Global Economy Bursting?

[Randolph Kinney]

The Low-wage, No-raise Economy

http://www.opednews.com/articles/The-Low-wage-No-raise-Eco-by-Patrick-Martin-120829-172.html

There is ample reason to doubt whether the jobs report accurately describes the real situation in the labor market. A separate report by the Labor Department, based on its survey of households, found a decline of 195,000 jobs in July. Moreover, the BLS figure of a rise in 163,000 jobs was based on raw data showing a decline of 1.2 million jobs, which was seasonally adjusted to yield an increase. This may well be overstated because the historical pattern for July is heavily influenced by the traditional auto industry changeover period, which did not take place this year.

More significant than the exact number of jobs created or lost in July is the quality of those jobs. The vast majority of the new jobs created in the course of 2012 have been part-time or low-paying or both. Full-time jobs have actually declined by 750,000 since March.

At the same time, wage rises are virtually nonexistent. Since March 2010, when official employment figures hit bottom, non-supervisory workers have seen a weekly raise of just 3 cents an hour, when inflation is taken into account. This is the product of two processes: the inability of workers to press for wage increases when they have no job security, and the disproportionately low wages being paid to those who have obtained new jobs during the past two years.

According to a report issued recently by the Economic Policy Institute (EPI), 28.3 percent of all workers are receiving poverty-level wages today, and that figure is projected to be virtually unchanged, at 28 percent, in the year 2020. Based on employer surveys of where jobs will be created in the next eight years, the EPI found that an amazing 25 percent would not require even a high school education, even though barely 8 percent of the work force falls into that category.

In other words, despite the incessant claims that getting a college education is essential to getting a decent job, American capitalism has something very different in store for the new generation of the working class: low-wage jobs in industries like retail, health care, office temps and food service, where the bulk of new workers will make the minimum wage or slightly more.

 

[Big ole Boy]

Eurobonds and the FED

.... here is the next shoe to drop ... I found it my crystal ball this morning ..... the bank cartels across the globe are all pointing to the phase ...

.... the FED will start buying more and more Eurobonds ...

... I just learned that the FED can buy anything from anywhere ......

.... the pressure will force the FED to not only sell money to itself but it will be a necessary for the FED to buy all kinds of crapola from all over the place .....

 

[Randolph Kinney]

The Shape Of 40 Years Of Inflation

http://www.forexpros.com/analysis/the-shape-of-40-years-of-inflation-134898

Note at the bottom the thin blue line on the chart and compare it to the top line. (You can also 'see' where the reported CPI was additionally fudged as that bottom line thins-out over time.

Anyone who has to commute to work and fills his own gas tank, or has to put food on his family table, or keep the lights/heat on knows ... the CPI (consumer price index) number the government reports is fantasy, since it doesn't include ANY of the things people actually have to buy.

 

[Big ole Boy]

Randolph .... huge stories are hitting the fan today ... Sunday .....

The FED ... audit

.. never mind .... the 16 trillion dollar story about the FED sending money to banks is a year old.

...without an audit of the FED ...they could be doing anything ...... there is no limits on them ....... they are allowed to buy anything from anyone .....

... I never really realized that the FED was involved in so much more than just financing our debt here in the US.

..... the money they are lending at 0% to banks and who knows what else makes our debt here in the US look like chump change.

.... I did not realize what a slave we have become to the Keynesian technocrats ..

.... its so hard to get the public aware of this - I guess that is the essence of Keynesian flesh ....

.... like fish out of water

 

[Randolph Kinney]

Poll: Raise taxes to preserve Social Security

http://www.sfgate.com/nation/articl...letter&utm_campaign=Top O' The Bay Newsletter

Most Americans say go ahead and raise taxes if it will save Social Security benefits for future generations. And raise the retirement age, if you have to.

Both options are preferable to cutting monthly benefits, even for people who are years away from applying for them.

Those are the findings of a new Associated Press-GfK poll on public attitudes toward the nation's largest federal program.

 

[Randolph Kinney]

The Lost Decade of the Middle Class

http://www.pewsocialtrends.org/2012/08/22/the-lost-decade-of-the-middle-class/

As the 2012 presidential candidates prepare their closing arguments to America’s middle class, they are courting a group that has endured a lost decade for economic well-being. Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some—but by no means all—of its characteristic faith in the future.

