How Can You Tell That Fannie and Freddie Are Government Owned? They Keep Asking For More

Fannie says they would be close to profitable if they didn’t have to pay interest on the money they received in the bailout. Isn’t that like a home owner not going into foreclosure if they didn’t have to repay their loan.

I started a thread about Fannie Mae nearly three years ago but stopped because the story was always the same. There was a single line is this AP article that inspired me. The article: Fannie Mae asks for $2.5 billion in new US aid. And the line from that article: “Fannie and Freddie together have repaid $16.7 billion as dividends to the Treasury Department.”

The reason I found that line so interesting was that the AP writer, Marcy Gordon, said that they have “repaid…as dividends” quite a bit of money. Dividends are like interest, it is earned off of the principle. They have yet to repay any of the principle. Fannie issued a statement last week saying that they would have been profitable if they didn’t have to pay back the government.

From Fannie Mae’s November 5, 2010 Press Release:

“WASHINGTON DC – Fannie Mae (FNMA/OTC) today reported a net loss of $1.3 billion in the third quarter of 2010, compared to a net loss of $1.2 billion in the second quarter of the year. The company continues to focus on building a strong new book of business and returning to profitability (excluding Treasury dividend payments)”

In fact they haven’t “repaid” the government anything, all they have done is to pay the dividends on the money they needed to keep them from going under. Since the government takeover and they received their bailout money, Fannie and Freddie have been asking for billions every quarter. Yet they have the nerve to suggest that it’s the governments fault their not making money.

In order not to mislead, Fannie has announced the repurchase of $1.3 billion of notes on the 15th. So they need $2.5 billion more so they can repay $1.5 billion.  Now that is how you get ahead.

Fannie Mae and Freddie Mac hold 70% of all mortgages in the U.S. and FHA hold another 20%. In the last two years they have lost $249 billion. or $1768 for every taxpayer. Notice I said taxpayer because if you don’t pay taxes they haven’t cost you anything.

Over that same period the Treasury has purchased $1.25 trillion in MBO’s (Mortgage Backed Obligations) leaving almost no private mortgage market. It is all government owned or backed.

Both the Federal Reserve and the Treasury have well over a trillion dollars each to use to ease the credit markets. So why are they printing another $600 billion?

The media is saying that it is to stimulate the economy by spreading some money around and to create jobs by making our exports more attractive. The money spreading helps the financial markets and the cheaper dollar only helps the multi-nationals. Aren’t those the same ones they have been blaming for our situation.

The Fed is putting the money into the economy by buying (with newly printed money)$75 billion in Treasury Notes each month for eight months. The question is why are they doing it this way. Why is the government borrowing money from the government and not in a way that that gets the money into the pockets of consumers. You and I, the consumers, represent 70% of the economy. Or into an investment tax credit that motivates business to upgrade and hire.

The answer is in the housing market. There has never been a recovery that didn’t include housing and the abnormally low rates we have had has not been enough to overcome the unemployment rate and the depressed wages it has caused. By purchasing $90 billion a month they will keep the price of Treasuries artificially low as to not effect mortgage rates.

That brings up the point that at these rates private enterprise would never be interested in funding home mortgages. So without Fannie, Freddie and FHA there would be no housing market.

If the recovery doesn’t kick-in in the next eight months, will they have to print more? As the dollar weakens because of this financial engineering will they have to raise rates to slow the economy to keep inflation from getting totally out of hand.

Again the winners are the major corporations that are flooding the debt markets with cheap paper. IBM just raised $1.6 billion at ¾ of one percent. Unbelievable. Did you ever think that companies could borrow money at less than 1%.

The government, in their politically expedient effort to make home ownership available to everyone, caused this recession. They loosened the rules and demanded that the banks make loans that they would of never done in the past. The banks stood to lose little with Fannie and Freddie either buying or securing them.

If the government would of let the chips fall, the housing crisis would have been washed out by now. Because of government intervention there is still 3 million homes that still need to go through foreclosure. That is as many as been foreclosed on in the last two years.

The result of this financial engineering could be worse. Bye replacing the mortgage bubble with a Treasury or liquidity bubble we could end up with a devalued dollar, devastating debt payments, crippling inflation and soaring interest rates. The Federal Reserve seems to be making all of their long term assumptions that foreign entities will continue to want Treasuries. If the dollar falls any more they will accelerate the rate at which they have been pulling their money out of the U.S..

