Posted By thestatedtruth.com on March 12, 2011
This will continue until the stimulus stops, at that point everything will change, and not for the better! So, eyes on the road everybody. New guidance should be coming soon from the Federal Reserve.
Posted By thestatedtruth.com on March 12, 2011
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March 12, 2011
Japan’s Nuclear and Industrial Safety Agency (NISA) said March 12 that the explosion at the Fukushima Daiichi No. 1 nuclear plant could only have been caused by a meltdown of the reactor core, Japanese daily Nikkei reported. This statement seemed somewhat at odds with Japanese Chief Cabinet Secretary Yukio Edano’s comments earlier March 12, in which he said “the walls of the building containing the reactor were destroyed, meaning that the metal container encasing the reactor did not explode.”
NISA’s statement is significant because it is the government agency that reports to the Agency for Natural Resources and Energy within the Ministry of Economy, Trade and Industry. NISA works in conjunction with the Atomic Energy Commission. Its role is to provide oversight to the industry and is responsible for signing off construction of new plants, among other things. It has been criticized for approving nuclear plants on geological fault lines and for an alleged conflict of interest in regulating the nuclear sector. It was NISA that issued the order for the opening of the valve to release pressure — and thus allegedly some radiation — from the Fukushima power plant.
Posted By thestatedtruth.com on March 11, 2011
Details are sketchy….but
TOKYO, March 12, Kyodo
The amount of radiation reached around 1,000 times the normal level Saturday in the control room of the No. 1 reactor of the Fukushima No. 1 nuclear power plant, the Nuclear and Industrial Safety Agency said.
The discovery suggests radioactive steam could spread around the facility operated by Tokyo Electric Power Co.
Posted By thestatedtruth.com on March 10, 2011
Let’s pay attention to the road….Austerity has a way to go.
Posted By thestatedtruth.com on March 10, 2011
Answer: Countries don’t grow without immigration and rising populations….and Germany is going the wrong way. They’re not alone on this.
BERLINÂ Â Germany, already grappling with one of Europe’s fastest aging and shrinking populations, faces a growing shortage of skilled labor for another, more immediate reason: stepped-up recruiting from abroad for the country’s top engineering and scientific talent.
Since 2008, more people have been emigrating from Germany than flocking to it, reversing decades of migration inflows to Europe’s biggest economic engine. Demographic analysts say engineers, scientists, doctors and other highly skilled workers make up a disproportionate share of the retreat.
In contrast, Germany’s tough immigration laws, a rigid labor code and more inward-looking hiring practices have kept it from importing enough skilled labor to compensate.
What’s of particular concern to German political and business leaders is that many of those leaving hark from the cutting-edge sectors that Germany views as crucial to safeguarding its export advantage, such as nanotechnology, electrical engineering, biotechnology and clean technologies. Unless it can stanch the flow, they argue, the country’s economy is at risk.
“We all have to be clear on how potentially explosive this labor shortage is,” German Labor Minister Ursula von der Leyen said in a recent German newspaper interview.
Posted By thestatedtruth.com on March 10, 2011
 
Red Alert: Saudi Police Fire On Protesters In Oil Hub
March 10, 2011
Saudi police have reportedly opened gunfire on and launched stun grenades at several hundred protesters March 10 rallying in the heavily Shiite-populated city of Qatif in Saudi Arabia’s oil-rich Eastern Province.
The decision to employ violence in this latest crackdown comes a day before Friday prayers, after which various Saudi opposition groups were planning to rally in the streets. Unrest has been simmering in the Saudi kingdom over the past couple weeks, with mostly Sunni youth, human rights activists and intellectuals in Riyadh and Jeddah campaigning for greater political freedoms, including the call for a constitutional monarchy. A so-called “Day of Rage†of protests across the country has been called for March 11 by Facebook groups Hanyn (Nostalgia) Revolution and the Free Youth Coalition following Friday prayers.
What is most critical to Saudi Arabia, however, is Shiite-driven unrest in the country’s Eastern Province. Shiite activists and clerics have become more vocal in recent weeks in expressing their dissent and have been attempting to dodge Saudi security forces. The Saudi regime has been cautious thus far, not wanting to inflame the protests with a violent crackdown but at the same time facing a growing need to demonstrate firm control.
Yet in watching Shiite unrest continue to simmer in the nearby island of Bahrain, the Saudi royals are growing increasingly concerned about the prospect of Shiite uprisings cascading throughout the Persian Gulf region, playing directly into the Iranian strategic interest of destabilizing its U.S.-allied Arab neighbors. By showing a willingness to use force early, the Saudi authorities are likely hoping they will be able to deter people from joining the protests, but such actions could just as easily embolden the protesters.
There is a strong potential for clashes to break out March 11 between Saudi security forces and protesters, particularly in the vital Eastern Province. Saudi authorities have taken tough security measures in the Shiite areas of the country by deploying about 15,000 national guardsmen to thwart the planned demonstrations by attempting to impose a curfew in critical areas. Energy speculators are already reacting to the heightened tensions in the Persian Gulf region, but unrest in cities like Qatif cuts directly to the source of the threat that is fueling market speculation: The major oil transit pipelines that supply the major oil port of Ras Tanura — the world’s largest, with a capacity of 5 million barrels per day — go directly through Qatif.
Posted By thestatedtruth.com on March 10, 2011
Interesting…..
Bank of America Says Nearly Half Its Mortgages Are ‘Bad’
Washington Business Journal
Bank of America Corp. is segregating almost half its 13.9 million mortgages into a “bad†bank comprised of its riskiest and worst-performing “legacy†loans, Bloomberg News reported, citing Terry Laughlin, who is running the new unit.
“We are creating a classic good bank, bad bank structure,†Laughlin told investors at a meeting in New York Tuesday, according to Bloomberg. He was promoted last month to manage the costs of resolving disputes stemming from the company’s 2008 purchase of Countrywide Financial Corp. “We’re going to get after this, we’re going to do it the right way and we’re going to put it to bed in the next 36 months,†he said.
Posted By thestatedtruth.com on March 10, 2011
Cumberland Advisors
Day of Rage
March 10, 2011
Modern technology. Read email of Saudi events on WiFi at 38,000 feet. This will be brief.
The day of rage came early. All outcomes are speculative. Contagion has reached Saudi Arabia.
Recent history shows Al-Qaida actively targeted Saudi Arabia several times. Until now, no success. Events in the Middle East-North Africa (MENA) have increased the risk by orders of magnitude which are difficult to estimate.
Cumberland remains with a cash reserve in its US Exchange-Traded Funds portfolios. We remain overweight in oil/energy. We believe this is a developing shock.
As we’ve written several times, “this is nowhere near over.â€
David R. Kotok, Chairman and Chief Investment Officer
This report has been derived from information considered reliable, but it cannot be guaranteed as to accuracy or completeness. Copyright 2011, Cumberland Advisors. All rights reserved.
Please feel free to forward this Commentary (with proper attribution) to others who may be interested.
Posted By thestatedtruth.com on March 9, 2011
Somebody should think about these programs before implementing them. Government morons get an F as in failing for setting it up this way! “No Child Left Behind is broken and we need to fix it now,” Education Secretary Duncan said in a statement. “This law has created a thousand ways for schools to fail and very few ways to help them succeed.”
82% Of U.S. Schools May Be Labeled ‘Failing’Â
An estimated 82 percent of U.S. schools could be labeled as “failing” under the nation’s No Child Left Behind Act this year, Education Secretary Arne Duncan said Wednesday.
