Home / 2013 / October (page 2)

Monthly Archives: October 2013

State of the Union

By , Published: October 23

“A majority of Americans with 401(k)-type savings accounts are accumulating debt faster than they are setting aside money for retirement, further undermining the nation’s troubled system for old-age saving, a new report has found.

Three in five workers with defined contribution accounts are “debt savers,” according to the report released Thursday, meaning their increasing mortgages, credit card balances and installment loans are outpacing the amount of money they are able to save for retirement.

The imbalance is expanding even as policymakers are encouraging people to set aside more by offering generous tax breaks and automatically enrolling workers in retirement accounts that in some cases automatically escalate the amount of money over time.

Currently, workers with retirement savings accounts put aside more than 11 percent of their pay for retirement — 5 percent in their own accounts, and 6.2 percent in Social Security.

Despite that — and despite the $2.5 trillion the report says employers have poured into defined contribution accounts from 1992 to 2012 — the retirement readiness of most Americans has been slipping, according to the report by HelloWallet, a D.C. firm that offers technology-based financial advice to workers and conducts research of economic behavior.

“Policy has tunnel vision. It tends to tackle problems on a piecemeal basis. The impact of policy on consumer finances is a bit like playing a game of Whac-A-Mole,” said Matt Fellowes, founder and chief executive of HelloWallet and a former Brookings Institution scholar. “We raised the victory flag as people increased retirement contributions, but in reality the ability of people to retire is a function of lots of different variables, most important of which is what they are doing on the other side of the ledger.”

The HelloWallet report is the latest in an expanding line of research suggesting that the United States is facing a looming retirement security crisis. A growing number of researchers are concerned that the nation is on the cusp of a shift in which more Americans are on a track that will lead to a decline in their living standards when they retire.

The report says that debt is among the biggest culprits. The amount of money that households nearing retirement are dedicating to pay down debts has increased 69 percent over the past two decades, the report said. Households headed by people ages 55 to 64 now spend 22 cents of each dollar to pay off old loans — about the same percentage as younger people, the report found.

The problem is not confined to the poorest Americans, many of whom have no retirement savings. Most of the people with accounts who are accumulating debt faster than retirement savings are older than 40, college educated and earning more than $50,000 a year, the report said.

More than a third of them, the report said, are older than 50, a time when financial planners say people should be paying down debt and increasing their efforts to prepare for retirement.

“My work confirms that people are reaching the threshold of retirement much more in debt than in the past,” said Olivia Mitchell, professor of economics and executive director of the Pension Research Council at the University of Pennsylvania’s Wharton School of Business.

Mitchell said the main reasons for the growing debt appear to be greater spending on housing, larger and more auto loans, and more credit card debt….”

Full article

Comments »

Your Tax Dollars at Work

Earlier this week we had a look into the wonderful world of $MCD; now let’s look at $WMT.

“On Tuesday, the BLS engrossed in the same frenzy of openly making up data like the Dept of Labor has been with the initial claims data ever since early September when it started upgrading its California “systems” and never finished, announced that while only 140K or so jobs were created in September, nearly 700K full-time jobs were added as over 500K part-time jobs were converted into full-timers. On the surface this is great news… until one actually looks for empirical evidence that this is happening anywhere besides the data manipulating, massaging and fabricating models used by the BLS. And one certainly won’t find it at the biggest private employer in the US – Walmart, which just announced that a whopping 475,000 of its employees earn at least $25,000 a year. Great news, right? Sure, until one considers that WMT has over 1 million employees, which means that well over 50% of Wal-Mart’s employees make a tiny $25,000 year.

From Bloomberg:

Wal-Mart has provided some new and useful information: More than 475,000 of its 1 million hourly store employees earn at least $25,000 a year for full-time work. This figure comes from Bill Simon, the president and chief executive officer of Walmart U.S., who presented (PDF) it at Goldman Sachs’s (GS) Global Retailing Conference last month. The statistic, which was listed under the heading “Great job opportunities,” means as many as 525,000 full-time hourly employees earn less than $25,000 a year.



