Plato records Socrates:
Convicted in 2009, the Ponzi scheme swindler Bernie Madoff serves a 150 year sentence in federal prison. Madoff recently philosophized to Barbara Walters in an exclusive interview and touched upon deep, important subjects:
"Sanity, humor, horror, luck, suicide, courage."
_________________
From ABC News:
Bernard Madoff Mulled Suicide, Is 'Lucky to Still Be Sane'
"Madoff said all he has left in prison is his sense of humor, and sometimes he is horrified to find himself smiling.
He is "lucky to still be sane," he added.
During four months he spent in a New York jail, Madoff said, he was on suicide watch. He considered killing himself, but he "didn't have enough courage to do it" at the time."
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Link: http://abcnews.go.com/US/bernie-madoff-live-fraud-victims-anger-familys-tells/story?id=14823108&page=2
Friday, October 28, 2011
Monday, October 24, 2011
Federal Reserve Bank: Transparency Needed
Below are four excerpts from news items and analysis found online regarding the Audit by the GAO (General Accountability Office) of the Federal Reserve.
Transparency at the Federal Reserve and in our government is badly needed. Conflicts of interest reign in the absence of transparency.
We highlight the Federal Reserve transparency issue because there is a parallel problem that affects you personally: there is little to no transparency when it comes to your investment costs. Billions of dollars of private wealth (your money!) are siphoned out of investor accounts through widely owned products like mutual funds while better alternatives and practices exist.
Investors can save tens of billions annually by changing the way they invest. This can be done simply, confidently, and effectively. Read below how conflicts of interest thrived during the financial crisis. Then consider whether you want to explore transparency regarding the costs you pay for investment products and advice.
We want to lead millions of investors to change the way they invest and save billions and billions of dollars every year. It starts with each household of investors. Discover how cutting costs, and keeping the money that belongs to you, can add thousands, tens of thousands, and up to hundreds of thousands of extra wealth over the rest of your life. Believe, no one in the industry wants you to do this. But we can effectively teach you how to keep those savings. It is your money.
Patrick Broderick
Transparency at the Federal Reserve and in our government is badly needed. Conflicts of interest reign in the absence of transparency.
We highlight the Federal Reserve transparency issue because there is a parallel problem that affects you personally: there is little to no transparency when it comes to your investment costs. Billions of dollars of private wealth (your money!) are siphoned out of investor accounts through widely owned products like mutual funds while better alternatives and practices exist.
Investors can save tens of billions annually by changing the way they invest. This can be done simply, confidently, and effectively. Read below how conflicts of interest thrived during the financial crisis. Then consider whether you want to explore transparency regarding the costs you pay for investment products and advice.
We want to lead millions of investors to change the way they invest and save billions and billions of dollars every year. It starts with each household of investors. Discover how cutting costs, and keeping the money that belongs to you, can add thousands, tens of thousands, and up to hundreds of thousands of extra wealth over the rest of your life. Believe, no one in the industry wants you to do this. But we can effectively teach you how to keep those savings. It is your money.
Patrick Broderick
Both Libertarian and Socialist Agree!
From the Washington Examiner:
_____________________
Apparent conflicts show why more transparency needed at the Fed
"Love him or hate him, Ron Paul, a Republican congressman from Texas and a candidate for the GOP nomination, deserves commendation for his determination to put the Federal Reserve Board under the national political microscope. Largely as a result of Paul's persistence in the House and an amendment offered by Sen. Bernie Sanders, I-Vt., the General Accounting Office was directed in the Dodd-Frank financial reform bill to examine the extent to which conflicts of interest were involved in Fed decisions during the financial crisis of 2008. The results of the GAO examination were made public last week, and they make clear that there is indeed a great need for more transparency in the operations of the U.S. central bank.
The most troublesome revelation in the GAO audit is the extent to which insiders benefited from their positions and access during the crisis. The GAO found 18 instances in which current and former members of the Fed affiliated with banks and other companies received emergency loans from the board, including General Electric, Goldman Sachs, Lehman Brothers, and JP Morgan Chase. In the case of General Electric, its CEO Jeffrey Immelt served on the New York Fed, which loaned his corporation $16 billion in emergency funding during the crisis. Those loans were made after the New York Fed consulted with General Electric officials concerning creation of a Commercial Paper Funding Facility, according to Sanders.
One of Goldman Sachs' directors, Stephen Friedman, was chairman of the board of the New York Fed. Friedman also owned substantial stock in Goldman Sachs during the same period in 2008 when the New York Fed voted to allow Goldman to operate as a commercial bank as well as an investment bank. That approval meant Goldman got access to loans from the Fed at highly favorable rates. Fed ethics guidelines prohibit a Fed governor from owning stock in a firm being considered for commercial status, but Friedman received a waiver and continued buying Goldman stock.
As for JP Morgan Chase, its chief executive officer, Jamie Dimon, was on the New York Fed board when the company got $29 billion in emergency loans. In addition, Dimon was able to secure approval from the New York Fed for an 18-month exemption for his firm from risk-based leverage and capital requirements, as well as removal of certain high-risk investments on Bear Stearns' balance sheet before JP Morgan Chase's acquisition of the troubled investment bank.
