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Tue Dec 31, 2013, 04:04 PM


Weekend Economists Hit the New Year (and it hits back) Goodbye 2013 / Hello 2014!

Last edited Tue Dec 31, 2013, 05:46 PM - Edit history (1)

It's the time of the social calendar, when we kick back, let down our hair (if we have any), and tell the recent past to "get lost" while we look forward to rescue, redemption, and validation in the coming 365.

What will the New Year bring? More than you can stand, so just take it one day at a time, please!

We are featuring Bernie Green and his orchestra. He was MY introduction to jazz, Bernie Green Plays More Than You Can Stand. I may even have the vinyl in my garage, as my inheritance...It will have to get a lot warmer before I go looking for it!


I've just had a brick wall experience in another group...evidently, we have "valid" and "Invalid" news sources....even when you are posting a OPINION COLUMN.

I may, in the fashion of Crocodile Dundee, go walkabout...for 18 months or so. I do not suffer fools. And I think there are too many of them, lately. I cannot imagine what the next election cycle will be like, when this kind of proto-fascist idiocy is already running riot around here.

On the other hand, since the topic was the poisonous effects of Fukushima, I will AGAIN have the dubious pleasure of "I TOLD YOU SO", when "mainstream" MSM ever catches up to those who fixate on something that doesn't involve "twerking" or "number of gullible souls enrolled in rapacious insurance scams by the ACA".

To the New Year, I say:

I love saying I told you so. It's my favorite phrase. But for some reason people don't seem to appreciate it when I say it to them. I haven't figured out why. Anything that gives me that much pleasure must give other people pleasure too, right?


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Reply Weekend Economists Hit the New Year (and it hits back) Goodbye 2013 / Hello 2014! (Original post)
Demeter Dec 2013 OP
Tansy_Gold Dec 2013 #1
Demeter Dec 2013 #11
Tansy_Gold Dec 2013 #25
Ghost Dog Dec 2013 #31
Demeter Dec 2013 #2
Demeter Dec 2013 #3
Demeter Dec 2013 #4
Demeter Dec 2013 #17
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Demeter Dec 2013 #6
Demeter Dec 2013 #12
Demeter Dec 2013 #13
Demeter Dec 2013 #15
Fuddnik Dec 2013 #22
Demeter Dec 2013 #16
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Fuddnik Dec 2013 #23
Demeter Dec 2013 #14
Demeter Dec 2013 #7
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Demeter Dec 2013 #9
Demeter Dec 2013 #10
Demeter Dec 2013 #18
Lefty Thinker Jan 2014 #47
Demeter Dec 2013 #20
Demeter Dec 2013 #21
Fuddnik Dec 2013 #24
Demeter Dec 2013 #26
Fuddnik Dec 2013 #39
Demeter Dec 2013 #27
Demeter Dec 2013 #28
Demeter Dec 2013 #29
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kickysnana Jan 2014 #41
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Demeter Jan 2014 #53
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antigop Jan 2014 #67
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Response to Demeter (Original post)

Tue Dec 31, 2013, 04:07 PM

1. And the one and only

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Response to Tansy_Gold (Reply #1)

Tue Dec 31, 2013, 04:34 PM

11. Thank you, Tansy!


I did try to find it.

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Response to Demeter (Reply #11)

Tue Dec 31, 2013, 07:23 PM

25. I wouldn't let you down.

Not on New Year's Eve!

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Response to Demeter (Reply #11)

Tue Dec 31, 2013, 07:59 PM

31. I was hearing about the triple meltdown via enenews since long before TEPCO 'confessed'.


But you do have to take it with a pinch of salt.

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Response to Demeter (Original post)

Tue Dec 31, 2013, 04:10 PM

2. George Galloway | The State of Britain | Oxford Union


Last edited Tue Dec 31, 2013, 04:47 PM - Edit history (1)


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Response to Demeter (Original post)

Tue Dec 31, 2013, 04:13 PM

3. Mortgage Applications Drop to 13-Year Low



The average number of mortgage applications slipped 6.3% to a 13-year low on a seasonally adjusted basis as interest rates rose from the previous week, the Mortgage Bankers Association said Tuesday.

“Following the Federal Reserve‘s taper announcement, mortgage application volume dropped again last week, with rates increasing and refinance application volume falling to its lowest level since November 2008,” said Mike Fratantoni, MBA’s vice president of research and economics

On an unadjusted basis, MBA said the market composite index fell 7% from the previous week. The refinance index dropped 8% from the prior week, while the seasonally adjusted purchase index eased 4%. Interest rates have generally been rising since early November, resulting in modest declines in weekly mortgage applications:

  • The average rate on 30-year fixed-rate mortgages with conforming loans increased to 4.64% from 4.62% in the prior week. Rates on 30-year fixed-rate mortgages with jumbo-loan balances rose to 4.63% from 4.61%.

  • The average rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration climbed to 4.29% from 4.25% a week earlier.

  • The average rate for 15-year fixed-rate mortgages increased to 3.74% from 3.66%. The 5/1 ARM average climbed to 3.26% from 3.20%.
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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 04:18 PM

    4. How Detroit went broke: The answers may surprise you - and don't blame Coleman Young



    Detroit is broke, but it didn’t have to be. An in-depth Free Press analysis of the city’s financial history back to the 1950s shows that its elected officials and others charged with managing its finances repeatedly failed — or refused — to make the tough economic and political decisions that might have saved the city from financial ruin. Instead, amid a huge exodus of residents, plummeting tax revenues and skyrocketing home abandonment, Detroit’s leaders engaged in a billion-dollar borrowing binge, created new taxes and failed to cut expenses when they needed to. Simultaneously, they gifted workers and retirees with generous bonuses. And under pressure from unions and, sometimes, arbitrators, they failed to cut health care benefits — saddling the city with staggering costs that today threaten the safety and quality of life of people who live here.

    The numbers, most from records deeply buried in the public library, lay waste to misconceptions about the roots of Detroit’s economic crisis. For critics who want to blame Mayor Coleman Young for starting this mess, think again. The mayor’s sometimes fiery rhetoric may have contributed to metro Detroit’s racial divide, but he was an astute money manager who recognized, early on, the challenges the city faced and began slashing staff and spending to address them. And Wall Street types who applauded Mayor Kwame Kilpatrick’s financial acumen following his 2005 deal to restructure city pension debt should consider this: The numbers prove that his plan devastated the city’s finances and was a key factor that drove Detroit to file for Chapter 9 bankruptcy in July.

    The State of Michigan also bears some blame. Lansing politicians reduced Detroit’s state-shared revenue by 48% from 1998 to 2012, withholding $172 million from the city, according to state records.

    Decades of mismanagement added to Detroit’s fiscal woes. The city notoriously bungled multiple federal aid programs and overpaid outrageously to incentivize projects such as the Chrysler Jefferson North plant. Bureaucracy bogged down even the simplest deals and contracts. In a city that needed urgency, major city functions often seemed rudderless. When all the numbers are crunched, one fact is crystal clear: Yes, a disaster was looming for Detroit. But there were ample opportunities when decisive action by city leaders might have fended off bankruptcy...


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    Response to Demeter (Reply #4)

    Tue Dec 31, 2013, 05:07 PM

    17. Detroit Will be Democracy's Decisive Battle By Glen Ford





    “If we don't do something real soon, I think you'll have to agree that we're going to be forced either to use the ballot or the bullet. It's one or the other in 1964. It isn't that time is running out -- time has run out!” – Malcolm X, “The Ballot or the Bullet,” Cleveland, Ohio, April 3, 1964.

    October 31, 2013 "Information Clearing House - "BAR" -- A half-century after the man once known as Detroit Red spoke those words, the last grains of sand are trickling from the hour glass of what has passed for democracy in America. The principle of one-person, one vote – or any meaningful franchise, at all – is no longer operative for the majority of Black people in the state of Michigan, whose largely African American cities are run by emergency managers accountable to no one but Rick Snyder, the venture capitalist in the governor’s mansion. The same bell is tolling for every urban center in the land, as hegemonic finance capital creates the template for direct corporate rule through the systematic destruction of Detroiters’ citizenship rights.

    The 82 percent Black metropolis has been reduced to a Bantustan in both the economic and political senses of the term. Surrounded by some of the richest counties in the nation, the impoverished city exemplifies a national racial wealth gap that is more profound than that which existed in South Africa at the height of apartheid, as detailed by Jon Jeter in this issue of BAR (See “Worse Than Apartheid: Black in Obama’s America”). The Emergency Manager law, passed by the Republican state legislature after rejection by voters in a referendum, makes the Bantustan analogy complete, with a Black corporate lawyer overseeing the dismantling of every mechanism of local democracy. Kevyn Orr’s ascension as plenipotentiary of Wall Street is also the ultimate logic of the most vulgar current of African American politics, which seeks only Black representation at the highest levels of power, no matter whose interests are served. Wall Street long ago scoped this Black weakness, and has exploited it at every political level.

    “The same bell is tolling for every urban center in the land.”

    Detroit’s dissolution also sounds the death knell for a generation’s dreams of authentic “Black Power” through purely electoral means in collaboration with corporate “renaissance” schemes. The Black masses have never been envisioned as part of any “renewal” of the cities under corporate auspices. Rather, investment is contingent on Black disempowerment and removal – the corporate axiom from which the Emergency Manager regime logically flows. Barack Obama, as loyal (and lawyerly) a servant of the banks as Orr, accepts the validity of the premise, which is why he raises no principled objection to Detroit’s disenfranchisement, either in its particulars or as a model for urban America.

