by ilene - August 30th, 2014 3:15 pm
By Patrick Cox
Godzilla, Zombies, and Cultural Coping Mechanisms
Before the Internet, there were libraries. We still have libraries, of course, but they were a lot more important a half century ago, before the Web brought the totality of human knowledge and art into our homes and phones. In my mind, at least, the now archaic libraries of the past century were a lot more fun than the sterile stripped down semi-electronic versions common today.
There are still some libraries with multistoried labyrinthine complexes of overcrowded shelves where you can get lost in knowledge, but they’re pretty rare. I hesitate to admit it but, prior to the Web, travel for me always involved searching out the most interesting and hopefully antiquated libraries whenever I traveled. I’ve spent a lot of hours wandering through bookshelves waiting for a book title to pull me into some subject that I didn’t even know existed.
The Japanese culture and history section often pulled me in so I was exposed to theories, at a very young age, about the cultural significance of Gojira, translated as Godzilla in English. Essentially, it’s proposed that Godzilla was Japan’s way of dealing with the combined and lasting emotional impact of the bombing of Hiroshima and Nagasaki.
Godzilla first appeared in full form in the 1954 movie, Gojira. I think there is truth to the belief that the giant monster that towered over and destroyed Japanese cities was a metaphor for nuclear weapons that could be psychologically compartmentalized. In the world Godzilla inhabits, a giant, destructive lizard would be the scariest thing possible. By dealing with Godzilla in art, the Japanese dealt with the reality of nuclear destruction. In fact, the plot of the original movie had it that Gojira was created by American nuclear weapons testing so the connection is direct.
When the Cold War brought the fear of nuclear weapons to the West, Godzilla crossed the Pacific and entered American theaters and televisions. The horror of nuclear weaponry resonated with humanity as a whole more poignantly than any other weapon has in the past. Prior to the advent of the bomb, the only weapon to have such a revolutionary impact on warfare was the gun.
The widespread adoption of
by ilene - August 30th, 2014 1:49 pm
Courtesy of Mish.
Obamacare greatly expanded Medicaid coverage, but there is a hidden gotcha that may come back and haunt your heirs for benefits you receive from age 55-64.
This is not new news, but few read and understand the “fine print”.
In a warning about the “fine print” and in response to Moral Dilemma: Should a Libertarian Who Does Not Need Food Stamps, but Qualifies for Them, Take Them? reader “TL” writes …
Your friend Steven may want to carefully research taking Medi-Cal benefits.
Medi-Cal, and many other state Medicaid programs include a ‘claw-back’ provision for recovery of costs incurred by the state to provide medical care. While there is much variation in particulars from one state to another, the bottom line is these costs include a monthly ‘administrative fee’
The ‘claw-back’ mechanism functions via the state placing ‘liens’ on individual assets at the point the Medicaid recipient reaches age 55, then recovers the money at the point the Medicaid recipient dies by ‘seizing’ the money from the estate.
When first put into effect, these ‘claw-back’ provisions were primarily intended to recover costs to the state of providing long term nursing home care for older recipients.
ObamaCare’s expanded Medicaid has, of course, now waived the assets portion of the ‘means test’. But under current law, those assets are subject to ‘claw-back’.
At the moment, the monthly ‘administrative fee’ amount for Medi-Cal is $611. Those who sign up for Medicaid may not be doing themselves any favors.
Medi-Cal Clawbacks and Liens
The California Healthcare Foundation explains the rules in Estate Recovery Under Medi-Cal
Medi-Cal estate recovery refers to state action to reclaim certain Medi-Cal costs from the estates of beneficiaries after their death. This program, which has been in place for decades, has received renewed attention from policymakers because of reports that some individuals newly eligible for Medi-Cal as expanded under the Affordable Care Act (ACA) may not enroll for fear that their house and assets could later be seized.
Moral Dilemma: Should a Libertarian Who Does Not Need Food Stamps, but Qualifies for Them, Take Them?
by ilene - August 29th, 2014 10:53 pm
Courtesy of Mish.
Here’s the moral dilemma of the day:
Suppose you are a staunch Libertarian, doing reasonably well and you don’t need food stamps. Yet, under perverse rules, you qualify for them. Should you take them?
Reader Steven faces that exact question. Steven writes …
In response to your article 40% of U.S. on Welfare; Obamacare Expands Welfare by 23 Million; More on Welfare Than Full-Time-Employed I confess my own moral dilemma.
