Posted By thestatedtruth.com on June 23, 2011

This is a lead bowling ball going down hill….the first pin to be hit is New Jersey!  And even more interesting, Democrats control both houses of the Legislature…. and union membership is among the highest in the country.  Go figure!

From The New York Times……

TRENTON — New Jersey lawmakers on Thursday approved a broad rollback of benefits for 750,000 government workers and retirees in a major victory for Gov. Chris Christie and a once-unthinkable setback for the state’s powerful public employee unions.

The Assembly passed the bill 46 to 32, as Republicans and a few Democrats defied raucous protests by thousands of people whose chants, vowing electoral revenge, shook the State House. Leaders in the State Senate said their chamber, which had already passed a slightly different version of the bill, would approve the Assembly version on Monday. Mr. Christie, a Republican, was expected to sign the measure into law quickly.

In a statement released after the vote, Mr. Christie said, “We are putting the people first and daring to touch the third rail of politics in order to bring reform to an unsustainable system.”

The legislation will sharply increase what state and local workers must contribute for their health insurance and pensions, suspend cost-of-living increases to retirees’ pension checks, raise retirement ages and curb the unions’ contract bargaining rights. It will save local and state governments $132 billion over the next 30 years, by the administration’s estimate, and give the troubled benefit systems a sounder financial footing, mostly by shifting costs onto workers.

The legislation applies to all state employees and to a much larger number of county, town and school district workers, because most local governments participate in the state-run pension and health care systems. When it is fully phased in, after four years, the average government worker will pay several thousand dollars more into the benefit funds.

Category: Commentary, Economy, Finance, Healthcare and Science, National News, Pensions and Retirement, Wall Street | 53 Comments »
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Posted By thestatedtruth.com on June 22, 2011

Considering that we’re in the summer buying season, this is bad news…..

Purchases of existing homes fell 3.8% in May from the prior month to an annual rate of 4.81 million homes. At that pace, sales this year would drop below last year’s 13-year low of 4.91 million.

At the same time, the price of the median home fell nearly 5% year- over-year to $166,700, which is roughly the same price of a median home nine years ago. “An unemployment rate hovering around 9% and tight credit standards,” Bloomberg News observes, “mean it may take years to absorb the 1.8 million distressed properties on the market that are weighing down home values.”

The National Association of Realtors (NAR) provides a more comprehensive explanation for the housing market’s persistent weakness – an explanation tinged with vitriol. In the NAR’s 18-page, lavishly illustrated “Realtors Confidence Index” report for May 2011, the Association’s Chief Economist, Lawrence Yun, blames both the soft economy and the “perverse new banking mindset” for the housing market’s difficulties.

But after a brief nod to the soft economy, Yun pillories the banking industry for its refusal to lend. “Adding to the challenge is the fact that banks are not lending,” he says flatly. “Banks are still hoarding cash and contracting lending activity…[They] are adding profits to their bottom lines, due partly from their ability to access money on the cheap, thanks to government backing of deposits, and by buying tradable assets such as realtors in government bonds. The inevitable too-big-too-fail taxpayer bailout if something were to go wrong is also quite reassuring for the large banks.

“In the ‘good old days,'” Yun continues, “there used to be a rule: the 3-6-3 banking rule. The bank would offer 3% interest to depositors, charge 6% on loans, and then be on the golf course by 3:00 p.m. That rubric has now been replaced with a new one: give nothing to depositors, give nothing to those who want to borrow, buy tradable assets, get an easy 3% yield from government bonds, and pretend to work long hours to justify a high salary and bonus. Partly because of this perverse new banking mindset…pending home sales in April took a tumble, falling 11% from the previous month.”

The substance of Yun’s scathing rebuke of the banking industry is not nearly as surprising as its source. Historically, the NAR and the banking industry relied on a close symbiosis to nourish themselves. Whatever was good for one of them was automatically good for the other. Easy credit nourished the housing bubble, just as the housing bubble fattened bank profits and provided the wherewithal to continue extending easy credit.

www.dailyreckonning.com

Category: Commentary, Economy, National News, Real Estate, Wall Street | 58 Comments »
Tags: Home Sales, housing, Real Estate, Realtors

Posted By thestatedtruth.com on June 19, 2011

From Washington’s Blog…………..

WOWT Reports: [Fort Calhoun Nuclear Power Plant’s chief nuclear officer, Dave Bannister] said for the plant to get to a disaster level, floodwater would have to rise three and a half feet above where it stands now.

The Kansas City Star Notes:  The endless complexities have made prediction a tough task, said
Ross Wolford, a hydrologist working long days for the National Weather Service in order to try to predict the river’s flow.“We don’t have, nor does the Corps or anyone else have, a hydraulic model of what the [Missouri] river’s going to do,” Wolford said. “There’s a lot of art in the way we estimate.”

The Journal Star Points Out:  The flood begins higher up, at places like Dark Horse Lake in the Bitterroots, [Montana] where another 2 inches of snow fell late this week, landing on the 8 feet still on the ground.“It’s all starting here,” said Jim Brusda with the National Weather Service in Great Falls, Mont. “It’s going to flow back down there toward Nebraska” …“People who have been here 50 years, 70 years, say they haven’t seen anything like this … And there’s a lot of water to come” …And as the snow-fed Missouri crosses Montana, it’s collecting record rainfall, too. Some areas received 10 inches in three weeks; 3 inches fell on a town in northeast Montana between Thursday and Friday.  The rain is expected to continue through the weekend. An even stronger storm system could surface next week.

From Japan: Monju

The New York Times has a must-read report on a situation at a reactor hundreds of miles from Fukushima which hasn’t turned into a catastrophe net, but could become a large-scale disaster:

Three hundred miles southwest of Fukushima, at a nuclear reactor perched on the slopes of this rustic peninsula, engineers are engaged in another precarious struggle.

The Monju prototype fast-breeder reactor — a long-troubled national project — has been in a precarious state of shutdown since a 3.3-ton device crashed into the reactor’s inner vessel, cutting off access to the plutonium and uranium fuel rods at its core.

Engineers have tried repeatedly since the accident last August to recover the device, which appears to have gotten stuck. They will make another attempt as early as next week.

But critics warn that the recovery process is fraught with dangers because the plant uses large quantities of liquid sodium, a highly flammable substance, to cool the nuclear fuel.

***

Prefecture and city officials found that the operator had tampered with video images of the fire to hide the scale of the disaster. A top manager at the plant recently committed suicide, on the day that Japan’s atomic energy agency announced that efforts to recover the device would cost almost $21.9 million. And, like several other reactors, Monju lies on an active fault.

More at: http://www.zerohedge.com/article/global-nuclear-update

Category: Commentary, Economy, National News, National Security, News Letters, Outliers, Weather | 49 Comments »
Tags: Nuclear Power Updates

Posted By thestatedtruth.com on June 18, 2011

Retirements are changing more then anyone thought possible.

From… The Wall Street Journal

Several factors are driving the trend toward older people earning and working less, from the sour economy to downsizing and the fact that employers have been moved to more “performance-based” pay, which often translates into smaller pay increases, as well as pay freezes.

