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Quite often you can see things otherwise invisible when you look at a big picture.. For example if you were flying from San Fran to Bangor, ME, no one in your interactions along the way would be able to tell you what was happening across the entire route in real time.  You simply trust that and hope all will end well.

But if you are at a console watching air traffic control across the entire United States, and noticing how suddenly those little plane shapes disappear whenever they cross the Mississippi anywhere between Memphis and Cedar Rapids, you know from that anomaly that something must be wrong… You don’t know what, but only you see it from looking at the macro picture, a hole developing into which those entering, never return.

Which is why some of us like to look at macro math.  Basically it is stuff that no one else thinks is important and for most of daily living, they are correct.  But if you are used to looking at the same picture every day and one day it is different, a person familiar would notice that.  No one else would.  Imagine waking up one morning and walking through your house and quickly looking up from your footsteps, seeing that portrait you have hanging on the wall has its subject facing left, instead of right… You would be unnerved, right?  Yet a visitor to your place, would not notice.

Here is where we are. We are already in a free-fall towards another financial crises which if not addressed quickly, will repeat 2008-9 and possibly be bigger. It is strongly possible that this summer quarter’s financial reports leaking out in October, will cause a crash similar to what happened 8 years ago….

I’m sure this is a surprise to you as it was me. I sure you are as skeptical of my telling of it, as you would be my insisting I saw my portrait whose image had been flipped during the night..  Main stream’s financial media and both political parties are still asleep and dreaming of the promise that the economy is buoyed and is roaring back.  Just like how we all get surprised when acquaintances of ours, actively healthy people, suddenly confide they’ve been diagnosed with terminal cancer.  That is the cruel side of life. Sometimes the outside does not properly show the hidden condition on the inside.

What has not been shown in all our financial reports, is the massive amount of quantitative easing buoying these glowing results.  QE for short, is where government prints money costing nothing, and then spends it on something. They could loan it.  They could donate it.  They can buy stock with it. They can do anything with printed money that can be done with circulated money… And in a recession, this policy works… (which is why we do it)… Businesses get loans and stay afloat; banks get loans and keep their doors open. But the last recession was 8 years ago, and across the world’s financial markets, certain actors still are doing it…

So in our newscasts we appear to have a great recovery just before the elections. Our stock market is high, our unemployment is quite low, and our corporate profits continue to rise.  Is their any other way to measure it?

But does it make a difference to you if the reason the stock market is high because many of the stocks are now owned by government entities involved in quantitative easing, bought at low times to boost prices keeping plummeting crashes from continuing?  Does it make a difference that corporate profits are continuing because of massive increases in corporate debt primarily taken on to avoid showing a negatively balanced profit sheet, debt often owed to government entities which bought them up when no one else would to help keep their prices high… Does it make a difference if I told you that despite all the newly minted private sector jobs now being generated at reduced wage levels from skeletons of the older jobs now gone, the entire total income now being generated by all those working, is less per person than was before the great recession of 2008-9?  But you knew all this, right?

When put all together, the bottom line is that our economy is actually in a recession if measured by “real” corporate profits being down,  by “total amount of generated wages” impacting the economy being down,  by corporate “revenue streams” across our business world, being down,  by our “stock market minus QE infused purchases” being down,… but the supports provided by QE hide these facts from us all.  And it is not just here in the US. It is even a bigger global problem. There is the EU who prints money for every Southern European economic crises.  There is Japan who prints money to prop up everything. There is the ongoing problem in China. There is Britain who is now pumping to keep Brexit from collapsing its economy. Globally in just one quarter, we witnessed QE soar to never-before-seen levels. and it hasn’t stopped climbing.

Have you noticed how even with bad economic news, stocks go up?  That should not be — a reality which is obvious to grasp when parsed this way….

“Uh-oh, looks like you are going to lose a lot of money/  Oh! No problem, I’ll just buy more stocks at a higher price then..”  Time in and time out, this is exactly what happens.

QE is buying those stocks… and we’ve reached the level where there are so many, there is no one there to sell them too… Bond yields are negative and yet they keep buying.

“We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low interest rates, with some 30% of global government debt at negative yields, combined with quantitative easing on a massive scale” —Chairman Lord Jacob Rothschild of Rothschild Investment Trust

Asset Purchases Global
Notice how across the globe, governments are now buying up $180 billion a month or $30 billion per month higher than all the QE in the world at the peak of the Recession (2009).