These stark assessments are based on findings from a new nationally representative Pew Research Center survey that includes 1,287 adults who describe themselves as middle class, supplemented by the Center’s analysis of data from the U.S. Census Bureau and Federal Reserve Board of Governors.

 

[Randolph Kinney]

U.S. Companies Brace for an Exit From the Euro by Greece

http://www.nytimes.com/2012/09/03/b...?_r=1&nl=todaysheadlines&emc=edit_th_20120903

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.

Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.

No one knows just how broad the shock waves from a Greek exit would be, but big American banks and consulting firms have also been doing a brisk business advising their corporate clients on how to prepare for a splintering of the euro zone.

That is a striking contrast to the assurances from European politicians that the crisis is manageable and that the currency union can be held together. On Thursday, the European Central Bank will consider measures that would ease pressure on Europe’s cash-starved countries.

JPMorgan Chase, though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries.

 

[Workbox]

U.S. Companies Brace for an Exit From the Euro by Greece

http://www.nytimes.com/2012/09/03/b...?_r=1&nl=todaysheadlines&emc=edit_th_20120903

Even as Greece desperately tries to avoid defaulting on its debt, American companies are preparing for what was once unthinkable: that Greece could soon be forced to leave the euro zone.

Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.

No one knows just how broad the shock waves from a Greek exit would be, but big American banks and consulting firms have also been doing a brisk business advising their corporate clients on how to prepare for a splintering of the euro zone.

That is a striking contrast to the assurances from European politicians that the crisis is manageable and that the currency union can be held together. On Thursday, the European Central Bank will consider measures that would ease pressure on Europe’s cash-starved countries.

JPMorgan Chase, though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries.

All these past years they have just been buying time. But this is the same old song and now we have to wait if the Fat Lady begins to sing.

 

[Randolph Kinney]

QE gives money to the banks, which were theoretically supposed to lend out excess reserves. However, individuals have enough debt and have been de-leveraging. Small businesses have not been hiring, but have been complaining that is it difficult to secure loans. While large companies have money on their balance sheets, many have been laying off workers.

In effect, QE primarily benefited the banks and the stock market (higher net worth individuals). The banks have taken systemic risks in the market. Indeed, evidence demonstrates that quanitaive easing helped the banks and the largest companies, but not the little guy or the American economy as a whole.


Over the past few years, the government has been a drag on the US GDP growth. ‘Austerity’ measures implemented by Obama and Congress have been pulling growth the wrong way. It seems counterintuitive, because the deficit is growing! What is the government spending our money on? Defense, Health and Human Services, and interest on the debt itself.

 

[Randolph Kinney]

More 'retired' Baby Boomers may work

http://www.sfgate.com/business/arti...letter&utm_campaign=Top O' The Bay Newsletter

Just how much the recession reshaped what many Baby Boomers thought retirement would look like is becoming clearer: More than ever they now expect to retire later or work when they're "retired."

In 1991, just one in 10 workers told the Employee Benefit Research Institute that they planned to wait to retire until they were older than 65. By 2007, three in 10 said that.

This year? More than four in 10.

Boomers cruising toward a traditional retirement suffered a financial comeuppance in the prolonged economic slump that began in late 2007. The downturn sapped jobs, stock and housing values, and interest on savings.

Many were also caught in the shift from defined-benefit pension plans to 401(k) plans that required workers to contribute toward their own retirement savings. Some didn't, a choice that will leave them short financially.

Small wonder that, according to the Pew Research Center, Boomers are the gloomiest of all age groups about the health and future of their finances. Boomers were more likely than other age groups to tell Pew researchers that they lost money on investments since the recession hit. Nearly 6 in 10 said their household finances worsened.

Finally, employment-based health insurance for many retirees has been withering away, causing older workers to keep working.

Overall, the stage is set for a new normal: limiting retirement.

A study by Ernst & Young, Americans for Secure Retirement, found that 3 out of 5 Missourians and Kansans can expect to outlive their financial assets. "Near retirees" need to reduce their standard of living by more than one-third to reduce the likelihood of outliving their assets to a 5 percent risk, the study said.