Tuesday, April 5, 2016

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Illinois on the Brink of Bankruptcy

by Martin Armstrong
illinois Button
The pension crisis is brewing and the one state that appears to be heading toward a complete bankruptcy is Illinois. Clients should not own ANY debt from Illinois, be it city, municipal, or state. Just get out before the curtain falls. The Illinois Constitution plainly states that pension benefits, once granted, “shall not be diminished or impaired.” Thus, taxpayers are absolutely screwed and this is not a place you want to own property. Governments cannot negotiate to reduce pensions so state workers will be pitted against taxpayers. The Supreme Court has struck down any attempt to reduce liabilities based upon this clause in the Illinois Constitution.

IBM Layoffs Hit Canada, Europe, Australia; US Likely Next

Photo Credit Dan Faber
Photo Credit Dan Faber

(Jessica Davis)  It’s been just over one month since IBM began cutting jobs in the US in a layoff that one analyst firm calculates will ultimately hit at least 14,000 globally in fiscal 2016. Last week this wave of job cuts hit IBM’s Canada locations in Toronto and Ontario, following on cuts that happened in Europe and Australia in recent weeks.
About 900 staff members are expected to be cut in Germany.
Most cuts are expected to come earlier in the year rather than later, according the report from financial analyst firmBerstein, and many of those jobs will be moving to less expensive offshore labor markets, the firm said.
WatchingIBM, a Facebook page that tracks IBM’s job cuts, shared the news about these new rounds of cuts, which were reported to the page by affected employees, by unions, and by governments in countries that require corporations to report actual layoff numbers. Group founder and former IBM employee Lee Conrad spoke with InformationWeek about the news.
Conrad said that the hardest hit business units are Global Technology Services and Global Business Services, and Software.
“There’s a big shakeup going on inside of IBM, and they are changing their whole operating model,” he told InformationWeek. “Over the last couple years these job cuts have been relentless. It’s become such a dismal existence for employees.”
Conrad said that sources have told him that more job cuts are imminent in the US, and that an upcoming round of layoffs, or “resource actions,” is code-named Project Solitaire. He said employees have told him that job cuts are planned for every quarter of 2016.
IBM has declined to comment on number of jobs being cut this year, and initially provided the following statement to InformationWeek: “IBM is aggressively transforming its business to lead in a new era of cognitive and cloud computing. This includes remixing skills to meet client requirements.”
After InformationWeek linked to reports saying that a third of IBM’s workforce could be affected by this year’s job cuts, an IBM spokesperson contacted us to say that reports of such a high number were “completely outlandish and untrue.” IBM declined to provide an actual number of jobs targeted for cuts, but noted that the company hired 70,000 people in 2015 and currently has 25,000 open positions around the world, including ones in the US.
IBM ended fiscal 2015 with 377,757 employees, according to the company’s 10-K report filed with the US Securities and Exchange Commission, down from 379,592 in 2014. So those 70,000 new hires from 2015 replaced employees who were cut or left the company for other reasons, including voluntary departures. It’s unlikely that IBM will ever confirm job cut numbers beyond the markets where it is required by law to report those numbers.
Conrad has told InformationWeek that many of the jobs that IBM says are open are actually in offshore locations such as Brazil, China, and India. IBM has told InformationWeek that many of its job openings are in the US, but has not yet confirmed the number of US openings and the number of those US jobs actually filled in the first quarter of 2016.
Conrad is a former IBM employee who previously ran the now defunct Alliance@IBM group for unionizing IBM employees. The Facebook page has picked up the communications part of the mission of the former Alliance@IBM group.

Eggs Fly in Iceland as Panama Papers Spark Populist Anger in the Streets

Capitalism could face crisis of credibility as leaked documents illuminate global rules rigged for the rich and powerful

Bernie Sanders: Breadlines are a Good Thing

(INFOWARS)  Back in the 1980s Vermont’s socialist congressman praised the communist dictatorship in Nicaragua. The remark is in a video recently aired on Fox.
In the video Sanders says bread lines are a good thing because in other countries where there are not breadlines people are starving to death because “the rich get all the food.”
In addition to the Sandinista government in Nicaragua, Sanders praises Fidel Castro in Cuba.
During a debate in Miami earlier this month Sanders walked back his praise of Castro and Cuba while lauding its healthcare system.
“Look, let’s look at the facts here. Cuba is, of course, an authoritarian undemocratic country, and I hope very much as soon as possible it becomes a democratic country,” he said. “But on the other hand, it would be wrong not to state that in Cuba they have made some good advances in health care. They are sending doctors all over the world. They have made some progress in education. I think by restoring full diplomatic relations with Cuba, it will result in significant improvements to the lives of Cubans and it will help the United States and our business community invest.”
However, according to a study conducted by International SOS, Cuba’s healthcare system is not one of the best in the world as socialists often claim.
“Many Cubans complain that top-level government and Communist Party officials have access to VIP health treatment, while ordinary people must queue from dawn for a routine test, with no guarantee that the allotted numbers will not run out before it is their turn,” Lucia Newman, a former Cuban resident, wrote for Al Jazeera in 2012. “The system is free, but it is neither fast nor efficient for two important reasons. One is obviously the lack of financial resources, and the other—which is related to the first—is the “export” of doctors, nurses and dentists in exchange for hard currency.”
“Over the years, I have heard many complain about the deteriorating quality of the services offered. One of the problems is that no small number of Cuban doctors have left the country looking for better opportunities abroad,” she added. “They are considered deserters.”

