Recently released government data shows that paychecks from private businesses were at the lowest level in U.S. history! That is a startling statistic and evidence of the socialist tendencies pushed upon our economy.
The recession has literally erased 8 million jobs, and shows that a record low of 41.9% of the nation's personal income came from private companies wages. This also accounts for the fact that a larger percent of "pay" was eroded due to the fact that wages were often substituted by higher payments for benefit programs and pensions.
Fully 10% of all wages paid were to government employees! Another 17.9% of income was from government programs paid to individuals.
Economists are warning that we are becoming like "GREECE" in establishing unsustainable income programs that will doom the economic growth of the country in the future.
This trend is NOT SUSTAINABLE...
GOVERNMENT PAY IS GROWING AND GROWING, AS SALARIES PAID BY PRIVATE EMPLOYERS IS SHRINKING-SCARY FUTURE AHEAD!
THE LIES ABOUT BUYING IRANIAN OIL; FACT, FICTION OR JUST BUSINESS REALITY THAT ALLOWS PURCHASES FROM IRAN OF THEIR OIL
There are sanctions in place to prevent companies from doing business with Iran, but there are many other countries that do not have any sanctions and continue to buy from Iran its oil, and plenty of it, but discreetly.
The oil tanker named Front Page, chartered by Royal Dutch Shell PLC, left a U.A.E. port on March 17 and reported it was going to another U.A.E. port, then on to Saudi Arabia, ship-tracking data show.
But the tracking information reveals that Front Page also made an unreported stop—to the coast of Iran. There it loaded Iranian oil, according to records obtained by oil traders and shipping sources.
The incident, some oil-industry experts say, is an example of how some companies these days are hiding their business dealings with Iran, even when they are perfectly legal because they aren't subject to any sanctions.
Another oil tanker that stopped in Iran in March, which oil traders say was chartered by Total SA of France, turned off its tracking transponder throughout the visit, according to ship-tracking data.
Spokesmen for Shell and Total declined to comment.
None of the current sanctions proposals in the United Nations or the U.S.—including the latest ones agreed to this week by the U.S., Russia and China—would target Iran's oil-export business, which generates about half of its government revenues. Doing so, experts say, likely would drive up the commodity's price world-wide and result in higher gasoline prices in the U.S., of as much as $1 more a gallon, even though the U.S. doesn't import any Iranian oil.
U.S. officials also fear that targeting Iranian crude could wreak havoc on the recession-ravaged economies of allies like Japan, which last year imported about 421,000 barrels of Iranian crude a day, just behind China and India.
As a result, companies like Shell and BP PLC continue to do a brisk business buying Iranian oil products. BP declined to comment.
"Everyone buys from the Iranians—governments, states, other companies," says Mark Ware, a spokesman for Vitol Group, an energy-trading company that continues to deal in Iranian crude and is one of the few companies willing to talk about it. "It's not subject to any legislation."
Still, given all the controversy over Iran's nuclear program, many companies decline to discuss their Iranian oil purchases.
Companies like Shell and BP have said they have stopped selling gasoline to Iran. But they rarely mention that they continue to buy crude or other Iranian oil products, which generally is a much larger and more lucrative business than gasoline deliveries.
Iran only imports about 100,000 barrels of gasoline a day. The country currently exports about 2 million barrels of oil a day—down from about 2.6 million in 2008.
"It's something they [companies] just don't want to advertise because of the stigma," says Lucian Pugliaresi, president of Energy Policy Research Foundation, Inc., an industry and government-funded research organization in Washington.
One tanker industry executive speculated that Shell might want to disguise its Iranian purchases so as not to suggest that the gasoline it sells in the U.S. is refined from Iranian oil, which would violate U.S. law.
Shell is one of the biggest oil-product sellers in the U.S. According to its 2009 annual report, Shell sold 1.33 million barrels a day of gasoline, diesel and other fuel products there. There is no evidence that any of Shell's U.S. products are sourced from Iran.
The information involving the Shell and Total-chartered tankers was obtained from ship-tracking data supplied by IHS Fairplay, a British provider of maritime information to the global shipping industry, and other records.
Given the proprietary and secretive nature of the business, it remains unclear how often oil companies try to conceal their trips to Iran, and whether they do it in part because of safety considerations.
The United Nation's International Maritime Organization says a ship's tracking transponder "should always be in operation" unless it would jeopardize a vessel's safety, such as in waters frequented by pirates.
According to records at the port of Fujairah in the U.A.E., which services about 80 tankers a day, Front Page arrived on March 16 and left the next day. Like all large ships, the tanker is required under an international convention to operate electronic equipment known as an Automatic Identification System that broadcasts information about its location, destination and other data. According to the regulations, the destination is "to be manually entered at the start of the voyage and kept up to date as necessary."
Data from the ship's AIS equipment picked up by satellites show the tanker listed its next destination as Jebel Dhanna, another U.A.E. port. It arrived there on March 18 and spent the night.
For the next four days, it continued to report its destination as Jebel Dhanna. But on March 19, it left the port, crossed the Persian Gulf and, on March 20, anchored off the Iranian coast near Asalouyeh, the site of an oil-and-gas development zone, according to its position coordinates. The tanker remained there for the next two days.
According to records obtained by oil traders and shipping sources, Front Page loaded an unknown quantity of an Iranian oil product called South Pars condensate, or light crude, which can be refined into gasoline.