It’s not too late for Washington to change direction and make some sound decisions instead of taking the path that produces the best sound bite. The media needs to stop reporting political sound bites as fact. The President needs to stop social engineering.

Social Security Goes The Way of China and Japan

At present the Social Security Administration holds 20% or $2.4 trillion of the $12 trillion that the U.S. now owes. That means that the government will soon lose its single biggest customer of U.S. debt. No one is saying exactly when this will occur but I’ll guess that the party is winding down and will end in the next two years. At the same time the next two largest purchasers of U.S. debt, China and Japan, are trimming their purchases of U.S. debt by 15% a year.


As I wrote last May in, The Honeymoon Is Over And I Want A Divorce - Obama’s Interest Rate Quagmire, there are pressures coming from all directions that will push interest rates up. The dollar has been losing value against all currencies except the Euro and the Pound, which are having their own fiscal problems. As soon as the problems in the EU start to subside the demand for the safe-haven dollar will also decrease.

When the above circumstances are combined with the need to fund an extra trillion a year in spending, interest rates have to move and move big. The first casualty will be a housing market that, because of government intervention, has not been able to work through its current downturn. Higher mortgage rates mean less affordability putting pressure on both home sales and home values that have little room for bad news.

The major money center banks like Goldman and Chase-Morgan have been thriving because the fed has kept the money flow to these guys at full blast and at little or no cost. They have been using that flood of short term money for everything but small business lending. For them it has been the perfect storm. When their interest rates raise the major money center banks will be in the exact place that stated this mess; an immediate cash squeeze.

As the government issues massive amounts of debt, corporate debt will also be entering the peak of their debt cycle. As stated in the Times article below, corporations will be bringing $700 billion of debt to the market. Competition for money is another factor for an increase in rates.

Currently the only positives for the future of interest rates would be if a if the U.S. has a phenomenal economic turnaround or if a war breaks out somewhere leading to another flight-to-safety.
 Posted on HOT AIR by ED MORRISSEY: Social Security starts cashing in US debt

An AP article by STEPHEN OHLEMACHER: Social Security to start cashing Uncle Sam's IOUs

An AP article by MARTIN CRUTSINGER: China trims holdings of Treasury securities

A New York Times article by NELSON D. SCHWARTZ: Corporate Debt Coming Due May Squeeze Credit

The Honeymoon Is Over And I Want A Divorce - Obama’s Interest Rate Quagmire

He lives in Fairy Land and The White House has become His Magic Kingdom.

My last article talked about the quagmire that our economy will be in if Obama's uncontrolled deficit spending, in His attempt to reshape America, is not brought under control. Two days ago He made a speech where He stated the same thing. Bloomberg published this article: Obama Says U.S. Long-Term Debt Load ‘Unsustainable’.

Yes, higher interest rates would devastate the budget causing astronomical deficits – beyond the enormous ones already in the pipeline. But the problem is NOT HIGHER INTEREST RATES, it’s that He will not stop spending money He does not have. It’s the spending that is causing us to borrow in the first place. He will not give up his dreams to reshape the American economy. Here is another campaign speech (oops, Presidential Address) He made a couple of days ago. He recognizes the danger of increased borrowing but places His vision for health care, energy and the environment at a higher level of importance than mere monetary concerns.

The implication is that we will have to raise our level of commitment to society, lowering the level of our bank accounts.

If He will not stop deficit spending then the only way to reduce the governments’ need to float Treasury Notes is to find different ways of raising taxes. He loves hidden taxes; a dime on a coke or candy bar, a quarter on a gallon of gas, a buck a six-pack, 10% on anything plastic. He’ll nickel-dime-quarter us to death but will not raise our taxes.

His carbon tax could devastate the lower income portion of our society, severely curb the spending habits of the middle class and we already know what He plans for the upper class. His health plan would eventually dictate everything that impacts our health. People that are considered over-weight will have restrictions put on them because they are now a burden to the health care system. We will be told what foods we’re allowed to eat, what doctors we will see and our health care will be monitored for our own welfare. The majority of a person’s medical expenses come in the last few years of life, euthanasia would be the single biggest money saver.

He said today that people should pursue fulfilling careers such as volunteering their time or working for a non-profit. That the American People should aspire to higher level of commitment to the society. That leaves government work out, their all about the money. If He thinks He can dictate salaries in the private sector then the next logical step is to dictate salaries of Physicians, Nurses, procedures, medicines and hospital costs. All would benefit society. Doctors should aspire to a higher level and donate their time.