While the financial crisis and recession have exacerbated the trend, it isn’t new. IRS filings for pension plans show that a decade ago, large employers assumed steep drops in the rate of salary growth as employees aged. Boeing Co., Hershey Co., Sears Holdings Corp. and Xerox Corp., for example, assumed salaries for a 25-year-old would increase by 7% to 13% a year, but that the rate of increase would fall steadily thereafter, generally reaching the 3% range by age 50. With inflation, this means that salaries remain flat in one’s final decade or two on the job.

Many large companies estimate what you will receive in Social Security benefits and subtract half that amount from your pension. But they may overestimate what you will receive from Social Security, reducing your pension too much. That is because they assume their current and former employees work 35 years and that their pay grows at a certain rate. You have the right to have your employer calculate your pension using your actual earnings history.

Such strategies might seem like a radical departure from the classic “save 10% of your income” strategy financial advisers used to push. Then again, “all the maxims of retirement have totally changed,” says Mr. Scott. “You can’t play by the same old rules.”

More at: www.wsj.com

Category: Commentary, National News, Pensions and Retirement, Wall Street | 717 Comments »
Tags: Retirement Facts, Salary;Employers Retirement

Posted By thestatedtruth.com on June 18, 2011

So, what does the federal government say about all of this?…….Uh, we never promised anyone a Rose Garden!

Bloomberg:

Little Rock, Arkansas, has stopped replacing aging police cars. Mesa, Arizona, is losing $5 million a year from thousands of vacant homes that aren’t paying utility bills. Providence, Rhode Island, closed schools, fired teachers and may cut almost a fifth of its police force.

“Even with all that, we’re still looking at a huge tax increase,” said Providence Mayor Angel Taveras, who proposed a $15 million boost in property levies. “Mayors are having to make difficult decisions. They are making them in Boston, New York, Newark, Detroit, all across the country.”

U.S. mayors gathered in Baltimore for their annual meeting this weekend say they are being squeezed by rising costs, tax collections below their peak and cuts from states and the federal government that threaten their nascent financial stability. While state governments are showing signs of emerging from the fiscal crisis caused by the recession, cities are still waiting for recovery, the mayors say.

“The big pieces aren’t coming back,” said Little Rock Mayor Mark Stodola. “They’re not coming back fast at all.”

Property-tax collection, a key revenue source for cities, dropped during the last three months of 2010 at the fastest pace since housing prices peaked as assessments were lowered, U.S. Census data show. Prices have dropped further this year.

At the conference, which began yesterday, mayors voiced concern that the federal government and the states, seeking to rein in their own budget deficits, will only make cities’ struggles worse. For the next fiscal year, 42 states and the District of Columbia have closed, or are working to close, $103 billion in budget gaps, the Washington-based Center on Budget and Policy Priorities said yesterday.

More at: http://www.bloomberg.com/news/2011-06-18/u-s-mayors-find-few-recovery-signs-as-cutbacks-pose-new-risks.html

Category: Commentary, Economy, National News, Real Estate, Wall Street | 472 Comments »
Tags: Cities, Government, taxes

Posted By thestatedtruth.com on June 18, 2011

There is good news here, and not so good news……..in a nutshell, the economy is flat and not growing but not collapsing either.  That sort of sums it up, the good and the bad!

By Lee Adler

Month to date Federal withholding taxes as of June 15 were down 5.5% from last year, negating the monthly gain shown in May. That gain was primarily due to the calendar anomaly of a payment date for a biweekly and semimonthly pay period for many employees coming on June 1 last year. That resulted in an understatement in May’s 2010 receipts and an overstatement for June last year. Therefore the 5.5% decline so far this month versus last June makes things look worse than they are. The truth is that tax receipts over the last rolling monthly period are about even with last year, suggesting that the economy has stalled, but has not collapsed to the degree implied by a 5.5% decline.

The one month moving average of daily withholding tax collections is at about the same level as last year. May’s gains have dissipated. The 13 week moving average is sinking fast and should be hitting bottom now. It is at roughly the same level as last year. Normal seasonality has a flat period through Q3, with a drop into the low in September/October. If this drops below last year’s level from here, then the economy probably is in free fall. That would be very bad news in terms of the levels of debt the Treasury must float in the months ahead.

Source: www.thewallstreetexaminer.com

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Wall Street | 586 Comments »
Tags: Federal Tax Payments, Tax Collections, Tax Reciets

Posted By thestatedtruth.com on June 15, 2011

The gap between spending and revenues has never been larger!

The American consumer is tapped.  Just look at the outstanding debt count:

-over $10 trillion in mortgage debt

-$1 trillion in student loan debt

-over $750 billion in credit card debt

We also have billions more in automotive debt.  This is simply unsustainable and we reached the apex reflected in our earlier chart where household debt equaled GDP at a near perfect one ratio. This sacrifice has come at the expense of the middle class since the top 1 percent have actually seen significant wealth gains over the last few decades.

For more: www.mybudget360.com

Category: Charts and Graphs, Commentary, Economy, National News, News Letters, Wall Street | 43 Comments »
Tags: Gap, GDP Gap, Revenues, spending

Posted By thestatedtruth.com on June 15, 2011

It’s a sign of the times and also why generations of workers are screwed for as far as the eye can see….main street Jack and Jill see little if any government stimulus drift down to him or her.  It’s the sad but real truth.  The better question though is ….How do we fix this?  The common answer from the powers that are, go something like this…..”my people will get back to your people on this”.  Then it’s forgotten.

In a recent report surveying working Americans (workers) the data reflects what we already know.  This so-called recovery really isn’t a recovery for working and middle class Americans.  Those with less than $25,000 in household savings have ballooned and this figure has more than doubled in four short years.  In 2007 at the peak of the debt bubble only 19 percent of these people felt not at all confident regarding their retirement.  First, this reflects the psychological delusion that somehow the credit cards and home equity would keep flowing forever.  However, this quickly reversed and now 43 percent in this group worry about retirement.  Notice all the older workers at Wal-Mart?  Mind you that one out of three Americans has no savings at all.

Now let’s look at the top group of retirees with $250,000 or more.  This number is actually up from the 2007 crisis.  So what you have is a larger number of Americans unable to save but those involved deeply in the stock market are growing at a healthy rate.  This reflects favorable government policies and bailouts to institutions that favor the wealthy.  The top 1 percent are benefitting from the banking graft being perpetrated on the working and middle class of America.  Unlike the 1950s through 1960s the growth in wealth is not benefitting all groups.  Nothing wrong with growing the financial base of a country but…….

www.mybudget360.com

Category: Charts and Graphs, Commentary, Economy, National News, News Letters, Pensions and Retirement, Personal Net Worth, Wall Street | 81 Comments »
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Posted By thestatedtruth.com on June 14, 2011

China and Russia are moving up on the Gold holdings chart… but the IMF is selling everything that’s not nailed down.  Otherwise it all stays pretty much the same. 

The Gold production rankings are as follows and listed in order of production……China, Australia, South Africa,USA, Russia and Peru. 

Category: Charts and Graphs, Commentary, Gold and Silver, National News, Wall Street, World News | 473 Comments »
Tags: Gold Holdings By Country, World Gold Holdings

Posted By thestatedtruth.com on June 14, 2011

Interesting comments from The Inger Letter….