It is not necessary to agree with Paul's demand that the Fed be abolished entirely to recognize the necessity for maximum transparency in its operations that is highlighted by these conflicts of interest exposed by GAO. As presently structured, the Fed operates with virtually no oversight by Congress or the president. Even if, as its defender claim, the Fed needs to be independent to accomplish its purpose of stabilizing the U.S. economy, greater transparency will help reassure Americans that the board is operating to benefit the entire country and not just a few insiders."
---------------
Link: http://washingtonexaminer.com/opinion/editorials/2011/10/apparent-conflicts-show-why-more-transparency-needed-fed
_____________________
Apparent conflicts show why more transparency needed at the Fed
"Love him or hate him, Ron Paul, a Republican congressman from Texas and a candidate for the GOP nomination, deserves commendation for his determination to put the Federal Reserve Board under the national political microscope. Largely as a result of Paul's persistence in the House and an amendment offered by Sen. Bernie Sanders, I-Vt., the General Accounting Office was directed in the Dodd-Frank financial reform bill to examine the extent to which conflicts of interest were involved in Fed decisions during the financial crisis of 2008. The results of the GAO examination were made public last week, and they make clear that there is indeed a great need for more transparency in the operations of the U.S. central bank.
The most troublesome revelation in the GAO audit is the extent to which insiders benefited from their positions and access during the crisis. The GAO found 18 instances in which current and former members of the Fed affiliated with banks and other companies received emergency loans from the board, including General Electric, Goldman Sachs, Lehman Brothers, and JP Morgan Chase. In the case of General Electric, its CEO Jeffrey Immelt served on the New York Fed, which loaned his corporation $16 billion in emergency funding during the crisis. Those loans were made after the New York Fed consulted with General Electric officials concerning creation of a Commercial Paper Funding Facility, according to Sanders.
One of Goldman Sachs' directors, Stephen Friedman, was chairman of the board of the New York Fed. Friedman also owned substantial stock in Goldman Sachs during the same period in 2008 when the New York Fed voted to allow Goldman to operate as a commercial bank as well as an investment bank. That approval meant Goldman got access to loans from the Fed at highly favorable rates. Fed ethics guidelines prohibit a Fed governor from owning stock in a firm being considered for commercial status, but Friedman received a waiver and continued buying Goldman stock.
As for JP Morgan Chase, its chief executive officer, Jamie Dimon, was on the New York Fed board when the company got $29 billion in emergency loans. In addition, Dimon was able to secure approval from the New York Fed for an 18-month exemption for his firm from risk-based leverage and capital requirements, as well as removal of certain high-risk investments on Bear Stearns' balance sheet before JP Morgan Chase's acquisition of the troubled investment bank.
It is not necessary to agree with Paul's demand that the Fed be abolished entirely to recognize the necessity for maximum transparency in its operations that is highlighted by these conflicts of interest exposed by GAO. As presently structured, the Fed operates with virtually no oversight by Congress or the president. Even if, as its defender claim, the Fed needs to be independent to accomplish its purpose of stabilizing the U.S. economy, greater transparency will help reassure Americans that the board is operating to benefit the entire country and not just a few insiders."
---------------
Link: http://washingtonexaminer.com/opinion/editorials/2011/10/apparent-conflicts-show-why-more-transparency-needed-fed
Transparency Needed
From Barrons Online:
______________________
No Way to Run a Central Bank
Two reports show that during the 2008 financial meltdown, regulators were taking advice from the regulated, who themselves were recipients of bailout largesse.
"When banking and investment wizards inadvertently blew up the financial system in 2008, the Federal Reserve Bank of New York required outside expertise on its triage team. And so it hired banking and investment wizards, including some who allegedly helped precipitate the devastating financial explosion, paying out $659.4 million across 103 contracts from 2008 through 2010. Among the hires were Goldman Sachs, Morgan Stanley, State Street and JPMorgan Chase -- all of which were recipients of the government's TARP, or Troubled Assets Relief Program funds. The 10 largest contracts awarded by the New York Fed represented 74% of the total amount. Eight of the largest contracts were awarded without competitive bidding.
Recipients of the 10 largest contracts were BlackRock (no bid); Morgan Stanley (no bid); Ernst & Young (no bid); Allianz's Pimco (no bid); law firm Davis Polk & Wardell (no bid); Wellington Management (no bid); State Street; JPMorgan (no bid); Goldman Sachs; and Morgan Stanley's EMC (no bid). Much of the contracted work was with American International Group, Bear Stearns, Citigroup and Bank of America; the no-bids were awarded to companies that were familiar with the innards of these troubled institutions. The New York Fed was lending the troubled institutions money and needed help to evaluate the value of the assets that they proffered as collateral....
By reading both audits head to footnote, I noticed things that apparently the GAO did not. Goldman Sachs and JPMorgan both got big contracts in 2008, when company officers were New York Fed directors. Without going into individual cases, the GAO makes a blanket statement that no directors had a say on any vendor contracts. Bully for that.