The Department of Education estimates the number of schools not meeting targets will skyrocket from 37 to 82 percent in 2011 because states are toughening their standards to meet the requirements of the law. The schools will face sanctions ranging from offering tutoring to closing their doors.
“No Child Left Behind is broken and we need to fix it now,” Duncan said in a statement. “This law has created a thousand ways for schools to fail and very few ways to help them succeed.”
Duncan delivered the news in remarks to a House education and work force committee hearing, in urging lawmakers to rewrite the Bush-era act. The law was established in 2002 and many education officials and experts argue it is overdue for changes.
President Barack Obama has highlighted reforming the act as a priority for his administration, and both Democrats and Republicans have agreed that it needs to be changed — though disagreements remain on how.
The current law sets annual student achievement targets designed with the goal of having all students proficient in math and reading by 2014, a standard now viewed as wildly unrealistic.
Duncan said the law has done well in shining a light on achievement gaps among minority and low-income students, as well as those who are still learning English or have disabilities. But he said the law is loose on goals and narrow on how schools get there when it should be the opposite.
“We should get out of the business of labeling schools as failures and create a new law that is fair and flexible, and focused on the schools and students most at risk,” Duncan said.
The Department of Education said its estimate was based on four years of data and the assuming all schools would improve at the same rate as the top quartile.”Even under these assumptions, 82 percent of America’s schools could be labeled ‘failing’ and, over time, the required remedies for all of them are the same — which means we will really fail to serve the students in greatest need,” Duncan said.
Posted By thestatedtruth.com on March 9, 2011
This is moving East to West, California’s day not to far away!
TOPEKA, Kan. – A Kansas House committee endorsed a bill Wednesday that would cut future retirement benefits for current teachers and government workers to help solve the long-term funding woes of their pension system.
The measure that cleared the Pensions and Benefits Committee on a voice vote also would increase the state’s annual contributions to the Kansas Public Employees Retirement System and increase the age at which many teachers and government workers could start drawing full retirement benefits.
The bill goes against a longstanding assumption that’s governed past debates over pension legislation, that the state constitution and Kansas law prevent the state from altering its public pension plans by forcing lower benefits on current participants. But committee members said they’re compelled to act because of the projected $7.7 billion gap between anticipated KPERS revenues and promised benefits over the next few decades.
“It’s not trimming around the edges,” Chairman Mitch Holmes, a St. John Republican, said after the committee’s meeting. “It goes to the fundamental problem.”
The bill is likely to draw opposition from public employees’ and retirees’ groups, who’ve long argued that the problem facing KPERS is that the state has historically fallen short of its obligations on contributing to the pension system and needs to catch up by committing more money. Critics of the current pension system contend the state simply can’t afford the promises it has made on pensions.
More at: http://www.cnbc.com/id/41991524
Posted By thestatedtruth.com on March 8, 2011
Reuters reports that European oil imports are about to get tough, making life for Italy, which is most reliant on Libyan oil, quite complicated: Libyan oil trade has been paralysed as banks decline to clear payments in dollars due to U.S. sanctions, trading sources told Reuters on Tuesday. The move follows a decision by major U.S. oil firms to halt trade with Libya and will complicate deals for European firms to buy Libyan oil. Around half of Libya’s oil output, or more than 1 percent of global supply, has already been choked off by lethal clashes between rebels and forces loyal to Libyan leader Muammar Gaddafi.
Posted By thestatedtruth.com on March 8, 2011
Rick’s Picks
“Phenomenally accurate forecastsâ€
Senate minority leader Mitch McConnell said on Face the Nation yesterday that President Obama wasn’t serious about the budget. Lest anyone mistake this for partisan sniping, here’s an interesting factoid that drives the charge home: the $4 billion in spending cuts that Congress just approved to avoid a government shutdown amounts to about ten hours of government spending and less than a day of Treasury borrowing. This calculation comes from Bill Buckler, editor of the Australia-based Privateer. Mind you, the cuts were ginned up by a U.S. Congress that supposedly is in the grip of austerity-crazed Tea Partiers and Republicans. What it suggests is that the paltry sum hacked from federal outlays may be as good as it gets for anyone hoping The Government will somehow get its act together.  Meanwhile, if either a Democrat or a Republican claims to be in favor of reducing the deficit, keep in mind that the sums he or she will be talking about will be in the billions, whereas the deficit itself is mounting into the trillions. As Buckler note, “This year, the official budget for the U.S. government is $3,700,000,000,000. That means the government will spend $10.13 billion every day – weekends and holiday included. The latest official figure for the fiscal 2011 deficit is $1.65 trillion. The U.S. Treasury will borrow nearly 45 cents of every dollar it spends – a total of $4.52 billion every day – weekends and holidays included.â€
That’s the reality of it. But when our best and brightest on Capitol Hill attempt to reconcile these numbers with tax revenues, you can bet it will play out as slapstick. The looming Punch-and-Judy show between the big spenders on one side of the aisle and the even bigger spenders on the other side was framed by news stories over the weekend concerning McConnell and such Democratic heavies as Sen. Dick Durbin, an ardent Obama ally, and Sen. John Kerry. Said McConnell, “What I don’t see now is any willingness to do anything that’s difficult.â€Â For his part, Kerry, emulating leftist economist Paul Krugman, went all out to demonstrate his ignorance in as concise a formulation as possible, calling the GOP budget proposal is an “ideological, extremist, reckless statement. If [it] were to be put in place, it would contribute to the reversal of our recovery…[and] deny us the competitiveness that we need to move with China, Indian and other countries into the future.â€Â We gather that Kerry, like Krugman, regards the U.S. Government as an engine of growth and thinks the best way for the economy to expand even faster is to push the Federal debt from its current $14.2 trillion to…what? $20 trillion? Durbin took another track, suggesting that too much budget-cutting would “push more kids out of school.â€Â Someone ought to tell the kids they’ll need good jobs to pay for teacher health care and pension benefits in the unlikely event the unions carry the day in Wisconsin.
***
Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts.  Rick’s Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick’s Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2011, Rick Ackerman. All Rights Reserved.
Posted By thestatedtruth.com on March 8, 2011
Yikes!
Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.
Even as the economy has recovered, social welfare benefits make up 35 percent of wages and salaries this year, up from 21 percent in 2000 and 10 percent in 1960, according to TrimTabs Investment Research using Bureau of Economic Analysis data.
Posted By thestatedtruth.com on March 8, 2011
This makes it hard to see economic growth….especially in Europe!
In Europe, gasoline has just hit an all time record of $8.632 per gallon! As HLN.be reports: Petrol 95 at €1.624 per litre. This breaks the 2008 record of €1.61 per liter.” Translated into American this means that a gallon of gas in Europe is now an unprecedented $8.632 per gallon.
Posted By thestatedtruth.com on March 7, 2011
What’s the old saying….records are made to be broken. The bottom line is we have a bunch of government morons here! They still don’t know basic math. March 18’th is the deadline for current stop gap funding. Without a new spending agreement by then, the government will shut down (?).
The federal government posted its largest monthly deficit in history in February, a $223 billion shortfall that put a sharp point on the current fight on Capitol Hill about how deeply to cut this year’s spending.That one-month figure, which came in a preliminary report from the Congressional Budget Office, dwarfs even the most robust cuts being talked about on the Hill, and underscores just how much work lawmakers have to do to get the government’s finances in balance again.
The Senate plans to vote Tuesday on competing proposals to cut spending, but Democrats have rejected GOP-backed cuts of more than $50 billion, and Republicans have ruled out Democrats’ cuts of less than $10 billion, meaning neither plan will draw the 60 votes needed to overcome a filibuster and pass.
