Corzine, others settle MF Global lawsuit for $64.5 million

Jon Corzine and other former MF Global Holdings Ltd officials have reached a $64.5 million settlement of litigation brought by investors seeking to hold them liable for the now-defunct futures brokerage’s 2011 bankruptcy.

The all-cash settlement with Corzine, who was MF Global’s chief executive and previously New Jersey’s governor, and nine other defendants resolves the lastCorzine major piece of litigation by MF Global stock, bond and convertible bond investors over the company’s rapid descent into Chapter 11.

U.S. District Judge Victor Marrero in Manhattan on Tuesday evening granted preliminary approval of the settlement, which was disclosed earlier in the day. He scheduled a Nov. 20 hearing to consider final approval.

The class action accord would boost the investors’ recovery to $204.4 million, including $74.9 million from underwriters and $65 million from the auditor PricewaterhouseCoopers….More

Crude Oil Manipulation?

NEW YORK — The U.S. has so much crude that it is running out of places to put it, and that could drive oil and gasoline prices even lower in the coming months.crude-oil-looks-in-a-volatile-mood-L-fgd5S5

For the past seven weeks, the United States has been producing and importing an average of 1 million more barrels of oil every day than it is consuming. That extra crude is flowing into storage tanks, especially at the country’s main trading hub in Cushing, Okla., pushing U.S. supplies to their highest point in at least 80 years, the Energy Department reported last week…MORE

Emerging Markets Crack as $3.9 Trillion Funds Unwind: Currencies

June 20 (Bloomberg) — Investors are pulling money from emerging markets at the fastest pace in two years as slowing economic growth and the prospect of less global stimulus sink stocks, bonds and currencies from India to Brazil.

More than $19 billion left funds investing in developing-nation assets in the three weeks to June 12, the most since 2011, according to EPFR Global. Foreign investors dumped an unprecedented $5.6 billion of Brazilian stocks and $3.4 billion of Indian bonds this month, exchange data show. The tumble that has sent JPMorgan Chase & Co.’s emerging-currency index down 1.4 percent this quarter extended today as the rupee and Turkish lira hit record lows.

“These are pre-quake tremors: something big is coming,” Stephen Jen, the co-founder of hedge fund SLJ Macro Partners LLP, said in a phone interview from London on June 12. “There’s tremendous deceleration in emerging markets. You may see crisis-like price actions without having a crisis.”

 The reversal of the $3.9 trillion of cash that flowed into emerging markets the past four years has been compounded by popular protests in Turkey and Brazil challenging government policies on everything from fighting inflation to developing infrastructure. China, the largest developing economy, is forecast by the World Bank to expand at the slowest pace since 1999 this year, while current-account deficits in Indonesia, Brazil and Chile have grown to the widest in a decade.

“While cyclical opportunities will come and go, the era of structural outperformance for EM is probably over,” Dominic Wilson, the chief markets economist at New York-based Goldman Sachs Group Inc. who predicted the rise of the biggest emerging markets in 2003, wrote in a report dated yesterday.

Cheap Money...(continued)

Commodities Sink To 12-Year Low as Copper, Oil Slump

(Bloomberg) — Commodities slumped to a 12-year low, led by the biggest plunge in copper since 2011, after a report from the World Bank fanned concerns of a global economic slowdown.

Copper futures for March delivery tumbled five percent to $2.5125 a pound as of 11:45 a.m. in New York, set for a fourth day of losses. Nickel erased more than 2 percent, while oil reversed earlier declines, with West Texas Intermediate trading little changed at $45.88 a barrel. The Bloomberg Commodity Index of 22 energy, agriculture and metal products was little changed after touching the lowest level since 2002 at 99.9516.

“It just shows the general level of weakness currently and worries spreading,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by phone today. “We have basically wiped out gains seen in the first decade, and this is obviously a significant change in outlook.”

 Investors are bailing out of raw materials after a decade-long bull market led producers to boost output and data from manufacturing to jobs fuel speculation that the global economy is too weak to sustain more demand for commodities. The World Bank cut its forecast for global growth this year, adding to concern of a growing disparity between the U.S. and other major economies…(more)

A Great Explanation of one of the many facets of Debt

Things Are Unraveling At An Accelerating Rate:  Those who brought their consumption forward can no longer add to present consumption

Does anyone else have the feeling that things are not just unraveling, but that the unraveling is gathering speed?Though quantifying this perception is more interpretative than statistical, I think we can look at the ongoing debt crisis in Greece as an example of this acceleration of events.

The Greek debt crisis began in 2011 and reached a peak in 2012. The crisis was quelled by new Eurozone/IMF loans to Greece, and European Central Bank chief Mario Draghi’s famous “whatever it takes speech” in late July, 2012.

The Greek debt crisis quickly went from “boil” to “simmer,” where it stayed for almost two-and-a-half years. But no one with any knowledge of the gravity and precariousness of the situation expects the latest “extend and pretend” deal to patch everything together for another two years.  Current deals are more likely to last a matter of months, not years.

We can discern the same diminishing returns in Federal Reserve/central bank interventions, as the initial rounds of quantitative easing pushed stock and bond markets higher for years at a time, while the following interventions generated lower returns.

What factors are reducing the positive effects of intervention and causing increased volatility? Let’s start with the engine behind every central bank/state intervention and every “save” of the status quo: debt.

Debt Brings Forward Consumption & Income

Debt has one primary dynamic: borrowing money to consume something in the present brings forward consumption and income.  Economists describe trading future income for consumption today as bringing consumption forward. And since debt must be repaid with interest, bringing consumption forward also brings income forward….More

Scores injured in anti-austerity riots against ECB’s new HQ

Frankfurt (AFP) – Violent clashes between anti-capitalist protesters and German police left dozens injured and a trail of destruction in Germany’s financial capital as the European Central Bank opened its new headquarters Wednesday.

In fierce street battles that began in the early hours in the well-heeled western city of Frankfurt, 14 police and 21 anti-capitalist protesters were wounded, police and rally organizers said.

Police said they had made 19 arrests by 1700 GMT, mostly on charges of disturbing the peace and arson after seven police cars were set ablaze and a police station pelted with rocks.EUCENTRALBANKRIBBONCUTTING

Firefighters also came under attack during several of the 47 times they were called out to douse the flames of burning automobiles and barricades made from toppled garbage bins…

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95% Of Income Gains Since 2009 Went To The Top 1% — Here’s What That Really Means

This month, Berkeley economics professor Emmanuel Saez put out an update to his estimates of income inequality, and the headline figure has everybody outraged: 95% of income gains since 2009 have accrued to the top 1%.

This is indeed outrageous, but not quite for the reason that most people think.

