by ilene - April 20th, 2015 11:07 pm
Courtesy of Mish.
I had the pleasure of being interviewed one again by Gordon Long as part of his financial repression series. The topic of this interview was “America’s Pension Problem“.
Synopsis – By Gordon Long – Edited by Me
Mish Shedlock talks about the magnitude of the mounting Pension Problem in America and uses his home state of Illinois as a prime example. According to a State Budget Solutions, last year’s state unfunded pensions reached an all-time high of $4.7 trillion. This funding gap state public pension plans are underfunded by $4.7 trillion, up from $4.1 trillion in 2013. Overall, the combined plans’ funded status has dipped three percentage points to 36%. Split among all Americans, the unfunded liability is over $15,000 per person.
Pending Pension Crisis
“Illinois Pension’s in general are 39% funded. This is after this massive rally we have had since 2009 in financial assets. Some of the worst ones are only about 20% funded.”
“Various cities in Illinois have problems, Chicago being one of them. The City of Chicago has a huge pension crisis right now. We have things in Illinois like “Home Rule Taxes” where cities can levy their own taxes in addition to the state. That is why we have varying sales tax that range anywhere from 6.25% to 10%, depending on locality.”
“I have been working with the Illinois Policy Institute on pension and bankruptcy issues. There are a number of cities in Illinois that are ready to file bankruptcy. The problem is they can’t file bankruptcy because the state doesn’t allow it.”
“The fundamental problem is they have made more promises than they can possibly keep”
Gaming the System
The problem is “you have police and fire workers who can retire after 20 years and collect up to 70% of their earnings based on the 5 highest years salaries. We see a lot of pension spiking in the last few years where for example police work overtime (which counts towards their best five years) so these workers stand to collect far more in retirement (total years in retirement) than they actually ever made while working (total years worked)….
by Zero Hedge - April 20th, 2015 10:41 pm
Submitted by Tyler Durden.
Last week two prominent Ukrainian opposition figures were gunned down in broad daylight. They join as many as ten others who have been killed or committed suicide under suspicious circumstances just this year. These individuals have one important thing in common: they were either part of or friendly with the Yanukovych government, which a US-backed coup overthrew last year. They include members of the Ukrainian parliament and former chief editors of major opposition newspapers.
While some journalists here in the US have started to notice the strange series of opposition killings in Ukraine, the US government has yet to say a word.
Compare this to the US reaction when a single opposition figure was killed in Russia earlier this year. Boris Nemtsov was a member of a minor political party that was not even represented in the Russian parliament. Nevertheless the US government immediately demanded that Russia conduct a thorough investigation of his murder, suggesting the killers had a political motive.
As news of the Russian killing broke, Chairman of the House Foreign Affairs Committee Ed Royce (R-CA) did not wait for evidence to blame the killing on Russian president Vladimir Putin. On the very day of Nemtsov’s murder, Royce told the US media that, “this shocking murder is the latest assault on those who dare to oppose the Putin regime.”
Neither Royce, nor Secretary of State John Kerry, nor President Obama, nor any US government figure has said a word about the series of apparently political murders in Ukraine.
On the contrary, instead of questioning the state of democracy in what looks like a lawless Ukraine, the Administration is sending in the US military to help train Ukrainian troops!
Last week, just as the two political murders were taking place, the US 173rd Airborne Brigade landed in Ukraine to begin training Ukrainian national guard forces – and to leave behind some useful military equipment. Though the civil unrest continues in Ukraine, the US military is assisting one side in the conflict – even as the US slaps sanctions on Russia over accusations it is helping out the other side!
As the ceasefire continues to hold, though shakily, what kind of message does it send to the US-backed government in Kiev to have US troops arrive…
by Zero Hedge - April 20th, 2015 9:55 pm
Submitted by Tyler Durden.
With economic growth decelerating markedly and with capital flowing the wrong way for four consecutive quarters (to the tune of $300 billion), China needs its margin-fueled equity mania to continue in order to distract everyone from the fact that the fundamental picture is, to quote Bloomberg metals analyst Kenneth Hoffman who recently visited the country, “a lot worse than you think.” The PBoC looks set to step up their easing efforts in an attempt to keep the music playing as evidenced by last weekend’s RRR cut and indeed the rumor now seems to be that the central bank will conduct ECB-style LTROs to ensure a new plan to (essentially) bailout deeply indebted local governments doesn’t end up working at cross purposes with efforts to keep liquidity flowing.