Category: Charts and Graphs, Commentary, National News, Oil and Nat Gas, Wall Street | 51 Comments »
Tags: Oil Reserves, World Oil Reserves

Posted By thestatedtruth.com on June 13, 2011

The price of everything is going up….only a dumb bell doesn’t believe we have inflation!  And the biggest dumb bell of them all….uh, who is that over there in line, Uncle Sammy….is that you?

As the summer tourist season begins, the Walt Disney Co. announced an increase in ticket prices at Walt Disney World Resort in Orlando and Disneyland Resort in Anaheim.

As of Sunday, one-day passes for the Disney theme parks in Anaheim increased 5.3%, from $76 to $80. A three-day pass to visit Disneyland and nearby Disney California Adventure Park jumped 8.7%, from $206 to $224. Annual passes for Southern California residents, among the most popular ticket option, increased 8.1%, from $184 to $199.

Category: Commentary, Economy, National News, Wall Street | 536 Comments »
Tags: Disney Hikes Prices

Posted By thestatedtruth.com on June 13, 2011

Greece goes down, just a matter of when! The Greece bonds are now considered junk by rating standards. The big question is does Greece take down the whole Euro complex?

Greece was branded with the world’s lowest credit rating by Standard & Poor’s, which said the nation is “increasingly likely” to face a debt restructuring and the first sovereign default in the euro area’s history.

The move to CCC from B reflects “our view that there is a significantly higher likelihood of one or more defaults,” S&P said in a statement yesterday. “Risks for the implementation of Greece’s EU/IMF borrowing program are rising, given Greece’s increased financing needs and ongoing internal political disagreements surrounding the policy conditions required.”

Category: Commentary, Economy, Interest Rates, Bonds, National News, World News | 353 Comments »
Tags: EU Greece Bonds, Greece, Greek Bonds, Junk Bonds

Posted By thestatedtruth.com on June 13, 2011

We’ve just had 100 year floods, now it looks like we have the 100 year drought………About 94 percent of Texas was in a state of severe, extreme or exceptional drought as of June 7, according to the U.S. Drought Monitor compiled by the U.S. Agriculture Department and the National Drought Mitigation Center. The October-through-May period was the state’s driest since record-keeping began in 1895, said Texas State Climatologist John Nielsen-Gammon.

It’s the worst Texas drought since record-keeping began 116 years ago, it may change the oil and natural- gas drilling boom because of rationed water supplies crucial to energy exploration.

In the hardest-hit areas, water-management districts are warning residents and businesses to curtail usage from rivers, lakes and aquifers. The shortage is forcing oil companies to go farther afield to buy water from farmers, irrigation districts and municipalities, said Erasmo Yarrito Jr., the state’s overseer of water supplies from the Rio Grande River.

Concern over water usage is especially acute in southern Texas’s Eagle Ford Shale area because drilling there is more water-intensive than other regions, said Robert Mace, a deputy executive administrator of the Texas Water Development Board.

The water crisis in Texas, the biggest oil- and gas- producing state in the U.S., highlights a continuing debate in North America and Europe over the impact on water supplies of an oil and gas production technique called hydraulic fracturing. Environmental groups are concerned the so-called fracking method may pose a contamination threat, while farmers in arid regions like south Texas face growing competition for scarce water.

Along the Rio Grande River, where border towns such as Laredo supply workers and equipment for the drilling boom, most areas have received less than 2 inches (5 centimeters) of rain since Oct. 1, the National Weather Service said.

Farmers, landowners, environmental activists and state oil industry regulators gathered on June 10 at the University of Texas Health Center in Laredo to discuss the potential impact of fracking on water, air and public health, one of several such meetings that have been held across the state this year.

13 Million Gallons

The Eagle Ford’s peculiar geology means it takes three to four times as much water to fracture as the Barnett Shale near Fort Worth, said Mace, of the state water board. Fracking a single Eagle Ford well requires as much as 13 million gallons of water, enough to supply the cooking, washing and drinking needs of 40 adults for an entire year, he said.

“This is not the drilling your grandparents knew in west Texas,” said Sharon Wilson, an organizer for Earthworks’ Oil and Gas Accountability Project, which lobbies for tougher government regulation of oil drillers. “It’s a heavy industrial activity with massive amounts of water and chemicals.”

More from www.bloomberg.com

Category: Commentary, Commodities, Economy, National News, Weather | 11,939 Comments »
Tags: 100 year drought, Drought, hundred year drought

Posted By thestatedtruth.com on June 11, 2011

Fat chance of this debt ever getting cut in a timely manor other then by default!  Debt is the reason that the world goes into another recession or controlled depression at some point!  Just a matter of time.

$26,172 isn’t some magic number, it’s the amount of debt the average U.S. household would need to cut to bring balance sheets back to 1990’s levels.

Americans have made only small progress in paring back their debt, but it’s mostly been cutting their credit-card use and walking away from mortgages and other loans.  In the first quarter of 2011, households owed $13.3 trillion, an amount equal to 18.4% of total household assets….but to get back to 14.4% last seen in the 1990’s, households would have to shed a combined $2.9 trillion of debt or about double what we’ve already seen.

Chat and some stats from: www.wsj.com

Category: Commentary, Economy, Finance, National News, Personal Net Worth, Wall Street | 482 Comments »
Tags: debt, household debt

Posted By thestatedtruth.com on June 11, 2011

And that’s saying a lot!

Category: Commentary, Pictures | 72 Comments »
Tags: 2, 600 Posts, the stated truth

Posted By thestatedtruth.com on June 10, 2011

Yep!  Makes sense, doesn’t it?

www.ingerletter.com

Category: Charts and Graphs, Commentary, Economy, National News, Real Estate, Wall Street | 750 Comments »
Tags: consumer spending, Real Estate Assets

Posted By thestatedtruth.com on June 9, 2011

About a year ago Zero Hedge posted an article…..”Record Number Of Americans Using Retirement Funds As Source Of Immediate Cash” after a report by Fidelity uncovered that “plan participants with loans outstanding against their 401(k) accounts had reached 22 percent versus 20 percent a year earlier.”  Well guess what?  The new number is now 30% and growing like a weed.  CBS News explains that raiding your 401(k) is so easy even a caveman can do it!

On “The Early Show” today financial journalist and Newsweek columnist Joanne Lipman said, “Right now we have 30% of the people with a 401(k) taking a loan against it, which is a new historic high. And the problem is this is growing like crazy: By 2014, we’re expecting to see 30 million people take loans against their 401(k)s.

 Parts from www.zerohedge.com

Category: Commentary, Economy, National News, Pensions and Retirement, Personal Net Worth, Wall Street | 966 Comments »
Tags: 401k Plans, pensions, retired, retirement accounts

Posted By thestatedtruth.com on June 9, 2011

Household wealth in the U.S. climbed by $943 billion in the first quarter of 2011 according to the Federal Reserve’s flow of funds report out of Washington,  as rising stock market share prices outstripped declines in home values.  From the peak in June 2007 to the low in 2009 the losses from all asset groups combined were -24.9% of assets.  As of now (1st quarter 2011) the losses off the high of all asset groups combined is -13.55%.  We have a chart posted below of how things looked at the highs in 2007……

Bloomberg:  Net worth for households and non-profit groups increased at a 6.8 percent annual pace, the Federal Reserve said today in its flow of funds report from Washington. American households also cut debt for a 12th consecutive quarter.

