Posts filed under ‘Financial Crisis’
Polls consistently show that We the People don’t think the economy has recovered. The Very Serious People in the media usually report that with a tone of bewilderment, as if they, gosh darn it, just can’t figure out why. Well, hello, here’s why:
Wages and salary as a share of GDP via the Federal Reserve Bank of St. Louis:
I don’t think I’ve heard a better description of Goldman Sachs than this one from this RawStory article about Matt Taibbi. Goldman Sacks is like a
vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
As I said last weekend, when a person reaches a certain strata in our society, the money just pours in. Like this:
NEW YORK/ABU DHABI (Reuters) – Ben Bernanke earned more in 40 minutes on Tuesday than he made all of last year as head of the U.S. Federal Reserve.
Bernanke was paid at least $250,000 for his first public speaking engagement, in Abu Dhabi, since stepping down in January, according to sources familiar with the matter. That compares to his 2013 paycheck of $199,700, and the appearance was only the first of three around the world this week.
I guess we’re supposed to believe that what Bernanke said was worth $6,250 per minute, even though by all accounts, he was asleep at the wheel while the world’s economy crashed.
We here in the U.S. (and in most of the world) have been told repeatedly that if we don’t bail out or prop-up the too-big-to-fail banks, it will spell financial doom for all of us.
Yeah? Then why is Iceland, which told the banks to go f*ck themselves, thriving?
Iceland let its banks fail in 2008 because they proved too big to save.
Now, the island is finding crisis-management decisions made half a decade ago have put it on a trajectory that’s turned 2 percent unemployment into a realistic goal.
While the euro area grapples with record joblessness, led by more than 25 percent in Greece and Spain, only about 4 percent of Iceland’s labor force is without work. Prime MinisterSigmundur D. Gunnlaugsson says even that’s too high.
“Politicians always have something to worry about,” the 38-year-old said in an interview last week. “We’d like to see unemployment going from where it’s now — around 4 percent — to under 2 percent, which may sound strange to most other western countries, but Icelanders aren’t accustomed to unemployment.”
Of creditor claims against the banks, Gunnlaugsson says “this is not public debt and never will be.”
I looove that guy!
(The unemployment rate in the U.S. is roughly 6.7% which, of course, doesn’t count people who’ve given up looking for jobs, which is so ridiculous.)
My Tweet of the Day:
Here’s a fascinating confessional from a former Wall Street trader about his addiction to money and about how the perception of what a bonus or a salary should be is so out of whack in that world:
After graduation, I got a job at Bank of America, by the grace of a managing director willing to take a chance on a kid who had called him every day for three weeks. With a year of sobriety under my belt, I was sharp, cleareyed and hard-working. At the end of my first year I was thrilled to receive a $40,000 bonus. For the first time in my life, I didn’t have to check my balance before I withdrew money. But a week later, a trader who was only four years my senior got hired away by C.S.F.B. for $900,000. After my initial envious shock — his haul was 22 times the size of my bonus — I grew excited at how much money was available.
Over the next few years I worked like a maniac and began to move up the Wall Street ladder. I became a bond and credit default swap trader, one of the more lucrative roles in the business. Just four years after I started at Bank of America, Citibank offered me a “1.75 by 2” which means $1.75 million per year for two years, and I used it to get a promotion. I started dating a pretty blonde and rented a loft apartment on Bond Street for $6,000 a month.
I wanted a billion dollars. It’s staggering to think that in the course of five years, I’d gone from being thrilled at my first bonus — $40,000 — to being disappointed when, my second year at the hedge fund, I was paid “only” $1.5 million.
Maybe it’s just me, but have you noticed how the cable “news” networks cycle through so-called news stories roughly every eight, ten, 15 minutes and repeat themselves ad nauseam all day (unless there’s “breaking news” of course, like a high-speed police chase or an apartment fire)?
And maybe its just me but have you noticed how the right constantly screams about how liberal the U.S. media is?