But from the outside looking in, the Fed looks sloppier than expected, no doubt owing to its insulation from oversight. A Dodd-Frank tweak, authorizing even broader GAO audits of the Federal Reserve System, might be the perfect pill."
--------------
Link: http://online.barrons.com/article/SB50001424052748703927304576637292951198616.html?mod=BOL_twm_col
______________________
No Way to Run a Central Bank
Two reports show that during the 2008 financial meltdown, regulators were taking advice from the regulated, who themselves were recipients of bailout largesse.
"When banking and investment wizards inadvertently blew up the financial system in 2008, the Federal Reserve Bank of New York required outside expertise on its triage team. And so it hired banking and investment wizards, including some who allegedly helped precipitate the devastating financial explosion, paying out $659.4 million across 103 contracts from 2008 through 2010. Among the hires were Goldman Sachs, Morgan Stanley, State Street and JPMorgan Chase -- all of which were recipients of the government's TARP, or Troubled Assets Relief Program funds. The 10 largest contracts awarded by the New York Fed represented 74% of the total amount. Eight of the largest contracts were awarded without competitive bidding.
Recipients of the 10 largest contracts were BlackRock (no bid); Morgan Stanley (no bid); Ernst & Young (no bid); Allianz's Pimco (no bid); law firm Davis Polk & Wardell (no bid); Wellington Management (no bid); State Street; JPMorgan (no bid); Goldman Sachs; and Morgan Stanley's EMC (no bid). Much of the contracted work was with American International Group, Bear Stearns, Citigroup and Bank of America; the no-bids were awarded to companies that were familiar with the innards of these troubled institutions. The New York Fed was lending the troubled institutions money and needed help to evaluate the value of the assets that they proffered as collateral....
By reading both audits head to footnote, I noticed things that apparently the GAO did not. Goldman Sachs and JPMorgan both got big contracts in 2008, when company officers were New York Fed directors. Without going into individual cases, the GAO makes a blanket statement that no directors had a say on any vendor contracts. Bully for that.
But from the outside looking in, the Fed looks sloppier than expected, no doubt owing to its insulation from oversight. A Dodd-Frank tweak, authorizing even broader GAO audits of the Federal Reserve System, might be the perfect pill."
--------------
Link: http://online.barrons.com/article/SB50001424052748703927304576637292951198616.html?mod=BOL_twm_col
Transparency Needed
From CNN:
__________________
GAO audit finds Federal Reserve bank boards lack transparency
"The Federal Reserve banks need to better prevent conflicts of interest, according to a new government report that highlights transparency issues with financial executives serving on the banks' boards.
All 12 reserve banks should more "clearly document the roles and responsibilities of the (board) directors," according to a Government Accountability Office (GAO) audit released Wednesday.
The report focuses on scenarios in which executives pose apparent conflicts of interest by serving on boards that regulate financial houses where they also have business relationships.
An example, it notes, occurred when then-chairman of the New York Fed's board of directors Stephen Friedman owned shares in the investment firm Goldman Sachs, but in September 2008 provided it and other banks billions of dollars in federal funding in response to the unfolding financial crisis.
Friedman was granted a waiver by the Federal Reserve Board in January 2009, the report said. But the board was unaware that he had purchased additional shares in Goldman Sachs through an automatic stock purchase program.
The former chairman, who resigned in May 2009, could not be immediately reached for comment.
The GAO, meanwhile, said that "without more public disclosure of governance arrangements, such as board of director bylaws and director eligibility and ethics policies, there may be continued concerns about Reserve Bank governance and the integrity of the Federal Reserve System.""
-----------
Link: http://www.cnn.com/2011/10/20/us/gao-report-fed/index.html
Transparency Needed
From The Economic Populist, economicpopulist.org:
_________________
GAO Audit of Federal Reserve Reveals Strong Conflicts of Interest
"The Government Accountability Office has completed their audit of the Federal Reserve. Guess what the GAO found? Conflicts of Interest. It seems the Banksters are sitting on the Federal Reserve board, supervising their own institutions. The fox is guarding the hen house in other words. One of the most damning GAO discoveries is the timeline of Goldman Sachs turning into a holding bank and a Goldman Sachs board of directors, Stephen Friedman, also serving as the New York Federal Reserve chair....
In other words, you have a NY Fed Chair, helping make sure his company, Goldman Sachs, has access to cheap money, which will guarantee a strong profit for Goldman Sachs and buying more stock in Goldman Sachs. Why this is watered down as a conflict of interest, instead of a criminal offense is beyond comprehension. And there are more.
You know G.E. CEO Jeffrey Immelt, sitting at the White House, as a jobs czar, all the while promoting offshore outsourcing, more foreign guest workers to displace U.S. citizen workers? How G.E. CEO Immelt loves China as an offshore outsourcing manufacturing destination? Seems while Immelt was sitting as a New York Federal Reserve director, G.E. magically got a new cheap money program (p. 39)...."