“We’ve all done the math and we all know how these votes will turn out: Neither proposal will pass, which means neither will reach the president’s desk as written. We’ll go back to square one and back to the negotiating table,†said Senate Majority Leader Harry Reid, Nevada Democrat.
The two sides are facing a March 18 deadline, which is when the current stopgap funding bill expires. Without a new spending agreement by then, the government would shut down.
Posted By thestatedtruth.com on March 7, 2011
Bill Gross of PIMCO has been saying similar things and thinks once QE2 ends things could get very negative for the free market system, the dollar and interest rates.Â
Charles Biderman: What nobody’s asking is what happens when QE 2 stops: If the only buyer is the Fed, and the Fed stops buying, I don’t know what is going to happen…When I was on your show a year ago I was saying the same thing: we can’t figure out who is doing the buying it has to be the government, and people said I was nuts. Now the government is admitting it is rigging the market.“ Now that the great muni scare forced retail to take proceeds from muni liquidations and invest in stocks just as the market topped out, CNBC asked Biderman again, hoping to get something new.  “In December of 2009 I received a lot of ridicule for saying that the Fed is rigging the market which as everybody is well aware.” As for the “sustainable economic recovery” i.e., what happens to Quantitative Easing: “They probably will end for a while, we think there is going to be a QE3 and 4, or until the market says: “No Mas – we are not going to believe this game the Fed is playing… The Fed is printing over $100 billion a month to buy other assets and pay bills, and economic growth is picking up at a $200 billion annual rate. This is a very inefficient method of boosting the economy, and then… how do we repay these trillions that have been created out of thin air……”
Â
Posted By thestatedtruth.com on March 7, 2011
World changing events are taking place in the oil rich Middle East. Saudi Arabia drafts another 10,000 troops ahead of protests, and drafting up to 10,000 security forces to the north eastern Muslim Shia provinces ahead of mass protests planned next week.
Peak oil has passed. The economic dominance of the West is now history.
Those that have planned and organized the Middle East events are those that benefit here and there from chaos and $500 crude.
               Jim Sinclair   www.jsmineset.com
Posted By thestatedtruth.com on March 5, 2011
Cumberland Advisors
David Kotok always does a good job on the important issues…..it’s a good read!
$115 Oil, Contagion and Central Banks
March 5, 2011
“… there’s so much unrest that one can actually sense or imagine unknown nano-particles of rage colliding in mid-air…â€Â (Source: a private person who screens Middle East media for me and with whom I correspond frequently)
“It ain’t over till its over.†–Yogi BerraÂ
We have no empathy for those who bought into the “head fake†rally last week and sold their energy positions because Venezuela’s Hugo Chavez was their peace broker. One doesn’t make a peace until at least one of the antagonists has reached the point of exhaustion. And, usually, the peacemaker needs credibility. Chavez? A peacemaker?  Really? Â
This turmoil hasn’t peaked yet.
In addition, the spread to Sub-Saharan Africa lies ahead, as the media images of social network-induced protest encourage copycats in those countries. We are now tracking the 20 MENA countries as well as others like Cameroon and Nigeria.
One needs to put this MENA contagion into the millennium old perspective of the Shia-Sunni schism in Islam. Discussion of that is beyond this short missive. But we must note that Iran is now the dominant sponsor of Shiite Islam and Saudi Arabia is the keeper of Sunni tradition. Readers and serious investors are encouraged to study this schism. Think about it as you think about Catholics vs. Protestants or the War of the Roses. Put that type of historical enmity into an Islamic setting. No way is this over.
Stratfor put the Bahrain situation in this context. “There are negotiations under way between the Shiite-dominated opposition and the Sunni royal family… If there is to be a negotiated settlement, then the royal family, the al-Khalifas, will have to shed some powers, which means that the Shia are likely to be empowered. If that happens, that energizes Shia in Kuwait… And then, of course, Saudi Arabia is next.â€
Let’s get to oil prices, financial markets and, lastly, to monetary policy in Europe vs. the United States.
Oil prices are headed higher and maybe much higher as inventory cushions diminish and as markets recognize the quality differences in crude oil. Sweet Libyan crude cannot be replaced by Saudi crude on a barrel-by-barrel basis. As Ed Yardeni wrote, “Saudi crude is cruder.â€
Brent crude is reflective of a truer world price. The US standard is West Texas Intermediate (WTI. It is trading at a discount to Brent. It normally trades at a 5% premium. The discount has widened to about 15% or nearly $15 dollars per barrel. This is more than two standard deviations from average. (Thanks to Strategas for data.)Â
US dependency on imported oil reveals the multi-decade failure of our nation’s energy policy.  We will now pay that price in higher gasoline, diesel, and other energy-related costs. Every dollar a barrel translates into about 2.5 cents per gallon of gasoline. Every penny in the gas price translates into about $1.5 billion in a national annual sales tax that extracts part of 305 million American citizens’ incomes and sends it abroad to mostly despotic regimes. Results: GDP growth will be slower, headline inflation will be higher, housing prices will stay weak longer, and the US employment recovery will be diminished.
Financial markets reveal the energy upward trend. XLE is the energy “spider†component of the S&P 500 index. It is the only sector in the S&P 500 that has consistently outperformed the index in the last 6 months. Energy was in this uptrend due to emerging-market economic recoveries and well before the MENA events exploded in the news.
Furthermore, since Egyptian event news hit the TV, XLE has achieved a total return of 9.59% vs. SPY of 1.91% (January 27-March 4 closing prices). Extract energy, and the rest of the US stock market components have been flat or down. We expect these trends to continue; US stocks have stopped discounting robust economic growth. There is a lot of history demonstrating the coincidence of recession and an oil price spike.Â
Cumberland is at maximum overweight in energy ETFs. We continue to maintain a cash reserve. We believe the US stock market will provide better redeployment opportunities for that cash.Â
We are also overweight the media ETF, whose symbol is IGN. Ned Davis databases strongly argue, “Media, advertising, broadcasting, Cable TV and movies & entertainment sub-industries, stand out as sector outperformers when the oil prices start to spike.â€Â Note that IGN has also outperformed SPY consistently during the last 6 months. Our US portfolio weight is 3%, which is about as high as we would take a small sub-industry like this.
Let’s move on.
Monetary policy and interest rate outlooks are diverging between the US Federal Reserve and the Eurozone’s European Central Bank (ECB). This has several implications.
In the US, the Fed is worried about employment and not about headline inflation. US policy looks at “core†inflation for estimates of the impact of monetary policy. Energy and food price spikes are viewed as “exogenous.â€Â They are shocks to systems but they are not caused by monetary policy. They can do economic damage that may require monetary policy to ease longer than otherwise would be needed. Bernanke continues to affirm his worry about jobs and the economic recovery. At Cumberland, we consider the chances of aborting QE2 to be zero. The Fed will finish the QE2 program and then pause to review data at the end of the summer. Shorter-term interest rates in the US are likely to remain where they are for all of 2011 and, perhaps, much longer.Â
In Europe, the focus is more on headline inflation. Europeans tolerate higher unemployment rates more easily than we do. Moreover, they manage their monetary policy on the overall inflation rate outlook and not on the “core.â€Â Thus food and energy prices are encouraging the ECB to tighten policy sooner rather than later. Our colleague Bill Witherell just discussed the upgrading of our outlook for Europe; he gave some specifics on how we are positioning within those portfolios. See www.cumber.com for Bill’s latest missive.