OUR Walmart, the union-backed workers’ group that’s been staging protests and asking for higher wages, pointed this out during a press conference in Washington, D.C., on Wednesday. (The company’s presentation is also on its website.) Three store associates, as well as three Democratic members of the House of Representatives, called on the retail giant to pay all of its full-time workers at least $25,000 a year.

Wal-Mart is adamant: the pay is fair.

“We have hundreds of thousands of associates who are making $25,000 a year or more,” says Kory Lundberg, a Wal-Mart spokesman. “And the opportunity exists for those who aren’t to grow into the career they want. We promote 160,000 people a year.” Lundberg also explained how to parse some of Wal-Mart’s figures. The company has 1.3 million hourly workers, which led OUR Walmart to claim at the press conference that 825,000 of them made less than $25,000 a year. Lundberg points out that Simon’s presentation was referring to the 1 million who work in the stores. (The rest work as truck drivers and at the Bentonville (Ark.) headquarters, among other places.) So about 52 percent of its associates make less than $25,000 a year—not 63 percent.

The other side disagrees. As expected, the minimum wage workers demand – what else – higher wages.

“A decent wage is their demand—a livable wage, of all things,” said Representative George Miller (D-Calif.). The problem with companies like Wal-Mart is their “unwillingness, not their inability, to pay that wage,” he said….”

Full article

Comments »

Richard Koo: The U.S. is in a QE Trap

“The Federal Reserve shocked market participants in September with its decision to refrain from tapering quantitative easing, as many felt that the central bank had signaled the move at its June meeting.

Fed chairman Ben Bernanke sparked a sharp rise in long-term interest rates at the June press conference by suggesting that tapering could happen later in the year.

The September decision raised questions among observers over whether talking about tapering ended up eventually precluding tapering, because the rise in long-term interest rates sparked by the signal weighed on the economy such that the Fed then felt it couldn’t ease up on the bond buying it does under its QE program.


QE trapNomura


Richard Koo calls it the “QE trap,” a concept he explained in a note following the September FOMC decision.

Koo has been meeting with clients and officials in the U.S., and he says he hasn’t been able to find anyone to refute the theory that the U.S. economy is currently ensnared in the “QE trap.”

“At the Fed I hoped to hear a refutation of the QE ‘trap’ argument presented in my last report and which I presented using Figure 1,” writes Koo in a note to clients. “However, the official I met with was unable to say anything to ease my concerns.”

The QE “trap” happens when the central bank has purchased long-term government bonds as part of quantitative easing. Initially, long-term interest rates fall much more than they would in a country without such a policy, which means the subsequent economic recovery comes sooner (t1). But as the economy picks up, long-term rates rise sharply as local bond market participants fear the central bank will have to mop up all the excess reserves by unloading its holdings of long-term bonds.

Demand then falls in interest rate sensitive sectors such as automobiles and housing, causing the economy to slow and forcing the central bank to relax its policy stance. The economy heads towards recovery again, but as market participants refocus on the possibility of the central bank absorbing excess reserves, long-term rates surge in a repetitive cycle I have dubbed the QE “trap.”

In countries that do not engage in quantitative easing….”

Full article

Comments »

U.S. Saudi Relations Head South, Is the Petrodollar in Peril ?

“Riyadh signals anger over U.S. policy in Middle East

* Source says shift could affect arms, oil trade

* Prince Bandar set to end cooperation over Syria war

* In Washington, Saudi prince assails Obama’s Mideast moves

By Amena Bakr and Warren Strobel

DOHA/WASHINGTON, Oct 22 (Reuters) – Upset at President Barack Obama’s policies on Iran and Syria, members of Saudi Arabia’s ruling family are threatening a rift with the United States that could take the alliance between Washington and the kingdom to its lowest point in years.

Saudi Arabia’s intelligence chief is vowing that the kingdom will make a “major shift” in relations with the United States to protest perceived American inaction over Syria’s civil war as well as recent U.S. overtures toIran, a source close to Saudi policy said on Tuesday.

Prince Bandar bin Sultan told European diplomats that the United States had failed to act effectively against Syrian President Bashar al-Assad or in the Israeli-Palestinian conflict, was growing closer to Tehran, and had failed to back Saudi support for Bahrain when it crushed an anti-government revolt in 2011, the source said.

