Friday, March 28, 2014

We Don’t Run This Country for Corporations

Hobby Lobby doesn’t want to cover its employees’ birth control on company insurance plans. In fact, they’re so outraged about  women  having  access  to birth control that they’ve taken the issue all the way to the Supreme Court.
I  cannot   believe  that  we   live  in a  world  where  we   would   even   consider   letting   some   big corporation   deny  the  women  who  work  for it  access  to the  basic   medical   tests , treatments or prescriptions that they need based on vague moral objections.
But here’s the scary thing: With the judges  we ‘ve got on the Supreme Court, Hobby Lobby might actually win.
The current Supreme Court has headed in a very scary direction.
Recently, three well-respected legal scholars examined almost 20,000 Supreme Court cases from the last 65 years. They found that the five conservative justices currently sitting on the Supreme Court are in the top 10 most pro-corporate justices in more than half a century.
And Justices Samuel Alito and John Roberts? They were number one and number two.
Take a look at the win rate of the national Chamber of Commerce cases before the Supreme Court. According to the Constitutional Accountability Center, the Chamber was winning 43% of the cases in participated in during the later years of the Burger Court, but that shifted to a 56% win-rate under the Rehnquist Court, and then a 70% win-rate with the Roberts Court.
Follow these pro-corporate trends to their logical conclusion, and pretty soon you’ll have a Supreme Court that is a wholly owned subsidiary of  big  business.
Birth control is at risk in today’s case, but  we  also need to worry about a lot more.
In  Citizens United , the Supreme Court unleashed a wave of corporate spending to game the political system and drown the voices of middle class families.
And right now, the Supreme Court is considering  McCutcheon v. FEC , a case that could mean the end of campaign contribution limits — allowing the  big  guys to buy  even  more influence in Washington.
Republicans may prefer a rigged court that gives their corporate friends and their armies of lawyers and lobbyists every advantage. But that’s not the job of judges. Judges don’t sit on the bench to hand out favors to their political friends.
On days like today, it matters who is sitting on the Supreme Court. It matters that  we  have a President who appoints fair and impartial judges to our courts, and it matters that  we  have a Senate who approves them.
We ‘re in this fight because  we   believe  that  we  don’t run this country for corporations –  we  run it for people.
Elizabeth Warren was assistant to the president and a special adviser to the Treasury secretary on the Consumer Financial Protection Bureau.

Autism Increased 30% in Just Two Years: Now It’s 1 in 68

According to new government figures just released today, autism in the U.S. has increased by a whopping 30% in just two years. The new estimate is that one in every 68 kids in America falls somewhere on the autism spectrum now.
Health officials claim that this is not because more kids are autistic these days, but that it is recognized more even in kids with fewer symptoms:
Much of the increase is believed to be from a cultural and medical shift, with doctors diagnosing autism more frequently, especially in children with milder problems.
While that may account for the increase over the last two years, can that explanation really account for the overall autism increase trending over the last two decades?
The prevalence rate for autism before 1990 was only three children per 10,000. When the CDC began surveillance of the study population above in 2000, figures clocked in at one child in every 150. Since then, autism diagnoses have been steadily increasing each year.
One trend that has remained the same is the five times higher prevalence of autism in boys, at one in every 42, over girls, at one in every 189.
Some have pointed to a wealth of studies that show possible correlation and causation of the continued rise in autism to the continued increase in vaccines. The U.S. currently has the most aggressive vaccination schedule of any country on the planet. New vaccinations have been steadily added to the average American child’s vaccine schedule each decade for several decades now:
In the early 1950s, there were four vaccines: diphtheria, tetanus, pertussis and smallpox. Because three of these vaccines were combined into a single shot (DTP), children received five shots by the time they were 2 years old and not more than one shot at a single visit.
By the mid-1980s, there were seven vaccines: diphtheria, tetanus, pertussis, measles, mumps, rubella and polio. Because six of these vaccines were combined into two shots (DTP and MMR), and one, the polio vaccine, was given by mouth, children still received five shots by the time they were 2 years old and not more than one shot at a single visit.
Since the mid-1980s, many vaccines have been added to the schedule. Now, children could receive as many as 24 shots by 2 years of age and five shots in a single visit.
Vaccines contain a vast array of potentially dangerous ingredients, including antibiotics, formaldehyde, monosodium glutamate (MSG), bovine fetal tissue, polysorbate and heavy metals like aluminum and the mercury-containing preservative thimerosal. When these are shot into the bloodstream, they bypass the majority of the body’s natural immune system which resides in the gut.
A new study recently released by Scientists from the University of California has put forth evidence that autism actually begins in utero during pregnancy and it not the result of a child’s environmental and social factors (such as childhood vaccines):
“Building a baby’s brain during pregnancy involves creating a cortex that contains six layers,” said Eric Courchesne, neurosciences professor and director of the Autism Center of Excellence at UCSD, in a statement. “We discovered focal patches of disrupted development of these cortical layers in the majority of children with autism.”
While many media outlets are saying this proves conclusively that vaccinations aren’t causing autism (the story quoted above was titled, “Autism Awareness: Disorder Begins Before Brain Is Fully Developed, Making Risks From Vaccinations Impossible”), that’s more media spin than reality.
In fact, this particular story goes on to contradict its own title.
As the story itself says:
But these trends aren’t reflected in other parts of the world. Asia, Europe, and other parts of North America display far lower prevalence rates, sometimes as low as one percent, which presents U.S. researchers with a curious challenge. There are no blood tests to diagnose autism, and behavioral observation is by nature imperfect. Some say we over-diagnose, especially on the higher-functioning end. Some say America’s obsession with vaccinations is to blame. So the question remains: How do stop something if we don’t fully know what it is?
And then:
This doesn’t rule out maternal exposure during gestation or earlier, but it does go a long way toward quieting many of today’s critics. [emphasis added]
Did you catch that?
Pregnant mothers are consistently told they need to get all kinds of vaccines in the U.S., including flu shots, one of the vaccines known to still contain thimerosal. How can something be “impossible” if it hasn’t entirely been ruled out?
The debate, then, rages on.
Delivered by The Daily Sheeple

Students at key London University college vote to boycott Israel

Students at London University’s prestigious King’s College have delivered a blow to Israel by voting to endorse the boycott, divestment and sanctions movement (BDS) against the world’s only apartheid state.
The motion, adopted on 25 March, was passed by 348 to 252 votes.
It calls for a thorough research into the college’s “investments, partnerships, and contracted companies, including subcontractors, that may be implicated in violating Palestinian human rights as stated by the BDS movement”.
It also calls for pressure to be put on the college to divest from companies found to be “directly or indirectly supporting the Israeli occupation and apartheid policies”.
It also resolves
To have a plaque in all KCLSU [King’s College London Students Union] student centres acknowledging that KCLSU formally supported the BDS call, as was done when KCLSU showed solidarity to our sisters and brothers in their struggle against Apartheid South Africa with the following text: “KCLSU officially endorses the 2005 Palestinian call for Boycott, Divestment, and Sanctions of Israel until it abides by international law and ends it illegal occupation of Palestine. KCLSU is proud to follow the example of a similar call in the 1980’s, which successfully led to the end of apartheid in South Africa.”
And it resolved to raise awareness of Israel’s apartheid policies and its illegal occupation by “helping KCL Action Palestine Society with printing materials and diffusion of important events such as the international ‘Israeli Apartheid Week’ through the KCLSU website and social media”.
Well done, King’s College students, for hammering another nail into the coffin of injustice and criminality.