TRUMP warns of massive recession, martial law, food stamp – Massive riots, huge crime waves expected in many US cities

by AMY S.

food stamp

TRUMP warns of massive recession, martial law ,food stamp – Massive riots, huge crime waves expected in many US cities

Trump’s ‘massive recession’ forecast stumps economists
WASHINGTON – Donald Trump’s prediction that the U.S. economy was on the verge of a “very massive recession” hit a wall of skepticism on Sunday from economists who questioned the Republican presidential front-runner’s calculations.
As with all forms of gambling, derivatives trading carries a certain amount of risk.
The scary part is that we are all exposed to the enormous derivative risks that the biggest U.S. banks have become entangled in, despite assurances to the contrary:
“Overall, the biggest U.S. banks collectively have more than 247 trillion dollars of exposure to derivatives contracts. That is an amount of money that is more than 13 times the size of the U.S. national debt, and it is a ticking time bomb that could set off financial Armageddon at any moment. Globally, the notional value of all outstanding derivatives contracts is a staggering 552.9 trillion dollars according to the Bank for International Settlements. The bankers assure us that these financial instruments are far less risky than they sound, and that they have spread the risk around enough so that there is no way they could bring the entire system down.”
In a revealing interview, Trump predicts a ‘massive recession‘
Pentagon resources and U.S. troops may be used if needed to quell protests and bank runs during an economic crisis, the U.S. Army War College’s Strategic Institutereported.
“Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security,” the War College study states.
Incidents of economic collapse, terrorism and disruption of legal order could require deployment of forces within the U.S., it said.
A “strategic shock” could require the nation to use “military force against hostile groups inside the United States.”
“[S]ocial unrest may happen in many countries – including advanced economies” if the economic crises are not properly dealt with, Strauss-Kahn said.
“He added that violent protests could break out in countries worldwide if the financial system was not restructured to benefit everyone rather than a small elite,” London’s Guardian reported.
In a recession where consumer spending is plummeting, foreclosures are rampant, workers are losing jobs, credit is tight and markets are strained, some are warning about a worst-case scenario.

47.6 million Americans are about to have their food stamp benefits cut, and most of them have absolutely no idea that it is about to happen.
Needless to say, a lot of them are going to be very angry when they discover that they cannot buy as much food for their families anymore. The reason that this is happening is because a temporary boost to food stamp benefits that was put in during the last recession is expiring. But most of the people that are having their benefits cut will not understand this.
Most of them will just be very upset that the government is “taking money away” from them. And considering the “mini-riots” that we witnessed earlier this month when the system that processes food stamp payments went down for a few hours, it is obvious that a lot of food stamp recipients can very easily be pushed over the edge. So what would happen if we have another “debt ceiling crisis” in Washington D.C. early next year and food stamp benefits are temporarily cut off completely?
Wherever “austerity” has been tried in Europe, it has resulted in protests and riots. Could a similar thing happen in this country?
NBC News is reporting that ALL food stamp recipients are going to have their food stamp benefits reduced in November. This is certainly not going to put those living in poverty in a good mood…
Millions of American families could face a sparse holiday table when food stamps benefits get reduced in November, and that could be just the start of deeper cuts to the program to feed poor families.
The modern-day food stamp plan, now called the Supplemental Nutrition Assistance Program, is scheduled to scale back benefits for all recipients on Nov. 1 because a recession-era boost in benefits is expiring.

