I stated in 2003 that the insider elitists would hold up the system
with printed money long enough to wipe every last crumb of middle class
wealth off the “table” and into their pockets. If you don’t have
enough cash laying around to buy your own Federal-level “elected”
official, you are middle class.
It’s easy for Wall Street to get their share of the crumbs being
swept off the table because it’s managed to infiltrate and control every
nook and cranny of Capitol Hill. Hillary Clinton is a Democrat?
Really? Then how come she and Bill greedily take millions from Goldman
Sachs alone in “speaking” fees. Quite frankly, ex-Presidents OR
potential Presidential candidates should be barred from accepting paid
appearances from any corporate or corporate-sponsored entity, but
especially from Wall Street.
I want to call your attention to an investigative article by Wall
Street On Parade titled “The U.S. Government [really, The Taxpayer] Is
Quietly Paying Billions To Wall St. Banks.” In the past for years,
2011 – 2015, Freddie Mac alone paid out nearly $12 billion in
derivatives counter-party payouts. These payouts resulted from losses
interest rate swaps, 90% of which are owned by Wall Street banks. That
money from Freddie Mac is actually Taxpayer money because the Government
still owns FRE and FNM. LINK
But it’s even more profound than the WSOP lays out.
Interest rates are held artificially low by the Fed/Treasury, which
enable FNM/FRE to underwrite mortgages for people who otherwise would
not be able to afford the mortgage. The Too Big To Fail banks make money
off of this is several ways. They source the mortgages and take a fee,
they flip the mortgage to FNM/FRE and take a fee, they securitize the
FNM/FRE mortgages and sell the mortgage pools to institutional investors
and take a fee and they sell interest rate swaps to FNM/FRE and take a
fee. When interest rates don’t go up because the Fed is holding them
down, FNM/FRE lose money on the swaps and…Wall Street gets the money
from the loss.
A close friend of mine was curious about how the housing market might
play out, because – after I described what’s happening and why the
mid-price homes in Denver are hot right now (while the over $800k
housing inventory piles up like trash at the local dump) – I explained
that the same mortgage bubble that fueled the big housing bubble has
been reinflated. The only difference is that FNM/FRE are now the
underwriters of sub-prime mortgages that are disguised to look like
conventional mortgages. But they’re far from “conventional.” If
someone puts down 3% – or, more likely borrows the 3% – they are
underwater on the value of their home after all closing costs are
factored in. These de facto LTV mortgages well in excess of 100%.
That’s what Countrywide and Wash Mutual were underwriting, only this
time it’s well-disguised and backed by YOU, the Taxpayer.
The same dynamic has already occurred with auto loans and student
debt. Auto loans are starting to blow up, as are student loans. These
3% (FHA) and 3.5% (FNM/FRE) and 0% (USDA and VHA) down payment mortgages
are next. We’re already seeing this occur in energy-heavy areas like
Houston. What’s going to happen to the Central States Teamster pension
beneficiaries who need their pension payout to make a mortgage payment
after their payout is cut 60%? That’s close to half a million people,
many of whom use that payout to fund monthly mortgage payments.
There’s another gigantic bail-out coming. And
Wall Street will get to keep all the $10’s of billions in Taxpayer
money that was funneled to it while it was underwriting the current
housing, auto sales and student loan bubble.
My friend then asked me what I thought be would be the event that
collapses the U.S. house of cards. The fact is, no one knows but it
will likely be derivatives-related just like in 2008. No one saw the
de facto AIG/Goldman collapse. Note: the Martins reference AIG blowing
up but Goldman Sachs blew up too. The only difference between AIG and
Goldman was that Henry Paulson, ex-Goldman CEO who was Treasury
Secretary, was in a position to direct Taxpayer money toward a bail-out
Goldman, while AIG and Lehman were left for dead. Note also:
AIG was taken over by the Government because it enabled the Government
to “dis-arm” – with the help of the Fed – all of the derivative bombs
that would have completely incinerated Goldman Sachs.
The only way to protect yourself from what’s coming is to get your
money out of the banking system. The Fed’s inexorable suppression of
the price of gold/silver is openly giving everyone a chance to convert
as much paper monopoly money as possible into physical gold and silver
at artificially low prices.
A Mining Stock Journal subscriber told me over the weekend that he
was contemplating a 100% cash-out refi on on his house, which has a lot
of equity in it, and buying gold and silver. He asked me if I thought
it was a good idea. I said that as long as he was okay sending the keys
to the bank and walking away when this thing blows – because I know of a
lot of people who are going to do just that – that he would be an idiot
if he didn’t do it.