He lives in Fairy Land and The White House has become the Magic Kingdom.

Citi Is A Town Full Of Problems

Their exposure doesn't stop with sub-prime, with hundreds of billions in off-the-books liability, they still have hard times in front of them. Substantial problems in commercial paper, credit cards and autos are still to come, where do they go from here?

From an AP article on RGJ.com: “The government has decided that guaranteeing hundreds of billions of dollars in possible losses and injecting $20 billion more into Citi trumps the alternative: a panic that could leave retirement accounts and investment portfolios of millions of ordinary Americans in tatters and shove more people out of jobs.”
Analysis: Why Citi had to be rescued

View from the Radcliff India: “There's only one reason to agree to such terms, says Ellison: to stay alive."There are capitalists all over the place, but no one wanted to do the deal," he adds. "This is chemo. They need this capital to stay alive."”
If Citi's in such a mess, what about other banks?

From the WSJ online: “The Bush administration's rescue of Citigroup Inc. is creating new confusion about the government strategy to shore up volatile markets.”
Uncertainty on Strategy in Citi Rescue

From the Arab News: “Citibank went into overseas markets long before its competitors and often secured an inside track by attending to the financial needs of government elites and leading local organizations.”
Editorial: Implications of Citibank bailout


From an AP article in the Columbus Dispatch: “Citigroup Inc. said yesterday that it will slash 53,000 more jobs in the coming months… Earlier this year, the New York-based financial giant trimmed 22,000 jobs.”
Citigroup shedding 53,000 positions

Citibank is cutting another 53,000 from its payroll, on top of the 22,000 job cuts it has already announced. This follows at least 17,000 last year.

Previous Citibank articles

Bear Stearns And The Fed

The question is can the Fed keep these banks afloat till after the election.

Last week BS was forced to close two of their funds that were leveraged 32 : 1. The current trend was to issue very short-term low-interest notes to pay for their higher interest debt that they had purchased, allowing them too subsequently book the difference in the interest rates as profit. When the market for these short-term notes dried up they lost their ability to redeem the ones that were coming due, creating a devastating margin call. This was the game that most of the investment banks were using to build their bottom lines over the last five years.

The next headache happens when the Fed is forced to react to inflation and raise interest rates to the point where these guys can no longer cover the cost of the longer term debt, which they are holding, with lower-rate short term money. Each time the Fed cuts rates, the game keeps going. It has only been a little over two years when the Fed started raising rates and the “biggies” started having troubles, this will happen again and again as long as the Fed feeds the cycle and prevents the unwinding of these debt instruments.

OPEC & China Worried That Their Draining Too Much From The American Economy

This week OPEC President and United Arab Emirates Energy Minister Mohammed al-Hamli, said that the group was concerned that rising fuel costs might be harming our economy and will increase production, pushing prices down, if they get the whim.

From a Forbes.com article by Brian Wingfield:

“After years of soaring economic growth fueled by low-cost goods sold abroad, the Chinese government is tapping the brakes on its export industry.”

“Beijing earlier this month dramatically cut the tax rebates that exporters get on more than 2,200 products, including soap, plastics and glassware. For another 553 goods--particularly those that cause pollution and use up a great deal of energy--it eliminated the rebates completely."

“The move is intended to let the air out of China's ballooning trade surplus with the rest of the world, which is projected to reach $250 billion in 2007.”

Could it be that they are just concerned that the patient is being drained to fast?

Earning Power And The American Dream

U.S. families have carried the economy during this last 5-year growth cycle, but for most of us, we have not participated in it. A significant portion of this growth has come from liquidity (cheap debt) and from developing foreign markets. Our biggest companies are growing overseas and shrinking here in the U.S., with the result bringing about a less than ideal situation for our future.

In the Christian Science Monitor article, American dream still burns bright for many – but results vary, and contributed to by Faye Bowers in Phoenix, Bill Frogameni in Fort Lauderdale, Fla., and Bina Venkataraman in Boston:

“Today, men in their 30s earn about $5,000 less in real terms than did their fathers' generation, according to Pew.”

“Today "there aren't the kind of jobs available you used to get with a high school education, and work yourself up," says Mr. Brockman. "Now you have to have training or experience to start – then you can work your way up from there."

Is Inflation A Worry

Today the Federal Reserve issued their Federal Open Market Committee statement. Wall Street cheered because they dropped the possibility of a rate increase from the statement. They did indicate that the:

“…readings on core inflation have been somewhat elevated.” and “the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected.”

