Obama's Laser-Like Focus Vaporizes Full-Time Jobs

Get mort-ified, here.

Zuckerman is Mortified: It May Be A Depression

He takes a long look at the depth of the unemployment problem, here, and concludes with this:

Gluskin Sheff's Rosenberg captured it perfectly: We may well be in the midst of a "modern depression."

Median Amount Saved in Retirement Accounts is $2,000?

Which would imply that half the population has less than that saved, and half the population has more than that saved.

The oft-repeated datum is pretty darn old already. A decade! It is based on a survey of about 3,400 people taken way back in 2001 and reported on the Bureau of Labor Statistics website in an "updated" posting dating to 2005, here:

The median amount held in retirement accounts--$2,000--provides another indication of the wide variation in the amounts held by households.

More recent surveys of somewhat smaller samples of Americans paint an only slightly less apocalyptic picture of the resources Americans may or may not have tucked away:

Just over a third (34 percent) of Americans have no retirement savings, up from 30 percent in 2009, according to a new Harris Poll of 2,151 adults. ... Some 42 percent of individuals age 45 and older have less than $25,000 saved for retirement, EBRI found. Only 11 percent of all current workers say they have $250,000 or more saved for retirement.

At a 4 percent per year drawdown rate in retirement, people with $250K can draw down roughly only $10K per year for 25 years, and then it's pretty much gone.

Pretty hard to live on that without Social Security and Medicare, which themselves are going bust.

Americans are not ready for the future, but the maw of the future sure is ready for them.

Congressional Mandates Overheated Housing, Not Wall Street

Mort Zuckerman writes a helpful essay explaining the complex world of mortgage finance and the role of derivatives, and lays much of the blame for the crisis we are going through squarely where it belongs, on the Congress of the United States, instead of on Wall Street:

But we also need to understand how the housing market got as hot as it did. Why did it keep rising, generating more and more derivatives geared to a rising market? It turns out that Fannie Mae, Freddie Mac, and the Federal Housing Administration had financed a lot more subprime and Alt-A (alternative documentation) loans than anyone realized, mostly as a result of congressional mandates. Indeed, of their total outstanding mortgage portfolios of $10.6 trillion, roughly half turned out to be of low quality. Had this been known, it would have been clear that the American public's capacity to assume this amount of housing debt was at great risk.

That is at the heart of the now-famous Goldman-Paulson saga. Hedge fund manager John Paulson judged that the housing market was a bubble, so he shorted the securities through Goldman Sachs and an insurer called ACA, which sold the package to a German bank. The buyers judged that it was safe to count on housing prices continuing to rise. They chose which mortgage securities would be bundled by Goldman. And they have paid a heavy price for their judgment.

The American public has hereby had a peek into the bewildering complexities of the world of finance. The natural instinct is for the public to blame the housing decline on those who shorted. But it is the other way around. They should be blaming those who let the market get pumped up, inviting a dramatic and painful correction that took most people by surprise.

The complete story is well worth reading, here.

Obama Allocates A Drop In The Bucket For A Critical $100 Billion Problem

So says Alex Kingsbury, here:

But while it may have been a technical wonder at the time of construction, the nation's power grid has become dangerously antiquated over the past few decades. If technology in the home is racing ahead at broadband speed, the power grid is stuck back in the days of rotary-dial phones. According to industry statistics, the dog food industry spends more on research and development than the electrical sector does. Aging technology means more frequent blackouts, a greater vulnerability to computer hackers, and, perhaps most insidious, colossal inefficiency. As part of the economic stimulus package, the Obama administration has pledged $3.4 billion toward "smart grid" technology—the next generation of infrastructure, meant to stabilize the grid in the event of a failure, incorporate green technology, and vastly improve efficiency. But those billions are a drop in the bucket toward bringing the entire national grid into the 21st century, which could take decades and cost upwards of $100 billion, some experts estimate.

Meanwhile the nearly $800 billion stimulus package gets spent preserving government sector votes, I mean jobs.