Timothy Geithner, U.S. Treasury Secretary on Charlie Rose

I watched this recently, a very interesting segment....Check out the video here
Timothy Geithner on Charlie Rose


Charlie Rose Talks to Timothy Geithner
The U.S. Treasury Secretary discusses the global recovery, the ongoing American mortgage mess, and tensions with China over its currency

By Charlie Rose as in Bloomberg Businessweek

October 18, 2010

Tell me where the global economy is right now and what you expect to happen next.
The world's now healing. And it's growing. The IMF expects the world as a whole to expand at a rate of a little over 4 percent next year, which is not amazing but much better than we would have thought possible. But that overall number hides huge difference across regions. China, India, Brazil, emerging markets in Asia, Latin America, Eastern Europe, they've got a long period of very rapid growth ahead of them. In Europe and Japan, growth is much weaker. In the U.S., the picture is mixed. Most economists think we're growing at a rate of about 2 percent. But the private forecasters say they expect the economy to strengthen gradually into 2011 and grow at about 3 percent. That's not fast enough for us. We want it to be faster.

We are, in my judgment, a substantial way through the process of healing, of fixing the things that were broken. The financial sector is much less leveraged, we've had a traumatic, huge adjustment in house prices across the country, and private savings rates have already increased quite significantly. Those things are really important for future growth, and they're encouraging. But they do mean that we're not growing as fast as we'd like, and I think Washington's got more work to do to try to provide some support for the economy.

Should there be a national moratorium on foreclosures?
What you're seeing in housing is a national tragedy, still very, very difficult. A lot of people were taken advantage of, and a lot of people were too optimistic about what they could afford. Now you've seen some banks suspend the foreclosure process so they can make sure that they're not causing any injustice to borrowers, and that's very important. But a national moratorium would be very damaging to exactly the kind of people we're trying to protect. We want to make sure we're holding [lenders] accountable. But we also want to make sure that we're not going to make the problem worse.

"It's The Economy, Stupid" Courtesy of SmallCapInvestor.com

"It's The Economy, Stupid" Ian Wyatt | SmallCapInvestor Daily | September 30, 2010 1:33pm EDT

When James Carville hung a sign with the phrase, "It's The Economy, Stupid" on Bill Clinton's Little Rock campaign headquarters in 1992 the message to campaign insiders was pretty clear - Clinton was a better choice than Bush because Clinton understood what the economy needed.

Now, I'm not going to get all 'political' on you today - but I am going to talk about the economy. Whether or not Clinton really delivered what the economy needed in the early 1990s is debatable. But what's not debatable is that the market and the economy are intertwined - so investors need to be aware of what's going on in the economy right now and consider how it will affect stocks moving forward.

***Earlier this week the Conference Board released the results of the latest Consumer Confidence Index. The results were dismal as the September consumer confidence level dropped to 48.5, down from 53.2 in August. The index measures consumers' feelings on the job market and general business conditions over the next six months.

"Overall, consumers' confidence in the state of the economy remains quite grim. And, with so few expecting conditions to improve in the near term, the pace of economic growth is not likely to pick up in the coming months" said Lynn Franco, director at the Conference Board Consumer Research Center.

Experts think consumer spending will increase only at a modest pace throughout the rest of the year. This will hold back GDP and limit growth in all sectors of the economy.

"The economy is stuck in an unvirtuous cycle. Consumers are waiting for more jobs to be created, and businesses are waiting for consumers" believes Wells Fargo economist Mark Vitner.

What's needed is a positive feedback loop in which greater consumer confidence leads to consumer spending. In other words, the consumer needs to be a part of the recovery - and that comes down to job creation. Keep an eye on job creation and consumer confidence numbers and look for stabilization in the trends to signal a good time to buy stocks. When they improve, the market will likely have already moved higher.

***Right now President Obama's staff could hang a sign on the oval office that says, "It's Housing, Stupid". Any politician that doesn't see the direct correlation between a stable housing market and economic recovery should get a place in the unemployment line.

According to the S&P/Case-Shiller Index, housing prices increased 3.2 percent from July 2009 to July 2010. New home sales, existing home sales, and new housing starts all beat estimates last month as well.