Imagine how this country would change if the media really was liberal and they repeated this kind of thing every day, all day:
– Giving Employees Paid Sick Leave is Good for Business: A large majority of employers in Connecticut — where paid sick leave has been mandatory since January, 2012 — “reported that the law did not affect business operations and that they had no or only small increases in costs.”
– The NSA’s Sweeping Surveillance Programs Don’t Stop Terrorism: On June 5, 2013, the Guardian broke the first story in what would become a flood of revelations regarding the extent and nature of the NSA’s surveillance programs. Facing an uproar over the threat such programs posed to privacy, the Obama administration scrambled to defend them as legal and essential to U.S. national security and counterterrorism. Two weeks after the first leaks by former NSA contractor Edward Snowden were published, President Obama defended the NSA surveillance programs during a visit to Berlin, saying: “We know of at least 50 threats that have been averted because of this information not just in the United States, but, in some cases, threats here in Germany. So lives have been saved.”
However, our review of the government’s claims about the role that NSA “bulk” surveillance of phone and email communications records has had in keeping the United States safe from terrorism shows that these claims are overblown and even misleading. An in-depth analysis of 225 individuals recruited by al-Qaeda or a like-minded group or inspired by al-Qaeda’s ideology, and charged in the United States with an act of terrorism since 9/11, demonstrates that traditional investigative methods, such as the use of informants, tips from local communities, and targeted intelligence operations, provided the initial impetus for investigations in the majority of cases, while the contribution of NSA’s bulk surveillance programs to these cases was minimal.
Climate change will complicate the Philippines’ efforts to become self-sufficient in rice, the country’s economic planning secretary said Monday.
Arsenio Balisacan said preliminary data showed that 74% of the estimated damage from natural disasters in the country last year came in the farm sector, primarily affecting rice. The natural disasters include extreme weather caused by global warming, he said.
“We expect these extreme events and unpredictable phenomena to become the new normal,” Mr. Balisican told a workshop on efforts to address the impact of climate change in agriculture.
No government regulation! Woo hoo. A Libertarian paradise (unless you need to take a shower, drink water, wash your clothes, make dinner or wash your face).
C R U M B S
I mean I guess it’s better than nothing but this is still pitiful:
Colorado’s minimum wage will increase by 22 cents on New Year’s Day to $8 an hour.
Supporters say the raise will benefit 104,000 low-wage workers statewide. The minimum for tipped workers in Colorado will also rise by 22 cents, to nearly $5 an hour.
Measures like this are enacted by legislators to make them feel good, like they’re doing something to help the working poor but in reality, it’s a joke. $8 and $5 respectively? Really?
Ah duh. Since Democrats seem to be suffering from Stockholm syndrome (going on 30 years now) and they’re incompetent when it comes to messaging, wouldn’t it be nice if someone put into context the Republican claim that extending unemployment benefits will break the bank?
Thank you Dean Baker. I mean, how hard is this:
Scream about this Democrats.
This is just sad, sad, sad:
Ten thousand people applied for 750 openings to work as flight attendants for Southwest Airlines in just two hours and five minutes, the airline says.
Applications were accepted last week, the first time the airline hired flight attendants from outside the company since 2011, according to Bloomberg.
From David Sirota over at Pando.com in an article titled: For Economic Stimulus, Pensions Beat Stadiums and Server Farms.
There [in Detroit], as if proudly advertising its reverse-Robin Hood class war, the city is simultaneously seeking bankruptcy to avoid pensions payments, while pledging $400 million to build a new hockey stadium.
I would much rather have my tax dollars go toward pensions instead of a hockey stadium. Geezus. It’s a no-brainer.
This is happened yesterday:
Meanwhile, there’s this from today:
Republicans are vicious, cold-hearted partisans who are willing to see over a million people suffer because they don’t want anything — anything — good to happen on Obama’s watch:
If Congress does nothing, and fails to extend a jobless-aid program, 1.3 million people will lose unemployment insurance only a few days after Christmas — perhaps leading to a series of stories about real people’s economic travails during the slow-news holiday season.
