Tuesday, February 19, 2013

£17m bonus bonanza for top Barclays bosses despite string of scandals

Five top bosses at Barclays will share a jackpot worth up to £17million despite being tainted by a string of scandals.
Those in line for the ‘wildly misjudged’ bonanza include chief executive Antony Jenkins and Rich Ricci, the controversial investment bank boss.
They could pocket up to £2.2million and £6million respectively from deferred shares bonuses awarded in 2010.
Striking it rich: The bank's top five bosses are set to share the jackpot despite a string of scandals
Striking it rich: The bank's top five bosses are set to share the jackpot despite a string of scandals
A  portion of this will be paid out in May, with the remainder triggering at the end of the year and dished out the following May.
Finance chief Chris Lucas, under investigation over Barclays’ 2008 emergency fund-raisings in the Middle East, could receive up to £5m. This includes a tranche of his 2011 bonus which pays out this May.

The other four are in line for a portion of their 2011 bonuses too, but the bank does not disclose who gets what.
The awards threaten to plunge Barclays into another row about pay as it attempts to rebuild its reputation.
Luke Hildyard, of campaign group the High Pay Centre, said: ‘Multi-million pound payments to bankers are unjustifiable and unnecessary at the best of times, but in the aftermath of the Libor scandal they look wildly misjudged.
‘Banks do have some capacity to withhold performance-related bonuses at their own discretion, and Barclays should certainly think about exercising these powers.’
Barclays last night stressed the awards are linked to performance, so it is not yet clear how much its top brass will receive. It added that over the last five years an average of just under 40 per cent of the maximum was paid.
Jenkins has pledged to deploy special ‘clawback’ powers to recoup deferred bonuses after a spate of scandals, including Libor-rigging and the mis-selling of payment protection insurance. It is not clear if 2010 awards will be affected.  
Barclays has attempted to defuse a row over bonuses ahead of its annual report detailing its pay awards in March.
Jenkins forfeited around £1million for last year, while Lucas and Ricci also gave up 2012 bonuses after the bank was fined £290million for manipulating interest rates. But news of huge pay-outs from other years threatens to undermine efforts to break with the past.   
Ricci is a hugely divisive figure who helped run the investment bank while traders bragged about manipulating Libor interest rates. Critics see him as the epitome of the aggressive ‘casino’ culture under former boss Bob Diamond.
Lucas has seen his tenure overshadowed by probes into emergency fund-raisings with Qatar investors. He, along with three current and former executives, are being investigated over fees paid as part of the deal. Any windfall for Tom Kalaris, head of stockbroking and investment arm Barclays Wealth, could also prove highly controversial.
The division’s chief operating officer Andrew Tinney quit last month after it emerged he suppressed an explosive dossier which described it as ‘out of control’.
The independent report described a ‘broken culture’ of fear and intimidation under Kalaris, where problems were ignored or buried.
Jenkins could also come under fire if he receives a substantial award. The bank is still counting the cost of the PPI mis-selling scandal which occurred under his watch as the former head of Barclaycard.  
A big award for Robert Le Blanc – chief risk officer since 2004 – could expose the bank to criticism.
All the scandals which have left Barclays fighting for its reputation occurred during his tenure.
The 2010 performance-related awards include a long-term incentive plan, which is paid in May next year, and two separate deferred share awards which pay out in equal tranches over three years.

SANTELLI: 'Republicans Need To Be Like Eisenhower And SLASH Spending For The Military Industrial Complex!'

'Cut defense spending.  It's the only way forward.'
Eisenhower speech that Santelli mentions:

'The ominous rise of the military industrial complex...'
Dwight D. Eisenhower's farewell address - Jan. 17, 1961

Households at the lower end of income scale suffering disproportionately from the financial squeeze

British households at the lower end of the income scale are suffering disproportionately from the financial squeeze, a report showed today.
Those with incomes of £15,000-£23,000 are feeling in worse financial straits than they have at any time in the last four years, Markit's household finance index for February found.
Meanwhile, those earning below £15,000 recorded the sharpest deterioration in their budgets for 14 months.
Low income households have experienced a sudden deterioration in their financial situation while those on higher incomes have seen an upswing.
Low income households have experienced a sudden deterioration in their financial situation while those on higher incomes have seen an upswing.
There is a growing gap between lower and higher income brackets earners in the perception of financial pressure: households in higher income brackets saw the deterioration in their finances slow down, while the highest earners - on £57,751 and over - saw the joint slowest squeeze on their budgets in a year.
The overall financial situation facing UK households deteriorated once again in the fourth quarter, according to a second study.
The Alliance Trust Economic Research Centre said its Financial Reality Index fell from 87.8 to 84.4, the lowest level since the second quarter of 2012 and weaker than the long-term average.
Alliance Trust's UK Financial Reality Index dipped last last year having seen a recovery since mid-2011.
Alliance Trust's UK Financial Reality Index dipped last last year having seen a recovery since mid-2011.
Financial pessimism among British households appeared to be justified last week, when a surprise fall in retail sales resurrected fears that the UK economy could be tipping back into recession.
Freezing weather made shoppers stay at home in January, according to official data, which showed retail sales suffered a surprise 0.6 per cent fall last month.

Analysts had expected the Office for National Statistics to report growing sales at UK shops, and provide a sign the country might avoid an unprecedented 'triple dip' recession by registering higher economic output for the first quarter of the year.
Four out of 10 households across the Markit survey expect their finances to worsen over 2013, while around one quarter predict an improvement.
The lowest earners were the most downbeat, with 57 per cent anticipating a deterioration, while those on the highest incomes had a neutral outlook, with similar numbers in this bracket predicting either a fall or an improvement.
Markit's headline household finance index was unchanged at 37.7 in February.
Markit's headline household finance index was unchanged at 37.7 in February.
Rising rents and food costs have placed added pressure on families, while a string of energy companies recently announced price hikes. Meanwhile, wages have remained stagnant.
People working in retail, construction, education, health and social services tended to be the most downbeat about their finances, while those working in IT and finance were the least pessimistic. Retail workers were the most pessimistic about job security.
The study also showed the sharpest deterioration in families' cash availability since June last year, with 35 per cent of people reporting a decline. More than twice as many households also reported a drop in their savings than those who saw a rise.
Overall, the index was unchanged at 37.7 in February, which is well below the 50 mark which shows that families' finances are improving rather than getting worse.
One third of households reported that their situation worsened during the month, while just one in 14 saw it get better.
Tim Moore, senior economist at Markit and author of the report, said: 'There was no let-up in the squeeze on UK household finances during February, as higher living costs and muted wage trends combined to reduce cash availability at the fastest pace since mid-2012.
'Worsening consumer finances are likely to further rein in spending on the high street and to complete this circle latest survey data showed that retail sector workers were the most downbeat about their job security and workplace activity in February.
'The lowest income households saw their financial situation move in an entirely different direction to the highest earners in February.'
The monthly survey asked 1,500 people across Britain about their finances.