Continue Reading

Tarp Lending, 30 Billion Small Business Lending Fund

TARP Lending Programs Curtailed


By DEBORAH SOLOMON - july 21, 2010
WASHINGTON—The Treasury Department, under Congressional orders to shrink and end sooner the much-maligned Troubled Asset Relief Program, plans to curtail two programs originally intended to help consumer and small-business lending.
Treasury officials say they plan to end a long-delayed, never-utilized $30 billion program designed to boost small-business lending and cut the amount of money available for a Federal Reserve lending program.

The Treasury will also stop creating any new programs to stabilize the financial sector.

The moves are expected to have minimal impact since the programs were not being used to the extent originally envisioned.

The Fed's Term Asset-Backed Lending Facility, which provided financing to bolster issuance of consumer and business loans, was used less than anticipated after markets stabilized.

The Treasury's small-business program, which never got off the ground, is expected to be replaced by a $30 billion lending fund. The House has already authorized the fund and the Senate could vote this week.

The Treasury's steps stem from a provision of the recently passed financial overhaul requiring the Treasury to cut TARP's spending authority to $475 billion from $700 billion and cease spending on new any programs. The provision brings forward the end of the government's ability to use TARP to fund any new programs retroactively to June 25 from Oct. 3.

The early end of TARP was included during last-minute negotiations between House and Senate leaders as a way to help pay for the new financial regulation. The nonpartisan Congressional Budget Office estimates it will save the government $11 billion.

President Barack Obama is expected to sign the legislation into law Wednesday.


Obama: Republicans holding small businesses "hostage"

WASHINGTON (Reuters) – President Barack Obama on Saturday accused Republicans of holding American small businesses "hostage to politics" after Republican senators refused to back a $30 billion small-business lending package.

Senate Republicans blocked the package on Thursday, dealing a fresh blow to Obama's efforts to show Americans, in the midst of a tough election year, that his administration is focused on tackling stubbornly high unemployment. Watch Video


Many Companies Reluctant to Hire- Watch Video

The Market's Mixed Messages- Watch Video


Fed Exempt From Most Oversight, FOIA- FBN?s Charlie Gasparino on the growing power of the Federal Reserve with little oversight by other areas of the federal government. Watch Video

Economic Outlook Not So Pretty Read Between the Lines

It has been several weeks since the last posting. I will be doing a more in depth posting this weekend. Former Fed Governor Robert Brusca and WSJ's Gerry Seib weigh in on the latest economic data and its impact on the market. Feds say full recovery to take at least 5 to 6 years. Watch Video

Unemployment Across States
A look at unemployment across the United States, with CNBC's Scott Cohn.
Watch Video

UMB CEO: Reform Bill Will Cost More for Credit
UMB Banks CEO Peter DeSilva on how financial reform will impact his business.
Watch Video

SEC's Khuzami: Goldman Will Have 'Profound Effect' on Wall Street
SEC Director of Enforcement Robert Khuzami weighs in on Goldman Sachs' settlement with the SEC. Watch Video

How to Get Business Credit

Call Lu'na Directly at 201.472.0759 to learn more about program. Free E-Book and Other informational Material. Initial Consultation ok.....

Community lenders hit the funding jackpot

Community Development Financial Institutions (CDFIs) have been a rare small business lending success story this year -- and next year, they'll have more cash.
NEW YORK (CNNMoney.com) -- Goldman Sachs' banking titans and top congressional Democrats don't often see eye to eye -- executive pay caps, anyone? But here's something the megabank and Capitol Hill agree on: One of the best ways to get financing to worthy small businesses is through a little-known community lending vehicle called a CDFI.

Taken together, Goldman Sachs and the federal government have earmarked more than $300 million to invest in these local financiers in 2010. Compared to Wall Street's bailout billions, that's pennies on the dollar, but for CDFIs it's a jackpot. Next year's funding pool is almost three times bigger than any they've ever had before.

A CDFI is a Community Development Financial Institution, a certification conferred by the Treasury Department. The program gives low-interest government loans, grants and tax credits to organizations that specialize in economically developing low-income and otherwise underserved markets.