Gold Headed Higher On US Concerns

TUE 25 MAR 14 | 06:47 PM ET
David Lennox, Resources Analyst at Fat Prophets, says lingering issues of a budget deficit and a debt situation in the U.S. could lift gold prices higher

Meet 5 People Who Made A Decision To Shine A Light In The Darkness

Heart - Photo by Louise Docker from Sydney, Australia
Are you ready for some inspirational stories that will make your heart jump for joy?  These days, it is so easy to get down.  Both individually and as a nation, we have so many problems and it often seems likethings just keep getting worse.  For example, this week we learned that pending home sales in the United States just droppedby the most in 3 years and that they have now been declining for 8 months in a row.  And without a doubt, incredibly challenging times are on the horizon.  In response, a lot of people are going to choose to complain bitterly and curse the darkness.  Others are going to respond with fear and will try to hide from the world as much as they can.  But I don’t think that either of those approaches is a good way to react to the problems that we will be facing.  Rather, I believe that the right choice is to be a light in the darkness and to try to make a difference.  As you will see below, there are many ways that this can be done.  You don’t have to be famous, or run for political office, or have a million dollars.  All that it takes is a willingness to reach out and love the one in front of you.  If all of us decided to do what we could to truly make a difference in the life of one other person, our nation would be a far better place.  The following are 5 people who made a conscious decision to shine a light in the darkness…
Kelly Nixon Mayr
It takes a lot of love and compassion to adopt a child into your own home.  When that child has special needs, it can be especially challenging.  That is why the story of Kelly Nixon Mayr is so inspiring.  Along with her husband, she has made a lifestyle out of helping children with special needs
Kelly Nixon Mayr of Colorado has birthed five children, adopted one troubled teen and fostered several special-needs infants. On Tuesday, she and husband Paul announced, through their family blog, that they had finalized their adoption of Angie, a 2-year-old who was born drug-exposed and clubfooted, whom they had fostered on and off since she was 1.
Now they are preparing for their next adoption—of Rita, an 8-year-old Eastern European orphan with arthrogryposis (a rare syndrome causing unbendable joints) and a case of post-traumatic stress disorder.
But Nixon Mayr, 45, who speaks about her close-knit brood with equal parts passion and humor, insists that she and her husband are not extraordinary.
“I yell at my kids, and I think one might have had Goldfish for breakfast the other day,” she tells Yahoo Shine with a laugh. “The only thing we are is willing.”
It takes a lot of money to raise those children.  Kelly and her husband could have used that money on a larger house, luxury cars and expensive vacations.  But instead, they willingly chose to live their lives in service to others.
Younger Americans are capable of feats of great compassion as well.  For example, a YouTube personality known as “Rahat” could have easily ignored the homeless man that he would often see at the local shopping mall.  But instead, he decided to do something about it
On March 4, a YouTube magician and prankster name Rahat set aside his mischievous pranks to do something really kind for a homeless man he’d often seen hanging around his shopping mall.
He heard that the man named Eric was a “nice and respectable guy,” so he gave him a lottery ticket telling him it was a winner and that he should come to the shop and claim his prize. The store clerk was privy to the stunt and pretended the ticket was indeed a winner and handed over $1,000 in cash to the homeless gentleman.
Rahat, who had secretly given the clerk the cash to give to Eric recorded a video of how excited Eric was to “win” the money.
And thanks to Rahat’s YouTube video and fundraising efforts, a total of$42,000 has been raised for that homeless man, and his future is looking bright for the first time in a very long while.
Annie Hart
Sometimes it is an animal that desperately needs some love and compassion.  In this economic environment, there are a lot of people that are abandoning their pets, and there are a lot of homeless dogs and cats that are in a tremendous amount of pain right now.
That is why what people like Annie Hart are doing is so wonderful
When Annie Hart rescued a sick, homeless pit bull, not even she could have predicted the miraculous transformation the animal would undergo.
Hart is the executive director of the Bill Foundationand is no stranger to rescuing animals.
She ended up naming the pit bull Gideon. The dog was in such bad shape that he actually trembled at the sight of humans.
Doctors also discovered that Gideon was suffering from multiple severe bacterial and highly contagious fungal infections. He was put in quarantine.
As you watch the video of the transformation of this dog that I have posted below, you might just find yourself getting choked up over it…
Mark A. Mayo
How many of you would be willing to give your life so that someone else could live?
That is precisely what Master-at-Arms 2nd Class Mark A. Mayo recently did.  It is this kind of heroism that America desperately needs more of
Master-at-Arms 2nd Class Mark A. Mayo, 24, was killed during a shooting incident at Naval Station Norfolk Monday. Mayo was assigned to Naval Security Forces, Naval Station Norfolk.
Norfolk Naval Base commander Robert Clark said the young sailor sacrificed himself to save others.
“It was incredibly extraordinary,” says Clark.
The shooting happened around 11:20pm Monday night at Pier 1 onboard the USS Mahan.
Mark Mayo was protecting a sailor who first confronted a civilian intruder. That man, a truck driver, tried to board the destroyer Mahan. He disarmed the watch stander and then turned the watch stander’s gun at Mayo.
“He jumped into the way between the gunman and the petty officer of the watch. She fell to the ground. He covered her and he basically gave his life for hers,” says Clark.
“Doing that, that’s something he would do,” says Virgil Savage, a fellow sailor and close friend of Mayo. “He always stood up for the little guy.”
You can read more about Mayo’s incredible act of bravery right here.
Dan And Linda Catlin
It takes a very special individual to commit your entire life to serving the homeless.
But that is exactly what Pastor Dan Catlin and his wife Linda have been doing for many years.
The following is an excerpt from a profile of the Messiah’s Branch homeless ministry in Wichita, Kansas that was written by Jessiqua Wittman
Messiah’s Branch is a family-owned homeless ministry. Since the year 2000, Dan and Linda Catlin have been traveling an hour, at least twice a week, to help the homeless in the city of Wichita, Kansas.
When I was a teenager (before we were homeless ourselves), my family had the privilege of working with this family.
We’d arrive at the mission building (a renovated bar), around 12:30 on Tuesdays and Fridays. The homeless people of the city, usually about 50 to 70 of them, would already be trickling into the area. There are a lot more homeless people than that in Wichita. Those were just the people from the surrounding area that could walk there, and had no other ministry that they could go for food. Most churches (besides Messiah’s Branch) require identification before they feed people off the street, and oftentimes homeless people have lost their identification long ago, whether because of drugs, mugging, or police raids (many of the police in Wichita are very hostile towards homeless people).
When you serve the homeless, there are no vacations.  It is just a relentless battle against human pain and suffering.  To do this year after year, you have got to be driven by compassion…
Sister Linda can hold a knife and cut a potato at the same time, in the same hand! The whole time seasoning her stew and chatting and laughing with a young homeless couple that are hanging around the kitchen door, hungry for more than just food.
And Pastor Dan? What does he do? He takes some people to doctor’s appointments, some to the hospital. Sometimes he buys shoes, or makes sure they find a coat that will fit just right. The way I remember him most is being the resident jar-opener.
In the wintertime, when it reaches a certain temperature, Pastor Dan and Sister Linda open up the building full time. There are so many people that come, they lay them all side-by-side in rows on the floor. For a week sometimes, it’s like this.
I have personally talked to Pastor Dan and I know how hard he has worked to help the homeless of Wichita for so many years.
But the need just keeps getting greater.
All over the country, the middle class is shrinking and more people arefalling into poverty.
We are going to need a lot more people like the ones you just read about above.
And you don’t have to do exactly what they are doing.  Find your own way to make a difference.  We all have different gifts, and together we can make this country a better place.
So make a conscious decision to shine a light in the darkness.
In the end, you will be glad that you did.