Now jump to the crux of the problem.

Negative Interest

Did you notice the climb of negative yield debt just in the past 8 months. Aren’t negative yields dangerous?

Can be. Already one third of all sovereign debt yields negative interest rates. That means that investors are effectively paying borrowers to lend to them. The Bank of Ireland and Royal Bank of Scotland already charge depositors interest, as opposed to paying depositors interest.   That’s bizarre. Not to mention unsustainable.

At the current rate of decline, the entire global market will be in subzero land by the end of the year.

 

Around 45% of the global “fixed income” market is now “compromised” by central bank buying.” 

This is compounded by the new fact that nearly half of the bond buyers in the world don’t care about price because they print money out of nothing.   So what does this look like? Take Japan, for example.

Japan’s biggest banks are running out of room to sell their government bond holdings, pushing the central bank closer to the limits of its record monetary easing.   Finding willing sellers is a headache for Governor Haruhiko Kuroda as the central bank prepares to review policy at next month’s board meeting, amid growing concern among economists that he has few tools left to revive the economy. Record bond buying has already saddled the Bank of Japan with more than a third of outstanding sovereign notes, draining liquidity from the market and making it more volatile.

As proof of this trend, on August 9th, the Bank of England couldn’t find enough bonds to buy.

In plain terms it is as if you were now living solely off borrowed money and constantly getting new loans just to make the payments on your past due old loans and then suddenly, not being able to get any new loans anymore……

As we can see from the first chart above, Japan’s “need” is near $90 billion a month, which means once the loans potential dries up… there is an $90 billion dollar hole into which everything collapses…

Don’t underestimate what is happening here, the BoJ is buying a lot more than just sovereign bonds.

The Bank of Japan’s controversial march to the top of shareholder rankings in the world’s third-largest equity market is picking up pace.  Already a top-five owner of 81 companies in Japan’s Nikkei 225 Stock Average, the BOJ is on course to become the No. 1 shareholder in 55 of those firms by the end of next year, according to estimates compiled by Bloomberg from the central bank’s exchange-traded fund holdings.

 

Japan may be the extreme example, but they are hardly alone.  

The balance sheet assets of the world’s six major central banks hit a new all-time record, increasing to $16.9 trillion from $4.9 trillion 10 years ago, a 239 percent increase.  All the major global central banks are buying up financial assets to the point that global liquidity is drying up. In other words, the central banks are becoming the markets.  Markets have become so distorted by central bank activity that they are no longer transmitting very useful information about the economy at all.”

Bad as this may sound, this is still not the real problem  Here is the REAL scary problem. These low negative rates in safe bonds are sending buyers out in droves to the unsafe markets to find any yield, even small ones of 5%.  In these markets the risk looms so large for so small a payoff, that one day’s trade can wipe a years of yield right off the books.

Volume in emerging markets have soared double their previous record in volume sold since March.

emerging markets 2016

But that is just one example

Junk Spike

Junk bonds, rallied 48% this year, even while junk bond defaults have hit five year highs.

Corporate debt.
Debt Corporate

Corporations are issuing record amounts of debt, and investors and QE are gobbling it up.

Companies worldwide are poised to raise more than $100 billion so far this month, the most for the period in Bloomberg data going back to 1999…. The average yield on sterling-denominated corporate bonds has fallen to a record-low 2.19 percent, according to Bank of America Merrill Lynch index data. Globally, the average is near the lowest ever at 2.3 percent, the data show.

More than $2.3tn of dollar-denominated debt has already been issued by companies and banks since the year began, including three of the ten largest corporate bond sales on record, Dealogic data show.   Which makes perfect sense…until you factor in that corporations are defaulting on debts at a near crisis level.

corporate defaults

The year is half over and we are already at the 60% level of 2009……….

According to a new report from Standard & Poor’s Global Ratings, corporate debt around the world is massively on the rise and could skyrocket to $75 trillion from the $51 trillion it’s at now…. What’s more – S&P estimates that two out of five corporations are highly leveraged (meaning they’ve taken on too much debt). About 43% to 47% of corporations globally are at a financial risk level.

Debt to EBITDA

EBITDA = (Earnings Before Interest,Taxes, Depreciation, Amortization)
Far, far above the 2009 recession levels…

But why are corporations the world over, all taking on debt at the same time (we are just finding out now because reports are filtering out from June 2016)?….