Citi Plans to Start a Small-Business Fund for Lower-Income Areas

Communities at Work Fund™
The Communities at Work Fund™ was established to create jobs, drive economic recovery, and provide hope and opportunity to thousands of Americans living in disadvantaged communities.

The Fund will accomplish this goal by making affordable loans available on a timely basis to Community Development Financial Institution (CDFI) loan funds that finance small businesses, not-for-profits, charter schools, and other community service organizations in low-income and low-wealth communities. The Fund will primarily offer unsecured, interest-only loans with terms up to five years to CDFI loan funds and CDFI affiliates participating in the New Markets Tax Credit Program.

The Fund is initially capitalized with $200 million, and is structured as a limited partnership—with Citi as the Limited Partner, and Calvert Foundation and Opportunity Finance Network as General Partners. Calvert Foundation and Opportunity Finance Network will jointly manage the Fund, with Calvert Foundation responsible for managing lending and fund administration and Opportunity Finance Network responsible for marketing and compliance.

Citi Plans to Start a Small-Business Fund for Lower-Income Areas

Derivatives and Goldman Bust

The Busted Homes Behind a Big Bet

Meet The Press Interview Sen. Dodd & Sen. Shelby

Visit msnbc.com for breaking news, world news, and news about the economy

Meet The Press Sunday Mornings on NBC

David M. Walker Comeback America

David M Walker, author of Comeback America: Turning the Country Around and Restoring Fiscal Responsibility he is also the president and CEO of the Peter G. Peterson Foundation, a great organization.

The Debt and the Deficit with Paul Krugman, David Walker of Peterson Foundation, Alan Auerbach of Univ. of Cal-Berkeley, Rep. John Spratt and Mohamed El-Erian of PIMCO

Watch very informative Interview with
Charlie Rose

Letter From Camden Fine, President Independent Community Bankers of America to Secretary Geithner

Dear Secretary Geithner:

On behalf of the 5,000 members of the Independent Community Bankers of America, we greatly appreciate and support the Administration’s proposal to establish a Small
Business Lending Fund that would provide capital to interested community banks.Under the program, banks with less than $1 billion in assets could receive capital investments up to 5 percent of their risk-weighted assets, and those with between $1
and $10 billion in assets could receive up to 3 percent. $30 billion in repaid Troubled Asset Relief Program funds would be transferred to the new program.

February 17, 2010 Letter. Apparently as of yesterday in my conversation with the Independent Community Bankers of America, this proposal is still held up Congress.

Who is Fair Issac and What is so Fair About It?

FICO (NYSE: FICO), founded in 1956 as Fair Isaac by engineer Bill Fair and mathematician Earl Isaac, provides consulting services and enterprise decision management systems. They developed the FICO scores, a measure of credit risk, which are the most used credit scores in the world. FICO scores are available through all of the major consumer reporting agencies in the United States and Canada: Equifax; Experian; TransUnion; and PRBC.[1] FICO is a registered trademark of Fair Isaac Corporation.

It's amazing how this statistical modelling method has become the standard for measuring credit and financial risk modelling to the consumer. Our financial health and lives are affected by the Fair Issac in every aspect of our lives literally. FICO and your credit score can determine:

-Whether or not you "qualify" for a credit card.

-Whether ot not you qualify for a home loan and how much of an interest rate you will pay on that loan.

-Whether or not your qualify for an auto loan.

- Whether or not you qualify for a small business loan, credit card or line of credit.

-May effect certain job prospects or opportunities.

- May effect certain health an insurance policies that you qualify for.

-Can and does effect whether or not you can rent an apartment or home.

-May require the need for an individual to place a deposit down before getting electric and or phone service.

Fair Issac (FICO) has a huge impact on quality of life issues. Most of us depend on some form of credit in the United States and if you have a lousy credit score this is going to have a direct impact on you. This is especially true if you do not generate other sources of income and cash flow "outside of the box" of a regular job. The good news is that you can turn your credit score around with time, usually within a two year period of conistently paying your bills on time, communicating with your creditors and staying on top of your credit file with the credit bureaus.

