Dua pertubuhan bukan kerajaan (NGO) hari ini mendedahkan penglibatan
Ketua Menteri Sarawak Tan Sri Abdul Taib Mahmud bersama anaknya, Datuk
Seri Mahmud Abu Bekir Taib, dalam satu perjanjian perniagaan bernilai
RM6.6 juta (AS$2 juta) dengan sebuah syarikat berpengkalan di Jerman.
Pembongkaran perjanjian tersebut didedahkan hari ini oleh dua NGO,
Global Witness dan Centre to Combat Corruption and Cronyism (C4) dua
hari sebelum Taib dijangka mengambil alih jawatan Yang di-Pertua
Negeri (TYT) Sarawak daripada Tun Abang Muhammad Salahuddin Abang
Barieng yang akan bersara 28 Februari ini.
Taib dan anaknya, Abu Bekir, terlibat dalam perjanjian lumayan dengan
syarikat pengurusan sisa Trienekens dengan kerajaan Sarawak pada 1998.
Syarikat berpengkalan di Jerman itu juga sebelum ini pernah terlibat
dalam kes rasuah pada 1999.
"Trienekens menjalankan kerjasama dengan syarikat tempatan, Sarawak
Capital, yang dimiliki anak Taib Mahmud untuk memberikan 'khidmat
nasihat' bernilai RM6.6 juta sebagai sebahagian daripada perjanjian,"
kata NGO tersebut dalam satu kenyataan hari ini.
Menurut Global Witness, penglibatan anak Taib tersebut mempunyai konflik kepentingan.
"Secara faktanya, nilai besar yang dibayar kepada syarikat anak Taib
sebagai sebahagian daripada perjanjian kelihatan mempunyai konflik
berkepentingan," kata Cynthia Gabriel pada sidang media petang ini. NGO
tersebut mendakwa anak Taib juga turut bersama menandatangani
perjanjian persefahaman yang dimerterai antara Sarawak Wastes Management
Sdn Bhd sebagai wakil kerajaan Sarawak dengan syarikat Jerman tersebut.
"Ia masih tidak jelas mengapa anak Ketua Menteri Sarawak perlu menjadi
saksi dalam perjanjian bernilai besar tersebut antara kerajaan negeri
dan firma antarabangsa," katanya lagi.
Global Witness mendakwa pakar perundangannya mendapati perjanjian
dengan syarikat milik anak Taib, Sarawak Capital, hanyalah sebuah
"perjanjian".
Syarikat milik anak Taib tersebut didakwa tidak terikat dalam kewajipan kontrak dalam "skop kerjanya".
"Pada pandangan kami, perjanjian ini menunjukkan wujudnya sogokan
tersembunyi; tidak kelihatan Sarawak Capital membuat sesuatu ke atas
wang mereka peroleh dan tidak munasabah mempunyai nilai komersil," kata
Gabriel.
Trienekens dan Sarawak Capital bagaimanapun masih belum memberi jawapan
kepada Global Witness walaupun sudah dihubungi NGO tersebut.
Namun, firma guaman di London, Mishcon de Reya yang mewakili Taib
menafikan anak guamnya terlibat dalam "perjanjian palsu" selepas maklum
balas dihantar oleh Global Witness.
"Perjanjian yang anda rujuk bukan 'perjanjian', juga bukan sogokan sama
ada tersembunyi atau sebaliknya," kata firma guaman tersebut.
Bagaimanapun, Global Witness melahirkan kesangsian ke atas perjanjian
tersebut memandangkan CEO Trienekens Hellmut Trienekens pernah didapati
bersalah terlibat dalam rasuah bernilai jutaan euro kepada pegawai
tempatan menerusi Switzerland untuk membina sebuah insinerator sisa di
Cologne, Jerman.
Susulan perkembangan terbaru di mana Taib kemungkinan dilantik sebagai
TYT Sarawak, Gabriel yang merupakan pengerusi C4, mendesak Putrajaya
menyiasat pendedahan terbaru ini.
"Kes ini melibatkan kepentingan awam yang perlu disiasat oleh
Suruhanjaya Pencegahan Rasuah Malaysia (SPRM)," kata Gabriel yang
mendesak SPRM supaya campur tangan dan menyiasat Taib.
"Kami desak pentadbiran Najib menangguhkan pelantikan Taib Mahmud sebagai TYT sehingga perkara ini selesai diteliti."
Tekanan kepada Taib supaya tidak dilantik sebagai TYT semakin ketara,
minggu lalu sekumpulan 50 NGO melancarkan petisyen dalam usaha
menghalang pelantikan ketua menteri Sarawak yang didakwa mereka seorang
perasuah dan menyalahgunakan kuasa sepanjang 33 tahun pemerintahannya.
Satu kajian oleh Bruno Manser Fund (BMF) mendedahkan harta Taib
mencecah AS$15 bilion (RM46 billion) dan 20 ahli keluarganya mengumpul
harta hampir AS$21 bilion (RM64 bilion).
Pada 16 Februari lalu, BMF yang berpengkalan di Switzerland juga
membuat laporan polis ke atas keluarga Taib atas dakwaan penyeludupan
balak haram di Kanada, malah PAS juga menggesa SPRM membuka kertas
siasatan ke atas ketua menteri tersebut.
BMF berkata, satu laporan polis dibuat kepada Royal Canadian Mounted
Police, berdasarkan "bukti baru" yang mendapati wujud kaitan kewangan
antara Richfold Investments di Hong Kong dengan Sakto Development
Corporation di Ottawa, Kanada.
Sakto Development Corporation adalah sebuah syarikat pemaju jutaan
ringgit yang dimiliki oleh anak perempuan Taib, Jamilah Taib Murray. –
27 Februari, 2014.
According
to a stunning new report from the U.S. Department of Agriculture,
nearly a third of all food produced in the United States gets
wasted. We are probably the most wasteful society in the
history of the planet, and we are also one of the most gluttonous.
More than 35 percent of all Americans are considered to be officially
“obese” by the Centers for Disease Control and Prevention.
Unfortunately, this era of gluttony and taking food for granted will
soon be coming to an end. Thanks to crippling drought in key
growing areas and other extremely bizarre weather patterns, a massive
food crisis is beginning to emerge all over the planet. If you
don’t think that this is going to affect you, then you simply are
not paying attention. Approximately
half of all produce grown in the United States comes from
the state of California, and right now California is suffering
through the worst stretch of drought on record. Food prices are
going to start
soaring, and that is going to affect the household budget of
every family in America.
Needless
to say, a time is coming when Americans will not waste food so
recklessly. But for the moment, we still have a tremendous
amount of disrespect for the value of food. According to the
U.S. Department of Agriculture, we waste a staggering 133
billion pounds of
food each
year…
Nearly
a third of
the 430 billion pounds of food produced for Americans to eat is
wasted, a potential catastrophe for landfills and a wake-up call to
officials scrambling to feed the hungry, according to a stunning new
report from the Department of Agriculture.
The just-issued report revealed that in 2010,
31 percent, or 133 billion pounds, of food produced for Americans to
eat was wasted, either molded or improperly cooked, suffered “natural
shrinkage” due to moisture loss, or because people became
disinterested in what they purchased.