Billionaires Are Warping Our Political System

Charles and David Koch should not be blamed for having more wealth than the bottom 40 percent of Americans put together. Nor should they be condemned for their petrochemical empire. As far as I know, they’ve played by the rules and obeyed the laws.
They’re also entitled to their own right-wing political views. It’s a free country.
But in using their vast wealth to change those rules and laws in order to fit their political views, the Koch brothers are undermining our democracy. That’s a betrayal of the most precious thing Americans share.
The Kochs exemplify a new reality that strikes at the heart of America. The vast wealth that has accumulated at the top of the American economy is not itself the problem. The problem is that political power tends to rise to where the money is. And this combination of great wealth with political power leads to greater and greater accumulations and concentrations of both — tilting the playing field in favor of the Kochs and their ilk, and against the rest of us.
America is not yet an oligarchy, but that’s where the Koch’s and a few other billionaires are taking us.
American democracy used to depend on political parties that more or less represented most of us. Political scientists of the 1950s and 1960s marveled at American “pluralism,” by which they meant the capacities of parties and other membership groups to reflect the preferences of the vast majority of citizens.
Then around a quarter century ago, as income and wealth began concentrating at the top, the Republican and Democratic Parties started to morph into mechanisms for extracting money, mostly from wealthy people.
Finally, after the Supreme Court’s “Citizen’s United” decision in 2010, billionaires began creating their own political mechanisms, separate from the political parties. They started providing big money directly to political candidates of their choice, and creating their own media campaigns to sway public opinion toward their own views.
So far in the 2014 election cycle, “Americans for Prosperity,” the Koch brother’s political front group, has aired more than 17,000 broadcast TV commercials, compared with only 2,100 aired by Republican Party groups.
“Americans for Prosperity” has also been outspending top Democratic super PACs in nearly all of the Senate races Republicans are targeting this year. In seven of the nine races the difference in total spending is at least two-to-one and Democratic super PACs have had virtually no air presence in five of the nine states.
The Kochs have spawned several imitators. Through the end of February, four of the top five contributors to 2014 super-PACs are now giving money to political operations they themselves created, according to the Center for Responsive Politics.
For example, billionaire TD Ameritrade founder Joe Ricketts and his son, Todd, co-owner of the Chicago Cubs, have their own $25 million political operation called “Ending Spending.” The group is now investing heavily in TV ads against Republican Representative Walter Jones in a North Carolina primary (they blame Jones for too often voting with Obama).
Their ad attacking Democratic New Hampshire Senator Jeanne Shaheen for supporting Obama’s health-care law has become a template for similar ads funded by the Koch’s “Americans for Prosperity” in Senate races across the country.
When billionaires supplant political parties, candidates are beholden directly to the billionaires. And if and when those candidates win election, the billionaires will be completely in charge.
At this very moment, Casino magnate Sheldon Adelson (worth an estimated $37.9 billion) is busy interviewing potential Republican candidates whom he might fund, in what’s being called the “Sheldon Primary.”
“Certainly the ‘Sheldon Primary’ is an important primary for any Republican running for president,” says Ari Fleischer, former White House press secretary under President George W. Bush. “It goes without saying that anybody running for the Republican nomination would want to have Sheldon at his side.”
The new billionaire political bosses aren’t limited to Republicans. Democratic-leaning billionaires Tom Steyer, a former hedge-fund manager, and former New York Mayor Michael Bloomberg, have also created their own political groups. But even if the two sides were equal, billionaires squaring off against each other isn’t remotely a democracy.
In his much-talked-about new book, “Capital in the Twenty-First Century,” economist Thomas Piketty explains why the rich have become steadily richer while the share of national income going to wages continues to drop. He shows that when wealth is concentrated in relatively few hands, and the income generated by that wealth grows more rapidly than the overall economy – as has been the case in the United States and many other advanced economies for years – the richest receive almost all the income growth.
Logically, this leads to greater and greater concentrations of income and wealth in the future – dynastic fortunes that are handed down from generation to generation, as they were prior to the twentieth century in much of the world.
The trend was reversed temporarily in the twentieth century by the Great Depression, two terrible wars, the development of the modern welfare state, and strong labor unions. But Piketty is justifiably concerned about the future.
A new gilded age is starting to look a lot like the old one. The only way to stop this is through concerted political action. Yet the only large-scale political action we’re witnessing is that of Charles and David Koch, and their billionaire imitators.
Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama‘s transition advisory board. His latest book is “Aftershock: The Next Economy and America‘s Future.” His homepage is

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Benihana restaurant founder Rocky Aoki was indicted by a federal grand jury yesterday on charges he cooked up an insider trading scheme that netted him $590,000. Aoki, 59, resigned last month as chairman and chief executive of Benihana, a 61-restaurant Japanese steakhouse chain based in Miami after being informed he was the subject of a federal securities investigation. According to federal prosecutors, Aoki bought 200,000 shares of Spectrum Information Technologies in September and October 1993 after learning that the company was about to hire then Apple Computer chairman John Sculley. The colorful Aoki a former Olympic wrester and successful balloonist paid between $4.
90 and $6.
60 per share. He then sold his stock for $11 a share, earning a profit of $590,000, after Sculley's appointment was announced soon after. The stock rose 46% the day of the announcement. Prosecutors said Aoki was tipped off about Sculley's negotations with Spectrum from public relations consultant Donald Kessler. Kessler, who was later paid $10,000 by Aoki, pleaded guilty last December to participating in an insider trading scheme and is cooperating with the government. Kessler's guilty plea last Dec. 30 was part of a larger case of securities fraud and tax evasion. In the case, Kessler is described as a "self-employed stock promoter who earned fees from companies primarily by arranging for them to be mentioned publicly and in print by a prominent business journalist.
" While the journalist was not identified in the indictment, BusinessWeek had previously identified him as Dan Dorfman, a long-time business columnist who made daily appearances on CNBC and wrote for Money Magazine and USA Today. Citing health problems, Dorfman left CNBC. Money fired him. The restaurateur will be arraigned tomorrow. Indicted on one count of conspiracy and six counts of insider trading, he faces up to five years in prison and $250,000 in fines on each count. "This indictment," said U.
S. Attorney Zachary Carter, "demonstrates this office's zero tolerance for violations of the securities laws and its commitment to protecting the investing public.
" Aoki's attorney, Martin Auerbach, said his client intends to plead not guilty and "respond to the charges in court.
" Aoki has long led a flamboyant life. In 1981, he was part of a crew that became the first to fly a gas balloon across the Pacific Ocean. Aoki is currently said to be working with Drezel Aqua Technologies to salvage a ship that sank off Ocean City, N.
J., in 1901.

Home Sales Plunge Most In 3 Years, Drop 8th Months In A Row

Must be the weather... (though if you want to believe that, do not look at the regional breakdowns)... Pending home sales fell 10.2% YoY - the worst in 3 years (notably worse than the 9% drop expected by the meteorologists in the economics departments of the big banks). This is the 8th month in a row of home sales drops (pre-weather).

Don;t worry though - a glimpse at the charts shows things are stabilizing as NAR's Larry Yun suggests..
Lawrence Yun, NAR chief economist, said the recent slowdown in home sales may be behind us, while home prices continue to rise. “Contract signings for the past three months have been little changed, implying the market appears to be stabilizing,” he said. “Moreover, buyer traffic information from our monthly Realtor® survey shows a modest turnaround, and some weather delayed transactions should close in the spring.”
Umm, no.