" The FICO score, which Fair Isasc says is used by 90% of the 100 largest banks, and other similar scores hold sway over the lives of millions of people. Some consumer groups have raised concerns about whether credit scores are being used properly and whether they are valid resources of credit risk for some groups of consumers especially minorities and lower -income individuals, says Travis Planket, the legislative director for the Consumer Federation of America."

Credit scores, which are calculated using proprietary models are also criticized for a lack of transparency. The new score model FICO 08 will target folks in the subprime category of scores in the 600's. These are the people that lenders are really struggling to predict how well they might pay their bills.

FICO 08 the newly implemented credit scoring system, rolled out in 2008 aims at connecting a making some adjustments to the scoring model and will be more "forgiving" to occasional slips by consumers. Despite the new scoring model, consumers still have to make sure the information in their credit reports which Fair Issac relies on to come up with the credit score is accurate. Errors must be disputed with the three major credit bureaus.

See article "FICO Reveals How Common Credit Mistakes Affect Scores", by Jerermy Simon, Creditcards.com

See also Suze Orman and Dave Ramsey

Start-Ups Chase Cash as Funds Trickle Back

Starting a new business is easier than it was a year ago, but wealthy investors, venture-capital firms and banks are still trickling out money very selectively.

Track The Stimulus

Track the Stimulus details where these investments are made, what jobs are being created and where, and attempts to measure whether these programs are achieving what they sought to achieve whether it is creating jobs, lowering the cost of borrowing to banks and corporations, etc.

China, Holding Upper Hand on Exchange Rate

China Says It Will Not Adjust Exchange Rate By SEWELL CHAN
Published: March 24, 2010

WASHINGTON — Despite mounting pressure in Congress for the Obama administration to declare China a currency manipulator, the Chinese government is giving no indication that it will change its exchange rate policy.

After meeting with officials at the Treasury and Commerce Departments on Wednesday, China’s deputy commerce minister, Zhong Shan, told reporters, “The Chinese government will not succumb to foreign pressures to adjust our exchange rate.”

Important Points in the article:

- Mr. Zhong's visit to Washington comes weeks before an April 15 deadline for the Treasury to deliver its semiannual report on foreign exchange. Many economists believe that China has deliberately undervalued its currency to support its export-oriented economy.

- China's position has raised the ire of members of both parties in Congress, who say that the exchange-rate problem is holding back job growth in the united States.

-The Treasury has not found China to be manipulating its currency since 1994, making the argument among others, that manipulation involves intent.

-Senator Lindsey Graham (R) South Carolina states that, "China's merchantilist policies are hurting the rest of the world, not just America. It helped create the global recession that we're in. The Chinese want to be treated as a developing country, but they're a global giant, the leading exporter of the world.

- Two senators pointed to a new study by the Economic Policy Institute, a labor- backed research organization, saying the growing trade deficit between China and the United States resulted in the elimination or discplacement of 2.4 million American jobs between 2001 and 2008.

Watch Video: Business News Network (Out of Canada great programming) The Close : March 24, 2010 : Quantifying China's Cheap Currency [03-24-10 4:35 PM]

Much of Adam Smith's The Wealth of Nations is an attack on mercantilism. The Wealth of Nations, one of the earliest attempts to study the rise of industry and commercial development in Europe, was a precursor to the modern academic discipline of economics.

Venture Lists and Other Tidbits 2010 Still a Challenge for Start-Up Venture Funding

Are you in search of venture funding...BEWARE? Know what you are getting into and how much you are giving up when you deal with some of these funders. A venture capitalist's motto is maximum ROI (Return on Investment). There is no romance here, this is all about the money especially now as the economy is shifting. Being part of the dot com boom and bust during the 90's and living in the San Francisco Bay area was quite an experience QUITE for me. I am glad because it has taken a lot of the myth of the process and bull which I can now share with others. Respect to my Berkeley, CA posse of engineers, coders and entrepreneurs.

Entrepreneurs who know ahead of time that they are going to take this route as an exit strategy must do their due diligence and get to know the venture funders there are going to engage and who will engage them because indeed this will be an engagement until the bitter end or not, ultimately an attractive IPO (Initial Public Offering).