    The drama unfolds in bankruptcy court, a venue whose rules were written almost entirely by the financial capitalist class. By virtue of the Emergency Manager law, Detroit is represented in court by its nemesis, Kevyn Orr – which is like imposing Newt Gingrich as chief counsel for the NAACP. (The Detroit NAACP seeks to halt the proceedings on voting rights grounds.) Orr’s office is referred to as “the city” in both legal terms and by idiot corporate media, who confuse the public by reporting, as did Detroit PBS correspondent Christy McDonald, this week, that the issue is “whether the city can go ahead with its bankruptcy” process. In fact, hardly an elected official or candidate exists that openly supports bankruptcy, especially under Kevyn Orr’s terms (Detroit holds a meaningless mayoral and council election, next week)...


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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 04:20 PM

    5. French telecom operator Orange threatens to sue NSA over cable tapping



    France’s largest telecom group, Orange, has threatened to sue the NSA over hacking the underwater cable that it jointly owns with 15 other companies, French media reported in the wake of the latest Snowden revelation. In response to the recent report published by Germany’s Der Spiegel, Orange said it was not aware of any intrusion or unlawful actions of this kind.

    "We will take legal action in the next few days because we want to know more about the eventuality that Orange data may have been intercepted," an Orange spokeswoman said as cited by Reuters. She added that Orange had had no role whatsoever in the spying.

    Orange has reiterated that the privacy of correspondence and negotiations can be broken only by special court order, and that the conditions and reasons for such action should be clearly defined in French law, the statement said, according to L’Express."Piracy to intercept data is not possible directly through the system of Orange, and such intrusion has not been previously reported," the company said in a statement, as quoted by Le Figaro.

    The company now plans to take action in civil court.


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    Response to Demeter (Reply #5)

    Tue Dec 31, 2013, 04:22 PM

    6. The NSA has nearly complete backdoor access to Apple's iPhone



    The U.S. National Security Agency has the ability to snoop on nearly every communication sent from an Apple iPhone, according to leaked documents shared by security researcher Jacob Appelbaum and German news magazine Der Spiegel.

    An NSA program called DROPOUTJEEP allows the agency to intercept SMS messages, access contact lists, locate a phone using cell tower data, and even activate the device’s microphone and camera. According to leaked documents, the NSA claims a 100 percent success rate when it comes to implanting iOS devices with spyware. The documents suggest that the NSA needs physical access to a device to install the spyware—something the agency has achieved by rerouting shipments of devices purchased online—but a remote version of the exploit is also in the works.

    Update: Apple denies it helped build the NSA's iPhone backdoor.

    Appelbaum says that presents one of two possibilities:

    “Either [the NSA] have a huge collection of exploits that work against Apple products, meaning they are hoarding information about critical systems that American companies produce, and sabotaging them, or Apple sabotaged it themselves,” Appelbaum said at the Chaos Communication Conference in Hamburg, Germany.

    “Do you think Apple helped them with that?” Appelbaum asked. “I hope Apple will clarify that.”

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    Response to Demeter (Reply #6)

    Tue Dec 31, 2013, 04:51 PM

    12. China to step up own security after new NSA allegations




    "Like many other countries, we have been paying close attention to these reports," Chinese Foreign Ministry spokeswoman Hua Chunying told a daily news briefing.

    "China is concerned about the continued revelations of eavesdropping and surveillance and is paying attention to how the situation develops," she added.

    "We will take the necessary steps to resolutely maintain the security of our own information," Hua said, without elaborating.



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    Response to Demeter (Reply #12)

    Tue Dec 31, 2013, 04:56 PM

    13. Intel Vets: Of Course Obama Knew About NSA Spying




    Everyone from the president to the lawmakers who are supposed to oversee the National Security Agency claim they had no idea it was spying on the communications of dozens of foreign leaders. But that claim is laughable, according to veteran members of the intelligence community, former White House advisers, and now one of the NSA's main overseers in Congress. A former White House official, who served in a prior administration, said it was essentially impossible that the president wouldn't know foreign leaders were being monitored by U.S. intelligence agencies, and principally the NSA, as part of regular operations aimed at keeping him informed about diplomatic relations and negotiations. Information on foreign leaders that is based on recorded calls or other signals intelligence is "unique," the former official said, and its nature is obvious to anyone reading or hearing an intelligence report or receiving a briefing.

    "If you saw it, you'd know that it came out of somebody's mouth," the former official said. "I cannot believe that Obama's national security staff didn't brief the president on foreign leaders when he was going in to visit with them." Much of that information would have comes from signals intelligence. And the failure to inform the president that a piece of information came from spying on a leader could be a fireable offense, the former White House official said. "It's almost a dereliction not to tell him."

    At a hearing Tuesday about whether to modify current surveillance law that governs the NSA's activities, a clearly frustrated Mike Rogers, the chairman of the House Intelligence Committee, all but admitted that the NSA had revealed to members of his committee the details of an operation that targeted the personal communications of as many as 35 heads of state and government. And if his colleagues didn't know it, Rogers implied, they weren't paying attention. Rogers said the committee is privy to huge amount of information on U.S. spying, including a list of priority intelligence topics that is approved and modified by the president and his advisers and sets out the parameters of U.S. intelligence gathering. And, he said, committee members have access to "sources and methods" of spying, as well as "mounds of material" about the fruits of intelligence. In a testy exchange with Rep. Adam Schiff, a California Democrat who questioned why the committee had not been informed that the NSA had intercepted the phone calls of German Chancellor Angela Merkel, Rogers fired back that the committee had been kept in the loop and that if Schiff hadn't read the reports he had no one to blame but himself.

    "To make the case that somehow we are in the dark is mystifying to me," Rogers said. "Some members spend a lot more time on this committee than others based on their schedules, which are significant in this Congress. But it is disingenuous to imply that this committee did not have a full and complete understanding of activities of the intelligence community."

    Asked directly by Schiff whether he was aware that the NSA had targeted the phone calls of foreign leaders, Rogers refused to confirm a specific operation but emphasized that "we have access to all sources and methods, and there is lots of product to be reviewed by the intelligence committee."

    "We would be happy to take you down to the committee and spend a couple of hours going through mounds of product that would allow a member to be as informed as a member wishes to be on sources and methods," a clearly frustrated Rogers told Schiff.

    Asked if Rogers had just confirmed knowledge of the NSA operations spying on foreign leaders, a spokesperson said, "The chairman's comment speaks for itself."



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    Response to Demeter (Reply #13)

    Tue Dec 31, 2013, 04:59 PM

    15. Spain colluded in NSA spying on its citizens, Spanish newspaper reports



    The widespread surveillance of Spanish citizens by the US National Security Agency, which caused outrage when it was reported this week, was the product of a collaboration with Spain's intelligence services, according to one Spanish newspaper.

    In the latest revelations to emerge from the documents leaked by the US whistleblower Edward Snowden, Spanish agents not only knew about the work of the NSA but also facilitated it, El Mundo reports.

    An NSA document entitled "Sharing computer network operations cryptologic information with foreign partners" reportedly shows how the US relies on the collaboration of many countries to give it access to intelligence information, including electronic metadata.

    According to the document seen by El Mundo, the US classifies cooperation with various countries on four different levels. In the first group – "Comprehensive Cooperation" – are the UK, Australia, Canada and New Zealand. The second group – "Focused Cooperation" – of which Spain is a member, includes 19 countries, all of them European, apart from Japan and South Korea. The third group – "Limited cooperation" – consists of countries such as France, Israel, India and Pakistan; while the fourth – "Exceptional Cooperation" – is made up of countries that the US considers to be hostile to its interests...MORE

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    Response to Demeter (Reply #13)

    Tue Dec 31, 2013, 05:36 PM

    22. They've always targeted those calls. Always.

    That's their job. They know it. The President knows it. And the foreign leaders know it. They just try various techniques to prevent it.

    I had a laugh one time. I stopped by a friend of mines car lot in the late 1980s. He was also a major bookmaker. The FBI and IRS had just raided his operation a week earlier. He swept his car lot, and found bugs all over the place. And his home. And his car.

    Him and his partner were walking around with brief case sized scrambler phones to communicate with each other. I cracked up laughing, and told him they had that encryption cracked before he even bought the thing. I'd been reading up and studying everything about the NSA and government surveillance that I could get my hands on for about 5 years at that point.

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    Response to Demeter (Reply #12)

    Tue Dec 31, 2013, 05:04 PM

    16. The Deep State PEGGY NOONAN'S BLOG




    President Obama says he didn’t know the U.S. government was tapping Angela Merkel, and you know, maybe he didn’t. I have come to wonder if we don’t have what amounts to a deep state within the outer state in the U.S.—a deep state consisting of our intelligence and security agencies, which are so vast and far-flung in their efforts that they themselves don’t fully know who’s in charge and what everyone else is doing. Maybe they’re bugging so many people it’s hardly news to them when they bug the chancellor of Germany. Maybe they mentioned it to the president, maybe not. Maybe they don’t know.

    Mr Obama has gone from seeming like someone who doesn’t quite know what’s going on in his government to someone who doesn’t really want to. He has perfected a sense of surprise. He’s always finding out at just the moment you are, and feeling your indignation. So maybe he didn’t know. Maybe our intelligence and security apparatus—so huge and full of money since 9/11, so self-encased and self-perpetuating—didn’t tell him.

    Before we think about that, should we be tapping Merkel’s phone?

    No, for a simple reason: Because it is wrong. She is our friend. She is our ally. She leads a great nation. As such—friend, ally, greatness—she deserves respect. It is not respectful or friendly to invade her privacy and spy on her in this way. It also seems sort of nuts. Does the National Security Agency think Angela Merkel is planning to blow up Times Square? That would be just like her, wouldn’t it? Does the NSA want to get the mood of her government before the trade talks commence? Then they can do it the old-fashioned way, through old-fashioned human measures: “Hey, source in the foreign ministry, what are you hearing?”