“The easy part of the repair of balance sheets may be behind us,” Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said before the report. “It’ll be tougher to get big increases in household wealth. We need to at least see house prices showing signs they are approaching stability.”

Since reaching a five-year low of $49.4 trillion in the first quarter of 2009, net worth has improved by $8.7 trillion. That still leaves it $7.7 trillion below the record high of $65.8 trillion reached in the quarter ended June 2007, six months before the recession began.

http://www.bloomberg.com/news/2011-06-09/household-worth-in-u-s-rises-by-943-billion-as-stocks-offset-home-prices.html

Category: Charts and Graphs, Commentary, Economy, National News, Pensions and Retirement, Personal Net Worth, Real Estate, Wall Street | 2,251 Comments »
Tags: household worth, net worth, persoanl net worth

Posted By thestatedtruth.com on June 8, 2011

Bill Gross has been on a roll talking about this……….Governments such as the U.S. are intentionally keeping interest rates artificially low to help reduce record debt levels, setting up investors up for a “pocket picking.” The U.S. has done little to reduce the size of the excess liabilities accumulated, Pimco wrote in what it called a secular outlook saying the amount of marketable debt outstanding has more than doubled to $97 trillion since the start of the financial crisis.

Pacific Investment Management Co.’s Bill Gross said foreigners are questioning the dollar’s role as the world’s reserve currency because of U.S. policies that keep borrowing rates low to reduce the nation’s debt burden.

Gross, manager of world’s biggest mutual fund, reiterated that investors should avoid U.S. Treasuries because they’re not being compensated for the risk of inflation. Investors should buy debt of nations that maintain better fiscal and monetary policies such as Canada, Germany and Mexico, he said.

“If you’re a foreign holder of dollars,” you should be concerned, Gross said, speaking today in Chicago at the 2011 Morningstar Investment Conference. “Ultimately, they too begin to question, and are already starting to, the soundness of a Treasury bill, bond or note.”

Under a strategy that economist Carmen Reinhart has described as “financial repression,” governments require banks, pension funds and other financial institutions to hold government debt, ostensibly for reasons related to the safety and soundness of the organizations, Gross said.

Such a situation is occurring now and is intolerable because almost four years since the start of the financial crisis, the U.S. has done little to reduce the size of the excess liabilities accumulated, Pimco wrote in what it called a secular outlook last month. The amount of marketable debt outstanding has more than doubled to $97 trillion since the start of the financial crisis.

Full article at: http://www.bloomberg.com/news/2011-06-08/gross-says-u-s-policy-prompting-foreigners-to-question-dollar.html

Category: Commentary, Economy, Interest Rates, Bonds, National News, Pensions and Retirement, Wall Street | 30 Comments »
Tags: debt, Interest rates, u.s. debt, U.S. Interest Rates

Posted By thestatedtruth.com on June 7, 2011

You won’t hear this from the government…..the gap between spending commitments and revenue last year equals more than one-third of the nation’s gross domestic product.

From USA Today:

The federal government’s financial condition deteriorated rapidly last year, far beyond the $1.5 trillion in new debt taken on to finance the budget deficit, a USA TODAY analysis shows.

The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.

This gap between spending commitments and revenue last year equals more than one-third of the nation’s gross domestic product.

Category: Commentary, Economy, Interest Rates, Bonds, National News, Wall Street | 624 Comments »
Tags: broke, debt, obligations, U.S. government

Posted By thestatedtruth.com on June 6, 2011

Is an education really worth the cost?  In many cases the answer is YES, but in many other cases the answer is NO, and especially involving  “for profit trade schools”!

The cost of education is becoming onerous and student loans are littered with financial landmines.  Many are given to students to attend for-profit schools that will yield very little return on investment in the market aside from stockholders and corporate leaders.  The uglier side also includes the inability to discharge student loans in bankruptcy.  Americans have the ability to discharge mortgage debt if they are unable to pay their home payment.  Businesses have the power to renegotiate contracts and loans with banks.  Yet we somehow have managed to recreate debtor’s prison except it comes in the form of a student loan.  Another dirty secret comes from the financial institutions gouging students with additional fees on top of the original loan balance.  The higher education bubble is popping and the long-term implications loom large for our struggling economy.

One of the implicit tenets we live by in America is the ability to fail and comeback from setbacks.  Currently this idea has been usurped by the giant financial organizations and has excluded virtually every other American.  You have luxury hotels imploding and banks simply dishing billion dollar bad bets to the American taxpayer.  At the core of the too big to fail bailouts is the notion that banks made horribly bad bets and needed to walk away.  So they did by saddling the American taxpayer with the bill.  Yet with student loans banks are lending to anyone and everyone willing to attend any questionable institution.  The due diligence is comical and the corruption that is occurring is similar to the mortgage boiler rooms that were dishing out subprime loans to any person that walked in through the front door.  The stories of student loan purgatory are starting to fill the internet.  Take a look at this post from “Frank” over at Student Loan Justice:

“I graduated from law school in December of 97. I have paid on my student loans off and on over the past 9+ years and have paid back an estimated $75,000 on a loan that when I graduated was a little of $100,000. When I last checked the pay off amount it was over $135,000 and thats with paying $75,000 + over the past 9 years. I owe more on it now than when I took them out !! One of my loans is in default, they claim I owe them $23,000+ (which somehow jumped from $17,000 in a span of about 30 days) My two other lenders are close to defaulting and I am unsure if I should just let them default…”

This is one of the darker sides of student loans that are kept hidden by the banks and the government.  Many lenders gouge students when they encounter problems.  Unlike a credit card for example, when you have really extraordinary problems you have an exit hatch with bankruptcy.  Ideally lenders are doing enough due diligence to learn their lesson.  Yet with student loans the market keeps increasing as for-profit schools and other institutions increase tuition and saddle students like Frank above with insane amounts of loans.  First, they have this person stuck in a modern day debtor’s prison.  No way out.  Next, they compound the misery by tacking on fee after fee.  If Frank was unable to pay the initial amount what use is it adding more and more on top of it?  The ugly side of the industry is they realize that they will have to milk the student as much as possible on the front-end.  The government guarantees most loans so many lenders care not if a student really has any ability to pay the loan back in the future.  These lenders quickly say, “well Frank shouldn’t have signed.”  This cynical attitude is what is expected especially when the lender isn’t using his money.  How about we ask the same lender to use their own money if they really feel many of these students warrant the current amount of loans being issued?

The acceleration and growth of student loan debt is incredible:

The cost of going to college has outpaced every category of living by a very wide margin.  It is hard to believe but the cost of college has even surpassed the now historic housing bubble.

So what should a student do?  We would suggest you review the school, cost and expected earnings potential of your type of major.  Then we would aggressively negotiate the educational contract because in most cases there are ways to cut the educational expense.  Everything is negotiable, think of it in terms of buying a car.  The better deal you can cut for yourself, the lower your payments will be, and the more money you will save in the long run.  And in this case above all others, a penny saved is a penny earned.