Not
that we need to stuff any more food into our mouths. As I
mentioned above, we have an epidemic of obesity in this nation.
In fact, the CDC says that 35
percent of the entire population is “obese”…
Meanwhile,
according to the Centers for Disease Control and Prevention, more
than one-third of US adults (35.7
percent)
are obese, which is perhaps the best argument that Americans can
offset a large part of the food waste problem by simply eating less.
The estimated annual medical cost of obesity in the US was $147
billion in 2008; the costs of providing medical assistance for
individuals who are obese were $1,429 higher than those of normal
weight, thereby placing an enormous strain on healthcare costs.
Since we are such gluttons and we are so
incredibly wasteful, we should have plenty of food to share with
those in need, right?
Unfortunately, we are also extremely greedy and
greatly lacking in compassion.
Feeding the
homeless is about to get harder as a new policy is set to begin this
Saturday, Feb. 15, in Columbia, SC. Charities and non-profits will be
requiredto
pay a fee and obtain a permit 15 days in advance in
order to feed the homeless in parks.
One impacted charity that was interviewed by
the Free Times, Food Not Bombs, has been serving food to the homeless
in Finlay Park every Sunday for 12 years. The group’s organizer,
Judith Turnipseed, noted that the group has an impeccable track
record and always tidies up after the meal. But with the new
crackdown, Food Not Bombs will have to pay at least $120 per week for
the right to feed the homeless.
Since the Columbia City Council approved its
exile plan in August, the city has been trying to herd its homeless
people to a shelter on the outskirts of town and keep them away from
downtown. If charities continue to provide food in downtown parks,
the thinking goes, it will allow homeless people to continue to live
downtown, rather than being forced to leave.
What is wrong with us?
While we stuff our faces with more french fries
and chicken wings, we have an appalling lack of compassion for those
that are not able to take care of themselves.
Perhaps we deserve what is coming.
The horrible drought that never seems to end is
rapidly turning much of the western half of the country into a barren
wasteland.
You
can see some incredible before and after photos of the drought in
California right
here.
The
water level in Folsom Lake has dropped 80
percent in just two years. In 2011, the lake was at 97
percent of capacity. Now it is just at 17 percent of capacity
and it is still dropping.
If
a miracle does not happen, the upcoming growing season is going to be
absolutely disastrous. As I have written about previously,
California farmers have already decided to allow half a million acres
of farmland to sit idle this year because of the extremely dry
conditions.
And
it certainly does not help that the government has decided to cut off
water supplies to many of the farmers. The following is an
excerpt from a recent article by
Holly Deyo…
Government
has lost its mind. It is no more evident than their decision last
week to cut off water to America’s food basket. Squeezed by the
worst-ever drought in the state’s history, California is dying of
thirst. Crushing news was delivered to farmer’s that no
water would
be coming from the Federal government. This dreaded decision was
compounded by the Sierra Mountains getting just
25% of normal snowpack.
There is no water to replenish already dangerously low reservoirs, so
no water for farmers.
Needless
to say, there are a lot of farmers that are going to be absolutely
crippled by this. The following is from Fox
News…
A federal agency’s recent announcement that
the California’s Central Valley will get zero percent water
allocation this year was devastating for farmers already dealing with
the worst drought seen in decades.
One of the
world’s most productive agricultural regions, the enormous valley
is reeling after the
driest year in more than a century.
But last week, the Department of Interior’s Bureau of Reclamation,
which supplies water to a third of the irrigated farmland in
California through a 500-mile network of canals and tunnel, said it
won’t be able to deliver any
of the water sought
by farmers.
“It
goes beyond
devastation,
you’re going to see farms that have been in
business 30 and 40 years,
they do not have any water, they are out of business,” said Dennis
Falaschi, general manager of the Panoche Water District.
If
California produces much less food than it normally does, that means
that food prices are going to start skyrocketing. Here is more
from Holly Deyo…
As one
Millennium-Ark reader pointed out in an email last week, after
the jump
in beef prices, people will look to chicken, pork, fish and
turkey. Chicken
is already up though not as much as beef. This will,
in turn, drive up their costs and affect availability of these other
meats. Keep in mind that California also produces all of these
proteins plus lamb.
Then consider this: Ag
Specialists Warn of Higher Wheat Prices Due to Drought. It’s
not just beef, weather is clobbering food from all angles.
And
please keep in mind that the total size of the U.S. cattle herd has
already been shrinking for seven years in a row, and that it is now
the smallest that it has been since
1951.
But back in 1951, the size of the U.S.
population was less than half of what it is today.
For
much more on the emerging food crisis, please see this
video.
Let us certainly hope and pray that the drought
in California ends soon and that things get back to normal.
But I wouldn’t count on that.
According
to National
Geographic, the scientific experts that have studied these things
tell us that it has been quite common throughout history for that
region of North America to suffer through extended droughts that last
for a decade or more.
One
drought even lasted for about 200
years.
So the current drought in California might end
next year.
Or it might last for the rest of our lifetimes.
We simply do not know.
But what does seem clear is that the days of
taking our food for granted will soon be coming to an end.
Our lead
story: Erin looks at a landmark deal between Comcast and Netflix this
past weekend that gives Netflix direct access to Comcast’s broadband
network. This agreement removes Internet middlemen like Cogent
Communications and Level 3, which Netflix previously used to send its
content to broadband providers. Now Netflix has cut out these middle
players so that it has a direct pipeline to Comcast. So instead of
public pipes for the Internet at large, Netflix got its own pipe, and
set a terrible precedent.Doug Casey calls in from Punta
del Este, Uruguay to give us his assessment of China and why he thinks
that 21st Century is a Chinese century. In this segment, he explains why
he thinks central banks will lead to greater higher inflation and
economic volatility in the near future; extols gold and explains why you
should buy it; and warns why economic nationalism by governments could
threaten economies throughout the world. After the break, Casey talks
about water scarcity, the rising price of oil extraction, and how
financialization and militarization hurt the US economy.In today’s Big Deal, Erin
welcomes Ed Harrison back to talk about Abenomics and what it is trying
to do to overcome Japan’s economic problems. Harrison expects Abenomics
to eventually fail since wages remain stagnant despite the recent
inflation numbers. He also explains why he thinks that the United States
could become the next Japan.
Image: James Stuart
The dismal trail of dead
bankers continues. As The
Journal Star reports, a successful Lincoln businessman and member
of a prominent local family died last week. Former
National Bank of Commerce CEO James Stuart Jr. was found dead in
Scottsdale, Ariz., the morning of Feb. 19. A family
spokesman did not say what caused the death. This brings the total of
banker deaths in recent weeks to 9 as Stuart is sadly survived by
three sons and four daughters. Mr Stuart’s background(via The
Journal Star):
Stuart was a native of Lincoln and graduated from the
University of Nebraska-Lincoln with a degree in Business
Administration.