The vessel reported that the water line of its hull dropped three meters by the time it left on March 22, further evidence that it took on cargo.
As it left the coast of Iran, AIS data show Front Page changed its destination to Ras Tanurah, a major oil port in Saudi Arabia. It arrived there on March 23.
An official with Frontline Ltd., a Bermuda-based company that charters the tanker to Shell, declined to comment.
In the case of the Total-chartered vessel, an Iranian-owned tanker named Saveh, AIS data show it reported its destination as Kharg Island, an Iranian oil-export terminal, on Feb. 28. But the satellites stopped picking up signals from the ship from the afternoon of March 1 to the morning of March 3.
According to records obtained by oil traders and shipping sources, on March 2, during the AIS blackout, Saveh loaded 100,000 metric tons of Iranian light crude oil and 34,000 metric tons of Iranian heavy crude oil.
An official with National Iranian Tanker Co., which owns Saveh and charters it to international companies, said, "It's a profitable and legal business."
But what would happen if sourcing from Iran was not available, would it help the USA?
The answer is that it would not, since any lesser available supply would only drive prices higher! It is, what it is....so doing business with a rogue state like Iran, discreetly, actually keeps oil prices lower.....go figure.
FORECLOSURES ARE NOT SLOWING DOWN-GOOD CREDIT BORROWERS NOW ALSO FACING MISSED PAYMENTS AND FORECLOSURE NOTICES
Every month, the local newspaper carries a listing of all the home sales for the prior month and compares those sales to the prior year sales by price, and takes the average.
For the last year, every reporting period has shown declines in over 90% of the reporting areas, sometimes as high as 95% of the areas showing declines from the prior year.
However, homeowners are struggling to pay the mortgages on their homes, needless to say for obvious reasons. Just because your home value declined as compared to recent sales, there is no reason for someone to sell their home. In fact, there is every reason to hold on since it is likely that your home will not bring the value of the outstanding mortgage, especially if you purchased you home in the last 4-5 years.
The other reason to hold on vary and range from children in a school district, established in the neighborhood, and why sell at a loss.
real estate tends over the long run to present an excellent value and typically by the time the home is paid off, it has increased in price and can provide a retirement nest egg.
However, recently it appears that even homeowners with good credit when they took out their mortgage are in trouble having missed at least one payment in the last quarter. These are NOT the sub-prime borrowers, these are good borrowers!
Homeowners who missed at least one payment on their mortgage surged to a record in the first quarter of the year, a sign that the foreclosure crisis is far from over.
More than 10 percent of homeowners had missed at least one mortgage payment in the January-March period, the Mortgage Bankers Association said Wednesday. That number was up from 9.5 percent in the fourth quarter of last year and 9.1 percent a year earlier.
Those figures are adjusted for seasonal factors. For example, heating bills and holiday expenses tend to push up mortgage delinquencies near the end of the year. Many of those borrowers become current on their loans again by spring.
Without adjusting for seasonal factors, the delinquency numbers dropped, as they normally do from the winter to spring.
More than 4.6 percent of homeowners were in foreclosure, also a record. But that number, which is not adjusted for seasonal factors, was up only slightly from the end of last year.
Jay Brinkmann, the trade group's chief economist, said the foreclosure crisis appears to have stabilized, as the seasonal adjustments may be exaggerating the change from the previous quarter.
"I don't see signs now that it's getting worse, but it's going to take a while," he said. "A bad situation that's not getting worse is still bad." Is this guy an idiot, the statistics prove otherwise.
Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. But homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.
Those borrowers made up nearly 37 percent of new foreclosures in the first quarter of the year, up from 29 percent a year earlier.
The risky sub-prime adjustable rate loans that kicked off the foreclosure crisis are making up a smaller share of new foreclosures. They made up 14 percent of new foreclosures in the January-March period, down from 27 percent a year earlier.
Now it is the GOOD credit borrowers who are defaulting.
THE END OF MEDICARE? YOU BET AND THIS IS JUST THE START OF THE LACK OF PRIMARY CARE AND SPECIALIST DOCTORS WHO WILL NOT ACCEPT PATIENTS
There are always consequences to every act, and when doctors are told that the amount that they get paid to treat a medicare patient will be cut another 20% of so for 2010, they stop accepting medicare covered patients.
Imagine that your employer told you that this year your salary will be cut 20%, and that these cuts are on top of prior year cuts, and that they will likely continue each year!
Well that is the Medicare program, and how it pays your doctor. If you have a special condition, and its diagnosis and treatment may require a "specialist" you may be totally out of luck, since the additional specialized treatments and the added medical training that it took to be able to provide it do not provide any incentive for that specialist to work for fees that often do not cover even basic time expended with the patient.
Doctors are opting out of Medicare at alarming rates, frustrated by reimbursement cuts they say make participation in government-funded care of seniors unaffordable.
Two years after a Texas survey found nearly half of Texas doctors weren't taking some new Medicare patients, new data shows 100 to 200 a year are now ending all involvement with the program. Before 2007, the number of doctors opting out averaged less than a handful a year.
“This new data shows the Medicare system is beginning to implode,” said Dr. Susan Bailey, president of the Texas Medical Association. “If Congress doesn't fix Medicare soon, there will be more and more doctors dropping out and Congress' promise to provide medical care to seniors will be broken.”