    America has been embarrassed by this. A president with more than adequate political smarts would never OK it. But our intelligence and security agencies? That vast edifice that always wants whatever new technologies are available and whatever new targets are around? Sure, they would do it. After all, it’s not their job to look after America’s reputation in the world, it’s just their job to get the goods and say they got them. Maybe they don’t get into sources and methods even with presidents. Particularly obnoxious on this question are the American policy thinkers and journalists who, when asked about the Merkel taps, put on their world-weary professional wise-guy face, looking like tragic suburbanites who once read a John le Carré novel and can’t forget the shiver of existential dread, and say that everyone does it, governments spy, get with the program, this is the way the world works.
    * * *


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    Response to Demeter (Reply #16)

    Tue Dec 31, 2013, 05:13 PM

    19. The Secret Government: The Constitution in Crisis By Bill Moyers



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    Response to Demeter (Reply #16)

    Tue Dec 31, 2013, 05:39 PM

    23. Reading Peggy Noonan is much easier than listening to her.

    That smarmy, phony voice is especially irritating.

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    Response to Demeter (Reply #5)

    Tue Dec 31, 2013, 04:57 PM

    14. Bernie Green And His Orchestra: I'll Remember April


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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 04:23 PM

    7. Seize the Moment By Sen. Bernie Sanders





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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 04:28 PM

    8. Citizens Have Become Subjects / 2014 Will Bring More Social Collapse By Paul Craig Roberts



    2014 is upon us. For a person who graduated from Georgia Tech in 1961, a year in which the class ring showed the same date right side up or upside down, the 21st century was a science fiction concept associated with Stanley Kubrick’s 1968 film, “2001: A Space Odyssey.” To us George Orwell’s 1984 seemed so far in the future we would never get there. Now it is 30 years in the past. Did we get there in Orwell’s sense? In terms of surveillance technology, we are far beyond Orwell’s imagination. In terms of the unaccountability of government, we exceptional and indispensable people now live a 1984 existence. In his alternative to the Queen’s Christmas speech, Edward Snowden made the point that a person born in the 21st century will never experience privacy. For new generations the word privacy will refer to something mythical, like a unicorn.

    Many Americans might never notice or care. I remember when telephone calls were considered to be private. In the 1940s and 1950s the telephone company could not always provide private lines. There were “party lines” in which two or more customers shared the same telephone line. It was considered extremely rude and inappropriate to listen in on someone’s calls and to monopolize the line with long duration conversations...The privacy of telephone conversations was also epitomized by telephone booths, which stood on street corners, in a variety of public places, and in “filling stations” where an attendant would pump gasoline into your car’s fuel tank, check the water in the radiator, the oil in the engine, the air in the tires, and clean the windshield. A dollar’s worth would purchase 3 gallons, and $5 would fill the tank....Even in the 1980s and for part of the 1990s there were lines of telephones on airport waiting room walls, each separated from the other by sound absorbing panels. Whether the panels absorbed the sounds of the conversation or not, they conveyed the idea that calls were private.

    The notion that telephone calls are private left Americans’ consciousness prior to the NSA listening in. If memory serves, it was sometime in the 1990s when I entered the men’s room of an airport and observed a row of men speaking on their cell phones in the midst of the tinkling sound of urine hitting water and noises of flushing toilets. The thought hit hard that privacy had lost its value.


    In America today people with power are no longer accountable. This means citizens have become subjects, an indication of social collapse.

    Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 04:31 PM

    10. Bernie Green & His Orchestra - Ping Pong


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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 05:11 PM

    18. Is Paul Krugman a Voodoo Economist? By Paul Craig Roberts




    Readers ask me if Paul Krugman could be correct that deficits don’t matter and that neither does printing endless reams of money with which to purchase the Treasury’s debt instruments that finance the deficits.

    If people at home and abroad who hold dollars and dollar denominated financial instruments do not care that trillions of new dollars are being created in order to cover the large gaps between revenues and expenditures in Washington’s annual budgets and to support “banks too big to fail,” that is, if these dollar holders do not see the value of their dollars diluted by the new dollars, which are appearing in greater quantities than new goods and services, Krugman is right.

    The problem for Krugman is that the likelihood of such indifference goes against supply and demand. Economists believe, including Krugman, that if supply increases faster than demand, price drops. So, if there is anything at all to economics, an excess supply of dollars must cause the dollar’s value to drop.

    A drop in the dollar’s value can occur in one of two ways. The way most people think of is via monetary inflation. Too many dollars chasing too few goods drives up prices, and each dollar buys less and is thus devalued. However, in our current situation, the excess dollars are in the banks. As the banks are not lending, the excess dollars are not getting into the money supply or prices. The banks are keeping large reserves in order to meet demands that can arise from their uncovered derivative bets, and the banks are using some of the money that the Federal Reserve is making available to them to speculate on stock market futures, thus pushing stock prices to unrealistic levels...MORE



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    Response to Demeter (Reply #18)

    Wed Jan 1, 2014, 07:05 AM

    47. Quantitative easing has not caused concern because...

    it only trades one kind of government (sector, including the Fed) liability (dollars) for another (Treasuries). Bernanke is out of effective tools and is playing a shell game (or perhaps a psychological game) in order to give the appearance of doing something about the horrible economy (for anyone in the bottom 98%). With a demand shortage occurring, it doesn't matter how cheap borrowing is -- the banks can't find anyone credit-worthy to whom to lend.

    The Republican Party wanted it just this way. By setting up the Fed as an institution that is only relevant when a supply shortage exists in the country, they guaranteed a bubble of large proportions. But they kept fiscal control in the hands of Congress, which only requires them to hold, at least, a minority of 41 in the Senate to block, fairly effectively, any fiscal policy efforts to improve the economy. A torpid economy gives employers increased leverage to suppress wages and, by so doing, increase the flow of money to the wealthy. Because the wealthy have historically supported the Republican Party, and because monetary support is ever more essential to winning national office, this was (and possibly still is) seen as an effective political strategy.

    What this does not account for is populist pressure on both ends of the political spectrum. With the Tea Party on the right dropping the Republicans into internecine battles and the Occupy movement on the left, anger is building at a do-nothing Congress. While the Tea Party is infamous for espousing "Second Amendment" solutions, such ideas are not solely the province of the political right. Russia, Cuba, China, and a number of South American countries had revolutions to the left. I, for one, do not expect the left of America to sit idly while the Tea Party tries armed insurrection. I find the idea chilling -- a civil war in America with the sides: the establishment, the right, and the left.

    Let's hope that in the New Year we can reach out to those who have abandoned their own interests to support a Republican Party that intentionally created this economic mess and put pressure on the Republicans to take effective measures to fix the economy. If necessary, let's run experiments with triggers that swing policies the opposite direction.

    Let's get something done this year, Congress.

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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 05:21 PM

    20. Glenn Greenwald: Dick Cheney, Most Radical, Criminal in the United States



    “Remember, Dick Cheney is a politician who engaged in some of the worst, most radical and criminal conduct in the last century in the United States and did it all in secret — from lying about the war in Iraq to torturing people, to putting people in cages with no lawyers, to eavesdropping on the American people without the warrants required by law”


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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 05:22 PM

    21. Bernie Green and His Orchestra - Kiss of Fire


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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 07:02 PM

    24. Let the drinking begin!

    I'm on my third already, so you slackers get moving.

    That goes double for you, X.

    Happy New Year to ALL of Ya!

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    Response to Fuddnik (Reply #24)

    Tue Dec 31, 2013, 07:36 PM

    26. Sparkling Cherry Juice, Anyone?


    I have champagne, 2 years in the fridge, for later...it should be cold by now. If not, I can put it out in 17F with a windchill of 9F.

    Global warming, my foot! I hear the North Pole is sliding into Canada, closer to us. Which is why it's currently 41F in Helsinki, which is 10 degrees north, vs. Ann Arbor at 17F at 42 degrees north...

    Is it any wonder I can't get well, and feel like biting?

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    Response to Demeter (Reply #26)

    Tue Dec 31, 2013, 09:44 PM

    39. We're going to champagne at midnight.

    Now, if I can get this frickin ipod to work, we'll have U2's "New Years Day" to usher it in.

    I haven't used the damned thing in two years, and I've since formatted the hard drive, and forgot all the damned passwords. So, I can't transfer the music to my computer.

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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 07:37 PM

    27. Bernie Green & His Stereo Mad-Men the green bee



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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 07:46 PM

    28. Sorry for letting them snoop? Dell apologizes for ‘inconvenience’ caused by NSA backdoor




    Security researcher Jacob Appelbaum dropped a bombshell of sorts earlier this week when he accused American tech companies of placing government-friendly backdoors in their devices. Now Texas-based Dell Computers is offering an apology.

    Or to put it more accurately, Dell told an irate customer on Monday that they “regret the inconvenience” caused by selling to the public for years a number of products that the intelligence community has been able to fully compromise in complete silence up until this week.

    Dell, Apple, Western Digital and an array of other Silicon Valley-firms were all name-checked during Appelbaum’s hour-long presentation Monday at the thirtieth annual Chaos Communication Congress in Hamburg, Germany. As RT reported then, the 30-year-old hacker-cum-activist unveiled before the audience at the annual expo a collection of never-before published National Security Agency documents detailing how the NSA goes to great lengths to compromise the computers and systems of groups on its long list of adversaries.


    Spreading viruses and malware to infect targets and eavesdrop on their communications is just one of the ways the United States’ spy firm conducts surveillance, Appelbaum said. Along with those exploits, he added, the NSA has been manually inserting microscopic computer chips into commercially available products and using custom-made devices like hacked USB cables to silently collect intelligence. One of the most alarming methods of attack discussed during his address, however, comes as a result of all but certain collusion on the part of major United States tech companies. The NSA has information about vulnerabilities in products sold by the biggest names in the US computer industry, Appelbaum said, and at the drop off a hat the agency has the ability of launching any which type of attack to exploit the flaws in publically available products. The NSA has knowledge pertaining to vulnerabilities in computer servers made by Dell and even Apple’s highly popular iPhone, among other devices, Appelbaum told his audience.

