Sunday, February 24, 2013

Why Should Taxpayers Give Big Banks $83 Billion a Year?

Illustration by Bloomberg View

On television, in interviews and in meetings with investors, executives of the biggest U.S. banks -- notably JPMorgan Chase & Co. Chief Executive Jamie Dimon -- make the case that size is a competitive advantage. It helps them lower costs and vie for customers on an international scale. Limiting it, they warn, would impair profitability and weaken the country’s position in global finance.
So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?
Granted, it’s a hard concept to swallow. It’s also crucial to understanding why the big banks present such a threat to the global economy.
Let’s start with a bit of background. Banks have a powerful incentive to get big and unwieldy. The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail.
Lately, economists have tried to pin down exactly how much the subsidy lowers big banks’ borrowing costs. In one relatively thorough effort, two researchers -- Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz -- put the number at about 0.8 percentage point. The discount applies to all their liabilities, including bonds and customer deposits.

Big Difference

Small as it might sound, 0.8 percentage point makes a big difference. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of $83 billion a year. To put the figure in perspective, it’s tantamount to the government giving the banks about 3 cents of every tax dollar collected.
The top five banks -- JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. - - account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits (see tables for data on individual banks). In other words, the banks occupying the commanding heights of the U.S. financial industry -- with almost $9 trillion in assets, more than half the size of the U.S. economy -- would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.
Neither bank executives nor shareholders have much incentive to change the situation. On the contrary, the financial industry spends hundreds of millions of dollars every election cycle on campaign donations and lobbying, much of which is aimed at maintaining the subsidy. The result is a bloated financial sector and recurring credit gluts. Left unchecked, the superbanks could ultimately require bailouts that exceed the government’s resources. Picture a meltdown in which the Treasury is helpless to step in as it did in 2008 and 2009.
Regulators can change the game by paring down the subsidy. One option is to make banks fund their activities with more equity from shareholders, a measure that would make them less likely to need bailouts (we recommend $1 of equity for each $5 of assets, far more than the 1-to-33 ratio that new global rules require). Another idea is to shock creditors out of complacency by making some of them take losses when banks run into trouble. A third is to prevent banks from using the subsidy to finance speculative trading, the aim of the Volcker rule in the U.S. and financial ring-fencing in the U.K.
Once shareholders fully recognized how poorly the biggest banks perform without government support, they would be motivated to demand better. This could entail anything from cutting pay packages to breaking down financial juggernauts into more manageable units. The market discipline might not please executives, but it would certainly be an improvement over paying banks to put us in danger.

Obama's lies about the origin of the sequester

President Obama has been making a big deal about blaming Congress for the sequester, even saying at one point during his debate with Romney last year, "The sequester is not something that I've proposed," Obama said. "It is something that Congress has proposed."
He either has a short memory or is a bald faced liar, as Bob Woodward points out:
The White House chief of staff at the time, Jack Lew, who had been budget director during the negotiations that set up the sequester in 2011, backed up the president two days later.
"There was an insistence on the part of Republicans in Congress for there to be some automatic trigger," Lew said while campaigning in Florida. It "was very much rooted in the Republican congressional insistence that there be an automatic measure."
The president and Lew had this wrong. My extensive reporting for my book "The Price of Politics" shows that the automatic spending cuts were initiated by the White House and were the brainchild of Lew and White House congressional relations chief Rob Nabors -- probably the foremost experts on budget issues in the senior ranks of the federal government.
Obama personally approved of the plan for Lew and Nabors to propose the sequester to Senate Majority Leader Harry Reid (D-Nev.). They did so at 2:30 p.m. July 27, 2011, according to interviews with two senior White House aides who were directly involved.
Nabors has told others that they checked with the president before going to see Reid. A mandatory sequester was the only action-forcing mechanism they could devise. Nabors has said, "We didn't actually think it would be that hard to convince them" -- Reid and the Republicans -- to adopt the sequester. "It really was the only thing we had. There was not a lot of other options left on the table."
The president's apologists like to point out that the GOP voted for it, and are therefore culpable. But no one is saying Republicans didn't support the idea of the sequester. The question is who made it up and who is responsible for pushing it?
This is the president's baby and now, he wants to run away from it by blaming it all on his opponents. Very few in the media have acknowledged the president's lies and simply don't report the fact that it was his OMB director who came up with the idea.
It's why the GOP will probably be blamed for any pain caused by the sequester.