What the 95% statistic obscures is that the last three years’ recovery haven’t been very good for anybody, including the rich. They’ve been terrible for the bottom 99%, whose incomes are barely rising at all: just 0.1% per year in real terms. But top 1% incomes are also growing more slowly than they did in the last two economic expansions. That’s because the same slack labor market that holds down wages also deprives businesses of the customer base they need to invest and grow.

Read more: http://www.businessinsider.com/95-of-income-gains-since-2009-went-to-the-top-1-heres-what-that-really-means-2013-9#ixzz3TuyBaeVp

Interactive Currency-Comparison Tool: The Big Mac Index

Global – Exchange Rates, To Go

THE Big Mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries. For example, the average price of a Big Mac in America in Julypulp_fiction_posters_by_padubs-d5yoetm 2014 was $4.80; in China it was only $2.73 at market exchange rates. So the “raw” Big Mac index says that the yuan was undervalued by 43% at that time.

Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Yet the Big Mac index has become a global standard, included in several economic textbooks and the subject of at least 20 academic studies. For those who take their fast food more seriously, we have also calculated a gourmet version of the index.

This adjusted index addresses the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones because labour costs are lower. PPP signals where exchange rates should be heading in the long run, as a country like China gets richer, but it says little about today’s equilibrium rate. The relationship between prices and GDP per person may be a better guide to the current fair value of a currency. The adjusted index uses the “line of best fit” between Big Mac prices and GDP per person for 48 countries (plus the euro area). The difference between the price predicted by the red line for each country, given its income per person, and its actual price gives a supersized measure of currency under- and over-valuation…MORE

S&P 500 Companies Spend Almost All Profits on Buybacks

(Bloomberg) — Companies in the Standard & Poor’s 500 Index really love their shareholders. Maybe too much.

They’re poised to spend $914 billion on share buybacks and dividends this year, or about 95 percent of earnings, data compiled by Bloomberg and S&P Dow Jones Indices show. Money returned to stock owners exceeded profits in the first quarter and may again in the third. The proportion of cash flow used for repurchases has almost doubled over the last decade while it’s slipped for capital investments, according to Jonathan Glionna, head of U.S. equity strategy research at Barclays Plc.  mkt caps

Buybacks have helped fuel one of the strongest rallies of the past 50 years as stocks with the most repurchases gained more than 300 percent since March 2009. Now, with returns slowing, investors say executives risk snuffing out the bull market unless they start plowing money into their businesses.

“You can only go so far with financial engineering before you actually have to have a business with real growth,” Chris Bouffard, chief investment officer who oversees $9 billion at Mutual Fund Store in Overland Park, Kansas, said by phone on Oct. 2. “Companies have done about all that they can in terms of maximizing the ability to do those buybacks.”

S&P 500 constituents will probably say earnings rose 4.9 percent in the third quarter when they begin reporting results this week, according to more than 10,000 analyst estimates compiled by Bloomberg. Alcoa Inc., Yum! Brands Inc. and Monsanto Co. are among nine companies scheduled to announce financial details.

Buyback Index

U.S. equities rebounded from last week’s retreat, with the S&P 500 rising 0.4 percent at 9:55 a.m. in New York. The S&P 500 Buyback Index is up 7.5 percent this year through Oct. 3, compared with the 6.5 percent advance in the S&P 500, after beating it by an average of 9.5 percentage points every year since 2009.

While the ratio to earnings shows how buybacks and dividends compare to past economic expansions, it doesn’t indicate companies are struggling to fund them. Five years of profit growth have left S&P 500 constituents with $3.59 trillion in cash and marketable securities and they’ve raised almost $1.28 trillion in 2014 through bond sales, headed for a record.

“Buybacks are something corporations can take control of and at low borrowing costs, they’re a viable option,” Randy Bateman, chief investment officer of Huntington Asset Advisors, which manages about $2.8 billion, said by phone on Oct. 1. At the same time, he said, “If management can’t unearth future opportunities for growth, as a shareholder, I lose confidence.”

 

 

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Lower Oil Prices Provide Benefits to U.S. Workers

LEWISTON, Me. — Wall Street may be growing anxious about the negative impact of falling oil prices on energy producers, but the steep declines of recent weeks are delivering substantial benefits to American working-class families and retirees who have largely missed out on the fruits of the five-and-a-half-year economic recovery.

Just last week, the federal Energy Information Administration estimated that the typical American household would save $750 because of lower gasoline prices this year, $200 more than government experts predicted a month ago. People who depend on home heating oil and propane to warm their homes, as millions do in the Northeast and Midwest, should enjoy an additional savings of about $750 this winter….More

**That’s it, $750, that’s all**

General Mills To Lay Off Another 700 – 800 Salaried Jobs

General Mills Inc. will slash another 700 to 800 jobs as part of a big cost-cutting effort, layoffs announced less than two weeks after the packaged-food giant posted a bleak fourth quarter and announced two plant closings.

Golden Valley-based General Mills, buffeted by weak sales, revealed the job cuts late Tuesday in a filing with federal securities regulators. The head count reduction will primarily be in the United States, the filing said. General Mills employs about 5,000 in the Twin Cities, mostly in white-collar positions.

General Mills spokeswoman Kirstie Foster said in an e-mail that the new cuts include “salaried positions in General Mills’ U.S. businesses, and the functions and groups that support those businesses.” She said the company did not yet know how jobs in Minnesota would affected….more

CrowdFunding

Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet.[1] One early-stage equity expert described it as “the practice of raising funds from two or more people over the internet towards a common Service, Project, Product, Investment, Cause, and Experience or SPPICE.”[2]

The crowdfunding model is fueled by three types of actors: the project initiator who proposes the idea and/or project to be funded; individuals or groups who support the idea; and a moderating organization (the “platform”) that brings the parties together to launch the idea.[3]

In 2013, the crowdfunding industry grew to be over $5.1 billion worldwide….MORE

How to Try Peer to Peer Lending

While thousands of investors continue to earn great returns at Lending Club and Prosper, the bulk of the country has yet to even hear about it. This is slowly changing as seen in the greater frequency of peer to peer lending being mentioned (Forbes) in major news outlets. And the potential Lending Club IPO (FT.com) may also bring greater awareness. It seems more and more people each day are becoming curious about this new and exciting way to invest.

That said, there is a definite “leap of faith” involved when going from being interested in peer to peer lending to actually investing in it with your own money. For most Americans (typically people in their later years), registering personal information on an unfamiliar website and portioning it with thousands of dollars in trial cash is a fairly large pill to swallow.

To help these prospective investors, I have broken down the average registration and investment process below. Keep in mind that these are simply the basic steps to get a feel for this investment. If you are trying to understand peer to peer lending for the first time, you should instead watch LendingMemo’s video course or read my ebook. On the other hand, if you already have a good feel for peer to peer lending, you may want to forego the 80 A-grade notes and instead invest $5,000 within 200+ loans of your liking.