From http://www.mybudget360.com

Category: Charts and Graphs, Commentary, Economy, Education and Schooling, National News, Wall Street | 9,398 Comments »
Tags: college, education, schools

Posted By thestatedtruth.com on June 6, 2011

So, what’s  in  a AAA ranking?  Triple AAA rankings are the highest mark given to companies considered to be the lowest risk investments.  It means “Prime Maximum Safety” and they are assigned by S&P and Fitch.  Rankings from other rating agencies use a slightly different labeling system, such as Aaa used by Moodys but it represents basically the same thing. 

In the early 1970s, about 60 US companies possessed a AAA rating. A decade later, that number had tumbled to 30. By the early 1990s, the ranks of AAA credits had dwindled to nearly 20, and when the new millennium dawned, only nine AAA companies remained. Seven companies managed to retain this prestigious ranking until 2009, when Berkshire Hathaway and GE slipped into the AA ranks.

Today, only five US companies can boast a AAA rating:

• Automatic Data Processing (ADP)
• Exxon Mobil (XOM)
• Johnson & Johnson (JNJ)
• Microsoft (MSFT)
• Pfizer (PFE)

www.dailyreckoning.com

Category: Commentary, Economy, Finance | 510 Comments »
Tags:

Posted By thestatedtruth.com on June 5, 2011

What are the two things about getting older that stand out on the chart below…….Yep, health care costs and health insurance lead the way in cost inflation for retirement age people.  The  comparison is to when they were ten years younger…..gasoline is in third place and drugs are fourth.  Nothing else is even close in terms of cost inflation.  As for total outlay… food is number one and health care is second.  So now you know!

Category: Charts and Graphs, Commentary, Economy, Healthcare and Science, National News, Wall Street | 40 Comments »
Tags: health insurance, healthcare, retirement inflation

Posted By thestatedtruth.com on June 4, 2011

Here we go with a summary of earnings details per household as of May 2010 (it hasn’t changed much since). We repeat….we’re talking earnings details in this missive not wealth or net worth.

• 40% of US households make below $36,000
• 60% make below $57,000
• 80% make below $91,750
• 95% making below $165k
• 98% making less than $250,000
• 99.99% make less than $5 million and 0.01% make more than $5 million
• 1% of society makes 17.3% of the income,
• The average income in the top 0.01%, or 11,000 households, is $35,473,200, and a minimum of $8,579,000
• The average income in the the next 99,000 households, or 99.9%-99.99% of the population makes an average $4,699,500, and a minimum of $1,532,400
• The average income in the next 451,000 households, or 99.5%-99.9% of the population makes and average $1,206,200, and a minimum of $482,400
• The average income in the next 564,000 households, or 99$-99.5% of the population makes and average $269,800, and a minimum of $126,300

Everyone gets the point we think!   Chart courtesy of Visualizing Economics:

From www.zerohedge.com

Category: Commentary, Economy, Finance, Personal Net Worth, Wall Street | 12,163 Comments »
Tags: Data, Earnings, Earnings Data, Personal Earnings

Posted By thestatedtruth.com on June 4, 2011

This is the global wealth pyramid……in U.S. dollars.  Basically only 8% of the WORLD population has $100,000 dollars or more of net worth!  Put another way, 92% of the world population has less then $100,000 in total wealth. 

Category: Commentary, Economy, National News, Pensions and Retirement, Personal Net Worth, Wall Street | 962 Comments »
Tags: Global Wealth, monopoly money, Pyramid Of Money, Wealth Effect

Posted By thestatedtruth.com on June 3, 2011

Hmm….So whom might we ask, bought all this crap?  How about the U.S. Federal Reserve…it’s as good a guess as any!  And most people probably didn’t think (the) markets were rigged….shame on them!

China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011 according to the most recent monthly report from the U.S. Treasury.

And just to make sure everyone understands what a Treasury bill is……they are considered to be short term securities, i.e. they mature in one year or less and are sold by the U.S. Treasury Department to fund the nation’s debt.

Category: Commentary, Economy, Finance, Interest Rates, Bonds, National News, Wall Street | 420 Comments »
Tags: China, Rigged Markets, u.s. debt

Posted By thestatedtruth.com on June 3, 2011

According to Zero Hedge, take away the Birth/Death adjustment of 206,000 in the chart below and the real number is: -150,000.  This is a big  monthly B/D adjustment.  If the McDonalds addition of 62,000 part-time jobs be added to the May number, the economy really lost over 200,000 jobs in May.  More government hocus pocus!    PS….the reason for the big spike in January is because that’s when the government adjusts for their variance (bad model numbers) during the year.  It is reflected in a one time number as an adjustment and posted in January of every year. So now you know.

Courtousy of www.zerohedge.com

Category: Charts and Graphs, Commentary, Economy, National News, Wall Street | 39 Comments »
Tags: Birth/Death Adjustment, Employment B/D Adjustment

Posted By thestatedtruth.com on June 3, 2011

So this is what the government proudly calls a recovery…..after spending trillions of borrowed dollars!  New all time records for the charts below.

www.zerohedge.com

Category: Charts and Graphs, Commentary, Economy, National News, Personal Net Worth, Wall Street | 517 Comments »
Tags: employment, Jobs, Recovery, unemployment

Posted By thestatedtruth.com on June 2, 2011

We need to keep a watch on this…..as the waters of the Mississippi head downstream, they leave behind flooded towns and ruined lives, but even worse they carry a nasty combination of farm chemicals and waste that is expected to result in the largest dead zone ever in the Gulf of Mexico.

Dead zones are areas of the ocean where low oxygen levels can stress or kill bottom-dwelling organisms that cannot escape and cause fish to leave the area. Excess nutrients transported to the gulf each year during spring floods promote algal growth. As the algae die and decompose, oxygen is consumed, creating the dead zone. The previous largest dead zone was measured in 2002 at about 8,500 square miles, roughly the size of New Jersey.

Category: Commentary, Commodities, National News, Weather | 433 Comments »
Tags: Farmers, Gulf of Mexico Dead Zone, River Polution

Posted By thestatedtruth.com on June 2, 2011

This is called “the new normal”…..and it will change everything in our lives!  A typical recovery pattern goes like this: the stock market bottoms, economic growth bottoms and then hiring and wage increases return. What’s unique and likely a leading indicator about this recovery is that the last piece of the recovery is not there.  

Squeezed on both sides by stagnant wages and rising prices, consumers believe the chances of bringing home more money one year from now are at their lowest in 25 years, according to analysis of survey data by Goldman Sachs.

“Households are already very pessimistic about future real income growth,” wrote Goldman’s economist to clients. “A slowdown in job growth would presumably translate into a further deterioration in (expected and actual) real income growth. This would heighten the downside risks to our current forecast that real consumer spending will grow 2.5 percent to 3 percent over the next year and might call for another downward revision to our forecast for US GDP growth in 2011 and 2012.”

 http://www.cnbc.com/id/43253175

Category: Commentary, Economy, National News, Wall Street | 385 Comments »
Tags: Expectations, Hard Times, Lower Expectations

Posted By thestatedtruth.com on June 2, 2011

Heads up comments from the one and only….Art Cashin on the floor of The New York Stock Exchange.