I am the beneficiary of trusts left to me by my parents. They are not huge, but they sustain me and my children. I prefer to spend time with my kids rather than pursue regular employment.
Until the beginning of this year, I was purchasing my own health insurance under a high deductible plan, that cost nearly $300 per month. It had risen steadily from $169 when I first obtained it two years ago. On December 31, my plan was essentially made illegal, with another plan costing nearly $600 put in its place.
I didn’t have that much of a medical budget so I cancelled the plan. Three months later and in desperation for coverage, I spoke with an insurance agent who was sure, based on what I was telling her, that I would not qualify for Obamacere subsidies, but I would qualify for Medicaid which was a “better’ program as it covers more services. She told me to march down to Medicaid with all my documentation and apply for coverage, which I did.
Because my trusts make all the money, my personal income is well below poverty line. Nevertheless I live quite comfortably. All the same, they eliminated the asset test for both Medicaid and food stamps, and am now receiving both.
I told my social worker the truth. I do not want to deal with a benefits fraud rap.
Because I have two dependent teens in my home, I now receive almost $500 per month for food in addition to the Medicaid coverage, which is pretty convenient. You should see the look on the cashiers’ faces when, after paying for my food with the EBT card, I then pay for the non-food items with an American Express card, or even my black Visa card.
On the minus side,
by ilene - August 29th, 2014 10:28 pm
Submitted by Tyler Durden.
While back in May Obama promised America's mission in Afghanistan was over, and all US troops would leave the country by the end of 2016, the "unintended" consequences of the US presence in this favored by al-Qaeda country will haunt America for a long time. And especially New York, where according to a new report by the Department of Mental Hygiene, the number of people who died from unintentional heroin overdoses in New York City last year was the highest in over a decade.
As WaPo reports, in New York, "where the overall rate of drug overdose deaths has dramatically risen since 2010, there is a national problem playing out across the city’s streets. The number of overdoses involving heroin in the city has significantly increased since 2010, accounting for more than half of New York City’s overdoses last year. And more than three-quarters of the overdoses in the city involved an opioid of some kind."
The number of heroin overdose deaths has risen every year since 2010, as the number of deaths has more than doubled to 420 people last year from 209 just three years earlier:
Some more on the ethnic and socioeconomic distribution of heroin-related deaths:
These overdoses are significantly impacting neighborhoods where the poverty level is the highest:
The Bronx and Staten Island were the boroughs where the most heroin overdoses occurred, but the situation worsened in Queens. That borough — which had trailed the other four in 2011 and 2012 — saw the rate of heroin overdoses more than double last year.
As has been the case for years, the rate of overdoses is the highest among white residents. But the rate has skyrocketed among Hispanic residents, more than doubling from 2010:
… and by age group:
Another particularly troubling trend noted by the Health Department was the increased rate of overdoses seen among younger New Yorkers. The age bracket with the biggest increase in heroin overdoses was people between 15 and 34, though people 35 to 54 still
by ilene - August 29th, 2014 6:33 pm
Earlier this month, Retail Sales missed expectations for the 3rd month in a row, essentially flat on the month. As Doug Short rhetorically asks 'how much insight into the US economy does the nominal retail sales report offer?' With the release of the CPI data, we can judge this in 'real' terms (adjusted for inflation and against the backdrop of our growing population)… and the picture is anything but healthy.
The "Real" Retail Story: The Consumer Economy Remains at a Recessionary Level
How much insight into the US economy does the nominal retail sales report offer? The next chart gives us a perspective on the extent to which this indicator is skewed by inflation and population growth. The nominal sales number shows a cumulative growth of 168.0% since the beginning of this series. Adjust for population growth and the cumulative number drops to 114.7%. And when we adjust for both population growth and inflation, retail sales are up only 24.8% over the past two-plus decades. With this adjustment, we're now at a level we first reached in September 2004.
Let's continue in the same vein. The charts below give us a rather different view of the U.S. retail economy and the long-term behavior of the consumer. The sales numbers are adjusted for population growth and inflation. For the population data I've used the Bureau of Economic Analysis mid-month series available from the St. Louis FRED with a linear extrapolation for the latest month. Inflation is based on the latest Consumer Price Index. I've used the seasonally adjusted CPI as a best match for the seasonally adjusted retail sales data. The latest retail sales with the dual adjustment declined 0.1% month-over-month, and the adjusted data is only up 0.9% year-over-year.