---------------
Link: http://www.economicpopulist.org/content/gao-audit-federal-reserve-reveals-strong-conflicts-interest
_________________
GAO Audit of Federal Reserve Reveals Strong Conflicts of Interest
"The Government Accountability Office has completed their audit of the Federal Reserve. Guess what the GAO found? Conflicts of Interest. It seems the Banksters are sitting on the Federal Reserve board, supervising their own institutions. The fox is guarding the hen house in other words. One of the most damning GAO discoveries is the timeline of Goldman Sachs turning into a holding bank and a Goldman Sachs board of directors, Stephen Friedman, also serving as the New York Federal Reserve chair....
In other words, you have a NY Fed Chair, helping make sure his company, Goldman Sachs, has access to cheap money, which will guarantee a strong profit for Goldman Sachs and buying more stock in Goldman Sachs. Why this is watered down as a conflict of interest, instead of a criminal offense is beyond comprehension. And there are more.
You know G.E. CEO Jeffrey Immelt, sitting at the White House, as a jobs czar, all the while promoting offshore outsourcing, more foreign guest workers to displace U.S. citizen workers? How G.E. CEO Immelt loves China as an offshore outsourcing manufacturing destination? Seems while Immelt was sitting as a New York Federal Reserve director, G.E. magically got a new cheap money program (p. 39)...."
---------------
Link: http://www.economicpopulist.org/content/gao-audit-federal-reserve-reveals-strong-conflicts-interest
Monday, October 17, 2011
"Financial Geniuses" who OCCUPY THE MEDIA!
________________
___________
The Austerity Myth: Federal Spending Up 5% This Year
from INVESTOR'S BUSINESS DAILY
When Republicans took control of the House in January, they pledged to make deep cuts in federal spending, and in April they succeeded in getting a bill advertised as cutting $38 billion from fiscal 2011's budget. Then in August, they pushed for a deal to cut another $2.4 trillion over the next decade.
Some analysts have blamed these spending cuts for this year's economic slowdown.
But data released by the Treasury Department on Friday show that, so far, there hasn't been any spending cuts at all.
In fact, in the first nine months of this year, federal spending was $120 billion higher than in the same period in 2010, the data show. That's an increase of almost 5%. And deficits during this time were $23.5 billion higher.
These spending hikes haven't stopped many analysts from claiming that the country is in an age of budget austerity, one that's hurting economic growth....
_______________________________
Link: http://www.investors.com/NewsAndAnalysis/Article/588254/201110170805/The-Austerity-Myth-Federal-Spending-Up-5-This-Year.htm
- What do you do when so many are so wrong?
- "Austerity" is a problem....really?
- Who occupies the media?
- What should we say about those multitudes in the media who are mere mouthpieces repeating the cliches and partisan slants of pre-ordained experts?
___________
The Austerity Myth: Federal Spending Up 5% This Year
from INVESTOR'S BUSINESS DAILY
- Economist and New York Times columnist Paul Krugman argued in September that "the turn toward austerity (is) a major factor in our growth slowdown."
- Jared Bernstein, former chief economic adviser to Vice President Biden, wrote over the summer that "government spending cutbacks have been a large drag on growth in recent quarters and have led to sharp losses in state and local employment."
- A July article in USA Today ... claimed that "Already in 2011, softer government spending has sapped growth."
When Republicans took control of the House in January, they pledged to make deep cuts in federal spending, and in April they succeeded in getting a bill advertised as cutting $38 billion from fiscal 2011's budget. Then in August, they pushed for a deal to cut another $2.4 trillion over the next decade.
Some analysts have blamed these spending cuts for this year's economic slowdown.
But data released by the Treasury Department on Friday show that, so far, there hasn't been any spending cuts at all.
In fact, in the first nine months of this year, federal spending was $120 billion higher than in the same period in 2010, the data show. That's an increase of almost 5%. And deficits during this time were $23.5 billion higher.
These spending hikes haven't stopped many analysts from claiming that the country is in an age of budget austerity, one that's hurting economic growth....
_______________________________
Link: http://www.investors.com/NewsAndAnalysis/Article/588254/201110170805/The-Austerity-Myth-Federal-Spending-Up-5-This-Year.htm
Monday, October 10, 2011
Recession Nightmare: From Unemployed to Unemployable
From the FiscalTimes.com:
...The key question for policymakers is how this labor market is different.
... many economists are starting to fear that the U.S. may never return to the days of 5 percent or less unemployment. That’s because the long-term jobless are losing their skills and their employment connections, and are drifting further away from the labor force. The most effective policy in that case would be retraining for the unemployed and education geared toward growth industries, especially at a time when ever-greater global competition is reshaping the U.S. industry.
People are less likely to move from unemployment to employment the longer they are out of work. Of people who have been jobless for more than 12 months, only about 1 in 10 have returned to work, while about 90 percent have either remained unemployed or dropped out of the labor force, according to a Labor Dept. study.
Since the recession began, the labor force participation rate, defined as the percentage of the population aged 16 and over who are employed or seeking work, has fallen by the most in post-war history to levels not seen since the early 1980s.
_____________________________
Link: http://www.thefiscaltimes.com/Columns/2011/10/10/Recession-Nightmare-From-Unemployed-to-Unemployable.aspx?p=1
...The key question for policymakers is how this labor market is different.
