Taken to Task: A Poverty of News, an Embarrassment of Media

Taken to Task: A Poverty of News, an Embarrassment of Media

By James B. Driscoll, 16 hours ago

48 Contiguous States and the District of Columbia
% Gross Yearly Income
Family Size 
 25% 50% 75% 81% 100% 133% 175% 200% 250% 300%
1 -$2,723 $5,445 $8,168 $8,821 $10,890 $14,484 $19,058 $21,780 $27,225 $32,670
2 -$3,678 $7,355 $11,033 $11,915 $14,710 $19,564 $25,743 $29,420 $36,775 $44,130
3 -$4,633 $9,265 $13,898 $15,009 $18,530 $24,645 $32,428 $37,060 $46,325 $55,590
4 -$5,588 $11,175 $16,763 $18,104 $22,350 $29,726 $39,113 $44,700 $55,875 $67,050
5 -$6,543 $13,085 $19,628 $21,198 $26,170 $34,806 $45,798 $52,340 $65,425 $78,510
6 -$7,498 $14,995 $22,493 $24,292 $29,990 $39,887 $52,483 $59,980 $74,975 $89,970
7 -$8,453 $16,905 $25,358 $27,386 $33,810 $44,967 $59,168 $67,620 $84,525 $101,430
8 -$9,408 $18,815 $28,223 $30,480 $37,630 $50,048 $65,853 $75,260 $94,075 $112,890More than 49 million Americans, or 16% of the population, were living in poverty in 2010, the government reported this week.  Rising poverty is a national tragedy and a brewing humanitarian crisis in America...

The poverty figures released this week came after the U.S. Census Bureau adjusted the way in which it calculates poverty using the new Supplemental Poverty Measure. Instead of just tripling a family’s minimum annual food budget, as previously, this new measure looks at how much families spend on food, shelter, clothing and utilities. You know, life’s basic necessities.

Most groups saw their poverty rates increase using the new calculations, including married couples, whites, Asians, immigrants, homeowners with mortgages, those with private health insurance and the elderly. Poverty rates among those over 65 rose to 15.9% from the previously reported 9%. Poverty rates did, however, drop for Americans under the age of 18, African Americans, renters and people living in rural areas.

I didn’t hear one word about this during the Republican Debate on Wednesday and you probably didn’t hear much about it either, unless you happened to catch former President Bill Clinton make a brief mention of it on The Daily Show with Jon Stewart, who turned it into a joke about the sexual harassment charges being levied at Herman Cain.

It’s Jon Stewart’s job to make light of serious issues, but I’d like to take the rest of the so-called serious media to task for burying this story.

I get that poverty is a depressing topic and a change to how it’s measured is a complicated story to tell. But I’ve never had a viewer tell me they want LESS depth or more ‘infotainment.’

More than ever Americans want news organizations to focus on the hard stuff…instead of the salacious (Victoria Secret‘s runway show), the sensational (Sharon Bialek’s press conference), the sophomoric (Rick Perry’s ‘oops’ gaffe) and the ridiculous (anything about the Kardashians) developments that pass as “news” in our society.

In his brilliant show “The Agony & The Ecstasy of Steve Jobs,” Mike Daisey talks about how working conditions remain brutal at Apple’s Foxconn plant, but we don’t hear about them anymore because of Chinese censorship. If the ‘media echo chamber’ pings for news and doesn’t hear a response, it moves on to the next story, he observers.

In these difficult times, and especially on Veterans Day, it’s important for all of us to be aware of the messages we’re sending to the media in the stories we watch, share, favorite and Tweet about.

Those among us — journalists and civilians alike — who ignore the hard realities of American life and get lost in what should be the minor distractions. You’ve been taken to task.

Again just a short word~to thank all you veterans who have served our country that we might be and keep out free GOD based society and enterprise.

Categories: Economic Update

Can the DOW really drop by 50% or more??? Going Down???

November 15, 2012 Leave a comment
Categories: Economic Update

Obama win could have big market worries.

November 7, 2012 Leave a comment

Obama win has U.S. investors staring at fiscal cliff

Reuters – 5 hours ago

Supporters of U.S. President Barack Obama cheer during his election night rally in Chicago, November 6, 2012. REUTERS/Philip Scott-Andrews

NEW YORK (Reuters) – U.S. investors will hit trading floors this morning with the same president and the same problems in gridlocked Washington. First up: a looming budget crisis that could send the U.S. economy reeling.

President Barack Obama beat back Republican challenger Mitt Romney to win a second term, but he will still have to contend with a Republican-controlled House of Representatives that could make forging a compromise on pressing issues like the coming “fiscal cliff” difficult.

“There will be an immediate shift to government gridlock and the fiscal cliff issue, and that will be a headwind for stocks,” said Michael Yoshikami, chief executive officer and founder of Destination Wealth Management in Walnut Creek, California.