Consider: Since January 1992, the U.S. population has grown about 25% while the dollar has lost about 42% of its purchasing power to inflation. Retail sales have been recovering since the trough in 2009. But the "real" consumer economy, adjusted for population growth is 3.9% below its all-time high in January 2006.
by ilene - August 29th, 2014 3:22 pm
Submitted by Tyler Durden.
Faith that the future will be better than the present is slipping, as despite President Obama's demands that Americans not be "cynics," a new report shows there is a major lack of confidence that the next generation will have it better than the last one. As WSJ reports, most strikingly, only 16% of respondents agree that job and career opportunities will be better for the next generation than for their own – a drop from the 56% who were optimistic about this measure in 1999 and down even from the 40% who agreed in November 2009, well into the recession.
In addition, a majority of those surveyed believe the recession permanently altered economic conditions in the U.S.
The numbers, while measuring individuals’ feelings rather than more objective measures such as employment or income, paint a picture of a workforce scarred by personal experience with unemployment or close proximity to others who suffered.
And despite more than six consecutive months of companies adding 200,000 or more jobs, workers are still pessimistic about their prospects for finding decent work. “Only 20 percent of currently employed workers feel extremely or very confident they could find another job if they were laid off,” the researchers found.
* * *
by ilene - August 29th, 2014 2:29 pm
Don’t be surprised to lose if you don’t make an effort at being competitive. And if you go out of your way to make yourself less competitive, expect to lose. This is simply common sense.
But for years, the US has been enacting tax policies that sabotage its global economic competitiveness.
It’s like trying to get in shape for a marathon on a McDonald’s diet. (Speaking of McDonalds, check out this funny video spoof of what their commercials should really look like.)
Here are two major reasons why the US is lagging in the global economic marathon:
- The US has the highest effective corporate income tax rate in the developed world (see chart below).
- Unlike most other countries, which only tax domestic profits, the US taxes the earnings of foreign subsidiaries of US companies when the money is transferred back to the US. This has had the effect of US corporations keeping over $1.9 trillion in retained earnings offshore to avoid the crippling US corporate income tax.
These “worst in the developed world” tax policies are clearly hurting the global competitiveness of American companies.
Being deemed a “US Person” for tax purposes is like trying to swim with a lifejacket made of lead.
It should come as no surprise that an increasing number of productive people and companies are seeking to shed this burden so they can keep their heads above water.
At this point, it’s more than just a trickle—it’s an established trend in motion.
And I don’t see anything that would reverse it. On the contrary, given the political dynamics—ramped-up spending on welfare and warfare policies, as well as an “eat the rich” mood—taxes have nowhere to go but north. And that means the exodus will continue.
Three Cheers for Walgreens
Over the past couple of years, dozens of high-profile US companies have moved abroad (or seriously considered it) to lower their corporate income tax rate and to access their offshore retained earnings without triggering US taxes.
by ilene - August 29th, 2014 1:53 pm
Courtesy of Igor Alexeev via OilPrice.com
Last week, Ukrainian Prime Minister Yatsenyuk pushed a bill through the Verkhovna Rada that would see his country’s gas transportation system sold off to a group of international investors. The provisions of the law would permit the transit of natural gas to be blocked. This decision may hurt the fragile industrial recovery in Germany and finish off Ukraine’s potential as a gas transit route to Europe.
Germany, which is the industrial heart of the European Union and a major creditor for its debtor nations, is facing the challenge of the double-edged consequences of its inverted Ostpolitik as it pertains to the trade in natural gas. Even the temporary transit risks ensuing from Kiev’s decision to block the pipeline may cause a business slump.
The Nobel laureate Joseph Stiglitz offered an unnerving forecast for the German economy. The Columbia University professor, speaking at the conference in the southern German city of Lindau, described economic growth in the Eurozone as “sluggish.” The German economy in particular failed to grow during the second quarter, threatening the EU’s fragile industrial recovery.
In the years to come, coping with Kiev’s attempts to jeopardize the gas-transit system and cut off Europe from its quintessential energy source in the east could become a real headache for Germany’s foreign minister, Frank-Walter Steinmeier. The most vivid example of Ukraine’s self-destructive policy that has the potential to affect European taxpayers is the recent sale of its gas transportation system.
The imminent agreement, with many conflicting political overtones, will allow sales of 49 percent of Ukraine’s gas transportation system to a cobbled-together coalition of foreign shareholders.