    “Hey Dell, why is that?” Appelbaum asked. “Love to hear your statement about that.”


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    Response to Demeter (Reply #28)

    Tue Dec 31, 2013, 07:52 PM

    29. U.S. to China: We Hacked Your Internet Gear We Told You Not to Hack By Cade Metz



    The headline news is that the NSA has surreptitiously “burrowed its way into nearly all the security architecture” sold by the world’s largest computer networking companies, including everyone from U.S. mainstays Cisco and Juniper to Chinese giant Huawei. But beneath this bombshell of a story from Der Spiegel, you’ll find a rather healthy bit of irony. After all, the United States government has spent years complaining that Chinese intelligence operations could find ways of poking holes in Huawei networking gear, urging both American businesses and foreign allies to sidestep the company’s hardware. The complaints grew so loud that, at one point, Huawei indicated it may abandon the U.S. networking market all together. And, yet, Der Speigel now tells us that U.S. intelligence operations have been poking holes in Huawei networking gear — not to mention hardware sold by countless other vendors in both the States and abroad.

    “We read the media reports, and we’ve noted the references to Huawei and our peers,” says William Plummer, a Huawei vice president and the company’s point person in Washington, D.C. “As we have said, over and over again — and as now seems to be validated — threats to networks and data integrity can come from any and many sources.”

    Plummer and Huawei have long complained that when the U.S. House Intelligence Committee released a report in October 2012 condemning the use of Huawei gear in telephone and data networks, it failed to provide any evidence that the Chinese government had compromised the company’s hardware. Adam Segal, a senior fellow for China Studies at the Center for Foreign Relations, makes the same point. And now we have evidence — Der Spiegel cites leaked NSA documents — that the U.S. government has compromised gear on a massive scale.

    “Do I see the irony? Certainly the Chinese will,” Segal says, noting that the Chinese government and the Chinese press have complained of U.S hypocrisy ever since former government contractor Edward Snowden first started to reveal NSA surveillance practices last summer. “The Chinese government has been hammering home what they call the U.S.’s ulterior motives for criticizing China, and there’s been a steady drumbeat of stories in the Chinese press about backdoors in the products of U.S. companies. They’ve been going after Cisco in particular.”

    To be sure, the exploits discussed by Der Spiegel are a little different from the sort of attacks Congress envisioned during its long campaign against Huawei and ZTE, another Chinese manufacturer. As Segal and others note, Congress mostly complained that the Chinese government could collaborate with people inside the two companies to plant backdoors in their gear, with lawmakers pointing out that Huawei’s CEO was once an officer in China’s People’s Liberation Army, or PLA, the military arm of the country’s Communist party. Der Spiegel, by contrast, says the NSA is exploiting hardware without help from anyone inside the Ciscos and the Huaweis, focusing instead on compromising network gear with clever hacks or intercepting the hardware as it’s shipped to customers.


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    Response to Demeter (Reply #29)

    Tue Dec 31, 2013, 07:53 PM

    30. The Most Important Surveillance Order We Know Almost Nothing About-- ACLU



    Over the last seven months, we have learned an incredible amount about the government's post-9/11 surveillance efforts. But there is a crucial gap in our basic understanding. We now know, for example, a good deal about how the government conducts surveillance that targets Americans, and about surveillance of foreigners that sweeps up Americans' international communications when the actual surveillance takes place on U.S. soil (for example, from a Google facility in the United States). But we still know very little about Executive Order 12,333, which governs the NSA's surveillance abroad — even when that surveillance sweeps up Americans' communications.

    To fill that gap, the ACLU, along with the Media Freedom and Information Access Clinic at Yale Law School, today filed a Freedom of Information Act lawsuit demanding that the government release basic information about its use of Executive Order 12,333 to conduct surveillance of Americans' international communications.

    Why is Executive Order 12,333 so important? Here is how we explained it in our complaint (filed today in federal court in New York):

    Although EO 12,333 permits the government to target foreigners abroad for surveillance, recent revelations have confirmed that the government interprets that authority to permit sweeping monitoring of Americans' international communications. How the government conducts this surveillance, and whether it appropriately accommodates the constitutional rights of American citizens and residents whose communications are intercepted in the course of that surveillance, are matters of great public significance and concern. While the government has released several documents describing the rules that govern its collection and use of Americans' international communications under statutory authorities regulating surveillance on U.S. soil, little information is publicly available regarding the rules that apply to surveillance of Americans' international calls and emails under EO 12,333.

    That gap in public knowledge is particularly troubling in light of recent revelations, which make clear that the NSA is collecting vast quantities of data worldwide pursuant to EO 12,333. For instance, recent news reports indicate that, relying on the executive order, the NSA is collecting: nearly 5 billion records per day on the location of cell phones, including Americans' cell phones; hundreds of millions of contact lists or address books from personal email and instant messaging accounts; and information from Google and Yahoo user accounts as that information travels between those companies' data centers located abroad.

    The core of the problem is that the NSA has, for years, relied upon its authority to gather foreign intelligence as permission to conduct sweeping surveillance of Americans' international communications. We know that this happens under the laws that govern surveillance on U.S. soil, and recent revelations confirm that it happens — perhaps to an even greater extent — in the surveillance that takes place abroad under Executive Order 12,333. Moreover, the rules that govern surveillance under the executive order are of particular concern because that surveillance is not meaningfully overseen by Congress, and it is not overseen at all by the Foreign Intelligence Surveillance Court.

    In other words, the executive is conducting surveillance under its own executive order without any real oversight. We now know too well that unchecked surveillance authority can lead to dangerous overreach. That's why we are fighting for the release of documents that would shed light on the internal rules that the executive has set for itself when it monitors international communications abroad — including Americans' international communications.

    Stay tuned.

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    Response to Demeter (Reply #30)

    Tue Dec 31, 2013, 07:59 PM

    32. President Obama claims the NSA has never abused its authority. That's false. Trevor Timm



    Time and again since the world learned the extent of what the NSA was doing, government officials have defended the controversial mass surveillance programs by falling back on one talking point: the NSA programs may be all-powerful, but they have never been abused.

    President Obama continually evokes the phase when defending the NSA in public. In his end-of-year press conference, he reiterated, "There continues not to be evidence that the metadata surveillance program had been abused". Former NSA chief Michael Hayden says this almost weekly, and former CIA deputy director and NSA review panel member Mike Morrell said it again just before Christmas. This mantra is likely to be repeated often in 2014 as Obama is set to address the nation on government surveillance, and Congress and the president debate whether any reforms are necessary.

    There's only one problem: it's not true.

    We don't have to look further than the Fisa court opinions that have been released in the past few months (thanks to Freedom of Information Act lawsuits by Electronic Frontier Foundation and American Civil Liberties Union). One of the opinions from 2009 deals directly with the phone metadata surveillance program that has caused so much controversy – the same program a Washington DC district court recently ruled is likely unconstitutional (a federal court in New York just reached the opposite conclusion.)

    For years, as new data came into the NSA's database containing virtually every phone call record in the United States, analysts would search over 17,000 phone numbers in it every day. It turns out only about 1,800 of those numbers – 11% – met the legal requirement that the NSA have "reasonable articulable suspicion" that the number was involved in terrorism. What were the other 89% of the numbers being searched for? We're not exactly sure. But we do know that five years after the metadata program was brought under a legal framework, the Fisa court concluded it had been "so frequently and systematically violated that it can fairly be said that this critical element of the overall … regime has never functioned effectively"...In another recently-released Fisa court opinion (pdf) about the NSA collection of American internet metadata, the court accused the NSA of engaging in "systemic overcollection" for years, and that "'virtually every metadata record' generated by this program included some data that had not been authorized for collection". The judge listed the government's "frequent failures to comply with the surveillance program's terms", excoriated them for their "apparent widespread disregard of Fisa court imposed restrictions", and accused the NSA of committing "longstanding and pervasive violations of the prior orders in this matter".

    Does that sound like an agency that has never abused its powers?


    Since the Snowden revelations started in June, we've also learned about other abuses, most notably the dozen times NSA analysts have been caught using the agency's vast powers to spy on former spouses or lovers. As the Wall Street Journal reported, "the practice isn't … but it's common enough to garner its own spycraft label: LOVEINT." The LOVEINT scandals never seem to come into play when officials discuss "abuse" either, despite the fact it was clearly wilful. One reason might be that, like many other words, the NSA has a different definition of "abuse" than most people. After LOVEINT was brought up to Director of National Intelligence general counsel Robert Litt on a conference call with reporters, he replied:

    I'm using abuse in a slightly more limited term. I'm not talking about the LOVEINT kind of thing, but people using surveillance for political purposes or to spy on Americans more generally or anything like that, as opposed to individual people screwing up.

    Apparently to qualify as "abuse", the surveillance has to be on a massive scale, wilful, in bad faith, hidden from the Fisa court, and it has to about political views. Spying on loved ones or unauthorized spying on criminal behavior does not count. Of course, if the NSA was spying on Americans for political purposes, we would likely never find out unless someone leaked it. The fact that the Fisa court ruled some NSA surveillance unconstitutional was kept secret from the American public for years after it happened, and that was behavior that was self-reported. Even many the LOVEINT issues weren't found until the perpetrators admitted it.
    Even the chief Fisa court judge, Reggie Walton, admitted the court is severely limited in the oversight it could provide, telling the Washington Post:

    The Fisc is forced to rely upon the accuracy of the information that is provided to the court. The Fisc does not have the capacity to investigate issues of noncompliance.

    With all that said, it's unclear why we're quibbling over whether or not the government truly abused the data it has. The programs themselves are an abuse. A primary reason the founding fathers declared independence from the British was in protest of "general warrants" – the idea that the police could seize everything in a given neighborhood, only to go through it afterwards and find the criminal. The Fourth Amendment requires particularized, individual court orders, and as long as the NSA is collecting such a vast database on every innocent person in the United States, and then searching it at their own discretion, they are abusing our constitution. We don't let police listen to our phone conversations or search our houses at will as long as the power "isn't abused". Why should we wait until the NSA is blackmailing politicians to stop them from doing the same thing with our private phone and internet metadata?