This is exactly what Wall Street is doing with the Government’s blessing. If you can’t beat ’em, join ’em…
Tuesday, May 24, 2016
Saudi Arabia, US Retailers, and the EU Are Having a Really Bad Year
from Dollar Collapse
Watch
Brexit, the Movie, to understand why Britain might just leave the EU —
and why other members should leave as well. Meanwhile, the Saudis are
apparently out of money, the bricks and mortar retailers are out of
customers and Wall Street bankers are looking at mass unemployment.
Brutal times for obsolete institutions!
Click Here to Listen to the Audio
Watch
Brexit, the Movie, to understand why Britain might just leave the EU —
and why other members should leave as well. Meanwhile, the Saudis are
apparently out of money, the bricks and mortar retailers are out of
customers and Wall Street bankers are looking at mass unemployment.
Brutal times for obsolete institutions!Click Here to Listen to the AudioThe EU and IMF deal over Southern Europe hangs over the Brexit debate
Five things to look out for this week in economics including the IMF-EU deal and the Marks and Spencer results, always a benchmark in judging our changing shopping habits
Is Europe the new Japan? It is an oft-posed question and one that is hanging over the Brexit debate. Leavers argue that if Europe is going to be a sclerotic economic region, maybe the UK is better getting shot of it. Remainers reply that quitting the EU does not mean you quit the European economic space and that in any case parts of Europe are doing all right. The problem is southern Europe, not the continent as a whole, and in particular Greece.
So what will Europe do about Greece? That is the prime thing to look for over the next few days. The International Monetary Fund thinks, quite rightly, that Greece can never repay its debts and that there should be some sort of debt write-off by Europe. It also thinks that Greece should not have to pay any interest on its borrowings before 2040. Germany, which would have to foot the lion’s share of the costs, wants to preserve the principle that the country must ultimately pay back the money it has borrowed. It would accept easier terms, such as a longer payback time and lower interest rates, but won’t shift on the principle. Both the European Union and the IMF were involved in the bail out of Greece but the two creditors now want to treat the country differently.
There is a meeting on Tuesday between the EU authorities and the IMF to see whether they can do a deal, perhaps by the EU taking over some of the IMF debt. We’ll see.
Greece is the immediate problem, but there is a wider message from the financial markets that the long term prospects for Europe are weak. The second thing to look for this week will be the contrast between Europe and the US. In financial terms the US is beginning to get back to normal. Europe is not. To take one measure, ten-year US government bonds yield 1.9 per cent. That is very low by historical standards but compares with the German equivalent of only 0.2 per cent or the French at 0.5 per cent. That may not be as bad as Japanese bonds yielding minus 0.1 per cent, but it is saying that investors do not expect many decent investment opportunities in Europe over the next few years. Otherwise why tie up your money in this way?
Janet Yellen, chair of the Federal Reserve Board, is speaking at the end of the week at Harvard, and everyone will be looking for a hint as to the pace at which US monetary policy will get back to normal. If she is reasonably upbeat, expect another US rise in interest rates before the summer is out. One reason for not having one next month: the possibility of Brexit and the unsettling impact this might have on global business confidence. But were that to happen it would be a rare case of the British tail wagging the American dog.
Number three is indeed confidence in Britain. Among the more specific claims about the impact of Brexit last week was the one by the Chancellor that house prices would drop by 17 per cent. It was slightly more hedged-about, but that was the headline figure. So this week let’s see whether people believe him. Will estate agents report a shading-off of business? Will more people decide to rent rather than buy? Will the warning have any effect at all? My guess is it won’t, because no-one believes anything the contenders are saying. But that would be interesting in itself, wouldn’t it?
Four, the migration story will hot up on Thursday. The ONS will publish two reports, the monthly ones on international migration drawn, among other places, from the international passenger survey, and the annual ones on the number of people who come for between a month and a year. Some of the data is already out, but this won’t stop people on all sides from spinning the numbers to fit their political views. What I think we will learn is what we already know: that if you have a fast-growing economy alongside slower-growing ones, people will move to the former to get jobs.