Note: this article shows the process via Lending Club. However, the process is generally the same on the other equally-deserving platform, Prosper. On Prosper, you would invest $2,000 in their safest grade: AA loans….MORE

Kohl’s And The Rest Of The Retailers Are In Deep Doo Doo

“Facts are stubborn things, but statistics are pliable.”  Mark Twain

I never believe government manufactured numbers. They will always be adjusted, massaged, and manipulated to achieve a happy ending for the propagandists attempting to control and fleece the sheep. Yesterday, the government produced retail sales numbers for August that were weak and the corporate MSM propaganda machine immediately threw up bold headlines declaring how strong these numbers were. Positive stories were published on the interwebs and Wall Street hack economists were rolled out on CNBC, where the bubble headed bimbos and prostitutes for the status quo like Jim Cramer and Steve Liesman declared the recovery gaining strength. Woo Hoo….READ

What Happened To Barclays’ Dark Pool Volume After It Got Caught

In the last week of June Barclays was charged with lying to clients about its Dark Pool, Barclays LX, where instead of preventing HFT algos from frontrunning institutional buyside orders, the criminal bank was in fact allowing and encouraging its predatory, parasite clients to abuse orderflow in any way they saw fit. The motive, if there was any confusion: to become the largest dark pool exchange in the US, filled with HFT scalpers, now that the bulk of other revenue streams for the British company have trickled to a halt.

It almost succeeded: in the week ending June 16 Barclays was second only to Credit Suisse’ Crossfinder ATS with 312.1 million total shares traded on some 1.6 million in total trades.

Unfortunately for Barclays it should put its ambitions on permanent halt, because as was revealed today by FINRA’s new “ATS Transparency” database, Barclays total dark pool volume has plunged by a whopping 37% to under 200 million shares….READ

The Next Global Meltdown Is Baked In: Connecting the Dots Between Oil, Debt, Interest Rates and Risk

The bottom line is the Fed can only keep the machine duct-taped together by suppressing the market’s pricing of risk.

One of the Grand Narratives of our era is the substitution of debt for income: as earned income and disposable income have stagnated for 40 years, the gap between the rising cost of living and stagnant household income has been filled by borrowed money.


Money has been borrowed to replace income everywhere: consumers have borrowed money to buy things they otherwise couldn’t afford, students have borrowed over $1 trillion to attend college, governments have borrowed money to fund wars and social spending, corporations have borrowed money to buy back their own shares, pushing stock prices higher.

There’s one little problem with debt: interest must be paid on debt. Let’s focus for a second on the difference between cash income and borrowing money. Cash doesn’t cost money to maintain; debt does. In a functioning economy (as opposed to the dysfunctional mess we have now), cash would earn income from interest paid by borrowers.

If cash income is saved, the cash can buy stuff without debt or interest payments. That is a powerful advantage over debt.

How powerful is the advantage of cash over debt? It’s literally life-changing. Take a look at your credit card statements, which now include an estimate of interest you will pay and how long it will take to pay off the balance at a given monthly payment.

Those making minimal payments will end up paying 100% or more of the balance due in interest.
The phenomenally high accrued costs of interest is true of mortgages, student loans, auto loans, corporate debt and government debt: eventually, current spending is crimped as more and more net income is devoted to paying interest….READ

Should dual citizen of US/Israel be vice chair of our Federal Reserve Bank?

FisCherTwo weeks back, Forbes and CNBC reported that President Obama plans to nominate Stanley Fischer to be the next vice chairman of the Federal Reserve if the current vice chair, Janet Yellen, is confirmed by the Senate as Fed chairwoman in the new year.

This would be a giant sop for the Israel lobby: Fischer is the former head of the Bank of Israel.

Fischer, a dual-citizen of the U.S. and Israel, served as the head of Israel’s central bank for eight-years before stepping down on June 30 of this year.

Fischer is disliked on the left because of his ruthless neoliberalism, as shown in this documentary about the International Monetary Fund, where he was once an exec. But the dual nationality question is also in play. Matthew Yglesias deemed Fischer extraordinarily well-qualified, but did arch an eyebrow:

This is a bit of a surprising development if only because Fischer didn’t seem to be seriously considered as a contender for the top Fed job. I figured that was either because Fischer wasn’t interested in a government job or because the White House deemed him insufficiently American. If either of those were the case, it would seem to disqualify him for the vice chairmanship too…..Read

The Tiny House Movement & Agenda 21: Welcome Home

The Community Faith Partners (CFP) has invested in the Second Wind Cottages (SWC) project which is a village of tiny houses built for the homeless in Newfield, New York.
With the cost of each home being $10,000, this project has become part of a national movement to offer an alternative to apartment building living.TinyHomeAgenda 21
SWC is currently open to homeless men only; however the non-profit is “exploring how to help women in similar circumstances”.
Services to help these homeless occupants will be provided by “private and governmental agencies” as well as “Christian fellowship and support”.
In Olympia, Washington, Quixote Village has been operational since late 2013 with “30 free-standing cottages and a community center. It was born out of the homeless encampment.”
The 30 cottages on the property are 114 square feet….READ

REVEALED: Central Banks Explain How They Control Money

Recently, the Bank of England (BoE) released a report entitled “Money Creation in the Modern Economy” which outlines that most people do not understand how banking works and the populist ideology regarding financial business is correct.

Through fractional reserve banking (FRB), technocrats are able to get away with dangerous lending practices; however the central banks continuously feed printed fiat into the system at the request of smaller banks.

 

– See more at: http://www.occupycorporatism.com/home/revealed-central-banks-explain-control-money/#sthash.EVaFQXkl.dpuf

Recently, the Bank of England (BoE) released a report entitled “Money Creation in the Modern Economy” which outlines that most people do not understand how banking works and the populist ideology regarding financial business is correct. Through fractional reserve banking (FRB), technocrats are able to Bankers2get away with dangerous lending practices; however the central banks continuously feed printed fiat into the system at the request of smaller banks. Central banks were intended to regulate fiat supplies within nations and control inflation, as the story goes. Printing fiat and not printing too much is the oversight role of the central bank. They are supposed to fund private economic trends and not governments through purchasing treasury bonds. In 2012, quantitative easing round 3 turned into QE Infinity because the Federal Reserve Bank under former chair Ben Bernanke purchased mortgage-backed securities (MBS) at $85 billion per month which is now being tapered back. The report reads: “Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits. In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money ‘multiplied up’ into more loans and deposits.”