... many economists are starting to fear that the U.S. may never return to the days of 5 percent or less unemployment. That’s because the long-term jobless are losing their skills and their employment connections, and are drifting further away from the labor force. The most effective policy in that case would be retraining for the unemployed and education geared toward growth industries, especially at a time when ever-greater global competition is reshaping the U.S. industry.
People are less likely to move from unemployment to employment the longer they are out of work. Of people who have been jobless for more than 12 months, only about 1 in 10 have returned to work, while about 90 percent have either remained unemployed or dropped out of the labor force, according to a Labor Dept. study.
Since the recession began, the labor force participation rate, defined as the percentage of the population aged 16 and over who are employed or seeking work, has fallen by the most in post-war history to levels not seen since the early 1980s.
_____________________________
Link: http://www.thefiscaltimes.com/Columns/2011/10/10/Recession-Nightmare-From-Unemployed-to-Unemployable.aspx?p=1
U.S. Economy Tipping into Recession: Bad News
From the Economic Cycle Research Institute:
"Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.
ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down – before the Arab Spring and Japanese earthquake – to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”
....A new recession isn’t simply a statistical event. It’s a vicious cycle that, once started, must run its course. Under certain circumstances, a drop in sales, for instance, lowers production, which results in declining employment and income, which in turn weakens sales further, all the while spreading like wildfire from industry to industry, region to region, and indicator to indicator. That’s what a recession is all about.
...So it comes as no surprise to us that, with the latest expansion only a couple of years old, we’re already facing a new recession. Actually, such short expansions are hardly unheard of. From 1799 to 1929, nearly 90% of U.S. expansions lasted three years or less, as did two of the three expansions between 1970 and 1981. In other words, such short expansions are unusual only with respect to recent decades.
It’s important to understand that recession doesn’t mean a bad economy – we’ve had that for years now. It means an economy that keeps worsening, because it’s locked into a vicious cycle. It means that the jobless rate, already above 9%, will go much higher, and the federal budget deficit, already above a trillion dollars, will soar.
Here’s what ECRI’s recession call really says: if you think this is a bad economy, you haven’t seen anything yet. And that has profound implications for both Main Street and Wall Street."
_____________________________________
Link: http://www.businesscycle.com/reports_indexes/reportsummarydetails/1091
"Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.
ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down – before the Arab Spring and Japanese earthquake – to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”
....A new recession isn’t simply a statistical event. It’s a vicious cycle that, once started, must run its course. Under certain circumstances, a drop in sales, for instance, lowers production, which results in declining employment and income, which in turn weakens sales further, all the while spreading like wildfire from industry to industry, region to region, and indicator to indicator. That’s what a recession is all about.
...So it comes as no surprise to us that, with the latest expansion only a couple of years old, we’re already facing a new recession. Actually, such short expansions are hardly unheard of. From 1799 to 1929, nearly 90% of U.S. expansions lasted three years or less, as did two of the three expansions between 1970 and 1981. In other words, such short expansions are unusual only with respect to recent decades.
It’s important to understand that recession doesn’t mean a bad economy – we’ve had that for years now. It means an economy that keeps worsening, because it’s locked into a vicious cycle. It means that the jobless rate, already above 9%, will go much higher, and the federal budget deficit, already above a trillion dollars, will soar.
Here’s what ECRI’s recession call really says: if you think this is a bad economy, you haven’t seen anything yet. And that has profound implications for both Main Street and Wall Street."
_____________________________________
Link: http://www.businesscycle.com/reports_indexes/reportsummarydetails/1091
New York Times headline: "Recession Officially Over, U.S. Incomes Kept Falling"
From the New York Times:
In a grim sign of the enduring nature of the economic slump, household income declined more in the two years after the recession ended than it did during the recession itself, new research has found.
Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent...
During the recession — from December 2007 to June 2009 — household income fell 3.2 percent.
[PB: This means median household income has fallen twice as much as during the "recession." This is frightening.]
The finding helps explain why Americans’ attitudes toward the economy, the country’s direction and its political leaders have continued to sour even as the economy has been growing....
One reason pay has stagnated is that many people who lost their jobs in the recession — and remained out of work for months — have taken pay cuts in order to be hired again. In a separate study, Henry S. Farber, an economics professor at Princeton, found that people who lost jobs in the recession and later found work again made an average of 17.5 percent less than they had in their old jobs.
“As a labor economist, I do not think the recession has ended,” Mr. Farber said. “Job losers are having more trouble than ever before finding full-time jobs.”
Mr. Farber added that this downturn was “fundamentally different” from most previous ones. Historically, other economists say, financial crises and debt-caused bubbles have led to deeper, more protracted downturns.
-----------------------
Link: http://www.nytimes.com/2011/10/10/us/recession-officially-over-us-incomes-kept-falling.html
In a grim sign of the enduring nature of the economic slump, household income declined more in the two years after the recession ended than it did during the recession itself, new research has found.
Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent...
During the recession — from December 2007 to June 2009 — household income fell 3.2 percent.
[PB: This means median household income has fallen twice as much as during the "recession." This is frightening.]