How Do We Put An End To Trillion Dollar Deficits?

Excellent interview.
(Bloomberg) -- Maya Macguineas, head of the Committee for a Responsible Federal Budget, talks with Bloomberg's Trish Regan about the federal budget deficit.
We're on track to add $7 trillion more to the national debt in the next ten years.

Banzai Debt Bomb...

Abolish The Income Tax: You Won’t Believe Who Is Getting Away With Paying Zero Taxes While The Middle Class Gets Hammered

by Michael
Abolish The Income Tax - You Won't Believe Who Is Getting Away With Paying Zero Taxes While The Middle Class Gets Hammered - Photo by Travis
The federal income tax is a bad joke and it needs to be abolished.  All over the nation, hard working American families are being absolutely crushed by oppressive levels of taxation, and our politicians are constantly coming up with new ways to extract money from all of us every single year.  Meanwhile, many ultra-wealthy Americans and many of the most profitable corporations in the country pay little to nothing in taxes.  In fact, as you will see below, there are dozens of very prominent corporations that make billions of dollars in profits and yet don’t pay a dime in taxes.  Tax avoidance has become a multi-billion dollar industry in the United States.  Those that have the resources to “play the game” use shell companies, offshore tax havens and the thousands of loopholes in our tax code to minimize their tax burdens as much as possible.  Meanwhile, the rest of us get absolutely hammered.  This is fundamentally unfair.  The federal income tax system is irreversibly broken at this point, and it is time to abolish it.  If you think that the federal income tax system can be “fixed”, then you probably have never studied it.  Our tax code is nearly 4 million words long and it is absolutely riddled with thousands of loopholes that favor big corporations and the ultra-wealthy.  We should come up with a better, fairer way to fund the government.  The United States once prospered greatly without a federal income tax, and it could do so again.
Many people simply do not believe that it is possible for corporations inside the United States to make billions of dollars in profits each year and not pay a dime in income taxes.
Well, according to a report put out by Public Campaign, that is exactly what is happening.  Posted below are numbers that come directly from their report.  30 large corporations are listed, and 29 of them had a tax burden for 2008 through 2010 that was less than zero even though they all made enormous profits.  And all 30 of them spent more on lobbying than they did on taxes.
The numbers that you are about to see are for 2008, 2009 and 2010 combined.  For “taxes paid”, please note that for 29 of the corporations a negative number is given.  That means that the net tax liability for 2008 through 2010 was actually less than zero.
After seeing these numbers, is there anyone out there that is still willing to claim that our tax system is “fair”?…
General Electric
U.S. Profits: $10,460,000,000
Taxes Paid: ?$4,737,000,000
PG&E Corp.
U.S. Profits: $4,855,000,000
Taxes Paid: ?$1,027,000,000
Verizon Communications
U.S. Profits: $32,518,000,000
Taxes Paid: ?$951,000,000
Wells Fargo
U.S. Profits: $49,370,000,000
Taxes Paid: ?$681,000,000
American Electric Power
U.S. Profits: $5,899,000,000
Taxes Paid: ?$545,000,000
Pepco Holdings
U.S. Profits: $882,000,000
Taxes Paid: ?$508,000,000
Computer Sciences
U.S. Profits: $1,666,000,000
Taxes Paid: ?$305,000,000
CenterPoint Energy
U.S. Profits: $1,931,000,000
Taxes Paid: ?$284,000,000
U.S. Profits: $1,385,000,000
Taxes Paid: ?$227,000,000
Duke Energy
U.S. Profits: $5,475,000,000
Taxes Paid: ?$216,000,000
U.S. Profits: $9,735,000,000
Taxes Paid: ?$178,000,000
NextEra Energy
U.S. Profits: $6,403,000,000
Taxes Paid: ?$139,000,000
Consolidated Edison
U.S. Profits: $4,263,000,000
Taxes Paid: ?$127,000,000
U.S. Profits: $365,000,000
Taxes Paid: ?$112,000,000
Integrys Energy Group
U.S. Profits: $818,000,000
Taxes Paid: ?$92,000,000
Wisconsin Energy
U.S. Profits: $1,725,000,000
Taxes Paid: ?$85,000,000
U.S. Profits: $2,124,000,000
Taxes Paid: ?$72,000,000
Baxter International
U.S. Profits: $926,000,000
Taxes Paid: ?$66,000,000
Tenet Healthcare
U.S. Profits: $415,000,000
Taxes Paid: ?$48,000,000
Ryder System
U.S. Profits: $627,000,000
Taxes Paid: ?$46,000,000
El Paso
U.S. Profits: $4,105,000,000
Taxes Paid: ?$41,000,000
Honeywell International
U.S. Profits: $4,903,000,000
Taxes Paid: ?$34,000,000
CMS Energy
U.S. Profits: $1,292,000,000
Taxes Paid: ?$29,000,000
U.S. Profits: $286,000,000
Taxes Paid: ?$26,000,000
Navistar International
U.S. Profits: $896,000,000
Taxes Paid: ?$18,000,000
DTE Energy
U.S. Profits: $2,551,000,000
Taxes Paid: ?$17,000,000
Interpublic Group
U.S. Profits: $571,000,000
Taxes Paid: ?$15,000,000
U.S. Profits: $1,020,000,000
Taxes Paid: ?$9,000,000
U.S. Profits: $1,977,000,000
Taxes Paid: ?$4,000,000
U.S. Profits: $4,247,000,000
Taxes Paid: $37,000,000 (a rate of less than 1%)
U.S. Profits: $163,691,000,000
Taxes Paid: ?$10,602,000,000
Just look at that combined total again.
Those 30 companies had combined profits of more than 163 billion dollars during those three years, and yet the combined net tax liability of those companies was negative 10.6 billion dollars.
I wish I could make my taxes look like that.
Another company that is making headlines because of their taxes these days is Facebook.
It turns out that Facebook made more than a billion dollars in 2012 but did not pay a single dime in federal or state income taxes.  The following is from a report that was just released by Citizens for Tax Justice
Earlier this month, the Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes.
Instead, Facebook says it will receive net tax refundstotaling $429 million.
According to Businessweek, Facebook has an additional 2 billion dollars in tax credits that it will be able to use in future years…
Facebook says that it anticipates reducing its tax liability in the future by an additional $2.17 billion by using further net operating loss carry-forwards that it has banked.
And of course when it comes to abusing the tax system, the big Wall Street banks are some of the worst offenders.  The following is an excerpt from a report put out by the office of U.S. Senator Bernie Sanders
Here are just a few examples of how the corporations and Wall Street banks these CEOs work for have significantly harmed our economy and the federal budget:
1. Bank of America CEO Brian Moynihan
Number of Offshore Tax Havens in 2010? 371.
In 2010, Bank of America operated 371 subsidiaries incorporated in offshore tax havens. 204 of these subsidiaries are incorporated in the Cayman Islands, which has a corporate tax rate of 0%.
Amount of federal income taxes Bank of America would have owed if offshore tax havens were eliminated? $2.5 billion.
Bank of America has stashed $18.5 billion in offshore tax havens to avoid paying U.S. income taxes. Bank of America would owe an estimated $2.5 billion in federal income taxes if its use of offshore tax avoidance was eliminated.
Amount of federal income taxes paid in 2010? Zero. $1.9 billion tax refund.
Bank of America received a $1.9 billion tax refund from the IRS in 2010, even though it made $4.4 billion in profits.
Taxpayer Bailout from the Federal Reserve and the Treasury Department? Over $1.3 trillion.
During the financial crisis, Bank of America received a total of more than $1.3 trillion in virtually zero interest loans from the Federal Reserve and a $45 billion bailout from the Treasury Department.
2. JP Morgan Chase CEO James Dimon
Number of Offshore Tax Havens in 2010? 83.
In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens.
Amount of federal income taxes JP Morgan Chase would have owed if offshore tax havens were eliminated? $4.9 billion