I’m told House Dems will hold a hearing on Thursday into the plight of those set to lose unemployment insurance if Congress fails to extend the Emergency Unemployment Compensation program, as part of an effort to pressure Republicans to agree to an extension. Sources tell me it will be presided over by Dem Reps. Nancy Pelosi, Chris Van Hollen, Sander Levin, and others, and will hear from witness who stand to lose those benefits.
Meanwhile, sources tell me that in private discussions, House Republicans are giving the thumbs down to Dem entreaties for an unemployment benefits extension. According to a senior Senate Democratic leadership aide, Dems have pushed for the extension to be included in ongoing budget conference talks. “So far, they’ve resisted,” the aide tells me. “They don’t want to do that.”
I wish “senior Senate Democratic leadership aides” like the one Greg Sargent spoke to above, would be a little, no, a lot less charitable when talking about this. It’s just outrageous what Republicans are doing here.
I can’t decide if this is some sort of twisted poverty porn or a way for privileged people to have what could be an enlightening experience:
Shanty Town for a Unique Accommodation Experience in Bloemfontein
Millions of people are living in informal settlements across South Africa. These settlements consist of thousands of houses also referred to as Shacks, Shantys or Makhukhus. A Shanty usually consists of old corrugated iron sheets or any other waterproof material which is constructed in such a way to form a small “house” or shelter where they make a normal living. A paraffin lamp, candles, a battery operated radio, an outside toilet (also referred to as a long drop) and a drum where they make fire for cooking is normally part of this lifestyle.
Now you can experience staying in a Shanty within the safe environment of a private game reserve. This is the only Shanty Town in the world equipped with under-floor heating and wireless internet access!
The Shanty Town is ideal for team building, braais, fancy theme parties and an experience of a lifetime. Accommodates up to 52 guests. Our Shantys are completely safe and child friendly.
My gut feeling is that this is pretty revolting. I mean, show me a South African shanty town that has “under-floor heating and wireless internet access” that’s “completely safe.” If they want to truly recreate the experience of living in a shanty town, do it. It isn’t just about the look of the shanties.
You probably heard that the government has apparently reached a deal with J.P. Morgan/Chase’s [JPM] CEO Jamie Dimon which would cause JPM to pay a supposedly gigantic fine of $13 billion for its involvement in the sub-prime mortgage fiasco. Again, the media wants us to believe the fine is, well, “massive.”
But, as usual, if you look just a wee bit under the covers, you find that the “massive” penalty amounts to only 2.5 cents on every dollar JPM pocketed:
One way to determine whether JPMorgan [will pay a "massive" penalty] is to calculate the settlement payments as a percentage of the subprime and Alt-A mortgages that the bank sold. From 2004 through 2007, JPMorgan, along with Washington Mutual and Bear Stearns, sold around $1 trillion of mortgages, according to Inside Mortgage Finance, an industry publication. So far, JPMorgan has paid or set aside about $25 billion to meet claims that the loans should not have been sold. In other words, that sum is 2.5 percent of the total, though that figure could increase as the bank strikes other settlements.
So, yeah, when I hear the number $13 billion being thrown around my eyes bug out and I immediately think the government really stuck it to them but in the end, JPM brought in an unfathomable $1 TRILLION and $13 billion ain’t squat in comparison.
I guess we’re supposed to weep with joy at Walmart’s supposed compassion here but the bottom line is, Walmart doesn’t pay its employees enough to afford a Thanksgiving meal for God’s sake:
The storage containers are attractively displayed at the Walmart on Atlantic Boulevard in Canton [Ohio]. The bins are lined up in alternating colors of purple and orange. Some sit on tables covered with golden yellow tablecloths. Others peer out from under the tables.
This isn’t a merchandise display. It’s a food drive – not for the community, but for needy workers.
“Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner,” read signs affixed to the tablecloths.
So, so, sad. We ought to be ashamed as a nation that this is happening in our midst.
Last night British Prime Minister David Cameron spoke at the Lord Mayor’s Banquet in London and called for permanent austerity:
The government is to forge a “leaner, more efficient state” on a permanent basis, David Cameron has said as he signalled he had no intention of resuming spending once the structural deficit has been eliminated.