More than 300 doctors have dropped the program in the last two years, including 50 in the first three months of 2010, according to data compiled by the Houston Chronicle. Texas Medical Association officials, who conducted the 2008 survey, said the numbers far exceeded their assumptions.
The largest number of doctors opting out comes from primary care, a field already short of practitioners nationally and especially in Texas. Psychiatrists also make up a large share of the pie, causing one Texas leader to say, “God forbid that a senior has dementia.”
The opt-outs follow years of declining Medicare reimbursement that culminated in a looming 21 percent cut in 2010. Congress has voted three times to postpone the cut, which was originally to take effect Jan. 1. It is now set to take effect June 1.
Not cost-effective
The uncertainty proved too much for Dr. Guy Culpepper, a Dallas-area family practice doctor who says he wrestled with his decision for years before opting out in March. It was, he said, the only way “he could stop getting bullied and take control of his practice.”
“You do Medicare for God and country because you lose money on it,” said Culpepper, a graduate of the University of Texas Medical School at Houston. “The only way to provide cost-effective care is outside the Medicare system, a system without constant paperwork and headaches and inadequate reimbursement.”
Ending Medicare participation is just one consequence of the system's funding problems. In a new Texas Medical Association survey, opting out was one of the least common options doctors have taken or are planning as a result of declining Medicare funding — behind increasing fees, reducing staff wages and benefits, reducing charity care and not accepting new Medicare patients.
In 2008, 42 percent of Texas doctors participating in the survey said they were no longer accepting all new Medicare patients. Among primary-care doctors, the percentage was 62 percent.
The impact on doctors has not been lost on their patients. Kathy Sweeney, a Houston retiree, twice has been turned away by specialists because they weren't accepting new Medicare patients. She worries her doctors might have to drop her if Medicare cuts go through and they can't afford to continue in the program.
“I've talked to them about the possibility,” said Sweeney, who sent her legislators a letter calling on them to fix Medicare. “They're hanging in there as long as there's not a severe cut, but just thinking I couldn't continue doctor-patient relationships I built up over years is disturbing. Seniors should be able to see the doctors they want.”
The problem dates back to 1997, when Congress passed a balanced budget law that included a Medicare payment formula aimed at reining in spending. The formula, which assumed low growth rates, called for payment cuts if spending exceeded goals, a scenario that occurred year after year as health care costs grew. The scheduled cuts, expected to be modest, turned out to be large.
Congress would overturn the cuts, but their short-term fixes didn't keep up with inflation. The Texas Medical Association says the cumulative effect since 2001 already amounts to an inflation-adjusted cut of 20.9 percent. In 2001, doctors receiving a $1,000 Medicare payment made roughly $410, after taking out operating expenses. In 2010, they'll net $290. If the scheduled 21.2 percent cut goes through, they'd net $72, effectively an 83 percent cut since 2001.
The issue caused the Texas Medical Association to break ranks with the American Medical Association and oppose health care reform efforts throughout 2009. Then TMA President Dr. William Fleming said “reform is doomed to failure” without Medicare reform and called Congress' failure to devise a rational payment plan “an insult to seniors, people with disabilities and military families.”
No surprise to senator
U.S. Sen. John Cornyn, R-Texas, said he isn't surprised by the new opt-out numbers, allowing that Congress' inability to reform Medicare is leaving “seniors without access and breaking the promise we made to them.”
“The problem has been how to eliminate the cuts without running up the deficit,” said Cornyn, responding to blame U.S. Rep. Gene Green, D-Houston, placed on the Senate for not passing a House bill that would have provided a longer-term Medicare fix. “There hasn't been the political will, but we really have no choice but to fix it.”
Cornyn acknowledged the task is daunting. The Congressional Budget Office recently estimated that eliminating scheduled Medicare payment cuts through 2020 would cost $276 billion.
The growth in Texas Medicare opt-outs began in earnest in 2007, when 70 doctors notified Trailblazer Health Enterprises, the state's Medicare carrier, they would no longer participate, up from seven in 2006. The numbers jumped to 151 in 2008, fell back to 135 in 2009 and are on pace for 200 in 2010. From 1998 to 2002, by contrast, no more than three a year opted out.
Now, according to a Texas Medical Association new poll, more than four in 10 doctors are considering the move.
“I've been in practice 24 years, and a lot of my patients got old right along with me,” Culpepper said. “It's stressful to tell them you're leaving Medicare and they're responsible for payments if they want to stay with you. You feel like you're abandoning them.”
That is just the start to the destruction of the American medical system that was able to provide some of the best care, the best drugs to prolong life without the misery that accompanies long term pain associated with many conditions related to old age.
Furthermore, emergency rooms will be overwhelmed with every type of patient insured and uninsured. The mandate to have to provide care is killing hospitals as they in effect are forced to provide care to those showing up.
The new health care law will pack 32 million newly insured people into emergency rooms already crammed beyond capacity, according to experts on health care facilities.
A chief aim of the new health care law was to take the pressure off emergency rooms by mandating that people either have insurance coverage. The idea was that if people have insurance, they will go to a doctor rather than putting off care until they faced an emergency.
People who build hospitals, however, say newly insured people will still go to emergency rooms for primary care because they don’t have a doctor.
“Everybody expected that one of the initial impacts of reform would be less pressure on emergency departments; it’s going to be exactly the opposite over the next four to eight years,” said Rich Dallam, a healthcare partner at the architectural firm NBBJ, which designs healthcare facilities.