“The shift away from the U.S. is a major one,” the source said. “Saudi doesn’t want to find itself any longer in a situation where it is dependent.”

It was not immediately clear whether the reported statements by Prince Bandar, who was the Saudi ambassador to Washington for 22 years, had the full backing of King Abdullah.

The growing breach between the United States and Saudi Arabia was also on display in Washington, where another senior Saudi prince criticized Obama’s Middle East policies, accusing him of “dithering” on Syria and Israeli-Palestinian peace.

In unusually blunt public remarks, Prince Turki al-Faisal called Obama’s policies in Syria “lamentable” and ridiculed a U.S.-Russian deal to eliminate Assad’s chemical weapons. He suggested it was a ruse to let Obama avoid military action in Syria.

“The current charade of international control over Bashar’s chemical arsenal would be funny if it were not so blatantly perfidious. And designed not only to give Mr. Obama an opportunity to back down (from military strikes), but also to help Assad to butcher his people,” said Prince Turki, a member of the Saudi royal family and former director of Saudi intelligence.

The United States and Saudi Arabia have been allies since the kingdom was declared in 1932, giving Riyadh a powerful military protector and Washington secure oil supplies.

The Saudi criticism came days after the 40th anniversary of the October 1973 Arab oil embargo imposed to punish the West for supporting Israel in the Yom Kippur war.

That was one of the low points in U.S.-Saudi ties, which were also badly shaken by the Sept. 11, 2001, attacks on the United States. Most of the 9/11 hijackers were Saudi nationals.

Saudi Arabia gave a clear sign of its displeasure over Obama’s foreign policy last week when it rejected a coveted two-year term on the U.N. Security Council in a display of anger over the failure of the international community to end the war in Syria and act on other Middle East issues….”


Full article

Comments »

Make Some Space

[youtube://http://www.youtube.com/watch?v=dGZ4WeQwmIk#t=362 450 300] [youtube://http://www.youtube.com/watch?v=eupEkeYOhj4#t=160 450 300]

Comments »

Fears of Tighter Chinese Monetary Policy Sack Global Markets

“(Reuters) – Concerns over tighter Chinese monetary policy hit global shares still high on hopes of extended U.S. stimulus on Wednesday, when the dollar tentatively steadied at an eight-month low after its latest slide.

European shares saw their biggest falls in two weeks as markets opened when fears of tighter policy in China were amplified by reports that some of its big banks were tripling write-offs on bad loans.

Asian markets saw widespread weakness as a variety of factors ranging from a strengthening yen in Japan and fading rate cut hopes in Australia added to the negativity.

“What has happened this morning is that we have the Chinese rate surge on the policy tightening fears,” said Alvin Tan, a strategist at Societe Generale in London.

“That has basically generated a broad correction in risk assets and in Europe that is continuing.”

Short-term Chinese money rates underscored investors’ concerns that regulators there are poised to tighten liquidity to quell growing inflationary pressures.

The benchmark seven-day repo contract, which had been steadily sliding since October 9, spiked in the morning session, a day after a policy adviser to the People’s Bank of China (PBOC) told Reuters it was weighing tightening measures.

In Europe, A string of earning misses from some of the region’s biggest corporate names including chip maker STMicroelectronics (STM.PA) and brewer Heineken (HEIN.AS) added to the pressure on shares.

Investors were also digesting the first firm details from the European Central Bank on it plans to check the health of euro zone banks over the next year.

The FTSEurofirst 300 .FTEU3 was down as much as 0.7 percent as trading gathered pace, with Italian, Spanish and Portuguese markets leading the way with respective falls of 1.4, 1.2 and 1.3 percent.


The ECB’s new supervision role is the first leg of a three-pronged plan for a banking union in the euro zone and is designed to ensure there are no holes that could leave the bloc vulnerable.

Jan von Gerich, chief developed market strategist for Nordea, said that while if done properly it should help the euro zone, in the short term it could revive questions about its weaker members.

“The most interesting part will be what it says about Italy….”

Full article

Comments »

The Markets are Ripe for a Rally

“The Standard & Poor’s 500 Index hit yet another record high Monday, and some experts say conditions are ripe for the stock market to keep climbing.