Meanwhile, southbound flows (i.e. money flowing from the mainland into Hong Kong shares on the back of new regulations in China that allow mutual funds to invest in Hong Kong-listed equities) hit $10 billion in Q1 while the pace of new stock trading account creation has continued to accelerate with data from the China Securities Depository and Clearing Co. showing more than 3 million new accounts were opened in the first two weeks of April alone. This helped shares of Hong Kong Exchanges & Clearing to go “interstellar” last week as analysts and investors alike are betting that record turnover portends big gains ahead for the exchange operator with Citi looking for EPS gains of over 40% over the next two years.
As we noted on Thursday, Citi also believes we may be only halfway to peak mania because even though daily turnover is at unprecedented levels in absolute terms, it rose 10 fold from 2006-2007 and has “only” managed a 5X move this time around.
Meanwhile, on the mainland, turnover associated with the country’s self-driven stock frenzy has now propelled the Shanghai Exchange to the top spot worldwide in terms of volume and in fact, turnover was so high on Monday at 1 trillion yuan, that the exchange’s software was incapable of reporting it. Here’s Reuters:
The exchange’s trading turnover exceeded 1 trillion yuan ($161.28 billion) for the first time on Monday, but the data could not be properly displayed because its software was not designed to report numbers that high.
Noam Chomsky: “The Idea Of A Media Which Does Not Repeat US Propaganda Is Intolerable To American Leaders”
by ilene - April 20th, 2015 9:45 pm
Few individuals polarize the public with their opinions, statements and mere presence, like Noam Chomsky. The 86 year old linguist, philosopher, cognitive scientist, logician, political commentator, social justice activist, and anarcho-syndicalist advocate, has strong opinions (and in some cases, entire schools of thought) on everything from philosophy, to sociology, to linguistics, but he is perhaps best known in recent years for his political activism which has led to death threats due to his staunch and far-reaching criticism of US foreign policy (allegedly the Anti-Defamation League "spied on" Chomsky's appearances).
His broader outlook is a peculiar version of libertarianism (he describes himself as an anacrho-syndicalist), in which he asserts that authority is inherently illegitimate, and that the burden of proof is on those in authority. If this burden can't be met, the authority in question should be dismantled. Authority for its own sake is inherently unjustified. He contends that there is little moral difference between chattel slavery and renting one's self to an owner or "wage slavery." He holds that workers should own and control their workplace.
He is has also repeatedly stated his opposition to ruling elites, among them institutions like the IMF, World Bank, and GATT.
In other words, the present, in which ruling elites (whether the BIS and "Troika) and ubiquitous US intervention in every possible foreign affair (courtesy of a State Department which, as it has now been revealed, had until recently worked on behalf of the highest foreign bidder) determine the fate of the entire world, should provide Chomsky with endless material for contemplation.
Conveniently, overnight we got a glimpse into his current thought process, courtesy of the following extended interview conducted by RT with the famed linguist and anti-establishmentarian, in which topics such as the "weaponization" of media and information, America's paradoxical propaganda machine, the immunity of the US from the set of rules it creates for everyone else (but itself), and America's conversion from a democracy into a plutocracy, as well as many more, are touched upon.
Whether one agrees or disagrees with Chomsky, he always provides a unique and interesting perspective on current (and future) events.
by Zero Hedge - April 20th, 2015 9:10 pm
Submitted by Tyler Durden.
Over the past several months we’ve built on several narratives out of China certainly not the least of which is the idea that economic growth in the country is decelerating quickly at a time when accelerating capital outflows make devaluation an unpalatable (if inevitable) proposition. Signs of a dramatic slowdown were on full display earlier this month when GDP growth slipped to 7%, the slowest pace in six years, while key indicators such as rail freight volume have fallen completely off a cliff:
With the country’s tough transition to a service-based economy being made all the more difficult by the hit industrial production will likely take as Beijing ramps up efforts to fight a pollution problem that was thrust back into the spotlight early last month thanks to a viral documentary, it’s reasonable to suspect we’ll be seeing a lot more of the idle cranes, empty construction sites, and half-finished abandoned buildings that greeted Bloomberg metals analyst Kenneth Hoffman who returned from a tour of the country earlier this month. Ultimately, Hoffman’s assessment was that metals demand in China is collapsing and isn’t likely to pick back up for the foreseeable future.