Readers are also advised to consider the shifts in global preferences for reserves. Oil exporters have a lower USD preference than oil importers,†says Barclays. Barclays expects this shift to favor the euro. By analyzing the Treasury flow data, they derive an estimate that every $10 a barrel increase in oil price results in a $2.4 billion per month of reduced demand for USD. Barclays admits this is a difficult estimate to quantify. As to the direction, they are “confident.â€Â Â
David R. Kotok, Chairman and Chief Investment Officer
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This report has been derived from information considered reliable, but it cannot be guaranteed as to accuracy or completeness. Please feel free to forward this Commentary (with proper attribution) to others who may be interested.
Copyright 2011, Cumberland Advisors. All rights reserved.Â
Posted By thestatedtruth.com on March 5, 2011
New faster data networks are being rolled out by the major U.S. wireless carriers, but does anybody really understand what’s happening to rapidly advancing cell technology? This may help!
Sprint Nextel Corp. has “the Now Network.†T-Mobile claims “the nation’s largest.†Verizon Wireless is “Lightning Fast, Lightning Strong.†Everyone is pushing new phones, tablets and other mobile devices that take advantage of all that power.
There’s just one problem. Some of these new networks aren’t so new, some aren’t so fast, coverage is spotty and they can be expensive. Did I say one problem? That was four. And here’s a fifth: Wireless carriers and device manufacturers are creating a confusing mess for consumers.
The confusion stems from a lack of agreement on what constitutes a 4G, or fourth-generation, data network. As initially defined by the standards-setting International Telecommunications Union, 4G was supposed to refer to networks that would be orders of magnitude faster than the 3G networks now widely in use.
That idea was largely ignored by carriers, especially those in the U.S., in the rush to convince consumers they were missing out on something new and cool. Late last year, the ITU basically threw in the towel on its original definition. Now almost anything goes.
The U.S. carrier most affected by 4G creep is probably Sprint, which last year began rolling out service on a new network based on a technology called WiMax in conjunction with Clearwire Corp. (CLWR) It’s a genuinely new network, and if you’re a Sprint 4G customer who is lucky enough to live in an area with 4G coverage, you’ll see data speeds that are noticeably faster than 3G.
Here’s where it gets complicated. AT&T Inc. (T) and Verizon Wireless both have embraced an alternative technology called LTE (for Long Term Evolution) and Verizon began rolling its network out late last year. Meanwhile, AT&T and the fourth major U.S. carrier, Deutsche Telekom’s T-Mobile, have begun tweaking and rebranding their existing 3G networks as 4G.
In promoting the Inspire, a smartphone from HTC Corp. (2498) running Google Inc.’s Android operating system, AT&T offers this explanation in faint, fine print, next to an asterisk: “4G speeds delivered by HSPA+ with enhanced backhaul.†Gee, doesn’t that make everything clear.
Adding to the confusion, the AT&T phones being labeled 4G because they can run on the HSPA+ network may not run on AT&T’s LTE network, which is likely to appear later this year.
“4G is now officially meaningless,†says Will Strauss, a wireless analyst who is president of Forward Concepts, in Tempe, Arizona.
While all carriers cite sky-high theoretical maximum speeds that normal human beings will never see, the only thing that counts is what users can actually expect on a daily basis. In recent months, I’ve tested a variety of allegedly 4G devices from all four major U.S. carriers, using Ookla’s speadtest app linking to the same remote server to compare speeds.
It’s hard to generalize, because network performance can vary widely from location to location, from device to device and even from hour to hour, depending on the volume of data traffic. But in my tests, conducted in both the San Francisco Bay Area and Los Angeles, I have consistently found that Sprint’s WiMax network is much faster than AT&T’s and T-Mobile’s HSPA+ networks.
For instance, in my San Francisco tests, the Sprint EVO Shift — a phone made by HTC that runs Google Inc. (GOOG)’s Android operating system — averaged download speeds that were seven times faster than AT&T’s Inspire, another Android-based HTC phone, and 16 times faster than T-Mobile’s Galaxy S 4G, an Android phone made by Samsung Electronics Co., which were connecting over their respective 4G networks.
The fastest results belonged to Verizon’s LTE network, which it switched on in December and is now available in 38 markets and more than 60 airports. I obtained speeds that were 50 percent faster even than Sprint’s.
There’s a huge caveat, though: The only devices that now take advantage of the network are a couple of laptop-computer adapters. The first Verizon LTE phone, the HTC Thunderbolt, isn’t yet for sale, and the true test of the network’s speed won’t come until it’s crowded with a few million phone users updating their Facebook pages and streaming YouTube videos. My early experiences were akin to speeding down a highway where I was essentially the only car on the road.
Meanwhile, pricing for 4G service is a murky work in progress. Sprint, for example, charges $49.99 a month for unlimited 4G service, which sounds pretty good until you remember that not everywhere you go may have 4G service. So you’ll likely end up needing the $59.99 plan, which couples unlimited 4G with up to five gigabytes of 3G data.
Verizon is currently charging users of its laptop adapters $50 a month for five gigabytes of data, and $80 a month for 10 gigabytes. There’s no definitive word on the cost for phones, but I bet that one way or another, 4G customers will find themselves paying more.
The moral of the story, if there is one, is to treat any 4G label skeptically for the foreseeable future. Your shiny new 4G phone may turn out to be as fast as you expect, or it may not; just don’t expect the carriers to give you much help figuring it out.
Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.)
Posted By thestatedtruth.com on March 4, 2011
Wisconsin Governor Walker……We’re Broke! So what does that make California and Illinois to name a few others. Yep. they’re even more broke.Â
Wisconsin governor Walker announced he would fire 1500 state workers unless democrats, who have been fled and are hiding in Illinois to avoid a critical vote on collective bargaining, return to the state. Reuters take on this word: “The threat of layoffs increased the stakes in a bitter battle between Wisconsin Republicans and Democrats, a fight being watched around the nation as other states like Ohio and Indiana weigh rolling back public employee union power as part of budget-cutting efforts.   Earlier this week, Walker declared the state “broke” when he unveiled his proposed two-year $59.2 billion budget for fiscal 2012-2013, which eliminates more than 21,000 positions and cuts funding to education, cities and counties.”
Posted By thestatedtruth.com on March 4, 2011
The U.S. Labor Department said Friday….Nonfarm payrolls rose by 192,000 last month and unemployment fell below 9% for the first time in nearly two years….8.9% employment;  Gallup had a different take on this, we review it below.
Adjustments to population has helped  keep number in order.  Labor force participation rate has not been moved. Job gains in Manf up 33,000; Health care up 32,000; Private ; Up 222,000. Negative; State and local government jobs lost. The economy is improving but few people are aware that the government changed the formula for calculating these numbers in January, and the population base was adjusted. Civilians not in the labor force hit an all time high, and 500,000 new people went on food stamps. Birth and death statistics showed the lowest number of people in the Labor Force in the last 25 years. Hence with a smaller Labor Force, it was easier to get better numbers. So whose numbers are right, the U.S. government or the Gallup Poll….. Hmm. We’ll side with Gallup.
The U.S. Labor Department also said the unemployment rate, which is obtained from a separate household survey, fell to 8.9% last month, the first time it dipped below 9% since April 2009. About 13.67 million people who would like to work can’t get a job.
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 By Dennis Jacobe, Chief Economist
PRINCETON, NJ – Unemployment, as measured by Gallup without seasonal adjustment, hit 10.3% in February — up from 9.8% at the end of January. The U.S. unemployment rate is now essentially the same as the 10.4% at the end of February 2010.
The percentage of part-time workers who want full-time work worsened considerably in February, increasing to 9.6% of the workforce from 9.1% at the end of January. A larger percentage of the U.S. workforce is working part time and wanting full-time work now than was the case a year ago (9.3%).