In 1969, Stuart joined Citibank in New York City and
served as a loan officer until 1973, when he joined First Commerce
Bancshares (then NBC Co.) as executive vice president. He
was named president in 1976, chairman and CEO in 1978, and also
became chairman and CEO of National Bank of Commerce in 1985. Stuart
spent his life building the organization into an important business
voice in Lincoln, friend and colleague Brad Korell said.
He was a very successful banker,” said
Korell, who worked with Stuart for more than 30 years. “I always
felt that he was a visionary. He really did build one of the most
successful and admired banking organizations in the Midwest.”
Stuart spent much of his career with First
Commerce Bancshares, a $3 billion multi-bank holding company
headquartered in Lincoln. First Commerce was sold to Wells Fargo in
2000.
He is a former member of the Nebraska Game and Parks
Commission and was appointed by Gov. Dave Heineman to the board of
the Nebraska Environmental Trust in 2008. Stuart was also involved
with natural resources-related groups such as Nature Conservancy,
Ducks Unlimited and U.S. National Forest Foundation.
He served on the international board of the Juvenile
Diabetes Foundation and the boards of the University of Nebraska
Foundation and Nebraska Wesleyan University.
According to Korell, Stuart was living in
Scottsdale, overlooking his family’s financial investments, as well
as golfing and fishing.
Which brings the total number of recent banker deaths to
9 (via
Intellihub): 1 – William Broeksmit, 58-year-old former
senior executive at Deutsche Bank AG, was found dead in his home
after an apparent suicide in South Kensington in central London, on
January 26th. 2- Karl Slym, 51 year old Tata Motors
managing director Karl Slym, was found dead on the fourth floor of
the Shangri-La hotel in Bangkok on January 27th. 3 – Gabriel Magee, a 39-year-old JP Morgan
employee, died after falling from the roof of the JP Morgan European
headquarters in London on January 27th. 4 – Mike Dueker, 50-year-old chief economist of
a US investment bank was found dead close to the Tacoma Narrows
Bridge in Washington State. 5 – Richard Talley, the 57 year old
founder of American Title Services in Centennial, Colorado, was found
dead earlier this month after apparently shooting himself with a nail
gun. 6 -Tim Dickenson, a U.K.-based communications
director at Swiss Re AG, also died last month, however the
circumstances surrounding his death are still unknown. 7 – Ryan Henry Crane, a 37 year old executive
at JP Morgan died in an alleged suicide just a few weeks ago.
No details have been released about his death aside from this small
obituary announcement at the Stamford Daily Voice. 8 – Li Junjie, 33-year-old banker in Hong Kong
jumped from the JP Morgan HQ in Hong Kong this week.
Delivered by The
Daily Sheeple
24/02/2014
– Marc Faber, author of ‘The Gloom, Boom & Doom Report’, foresees
investors will fly out of US equities in 2014 and shares where he is
putting his money.
We don’t want to cause you unnecessary stress
or worry, but it might be prudent to pay attention to a series of
unusual news reports recently emanating from the banking world.
Viewed independently, each event might be rather insignificant.
However, when examined collectively, these
events paint a very dire warning for the safety of bank deposits
everywhere. Naturally, most all of these have received little
to no coverage by the mainstream media. That is to be expected.
The mainstream media’s job one is to always
obfuscate any potentially dangerous news that has a chance of
frightening investors or depositors. After all, the goal of the
world banking cartel/equities Ponzi scheme is to keep depositors and
investors relaxed and passive in their comfort zones until the
complete collapse of their positions is unavoidable.
Here is a timeline of these very disturbing
banking events that have occurred since last fall:
1 – October 3, 2013:USbanks
fearing default stock up on cash. The Financial
Times reported today that two of the country’s biggest
banks are putting into place a “play book” as preparation for a
possible banking panic. A senior banking executive reported
that his bank has delivered 20 – 30% more cash than usual in cash
panicked customers try to withdraw cash in mass.
2 – October 12, 2013:Food
stamp card malfunction causes riots at Walmart stores in
Louisiana. The technical problem that eliminated
spending limits on food stamp debit cards sets off a bizarre shopping
frenzy at Walmart stores in Louisiana.
3 – November 2 – 8, 2013:A
reputed computer glitch wipes out ATMs and online banking on a
massive scale. Major shutdowns of online banking
occurred in Alabama, Arizona, and California and affected such banks
as Wells Fargo, Chase, Bank of America, Compass, Chase Fairwinds
Credit Union, American Express, and others. Tellers reportedly
had a hard time with even simple transactions such as check cashing
and checking balances. Rumors circulated on the internet that
the banks are using this temporary shutdown as a beta test for a
future full bank “holiday” closure.
4 – November 17, 2013:JP
Morgan Chase halts international wire transfers from the US for many
small businesses. Also, Chase alerted it small business
customers that the total cash activity (the combined total of cash
deposits and withdrawals made at Chase branches and ATMs, including
money orders and cashier’s checks) is hereby limited to a total of
$50,000 per business customer per billing cycle.
5 – January 16, 2014:Reports
from Hong Kong indicate another HSBC scandal: an $80B
capitalization shortfall. Forensic Asia, a Hong Kong
based research firm, issued a “sell recommendation” on HSBC
because of “questionable assets” on its balance sheet.
The London Telegraph reported Forensic Asia’s
warning that HSBC “had between $63.6B and $92.3B of ‘questionable
assets’ on its balance sheet, ranging from loan loss reserves and
accrued interest to deferred taxes.”
6 – January 24, 2014:HSBC
imposes restrictions on cash withdrawals in Britain.
Reports circulated that British HSBC customers have been suddenly
refused cash withdrawals as low as 3,000 pounds. HSBC admitted
that it did not inform its customers of the abrupt policy change.
HSBC officers putatively suggested that it is “only for the
protection of its customers.”
7 China’s Banking Problems are
Escalating Fast. Beijing based ICBC, the world’s
largest bank by assets, announced it will not take full
responsibility for a trust investment equivalent to US $500 million
that may go bust. ICBC, one of China’s “Big Four” banks,
may be linked to a loan default very similar to the type that
precipitated the Lehman Brothers crisis in 2007.
In fact, this may be only the tip of the
iceberg that has an outside chance of bringing down the entire
Chinese banking world. This ICBC “trust investment” is
actually one of a vast array of loans that comprises China’s secret
shadow banking system. It is estimated that China’s total
shadow banking debt is now in excess of $4.7 trillion – a
staggering figure for any market, let alone an unregulated one.
It is believed that much of this secret lending system is fraught
with high interest, high risk loans that contain a strong possibility
of default. Any major failure in this market can only have
catastrophic outcomes, for not only markets in China, but for all
types of markets worldwide.
8 – January 28, 2014:One
of Russia’s top two hundred lenders, “My Bank,” introduces a
one week complete ban on cash withdrawals. The reputed
reason is customer wishing to exit the declining ruble in exchange
for other currencies.
9 – February 17, 2014:Chase
imposes imposes new capital controls on cash deposits.
Chase alerted customers that they must now present a valid ID when
making any cash deposit and that the bank will now only accept cash
deposits in the customer’s own account. As of February 1,
2014, Chase customers are asked for ID for cash deposits for their
account while cash deposits for another customer’s account will be
completely banned after March 3, 2014.