This is bad news for the Chinese economic machine and it’s also bad news for any iron ore miner out there whose marginal costs aren’t low enough to stay profitable in the face of a protracted downturn in prices because if you can’t convince the big guys that your price collusion idea will pass regulatory muster, well, they’ll likely take the opportunity to keep right on producing despite the slump and run you out of business. With the stage thus set, we bring you the following from BNP who explains why iron ore prices aren’t likely to rebound any time soon, and why the economic outlook for China is indeed “as bad as the data looks, if not worse” (to quote Mr. Hoffman).
Global commodity prices have fallen sharply since last summer, dragged down by a cocktail of fading Chinese industrial demand, surging supply and a strong USD. Oil has inevitably garnered the majority of headlines but iron ore prices have fallen even further. Iron ore prices have collapsed by close to 50% since last July and over 65% since the beginning of 2014. Falls have accelerated
by Zero Hedge - April 20th, 2015 8:55 pm
Submitted by Tyler Durden.
As if anyone actually needed another reason to move out of the crazy state of California, now it is being reported that conditions in some areas of the state “are like a third-world country” due to the multi-year megadrought that has hit the state. In one California county alone, more than 1,000 wells have gone dry as the groundwater has disappeared. The state is turning back into a desert, and an increasing number of homes no longer have any water coming out of their taps or showerheads.
So if you weren’t scared away by the wildfires, mudslides, high taxes, crime, gang violence, traffic, insane political correctness, the nightmarish business environment or the constant threat of “the big one” reducing your home to a pile of rubble, perhaps the fact that much of the state could soon be facing Dust Bowl conditions may finally convince you to pack up and leave. And if you do decide to go, you won’t be alone. Millions of Californians have fled the state in recent years, and this water crisis could soon spark the greatest migration out of the state that we have ever seen.
Back in 1972, Albert Hammond released a song entitled “It Never Rains In Southern California“, and back then that was considered to be a good thing.
But today, years of very little rain are really starting to take a toll. In fact, one government official says that conditions in Tulare Country “are like a third-world country”…
Near California’s Success Lake, more than 1,000 water wells have failed. Farmers are spending $750,000 to drill 1,800 feet down to keep fields from going fallow. Makeshift showers have sprouted near the church parking lot.
“The conditions are like a third-world country,” said Andrew Lockman, a manager at the Office of Emergency Services in Tulare County, in the heart of the state’s agricultural Central Valley about 175 miles (282 kilometers) north of Los Angeles.
As California enters the fourth year of a record drought, its residents and $43 billion agriculture industry have drawn groundwater so low
Secretary Of State For Hire: Hillary Clinton Made Millions From Foreign Donors In Exchange For “Favors”
by Zero Hedge - April 20th, 2015 8:30 pm
Submitted by Tyler Durden.
That the Clintons have made millions of dollars from speaking fees is no secret: just last summer it was revealed that the former president was paid $104.9 million for delivering 542 speeches around the world between January 2001 and January 2013, when Hillary left her job as secretary of state.
What is not known, and what will be revealed in a new book “Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich,” by Peter Schweizer, is something far more sinister: foreign entities made payments to the Clinton Foundation and to Mr. Clinton through high speaking fees expected, and received, favors from Mrs. Clinton’s State Department in return.
As the NYT reports, the “186-page investigation of donations made to the Clinton Foundation by foreign entities — is proving the most anticipated and feared book of a presidential cycle still in its infancy.”
“We will see a pattern of financial transactions involving the Clintons that occurred contemporaneous with favorable U.S. policy decisions benefiting those providing the funds,” Mr. Schweizer writes.
His examples include a free-trade agreement in Colombia that benefited a major foundation donor’s natural resource investments in the South American nation, development projects in the aftermath of the Haitian earthquake in 2010, and more than $1 million in payments to Mr. Clinton by a Canadian bank and major shareholder in the Keystone XL oil pipeline around the time the project was being debated in the State Department.
This means that during her tenure as Secretary of State, Hillary Clinton may or may not have been working in the best interest of the US population; she was, however, certainly working in the best interest of the biggest Clinton Foundation donor du jour. And she was communicating on her personal, unsupervised, and unrecorded Blackberry while she was doing it.
Slowly, all the pieces of Hillary’s public service are falling into place. Very lucrative public service.
Naturally, the Hillary campaign has a prepared “response”, a response we have heard countless times when faced with a challenger who has no facts on their side: immediate accusations of “conspiracy theories.”