The economy and earnings are growing, albeit at a modest pace; inflation is low; and in the wake of Washington’s budget/debt ceiling mess, the Federal Reserve isn’t about to tighten policy, the bulls tell The Wall Street Journal.

“This is the best environment for stocks right now. You don’t have rising interest rates becoming a problem. You don’t have inflationary pressures. You do have earnings growth,” Tim Hayes, chief global investment strategist at Ned Davis Research, tells the paper.

Even the 7.3 percent unemployment rate is a good thing, he says, because the rate is dropping.

When the unemployment rate is above 6 percent and decreasing, the S&P 500 averages annual gains of 16.5 percent, going back to the 1940s, Hayes explains.

Ned Davis Research says stocks also do better when earnings growth is under 5 percent….”

Full article

Comments »

Your Tax Dollars at Work

Corporate welfare come in many forms, but this is one you might not have expected….

“The fast-food industry is one of the nation’s largest employers of low and minimum wage workers. According to one group, often the industry workers’ pay is not enough and many turn to government programs for assistance. In fact the group calculated the largest of these companies, McDonald’s, cost U.S. taxpayers close to $3.8 billion each year.

According to the National Employment Law Project’s (NELP) newest report, because the fast-food industry pays its workers less than a living wage, U.S. taxpayers must foot the bill in the form of the public assistance programs these workers must use to get by. McDonald’s alone, according to the group, cost taxpayers $1.2 billion last year. Based on NELP’s estimates, 24/7 Wall St. reviewed the annual costs of providing public assistance to low wage employees working at the seven largest publicly traded fast-food companies.

“What this report shows,” explained NELP policy analyst Jack Temple, “is that whether or not you work in the fast-food industry or eat fast-food, the industry is costing you….”

Full article

Comments »

Bow Down Before the One You Serve

[youtube://http://www.youtube.com/watch?v=GvrHZzgDjGs 450 300] [youtube://http://www.youtube.com/watch?v=5H8G7aotaXQ 450 300]

Comments »

Lacy Hunt Ph.D., Economist: The Fed’s Failures are Mounting

“The Fed’s capabilities to engineer changes in economic growth and inflation are asymmetric. It has been historically documented that central bank tools are well suited to fight excess demand and rampant inflation; the Fed showed great resolve in containing the fast price increases in the aftermath of World Wars I and II and the Korean War. In the late 1970s and early 1980s, rampant inflation was again brought under control by a determined and persistent Federal Reserve.

However, when an economy is excessively over-indebted and disinflationary factors force central banks to cut overnight interest rates to as close to zero as possible, central bank policy is powerless to further move inflation or growth metrics. The periods between 1927 and 1939 in the U.S. (and elsewhere), and from 1989 to the present in Japan, are clear examples of the impotence of central bank policy actions during periods of over-indebtedness.

Four considerations suggest the Fed will continue to be unsuccessful in engineering increasing growth and higher inflation with their continuation of the current program of Large Scale Asset Purchases (LSAP):

  • First, the Fed’s forecasts have consistently been too optimistic, which indicates that their knowledge of how LSAP operates is flawed. LSAP obviously is not working in the way they had hoped, and they are unable to make needed course corrections.
  • Second, debt levels in the U.S. are so excessive that monetary policy’s traditional transmission mechanism is broken.
  • Third, recent scholarly studies, all employing different rigorous analytical methods, indicate LSAP is ineffective.
  • Fourth, the velocity of money has slumped, and that trend will continue—which deprives the Fed of the ability to have a measurable influence on aggregate economic activity and is an alternative way of confirming the validity of the aforementioned academic studies.

1. The Fed does not understand how LSAP operates

If the Fed were consistently getting the economy right, then we could conclude that their understanding of current economic conditions is sound. However, if they regularly err, then it is valid to argue that they are misunderstanding the way their actions affect the economy.

During the current expansion….”

