YouTube – Blame the Unions for Everything!

In Black America, The Depression Rolls On – The latest snapshot of the American job market, released by the Labor Department on Friday, confirms what most ordinary people already knew without need of a government report: Little is improving quickly or broadly enough to dislodge the anxiety that has taken up long-term residence in many communities. The unemployment rate fell to 9.4 percent in December, from 9.8 percent the month prior. But that had little to do with people actually finding work, and much to do with the jobless simply giving up and halting their searches, dropping out of the statistical pool known as the labor force. A deeper dive past the headline numbers reveals a reality that ought to trigger national alarm but hasn’t for the simple reason that it is already embedded in the country we have unfortunately become: the Divided States of America.  Among white people, the unemployment rate dropped in December to 8.5 percent — hardly acceptable, but manageable were the government spending more to expand a fraying social safety net and generate jobs. For black Americans, the unemployment rate was 15.8 percent.

 

ECB Throws Portugal a Temporary Lifeline – The European Central Bank threw Portugal a temporary lifeline on Monday by buying up its bonds, traders said, as market and peer pressure mounted for Lisbon to seek an international bailout soon. A senior euro zone source told Reuters on Sunday that Germany, France and other euro zone countries were pushing Portugal to seek an EU-IMF assistance programme, following Greece and Ireland, in a bid to prevent contagion spreading to much larger Spain, the fourth biggest economy in the euro area. The interest rate premium on Portuguese sovereign debt fell on Monday after rising sharply late last week as traders said the ECB intervened to buy government bonds on the secondary market. "They’re buying five-years and 10-years in Portugal, whatever people are offering really,"

Greece borrowing rates hit new record  — Greek bond yields have hit another record high, exceeding benchmarch German bond rates by 10 percentage points for the first time. Monday’s record occurred on the eve of a euro1.5 billion ($1.96 billion) auction of 6-month treasury bills, considered an important test of market sentiment. Greece has said it wants to return to bond markets this year, but the interest gap, or spread, on 10-year bonds compared with the German issue reached a worrying 1,001.1 basis points amid renewed worries about some EU nations’ struggle to handle debt loads.

Fed Paper Details Benefits of Asset Purchases — The Federal Reserve’s asset buying program has boosted growth, lowered unemployment and warded off what almost certainly would have been a descent into a deflationary price environment, new research published by the Federal Reserve Bank of San Francisco argues. The paper,  made available on the bank’s website Friday, attempts to accomplish something many have wanted to see, which is a firm quantification of the impact of central bank’s asset buying program. The paper argues the totality of what the Fed is doing with asset buying has had a salutatory impact on the economy. In the program’s first phase, the Fed purchased $1.25 trillion in mortgages, along with hundreds of millions in agency and Treasury debt. It followed that with a decision to reinvest the proceeds of maturing mortgages into Treasurys. Then, late last year the Fed said it would buy an additional $600 billion in longer-dated government bonds.
 

The Long Swim – How the Fed Could Become Insolvent  –  In a world of fiat money, a central bank can always print more of its own currency. So unless it takes on debt or other obligations denominated in something other than its own currency, it’s impossible for a central bank to become formally insolvent. Nonetheless, it can become functionally insolvent, void of any ability to command resources or influence markets. That’s what happened in Zimbabwe, with a hyperinflation.  As of  today, we’re nowhere near such a catastrophe. But there is another way, long before hyperinflation destroys its currency, for a central bank to become functionally insolvent. It’s a trap into which our own Federal Reserve System has already stuck its foot and now seems to be getting ready to stick its neck.

Germany May Soften Objections to Fund Increase as Bonds Drop (Bloomberg) — Germany may soften its opposition to expanding the region’s 750 billion-euro ($966 billion) rescue facility as Belgium’s political deadlock sent borrowing costs surging and the European Central Bank bought Portuguese bonds. The cost of insuring against default on European sovereign debt climbed to records and European stocks fell amid concern Portugal is next in line for a bailout. Portuguese securities reversed declines after three traders with knowledge of the deals said the ECB purchased the government’s bonds. With European governments including Portugal and Spain due to borrow at least $43 billion this week, attention is shifting to whether Europe is doing enough to stem the crisis. For the first time, investors view western European government bonds as riskier than emerging-market debt, the Markit iTraxx SovX Western Europe Index of credit-default swaps showed last week.

Jobs: Stalled Out in 2010 – The January 2011 jobs report, covering the U.S. employment situation through December 2010, painted pretty much the same picture as every other jobs report has since March 2010: the post-2007 jobs recovery has stalled out, with no sustained improvement observed in the U.S. employment situation during the past nine months.  Through December 2010, the total employment level of the United States is 7,378,000 less than what it was at the pre-recession peak in November 2007, which is about the same as what was recorded in June 2010 and October 2010.  Compared to the previous month of November 2010, the number of individuals counted as being employed increased by 297,000. Breaking down that small improvement by age, we find that the numbers of employed teens (Age 16-19) and young adults (Age 20-24) declined by 95,000 and 61,000 respectively, while the number of older workers (Age 25+) rose by a robust 392,000

  The Paycheck Data CEOs Don’t Want Us to See Corporate America is working feverishly behind the scenes to smother a new federal mandate, enacted last year, that just might revitalize the drive to roll back excessive executive pay. Lobbyists for Corporate America messed up big-time last summer. They let slip into law, via the 2,300-page Dodd-Frank financial reform bill, an obscure provision that could give future lawmakers a powerful lever for ratcheting down excessive CEO pay.Now those lobbyists are pushing hard to undo their mistake — and progressives, led by AFL-CIO president Rich Trumka, are pushing back.  The winner won’t be clear until later this year when the Securities and Exchange Commission, the federal watchdog agency over Wall Street, releases the final regulations that will enforce the Dodd-Frank legislation. That legislation includes an assortment of provisions that impact executive pay. One of these — “say on pay” — guarantees shareholders a regular opportunity to cast “advisory” votes on the CEO pay packages that corporate boards produce.

 Business Group Prepares Plans to Counter Unions – It has already changed its name once during its two-month existence and one prominent board member, Richard D. Parsons, the chairman of Citigroup, has already resigned, possibly under pressure from public employee unions.  But the powerful real estate moguls, bankers and business executives behind the Committee to Save New York are moving ahead and expect to run their first television commercial early next week supporting Gov. Andrew M. Cuomo’s campaign to oppose tax increases, reduce the size of government and reform Medicaid and public employee pensions.  The governor has already called for a one-year salary freeze for state workers.  Even as the unions representing state employees gird for a possible showdown with Mr. Cuomo, Save New York members spent this week collecting $10 million in pledges for what they describe as an educational campaign that would be a “counterweight” to the expected union campaigns opposing drastic cuts.

 
Misery With Plenty of Company – Consider the extremes. President Obama is redesigning his administration to make it even friendlier toward big business and the megabanks, which is to say the rich, who flourish no matter what is going on with the economy in this country. (They flourish even when they’re hard at work destroying the economy.) Meanwhile, we hear not a word — not so much as a peep — about the poor, whose ranks are spreading like a wildfire in a drought.  The politicians and the media behave as if the poor don’t exist. But with jobs still absurdly scarce and the bottom falling out of the middle class, the poor are becoming an ever more significant and increasingly desperate segment of the population.  During a conversation I had this week with Peter Edelman, a professor at Georgetown University Law Center and a longtime expert on issues related to poverty, he pointed out that the number of people in that tragically dismal category has grown to more than 17 million. How do you imagine a family of four would live if its annual income was $11,000 or less?
 
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