The fiscal cliff is a $600 billion package of automatic tax increases and spending cuts, scheduled to take effect at the end of 2012, that could severely strain economic growth.

Obama is expected to demand tax increases for the wealthy as part of a deal to reduce spending to tackle the nation’s deficit. Many investors thought that Romney as president-elect would have had a smoother time in negotiations.

“The real challenge is for (Obama) to bridge the differences with Congress and work to get in the middle,” said Jason Ader, a former Wall Street gaming analyst and a Romney supporter.

Steven Englander, Citigroup’s head of G10 foreign exchange strategy, said markets could panic toward yearend if it looks as though no deal is imminent to avoid the fiscal cliff.

If that happens, investors will think twice about lending the U.S. government money at low interest rates, which would strain the economy, widen the deficit and hurt the dollar. It also raises the possibility that major credit-rating agencies will cut the U.S. debt rating.

Standard & Poor’s stripped the U.S. of its pristine triple-A rating in 2011; the agencies have said they will evaluate budget negotiations and solutions and may take action next year.

Investors have had a tendency to downplay problems emanating from Washington only to find themselves surprised when lawmakers cannot get together on critical issues. The market reacted harshly to Washington gridlock after failed legislation to backstop the banks in 2008 and again during protracted talks to raise the U.S. debt ceiling in 2011.

Whitney Tilson, a hedge fund manager and one of the only managers in the $2 trillion industry publicly to endorse Obama for a second term, said he was optimistic that the two parties would compromise.

“This was a victory for moderates,” he said. “I hope both parties recognize this and move toward each other – to the center – to address the pressing problems our country faces.”

The end of the drawn-out election campaign puts to rest questions about regulation and monetary policy – Romney had said he would replace Federal Reserve Chairman Ben Bernanke – but some investors remained on edge about taxes and overall economic health.

Billionaire investor George Soros said late Tuesday that the re-election of Obama will open “the door for more sensible politics.” Soros, a major contributor to Democratic causes, said in an email exchange with Reuters that he hoped “the Republicans in office will make better partners in the coming years.

CLARITY ON THE FED, LESS ON THE ECONOMY

Although markets came into the night expecting Obama to win, most traders and investors supported Romney, who raised more money on Wall Street than the incumbent.

Obama’s win did remove uncertainty about the future of Fed policy. Romney had said he would replace Bernanke, whose dovish monetary policy has helped propel gains in both U.S. bond and stock prices in recent years.

The benchmark S&P 500 has rallied 67 percent since Obama took office – one of the most impressive runs ever for stocks under a single president.

Benchmark bond yields hit record lows despite a downgrade of the U.S. credit rating last year. Cumulative returns for maturities on all U.S. Treasuries are at 14 percent since Obama took office, according to Barclays.

The Fed’s easy-money policy has pushed down the value of the dollar, though, and some worry more dollar weakness may be in store, particularly if investors see signs of rising inflation.

“The market rewards this certainty by bidding up gold and selling the dollar against all major currencies,” said Axel Merk, president of Merk Investments in Palo Alto, California.

Under a second Obama presidency, Wall Street will have to forgo trying to repeal Dodd-Frank financial reforms and instead continue to use personal relationships in Washington to keep the law from harming firms, said Karen Shaw Petrou of Federal Financial Analytics, a Washington-based research firm.

Wall Street has bristled at the reforms, which include stricter capital requirements for banks, and the Volcker Rule, which is intended to stop banks from making bets in the financial markets with insured deposits.

But some welcomed the changes.

“I don’t think any reasonable observer would want to go back to the risk that we had in the system before the financial crisis,” said Evercore CEO Ralph Schlosstein.

Categories: Economic Update

Costs up by 200%

September 28, 2012 Leave a comment

Categories: Economic Update

Banks are never too big to fail-and will we bail them out again?

 

“If You Are Too Big To Fail, You’re Too Big”:

By Stacy Curtin | Daily Ticker – 19 hours ago-5-3-12                                               


Nearly four years after U.S. taxpayers bailed out Wall Street, the debate over how to deal with America’s too big to fail banks rages on.

One very outspoken critic of TBTF banks has been Dallas Fed President Richard Fisher.


“The TBTF institutions that amplified and prolonged the recent financial crisis remain a hindrance to full economic recovery and to the very ideal of American capitalism,” Fisher wrote in the Dallas Federal Reserve’s 2011 annual report entitled “Choosing the Road to Prosperity: Why We Must End Too Big to Fail — Now.”

He joined The Daily Ticker’s Aaron Task at the Milken Institute’s 2012 Global Conference in Los Angeles to discuss the threat posed by TBTF banks.