JP Morgan Chase has stashed $21.8 billion in offshore tax haven countries to avoid payng income taxes. If this practice was outlawed, it would have paid $4.9 billion in federal income taxes.
Taxpayer Bailout from the Federal Reserve and the Treasury Department? $416 billion
During the financial crisis, JP Morgan Chase received a total of more than $391 billion in virtually zero interest loans from the Federal Reserve and a $25 billion bailout from the Treasury Department, while Jamie DImon served as a director of the New York Federal Reserve.
3. Goldman Sachs CEO Lloyd Blankfein
Amount of federal income taxes paid in 2008? Zero. $278 million tax refund.
In 2008, Goldman Sachs received a $278 million refund from the IRS, even though it earned a profit of $2.3 billion that year.
Number of offshore tax havens in 2010? 39.
In 2010, Goldman Sachs operated 39 subsidiaries in offshore tax haven countries.
Amount of federal income taxes Goldman Sachs would have owed if offshore tax havens were eliminated? $3.32 billion.
Goldman Sachs has stashed $20.63 billion in offshore tax haven countries to avoid paying income taxes. If this practice was outlawed, it would have paid $3.32 billion in federal income taxes.
Taxpayer Bailout from the Federal Reserve and the Treasury Department? $824 billion.
During the financial crisis, Goldman Sachs received a total of $814 billion in virtually zero interest loans from the Federal Reserve and a $10 billion bailout from the Treasury Department.
Are you starting to get the picture?
The big banks and the big corporations make billions, but they pay nothing or next to nothing.
The rest of us bust our rear ends to try to get ahead, and we get gougedby dozens of different taxes.
Over time, the percentage of the overall tax burden shouldered by corporations has gotten smaller and smaller.
Back in 1950, corporate taxes accounted for about 30 percent of all federal revenue.  In 2012, corporate taxes accounted for less than 7 percent of all federal revenue.
These days, large corporations have become absolute masters at avoiding taxes.  In fact, there are many international tax havens that are doing a booming business in setting up sham headquarters for U.S. corporations.  For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.
But corporations are not the only ones doing this kind of thing.
The ultra-wealthy have also mastered the art of legally not paying taxes.
As I mentioned in a previous article, it has been reported that the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.
With that amount of money, you could pay off the entire U.S. national debt and still have enough money left over to buy every product and service produced in the United States during an entire year.
It is time to admit that our tax system is broken.
Congress has had decades to fix it, and yet the abuses just keep getting worse.
What we are doing is not working.
We need to abolish the income tax.
If you are still not convinced that the federal income tax is an abomination and that we need to abolish it, here are some more shocking facts about our tax system from one of my previous articles about taxes
1 - The U.S. tax code is now 3.8 million words long.  If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.
2 - According to the National Taxpayers Union, U.S. taxpayers spendmore than 7.6 billion hours complying with federal tax requirements.  Imagine what our society would look like if all that time was spent on more economically profitable activities.
3 - 75 years ago, the instructions for Form 1040 were two pages long.  Today, they are 189 pages long.
4 - There have been 4,428 changes to the tax code over the last decade.  It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.
5 - According to the National Taxpayers Union, the IRS currently has1,999 different publications, forms, and instruction sheets that you can download from the IRS website.
6 - Our tax system has become so complicated that it is almost impossible to file your taxes correctly.  For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household.  All 46 of them came up with a different result.
7 - In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household.  All five of them came up with a different result.
8 - The IRS spends $2.45 for every $100 that it collects in taxes.
9 - According to The Tax Foundation, the average American has to workuntil April 17th just to pay federal, state, and local taxes.  Back in 1900, “Tax Freedom Day” came on January 22nd.
10 - When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.
11 - Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.
12 - The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.
13 - According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.
14 - Warren Buffett had an effective tax rate of just 17.4 percent for 2010.
15 - The top 20 percent of all income earners in the United States payapproximately 86 percent of all federal income taxes.
16 - Sadly, as Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.
Please share this article with as many people as you can.  We have now entered a time of the year when tens of millions of Americans will be filling out their tax returns, and the pain of going through that process will make people even more receptive than normal to the truth about how broken our system is.
So what do you think?
Do you think that it is fair for the ultra-wealthy and hugely profitable corporations to get away with paying zero taxes while you get hammered?
Do you believe that it is time to abolish the income tax?
Please feel free to post a comment with your thoughts below…
No Federal Income Tax

Global Economic Collapse In Process: Billionaires Continue To Dump Stocks, Traders Are Betting Against The Economy, Hedge Funds Preparing For Market Sell-Off, And Now They Start Betting Against Currencies As World Plunges Into Recession

Billionaires Dumping Stocks, Economist Knows Why

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.
Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
Unfortunately Buffett isn’t alone.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee
No investors, let alone billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why Buffett, Paulson, and Soros are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.

