The Latest Generation Of 20 Year Olds Increasingly Renting…Everything

The day Michael Anselmo signed a lease on his first apartment in New York City, he lost his job at Buck Consultants LLC. He spent about 10 months struggling to pay rent with unemployment benefits. Two years later he’s still hesitant to buy a home or even a road bike.

“Every decision that I have made since I lost my job has been colored by that insecurity I feel about the future,” said Anselmo, 28, who now rents an apartment in Austin, Texas, and works as a consultant for UnitedHealth Group Inc. “Buying a house is just further out on the timeline for me than it used to be.”

Anselmo and many of his peers are wary about making large purchases after entering adulthood in the deepest recession and weakest recovery since World War II. Confronting a jobless rate above 8 percent since 2009 and student-loan debt hitting about $1 trillion, 20-to-34-year-olds are renting apartments, cars and even clothing to save money and stay flexible.

As the Great Depression shaped the attitudes of a generation from 1929 until the early years of World War II, so have the financial crisis and its aftermath affected the outlook of young consumers like Anselmo, said Cliff Zukin, a professor of public policy and political science at the Edward J. Bloustein School of Planning and Public Policy at Rutgers, the state university of New Jersey.

Recession Effects
“This is a generation that is scared of commitment, wants to be light on their feet and needs to adjust to whatever happens,” said Zukin, who’s researched the effects of the recession on recent college graduates. “What once was seen as a solid investment, like a house or a car, is now seen as a ball and chain with a lot of risk to it.”

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New York, August 07, 2012 — Historical evidence shows that the risk of re-default tends to remain high after sovereign distressed exchanges, Moody’s Investors Service says in a new report that analyzes the modern history of sovereign bond defaults and the haircuts imposed on investors.

The new report, entitled “Sovereign Defaults Series: Investor Losses in Modern-Era Sovereign Bond Restructurings,” is available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release.

“Thirty-seven percent of the 30 sovereign debt exchanges since 1997 were followed by further default events,” explains Elena Duggar, Moody’s Group Credit Officer for Sovereign Risk and author of the report. “These high rates of re-default after a distressed exchange in the sovereign sector are similar to the experience in the global corporate sector and explain why ratings often remain low, in the Caa-C rating range, following distressed exchanges.”

Since 1997, there have been 30 distressed exchanges on sovereign bonds, by 22 sovereign issuers. Moody’s new report pinpoints four key findings:

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Knowing how many poor idiots are in this state, I’m guessing no.

Please let me be wrong…

No more than a sliver of the statewide vote is in, but former U.S. Rep. Pete Hoekstra has a lead on the competition in the race to take on U.S. Sen. Debbie Stabenow this fall – at least for now.

The Associated Press reports that with 12% of the vote in, Hoekstra, from Holland, had 55% of the vote compared to 32% for Cornerstone Schools founder Clark Durant.

Most polls showed Hoekstra with a strong chance of winning the Republican nomination going into Tuesday’s primary balloting but Durant had picked up some key endorsements. He and his supporters also were trying to strike back with ads questioning Hoekstra’s record in Congress.

The polls closed at 8 p.m. except for three counties in the western part of the Upper Peninsula, where they were set to close at 9 p.m.

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NEW YORK (CNNMoney) — The drought that’s killing crops across the Midwest and sending corn prices to record highs has revived calls to end or ease the government’s requirement that corn-based ethanol be blended with gasoline.

Current rules stipulate that nearly 10% of the nation’s gasoline supply come from corn-based ethanol. To make that ethanol, up to 40% of the country’s annual corn production can be required.

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NEW YORK (CNNMoney) — Gas prices continued their slow but steady march higher Tuesday, surpassing a nationwide average of $3.63 cents a gallon on the back of refinery problems in the United States and higher crude oil prices globally.

Nationwide average gasoline prices are now 30 cents higher than they were just five weeks ago. They are now at the midway mark between this year’s high price of $3.94 a gallon — hit April 5 — and the recent low of $3.33 hit just over five weeks ago, according to AAA.

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“It’s a tax that punishes people that have been diligent over the years and did the right thing,” says Certified Public Accountant Bob Keebler on the Medicare surtax that kicks in on Jan.1.