Many years ago, I read a book about Ron Conway, The Godfather of Silicon Valley: Ron Conway and the Fall of the Dot-coms (Paperback)-Gary Rivlin (Author). It is a great read and I was delighted to meet Mr. Conway in person last fall at an event hosted by Warren Lee and Canaan Partners called StartupAtWork. It's a great event. Check out Ron's investments at Crunchbase.

Venture Hacks is also an excellent source as well as Scott Digs, Venture Dig. Here is the list that he complied, http://venturedig.com/venture-capital/the-top-75-venture-capital-blogs/.

Keep your head high enough to touch the clouds and your reality grounded enough not to get into a Bad deal. If you are a start-up and are in the process of raising capital via this route or have other questions please feel free to fill out some initial questions. If you have problems with the form email startuplendingmodels@gmail.com. Thanks

Small Business Know the IRS and Understand Your Taxes

Over the last year and a half, I have gotten a crash course in a Wills, Trust and Estate matter that could make your hair stand while assisting a client through the help and guidance of attorney(s) and other professionals. As a start-up business owner, I also work as a certified paralegal and in small business finance. Fortunately, I have an extensive background in writing, research, case law analysis with in the trenches down and dirty work, court house visits and meeting clients in coffee shops and train stations included. I have a renewed sense of how serious and how amazing the powers of the Internal Revenue Service really are.

Without disclosing too much about this situation, let me say this, if you have assets, it is
seriously important to work with and hire "extremely" competent professionals with respect
to the management and the advice offered with regard to your estate. Actually, if assets, a business and or any other wealth has been passed onto you, it is seriously important to know what the heck is going on. Grill your lawyers, accountants and other professionals, do your research and make sure what they are telling you is correct, because this can be the difference between financial freedom or a financial nightmare. Don't let a $250 or $300 an hour charge impress you, especially if this or these individual(s) does more to harm then to help you.

As a small business owner, your relationship with the Internal Revenue Service is one that
can make or break you quite seriously. How many people really understand the tax code? How
many people understand how taxes are computed? Do you understand how payroll and social security taxes work? Do you know how to deal with liens? This is a very complex matter but in hindsight, when Joe the Plumber asked now President Obama about how much his taxes would increase under his plan, Mr. Wurzelbacher approached Obama and asked him if he believes in the American dream. He proceeded to tell Obama that, "after working as a plumber for 15 years, he is going to purchase his own business. The catch was that the business was worth more than $250,000 and Joe asked if he would be taxed more under Obama's plan."

"I'm being taxed more and more for fulfilling the American Dream," he said to Obama. While Obama made several attempts to explain his tax plan, the bottom line was always that Joe would suffer from increased taxes. "I'm gonna cut taxes a little bit more for the folks who are most in need and for the 5% of the folks who are doing very well - even though they've been working hard and I appreciate that – I just want to make sure they're paying a little bit more in order to pay for those other tax cuts," Obama told Joe.

Most recently, I came across the very informative web site of Alvin Brown & Associates, LLC
and I am extremely grateful to have found it. Check it out for yourself www.irstaxattorney.com also check out the forum at www.irsforum.org.

The Directory of State Tax Administrators may also be a helpful tool.

Ask Us About Small Business Financing

It is not totally gloom. There are choices beyond loan shark and other ridiculous rates for small business. See contact information at the right and call for an initial consultation. Be a leader make a difference, GIVE! Thanks and Good Luck!

News Worth Noting: Stimulus Spending, Bi-Partisan Jobs Bill, The New Poor

Bulk of Stimulus Spending Yet to Come, by Louise Radnofsky
Wednesday, February 17, 2010, Wall Street Journal

Highlighted Points:

-A third of the total $787 billion has been spent so far during the first year to maintain social services, government jobs and to provide tax cuts for workers.

-Infrastructure spending is set to step up in the second year with the goal of more money flowing to private-sector employers. Economists state that won't likely have a big effect on the unemployment rate.

-The bulk of the money proposed for projects like new rail lines and water projects about $180 billion is likely to be spent this year at the earliest. According to Kenneth Simonson, chief economist of the Associated General Contractors of America, " a lot more stimulus money will go into actual contracts and actual hiring in 2010". That will contribute 1.4 percentage points to the Gross Domestic Product (GDP) this year according to Brian Bethune, chief US financial economist for IHS Global Insight.

