You are currently browsing the category archive for the ‘easy credit’ category.
On July 1st the interest rate on student loans rises from 3.4 percent to 6.8 percent of this year.
One year ago, the trillion dollar mark was crossed for the amount owed and required to be paid back for a student’s education..
3.4 to a 6.8 is a doubling… Just on a gross scale, off a Trillion dollars, the interest per year is jumping from $34 billion to $68 billion. On a $16 trillion GDP, that is nothing. But when you look at other figures, that jump has shocking consequences for the world-wide banking system.
The post graduate boom is usually what drives our economy. New cars, New electronics, New houses. Dining out. Spontaneous purchases. A study by the New York Federal Reserve shows that graduates are living austerely to pay of their gigantic debt, most of which are more costly than the mortgages owned by middle America. Asking someone to buy a house while paying off their educational loan, is equivalent to asking then to buy a second house while still paying off their first, How rich does one have to be in order to do that? What amount of yearly income is required to do that? +$125,000? Does this mean there will be no net new buyers of houses for 20 years? Anyways, after July 1st, there will be $34 billion less with which to purchase houses.
The Department of Education predicts a default rate of 13.4%… Off a trillion that means $130.4 billion dollars will be the amount defaulted. $130.4 billion.
So adding the two together, the upcoming shock on our economy will now cost $198 billion. Poof, right out the door, $198 billion. Gone from our economy.
Tran Union a credit reporting agency says the data in it’s files show that almost half, or 43.5% of student debt is in deferment. In dollars off that trillion total, that would amount to $435 billion dollars of debt not being paid in a timely fashion.
Particular concern must be paid here, because more than half of college graduates under the age of 25 are either unemployed or underemployed — the highest rate in 11 years, according to an analysis of government data.
Putting the two together, we have half of those required to pay $435 billion defaulted, who are either under or unemployed.
As we saw with mortgages, when people can’t pay, there is no notice, They just walk away.
A nation depends upon its newest generation to lead them forward with energy and enthusiasm, long after the previous ones are tired and ready for rest. This generation is coming out on the playing field, weighed down like knights of old, in ancient armor…. The upcoming football game does not look promising… Their best 100 yard dash is just under 10 minutes.
Not likely one would say today. But, hear me out. This session the corporate financial targets that got hit, all missed their revenue. That means people did not spend as was planned, but some fat on the corporate skeleton could be cut to compensate. That fat is not there for the next report…
The economy has taken a shock from $85 billion sequestered despite only $10 billion having been applied already. The $75 billion cuts are coming.
Even though the US market is the only safe place to put ones money today, the rest of the world is as unsafe as ever. Since there is no where else to go with one’s money if he US market dives,… panic will begin very quickly….
The possibility is rather good for a 30-50% correction in the US Stock market. I would still stay out and remain in Treasuries if I were you….
Roosevelt’s Inauguration 3/4/33
Courtesy of CSpan.
Franklin Delano Roosevelt’s Inauguration Day. (It was the last before the 20th Amendment moved it to January 21st.) It is hard for us to see though the old film clips but here are some additional notes from H.W. Brand’s biography of Franklin Roosevelt, titled “Traitor To His Class”….
In 1933, the pervading bitterness was similar to that experienced by today’s Republicans. They had talked themselves into believing Herbert Hoover was a shoo in. Instead it was a rout for Roosevelt. Hoover was not a social person to begin with, and his awkwardness continued though out the inauguration….
It was customary at that time, to have the outgoing president host a dinner for the incoming President. Hoover refused, and instead, settled on an awkward afternoon tea… When Mr. Roosevelt tried to mitigate the awkwardness and offer Hoover an early exit, Hoover aggravated the discomfort. “Mr. President” said Roosevelt. “as you know it is rather difficult for me to move in a hurry. It takes me a little while to get up and I know how busy you must be. So please don’t wait for me.” Hoover stood up and affixed Roosevelt with a glare. “Mr. Roosevelt. After you have been President for a while, you will learn that the President of the United States waits for no one…” and stormed off, leaving his wife to say the goodbyes..