Because operating cash flow doesn’t cover it.

 

In Q2, companies generated $425 billion in operating cash flows. Only $151 billion was invested in fixed assets. The lack of investment is the bane of the US economy. And:

 $110 billion went into dividend payments.    

$61 billion was used for takeovers (OK, that’s down from last year)    

$137 billion was blown on financially engineering their earnings via share buybacks.

So operating cash flows were $35 billion short. That happened quarter after quarter. Hence debt ballooned to 32% of total assets at non-financial firms, the highest since 2008, another propitious year.

As you can see in order not to disappoint shareholders, corporate entities are taking on low interest debt simply to keep their profits looking pretty for the short term.  As seen above one could easily avoid debt by

  • a) cutting dividend payments,
  • b) stop taking over other businesses, or
  • c) stop buying back your stock to increase earnings/share…..

No, but none of these superfluous options got cut back, debt was taken on to cover them…

(As an aside, if anyone is wondering what is still wrong with the American economy, the number of whopping total of $61 billion applied to takeovers compared to an anemic $151 billion into capital investment, says it all… )

You must be wondering!  With all this bad news, why is the stock market climbing so precipitously?  Who would put money into a struggling company laden with debt (32% of assets) which cannot meet profit targets without taking on even more debt?  Let me guess. You? You are going to go out and buy some debt laden stock right now, correct?  Of course, you’ll put your whole retirement plan on it, correct?

Well, yes. If you have anyone minding your money, a mutual fund perhaps, I’m sorry, but this has already happened to you.  For in the short term, it has become the only way to get any yield at all.

Yield Comparison

Today’s precarious stock market scenario only makes sense when compared to negative bond yields… From the comparison chart above, you can see that this is a new phenomenon.  Accounting for the negative bond yields, today, you make 70% more in stocks than you do in bonds…

With a bubble stretched this thin, and with ample covering up so much bad financial news, the danger becomes very real that a tiny pinprick from somewhere, whether coming from student loans, junk bonds, emerging market bonds, corporate bonds, equities, or sub-prime car loan bonds, causes negative losses more than the ability of one to pay……

When disaster finally happens there will be another rush for the exits everywhere, and that is where the fatal flaw in the system will be exposed: there is no liquidity in the markets….

The World Bank estimates the ratio of non-performing loans to total gross loans in 2015 reached 4.3 percent. Before the 2009 global financial crisis, they stood at 4.2 percent.     If anything, the problem is starker now than then: There are more than $3 trillion in stressed loan assets worldwide, compared to the roughly $1 trillion of U.S. subprime loans that triggered the 2009 crisis….

Mr. Businessman calls up his bank… I need a loan right now, quick!   ….. Sorry says the bank. We’re out of money…..

The one solution?  Pretty painful.. Raise interest rates,.  which will result in downward pressure globally on all portfolios, dropping overinflated stock like its hot, but… will dothe necessary job of stopping corporate debt-load from continuing to grow and return us to more accurate reporting. Raising the interest rates act like chemo therapy to the economy, providing long-term healing by actually killing off parts of the living body to keep a malignancy from spreading to healthy tissues… When given the choice, very few of us choose to die forthright, instead resign to taking the chemo.  As we struggle with the decision, at the end of our thought process we all succumb to choosing that option at the end, coming to the realization that either way, we die, and at least therapy provides us the option of more time….

These implications hitting in October are anyone’s guess to their impact on this election year.

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Even the most callous, ignorant, unconcerned citizen can’t ignore this. One can blame all Congress for it’s inaction. This Congress going on vacation now, has worked the least of any Congress in modern history up to this point. Just 142 public bills have become law in this current Congress (2013-2014) – down from the 906 the 80th “Do-Nothing” Congress passed in 1947-48, and the 333 that were enacted during the Newt Gingrich-led 104th Congress of 1995-96.

When a major crises hits our border, and is all over the air waves for two weeks, and every Republican goes before a TV camera and blames the President for causing the crises, and the President gives Congress his plan to solve it and it passes the Senate and the House REFUSES to vote on it, and instead offers their OWN contorted bill, which gets pulled because there are not enough votes in their OWN party to EVEN pass it…

It is obvious where the problem lies. Those people blaming Obama, who are so dysfunctional, they can’t even get THEIR OWN legislation passed in THEIR OWN controlled chamber….