Sadly, the truth is that food stamp benefits don’t even buy a lot of food right now. According to the USDA, the average monthly food stamp benefit is approximately $272 per household.
And now it will be even lower.
The government says that a family of four will be getting 36 dollars less per month starting on November 1st.
That may not sound like a lot to you, but for those living on the edge of poverty it can make a huge difference.
What are impoverished families supposed to do? Eat a diet that consists entirely of Ramen noodles?
Of course the real solution would be to provide good paying jobs for those families, but unfortunately our leaders continue to pursue policies that are systematically killing American jobs so that is not going to happen.
Meanwhile, those living in poverty continue to become angrier and more frustrated.
We got a glimpse of this earlier this month. The following is a brief excerpt from a recent article posted on offgridsurvival.com
Over the weekend, the debit system that allows people on government assistance to buy food, temporarily went down. The resulting chaos is a small glimpse at what I believe will happen, should the government plunge this country into some sort of economic collapse.
A couple of Walmarts in Louisiana decided to allow people to shop, even though the system was down and they had no real way of knowing how much credit people had on their cards. The resulting chaos had the store’s shelves in Springhill and Mansfield, LA stripped bare, as food stamp recipients attempted to defraud the grocery stores.
When the system went back online, the grocery store found people who had as little as .49 on their Food Stamp cards attempting to steal over $700 in food. Local police were called in as the crowd started to turn ugly, and overflowing grocery carts were left abandoned in the aisles.
But this is just the beginning. To get an idea of what is eventually coming to America.
Demonstrators clashed with Italian police on Saturday as tens of thousands marched through Rome to protest against unemployment, government cuts and big construction projects they say take money away from social services.
Hooded protesters turned over garbage bins in front of the Economy Ministry and set several of them on fire. Using sticks and clubs, they attacked police in riot gear. The police charged and chased demonstrators up side streets.
The hooded demonstrators, who infiltrated a mostly peaceful protest, threw smoke bombs, eggs and bottles at the ministry and broke the window of a nearby bank.
As poverty continues to grow and government handouts continue to get cut back, the desperation of those living in poverty in this country is going to continue to increase.
At this moment, there are 6 million Americans in the 16 to 24-year-old age group that are neither in school or working. In fact, a whole bunch of major U.S. cities currently have more than 100,000 “idle youth” living in them…
Just look at some of the nation’s largest cities. Chicago, Houston, Dallas, Miami, Philadelphia, New York, Los Angeles, Atlanta and Riverside, Calif., all have more than 100,000 idle youth, the Opportunity Nation report found.
It is only a matter of time until we see massive riots and huge crime waves in many of those cities.
The conditions for a “perfect storm” are already here.
All we need is a spark.
According to a brand new Pew Research survey, only 19 percent of all Americans trust the government. Back in 1958, 73 percent of all Americans trusted the government.
Right now, only 23 percent of all Americans have a favorable view of Congress. Back in 1985, 67 percent of all Americans did.
Anger and frustration are growing and our society is breaking down all around us.
Get ready while you still can.

Would you be able to sustain your loved ones when all hell brakes loose?In this video, I will unearth a long-forgotten secret that helped our ancestors survive famines, wars, economic crises, diseases, droughts, and anything else life threw at them… a secret that will help you do the same for your loved ones when America crumbles into the ground.I’m also going to share with you three old lessons that will ensure your children will be well fed when others are rummaging through garbage bins. Click here to learn all about the 3 skills that will help you thrive in any crises situation.

Who benefits from the world conflict? Or ALLATRA IPM refers to dignity, freedom and human rights. This is a video appeal to the international community regarding outrageous events and abuses of human rights and liberties, which have recently taken place in Ukraine. Fake programs, pseudo-investigations and slanders by dishonest journalists of Ukrainian TV channels. Reputation of public figures and the ALLATRA International Public Movement is being undermined. Facts, comments, documentary material, international documents on human rights protection. Lamentable status of the freedom of speech, made-to-order persecution of Igor Danilov whom people in many countries call the Man of Peace. Being Christian, he publicly supported true Islam and unity of all people on the planet. The video addresses vital issues of international journalism: why are news on examples of kindness, humaneness, mutual assistance and friendship between nations, positive changes in different countries and regions of the world being shamefully ignored? Are international laws practically implemented by the global community? And who prevents us from living in peace with each other and at peace with ourselves?

Rickards: ‘Unallocated Gold Is a Euphemism for No Gold.’

by Jesse
I think that Rickards is correct in his judgement, and joins many others including Kyle Bass, who because of their backgrounds are much harder to ridicule and dismiss by the creatures of the bullion banks.  And in some of their more recent remarks about this, one can almost feel the desperation.  And here and there, the rats seem to be leaving the ship.
When this pyramiding of bullion and price manipulation falls apart, which history suggests that it must, there will be many angry investors demanding explanations of officials and regulators and bankers who will be shuffling from one foot to another, trying to excuse their lack of good fiduciary judgement and responsibility.
I just wonder if they will try to wait for some ‘big event’ to disclose this, in the hopes that fewer questions will be asked, and will be more easily dismissed.
As Rickards notes, and again I think he is right, they will ‘close the gold trading window’ and force settlements for cash at one price, and then reopen the price for actual bullion at a price that will climb  shockingly higher, despite a determined PR campaign by their friends in the media.
Perhaps I am wrong about this, but to me it has seemed for some time to be all too similar to the improbable sustainability of the Madoff scheme, and other such arrangements that depend on large numbers of people accepting a proposition that is dangerously misconstructed, misrepresented, and therefore mispriced in terms of risks.
“If JP Morgan leases gold from the US Treasury it does not mean that they back up a truck in Fort Knox and drive the gold away. There is no need for that. It is just a paper transaction. The gold can sit in Fort Knox. JP Morgan can take a hypothecatable title. Now once JP Morgan has the gold what they do is they sell it at times 100 to gold investors who think they have gold but what they really have is what is called unallocated gold.
Unallocated gold is a euphemism for no gold. If I call up JP Morgan and I say, ‘You know I wanna buy a million dollars worth of gold,’ they will say, ‘Fine. Here is our contract. Send us the million dollars.’ I sign the contract. I send the million dollars. They send me a confirmation and it says I own a million dollars worth of gold subject to the contract.
Well, read the fine print in the contract. What it says is your gold is unallocated which means that they do not claim to have any specific bar with a serial number or your name on it. In reality they have taken the same bar of gold and sold it to a hundred different investors.
Now that is fine if we are happy with the paper contract, but if all 100 of us show up at JP Morgan and they have only got one bar of gold, the first person may get the gold. The other 99 people, they are going get their contracts terminated. They are going to get a check for the value of gold at the close of business yesterday, but they are not going to get today’s price movement or tomorrow’s price movement when super spiking going up to $2,000, $3,000, $4,000 an ounce. That is when you want your gold for the price protection when everything else is falling apart. That is when you are going to discover that you do not have gold.”
Read the entire interview with Jim Rickards here.
Very unlikely you say? Do you remember what happend to those who were holding their bullion in these warehouses through MF Global? And this was a relatively isolated event. A more general break in the chain of cross ownership and counterparty risks at 100 to 1 leverage would create a market dislocation that would be quite memorable.
And as a reminder, here is what Kyle Bass had to say about unallocated and hypothecated gold, even that held within a ‘fractional reserve’ exchange structure.