“We are sticking to the task. But that doesn’t just mean making difficult decisions on public spending. It also means something more profound. It means building a leaner, more efficient state. We need to do more with less. Not just now, but permanently.”
Here’s a photo.
Need I say more?
I’ve got to start keeping track of the infrastructure failures that are occurring all across the United States; everything from water main breaks to computer glitches. I read about them here and there almost every day. They seem small on their own but together, they add up.
Our country is falling apart. Literally. The thing is, the failures aren’t happening in areas where rich white people live so we aren’t hearing about them.
Case in point. This is an emergency:
Power Outage Shuts Down Food Stamp Program In 17 States
SACRAMENTO, California (Reuters) – Food stamp recipients in 17 states lost access to the electronic system used by stores to verify their benefits on Saturday, leaving many unable to buy groceries, the company that manages the system said.
People enrolled in the government food assistance program use plastic vouchers similar to debit cards. Starting at about 11 a.m. EDT (1500 GMT), some of those cards stopped working, Xerox spokesman Kevin Lightfoot said.
A power outage that started the problem was fixed within 20 minutes, Lightfoot said, but shoppers continued to run into difficulties throughout the day. By early evening, the problem still had not been fixed.
States States experiencing problems included Alabama, California, Georgia, Iowa, Illinois,Louisiana, Massachusetts, Maryland, Maine, Michigan, Mississippi, New Jersey, Ohio,Oklahoma, Pennsylvania, Texas and Virginia, Lightfoot said.
My food bank-volunteer-self knows this is going to hurt so many people in so many ways. The ripple effect will be tremendous lest it’s fixed tonight. Get that “electronic system” up and running ASAP! Oh, wait, the government’s shut down. Shi*t.
We are watching the United States collapse from within:
A new, eye-opening study shows that the United States is not only falling behind in scientific research, but now we are in danger of losing our scientists, too.
In a study called, “Unlimited Potential, Vanishing Opportunity,” The American Society For Biochemistry and Molecular Biology (ASBMB) surveyed nearly 4,000 scientists from nearly all fields of research about the effects of budget cuts and sequestration on scientific research. The results are quite disturbing for anyone who cares about the future of science in our country.
In its press release summarizing its findings, the ASBMB wrote that the cuts are “tearing at the fabric of the nation’s scientific enterprise” while having a “minimal impact” on our national debt and deficit. Also, “The overwhelming majority of scientists in all fields believes the U.S. has lost its position as the global leader in scientific research.”
Sam Stein, at the Huffington Post, dug through the weeds and found, “Nearly one-fifth of scientists are considering going overseas to continue their research because of the poor funding climate in America.”
Eric Holder Vows ‘Significant’ Financial Crisis Prosecutions Against Banks
Wall Street should brace for “significant” civil or criminal charges from the Department of Justice (DOJ), according to Attorney General Eric Holder. The promise comes amid intensifying criticism of the DOJ’s financial enforcement decisions.
In an interview with the Wall Street Journal on Tuesday, the nation’s top law enforcement official refused to give specifics about what sort of charges his department will be filing and would not discuss the number or type of cases he expects to pursue.
What? Is Obama suddenly worried about this legacy?
This is grim:
More Than 28,000 Italians Apply for 200 Ikea Jobs
Swedish furniture giant Ikea has attracted 28,616 applications for just 200 jobs at its new store in Pisa. Gaià Paradiso, a 25-year-old student at the University of Florence, told The Local there are “few options” for young jobseekers in Italy.
Temporary jobs that is:
From Wal-Mart to General Motors to PepsiCo, companies are increasingly turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them – about 12 percent of everyone with a job.
Hiring is always healthy for an economy. Yet the rise in temp and contract work shows that many employers aren’t willing to hire for the long run.
The number of temps has jumped more than 50 percent since the recession ended four years ago to nearly 2.7 million – the most on government records dating to 1990. In no other sector has hiring come close.
