(Reuters) – Stocks have more than doubled since the financial crisis and are closing in on a five-year high, but many Main Street investors have been absent from the party – especially those with the least saved.

Those who missed much of the rally did so because they reduced equity exposure after the benchmark S&P 500 index plummeted 57 percent between late 2007 and March 2009, according to an analysis by Reuters of mutual fund flows and changes in assets held in retirement accounts. Investors with the smallest savings typically saw the lowest percentage recovery in returns.

And while some have returned to the stock market during the subsequent rally, plenty of small investors remain on the sidelines.

“This is the most uncelebrated bull market in history,” said Tony Ferreira, managing director at Cogent Research, which provides research and consulting for large fund managers. “In the old days, people would be jumping on the bandwagon, but nobody’s chasing equity performance this time. Many people are still scared to wade back into the water.”

Read the rest here.

(Money Magazine) — Cracks are starting to appear in the municipal bond market. If you’re investing for income, it’s time to pay attention.

Consider: Three California cities filed for bankruptcy this summer — unusual in such a short period — and ratings agencies warn that more trouble is coming. “We expect local governments to be struggling with this through 2013,” says Robert Kurtter, managing director, public finance, at Moody’s Investors Service.

Berkshire Hathaway (BRKA,Fortune 500) recently disclosed it was terminating half its contracts that insure against muni bond defaults — a sign, perhaps, that Warren Buffett is increasingly worried about the public sector’s fiscal health.

Policymakers looking to shrink the federal deficit are discussing limits on the tax benefits of munis, normally exempt from federal and, in some cases, state income taxes.

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Income is up 0.1% vs consensus of 0.2%

Spending is up 0.5%..in line with expectations

This makes sense. The best way to wake up the youth to the creeping socialism and over-reaching Obama government is to FUCK WITH THEIR FOOD.

They hope to further their efforts with a cafeteria boycott that will cost the school money, and students like Faris said they want to know why they are paying the price for other people’s problems.

“If somebody’s obese why should someone like me who’s not obese have to suffer, and eat a small meal when I’d rather have a bigger meal?” he said.

Read the rest here.

The United States’ lowest earners spent more than double their incomes last year, according to data released Tuesday by the Labor Department.

The bottom fifth of the U.S. income distribution — 24.4 million households — on average earned $10,074 in after-tax annual income and spent $22,001 last year, according to the Labor Department.

This percentage of households includes many retirees, who are presumably living off savings.

Many of these households may be spending more than they earn through some combination of loans from family and friends, credit cards, savings, and payday loans. The government helps a bit with an income tax credit: The average bottom-fifth household’s after-tax income is $269 higher than its before-tax income. The income accounted for includes welfare and Social Security benefits.

Many are also taking on debt. In 2010, roughly one-quarter of the poorest fifth of households held a high debt burden, or had debt service payments exceeding 40 percent of their income, according to the Economic Policy Institute.”

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“Nearly one quarter of Americans have less than $100 in savings to cover an emergency expense, and many would not turn to family members for a loan, according to findings from a new survey from online lender CashNetUSA.com.

The data also show that a significant percentage of Americans are living paycheck to paycheck.

The survey was conducted in February by TNS Omnibus on behalf of CashNetUSA.com and included responses from a national sample of 1,000 Americans.”

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I think it’s hard to disagree that the poor could stop being poor–at least as the US currently defines poverty–if they behaved differently; it’s basically numerically impossible to fall under the poverty line if you finish high school, wait to have children until you get married, and both work full time.  On the other hand, as I wrote a while back, I think this ignores the evidence that when you are poor–“which is to say”, noted George Orwell of unemployed coal miners, “when you are underfed, harassed, bored, and miserable”–it is actually much harder to make those choices than Bryan seems to imagine.  Which is why the poor of Orwell’s England also struggled with things like obesity and dental decay from consuming too much sugar and not enough vegetables; it is hard to get interested in dieting if a sugar high is the nicest thing that ever happens to you.