China Drought Worsens, Possibly Putting Pinch On Profits, Populace And Maybe The Government – As we noted last week, new pressures appear to be accelerating in China.  Not the least of these is the worsening of the very severe drought that has beset much of the nation for several years now.

Here are some drought related developments garnered from sources such as Bloomberg, China Daily, the FT, Xinhau News Agency and others.  Confronted with the worst drought in 50 years, Chinese authorities have ordered the managers of the Three Gorges Dam (the world’s largest) to release 20% more water immediately.  It is a desperate attempt to increase the badly depleted water flow in the Yangtze River, which has become almost un-navigable for much of its nearly 4000 mile length.

The Yangtze is the Mississippi of China carrying ships and barges that move much of the nation’s goods.  Additionally, it is the source of irrigation for the majority of the rice paddies in China’s most fertile and productive agricultural provinces.  Lastly, it is a primary source of drinking water for millions upon millions of people along its route.

The numbers bear out the magnitude of the growing concern.  The water of the Yangtze traditionally irrigates over two-thirds of the nation’s rice fields.  There are fears that over 75% of the spring rice crop may already be lost.  Poyang Lake, China’s largest fresh water lake, is said to have shrunk by over 60%.  The loss of hydro-electric power caused by the diminished Yangtze may increase China’s oil demand by 300,000 barrels a day.

The falloff in hydro-electric power has already caused authorities to order brownouts at thousands of factories and facilities for one or two days each week.  To compensate, factory owners are said to be resorting to diesel generators for power during those brownouts.  That surge in diesel use will not only put upward pressure on crude prices but greatly exacerbate China’s air pollution problems.

The government is scrambling to address the power problem as witnessed in this Reuters report:

BEIJING (Reuters) – China has raised power prices for industrial, commercial and agricultural users in some regions by about 3 percent in an attempt to ease what threatens to be the worse power shortage in seven years in the world’s second-largest economy.

The power price rise, which excludes residential users, will add to inflationary pressures but revive profit margins at power producers.

That should prompt an increase in electricity supplies from loss-making power plants that had failed to keep up with rising demand. Higher prices should also discourage excess power consumption.

Category: Commentary, Economy, National News, Wall Street, Weather, World News | 220 Comments »
Tags: China Drought, Drought, weather

Posted By thestatedtruth.com on June 2, 2011

This new super bug (we’re not talking Volkswagon) is a doozer.  The good news is….the incubation period for this type of E. coli is about three to eight days. It has become the deadliest outbreak of the bacteria on record and is causing kidney failure in unprecedented numbers according to U.S. health officials. At least 16 people have died and 1,624 cases have been reported,  based on statistics from the World Health Organization in Geneva.

LONDON – Scientists on Thursday blamed Europe’s worst recorded food-poisoning outbreak on a new “super-toxic” strain of E. coli bacteria.

But while suspicion has fallen on raw tomatoes, cucumbers and lettuce as the source of the germ, researchers have been unable to pinpoint the food responsible for the frightening illness, which has killed at least 18 people, sickened more than 1,600 and spread to least 10 European countries.

An alarmingly large number of victims — about 500 — have developed kidney complications that can be deadly.

Chinese and German scientists analyzed the DNA of the E. coli bacteria and determined that the outbreak was caused by “an entirely new, super-toxic” strain that contains several antibiotic-resistant genes, according to a statement from the Shenzhen, China-based laboratory BGI. It said the strain appeared to be a combination of two types of E. coli.

“This is a unique strain that has never been isolated from patients before,” Hilde Kruse, a food safety expert at the World Health Organization, told The Associated Press. The new strain has “various characteristics that make it more virulent and toxin-producing” than the many E. coli strains people naturally carry in their intestines.

In Hamburg, Philipp, a 29-year-old photojournalist, was hospitalized on Monday after falling ill. He would not provide his last name because he did not want people to know he had the E. coli strain.

After suffering from stomach aches and bloody stools, he developed neurological symptoms and couldn’t feel his left arm or leg. Despite three blood plasma transfusions to wash the toxins out of his blood, he hasn’t improved.

http://news.yahoo.com/s/ap/20110602/ap_on_he_me/eu_contaminated_vegetables_europe

Category: Commentary, Economy, National News, Wall Street | 61 Comments »
Tags: Bacteria, E Colo Bacteria, Food Poisoning

Posted By thestatedtruth.com on June 1, 2011

Chris is one of the top real estate and banking minds for institutional money.  Chris Whalen of Institutional Risk Analytics: “If we do not see a meaningful recovery in home prices by the end of the year, we may need to contemplate impairment charges on first liens owned by banks and wholesale write-downs of second lien exposures. This implies solvency issues for BAC, WFC, JPM and C, and big losses for the U.S. government and private investors.” 

Real estate prices have now fallen more than they did during the Great Depression. “On that occasion, the peak in prices was not regained until 19 years after they first fell,” notes Paul Dales at Capital Economics.

So what about the banks? Sure, they took huge write-downs already, but there is clearly more pain to come, especially given that this report out today is actually a three month running average based on home sale closings in March, so really you could say the whole thing is based on sales contracts signed around six months ago. We’ve seen considerably more housing weakness since then.

“All will have to take new markdowns if these price pressures continue, which everything points to the fact that it will,” says Peter Boockvar at Miller Tabak. “Bank balance sheets are still cluttered with mortgage loans, and they are still being asked to take back bad mortgages from those that bought them, like Fannie Mae and Freddie Mac, so the lower home prices go, the risk rises that another round of balance sheet write downs may be necessary.”

And speaking of Fannie and Freddie (and I’ll throw in private label and FHA), when you consider the enormous volume of bank-owned (REO) inventory of foreclosed properties they’re holding….

…you have to also consider what a drop in home values means to all that. The chart we have shows all the REO without the banks included, as we don’t know that, but if you take additional data from RealtyTrac showing total REO inventory at 872,990 in May and multiply it by the latest median home price from the National Association of Realtors ($163,700 in April), you get around $142.9 billion in value at risk minus at least a 25 percent discount because it’s a foreclosure already. “With each subsequent dip in home prices, the portfolio is worth less and the banks will suffer increasing losses,” notes RealtyTrac’s Rick Sharga.It’s impossible to say what the bank losses are right now, especially when you have to add in more potential put backs, where Fannie and Freddie force the banks to buy back bad loans. All we know is that the more home prices fall, the more the banks stand to suffer, and we all know what happened the last time they suffered.

“If we do not see a meaningful recovery in home prices by the end of the year, we may need to contemplate impairment charges on first liens owned by banks and wholesale write-downs of second lien exposures. This implies solvency issues for BAC, WFC, JPM and C, and big losses for the U.S. government and private investors,” says Chris Whalen of Institutional Risk Analytics.

 http://theautomaticearth.blogspot.com/

Category: Commentary, Economy, Finance, National News, Real Estate, Wall Street | 27 Comments »
Tags: fannie mae, Fredie Mac, Put Backs, Real Estate

Posted By thestatedtruth.com on May 31, 2011

Read this story with a strong sense of doubt.  Question each motive and the why and by whom.  Then remember what you read just in case it turns out to be right!

