Nearly a third of the nation’s cities are laying off workers this year. More than half have canceled or delayed infrastructure projects. And two out of five have raised their fees.

The catalog of service cuts and fee increases comes as America’s cities are bracing for what they expect will be their fifth straight year of declining revenues, according to a survey of city finance officers to be released on Tuesday by the National League of Cities.

One of the main culprits is the property tax, which many cities and local governments rely on heavily. Property tax collections, which are usually quite resilient, are projected to fall by 3.7 percent this year ”” their second year in a row of declines ”” as tax assessments belatedly catch up with the lower property values left behind by the battered real estate market. Sales tax collections are projected to be slightly higher this year, but income tax collections are projected to be slightly lower, as unemployment and lower wages take their toll in many places.

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There are many more reasons for concern. The continuing inability of Europe to cope with the euro troubles, the political impasse over economic policy in the United States, and the deer-in-the-headlights immobility of Japan do not inspire confidence. The emerging economies ”” China, India, Turkey and Brazil ”” face increased difficulties of their own and will not pull the global economy out of the dumps. That large corporations are sitting on cash hoards or buying back stock rather than making new investments is bad news; that consumers are cutting down debt and doing what they can to increase their savings is good news for the long term, but bad news now. And it seems clear that two years of frantic efforts in Washington have failed to breathe new life into the nation’s housing market….

Global economic events are moving so rapidly that we have no way of foreseeing the economic environment for next year. It will probably not be very good, but how bad it will be and how it will look to voters cannot yet be foretold.

More to the point, we need policy discussions more than we need political ones. This is not just about how big the deficit should be; it is about whether the international financial system will survive the next six months in the form we now know it. It is about whether the foundations of the postwar order are cracking in Europe.

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“The storyline is that global growth is decelerating,” Mike Ryan, chief investment strategist at UBS Wealth Management Americas, told Bloomberg. “Financial stresses are rising and policymakers are finding few viable options to stabilize the real economy.”

That leaves [Ben] Bernanke and company in a bind.

“The Fed can only do so much,” Greg McBride of the financial website Bankrate.com, told NPR’s Scott Horsley. “Their most effective tools are things that they have used up already. At this point, they’ve got a few options left, but none of them is a surefire way to either jump-start the economy or get people to borrow or get banks to lend. There’s still a demand problem. And that is not something that the Fed alone can fix.”

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Cutting its global forecasts sharply, the world’s economic watchdog said the global economy had entered a “dangerous new phase” and urged policymakers to tread a careful line between aggressive deficit reduction and growth. Central banks should stand ready to restart the printing presses to aid the recovery, it added in its twice-yearly World Economic Outlook.

“The recovery has weakened considerably. Strong policies are needed to improve the outlook and reduce the risks,” Olivier Blanchard, the IMF’s chief economist, said. “Markets have clearly become more sceptical about the ability of many countries to stabilise their public debt. Fear of the unknown is high.”

Europe’s leaders came under scathing criticism over the escalating debt crisis.

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Americans’ pessimism about the economy and its future is deepening, a USA TODAY/Gallup Poll finds, and they are increasingly willing to hold President Obama responsible for hard times.

Eight of 10 say the economy is in a recession, and nearly as many say it hasn’t improved over the past year. Even more ominous: Six in 10 predict the economy a year from now will be the same or worse than today, a downturn from the public’s views last year and the year before.

That gloomy outlook, economists say, can become a self-fulfilling prophesy.

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A sharply divided Federal Reserve is expected to take modest steps Wednesday to bolster stagnant growth and hiring amid European debt woes.

The efforts likely won’t have a dramatic impact, analysts say. But inflation concerns may preclude stronger medicine, and in any case prior doses of shock-and-awe easing didn’t result in a self-sustaining, robust recovery.

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Shortly after the election of Barack Obama to the presidency in 2008, the cover of Time magazine featured a fabrication of an iconic photograph of Franklin Roosevelt, cigarette holder at a rakish tilt, sitting at the wheel of a convertible. FDR’s face and hands had been displaced by those of Obama’s above a headline speculating on the arrival of a “New New Deal.” That same week, the New Yorker featured an article by George Packer advancing a similar speculation, which was illustrated with a drawing of much the same invention.