Some analysts speculated that such measures are
a sign that banks are getting ready for economic turmoil and possible
bank runs.
10 – February 20, 2014:Royal
Bank of Scotland group announces lay-offs of 30,000 employees in
coming months. The Financial Times reported
that Britain’s largest state owned lender will shrink its work
force by 30,000 and also pull out of “dozens of the 38 countries”
in which it does business. As initially reported in Bloomberg
(but later revised for online posting), this dramatic pull-back by
RBS (which is 80% government owned), was strongly encouraged by
British Prime Minister David Cameron, who undoubtedly has become
concerned by the bank’s overextension in non-British markets.
(A special thanks to David Lenihan of Wavesync Research LLC, for the
tip on this story)
Our question, dear reader, is why any sane
person would wish to risk their hard earned money in any of today’s
banking institutions, especially when they are paying ridiculously
low returns substantially below the real rate of inflation.
From our perspective, another Lehman Brothers, Iceland banking
collapse, or Cyprus depositor bail-in confiscation is in the making.
Do you really want to entrust your hard earned savings to these
completely irresponsible institutions? If you don’t, please
consider precious metals investment as an excellent alternative.
To
learn more about the rewards of precious metals investing, including
how to fund your existing IRA with gold or silver, call Liberty
Gold and Silver seven days a week at 888.751.3330. To learn
about the most generous referral program in the precious metals
industry, please visit the Liberty
Gold and SilverReferral
Program. We’re happy to spend as much time as you need to
discuss the details with you.
Former
(unelected*) Italian prime minister Mario Monti has been handed the
thorny task of finding new sources of funding for the EU budget,
European authorities announced on Tuesday.
Europe's leaders are hoping Monti's pedigree will help in formulating
new funding ideas to avoid the deadlock that occurs every seven years
when the 28-member bloc debates its common budget.
Aware of the uphill challenge he faces in leading a working group on
the subject, Monti joked that one of the reasons he took the job was "a
great curiosity about a subject that is practically impossible to
resolve."
Source and full story: The Local (Italy), 26 February 2014
* added by Tom, not in the original
(Reuters)
- Bank of America Corp may have a new mortgage problem on its plate,
saying on Tuesday that federal investigators are looking into whether
the bank violated requirements of a U.S. government housing program.
The second-largest U.S. bank said the civil division of
the U.S. Attorney's Office for the Eastern District of New York in
Brooklyn is investigating Bank of America's compliance with the rules of
the Federal Housing Administration's Direct Endorsement Program. Bank
of America made the disclosure in its annual report filed on Tuesday
with the U.S. Securities and Exchange Commission.
Spokesmen for Bank of America
and U.S. Attorney Loretta Lynch declined to provide additional details
on the probe.
The Charlotte, North Carolina-based
bank also said in the filing that government authorities in North
America, Europe and Asia are investigating the bank's conduct and
practices in foreign-exchange markets as part of a broader industry
inquiry.
The FHA program has been at the center of
cases brought by U.S. Attorney Preet Bharara, who is Lynch's counterpart
in Manhattan. In 2012, Citigroup Inc agreed to pay $158.3 million and
Deutsche Bank AG agreed to pay $202.3 million to settle cases, while a
third case is pending against Wells Fargo & Co.
Under the program, mortgage lenders such as Bank of America are given
the authority to approve home loans that the federal government then
insures without further review. If the mortgage defaults and it is later
determined that the lender did not follow FHA underwriting standards,
the FHA can demand to be reimbursed for any losses.
JPMorgan Chase & Co agreed in early February to pay $614 million to
settle claims that it defrauded the FHA and the Department of Veterans
Affairs by making sub-standard mortgage loans.
In
February 2012, Bank of America agreed to $1 billion in payments to the
federal government to settle separate claims that its Countrywide home
loan subsidiary made FHA-insured mortgages to unqualified borrowers.
That settlement covered loans made before April 30, 2009.
Bank of America raised its estimate of overall litigation costs
to as much as $6.1 billion above what it has already set aside, up from
an estimate of $5.1 billion at the end of the third quarter, according
to its SEC filing.
GETTING A CAPITAL BOOST
The bank also disclosed in the filing an agreement with
Warren Buffett's Berkshire Hathaway Inc that could give it an additional
$2.9 billion in capital.
Berkshire acquired a
special class of preferred stock in Bank of America in 2011 as part of a
larger $5 billion investment. Under international regulatory capital
rules that U.S. regulators finalized in 2013, that preferred stock would
not have counted toward the bank's capital ratios.
But in exchange for agreeing not to redeem the preferred stock for five
years, Berkshire agreed to change the terms of the investment so that
it counts for Tier 1 capital purposes. The new terms include a fixed
annual dividend of 6 percent and the removal of a provision that would
have let Berkshire receive additional payments if the bank missed a
dividend.
The deal is subject to shareholder
approval. An amendment will be put to a vote at the bank's annual
meeting in May.
(Reporting by Peter Rudegeair in
New York; Additional reporting by Nate Raymond, Jonathan Stempel and
Karen Freifeld in New York; Editing by Andrew Hay, Lisa Shumaker and Jan
Paschal)
Gold
may post its fourth week of gains as concern of prolonged political
unrest in Ukraine raises fears of a sovereign default, fueling demand
for safe-haven assets including bullion.
Well China gave it right back to the U.S. right where it Hurts!
The U.S. of course accuses China of having financial problems and putting the 'Global Economy' at risk.
China stood up to the U.S. bullying and told the truth about the U.S.
economy and the printing press of the Federal Reserve. They said the
U.S. was living off printed money and the U.S. economy was fake and
there was nothing really backing the 'prosperity' of the U.S.
China obviously knows the U.S. is running on fumes and was not going to
stand for the U.S. trying to bully them. The U.S. is going down in
stature in every respect.
Portion From article:
Atthemeetingof G20 FinanceMinistersandCentralBankGovernorswhichconcludedon February 23, ChinaandtheUSengagedinavigorousdebateonChina'seconomicreforms.Beforethemeeting, AmericanTreasurySecretaryJacobLewhadcriticizedChinaforitsfailuretoshowanysignsofacceleratingeconomicreforminlinewith U.S. expectations,and calledforChinatospeedupreformsthoughfacingtheriskofsocialandpoliticalturmoil.ChineseFinanceMinisterLouJiweirespondedinkindbypointingoutthattheUShadnot engagedinanystructuralreformeither, but had revitalized its economy by printing money.
Lew wrote to G20 members voicing his concerns about bad debt in the Chinese financial system, which may threaten the global economy. LouJiweirespondedthatChina'sshadow bankingproblemwaslessseriousthanwesterneconomies, sinceChina's shadow banking was still connected with the real economy;while the shadow banking products of western economies, such as CDS (credit default swap),havenothingtodowithrealeconomic activity.
The epicenter of the U.S. foreclosure crisis is shifting to New Jersey and New York, threatening a housing rebound in one of the country’s most densely populated areas.