Read More

EXCLUSIVE: Chase to Charge Customers Fees For Handing Cash Deposits

Beginning August 1st of this year, JP Morgan & Chase Co. will charge their customers for depositing nochasebankcash into their accounts. According to an internal document sent to account holders, in less than a month from now “the fee for all types of Cash Deposit Processing (CDP) will be $0.25 per $100 [deposited]. The CDP fee will only apply after you exceed your account’s cash deposit limit.”  One reason for Chase to charge their customers a fee on cash deposits may reside in the fact that the major banks are “charging customers who deposit lots of cash.” Wherein Chase is charging customers for every $100 in cash deposited, other banks are charging on every cash deposit of $10,000; or $0.20 on every $100 deposited...more

When Too Much Cash Hurts

Rodney Johnson, Senior Editor, Survive & Prosper

Europeans are struggling with a problem. Their banks are stuffed to the gills with cash.

In the aftermath of the financial crisis, there aren’t many borrowers, or at least, qualified borrowers, just aching to take on more debt.

This has left banks with wads of idle euros lying around, which they’re putting on deposit at the European Central Bank (ECB).

At first this suited everyone just fine. The ECB even paid the banks interest on their deposits of excess reserves, which kept the money close at hand instead of potentially fueling runaway inflation as all of those euros got lent out.
But now things aren’t so rosy…

For the last year and a half, the euro zone’s inflation rate has fallen. Now it’s approaching zero. This is the twilight zone for bankers.
As we’ve said for many years, inflation doesn’t really scare central bankers. They believe they know how to fight it. It’s deflation that keeps them up at night.

What do you do when consumers and businesses refuse to spend at the rate you want them to? You can make loans cheaper through lower interest rates, but after that there aren’t many options.

Looking at fat (digital) stacks of euros, the ECB decided they needed to act, so they recently cut interest rates… to negative 0.1%. That’s right, now the central bank charges member banks to hold their cash.

The ECB did this hoping it would motivate banks to remove their excess deposits and use the funds to provide loans to businesses and consumers. The thought was that more lending would lead to more cash flowing through the economies of European countries, which would mean more euros chasing goods, and therefore rising inflation.

There’s only one problem: Charging banks to hold their excess cash does nothing to motivate consumers and businesses to borrow more money.

When it comes to credit, Europe is not facing a supply problem. There’s plenty of cash and credit available for qualified borrowers. Instead, it’s facing a demand problem. People aren’t motivated to borrow at a higher level.

To prod borrowers, the ECB would have to improve the confidence among Europeans that their businesses will receive more orders, their workers will receive higher pay, and their citizens — particularly the youth — will actually gain employment. Without these critical factors, making more funds available for lending is like putting more fuel in the tank of a car with no engine.

So what is a bank in the euro zone to do?

If making more loans is a non-starter, then European banks will have to decide what to do with their extra cash. They can keep the funds at the ECB and pay the penalty, but banks aren’t making a lot of profit these days, so ponying up for a penalty seems unlikely.

The most probable outcome is that banks will use the funds to buy securities, particularly bonds issued by euro zone countries. These bonds would require the smallest reserve requirement against loss so that banks could invest the most money.

It wouldn’t make sense to buy German bonds, which pay almost no interest. Instead, the banks will probably buy short maturity bonds of peripheral countries, particularly those that have struggled in recent years, because that’s where the yield is.

This will cause the interest rate paid on Greek, Irish, Portuguese, Spanish, and Italian bonds to drop dramatically as banks pile into the bonds issued by these countries.

What is not likely to happen is that the euro zone countries get any respite from their steady march toward outright deflation.
This trend is occurring because many countries are still dealing with the debt hangover from the financial crisis, their populations are aging and therefore want to save more not spend more, and wide swaths of European youths have no income, so can’t spend at all.

At the end of the day, negative interest rates on excess reserves held at the ECB does nothing to change any of this.

The American Dream is out of reach

The American Dream is impossible to achieve in this country.

So say nearly 6 in 10 people who responded to CNNMoney’s American Dream Poll, conducted by ORC International. They feel the dream — however they define it — is out of reach.  Young adults, age 18 to 34, are most likely to feel the dream is unattainable, with 63% saying it’s impossible. This age group has suffered in the wake of the Great Recession, finding it hard to get good jobs.  Younger Americans are a cause of great concern. Many respondents said they140603051910-american-dream-poll-american-dream-620xa are worried about the next generation’s ability to prosper.  Some 63% of all Americans said most children in the U.S. won’t be better off than their parents. This dour view comes despite most respondents, 54%, feeling they are better off than their own parents.  The downbeat mood is not surprising, say economic mobility experts.  “The pessimism is reflective of the financial realities a lot of families are facing,” said Erin Currier, the director of the Economic Mobility Project at Pew Charitable Trusts. “They are treading water, but their income is not translating into solid financial security.”…more

Le Pen: We need to destroy the European Soviet Union

SPIEGEL: Ms. Le Pen, having won 25 percent of the French vote, your Front National party stands as one of the primary beneficiaries of the May 25 European Parliament election. How could such a thing come to pass?

Le Pen: The French want to regain control of their own country. They want to determine the course of their own economy and their immigration policies. They want their own laws to take precedence over those of the European Union. The French have understood that the EU does not live up to the utopia they were sold. It has distanced itself significantly from a democratic mode of operation.

SPIEGEL: Yet, prior to the election, it was said that the establishment of lead candidates for the two biggest groups–Jean-Claude Juncker for the center-right and Martin Schulz for the center-left–would strengthen democracy in the EU….more

Debt Management

Are You Trading In Your Constitutional Rights for a Loan?

How would you feel about a physician who requires that you first agree not to sue if he were to botch your treatment? What about promising to never report the food poisoning you may end up contracting before the waiter agrees to take your order?  Ridiculous demands? Sure. So why is it OK to surrender these same rights to your lenders and the loan servicing companies that administer the contracts?  Take a close look at the terms and conditions of your credit card, auto and student-loan agreements, and focus on the section entitled Arbitration. There you’ll read how disputes between you and the firms that lend you money (and service the ensuing contracts) are resolved—not in a court of law, but privately, quietly and without your ability to involve anyone else who may have been harmed in the same way by the same companies...more

Stocks Fall as Dow, S&P Retreat from Records

Stocks fell Tuesday as the Dow Jones industrial average and S&P 500 pulled back from record closing highs in the previous session.

The Dow fell 21.29 points, or 0.1%, to 16,722.34 and the Standard & Poor’s 500 index dropped 0.73, or less than 0.1%, to 1924.24. The Nasdaq composite index fell 3.12 points, or 0.1%, to 4234.08. The Nasdaq was down for a third straight day.

STOCKS: USA TODAY’s live markets blog

Ostensible good news on the factory front didn’t lift investor spirits. Orders to U.S. factories rose for a third consecutive month in April, adding to evidence that manufacturing is regaining momentum after a harsh winter.