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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 08:01 PM

    33. Bernie Green and His Orchestra - Out Of This World


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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 08:05 PM

    34. Don’t Plan on Retiring Work Until You're Dead? By Mike Whitney



    Millions of older Americans say they will never be able to retire. They simply don’t have the savings. According to CNN, “Roughly three-quarters of Americans are living paycheck-to-paycheck, with little to no emergency savings…50% have less than a three-month cushion and 27% had no savings at all….” (“76% of Americans are living paycheck-to-paycheck“, CNN Money)

    “No savings at all”?

    That’s right. So retirement is out of the question. A sizable chunk of the adult population is going to punch a clock until they keel-over in the office parking lot and get hauled off in the company dumpster. And those are the lucky ones, the so called baby boomers. By the time we get to the millennials it’ll be even worse because the economy will have been ravaged by 25 or 30 years of austerity leaving the proles to scrape by on hardtack and gruel. Pensions are already being looted, Social Security is under fire, and any small stipend that supports the poor, the unemployed, or the infirm is going to be terminated. That’s why everyone is so down-in-the-mouth, because their expectations of the future are so bleak. Check this out from Business Insider:

    “For millennials, the situation is even more grim. Compared to their parents at their age, the under-30 set is worth only half as much. And while this is a sobering reminder of the scale of the Great Recession’s impact on younger generations, it’s not the whole story. These households were actually falling behind even before the stock market and housing crash, researchers found.

    Young people not only saw their wages stagnate or drop but also suffered a rise in fixed costs. They leave college with an average $27,000 debt load and have a harder time finding jobs that pay well, while facing more expensive health care and housing costs.

    “If these generations cannot accumulate wealth, they will be less able to support themselves when unexpected emergencies arise or when they eventually retire,” the study authors said. “This financial uncertainty could reverberate throughout the economy, since entrepreneurial activity, saving, and investment tend to build on a base of confidence and growing wealth.”(“AMERICA IN DECLINE: Young People Are Much Worse Off Than Their Parents Were At That Age“, Business Insider)

    An entire generation of young people have been raped and discarded by their government and all the author cares about is the impact it will have on personal consumption. Go figure. And there’s a larger point here too, which is that Americans have always believed that their children would enjoy a higher standard of living than their own. Until now, that is. Now most people think things are going to get worse, much worse. You see it in all the surveys. Expectations have changed, the future looks darker than ever before, and people are scared. Check this out from CNN:

    “Things appear to be looking up for the economy.

    On Wednesday the Federal Reserve felt confident enough to begin slowly withdrawing the huge economic stimulus the central bank has been pumping into the economy.

    Unemployment is the lowest in five years. Economic growth picked up recently. The housing sector — which got us into this mess in the first place — is bouncing back. Home sales, prices and construction are all on the rise.

    Auto sales recently had their strongest growth since 2006. Gas prices have fallen dramatically this year, and the stock market has risen sharply.

    And there’s some reason to be hopeful for next year too. The Fed announced a slightly improved outlook for unemployment in 2014.

    But things aren’t always as good as they seem. For many Americans, all the good news in the larger economy isn’t translating over to everyday life. Only 24% of the public believe economic conditions are improving, while nearly four-in-ten say the nation’s economy is actually getting worse, according to a recent CNN poll.” (“Is the economy as good as it looks?“, CNN Money)

    That’s right; no one is buying the “recovery” crappola any more. They all know it’s BS. And a closer look at the CNN survey tells you why.

    “Looking specifically at the economy, 39% feel that the economy is still in a downturn, up six points from April. Only 24% believe that an economic recovery is under way. Thirty-six percent are in the middle – they don’t think we’re in a recovery but they believe conditions have stabilized.” (CNN Politics)

    So, 3 out of 4 people think we’re either still in a severe slump or running in place.(stagnation) That’s your recovery in a nutshell. And it explains why people hate bankers, Wall Street, and Congress. It also explains why millennials have given up on Obama after finally acknowledging that the man is a bumptious blowhard who’s never lifted a finger to help the people who shoehorned his worthless keister into office. Take a look at this from Policy Mic:

    “Debt-weary millennials are disillusioned with Obama’s performance with regard to the economy, the implementation of the Affordable Care Act, his handling of foreign relations”…

    A new poll conducted by Harvard University’s Institute of Politics has revealed that young Americans’ support for President Barack Obama has reached the lowest point yet. According to the poll, only 41% of Americans aged 18-29 approve of Obama’s performance in office, an 11% drop since April.” (“Millennials officially hate Obama. Here’s why“, policymic)

    Ahhh, so people are finally waking up to what an unprincipled phony this guy is. Good! Unfortunately, ripping Obama won’t pay the bills, which is why so many people are making painful adjustments in their own lives to make ends meet. Aside from cutting back on trips to the doctor and setting the thermostat on “Off”, America’s plenteous graybeards are staying on the job longer than ever. Here’s a clip from an article in Forbes:

    “An alarming 37% of middle class Americans believe they’ll work until they’re too sick or until they die.

    Another 34% believes retirement will come at the ripe age of 80…

    It’s a grim look at the state of retirement which seems to be getting worse for middle class Americans.

    Wells Fargo WFC -0.09% interviewed 1,000 Americans between age 25 and 75 and with household income ranging between $25,000 and $99,000. More than half (59%) said their top day-to-day financial concern is paying the monthly bills; that’s up from 52% who said the same last year.

    “We do this survey every year and for the past three years, the struggle to pay bills is a growing concern and the prospect of saving for retirement looks dim, particularly for those in their prime saving years,” Laurie Nordquist, head of Wells Fargo Institutional Retirement and Trust, says in the report.

    And here’s something for leaders in Washington DC to consider: One third of those surveyed said their primary source of retirement income will come from social security. That figure gets even bigger for those who make less than $50,000–48% of those earners say social security is going to be their primary retirement income.” (“Work Until You Die? More Middle Class Americans Say They Can Never Retire“, Halah Touryalai, Forbes)

    How do you like that, eh? So nearly half the people who make less than $50,000 are counting on Social Security as their “primary retirement income.” At the same time, our old buddy Obama is planning to cut Social Security to keep his criminal friends on Wall Street happy. That means a whole lot of us are going to be stuck bussing tables at Olive Garden until they carry us out feet first. You're doing a heckuva job, Barry!

    Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

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    Response to Demeter (Reply #35)

    Tue Dec 31, 2013, 09:08 PM





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    Response to Demeter (Reply #36)

    Tue Dec 31, 2013, 09:09 PM



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    Response to Demeter (Reply #37)

    Tue Dec 31, 2013, 09:12 PM

    38. I haven't heard these in close to 50 years!


    No wonder I grew to be what I am today.

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    Response to Demeter (Original post)

    Tue Dec 31, 2013, 10:03 PM




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    Response to Demeter (Reply #40)

    Wed Jan 1, 2014, 12:44 AM

    41. -

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 06:26 AM

    42. German Yields Climb Most Since 2006 as Euro Area Exits Recession


    German government bonds slumped last year, with 10-year yields rising the most since 2006, as the euro area’s emergence from its longest recession on record damped demand for the region’s safest assets.

    Two-year notes dropped for the first time since 2007, with the rate rising from less than zero, as the threat of the 17-nation currency bloc splintering diminished. The economies of the countries that share the euro will expand 1 percent in 2014 and 1.4 percent in 2015, after contracting 0.4 percent in 2013, according to Bloomberg surveys of analysts. Bunds fell along with Treasuries as the Federal Reserve said it would reduce its $85 billion in monthly asset purchases.

    “We’re optimistic the euro region is on slightly firmer ground,” said John Wraith, fixed-income strategist at Bank of America Corp. in London. “Yields have risen for positive reasons, not negative ones. It’s about improving growth expectations and a diminished bid for core sovereign bonds.”

    The yield on German 10-year bunds climbed 61 basis points, or 0.61 percentage point, this year to 1.93 percent at the close of trading on Dec. 30. That’s the biggest increase since 2006, when yields jumped 64 basis points. The 10-year yield reached 2.09 percent in September, the highest since December 2011. The two-year rate rose 23 basis points to 0.21 percent, after being as low as minus 0.045 percent in May.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 06:39 AM

    43. Average U.S. Pump Prices Poised to Decline in 2014, AAA Says


    Drivers in the U.S. will probably pay an average of 5 cents a gallon less in 2014 than this year as refineries produce more fuel, AAA said.

    The price of regular gasoline averaged $3.49 a gallon this year, making 2013 the least expensive year to fill up since 2010, according to Heathrow, Florida-based AAA, the nation’s largest motoring club. Prices in 2012 averaged a record $3.60 a gallon and $3.51 in 2011.

    U.S. gasoline production jumped 4.3 percent to 9.72 million barrels a day in the week ended Dec. 20, the most in data going back to 1982, the Energy Information Administration reported on Dec. 27. Refiners have ramped up operations to benefit from a flood of less-expensive domestic crude oil as U.S. output reached the highest level in 25 years.

    “Our hope is that prices will continue to fall as cars grow increasingly fuel efficient and refineries expand production to take advantage of the recent boom in North American crude oil,” Avery Ash, a spokesman for AAA in Washington, said in a statement.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 06:43 AM

    44. Latvia caps years of austerity with euro zone membership


    (Reuters) - Latvia joined the euro zone on Wednesday, banking on its experience of austerity to bring it prosperity in a currency union where other economies have floundered.

    The Baltic country of just 2 million people became the bloc's 18th member at midnight (2200 GMT), taking a step further out of the shadow of neighbouring Russia a decade after joining the European Union and NATO.