“We don’t have the primary care infrastructure in place in America to cover the need. Our clients are looking at and preparing for more emergency department volume, not less,” he said.
Some Democrats agree with this assessment.
Rep. Jim McDermott (D-Wash.) suspects the fallout that occurred in Massachusetts’ emergency rooms could happen nationwide after health reform kicks in.
Massachusetts in 2006 created near-universal coverage for residents, which was supposed to ease the traffic in hospital emergency rooms.
But a recent poll by the American College of Emergency Physicians found that nearly two-thirds of the state’s residents say emergency department wait times have either increased or remained the same.
A February 2010 report by The Council of State Governments found that wait times had not abated since the law took effect.
“That is not an unrealistic question about what’s going to happen in the next four years as you bring all these people on; who are they going to see?” McDermott said.
The Washington congressman tried to include a provision in the health care bill he thought would increase the number of doctors.
McDermott’s legislation would have required the government to pay for students’ medical education in return for students serving four years as a primary care physician. The measure did not make it on the final bill that eventually became law.
McDermott stressed that creating a “whole new cadre of doctors” needs to begin now to meet the rising need from patients in the future.
While the measure wouldn’t prevent the infrastructure crunch, it would have provided new doctors for people seeking care.
Richard Foster, Chief Actuary at the Centers for Medicare and Medicaid Services, told The Hill that the current dearth of primary care physicians could lead to greater stress on hospital emergency rooms.
“The supply of doctors can’t be increased very quickly – there’s a time lag,” he said, adding, “Is the last resort to newly covered people the emergency room? I would say that is a possibility, but I wouldn’t say anybody has a very good handle on exactly how much of an infrastructure problem there will be or exactly how it might work out.”
The Academy of Architecture for Health predicts hospitals will need at least $2 trillion over the next 20 years to meet the coming demand.
“As more people have access, you have to deal with the increased capacity,” said Andrew Goldberg, senior director of federal relations at the American Institute of Architects. “At the moment there is not a lot of building going on because of the economy and a lot of health care facilities can’t get the financing. We’ve been working on the Hill to try to address that issue.”
The group has called on Congress to beef-up bonding authorities and expand energy efficient tax breaks for professional buildings. The vehicle targeted is the green energy legislation making its way through the House Ways and Means Committee and Senate Finance.
Dan Noble, a principal at the Dallas-based architecture firm HKS Inc., which also specializes in designing health care facilities, believes the only remedy to meet the coming demand on hospitals is to start projects immediately.
“We would have to get very busy soon,” he said. “It would take a fairly aggressive building campaign for the next decade.”
Of sure..dream on.
GOVERNMENT NON-PERFORMANCE AS USUAL IN THE GULF CRUDE OIL CATASTROPHE; LET'S PASS THE BLAME ON EVERYBODY ELSE!
As we are now expecting, anything that the government is responsible for is usually something we can not count on and is probably just a waste of money. We were proven right again in the GULF oil catastrophe.
Long, long ago after previous disasters various government agencies were mandated to be the FIRST RESPONDERS on such an event and that they were to have FIRE BOOMS instantly available...that was a LAW. Instead, there were no fire booms to use.
The fire booms are special means to gather the oil and to burn it. There were none, they had to find some company in Illinois that had one, yet there is an entire group of bureaucrats that have offices, budgets, limos to ride around in probably, assistant directors, and such and yet they have no booms!
So again the government has failed in its responsibility ( just go visit New Orleans to see the abandoned homes).
Shame on you passing around the incompetence and responsibility.
SMALL BUSINESS LENDING-WHAT SMALL BUSINESS LENDING??? NO LENDING IS GOING ON TO SMALL BUSINESSES-IT'S A CREDIT DESERT OUT THERE!
The headlines purporting to see the light at the end of the tunnel relating to business picking up is a very dull and fading light. The stock market DOW INDUSTRIAL AVERAGE has shown signs of life and was spirited up over the last few months, but you have to remember that there are only 30 STOCKS!
These 30 companies, although representing a cross section of industrial giants are typically not the victims of the current lender's "loan desert" afflicting small business. Small business is defined as having variously less than 500, less than 100 or so employees, and is represented as responsible for most of new hiring and employs most Americans.
The banks receiving TARP funds were told to make loans to "small businesses" yet to date that has not really happened and causing many short of needed working capital to just close up or significantly cut back operations.
Small business is just considered too risky for lenders who are more worried about their derivative trading or counter-party losses, and to lend to a entrepreneur seems risky at best.
Typically small business lending consists of having collateral backing the loans as well as the personal guarantee of the principal owners or stockholders, and as there are less assets to pledge as collateral for loans, there is less lending! The vicious circle is ongoing.
We are seeing marginal businesses simply getting their credit lines canceled, and then all they can do is pay down the existing loans and just close or work on its own cash or credit cards of the owners, etc..
Do not believe the headlines, small business lending is constricted and indirectly what happens to larger business is that it benefits from the demise if is many smaller competitors who are now closing shop.
So the revenue pie may stay the same, but there are less businesses sharing it and thus the small ones close and the big one's grow; like the DOW AVERAGE members.
Is this good for the country? No. Everyone can not work for the giants, there is still a need for the small machine shop, for the boutique design firm, the small specialty chain store or local food store located in "food deserts" as we see the articles.