The finding helps explain why Americans’ attitudes toward the economy, the country’s direction and its political leaders have continued to sour even as the economy has been growing....
One reason pay has stagnated is that many people who lost their jobs in the recession — and remained out of work for months — have taken pay cuts in order to be hired again. In a separate study, Henry S. Farber, an economics professor at Princeton, found that people who lost jobs in the recession and later found work again made an average of 17.5 percent less than they had in their old jobs.
“As a labor economist, I do not think the recession has ended,” Mr. Farber said. “Job losers are having more trouble than ever before finding full-time jobs.”
Mr. Farber added that this downturn was “fundamentally different” from most previous ones. Historically, other economists say, financial crises and debt-caused bubbles have led to deeper, more protracted downturns.
-----------------------
Link: http://www.nytimes.com/2011/10/10/us/recession-officially-over-us-incomes-kept-falling.html
Saturday, October 8, 2011
Baseball: 3 Top Payrolls Gone!
Of the remaining 4 teams in Major League Baseball, ESPN blogger Howard Bryant tweets on Twitter about Payroll and Playoffs:
"DET top payroll team left, 10th @ $105.7m.
STL 11th @ $105.4.
TEX 13th @ $92.2m.
MIL 17th @$85.4m. 1-2-3:
NYY $201.6, PHI $172.9, BOS $161.4"
_____________________________
What does this mean? High costs guarantee nothing. Big names, marketing muscle and media attention can mean nothing. This also applies to investment costs. Like Payrolls during this season's MLB Playoffs, costs paid to advisers and mutual funds do nothing but take your money.
There are high quality, low cost ETFs that can reduce your total investment costs by up to 90% for the rest of your life. There are a select number of these ETFs that are so good you can keep them for life.
Learn what this means in real dollars. You can save thousands, hundreds of thousands, and possibly millions of dollars over the rest of life by keeping the costs you no longer have to pay! Uncover how much of your money is lost over time to costs, especially costs hidden in products like mutual funds.
Once you measure the savings in actual dollars, do you think you might want to keep more of your money instead of wasting it?
Patrick Broderick
"DET top payroll team left, 10th @ $105.7m.
STL 11th @ $105.4.
TEX 13th @ $92.2m.
MIL 17th @$85.4m. 1-2-3:
NYY $201.6, PHI $172.9, BOS $161.4"
_____________________________
What does this mean? High costs guarantee nothing. Big names, marketing muscle and media attention can mean nothing. This also applies to investment costs. Like Payrolls during this season's MLB Playoffs, costs paid to advisers and mutual funds do nothing but take your money.
There are high quality, low cost ETFs that can reduce your total investment costs by up to 90% for the rest of your life. There are a select number of these ETFs that are so good you can keep them for life.
Learn what this means in real dollars. You can save thousands, hundreds of thousands, and possibly millions of dollars over the rest of life by keeping the costs you no longer have to pay! Uncover how much of your money is lost over time to costs, especially costs hidden in products like mutual funds.
Once you measure the savings in actual dollars, do you think you might want to keep more of your money instead of wasting it?
Patrick Broderick
Tuesday, October 4, 2011
WSJ: Hedge Funds Pay Top Dollar for Washington Insider Information
----------------------------------
Good work - if you can get it. Washington is so huge, and the money that flows through it so enormous, insiders become "experts" and profit from it. What some promote as "public service" is little more than a lifetime of profit from public connections and insider status.
The most revealing quotes from the article:
"I have information from doing my day job as a lobbyist," explains one lobbyist. "That information has value on Wall Street. So I sell it."
Securities laws don't, however, bar most political insiders from sharing nonpublic information about government affairs.
"The ultimate [investing edge] is insider information, so you want to get as close to the line as possible without crossing the line" ... "That's why Washington is so interesting—because there is no line."
Because there is no line.
-----------------------------------------
From today's Wall Street Journal:
WASHINGTON—At a breakfast fund-raiser last year at the Liaison Capitol Hill hotel, former lobbyist Paul Equale pulled up a chair next to Sen. Richard Durbin. As they chatted, the Illinois Democrat told him about a recent breakthrough in his efforts to push through a bill to cap debit-card fees.
In Washington, such shop talk between political insiders is so routine that it hardly warrants mention. For Mr. Equale, however, it yields intelligence that fetches good money on Wall Street.
Mr. Equale works as a consultant ... which connects Wall Street investors hungry for information with Washington insiders ... [the Hedge] funds subsequently traded in the stocks of Visa Inc. and MasterCard Inc., according to regulatory filings. It is unclear what role Mr. Equale's report played in their investment decisions.
Information about what's happening in Washington is at a premium on Wall Street these days. Government regulatory changes and economic initiatives following the 2008 financial crisis have affected numerous industries, and even minor shifts in policy can be of interest to hedge-fund managers. When the health-care bill was snaking its way through Congress in 2009, for example, hedge funds wanted to know about every twist and turn. They followed the debt-ceiling showdown over the summer just as closely.