CHART: 50% Of College Grads Are Underemployed

Underemployed America.
Half of college graduates are now in jobs that don't require a degree.
Feb. 4 (Bloomberg) -- In today's "Single Best Chart," Bloomberg's Scarlet Fu explains why it doesn't always help to have a college degree.
The 10 Best-Paid Jobs, No Degree Required - MarketWatch

Last week:

The Chart That Should Force The Fed Out Of Business

Why is Wal-Mart worried? Payroll tax could cut consumer spending.

Christian Science Monitor – by Husna Haq
Retailers are preparing for a triple whammy as the restoration of the payroll tax, surging gas prices, and stagnant employment and wages take a bite out of consumers’ disposable income, leaving them with less cash to spend on clothing, groceries, and eating out.
As a result, more than three years after the recession officially ended, American consumers might be preparing to downshift again, if only slightly, with low-income consumers hit the hardest. Sensing consumer trepidation, retailers are scrambling to adjust.
Retailers, restaurants, and consumer goods companies like Wal-Mart are lowering sales forecasts and adjusting marketing campaigns ahead of expectations that consumers will slash spending, the Wall Street Journal reports.
In a survey released Thursday, the National Retail Federation (NRF) said some 46 percent of consumers plan to spend less as a result of the payroll tax increase. One-third said they will reduce dining out and one-quarter will spend less on “little luxuries,” like manicures and trips to coffee shops.
“A smaller paycheck due to the fiscal cliff deal early last month, higher gas prices, low consumer confidence and ongoing uncertainty about our nation’s fiscal health is negatively impacting consumers and businesses across the country,” Matthew Shay, president and CEO of the NRF, said in a statement.
Originally enacted in December 2010 to help taxpayers weather the recession and to spur economic activity, the payroll tax cut expired Jan. 1 of this year. The restoration of the tax effectively raised the rate from 4.2 percent in 2012 to 6.2 percent in 2013, shaving 2 percent from consumers’ take-home pay.
That means Americans making $50,000 a year will pay $83 more in taxes each month, almost $1,000 more each year. Those making $75,000 will pay $125 more each month, or $1,500 more each year. As retailers see it, that’s $1,500 less a consumer has to spend on groceries, household goods, and dining out.
Multiply that by 153.6 million people in the labor force and retailers start to panic. According to an estimate by Citigroup, the expiration of the payroll tax cut will move $110 billion out of consumers’ pockets.
For high-end consumers, the payroll tax may not change a thing, and for many middle-income consumers, it will likely result in only a subtle shift. But the impact is most likely to be felt among low-income consumers and the businesses they tend to frequent, like Wal-Mart.
“It’s a big deal,” says Morgan Housley, a macroeconomic analyst with Motley Fool, an online financial education website. “The biggest impact is on lower-income households since the payroll tax is regressive, only applying to the first $113,000 of income. Wealthier households don’t feel the same pinch because the tax doesn’t hit all of their income. Lower-income households also spend a larger share of their income than wealthier consumers.… Low-income families are in one of the toughest spots they’ve been in since 2009.”
Combine that with stagnant employment and wages, as well as soaring gas prices – gas is up 50 cents a gallon in the past month alone – and consumers start to feel the pinch, says Edgar Dworsky, founder of, a consumer information service.
“Those who are living paycheck-to-paycheck, spending all they’ve got, those are the folks who are going to be hit the most,” Mr. Dworsky says.
Retailers are also bracing for the hit, says Mr. Housel.
“The big retailers like Wal-Mart are very good at reading customers’ shopping habits and adjusting quickly,” he says. “You’ll see stores adjusting inventory toward lower-price items and smaller-packaged goods.”
Case in point: McDonald’s is promoting its Dollar Menu,Burger King slashed its Whopper Jr. burger from $2 to $1.29, Tyson Foods is ordering more budget-friendly chicken and lower-priced cuts of meat, and Wal-Mart is stocking shelves with cheaper goods and smaller packages of bulk items, reports the Wall Street Journal.
“Any industry that focuses on low-income consumers starved for value will see the biggest hit – discount retail and dollar stores, for example,” adds Housel.
Already, Wal-Mart, the world’s largest retailer, had the worst start to a month in seven years and described February sales as “a total disaster,” according to internal company e-mails obtained by Bloomberg News.
Despite the doom-and-gloom predictions, however, some analysts say it’s unlikely the restoration of the payroll tax will wreak havoc on the economy. After all, retail sales inched up 0.1 percent in January in spite of the tax restoration.
“Although the payroll tax hike has taken a chunk out of wages across the country and sent the retail sector into a panic, it doesn’t look like the tax will hurt all that bad in the end,” says analyst Dan Carroll in a recent Motley Fool column. “With consumers spending much of the payroll tax holiday’s two years getting a handle on debt and auto sales continuing to shine despite the tax holiday’s expiration, the payroll tax hike won’t be able to kill the economy’s momentum.”
But Dworsky still expects consumers and retailers will be negatively affected.
“Consumers may cut back and buy less, eat out less, buy one less dress, one fewer pair of shoes, maybe join Costco,” says Dworsky.
If there is a negative impact, it is likely to be long-lasting.
“It’s safe to say that whatever negative impact the restoration of the tax has on consumer spending will be permanent,” says Housel. “There’s nothing consumers can do to avoid it, and without leveraging back up on debt, it will be a permanent impact on spending.”