Citigroup Fails Fed Stress Test as BofA Gets Dividend Boost

Citigroup Inc.’s capital plan was among five that failed Federal Reserve stress tests, while Bank of America Corp. (BAC) won approval for its first dividend increase since the financial crisis.
Lenders announced more than $60 billion of dividends and stock buybacks after the Fed approved capital plans for 25 of the 30 banks in its annual exam. Citigroup, as well as U.S. units of Royal Bank of Scotland Group Plc, HSBC Holdings Plc and Banco Santander SA (SAN), failed because of concerns about the quality of their processes, the central bank said yesterday in a statement. Zions Bancorporation failed after its capital fell below Fed minimums in a simulation of a severe economic slump.
The results show lenders may still face obstacles to boosting dividends and buybacks even as regulators say the firms have doubled their capital since the first public stress test in 2009. The Fed is increasing scrutiny of the industry’s controls and planning processes as concerns about capital levels wane.
“Things are improving and the banking industry has turned a corner; it just might not be as far along as the market would like,” said Joseph Vitale, a partner at law firm Schulte Roth & Zabel LLP who represents financial firms. “You’ve still got some time to go before the regulators see things as business-as-usual again.”
Photographer: Craig Warga/Bloomberg
A customer uses an automated teller machine (ATM) inside of a Citibank bank branch on... Read More
Higher payouts may help bank stocks continue their recent rally. The KBW Bank Index (BKX) of 24 lenders advanced 4 percent this year through yesterday, compared with the 0.2 percent gain for the Standard & Poor’s 500 (SPX), and the KBW benchmark beat the broader measure in three of the past four years.

Bigger Payout

Banks in this year’s test collectively received approval to pay out about 60 percent of their estimated net income during the next four quarters, according to a Fed official. That ratio is closer to the 69 percent that lenders were returning to shareholders in 2005 before the crisis, according to data from Bloomberg Industries.
Citigroup (C) was denied in its attempt to quintuple its quarterly dividend to 5 cents and put in place a $6.4 billion buyback. Bank of America and Goldman Sachs Group Inc. each had to cut their planned capital return to gain approval.
Citigroup, which last year asked for the least capital return among the five largest U.S. banks, would have passed this year’s test on quantitative grounds alone. It had a 6.5 percent Tier 1 common ratio, above the Fed’s 5 percent minimum.

Multiple Defects

The central bank found defects in Citigroup’s planning practices that included areas the Fed flagged before. The regulator expressed concern with the New York-based company’s ability to project losses in “material parts of its global operations” and to reflect all business exposures in its internal stress test.
“Taken in isolation, each of the deficiencies would not have been deemed critical enough to warrant an objection, but when viewed together, they raise sufficient concerns regarding the overall reliability of Citigroup’s capital planning process,” the Fed said of the third-largest U.S. bank.
Michael Corbat, the bank’s chief executive officer, said in a statement that Citigroup is “deeply disappointed” by the rejection and will “work closely with the Fed to better understand their concerns so that we can bring our capital planning process in line with their expectations.” The timing of any resubmission hasn’t been decided, he said.

Mexico Fraud

The Fed made no mention of the bank’s discovery of a $400 million loan fraud last month at its Mexico unit, which had stirred speculation that regulators might fault Citigroup’s controls. Corbat has vowed that the people involved will be held accountable.
Citigroup shares fell the most in more than a year, sliding 5.7 percent to $47.28 at 12:22 p.m. in New York. Analysts from Stifel Financial Corp.’s KBW unit and Sanford C. Bernstein & Co. downgraded the stock today, while Mike Mayo at CLSA Ltd. said the company should increase its pace of restructuring.
“The Federal Reserve’s surprise qualitative rejection of Citigroup’s capital plan raises questions about the company’s relationship with its regulators and the necessary next steps and timing to restore confidence,” Bernstein’s John McDonald wrote in a note cutting his rating to market perform.

Rejected Again

It’s the second time the Fed has failed one of Citigroup’s capital plans. The last rejection came in 2012, when Vikram Pandit was the CEO, and the defeat played a role in Pandit’s ouster later that year, a person with knowledge of the board’s discussions said at the time.
“It came as a surprise,” said Michael Scanlon, managing director at Manulife Asset Management in Boston, who helps oversee $3 billion, including shares of Citigroup. “It can be a significant ding to confidence when these companies have failed in the past. Sometimes it’s short-lived and they resolve the issues, resubmit and move forward, and ultimately that is what Citigroup is going to have to do.”
Two of the main gauges in the Fed’s test were the Tier 1 common ratio and the leverage ratio. The first measures a bank’s core equity, made up of common shares and retained earnings, divided by its total assets adjusted for risk using global banking guidelines. The leverage ratio makes no distinction among risks and is considered a stricter standard by some regulators.

Second Chance

Bank of America and Goldman Sachs each saw their Tier 1 leverage ratios drop to 3.9 percent in their original capital plans, below the required 4 percent. Both firms lowered their requests and were approved, meaning they don’t have to resubmit.
The two firms asked for too much in buybacks and dividends after their own internal stress tests showed better performance than in the central bank’s exam. New York-based Goldman Sachs predicted its Tier 1 common ratio would be about 3.8 percentage points stronger than the Fed estimated in a worst-case scenario. The gap for Bank of America was 2.7 percentage points.
Bank of America, ranked second by assets, raised its quarterly payout to 5 cents from 1 cent after the Fed’s decision and authorized a $4 billion stock buyback. The increase is a victory for CEO Brian T. Moynihan, who has pressed to raise the payout from the token level that prevailed since the financial crisis.
The Fed blocked plans in 2011 for an increase by the Charlotte, North Carolina-based company, which didn’t ask for anything the following year and won permission for a $5 billion stock buyback last year.

Loss Tally

Goldman Sachs said yesterday that its capital plan “provides flexibility,” without saying what it seeks to pay out to shareholders.
Projected losses for the 30 banks under a scenario of deep recession would total $366 billion over nine quarters, the Fed said last week. The aggregate Tier 1 common capital ratio would fall from an actual 11.5 percent in the third quarter of 2013 to a minimum of 7.6 percent, before accounting for capital plans.
“The banking system is much better capitalized at this point in time compared to where it was in 2009,” Sameer Gokhale, an analyst at Janney Montgomery Scott LLC, said in a Bloomberg Television interview with Carol Massar. “The risk that you see large-scale bank failures has diminished significantly.”
JPMorgan Chase & Co. (JPM), the biggest U.S. lender by assets, had its capital plan ratified as it maintained a Tier 1 common ratio of 5.5 percent, a half a percentage point above the minimum. Last year, approval for the New York-based bank came with an order to resubmit the plan to fix qualitative weaknesses. The quarterly dividend will rise to 40 cents a share from 38 cents, and the company authorized a $6.5 billion stock buyback, according to a bank statement.

Wells Fargo

The Tier 1 common ratio at Wells Fargo & Co., the biggest U.S. home lender, was 6.1 percent and Morgan Stanley (MS)’s was 5.9 percent. Wells Fargo boosted its dividend 5 cents to 35 cents a quarter. Morgan Stanley doubled its quarterly payout to 10 cents and announced a $1 billion buyback.
Zions, the Salt Lake City-based bank that had a 4.4 percent Tier 1 common ratio in the test, said before yesterday’s results were announced that it planned to resubmit its capital plan.
The Fed broke new ground on governance and transparency on this round of tests. For the first time, the board held a vote on the qualitative objections that resulted in a 4-0 approval, with Fed Governor Sarah Bloom Raskin abstaining. Raskin was confirmed by the U.S. Senate as deputy Treasury secretary on March 12.