What this image in two major American magazines mani-fested was the hope on the left and the fear on the right that Obama would revitalize and extend the New Deal order that had been significantly dismantled by the conservative ascendancy since the mid-1970s (and that “new Democrat” Bill Clinton did little if anything to stem in his eight years in office)….

In sum, FDR’s recovery policies centered on the un­employed, depositors and homeowners. Obama’s recovery policies have centered on employers, bank managers and shareholders, and mortgage lenders. FDR’s more egalitarian policies generated enormous political capital; Obama’s much less egalitarian policies have helped push him to the edge of political bankruptcy.

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But for the inflationary policies of the Fed and the ECB to stimulate pseudo “growth” over the past several decades, there would have been no financial bubble and no mountain of housing-related debt. Why do economists like Roubini and Krugman say we need more of this medicine? Such pathetic proposals for more-debt-driven government intervention are what pass for mainstream economic thinking today in the G-20 nations.

Keep in mind that there are still hundreds of billions in bad debts in the US and EU tied to real estate and other speculative endeavors ”” debt which must eventually default. Until the global financial system is cleansed of these bad debts, market volatility and uncertainty will remain high. Unless we bite the bullet and write down debts to levels that will allow private growth and employment, there will be no recovery.

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About one in five Americans combine a view of God as actively engaged in daily workings of the world with an economic conservative view that opposes government regulation and champions the free market as a matter of faith.

“They say the invisible hand of the free market is really God at work,” says sociologist Paul Froese, co-author of the Baylor Religion Survey, released today by Baylor University in Waco, Texas.

“They think the economy works because God wants it to work. It’s a new religious economic idealism,” with politicians “invoking God while chanting ‘less government,'” he says.

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As readers of this blog are aware, your Curmudgeon is no fan of the Dennis Canon, which I like to call the Episcopal Church (USA)’s Trojan Horse. It has spawned a disproportionate amount of Church property litigation, because it operates by stealth, and springs onto the back of a parish just at the time when it is most vulnerable, having decided to take the final step to disaffiliate from ECUSA. All of a sudden, the Bishop of the Diocese swoops down with his attorneys, and orders the congregation to vacate its building, and leave everything behind, from the altar candlesticks to the bank accounts and pew cushions. “Because you no longer are operating within the Episcopal Church,” he says, “Canon I.7.4 [the Dennis Canon] declares that all of your property is now forfeit to the Diocese, since it was always held in trust for this Diocese and the Church.”

Such a claimed operation for the Canon comes as a surprise to many congregations who thought that their years of paying for the acquisition, construction and maintenance of their building, plus a deed in their name, meant that they owned it. Furthermore, every State in the United States has a law which says that trusts in real property can be created only by a writing signed by the owner of the property. The Dennis Canon operates in reverse: it purports to create a trust in church property without the owner’s signature, and just on the authority of ECUSA’s General Convention. As I noted elsewhere, it purports to operate as though, upon you and your spouse’s joining the Democratic Party, your house and all your worldly goods become forfeit to the Party should you ever decide to become a Republican.

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During the English Civil War, Oliver Cromwell took a dim view of Rose Castle, the Bishop of Carlisle’s palace in Cumbria. One of the occupants had been rash enough to fire a cannon as he passed by, and so he burnt it. But thanks to the efforts of Georgian and Victorian divines, it recovered from the disaster and entered the 21st century as one of the most precious jewels of the Church Commissioners’ portfolio. But the Puritans are back. Despite a report two years ago by the then Bishop of Carlisle, stating that Rose Castle admirably fulfilled its purpose as a “see house”, it is now seen as surplus to requirements. Cavaliers fear its sale will be considered at a meeting this month.

We all know that the Church Commissioners have a chequered record where property is concerned….

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Home buyers such as Bob and Janet Zych have fueled the U.S. housing market for decades.

They have excellent credit with scores that top 800, life-long careers and investment portfolios that have set them up for a comfortable retirement, they say.

But this year, “after faxing a ream of paper” about their finances, they got so fed up applying for a home loan that they simply wrote a check for their new $85,000 vacation condo in Phoenix.

Trying to get a loan “was just a nightmare,” says Bob Zych, 65, a manager for Mohawk Industries in Omaha.

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The number of U.S. homes that received an initial default notice — the first step in the foreclosure process — jumped 33 percent in August from July, foreclosure listing firm RealtyTrac Inc. said Thursday.