    Latvia's acting prime minister, Valdis Dombrovskis, who led his country through its worst economic crisis since it left the former Soviet Union in the early 1990s, said euro adoption was an opportunity, but not a guarantee of wealth, and the country should not relax its fiscal policy.

    "It's not an excuse not to pursue a responsible fiscal and macroeconomic policy," he said after withdrawing the first euro banknote after midnight from a cash machine in Riga.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 06:45 AM

    45. World indexes finish vintage year, more gains seen in '14


    (Reuters) - U.S. stocks were set to close 2013 at record levels, with world equity markets close to six-year peaks on Tuesday, while benchmark bond yields were poised for their first annual rise since 2009.

    Ultra-easy monetary policies and an improving economic outlook worldwide led to a stellar year for stocks. Equity strategists see the gains continuing into 2014 as economic growth improves even as the Federal Reserve steadily trims its bond-buying stimulus.

    "Things still look pretty solid at the end of 2013, (and) 2014 will be a better year with less fiscal drag," said Gus Faucher, senior economist at PNC Financial Services in Pittsburgh.

    "The other thing is a better global economy. Exports will be better. Europe is coming out of recession. Growth in Asia is expected to re-accelerate."

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 06:47 AM

    46. France's Hollande offers tax-cutting 'pact' to companies


    (Reuters) - President Francois Hollande on Tuesday offered French companies what he called "a responsibility pact" to tackle unemployment under which they would reap the benefit of lower labour taxes in return for hiring more workers.

    "It is based on a simple principle: lower labour charges and fewer restrictions on their activity in return for more hires and more dialogue with trade unions," Hollande said in a New Year's address broadcast on national television.

    Hollande did not specify how he would go about reducing labour charges but it is a possibility that has been mooted under a wide-ranging reform of taxes already promised by his Socialist government for implementation during the remainder of his mandate through to 2017.

    French corporate margins are among the lowest in Europe, partly due to the high labour charges needed to fund its generous welfare state.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 07:33 AM



    ATHENS, Greece (AP) -- Greece assumes the presidency of the European Union Wednesday, starting 2014 with a promise by the government to pull the country out of a six-year recession, keep a balanced budget, and effectively end a financial crisis that rattled the euro.

    "In 2014, Greece will return to the markets and start to become a normal country again," Prime Minister Antonis Samaras said in a televised New Year's address. "After six unending, painful years, 2014 will herald the prospect of growth ... What's important is that we've avoided the worst."

    But have they?

    With most of the 240 billion euros ($330 billion) in bailout loans already paid out, Greece still has an unsustainably high national debt, faces the threat of renewed political instability, and has more than one-in-four jobless and steadily sliding into poverty.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 07:35 AM



    NEW YORK (AP) -- The stock market was unstoppable in 2013.

    A U.S. government shutdown, fear of a default, the threat of military action in Syria, big budget cuts, and a European country looking for a bailout - any number of events might have derailed the stock market. But they didn't.

    And if skittish investors jumped out of stocks, they lost out.

    "2013 would have been good year to wear noise-cancelling headphones," says Dean Junkans, chief investment officer for Wells Fargo Private Bank. "There were a lot of things that happened and the market kept moving higher."

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 07:37 AM



    BEIJING (AP) -- Chinese manufacturing activity declined in December, adding to pressure on communist leaders who have promised sweeping reforms to revive the slowing economy.

    An industry group, the China Federation of Logistics & Purchasing, said Wednesday its purchasing managers index for December declined to 51 from the previous month's 51.4. The measure is a 100-point scale on which numbers above 50 indicate increasing activity.

    "There still is downward pressure on economic growth," said economist Zhang Lijun in a statement that accompanied the report.

    A Communist Party plan issued in November promised to revitalize the economy by injecting more competition into industries dominated by state-owned companies. This week, the ruling party announced the formation of a body led by President Xi Jinping to oversee regulatory changes.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 08:02 AM

    51. China local government debt surges by 70%


    China has local government debts of 17.7 trillion yuan ($2.9tn), up 70% from three years ago, according to an official report.

    China's government asked the National Audit Office (NAO) in July to do a round-up of the debts outstanding at a local level.

    The report showed some local governments were using new loans to repay more than a fifth of their debt.

    China has a total government debt of about 58% of its economic output.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 08:06 AM

    52. New coin designs for 2014 unveiled by The Royal Mint


    Coins marking the Commonwealth Games in Glasgow and the 100th anniversary of the start of World War One will enter circulation in 2014.

    The Royal Mint has released details of the new coin designs that will feature on the 50p, £1 and £2 coins.

    The new coins will enter circulation gradually, so people will start to spot them in their change during the year.

    Five billion coins are produced at the Mint's site in Llantrisant, south Wales, every year.

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    Response to xchrom (Reply #52)

    Wed Jan 1, 2014, 09:20 AM

    53. Commemorative coins... for a WAR?!!


    Is it fascism, yet? Has any other nation ever commemorated a war in coinage, before? I don't think so. This is a new low.

    I stand corrected--the US has issued coins commemorating

    the Civil War (nothing like perpetuating the schism and rubbing it in)
    Korean War

    In our defense, these wouldn't go into circulation, but are designed and priced for collectors....

    Roman emperors would gloat over their conquered peoples in coinage.

    So there, Merkel! Consider yourself snubbed.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 09:35 AM

    54. Most Economists Say Happy New Year — Really




    As the new year begins, most economists' annual forecasts are brimming with good cheer."The economic news remains broadly encouraging," the Goldman Sachs forecasters write in their 2014 outlook. ALL THAT MEANS IS, THEIR HANDS HAVE NOT BEEN HANDCUFFED TO PREVENT AGGRESSIVE THEFT...

    And the brighter prospects are not limited to this country. "The global economy is likely to emerge in 2014 with modest growth of 3.3 percent compared with 2.5 percent this year," according to Nariman Behravesh, chief economist at IHS Global Insight, the forecasting firm.

    Most stock analysts also see more gains coming on Wall Street. JPMorgan chief U.S. equity strategist Tom Lee, who accurately predicted stock advances for 2013, says Americans are now in the midst of "a classic bull market," driven by good earnings. So, why all the upbeat forecasts? What has changed? These are among the most commonly cited factors:

    • Congress may be less of an economic nuisance. In October, Congress' failure to pass a budget led to a partial government shutdown, creating uncertainty for federal workers and contractors. But a approved in December has reduced chances for another disruption. "The drag from fiscal policy will be less, allowing underlying strengths in the economy ... to become more visible," Behravesh says.

    • Energy is becoming more abundant. As oil and gas, Americans are becoming less dependent on foreign suppliers. That's lowering energy prices and leaving more money in consumers' wallets. "Energy prices are now tilted to the downside, which implies a potential boost to real income growth," the Goldman Sachs assessment says.

    • Consumers are spending again. "The consumer picture is improving, judging from the latest and figures," Goldman Sachs says.

    • Stock prices keep heading higher. JPMorgan's stock strategy team predicts investors will see more gains as pent-up demand drives home and auto sales. Also, corporations will continue to have strong balance sheets, and central banks around the world will keep interest rates low in the new year. All of that will bolster profits. "The fundamental cornerstone of a bull market is continued profit growth," the team writes.

    • Jobs are coming back. In the U.S., the is forecast to decline from an average of 7.4 percent in 2013 to an average of 6.6 percent in 2014, "as much from weakness in labor-force growth as from genuine employment growth," Behravesh says.

    • Inflation isn't pinching consumers. Federal Reserve policymakers forecast that inflation will rise between 1.4 percent and 1.6 percent in 2014.

    • Interest rates are still low. The Federal Reserve will take steps to nudge rates a bit higher, but the change will be gradual. "We believe that a more normalized environment, where rates move toward 5 percent, may be several years away," according to Vanguard's 2014 outlook.

    Because of those positive factors, the gross domestic product, a broad measure of growth, is widely expected to rise. The Fed set its growth prediction for 2.8 percent to 3.2 percent next year. Such a pace would feel good, given that the economy mostly has been chugging along at a much slower 2 percent throughout the recovery.

    Of course, not all economists are as enthusiastic about 2014's prospects. Lindsey Piegza, chief economist for Sterne Agee, writes that growth likely will slow a bit in 2014 "because the consumer remains under pressure from a lack of quality job creation and minimal wage growth."
    But most forecasters are more in line with the optimists, including Jerry Jasinowski, an economist and former president of the National Association of Manufacturers. He says that while the economy does face risks, the good indicators are growing. Recent job gains, stock price hikes and factory output advances are making a compelling case for growth, he says.

    "You don't need to be a Pollyanna to see sunshine in those numbers," he writes in his outlook. Despite lingering problems, "the New Year looks promising."


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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 09:44 AM

    55. Federal Flood Insurance Program Drowning in Debt. Who Will Pay?




    Millions of American property owners get flood insurance from the federal government, and a lot of them get a hefty discount. But over the past decade, the government has paid out huge amounts of money after floods, and the flood insurance program is deeply in the red. Congress tried to fix that in 2012 by passing a law to raise insurance premiums. Now that move has created such uproar among property owners that Congress is trying to make the law it passed disappear.

    Caught in the middle is FEMA, WHICH provides food, shelter, money and pretty much whatever people need after a disaster. But before a disaster, FEMA helps with flood insurance — cheap flood insurance. You can buy a FEMA flood insurance policy for about half the "actuarial" rate private insurers would offer. (The actuarial rate more accurately reflects the value of a property at risk.) But now FEMA has a problem. "We are $24 billion in debt," says , who directs FEMA. Fugate delivered that bit of news to Congress' House Financial Services Committee in Washington, D.C., recently, as he tried to make the case for raising insurance rates. A string of hurricanes and floods over the past decade has drained FEMA's insurance fund. Meanwhile, people keep rebuilding in flood zones, in part because FEMA offers cut-rate prices on one-fifth of its policies. At the hearing, Fugate made it clear that this is bad policy: "The moral hazard of subsidizing risk is, we're going to rebuild right where we were, just the way it was, and we're going to get wiped out." The weird thing in this case is that Fugate was trying to convince Congress not to undo what it had just done. The 2012 law Congress passed — the — instructed FEMA to charge more realistic insurance rates that are in keeping with the rates private companies would charge. Congress said, in effect, "It's OK to stop subsidizing those policies." So FEMA did just that. In 2013, it began phasing in higher premiums — mostly for second homes and for properties that have changed hands since then. In some cases, premiums went up by thousands of dollars.