New Jersey has surpassed Florida
in having the highest share of residential mortgages that are seriously
delinquent or in foreclosure, with New York third, a Mortgage Bankers
Association report showed last week. By contrast, hard-hit areas such as
Arizona and California have some of the lowest levels of soured loans after allowing banks to quickly foreclose after the 2007 property crash.
The
number of New York and New Jersey homeowners losing their houses
reached a three-year high in 2013. Banks in these states have been
slowly working through a backlog of delinquent loans that enabled
borrowers to skip mortgage payments for years. Now these properties are
poised to empty onto a market where affluent Manhattan suburbs neighbor
blighted towns that are struggling most with surging defaults.
“It is really a delayed reaction in New Jersey and New York,” said Michael Fratantoni, chief economist for the Mortgage Bankers Association in Washington.
“Loans that were made pre-crisis have been in this state of suspended
animation for a number of years. And now, we are beginning to see the
pace of resolution pick up.”
Photographer: Spencer Platt/Getty Images
A resident stands outside of his home as community activists and members of the Occupy... Read More
Filings Plunge
In January, the number of New York
foreclosure auctions reached 527, the highest monthly level since
October 2010, according to data firm RealtyTrac. Foreclosure filings in New York City increased 30 percent to 15,993 in 2013, a three-year high, according to RealtyTrac.
Almost
10,000 cases in New Jersey headed to a sheriff sale in 2013, 47 percent
more than the year before and the highest level since 2009, according
to the New Jersey Administrative Office of the courts. Across the
country, repossessions fell 31 percent in 2013 to the lowest since 2007,
according to RealtyTrac.
The difference in New York and New
Jersey stems partly from a foreclosure process that requires court
approval before lenders can seize homes. It takes 1,029 days on average
to foreclose in New York, the longest timeline in the U.S., followed by
New Jersey at 999 days and Florida, at 944 days, RealtyTrac data show.
Delays
were worsened by negotiations between top banks and state attorneys
general over alleged foreclosure abuses that ended with a $25 billion
settlement in 2012. Superstorm Sandy, which damaged homes and businesses
in coastal northeast communities in 2012, also slowed the process.
New York Trailing
The
real estate markets in New York and New Jersey are trailing the rest of
the country as a result. Prices in New Jersey, the most densely
populated state, climbed 2.9 percent in the fourth quarter from a year
earlier, compared with a 7.7 percent jump for the U.S, the Federal Housing Finance Agency said yesterday. New York values rose 3.7 percent.
California
prices surged 19.5 percent and Arizona’s gained 15.2 percent. These
states do not have a judicial foreclosure process.
“Price
increases that are occurring in the rest of the country are not likely
to happen in the New York-New Jersey area, with the potential inventory
that can come at any time,” said Lawrence Yun, chief economist of the National Association of Realtors.
“When
one sees a price increase in Phoenix or many other parts of the
country, one can assume it’s a genuine increase from falling inventory,”
he said. “If it happens in Edison, New Jersey, or Long Island, New York, one has to ask, ’Is this for real or just temporary?”
Commission Income
Jon
Pardi, a 62-year-old resident of Edison, is among those facing eviction
after he stopped making house payments in mid-2012. Last month, a judge
gave Pardi six months to generate enough income so that he could work
out a modified payment arrangement with his loan servicer, Ocwen Financial Corp. (OCN), or lose his home to foreclosure, he said.
Pardi
said he could no longer pay his loan because his commission-based
income as a mortgage broker dropped to $20,000 a year from a peak of
more than $100,000. Having little confidence in New Jersey’s housing
market rebounding, and the career prospects for loan officers, Pardi is
training to become a holistic nutritionist.
“My odds are down
but the chances of saving my home aren’t zero,” Pardi said. “If I start
making money again, everything changes. But if jobs don’t come back for me, and for my country, then it’s going to keep moving in a down direction.”
Ocwen,
which declined to comment on specifics of the case, citing privacy
considerations, said it hasn’t made a decision and hasn’t received the
necessary documentation from the borrower.
Ocwen Response
“Ocwen
has been working hard to provide a modification or other resolution for
this borrower,” since the servicing of the loan was transferred late
last year from the prior servicer, the company said in an e-mailed
statement.
Phyllis Salowe-Kaye, executive director of New Jersey
Citizen Action, said many borrowers who aren’t paying their mortgages
don’t put that money aside.
“Some people put money away, but
most people are not paying for their house because they don’t have it,”
Kaye said. “Why they don’t have it is often due to lack of employment or
underemployment.”
Moving Quicker
Lenders in New
Jersey are pushing cases through more quickly and it now takes about two
months to process final judgments against delinquent homeowners,
compared with a backup of nine months a few years ago, said Kevin Wolfe,
assistant director of the Civil Practice Division in the Administrative
Office of the Courts.
The Office of Foreclosure, which reviews
case files before they can move to the final step of sheriff sale, has
added four permanent staff members, six law clerks and 10 case analysts
since 2012. It previously had seven employees.
“We are staffed
up to move these cases faster,” Wolfe said. “But the other reason cases
are moving more quickly is that lenders have improved their foreclosure
practices and worked out logistics with their law firms and, as a
result, they’re geared up to handle foreclosures more efficiently.”
Private-equity firms such as Blackstone Group LP (BX) -- which helped drive up prices by buying thousands of single-family homes to rent in Arizona, Nevada,
California and Florida -- have steered clear of the Northeast. Large
investors favor markets with newer construction and demographic growth
rather than the Northeast’s aging homes and higher property taxes, said
Sam Khater, senior economist for CoreLogic.
Hedge Funds
Some
hedge-fund investors are instead purchasing delinquent mortgages in the
New York and New Jersey area. They are discounted because of the legal
delays, said Jeff Taylor, managing partner at Digital Risk, a
mortgage-risk analytics firm.
The investor strategy is to avoid
court delays by modifying loans, and if that’s not feasible, to pay
homeowners to handover keys or sell for less than what’s owed, Taylor
said. That may help flush out the pipeline of delinquencies.
“The
sooner that this inventory that has been pent up gets to the market
place the quicker you’re going to see more home price appreciation,”
Taylor said. “It gets the overall real estate market healthier quicker.”
Housing inventory remains tight in the U.S., with a 4.6 month
supply in December, according to the National Association of Realtors.
New Jersey had a 6.6 month supply, the New Jersey Association of
Realtors data show. A six-month inventory is considered equilibrium
between buyers and sellers.
Urban Areas
While investors may help the market, they are generally avoiding hard-hit neighborhoods in cities such as New Jersey’s Newark,
Irvington, Elizabeth, Trenton and Camden, according to Jeffrey G.
Otteau, president of Otteau Valuation Inc. in East Brunswick. About 21
percent of New Jersey foreclosures are in urban areas and another 18
percent are in towns hit by Sandy. Only 4 percent are in the southern
suburbs and 2.5 percent in the northern ones, Otteau said.
“There
is a crisis, and where that crisis will play out is in inner, urban
neighborhoods where unemployment is highest, credit scores are lowest
and investor appetite is non-existent,” Otteau said.