The increase represents a nine-month high and the biggest monthly gain in four years. The spike signals banks are starting to take swifter action against homeowners, nearly a year after processing issues led to a sharp slowdown in foreclosures.

“This is really the first time we’ve seen a significant increase in the number of new foreclosure actions,” said Rick Sharga, a senior vice president at RealtyTrac. “It’s still possible this is a blip, but I think it’s much more likely we’re seeing the beginning of a trend here.”

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Researchers at the quiz show Q.I. in the UK hosted by Stephen Fry claim to have calculated length of Goldman Sachs defense sent to the SEC.

They say would take 11 ½ years to read.

Per: The Telegraph

Another congregation in the Anglican Diocese of Pittsburgh has decided to abandon its building, saying that it couldn’t meet the financial or ecclesiastical demands that the Episcopal Diocese of Pittsburgh made during negotiations for the property.

On Oct. 2 the 104 members of All Saints Church in Penn Hills will begin holding services in nearby Rosedale United Methodist Church….

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Federal Reserve Governor Elizabeth Duke called for government efforts to promote the rental of foreclosed homes, saying a recovery in the U.S. housing market hinges on clearing the backlog of such properties.

“We need to deal with the unprecedented number of loans in or still entering the foreclosure pipeline, the disposition of properties acquired through foreclosure, and the effect of a high percentage of distressed sales on home prices,” Duke said in a speech today in Washington. “We, as a nation, currently have a housing market that is so severely out of balance that it is hampering our economic recovery.”

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The Turkish government said it would return hundreds of properties that were confiscated from religious minorities by the state or other parties over the years since 1936, and would pay compensation for properties that were seized and later sold.

Prime Minister Recep Tayyip Erdogan made the announcement on Sunday to representatives of more than 150 Christian and Jewish trusts gathered at a dinner he hosted in Istanbul to break the day’s Ramadan fast. The government decree to return the properties, bypassing nationalist opposition in Parliament, was issued late Saturday.

The European Union, which Turkey has applied to join, has pressed the country to ease or eliminate laws and policies that discriminate against non-Muslim religious groups, including restrictions on land ownership….

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For the last three years we have been told repeatedly by government officials that funneling hundreds of billions of dollars to large and teetering banks during the credit crisis was necessary to save the financial system, and beneficial to Main Street.

But this has been a hard sell to an increasingly skeptical public. As Henry M. Paulson Jr., the former Treasury secretary, told the Financial Crisis Inquiry Commission back in May 2010, “I was never able to explain to the American people in a way in which they understood it why these rescues were for them and for their benefit, not for Wall Street.”

The American people were right to question Mr. Paulson’s pitch, as it turns out. And that became clearer than ever last week when Bloomberg News published fresh and disturbing details about the crisis-era bailouts.

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… let me say that in English: the European Union is cracking up. The Arab world is cracking up. China’s growth model is under pressure and America’s credit-driven capitalist model has suffered a warning heart attack and needs a total rethink. Recasting any one of these alone would be huge. Doing all four at once ”” when the world has never been more interconnected ”” is mind-boggling. We are again “present at the creation” ”” but of what?….

As for America, we’ve thrived in recent decades with a credit-consumption-led economy, whereby we maintained a middle class by using more steroids (easy credit, subprime mortgages and construction work) and less muscle-building (education, skill-building and innovation). It’s put us in a deep hole, and the only way to dig out now is a new, hybrid politics that mixes spending cuts, tax increases, tax reform and investments in infrastructure, education, research and production. But that mix is not the agenda of either party. Either our two parties find a way to collaborate in the center around this new hybrid politics, or a third party is going to emerge ”” or we’re stuck and the pain will just get worse.

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The Obama administration is considering further actions to strengthen the housing market, but the bar is high: plans must help a broad swath of homeowners, stimulate the economy and cost next to nothing.

One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.

A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.

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Following a stinging rebuke by the Anglican Church, the state-run Urban Development Corporation (UDC) appeared yesterday to be backing off what appeared to be a veiled threat to forcibly acquire the church-owned Nuttall Hospital lands near Cross Roads, Kingston.

UDC general manager, Joy Douglas was quoted in television reports as suggesting that the agency was eyeing the sprawling Nuttall lands as part of redevelopment plans for the capital city.

