Daily Digest - October 31

• Data Likely to Credit Stimulus for 650,000 Jobs
• Energy-savings project leaves Army in the cold
• Dead Government Walking
• Stocks Sizzle As China Debuts Nasdaq- Style Stock Market 
• Americans Becoming Increasingly Disheartened 
• 650,000 Jobs Created/Saved By Stimulus? There’s No Way to Know 
• California To Withhold A Bigger Chunk Of Paychecks Starting Sunday 
• Nine U.S. Banks Seized In Largest One-Day Haul  
• Do Banks Have Something To Hide?

Economy

Data Likely to Credit Stimulus for 650,000 Jobs (SteveS)

Obama administration officials expect new reports Friday to show that the government's fiscal stimulus program helped create or save about 650,000 jobs, a figure officials are prepared to tout as a sign of stimulus success. As mandated by Congress, the reports cover only $150 billion of the $339 billion stimulus spending that has occurred through Sept. 30.

Energy-savings project leaves Army in the cold (Livio S.)

Army officials say they are stuck with a system that consumes more energy than before. Over the 25-year life of the project, the Army could lose more than $100 million, according to internal Army documents. "There were no savings at all," said Army auditor Nayer Mahmoud, former chief of internal review at Ft. Richardson.

Dead Government Walking (Claire H.)

In case you failed to catch it in our previous articles this year, we thought we’d state it outright for our readers this month: the United States Government is on a trajectory to default on their obligations. In its current financial condition, it will not be able to fund its forecasted budget deficits and unfunded Social Security and Medicare promises on top of its current debt obligations. This isn’t official yet, and we don’t know when the market will react to it, but there is no longer any doubt about the extent of their trajectory. There simply isn’t enough taxing power, value creation or outside capital willing to support its egregious spending.

Stocks Sizzle As China Debuts Nasdaq- Style Stock Market (M.W.)

The ChiNext stock market, China's long-awaited Nasdaq-style second board, debuted on Friday with a speculative surge that more than doubled the price of all 28 stocks during intraday trade -- a good sign for companies lining up to list on China's stock markets.The bubbly open to a market that hopes to turn local start-up firms into budding Microsofts or Intels.

Americans Becoming Increasingly Disheartened (M.W.)

The new economic statistics put growth at a healthy 3.5% for the third quarter. We should be dancing in the streets. No one is, because no one has any faith in these numbers. Waves of money are sloshing through the system, creating a false rising tide that lifts all boats for the moment. The tide will recede. The boats aren't rising, they're bobbing, and will settle. No one believes the bad time is over. No one thinks we're entering a new age of abundance. No one thinks it will ever be the same as before 2008. Economists, statisticians, forecasters and market specialists will argue about what the new numbers mean, but no one believes them, either. Among the things swept away in 2008 was public confidence in the experts. The experts missed the crash. They'll miss the meaning of this moment, too.

650,000 Jobs Created/Saved By Stimulus? There’s No Way to Know (M.W.)

“One can search economic textbooks forever without finding a concept called ‘jobs saved’,” said Allan Meltzer, a professor at Carnegie Mellon University. “How can anyone know that his or her job has been saved?” The disparate estimates come down to the multiplier effect.

California To Withhold A Bigger Chunk Of Paychecks Starting Sunday (M.W.)

Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners -- holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear. Technically, it's not a tax increase. You'll get the money back eventually.

Nine U.S. Banks Seized In Largest One-Day Haul  (M.W.)

U.S. authorities seized nine failed banks on Friday, the most in a single day since the financial crisis began and the latest stark sign that substantial parts of the nation's banking industry are being crippled by bad loans.

Do Banks Have Something To Hide? (M.W.)

Even experts have a hard time getting a handle on how bad losses might get as the commercial real estate market implodes.