Keen for information about what's happening behind the scenes, hedge funds have been drilling ever deeper into the government. Thousands of political insiders are being paid by hedge funds, private-equity firms and other big investors.
Former Federal Reserve Chairman Alan Greenspan, for example, is an adviser to Paulson & Co., and former Treasury Secretary John Snow works for Cerberus Capital Management. SAC Capital Advisors and Eton Park Capital Management have hired former congressional staffers....
----------
Link: http://online.wsj.com/article/SB10001424053111904070604576514791591319306
Good work - if you can get it. Washington is so huge, and the money that flows through it so enormous, insiders become "experts" and profit from it. What some promote as "public service" is little more than a lifetime of profit from public connections and insider status.
The most revealing quotes from the article:
"I have information from doing my day job as a lobbyist," explains one lobbyist. "That information has value on Wall Street. So I sell it."
Securities laws don't, however, bar most political insiders from sharing nonpublic information about government affairs.
"The ultimate [investing edge] is insider information, so you want to get as close to the line as possible without crossing the line" ... "That's why Washington is so interesting—because there is no line."
Because there is no line.
-----------------------------------------
From today's Wall Street Journal:
WASHINGTON—At a breakfast fund-raiser last year at the Liaison Capitol Hill hotel, former lobbyist Paul Equale pulled up a chair next to Sen. Richard Durbin. As they chatted, the Illinois Democrat told him about a recent breakthrough in his efforts to push through a bill to cap debit-card fees.
In Washington, such shop talk between political insiders is so routine that it hardly warrants mention. For Mr. Equale, however, it yields intelligence that fetches good money on Wall Street.
Mr. Equale works as a consultant ... which connects Wall Street investors hungry for information with Washington insiders ... [the Hedge] funds subsequently traded in the stocks of Visa Inc. and MasterCard Inc., according to regulatory filings. It is unclear what role Mr. Equale's report played in their investment decisions.
Information about what's happening in Washington is at a premium on Wall Street these days. Government regulatory changes and economic initiatives following the 2008 financial crisis have affected numerous industries, and even minor shifts in policy can be of interest to hedge-fund managers. When the health-care bill was snaking its way through Congress in 2009, for example, hedge funds wanted to know about every twist and turn. They followed the debt-ceiling showdown over the summer just as closely.
Keen for information about what's happening behind the scenes, hedge funds have been drilling ever deeper into the government. Thousands of political insiders are being paid by hedge funds, private-equity firms and other big investors.
Former Federal Reserve Chairman Alan Greenspan, for example, is an adviser to Paulson & Co., and former Treasury Secretary John Snow works for Cerberus Capital Management. SAC Capital Advisors and Eton Park Capital Management have hired former congressional staffers....
----------
Link: http://online.wsj.com/article/SB10001424053111904070604576514791591319306
Monday, October 3, 2011
Solyndra? More Needed!
-----------------------------
From the New Yorker:
A Waste Of Energy?
by James Surowiecki
Two years ago, the solar company Solyndra was a darling of the Obama Administration. The company had received more than five hundred million dollars in loan guarantees from the Department of Energy...
Vice-President Joe Biden spoke by video at the plant’s groundbreaking ceremony, saying that the company was creating “the jobs of the future.” The following May, Obama gave a speech at the factory, and declared, “The true engine of economic growth will always be companies like Solyndra.”
...Solyndra had a huge problem: the company burned through its pile of cash ... it declared bankruptcy and fired eleven hundred workers... its offices were raided by the F.B.I. ... allegations of corruption are flying; critics of the Administration are arguing that the whole idea of government support for green companies should be abandoned as a pure boondoggle....
Washington being what it is, the backlash against green subsidies is no surprise. But it’s an overreaction every bit as hysterical as the pro-Solyndra hype was...
Putting money into alternative energy is as close as we can get to levelling the playing field. Solyndra was a big bet that happened to go bad. But we probably need to be making more bets like it.
------------
Link: http://www.newyorker.com
From the New Yorker:
A Waste Of Energy?
by James Surowiecki
Two years ago, the solar company Solyndra was a darling of the Obama Administration. The company had received more than five hundred million dollars in loan guarantees from the Department of Energy...
Vice-President Joe Biden spoke by video at the plant’s groundbreaking ceremony, saying that the company was creating “the jobs of the future.” The following May, Obama gave a speech at the factory, and declared, “The true engine of economic growth will always be companies like Solyndra.”
...Solyndra had a huge problem: the company burned through its pile of cash ... it declared bankruptcy and fired eleven hundred workers... its offices were raided by the F.B.I. ... allegations of corruption are flying; critics of the Administration are arguing that the whole idea of government support for green companies should be abandoned as a pure boondoggle....
Washington being what it is, the backlash against green subsidies is no surprise. But it’s an overreaction every bit as hysterical as the pro-Solyndra hype was...
Putting money into alternative energy is as close as we can get to levelling the playing field. Solyndra was a big bet that happened to go bad. But we probably need to be making more bets like it.
------------
Link: http://www.newyorker.com
Solyndra? Another ENRON!