Finally something more precise: Marks and Spencer results, out Wednesday. M&S is only a company and most of the comment will be about how well or otherwise is it doing. Its food business is terrific but is it at last producing clothes that fashion-aware people want to be seen in? But it is much more than just a business, for it is gives a feeling for the way our lives are changing. We buy much more online; we are more price-conscious; we are more fickle; and so on. How M&S is seeking to adapt tells us about ourselves, always a fascinating subject, of course.
TPP Would Subject Canadian Citizens’ Banking Data to U.S. PATRIOT Act
(Joe Wolverton, II, J.D.)
A provision in the Trans-Pacific Partnership (TPP) trade agreement, to
which Canada and the United States are parties, makes it “quite likely”
that the private banking details of Canadian citizens could be
“accessible to American security intelligence agencies,” according to a
member of the Canadian parliament.
Speaking on May 12 in the House of Commons, Parliament member Guy Caron warned fellow lawmakers that the sprawling surveillance state to the south of Canada could soon swallow up private banking data in Canada.
“Right now, Canadian data, such as banking information and confidential information, are stored on Canadian servers, which are obviously not accessible to the United States at the moment and do not fall within the scope of the USA Patriot Act,” Caron said. “However, the provision that requires these types of data to be stored on Canadian servers may be removed. It is therefore quite likely that these data could be stored on servers on American soil, where they would be accessible to American security intelligence agencies.”
David Lametti, member of Parliament from Quebec, said he was familiar with this criticism, but dismissed it as part of a necessary “quid pro quo” with the United States and other TPP signatories.
“There is a quid pro quo because a number of Canadian companies in the financial services and insurance sector have told us that the cross-border flow of data is very important,” Lametti said.
Economic growth in Canada “is directly linked to international trade,” Lametti added. “The government strongly supports free trade as a way to open markets to Canadian goods and services, grow Canadian businesses, and create good-paying middle-class jobs.”
Goods and services aren’t the only things that will be freely traded across the border. Banking data will be packaged and transmitted to servers in the United States where U.S. intelligence gathering organizations would undoubtedly rejoice at the reception of such a large cache of critical financial data without the need of a warrant.
Then, that data would become subject to the provisions of the PATRIOT Act. As explained in the Canadian edition of the Huffington Post:
The combined effect of these U.S. laws is that many users fear that once their information is stored in the U.S., it will be accessible to U.S. authorities without suitable privacy protections or oversight. Since U.S. law provides less privacy protection to foreigners, there is indeed limited legal recourse for Canadian data held in the U.S.
In November 2013, portions of the TPP draft agreement published by WikiLeaks contained sketches of President Obama’s plans to surrender American sovereignty to international tribunals.
Another WikiLeaks disclosure in January of the next year revealed that the president was attempting to surrender sovereignty over U.S. environmental policy to international bureaucrats interested in lowering those standards to mirror those of our TPP partner nations.
U.S. copyright laws, Internet freedom, and web-based publishing can be obliterated by the TPP, and, although it hasn’t been widely reported, the TPP grants to the global government sweeping surveillance powers, as well.
Canadian opposition to the data dump isn’t new. Negotiators for our neighbors to the north denounced the emigration of electronic data early on the agreement’s history.
A reported published in 2014 by Vice exposed Canada’s attempt to block the proposed surveillance scheme:
America is, essentially, the world’s data server. Since the dawn of the internet itself, every database of import has been hosted in the grand US of A. But now, foreign governments are starting to see the benefit of patriating their citizens’ private information.
Canada was an early adopter of the idea. Federal procurement regulations often require government departments to insert local data requirements, stating that businesses who wish to administer or host Canadians’ information must keep the information within Canadian borders. Most recently, the Canadian Government put out a tender for a company to merge and host the email servers for all their departments. In doing so, they stuck in a national security exemption, forbidding foreign contractors from applying.
Nova Scotia and British Columbia went a step further, flatly requiring any government-hosted personal data to be physically located in Canada.
Of course, American trade representatives wouldn’t brook this patriotic protection of Canadian’s personal data.
Again, from Vice:
But the American government is not having any of it and is using TPP negotiations to strong-arm new provisions that favour American hosted data.
“In today’s information-based economy, particularly where a broad range of services are moving to ‘cloud’ based delivery where U.S. firms are market leaders; this law hinders U.S. exports of a wide array of products and services,” reads a report on Canada from the office of the United States trade commissioner.
The Americans aren’t even making secret their insistence on the matter. On the American website for the trade deal, it clearly states there’s a priority for the TPP to include: “requirements that support a single, global Internet, including ensuring cross-border data flows, consistent with governments’ legitimate interest in regulating for purposes of privacy protection.”
