Monthly Archives: October 2011
Johnson and Johnson Beats Estimates, But Profits Fell QoQ & YoY
Goldman Sachs Posts a Much Wider Than Expected Loss
United Health Profit Falls Slightly, But Revenues are Up and the Company Guides Higher
BofA Appears to Beat the Street, But Core Business Shrinks Putting Them in Second Place by Assets
Cocal-Cola Beats by a Penny
Disagreement Rises Within the Federal Reserve
German Investor Confidence Drops to a Three Year Low
French and German Yields Blow Out by 100 Basis Points
French yields climbed higher than Germany’s yields for the first time since the Euro began…
Comments »Germany Continues To Remind Markets That A Solution May Not Be Found By This Weekend For Sovereign Debt Woes
Corporate Bond Risk Falls in Australia Much Faster Than U.S. and Europe
Copper Falls on Slower GDP in China
Despite a 9.1% GDP expansion in China the pace of growth has now slowed to 2009 levels. Copper was down 3% on that and other news out of Europe.
Comments »Economic Confidence in Canada Falls to a Two Year Low
GS, MS, & Two Other Firms Take a Piece of Chi-X Global Holdings; A Division of Instinet
The Euro Drops on Moody’s Warning as the Yen and the Dollar Find Strength
Moody’d Warns of a Downgrading France
Global Markets Meltdown
Jesse Jackson “Saves” Medical Tent at Zuccotti Park
Two Americas: One Rich, One Poor? Understanding Income Inequality in the United States #OWS
Since income inequality seems to be one of the concerns of the #Occupy Wall Street protestors, I thought I’d dig up some research about it so that we may all have a more thorough, if not intelligent understanding of the matter…Be sure to read the whole article. I’ve included the conclusion here, because I’m sure it will stimulate your interest and challenge your assumptions.
Conclusion
The Census income distribution figures are the foundation of most class-warfare rhetoric. On the surface, these figures show a high level of inequality: The top fifth of households have $14.30 of income for every $1.00 at the bottom.
However, these figures are flawed by the exclusion of taxes and social safety net spending and by the fact that the “fifths” do not contain equal numbers of people. Adjustment for these factors radically alters the picture of income distribution: The top fifth of the population has $4.21 of income for every $1.00 at the bottom.
The remaining inequality in society is heavily influenced by the lack of work at the bottom. If working-age adults in the lower quintiles worked as much as their higher-income counterparts, the income disparity of the top to the bottom quintiles would fall to $2.91 to $1.00.
Still, the top fifth of U.S. households (with incomes above $84,000) remain perennial targets of class-warfare enmity. These families, however, perform a third of all labor in the economy. They contain the best educated and most productive workers, and they provide a disproportionate share of the investment needed to create jobs and spur economic growth. Nearly all are married-couple families, many with two or more earners. Far from shirking the tax burden, these families pay 82.5 percent of total federal income taxes and two-thirds of federal taxes overall. By contrast, the bottom quintile pays 1.1 percent of total federal taxes.12
In one sense, John Edwards is correct: There is one America that works a lot and pays a lot in taxes, and there is another America that works less and pays little. However, the reality is the opposite of what Edwards suggests. It is the higher-income families who work a lot and pay nearly all the taxes. Raising taxes even higher on hard-working families would be unfair and, by reducing future investments, would reduce economic growth, harming all Americans in the long run.
Read the research here.
Comments »Downtown Josh Brown Discusses Downtown Manhattan #OWS #Occupy
Earlier on Monday, iBankCoin Financial News reposted commentary by Charles Gasparino about the Occupy protestors. Because we like to present all viewpoints here at iBC FN in order to piss off everyone, here is The Reformed Broker (Josh Brown) with an opposite take on the movement. Josh’s must-read blog can be found here: thereformedbroker.com
___________________
And the men who hold high places
Must be the ones who start
To mould a new reality
Closer to the Heart
– Rush
Today I had the audacity to disagree with Charlie Gasparino about the nature of the Occupy Wall Street movement and he wasted no time in going ad hominem on me, espousing that I don’t “know anything”. I felt bad for ten seconds and then checked his Twitter stream – it reads like the a menu of insults and defensive barbs against anyone who dares to feel differently than he does about any given issue. For a tough guy reporter, he has an awfully thin skin. I liked that guy, too, what a shame.