Google Inc Executive Chairman Eric Schmidt is selling roughly 42 percent of his stake in the Internet search

Google Inc. chairman Eric Schmidt plans to sell up to $2.51 billion of his share in the company, according to a Securities and Exchange Commission filing late Friday.
Venezuela devalued its currency, the bolivar, the country’s Finance Minister Jorge Giordani said Friday. President Hugo Chavez ordered the move from Cuba, the minister said

Could these be the signs of the upcoming market collapse people have been talking about? I don’t know, but things could start to get interesting.

An ominous contemporary warning

Something happened this week that brings back haunting memories of the 2001 put options of airline stocks, except this “bet” is against the entire U.S. economy. This week, an anonymous trader bought 100,000 put options on the ETF, which is an acronym for an exchange-traded fund. One commonly traded ETF is XLF, which, in the most unscientific and basic terms, is a group of funds that is like a barometer for the stock market.
Over the last week and a half, high level JP Morgan executives have dumped over $6 million in shares in what experts have described as ‘unusual activity’.
Anyone believe JPM’s October 12th earnings report which beat expectations? Looks like accounting BS engineered to dump legacy positions on the general public.A chorus of high-level executives inside JPMorgan (JPM) are selling down their stakes in the company, in what some experts are citing as “unusual” activity within the nation’s largest bank by deposits.CNBC reports that JPM execs have dumped $6 million in the past 10 days!

Urgent! Hedge Funds Preparing For Market Sell-Off.

Some of The Biggest U.S. Hedge-Fund Investors Score Big by Betting Against Yen

Some of the biggest U.S. hedge-fund investors have made billions betting against the yen, exploiting Japan’s determination to weaken its currency and boost its economy.
Wagering against the yen has emerged as the hottest trade on Wall Street over the past three months. George Soros, who made a fortune shorting the British pound in the 1990s, has scored gains of almost $1 billion on the trade since November, according to people with knowledge of the firm’s positions. Others reaping big trading profits by riding the yen down include David Einhorn’s Greenlight Capital, Daniel Loeb’s Third Point LLC and Kyle Bass’s Hayman Capital Management LP, investors say….

Currency War Fears Threaten Fragile Global Economic Recovery 

The world economy faces a new threat. Instead of a banking collapse or too much debt, fears are growing that countries are using their currencies as an economic weapon.
History suggests that’s never a good thing.
If too many countries try to weaken their currencies for economic gain — sparking a so-called “currency war” — then the fragile global economic recovery could be derailed and the international financial system thrown into chaos.

World Plunges Into Recession

With the disappointing initial GDP releases for Q42012 from Europe out, the “world” as defined by 41 OECD countries across the globe, has plunged into recession. We define “recession” through two alternative definitions for our comparison, either the presence of a single negative quarter-on-quarter growth or the more traditional two consecutive negative quarterly growths. Whichever way you look at it, the number of countries in expansion plunged dramatically between 3Q2013 and 4Q2012.
Now this is a diffusion index, with each country receiving equal weightings, and so it appears that 60% seems to be a viable threshold for the definition of “global recession” using the single-quarter definition (black) and 70% is probably the appropriate threshold for the 2-quarter definition (blue).

WIKIPEDIA: International conditions required for currency war

For a widespread currency war to occur a large proportion of significant economies must wish to devalue their currencies at once. This has so far only happened during a global economic downturn.
An individual currency devaluation has to involve a corresponding rise in value for at least one other currency. The corresponding rise will generally be spread across all other currencies[19] and so unless the devaluing country has a huge economy and is substantially devaluing, the offsetting rise for any individual currency will tend to be small or even negligible. In normal times other countries are often content to accept a small rise in the value of their own currency or at worst be indifferent to it. However, if much of the world is suffering from a recession, from low growth or are pursuing strategies which depends on a favourable balance of payments, then nations can begin competing with each other to devalue. In such conditions, once a small number of countries begin intervening this can trigger corresponding interventions from others as they strive to prevent further deterioration in their export competitiveness.[20]

Felix Zulauf – We Have Never Seen Anything Like This In History

KWN: Renowned money manager Felix Zulauf told King World News that despite the rally in stocks, the world economy is still in trouble.  Zulauf, founder of Zulauf Asset Management and 20+ year Barron’s Roundtable panelist, believes the current euphoria among investors and optimistic expectations going forward are creating a very dangerous environment.  Zulauf also feels that although there has been a long consolidation in gold, the fundamentals are still quite bullish.

This is the final part of a three part written interview series which has been released on King World News.  In these interviews the legendary money manager has discussed why he believes central planners will fail, how this will lead to systemic collapse, gold repatriation, what investors should be doing with their money right now, how they can protect themselves going forward, and much more.

Analyst Explains Why Wal-Mart’s February Sales Are So Bad—Hours Before Leaked Emails Confirm

This morning, an email hit our inbox with a big call on Wal-Mart from a firm called Cleveland Research.
In the note, the firm said it was lowering its Q1 2013 same-store sales growth estimate for Wal-Mart to 0 percent from 1 percent.
In other words, they expect Wal-Mart’s sales to stagnate in the first quarter.
The reason why, according to Cleveland Research (emphasis added): “A pullback in consumer spending related to 1) payroll/social security tax increase, 2) delayed tax returns, and 3) rising gas prices.”

Stocks Look Expensive Relative To Industrial Production
It’s certainly a yellow flag.

Sterling strikes seven-month lows amid calls for further weakness

Sterling struck seven-month lows against the dollar, before later recovering some of its losses, as a Bank of England policymaker said the pound may need to weaken further.

