Payday Loans In Oregon

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A recent study published in the Journal of Banking and Finance by Dartmouth professor Jonathan Zinman revealed that banning payday loans ended up hurting Oregon households, not helping them.

"Restricting access (to payday loans) caused deterioration in the overall financial condition of Oregon households," Zinman wrote. "Overall the results are consistent with restricted access harming, not helping, consumers on average."

Economists agree: Eliminating payday loans as an option for consumers has disastrous consequences for those who utilize them. We've already seen what happens when other states outlaw these short-term infusions of cash. It remains to be seen whether Colorado will fall into the same trap.

Comparing Oregon, which has placed a rate cap on payday loan that drove three-quarters of the lenders out of business, to Washington, which has no cap, Zinman measured both subjective assessments (i.e., how people felt) and more objective measures like employment status. He found that people fared worse in both regards.

Think of it this way: You're living paycheck to paycheck but have a steady job. One morning, the radiator in your car goes kaput, putting you in a bind. With no savings it will be impossible to get the car repaired. For most Americans, no car means no transportation and no job.

A short-term payday loan, however, gives you access to instant cash allowing you to repair your car and keep commuting to work. Removing that source of credit cuts a lifeline that many families rely upon in crises, a lifeline that, in many cases, keeps them out of the unemployment line.............

http://www.denverpost.com/headlines/ci_14938935

Recovery???

Another must read by Comstock Partners. Let's take a look

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Normal Recovery? Don't believe it.

The "Street" and the financial media are portraying a totally misleading impression that the economy is now undergoing a normal recovery as each new piece of economic data is issued. At the same time the stock market has been in the process of pricing in the so-called great news. Let's have a look at the actual numbers.

1) March retail sales were up 8.6% from the low a year earlier. However, this was still 3.6% below the peak sales in May 2008, almost two years ago. Moreover, sales are still slightly below the level reached back in December 2006, over three years earlier. Over the last 43 years retail sales had hardly ever gone down at all, even in recessions.

2) March industrial production (IP) was up 6.1% from the June trough, but was still down 9.1% from the top December 2007. At its current level IP is still where it was over 10 years ago in December 1999. Never since the depression in the 1930s has IP failed to exceed a level established 10 years earlier.

3) New orders for durable goods in February were up 12.8% from the low in March 2009, but were still 22% below the peak in late 2006. In fact orders are back at the same level as in the fall of 1997.

4) Initial weekly unemployment claims for the latest reported week are 456,000. Claims declined from a peak of 643,000 for the week ending March 29, 2009 to 477,000 on November 15. Since then, however, the number of claims has flattened out to a range between 439,000 and 490,000 weekly over the five-month period. This is still a recessionary number.

5) March housing starts were up 31% from the low April 2009, but still down 72% from the peak in January 2006. Except for the current recession the number of starts in March was the lowest in any month over the last 51 years.

6) As reported today, existing home sales were 535,000, up 6.8% from the prior month and 19% from the low in late 2008. However, this was still 27% below the peak in late 2005.

7) New vehicle sales in March were at an annual rate of 11.8 million, up 13.5% from the prior month and 28% from the recession low. This is still well below the average of about 16 million vehicles between in the decade ending in 2007.

8) February personal income was up 11.9% from the trough in July 2009, but still 1.5% below the top in May 2008. At the current level personal income is 2% higher than a year earlier after being down for 12 consecutive months. Prior to the current recession personal income had never been down year-over-year in any month going back to 1960, and the current plus 2% is still at recessionary levels.

9) Payroll employment in March increased 162,000 leaving the total 8.3 million jobs below the peak reached in February 2008 and equal to the number of jobs back in October 1999.

10) February consumer credit was down 4% from a year earlier, the biggest decrease on a year-to-year basis since late in World War ll.

http://www.comstockfunds.com/(X(1)S(obxg3g45jnw2ib45j0ojn045))/default.aspx?act=Newsletter.aspx&category=MarketCommentary&newsletterid=1522&menugroup=Home&AspxAutoDetectCookieSupport=1

Big Banks' Bet against Main Street

This is a must read article by the Wall Street Journal. Let's take a look

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The Busted Homes Behind a Big Bet

ABERDEEN TOWNSHIP, N.J.—The government's civil-fraud allegation against Goldman SachsGroup Inc. centers on a deal the firm crafted so that hedge-fund king John Paulson could bet on a collapse in U.S. housing prices.

It was a dizzyingly complex transaction, involving 90 bonds and a 65-page deal sheet. But it all boiled down to whether people like Stella Onyeukwu, Gheorghe Bledea and Jack Booket could pay their mortgages.

They couldn't, and Mr. Paulson made $1 billion as a result.

http://online.wsj.com/article/SB10001424052748704133804575198120387721724.html?mod=rss_Today's_Most_Popular

Who coulda knowed?

let us take a look

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Defaults Rise in Loan Modification Program

The number of homeowners who defaulted on their mortgages even after securing cheaper terms through the government’s modification program nearly doubled in March, continuing a trend that could undermine the entire program.

Data released Wednesday by theTreasury Department and the Housing and Urban Development Departmentshowed that 2,879 modified loans had been ended since the program’s inception in the fall, up from 1,499 in February and 1,005 in January.

The Treasury Department said it could not explain the growing number of what it called cancellations, almost all of which were apparently prompted by the borrower’s being unable to make the new payment. A scant number — 37 — were because the loan had been paid off, presumably because the borrower sold the house.