Detailed Objections

The board’s descriptions of its qualitative objections were also more detailed than before. In their remarks on Santander Holdings USA, for example, they cited “specific deficiencies” including governance, internal controls and risk management in capital planning.
The central bank also faulted HSBC North America Holdings Inc. and RBS Citizens Financial Group Inc. for estimates of revenue and losses in the test. The rejection means the lenders won’t be able to increase dividends to their European parent companies, freezing them at current levels, according to a Fed official.
The dividend raises will boost yields closer to the norms that prevailed before the financial crisis, when the stocks were favored by income-oriented investors. The average yield for the 24 companies in the KBW Bank Index stood at 4.9 percent at the end of 2007. It’s now under 2 percent.

Higher Yields

The $60 billion of payouts includes dividends that were already being paid in addition to increases and new repurchase plans.
JPMorgan’s increase boosted its yield to about 2.7 percent annually based on yesterday’s close. Its payout ratio -- dividends plus buybacks -- equals about 56 percent of earnings over the next four quarters, according to figures from the banks and KBW estimates. That’s up from 48 percent in the last four quarters, said KBW, which made its estimates before stress-test results were announced.
Bank of America’s payout ratio climbed to about 39 percent from 34 percent, bringing the dividend yield to 1.2 percent. U.S. Bancorp’s payout jumped to about 70 percent from 59 percent, and the yield would be 2.3 percent.
SunTrust Banks Inc. doubled its dividend yield to 2 percent, according to data compiled by Bloomberg. Discover Financial Services boosted its yield to 1.7 percent from 1.4 percent and American Express Co.’s climbed to 1.2 percent from 1 percent.

The Economic Scam of the Century

The leaders of the U.S. Senate Banking Committee,  Sen. Tim Johnson (D., S.D.) and Sen. Mike Crapo (R., Idaho),  released a draft bill on Sunday that would provide explicit government guarantees on mortgage-backed securities (MBS) generated by privately-owned banks and financial institutions. The gigantic giveaway to Wall Street would put US taxpayers on the hook for 90 percent of the losses on toxic MBS the likes of which crashed the financial system in 2008 plunging the economy into the deepest slump since the Great Depression. Proponents of the bill say that new rules by the Consumer Financial Protection Bureau (CFPB) –which set standards for a “qualified mortgage” (QM)– assure that borrowers will be able to repay their loans thus reducing the chances of a similar meltdown in the future. However, those QE rules were largely shaped by lobbyists and attorneys from the banking industry who eviscerated strict underwriting requirements– like high FICO scores and 20 percent down payments– in order to lend freely to borrowers who may be less able to repay their loans.  Additionally, a particularly lethal clause has been inserted into the bill that would provide blanket coverage for all MBS  (whether they met the CFPB’s QE standard or not) in the event of another financial crisis. Here’s the paragraph:
“Sec.305. Authority to protect taxpayers in unusual and exigent market conditions….
If the Corporation, the Chairman of the Federal Reserve Board of Governors and the Secretary of the Treasury, in consultation with the Secretary of Housing and Urban Development, determine that unusual and exigent circumstances threaten mortgage credit availability within the U.S. housing market, FMIC may provide insurance on covered securities that do not meet the requirements under section 302 including those for first loss position of private market holders.” (“Freddie And Fannie Reform – The Monster Has Arrived”, Zero Hedge)
In other words, if the bill passes,  US taxpayers will be responsible for any and all bailouts deemed necessary by the regulators mentioned above.  And, since all of those regulators are in Wall Street’s hip-pocket, there’s no question what they’ll do when the time comes. They’ll bailout they’re fatcat buddies and dump the losses on John Q. Public.
If you can’t believe what you are reading or if you think that the system is so thoroughly corrupt it can’t be fixed; you’re not alone. This latest outrage just confirms that the Congress, the executive and all the chief regulators are mere marionettes performing whatever task is asked of them by their Wall Street paymasters.
The stated goal of the Johnson-Crapo bill is to “overhaul” mortgage giants Fannie Mae and Freddie Mac so that “private capital can play the central role in home finance.” (That’s how Barack Obama summed it up.) Of course, that’s not really the purpose at all. The real objective is to hand over the profit-generating mechanism to the private banks (Fannie and Freddie have been raking in the dough for the last three years) while the red ink is passed on to the public. That’s what’s really going on.
According to the Wall Street Journal,  the bill will
“construct an elaborate new platform by which a number of private-sector entities, together with a privately held but federally regulated utility, would replace key roles long played by Fannie and Freddie….”
“The legislation replaces the mortgage-finance giants with a new system in which the government would continue to play a potentially significant role insuring U.S. home loans.” (“Plan for Mortgage Giants Takes Shape”, Wall Street Journal) 
“Significant role”? What significant role? (Here’s where it gets interesting.)
The WSJ:
“The Senate bill would repurpose the firms’ existing regulator as a new “Federal Mortgage Insurance Corp.” and charge the agency with approving new firms to pool loans into securities. Those firms could then purchase federal insurance to guarantee payments to investors in those bonds. The FMIC would insure mortgage bonds much the way the Federal Deposit Insurance Corp. provides bank-deposit insurance.”
Unbelievable. So they want to turn F and F into an insurance company that backs up the garbage mortgages created by the same banks that just ripped us all off for trillions of dollars on the same freaking swindle?
You can’t be serious?
More from the WSJ:  “Mortgage guarantors would be required to maintain a 10% capital buffer against losses and to have that capital extinguished before the federal insurance would be triggered.”
10 percent? What the hell difference does 10 percent make; that’s a drop in the bucket.  If the banks are going to issue mortgages to people who can’t repay the debt, then they need to cover the damn losses themselves, otherwise they shouldn’t be in the banking biz to begin with, right?
This is such an outrageous, in-your-face ripoff, it shouldn’t even require a response. These jokers should be laughed out of the senate. All the same,  the bill is moving forward, and President Twoface has thrown his weigh behind it. Is there sort of illicit, under-the-table, villainous activity this man won’t support?
Not when it comes to his big bank buddies, there isn’t. Now check out this clip from an article by economist Dean Baker. Baker refers to the Corker-Warner bill, but the Crapo-Johnson fiasco is roughly the same deal. Here’s Baker:
“The Corker-Warner bill does much more than just eliminate Fannie and Freddie. In their place, it would establish a system whereby private financial institutions could issue mortgage-backed securities (MBS) that carry a government guarantee. In the event that a large number of mortgages in the MBS went bad, the investors would be on the hook for losses up to 10 percent of its value, after that point the government gets the tab.
If you think that sounds like a reasonable system, then you must not have been around during the housing crash and ensuing financial crisis. At the peak of the crisis in 2008-2009 the worst subprime MBS were selling at 30-40 cents on the dollar. This means the government would have been picking up a large tab under the Corker-Warner system, even if investors had been forced to eat a loss equal to 10 percent of the MBS price.
The pre-crisis financial structure gave banks an enormous incentive to package low quality and even fraudulent mortgages into MBS. The system laid out in the Corker-Warner bill would make these incentives even larger. The biggest difference is that now the banks can tell investors that their MBS come with a government guarantee, so that they most they stand to lose is 10 percent of the purchase price.” (“The disastrous idea for privatizing Fannie and Freddie”, Dean Baker, Al Jazeera)
Just ponder that last part for a minute: “The bill would make these incentives even larger.”
Do you really think we should create bigger incentives for these dirtbags to rip us off? Does that make sense to you? Here’s more from Baker:
“The changes in financial regulation are also unlikely to provide much protection. In the immediate wake of the crisis there were demands securitizers keep a substantial stake in the mortgages they put into their pools, to ensure that they had an incentive to only securitize good mortgages. Some reformers were demanding as much as a 20 percent stake in every mortgage.
Over the course of the debate on the Dodd-Frank bill and subsequent rules writing this stake got ever smaller. Instead of being 20 percent, it was decided that securitizers only had to keep a 5 percent stake. And for mortgages meeting certain standards they wouldn’t have to keep any stake at all.
Originally only mortgages in which the homeowner had a down payment of 20 percent or more passed this good mortgage standard. That cutoff got lowered to 10 percent and then was lowered further to 5 percent. Even though mortgages with just 5 percent down are four times as likely to default as mortgages with 20 percent or more down, securitizers will not be required to keep any stake in them when they put them into a MBS.”
Hold on there, Dean. You mean Dodd Frank didn’t ”put things right”?  What the heck? I thought that “tough new regulations” assured us that the banks wouldn’t blow up the system again in five years or so. Was that all baloney?
Yep, sure was. 100% baloney. Once the banks unleashed their army of attorneys and lobbyists on Capital Hill,  new regulations didn’t stand a chance. They turned Dodd Frank into mincemeat and now we’re back to square one.
And don’t expect the ratings agencies to help out either because they’re in the same shape they were before the crash. No changes at all.  They still get paid by the guys who issue the mortgage-backed securities (MBS) which is about the same as if you paid the salary of the guy who grades your midterm exam. Do you think that might cloud his judgment a bit? You’re damn right, it would; just like paying the ratings agencies guarantees you’ll get the rating you want. The whole system sucks.
And as far as the new Consumer Financial Protection Bureau, well, you guessed it. The banks played a role in drafting the new “Qualified Mortgage” standard too, which is really no standard at all, since no self-respecting lender would ever use the same criteria for issuing a loan or mortgage. For example, no banker is going to say, “Heck, Josh, we don’t need your credit scores. We don’t need a down-payment. We’re all friends here, right? So, how much do you need for that mortgage old buddy, $300,000, $400,000, $500,000.  You name it. The sky’s the limit.”
No down payment? No credit scores? And they have the audacity to call this a qualified mortgage?
Qualified for what? Qualified for sticking it to the taxpayers?  The real purpose of the qualified mortgage is to protect the banks from their own shifty deals. That’s what it’s all about. It provides them with “safe harbor” in the event that the borrower defaults. What does that mean?
It means that the government can’t get its money back if the loan blows up.   The qualified mortgage actually protects the banks, not the consumer. That’s why it’s such a farce,  just like Dodd Frank is a farce. Nothing has changed. Nothing. In fact, it’s gotten worse. Now we’re on the hook for whatever losses the banks run up peddling mortgage credit to anyone who can fog a mirror.
We’ll leave the last word for Dean Baker, since he seems like the only guy in America who has figured out what the hell is going on:
“In short, the Corker-Warner plan to privatize Fannie and Freddie is essentially a proposal to reinstitute the structure of incentives that gave us the housing bubble and the financial crisis, but this time with the added fuel of an explicit government guarantee on the subprime MBS. If that doesn’t sound like a great idea to you then you haven’t spent enough time around powerful people in Washington.”
The Johnson-Crapo bill doesn’t have anything to do with “winding down” Fannie and Freddie or “overhauling” the mortgage finance industry. It’s a bald-face ripoff engineered by two chiseling senators who are putting the country at risk to beef up Wall Street’s bottom line.
It’s the scam of the century.