Eminent Domain
Newark,
the state’s most populous city, and nearby Irvington are considering
plans to use government power to seize underwater mortgages to help
homeowners reduce debt and avoid foreclosure. The cities are researching
a program that would offer fair-market value for the loans and reissue
them to homeowners who can afford to keep making payments at the lowered
amount.
Many largely black and Hispanic communities in New
Jersey and elsewhere were targeted for predatory loans during the boom,
said Linda E. Fisher, law professor at Seton Hall University, who is helping the cities research the eminent domain proposal.
Fisher
is also campaigning with residents on her block in the town of
Montclair to encourage the bank, which owns a vacant property two doors
down from her, to clean it up and resell it. The house, which has been
empty for three years, was stripped of pipes. It attracted squatters who
moved in a stove and a flat screen television, she said.
Montclair, home of comedian Stephen Colbert, is a leafy commuter town with hundreds of shops and restaurants accessible by foot.
“Here
we are in our middle- and upper-middle-class community and we’re seeing
the same problem of poor maintenance by servicers,” Fisher said. “The
foreclosure crisis has had ripple effects and it is not limited to poor
communities of color where it’s concentrated.”
Forced Move
About
a 15-minute drive south of Fisher, a court officer knocked on the door
of the two-story home on Newark’s west side that Janet Hopes-Edrington
shares with her elderly parents. The officer served her with foreclosure
papers. Hopes-Edrington, 50, said she had filed the necessary paperwork
to modify the terms of payments with her lender in December and was
surprised to learn it was pursuing a foreclosure. Now, she’s
contemplating having to move along with her infirm parents.
Hopes-Edrington, who lives on Social Security disability benefits, fell behind on her mortgage after losing her job at the Internal Revenue Service and hasn’t made a mortgage payment since July 2012.
“That’s the thing that’s getting me, I can’t easily relocate,” she said. “I have no idea what I’m going to do.”
Taxpayer owned Royal Bank of Scotland
is set to reignite the row over pay tomorrow when it will reportedly
reveal a £550million staff bonus pot despite slumping into the red with
an expected £8billion annual loss. The
lender has agreed the bonus windfall with UK Financial Investments, the
body charged with managing government stakes in banks, according to Sky
News. This would be a drop
on the £607million haul for 2012, although this is partly expected
given the significant headcount reduction in its investment banking
team.
Big loss: RBS, which is just over 80 per cent
owned by the taxpayer, is thought to be heading for an annual loss of
close to £8billion for 2013
The bonus haul will be
controversial given the losses expected at RBS and as a strategy review
by chief executive Ross McEwan is likely to reveal a major downsizing as
the bank refocuses on retail customers, small businesses and larger
corporates. There are fears
over large scale job losses as reports suggest its 120,000 strong
workforce could be reduced by around a quarter, although much of this is
thought likely to come from plans to sell off businesses and exit from
many of its riskier investment bank activities, as well as much of its
overseas operation.
Mr McEwan will also give his verdict
on the group's troubled Ulster Bank subsidiary, which has been put under
the microscope as part of the group-wide review. RBS
is expected to make heavy cuts to the 11,000 jobs in its investment
bank, including a retreat from its US and Asian markets businesses. The
planned sale of its US retail bank Citizens will remove 18,500 jobs,
while further reductions will come from its float of Williams &
Glyn's, which employs about 4,500 staff. The
bank's full-year results will lay bare the scale of the turnaround job
that lies ahead and will come in stark contrast to the fortunes of
fellow bailed out player Lloyds Banking Group, which returned to bottom
line profit for the first time in three years in 2013.
RBS boss: New chief executive Ross McEwan has already said he would not take a bonus for 2013 or 2014
RBS, which is just over 80
per cent owned by the Government, is thought to be heading for an annual
loss of close to £8billion for 2013 after it stunned the City last
month by revealing a string of scandal-related financial charges worth
more than £3billion. Its
latest round of provisions include £1.9billion to cover mainly US action
over mortgage-backed financial products, an extra £465million to
payment protection insurance (PPI) compensation and another £500million
for mis-selling of interest rate swaps to small businesses. The
bank was already facing bad debt write downs of up to £4.5billion in
the creation of an internal 'bad bank' to wind down toxic loans. The
losses also come after a calamitous year for IT glitches at RBS,
prompting Mr McEwan to admit it had failed to invest properly in systems
for decades and pledge hundreds of millions of pounds in new
investment. RBS has sought
to deflect flak over bonuses by scrapping 2013 payouts for its
eight-strong executive committee in the wake of its recent shock
provisions update, while Mr McEwan has already said he would not take a
bonus for 2013 or 2014. But
any banker windfalls will court controversy given that it is still
heavily loss-making and under investigation over allegations of
unscrupulous treatment of small firms. The
group is facing a series of investigations after a shocking report from
government adviser Lawrence Tomlinson accused RBS of driving firms to
collapse in order to profit from their property assets/
The bank has fuelled
anger further over bonuses by recently confirming it was considering
plans to request shareholder permission to pay bonuses of up to double
an employee's salary for 2014 onwards - the maximum allowed under new EU
rules to cap payouts. It
will no doubt also be pressed on whether it plans to follow the lead of
rivals such as Barclays and HSBC by introducing monthly allowance
payments to sidestep the rules further and boost potential bonuses. On
Monday, HSBC confirmed plans for its boss Stuart Gulliver to swerve the
EU bonus cap as his pay package soared to £8million - making him
Britain's best paid banker. The
UK-based global banking giant said Mr Gulliver's base salary will
remain at £1.25million for this year but that he will receive a fixed
pay allowance of £1.7million, to be awarded in shares on a quarterly
basis. The news came as HSBC today announced profits up 9 per cent to £13.6billion in 2013. Last
week, Lloyds Banking Group came under fire for handing its chief
executive Antonio Horta-Osorio a £1.7million shares bonus, albeit one
which he will not be able to collect until 2019. Lloyds
also confirmed it had hiked its bonus pool by 8 per cent to
£395million, which Horta-Osorio described as a ‘small increase’ given
the improvement. And the increase in bonuses at Lloyds came just days after Barclays hiked its bonus pool by 10 per cent to £2.38billion. Barclays
chief executive Antony Jenkins, who had already waved his bonus of up
to £2.75million, said paying for talented staff was in the ‘best
interests’ of shareholders.
The
Consumer Financial Protection Board, which was created by the
Dodd-Frank financial regulation bill President Obama signed into law, is
operating in almost complete secrecy. The public isn’t allowed in on
its meetings and the minutes of those meetings are not available for
scrutiny. Why are they being so secretive? Could it be all of the
radicals advising them? They’re meeting again today and tomorrow, but we have no way of knowing what they’re up to.
According
to an agenda from CFPB’s Consumer Advisory Board, the closed-door talks
include issues regarding mortgage “rulemaking” and something called
“Approach to Regulation.” The secret talks will take place, ironically,
at the Constitution Center in Washington.
It’s critical the
financial community and the public know that these powerful officials
are scheming with their taxpayer-paid advisers. CFPB has the power to
control virtually every financial transaction in the U.S. And it’s doing
so with the help of radical advisers.