One provision of the TPP agreement would authorize American corporations to sue Ottawa should Canadian interests interfere with the “data flow provisions” of the agreement.
What makes the TPP agreement so extreme is that it could allow those corporations to sue governments that don’t respect the data flow provisions.
It’s two years on, the TPP agreement is complete, and the Canadians have walked back their insistence on domestic storage of electronic data.
A majority of Parliament now considers the TPP “the best opportunity to strengthen the multilateral trading system and develop rules that protect Canada’s economic interests.”
Something more than private banking data is being transferred by the TPP: national sovereignty.
Economic and political integration that is central to the TPP’s purpose will push the once-independent United States of America into yet another collectivist bloc that will facilitate the complete dissolution of our nation and our states into no more than impotent members of a one-world government.
Each of the “partners” to the pact, including foreign corporations, would be exempted from abiding by American laws governing trade disputes. Moreover, the sovereignty of the United States and the Constitution’s enumeration of powers would once again be sacrificed on the altar of global government by subordinating U.S. laws passed by duly elected representatives of the people to a code of regulations created by a team of transnational bureaucrats.
Speaking on May 12 in the House of Commons, Parliament member Guy Caron warned fellow lawmakers that the sprawling surveillance state to the south of Canada could soon swallow up private banking data in Canada.
“Right now, Canadian data, such as banking information and confidential information, are stored on Canadian servers, which are obviously not accessible to the United States at the moment and do not fall within the scope of the USA Patriot Act,” Caron said. “However, the provision that requires these types of data to be stored on Canadian servers may be removed. It is therefore quite likely that these data could be stored on servers on American soil, where they would be accessible to American security intelligence agencies.”
David Lametti, member of Parliament from Quebec, said he was familiar with this criticism, but dismissed it as part of a necessary “quid pro quo” with the United States and other TPP signatories.
“There is a quid pro quo because a number of Canadian companies in the financial services and insurance sector have told us that the cross-border flow of data is very important,” Lametti said.
Economic growth in Canada “is directly linked to international trade,” Lametti added. “The government strongly supports free trade as a way to open markets to Canadian goods and services, grow Canadian businesses, and create good-paying middle-class jobs.”
Goods and services aren’t the only things that will be freely traded across the border. Banking data will be packaged and transmitted to servers in the United States where U.S. intelligence gathering organizations would undoubtedly rejoice at the reception of such a large cache of critical financial data without the need of a warrant.
Then, that data would become subject to the provisions of the PATRIOT Act. As explained in the Canadian edition of the Huffington Post:
The combined effect of these U.S. laws is that many users fear that once their information is stored in the U.S., it will be accessible to U.S. authorities without suitable privacy protections or oversight. Since U.S. law provides less privacy protection to foreigners, there is indeed limited legal recourse for Canadian data held in the U.S.
In November 2013, portions of the TPP draft agreement published by WikiLeaks contained sketches of President Obama’s plans to surrender American sovereignty to international tribunals.
Another WikiLeaks disclosure in January of the next year revealed that the president was attempting to surrender sovereignty over U.S. environmental policy to international bureaucrats interested in lowering those standards to mirror those of our TPP partner nations.
U.S. copyright laws, Internet freedom, and web-based publishing can be obliterated by the TPP, and, although it hasn’t been widely reported, the TPP grants to the global government sweeping surveillance powers, as well.
Canadian opposition to the data dump isn’t new. Negotiators for our neighbors to the north denounced the emigration of electronic data early on the agreement’s history.
A reported published in 2014 by Vice exposed Canada’s attempt to block the proposed surveillance scheme:
America is, essentially, the world’s data server. Since the dawn of the internet itself, every database of import has been hosted in the grand US of A. But now, foreign governments are starting to see the benefit of patriating their citizens’ private information.
Canada was an early adopter of the idea. Federal procurement regulations often require government departments to insert local data requirements, stating that businesses who wish to administer or host Canadians’ information must keep the information within Canadian borders. Most recently, the Canadian Government put out a tender for a company to merge and host the email servers for all their departments. In doing so, they stuck in a national security exemption, forbidding foreign contractors from applying.
Nova Scotia and British Columbia went a step further, flatly requiring any government-hosted personal data to be physically located in Canada.
Of course, American trade representatives wouldn’t brook this patriotic protection of Canadian’s personal data.