Billionaire will meet and greet you for $1000

Billionaire Oprah Winfrey is planning a tour to help you with your life.
The Oprah Winfrey experience is coming to an arena near you.
Starting in September, Winfrey will set out on an eight-city Oprah’s The Life You Want Weekend tour. The plan: pack 18,000-seat arenas for a two-day experience featuring a keynote by Winfrey, who will share her personal story and advice on Friday night, and group activities and speakers picked by her on Saturday. Among those signed to participate: Eat Pray Love author Elizabeth Gilbert, pastor Rob Bell, OWN star Iyanla Vanzant and, in certain cities, guru Deepak Chopra.
It’s all about helping you live the life you want:
Winfrey tells THR a domestic tour has been atop her “bucket list” since she finished a speaking circuit in Canada in early 2013. Although Life You Want will be much larger in scale, her message remains the same. “It’s about living the life you want, because a great percentage of the population is living a life that their mother wanted, that their husband wanted, that they thought or heard they wanted,” says Winfrey, adding that she will use the platform to push themes of “empowerment, resilience and authenticity.”
Tickets begin at $99 and a VIP “Meet and Greet” will cost you $999. Oprah says that this has been on her “bucket list” for some time, but it appears to represent one more avenue to extract capital from her addle-brained fans.
Life You Want is being staged in partnership with Harpo Studios, O, The Oprah Magazine, cable network OWN and her agency, WME, which recently launched a live events division. (The latter, a way to capitalize on another potential revenue stream in a fractured media environment, also is behind other events, including Arianna Huffington and Mika Brzezinski’s Thrive: A Third Metric Live and Cosmopolitan Magazine’s Fun Fearless Career Weekend.) Toyota and Olay will serve as sponsors. Although the different Winfrey media outlets likely will use tour content, fellow OWN president Erik Logan says they haven’t yet determined how.
This is precisely what makes liberals, especially wealthy liberals, so loathsome. A billionaire does not need any more money. A billionaire can afford to offer you advice for free. What Winfrey is doing is so typical of hypocritical liberals. This is all about helping you- for a chunk of change. Where’s the “spreading it around” that liberals and her buddy Obama are always blathering about? The bottom line is always the same. It’s about spreading YOUR money around and not theirs.
If you have $1000 to squander on meeting Oprah, then you already have the life you want.

Thai satellite spots 300 objects in jet search

Thai satellite images have shown 300 floating objects in the southern Indian Ocean during a search for the missing Malaysian airliner, an official said Thursday.
The objects, ranging from two to 15 metres (6.5 to 50 feet) in size, were scattered over an area about 2,700 kilometres (1,680 miles) southwest of Perth, according to the Geo-Informatics and Space Technology Development Agency.
"But we cannot -- dare not -- confirm they are debris from the plane," the agency's executive director, Anond Snidvongs, told AFP.
He said the information had been given to Malaysia.
The pictures were taken by Thailand's only earth observation satellite on Monday but needed several days to process, Anond added.
He said the objects were spotted about 200 kilometres away from an area where French satellite images earlier showed potential objects in the search for the Boeing 777 which vanished on March 8 with 239 people aboard.
Thailand faced criticism after announcing more than a week after the jet's disappearance that its radar had picked up an "unknown aircraft" minutes after flight MH370 last transmitted its location.
The Thai air force said it did not report the findings earlier as the plane was not considered a threat.
The Malaysia Airlines plane is presumed to have crashed in the Indian Ocean after mysteriously diverting from its Kuala Lumpur-Beijing path and apparently flying for hours in the opposite direction.
Thunderstorms and gale-force winds grounded the international air search for wreckage on Thursday.

Japanese satellite images show floating objects possibly from MH370, say reports

Japanese satellite images have shown around 10 floating objects off Australia, possibly from missing Malaysia Airlines flight 370, media reports quoted the government as saying today.
The objects were spotted in waters roughly 2,500 kilometres southwest of Perth, Kyodo and Jiji news agencies said.
Japan's Cabinet Satellite Intelligence Center's study showed objects up to eight metres (26.4 feet) in length and four metres wide in images captured by a satellite between 8 am and 2 pm (0000 GMT and 0600 GMT) Wednesday, Kyodo said.
A government source said they could be wreckage of the missing plane since they were found in an area overlapping the sites where debris had previously been spotted, according to the agency.
Jiji quoted a government official as saying the floating objects were "highly likely" to be part of the plane.
Japan had handed the information to Malaysia, the reports said. – AFP, March 28, 2014.