Full article

Comments »

CNN Whistleblower: ‘CNN is Paid by Foreign and Domestic Government Agencies for Specific Content’

[youtube://http://www.youtube.com/watch?v=610L8sp0GLw#t=240 450 300]

“CNN Exposed – Emmy Winning Former CNN Journalist Blows The Whistle: CNN is paid by foreign and domestic Government agencies for specific content…

Perhaps this one of the most important discussion ever regarding Legacy Media manipulation.   We sincerely hope you will take the time to digest the content, think about the ramifications to what is here, and then share the information with others.

This is not a matter of opinion, the CNN stories are documented, attributed and cited.   They are factual.   Everything is verifiable within the embedded links and citations.

Believe it or not, just creating this discussion is risky. We are unable to expand.

Before getting to the CNN Amber Lyon expose’ (which is incredible and troubling) let’s first back up a moment andtake you back to a previous video we shared surrounding recent events.

In this first video from Canada the topic is the Libyan US Consulate Bombing and the US Egyptian Embassy being overrun.   While the topic of Egypt is a ‘component’ of the issue, it is not our central concern.

The central issue is Media Controlled by The Obama Administration, and more specifically CNN – as a VERIFIED tool for propaganda and disinformation.

Within this Canadian video report you will find footage of a CNN story on Egypt and Mohammed Al Zawahiri. It was produced by well-known CNN Journalist Nick Robertson. The entire video is excellent, but the pertinent aspect is at the 1:30 mark.

Why would CNN [or CNNi] refuse to air the Nick Robertson report with Muhammed Al Zawahiri (brother of Ayman Al Zawahiri) that clearly shows the Egyptian uprising was 100% in response to his call for protests for release of the Blind sheik on 9-11.? Why would the “most trusted name in news“, hide the report showing the truth, and instead allow the false narrative to be sold, by them, to the American electorate?

CNN never aired the Nick Robertson report in Egypt because it completely contradicted President Obama and Hillary Clinton’s assertions.   In short, the Robertson report, if aired, would have proved Obama and Clinton were lying.

The Nick Robertson CNN report was filmed on 9/11/12, yes the exact morning of the Cairo embassy protest, and, by coincidence, it would have aired at the exact moment Hillary Clinton and Barack Obama began attributing the Egyptian embassy protest to a “U-Tube Video”.   A U-Tube Video the U.S. Cairo embassy itself was unaware of until 9/9/12.

CNN’s refusal to air the real reasoning for the Egyptian Embassy protest turned assault was intentional protection of President Obama, specifically orchestrated by the CNN News group, at the behest of the White House.   Specific, intentional, lying.

Apparently they have a history of this no-one knew about.   UNTIL NOW…..”

Full article



Comments »

China Downgrades U.S. Debt

“China’s credit rating agency Dagong has downgraded the U.S. rating from A to A-.

“[T]he fundamental situation that the debt growth rate significantly  outpaces that of fiscal income and GDP remains unchanged,” they warned after President Obama signed a deal to end the government shutdown and raise the debt ceiling.

“For a long time the U.S. government maintains  its solvency by repaying its old debts through raising new debts, which constantly aggravates the  vulnerability of the federal government’s solvency. Hence the government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future.”

Dagong is not recognized by the SEC, and it does not have the influence of the big three: S&P, Moody’s, and Fitch.

Not many people outside of China really follow Dagong.

Still, the downgrade appears to reflect China’s deteriorating sentiment toward U.S. governance….”

Full report

Comments »

Documentary: Spoiler

Given the recent shutdown one can say respectfully that at the very best we have a highly fractured political environment which exudes dysfunction and political embarrassment for our country.

More importantly, i will maintain that political theater is ever more present to try and keep control over the last strong holds of constituency; in order to keep the mantra going that government is working for you.

Here is an interesting claim that the government shutdown was planned. Click here for article.  Let’s us pray this was not the case.

At any rate, the documentary below is a good look at the political scene and why we need a third party that is completely independent of all dross our politicians posses.

Also if your interested in how to fix the system you can watch Patriocracy on Netflix….if i could find it for you i would…perhaps down the road. Here is the official trailer.  Trailer

Cheers on your weekend !

[youtube://http://www.youtube.com/watch?v=GbF5loRF61U 450 300] [youtube://http://www.youtube.com/watch?v=TkVijd9g_Hk 450 300]

Comments »