Hardest hit are businesses in traditionally low margin industries such as small manufacturing, retail and contracting, and the unemployment numbers show it.
Now, add to these credit issues the overhang of the various proposed mandates such as health care to be provided, as well as the numerous others that each state and federal government is calling for, and it can not be predicted to be good for the future growth of the economy.
Small business needs real lending, and most of all a government that understands lending to small business and supports the lenders who do such lending.
CLUELESS-NO IT IS NOT THE NAME OF A MOVIE ABOUT AN AIRHEAD BLONDE, BUT A DESCRIPTION OF OUR CONGRESSIONAL MAJORITY
How would you feel about this scenario if you heard it.
Let's say that your neighbor or best friend is spending more money than he earns, and then he told you that he is asking all his banks to lend him more money, asking his credit card providers to lend him more money, and that as far as he can predict he will not make sufficient income to ever pay back any of these loans!
In fact he expects to be spending $1 TRILLION ( that's a thousand billion!) more than he earns every year for as many years as he can predict and he is taking on more and more loans and obligations that are bound to increase this total.
What would you say to this person?
Well friends, this is our government at work, and we are the hapless neighbor standing there watching the self destruction of this person...except that it is not a person it is our COUNTRY!
Since about 20% of all Americans are functionally illiterate, according to statistics provided by the Department of Education, they have no idea about any of this. Another 25% depend on some program or handout from a government so that they support all government spending in the hope that some of it will end up in their pocket, we can assume that 55% of Americans are clueless or in favor of these policies!
This is a road of no return that will destroy the value of our currency, the value of our savings, as well as significantly diminishing our standard of living.
The runaway spending is unprecedented, it will be the destruction of America just as it destroyed the Roman Empire...exactly for the same reasons in 400 AD, and the Weimar Republic in the early 20th Century.
STUPID IS AS STUPID DOES: THE EUROPEAN UNION'S RESCUE PLAN FOR THE "PIGS"...BUT PIGS ARE ALWAYS PIGS! THE PROBLEM IS JUST DELAYED
Last week the US stock markets did a rubber-band swing in the time of just several minutes, with certain high value stocks declining to near zero others declining by significant percentages. Various reasons were provided by pundits ranging from "my dog entered a sell order by mistake" to "there was fear of the Greek tragedy." Right, sure, and if you believe that I have a bridge in Brooklyn you might want to buy!
Now today, the market was up about 400 points with the excuse that the investors liked the $1 trillion "rescue package for the weakest links in the EURO zone, the so called PIGS, (Portugal, Italy, Greece and Spain.) Pigs is certainly a good name for those countries in describing their socialist welfare states that are literally running out of other people's money to pay people who are not working, are overpaid in their retirement pensions, are sucking off the state in every conceivable freebie possible, until the well dried out!
Yes as we all should note, there is only so much water in the well. Eventually all wells dry out! Theirs is near that point and these are the weakest links in that EURO zone, they will dry out the $1 trillion well.
The EU was a good idea in theory, but trying to have so many countries acting as one, so many cultures acting as one, is near impossible and has never previously succeeded and here simply is why not.
Let's say that my country, a hypothetical country in the EURO zone, our parliament decides to give every retiree a lifetime pension of $100,000 a year. Then as the country runs out of money, they get a "loan" to tide them over that crisis. Then the next country seeing how well that worked out, does the same, the next does the same....see how that works? It does not work, but in effect that is what has just happened.
The out of control social programs in these countries will drive them to insolvency, just like our new entitlements will as well.
Our budget deficit will create unbearable debt, and there is no end in sight.
All these countries have "stupid" onerous employer mandates requiring costly payments into social welfare programs or the employer needs to provide a safety net and comfort net that become costly and thus employment decreases.
For instance a great example is the 4-8 weeks of vacation that are routinely allowed and paid for in the EU countries, thus reducing productivity significantly.
I remember last year in dealing with a French company in July...forget it, nobody was working at all, everyone was on vacation! No work got done until the managing director and most employees came back in September.
The other problem is that most EU politicians are no different that ours, they almost never had a real job in the workforce, or ran a business and thus have no idea how the real economic forces work. In order to raise money, they raise taxes, until there is nothing left and the underground economy operates, you guessed it, under ground, not taxed, or reported.
All business stagnates under a high tax system. Businesses do not grow, and new employees are not hired.
Another report came out last week finding that when Congress extended the unemployment benefits, those out of work failed to "find" jobs longer, thus prolonging both that as well as adding to the national deficit to finance those benefits to be paid.
This is only normal human nature, if you get something for nothing, why not take it!
With now almost 50% of the population not paying any taxes, the other 50% is trying to find ways not to pay as well, so this circle of deceit will get to be quite interesting.
Bailouts, temporary loans, rescue packages...none of these address the problem of out of control spending by every government and their ability to borrow or to get "rescued" just prolongs, but never solves the problem.
As Greece goes, so will the rest of the EU zone.
European leaders orchestrated a huge show of financial force to halt a spreading debt crisis, drawing applause from investors but also questions about whether the nearly $1 trillion rescue package merely postponed a reckoning with the euro area’s underlying problems.
Jean-Claude Trichet, president of the European Central Bank, spoke to reporters Monday, following a two-day meeting of central bankers.