We have been waiting 37 years for answers, families of MH653 crash recall their trauma

The disappearance of flight MH370 has triggered painful memories for families of another Malaysia Airlines tragedy who have been waiting for answers even longer – 37 years, to be exact, reported CNN today.
In 1977, flight MH653 was hijacked en route from Penang to Kuala Lumpur. The Boeing 737-200 crashed into a mangrove swamp as it descended, killing all 100 on board.
It was the deadliest incident in Malaysian aviation history prior to MH370.
"Thirty-seven years down the line, we still don't really know the truth," Ruth Parr, who was 19 when her father, Thomas, died in the crash, told CNN.
The hijacker or hijackers of MH653 have never been identified, despite cockpit voice recordings that captured everything from the breach of the cockpit to the sound of gunshots that killed both pilots.
A report by the Malaysian Civil Aviation Department said the aircraft was hijacked as it approached Kuala Lumpur.
Apparently, there was confusion over whether it should land there and the aircraft then proceeded towards Singapore.
As it descended, the crew was shot and the aircraft "carried out some unusual pitch up and pitch down terminal manoeuvres before finally crashing into swampy ground at some 450 knots".
The report, quoted by CNN, concluded that the crash was caused by the crew being fatally incapacitated, leaving the aircraft "professionally uncontrolled".
However, some eyewitnesses at the time reported seeing the aircraft in flames before it hit the ground, while others reported hearing an explosion before the crash although there was no evidence to support these allegations.
As the search for MH370 enters the 21st day, for the family members of victims of flight MH653 contacted by CNN, MH370 tiggered painful memories although they have learned to cope with their grief.
"You have to carry that with you all the time," Tom Sherrington, whose father, Richard, was on MH653, told CNN.
He said talking about their memories of his father, whom he described as a "fun guy" and "big adventurer," helped his family to cope.
The family also visits the memorial, built near the crash site in the coastal town of Tanjung Kupang, Johor, and Sherrington said this enabled his family to have a tangible place to reflect on their loss.
Sherrington told CNN that families of those on board MH370 should focus on remembering their loved ones and not become obsess with assigning blame for the tragedy.
"The one thing I would say is not for them to get too obsessed with the detail and the recriminations and all that," he said, adding that he hoped the families would stick together and find comfort in each other. Both Parr and Sherrington said everyone processed his or her grief in different ways and there was no shortcut.
"It gets a little easier over time but you can never forget the date," Parr told CNN.
"You will forever think you see that person out and about, a glance in the car's rearview mirror or crossing the road. It could be anywhere, a voice that sounds like him will have you spinning around only to find it's someone else."
Anguished families of passengers on board MH370 have been clamouring for proof that the Boeing 777-200ER (9M-MRO) had indeed ended its flight in the Indian Ocean as announced by Prime Minister Datuk Seri Najib Razak on Monday night.
Ch’ng’s Khai Cheak, whose sister Ch’ng Mei Ling was on the flight, said such an announcement should only have been made when there was physical evidence or bodies to show that the plane had indeed crashed in the ocean.
“What do I tell my mother back home? She saw the news but she cannot accept the fact that my sister is dead. She keeps asking how did she die?” said a visibly angry Khai Cheak, the eldest of five children.
“I don’t know what to tell her because there is no proof to show that Mei Ling is dead.”
Families in China, too, have criticised the Malaysian authorities and had lambasted senior officials at briefings held for them.
Scores of angry relatives of the Chinese passengers aboard MH370 had marched to the Malaysian embassy in Beijing to demand more answers about the fate of the plane and its passengers.
Around 200 family members, some in tears, linked arms and shouted slogans, including "the Malaysian government are murderers" and "we want our relatives back".
Some families have also approached a Chicago-based law firm to help them file a suit against the 777 aircraft manufacturer Boeing Co and Malaysia Airlines as they believe the plane had crashed because of mechanical failure. – March 28, 2014.

Dear Keynesians: Your Sad Devotion to Your Failed Religion Hasn’t Conjured Up a Recovery–Here’s Why

That any schoolkid could predict eliminating feedback and consequences will lead to a series of disastrously poor choices by speculators and imprudent borrowers doesn’t register with the Keynesian Cargo Cult.
The Keynesian Cargo Cult’s ability to print and squander money is insignificant next to the power of Diminishing Returns. By now we all know two things about the Keynesian Cargo Cult’s religion:
1. It has failed to conjure up the recovery its sadly devoted believers insist is “just around the corner if we only borrow and squander more money” because…
2. Its main tenet–that the problem is “lack of aggregate demand,” i.e. people will buy more stuff made in China and corporations will open more stores to sell the stuff made in China–if only it was dirt-cheap to borrow more money–is completely, utterly, painfully false.
The central premise of the Keynesian Cargo Cult is that this mechanism of making it cheap and easy to borrow money will work a kind of magic that can only be manifested by dancing around a fire at night waving dead chickens and chanting “humba-humba.” The Keynesian cargo Cult calls this magic “animal spirits.”
Unfortunately, waving dead chickens while dancing around a fire doesn’t do anything in the real world, and neither does making it cheap and easy to borrow more money.It turns out that prudent people have no interest in borrowing more money, even at low rates of interest, and imprudent people are happy to do so but will stop paying the loan as soon as something untoward occurs in their finances. The cheap, easy-to-get loans default and either the banks who made the loans collapse or the taxpayers have to bail out the banks who foolishly lent money to imprudent borrowers at super-low rates of interest.
Corporations, meanwhile, look at the real risks of expanding business in a debt-saturated economy distorted by Keynesian Cargo Cult policies and realize that gambling capital on the possibility that waving dead chickens and chanting “humba-humba” will actually increase profits is a truly stupid bet, so they borrow the nearly-free money and invest it in various carry trades overseas that return a virtually risk-free return, thanks to the nearly-free cost of borrowing mountains of money from the Cargo Cult.
The Keynesian Cargo Cult is stubbornly blind to the two key dynamics of the real-world economy: diminishing returns and the S-Curve. Diminishing returns result when a system’s ability to produce an economically valuable output declines.
Higher education is a good example: tuition has soared $1,100% while the output (value of a college degree) has declined precipitously. A recent major study,Academically Adrift: Limited Learning on College Campuses, concluded that “American higher education is characterized by limited or no learning for a large proportion of students.”
‘Academically Adrift’: The News Gets Worse and Worse (The Chronicle of Higher Education)
Meanwhile, student loans exceed $1 trillion, only 37% of freshmen at four-year colleges graduate in four years (58% finally graduate in six years), and 53% of recent college graduates under the age of 25 are unemployed or doing work they could have done without going to college–retail clerks, waiting tables, etc.
The Keynesian Cargo Cult solution to the diminishing returns is to provide more debt to students, making them into debt-serfs for life. The cruel stupidity and immorality of the Keynesian Cargo Cult knows no bounds because they refuse to accept the reality that diminishing returns cannot be fixed by more debt and more squandering of good money after bad.
The truth is the failed cartel of higher education has to be leapfrogged and left in the dustbin of history: here’s a model that lowers costs by 90% and aligns the output with the real economy: The Nearly Free University and The Emerging Economy.
The Keynesian Cargo Cult’s solution allows no feedback from the real world, and allows no mechanism to discipline the imprudent borrower/speculator. If imprudent borrowers take on too much debt, the Keynesian Cargo Cult’s solution is to offer them more credit at rates they can afford–near-0% if necessary.
If a speculator borrows money and loses it in a high-risk gamble, the Keynesian Cargo Cult’s solution is to force the taxpayer to make good the gambler’s losses and then give the speculator more nearly-free money to continue gambling.
This “solution” works the first time around, less well the second time around, and triggers a collapse the third time around. This lifecycle is called the S-Curve:
The Keynesian Cargo Cult inflated one credit bubble in the 1990s, another in the 2000s, and by an extraordinary expansion of credit and lowering interest rates to near-zero has managed to Beat the Devil and inflate a third credit bubble in the 2010s.
That any schoolkid could predict waving dead chickens and eliminating feedback and consequences will lead to a series of disastrously poor choices by speculators and imprudent borrowers doesn’t register with the Keynesian Cargo Cult. But since the Keynesian Cargo Cult is headed by a Nobel Prize academic economist, the Cargo Cult members effusively praise the Emperor’s fine (and nonexistent) robe.
You poor, dumb, deluded fools. You’ve destroyed our economy, our values and our ability to deal with reality. Your faith is as boundless and disconnected from the real world as your policies.