There are stories out and about, and some even seem believable as they challenge the logic that there isn’t much gold in Fort Knox. To the practical effects on the global economy, should it be proved that the US indeed has been lying about its gold reserves, then a thought is, that this might be a reason why  Russia’s Central Bank yesterday ordered its interest rate raised from 0.25 to 3.5 percent.  This was a totally unexpected move and some suspect Putin at the same time ordered the export ban on wheat and grain crops lifted by July 1st in a move designed to fill the Motherlands coffers with money that normally would have flowed to the US.  (maybe,and maybe not)

A Russian Opinion: The American peoples ability to know the truth of these things, and as always, has been shouted out by their propaganda media organs leaving them in danger of not being prepared for the horrific economic collapse of their nation now believed to be much sooner than later.

Draw your own conclusions………but this story has switch backs at every turn! 

The following story is puzzling from both ends…here are some reasons….why would DSK risk his bid for the presidency of France?  Supposedly the night before, he called on the services of a call girl. Then he attempts to rape a maid? 

As for the IMF: DSK (Dominque Strauss-Kahn) was shocked that the USA has no gold at Fort Knox?  The IMF was waiting patiently for 191 tonnes of gold from April  1978?

Russia’s Prime Minister Putin Says the IMF Chief was jailed for discovering all the U.S. Gold is GONE.    

Anyway here is the conspiracy story, it’s a lu lu…..We will let you be the judge.  If nothing else, it’s great reading:   

 Posted by EU Times on May 31 st, 2011     

International Monetary Fund (IMF) Special Drawing Rights  (SDRs) are set up to be an alternative to what are called reserve currencies. A new report prepared for Prime Minister Putin by the Federal Security Service (FSB) successor to {The Old KGB} says that former International Monetary Fund (IMF) Chief Dominique Strauss-Kahn was charged and jailed in the US for sex crimes on May 14th after his discovery that all of the gold held in the United States Bullion Depository located at Fort Knox was ‘missing and/or unaccounted’ for.

According to this FSB secret report, Strauss-Kahn had become “increasingly concerned” earlier this month after the United States began “stalling” its pledged delivery to the IMF of 191.3 tons of gold agreed to under the Second Amendment of the Articles of Agreement signed by the Executive Board in April 1978 that were to be sold to fund what are called Special Drawing Rights.

This FSB report further states that upon Strauss-Kahn raising his concerns with American government officials close to President Obama he was ‘contacted’ by ‘rogue elements’ within the Central Intelligence Agency (CIA) who provided him ‘firm evidence’ that all of the gold reported to be held by the US ‘was gone’.

Upon Strauss-Kahn receiving the CIA evidence, this report continues, he made immediate arrangements to leave the US for Paris, but when contacted by agents working for France’s General Directorate for External Security (DGSE) that American authorities were seeking his capture he fled to New York City’s JFK airport following these agents directive not to take his cell-phone because US police could track his exact location

Once Strauss-Kahn was safely boarded on an Air France flight to Paris, however, this FSB report says he made a ‘fatal mistake’ by calling the hotel from a phone on the plane and asking them to forwarded the cell-phone he had been told to leave behind to his French residence, after which US agents were able to track and apprehend him.

Within the past fortnight, this report continues, Strauss-Kahn reached out to his close friend and top Egyptian banker Mahmoud Abdel Salam Omar to retrieve from the US the evidence given to him by the CIA. Omar, however, and exactly like Strauss-Kahn before him, was charged yesterday by the US with a sex crime against a luxury hotel maid, a charge the FSB labels as ‘beyond belief’ due to Omar being 74-years-old and a devout Muslim.

In an astounding move puzzling many in Moscow, Putin after reading this secret FSB report today ordered posted to the Kremlin’s official website a defense of Strauss-Khan becoming the first world leader to state that the former IMF chief was a victim of a US conspiracy. Putin further stated, “It’s hard for me to evaluate the hidden political motives but I cannot believe that it looks the way it was initially introduced. It doesn’t sit right in my head.”

Interesting to note about all of these events is that one of the United States top Congressman, and 2012 Presidential candidate, Ron Paul has long stated his belief that the US government has lied about its gold reserves held at Fort Knox. So concerned had Congressman Paul become about the US government and the Federal Reserve hiding the truth about American gold reserves he put forward a bill in late 2010 to force an audit of them, but which was subsequently defeated by Obama regime forces.

When directly asked by reporters if he believed there was no gold in Fort Knox or the Federal Reserve, Congressman Paul gave the incredible reply, “I think it is a possibility.”

Also interesting to note is that barely 3 days after the arrest of Strauss-Kahn, Congressman Paul made a new call for the US to sell its gold reserves by stating, “Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak.”

Bizarre reports emanating from the US for years, however, suggest there is no gold to sell, and as we can read as posted in 2009 on the ViewZone.Com news site:

“In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between 5,600 to 5,700 bars, weighing 400 oz. each, in the shipment!”

To the final fate of Strauss-Kahn it is not in our knowing, but new reports coming from the United States show his determination not to go down without a fight as he has hired what is described as a ‘crack team‘  of former CIA spies, private investigators and media advisers to defend him

To the practical effects on the global economy should it be proved that the US, indeed, has been lying about its gold reserves, Russia’s Central Bank yesterday ordered the interest rate raised from 0.25 to 3.5 percent and Putin ordered the export ban on wheat and grain crops lifted by July 1st in a move designed to fill the Motherlands coffers with money that normally would have flowed to the US.

Russia’s Opinion: The American peoples ability to know the truth of these things, and as always, has been shouted out by their propaganda media organs leaving them in danger of not being prepared for the horrific economic collapse of their nation now believed will much sooner than later.

Draw your own conclustions!

More at: http://harveyorgan.blogspot.com/2011/05/silver-holds-38-dollar-levellousy.html

Category: Commentary, Economy, National News, National Security, Personal Net Worth, Wall Street, World News | 525 Comments »
Tags: CIA, Fort Knox Gold;Gold May Be Gone, IMF, IMF Gold, Mystery, Read This Story, Russia FSB

Posted By thestatedtruth.com on May 31, 2011

The answer is NO….In a symbolic vote, House GOP leaders voted against a debt ceiling increase of $2.4 trillion to a new ceiling of $16.7 trillion….the final roll call:

• Nay (Republicans 236, Democrats 82), total: 318
  
• Yea (Republicans 0, Democrats 97), total: 97
  
• Not Voting (Republicans 3; Democrats 6); 9
  

 www.zerohedge.com

Category: Commentary, Inspirational, National News, Wall Street | 53 Comments »
Tags: congress, Debt Ceiling, House GOP Vote, Roll Call

Posted By thestatedtruth.com on May 31, 2011

From the Wall Street Journal.  These are ridiculous numbers, no society can operate for long with so such concentrated wealth, this will have to change…….The world’s millionaires represent 0.9% of the world’s population but control 39% of the world’s wealth, up from 37% in 2009. Those with $5 million or more represent 0.1% of the population, and controlled 22% of the world’s wealth, up from 20 percent in 2009.  The middle class is screwed and cannot recover until this issue is addressed.  Plain and simple!