As I wrote last week, the additional 3.8% tax is part of the president’s Patient Protection and Affordable Care Act, ak.a. “Obamacare,” and affects individuals Congress has decided are “wealthy:” single taxpayers with modified adjusted gross income (MAGI) of $200,000 or more and married couples with a MAGI of at least $250,000.

If you fall into one of these categories, you’ll pay 3.8% more in federal income tax on the lesser of your investment income or your “excess” MAGI- the amount that exceeds the $200,000 or $250,000 threshold.

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WASHINGTON (AP) – People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press.

Previous generations got a much better bargain, mainly because payroll taxes were very low when Social Security was enacted in the 1930s and remained so for decades.

“For the early generations, it was an incredibly good deal,” said Andrew Biggs, a former deputy Social Security commissioner who is now a scholar at the American Enterprise Institute. “The government gave you free money and getting free money is popular.”

If you retired in 1960, you could expect to get back seven times more in benefits than you paid in Social Security taxes, and more if you were a low-income worker, as long you made it to age 78 for men and 81 for women.

As recently as 1985, workers at every income level could retire and expect to get more in benefits than they paid in Social Security taxes, though they didn’t do quite as well as their parents and grandparents.

Not anymore.

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They were homes once, but they are homes no longer. They are hollow dangers. Hiding places. Drug houses.

They are lurching shadows that stare down our city’s children as they walk to school. There’s a real home; there’s a shell of a house. There’s a neighbor; there’s two shells of houses. A child wonders who just ducked behind a smashed window, or why that doorway is wide open.

The child is scared — with good reason.

And we need to stop it.

On Aug. 25, I am helping organize an event called 100 Houses to make those streets a bit less frightening for kids. The goal is ambitious, but simple:

Board up 100 houses in a single day.

That’s right, 100 houses.

We can do this. In a way, we must. Because the Abandoned Home has become a terrible symbol of Detroit. Left behind by someone who couldn’t pay the mortgage. Bid farewell by someone who couldn’t deal with the city. These places, like animal carcasses, are quickly stripped of anything valuable — right down to the pipes — and then begin their steady slide into the muck. The windows and doors are soon gone, smashed or destroyed by people wanting to use the place for shelter, hiding, prostitution, drugs.

When one house like that goes down, it affects the block. When many go down, it affects the neighborhood. Families leave. They walk away.

And what’s the result?

Another abandoned house.

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NEW YORK (CNNMoney) — If lawmakers cannot agree on how to address the pending “fiscal cliff,” $7 trillion worth of tax increases and spending cuts will begin to go into effect in January.

The smart money says Congress won’t come close to an agreement before the November election, and that lawmakers may not even be able to reach one until early next year. At that point, of course, they’d need to undo at least some of the tax increases and spending cuts that went into effec.

In the meantime, uncertainty about just what Congress will do will weigh on the economy.

Here’s a rundown of what happens if lawmakers fail to act before Jan. 1, 2013.

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Economic Measurement

I appreciate the opportunity to speak at a conference with the important theme of economic measurement. In many spheres of human endeavor, from science to business to education to economic policy, good decisions depend on good measurement. More subtly, what we decide to measure, or are able to measure, has important effects on the choices we make, since it is natural to focus on those objectives for which we can best estimate and document the effects of our decisions. One great pioneer in this subject area, of course, is Simon Kuznets, who was awarded the Nobel Prize in 1971 for his work on economic measurement, including the national income accounts. Over the years many economists have built on his work to further improve our ability to quantify aspects of economic activity and thus to improve economic policymaking and our understanding of how the economy works. The remarkably broad and ambitious research program of this conference and the impressive expertise that has been assembled illustrate the continued vitality of this field. Evolving technologies that allow economists to gather new types of data and to manipulate millions of data points are just one factor among several that are likely to transform the field in coming years.

As we think about new directions for economic measurement, we might start by reminding ourselves of the purpose of economics. Textbooks describe economics as the study of the allocation of scarce resources. That definition may indeed be the “what,” but it certainly is not the “why.” The ultimate purpose of economics, of course, is to understand and promote the enhancement of well-being. Economic measurement accordingly must encompass measures of well-being and its determinants.