Again, from Vice:
But the American government is not having any of it and is using TPP negotiations to strong-arm new provisions that favour American hosted data.
“In today’s information-based economy, particularly where a broad range of services are moving to ‘cloud’ based delivery where U.S. firms are market leaders; this law hinders U.S. exports of a wide array of products and services,” reads a report on Canada from the office of the United States trade commissioner.
The Americans aren’t even making secret their insistence on the matter. On the American website for the trade deal, it clearly states there’s a priority for the TPP to include: “requirements that support a single, global Internet, including ensuring cross-border data flows, consistent with governments’ legitimate interest in regulating for purposes of privacy protection.”
One provision of the TPP agreement would authorize American corporations to sue Ottawa should Canadian interests interfere with the “data flow provisions” of the agreement.
What makes the TPP agreement so extreme is that it could allow those corporations to sue governments that don’t respect the data flow provisions.
It’s two years on, the TPP agreement is complete, and the Canadians have walked back their insistence on domestic storage of electronic data.
A majority of Parliament now considers the TPP “the best opportunity to strengthen the multilateral trading system and develop rules that protect Canada’s economic interests.”
Something more than private banking data is being transferred by the TPP: national sovereignty.
Economic and political integration that is central to the TPP’s purpose will push the once-independent United States of America into yet another collectivist bloc that will facilitate the complete dissolution of our nation and our states into no more than impotent members of a one-world government.
Each of the “partners” to the pact, including foreign corporations, would be exempted from abiding by American laws governing trade disputes. Moreover, the sovereignty of the United States and the Constitution’s enumeration of powers would once again be sacrificed on the altar of global government by subordinating U.S. laws passed by duly elected representatives of the people to a code of regulations created by a team of transnational bureaucrats.
Honolulu Rail: It Just Keeps Getting Worse
HONOLULU RAIL: IT JUST KEEPS GETTING WORSE
by Wendell Cox, New Geography, May 19, 2016
There seems to be no end to the difficulties facing Honolulu’s urban rail project.
In an editorial, Honolulu’s Civil Beat noted that federal officials fear the project cost may reach $8.1 billion, which is more than 50 percent above the “original estimate” of $5.2 billion.
The cost blowout of nearly $3 billion would be far more than state consultants suggested in a 2010 report. That report, by the Infrastructure Management Group (IMG) in conjunction with the Land Use and Economic Management Group of CB Richard Ellis and Thomas A. Rubin estimated a “most likely scenario” in which the rail cost overrun would have been $909 million (Note).
This is, however, a particular concern to local citizens, since it has been suggested that no rail project has cost more in relation to its population base in US history. If the the project costs $8.1 billion, the IMG et al report estimate will have turned out to be far too conservative, less than one-third the overrun.
At $2.9 billion this extra cost is nearly $3,000 for every man, woman and child in Honolulu. It is more than $8,500 per household.
read … New Geography
The Civil Beat editorial is here.
Note: Thomas A. Rubin’s more recent analysis of rail and transit ridership in Los Angeles is here
by Wendell Cox, New Geography, May 19, 2016
There seems to be no end to the difficulties facing Honolulu’s urban rail project.
In an editorial, Honolulu’s Civil Beat noted that federal officials fear the project cost may reach $8.1 billion, which is more than 50 percent above the “original estimate” of $5.2 billion.
The cost blowout of nearly $3 billion would be far more than state consultants suggested in a 2010 report. That report, by the Infrastructure Management Group (IMG) in conjunction with the Land Use and Economic Management Group of CB Richard Ellis and Thomas A. Rubin estimated a “most likely scenario” in which the rail cost overrun would have been $909 million (Note).
This is, however, a particular concern to local citizens, since it has been suggested that no rail project has cost more in relation to its population base in US history. If the the project costs $8.1 billion, the IMG et al report estimate will have turned out to be far too conservative, less than one-third the overrun.
At $2.9 billion this extra cost is nearly $3,000 for every man, woman and child in Honolulu. It is more than $8,500 per household.
read … New Geography
The Civil Beat editorial is here.
Note: Thomas A. Rubin’s more recent analysis of rail and transit ridership in Los Angeles is here
Next Up For Our Chaotic World
What
will happen in our increasingly chaotic financial world? For sensible
analysis, seek the most intelligent, least biased, and experienced
people … central bankers, most economists, and all politicians are, of
course, not eligible.