About seven million households are behind on their mortgage payments.

http://www.nytimes.com/2010/04/15/business/15mortgages.html?src=me

Borrow at 3% Lend at 6% Golf at 4:00pm

let us take a look

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.................With millions of homeowners losing their homes to foreclosure during this recession, megabank JPMorgan Chase plans to argue against the Obama administration's latest weapon in its fight to stem the problem -- principal cuts for struggling borrowers -- by citing the sanctity of contracts and the borrower's "promise to repay."

In testimony to be delivered Tuesday afternoon, David Lowman, chief executive officer for home lending at the "Too Big To Fail" behemoth, will fight back against the program which calls for lenders and investors to decrease the outstanding debt owed on a home mortgage. While his competitors at Bank of America, Wells Fargo and Citigroup plan to dance around the issue -- judging from their prepared remarks -- Lowman cut right to it: borrowers don't deserve it.

"Like all loans, mortgage contracts are based on a promise to repay money borrowed," Lowman's prepared remarks read. "Importantly, there is no provision in the mortgage contract, express or implied, that the lender will restore equity or reduce the repayment amount if the value of the collateral -- be it a home, a car or a stock market investment -- depreciates.

http://www.huffingtonpost.com/2010/04/12/jpmorgan-chase-argues-aga_n_534898.html

Oregon Wins with New Jobs!

let us take a look

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Oregon’s officials see Genentech’s presence as integral to the state’s economic future and often cite the 250 jobs already created at the plant. That number is expected to grow to 300 over the next few years.

Meanwhile, Genentech’s management has a much more pragmatic view of why they chose to locate here.

Clark said the search for a new site began in 2003-2005 when introduction of three new products forced the company to increase their manufacturing capacity. A risk assessment drove them to look beyond existing California sites. They didn’t want to do final bottle-fill processing in the middle of a high-risk earthquake zone.

Clark also credited Oregon’s favorable business climate — a surprise given how much criticism the state has received since passage of Measures 66 and 67. He said the economic element of only being taxed once on product production, coupled with the support and encouragement of local and state governments, made the decision to locate in Hillsboro straightforward.

Oregon, though, will probably hold on to the idea that the Genentech plant will ultimately attract other biotechnology firms to the area, even if the company’s expansions remain on its manufacturing side.

When his turn to address the audience came, Sen. Jeff Merkley said, “The future is no longer plastics … the future is biological, a word that was essentially science fiction a few years ago.”

“Many will be touched in the future by this research,” he said, after describing how innovations in the treatment of one disease can lead to new approaches in dealing with others.

http://blog.oregonlive.com/hillsboroargus/2010/04/genentech.html

Mortgage Rates Jump

Let us take a look:

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April 8 (Bloomberg) -- U.S. mortgage rates jumped to the highest level in almost eight months, increasing borrowing costs for buyers and signaling a threat to the housing market’s recovery as government efforts to spur demand end.

Rates for 30-year fixed loans rose to 5.21 percent for the week ended today from 5.08 percent, mortgage finance company Freddie Mac said in a statement. That’s the highest rate since the week ended Aug. 13. The average 15-year rate was 4.52 percent, according to the McLean, Virginia-based company.

Loan rates are climbing from record lows last year as the economy shows signs of strengthening and after the Federal Reserve completed a program of buying about $1.25 trillion of securities backed by U.S. residential mortgages. Rising borrowing rates and the expiration of homebuyer tax credits this month may reduce demand for homes......................

............................Homes for Sale

The number of existing homes for sale jumped 9.5 percent in February, data from the National Association of Realtors show. Government tax credits for first-time home buyers and some current owners expire April 30.

The Fed’s program of buying mortgage-backed securities, which ended last week, helped reduce rates to a record low of 4.71 percent in December. The average 30-year rate over the past decade is 6.2 percent, with a high of 8.64 percent in May 2000, Freddie Mac data show.

The government bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae, agencies that buy home loans from lenders and package them into securities, brought down yields and allowed lenders to reduce mortgage rates while still selling the bonds at a profit.

The Mortgage Bankers Association’s index of mortgage applications fell 11 percent in the week ended April 2. The portion of refinancings dropped 17 percent. Applications to purchase a home increased 0.2 percent.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aX9YxHf.MpN8&pos=4

Antidepressant's sales Booming!

Sales of antidepressants rose 3 percent to $9.9 billion, .............That made them the fourth-largest class of medicines by sales, up from fifth in 2008.

http://www.bloomberg.com/apps/news?pid=20601124&sid=aAs2MdK_YIsc

Garnishment on the Rise

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PHOENIX — When the bank sued Leann Weaver for not paying her credit card balance, her reaction was typical for someone in that situation. Personal and financial setbacks weighed her down, and she knew she owed the $2,470. So she never went to court to defend herself.

She was startled by what happened next. When she swiped her debit card at the grocery store, it was declined. It turned out Capital One Bank had taken $224.25 from her paycheck, a quarter of her wages for two weeks of work at a retail chain, and her bank account was overdrawn.

“They’re kicking somebody who’s already in the dirt,” she sai

http://www.nytimes.com/2010/04/02/business/economy/02garnish.html?src=me&ref=business

Bankruptcy Biz Booming

Let us take a look

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.............................More Americans filed for bankruptcy protection in March than during any month since the federal personal bankruptcy law was tightened in October 2005, a new report says, a result of high unemployment and the housing crash.

Federal courts reported over 158,000 bankruptcy filings in March, or 6,900 a day, a rise of 35 percent from February, according to a report to be released on Friday by Automated Access to Court Electronic Records, a data collection company known as Aacer. Filings were up 19 percent over March 2009. The previous record over the last five years was 133,000 in October...........

http://www.nytimes.com/2010/04/02/business/economy/02bankruptcy.html