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Joined Nov 11, 2007
31,929 Blog Posts
Elizabeth Warren Implores the Bearded Clam, The SEC, & The Comptroller of Currency to Send Bank CEOs to Jail
“Senator Elizabeth Warren has really hit the ground running since being sworn in back in January. Hot on the heels of JPMorgan’s record $13 billion settlement for their role in the fiscal meltdown, the Massachusetts Senator penned a letter to the heads of the Securities and Exchange Commission, the Officer of the Comptroller of Currency, and the Federal Reserve imploring them not to stop at fines and settlements, but to throw the entire weight of the United States justice system at those whose fiscal malfeasance nearly destroyed our economy for good.
We thought we’d share Senator Warren’s letter with you”
[youtube://http://www.youtube.com/watch?v=-F62B6BX0xs 450 300]Documentary: Shade
Let’s just say the rabbit hole runs deep in this documentary….so don’t shrug this off as tinfoil hat wearing tard opinion; Edward Snowden has given us corroborating evidence beyond the documentation presented in this film.
Cheers on your weekend!
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The Future of Manufacturing…
“A former high-ranking official from the Department of State claims that the mass loss of civilian life caused by American-launched drone strikes in Yemen are creating dozens of new militants with each attack.
Nabeel Khoury, the deputy chief of mission in Yemen for the State Department from 2004 to 2007, writes in the Cairo Review this week that the use of unmanned aerial vehicles against alleged Al-Qaeda operatives is breeding anti-American sentiment overseas.
The editorial, published Wednesday, comes as the United States’ use of drones is dominating discussions in Washington and around the world. Two leading human rights organizations condemned drones in a pair of reports released earlier this week, and on Wednesday the prime minister of Pakistanurged US President Barack Obama to cease drone strikes in his country and essentially halt an operation that has involved hundreds of attacks since 2004.
According to Khoury, similar attacks conducted in Yemen during the last few years have spawned a hatred that could immensely hurt America’s efforts.
“Drone strikes take out a few bad guys to be sure, but they also kill a large number of innocent civilians. Given Yemen’s tribal structure, the US generates roughly forty to sixty new enemies for every AQAP operative killed by drones,” Khoury wrote, referring to Al-Qaeda in the Arabian Peninsula.
“In war, unmanned aircraft may be a necessary part of a comprehensive military strategy. In a country where we are not at war, however, drones become part of our foreign policy, dominating it altogether, to the detriment of both our security and political goals,” he added.
Khoury is currently a senior fellow for Middle East and national security at the Chicago Council on Global Affairs, a Windy City-based nonpartisan, independent think tank described on its website as “committed to influencing the discourse on global issues through contributions to opinion and policy formation, leadership dialogue and public learning.” His “40-60 new enemies” estimate was not scientifically drawn, but instead relied on his intimate knowledge of Yemeni society. ….”
Comments »State of the Union
By Michael A. Fletcher, 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….”
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.
Comments »“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….”
How Not to Solve America’s Debt Problems
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Comments »Twitter IPO Price Expected Between $17-$20 per share
Comments »Twitter offering 70,000,000 shares in IPO; sees IPO price $17-$20 per share – @BloombergTV
— Breaking News (@BreakingNews) October 24, 2013
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.
Nomura
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….”
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….”
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Make Some Space
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Comments »Are Billionaires Dumping Equities or Taking Profits in Consumer Stocks?
UN Report: Drone Strikes May Have Killed More Innocent Civilians Than Previously Thought, International Law May Have Been Broken
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.
ECB BANK CHECK
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….”
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….”
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….”
Comments »September Jobs Report Misses Expectations; Unemployment Falls to 7.2%
“The September jobs number is out and it’s a miss.
Just 148,000 jobs were created in September, well below the expectations of 180,000.
The unemployment rate fell to 7.2% from 7.3%….”
Comments »Bow Down Before the One You Serve
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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….”
Comments »Seek Truth From Facts: Ground Breaking Research
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