According to a new report by Boston Consulting Group out today, the number of millionaire households in the world grew by 12.2% in 2010, to 12.5 million. (BCG defines millionaires as those with $1 million or more in investible assets, excluding homes, luxury goods and ownership in one’s own company).

The U.S. continues to lead the world in millionaires, with 5.2 million millionaire households, followed by Japan with 1.5 million millionaire households, China with 1.1 million and the U.K. with 570,000. Singapore leads the world in “millionaire density,” or the percentage of millionaires, with 15.5% of its population now millionaire households.

The most important trend, however, is the global wealth distribution. According to the report, the world’s millionaires represent 0.9% of the world’s population but control 39% of the world’s wealth, up from 37% in 2009. Their wealth now totals $47.4 trillion in investible wealth, up from $41.8 trillion in 2009.

Those higher up the wealth ladder also gained. Those with $5 million or more, who represent 0.1% of the population, controlled 22% of the world’s wealth, up from 20 percent in 2009.

As you can see from the accompanying chart, millionaires control 29% of North America’s wealth, while millionaires control about 38% of the wealth in the Middle East and Africa. While the chart makes it look like millionaire-wealth in America is more concentrated, we also have far more millionaires, so their wealth is more spread out among the millionaire population.

Still, the data supports a trend we have been seeing for years: the rise of the global, winner-take-all (or most)  economy.

www.wsj.com

Category: Charts and Graphs, Commentary, Economy, Finance, Interest Rates, Bonds, National News, Personal Net Worth, Wall Street | 487 Comments »
Tags: Rich Man Poor Man, The Rich, Wealthy

Posted By thestatedtruth.com on May 31, 2011

An all time record new high……44.199 million people on food stamps and counting, during an economic recovery!  Geez

 

Courtesy of John Lohman

Category: Commentary, Economy, National News, Personal Net Worth, Wall Street, World News | 425 Comments »
Tags: food stamps, Free Food, Government Entitlements, New Record

Posted By thestatedtruth.com on May 31, 2011

Decreased production because of the drought has been cited as the major reason for price increases, and the prices of rice and vegetables may not drop soon, according to a report by the Ministry of Agriculture.

Statistics from the Office of State Flood Control and Drought Relief Headquarters show that an area of nearly 7 million hectares of arable land has been affected by the drought, with Hubei, Hunan, Jiangxi, Anhui and Jiangsu provinces most seriously affected.

“Cabbage used to be as cheap as paper, and for 5 yuan (77 cents) you would get too many cabbages to carry home,” she said.

She has had to switch to melons and pumpkins, which are getting cheaper this year.

She also changed from eating porridge for breakfast to noodles.

“My grandson said he doesn’t like the dishes I cook these days, but what else can I do?” she said.

Shoppers at a supermarket in Shanghai’s Huangpu district complained that the price of rice produced in Hubei increased 20 percent in one month to 2.6 yuan a kg. Lotus root produced in Hunan also climbed 20 percent during the same period to 4.2 yuan a kg.

In Wuhan, capital of drought-hit Hubei, the average price of 20 monitored vegetables climbed 7.3 percent in one month. The price of cabbage almost doubled in May to 2.22 yuan a kg, according to the Ministry of Agriculture.

The price of freshwater fish, crab and shrimp also witnessed a surge in the past week. Freshwater fish production in several provinces has reached bottom as lakes and rivers are drying up.

Category: Commentary, Commodities, National News, Weather, World News | 3 Comments »
Tags: China Drought, China Food Shortage, Drought In China, Food Inflation In China

Posted By thestatedtruth.com on May 30, 2011

Category: Commentary, Economy, National News, National Security, World News | 741 Comments »
Tags: Computer Sabotage, Cyber Combat, Hackers, Pentagon

Posted By thestatedtruth.com on May 30, 2011

Robert Reich is a well qualified guy……we agree with most everything he says, politics aside to stay objective of course!  Reich: During the Great Prosperity the American middle class saved about 9 percent of their after-tax incomes each year.  By 2008, Americans saved nothing, and the typical American owed 138 percent of their after-tax income.  The fundamental economic challenge ahead is to restore the vast American middle class. We totally agree….The problem is that a substantial part of the American middle class is now for the most part effectively BROKE, and starting over!

Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His “Marketplace” commentaries can be found on publicradio.com and iTunes.

The Truth About the American Economy

Monday, May 30, 2011

Excerpts from Robert Reich’s latest blog review are covered below:

The U.S. economy continues to stagnate. It’s growing at the rate of 1.8 percent, which is barely growing at all. Consumer spending is down. Home prices are down. Jobs and wages are going nowhere.

It’s vital that we understand the truth about the American economy.

How did we go from the Great Depression to 30 years of Great Prosperity? And from there, to 30 years of stagnant incomes and widening inequality, culminating in the Great Recession? And from the Great Recession into such an anemic recovery?

How America Kept Buying: Three Coping Mechanisms

Coping mechanism No. 1: Women move into paid work. Starting in the late 1970s, and escalating in the 1980s and 1990s, women went into paid work in greater and greater numbers. For the relatively small sliver of women with four-year college degrees, this was the natural consequence of wider educational opportunities and new laws against gender discrimination that opened professions to well-educated women. But the vast majority of women who migrated into paid work did so in order to prop up family incomes as households were hit by the stagnant or declining wages of male workers.

This transition of women into paid work has been one of the most important social and economic changes to occur over the last four decades. In 1966, 20 percent of mothers with young children worked outside the home. By the late 1990s, the proportion had risen to 60 percent. For married women with children under the age of 6, the transformation has been even more dramatic — from 12 percent in the 1960s to 55 percent by the late 1990s.

Coping mechanism No. 2: Everyone works longer hours. By the mid 2000s it was not uncommon for men to work more than 60 hours a week and women to work more than 50. A growing number of people took on two or three jobs. All told, by the 2000s, the typical American worker worked more than 2,200 hours a year — 350 hours more than the average European worked, more hours even than the typically industrious Japanese put in. It was many more hours than the typical American middle-class family had worked in 1979 — 500 hours longer, a full 12 weeks more.

Coping mechanism No. 3: Draw down savings and borrow to the hilt. After exhausting the first two coping mechanisms, the only way Americans could keep consuming as before was to save less and go deeper into debt. During the Great Prosperity the American middle class saved about 9 percent of their after-tax incomes each year. By the late 1980s and early 1990s, that portion had been whittled down to about 7 percent. The savings rate then dropped to 6 percent in 1994, and on down to 3 percent in 1999. By 2008, Americans saved nothing. Meanwhile, household debt exploded the typical American owed 138 percent of their after-tax income.

The Challenge for the Future

All three coping mechanisms have been exhausted. The fundamental economic challenge ahead is to restore the vast American middle class.

That requires resurrecting the basic bargain linking wages to overall gains, and providing the middle class a share of economic gains sufficient to allow them to purchase more of what the economy can produce. As we should have learned from the Great Prosperity — the 30 years after World War II when America grew because most Americans shared in the nation’s prosperity — we cannot have a growing and vibrant economy without a growing and vibrant middle class.

(This is excerpted from my testimony to the U.S. Senate Committee on Health, Education, Labor, and Pensions, on May 12. It is also drawn from my recent book, Aftershock: The Next Economy and America’s Future.)

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