“A campaign spokesman, Brian Fallon, called the book part of the Republicans’ coordinated attack strategy on Mrs. Clinton “twisting previously known facts into absurd conspiracy theories,” and
by Zero Hedge - April 20th, 2015 8:04 pm
Submitted by Tyler Durden.
Readers of this publication will know that for some time, I’ve forecasted the creation of a new monetary system by which governments and banks gain total control over all monetary transactions.
On the surface of it, this may seem an impossible goal, as it would be so all-encompassing and would eliminate economic freedom entirely. Surely, it would not be tolerated. However, I believe that it’s not only relatively easy to create, but it will be sold in such a way that the public will see it as an absolute panacea to their economic woes. Only those who are far-sighted will understand its level of destruction in advance of its implementation.
It might transpire like this:
Part 1: The Currency
- Any one of a number of triggers (decline of the petrodollar, dumping of US debt back into the US market, Europe defaults on its debt, sanctions backfire, etc.) causes a crash in markets.
- Deflation kicks in.
- The Fed creates massive QE to reverse deflation, ending in dramatic inflation and possibly hyperinflation.
- Government declares a state of economic emergency, states that cash is (and has been) the problem and must be done away with for recovery to occur.
- A new electronic currency is created, to be issued by banks.
- All economic transactions of any kind—both debits and credits—are to be done through a currency card (purchases as small as a candy bar or as large as a home; all credits, including wages, dividends, sales of goods, etc.).
- Entire economic system becomes greatly simplified, as only the currency card (or smart phone) is now needed by anyone.
Part 2: Taxation
- At this point, every transaction, no matter how small, is on record, so government can assess the cardholder’s income to the penny, without the need to file for income tax each year.
- Government announces that the tax system is a mess and that it must be simplified to relieve the people of the burden. In future, tax will be taken by direct debit from the currency card account.
- Government later announces that, as the annual filing is such a hardship on the average person,
by Zero Hedge - April 20th, 2015 7:40 pm
Submitted by Tyler Durden.
A Cabarrus County, North Carolina man died last week, but Larry Upright, 81, made one final request in his obituary – written by his family.
"Also, the family respectfully asks that you do not vote for Hillary Clinton in 2016. R.I.P. Grandaddy."
Judging by the condolences, he is not alone in his request. It seems "everyday Americans" does not include North Carolinans…
Via Whitley's Funeral Home…
And the condolences include the following…
* * *
The Condolence book has now become a multiple page political pissing contest – all done 'respectfully' of course.
* * *
One word… "Polarized"
by Zero Hedge - April 20th, 2015 7:15 pm
Submitted by George Washington.
For most of the 1990s and the subsequent decade, a substantial majority of Americans believed it was more important to control gun ownership than to protect gun owners’ rights. But in December 2014, the balance of opinion flipped: For the first time, more Americans say that protecting gun rights is more important than controlling gun ownership, 52% to 46%.
Most believe gun ownership – not gun control – makes people safer.
Other recent data confirm this pattern. A 2013 Pew Research survey showed that protection is now the top reason gun owners offer for why they choose to own a gun (in 1999, hunting was the top reason). And among the public at large, the latest Gallup survey finds that 63% of Americans now say having a gun in the home makes it a safer place compared with 30% who say it makes a home more dangerous. Fifteen years ago, more said the presence of a gun made a home more dangerous (51%) than safer (35%).
Are Americans right that guns help prevent crime?
There are dueling statistics. Everyone has heard the argument that guns increase murder.
But Boston Magazine notes:
A study from 2007 published in a Harvard University journal … claims that more control over firearms doesn’t necessarily mean their will be a dip in serious crimes.
In an independent research paper titled “Would Banning Firearms Reduce Murder and Suicide?,” first published in Harvard’s Journal of Public Law and Policy, Don B. Kates, a criminologist and constitutional lawyer, and Gary Mauser, Ph.D., a Canadian criminologist and professor at Simon Fraser University, examined the correlation between gun laws and death rates.
“International evidence and comparisons have long been offered as proof of the mantra that more guns mean more deaths and that fewer guns, therefore, mean fewer deaths. Unfortunately, such discussions [have] all too often been afflicted by misconceptions and factual error and focus on comparisons that are unrepresentative,” the researchers wrote in their introduction of their findings.
In the 46-page study,