The 25-member Consumer
Advisory Board includes trial lawyers who make a living suing banks,
former ACORN activists, and even a member of the Democratic National
Committee. Some have taken hundreds of thousands of dollars in federal
grant money to gin up housing and lending discrimination complaints. Yet
their activities are subject to virtually zero scrutiny.
CFPB not
only is paying these community organizer zealots, but is contracting
with them to help investigate lenders. One CFBP adviser getting hundreds
of thousands of dollars in federal grants is Maeve Brown, a lawyer who
runs Oakland, Calif.-based Housing and Economic Rights Advocates, a
far-left shakedown group.
Read the whole thing.
The Competitive Enterprise Institute is suing the CFPB for what it’s
worth, but by the time that law suit is settled who knows how much
damage they can do.
The number of homeless families seeking shelter in the Washington, DC
has risen by 135 percent from the same time last year, surging past
earlier official expectations of a 10 percent increase, according to
various news sources. The growing rate of homeless families seeking
shelter is almost unprecedented, bringing the entire family shelter
system to maximum capacity by late January.
Nearly 300 individuals fill DC General, a former
hospital-turned-family shelter, with another 125 families filling up the
District’s only other family shelter. In fact, the city has had to put
an additional 436 families with a combined 849 children in motels in the
District and in the neighboring Maryland suburbs. The epidemic has been
termed “a crisis” by the District’s director of the Department of Human
Services (DHS), David Berns.
At a February 3 public hearing at the former hospital, shelter
residents blasted the city government for the abysmal conditions in
which they were living. The hearing was attended by Council member Jim
Graham, who chairs the Committee on Human Services. One complaint was
raised in regard to a pile of dirty diapers that had been allowed to
accumulate next to the cafeteria, where residents took their meals.
Washington, DC is one of the few cities in the US with a “right to
shelter” law that goes into effect every winter when the temperatures
reach dangerously cold levels. With the recent cold snap in January,
homeless families from the District have come to rely on the law to
protect them from the threat of deadly hypothermia.
Democratic Mayor Vincent Gray has attributed the rise in homelessness
to non-residents flocking to the District with intent to “take
advantage” of the law. This is an attempt to deflect attention away from
the city’s miserly allocation of resources for dealing with the victims
of the social catastrophe wrought by gentrification, budget cuts, and a
general decline in the living standards of the city population.
The current crisis fully exposes the social reality of the Washington
Metropolitan region, often cited by pundits and politicians as having a
“recession-proof” economy. According to the DC Fiscal Policy Institute
(DCFPI), the District has shed over 50 percent of its low-cost rental
units and 72 percent of its low-value homes. In addition to that, 40
percent of DC households have not seen their incomes increase since
2000.
As in many other cities throughout the US, official responses to the
decline in living standards have been limited to populist calls to raise
the minimum wage. In the case of DC, last December saw the DC Council
vote unanimously to raise the minimum wage from $8.25 an hour to $11.50
over the next three years. This was after an earlier attempt to raise
the minimum wage to $12.50 was vetoed by Gray last summer.
At $11.50 an hour, a full-time worker would see a yearly income of
$22,080 before taxes. A report put out by the Economic Policy Institute
(EPI) found that a family of four would need a combined income of
$88,000 yearly to live decently in the District of Columbia.
For the top layers of DC, business has been brisk. According to a report by the Wall Street Journal,
government spending on local contractors went from $29.3 billion a year
in 2000 to $83.5 billion a year in 2010. In 2013 the sale of
million-dollar homes went up by 32 percent over 2012. In 2013, Market
Watch rated the Washington-Arlington-Alexandria area the second richest
region in the US, with a median household income of $88,223. The
District has a city budget surplus of $1.75 billion.
Gray, who is running for re-election as mayor, first won office in
2010 by making appeals to the city’s homeless advocates with pledges of
support, but it was not long after winning office that he began to hatch
proposals to defund essential social services, which he contemptuously
refers to as the District’s “handout” culture.
During his tenure, Gray and the DC Council have cut $20 million from a
trust fund for affordable housing units and imposed stricter measures
on the Temporary Assistance for Needy Families (TANF) Act in the name of
fiscal responsibility. Last year, on the local level, nonprofits saw
their funding for homeless prevention and family counseling cut by as
much as 18 percent, in addition to the loss of federal homeless
prevention grants as a result of the sequester.
DHS Director David Berns has stated that without additional funding,
he may need to close shelters for homeless singles in order to shift
resources to caring for families.
City officials have offered up the “Rapid Rehousing” program as a
solution to the crisis. Under Rapid Rehousing, sheltered families agree
to sign an apartment lease for which the city government will pay the
first four months of rent, with an additional two years of possible
extensions. The program is being presented as a means of clearing
families out of overflowing shelters in order to make space for others in need.
Yet, according to the Washington Post, the absence of
affordable housing is bottlenecking Rapid Rehousing. Whereas official
predictions put the monthly number of families relocated with the
program at 60, the actual numbers are 27 to 35. This is because many
sheltered families are resisting the city’s efforts to put them into the
program. According to one sheltered resident interviewed by the Post,
Cartrice Haynesworth, “A lot of families that tried Rapid Rehousing are
back at DC General, so families are afraid to try it.” Another resident
who testified at the February 3 hearing called it “a revolving door of
homelessness.”
In pushing for Rapid Rehousing, DC officials seek to claw back even
more savings by eliminating more costly programs like permanent subsidy
vouchers or rent-controlled public housing units. To highlight this,
Gray recently amended a law that would allow officials to kick out
sheltered families who have refused at least two Rapid Rehousing offers. Adam Soroka is a writer for WSWS.
Why is Congress still measuring poverty based on a 1963 trip to the grocery store?
To determine who is officially poor in America, the federal government compares a family’s annual cash income to a figure produced by an arcane formula that’s based on the price of food in
1963, when a loaf of bread was 22 cents and a burger less than a
quarter. Starting under President Lyndon Johnson, the government’s
official way of defining who is poor comes from calculating a
minimum food budget for a family of four, tripling that figure to cover
other living costs, and then indexing it annually for inflation.
The result is the federal poverty level. For 2014, that threshold was
$23,850 for a family of four. Smaller families can subtract $4,060 per
person. Individuals making $11,670 or less in 2014 were officially poor.
Many government programs, from School Lunch to the Earned Income Tax
Credit to Obamacare’s subsidies, decide eligibility by comparing one’s
annual cash income to the official poverty level—or to a multiple of it,
say 150 percent.
Cities, states, advocates and academics have known for years that
this measure of who is poor undercounts millions of Americans. They know
that the 1960s-based formula ignores modern living costs, such as
today’s cheaper food but higher housing and other expenses. And they
have developed alternative
ways to track living costs that confirm poverty and economic insecurity
of households just above the poverty line is far more widespread than
Congress wants to admit.
But the 1960s poverty formula persists, and not without other
pernicious effects. This heads-in-the-sand approach works against
Congress spending more on current programs because lawmakers aren’t
using numbers that honestly depict the extent of economic insecurities.
And an outdated methodology pre-empts a contemporary discussion of what a
basic, dignified living standard costs, based on variables such as
family size, one’s age and stage in life, and location.