Pound sign carved out of rock
Sterling has already come under pressure amid anxiety over Britain's stuttering economy and the Bank of England forecasting higher inflation and anaemic growth. Photo: Joe Partridge/Rex Features 
During morning trading on Monday, the pound fell 0.5pc to $1.5438 - its lowest level since July last year - before recovering to trade around $1.5483.
Sterling's slide came as Martin Weale, a senior Bank of England policymaker, said on Saturday that the pound may need to weaken further, which would help to make exports cheaper and spur growth.
“It may be that high levels of uncertainty and a reluctance to take on new risks have stood in the way of exporters seeking new markets and domestic producers doing what is needed to displace imports,” Mr Weale said in a speech.
“Provided the calmer atmosphere we have seen since the summer is sustained, we may see further benefits of the depreciation.”
With the Bank of England appearing comfortable with sterling's drop, traders suggested that more losses are likely.
"Policymakers are hoping that a weaker sterling will help revive the economy," said John Hardy, currency strategist at Saxo Bank.
"Safe-haven inflows have dried up and economic weakness means there is little reason to buy sterling. We should see a gradual drift towards $1.50."
Sterling has already come under pressure amid anxiety over Britain's stuttering economy and the Bank of England forecasting higher inflation and anaemic growth.
Last week, the pound suffered its biggest weekly loss since early June 2012 after a weak retail sales report for January added to gloom about the UK economy and the currency.
But, analysts pointed out that some relief could be provided later this week from the latest unemployment figures.
"The downside risk continues, although later this week another monthly fall in UK unemployment is expected, which if realised will continue to baffle economists, and may be enough to give sterling some brief respite from the rampant selling that it has faced in the past few weeks," said Lee McDarby of Investec Corporate Treasury.
However, with concerns over the economic outlook persisting, hedge funds and investment managers are ditching sterling.
The Financial Times reported that figures from the US Commodity Futures Trading Commission show that more speculators are shorting the pound than buying it for the first time in five months.
Betting against sterling is second only in volume to the yen. The latter has sunk against other currencies as a result of aggressive monetary and financial policies to reflate the Japanese economy.

The Offshore Outsourcing of American Jobs: A Greater Threat Than Terrorism

The Offshore Outsourcing of American Jobs: A Greater Threat Than Terrorism
Is offshore outsourcing good or harmful for America? To convince Americans of outsourcing’s benefits, corporate outsourcers sponsor misleading one-sided “studies.”
Only a small handful of people have looked objectively at the issue. These few and the large number of Americans whose careers have been destroyed by outsourcing have a different view of outsourcing’s impact. But so far there has been no debate, just a shouting down of skeptics as “protectionists.”
Now comes an important new book, Outsourcing America, published by the American Management Association. The authors, two brothers, Ron and Anil Hira, are experts on the subject. One is a professor at the Rochester Institute of Technology, and the other is professor at Simon Fraser University.
The authors note that despite the enormity of the stakes for all Americans, a state of denial exists among policymakers and outsourcing’s corporate champions about the adverse effects on the US. The Hira brothers succeed in their task of interjecting harsh reality where delusion has ruled.
In what might be an underestimate, a University of California study concludes that 14 million white-collar jobs are vulnerable to being outsourced offshore. These are not only call-center operators, customer service and back-office jobs, but also information technology, accounting, architecture, advanced engineering design, news reporting, stock analysis, and medical and legal services. The authors note that these are the jobs of the American Dream, the jobs of upward mobility that generate the bulk of the tax revenues that fund our education, health, infrastructure, and social security systems.
The loss of these jobs “is fool’s gold for companies.” Corporate America’s short-term mentality, stemming from bonuses tied to quarterly results, is causing US companies to lose not only their best employees-their human capital-but also the consumers who buy their products. Employees displaced by foreigners and left unemployed or in lower paid work have a reduced presence in the consumer market. They provide fewer retirement savings for new investment.
Nothink economists assume that new, better jobs are on the way for displaced Americans, but no economists can identify these jobs. The authors point out that “the track record for the re-employment of displaced US workers is abysmal: “The Department of Labor reports that more than one in three workers who are displaced remains unemployed, and many of those who are lucky enough to find jobs take major pay cuts. Many former manufacturing workers who were displaced a decade ago because of manufacturing that went offshore took training courses and found jobs in the information technology sector. They are now facing the unenviable situation of having their second career disappear overseas.”
American economists are so inattentive to outsourcing’s perils that they fail to realize that the same incentive that leads to the outsourcing of one tradable good or service holds for all tradable goods and services. In the 21st century the US economy has only been able to create jobs in nontradable domestic services-the hallmark of a third world labor force.
Prior to the advent of offshore outsourcing, US employees were shielded against low wage foreign labor. Americans worked with more capital and better technology, and their higher productivity protected their higher wages.
Outsourcing forces Americans to “compete head-to-head with foreign workers” by “undermining US workers’ primary competitive advantage over foreign workers: their physical presence in the US” and “by providing those overseas workers with the same technologies.”
The result is a lose-lose situation for American employees, American businesses, and the American government. Outsourcing has brought about record unemployment in engineering fields and a major drop in university enrollments in technical and scientific disciplines. Even many of the remaining jobs are being filled by lower paid foreigners brought in on H-1b and L-1 visas. American employees are discharged after being forced to train their foreign replacements.
US corporations justify their offshore operations as essential to gain a foothold in emerging Asian markets. The Hira brothers believe this is self-delusion. “There is no evidence that they will be able to outcompete local Chinese and Indian companies, who are very rapidly assimilating the technology and know-how from the local US plants. In fact, studies show that Indian IT companies have been consistently outcompeting their US counterparts, even in US markets. Thus, it is time for CEOs to start thinking about whether they are fine with their own jobs being outsourced as well.”
The authors note that the national security implications of outsourcing “have been largely ignored.”
Outsourcing is rapidly eroding America’s superpower status. Beginning in 2002 the US began running trade deficits in advanced technology products with Asia, Mexico and Ireland. As these countries are not leaders in advanced technology, the deficits obviously stem from US offshore manufacturing. In effect, the US is giving away its technology, which is rapidly being captured, while US firms reduce themselves to a brand name with a sales force.
In an appendix, the authors provide a devastating expose of the three “studies” that have been used to silence doubts about offshore outsourcing-the Global Insight study (March 2004) for the Information Technology Association of America, the Catherine Mann study (December 2003) for the Institute for International Economics, and the McKinsey Global Institute study (August 2003).
The ITAA is a lobbying group for outsourcing. The ITAA spun the results of the study by releasing only the executive summary to reporters who agreed not to seek outside opinion prior to writing their stories.
Mann’s study is “an unreasonably optimistic forecast based on faulty logic and a poor understanding of technology and strategy.”
The McKinsey report “should be viewed as a self-interested lobbying document that presents an unrealistically optimistic estimate of the impact of offshore outsourcing and an undeveloped and politically unviable solution to the problems they identify.”
Outsourcing America is a powerful work. Only fools will continue clinging to the premise that outsourcing is good for America.
Dr. Paul Craig  Roberts was Assistant Secretary of the Treasury in the Reagan administration. His latest book, “How The Economy Was Lost,” has just been published by CounterPunch/AK Press.
To find out more about Paul Craig Roberts, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com .