Orders increased 0.7% in April, pushed higher by a surge in demand for military hardware, the Commerce Department reported. That followed a 1.5% increase in March and a 1.7% climb in February.

The bidding war for Hillshire Brands and its Jimmy Dean sausages sizzled anew Tuesday when Pilgrim’s Pride upped its bid for the food giant by $10 a share to $55, topping last week’s $50-a-share offer from chicken giant Tyson Foods.

Hillshire shares jumped 9.5% to $58.65 on the news. Pilgrim’s Pride shares slid 2.2%to $25.34 and Tyson shares were off 3% to $42.08.

Investors dropped Krispy Kreme in the deep fryer, a day after the doughnut icon reported a rough first quarter. Its stock plunged 14.8% to $16.19…….Read Here

Gm Has Recalled More Vehicles In 2014 than it SOLD In 5 YEARS

General Motors has recalled nearly 13.8 million vehicles in the U.S. this year. That’s a lot, obviously. For example, it blows past GM’s previous annual recall record of 10.75 million vehicles, set in 2004. And it means GM is responsible for more than half of the total number of vehicles recalled in the U.S. so far this year.  But if you’re looking for one statistic that really drives home just how cataclysmic the whole episode has been for GM, it’s this one: In just this year alone, GM has recalled more vehicles in the U.S. than it sold between 2009 and 2013. And it’s only May.  Read Here

n-GM-570

 

Government Plan Would Transform Israel Into The World’s First Cashless Society

Will Israel be the first cashless society on the entire planet?  A committee chaired by Israeli Prime Minister Benjamin Netanyahu’s chief of staff has come up with a three phase plan to “all but do away with cash transactions in Israel”.  Individuals and businesses would still be permitted to conduct cash transactions in small amounts (at least initially), but the eventual goal is to force Israeli citizens to conduct as much business as possible using electronic forms of payment.  In fact, it has been reported that Israeli officials believe that “cash is bad” because it fuels the underground economy and allows people to avoid paying taxes.  It is hoped that requiring most transactions to be conducted in cash will reduce crime and help balance the national budget.  And once 98 or 99 percent of all transactions are cashless, it will not be difficult for the Israeli government (or any other government) to go the rest of the way and ban cash transactions altogether.  But is a cashless society actually desirable?  This is a question that people all over the world will have to start asking as governments increasingly restrict the use of cash...more

 

Retail Death Rattle Grows Louder

The definition of death rattle is a sound often produced by someone who is near death when fluids such as saliva and bronchial secretions accumulate in the throat and upper chest. The person can’t swallow and emits a deepening wheezing sound as they gasp for breath. This can go on for two or three days before death relieves them of their misery. The American retail industry is emitting an unmistakable wheezing sound as a long slow painful death approaches.

It was exactly four months ago when I wrote THE RETAIL DEATH RATTLE. Here are a few terse anecdotes from that article:

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones…more

Food Prices Soar; CPI Posts Biggest Gain in 10 Months; Real Average Earnings Decline

From the widely popular blog Mish’s Global Economic Analysis                                 by Mike “Mish” Shedlock

The BMish 1LS released CPI for April this morning. Data shows prices ticking higher with food up substantially for the third month. The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.  The indexes for gasoline, shelter, and food all rose in April and contributed to the seasonally adjusted all items increase. The gasoline index rose 2.3 percent; this led to the first increase in the energy index since January, despite declines in the electricity and fuel oil indexes. The food index rose 0.4 percent for the third month in a row, as the index for meats rose sharply……More at GlobalEconomicAnalysis.Blogspot.com…

Home builders losing confidence in recovery

After three months of holding out steady hope, sentiment among U.S. home builders weakened slightly in May. A monthly index from the National Association of Home Builders slipped one point from a downwardly revised April figure. The index now stands at 45. Anything above 50 is considered positive sentiment.  “It is clear that builder sentiment is becoming more in line with the market reality of a continuing but modest recovery,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “However, builders expressed some optimism that sales will pick up in the coming months.”  Builder confidence had moved well into positive territory throughout much of 2013, as prices soared on investor demand at the low end of the market. Home sales this spring have been decidedly weaker, as investors slow their purchases, leaving the market to mortgage-dependent, owner-occupant buyers.

..more

Black Hole: China’s Days are Numbered

Harry S. Dent Jr., Senior Editor, Survive & Prosper

I have been warning for years that the greatest — and final — bubble to burst, in this century of bubbles, would be China. Now that cracks in the great red dragon’s economy are widening, it’s time to prepare for the worst.

China has a unique, state-driven model of capitalism that clueless economists have hailed as the “new model for economic success.”

But I say China’s model (and economy) will fail drastically, proving once and for all that government-planned economies do not work as well as free market capitalism balanced by democracy.

China has massively overbuilt everything: industrial capacity, housing, offices, malls, infrastructure, you name it.

It’s overbuilt twice as much, and for twice as long, as any other government-driven emerging economy ever has. In fact, the last government-driven over-investment spree occurred in Southeast Asia, and it resulted in a financial crisis between late 1997 and late 2002. And China has made that situation look puny by comparison.

There is no way this can end any way other than very, very badly. The question is: when will an economic collapse come? The answer is, sadly: sooner than you’d like.

Here are the seven signs the end is near…

Sign #1: Recently, a large Chinese property developer decided, for the first time, to discount condos by 40% when sales stalled.

The thing is, this is a shocking step to take in China. It’s just not done.

The affluent Chinese line up to buy overbuilt, empty condos at insanely overpriced levels. They don’t rent them out because there is no rental culture in the country. Ninety percent of homes are owned. They simply buy the property and let it stand empty… so when a developer cuts prices and thus devalues their investment, they get bitterly angry.

But this discounting trend is likely to spread rapidly now as more developers are forced to discount prices just to raise cash and avoid bankruptcy.

Sign #2: The richest man in China, with $31.9 billion, is Li Ka-shing. He and his son, Richard, have sold $3 billion of prime commercial properties in the last nine months. That tells me the smart money is leaving before the bubble bursts!

Sign #3: A Bain & Company/Chinese bank survey of affluent households showed that 60% of the rich are considering moving overseas because they don’t trust government or the bubble, pollution levels are getting intolerable, and they want to get their kids an English-speaking education.

Sign #4: A number of major developers have gone bankrupt. These developers are highly leveraged and pose the greatest threat to the banking system, which has grown more through shadow banking and sub-prime lending in the last few years than anything sustainable. The worst new statistic, as developers pull back, is that housing starts in floor space dropped 37% in the first four months of 2013.