Roosevelt began what later becoming tradition, of spending the morning at a private service, this time at St. John’s Episcopal Church. At 11 o’clock the car swung by the Mayflower Hotel and picked up both Franklin and Eleanor, then swung by the White House to pick up Hoover. Hoover surveyed the White House grounds then climbed in and scarcely looked at the Roosevelts…
As the open car pulled down Pennsylvania Avenue, Franklin politely acted like the cheers were for the actual president at that moment, the outgoing one, and declined to acknowledge them… But within blocks the fiction became unattainable and he began acknowledging the crowd by tipping his silk hat and smiling and the anger radiated by Hoover, intensified stronger.
In the Capitol he watched the swearing in of the Senators, and the Vice President John Nance Garner and watched what would be the last adjournment of a Lame Duck Congress. At one o’clock all moved outdoors and in front of a crowd of 100,000, began the ceremonies. Roosevelt was uncharacteristically serious. Many of his staff were surprised by his somber character…
As you can see in the beginning of the clip above, upon taking the oath of office Franklin took the unusual step of repeating back the entire part read from the Constitution, before saying “I do.”
This is a day of national consecration and I am certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our nation impels.”
Hoover was standing next to Roosevelt and his dour expression became a grimace as he anticipated another attack upon his administration… But Roosevelt proceeded with words of encouragement and hope.
“This great nation will endure as it has endured, and will revive and prosper. Let me assert my firm belief that the only thing we have to fear is fear itself.– nameless, unreasoning, unjustified terror, which paralyzes needed efforts to convert retreat into advance.”
This line did not resonate as it does now, as the famous line we now know from our study of history. At the time, it was patiently false. Americans did have a lot to fear. Banks were closed. There was massive unemployment. Hunger was widespread, and a financial system could barely get up onto its knees.. If you notice in the clip above, to the line… there is no applause.
More noticed and featured in the following day’s headlines, were these lines assailing “unscrupulous money changers” of Wall Street as those responsible for America’s plight. “Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply”.. “Primarily this is because the rulers of the exchange of mankinds’ goods have failed through their own stubbornness and incompetence.” Waxing eloquently, “the money changers have fled from their high seats in the temple of our civilization. We may not restore that temple to the ancient truths…”
Other applause lines: “our greatest primary task is to put people to work.” This would be accomplished in part by the “direct recruiting of the government itself; treating the task as we would the emergency of war.”
“We must frankly recognize the overabundance of population in our industrial centers and, by engaging on a national scale in a redistribution , endeavor to provide a better use of the land for those best fitted for the land.”
He calls for “definite efforts to raise the values of agriculture products” for insistence that the “federal, state, and local governments act forthwith on the demand that their cost be drastically reduced”, and he spoke for an “adequate but sound currency”… He set the agenda with this: “The international trade regulations though vastly important, are, in point of time and necessity, secondary to the establishment of a sound national economy.”
If you didn’t get the gist of it, Roosevelt’s words were purposefully vague. They were crafted to inspire confidence that action was forthcoming, without belying that on one yet knew what action or actions would begin to take place. “We must act, and we must act quickly.”
“I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crises– broad executive power to wage a war against the emergency as great as the power that would be given to me if we were in fact invaded by a foreign foe.“
No president, not even Lincoln, had spoken boldly of the power he would require. The American people were demanding much, and they deserved all that government could accomplish for them.
“They asked for discipline and direction under leadership. They have made me the present instrument of their wishes. In the spirit of their gift….. I take it.“
He had an amazing 100 days.
There is a huge irony that on this same date, 80 years later, we are facing our first full day of sequestration; the exact opposite of what Franklin Delano Roosevelt ran against, won against, and fought against the entire length of his presidency. And his policies would still be in effect today. if it weren’t for the Republicans and the presidency of George W. Bush.