Economic growth chugs along at a percent or two while debt races ahead at 9% or so each and every year. Debt rising far more rapidly than the underlying economy which must support the debt is unsustainable. If something can’t continue, it will end ….
Our debt based economic future looks grim for the next several years, unless, as Druckenmiller suggests, we move out of financial assets and move into gold (and silver) – real physical gold (and silver) – not the paper versions.
Gary Christenson
The Deviant Investor
From Mish regarding the opinions of Stanley Druckenmiller:
- “Gold is the superior asset in present part of cycle
- Fed is lost – totally lost and nothing they say match their action
- Negative interest is worst policy mistake ever
- Debt is and remains the elephant in the room”
“Stanley Druckenmiller warned on
Wednesday that the Federal Reserve’s low-rate policy is creating vast
long-run risks for the US economy.”
“… most of the debt today has been
used for financial engineering in the form of stock buybacks and other
methods that provide a boon to corporate profits…”
“I have argued that the myopic policy
makers have no endgame, billionaire Stanley Druckenmiller said towards
the end of a scathing twenty minute romp through all the world’s
economic problems.”
From The Telegraph regarding global economies:
“The patient is in a critical
condition. The International Monetary Fund is concerned that the global
economic recovery has taken too long. Kaushik Basu, chief economist of
the World Bank, says the financial crisis has left a ‘festering wound’
that is ‘refusing to heal.’ Growth is too weak, resulting in the
equivalent of a compromised immune system that has left the economy
vulnerable to fresh diseases.
“The question now facing the global economy’s physicians: is the ailment chronic or acute?”
IT IS ALL ABOUT DEBT …
From Michael Lewitt at SureMoney:
“Debt drains away vital resources
from economic growth. Fighting a debt crisis with more debt is doomed
to failure, yet that is not only what global central banks did during
the crisis, but long after markets stabilized (though the crisis never
truly ended, just slowed). This was an epic policy failure that
continues today.”
Economic growth chugs along at a percent or two while debt races ahead at 9% or so each and every year. Debt rising far more rapidly than the underlying economy which must support the debt is unsustainable. If something can’t continue, it will end ….
From David Stockman:
“That’s because the Bubble Finance
status quo as we know it is on its last legs. … That means a big market
dive is coming soon.”
“In fact, a recession, a market
crash, an explosion of deficit projections and, for good measure, double
digit increases in next year’s health insurance premiums and copays
will be hitting the headlines before the final Hillary/Donald debate
duals of the fall campaign.”
Repeat – What Comes Next? Thank you David Stockman!
- A recession, happening now, or soon
- A stock market crash or severe correction
- Higher deficits – practically guaranteed in the coming recession
- Health Insurance increases – the data and history suggest this is likely
What Comes Next? More Possibilities:
- “Helicopter Money” or per Bill Gross the “Universal Basic Income” or UBI
- Negative interest rates, like a viral infection, could spread to the U.S.
- Emergency stimulus or more QE under a different name
- A war to serve as a scapegoat and distraction
- More “bread and circuses”
From Albert Edwards: Summary from “Let me tell you how this ends”
- Investors can pretend no longer – profits slide into a recession.
- Deep bear market in equities
- Corporate bond spreads explode with widespread corporate bankruptcies.
- Social unrest and huge budget deficits.
- Investors lose faith in the Fed.
- Negative interest rates, currency and trade wars, helicopter money, and inflation.
- It ends BADLY!
From John Rubino:
“Where do we go from here? Probably into a crisis in which the world stops trusting markets, and financial assets are devalued accordingly.”
Our debt based economic future looks grim for the next several years, unless, as Druckenmiller suggests, we move out of financial assets and move into gold (and silver) – real physical gold (and silver) – not the paper versions.
Gold and silver are not the answer to all of our economic problems, but they are better answers than more debt, QE, war, and lies.
Gary Christenson
The Deviant Investor
Cash-strapped colleges still splurge on celebrity speakers
Even as many colleges are tightening the belt financially,
administrators are choosing to pay sizable fees for the prestige of
having a well-known figure speak at graduation ceremonies.
This graduation season universities attracted big names for big
bucks, documents obtained by the Associated Press show. Rutgers
University paid $35,000 to book journalist Bill Moyers, and the
University of Houston paid the same amount to get astronaut Scott Kelly
to speak.
Kean University invited Brandon Stanton and astronaut Mark Kelly – Scott’s twin brother – to speak at its undergraduate and graduate ceremonies and paid them $40,000 each, AP reported.