Two of the underlying indicators, wholesale prices and factory orders, do not look positive for future inflation concerns. From Economic Slowdown Sooner Rather Than Later the January reading of factory orders showed the largest drop in 6 ½ years and as indicated in a Martin Crutsinger article on the AP, in February wholesale prices jumped 1.3%, also a negative trend for future inflation.

Many prominent economists seem to feel that these indicators are only bumps in the road to prosperity. But any slowdown could also be accelerated by ignoring these economic factors today.

U.S Commerce Secretary Carlos M. Gutierrez Blowin’ Smoke

While searching for some accurate numbers pertaining to the economy today, I ran across what is billed as “Top Economic Story” on the U.S. Commerce Departments web site. Secretary Gutierrez blatantly announced that the economy is great and all of us can just go home and kiss our dog. He bases this overwhelming complacency in the economy on two numbers; the Trade Deficit and Job Creation.

First the slightly lower trade deficit that was brought about by two factors, an increase in exports due largely to the decline in the value of the dollar and a single months15% drop in the price of oil, lowering the import amount. The second is that we have created 7.6 million jobs over the last 3 ½ years. As quoted before, nearly all of these new jobs come from positions created in the medical field and, in the last year, services.

With the price of oil back up, housing falling apart, 1.5 million general accounting jobs to be “exported” soon and the dollars further decline, I can’t wait to see what he brags about next.

Sprint, Motorola, Nortel & Kodak Plan Major Cutbacks – In People

Kodak: 30,000

From Ben Dobbin, AP Business Writer writes an interesting article about Kodak. They are adding an additional 3,000 layoffs to the previously announced 27,000 planned for this year. That comes on the heals of 23,000 already sent packing.

At its peak in 1988 Kodak employed 145,000 and after the cuts planned for 2007 will employ 29,000. At the end of these cuts Kodak will have shrunk by 80%.

Sprint: 5,000

This is a different story, in an InformationWeek story by Elena Malykhina Sprint plans to cut 5,000 of its staff. As quoted by Ms. Malykhina:

“Sprint is the most ambitious of the four major U.S. cellular carriers, acquiring Nextel for $35 billion and making bets on emerging technologies like WiMax. But with costs up, customers unhappy, and layoffs imminent, the No. 3 U.S. cellular carrier may have taken on more than it can handle.”

The recent breakout of the video blogging and pod casts, has caused carriers to throw out any previous projections concerning bandwidth requirements. With the consumer now demanding substantially more bandwidth networks have to be reworked before they are even finished. From an article in The Guardian titled Rise of video downloads threatens gridlock on net:

"The growth in video downloads could create an internet traffic jam that threatens the net's development, according to Google."

Motorola: 3,500

Motorola has announced layoffs of 3,500 after having a record breaking 4th quarter where sales of handsets rose 47%. Unfortunately profits went the other way by 48%. Motorola does so many different things and has been on a buying spree lately that the poor results have to be answered somewhere, or by 3,500 some ones.

Nortel: 2,900

Nortel, a Canadian Company with a 2,600 worker plant in the Research Triangle Park of the Raleigh/Durham, area has announced layoffs of 2,900. The specific locations of the proposed layoffs weren’t given but the company has indicated plans to cut spending in the R& D and administration areas.

Why Are Prescription Drugs So Expensive

As previously posted in my article Pfizer Has No Cure For Michigan’s Headache and Health Insurance The Wild Card the health care industry is operating outside of any economic realities. Costs have consistently raised at 2 to 3 times inflation, medical coverage has gone up so much and has become such a problem, that in a recent CNN survey 43% of company CEOs consider health insurance premiums the #1 threat to their companies future.

So it came as no surprise when I read Insiders article Pfizer's decimation - will the lobbyists be cut? On his/her blog PharmaGossip:

“According to the Centre for Responsive Politics, in 2005 there were 2,326 registered pharmaceutical lobbyists. That amounts to 4.3 lobbyists for every member of Congress, and the drug companies spent $146,783,853 on their efforts.”

”And the Center for Public Integrity reports that between 1998 and 2005, the industry spent over $675 million on federal lobbying”

Response To Neil Cavuto On Minimum Wage vs.Legal Status

If an employer is already breaking the law by hiring illegal workers, then he is breaking two or more laws by not paying them a minimum wage. The problem is in the enforcement. We do not need more laws with more political correctness, we need enforcement of our current law. When that happens, the solution to the issue of illegal workers also begins. Until then all our politicos achieve is more free air-time.