Markets rallied around the world (FOR ONE DAY) in response to the extraordinary show of solidarity in defending the euro, which topped even the U.S. government’s support for its collapsing financial system in 2008. A broad index of European blue chips closed up more than 10 percent and Wall Street was up more than 3 percent in afternoon trading.
The risk premium on Greek bonds nearly halved as the European Central Bank said it would buy government bonds directly for the first time ever.
But analysts pointed out that the package did nothing to reduce overall debt — it just spread it onto more shoulders. HA HA, as that Simpson's character would say riding on his bicycle.
There will also be a risk that, by in effect shielding Greece, Portugal, Spain and other over-indebted countries from the harsh verdict of the open market, the measures will make it harder for political leaders to overcome public resistance to the deep budget cuts needed to get spending and borrowing under control. Strikes in Greece led to a riot last week that left three people dead.
In what could be a sign of continued jitters, the euro gave up much of its early gains on Monday and interbank lending rates remained elevated. Moody’s Investors Service also announced that it might cut Greece’s credit rating to junk within the next month, citing the country’s “dismal” economic prospects.
“Lending more money to already over-borrowed governments does not solve their problems,” Carl Weinberg, chief economist of High Frequency Economics in Valhalla, New York, said in a research note. “Had we any Greek bonds in our portfolio, we would not feel rescued this morning.”
Robert Barrie, head of European economics at Credit Suisse, paraphrased Winston Churchill: “It’s not the end, I’m not even sure it’s the beginning of the end.” But, he added, “it takes us away from the threat of a crisis.”
Jean-Claude Trichet, president of the E.C.B., said the central bank’s governing council decided to prop up the bond market and inject cash into the European banking system because “the channels of normal monetary policy were not functioning.” Only four days earlier, Mr. Trichet had insisted that the council had not even discussed bond purchases.
The E.C.B. action Monday also included measures, together with the U.S. Federal Reserve and other major central banks, to provide banks with dollars through the use of currency swaps.
The swaps are intended to make it easier for European companies, institutions and governments to borrow dollars when they need them, “and to prevent the spread of strains to other markets and financial centers,” the Fed said in a statement from Washington.
The scale of the E.U. rescue program — €750 billion, or $957 billion — recalled the $700 billion package the U.S. government provided to help its ailing financial institutions in late 2008. That package, known as the Troubled Asset Relief Program, or TARP, also cheered markets at the time, but the uplift proved temporary until much later, after the broader economy, and U.S. banks, began to recover.
The E.U. package, reached after hours of meetings that lasted until early Monday, includes €440 billion in loan guarantees and €60 billion under an existing lending program. Elena Salgado, the Spanish finance minister who announced the deal, also said that the International Monetary Fund was prepared to provide up to €250 billion separately.
One major difference between the European bailout and the TARP plan, however, is that Europe is hoping that the fund will not be activated. After the Lehman collapse, there was always a certainty that the TARP would be deployed as soon as it was approved by the U.S. Congress.
Indeed, for all the excitement about the numbers, it is important to remember that the headline €440 billion number does not now exist. It is a commitment by E.U. governments to borrow such an amount if a large economy like Spain, which represents 12 percent of euro-zone gross domestic product, asks for it — and then have the I.M.F. contribute about half of what Europe lends.
By definition, if it came to such a point, interest rates would climb and the billions of euros that the special purpose vehicle would have to raise from the markets would not only come at a high cost, but would increase the debt levels of the likes of Portugal, France, Italy and Britain, thus compounding the region’s heavy debt woes.
In the months ahead, investors are likely to closely scrutinize monthly budget figures from European governments, which previously went almost unnoticed.
“You definitely would want to see these additional austerity measures, especially Spain and Portugal,” said Elga Bartsch, an economist at Morgan Stanley in London. “They all seem to be moving and getting more serious in addressing the underlying problem.” SURE THEY WILL DO THAT!
On Monday, Mr. Trichet warned European governments, all of whom are likely to miss the budget deficit targets they agreed to when they formed the euro, that they must continue to cut government spending.
“For us what is absolutely decisive is the commitment of governments of the euro area to take all measures needed to meet their fiscal targets this year and in the years ahead,” Mr. Trichet said at a press conference in Basel, Switzerland.
He declined to say how much money the bank would spend buying government bonds on open markets, via the euro-zone’s national central banks — a process that began Monday.
The E.C.B. also said that it would resume offering unlimited cash for up to six months at the benchmark interest rate of 1 percent for banks that post the necessary collateral.
The Bank of Japan joined in the global response, saying after an emergency board meeting Monday that it would pump ¥2 trillion, or $21.6 billion, into financial markets for a second consecutive trading day.
The overall package was much larger than expected, and represented an audacious step for a bloc that had been criticized for acting tentatively, and without unity, in the face of a mounting crisis.
At the same time, the sheer size of the package will strain the unity of Europe’s fractious governments, especially when leaders like Nicolas Sarkozy of France or Angela Merkel of Germany are losing ground politically. Ms. Merkel’s Christian Democrats lost power in North Rhine-Westphalia, Germany’s most populous state, in elections Sunday.
In effect, Germany and other wealthier European countries are assuming responsibility for the creditworthiness of Greece, Portugal and the other debt delinquents, as if the U.S. government were bailing out California.
But the European central government is weak and must invent new structures to administer the promised aid.