Courtesy of Bloomberg
Bloomberg published a report showing how a Federal subsidy of 0.8th of one percent, costs the US Treasury $83 billion dollars a year.
Ironically we are arguing about how to fill almost that exact amount with sequestration. $83 billion; either by taxes or cuts.
But what Bloomberg points out, by deducting the subsidies from the reported profits of the top five banks, that without the subsidies, there would be no profits.
The bonuses being paid to all top bank executives, are our money that we are subsidizing. The dividend payouts being received by every stockholder, is a give-you-something-free right from the US Treasury….
So, how does it make you feel, Mr. Middle Class, to have bankers flaunting $43 million paychecks, fleeced out of taxing you, while you pay $3.00 for every automatic teller transaction….
Oh, I’m sure you don’t mind. These banks are too big to fail… They bankrolled almost the entire Republican Party, and now, as long as Boehner runs the House, they are completely protected and can keep living off your subsidies…. You know what? They probably won’t even say thank you… Because in their eyes, their bonuses? They built that…..
Republicans, so devious … you gotta love them.
If ever there was a reason showing how the low taxes we currently have cause pain and suffering and damage our economy it is this….
The New York Stock Exchange, after 2 Centuries, 2 Centuries mind you… has lost it’s independence… 2 Centuries of History, kaput. gone. changed…
It is now owned by…. IntercontinentalExchange Inc.
Who? IntercontinentalExchange Inc.! Uh …. who is that? What? You don’t know who the IntercontinentalExchange.Inc is? Oh, my, where have you been?
Right here. I’ve been right here. And I don’t know who the IntercontinentalExchange Inc. is… So, please, enlighten me…
Well, the IntercontinentalExchange Inc didn’t exist when you were learning about finances. If anything, it was known as the Continental Power Exchange when it was taken over by Jeffrey Sprecher, ICE’s founder, in the waning years of the Clinton Administration.
Then in May 2000, IntercontinentalExchange (ICE) was established, with its founding shareholders representing some of the world’s largest energy traders. The company’s stated mission was to transform OTC trading by providing an open, accessible, multi-dealer, around-the-clock electronic energy exchange. The new exchange offered the trading community better price transparency, more efficiency, greater liquidity and lower costs than manual trading.
In June 2001, ICE expanded its business into futures trading by acquiring the International Petroleum Exchange (IPE), now ICE Futures Europe which operated Europe’s leading open-outcry energy futures exchange…
In 2003, ICE partnered with the Chicago Climate Exchange (CCX) to host its electronic marketplaces…
In January 2008, ICE partnered with TSX Group’s Natural Gas Exchange, expanding their offering to clearing and settlement services for physical OTC natural gas contracts…
In 2011, ICE and NASDAQ OMX Group joined forces to bid against Deutsche Börse after the latter announced a $9.5 billion deal to merge with NYSE Euronext. The two U.S. bidders ultimately withdrew after their bid encountered regulatory antitrust resistance. The proposal, would have brought nearly all U.S. stock listings under a merged Nasdaq-NYSE…..
Oh, and did I say the ICE was based in Atlanta? No wonder you didn’t recognize the name IntercontentalExchange Inc. But you probably are familiar with the letters ICE…
IntercontinentalExchange plans to fund the cash portion of the acquisition with a combination of cash and existing debt. It added that the addition of NYSE will help it cut costs by firing lots and lots of people.
So 2 centuries of independence comes to an end. Bought up by a company barely twelve years old…..
How? By having tremendous amounts of ICE profits that are untaxed. Prior to this decade, we had taxes siphoning a large part of this cash back into our economy and back into paying off our national debt. Now we don’t, thanks to the Republican Tax Cuts passed by a Republican Congress and signed by a Republican President.
These companies make money almost tax free…
This purchase of $8.2 billion, is simply the extra money this ICE exchange had left over after expenses, money that normally would have gone into taxes. It is funded by loans approaching interest rates of 0%.