Douglas was further reported as saying “there are plans by the prime minister to amend the UDC Act, that will do away with a clause that forces the Corporation to acquire land before engaging in redevelopment activities”.

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In this year’s speech, he is likely to put particular emphasis on what needs to be done to repair the U.S. economy over the longer run, including lowering long-term deficits. The title of the speech, in fact, is “Near- and Long-Term Prospects for the U.S. Economy.”

While Bernanke has said that Congress should not cut the budget deficit too quickly, lest this austerity undermine the weak economic recovery, he has previously argued that a long-term plan to put the government’s spending in line with its revenue could help instill confidence. Indeed, Deutsche Bank chief economist Peter Hooper said in a research note that the need for longer-term adjustments in the economy could be another argument against new Fed intervention.

“Any action the Fed takes at this point may give the markets no more than a temporary lift and would not resolve the more fundamental problems that are weighing on the economy,” Hooper said.

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Experts say the parsonage allowance was originally included as a way to minimize taxes on clergy members, whose compensation was often meager. It still is widely used for that purpose, church officials said, although the IRS doesn’t track usage of the benefit.

“For most of them the housing allowance is modest because their compensation is modest,” says Daniel Gary, an attorney with the United Methodist Church in Nashville.

Similarly, D. August Boto, general counsel of the Executive Committee of the Southern Baptist Convention, says for leaders of the organization’s 46,000 churches “the housing allowance is critically important for making ends meet””it is not a luxury.”

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The one-two punch of soaring real estate prices followed by the housing meltdown has reduced homeownership across South Carolina. First came a rise in real estate prices that far outstripped incomes, making homeownership harder to attain.

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Like earthquakes, financial crises seem to be accompanied by aftershocks, like the one we’ve been living through this week. They can feel every bit as bad as the crisis itself. But economic history and academic research suggest they can set the stage for a sustainable recovery ”” and eventual sharp stock market gains.

The events of the last few weeks ”” gridlock in Washington, brinksmanship over raising the debt ceiling, Standard & Poor’s downgrade of long-term Treasuries, renewed fears about European debt and a dizzying plunge in the stock market ”” bear an intriguing resemblance to some of the events of 1937-38, the so-called recession within the Depression, with a major caveat: it was a lot worse back then. The Dow Jones industrial average dropped 49 percent from its peak in 1937. Manufacturing output fell by 37 percent, a steeper decline than in 1929-33. Unemployment, which had been slowly declining, to 14 percent from 25 percent, surged to 19 percent. Price declines led to deflation.

“The parallels to what is happening now are very strong,” Robert McElvaine, author of “The Great Depression: America, 1929-1941” and a professor of history at Millsaps College, said this week. Then as now, policy makers were struggling with how and when to turn off the fiscal stimulus and monetary easing that had been used to combat the initial crisis.

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Americans’ economic confidence plunged to -53 in the week ending Aug. 7, a level not seen since the recession days of March 2009. This deterioration coincided with the final wrangling over the U.S. debt ceiling and Standard and Poor’s downgrade of the United States’ debt rating. Economic confidence is now far worse than the -43 of two weeks ago and the -34 of a month ago.

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From here:

Lord God, we live in disturbing days:
across the world,
prices rise,
debts increase,
markets are in turmoil,
jobs are taken away,
and fragile security is under threat.
Loving God, meet us in our fear and hear our prayer:
be a tower of strength amidst the shifting sands,
and a light in the darkness;
help us receive your gift of peace,
and fix our hearts where true joys are to be found,
in Jesus Christ our Lord. Amen.

The Federal Reserve on Tuesday sharply downgraded its outlook for the American economy and took the extraordinary step of signaling that it would hold short-term interest rates at exceptionally low levels “at least through mid-2013.”

The move marks the first time that the U.S. central bank has pegged a specific timetable to a pledge on its benchmark interest rate, the federal funds rate, which has been near zero since late-2008.

But the decision came with three dissenting votes from Fed committee members, reflecting concerns about the threat of runaway inflation down the road.

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The U.S. economy is already skirting the razor’s edge that separates recession from recovery.

“There is no emerging source of demand that’s going to lead us to a surge of growth,” says Lawrence Mishel, president of the Economic Policy Institute.

He says no one is spending money enough to help the economy expand ”” not consumers, not businesses and not government.

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Take a careful look.