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What kind of stupidity is this? That’s only about 5.7%, but staggered in such a way that the taxpayers will get absolutely hammered.

Cut the Keynesian horseshit and just raise taxes a bit.

This is a truly astounding story: San Diego’s Poway school district is paying $1 billion to borrow $105 million.

And it may not be alone in San Diego or the state paying loan shark rates.

According to a story in the Voice of San Diego, a mostly investigative online news site, the city really had no choice. It was either raise taxes or float what appeared to be just another bond to fix its schools.

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The Knight Capital trading fiasco, bad as it is, looms even worse because similar high-speed trading problems are likely to keep on roiling the markets and fueling investor mistrust.

Anger and gloom swept across trading floors Thursday, the day after the New York-based trading firm reported a software malfunction that caused a surge in volume at the market open Wednesday and violent price swings for nearly 150 stocks.

Few if any were cheering the misfortunes of Knight (KCG), whose very survival is challenged by the scandal.

But the biggest concerns were for the retail investors who are likely to continue to flee the market.

“You can only assume that these glitches are going to continue into the future,” says Todd Schoenberger, managing director of the BlackBay Group in New York. “This is a huge, huge negative. It’s another black eye for Wall Street. This is not good for the retail investor. How are they supposed to trust what we do?”

Knight blamed the malfunctions on a software upgrade and said the episode would cost a whopping $440 million, a burden that will force the company to raise capital to cover.

The price tag on a market that already had been bleeding investor money is yet to be determined.

“So many good people are getting hurt in a very bad way, so many people in many industries. This hurts all of us,” says Sal Arnuk, partner at Themis Trading, an independent brokerage in Chatham N.J. “It hurts folks like us because when confidence is diminished people pull their money out of the market. When people pull their money out of the market my customers – institutions, mutual funds – trade less.”

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After the Federal Reserve declined to spike the punchbowl Wednesday, fans of monetary stimulus are now entirely dependent on the European Central Bank for a fix.

In leaving its policies unchanged, the Fed gave investors what they expected, but not what they wanted. Now, all eyes are turning to Frankfurt, where top ECB officials will meet Thursday for their monthly policy discussion.

ECB president Mario Draghi raised the stakes last week when he said the ECB will do “whatever it takes” to preserve the euro currency. In a coda that caught the attention of many stimulus-hungry investors, Draghi added: “Believe me, it will be enough.”

But investors who think that Draghi is going to do something big and bold as soon as Thursday morning are much more likely to be let down if he fails to deliver. Beware, this could end in tears.

“We think there is plenty of scope for disappointment,” said John Higgins, senior market economist at Capital Economics. “The ECB’s bark could prove louder than its bite.”

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NEW YORK (CNNMoney) — Toyota announced the recall Wednesday of some 778,000 vehicles in the United States due to a suspension problem that could cause crashes.

The recall comprises roughly 760,000 Toyota RAV4’s from model years 2006 to 2011, as well as about 18,000 Lexus HS 250h’s from 2010.

Toyota said that if the nuts on the rear suspension arms of these vehicles aren’t tightened properly during a wheel alignment service, the arms may come loose or separate.

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(CNN) — A recent CNN.com op-ed asked “Was the Shell Oil hoax ethical?” We at Greenpeace, along with the activist group Yes Men, are behind the Shell Oil website ArcticReady.com, which we created to call attention to the company’s Arctic destruction. So we were intrigued by this question.

The writer, Paul Root Wolpe, director of the Center for Ethics at Emory University, said the spoof website did not announce itself as a parody and that omission could be called misrepresentation. And that could possibly be called unethical. But we revealed our role just hours after the site went up, and the site is so over-the-top — it has a kids’ game called “Angry Bergs” — that people realize very quickly that it is fake.

But mispresentation is Wolpe’s concern, which is why he should have addressed the ethics of Shell’s multibillion-dollar international hoax perpetrated on Earth itself. A hoax the company has failed to reveal to the public.

Royal Dutch Shell made $31 billion in profits last year, while its CEO took home $15 million in compensation during one of the worst economic crises in a century. The company’s lobbyists in Washington, London and other global capitals work to slow the development of clean technologies and renewable energy, preferring instead a status quo that benefits their shareholders and leaves the massive costs of climate change to the 99%.