CNBC Documentary Exposes Government Sachs

The revolving door at Government Sachs.
Narrated and produced by David Faber.
Lloyd Blankfein in the news recently for some controversial tax comments...
Description from CNBC:
Goldman Sachs - Power And Peril
Goldman Sachs has come under intense scrutiny following a government investigation into its practices. The firm is a powerhouse whose 34,000 employees are known as the best and the brightest. It's unique corporate culture and its long history of success have always been the envy of its competitors...but now Goldman Sachs is fighting to maintain its reputation. The firm has been accused by some critics of misleading investors, and taken to task for accepting a government bailout when, less than a year later, it was able to reap massive profits. Some ask if its connections to the many Goldman alumni who went on to influential government positions gave it an unfair advantage in surviving the global financial crisis.
In this CNBC original documentary, correspondent David Faber reveals how Goldman Sachs benefited from some of its most controversial deals before, during and after the economic collapse. He describes how Goldman, throughout its history, has fought back from adversity with innovation and fierce competitiveness. Faber also examines the future of Goldman Sachs, asking whether the bank can maintain its dominant position atop the world of finance.

Here's just a taste of the revolving door:

Photos by William Banzai7

Ben looks a little bit hairy
The shadow banks sure can be scary
But just like before
Ben's eyesight is poor
So Lloyd is exceedingly merry
The Limerick King

Adam VS the TSA

The Bank of England can’t just go on doing down the pound

Devaluation has now become an end in itself at the Bank of England – but it’s no panacea and we risk a lost decade like Japan

There has been a persistent bias towards devaluation in British economic policy ever since leaving the gold standard in 1931. Ever since, policy-makers in Britain have reached for devaluation whenever in real trouble
There has been a persistent bias towards devaluation in British economic policy ever since leaving the gold standard in 1931. Ever since, policy-makers in Britain have reached for devaluation whenever in real trouble Photo: Alamy
When the banking crisis erupted, it was fashionable to dismiss as alarmist suggestions that Britain and other advanced economies at the centre of the collapse could end up like Japan, condemned to decades of economic stagnation. The US and UK were structurally different, it was argued, and adaptable enough to avoid such an outcome.
Regrettably, this complacent consensus has proved incorrect. We are five years into the crisis, or halfway through the first decade of lost growth, and the UK’s performance is, if anything, slightly worse than Japan’s post-bubble experience. Few would put money on us breaking out of this economic funk in the near future. Yet, despite the obvious similarities with Japan’s banking boom and bust, there are key differences, at least as far as Britain is concerned. Unfortunately, few of them point to a more positive outcome. Against Japan’s generally high current account surplus, the UK continues to experience a stubbornly persistent deficit; as a nation, we are still spending much more than we earn. Inflation also remains elevated, whereas in Japan they’ve experienced years of deflation. And sterling has devalued dramatically, while Japan constantly has to battle a strong yen.
For policy-makers at the Bank of England, devaluation seems to have become an end in itself, a panacea that can help the economy rebalance away from the debt-fuelled public and private consumption of the past and towards investment and net trade.
The policy was reaffirmed in the minutes published this week of the Monetary Policy Committee, with the Bank’s Governor, Sir Mervyn King, acting as its cheerleader. Having only recently said that central bank money printing, or quantitative easing, was not the silver bullet he had hoped for, it now appears he wants much more, in part because it helps keep the pound low and therefore may assist in reaching the Holy Grail of a more balanced British economy.
If that was Sir Mervyn’s intention, it worked; the pound, which has been under pressure for some months now, fell further. Is this going to help us avoid Japan’s fate? So desperate has everyone become for anything that might kick-start growth that even Japan, under Shinzo Abe’s new government, appears ready to follow Britain’s lead. Abe’s economic strategy implicitly accepts that some inflation, traditionally anathema to this savings-addicted nation, is preferable to years of further deflation. I have to confess to being in a quandary about these policies. There are good arguments on either side. But first, a little history.