Chart Of The Day: New Auto Sales Rolling Over, March Down Sharply

Is the Next Taxpayer Bailout the Coal Industry?

A coal mine in Gilette, Wyoming. (Photo: Greg Goebel; Edited: LW / TO)
Eight years after we bailed the big banks to the tune of $14 trillion, US taxpayers could soon be on the hook again — this time to help out the coal industry.
Just a few years ago, Big Coal was riding high on the crest of a nice little boom. Energy prices were high, as was demand from China’s rising economy.
And so Big Coal started doing what big industries always do when times are good: consolidated and expanded. Alpha Natural Resources bought Massey Energy. Peabody Energy bought Macarthur Coal. Walter energy took over Western Coal, and so on and so on.
See more news and opinion from Thom Hartmann at Truthout here.
At the time, the debt-fueled consolidation wave looked like a smart business decision. The world showed no sign of backing off its addiction to coal, and energy giants like like Alpha had every reason to believe that gobbling up the competition would bring home the big bucks for decades to come.
Well, things didn’t really turn out that way.
A combination of slowing demand from China, competition from renewables and natural gas, and tougher regulations, has pushed coal production to its lowest levels in three decades.
Big Coal is now in big trouble.
Lower production and lower energy prices have turned those expansions from the earlier part of the decade into liabilities, especially because they were almost all paid for with debt — these companies took out massive loans to fund the acquisitions and all the executive bonuses that go with them.
As a result, Arch Coal, Patriot Coal, Walter Energy and Alpha Natural resources have all filed for bankruptcy in the past few years.
Peabody Energy, meanwhile, is pleading with its creditors for extra time to pay off its debts.
And, both morally and legally, when coal companies like Peabody go under, they’re supposed to clean up the mess they made at their mining sites.
A 1977 law actually requires them to do this.
But even so, many of the big coal…
Read more

Retail job cuts spike 41% in Q1


(Retail Dive)  Dive Brief:

  • Employers announced 184,920 job cuts during the first quarter of 2016, up 31.8% from the 140,241 cuts tracked in the same period last year and 75.9% more than in Q4 2015’s 105,079 job cuts, according to outplacement firm Challenger Gray and Christmas’s monthly and quarterly report. March’s total, however, was 21.7% lower than the 61,599 layoffs in February and the lowest monthly total since December’s 23,622 cuts.
  • Significant cuts in the retail and computer sectors combined with declines in the oil business to lead the Q1 surge, according to the report. The retail sector recorded the second highest number of job cuts compared to other industries with 31,832 in Q1, up 41% from 22,502 in Q1 2015. Only the energy sector ranked higher in Q1, at52,901 job cuts.
  • Meanwhile, the U.S. Department of Labor said Friday that the proportion of Americans employed is at its highest level in two years, up somewhat to 63% as the economy added 215,000 jobs in March. The unemployment rate rose to 5%, compared with 4.9% last month, because more Americans are looking for work.

Dive Insight:

The Labor Department released its most upbeat employment report yet, with March statistics that appear to signal real strength in employment, including better jobs at higher wages.
But Challenger’s report is another indication of the American economy’s somewhat tenuous position, and a clear sign of turmoil in the retail sector. Retail industry job losses soared in March 2016, reaching 8,490 in March, up from 1,096 the previous month and ahead of the 6,640 retail job cuts reported in March 2015.
Among the retailers announcing job cuts in the first quarter:Macy’s, Nordstrom, Bebe and Avon.
It’s all a reflection of how technology is changing many of the most affected sectors, including retail, according to Challenger, Gray & Christmas CEO John Challenger.
“We, as a nation, and really as a global community, are changing the way we produce and consume energy. We are also changing the way we buy goods and services,”  Challenger said in a statement. “These changes are necessary and inevitable, but they come with a cost in the form of job loss. However, while jobs are being lost in some areas, they are being created in others, including renewable energy, online retailing and mobile computing.”