It shows exactly where the dysfunction lies… No one buys a car that won’t run. No one keeps a refrigerator that won’t work. No one put up with a spouse who doesn’t help contribute to the running of the house… The dysfunction lies solely with this ONE party in this ONE house…

It played exactly the way the shut down the government last October. America, you have to stand up and do something about it… You can only blame yourselves…..

 

 

WORSE-THAN-CHRYSLER-1-1024x791WORSE-THAN-CHRYSLER-23-1024x791
Courtesy of Newark’s True Residents

If anything is clear over how things have moved with the establishment of the power plant across the public’s eyes these past nine months, it is how the Newark Public is being manipulated by outside interests.

When one finds why they are being manipulated, they must first ask why?   Why did you not tell us the truth up front in the beginning?

In the beginning for those who an still remember, there was  just a Data Center, that to insure constant coverage, would have a small auxiliary clean natural gas fired do-generator to supply electricity to the facility in case of power failure….

Why were we lied to?

The answer is simply, like the reason anyone lies, ever, that if they told us the truth they would never get the power plant opportunity.

The truth is that the largest gas fired generator in the state will be built 200 yards away from someone’s back yard.  The truth is that one of the largest polluters in the state, will be within a mile of a University of over 15,000 students.  The truth is that  two miles from Delaware’s largest single output smokestack,  lies a Main Street that has just seen over 100 million in renovations, both public and private… The truth is, that the air of Northern New Castle County, will now be dominated entirely by  a burner larger than any single burner  in Millsboro, or Foxmoor, or anywhere else in the country….  This one  is right in the middle of town.

So of course if the truth had been told, it wouldn’t pass…. Duh….   Why are you shocked, shocked you were lied to?

Silly Newark people.  What did you expect?  Openness?  Honesty?  C’mon.  Were you all just born yesterday?

So you lost two close fought battles….

The US lost Pearl Harbor and Subic Bay,  but signed the Armistice in Tokyo Harbor.  The Allies lost all mainland Europe, but ended the war in the middle of Berlin…   So don’t even think this is over.  The last meeting in Newark showed some interesting opportunities….

One.  Those supporting the power plant have used all their resources.  Ads,  mysterious PAC’s,  back-room deals,  imported activists,  bribes?, sponsors, promoters,  all the best that money can buy… and they have just barely squeaked by with very narrow victoreis…

Two. These opponents are just getting warmed up.  At their advantage is the feeling  of a whole city, a whole county that will have to breathe the results of this decision for 75 years hence…   The information, or truth, is on the side of the opponents.  That this will be killing you seventy five years from now, is a very effective argument…  It is an argument that seems distant if glimpsed from far away, but one which grows in importance with every step closer to that mark… Except for 50 assorted jobs,  all  short-termed economic benefits will be gone in 3 years.

Here is where it stands.

Short Term Gain at the price of Long Term Suffering….

Fact: if Newark does choose to go forward with this power plant it will pay for its consequences for the rest of its life. Liken it to this scenario…..

Imagine two teenagers exploring each  other for the first time.  Making out, the usual things, and  trying to figure if they want to go all the way….  Hormones are flowing and the thought processes have pretty much been shut up into a box….  They decide to go for it, and take off their clothes, and jump into the bed and continue making out… Then just as one of them swings over and gets on top,  the other see the rash….

Newark is there now; it has just seen the rash…  (It’s in the images up top, if you still don’t “get it”.)  The cost of going forward will, like the rash,  last forever.   Question is, will just the sight of it dissuade Newark from continuing its momentary psychological fantastical rush? Don’t know. Can’t say.  That is up to Newark.   But there are a lot of people out there in society today who are presently wearing rashes and wish they weren’t, is all I will say….

But it should not be lost that the opposition has put up everything they have, and still it barely came out of the last confrontation with more than  a draw.  Once it truly becomes apparent to those locals deciding this issue, that they will become Newark pariahs if they continue supporting TDC, the decisions currently being made will fall in line differently. Right now to those deciding, that vision is not crystal clear. If the power plant opponents are truly serious, it would seem that a door to door campaign with red signs in hand, handing out the charts above, and asking permission to put signs in each property owner’s yards,  would be their most effective weapon towards keeping that lifetime rash away from Newark….