Sign #5: Bad loans are rising fast in China. The country’s private debt is now higher than that of the U.S. or Europe, as you can see in the chart below. At 190% and rising, it’s higher than emerging countries in Asia in 1998, when private debt peaked at 160% before a five-year currency and financial crisis.

But note that this chart doesn’t include financial sector or government debt. When you add those numbers into the pot, my estimates of the country’s total debt is around 277% of GDP. That’s much higher than other emerging countries like Brazil, which is at 152%, India at 130%, and Russia at 78%.

Emerging countries don’t have nearly the private debt of developed nations because their incomes are low and their citizens and businesses are less creditworthy. So for China to have a total debt of around 277% is unprecedented for an emerging country.

Sign #6: A major agricultural co-op closed its doors and investors couldn’t withdraw their deposits.

Sign #7: A major Chinese solar company defaulted on its bonds — the first to occur in China.

Thus far, the government has quietly bailed out or covered over the defaults and cracks. But they’re now hinting that they’re going to let more defaults happen to “slowly let the air out of the balloon.”

The Chinese government simply doesn’t have a clue. Actually, no government does. They always think they can deflate bubbles slowly to ensure a soft landing.

Soft landings never occur in major bubbles.

Bubbles don’t correct. They burst.

They get so extreme — and China’s bubble is the most extreme of all — that once they start to unwind, you get an avalanche of deleveraging and defaults that build on each other.

Bubbles become black holes.

I expect major problems in China likely by the summer or fall.

When China blows, there won’t be an effective stimulus policy from the U.S., Europe, or Japan, to counter such a shock. It will make the U.S. sub-prime crisis look like a Sunday afternoon picnic.

Wal-Mart sales growth weakest in five years, outlook cautious

(Reuters) – Wal-Mart Stores Inc forecast second-quarter profit below analysts’ estimates after reporting its smallest growth in quarterly sales in nearly five years, as a severe winter kept shoppers from its stores.  Shares of the world’s largest retailer fell as much as 3.4 percent before the bell on Thursday.  Wal-Mart is the latest retailer to flag a colder-than-usual winter for weak sales. Department store operator Macy’s on Wednesday cited the harsh winter for a 1.7 percent decline in quarterly sales.  Shoppers found it difficult to visit Wal-Mart’s gargantuan stores, mainly located on the outskirts of towns and cities, as winter storms snowed out access routes. The company has also been struggling with a sharp cut in benefits under the Supplemental Nutrition Assistance Program, the largest U.S. anti-hunger program. At least one in five of Wal-Mart’s customers relies on food stamps...more

Euro zone first-quarter growth disappoints, puts pressure on ECB to act

(Reuters) – The euro zone economy grew much less than expected at the start of the year and inflation remained locked in the ‘danger zone’ below 1 percent, increasing pressure on the European Central Bank to ease monetary policy at its next meeting in June.  The 9.5 trillion euro economy expanded only 0.2 percent quarter-on-quarter in the first three months of 2014, the same as the downwardly revised rate in the last quarter of 2013, while economists hadeurozone expected 0.4 percent growth.  The first quarter figure stayed positive mainly thanks to strong growth in the biggest economy Germany, which compensated for stagnation in France and shrinking output in Italy, the Netherlands, Portugal and Finland.  “Today’s figure is a major disappointment, as it suggests that the euro zone is still far away from reaching the escape velocity required for a sustainable recovery,” said Peter Vanden Houte, chief euro zone economist with ING...more

 

U.S. Backs Off Tight Mortgage Rules In Reversal, Administration and Fannie, Freddie Regulator Push to Make More Credit Available to Boost Housing Recovery

The Obama administration and federal regulators are reversing course on some of the biggest post-crisis efforts to tighten mortgage-lending standards amid concern they could snuff out the fledgling housing rebound and dent the economic recovery. Nick Timiraos reports.

WASHINGTON—The Obama administration and federal regulators are reversing course on some of the biggest postcrisis efforts to tighten mortgage-lending standards amid concern they could snuff out the fledgling housing rebound and dent the economic recovery.

On Tuesday, Mel Watt, the newly installed overseer of Fannie Mae FNMA -4.56% and Freddie Mac, FMCC -4.56% said the mortgage giants should direct their focus toward making more credit available to homeowners, a U-turn from previous directives to pull back from the mortgage market.

FHFA director Mel Watt, pictured in Washington this month, took the helm of the agency in January. Bloomberg News

In coming weeks, six agencies, including Mr. Watt’s, are expected to finalize new rules for mortgages that are packaged into securities by private investors. Those rules largely abandon earlier proposals requiring larger down payments on mortgages in certain types of mortgage-backed securities.

The steps mark a sharp shift from just a few years ago, when Washington, scarred by the 2008 crisis, pushed to restrict the flow of easy money that fueled the housing bubble and its subsequent bust. Critics of the move to loosen the reins now, including some economists and lenders, worry that regulators could be opening the way for another boom and bust.

For the past year, top policy makers at the White House and at the Federal Reserve have expressed worries that the housing sector, traditionally a key engine of an economic recovery, is struggling to shift into higher gear as mortgage-dependent borrowers remain on the sidelines.

Both Treasury Secretary Jacob Lew and Federal Reserve Chairwoman Janet Yellen last week noted the housing market as a factor holding back the economic recovery.

Mr. Watt, the former North Carolina congressman who took over as the director of the Federal Housing Finance Agency in January, used his first public speech on Tuesday to lay out the shift in course for Fannie and Freddie, and pegged executive compensation at the companies to meeting the new goals.

Fannie and Freddie, which remain under U.S. conservatorship, and federal agencies continue to backstop the vast majority of new mortgages being issued.

The FHFA has recently attempted to lure private investors back into the housing-finance market—and reduce the Fannie and Freddie footprint—by raising the cost of government-backed lending.

With few signs that private investors are returning on a large scale, Mr. Watt signaled a clear break with his predecessor, Edward DeMarco, who left the FHFA last month after nearly five years as its acting director.

“I don’t think it’s FHFA’s role to contract the footprint of Fannie and Freddie,” Mr. Watt said during a discussion at the Brookings Institution in Washington. Winding down the companies without clear proof that private investors are willing to step back in “would be irresponsible.”

His comments signal a move away from treating Fannie and Freddie as “institutions in intentional decline” towards “institutions that should be better prepared to form the core of our system for years to come,” said Jim Parrott, a former housing adviser in the Obama White House.

Mr. Watt’s remarks are significant, given legislation to overhaul the mortgage-finance giants and replace them with a new system that reduces the government’s role in housing appears headed for a dead end in the current session of Congress.

Mr. DeMarco in a separate speech at a banking conference in Charlotte, N.C., on Tuesday, urged restraint: “Do not confuse weakening underwriting standards and underpricing risk with helping people or promoting market efficiency.”

