitals are struggling

financially due to chronic government underfunding. In the past 18 months alone,

four acute care hospitals have closed, four more have announced plans to close and

five others have filed for bankruptcy protection. Of the hospitals that remain,

nearly half are losing money.

Read full article here Hospital Groups United in Opposition to Charity Care Cuts

Do you remember the article I sent earlier about inflation/rising prices/tax in NJ ? ring a bell.

If not just note down this on your expense list for next year your health care coverage cost will go up even higher next year.

If you have a inquisitive mind like mine who always likes to know more..question is where the money to hospital came from to begin with…well, there was never money for that program. Money came from Un-employment funds. Un-employment is paid by the state, it pays when somebody gets a lay-off. Ya! that one, since economy was doing so well for past several years and there were minimum lay-offs fund was taking more than what it paid out. So excess money was given to hospitals which like anything else they grew addicted (free money) to. Now the situation is that there is less money so hospitals cannot get it.

“The problem comes after legislators and governors diverted $4.7 billion from the fund from 1993 until 2006 to help hospitals pay for treating uninsured patients. ”

It does not stop here…the fund has lost money due to recent higher un-employment to the extent that payroll-tax hike might go in effect by July 1st this year itself.

“The governor said the fund, which pays weekly unemployment benefits, is projected to fall below a minimum reserve level that would trigger an automatic $350 million increase in employer payroll taxes as of July 1.”

That bring to yet another problem can business afford this new tax hike in times like these…we don’t know answer to that question yet ! and governor is trying to avoid it.

“We should avoid imposing a $350 million tax increase on employers during this national recession,” Corzine said. “I am asking for the Legislature’s help to address this problem now to prevent this tax increase, so that businesses will have a stable and certain tax environment for economic growth in New Jersey.”

Can they avoid it ? if you’re still curious and want to make an educated guess go ahead click it.

http://biz.yahoo.com/ap/080403/economy.html