Gas Prices Surge To Highest Ever On This Day At Fastest Pace In Four Years

Despite being weeks away from the start of the driving season proper, gas prices - at the pump - have been surging recently. With premium now over $4 nationwide (over $5 in SoCal - up 25 days in a row), this is the most expensive gas has ever been for the second week in February despite gasoline being relatively well supplied. Gasoline futures have ripped higher as unplanned maintenance, refinery closings, and rising crude oil prices (seemingly more central bank liquidity-driven than middle-east tensions) have impacted wholesale price expectations (and thus retail). The 44c rise is the fastest in four years and the year-to-date surge over 12% (outpacing stocks) is almost four times faster than average. What is more worrisome is the fact that seasonally the next month or two are when the biggest price spikes occur - which coupled with the tax-hike drag, will inevitably eat into people's spending habits and sentiment.
Gas Prices at the pump are the highest on record for this time of year...

With the last month seeing the biggest rise in almost four years...

and far in excess of the average seasonal shift - which is set to start...

And in Southern California, $5 gas prices are now the norm!!

Matt Taibbi: Mary White As Head Of SEC Puts Fox In Charge Of Hen House

Mary Jo White As Head Of SEC Puts Fox In Charge of Hen House
By Matt Taibbi
I was shocked when I heard that Mary Jo White, a former U.S. Attorney and a partner for the white-shoe Wall Street defense firm Debevoise and Plimpton, had been named the new head of the SEC.
I thought to myself: Couldn't they have found someone who wasn't a key figure in one of the most notorious scandals to hit the SEC in the past two decades? And couldn't they have found someone who isn't a perfect symbol of the revolving-door culture under which regulators go soft on suspected Wall Street criminals, knowing they have million-dollar jobs waiting for them at hotshot defense firms as long as they play nice with the banks while still in office?
I'll leave it to others to chronicle the other highlights and lowlights of Mary Jo White's career, and focus only on the one incident I know very well: her role in the squelching of then-SEC investigator Gary Aguirre's investigation into an insider trading incident involving future Morgan Stanley CEO John Mack. While representing Morgan Stanley at Debevoise and Plimpton, White played a key role in this inexcusable episode.
Continue reading at Rolling Stone...

George Soros Is Going After The Two Most Hated Currencies In The World

George Soros
George Soros

The two most hated currencies in the world right now are: The Japanese Yen and The British Pound.

In the case of the yen, the new Prime Minister Shinzo Abe has come into power with an aggressive easing agenda (both monetary and fiscal). The yen has been getting slaughtered since November.

In the case of the British pound (which has been getting hammered all year) the currency is weakening on a combination of weak economic prospects, a worsening balance of trade, and the expectation that newly incoming Bank of England chief Mark Carney will be inclined to ease policy further.

And George Soros is apparently going after both currencies.

The FT's Sam Jones reports:

Ask some of the world’s biggest hedge funds where they are watching for the next big shift in global markets and many will point to the same place: sterling.  Having made billions successfully shorting the yen since November, top global macro traders – funds such as Soros Fund Management, Tudor Investment Corporation, Caxton Associates and Moore Capital – are increasingly looking at the pound.

It's unclear what "increasingly looking" at means, in terms of where they are in the trade process.

But yes, as noted above, Soros is also making a fortune on the declining yen, with his firm having tallied $1 billion in profits on the declining currency, according to reports.

As an aside, there's a piece up at The Guardian about the Pound losing its safe-haven status.

But this isn't entirely accurate. A decline in a currency, even a sharp one, doesn't say anything about its role as a safe haven or not. All around the world, a lot of crisis trades are being unwound (safe havens everywhere are falling) and so a drop in the Pound is entirely consistent with being a safe haven. Furthermore, the drop in the pound is a natural response to both economics and policy, not about some loss of confidence in the durability of the currency itself.

One last point, Soros shorting the pound of course has symbolic interest, because he famously "broke" the Bank of England" by shorting the pound in 1992, when it was pegged to an unsustainable fixed exchanged rate. This is nothing like that. The BoE isn't trying to defend the pound in any sense at this point, and a decline in the currency is not a problem.
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Read more: http://www.businessinsider.com/soros-profiting-from-decline-in-pound-yen-2013-2#ixzz2LHe12kG9

Millionaires Say They’re Better Off Than in 2007

bankstersInformation Clearing House – by Robert Frank
February 17, 2013 “CNBC” –  The good old days for the wealthy are now back.
A survey from Northern Trust found that three quarters of millionaires surveyed said they are better off, or as well off, as they were in 2007 — the peak for both wealth and sheer numbers of America’s millionaires. Most cited improved investment returns as their reason for feeling better off.
That confidence may soon start translating into hiring. Eighty percent of wealthy business owners say they plan to recruit more workers or keep their staff levels stable over the next 18 to 24 months. One in five plan to make capital investments in upgrading computers and other technology over the same period.
Millionaires Happy with Their Own Situation
CNBC’s Robert Frank reports 3 out of 4 millionaires say they’re better off or the same as they were in 2007. In short, they’ve healed from the crisis.
Still, the millionaires are less optimistic about the broader country. Two thirds of millionaires believe the country is worse off than it was in 2007. They blame the growing national debt and stubbornunemployment as the reasons.
Nearly a third blamed their negative outlook on the Obama administration.
In short, today’s millionaires are feeling prosperous in their private life, but pessimistic about public life. “The survey results mirror our clients’ divergent views around U.S fiscal policy,” said Katie Nixon, Northern Trust’s Chief Investment Officer for Wealth Management.
When it comes to investment goals, more than a third of wealthy investors said growing wealth was their goal. About one quarter focus on generating income and the rest say capital preservation is their goal.