There’s also what I’d call the implicit left view, which is that, as Jesus said, “The poor, you will always have with you.”  This Noah Smith post on poverty in Japan seems to encapsulate it pretty well.  In response to Caplan, Smith argues out that about 16% of the Japanese seem to be poor, even though they are notoriously crime free, averse to single parenthood, and not big drinkers or drug users.  These are people who work, but need to scrimp on things like food, and eschew vacations, in order to afford even more necessary items such as medical care and school uniforms.  “Poverty in a prosperous society usually does not mean living in rags on a dirt floor,” Tokyo social welfare professor Masami Iwata told the New York Times. “These are people with cellphones and cars, but they are cut off from the rest of society.”

A downturn in US transportation stocks is indicating a deeper slowdown in the global economy and suggesting that the broader market rally has more to do with central bank action than fundamental strength from corporate America.

The rest of the article is worth a read, here.

“SAN ANTONIO, Sept 19 (Reuters) – More than two-thirds of Americans are now living paycheck to paycheck, according to a survey released on Wednesday by the American Payroll Association. The survey of 30,600 people found that 68 percent said it would be somewhat difficult or very difficult if their paychecks were delayed for a week. These results show Americans are still struggling with the recession’s effects, the association said.

“This study clearly shows that Americans are finding it hard to save,” said Dan Maddux, executive director of the San Antonio-based association of payroll managers.”

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“WASHINGTON—An insider of the secretive world of high-frequency trading is set to attack that industry Thursday on Capitol Hill, giving lawmakers a potential road map to address practices that critics say can put ordinary investors at a disadvantage and the financial system at risk.

Since rapid-fire trading firms now provide many of the buy and sell orders that support the market, investors are at the mercy of automated systems that can run amok during volatile times, according to Dave Lauer, who last year quit his job as a trader for an elite Chicago high-frequency trading outfit.

Mr. Lauer is part of a growing chorus of industry insiders blowing the whistle on approved trading techniques that they say are designed by the traders who derive the most benefit. Mr. Lauer is now a consultant on market-structure issues for Better Markets, a Washington, D.C., advocacy group funded by a hedge fund.

He plans to tell senators how he came to believe that high-speed trading has made the market less fair for many investors, according to his advance testimony for a Senate panel on computerized trading.”

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It will be an asterisk in the history books, if it gets a mention at all.

Read the article here.

(Reuters) – Occupy Wall Street marks its first anniversary on Monday, and, in a bid to rejuvenate a movement that has failed to sustain momentum after sparking a national conversation about economic inequality last fall, activists plan once again to descend on New York’s financial district.

Read the rest here.

The killings of the US ambassador to Libya and three of his staff were likely to have been the result of a serious and continuing security breach, The Independent can reveal.

American officials believe the attack was planned, but Chris Stevens had been back in the country only a short while and the details of his visit to Benghazi, where he and his staff died, were meant to be confidential.

The US administration is now facing a crisis in Libya. Sensitive documents have gone missing from the consulate in Benghazi and the supposedly secret location of the “safe house” in the city, where the staff had retreated, came under sustained mortar attack. Other such refuges across the country are no longer deemed “safe”.

Read the rest here.

Fun times developing….

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More fun times to come….

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Fun times…..

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Take out the garbage and clean up your room…

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“The United States wastes more money each year providing health care than it does paying for the entire Department of Defense budget, according to a new study.

Thirty cents of every dollar spent on medical services is squandered, says a group of researchers from the Institute of Medicine of the National Academies. That translates into $750 billion annually being flushed on unnecessary care, bureaucratic delays, fraud and other waste, based on calculations for 2009.”

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“The percentage of Americans who say they are in the lower-middle or lower class has risen from a quarter of the adult population to about a third in the past four years, according to a national survey of 2,508 adults by the Pew Research Center.

Not only has the lower class grown, but its demographic profile also has shifted. People younger than 30 are disproportionately swelling the ranks of the self-defined lower classes.1 The shares of Hispanics and whites who place themselves in the lower class also are growing.”

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Could you live without an iDevice ? Perhaps you must have a substitute. Either way usury gets most in the end.

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