    Right away, the phones in Congress started ringing — ringing so much so that Congress called Fugate in to demand a stop to the very law it had passed. Among the most outraged was Maxine Waters — the co-sponsor of the Biggert-Water's Act. At the hearing, Waters described her law as "well-meaning," and then scolded Fugate for not coming to Congress earlier to explain just how high the premium increases would go (though they were specifically called for in the Biggert-Waters Act). "Let me just say," she told Fugate, "all of the harm that has been caused to thousands of people across the country —[who are calling us, [who are going to lose their homes, [who are placed in this position — is just unconscionable." Now Waters and other members are calling for a lengthy "affordability study" to see just how high rates might go. They also want FEMA to finish updating its to see if people who are not in a flood zone now will end up in one.

    FEMA's Fugate told Waters he doesn't think much of this plan. "If we are going to continue to do this," he explained, "if we wait until all the maps are updated, it will indefinitely delay implementation."

    "It is buyer's remorse by the lawmakers," says Stephen Ellis, who monitors the ups and downs of flood insurance for a group called . "I mean, they did the right thing," he says. "And then that kind of outraged some of their constituents, who have howled quite loudly, and now they're talking about undoing those reforms."

    Ellis says subsidized insurance from FEMA means taxpayers are footing part of the bill for people who choose to live in flood zones. Moreover, he says, artificially low premiums actually encourage people to rebuild where they probably shouldn't...Meanwhile, Congress has drafted a new bill to delay the Biggert-Waters Act of 2012. Sponsors want to hold off on rate hikes while the National Academy of Sciences spends two years studying the issue. When the NAS is done, Congress would then spend a year or so reviewing that study. Given that the Biggert-Waters Act expires in 2017, that delay could solve Congress' problem with its angry constituents.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 09:54 AM

    57. Apple says never worked with NSA on iPhone hacks




    Apple Inc has never worked with the U.S. National Security Agency and is unaware of efforts to target its smartphones, the company said in response to reports that the spy agency had developed a system to hack into and monitor iPhones...Germany's Der Spiegel reported this week that a secretive unit of the NSA, which is under fire for the extent and depth of its spying programs around the world, makes specialized gear and software to infiltrate and monitor a plethora of computing devices, including mobile phones.


    The report included an NSA graphic dated 2008 that outlined a system in development called DROPOUTJEEP, described as a "software implant" that allows infiltrators to push and pull and retrieve data from iPhones such as contact lists. Der Spiegel referred to it as a "trojan," or malware that helps hackers get into protected systems. The report, which surfaced on Sunday, did not suggest that Apple had cooperated with the U.S. spying agency on so-called backdoors.

    In a statement issued Tuesday, the NSA did not comment on any specific allegations but said that its interest "in any given technology is driven by the use of that technology by foreign intelligence targets...The United States pursues its intelligence mission with care to ensure that innocent users of those same technologies are not affected," the agency added.

    The iPhone was a relatively innovative gadget in 2008. It hit the market in 2007 and proceeded to help revolutionize the mobile phone industry.

    "Apple has never worked with the NSA to create a backdoor in any of our products, including iPhone. Additionally, we have been unaware of this alleged NSA program targeting our products," the company said in a statement.

    "We will continue to use our resources to stay ahead of malicious hackers and defend our customers from security attacks, regardless of who's behind them."

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 09:57 AM

    58. Analysis: Scarred U.S. consumers a hard sell for traditional retail




    If there was one lesson from this year's holiday shopping season, it is that many traditional retailers are having to work a lot harder to persuade Americans to open their pocketbooks. A lot of stores had to discount heavily to eke out a modest increase in sales, likely squeezing profit margins in the process. Some improvement in the U.S. economy and declines in the jobless rate, plus gains in stock and home prices, are failing to resonate with many Americans whose incomes are struggling to catch up to where they were before the financial crisis.

    But to many retail experts and economists there are other less cyclical factors at play. Consumers are spending more. Government figures show monthly personal consumption has risen for seven straight months, with November's outlay marking the fastest increase in five months. But they just are not spending in the shopping malls like they used to. And that means that, even if the economy picks up significantly, retailers of many products could still struggle.

    "We are in a something of an evolutionary process, said Bill Martin, founder of data firm ShopperTrak, which monitors foot traffic in about 60,000 retail stores. Americans are spending more online and becoming more careful about what they buy, he said. Some of this has been unfolding over a long period, although the changes might be picking up pace.

    For example, department stores have found themselves on the wrong end of trends for some time. According to data compiled by Reuters, they now capture just $3.37 of every $100 of U.S. retail spending, the lowest since records began in 1992, when the number was nearly $9. Some of that is explained by the rise of Wal-Mart Stores Inc and other big box discount retailers. But the pace of decline has picked up, with department stores losing about 0.28 percentage points of market share at an annualized rate between 2002 and 2011, compared with 0.22 in the prior 10 years.


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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 10:01 AM

    59. What a Bitcoin is really worth in India and China



    The Bitcoin saga took an unpleasant turn this December when China’s central bank banned financial institutions from dealing in the virtual currency. Bitcoin was enjoying a surge of popularity in the country; by the end of November, Chinese exchanges were responsible for almost two-thirds of worldwide traffic. The central bank’s decision sent the currency tumbling.
    Last week, Indian regulators joined the fray. Preferring ominous warnings to outright prohibition, the Reserve Bank of India issued a public advisory on the dangers of Bitcoin. The meaning was clear enough. India’s largest exchange was promptly shut down, and its operator raided by local authorities.

    Why the crackdown? The People’s Bank of China explained that Bitcoin isn’t a currency “in the real meaning of the word,” and cited the risk of money laundering. India’s central bank objected to Bitcoin’s volatility and its lack of “backing assets.” The larger problem, though, may be Bitcoin’s mobility. Virtual currencies are borderless. They can be acquired in one country and exchanged immediately in another. Since they’re not “real” money, they can get around foreign-exchange laws. And since they’re not backed by assets, there’s no easy way for governments to control them.

    Consider that Chinese citizens are forbidden from taking more than $50,000 out of their country in any given year. This policy yields strange results, such as the fact that, in 2012, 17 million Chinese made the pilgrimage to Macau. It wasn’t gambling that attracted them but rather gambling chips, which can be converted to foreign currency and then sent abroad. Capital flight has remained a problem for China in 2013, with the country’s new premier leading a campaign against corruption and the Fed’s taper creating weakness throughout the developing world. For wealthy Chinese, Bitcoin was a way of avoiding the expense — and the raised eyebrows — of a trip to Macau.

    In India, Bitcoin was an alternative to smuggling gold. The rupee’s terrible performance this year has led many Indians to run for the exits. India’s government responded by locking the doors. In August, gold imports were slapped with heavy restrictions and capital controls were tightened, preventing money from being sent or invested abroad. Perhaps this explains Bitcoin’s appeal, and why it’s seen as a threat, in China and India. Neither government has much recourse...Once mined, Bitcoins are utterly beyond the reach of regulators. The virtual currency might be many things. It might be in a bubble, as Alan Greenspan told Bloomberg in early December. (It might also be the next evolution of Paypal, as Bank of America argued the very next day.) Holding Bitcoins can be dangerous, with the price swinging by as much as 40% in a month. Paul Krugman thinks they’re evil. But in some parts of the world, Bitcoin can be a way out; and if we’re going to make sense of the crazy ride that it’s been on this year, that’s a good thing to remember.


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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 10:13 AM

    60. Hillary Clinton calls for unemployment benefits extension




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    Response to Demeter (Reply #60)

    Wed Jan 1, 2014, 02:37 PM

    67. oh, the irony. Ms. "increase the h-1b" and "outsourcing will continue".

    pssst...Hillary...don't tell anyone.

    Maybe if THEIR JOBS WEREN'T OUTSOURCED and THEIR JOBS WEREN'T REPLACED BY AN H-1B VISAHOLDER, maybe they wouldn't be unemployed!

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    Response to antigop (Reply #67)

    Wed Jan 1, 2014, 06:09 PM

    68. Oh yes, the irony.

    Back in 2007 and 08, the Florida Democratic Party was all Hillary, all the time.

    The core of her supporters was a group in our county DEC, and in particular our State Committeewoman. I was reading that the India outsourcing giant TaTa was giving Hillary major funding.

    This committeewoman had a high position at a well known national company. TaTa bought them out, and got a shitload of funds and tax breaks from the state, county and city to create jobs. The next thing they did was lay off the majority of their employees, and import people from India on h-1b s to replace them.

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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 10:15 AM

    61. How Obama can kick off the minimum-wage push




    The New York Times reported this morning (echoing the reporting of Greg Sargent and others earlier this year) that Democrats plan to campaign on raising the minimum wage during the election season. Aside from being good economic policy, raising the minimum wage is quite popular, even among moderates and conservatives. Democrats also hope it shows the party is focused on improving the economic fortunes of Americans and not getting bogged down in Beltway bickering.

    It’s a terrific idea. And there’s one way President Obama can show he takes the issue seriously: by issuing an executive order raising the minimum wage for 2 million federal contractors. This, too, is good policy, and the president is likely to get significant pressure from his left flank to do so....