“The debt crisis will change the nature of European monetary union,” Jörg Krämer, chief economist at Commerzbank, argued in a note Monday. “The euro zone has moved away from a monetary union and towards a transfer union.”
Mr. Krämer warned that the shift “can undermine political support for the euro zone in the long run. After all, it is unlikely that the countries receiving support will let others permanently dictate their economic policies. Moreover, voters in the countries giving support will not be willing to permanently give financial support to other countries.”
So the game of charades continues....fooling nobody.
COMPUTERS CONTROL THE VALUE OF ALL STOCKS, YOU MAY NOT REALIZE IT BUT IT CAN HAPPEN AT ANY MOMENT AND CAN NOT BE STOPPED!
Trades on the trading floor of the NYSE turned to their screens and many were just frozen not believing what they saw. Excelon, the gigantic Illinois utility holding company was at near ZERO stock price trading at 41 cents down from $41 dollars! It was showing a 99% price drop. Worse yet, BOSTON Beer (maker of the Samuel Adams beers) which traded at about $48 a share, was down to ZERO!!!!
Probably when they saw BEER at zero, they realized that it was impossible, and then started to realize something was wrong.
Many other top stocks were acting similarly so traders did not know what to do, buy, sell, wait, hold...total pandemonium ruled.
Expect that the administration, composed of 95% of people who had no real job, to want more "controls" again.
Dow stocks plunged 9 percent in the last two hours of trading before
clawing back some of the losses. Nasdaq OMX
trades with price deviations of more than 60 percent between 2:40 p.m. and 3
p.m. from their 2:40 p.m. levels, and the New York Stock Exchange said it would
similarly cancel trades on its all-electronic NYSE Arca platform that deviated
over 60 percent from their last print at 2:40 p.m. between 2:40 and 3 p.m.
Some stocks dropped to nearly zero before rebounding. The following is a
list of some of the biggest drops, as well as some large cap companies that had
significant drops.
COMPANY PREVIOUS PRICE LOW PRICE PCT CHANGE
EXCELON
BOSTON BEER
CENTERPOINT
BROWN & BROWN
IOWA TELECOMMUNICATIONS
SERVICES
CASEY'S GENERAL
EBIX INC
PROCTER & GAMBLE
APPLE
3M
AMERICA IS REALLY JUST LIKE GREECE EXCEPT IT IS 30 TIMES LARGER IN POPULATION AND ITS STAGGERING NON-REPORTED DEBTS OF $112 TRILLION!
"Greece is not America", I saw a public official's quote in the paper. But that quote is deceptive since it is totally FALSE. Everything about the USA's publicly reported debt is wrong, and the quote should be," America is way worse than Greece!".
Scary thought, is it not?
All over the country, individual state governments are finding that the lower revenues must also temper spending. The legislators are unable or unwilling to do so, so that now, by default, they are announcing teacher layoffs for instance. In Illinois, teachers took a day off teaching and assembled in the State Capital to yell,"RAISE MY TAXES", ( meaning raise MY taxes).
The impression is that teachers are just so underpaid, so being at the front lines like this serves to create the impression that these poor teachers are just so worthy of getting a raise.
The reality with teachers in Illinois, as elsewhere, is just the opposite of the impression created by the media and teacher unions. The web site-www.the champion.org, provides all the teacher salaries (salaries only, no accounting for the generous pensions) which is absolutely astounding.
For instance, due to seniority and teacher contracts which have never been reigned in, the two highest paid teachers in Illinois, in one of the WORST performing school districts-CHICAGO, their salary is---HOLD ON TO YOUR WALLET, IN EXCESS OF $600,000 ANNUALLY!!!!!! Plenty more teachers make in excess of $200,000 and $300,000 as well! Keep in mind that teachers work only about 180 days a year, not like the rest of us, who work with an average of 2 weeks vacation and thus about 250-300 days a year.
We will be looking like Greece in this generation as our debt mushrooms out of control and "reality hits" the federal and state budgets, the dollar value declines and savings and investments are wiped out.
In Greece, there are only about 10 million people, we have 30 times more. Our problems are going to be 30 times more!
Greek government workers shut down schools and hospitals and disrupted flights as demonstrators occupied the Acropolis in an escalation of protests against 30 billion euros ($40 billion) of additional wage cuts and tax increases unveiled this week.
The ADEDY union federation, which represents more than 500,000 civil servants having their pensions and pay slashed under measures announced May 2 by Prime Minister George Papandreou, will hold a rally at midday joined by striking teachers. A general strike, the third this year, is planned for tomorrow, with private-sector workers due to participate.
“Protests will increase,” said Spyros Papaspyros, the head of ADEDY. “Opting for the easy path of cutting wages and pensions can’t be accepted.”
Papandreou has called on Greeks to endure more sacrifices in return for an unprecedented 110 billion-euro bailout from the European Union and the International Monetary Fund. The austerity measures, called “savage” by union groups, include a second set of wage cuts for public workers, a three-year freeze on pensions and a second increase this year in sales taxes and the price of fuel, alcohol and tobacco.
Protesters from the Communist Party of Greece draped banners over the walls of the ancient Acropolis citadel in Athens today that said “Peoples of Europe Rise Up” in Greek and English, as tourists took photographs. Unemployed teachers yesterday disrupted the evening news show on state-run NET TV.
