Friday, January 28, 2011

Social Security Drained By 2037

Social Security Drained By 2037
New congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037. This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut. Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 — unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration.

The $2.5 trillion surplus, however, has been borrowed over the years by the federal government and spent on other programs. In return, the Treasury Department has issued bonds to Social Security, guaranteeing repayment with interest.

Oil Prices Rise on Egypt Unrest

Egypt Shows How Easily Internet Can Be Silenced
The move by Egyptian authorities to seal off the country almost entirely from the Internet shows how easily a state can isolate its people when telecoms providers are few and compliant.

Egypt Protests: America's Secret Backing
The American Embassy in Cairo helped a young dissident attend a US-sponsored summit for activists in New York, while working to keep his identity secret from Egyptian state police. On his return to Cairo in December 2008, the activist told US diplomats that an alliance of opposition groups had drawn up a plan to overthrow President Hosni Mubarak and install a democratic government in 2011

Wednesday, January 26, 2011

Homes Less Affordable Across Canada

Homes Less Affordable Across Canada
The dream of owning a home in Canada continues to get hazier as housing prices in some of the country's largest markets skyrocket while income growth lags behind, results of a 325-city international survey of housing affordability suggest. "There are a lot of people that tend to be squeezed out of the housing market," said David Seymour, a policy analyst with the Frontier Centre for Public Policy which compiled the survey's findings. "Owning your own little patch of Canada is a dream for a lot of people that is getting tougher." The annual International Housing Affordability Survey, released Tuesday, compared home prices and household income in 325 cities in Canada, Australia, Hong Kong, Ireland, New Zealand, Britain and the United States.

Household Debt At A Near-boiling Point
With average household debt in Canada at nosebleed levels -- it reached 148 per cent of annual disposable income in the third quarter of 2010 -- and interest rates likely to rise later this year, many consumers are flirting with disaster. Some are already in crisis mode, says Hannah, whose New Westminster, B.C.-based non-profit organization offers free credit counselling, education and debt management programs for debt-strapped consumers. "For a lot of people, they've leveraged themselves to an extreme. With the vast majority of our clients, most of them are just a paycheque or two away from financial difficulty. They're that highly leveraged," he says. "The average consumer walking through our door is in their early 40s, they carry six or seven credit cards and owe anywhere from $25,000 to $50,000 on those cards." "So they're just able to keep up with their minimum obligations."

Saturday, January 22, 2011

The Triumph of Hacker Culture

The Triumph of Hacker Culture
It's the best of times and the worst of times for hacker culture. On the one hand, this is a moment of history-making triumph for a cyber-worm, the complex computer virus known and feared as "Stuxnet." A stunning evolutionary leap in development of "malware" (the generic term for the mischief-making software a virus embeds in computers via digital networks). Composed, it has been reported, of 15,000 lines of code. Stuxnet exhibited virtual superpowers last fall by penetrating, taking control of, and jamming into self-destruction some 1,000 precisely calibrated uranium-refining centrifuges in Iran's Natanz nuclear facility.

Friday, January 21, 2011

No More 35 Year Mortgages

Mortgage Rules Will Sideline Some Buyers
This week, Finance Minister Jim Flaherty did just that. As of March 18, the government will no longer insure mortgages with amortization periods of more than 30 years. That will keep some potential home buyers out of the market, and in theory, help stop already debt-burdened households from going even deeper. Ottawa will also make home refinancing rules tighter, among other moves.

Saturday, January 8, 2011

Canadian Real Estate Association - Call To Action

Additional changes to mortgage financing rules would raise the barrier to homeownership excessively and destabilize housing markets and the economy. In particular, we are concerned about the negative impact modifications to the allowable amortization period or minimum down payment requirements would have. These changes would create affordability problems, especially for first-time buyers. First-time buyers are the first link in a chain reaction of real estate activity. They allow existing home owners to change properties or rent. Creating burdensome barriers for first-time buyers will seriously impact the rest of the market, including retirees looking to downsize.

Further tightening of mortgage rules would have other far reaching consequences for the economy. It risks causing a home price correction, a drop in the net worth of Canadian households, lowered economic growth and reduced tax revenues. Consumer confidence would be damaged, labour mobility would be impeded, and unemployment would stay elevated.

Canada Debt Warnings

Canada Debt Warnings
Canada's Superintendent of Bankruptcy issued a warning to Canadians about the dangers of high household debt Friday, adding his voice to the chorus from officials concerned about the amount of leverage the average resident now has. In a letter attached to the latest report on bankruptcy statistics, James Callon said it was "important for Canadians to be aware of the risks and possible consequences of taking on a large amount of debt." He noted that a significant event - a change in employment such as job loss, or a change in family status such as a divorce, or a serious illness - "can cause a huge drain on finances." If such an event were to suddenly occur in a household carrying a large amount of debt, that could lead to "the harsh realities of insolvency," Callon said. The number of consumer insolvencies filed in Canada in October 2010 was 22.5% higher than in 2007-08, before the economic crisis that led to the recent recession. Household debt in Canada reached a record C$1.41 trillion in December.

According to Statistics Canada, debt to household income levels has reached a record 148%, rising above comparable U.S. figures for the first time since the late 1990s. Bank of Canada Governor Mark Carney recently warned that a growing number of Canadian households were vulnerable to adverse shocks, and more would become vulnerable if interest rates go up from record low levels as expected. Finance Minister Jim Flaherty has also sounded numerous warnings on household debt levels in recent months.

Monday, January 3, 2011