Daily Digest - January 6

• Contracts down: Is housing headed for double-dip?
• Pump prices on pace to top 2009 high by weekend
• GMAC Says Lender Will Post $5 Billion Quarterly Loss
• Silicon Valley ‘Bloodbath’ Leaves Buildings Empty
• Manhattan Apartment Prices Fall as Finance Jobs Lost
• Fed may re-enter MBS market later in 2010
• TrimTabs suggests government manipulated stocks
• Medicaid Long-Term Care Spending Tops $106 Billion
• Missouri revenue drops in December, more budget cuts coming
• U.S. business bankruptcies rise 38% in 2009
• Homelessness and cold weather have shelters at capacity
• Unemployment spikes demand for Census jobs
• Promise to Trim Deficit Is Growing Harder to Keep
• US public pensions 'facing $2,000bn shortfall'
• Over $26 billion borrowed by states for unemployment benefits
• U.S. Budget Deficit May Exceed $1 Trillion for Years, Kos Says

Economy

Contracts down: Is housing headed for double-dip?

The number of people preparing to buy a home fell sharply in November, an unsettling new sign that the housing market may be headed for a "double-dip" downturn over the winter. The figures Tuesday came after a similarly discouraging report on new home sales, illustrating how heavily the housing market depends right now on government help.

Pump prices on pace to top 2009 high by weekend

The cost of filling up the car is rising in the wake of soaring crude and by this weekend, pump prices will race past the highs for all of 2009. Tracing the ascension of crude, up 14 percent since mid-December, energy prices across the board are catching up. On Tuesday, benchmark crude prices closed higher than they had on any day last year.

GMAC Says Lender Will Post $5 Billion Quarterly Loss

GMAC Inc., the auto and home lender bailed out by the U.S. government three times, said its combined fourth-quarter loss was about $5 billion as the company tried to stanch losses from mortgages....... The estimated quarterly loss was the fourth straight and may boost the full-year deficit above $10 billion for the Detroit-based firm, which is now majority owned by taxpayers.

Silicon Valley ‘Bloodbath’ Leaves Buildings Empty

Silicon Valley is beset by the biggest office property glut since the dot-com bust, leaving the U.S. technology hub with empty high-rises and office parks that make it impossible for landlords to sustain average rents. More than 43 million square feet (4 million square meters) -- the equivalent of 15 Empire State Buildings -- stood vacant at the end of the third quarter

Manhattan Apartment Prices Fall as Finance Jobs Lost

The median price slid 10 percent to $810,000 in the fourth quarter from a year earlier, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The median price hit $1.03 million at the top of the market in 2008.

Fed may re-enter MBS market later in 2010 - Market News

The Federal Reserve is discussing re-entering the mortgage-backed securities market later this year if its buying power is needed to hold down interest rates, Market News said on Tuesday in a story citing Fed officials. The $5 trillion agency mortgage-backed securities market may weaken when last year's biggest buyer, the Federal Reserve, ends its $1.25 trillion agency MBS purchasing program at the end of the first quarter of 2010. Fed officials, however, "are prepared to contemplate changes if need be,

TrimTabs suggests government manipulated stocks

The unusual circumstances that led the U.S. market to rally powerfully in 2009 might be explained by secret government moves to buy stocks, according to Charles Biderman, the founder and chief executive of TrimTabs, a research firm that tracks liquidity flows in the market.

"We cannot identify the source of the new money that pushed stock prices up so far so fast," Biderman said in a statement Tuesday. The source of approximately $600 billion net new cash necessary to lift the market's overall capitalization by $6 trillion last year could not be identified by TrimTabs, Biderman said. The money, he said, didn't come from traditional players such as companies, retail investors, foreign investors, hedge funds or pension funds.

Medicaid Long-Term Care Spending Tops $106 Billion

Long-term care represents 32.1 percent of total Medicaid spending according to a new report. As costs rise, the program is raising serious budget problems for numerous states......"State governments don't have the ability to print money and taxpayers are having to pay an ever-increasing cost for long-term care services," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. "If the trend continues, people can expect to see reduced services across the board as states are unable to sufficiently raise taxes to cover the increased cost."

Missouri revenue drops in December, more budget cuts coming

Missouri’s net general revenue collections for December dropped 22 percent to $615.2 million, down from $785.6 million in December 2008, new numbers show. Year-to-date net general revenue collections for fiscal 2010 declined 11 percent to $3.3 billion, down from $3.7 billion in fiscal 2009, State Budget Director Linda Luebbering said Tuesday.

U.S. business bankruptcies rise 38 pct in 2009

U.S. business bankruptcies rose 38 percent last year, to a record since bankruptcy laws were changed in 2005, according to a bankruptcy data firm on Tuesday. There were 89,402 bankruptcy filings by businesses last year, compared with 64,584 the previous year, according to data compiled from court filings by Automated Access to Court Electronic Records, which is part of Jupiter eSources LLC in Oklahoma City. That's the highest yearly figure since 2005 when a flood of businesses and consumers filed for bankruptcy before changes to the U.S. Bankruptcy Code that made it harder for consumers to erase their debts and for businesses to restructure without interference from creditors.

Homelessness and cold weather have shelters at capacity

Unemployment spikes demand for Census jobs

The U.S. Census Bureau Memphis has already received more than 7,500 applications for the 1,900 jobs it is expected to create for the 2010 Census. And that’s before the local Census Bureau holds an open house later this month to screen even more applicants, who are seeking part-time jobs that will pay between $12.75 and $20 per hour.

Promise to Trim Deficit Is Growing Harder to Keep

President Obama is making final decisions on his budget for next year and is still promising to outline a path to substantially lower federal deficits. But on nearly every front, that goal has gotten harder since his first budget a year ago. A deeper recession and slower recovery than the administration initially forecast have increased the tab for economic stimulus measures beyond the original $787 billion package, adding hundreds of billions of dollars for programs like unemployment relief and tax credits for homebuyers.

US public pensions 'facing $2,000bn shortfall'

The US public pension system faces a higher-than-expected shortfall of more than $2,000bn that will increase pressure on many states' strained finances and crimp economic growth, according to the chairman of New Jersey's pension fund. The estimate by Orin Kramer, chairman of New Jersey's investment council, will fuel investors' concerns over the deteriorating financial health of US states following the credit crisis and the recession. "State and local governments are correctly perceived to be in serious difficulty," Mr Kramer told the Financial Times. "If you factor in the reality of these unfunded promises, their deficits will rise exponentially."

Over $26 billion borrowed by states for unemployment benefits

At the end of 2009, the U.S. Department of Labor reported that the 25 states and one territory had borrowed more than $26.03 billion to fund their respective unemployment benefit programs. California borrowed $5.914 billion in 2009, the most of any other state. Mike Miller, with the U.S. Department of Labor division of fiscal and actuarial services, recently reported that payments from state unemployment trust funds will exceed revenues and interest income by $41 billion in fiscal year 2009 and $55.8 billion in fiscal year 2010

U.S. Budget Deficit May Exceed $1 Trillion for Years, Kos Says

The U.S. government will be plagued by record budget deficits for the foreseeable future, said Dino Kos, managing director at Portales Partners LLC in New York. “It’s hard to see anything happening in Washington,” Kos said today in an interview on Bloomberg Radio. “It seems without a crisis there’s not enough will” to trim the gap. In fiscal 2009, the budget deficit exceeded $1 trillion for the first time and “the risks are it will remain above $1 trillion for a very long time,” Kos said.