Many speakers do it for free, though. For example, President Barack Obama spoke at Rutgers earlier this year. Since high-value speakers willing to offer their services for free are the exception rather than the rule, however, even institutions that run tight budgets are willing to splurge.
Hollywood actor Matthew McConaughey made headlines last spring for bringing in $135,000 for a speech at the publicly-funded University of Houston, where the average salary of an assistant professor is only $91,983, according to Glassdoor.
In 2014, the University of Nevada, Las Vegas (UNLV) sparked outcry when Hillary Clinton was paid $225,000 to give a commencement speech to new graduates, after tuition at the institution had recently increased by 17 percent.
“You could give scholarships to thousands of students, benefit research on campus, give more students grants for research and studying,” Daniel Waqar, Student Relations Director for the UNLV Student Government, told Ralston Live at the time.
While it may seem like a luxury, an estimated 30 percent of colleges pay their commencement speakers, according to Inside Higher Ed. This fee is often seen as an investment to attract publicity, donors and potential students.
“Universities do see who their students want, and they assume that that’s what their future students will want to see as well,” Margot Sarlo, director of marketing at All American Entertainment, told Inside Higher Ed last year. “Universities are vying for customers in the form of admissions, and this can be a great way to advertise and get people on campus.”
Colleges in the Illinois public university system don’t seem to have such a luxury, and paid hefty fees to speakers last spring while simultaneously struggling with a budget crisis that is still unsolved. State legislators tried to pass a bill that would have prevented using public money on graduation speakers, though it never actually made it into law.
Bradley University, a private school in Peoria, Illinois, opted to forego a celebrity commencement speaker.
“I’m not going to use student tuition dollars to pay a person who’s already pretty wealthy to come and pontificate,” university President Gary Roberts told AP. “I can think of a lot of things to do with that kind of money that would be more valuable to our students.”
A 2014 report by Bloomberg News found that in California alone, universities spent more than $7.5 million on commencement speakers over the course of two years. That same year, the University of California board approved a plan to raise tuition by 27.6 percent.
Via RT. This piece was reprinted by RINF Alternative News with permission or license.
Kean University invited Brandon Stanton and astronaut Mark Kelly – Scott’s twin brother – to speak at its undergraduate and graduate ceremonies and paid them $40,000 each, AP reported.
Many speakers do it for free, though. For example, President Barack Obama spoke at Rutgers earlier this year. Since high-value speakers willing to offer their services for free are the exception rather than the rule, however, even institutions that run tight budgets are willing to splurge.
Hollywood actor Matthew McConaughey made headlines last spring for bringing in $135,000 for a speech at the publicly-funded University of Houston, where the average salary of an assistant professor is only $91,983, according to Glassdoor.
In 2014, the University of Nevada, Las Vegas (UNLV) sparked outcry when Hillary Clinton was paid $225,000 to give a commencement speech to new graduates, after tuition at the institution had recently increased by 17 percent.
“You could give scholarships to thousands of students, benefit research on campus, give more students grants for research and studying,” Daniel Waqar, Student Relations Director for the UNLV Student Government, told Ralston Live at the time.
While it may seem like a luxury, an estimated 30 percent of colleges pay their commencement speakers, according to Inside Higher Ed. This fee is often seen as an investment to attract publicity, donors and potential students.
“Universities do see who their students want, and they assume that that’s what their future students will want to see as well,” Margot Sarlo, director of marketing at All American Entertainment, told Inside Higher Ed last year. “Universities are vying for customers in the form of admissions, and this can be a great way to advertise and get people on campus.”
Colleges in the Illinois public university system don’t seem to have such a luxury, and paid hefty fees to speakers last spring while simultaneously struggling with a budget crisis that is still unsolved. State legislators tried to pass a bill that would have prevented using public money on graduation speakers, though it never actually made it into law.
Bradley University, a private school in Peoria, Illinois, opted to forego a celebrity commencement speaker.
“I’m not going to use student tuition dollars to pay a person who’s already pretty wealthy to come and pontificate,” university President Gary Roberts told AP. “I can think of a lot of things to do with that kind of money that would be more valuable to our students.”
A 2014 report by Bloomberg News found that in California alone, universities spent more than $7.5 million on commencement speakers over the course of two years. That same year, the University of California board approved a plan to raise tuition by 27.6 percent.
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