‘Terrorizing’ Tourists
Government spokesman George Petalotis condemned the occupation of the Acropolis, saying on NET TV that such protests “aimed to destroy tourism to Greece by terrorizing foreign visitors.”
“My trip is complete,” said Roger Smith from the U.S. as he took photos of the protests below the Acropolis. Smith, on his first visit to Greece with his wife, Diane, said rich Greeks, like rich Americans, needed to pay their taxes.
Elected in October on pledges to raise wages for public workers and step up stimulus spending, Papandreou revised up the 2009 budget deficit to more than 12 percent of gross domestic product, four times the EU limit, and twice the previous government’s estimate. EU officials revised the deficit further on April 22, to 13.6 percent of GDP.
Investor Concern
The surge in the budget gap as the economy contracted fueled investor concern about Greece’s ability to finance the deficit and sent borrowing costs to the highest since before the start of the euro in 1999. Papandreou has pledged to cut the shortfall to within the EU limit of 3 percent in 2014.
Fifty-one percent of Greeks say they won’t accept new austerity measures and would join protests against them, according to a poll of 1,000 people by ALCO for Proto Thema newspaper. That compared with 33 percent who would accept them. No margin of error was given for the poll, which was conducted from April 27 to April 29.
Most Greeks feel anger and dismay rather than relief over Papandreou’s decision to request emergency loans, a separate survey showed. Just 14.8 percent of the 1,256 people polled by Kappa Research April 28-29 for To Vima newspaper felt relief or hope after the move, compared with 31 percent who answered “anger,” 30.6 percent “disappointment or fear” and 22.8 percent who said they felt “shame.” The margin of error for the poll was 2.6 percentage points.
Aid Package
Greeks were divided on whether Papandreou needed to ask for the aid package with just over 50 percent saying it was necessary and 41.9 percent saying it could have been avoided, according to the Kappa poll.
With cuts in wages and increases in taxes, the Greek economy is forecast to shrink 4 percent this year and 2.6 percent in 2011. Unemployment has risen to 11.3 percent, a six- year high.
Archbishop of Athens and All Greece, Hieronymos, the leader of the Greek Orthodox Church, said the Church, which represents most of the 11 million Greeks, would stand by the “battered Greek people” and urged “unity, strength and optimism,” according to the state-run Athens News Agency.
Finance Minister George Papaconstantinou said the government plans to submit legislation on the latest budget cuts to parliament today. Papandreou has a 10-seat majority in parliament, enabling the government to push through the measures.
Electricity Company
Tomorrow’s general strike could disrupt public transport, air traffic, ferry sailings and other services as workers from shopkeepers to sportswriters walk off the job. Employees at Public Power Corp SA, the state-controlled electricity company, also will strike.
An air-traffic controllers’ strike will mean all flights at the Athens International Airport, the country’s biggest, will be cancelled. Greek carriers Aegean Airlines SA, which cancelled 17 flights for today, and Olympic Airlines SA won’t operate any flights tomorrow.
The government also promised changes to the pension system, such as raising the retirement age for women in the public sector, increasing the number of years worked before qualifying for a pension and overhauling labor rules to make firing workers easier and cheaper. Labor Minister Andreas Loverdos plans a press conference on the measures today.
Some economists say the worst is yet to come. Paul Mylonas, chief economist at National Bank of Greece, anticipates social unrest “will be muted this year” and could grow as the austerity measures continue into the coming years.
“The risk is more for ‘adjustment fatigue’ going down the road,” Mylonas said. “There’s a higher risk of social opposition for further reforms in 2011 and 2012 if light doesn’t begin to appear at the end of the tunnel.”
In the United States virtually every public sector entity utilizes multiple “sets of books” to account for debt, deficits, and unfunded liabilities of welfare programs and the costs of their own employee benefits. In some cases, most notably concerning health insurance continuation coverage, there is virtually no unfunded liability disclosed to taxpayers. The federal government does not include the unfunded liabilities of Medicare, Social Security, or its own retirement programs as part of the official US debt.
All federal and most non-federal public sector entities also pay higher salaries and offer better benefits to their employees than can be provided in the private sector. The massive cost of early retirement for public sector employees, available 10-25 years earlier than is allowed by Social Security, together with free or highly subsidized health insurance during the early retirement years, is generally hidden from taxpayers. Virtually every government entity has huge understated and underfunded liabilities that are either not represented at all, or are misrepresented to taxpayers via employing misleading or incomplete actuarial and accounting methods that the government itself will not tolerate of the private sector.
A report prepared for FEN by Andrew Biggs, a scholar from the American Enterprise Institute, states that the disclosed “debt” of non-federal entities is approximately $2.2 trillion (the sum total of all bonds), and that the additional “off the balance sheet” unfunded liability for non-federal public sector pension plans is currently stated to be around $400 billion.
Biggs concluded that the actual unfunded liability for these public sector pension plans would be $3.5 trillion if more realistic and conservative interest rate assumptions were utilized. Attempts by others to determine the true federal debt (including unfunded obligations) result in the determination that if one federal “balance sheet” were utilized, the total federal debt would exceed $107 trillion, not the $12.3 trillion currently stated as “debt”. The result is that the total federal and non-federal debt (if unfunded liabilities are included) is an estimated $112+ trillion, or SEVEN TIMES higher than the total $15 trillion currently disclosed to taxpayers.!!
Lies and tricky accounting that would get any CFO into prison, are just normal for our government entities.
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