The Plan to Break Up Syria Explained

30% of bank jobs are under threat


(Matt Egan)  Digital disruption is turning finance on its head — and destroying tons of traditional banking jobs along the way.
A wave of innovation has made it possible for people to get their banking done without walking into a branch if they don’t want to. People can now deposit checks using a smartphone or digitally fire off cash to friends using Venmo.
The end result is a pretty sweet experience for consumers…but an imminent threat to people who work at bank branches.
The downsizing of the bank workforce is about to accelerate as more technology takes over jobs humans used to do, according to a new Citigroup report. Another 30% of bank jobs could be lost between 2015 and 2025, mainly due to retail banking automation, Citi warned.
“Fintech is forcing banking to a tipping point,” Citi said.
Former Barclays (BCS) CEO Antony Jenkins has likened this to the banking industry’s Uber moment.
Indeed the smartphone revolution has shifted the e-commerce landscape to a point that threatens more established players. The payments business has experienced some of the greatest changes, with platforms like PayPal, Apple (AAPL, Tech30) Pay and Square (SQ)transforming the way consumers make payments.
And then there’s sophisticated robo advisers like Wealthfront that can manage money automatically. Even highly paid Wall Street jobs aren’t safe. New platforms like Kensho are using technology to spew up sophisticated research reports in minutes that highly paid Wall Street analysts would normally take hours to prepare.
There’s enormous sums of money being poured into such emerging financial technology. Investments in fintech has exploded to $19 billion last year from $1.8 billion in 2010, according to Citi and CB Insights. More than 70% of this investment is focused on making the customer experience better.
“Silicon Valley is coming,” JPMorgan Chase CEO Jamie Dimon said in his 2015 annual letter. “There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking.”
So far, traditional banks have withstood this assault pretty well. Just 1% of North American consumer banking revenue has migrated to new digital models. That’s because the big banks like JPMorgan (JPM) and Wells Fargo (WFC) have the advantage of scale.
But Citi thinks that will change soon, especially given the sluggish business environment for traditional banks and the transformative power of new technology. This shift has already taken place in China, where Internet giants have supplanted top banks in some cases.
“We are not even at ‘the end of the beginning’ of the consumer disruption cycle” in the U.S, said Greg Baxter, Citi’s global head of digital strategy.
By 2023, roughly 17% of North American consumer banking revenue could be impacted by digital disruption, Citi estimates. How will banks respond? In part by cutting costs — something most big banks have already done lots of since the 2008 financial crisis.
Branches and associated staff costs make up about 65% of the total retail cost base of a larger bank, Citi said. Much of these jobs are at risk from automation.
Branch teller jobs are particularly threatened. The number of U.S. branch tellers has declined by 15% since peaking in 2007 and Citi says these losses will accelerate because some two-thirds of bank employees are doing processing work that could eventually be automated.
Even more exciting innovation could further disrupt banking jobs in the future. For instance, banks are experimenting with blockchain, the technology that Bitcoin uses to verify transactions all over the world.
Think of it like a perfect record log. Many believe that banks will eventually perfect blockchain and use it to power recordkeeping and cross-border payments.
It’s another reason why futurist Amy Webb has for years been predicting the loss of many bank jobs to automation.
“As computers become smarter, we no longer need humans as intermediaries,” said Webb, founder of Future Today Institute.
“Professions whose basis is in transactions will be disrupted by machines — there is no question. And it will happen fast,” she said.

Hancock Fabrics stores closing nationwide

Hancock Fabrics will be closing all 185 of its remaining stores after being purchased by liquidators Great American Group at a bankruptcy option. The group will begin the liquidation process by carrying out "going out of business sales" starting April 1 until all remaining merchandise is sold. Photo by Ken Wolter/Shutterstock.com
LOS ANGELES, April 2 (UPI) -- Hancock Fabrics stores will close its remaining 185 stores nationwide after filing for bankruptcy protection earlier this year.
Great American Group, a liquidator, announced it was the highest bidder on the assets and inventory of the fabric retailer, which filed for Chapter 11 bankruptcy protection in early February.
"Great American Group has worked closely with Hancock Fabrics in a range of capacities over the last several years," Scott Carpenter, of Great American Group, said. "This has given us a deep understanding of Hancock's inventory and assets, which ultimately allowed us to prevail as the highest bidder."
On Friday, the stores began going-out-of-business sales that are expected to continue for several weeks until all merchandise is sold.
Hancock Fabrics originally planned to close just 70 stores and seek a buyer that would keep the remains stores open. The chain had also filed for bankruptcy in 2007, but only posted a profit in 2009 following a reorganization.

Watchdog: Pay-or-go-to-jail policy makes probation officers bill collectors

/Dave Lieber
Todd Jermstad, Bell County Director of Community Supervision and Corrections Department in Belton Texas.