First, the non-transparent deal — sponsored by high-ranking government officials — is a textbook case of restrictive practices that violate World Trade Organization rules. Secondly, the pipeline itself is anything but an attractive offer.
The major players in the European energy market are very well aware of the quality of the asset. They know that the pipeline is sorely in need of repair and is dependent on gas from a third party. According to some provisions of the law, the transit of natural gas through Ukraine can be blocked. If it really happens, the pipeline’s price will immediately plummet to $2…
by ilene - August 29th, 2014 1:07 pm
Courtesy of Lance Roberts of STA Wealth Management
The Missing Ingredient
I have been in the "money game" for a long time starting with a bank just prior to the crash of 1987. I have seen several full market cycles in my life, and my perspectives are based on experience rather than theory.
In 1999, there was a media personality who berated investors for paying fees to investment advisors/stock brokers when it was clear that ETF's were the only way to go. His mantra was "why pay someone to underperform the indexes?" After the subsequent crash, he was no longer on the air.
By the time the markets began to soar in 2007, there was a whole universe of ETF's from which to choose. Once again, the mainstream media pounced on indexing and that "buy and hold" strategies were the only logical way for individuals to invest. Why pay someone to underperform the indexes when they are rising. Then came the crash in 2008.
Today, we are once again becoming inundated with articles bashing financial advisors, money managers, etc. for underperforming the major indexes during the Fed-induced market surge. It is once again becoming "apparent" that individuals should only be using low-cost indexing strategies and holding for the "long term." Of course, the next crash hasn't happened yet.
My point: There is a "cost" to chasing "low costs." I do not disagree that costs are an important component of long-term returns. However there are two missing ingredients to all of these articles promoting "buy and hold" index investing: 1) time; and, 2) psychology.
As I have discussed, the most important commodity to all investors is "time." It is the one thing we cannot manufacture more of. Individuals who experienced the last two bear markets should understand the importance of "time" relating to their investment goals. Individuals that were close to retirement in either 2000, or 2007, and failed to navigate the subsequent market drawdowns, have had to postpone their retirement plans, potentially indefinitely. While the media cheers the rise of the markets to new all-time highs, the reality is that most investors have still not financially recovered due to "psychology."
by ilene - August 29th, 2014 12:46 pm
Courtesy of Mish.
Mainstream media headlines in the last two days offer an amusing look at GDP forecasts.
GDP Stronger Than Expected
Yesterday, the Financial Times reported US Rebound Stronger than First Thought.
The US economy’s second quarter bounce was stronger than previously thought, with the official annualised growth estimate increased from 4 per cent to 4.2 per cent.
The revision is more evidence of robust underlying growth in the world’s biggest economy as it swung back from a weather affected 2.1 per cent fall in the first quarter.
"Economic Pilot in Reverse"
Today, the Wall Street Journal reported U.S. Consumer Spending Declines 0.1% in July.
Consumer spending fell in July and income growth was weak, signs that cautious consumers could restrain economic growth in the second half of the year.
Personal spending, which measures what Americans pay for everything from sneakers to doctor visits, declined a seasonally adjusted 0.1% in July from a month earlier, the Commerce Department said Friday. It was the first time spending fell in a month since January.
Personal income, reflecting income from wages, investment, and government aid, rose 0.2% in July—the smallest monthly increase of the year.
"Looks like the pilot threw the economy's engines into reverse at the start of the third quarter," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ. Forecasts that the economy would grow at a strong 3% clip in the third quarter "look increasingly unrealistic if consumers don't return to the shops and malls."
Economists surveyed by The Wall Street Journal had predicted personal spending would increase 0.1% and incomes would rise 0.3% in July.
Barclays lowered its forecast for third-quarter growth by a half-percentage point to a 2.2% pace. Goldman Sachs economists lowered their estimate to a 3.1% annual rate from a 3.3% pace.
Diving Into the Numbers
Please consider Personal Income and Outlays: July 2014 by the BEA.
Personal income increased $28.6 billion, or 0.2 percent, and disposable personal income (DPI) increased $17.7 billion, or 0.1 percent, in July, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $13.6 billion, or 0.1 percent. In June, personal income increased $67.1 billion, or 0.5 percent, DPI increased $62.9 billion, or 0.5 percent, and PCE increased $50.5 billion, or 0.4 percent, based on revised estimates.
Real PCE Highlights