There has been a persistent bias towards devaluation in British economic policy ever since leaving the gold standard in 1931, an act widely judged to have been a success in that it helped the economy avoid the deep depression of the US and large parts of Europe. Ever since, policy-makers in Britain have reached for devaluation whenever in real trouble, as if it were a big bazooka that would blow away all our troubles.
Unfortunately, post-war experience has been more mixed. Harold Wilson’s “pound in your pocket” devaluation set the scene for more than a decade of rampant inflation and relative economic decline. And whereas the ERM debacle is sometimes cited as a further example of successful devaluation, in fact it was the rapid decline in interest rates that disengagement from the Deutschmark allowed, rather than the devaluation itself, which reignited the economy in the 1990s.
The buffeting the pound has received this time around in fact exceeds these previous devaluations. Against the euro, it is down about a quarter, having been even lower. Little good does it seem to have done, either. So far, it has self-evidently not helped the economy to rebalance, while, by adding to inflation at a time of very low interest rates and stagnant wages, it has damaged savings and household consumption.
On the other side of the ledger, it may have helped the UK avoid the crushing rise in unemployment that has engulfed eurozone periphery nations such as Spain and Ireland. On many financial measures, the British economy looks a basket case, but there is no arguing with the creation of more than a million private sector jobs over the past two and a half years. This is little short of miraculous for a supposedly nil growth economy.
All the same, there is a sense in which by flooding the system with liquidity, Britain has merely put the crisis on hold. The economy does not any longer have a shortage of money. The problem lies elsewhere, and yet the only solution proposed is to print even more of the stuff. By doing so, the Bank of England treads a dangerous line. The sell-off we have seen in the pound may or may not help the competitiveness of British goods, but it could easily turn into a full-blown rout if foreign investors start to lose faith in the value of sterling assets. This would force a steep rise in interest rates, a fiscal crisis and another deep recession.
All this “looking through” the inflation target to the sunlit uplands of more normal economic conditions, which supposedly lie just the other side of the next spike in prices, has gone on far too long. We’ve tried devaluation, and it doesn’t seem to have worked. Conventional economic analysis is that Western economies are over the worst, as indeed it has been ever since the near-death experience of the banking implosion. Sadly, that still doesn’t look the way to bet.

Who’s Who of Prominent Economists Say that Too Much Inequality Causes Economic Downturns

Inequality Is Bad For the Economy

A who’s-who’s of prominent economists in government and academia have all said that runaway inequality can cause financial crises:
Indeed, extreme inequality helped cause the Great Depression, the current financial crisis … and the fall of the Roman Empire.
It’s not just liberal economists who say this … many conservatives say the same thing.
This entry was posted in Business / Economics, Politics / World News. Bookmark the permalink.

Dollar Collapse Update: Bank of England Closes In On China Currency Deal, Fed Downplays New Bubble Worries And Already Planning QE5, G20 & IMF Push for Global Fed, Global Currency, And World’s Largest Gold Storage Dumping US Customers!!

Bank of England closes in on China currency deal

Sir Mervyn King, Governor of the Bank of England, is on the brink of striking a deal with the People’s Bank of China which would cement the UK’s role as the leading G7 trade hub for the world’s fastest growing currency.
The Bank of England expects to sign a final agreement to set up a three-year yuan-sterling swap line “shortly”, during a meeting between Sir Mervyn and his counterpart Zhou Xiaochuan in Beijing.
European and US officials have been pressing China for years to do more to open up the yuan to market forces, saying its artificial weakness was one of the key imbalances of the global economy.
Beijing is slowly delivering, although it still keeps a tight rein on gains for the currency for fear it will weaken its export-powerhouse economy, which has been the biggest engine of global growth for a decade.