Underemployment Surges in February
Underemployment, a measure that combines part-time workers wanting full-time work with those who are unemployed, surged in February to 19.9%. This resulted from the combination of a sharp 0.5-point increase since the end of January in the percentage unemployed and a 0.5-point increase in the percentage working part time but wanting full-time work. Underemployment is now higher than it was at this point a year ago (19.7%).
Jobs Situation Deteriorates in February
There is essentially no difference between the unemployment rate now and the one at this time a year ago; January’s rate, in contrast, showed a 1.1-percentage-point year-over-year improvement. This suggests that the real U.S. jobs situation worsened in February. That is, jobs are relatively less available now than in January.
In the broader underemployment picture, the situation is much the same. January’s year-over-year improvement of 1.0 points became -0.2 points in February. In turn, this suggests job market conditions in terms of underemployment also worsened during February.
This deterioration in the jobs situation combined with surging gas prices, budget battles at the federal and state level, and declines on Wall Street tend to explain the recent plunge Gallup recorded in consumer confidence. They also align with the continued “new normal†spending patterns of early 2011. Although Gallup’s Job Creation Index has improved over the past year and showed modest improvement in February, the improvement has not been significant enough to positively affect underemployment and unemployment.
Gallup.com reports results from these indexes in daily, weekly, and monthly averages and in Gallup.com stories. Read more about Gallup’s economic measures.
Survey Methods: Gallup classifies American workers as underemployed if they are either unemployed or working part time but wanting full-time work. The findings reflect approximately 18,000 phone interviews with U.S. adults aged 18 and older in the workforce, collected over a 30-day period. Gallup’s results are not seasonally adjusted and are ahead of government reports by approximately two weeks.
Results are based on telephone interviews conducted as part of Gallup Daily tracking from Jan. 30-Feb. 28, 2011, with a random sample of 17,996 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia, selected using random-digit-dial sampling.
For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage points.
Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each daily sample includes a minimum quota of 200 cell phone respondents and 800 landline respondents, with additional minimum quotas among landline respondents for gender within region. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, cell phone-only status, cell phone-mostly status, and phone lines. Demographic weighting targets are based on the March 2010 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
For more details visit www.gallup.com.
Posted By thestatedtruth.com on March 3, 2011
Wow, this sure looks spacey…come to think of it, that makes total sense! Unlike NASA’s space shuttles, the X-37B space plane does everything autonomously. It also has a solar array that is deployed from its payload bay to generate power during its months-long stay in orbit.Â
The first X-37B spacecraft launched in April 2010 and returned to Earth in December after an apparently successful test flight, though the details of that mission – like this upcoming flight – are classified. The first X-37B mission lasted 225 days.
The U.S. Air Force’s secretive X-37B space plane is poised to launch on its second mission Friday (March 4), though what exactly it will be doing once it leaves the ground remains a mystery.
The robotic X-37B mini-shuttle is slated to lift off from Cape Canaveral, Fla., on Friday atop an Atlas 5 rocket, weather permitting. Its launch window opens at 3:39 p.m. EST (2039 GMT), according to the launch provider United Launch Alliance, which is overseeing the flight.
This will mark the second space mission for the Air Force’s X-37B space plane program — but the first for this particular plane. It is the second X-37B spacecraft built for the Air Force by Boeing and carries the name Orbital Test Vehicle 2, or OTV-2.
The first X-37B spacecraft launched in April 2010 and returned to Earth in December after an apparently successful test flight, though the details of that mission – like this upcoming flight – are classified. The first X-37B mission lasted 225 days.
A small robotic space shuttle
With its blunt nose and stubby wings, the unmanned X-37B spacecraft resembles a miniature version of NASA’s space shuttles. The vehicle was originally developed as part of a NASA project that was shifted to the military when funding ran dry.
The spacecraft is about 29 feet (almost 9 meters) long and 14 feet wide (nearly 4.5 meters), with a payload bay about the size of a pickup truck bed. It is designed to launch vertically inside the nose cone of a rocket, stay in orbit for months at a time, and then land horizontally on a runway like a space shuttle.
But unlike NASA’s shuttles, the X-37B space plane does everything autonomously. It also has a solar array that is deployed from its payload bay to generate power during its months-long stay in orbit.
“There is no one on the ground with a joystick flying it,” Lt. Col. Troy Giese, X-37B program manager in the Air Force Rapid Capabilities Office, said before the first X-37B mission blasted off last year.
Secret second test flight
Air Force officials have not said much about first X-37B mission, and they’re been similarly tight-lipped about the upcoming second flight with the OTV-2 vehicle.
But the Air Force has said that the X-37B spacecraft should help the Air Force test and demonstrate new technologies — such as guidance, navigation and control systems — that could be used on future satellites.
The secrecy surrounding the X-37B has led to some speculation that the plane could be a space weapon of some sort. But Air Force officials have repeatedly denied that charge, and some experts have postulated that it is a platform for space reconnaissance.
The X-37B is built by Boeing’s Space and Intelligence Systems division. It can fly long, extended missions because of its solar array power system, which allows it to stay in orbit for up to 270 days, Air Force officials have said.
Originally, NASA used the space plane as an experimental test bed until funding for the project ran out in 2004.
The vehicle then passed to the (DARPA) Defense Advanced Research Projects Agency and was ultimately turned over to the Air Force in 2006.  The Air Force Rapid Capabilities Office oversees the X-37B space plane program for the U.S. military.
More at: Â www.SPACE.com
Posted By thestatedtruth.com on March 3, 2011
PRINCETON, NJ — Unemployment, as measured by Gallup without seasonal adjustment, hit 10.3% in February — up from 9.8% at the end of January. The U.S. unemployment rate is now essentially the same as the 10.4% at the end of February 2010.
The percentage of part-time workers who want full-time work worsened considerably in February, increasing to 9.6% of the workforce from 9.1% at the end of January. A larger percentage of the U.S. workforce is working part time and wanting full-time work now than was the case a year ago (9.3%).
Underemployment Surges in February
Underemployment, a measure that combines part-time workers wanting full-time work with those who are unemployed, surged in February to 19.9%. This resulted from the combination of a sharp 0.5-point increase since the end of January in the percentage unemployed and a 0.5-point increase in the percentage working part time but wanting full-time work. Underemployment is now higher than it was at this point a year ago (19.7%).
Jobs Situation Deteriorates in February
There is essentially no difference between the unemployment rate now and the one at this time a year ago; January’s rate, in contrast, showed a 1.1-percentage-point year-over-year improvement. This suggests that the real U.S. jobs situation worsened in February. That is, jobs are relatively less available now than in January.
In the broader underemployment picture, the situation is much the same. January’s year-over-year improvement of 1.0 points became -0.2 points in February. In turn, this suggests job market conditions in terms of underemployment also worsened during February.
This deterioration in the jobs situation combined with surging gas prices, budget battles at the federal and state level, and declines on Wall Street tend to explain the recent plunge Gallup recorded in consumer confidence. They also align with the continued “new normal” spending patterns of early 2011. Although Gallup’s Job Creation Index has improved over the past year and showed modest improvement in February, the improvement has not been significant enough to positively affect underemployment and unemployment.
Gallup.com reports results from these indexes in daily, weekly, and monthly averages and in Gallup.com stories. Read more about Gallup’s economic measures.
Results are based on telephone interviews conducted as part of Gallup Daily tracking from Jan. 30-Feb. 28, 2011, with a random sample of 17,996 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia, selected using random-digit-dial sampling.
For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage points.
Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each daily sample includes a minimum quota of 200 cell phone respondents and 800 landline respondents, with additional minimum quotas among landline respondents for gender within region. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, cell phone-only status, cell phone-mostly status, and phone lines. Demographic weighting targets are based on the March 2010 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
For more details visit www.gallup.com.
Posted By thestatedtruth.com on March 3, 2011
The economy may be getting better for the time being, but not for those at the bottom! Food stamp usage just hit 44.1 million people in December and averaged $134 a month per person.
Posted By thestatedtruth.com on March 3, 2011
Guess Ben Bernanke has been looking at the wrong picture with his “inflation isn’t a problem” rant! The picture above looks pretty darn clear to us.
Global food prices rose to a record in February and grain costs may continue to rise in the next several months, with only rice keeping the world from a repeat of the crisis three years ago, the United Nations said.
An index of 55 food commodities rose 2.2 percent to 236 points from 230.7 in January, the eighth consecutive gain, the UN’s Food and Agriculture Organization said today. Wheat rose as much as 58 percent on the Chicago Board of Trade in the past 12 months, corn gained 87 percent and rice added 6.5 percent.
Rising food costs contributed to riots across North Africa and the Middle East in the last several months that toppled leaders in Egypt and Tunisia. Prices surged as bad weather ruined crops from Canada to Australia and Russia banned grain exports after its worst drought in a half-century.
Global food prices probably will rise in the first half of this century because of an expanding population and higher incomes, slower crop-yield growth and the effect of climate change, Ross Garnaut, the Australian government’s climate-change adviser, said yesterday.
“The hike in food prices is deeply worrying,†Thierry Kesteloot, a food-policy adviser at Oxford, England-based hunger-relief charity Oxfam, said in an e-mailed statement. “Millions more people are sliding into poverty as they struggle to afford basic food supplies, and more and more are at risk of going hungry.â€
“You now need a very good 2011 crop, and if we don’t get that, I’m not very optimistic about 2011-12,†Abbassian said. “There hasn’t been a food crisis per se, anything comparable to 2008. With stocks being drawn down, for 2011-12 we’ll have to be far more cautious.â€
Posted By thestatedtruth.com on March 2, 2011
Ok class, let’s review the current housing market. So where do we start…how about with inventory!
Inventory continues to swell. “There’s just way too many homes out there relative to demand and we’re not going to see that change anytime soon,” says Joshua Shapiro, chief US economist for MFR Inc. Lenders continue to repossess massive numbers of homes, even though they are trying not to. Despite foreclosure moratoriums, workouts and government-subsidized refinancings, the monthly foreclosure totals remain extremely high.
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Foreclosures, while still extremely numerous, have declined from peak levels. Unfortunately, this modest improvement may be short-lived. After a temporary dip in “Foreclosures Started” early last year, this metric is bouncing back up toward record highs.
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At the same time, “negative equity” continues to rise – a trend that contributes to rising defaults and foreclosures. According to a recent report from Zillow, home prices in the fourth quarter of last year plunged 5.9% compared to the fourth quarter of 2009. As home prices fall, negative home equity inevitably rises. Not surprisingly, therefore, negative home equity surged in the fourth quarter of 2010. 27% of borrowers are now “underwater” on their mortgages, according to Zillow, up from 23% in the previous quarter.
Rising negative equity does not guarantee rising defaults and foreclosures. But “underwater” homeowners tend to lack the mortgage- paying enthusiasm of their above-water counterparts. Net-net, the enormous volume of foreclosures – completed, newly started and prospective – is weighing heavily on the housing market.
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As a result, the ratio of foreclosures to home sales remains extremely high. As these foreclosed properties continue to flood the market, they continue to depress prices. More troubling is the fact that this ratio has been trending higher during the last six months.
Demand refuses to recover. Household finances are in tatters. The dual bear markets in housing and stocks since 2007 have erased a whopping $12 trillion of national wealth – a sum nearly equal to one year of US GDP. On the other side of the balance sheet, meanwhile, we Americans have been struggling mightily to reestablish some kind of balance…by reducing our debts.
If the wealth doesn’t return, getting rid of debt is the only way to regain or improve solvency. Unfortunately, wealth disappears much more easily than debt. Compared to the $12 trillion of household wealth that evaporated during the last two years, only $1 trillion of debt has disappeared from consumer balance sheets – a decrease of only 7.4% from the peak consumer debt reading.
So even though homes are cheaper, prospective homebuyers are less capable of buying a home than they were a few years ago. Â
Mortgages are much more difficult to obtain today than they were during the boom years. Lenders aren’t lending as generously. Consequently, borrowers aren’t borrowing as ravenously. The volume of purchase-mortgage originations continues to slide…and shows no sign of rebounding. There are stories of legions of individuals who wish to buy a home – and who legitimately possess the wherewithal to do so – but are unable to obtain a traditional 30-year mortgage from anyone.
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Painfully aware of these trends, homebuilders’ confidence in the housing market languishes near all-time lows. The National Association of Homebuilders’ Index measures three categories of housing market activity: Foot traffic from prospective buyers, current sales and builder expectations for home sales during the next six months.
Taken together, these metrics reflect little sign of a rebound, and there in lies the sad story!
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Posted By thestatedtruth.com on March 2, 2011
Chile will delay the end of its summer time by three weeks
as the country faces an energy squeeze because of drought and
high demand, the government said Wednesday.
Chile relies heavily on hydroelectric power to meet energy needs in the world's top copper producer, and rain shortages force generators to rely on costly fuel-driven plants, compounding inflation risks in the country's fast-growing economy.
Posted By thestatedtruth.com on March 2, 2011
The U.S. economy grew moderately in early 2011 and the weak jobs market improved, while businesses reported rising costs, the Fed said.
Here are some key highlights:
Posted By thestatedtruth.com on March 1, 2011
By George Friedman | March 1, 2011
U.S. Secretary of Defense Robert Gates, speaking at West Point, said last week that “Any future defense secretary who advises the president to again send a big American land army into Asia or into the Middle East or Africa should have his head examined.†In saying this, Gates was repeating a dictum laid down by Douglas MacArthur after the Korean War, who urged the United States to avoid land wars in Asia. Given that the United States has fought four major land wars in Asia since World War II — Korea, Vietnam, Afghanistan and Iraq — none of which had ideal outcomes, it is useful to ask three questions: First, why is fighting a land war in Asia a bad idea? Second, why does the United States seem compelled to fight these wars? And third, what is the alternative that protects U.S. interests in Asia without large-scale military land wars?
Let’s begin with the first question, the answer to which is rooted in demographics and space. The population of Iraq is currently about 32 million. Afghanistan has a population of less than 30 million. The U.S. military, all told, consists of about 1.5 million active-duty personnel (plus 980,000 in the reserves), of whom more than 550,000 belong to the Army and about 200,000 are part of the Marine Corps. Given this, it is important to note that the United States strains to deploy about 200,000 troops at any one time in Iraq and Afghanistan, and that many of these troops are in support rather than combat roles. The same was true in Vietnam, where the United States was challenged to field a maximum of about 550,000 troops (in a country much more populous than Iraq or Afghanistan) despite conscription and a larger standing army. Indeed, the same problem existed in World War II.
Posted By thestatedtruth.com on March 1, 2011
Well, this is a deep subject, no pun intended, suffice to say 401K’s are not the only way states can help their pension funds. They can manage them more wisely and put less faith into Wall Street. The financial collapse, poor management and the housing bubble are amoung the reasons these plans are in crisis. Here are some definitions:
AÂ defined benefit pension plan is a type of pension plan in which an employer promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee’s earnings history, tenure of service and age, rather than depending on investment returns. It is ‘defined’ in the sense that the formula for computing the employer’s contribution is known in advance.