“Five banks have 52% of all the deposits in the industry and they are now bigger than they were before we got into the crisis,” explains Fisher. That’s compared to 1970 when the top five banks maintained just 17% of all deposits. “We’ve had this huge amount of legislation called Dodd-Frank — thousands of pages, hundreds of sections — and it is has not solved the too big to fail problem.”

In fact, the combined assets of the top 10 banks equal half of America’s total GDP, according to the Dallas Fed’s annual report.

“There is an inherent injustice in being too big to fail because you are implicitly getting a subsidy from the government,” says Fisher. “They don’t have to be these giant depository institutions that are underwritten by the taxpayer.”

Not only do TBTF banks pose a threat to the U.S. taxpayers and financial system, they are also to blame for the slowest economic growth since the Great Recession, says Fisher. In an earlier segment with The Daily Ticker, he explains there is currently enough “gas in the tank” from Fed policy to jumpstart a recovery, but policymakers won’t step on the gas pedal in terms of jobs creation, which Fisher also attributes to the issue of TBTF.

“Dodd-Frank has made it very difficult from a regulatory burden standpoint for community and regional banks,” Fisher says. “These are the people who lend to small businesses [and] small businesses create the majority of jobs in America.”

He believes Dodd-Frank “penalizes community and regional banks” and even “interferes with the proper connection of monetary policy to the economy as a whole.”

If the problem is not solved, he believes another crisis will hit again, at some point in the future.

“If you are too big to fail, you’re too big,” he says.

 

So goes Europe, so goes the DOW!

A string of disappointing developments in Europe put heavy pressure on global markets Monday morning.

In recent trading, the Dow was down 150 points while major bourses in Germany and France were off by nearly 3% as Europe’s crisis completed its migration from the back burner to the forefront of the market’s consciousness.

Last week, financial markets became fixated on Spain’s debt crisis and then turned to focus on French elections heading into the weekend.   But it was developments in the Netherlands, where budget talks broke down this weekend, that really unsettled the markets.

Next to Germany, the Netherlands was considered “the cleanest country” in the EU in terms of its fiscal discipline, says Sassan Ghahramani, president and CEO of SGH Macro Advisors. “The triple-A of triple-A is now having a big dogfight over the budget. They may put a budget together but the government is going to fall apart.”

Indeed, Dutch Prime Minister Mark Rutte said new elections were an “obvious scenario” after budget talks ended and Rutte’s government lost the support of the right-wing Freedom Party, led by Geert Wilders. The Freedom Party opposed Rutte’s plans to bring the country’s deficit toward 3% of GDP. The risk for financial markets is Netherlands losing its AAA rating.

In Europe, right-wing parties tend to be extremely conservative on social issues, like immigration, but not necessarily what Americans think of as “conservative” on fiscal issues. These parties are “very anti-bank, anti-establishment,” Gharamani says.

Right-wing politicians in the Netherlands and France, among others, have been critical of the EU and are pushing back against the austerity measures agreed to in the EU Fiscal Compact Treaty. The compact, which was approved in January, obliges EU members to keep budget deficits below 3% of GDP and keep public debt at 60% of GDP.

“Northern countries are drifting away from the fiscal austerity they’re preaching to southern countries,” Ghahramani observes. “That’s an issue people are concerned about.”

Right-wingers, led by France’s Marine Le Pen, also fared better than expected in the first round of France’s presidential elections this weekend. That could pressure President Nicolas Sarkozy to mollify his support for the EU Fiscal compact as he heads into the second-round match up on May 6 against Socialist Francois Hollande, who is leading in the polls.

“Maybe people are finally realizing ‘Oh my god, we’re going to have a socialist in place’ but the surprise [in France] is the showing of the far right and the weak showing of the far left,” Ghahramani says.

But France’s election and the potential end of Sarkozy’s reign was on the market’s radar, he says. “Holland is just beginning. The problem there is the coalition led by liberals has now fallen apart. It’s an anti-euro type movement.”

Germany’s Angela Merkel faces similar pressures at home, even as her government is pushing for more austerity elsewhere in Europe. Merkel’s party is expected to lose support in local elections on May 6 in North-Rhine Westphalia, Germany’s largest state.

In the end, Ghahramani believes the rising anti-euro sentiment will cause changes in the domestic policies in various nations, rather than an “overhaul” of the EU itself.

Still, the political trends will complicate policymaking in the EU, which is concurrently facing a sharp slowdown in economic activity. Also Monday, dismal reports on German manufacturing and Italian consumer confidence reinforced concerns about the eurozone being in recession. Speaking of which, Spain’s central bank said its economy contracted for a second straight quarter, the conventional (albeit flawed) definition of a recession.

“Even as you’re fixing problems on the budget the real economic problem is starting to hit,” Ghahramani. “You’re getting a bigger hole to dig out of, which might even be a bigger problem than dealing with policy,” which is heading in a direction antithetical to the bulls.

 

Categories: Economic Update