I don’t think corporations are afraid to “hire for the long run” because the economy is still jittery. I think the economy is still jittery because when corporations hire temporary workers they (1) aren’t paid as much, (2) they don’t have any job security whatsoever, and (3) they probably aren’t getting any health care benefits so they’re either afraid to spend or they don’t have any extra money to spend.
This is about people being desperate for jobs and corporations taking advantage of them. You know, beggars can’t be choosey and corporations know it.
Madison — In a raucous clash on the state Senate floor Wednesday that recalled the bitter divides of 2011, Republicans abruptly cut off debate and forced a vote mandating that women seeking abortions get ultrasounds.
The morning’s brief floor session included sharp exchanges and one senator claiming abortions “became the thing to do” in the 1960s.
Democrats protested the bill’s merits and the process by which it was passed, saying Senate Majority Leader Scott Fitzgerald of Juneau and his fellow Republicans were trampling on democracy by ending debate after about 20 minutes.
“My first advice to the majority leader is that he seeks psychological help,” Sen. Bob Jauch (D-Poplar) said at a news conference after the vote.
[...]“Here we go again,” Fitzgerald said. He described Democrats’ approach as, “We don’t like what’s happening from a public policy perspective, so we’re not going to play by the rules.”
The abortion measure passed 17-15, with all Republicans for it and all Democrats against it. Sen. Luther Olsen (R-Ripon) was absent.
It now goes to the Assembly, which is expected to take it up Thursday. GOP Gov. Scott Walker has said he would sign the bill.
Wisconsin Republicans are spending their time on this instead of creating ah, hello!, JOBS: No matter how you spin job numbers, Wisconsin near bottom compared to other states. But I’m sure, come the heat of the 2014 campaign, they’ll start screaming about them again. It’s a thing they bring up every two years for a little while and then they go back to their real love: oppressing people.
Nothing speaks to the plight of the working poor better than this, which I read early this morning. It has haunted me all day. The poor are, well, poor; vicious shysters are (legally) taking advantage of them, lawmakers are sitting around at the beach somewhere and yes, this is supposedly the Greatest Country on Earth. My God:
When the tires on their Dodge Caravan had worn so thin that the steel belts were showing through, Don and Florence Cherry couldn’t afford to buy a new set.
So they decided to rent instead.
The Rich Square, N.C., couple last September agreed to pay Rent-N-Roll $54.60 a month for 18 months in exchange for four basic Hankook tires. Over the life of the deal, that works out to $982, almost triple what the radials would have cost at Wal-Mart.
“I know you have to pay a lot more this way,” said Florence Cherry, a 57-year-old nurse who drives the 15-year-old van when her husband, a Vietnam veteran, isn’t using it to get to his job as a prison guard. “But we didn’t really have a choice.”
Socked by soaring tire prices and short on funds, growing numbers of Americans are renting the rubber to keep their cars rolling.
Rent-to-own tire shops are among the newest arrivals to a sprawling alternative financial sector focused on the nation’s economic underclass. Like payday lenders, pawn shops and Buy Here Pay Here used-car lots, tire rental businesses provide ready credit to consumers who can’t get a loan anywhere else. But that access doesn’t come cheap.
Customers pay huge premiums for their tires, sometimes four times above retail. Those who miss payments may find their car on cinder blocks, stripped of their tires by dealers who aggressively repossess. Tire rental contracts are so ironclad that even a bankruptcy filing can’t make them go away.
Still, with payments as low as $14 a week, rent-to-own — long the province of sofa sets and flat-screen TVs — is proving irresistible for consumers desperate for safe transportation.
I guess renting tires is something you have to do if a nurse doesn’t get paid enough to buy new ones (Problem #1) but if that’s the case, let’s put limits on the amount of interest folks like Rent-N-Roll can charge these poor people (Problem #2).
Ugh. This just makes me sick.
My quote of the day from venture capitalist and entrepreneur Nick Hanauer who testified before the Senate a few days ago on income inequality:
I’ll argue here that prosperity in capitalist economies never trickles down from the top. Prosperity is built from the middle out. As an entrepreneur and investor, I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all would have failed and all those jobs would have evaporated.