A 401(k) is a type of retirement savings account in the United States, which takes its name from subsection 401(k) of the Internal Revenue Code.The 401(k) emerged as an alternative to the traditional retirement pension, which was paid by employers. Employer contributions with the 401(k) can vary, and are self managed or self directed to a manager.  In general the 401(k) had the effect of shifting the burden for retirement savings to workers themselves. In 2011, about 60% of American households nearing retirement age have 401(k)-type accounts. But the majority of the 401K’s are underfunded.
Defined-contribution plans open up a Pandora’s box of potential problems down the road. Take the case of the West Virginia. In 1991 West Virginia lawmakers ended their defined-benefit plans for new teachers. All teachers hired after 1991 were placed on a 401(k)-style plan. Under a 401(k) employees pay into a personal retirement account and employers match their contributions up to a certain amount. This money is invested in stocks and bonds and is often left to the employee to manage. It’s also tax-free up to a certain percentage of income, and portable. But it turns out, 401(k) plans are not for everyone:
Fast forward to today. It turns out that for a very large segment of West Virginia teachers, the 401(k)-type plan hasn’t panned out too well. According to a study done by West Virginia’s Consolidated Public Retirement Board, the average account balance is just $33,944 and only a handful of teachers age 60 or older have amassed more than $100,000 in their accounts – a fraction of what the pension plan would’ve paid.
What happened? Despite receiving an annual matching contribution equal to 7.5% of their pay, many teachers are claiming that they were improperly steered into low-yielding annuities, even though the plan offered more appropriate investment choices. Others say they received no guidance or education on such important topics as asset allocation and rebalancing.
So the West Virginia teachers now want a do-over. Essentially, they want to treat the past 17 years under the 401(k)-style system as though it never happened. They are asking to be put back – retroactively – into the traditional defined-benefit pension plan. Like a bad dream, their paltry 401(k) balances will disappear, to be replaced by the more generous pensions they would have racked up had they been in the traditional plan all along.
Of course, millions of private-sector workers would also like a second chance. According to an analysis of 20 million 401(k) participants conducted by the Employee Benefit Research Institute and the Investment Company Institute, the median account balance of a worker in his or her 60’s, making between $40,000 and $60,000 a year (in the same ballpark as a retiring West Virginia teacher) was $97,588 at the end of 2006. To put that amount in perspective, it would generate only about $8,000 a year in retirement income if it were invested in an immediate annuity.
But back to West Virginia. Incredibly, the state legislature has already agreed to go along with this retroactive pension switchover – as long as 65 percent of teachers formally elect to make the voluntary changeover.
Did you catch that? The average balance on these plans was just $33,944 – not exactly a nest egg. Spread over just twenty years of retirement, that only gets you a little over $140/month. The median account balance at retirement of private-sector workers on a 401(k) plan is only $97,588, or just over $400/month. Compare this with a defined benefit of say $2,500/month for twenty years – the equivalent of a $30,000/year pension – and you get a total benefit of $600,000. This should give you a sense of how difficult 401(k) plans are to scale across the American workforce. As Salmon correctly notes:
The fact is that the states’ move to defined-contribution plans is a blatantly political one, born of Republican ideology conflating such plans with individual freedom and choice. For rich professionals who jump from job to job every few years, 401(k) plans do make a certain amount of sense. For public servants spending a lifetime in the police force or in elementary schools, by contrast, they emphatically don’t. As for the state pension plans, the only way that the state governments can help them make up their actuarial liabilities is if they pour more money into them. Not less.
Posted By thestatedtruth.com on March 1, 2011
Gallop breaks things down into different categories much better then other polls do!
According to the Gallup Poll, “Americans have become much less confident in the U.S. economy over the past two weeks, with Gallup’s Economic Confidence Index falling from -18 to -30 during that span. The -18 Index score from two weeks ago was the most positive Gallup had measured in the last three years.”
Gallup’s latest weekly update suggests consumer confidence has fallen back to where it was in early December.”
From Gallup:
More on this index which actually makes sense:
The slump in confidence is likely tied to gas prices, which have risen sharply amid growing political instability in the Middle East, most notably in Libya. The U.S. Department of Energy reported an increase in gas prices from an average $3.14 per gallon nationwide during the week ending Feb. 14 to $3.38 this past week. In addition, news media focus on the challenges governments are having in passing budgets may also affect Americans’ perceptions of the economy.
All key demographic and attitudinal subgroups are less confident now than in mid-February. The drop is slightly greater among Democrats, who were in positive territory two weeks ago, than among Republicans. Younger adults, Democrats, and higher socioeconomic status respondents remain relatively more confident than other subgroups.
The recent trend in Gallup’s Economic Confidence Index shows that consumers’ views of the economy can change fairly quickly in response to events. This means consumer confidence measures based on monthly reporting periods, such as those conducted by the Conference Board and Thomson Reuters/University of Michigan, may not reflect the current state of consumer attitudes when they are released, because they are based largely on surveys conducted during the first part of a month. Should the current trend continue, other measures of consumer confidence will show declines in their March reports — which are released near the end of March — though the decline appears to have begun in late February.
The short-term prospects for a turnaround in consumer confidence do not appear great, with gas prices likely to continue to rise, with state and federal governments facing increasingly difficult budget situations, and unemployment remaining high.
Posted By thestatedtruth.com on February 28, 2011
Half Past Human in “The Shape Of Things To Come 2011/2012″ predicted earthquakes along with repeated references of floods and serious crop shortages in the U.S. this year……they use an artificial intelligence Asymetric Language Trend Analysis computer program that has been successful about 50% of the time! They see tension building until the equinox on March 21’st, then there is somewhat of a release of tensions until October 6’th 2011. Part of the tension seems to involve a significant fall of the U.S. dollar and some kind of derivative failure connected to precious metals (Gold?) by spring!  Also large social disorder events in the U.S. (Wisconsin?) and talk of the possibility of multiple magnetic poles appearing around earth….causing wide spread communication and technology failures. There is more, but we no time to review it now. Â
None of this is set in cement, so we’ll have to see how it all pans out! And remember, these aren’t recommendations, we’re just the messenger (reporter).
GREENBRIER, Ark. — The largest earthquake to hit Arkansas in 35 years also shook parts of Missouri, Oklahoma, Tennessee and Mississippi on Sunday night. This comes in a swarm of about 800 earthquakes to strike north central Arkansas since September.
The magnitude 4.7 earthquake hit just after 11 p.m. Sunday, and was felt for hundreds of miles. This biggest one yet has everyone wondering what’s next and what’s causing all the quakes.
Reports to the U.S. Geological Survey show the 4.7-magnitude quake caused moderate to light shaking across the Natural State and parts of four others.
“You could feel it rumbling and then a real good jolt. It’ll rumble again then another good jolt, and they were pretty firm jolts,” said Arkansas resident Stephen Dunn.
Posted By thestatedtruth.com on February 28, 2011
Yep…we’re not surprised!
From The Wall Street Journal:
A government study found duplicative programs that cost taxpayers billions of dollars each year, including 15 different agencies overseeing food-safety laws, 20 programs to help the homeless and 80 for economic development.
Posted By thestatedtruth.com on February 27, 2011
Ridiculous 7.5%-9.0% assumed rates of return are not “little white lies” — they are Everest-sized whoppers. They are far from reality and nearly impossible to ever realistically have happen over the medium term and even more impossible over the long term in mature economies.Â
If the three big California Public Retirement Funds used a realistic 4.5%-5% rate of return instead of the make believe 7.5%-8% in which they now use, these funds would be $500 billion under-funded — 10 times the $50 billion shortfall they admit to. Public employee funds as a whole are probably $3 or $4 trillion underwater. The massive shortfalls we now face exist despite prior “Bull Markets” and the current huge stock market rally.