Fed Downplays New Bubble Worries And Planning QE5

Bernanke downplays new bubble worries
Federal Reserve Chairman Ben S. Bernanke minimized concerns that the central bank’s easy monetary policy has spawned economically-risky asset bubbles in comments at a meeting with dealers and investors this month, according to three people with knowledge of the discussions.
The people, who asked not to be identified because the talks were private, said Bernanke made the remarks at a meeting in early February with the Treasury Borrowing Advisory Committee. Fed spokeswoman Michelle Smith declined to comment.
The Fed chairman brushed off the risks of asset bubbles in response to a presentation on the subject from the group, one person said. Among the concerns raised, according to this person, were rising farmland prices and the growth of mortgage real estate investment trusts. Falling yields on speculative- grade bonds also were mentioned as a potential concern, two people said.

Money Manager: Fed Already Planning QE5
“Given the Fed’s history, [increasing the amount of the Fed’s purchases is] the most likely course of action,” Pento told Yahoo. He said Bernanke “doesn’t understand that his balance sheet is unshrinkable.”
Pento predicted the next quantitative easing, which would be QE5 on his scorecard of the Fed’s easy money program, could raise the government’s monthly debt purchases from $85 billion per month to as much as $150 billion per month.
The prevailing sentiment at the Fed, as conveyed by the minutes of its January meeting and by members’ recent remarks, is that the central bank’s efforts to pump tens of billions of dollars into the economy every month should not end anytime soon.

Killing the Dollar: G20 & IMF Push for Global Fed, Global Currency

While headline stories about averting the dangers of an international “currency war” dominated news coverage of the recently concluded G20 meeting in Moscow, the real unreported story is that the global gathering of central bankers and finance ministers is pushing forward with their plan for “supersizing” the International Monetary Fund. The end goal is to transform the IMF into a global Federal Reserve, with the ability to flood the world with huge new volumes of loans and currency. It would also wield vast financial regulatory powers.
The IMF’s unit of account, or “currency,” known as a Special Drawing Right (SDR), is being readied for eventual adoption as the replacement for the U.S. dollar in international transactions, to lead the way toward eventual adoption of the SDR or some other designated unit as the global currency, much in the same way that the euro was foisted upon the people of Europe as a replacement of their national currencies.
The mainstream media seem intent on keeping the public fixated on the latest Kardashian frolics, sportsmania, and Democrat-Republican political mudwrestling, while coverage of the G7, G20, and IMF confabs that are determining the economic fate of the world receive short shrift. And the little reporting of these events that does leak out usually amounts to little more than regurgitation of the pre-scripted talking points of the conference principals. Over the past four years, The New American has published numerous articles detailing the radical plans currently underway for the total destruction of the dollar and the plans for supersizing the IMF into a global Fed. (See the linked stories at the bottom of this article).

Expert: Currency War Will Escalate Worldwide

There is a currency war, insists Gerald Celente, editor and publisher of the Trends Journal, and it’s going to degenerate into all out combat.
Celente’s declaration and forecast stand in sharp contrast to those of global finance leaders who are aiming to bury concerns about a currency war, as the act of competitive currency devaluation is called.
At last weekend’s G20 meeting, the finance leaders promised to “refrain from competitive [currency] devaluation,”

Peter Schiff: “We are headed for a monetary crisis, a dollar crisis

Money manager Peter Schiff predicts, “We are headed for a monetary crisis, a dollar crisis. . . . Money supplies are going to explode, and gold supplies are going to be constricted.”