The new steps are the fruit of three years of strenuous pushback by those opposed to tighter lending standards.

In the wake of the 2010 Dodd-Frank law, regulators proposed a spate of new rules intended to eliminate questionable mortgage products and remove any incentive banks had to make loans unlikely to be repaid.

Among the biggest changes that were proposed: Borrowers would either have to put 20% down, or the bank would have to retain 5% of the loan’s risk once it was sliced, packaged and sold to investors.

The March 2011 proposal triggered a huge outcry from lawmakers, affordable-housing groups and the real-estate industry, all of whom said it would put the brakes on homeownership for millions of credit-worthy borrowers, particularly first-time buyers and minorities.

The potential for a high down payment also raised alarm bells at the Department of Housing and Urban Development, one of six writing the rule, according to government officials.

HUD officials agitated for a gentler approach, telling counterparts that a high down payment wasn’t the only way to prevent defaults, but would likely destroy any chance for a housing-market recovery.

At a meeting before the rule was proposed, a HUD official warned fellow regulators away from a 20% down payment, saying that “the impact is between uncertain and bad,” according to a person familiar with the discussions.

When the five other agencies were not swayed, HUD took another approach and refused to sign off on the proposal unless a 10% down payment was included as an alternative. Regulators agreed.

By August 2013, more than 10,000 comment letters had poured in to the agencies, and the response was almost universal: Regulators should avoid a high down-payment level.

The groundswell caught the attention of U.S. policy makers, who began to worry about the collective impact of so much new regulation.

Regulators announced a series of steps Tuesday that they said could help ease standards—abruptly raised by lenders during the financial panic—and make it easier for first-time and other entry-level buyers.

Mr. Watt said that he would direct Fannie and Freddie to provide more clarity to banks about what triggers “put-backs,” in which lenders have been forced to spend billions of dollars buying defective loans sold during the housing boom. To guard against future put-back demands, lenders say they have enacted standards that go beyond what Fannie, Freddie and other federal loan-insurance agencies require.

Mr. Watt said that he hoped that the changes would “substantially reduce” credit barriers, “and that lenders will start operating more inside the credit box that Fannie and Freddie” provide.

Shaun Donovan, the HUD secretary, announced on Tuesday similar changes designed to encourage lenders to reduce similar restrictions on loans insured by the Federal Housing Administration, which is part of his department.

No, Jimmy Carter did it

When Richard Posner, icon of the Chicago School, and William Greider, a fixture of the left, both decide to tell Paul Krugman that’s he’s wrong, maybe we should pay attention. Notwithstanding Posner’s recent reevaluation of the infallibility of markets, the two men tend to disagree far more than they agree.

Both say Krugman’s Monday New York Times column, “Reagan Did It,” gets history wrong.

Krugman’s thesis is that “the prime villains behind the mess we’re in were Reagan and his circle of advisers.” The smoking gun, he says, was Reagan’s 1982 signing of “the Garn-St. Germain Depository Institutions Act,” which helped precipitate the savings and loan crisis, writes Krugman, by giving the banking industry “license to gamble with taxpayers’ money.”

Not quite, say Posner and Greider, both of whom point to the administration of Jimmy Carter as the starting point for financial industry legislation.

Greider:

A Democratic Congress and Democratic president (Jimmy Carter) enacted the Monetary Control Act of 1980 which removed all remaining controls on interest rates and repealed the federal law prohibiting usury (note that sky-high interest rates and ruinous predatory lending have been with us ever since). It was the 1980 legislation that took the lid off banking and doomed the savings and loan industry, the mainstay that used to provide housing loans and home mortgages. The thrifts were able to raise capital because they were allowed to pay a half percent more in interest to depositors. Bankers wanted them out of the way. The Democratic party obliged.

Posner:

Deregulation was bipartisan. It is entirely speculative to suppose that, had Carter been reelected, the deregulation of banking, including the relaxation of mortgage standards, would have ceased. When the Democrats regained the presidency in 1993, banking deregulation continued, culminating in the repeal of the Glass-Steagall Act, which had split commercial banks from investment banks, and in the rejection of regulation of the new derivatives, notably credit-default swaps. Robert Rubin and Lawrence Summers, Clinton’s principal economic advisers, were steadfast supporters of banking deregulation. They are both Democrats……more

Office Depot to Close 400 US Stores

(Reuters) – Office Depot Inc (ODP.N) said it would close at least 400 stores in the United States over two years as it looks to consolidate operations after acquiring OfficeMax, and the company raised its forecast for full-year adjusted operating income.

Shares of Office Depot, which also reported better-than-expected quarterly results, rose as much as 20 percent in early trading. The stock was among the highest percentage gainers on the New York Stock Exchange on Tuesday.

“This stock looks to be a beat and raise story throughout 2014,” Janney Capital Markets analyst David Strasser wrote in a note, implying Office Depot was being cautious in its forecast...more

NAFTA’s Impact on US Workers

The North American Free Trade Agreement (NATFA) was the door through which American workers were shoved into the neoliberal global labor market.
By establishing the principle that U.S. corporations could relocate production elsewhere and sell back into the United States, NAFTA undercut the bargaining power of American workers, which had driven the expansion of the middle class since the end of World War II. The result has been 20 years of stagnant wages and the upward redistribution of income, wealth and political power.
NAFTA affected U.S. workers in four principal ways. First, it caused the loss of some 700,000 jobs as production moved to Mexico. Most of these losses came in California, Texas, Michigan, and other states where manufacturing is concentrated. To be sure, there were some job gains along the border in service and retail sectors resulting from increased trucking activity, but these gains are small in relation to the loses, and are in lower paying occupations. The vast majority of workers who lost jobs from NAFTA suffered a permanent loss of income…more

*What’s most interesting is how NAFTA paved the way for China to take over*

Baltimore Residents & Workers Voice Outrage Over Plans to Privatize Public Housing

JAISAL NOOR, TRNN PRODUCER: Baltimore moves ahead with controversial plans to sell about 40 percent of the city’s public housing to raise money for badly needed repairs. Over one hundred public housing residents, workers, and advocates gathered to speak out against the proposal.