BELTON — Houston Miller hustles to the exit door of the Bell County adult probation department, his blond ponytail flopping halfway down his back.
The 19-year-old must get to his new $8-an-hour shipping clerk job so he can pay $1,800 in fines, fees and court costs. He got busted with a pinch of pot.
“How will you pay that?” I ask when I catch up with him.
“Working Monday through Friday — and maybe overtime,” he answers.
Explaining his rush, he says, “I gotta pay $400 by the end of the month. I was under the impression that if I don’t pay, if you miss a payment, they can send you to jail for it.”
They’re not supposed to. That’s why I’m in Bell County, near the center of Texas.
Bell County was chosen for a study on how adult probation works in Texas. Turns out Bell County is a microcosm not only for Texas but also for the nation. A pay-or-go-to-jail mentality is causing problems, so much so that the U.S. Justice Department sent a rare letter to judges and court administrators across the nation last month urging them to avoid sending people to jail for failure to pay fines and fees, especially when they can’t afford it.
When the fees raise money for government but don’t contribute to public safety, the letter states, “they can cast doubt on the impartiality of the tribunal and erode trust between local governments and their constituents.”
Attention has turned to a fault line in the adult probation world. The crack is that probation officers across Texas are required to serve as bill collectors more than rehabilitators. In Bell County, half of the office payroll comes from probation fees. If those on probation don’t pay, paychecks can’t get cashed.
In our area, half the office budget for Collin County’s probation budget comes from fees as well. In Denton and Dallas County, it’s closer to 40 percent.
That causes a conflict about what the job of probation officer actually is. Another problem: When a probationer can’t pay a fee and gets punished, his or her family suffers, too, which community experts say can lead to a cycle of poverty for everyone.
One probation officer told researchers from the Robina Institute at the University of Minnesota Law School: “People say they only have enough money to put food on the table and take care of their family and ‘what do you want me to do?’ They just don’t have any money. There is no income.”
Fees are adding up: court costs; lab fees; CrimeStopper fees; Life Skills program fee; Pre-Sentence Investigation Report fees; Substance Abuse Questionnaire fee; and the monthly probation supervision fee, about $40 to 60.
In Texas, House Speaker Joe Straus asked an interim committee to come up with ideas to reform the system. One way: if the 2017 Legislature were to budget $160 million a year to probation departments to make up for the fees. But that’s not going to happen so fast.
The boss
The Bell County study began because probation director Todd Jermstad invited Robina Institute researchers to interview many in his department.
The study’s conclusions that probation officers must act like bill collectors do not trouble him. He knows that’s true. Jermstad says that if he ever faced a choice between prison and probation, he’d skip working with his own department and instead go to prison.
With prison and then parole, it’s mostly over. Probation can linger and cost money for a long time.
“These fees have gotten out of hand,” he said. “They’re funding government when they were not intended for that.”
One Bell County probationer has paid $10 a month since 1997, the study found. Another served five years of probation and was $175 short on his payments. His probation was extended two more years, and when he couldn’t get a job, he went to jail.
Jermstad says he’s forced to run his department like a business. “It’s making payroll. You don’t meet your sales quota, and you lay somebody off.”
Probation officers whose collection rates are strong can get a half day off as a reward. Those not doing well might get penalized, he says.
“We train them to collect. It’s a major thing to do.”
In response to the study findings, Jermstad enacted a new policy on when fees can be waived for financial reasons. One debt that can never be waived is court-ordered restitution. Victims must get paid back.
Ready to lobby
Rebecca Bernhardt says she will try to persuade state lawmakers next year to alter the funding so that probation officers can focus more on helping and less on bill collecting. She’s the executive director of the Texas Fair Defense Project in Austin.
“We have a big challenge in Texas,” she says. “We have a lot of portions of the criminal justice system that are expected to fund themselves with fees. And it’s very dysfunctional.”
When people fail to pay and get sent to jail or prison, that costs the rest of us a lot more.
Check out The Watchdog Mondays on NBC5 at 11:20 a.m. talking about matters important to you.
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YELLEN – Economic Readings Mixed, Appropriate to Proceed Cautiously

YELLEN – Economic Readings Mixed, Appropriate to Proceed Cautiously
Yellen, speaking to the Economic Club of New York, noted in prepared remarks that recent readings on the strength of the U.S. economy since the beginning of the year have been mixed. All major U.S. indexes turned positive and Treasury yields hit multi-week lows after the release of Yellen’s remarks.
The Federal Reserve held interest rates steady on Wednesday and indicated that moderate U.S. economic growth and “strong job gains” would allow it to tighten policy this year, with fresh projections showing policymakers expected two quarter-point hikes by the year’s end, half the number seen in December.
Bank of Japan ‘intervenes’ to weaken the yen
All the day’s economic and financial news, as the Bank of England decides to leave interest rates at 0.5% yet again BoE warns about global growth Shares fall after Norwegian rate cut
Federal Reserve Chairwoman Janet Yellen faced what may have seemed like an absurd line of questioning on Capitol Hill this week: Has the Fed considered negative interest rates? The basic logic of lowering interest rates when economic conditions turn south is to spur spending. If savings accounts aren’t accruing much interest, companies and savers are incentivized to spend the cash or invest elsewhere, stimulating the economy. Major economies around the world are desperate to spur inflation; one way to do that is to cut interest rates, which typically would make their currencies less attractive. Lower currencies raise the prices of imported goods and boost the fortunes of exporters. Stock markets around the world continue to collapse as this new global financial crisis picks up more steam. BullionByPost, Britain’s biggest online gold dealer, said it has already taken record-day sales of £5.6m as traders pile into gold following fears the world is on the brink of another financial crisis.
explained that the economies of Japan, Brazil, Canada and Russia are all in recession. Today, I am mainly going to focus on the United States. We are seeing so many things happen right now that we have not seen since 2008 and 2009. In so many ways, it is almost as if we are watching an eerie replay of what happened the last time around, and yet most of the “experts” still appear to be oblivious to what is going on. If you were to make up a checklist of all of the things that you would expect to see just before a major stock market crash, virtually all of them are happening right now. The following are 11 critical indicators that are absolutely screaming that the global economic crisis is getting deeper… oil price collapse hike
#5 The Bloomberg U.S. economic surprise index is more negative right now than it was at any point during the last recession. #6 Credit card data that was just released shows that holiday sales have gone negative for the first time since the last recession. slaves corporate rich poor gap “Peter Schiff” u.s. usa america “united states” imports exports trade economy “stock market” “savings account” savings “bank account” banking debt credit “credit card” money wealth jobs job employment “job agency” poverty poor christmas sale manufacturing “made in usa” 2015 2016 interest “interest rate” mortgage “real estate” gold silver “silver eagle coin” “silver coin” news media entertainment “elite nwo agenda” “binary options” data jim rogers marc faber lindsey williams alex jones infowars coast to coast am louis farrakhan rawdogletard
#9 In 2008, commodity prices crashed just before the stock market did, and late last month the Bloomberg Commodity Index hit a 16 year low. #10 In the past, stocks have tended to crash about 12-18 months after a peak in corporate profit margins. At this point, we are 15 months after the most recent peak. #11 If you look back at 2008, you will see that junk bonds crashed horribly. Why this is important is because junk bonds started crashing before stocks did, and right now they have dropped to the lowest point that they have been since the last financial crisis.
And I am not the only one saying this. Robert Kiyosaki: ‘Biggest’ Market Crash Likely in 2016 Author Robert Kiyosaki: ‘Biggest’ Market Crash Likely in 2016 Important: Can you afford to Retire? Robert Kiyosaki, best-selling author of “Rich Dad, Poor Dad,” warns that stock market manipulation may result in a crash bigger than in 2007. Gold and silver have crashed. Junk bonds have crashed. Chinese stocks have crashed. The Global Economy Is Officially Melting Down