But what I’d like to do tonight is explain why I’ve got a banner across the top left of this site proclaiming my support for Occupy Wall Street lest anyone misunderstand where I’m coming from. I’d also like to reiterate how important it is for my colleagues on The Street -the proverbialMen Who Hold High Places – to give a fair shake to the kids down there and to give them the benefit of the doubt that they are not all “Marxists” as Charlie would have you believe.
The first thing to understand is that Karl Marx actually got it half-right; the philosopher taught that capitalism, left completely unchecked, would ultimately destroy itself. Marx said that the capitalists would figure out a way to industrialize to the point where workers were no longer necessary and that the result would be a social order and economy that would cave in on itself. If you can’t see that this prediction was a shockingly accurate depiction of our current Jobless Recovery for the Few then you’re simply not paying attention.
The part that Marx gets wrong – the most important part in my estimation – is that capitalism is astoundingly good at repairing itself after a major fall. This is because capitalism, while flawed, is, at the end of the day, the closest approximation to human nature that we find among all the different economic theories.
We can argue about when it was that capitalism began destroying itself for hours and hours. Some would say it goes back to Reagan and the logic of “deficits don’t matter”. Others would say that the orgiastic deregulation of the second Clinton administration and both Bush terms was the trigger. Regardless, the undeniable fact is that we tilted the scales too far and chainsawed the rulebooks, allowing that lack of regulation to chainsaw our economy and tilt it into the abyss. Business is guilty, government is guilty, banking is guilty and the voters are guilty – so let’s accept that and move on.
The fundamental question facing those of us who seek a way out as opposed to political victories is whether or not things must change. I stolidly answer that question in the affirmative. To me, the fact that an Occupy Wall Street even exists after so much acquiescence and docility in the American public is a positive sign. Agents of change often scare the shit of the mainstream at first. Think of Jesus Christ overturning the moneychangers’ tables at the Temple, think of the booming cannonfire at Lexington and Concord.
Is it a bit too precious to compare the outcry in Zuccotti Park to some of the most momentous rebellions in human history? Perhaps, but I am nothing if not dramatic and if I cannot be dramatic about something as thrilling as this, then what kind of blogger would I be?
The simple fact is that, as Suzanne explained, OWS is about checks and balances in an era of nearly unparalleled financial system dominance. It’s about ripping back the opportunity from those who have hoarded it for themselves and bringing back an economy where students don’t begin life as debt slaves forced to choose between dead-end jobs and no jobs. It’s about punishing those who’ve inflicted so much punishment on the rest of us, enabled by their position on the crony capitalist totem pole. It’s about wrenching apart the hand-in-glove coziness of Congress and Wall Street so that a few inches of daylight can shine through on everyone else.
I am not blind, and I recognize that there are anarchists, extremists and socialists among the demonstrators. But no one is forcing me or you to agree with every single sign held aloft at the various protests being held all over the country. One doesn’t have to agree with all of the causes, only with the fact that there are causes currently worth fighting for, now more than ever.
Obama promised Change and didn’t even attempt to deliver. But should his epic failure stop us from seeking to effect that change ourselves? Can we really afford to wait for 2012 and the next functional psychopath who is voted in by the disconnected electoral machine?
And so when I see The Men Who Hold High Places like Bill Gross and Mark Cuban and Jim Chanos and the like express their understanding for the protesters and their anger, I am encouraged to do so myself. When I see tandem movements start up like the 1% that supports the 99%, I am proud of the fact that there are Wall Streeters like myself who are both Capitalist and Humanist at once.
And to the elitists and defenders of the feudalist status quo, I say this: Pay close attention – closer attention than to anything else that currently occupies your thoughts – because when capitalism repairs itself as it always does, your role in administering it may be greatly diminished.
Sleep tight.
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