----------------------
From the Weekly Standard:
Solyndracracy
by Matthew Continetti
In happier times, the firm had been celebrated as a harbinger of the future. The political connections it enjoyed were the fruit not only of well-placed contributions but of a self-imposed ideological mission: It was going to deliver cheap energy in amazing ways. Top executives had dismissed accounting irregularities. The normal rules, it was said, did not apply.
Then came the reckoning. Bankruptcy. Layoffs. An FBI investigation. Subpoenas. And the guard dogs of the press—always ready to sniff out a good scandal—leaped into action. What you read in the news was “not just the story of a company that failed,” wrote one major columnist. “It is the story of a system that failed. And the system didn’t fail through carelessness or laziness; it was corrupted.” A frenzy of speculation surrounded the company’s demise: “One wonders if it is the tip of an iceberg,” the columnist wrote. “And how many of us have, without knowing it, booked passage on the Titanic?”
...the editorial board at (the) paper let its verdict be known throughout the land: “In order to restore confidence in American capitalism and in the integrity of its financial markets,” the editors wrote, “the public needs to understand what brought” the company “down.”
Paul Krugman, Frank Rich, and the New York Times, in other words, were all bent on uncovering the extent of the executives’ crimes and the nature of the White House’s involvement. But that must have been only because the company in question was Enron and the administration under attack was George W. Bush’s.
About the spectacular bankruptcy of the (admittedly smaller) solar-panel manufacturer Solyndra, our most fashionable minds are much less curious....
All this cronyism says nothing good about the state of American politics, either. Nor does the fact that, if you went through every paper published in the last month and replaced “Solyndra” with “Enron” and “Obama” with “Bush,” the media would be howling like a pack of rabid wolves. “The truth,” Paul Krugman wrote in January 2002, “is that key institutions that underpin our economic system have been corrupted. The only question that remains is how far and how high the corruption extends.” Right you are, professor. Right you are.
--------------
Link: http://www.weeklystandard.com/articles/solyndracracy_594668.html
From the Weekly Standard:
Solyndracracy
by Matthew Continetti
In happier times, the firm had been celebrated as a harbinger of the future. The political connections it enjoyed were the fruit not only of well-placed contributions but of a self-imposed ideological mission: It was going to deliver cheap energy in amazing ways. Top executives had dismissed accounting irregularities. The normal rules, it was said, did not apply.
Then came the reckoning. Bankruptcy. Layoffs. An FBI investigation. Subpoenas. And the guard dogs of the press—always ready to sniff out a good scandal—leaped into action. What you read in the news was “not just the story of a company that failed,” wrote one major columnist. “It is the story of a system that failed. And the system didn’t fail through carelessness or laziness; it was corrupted.” A frenzy of speculation surrounded the company’s demise: “One wonders if it is the tip of an iceberg,” the columnist wrote. “And how many of us have, without knowing it, booked passage on the Titanic?”
...the editorial board at (the) paper let its verdict be known throughout the land: “In order to restore confidence in American capitalism and in the integrity of its financial markets,” the editors wrote, “the public needs to understand what brought” the company “down.”
Paul Krugman, Frank Rich, and the New York Times, in other words, were all bent on uncovering the extent of the executives’ crimes and the nature of the White House’s involvement. But that must have been only because the company in question was Enron and the administration under attack was George W. Bush’s.
About the spectacular bankruptcy of the (admittedly smaller) solar-panel manufacturer Solyndra, our most fashionable minds are much less curious....
All this cronyism says nothing good about the state of American politics, either. Nor does the fact that, if you went through every paper published in the last month and replaced “Solyndra” with “Enron” and “Obama” with “Bush,” the media would be howling like a pack of rabid wolves. “The truth,” Paul Krugman wrote in January 2002, “is that key institutions that underpin our economic system have been corrupted. The only question that remains is how far and how high the corruption extends.” Right you are, professor. Right you are.
--------------
Link: http://www.weeklystandard.com/articles/solyndracracy_594668.html
Saturday, October 1, 2011
No Rise in Home Prices Until 2020?
--------------
From CNBC.com:
Home prices are unlikely to recover before 2020 and mortgage defaults will persist for years, says a survey of bank risk managers out Friday.
The survey ... found that 49 percent of respondents do not expect housing prices to rise back to 2007 levels for another nine years. Only 21 percent of respondents said they would....
“While the housing sector will almost certainly gain strength during the next nine years, many bankers clearly believe prices will remain depressed for half a generation”....
A large number of respondents says they also expect to see an uptick in delinquencies on auto loans, credit cards and student loans.
---------------
Link: http://www.cnbc.com/id/44735283
From CNBC.com:
Home prices are unlikely to recover before 2020 and mortgage defaults will persist for years, says a survey of bank risk managers out Friday.
The survey ... found that 49 percent of respondents do not expect housing prices to rise back to 2007 levels for another nine years. Only 21 percent of respondents said they would....
“While the housing sector will almost certainly gain strength during the next nine years, many bankers clearly believe prices will remain depressed for half a generation”....
A large number of respondents says they also expect to see an uptick in delinquencies on auto loans, credit cards and student loans.
---------------
Link: http://www.cnbc.com/id/44735283
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