WATCH: Lagarde On Currency Wars, Cyprus Bailout

'No reason to worry about the Yen.'
Reporter catches the IMF Director after her G-20 speech.  Check out the hyper-vigilant security guards when they step outside.
Feb. 17 (Bloomberg) -- IMF Managing Director Christine Lagarde speaks about the debt crisis in Cyprus and the Group of 20's statement on currency policies at a G-20 meeting in Moscow.
Bonus clip:

What are the chances of Cyprus getting bailed out?
Feb. 18 (Bloomberg) -- Alvine Capital Management's Stephen Isaacs discusses latest development in Cyprus presidential elections and the possibility of a bailout.

The Extremist Cult of Capitalism

PAUL BUCHHEIT, FOR BUZZFLASH AT TRUTHOUT                                                    capitalism 75

A 'cult,' according to Merriam-Webster, can be defined as "Great devotion to a person, idea, object, movement, or work..(and)..a usually small group of people characterized by such devotion."

Capitalism has been defined by adherents and detractors: Milton Friedman said, "The problem of social organization is how to set up an arrangement under which greed will do the least harm, capitalism is that kind of a system." John Maynard Keynes said, "Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."

Perhaps it's best to turn to someone who actually practiced the art: "Capitalism is the legitimate racket of the ruling class." --Al Capone

Capitalism is a cult. It is devoted to the ideals of privatization over the common good, profit over social needs, and control by a small group of people who defy the public's will. The tenets of the cult lead to extremes rather than to compromise. Examples are not hard to find.

1. Extremes of Income

By sitting on their growing investments, the richest five Americans made almost $7 billion each in one year. That's $3,500,000.00 per hour. The minimum wage for tipped workers is $2.13 per hour.

Our unregulated capitalist financial system allows a few well-positioned individuals to divert billions of dollars from the needs of society. If the 400 richest Americans lumped together their investment profits from last year, the total would pay in-state tuition and fees for EVERY college student in the United States.

2. Extremes of Wealth

The combined net worth of the world's 250 richest individuals is more than the total annual living expenses of almost half the world - three billion people.

Within our own borders the disparity is no less shocking. For every one dollar of assets owned by a single black or Hispanic woman, a member of the Forbes 400 has over forty million dollars. That's equivalent to a can of soup versus a mansion, a yacht, and a private jet. Most of the Forbes 400 wealth has accrued from nonproductive capital gains. It's little wonder that with the exception of Russia, Ukraine, and Lebanon, the U.S. has the highest degree of wealth inequality in the world.

3. Extremes of Debt

Up until the 1970s U.S. households had virtually no debt. Now the total is $13 trillion, which averages out to $100,000 per American family.

Debt appears to be the only recourse for 21- to 35-year-olds, who have lost, on average, 68% of their median net worth since 1984, leaving each of them about $4,000.

4. Extremes of Health Care

A butler in black vest and tie passed the atrium waterfall and entered the $2,400 suite, where the linens were provided by the high-end bedding designer Frette of Italy and the bathroom glimmered with polished marble. Inside a senior financial executive awaited his 'concierge' doctor for private treatment.

He was waiting in the penthouse suite of the New York Presbyterian Hospital.

On the streets outside were some of the 26,000 Americans who will die this year because they are without health care. In 2010 50 million Americans had no health insurance coverage.

5. Extremes of Justice

William James Rummel stole $80 with a credit card, then passed a bad check for $24, then refused to return $120 for a repair job gone bad. He got life in prison. Christopher Williams is facing over 80 years in prison for selling medical marijuana in Montana, a state which allows medical marijuana. Patricia Spottedcrow got 12 years for a $31 marijuana sale, and has seen her children only twice in the past two years. Numerous elderly Americans are in prison for life for non-violent marijuana offenses.

Banking giant HSBC, whose mission statement urges employees "to act with courageous integrity" in all they do, was described by a U.S. Senate report as having "exposed the U.S. financial system to 'a wide array of money laundering, drug trafficking, and terrorist financing'" in their dealings with Mexico's Sinaloa cartel, which is considered the deadliest drug gang in the world.

HSBC received a fine equivalent to four weeks' profits. The bank's CEO said, "we are profoundly sorry."

In the words of Bertrand Russell, "Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate."

Accurate to the extreme.

Facebook to Get $429 Million Tax Refund Despite $1.1 Billion in U.S. Profits

Citizens for Tax Justice, Facebook's Multi-Billion Dollar Tax Break: Executive-Pay Tax Break Slashes Income Taxes on Facebook-- and Other Fortune 500 Companies:
Earlier this month, the Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes.
Instead, Facebook says it will receive net tax refunds totaling $429 million. Facebook’s income tax refunds stem from the company’s use of a single tax break, the tax deductibility of executive stock options. That tax break reduced Facebook’s federal and state income taxes by $1,033 million in 2012, including refunds of earlier years’ taxes of $451 million.
(Hat Tip: John Stanley.)

REPORT: Another Secret Bailout For Bank Of America

The NY Fed secretly bailed out Bank of America last Summer, and it's just coming to light now.
Don't Blink, Or You'll Miss Another Bailout
New York Times
By Gretchen Morgenson
Many people became rightfully upset about bailouts given to big banks during the mortgage crisis.  But it turns out that they are still going on, if more quietly, through the back door.
The existence of one such secret deal, struck in July between the Federal Reserve Bank of New York and Bank of America, came to light just last week in court filings.
That the New York Fed would shower favors on a big financial institution may not surprise.  It has long shielded large banks from assertive regulation and increased capital requirements.
Still, last week’s details of the undisclosed settlement between the New York Fed and Bank of America are remarkable.  Not only do the filings show the New York Fed helping to thwart another institution’s fraud case against the bank, they also reveal that the New York Fed agreed to give away what may be billions of dollars in potential legal claims.
Here’s the skinny: Late last Wednesday, the New York Fed said in a court filing that in July it had released Bank of America from all legal claims arising from losses in some mortgage-backed securities the Fed received when the government bailed out the American International Group in 2008.  One surprise in the filing, which was part of a case brought by A.I.G., was that the New York Fed let Bank of America off the hook even as A.I.G. was seeking to recover $7 billion in losses on those very mortgage securities.
Let’s recap: For zero compensation, the New York Fed released Bank of America from what may be sizable legal claims, knowing that A.I.G. was trying to recover on those claims.
It gets better.
What did the New York Fed get from Bank of America in this settlement?
Continue reading at the New York Times...

This wasn't the first time:

Bank Of America's Backdoor Bailout - Dumping Mortgage Trash Onto Taxpayers Via Fannie Mae

Photos by William Banzai7...

Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing?

If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores?  When I was growing up, Sears, J.C. Penney, Best Buy and RadioShack were all considered to be unstoppable retail powerhouses.  But now it is being projected that all of them will close hundreds of stores before the end of 2013.  Even Wal-Mart is running into problems.  A recent internal Wal-Mart memo that was leaked to Bloombergdescribed February sales as a “total disaster”.  So why is this happening?  Why are major retail chains all over America collapsing?  Is the “retail apocalypse” upon us?  Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes.  Incomes are declining, taxes are going up, government dependence is at an all-time high, and according to the Bureau of Labor Statistics the percentage of the U.S. labor force that is employed has been steadily falling since 2006.  The top 10% of all income earners in the U.S. are still doing very well, but most U.S. consumers are either flat broke or are drowning in debt.  The large disposable incomes that the big retail chains have depended upon in the past simply are not there anymore.  So retail chains all over the United States are now closing up unprofitable stores.  This is especially true in low income areas.
When you step back and take a look at the bigger picture, the rapid decline of some of our largest retail chains really is stunning.
It is happening already in some areas, but soon half empty malls and boarded up storefronts will litter the landscapes of cities all over America.
Just check out some of these store closing numbers for 2013.  These numbers are from a recent Yahoo Finance article
Best Buy
Forecast store closings: 200 to 250
Sears Holding Corp.
Forecast store closings: Kmart 175 to 225, Sears 100 to 125
J.C. Penney
Forecast store closings: 300 to 350
Office Depot
Forecast store closings: 125 to 150
Barnes & Noble
Forecast store closings: 190 to 240, per company comments
Forecast store closings: 500 to 600
Forecast store closings: 150 to 175
Forecast store closings: 450 to 550
The RadioShack in a nearby town just closed up where I live.  This is all happening so fast that it is hard to believe.
But the truth is that those store closings are not the entire story.  When you dig deeper you find a lot more retailers that are in trouble.
For example, Blockbuster recently announced that this year they will be closing about 300 stores and eliminating about 3,000 jobs.
Toy manufacturer Hasbro recently announced that they will be reducing the size of their workforce by about 10 percent.
Even Wal-Mart is going through a tough stretch right now.  According to documents that were leaked to Bloomberg, Wal-Mart is having an absolutely disastrous February…
Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.
“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”
So what in the world is going on here?
The mainstream media continues to proclaim that we are experiencing a robust “economic recovery”, but at the same time there are a whole host of indications that things are continually getting worse.
Even global cell phone sales actually declined slightly in 2012.  That was the first time that has happened since the last recession.
Perhaps it is time that we faced the truth.  The middle class is shrinking, incomes are declining and there are not nearly as many jobs as there used to be.
Mort Zuckerman pointed this out in a recent article in the Wall Street Journal
The U.S. labor market, which peaked in November 2007 when there were 139,143,000 jobs, now encompasses only 132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work that has increased is part-time, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.
So how can the mainstream media be talking about how “good” things are if we still have 6.4 million fewer jobs than we had back in November 2007?
And sadly, things may soon be getting a lot worse.  If Congress does not do anything about the “sequester”, millions of federal workers may shortly be facing some very painful furloughs according to CNN
Federal workers could start facing furloughs as early as April, according to federal agencies trying to prepare for the worst.
Unless Congress steps in, some $85 billion in massive spending reductions will hit the federal government, doling out furloughs to much of the nation’s 2.1 million federal workforce, experts say.
If you still live in an area of the country where the stores and the restaurants are booming, you should be very thankful because that is not the reality for most of the country.
I often write about the stunning economic decline of major cities such as Detroit, but there are huge sections of rural America that are in even worse shape than Detroit in many ways.
For example, many Indian reservations all over America have been shamefully neglected by the federal government and have become hotbeds for crime, drugs and poverty.
Business Insider recently profiled the Wind River Indian reservation in western Wyoming.  The following is a brief excerpt from thatoutstanding article
The Wind River Indian Reservation is not an easy place to get to, but I had to see it for myself.
Thirty-five-hundred square miles of prairie and mountains in western Wyoming, the reservation is home to bitter ancestral enemies: the Eastern Shoshone and Northern Arapaho tribes.
Even among reservations, it’s renowned for brutal crime, widespread drug use, and legal dumping of toxic waste.
You can see some amazing photos of the Wind River Indian reservationright here.
It is hard to believe that there are places like that in America, but the truth is that conditions like that are spreading to more U.S. communities with each passing day.
We are a nation that is in an advanced state of decline.  But as long as the financial markets are okay, our leaders don’t seem too concerned about the suffering that everyone else is going through.
In fact, former Federal Reserve Chairman Alan Greenspan essentially admitted as much during a recent interview with CNBC.  The following is how a Zero Hedge article summarized that interview…
Starting at around 1:50, Greenspan states the odds of sequester occurring are very high – in fact, the playdough-faced ex-Chair-head notes, “I find it very difficult to find a scenario in which [the sequester] doesn’t happen” But when asked how this will affect the economy, Awkward Alan is unusually clearly spoken - “the issue is how does it affect the stock market.”
While not so many of our leaders have taken the path to direct truthiness, Greenspan somewhat shocks a Botox’d and babbling Bartiromo when he admits “the stock market is the key player in the game of economic growth.”
Bartiromo shifts uncomfortably in her seat, strokes her imaginary beard and stares blankly as Greenspan explains that while the sequester will have a real effect on the real economy, “if the stock market can hold up through this, then the effect will be rather minor.”
Do you see?
As long as the stock market is moving higher they think that everything is just fine and dandy.
And the Obama administration?
They continue to pursue the same policies that got us into this mess.
Their idea of “economic reform” is to threaten to sue businessesthat do not hire ex-convicts.
And of course now that Obama has been re-elected he is putting a tremendous amount of effort into “stimulating the economy”.
For example, he spent this weekend golfing in Florida, and the Obamas recently spent about 20 million taxpayer dollars vacationing in Hawaii.
Meanwhile, the U.S. economy is getting worse with each passing day.
If you doubt that economic conditions are getting worse, please read this article: “Show This To Anyone That Believes That ‘Things Are Getting Better’ In America“.
When you look at the cold, hard numbers, it is undeniable what is happening to America.
And our leaders are not doing anything to fix our problems.  In fact, most of the time they are just making things worse.
So buckle up and get prepared.  We are in for very bumpy ride, and this is only just the beginning.