Neil expressed his opinion that the latest numbers on the U.S. savings rate are misrepresented and in our economy is meaningless. Every time people start to ignore basic economic tenants, we learn why they are considered rules the hard way.

There are two distinct attitudes towards our economy, one is that everything is fine and the other is that we our on the brink of catastrophe. Either way the negatives are numerous and enormous, there has to be a time when they are reversed or we will experience some very negative consequences. The U.S. savings rate is just one of them. With the age of our populace, savings through retirement vehicles, should be at its peak.

Economy, Reporters And Numbers

In a Bloomberg article Courtney Schlisserman sourced statistics from the Institute for Supply Management's non-manufacturing index, which moved up in December to 59. A 59 reading indicates a very strong services sector that is healthy and growing. She then states that Services make up almost 90% of the GDP.

It’s this statement that drew attention and shows that many who write about the economy and financial matters do not understand how these numbers coincide with each other. If the Services sector is 90% of GDP then all other sectors must only be 10%. The military alone is more than 10%.

Manufacturing hit its peak in 1959 at 47% of GDP and in 2005 had dropped to 33%, last year manufacturing had further declines but is still above 30%. To do the math; military 10% + manufacturing 32% = 58% for everything else that makes up the GDP.

Later in the article Ms. Schlisserman does make some very good points: “Lower energy prices and higher wages are fueling increased consumer spending and generating stronger sales at retailers, adding to economic growth.” The first part, of the quote, nails the economy but the second part “and higher wages” is also inaccurate. Wages have increased at a slightly higher pace than inflation over the last three months, but over the last three years have not kept pace with inflation. In fact this trend has been going on for awhile, and the American workers earnings in real dollars, is at the bottom of the earnings scale today than at any time over the last 40 years. It is not wages but the unemployment rate that is adding to consumer spending.

Big Business In Patents

The U.S. Patent and Trademark Office has started a hiring blitz that will bring 1,200 new jobs and for the next three. this year to its sprawling complex in Alexandria

From an article by Senior Staff Reporter Joe Coombs in the Washington Business Journal the PTO has moved to its new digs, a quant 2.5 square mile facility, in 2005 and is running out of room.

John Doll, the PTO's commissioner of patents says:

"We have moved from a manufacturing society to an idea, or intellectual society… The surge in applications is due to the surge in innovation in America."

Last year which ended last September PTO received a record 440,000 patent applications. That doesn't include a backlog of 701,000 applications that have yet to be handled by examiners.

Since most new patent applications are centered on electrical systems, including mechanisms that support cell phones, satellite communications, interactive videos and other avenues of communication, patents can take from seven months to over six years.

There was no reference how many of these applications were from outside the United States. According to FreshPatents.com 36.8% of patent applications are of foreign origin.

Hot News For Generation Young -- Visa/Master Card Are Not Savings Plans

I know this may come as a surprise to many of you, but sending money to make a card payment is not the same as putting money in the bank. After reading Martin Crutsinger’s article, on a Commerce Department report, I thought that many of you might think that it is.

Last year we came the closest to breaking a record, that has held since 1933, than at any time in 74 years. What record is that? Why silly, it’s our savings rate. Last year Americans saved a negative 1%. The record was set in 1933 with a negative 1.5%. There have been only 4 times that the United States has had a negative savings rate, twice during the Great Depression 1932 & 1933, when unemployment was at 25% and again in 2005 & 2006 when unemployment was 5% or lower.

On top of that the average American tapped into their Visas and Master Cards increasing their personal debt levels to highest amount in history. Of course the consumer would get an A from wall street who is cheering while the DOW, fueled by consumer spending, is hitting new highs and from Uncle Sam they would get an A+ for following the governments stellar example.

Employees Locked Out At Harley Davidson

As of Thursday morning the 2,700 employees of the York, Pa. Harley Davidson Plant was locked out. According to articles, written by Andrea Maria Cecil in Sunday’s and today’s York Daily Record, 98% of the members of International Association of Machinists and Aerospace Workers Local 175 voted on Wednesday to reject Harley’s latest proposal and initiate a strike at 12:01 am. Friday.

At this time the terms of the proposed contract have not been disclosed, but a reader has commented that the company has requested employees accept a higher share of medical costs and reduced pension benefits. There was no reference to wages other than Harley had requested that new hires may be brought in at about ½ the current wage. As quoted by David J. Lynch, published in the Aug. 17, 2006 issue of USA TODAY:

“The venerable motorcycle maker, battered by Japanese rivals, came within an eyelash of bankruptcy in 1985. Harley slashed payroll, overhauled its factories and engineered a remarkable turnaround. The company has been profitable for 20 years and, in a nice irony, now enjoys the largest market share in Japan.”