There are many reasons for the pension fund debacle, but one of the biggest is the greed of Wall Street and its corporate allies. It’s a result of their dismantling of our nation’s regulatory safeguards and Wall Street’s capture and abuse of America’s public pension funds — charging them huge management fees, while losing trillions of dollars of pension fund assets in risky investments.
Inappropriate investments that caused these massive pension fund losses were not an accident. The pension fund field caught the Wall Street contagion — financial corruption. It’s called “Pay to Play.” The SEC saw it years ago but, controlled by anti-regulation political appointees, it did nothing. So a nationwide system of political contributions to elected officials who sit on fund boards and payoffs and kickbacks to politically well-connected “Placement Agents” to steer fund money to Wall Street became widespread. Not surprisingly, the investments obtained by “pay-to-play” kickbacks and contributions have generated horrific losses.
An investment officer of the California Public Employee Pension Fund was forced to resign — he got an all-expense-paid trip to NYC from an investment group that got $600 million from the fund. The middle men on that deal — two former top CalPERs officials — got some $20 million to arrange this placement. Two other former CalPERS officials have been sued by the Attorney General for taking $50 million in placement fees to steer pension investments.CalPERs lost hundreds of millions on such investments. Alan Hevesi — the former head of the New York State Fund — pleaded guilty to doling out billions in that Fund’s assets to favored managers in return for benefits. The SEC has finally outlawed this system of bribes and kickbacks. But too late — the damage has already been done to the pension funds. Nationwide, public pension funds lost billions on these types of corrupt investments with Wall Street types.
The horrible deficit numbers funds admit to actually hide a far more terrible reality. To determine how well a fund is “funded” it uses an assumed rate of return. It estimates how much the fund will earn on its investment portfolio in the future. For decades, public pension funds have assumed 7.5%-8%, even 9% annual growth, i.e., over 100% compounded over 10 years. Fat chance!
Today, pension funds are engaged in massive deceptions to conceal the true extent of their funding deficits. They are concealing the massive black holes that haunt public budgets. These ridiculous 7.5%-9.0% assumed rates of return are not “little white lies” — they are Everest-sized whoppers. If the three big California Public Funds used a 4.5%-5% rate of return instead of the 7.5%-8% they now use, these funds would be $500 billion under-funded — 10 times the $50 billion shortfall they admit to. Since this is a nationwide deception going on in virtually all public plans, try extrapolating that out. Public employee funds are probably $3 or $4 trillion underwater. The massive shortfalls we now face exist despite prior “Bull Markets” and the current rally. And the next round of excess of a still under-regulated Wall Street will produce another wealth destruction event that will erase recent gains.
Posted By thestatedtruth.com on February 27, 2011
Anybody surprised? Nope, didn’t think so……Why do so few Americans believe in our government today? That’s simple….it’s because Congress is self serving, and favors the giant corporations and the ultra-wealthy, not Main Street and the common American.
Influential Harvard and Stanford law professor Lawrence Lessig noted in a must-watch speech last week that polls show that only 11% of the American people have confidence in Congress.
Posted By thestatedtruth.com on February 27, 2011
Everything the government is doing involves a rig job of one kind or another and it’s unmatched in history. Real estate and equity markets are not standing on there own, they are all being supported by the government either directly or indirectly…..and there in lies the problem.Â
Here are some key extracts from the Marc Faber interview by The McAlvany Financial Group:
I think what will happen is that we are in the midst of a kind of a crack-up boom that is not sustainable, that eventually the economy will deteriorate, that there will be more money-printing, and then you have inflation, and a poor economy, an extreme form of stagflation, and, eventually, in that situation, countries go to war, and, as a whole, derivatives, the market, and everything will collapse, and like a computer when it crashes, you will have to reboot it.For the investor, the question is: How do I navigate through this complete disaster that is going to unfold? And I think if you look at different asset classes real estate, equities, bonds, cash, precious metals I suppose that you have to be diversified. I think real estate in the U.S. may go down another 15%.  Look at the history, for example, of Germany, for the last 100 years. They had World War I. They had the hyper-inflation in World War II. The bond-holders got wiped out three times. If you owned Siemens, and you still own Siemens today, it was not a fantastic investment, but at least you still have something. You were not wiped out. I think that in equities you will be better off because you have an ownership in a company, than by being the lenders to companies, and the lenders, especially, to governments.
Faber on the key distinction between nominal and real, which nobody on CNBC seems to grasp yet, why gold now is cheaper than it was in 1999, and on the Dow and gold reaching parity.
In a money-printing environment, it is very difficult to know what is actually cheap and what is expensive. Is the price of wheat high, or is it low? Inflation-adjusted, it is extremely low. In nominal terms, it is relatively high. I believe that, in March 2009 when the S&P was at 666, the market was actually much cheaper than is generally perceived, because of the money-printing, and I do not anticipate that we will see 666 on the S&P again, in nominal terms. In other words, the Dow could be perhaps at 10,000 or 12,000, and gold could be at the same level. Can gold have a correction? Yes, there has been a little bit too much euphoria about gold, and we may have a correction, but I do not think we are in a bubble in the price of gold. In fact, I could make a case that gold, at this level of $1400 an ounce, is cheaper than in 1999, when I look at the unfunded liability growth of the U.S., at the credit growth of the U.S., and at the household growth, and at the money printing, and at all the wealth creation that happens in China and Russia.
In other words, they are going to print so much money that the S&P could be at, perhaps, 2000, but in real terms, it could be down below the lows of March 6, 2009. Maybe in gold terms, we could one day reach a ratio of Dow Jones to gold of 1-to-1, as we were in 1980.Â
Marc Faber: That is why I am advising people to accumulate gold.
Posted By thestatedtruth.com on February 27, 2011
From The Wall Street Journal….this is why commodity prices continue to go higher!
WASHINGTON—A report being prepared for the world’s Group of 20 leading economies indicates the main factor behind rising prices for wheat, sugar, cotton, metals, oil and other commodities isn’t speculators, as some have suggested, but that the global demand to consume these goods is growing faster than the supply.
Posted By thestatedtruth.com on February 26, 2011
Understanding Derivatives – Class Name and Description: Greedy Financial Morons 101, How To Destroy The Financial World……
Heidi is the proprietor of a BBQ Bar in Mt. Airy Maryland .
She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.
To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.
Heidi keeps track of the drinks consumed on a ledger (thereby granting the customers’ loans).
Word gets around about Heidi’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Heidi’s bar. Soon she has the largest sales volume for any bar in the Baltimore-Washington area .
By providing her customers freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages.
Consequently, Heidi’s gross sales volume increases massively.
A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi’s borrowing limit.
He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral!!!
At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINK BONDS.
These “securities” then are bundled and traded on international securities markets.
Naive investors don’t really understand that the securities being sold to them as “AAA Secured Bonds” really are debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb!!!, and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.
One day, even though the bond prices still are climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi’s bar. He so informs Heidi.
Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts.
Since Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and Heidi’s 11 employees lose their jobs.
Overnight, DRINK BOND prices drop by 90%.
The collapsed bond asset value destroys the bank’s liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.
The suppliers of Heidi’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the BOND securities.
They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.
Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.
Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.
The funds required for this bailout are obtained by new taxes levied on employed, middle-class, nondrinkers who have never been in Heidi’s bar.
Now does everybody understand?Â
Coming Soon
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