-Many signature projects including $20 billion for doctors to create electronic medical records, $4.5 billion for an energy Smart Grid and $7.2 billion for broadband networks are still in the very eary stages.

-Of the $179 billion in stimulus funds paid out last year, $112 billion has gone out in the form of large checks to state governments to plug holes in school, medicaid and unemployment-benefits or to increase funding for food stamps.


Bipartisan Jobs Bill Advances Past GOP Filibuster, By ANDREW TAYLOR Associated Press Writer WASHINGTON February 23, 2010

Highlighted Points:

-Four provisions, one including a measure exempting businesses hiring the unemployed from Social Security payroll taxes through December and giving another $1000 credit if new workers stay on the job a full year.

-$250 payment to Social Security recipients

-$25 billion to help cash-strapped states

-$30 billion in Wall Street bailout money redirected to help community banks lend to small business


The New Poor: Millions of Unemployed Face Years Without Jobs, By PETER S. GOODMAN, February 20, 2010

Highlighted Points:

-Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.

-Social safety net is already showing severe strains.

-Every downturn pushes some people out of the middle class before the economy resumes expanding. Most recover. Many prosper. But some economists worry that this time could be different. An unusual constellation of forces — some embedded in the modern-day economy, others unique to this wrenching recession — might make it especially difficult for those out of work to find their way back to their middle-class lives.

-Labor experts say the economy needs 100,000 new jobs a month just to absorb entrants to the labor force. With more than 15 million people officially jobless, even a vigorous recovery is likely to leave an enormous number out of work for years.

-Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.

-“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics.

-Traditionally, three sectors have led the way out of recession: automobiles, home building and banking. But auto companies have been shrinking because strapped households have less buying power. Home building is limited by fears about a glut of foreclosed properties. Banking is expanding, but this seems largely a function of government support that is being withdrawn.

-The continued bite of the financial crisis has crimped the flow of money to small businesses and new ventures, which tend to be major sources of new jobs.

-“You have very large sets of people who have no social protections,” said Randy Albelda, an economist at the University of Massachusetts in Boston. “They are landing in this netherworld.”

Economic models can be such powerful tools in understanding some economic relationships, that it is easy to ignore their limitations. One tangible example where the limits of Economic Models collided with reality, but were nevertheless accepted as "evidence" in public policy debates, involved models to simulate the effects of NAFTA, the North American Free Trade Agreement. James Stanford published his examination of 10 of these models.

Small Banks and Trust Preferred Securities What?

I came across a very interesting article in the Wall Street Journal the other day "Small Banks Hit Snag As They Raise Cash", by Robin Sidel. This is what made my eyeballs pop: From 2000 to 2008, more than 1,500 small and regional banks issued about $50 billion in trust preferred securities, according to Red Pine Advisors LLC, a New York firm that helps small banks value illiquid investments. The banks favored the securities, a mixture of debt and equity, because they could be counted as capital for regulatory purposes. That gave the banks firmer footing to lend and boost earnings.

Many of the trust preferred securities were placed into pools of collateralized debt obligations. Ratings downgrades have battered the value of many trust preferred securities, which trade infrequently. "For many banks, raising capital is contingent on the extinguishment of the trust preferred securities, " said Brad Larson managing director at Hexagon Securities LLC, a New York Firm that advises small banks on the problem and is affiliated with Red Pine. " A long list of banks is likely to fail if their capital- raising efforts are unsuccessful."

The Consumer and Main Street especially small business owners need to understand the impact of the residue of the meltdown and keep the pressure on.

Slow Start But a Good Start to 2010

It has been a few weeks since the last post. A slow start but a good start as the economy continues to trek along, as more and more data is coming out about how "challenging" things really are with regard to getting small business lending and job growth on a re-newed course. About a week or so ago, the Obama administration announced a new initiative to use over 30 billion dollars of Troubled Asset Relief Fund (TARP) money to use for Coummunity Banks in as a guarantee to jumpstart lending for small business.

Let's track this process and see how successful this initiative will be.

Obama calls for $30 billion small business lending fund By Catherine Clifford, February 2, 2010 CNN Money