This $8.2 billion will create no new jobs. It will cost jobs. Had that $8 billion been taken in taxes as it would have been at any other time since the Great Depression, that $8 billion might have gone to hiring more firemen, hiring more policemen, hiring more air traffic controllers, hiring more teachers, hiring more accountants, hiring more IRS agents, hiring more SEC investigators, all of which shop at grocery stores and buy more cars…and more houses.
The Republican policy of not taxing the wealthy at higher rates, no only yields the misallocation of valuable investment, but also the elimination of more jobs.
Here is a direct example of why NOT taxing the wealthy at very high rates, cost America jobs instead of create them…
The philosophy that “Taxes are good” applies when used on the top earners… The higher the tax rate, the better for everyone else. If you want a thriving economy, having multiple stock exchanges is better than one person controlling all. And what better way to achieve that, than tax away all ICE’s profits…..
That money needs to flow through our economy and can’t. Because it is getting wasted buying up companies by other companies that are simply being allowed to keep, …way too much money.
200 years. Gone, just like that….
1) It grows the economy.
2) It moves wealth back towards the middle class.
3) It makes investing in one’s employees, profitable again.
4) It grows jobs.
5) It makes investing in physical capital better than betting on the future worth of something.
6) It increases the entire nation’s purchasing power.
7) It make investing in America’s infrastructure a very profitable option.
8) It makes wind energy, solar energy, and green energy all more profitable.
If you have money just sitting there, not being re-invested into the economy, raising the tax rate WILL cost you. In fact that is the whole idea; force you to invest in something that grows jobs…
I think we could still use some more jobs, don’t you?
In fact the sole reason Republicans are strenously arguing against raising Marginal Tax Rates, is because they know this! They will lose seats in 2014 or 2016 because of the booming economy when this rate hike goes through….
In reality, there’s remarkable consensus among mainstream economists, including those from the left and right, on most major macroeconomic issues. 92 percent of top-ranked economists say the ‘stimulus’ lowered unemployment.
Here are 6 areas that economists agree on….
- The Recovery Act (‘Stimulus’) was a success, part of a historic turnaround.
- The American Jobs Act should be passed at once.
- The economy needs MORE federal spending, not LESS
- Repairing and upgrading our infrastructure is job 1
- Lower tax rates on top incomes make things worse, not better, as in:
- The income gap, which fueled this crisis, is a big drag on growth.
Every Republican who disses the Stimulus Funding is simply dead wrong. Every Republican who does not even have an idea of what they are talking about… Job growth went from -800,000 per month under Bush to an average net gain of 160,000. That’s a turnaround of nearly 1 million jobs per month! A historic achievement that gives tangible meaning to change we can believe in. 92% of economists or 100% of those NOT on Romney’s payroll, concur.
Moody’s Analytics estimated the American Jobs Act would create 1.9 million jobs and add 2% to gross domestic product.
The Economic Policy Institute estimated it would create 2.6 million jobs and protect an addition 1.6 million existing jobs.
Macroeconomic Advisers predicted it would create 2.1 million jobs and boost GDP by 1.5 percent.
Goldman Sachs also predicted it would add 1.5% to GDP.
Policy advisers to Presidents Reagan, Bush and Clinton, Nobel prize winners, IMF and World Bank analysts, private forecasters, Goldman Sachs, Forbes…The Consensus is clear: our economy needs MORE Federal spending, not LESS. The world’s top economists warn austerity policies are pushing the world economy toward disaster.
The American Society of Civil Engineers is calling for a 5 year, $2.2 trillion dollar program to repair, rebuild and update our infrastructure, beginning immediately. That’s $400 billion a year, every $1 billion dollars of which will create 23,000 jobs. That translates into 9.2 million jobs a year. Romney wants to spend the same amount on our military. Our military is already larger than the twenty next armies combined….
Tax cuts on top incomes likewise produce no return. A study by the Congressional Research Service reviewed tax, investment and growth data beginning in 1945, the first year for which they’re available. Their analysis showed tax reductions on top incomes do not increase investment or growth. In fact, growth has consistently been more robust during periods when top tax rates were higher.