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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 10:16 AM

    62. The Best-Performing Stock Market In 2013 Is Located In A South American Socialist Paradise


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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 10:22 AM

    63. Buyout kings seek U.S. partnerships as deal prices rise




    Private equity firms are increasingly seeking to partner with U.S. companies rather than buying them outright, as they struggle to find ways to put their huge piles of money to work at a time when frothy markets have made takeovers expensive. Major U.S. buyout shops, such as Blackstone Group LP (BX.N) and Carlyle Group LP (CG.O), are looking at deals such as minority investments in companies or partnerships with companies looking to make an acquisition -- types of transactions that they largely shunned before the financial crisis of 2008. Carlyle, for example, did no such deals in Carlyle Partners IV, a $7.8 billion U.S. buyout fund raised in 2005. But it ended up investing about 15 percent of its $13.7 billion Carlyle Partners V fund, raised in 2007, in such non-conventional deals. It sees potentially even more such deals for the U.S. fund it raised this year, the $13 billion Carlyle Partners VI fund. In September, for example, it agreed to invest $500 million for a minority stake in Beats Electronics LLC, the headphones company co-founded by rapper Dr. Dre.

    "You clearly need to do more of those deals to get your targeted rate of return," said Peter Clare, co-head of Carlyle's U.S. buyout group, who noted that the share of non-conventional deals could top 15 percent in its latest fund.

    Private equity executives argue non-conventional deals can be more lucrative when full-blown buyouts are expensive. Competition for them is less, as the transactions are custom-made and often do not involve auctions.

    "Once we have an investment in a company we will do everything we can to help them achieve their goals, whether it is investing more money or not," Clare said.

    While such non-conventional investments account for a small minority of private equity deals, they underscore the industry's desire to avoid the debt-fueled excesses of the 2005-2008 buyout boom in today's environment, in which cheap financing and high equity prices favor selling companies rather than buying. Private equity firms took advantage of red-hot capital markets to cash out on investments throughout the year, an approach epitomized by Apollo Global Management LLC (APO.N) co-founder and Chief Executive Leon Black in April with the phrase: "We are selling everything that is not nailed down."

    Deploying capital has been more challenging. Although private equity-backed deal volumes are up 31 percent year-on-year in the United States in 2013 thanks to megadeals such as Dell inc and H.J. Heinz Co, the number of deals went down from 1,917 in 2012 to 1,715 in 2013, according to Thomson Reuters data. At the heart of private equity's predicament is a problem of plenty. The industry ended the year with $585 billion of "dry powder" to spend in North America, the highest since 2009, according to market research firm Preqin, thanks to yield-hungry investors, such as pension funds and insurance firms, piling in amid record-low interest rates. At the same time, these firms have struggled to find enough buyout opportunities to invest in to make the 20 percent annual return they like to promise to the investors in their funds, who are known as limited partners (LPs).



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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 10:24 AM

    64. Dallas Fed’s Richard Fisher talks TBTF on EconTalk


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    Response to Demeter (Original post)

    Wed Jan 1, 2014, 10:29 AM

    65. last comment on fiscal drag for the year Posted by WARREN MOSLER



    Back in November (2012?) my forecast for 2013 was 4%, which at the time was by far the highest around. The govt was spending more than its income by about 6% of GDP, which was about $900 billion if I recall correctly. But then it cut back, first with the year end FICA hike along with other expiring tax cuts, and then with the sequesters that began in April. Consequently, the govt spent only about $680 billion more than its income, which lowered growth by maybe 2%. And today mainstream economists are saying much the same- growth would have been maybe 2% higher without the ‘fiscal drag’ of the tax hikes and spending cuts.

    So far our narratives are the same. But here’s where they begin to differ.

    They say the GDP/private sector would have grown by 4% if the fiscal drag hadn’t taken away 2%, and so without the govt again taking away 2%, the private sector will resume its ‘underlying’ 4% rate of growth. I say the GDP/private sector would have grown by 4% that included the 6%/$900 billion net spending contribution by govt, if govt hadn’t cut back that contribution to $600 billion. That is, they say the govt ‘took away’ from the ‘underlying’ 4% growth rate, and I say the govt ‘failed to add’ to the ‘underlying’ 2% growth rate that still included a 4% contribution by net govt spending. And, in fact, I say that if the govt had cut its deficit another 4% to 0, GDP growth might have been -2% (multipliers aside for purposes of this discussion), which is the actual ‘underlying’ private sector growth rate. And that’s due to the ‘unspent income’ of some agents not being sufficiently offset by other agents ‘spending more than their income’.

    Furthermore, I say that unless the ‘borrowing to spend’ of the ‘non govt’ sectors steps up to the plate to ‘replace’ the reduced govt contribution, the output won’t get sold, as evidenced by unsold inventory and declining sales in general, throwing GDP growth into reverse, etc.

    So because we have different narratives, we read the same data differently. They see the 1.7% Q3 inventory build as anticipation of future sales, while I see it as evidence of a lack of demand. They see the Chicago PMI’s large spike followed by 2 months of decline as a strong 3 month period, while I see it as a sharp fall off after the inventory build. They see the fall off in mortgage purchase apps as a temporary pause, while I see it as a disturbing fall off in the critical ‘borrowing to spend’ growth maths. They see October’s shut down limited 15.2 million rate of car sales followed by November’s spike to 16.4 million as a return of growth, while I see the two month average a sign that growth has flattened in this critical ‘borrowing to spend’ dynamic. And likewise with the weakness in the Pending Home Sales, Credit Manager’s Index, Architectural billings, down then up durable goods releases, new home sales, the slowing rate of growth of corporate profits, personal income, etc. etc.

    And they see positive survey responses as signs of improvement, while I see them as signs they all believe the mainstream forecasts.

    And not to forget they see the increase in jobs as evidence of solid growth given the rapidly growing % of sloths, and I see it flat as a % of the population.

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    Wed Jan 1, 2014, 11:22 AM

    66. The Strange Case of American Inequality MUST READ!



    Unless something goes unexpectedly wrong in 2014, the level of real per capita GDP in the United States will match and exceed its 2007 level. That is not good news. To see why, consider that, during the two business cycles that preceded the 2007 downturn, the US economy’s real per capita GDP grew at a 2% average annual pace; indeed, for a century or so, the US economy’s real per capita GDP grew at that rate. So US output is now seven years – 14% – below the level that was reasonably expected back in 2007. And there is nothing on the horizon that would return the US economy to – or even near – its growth path before the 2008 financial crisis erupted. The only consolation – and it is a bleak consolation indeed – is that Europe and Japan are doing considerably worse relative to the 2007 benchmark.
    The US economy’s annual per capita underperformance in 2014 will thus amount to $9,000. That means $9,000 per person per year in consumer durables not purchased, vacations not taken, investments not made, and so forth. By the end of 2014, the cumulative per capita waste from the crisis and its aftermath will total roughly $60,000. If we project that forward – with nothing visible to restore the US to its pre-2008 growth path – at the annual real discount rate of 6% that we apply to equity earnings, the future costs are $150,000 per capita. If we use the 1.6% annual real discount rate at which the US Treasury can borrow via 30-year inflation-protected Treasuries, the future per capita costs are $550,000. And if we combine the costs of idle workers and capital during the downturn and the harm done to the US economy’s future growth path, the losses reach 3.5-10 years of total output.

    That is a higher share of America’s productive capabilities than the Great Depression subtracted – and the US economy is 16 times larger than it was in 1928 (5.5 times larger in per capita terms).
    So, unless something – and it will need to be something major – returns the US to its pre-2008 growth trajectory, future economic historians will not regard the Great Depression as the worst business-cycle disaster of the industrial age. It is we who are living in their worst case. One would think that such a macroeconomic disaster – one that robs the average American family of four of $36,000 per year in useful goods and services, and that threatens to keep Americans poorer than they might have been for decades, if not longer – would focus policymakers’ minds. One would think that America’s leaders would be clambering to formulate policies aimed at returning the economy to its pre-2008 growth path: putting people back to work, cleaning up underwater mortgages, restoring financial markets’ risk-bearing capacity, and boosting investment. But no. Part of the reason is that, at the top, there is no crisis. According to the best estimates, the income share of America’s top 10% probably crossed 50% in 2012 for the first time ever, and the 22% income share that went to the top 1% was exceeded only in 2007, 2006, and 1928. The incomes of America’s top 10% are two-thirds higher than those of their counterparts 20 years ago, while the incomes of the top 1% have more than doubled.

    Those who fall into the top strata thus regard themselves as doing well in the current US economy. And indeed they are. Only those who spend more time talking to competent macroeconomists than is healthy know that they could be doing even better if the economy were rebalanced at full employment. So the absence of distress among America’s top 10% and its top 1% – and hence political pressure for measures to return the economy to its pre-2008 growth path – is understandable. But, for everyone else – roughly 90% of the US population – there has been no jump in income share relative to ten or 20 years ago to offset what now looks to be a permanent lost decade. On the contrary, the bottom 90% has continued to lose ground.

    When income inequality began to rise in the 1980’s and 1990’s, those of us who cut our teeth on the long march of North Atlantic history expected to see a political reaction. Democratic politics, we thought, would check the rising power of a largely parasitic economic over-class, especially if its influence caused governments to fail to live up to their commitments to provide full employment with increasing – and increasingly shared – prosperity. After all, in early-nineteenth-century Britain, growing inequality caused by the Industrial Revolution gave rise to movements for government regulation in the interests of the middle and working classes, and for a rebalancing of real incomes away from rich landlords. Similarly, the Great Depression produced enormous political pressure for reform and change (often for destructive and dangerous change, to be sure, but pressure nonetheless). Why can’t America launch similar movements today? To the extent that this has become a valid question, most Americans should be as worried today about the quality of their democracy as they are about the inequality of their incomes.

    Read more at http://www.project-syndicate.org/commentary/j--bradford-delong-asks-why-americans-are-not-clamoring-for-polices-that-would-leave-90--of-them-better-off#Dvtd0oRG3jo6VZzp.99

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