Call it a public education campaign if you want,   but if so  it is one that bypasses our media-whores too afraid to turn away free cash for each trick they get to turn….

 

 

 

The bill entering law this session is very different from that of last session.

Here is the original bill:

This Act would increase the minimum wage to not less than $8.00 per hour effective July 1, 2013, and not less than $8.75 per hour effective July 1, 2014. If the federal minimum wage becomes higher than the Delaware minimum wage, the Delaware minimum wage would increase by $1.00 above the federal minimum wage….

Here is the amended version that passed the Senate last year…… which dropped the rates by a half a dollar, and excluded the possibility that Delaware could be over the Federal Minimum Wage…

“(a) Except as may otherwise be provided under this chapter, every employer shall pay to every employee in any occupation wages of a rate i) not less than $7.75 per hour effective January 1, 2014 and ii) not less than $8.25 per hour effective January 1, 2015. Upon the establishment of a federal minimum wage in excess of the State minimum wage, the minimum wage in this State shall be equal in amount to the federal minimum wage, except as may otherwise be provided under this chapter.

The House Amended it this year, primarily to update the dates by 6 months.

AMEND Senate Bill No. 6, as amended by Senate Amendment No. 2, by deleting on line 3 of Senate Amendment No. 2 the text “January 1, 2014” and substituting in lieu thereof the text “June 1, 2014”. FURTHER AMEND Senate Bill No. 6, as amended by Senate Amendment No. 2, by deleting on line 4 of Senate Amendment No. 2 the text “January 1, 2015” and substituting in lieu thereof the text “June 1, 2015”.

Then came the first Republican torpedo, later stricken…. to poke multiple holes in the minimum wage, thereby making it a minimum seive. Allowing for the payment of $5.81 per hour to the following….

(e) A wage no less than 75-percent of the minimum hourly wage required under § 902(a) of this Title shall be paid to the following:

(1) employees under the age of 18; and

(2) employees during their first 180 consecutive calendar days of employment with the employer; and

(2) employees employed in a seasonal capacity.”

Here is the real Republican torpedo. (Defeated naturally like everything Republican in this wonderful state) to extend implementation by half a year.

“(a) Except as may otherwise be provided under this chapter, every employer shall pay to every employee in any occupation wages of a rate (i) not less than $7.75 per hour effective January 1, 2015; and (ii) not less than $8.25 per hour effective January 1, 2016. Upon the establishment of a federal minimum wage in excess of the State minimum wage, the minimum wage in this State shall be equal in amount to the federal minimum wage, except as may otherwise be provided under this chapter.”

Then the third Republican attempt at poking holes in the minimum wage to allow businesses to exploit child and migrant labor by paying them $5.81 an hour….

e) A wage no less than 75-percent of the minimum hourly wage required under § 902(a) of this Title shall be paid to an employee satisfying any of the following:

(1) is under the age of 18; or

(2) is within the employee’s first 180 consecutive calendar days of employment with the employer; or

(2) is employed in a seasonal capacity.”

As it stands now, the minimum wage will rise to $7.75 per hour on June 1, 2014, and then again one year later.  On June 1, 2015, the minimum wage will be $8.25.. unless the Federal wage is passed at a higher amount:  $10.10….

But the real question is this:  how is it remotely possible that we still have 16 people in the civilized world, much less in our Delaware legislature, who still think it is ok to pay $5.81 for minimum wages therby putting Delaware in a slot between Slovenia and Greece on a chart of international minimum wages….

How is it possible that Blakely, Briggs-King, Dukes, Gray, Deborah Hudson AGAIN!!!!, Q. Johnson, Kenton, MIRO, Outten, Peterman, Ramone, D. Short, Smyk,  Spiegelman, Walker, Wilson, are still living in the 1990’s back when $5.81 was considered the barest acceptable minimum wage?  Roll back time 20 years… Sure, no problem say these 16.

Greece.  These people want us to be Greece…. GET RID OF THEM!  GET RID OF THEM ALL….. 🙂   (it is an election year, you know?)

What if McDonald’s, Wal*mart, Papa John’s, and other companies whose wealth is made off the backs of sub-standard wages, had to pay for each one of their employee’s food stamps and Medicaid costs?