“In the 1960s, the poverty measure was a focal point for the nation’s growing concern about poverty,” an April 2013 report by
New York City’s Center for Economic Opportunity said, recounting this
history and shortcomings. “Over the decades, society evolved and
policies have shifted, but the official poverty measure remains frozen
in time. As a result it has lost its credibility and usefulness.”
“In 2011, our poverty line for the two-adult, two-child family comes to $30,945,” the NYC agencysaid,
after using a more sophisticated modern formula. “The 2011 official
[federal] poverty threshold for the corresponding family was $22,811.”
Looking back to 2005, New York City found that its poverty rate
consistently was 2 percent higher than the official federal rate. The
federal formula did not just ignore changes in real life expenses, but
also decades of government programs that didn’t pay out cash but kept
more money in poorer people’s pockets.
“In recent years an increasing share of what government programs do
to support low-income families takes the form of tax credits and in-kind
benefits,” the Center for Economic Opportunity said. “If policymakers
or the public want to know how these programs affect poverty, the
official measure cannot provide an answer.”
There have been notable efforts in recent decades by
government institutions, including Congress, to update, expand and
replace the 1963 formula. But those efforts, while drawing a more
realistic picture of who is poor in America,
still aren’t framing federal policy. That’s because when it comes to
Congress, better metrics aren’t used to create policy and law. One
result is that anti-poverty advocates continually urge Congress to look
at real living costs, and use more up-to-date numbers.
“Policymakers considering changes to social insurance programs such
as Social Security and Medicare must consider the economic realities
confronting older Americans,” a 2013 report by
the Economic Policy Institute said, in one such example. EPI based its
analysis on a more comprehensive but unofficial measure used by the
Census Bureau—the same one used by New York City. Not surprisingly, EPI
found that poverty and near-poverty were more widespread among the
elderly than the government admitted.
“Many of America’s 41 million seniors are just one bad economic shock away from significant material hardship,” it reported.
“Most seniors live on modest retirement incomes, which are often barely
adequate—and sometimes inadequate—to cover the costs of basic
necessities and support a simple, yet dignified, quality of life.”
But official Washington holds firm, using its arcane 1960s formula
instead of adopting a more honest measure of tracking poverty and
economically insecure Americans. A Better Baseline
Social scientists have known for decades that the 1963-based poverty
line didn’t include necessities such as shelter, utilities, healthcare,
childcare, clothes, commuting and other out-of-pocket costs. In 1995,
Congress asked the National Academy of Sciences (NAS) to create a
formula including those factors. It did, but for years that sat on the
shelf. It was used for academic research but not to recalibrate
government policy and actions.
However, a decade after it was created, the NAS formula was adopted by
several cities and states. Starting in 2005, New York, Philadelphia,
Connecticut, Georgia, Illinois, Masachusetts, Minnesota and Wisconsin
used the NAS formula and soon found out there were many more households
living just above and below the poverty line.
Starting in March 2010, the Census Bureau started applying the
1995 formula, which it called the Supplemental Poverty Measure (SPM),
and started issuing reports comparing the official and unofficial
measures. For 2012, the “official measure” of poverty level income for
“two-adult, two-child” households was $23,283, while the SPM was
$31,060. For seniors, the Census Bureausaid,
“Note that poverty rates for those 65 years of age and over were higher
under the SPM measure compared with the official measure.”
This Obama
administration initiative, which was not embraced by the Congress, was
noticed and praised by New York City Mayor Michael Bloomberg, who
encouraged his city’s Center for Economic Opportunity to do a better job
measuring poverty even if it meant acknowledging that New York had more
poor people than previously thought.
“If we are going to successfully fight poverty, we need data that
captures the challenges that poor households face as well as the
benefits conveyed by our most significant government supports,” he said
in 2011, when the Census released its first report using the NAS
formula. “The decision to adopt this measure is not one that was made
lightly; we know that a greater proportion of the American people are
poor under this Supplemental Measure, and this is, if course an
attention-grabbing finding. But it is important to have a measure that
can accurately tell us what is going on.”
What’s going on, as Bloomberg puts it, is that Congress is in the
dark about the extent of economic insecurity and the role of government
programs to offset it. Perhaps the best example is Social Security,
which is not just an anti-poverty program paying the elderly a monthly
benefit, but also helps millions of people with disabilities as well as children in families who lose a parent.
A recent Boston College study found
that the country’s latest generation of retirees lack $6.6 trillion to
maintain current lifestyles as they age, underscoring just how important
Social Security will be for their quality of life. For millions of baby
boomers, especially people of color and women, it will make up 90
percent or more of retirement income, according to experts like the
non-partisan National Academy of Social Insurance.
In June 2013, the Social Security Administration said that
there were 37 million retirees receiving benefits. Of those recipients,
23 percent of married couples and 46 percent of unmarried individuals
relied on Social Security for 90 percent or more of their income. Those
percentages are expected to grow in coming years, advocates say.
Washington’s current budget debate highlights this omission. President Obama
is pushing to raise the minimum wage to $10.10 a hour, or $21,000 a
year—saying that’s a living wage. But absent from public debate is what
it costs to keep vulnerable Americans, young and old, from falling into
poverty or hovering above it by paying for household necessities. How Much Is Needed?
When EPI experts Elise Gould and David Cooper looked at
replacing the official poverty line with the more modern Supplemental
Poverty Measure, they found that seniors with a household income (via
any mix of social insurance benefits or savings) that was less than
double the SPM could be thrown into poverty by a “single economic
shock.”
“There is a large share of elderly Americans who are economicaly
vulnerable; a single shock could push them precariously close to or into
outright material deprivation,” they wrote.
“With nearly half of all seniors in the United States falling below the
threshold of economic vulnerability, policymakers must be especially
careful when considering changes to social insurance
programs—predominantly Social Security and Medicare—that protect this
group.”
EPI’s conclusion that elderly Americans needed a monthly income twice
that of the SPM is backed up ny an even more detailed poverty-line tool
developed by the Washington-based advocacy group, Wider Opportunities for Women. It has an online index where
anyone, from families with children to seniors, can plug in information
on family type, income, location, savings and other expenses to
calculate basic living costs below which one becomes impoverished—not being able to pay for necessities.
All of these tools and indices—the Supplemental Poverty Measure,
EPI’s finding that elderly Americans need to earn double the SPM to
weather inevitable crises, WOW’s economic security index—are a far cry
from the official federal poverty threshold. They suggest that Congress
and the White House
should be looking at a different big picture: what it costs to live
today and how far social insurance programs fall short of that line.
There’s no need to measure poverty and economic insecurity by
indexing family food budgets based on large eggs costing 45 cents a
dozen and macaroni-and-cheese dinners 39 cents, as they did in Wisconsin
in 1963. Steven Rosenfeld covers democracy issues for AlterNet.
NGO
tersebut mendakwa anak Taib juga turut bersama menandatangani
perjanjian persefahaman yang dimerterai antara Sarawak Wastes Management
Sdn Bhd sebagai wakil kerajaan Sarawak dengan syarikat Jerman tersebut.
