Kaidgen Finance Story Blog

CIT Rescue Talks Fail, Bankruptcy Looms

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/15/AR2009071503305.html?hpid=moreheadlines

Lending firm CIT Group has failed to convince the federal officials for provision of further financial assistance to it to resolve its worsening liquidity crisis. The failure to get further federal aid may push CIT into bankruptcy and hurt thousands of its clients ranging from small businesses to firms such as Dell. The federal government’s decision to not provide further aid to save a large corporate probably stems from the conviction that the US economy is strong enough to absorb the shock of failure of a medium scale firm. However, the failure of CIT is likely to have a catastrophic impact on thousands of its customers besides wiping out the $2.3 billion aid earlier provided by the US government. The government wants on its part to send a message that aid is not available for every failing firm and that it is reducing its participation in the financial markets.

Fed Worries Do Not End

http://online.wsj.com/article/SB124606477050863921.html

The Fed officials are in disagreement! They are arguing about how to handle Bank of America Corp.’s acquisition of Merrill Lynch. Moreover, they are concerned about whether it’s right to give the Central Bank more regulating powers to control the financial system of the country. Last year, B of A approached the Fed for help with a $20 billion rescue package to cover the losses of Merrill Lynch. In the light of the worsening situation banks face, it may be right that the Obama administration wants the Fed to over the functioning of the financial system’s largest companies. However, the central bank has also claimed that it should be given the power to avert future crises. The game of power will tilt – but to which side, only time will tell.

Pay Association Dues In Time To Prevent Foreclosure

http://www.usatoday.com/money/economy/housing/2009-06-11-homeowner-association-foreclosures_N.htm

In times like these, the only way to survive is to prioritize one’s expenses. However lack of information or negligence has led to many homeowners losing their homes due to non payment of Home Association Dues. These dues, usually small if paid monthly, pay for the security patrols, upkeep of lawns, swimming pools, common areas like elevators and maintenance of the homes. People who chose to cut back on paying these dues regularly have found them to have grown into impossibly large amounts due to the penalties attached.

The association is within rights to send a foreclosure notice to delinquent homeowners as part of a contract that they have signed and is doing so to recover their dues. What a huge price to pay for a small saving!

Foreclosure Filings Remain High But Rise Month On Month

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/11/AR2009061101098.html?hpid=moreheadlines

According to data released by RealtyTrac, foreclosures filings in the US declined in May. Although the number of foreclosure filings in May declined by 6% from April’s level, they were 18% higher than the year ago levels. The data which covers nearly 90% of the households in the US revealed that the foreclosure filings remained above the 300,000 level for the third month in a row.  The foreclosure filings are expected to surge in the near future as the  foreclosure moratoriums implemented by lenders and states expire in the coming months. Meanwhile, the Obama administration is trying hard to arrest the rising foreclosure rates but the falling home prices and a weak labor market are playing spoilsport.

Economists Expect US Recession To End Soon

http://www.bloomberg.com/apps/news?pid=20601103&sid=a7TEmvxOT.gY

A survey of leading economists has revealed that the US economy is expected to come out of recession in the third quarter. However, the country’s unemployment rate will continue to soar for some time. According to the National Association for Business Economies, although the US economy is expected to recover soon, the pace of recovery is likely to be slower than earlier estimated. The unemployment levels are also expected to rise in the second half and 2010. Efforts by the US government and the Federal Reserve to pull the economy out of its worst slump in a long time have started yielding results, economists have said. Although the housing segment has started to stabilize, consumer spending is likely to be restrained for some more time in the wake of the high unemployment levels. The survey results show that the US economy is expected to shrink at an annualized rate of 1.8% in the current quarter, grow by 0.7% in the next quarter, and 1.8% in the final quarter of the current year.