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Washington (CNN) — The U.S. House on Wednesday took the opposite action on tax cuts as the Senate, rejecting a Democratic proposal championed by President Barack Obama to extend lower tax rates for middle-income Americans, and then passing a Republican plan to maintain the lower rates for everyone for a year.

In separate votes that amounted to political posturing in an election year, House Republicans joined by more than a dozen Democrats passed the GOP measure by a 256-171 margin.

Minutes earlier, a similar tally defeated the Democratic alternative that would maintain the lower rates for income up to $250,000 for families and $200,000 for individuals for a year.

Wednesday’s votes extended a congressional stalemate over the Bush tax cuts from 2001 and 2003 that has come to symbolize legislative inaction in Washington.

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The Federal Reserve has indicated it will take further steps as necessary to promote a stronger economic recovery. Sadly, the Fed’s bullets are spent, and the U.S. economy is skidding as a result of Administration missteps.

The economy is growing at less than 2%. Unemployment holds steady at 8.2% only because so many folks have quit looking for work and are no longer counted in the official tally of joblessness.

Consumer spending has slowed substantially, because Americans are pessimistic that President Obama’s economic policies will fix the economy and are hunkering down for a long siege. They are simply not convinced Governor Romney offers sufficiently effective alternatives and the personal qualities to be President.

At the conclusion of its August 1 meeting, the Federal Reserve Open Market Committee stated it “will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions…”

Unfortunately, the Federal Reserve has already pulled all the levers that might make a difference. Short-term interest rates — such as the overnight bank borrowing rate and one-month and one- year Treasury Bill rates — are already close to zero.

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(CNN) — More than half of all U.S. counties have been designated disaster zones, the Department of Agriculture reported, blaming excessive heat and a devastating drought that’s spread across the Corn Belt and contributed to rising food prices.

Agriculture Secretary Tom Vilsack on Wednesday declared disaster zone designations for an additional 218 counties in 12 states because of damage and losses caused by drought and excessive heat.

The states are Arkansas, Georgia, Iowa, Illinois, Indiana, Kansas, Mississippi, Nebraska, Oklahoma, South Dakota, Tennessee and Wyoming.

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Employees at the obscure General Services Administration are quietly gobbling up 10 percent of the entire federal government’s bonus checks, a top Republican lawmaker revealed Wednesday, with the tab reaching a stunning $44 million last year.

The $44 million amount is far more than was previously reported. As House lawmakers convened a hearing Wednesday digging deep into alleged mismanagement and waste at the embattled agency, Transportation Committee Chairman John Mica, R-Fla, called the latest revelations “absolutely outrageous.”

Disclosing the results of what he described as a preliminary investigation, Mica said bonuses totaled $44 million, with many bonuses worth $50,000 apiece and some going to workers now under investigation. One employee, he said, received a $79,000 bonus, adding up to nearly $260,000 in total compensation.

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REDMOND, Wash. (CNNMoney) — Flatscreen HDTVs are nice, but the technology hasn’t changed all that much over the past decade.

There have been all kinds of attempts to update the TV experience by adding features like Internet connectivity or 3-D. Microsoft (MSFT, Fortune 500) is thinking about a bigger change — much bigger.

At its research lab in Redmond, Wash., Microsoft engineers are working on a display technology called “vX,” which scales infinitely large. Or at least really, really big.

Giant HD displays exist today, but they typically involve multiple displays working in tandem with one another, each controlled by an individual computer. That means today’s big displays require a lot of electronics, take up way more space than just the display itself, and they’re massively expensive. The 2,160-inch HD screen at Cowboys Stadium in Arlington, Texas, cost $40 million.

Microsoft believes vX is a solution to that problem. In a feat of engineering, the company’s researchers built 15 flatscreen displays and gave each screen its own unique set of electronics. None has its own graphics card or a computer — they’re all collectively controlled by one PC.

The next step is to add nine more screens to get to 24. Tom Blank, the Microsoft Research engineering manager in charge of the vX project, said the system is designed to scale up to a 1,300-inch display.

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