SHARON JONES, TENANT COUNCIL PRESIDENT, BEL-PARK TOWER: Like everyone said, we want to be able to live in the places. We don’t want to [incompr.], we don’t want to be stepped on, we don’t want to be told that everything is going to be alright and the whole time they are running over us over and over again in these large buses, running us out…

While local entities such as the Housing Authority of Baltimore City own public housing, the federal government provides capital and maintenance funds. Cities cross the country are grappling with dropping federal funding for public housing. We’ll explore this important context in the second part of this story… more

What’s that fishy smell? The Fed’s corrupt policies Opinion: Central bank costs savers more than $100 billion a year

How else can one describe a regime that punishes savers and rewards borrowers and speculators for years on end? Our central bank is essentially taking billions of dollars a year from average Americans, who are still struggling to get by in a bombed-out economy, and it is giving it — yes, giving it — to the very banks that helped cause the 2008 financial crisis in the first place….more

Rent-A-Center earnings fall on continued weakness in U.S. stores: Company will close 150 locations

PLANO, Texas — Rent-A-Center said first-quarter revenues edged up 1.8%, but earnings tumbled 37% due to continued weakness in its core U.S. stores.  The company said revenues fell 5.6% in its U.S. segment, but were up 37% in its Acceptance Now segment, which places rent-to-own kiosks in traditional retail stores.  Same-store sales fell 6.1% in the U.S. store segment, but rose 26.1% in the Acceptance Now segment.  Total revenues for the quarter ended March 31rentacenter were $833.7 million, up from $819.3 million in last year’s first quarter.  Net income totaled $28.9 million or 54 cents per share. That was down from $46.1 million or 79 cents per share in the same quarter last year.  “We are generally pleased with our results in the quarter,” said Robert Davis, CEO. “We remain aware of continued challenges in the macro-economic environment but our focus remains on the execution of the strategy … to build shareholder value.”  He said customer demand was down in the U.S. store segment, but the average ticket was higher than the fourth quarter of 2013 due to a change in promotional strategy and other operational improvements…more

*You know it’s bad when RAC is closing stores*

Numericable Raises $10.9 Billion in Junk Bond Offering

Numericable, the French cable unit of Altice, raised 7.9 billion euros, or about $10.9 billion, on Wednesday in the largest junk bond offering in history to help finance the acquisition of Vivendi’s mobile unit, SFR. Altice, a cable and mobile services provider based in Luxembourg, prevailed this month in a bidding war for SFR in a deal worth up to €17 billion. Altice plans to merge SFR and Numericable after the acquisition. The amount Numericable raised in a high-yield bond offering was about €2 billion more than originally expected. It also successfully priced about €4 billion in term loans to help finance the SFR deal. The offering, which is being managed by JPMorgan Chase, Deutsche Bank and Goldman Sachs, far outpaced a $6.5 billion junk bond sale by the mobile provider Sprint Nextel last year, the largest high-yield offering on record, according to Dealogic…more

Smart Money in China Cuts Back on Property

SHANGHAI—For years, Chinese property has been a sure bet for savvy investors looking to ride the country’s economic surge. Now, some of the best-known names in Chinese investing are cutting back, at least for the present. Since September, Hong Kong tycoon Li Ka-shing, widely considered Asia’s richest man, has sold office and shopping-mall projects in the cities of Shanghai and Guangzhou. His son, businessman Richard Li, sold a prime piece of real estate, a mixed-use complex in Beijing’s Sanlitun shopping district, for US$928 million in early April…more

The Secret History of How Banks Assumed Control of the U.S. Economy

With U.S. inequality at its highest point since 1928 and Wall Street bonuses hitting pre-2008 levels, we look at the 100-year history of secret collusion between Washington and the financial industry. In her new book, ” All the Presidents’ Bankers: The Hidden Alliances that Drive American Power,” financial journalist Nomi Prins explores how a small number of bankers have played critical roles in shaping a century’s worth of financial, foreign and domestic policy in the United States. Prins examines how these relationships have influenced events from the creation of the Federal Reserve, the response to the Great Depression, and the founding of the International Monetary Fund and the World Bank. Now a senior fellow at Demos, Prins is a former managing director at Bear Stearns and Goldman Sachs, and previously an analyst at Lehman Brothers and Chase Manhattan Bank…more

20 Price Increases That Are Breaking America’s Middle Class Families

(Thomas Dishaw)  American families are under the gun.  Whether you are employed, unemployed, or underemployed you’re not alone, because millions of families are struggling in the U.S. With the cost of basic goods and services rising  at an alarming rate many households struggle to supply the basicprice increase necessities some of us take for granted.

Under the Obama Administration taxes are increasing faster than anytime in history, with Americans  paying more in taxes than on food, clothing  and housing combined.  Hard working middle class families will continue to evaporate and essentially be extinct if this cycle continues…more

Report Finds Los Angeles at Risk of Decline

LOS ANGELES — From the 73-story skyscraper that juLACHst broke ground downtown (the tallest in the West), to the blizzard of office, shopping and apartment complexes rising from there to the Pacific, construction is bustling in Los Angeles. Home prices are up, and the foreclosure rate is declining. Crime is down. There is a new mayor in City Hall. In many ways, Los Angeles, like many once-beleaguered cities across the nation, seems on the upswing…more

*The title of the article seems to down play the breadth of the situation*

Fruit of the Loom to shift clothing operations to Honduras

Fruit of the Loom, a clothing manufacturing company with its headquarters in the US state of Kentucky, is shifting its operations to Honduras.

The company will close its current manufacturing at its Jamestown plant in stages from June 8, 2014 onwards and all operations are expected to be shut by the end of the year, resulting in a layoff of around 600 workers c533dd2382d2f7.preview-300urrently employed at the plant…more

16 major retail chains closing stores across America

Daniel Jennings writes for Wealthy Debates, April 4, 2014, that despite all the talk from the Obama administration and the MSM about a “recovering” economy, a retail tsunami shows the U.S. economy to be in trouble.  Recent news stories show that American retail is in dire straits. Here are 16 big retail companies that have closed or will close stores soon:POW

  1. Office supply company Staples has announced plans to close 225 stores by 2015, which is about 15% of its chain. Staples already closed 40 stores last year.
  2. Office Depot, Staples’ main competitor which bought Office Max last year, isn’t in good shape either. Industry analysts expect Office Depot to announce its own round of store closings soon.
  3. Radio Shack has announced plans to close 20% of its stores or as many as 1,100 stores this year. The company, which operates around 4,000 stores, reported that its sales fell by 19% last year….more

Americans live in matrix of total lies :: Dr Paul Craig Roberts

The March payroll jobs report released April 4 claims 192,000 new private sector jobs. Here is what John Williams has to say about the claim:

“The Bureau of Labor Statistics (BLS) deliberately publishes its seasonally-adjusted historical payroll-employment and household-survey (unemployment)mark-twain1907 data so that the numbers are neither consistent nor comparable with current headline reporting. The upside revisions to the January and February monthly jobs gains, and the relatively strong March payroll showing, reflected nothing more than concealed, favorable shifts in underlying seasonal factors, hidden by the lack of consistent BLS reporting. In like manner, consistent month-to-month changes in the unemployment rate or labor force simply are not knowable, because the BLS cloaks the consistent and comparable numbers.”   (More)