Instead of making the economic pie larger, the CRS found, reductions on top tax rates change how the pie is sliced, concentrating income at the top. (ie the kavipsian Economic Theory) Romney’s approach leads us on the road to Greece.
The effect of income inequality on economic growth is negative. But inequality, especially of the U.S. variety, is bad for growth. The country grew faster in the decades after World War II — when it was also growing together, with all groups seeing increases in income. But those at the bottom were growing the most. those in the middle, ordinary Americans who work for a living, let alone those at the bottom, are getting a smaller slice of a pie that is smaller than if we had continued growing as we did postwar. The net result is disheartening: Most Americans are worse off today than they were 15 years ago.” Income inequality in America peaked in 1929 and in 2007 – just before massive economic contractions. It is about to again and will, if Romney’s 5 Trillion tax cut is allowed to progress unimpeded…..
One year ago, September 8th, 2011, the greatest President in our lifetime (you may not agree now, but you will, you will) laid out the American’s Jobs Act.
The plan included stimulus spending in the form of immediate infrastructure investments, tax credits for working Americans and employers to encourage consumer spending and job growth, and efforts to shore up state and local budgets to prevent further layoffs of teachers, firefighters, police officers, and other public safety officials…..
IT NEVER BECAME LAW.
One month later, the GOP blocked the bill in the Senate, preventing the creation of more than a million jobs and the added growth that multiple economists predicted would occur if the bill passed…..
1 million jobs, Republicans like Mitt Romney, Paul Ryan, Eric Cantor, Mitch McConnell, and every single person running this election under the banner of Republicanism… cost you..
1 million jobs. One million jobs.
Jobs bills are seeds that usually sprout and give fruit in other jobs. If ten people in your community suddenly get jobs, they will spend some of that in your community. It could be groceries. It could be gasoline, It could be the Indian liquor store. It could be Radio Shack. But they get it. When the government creates jobs, we get the benefit.
Republicans killed 1 million jobs. Why? So Obama would not get re-elected.
Where would unemployment be now?
12.5 million unemployed minus 1 million employed equals= 11.5 million unemployed. Today our rate would be with no additional growth in the private sector, 7.4% (11.5/154.6= 7.4%)
Republicans are the reason our economy sucks. They didn’t want Obama to do his thing…. and grow those jobs…..
Here is what others said the Jobs Bill, killed by Republicans so Obama wouldn’t get elected, ……
–Moody’s Analytics estimated the American Jobs Act would create 1.9 million jobs and add two percent to gross domestic product.
–The Economic Policy Institute estimated it would create 2.6 million jobs and protect an addition 1.6 million existing jobs.
–Macroeconomic Advisers predicted it would create 2.1 million jobs and boost GDP by 1.5 percent.
–Goldman Sachs estimated it would add 1.5 percent to GDP.
Republican Tea Partiers have also cut 700,000 jobs since 2010. Public-sector job cuts also cause job loss in the private sector, for a couple of reasons. First, public-sector workers need to use inputs into their work that are sourced by the private sector. Firefighters need trucks and hoses, police officers need cars and radios, and teachers need books and desks. When public-sector jobs are lost, it stands to reason that the inputs into these jobs will fall as well, and indeed research shows that for every public-sector job lost, roughly 0.43 supplier jobs are lost.
And they blame Obama? Gee, what a great president we have who has to work with garbage and still, does what is right for the American people. 96,000 brand new, never before, created jobs in July…. Surely we live in the times of the “Best President Ever”
If America can just wipe out every single Republican on the ballot, whose party is solely responsible for the crash in 2008, the fall in 2009, the crises in 2011… today’s sluggish growth… we would get roaring.
Republicans can do no right. At least when it comes to your money…
Their money? Oh, no problem.. “I’ll bet you $10,000 dollars, right here….”
The headlines should read:
OBAMA GROWS 96,000 JOBS DESPITE REPUBLICANS CONTROLLING HOUSE.
Now that, is a proper headline.