It would be similar to our Unemployment tax… Essentially we ( the State of Delaware’s Employment Services) would state that you had “x” amount of employees on Medicaid and Food Stamps and therefore you must pay this higher premium so we can care for them…. To someone like Costco, they would say since you had very few employees on Medicaid and Food Stamps you get to pay a much lower rate into the pool…

As with unemployment, companies who cost the state more by firing with impunity, pay a higher rate into the fund than companies whose employees very rarely ever have to file for unemployment benefits…

Apply the same to Medicaid and Food Stamps…..  it is simply putting the cost to society into the right account.  Something accountants have to do all the time when going through a companies books….

Today's Tea Party

Image Courtesy of HannaBarbara Productions.

Delaware Liberal has running commentary here…… 

Delaware already has data centers.  Each has 5 people per shift and operates across 3 shifts so roughly 24 per each are employed… So  those 24  jobs added to the Newark economy, need to be balanced against the amount of money a loud data center will drive away.  Does it lower home value?  One would think, and would that total lowering of home values due to a “twenty four hour conversation”, cost the city more than would 24 jobs?  Most likely, yes.

Secondly, Newark Delaware has recently had a boom of building activity.  Main Street West, as well as Delaware Avenue, and don’t forget the University construction on Loering Street.   How much increase did all of New Castle County’s businesses get uplifted from all that activity? Building the power plant will employ less.

So when the lobbyists begin promising jobs, remember, in a data center, there are not that many jobs.  Computers run themselves.

Furthermore, data centers have issues with getting good help on board.

At a roundtable of Data Center managers, several problems were evident. Good people don’t stay; they jump shift quite often.

One reason they don’t stay is because of job pressure– the pressure to keep data centers on line and up and running all the time. One thing goes wrong, they lose their jobs.  Therefore they are on the constant lookout for centers that have the means to avoid those interruption, and therefore provide a higher level of security.

What is known as densities, has increased over the past 5 years immensely.. That is the number of transactions per minute.  They are way up due to technological advancements.  Which means one small one half-second glitch, would wipe out data for one half of the United States of America .

The roundtable also dipped into carbon emissions.  Data Centers use a lot of electricity.  More than a town.  A data center must have a constant front against accusations it is damaging the environment worse than anything other than a coal plant…

The perfect employee for a data center does not need a college degree nor does he need certification in computers. Actually someone who hacks games and can bypass securities and download copyrighted material, is the perfect candidate recommended to work inside a data center.  Sort of turns the world on it’s end, doesn’t it?

So Newark. here is the bottom line.  What do you want to do?

Do you want a 240 Megawatt gas turbine power plant next to your domicile, or don’t you?  You will have a few people with bacon grease hair, all selling you how great having jobs will be.   Just remember they are selling!  Just like that guy who promises you the car you buy, can fly to Japan and back.  Both are selling.

Looking across the nation, whenever a company comes in, they always say they will hire 200+.  If they have their own power plant, it actually is between 30 and 50.  In Delaware, the  bank’s data centers themselves, usually run a crew of 24 on the average.

So 24 kids making $50,000 nets $1.2 million.   If nearby houses lose $10,000 in asking price due to the data center’s twenty-four hour conversation, it would take 120 houses to suck that gain right out of the air.  Then every single other house selling under its estimate as well,  pulls Newark further into a hole worse off than it is today…..

120 Homes are basically two streets worth.

There are over 100 streets within a radius of one mile from the power plant…

This will create a net loss for Newark, unless the taxes paid by the data center more than make up for the lost revenue the depression of house values will cause over the next 75 years…

But that is just calculations, and calculations don’t mean anything.  The bottom line, Newark, is what do you want to do?  Do you need more jobs?  More traffic?  More power outages?  More noises?  More carbon dioxide? More aggravation?

Don’t be intimidated by the bacon grease lobbyists.  They usually only interact with members of the General Assembly who get intimidated rather easily.  Stand up to them if you wish.  They are just people hired to paint only one side of an issue in glowing colors.  Doesn’t mean we have to believe them, especially when we have the Internet that can tell us the truth with two clicks… 🙂

Bottom line, it is what you want to do.  Choose to fight it, and if there are enough of you, …. it is not going in….. No one wants to take the blame for depreciating Newark’s house values by $10,000 a pop, if you make it an issue…

This philosophy is at the core of America’s current demise.  Unless it changes, reverts back to caring about others and realizing we are only as good as our weakest link,  I ‘m afraid the writing is on the wall as far as America’s future prosperity goes…

Anyone to who says the fault of America is its firemen who are paid too much, it’s police force who retires too well, it’s workers who are too wealthy, it’s teachers  who do too little, is our number one enemy and should be eliminated just as any terrorist would…

Terrorists bring down buildings.  These people ruin great civilizations.