This is the same plant that President Bush visited:

“Harley-Davidson's example also is something less than a pure free-trade success. In 1983, the company won special trade protection from the Reagan administration that raised tariffs on imported Japanese bikes to 49% from 4%. That gave Harley critical time to retool.”

“The president said such temporary protection is sometimes warranted. And Harley's robust workforce of more than 9,000 — roughly double the 1995 figure — underscores the point.”

In a company statement:

"Because of the union's intent to strike at midnight, not knowing how long that would last, we thought it was in the best interests of everyone to suspend badges and eletronic access to the facility, essentially giving employees a second day off with pay."

As quoted from The Auto Channel:

"Harley-Davidson has no business behaving like they're on the brink of bankruptcy," said Tom Buffenbarger, international president of the International Association of Machinists and Aerospace Workers (IAM). "When Harley was flat on its back in the 1980's, it was union members who refused to let it die. Harley went on to become an international success story but they've obviously forgotten how they got this far."

"They don't respect workers as much as their stock options," declared District 98 Directing Business Representative Tom Boger about company leaders who reported record revenue of more than $1.6 billion for the third quarter of last year.

At this point all parties need to take a step back. There are many communities that would pay Harley mucho buckos to move to their community. Google just received $100 million in tax discounts from North Carolina for a 215 employee server farm. We are in a highly competitive era and companies have more options than ever before. Someone has to give and I seriously hope it’s not the 2,700 workers at the York Harley plant. There just aren’t comparable jobs out there.

Not Just Manufacturing

As reported on by David Wighton of FT.com, New York could lose 60,000 jobs in its financial district to London and other financial centers within the next five years.

In a study by McKinsey Consultancy, a global relations firm, Mr. Wighton reports: “The report, published on Monday, says New York has also been losing out in areas such as derivatives, where Wall Street chief executives say they have been shifting business to London because of its more attractive legal and regulatory environment.”

Also quoted from the article: “McKinsey based the report partly on interviews with 50 financial services chief executives. There was a consensus that New York had become less attractive than London over the past three years, and many expected the trend to continue.”

Finally Textiles Layoffs Bottoming Out

In this article in the Business Journal of the Greater Triad Area, written by Matt Harrington mass layoffs that have devastated North Carolina are almost over. As posted earlier the state and regional governments and agencies have gotten their act together in attracting quality jobs to the state to replace these lost jobs.

The Sun Belt Is Doing It Right

Here’s another success story coming out North Carolina. “State dangles $15M to lure electric car plant” in the Triangle Business Journal by Amanda Jones Hoyle. Tesla Motors Inc. is considering North Carolina as the future home for it’s $100 million plant to build it’s Tesla Roadster electric car that gets up to 135 miles to a gallon of gas.

North Carolina that was devastated by the loss of textile manufacturers, but it seems that they have gotten their act together in attracting quality jobs to their state.

I only wish that local politico’s, here in Pennsylvania, could be half as smart. The only thing that seems to get their tails wagging is slots.

Isuzu Taking Advantage Of The Underemployed In Birmingham

From the Birmingham Business Journal, Tiffany Ray reports that Isuzu purchased a large plant in Birmingham and may set-up shop there. What is evident is that a large group have the cojones to show concern for the average guy.

As quoted from Frank Woodson, Assistant Director of a non-profit Young Business Leaders: "Part of the way we fight crime and blight within the Birmingham urban community is to provide jobs that pay a living wage,"

Woodson further adds: "When children see that there are employment opportunities there, education becomes more important,"

Larry Holt, director of research for the Birmingham Regional Chamber of Commerce, adds the obvious: "Any time you have that significant of a capital investment and jobs created in the area, that's obviously a huge positive for the area."

Woodson noted that the unemployment rate does not count people who have dropped out of the work force and are not seeking employment, nor does it take into account underemployment. "To me, (underemployment is) just as bad as unemployment as far as the impact on the community because it keeps parents out of children's lives,"

Small wonder that in November 2006, Alabama's unemployment rate was 3.2 percent, down from 3.6 percent the same month the year before. The Birmingham metro area posted a jobless rate of 2.8 percent for the month, compared with 3.2 percent in November 2005.