Another round of food stamp cuts in states

A fresh round of food stamp cuts at the state level are underway, on top of federal food stamp reductions that hit millions of Americans twice since November. In some states, policymakers have imposed additional cuts that jeopardize benefits for hundreds of thousands.
The impact of the reductions is just beginning to take hold, or soon will.
"They're getting cut off and seeking help," said Debi Kreutzman of the Kansas Food Bank, which is dealing with changes that could affect 20,000 Kansans. "We're starting to see that come into play now, and I'm afraid it's only going to get worse."
The state cuts target a relatively small portion of the food stamp population: low-income able-bodied adults, without children, 18 to 50 years old -- estimated to be about 10% of the more than 47 million in the program. In some states, recipients are losing benefits because of reinstated work requirements as a condition of qualifying for food stamps.
These cuts come on top of an across-the-board 5% reduction of benefits to all food stamp recipients' benefits last November. As part of the farm bill earlier this year, Congress also closed a loophole and cut benefits for 850,000 households, although many states affected are moving to block the cuts for now.
The federal food stamp program (formally known as the Supplemental Nutrition Assistance Program) limits how long low-income childless, able-bodied adults can receive food stamps to three months in a three-year period, unless they are working or participating in a training or workfare program for at least 20 hours a week. Other food stamp recipients face less stringent work requirements, and there are exemptions for those with children or other caregivers.
The 2009 stimulus bill suspended these requirements through 2010, and after that states were allowed to waive them if they met certain conditions based on their economies and job markets. Most every state has waived the requirements since 2011.
In recent years, though, some states — many controlled by Republicans — began to rethink the waivers, which were part of the 1996 welfare reforms and designed to give states flexibility in times of high unemployment. With the start of the new federal fiscal year last October, eight went back to enforcing the requirements, and 10 waived them only in part of their state or for part of this year. The changes are just beginning to be felt in some of those states.
In Delaware, officials insist a waiver is unnecessary because the state's work-training and placement program has been able to manage the growing ranks of the jobless. But the Food Bank of Delaware said some recipients have hit the three-month cutoff unable to find work. The state might soon reconsider the requirements.
"The case load is growing pretty dramatically," said Elaine Archangelo, director of the Division of Social Services for Delaware. "So we have been considering if there are areas where we could, should request a waiver."
Of states without waivers, Iowa, Nebraska and Wyoming were no longer eligible, because their economies and job markets had improved, as measured by the eight factors considered by the federal government when determining waiver eligibility. Others, such as Delaware, Kansas, Oklahoma, Utah and Virginia, are going without them despite being eligible for at least partial waivers.
Ohio, Colorado, New York, Texas and Wisconsin are all waiving the work requirements for only part of the year or in certain areas, even though they were eligible for full coverage. Minnesota, New Hampshire, North Dakota, South Dakota and Vermont were eligible only for partial waivers. For a full list of each state's status for this year, click here.
Ohio chose to go without a waiver for most of the state. Only 16 out of 88 counties are exempt — mainly rural, Appalachian regions where the average unemployment rate was 10.2% or higher in 2011 through 2012. The situation left food banks and food stamp outreach workers in Ohio scrambling, facing a shortage of jobs and training opportunities.
"It's a lack of jobs, not a lack of willingness to work," said Lisa Hamler-Fugitt of the Ohio Association of Food Banks. "In an environment where we have college graduates that are now competing for low-wage jobs, for folks with multiple barriers to employment, it's going to be difficult for them to find work."
Exact figures on the effect in Ohio are hard to come by. Of the nearly 141,000 people in the affected category receiving food stamps before, 98,000 were still receiving them in January, but it's impossible to know exactly why people left the program. According to the Ohio Department of Job and Family Services, in January more than 16,000 were suspended or kicked off the program due to the work requirements.
Ben Johnson of the Ohio Department of Job and Family Services disagreed with Hamler-Fugitt's assertion that jobs aren't available. "Our only goal was to provide benefits and job training where appropriate," he said. "We've worked very hard, and our county partners have worked especially hard, to notify individuals and bring them in and find appropriate training and employment activities."
Passed by the Republican-controlled legislature, Wisconsin will re-impose the work requirements this year as part of a job-growth pitch from Republican Gov. Scott Walker. The changes — which were part of a jobs package that also included $35 million for job training — will phase in starting in July and cover the entire state by next January. About 63,000 could be affected.
In some states, the decision to reinstate work requirements was part of an effort to push people off food stamps and back to the workforce, as in Kansas, where officials said jobs, not public welfare, was the cure for poverty.
In Oklahoma, Republican House Speaker T.W. Shannon, who's now running for U.S. Senate, pushed the change as welfare reform. As many as 233,000 were put under review , according to the Regional Food Bank of Oklahoma, many more than originally expected.
"Unfortunately, some believe compassion is measured by how many people you can keep on a government aid program," Shannon said in a statement when fellow Republican Gov. Mary Fallin signed his bill. "Through personal responsibility, hard work and a drive to better one's situation, people can establish their independence and begin down the road of prosperity."
Food banks and other advocates see things differently. They say the economy hasn't recovered enough to support reinstating the work requirements. Many affected are very poor, often uneducated, sometimes homeless who would have difficulty meeting the requirements anyway.
"Certainly a lot of people max out with that three-month period," said Matt Talley, who works on outreach for the Food Bank of Delaware, which includes helping those who lack transportation or have other barriers to meeting requirements. "It's just a matter of trying to help them find work, or help them find an opportunity to participate in a job training program."
The changes in states are coming as part of a broader effort in Congress to trim food stamps, after spending hit a record high of $82 billion in fiscal year 2013.
The work requirements have been a popular subject in that debate. House Republicans in Congress proposed reinstating the requirements nationwide last year, citing a recovering economy and warning about the cost of suspending the requirements for too long. But Democrats rejected that, leaving states to enact the changes themselves.
"In general, having a work requirement is good policy," said Rachel Sheffield of the conservative Heritage Foundation. "It serves as a gatekeeper to ensure that those who need assistance are able to get it, but at the same time encourages those who might not necessarily need it to look for work first."
Safety net advocates say the average monthly benefit of about $275 is hardly enough to lull people into complacency and out of the workforce. And in many areas, it's possible the economy hasn't yet recovered enough for such strict requirements.
"What happens to an able-bodied adult without dependents that is actively looking and trying to get into the workforce but is unable to?" asked Helly Lee of the Center for Law and Social Policy, an advocacy group for low-income people. "It's a downward spiral if you're unable to find jobs. It's hard to climb out of it if there are constantly barriers along the way."
Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trusts that provides daily reporting and analysis on trends in state policy.