All four postal unions sent a joint letter to Senate Majority Harry Reid on Aug. 5 expressing “utter dismay” at the introduction of S. 1486, the postal bill co-sponsored by Sen. Tom Carper (D-DE) and Sen. Tom Coburn (R-OK), the chair and ranking member of the Senate Homeland Security and Governmental Affairs Committee.

The bill continues the disastrous policy of mandating massive pre-funding of retiree health benefits and provides for major downsizing measures to pay for it, the letter notes.

In case you haven’t followed, Congress requires the Post Office to make inordinately huge pension-plan payments, for reasons which nobody can really understand.   In the final analysis, USPS pensions are a government obligation, and it doesn’t make a huge amount of difference whether they come out of a) a well-funded pension plan, b) a badly-funded pension plan, or c) just out of US government revenues.

A 2006 Congressional mandate requires the agency to “pre-pay” into a fund that covers health care costs for future retired employees. Under the mandate, the USPS is required to make an annual $5.5 billion payment each year for over ten years, through 2016. These “prepayments” are largely responsible for the USPS’s financial losses.

No other business prepays for all employee’s actual medical hospital bills 20 years from now when they retire… It’s crazy actually. Lets assume you will be in a nursing home at $120,000 a year and you will (let’s be nice), live 10 years… Therefore it will cost you $1.200,000. So, assuming you are currently 53, giving you 12 more years of work left, we would take $100,000 of your income every year for the next 12 years….

Think you’d go broke? Do you know any business that assesses themselves so harshly? Of course not. No one would assess themselves that harshly. But Congress did assess the postal service that harshly. Congress forced this huge payment, which takes money out of running the business to be sure, just like you losing $100,000 a year takes money out of you.

Obviously the unions are upset. For to be able to make the payments on these huge pre-payments, they are cutting people’s pensions and benefits to pay for it. Imagine working 40 years and retiring tomorrow with no pension, so those retiring in 20 years hence, will be fully funded? They ave a right to be mad.

Here is what Senator Tom Carper proposed.

  • Destroy 80,000 full- and part-time jobs after a one-year delay, by eliminating Saturday mail delivery and give the Postmaster General authority to eliminate additional delivery days in the future;
  • Slash tens of thousands of additional jobs after a two-year delay, by allowing USPS to reduce delivery standards and close hundreds of mail processing facilities and thousands of post offices;
  • Mandate the elimination of door-to-door delivery, threatening at least 16,500 additional jobs, and
  • Impose “cruel and discriminatory” changes to the Workers Compensation program that would leave injured federal workers vulnerable to impoverishment when they reach Social Security retirement age.

“This massive downsizing and the bill’s assault on postal employee benefits are not necessary,” the letter says. “They are being driven by the irrational retiree health financing policy that no other business or agency would adopt. The Postal Service has already pre-funded decades of retiree health premiums, more than any other enterprise in America. Indeed, USPS has already set aside an estimated $49 billion for such premiums, approximately 50 percent of total expected costs over the next 90+ years.”

Do you think they’re a little bit angry?  Do you think they’re a little bit justified?

“The 30 members of the Senate who have co-sponsored S. 316, the Postal Service Protection Act of 2013, have taken the right approach. That bill (Bernie Sanders )would strengthen the Postal Service, promote innovation and, most importantly, resolve the retiree health and pension policies that have crippled the Postal Service in recent years,” it says.

Bernie Saunders bill is aimed at promoting the prosperity of the Post Office, as well as those who work for it.  Tom Carper’s bill, which insists on imposing the $5.5 billion penalty, is aimed at promoting the prosperity of financiers and banks.  After all, who do you think, gets commissions investing off that $5.5 billion?

Banks = Delaware = Carper

That is why a Senator from little ole Delaware is in the heart of kicking  down the US Post Office.    Makes more sense now, doesn’t it?

 

Courtesy of Western Pennsylvania Healthcare News

I haven’t been paying attention.  Thank Goodness Steve has.