It Takes a B.A. to Find a Job as a File Clerk

CNBC – by Catherine Rampell, The New York Times
The college degree is becoming the new high school diploma: the new minimum requirement, albeit an expensive one, for getting even the lowest-level job.
Consider the 45-person law firm of Busch, Slipakoff & Schuh here in Atlanta, a place that has seen tremendous growth in the college-educated population. Like other employers across the country, the firm hires only people with a bachelor’s degree, even for jobs that do not require college-level skills.
This prerequisite applies to everyone, including the receptionist, paralegals, administrative assistants and file clerks. Even the office “runner” — the in-house courier who, for $10 an hour, ferries documents back and forth between the courthouse and the office — went to a four-year school.
(Read MoreThe Most Expensive Colleges 2012-2013)
“College graduates are just more career-oriented,” said Adam Slipakoff, the firm’s managing partner. “Going to college means they are making a real commitment to their futures. They’re not just looking for a paycheck.”
Economists have referred to this phenomenon as “degree inflation,” and it has been steadily infiltrating America’s job market. Across industries and geographic areas, many other jobs that didn’t used to require a diploma — positions like dental hygienists, cargo agents, clerks and claims adjusters — are increasingly requiring one, according to Burning Glass, a company that analyzes job ads from more than 20,000 online sources, including major job boards and small- to midsize-employer sites.
This up-credentialing is pushing the less educated even further down the food chain, and it helps explain why the unemployment rate for workers with no more than a high school diploma is more than twice that for workers with a bachelor’s degree: 8.1 percent versus 3.7 percent.
(Read MoreWhy More Than 8% Unemployment Could Lie Ahead)
Some jobs, like those in supply chain management and logistics, have become more technical, and so require more advanced skills today than they did in the past. But more broadly, because so many people are going to college now, those who do not graduate are often assumed to be unambitious or less capable.
Plus, it’s a buyer’s market for employers.
“When you get 800 resumees for every job ad, you need to weed them out somehow,” said Suzanne Manzagol, executive recruiter at Cardinal Recruiting Group, which does headhunting for administrative positions at Busch, Slipakoff & Schuh and other firms in the Atlanta area.
Of all the metropolitan areas in the United States, Atlanta has had one of the largest inflows of college graduates in the last five years, according to an analysis of census data by William Frey, a demographer at the Brookings Institution. In 2012, 39 percent of job postings for secretaries and administrative assistants in the Atlanta metro area requested a bachelor’s degree, up from 28 percent in 2007, according to Burning Glass.
“When I started recruiting in ’06, you didn’t need a college degree, but there weren’t that many candidates,” Ms. Manzagol said.
(Read MoreColleges That Bring in the Highest Paycheck)
Even if they are not exactly applying the knowledge they gained in their political science, finance and fashion marketing classes, the young graduates employed by Busch, Slipakoff & Schuh say they are grateful for even the rotest of rote office work they have been given.
“It sure beats washing cars,” said Landon Crider, 24, the firm’s soft-spoken runner.
He would know: he spent several years, while at Georgia State and in the months after graduation, scrubbing sedans at Enterprise Rent-a-Car. Before joining the law firm, he was turned down for a promotion to rental agent at Enterprise — a position that also required a bachelor’s degree — because the company said he didn’t have enough sales experience.
His college-educated colleagues had similarly limited opportunities, working at Ruby Tuesday or behind a retail counter while waiting for a better job to open up.
“I am over $100,000 in student loan debt right now,” said Megan Parker, who earns $37,000 as the firm’s receptionist. She graduated from the Art Institute of Atlanta in 2011 with a degree in fashion and retail management, and spent months waiting on “bridezillas” at a couture boutique, among other stores, while churning out office-job applications.
“I will probably never see the end of that bill, but I’m not really thinking about it right now,” she said. “You know, this is a really great place to work.”
The risk with hiring college graduates for jobs they are supremely overqualified for is, of course, that they will leave as soon as they find something better, particularly as the economy improves.
Mr. Slipakoff said his firm had little turnover, though, largely because of its rapid expansion. The company has grown to more than 30 lawyers from five in 2008, plus a support staff of about 15, and promotions have abounded.
“They expect you to grow, and they want you to grow,” said Ashley Atkinson, who graduated from Georgia Southern University in 2009 with a general studies degree. “You’re not stuck here under some glass ceiling.”
Within a year of being hired as a file clerk, around Halloween 2011, Ms. Atkinson was promoted twice to positions in marketing and office management. Mr. Crider, the runner, was given additional work last month, helping with copying and billing claims. He said he was taking the opportunity to learn more about the legal industry, since he plans to apply to law school next year.
The firm’s greatest success story is Laura Burnett, who in less than a year went from being a file clerk to being the firm’s paralegal for the litigation group. The partners were so impressed with her filing wizardry that they figured she could handle it.
“They gave me a raise, too,” said Ms. Burnett, a 2011 graduate of the University of West Georgia.
The typical paralegal position, which has traditionally offered a path to a well-paying job for less educated workers, requires no more than an associate degree, according to the Labor Department’s occupational handbook, but the job is still a step up from filing. Of the three daughters in her family, Ms. Burnett reckons that she has the best job. One sister, a fellow West Georgia graduate, is processing insurance claims; another, who dropped out of college, is one of the many degree-less young people who still cannot find work.
Besides the promotional pipelines it creates, setting a floor of college attainment also creates more office camaraderie, said Mr. Slipakoff, who handles most of the firm’s hiring and is especially partial to his fellow University of Florida graduates. There is a lot of trash-talking of each other’s college football teams, for example. And this year the office’s Christmas tree ornaments were a colorful menagerie of college mascots — Gators, Blue Devils, Yellow Jackets, Wolves, Eagles, Tigers, Panthers — in which just about every staffer’s school was represented.
“You know, if we had someone here with just a G.E.D. or something, I can see how they might feel slighted by the social atmosphere here,” he says. “There really is something sort of cohesive or binding about the fact that all of us went to college.”
—Written by Catherine Rampell for The New York Times