Avoid putting your money in these banks

by Simon Black
A friend of mine who’s an equities analyst at a large brokerage firm recently sent out pretty ironic note to all of his private clients.
He focuses on the financial sector, so his job is basically to analyze bank stocks and figure out which ones his investors should buy.
To determine this, he does a deep dive on banks’ financial statements, assessing everything from their capital levels to their non-performing loan ratios.
That’s a fancy way of saying that financial analysts who concentrate on bank stocks conduct a LOT of research to make sure the banks are SAFE and will be in good shape in the long-term.
What struck me as so ironic about his most recent report was how FEW banks are actually safe these days.
Bank balance sheets, particularly in western nations, have eroded substantially over the last few years.
Capital reserves are in the toilet… meaning the banks themselves have very little tucked away for a rainy day fund. If asset prices start to fall, western banks could easily slip into insolvency.
Liquidity ratios are also appalling. Banks keep an incredibly LOW ratio of high quality liquid assets (including cash) on reserve as a percentage of customer deposits.
So if any meaningful portion of the banks’ customers wanted to withdraw their funds out of the system, the banks simply wouldn’t have the money.
My friend’s conclusion about bank stocks was that very few of them are worth owning.
Some are at risk of going under. And the others will be too busy trying to raise their capital ratios, unable to generate much profit or pay dividends to their shareholders.
But this raises a very interesting point: investors spend a lot of time analyzing bank stocks to see whether or not they should invest.
Yet very few people analyze the banks themselves to see whether or not to deposit money there.
This is totally backwards.
Banks are, for better or worse, our financial partners. They’re holding the money.
And while this model is changing rapidly, banks remain an absolutely critical part of our lives.
But there’s almost ZERO analysis that goes into selecting a bank. These decisions are usually made because the bank is conveniently located across the street, not due to its fundamentals.
Crazy. Banking as an industry has been about as deceitful as the political establishment. They never miss an opportunity to cheat their own customers.
They conspire to fix interest rates in their favor. They manipulate asset prices. They inflate fees and commissions for foreign exchange.
They treat us like criminal terrorists when we have the audacity to ask for our own money back.
They take our hard-earned savings and make the most mindless and destructive loans. And then when the whole house of card collapses they claim that they’re too important and demand to be bailed out at taxpayer expense… only to shower themselves with fat bonus checks.
And they consistently make the same mistakes over and over again, while using clever accounting tricks to hide their true financial condition.
Handing over our life’s savings to an institution with such an abysmal track record demands a modicum of analysis.
And if you pop the hood and look at the inner workings of your bank, more than likely you’re not going to be happy with what you see.
Again, most banks, particularly in the West, have extremely low levels of liquidity. So perhaps it’s no surprise how many western nations are establishing “bail-in” rules.
This means that the next time your bank runs into trouble, they’re pre-authorized to steal their depositors’ savings instead of going to the government for a bailout.
You’d think that with this kind of history and level of risk we would give a bit more thought before handing over all of our money.
To make the best decision on where to put your savings, why not think like a savvy investor and take look at your banks’ finances?
You can get started right now, as large banks usually publish annual financial reports online.
(If your bank is private and refuses to provide its balance sheet to you on request, that’s all you need to know about that bank. Take your money and run.)
In a bank’s financial report you want to look for two main things: the bank’s liquidity and its solvency.
A liquid bank is one that holds plentiful liquid assets and cash equivalents on hand to be able to honor all withdrawal requests.
An easy way to determine this is by dividing the bank’s cash and cash equivalents by its total customer deposits.
Liquid banks are safer, and this ratio is key in a financial crisis. Illiquid banks will be the ones ‘bailed in’ by their depositors.
Simultaneously, a solvent bank is one whose assets are far greater than its liabilities. It’s like having a large net worth.
Depending on what a bank is invested in, the value of its assets can drop significantly when there’s a market shock. And if the drop is great enough it can quickly become insolvent.
Healthy banks hold strong capital reserves on their balance sheets and maintain a high ‘net worth’. You can calculate this by looking at a bank’s total capital divided by its assets.
The higher the percentage, the safer the bank.
These are just two very basic numbers to look at when determining the safety of your bank. And it’s imperative to start asking questions. After all, there’s a lot at stake.
If you don’t feel comfortable with the results, think about changing banks. And leave out geography in your decision.
It’s 2016, not 1916. Your money can ‘live’ on the other side of the planet from you. And you might find that a foreign bank is MUCH safer than where your money is currently.
More on that soon.