That’s why I am so sure that rich business people don’t create jobs, nor do businesses, large or small. What does lead to more employment is a “circle of life” like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring.That’s why the real job creators in America are middle-class consumers. The more money they have, and the more they can buy, the more people like me have to hire to meet demand.
Exactly. So let’s put this trickle-down BS to bed, once and for all. I mean, how long are we going to wait before we say: Hello! It ain’t workin’.
On a related note, check out this post: Labor’s Falling Share, Everywhere
Here’s the money quote. Prosperity is, in fact, trickling up:
The share of income going to labor as a whole is falling, and also a greater share of labor income is going to those at the highest levels of income. Both trends mean that those with lower- and middle-incomes are having a tougher time.
UPDATED @6:31 EDT below.
People marching this afternoon against the proposed closure of 61 public schools in Chicago.
Remember back in the day when schools had to hold bake sales while the military got everything it needed? Fast forward to today and heck, forget bake sales. They’re just freakin’ closing the schools now.
What kind of values and priorities are those?
And now, of course, the police, representing the establishment — the folks who want to close the schools — are arresting people (in front of Chicago City Hall) who are trying to protect our kids:
What a country.
Last Saturday the Cypriot government came up with the lamebrained idea of skimming a percentage of funds off the top of the guaranteed savings accounts (like our FDIC) of its citizens in order to bail out its banks.
What astonishingly arrogant chutzpah.
After the whole world rightly shrieked in horror, the government backed down but it closed all the banks to give it time to work on a new plan. They’re still closed. Initially they were going to open this past Tuesday but now they will be closed until at least next Tuesday.
Meanwhile, this is what’s going on on the street there:
NICOSIA, March 21 (Reuters) – Forget the plastic. In Cyprus, cash is king.
“I plan to have at least 1,000 euros on me at all times,” Constantinos Tsissios, a 34-year-old banker, said at a downtown ATM in the capital, Nicosia.
“We’ve taken as much out as we could,” he said on Thursday. “You don’t know what might happen over the next few days.”
Five days after Cyprus’s panicked leaders ordered banks to close their doors, the fate of the financial system hangs in the balance and credit cards are going out of fashion.
Reluctant to accept the promise of payment from customers, shop owners say wholesalers are demanding cash on delivery. Some petrol stations, too, are refusing credit cards. Retailers with only Cypriot bank accounts are struggling to ship supplies in from abroad. Gentlemanly arrangements are bridging the gap.
“Because of what’s going on the suppliers ask for a small amount, say 50 percent, in cash, so they can meet their costs,” said Federico Basonidis, a 25-year-old worker at a kiosk selling cigarettes, newspapers and sweets.
Spooked by an aborted bid to tax their savings, Cypriots are fast losing confidence that their money will still be there when – or if – banks reopen, on Tuesday at the earliest.
Rumours on Thursday that one teetering bank would be allowed to fall saw queues grow at ATMs at a downtown branch, as staff behind locked doors replenished cash machines.
Some of the bank’s employees, fearing for their jobs, faced off with riot police outside parliament.
“We have children studying abroad and next month we need to send them money so they can eat,” protester Stalou Christodoulido said through tears. “We’ll lose what money we had and saved for so many years if the bank goes under.”
It sounds awful. I can feel the stress the people are under oozing out between the words here.
There seems to be no end to the suffering greedy, irresponsible bankers and their political enablers have caused, and continue to cause.
The answer is a loud: HELL NO!
Who are the “Don’t Know/Can’t Say” people? Who doesn’t have an opinion about this?
Follow the vote here. The results above are preliminary.
P.S. We here in the U.S. are already giving up our “savings” to save the banks. More on that later.
Because of this — which is causing worldwide outrage and panic — we’re seeing the likes of this:
A Planned Tax [the word tax should be in quotes] on Cyprus Bank Depositors [as in average citizen savers] as Part of a European Union Bailout is Sending People Rushing to ATMs to Withdraw Cash
Tomorrow is going to be wild.