Britain's credit rating downgraded from AAA to Aa1

The Government’s economic strategy has been dealt a serious blow after a leading credit ratings agency downgraded UK debt on its expectation that growth will "remain sluggish over the next few years".

David Cameron has 'full confidence' in the Chancellor, Downing Street said
David Cameron has 'full confidence' in the Chancellor, Downing Street said Photo: EDDIE MULHOLLAND
Moody’s announced on Friday night that it had cut the Government’s bond rating one notch from ‘Aaa’ – the highest possible level – to ‘Aa1’.
The move is a significant setback for Chancellor George Osborne, who has faced criticism that his strategy for dealing with UK’s huge debt burden is failing to deliver.
Moody’s pointed to “continuing weakness in the UK’s medium-term growth outlook, with a period of sluggish growth which [it] now expects will extend into the second half of the decade”.
The credit ratings agency also noted that the Government's debt reduction programme faced significant "challenges" and that the UK's huge debts are unlikely to "reverse before 2016".
Moody’s said that despite considerable structural economic strengths, growth is expected to be sluggish due to a combination of weaker global economic activity and the drag on the UK economy “from the ongoing domestic public- and private-sector deleveraging process.”

However, Moody’s, which is the first ratings agency to lower the UK from the highest rating, said the outlook on UK debt is stable.
Mr Osborne responded to the downgrade by insisting he would not change course on the Government’s austerity programme.
He called Moody’s decision a “stark reminder of the debt problems facing our country – and the clearest possible warning to anyone who thinks we can run away from dealing with those problems”.
“Far from weakening our resolve to deliver our economic recovery plan, this decision redoubles it.”
“We will go on delivering the plan that has cut the deficit by a quarter, and given us record low interest rates and record numbersof jobs."
He also took comfort that Moody’s noted that “the UK’s creditworthiness remains extremely high” thanks in part to a “strong track record of fiscal consolidation”.
Mr Osborne added: “[Moody’s] also make it absolutely clear that they could downgrade the UK’s credit rating further in the event of ‘reduced political commitment to fiscal consolidation’.
“We are not going to run away from our problems, we are going to overcome them.”
In his Autumn Statement in December, Mr Osborne admitted public finances were taking longer to address than he had hoped, adding that he would be forced to extend austerity measures by at least another year.
All three major credit agencies last year put the UK on "negative outlook", meaning they could downgrade its rating if performance deteriorates.

Let’s face it; Can you really afford to own a house or a car? It’s becoming something only the rich can afford

Owning items is becoming something of a luxury these days, especially for the younger population. While the parents of the younger crowd out there are sitting pretty in their hard fought paid for homes, the younger crowd are being shut out. Mainly because they just can’t afford the debt burden. This goes for cars as well. The younger crowd just can’t swing the debt as easily as their parents could. It’s becoming a luxury to do so. The few that are lucky enough to do so are either getting big time help from their parents, or they have hit the lottery.
Many adults can no longer afford their homes as well as a car. Just too damn expensive. If they are buying, they are mainly rich overseas investors looking to take what we once had. Many are snatching up all of America’s homes in the wealthier neighborhoods.
Even if younger Americans have well paying jobs they’re not buying. The American dream has been dealt a lousy hand as all of the Bankster cheating and BS has hit our landscape. Because of all of the exposed fraud that American banks have been involved in, causing our economy to crater, homes and cars are taking a back seat.
After all, when you have small business closing their doors at a monumental pace you have to ask yourself, how are you supposed to pay for these items? We have been fed a bunch of Gobble de Gook about how well our economy is picking up and how the housing starts are rising at a record pace.
I tend to differ.
American business closures so far this year: Only 26 days worth…..Not good
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Do not believe the BS you are hearing on the idiot boxes people. Obviously, as proved above, owning a home or car is becoming impossible.