“Can we just remind ourselves that the Panama Papers are from just ONE law firm, in just ONE tax haven. Tip of the proverbial iceberg.”

Can we just remind ourselves that the are from just ONE law firm, in just ONE tax haven. Tip of the proverbial iceberg.

No US Names in Panama Papers Leak- Why Not?

The Panama Papers leak is still in its infancy, but one thing is clear: the largest data leak in the history of investigative journalism promises to have repercussions for the rich and powerful around the world. Already, leaders in Iceland and Russia are facing questions about their use of the Panamanian law firm Mossack Fonseca to squirrel their money away in offshore dummy corporations. And there is more information coming.
But one country has been absent from the discussion: the United States of America. No American politicians have been named (yet) in the leak. Is this because, to paraphrase media critic Adam Johnson, American politicians are “pure and good and incorruptible?”

The United States is pure and good and incorruptible. 

Unlikely. What’s more probable is that US- Panamanian relations over the 39 years that MF has existed have contributed to a culture where Americans do not feel comfortable storing their ill-gotten gains in the Central American country.

Mossack Fonseca was formed in 1977 by Jurgen Mossack and Ramon Fonseca. The two Panamanians formed the company as a provider of shell corporations to the rich and powerful around the world.
1977 was also the year that the US and Panama signed the Torrijos–Carter Treaties, which provided for the transfer of the Panama Canal from US sovereignty to Panamanian. The treaty was decried in some right wing circles of the US as an abdication of US territory and the treaty’s actual purpose was murky at best.
In other words, 1977 was not the peak of good US-Panamanian relations. It is doubtful that anyone wanting to shield their finances from the IRS would have chosen a country under intense scrutiny from elements within the US government.
Further, Panama’s leadership from 1977 until 1989 was dominated by a military dictatorship. In 1989, the US invaded Panama to depose former CIA asset Manuel Noriega, who had ceased to be useful for his patrons in Washington. Storing cash, data, and legal information in a country that could easily become the target of a US intervention was not a prudent move.

Making matters worse for Americans wanting to store their ill-gotten gains offshore, the 2010 United States—Panama Trade Promotion Agreement included a taxation clause that effectively shut down any chance of the rich in the US using Panama as a shelter.
The Tax Information Exchange Agreement includes a clause, Article 5, that specifies the terms of information sharing between the two countries on tax related matters:
The competent authority of the requested Party shall provide upon request by the competent authority of the requesting Party information for the purposes referred to in Article 1 of this Agreement. Such information shall be exchanged without regard to whether the requested Party needs such information for its own tax purposes or the conduct being investigated would constitute a crime under the laws of the requested Party if it had occurred in the territory of the requested Party.
The Article goes on to make clear that Mossack Fonseca’s type of services would particularly be included in the information request:
Each Party shall ensure that it has the authority, for the purposes referred to in Article 1 of this Agreement and subject to Article 2 of this Agreement, to obtain and provide, through its competent authority and upon request:
(a) information held by banks, other financial institutions, and any person, including nominees and trustees, acting in an agency or fiduciary capacity; and
(b) information regarding the ownership of companies, partnerships, trusts, foundations, and other persons, including…. ownership information on all such persons in an ownership chain; in the case of trusts, information on settlors, trustees and beneficiaries; and in the case of foundations, information on founders, members of the foundation council and beneficiaries.
If Panama had ever been an attractive destination for American offshore storage of funds, this agreement shut the door on that possibility.
It’s quite possible that as the leak unfolds, American names will be uncovered in the files of Mossack Fonseca. It’s equally possible that Americans are using one or more of the other three top firms involved in this kind of work.
If Americans are not named or implicated in this leak, it will have more to do with the uniqueness of the US- Panamanian relationship and less to do with the morality- real or perceived- of the US and its power brokers.
Update: Matthew Ingram at Fortune reported last night that US names may be coming:

I’ve reached out to a Latin American expert in Argentina and will update this post when he replies.
This post will also update as the story unfolds.

Three Snowstorms to Hit Northeast – Heating Oil Prices to Spike