LONDON—The British Medical Journal on Monday said GlaxoSmithKline PLC’s diabetes drug Avandia should never have been licensed and should be withdrawn from sale, a claim the company rejected.
An investigation by the journal found the U.K. Commission on Human Medicines in July advised the country’s drugs regulator, the Medicines and Healthcare products Regulatory Agency, or MHRA, to withdraw Avandia from sale because its risks outweigh its benefits.
The probe also found members of a European panel that reviewed the drug prior to its European Union-wide approval in 2000 had concerns about the long-term risks and benefits of Avandia, also known as rosiglitazone. The journal raised concerns about the quality of the data GlaxoSmithKline used to show Avandia didn’t lead to increased heart problems compared with other diabetes drugs.
Avandia was once Glaxo’s second-biggest drug, raking in about $3 billion a year. But its sales have plunged since a U.S. study linked it to heart attacks in 2007, and second-quarter revenue was only £152 million ($235 million) as patients defected to alternatives, such as Takeda Pharmaceutical Co.’s Actos.
Unfortunately, politicians and Keynesian clown economists will not see it that way. Indeed there is a $26 billion bill giving money to the states to keep bureaucrats employed. This is unfortunate because we need to shed government jobs.
Hidden beneath the surface the BLS Black Box – Birth Death Model added 115,000 jobs, a number likely to be revised lower in coming years. Please note you cannot directly subtract the number from the total because of the way the BLS computes its overall number.
Participation Rate Effects
The civilian labor force participation rate (64.7 percent) and the employment-population ratio (58.5 percent) were essentially unchanged from last month’s report. However, these measures have declined by 0.5 percentage points and 0.3 points, respectively, since April.
The drop in participation rate this year is the only reason the unemployment rate is not over 10%. The drop in participation rates is not that surprising because some of the long-term unemployed stopped looking jobs, or opted for retirement.
Nonetheless, I still do not think the top in the unemployment rate is in and expect it may rise substantially later this year as the recovery heads into a coma and states are forced to cut back workers unless Congress does substantially more to support states.
Employment and Recessions Calculated Risk has a great chart showing the effects of census hiring as well as the extremely weak hiring in this recovery.
click on chart for sharper image
The dotted lines tell the real story about how pathetic a jobs recovery this has been. Bear in mind it has taken $trillions in stimulus to produce this.
June, July Revisions
The change in total nonfarm payroll employment for June was revised from -221,000 to -175,000, and the change for July was revised from -131,000 to -54,000.
Those revisions look good but it is important to note where the revisions comes from. The loss of government jobs in June was revised from…
Now that Schwarzenegger is a certifiable lame duck (dead duck may be a more appropriate term) Schwarzenegger sees fit to take on public unions in a major way. It’s too late now (for him) even as he speaks the truth.
Recently some critics have accused me of bullying state employees. Headlines in California papers this month have been screaming "Gov assails state workers" and "Schwarzenegger threatens state workers."
I’m doing no such thing. State employees are hard-working and valuable contributors to our society. But here’s the plain truth: California simply cannot solve its budgetary problems without addressing government-employee compensation and benefits.
Thanks to huge unfunded pension and retirement health-care promises granted by past governments, and also to deceptive pension-fund accounting that understated liabilities and overstated future investment returns, California is now saddled with $550 billion of retirement debt.
The cost of servicing that debt has grown at a rate of more than 15% annually over the last decade. This year, retirement benefits—more than $6 billion—will exceed what the state is spending on higher education. Next year, retirement costs will rise another 15%. In fact, they are destined to grow so much faster than state revenues that they threaten to suck up the money for every other program in the state budget.
At the same time that government-employee costs have been climbing, the private-sector workers whose taxes pay for them have been hurting. Since 2007, one million private jobs have been lost in California. Median incomes of workers in the state’s private sector have stagnated for more than a decade. To make matters worse, the retirement accounts of those workers in California have declined. The average 401(k) is down nationally nearly 20% since 2007. Meanwhile, the defined benefit retirement plans of government employees—for which private-sector workers are on the hook—have risen in value.
Few Californians in the private sector have $1 million in savings, but that’s effectively the retirement account they guarantee to public employees who opt to retire at age 55 and are entitled to a monthly, inflation-protected check of $3,000 for the rest of their lives.
In 2003, just before I became governor, the state assembly even passed a law permitting government employees to purchase additional taxpayer-guaranteed, high-yielding
Those government jobs just aren’t what they used to be. Furloughs, IOUs and increased scrutiny of the cost of public employees. Now, a growing number of state governments are instituting requirements that new employees work longer before being able to retire with full pensions.
The change comes as foreign governments from France to Morocco have either decided to increase or are contemplating a rise in the age at which private and public workers can receive government pensions.
A federal commission studying long-term U.S. fiscal issues is also entertaining the idea of changing the retirement age as one way to shore up Social Security, said a person familiar with the matter. A report is due to President Obama in December.
Individual states, meanwhile, are moving ahead as they respond to the widening gaps between the obligations made to workers and the money expected to be available to pay them, thanks to investment losses and recessionary budget pressures.
"It’s a very positive change that the age for receiving full benefits is increasing," said Alicia Munnell, director of the Center for Retirement Research at Boston College. "Increasing the retirement age is the single most important thing [states] can do" to tame future pension costs, because it reduces the number of years the state is paying a benefit, she said.
Though lengthening lifespans have been expected to pressure pension systems, the looming fiscal predicament has emboldened lawmakers to demand more years from employees. Also, as many American states cut services, scrutiny has fallen on the compensation of public workers.
In Illinois, where state lawmakers voted in March to increase the retirement age for most new hires to 67 from 60, "it had everything to do with the financial straits the state is in," said Tim Blair, the executive secretary of the State Employees’ Retirement System of Illinois. "The scales have tipped."
Chalk it up as another one of those things that most people never gave much thought to when things were good. Most of all, state workers probably never thought the sweet deal would turn sour. Of course, as always, it could be worse. For some government workers, retirement comes extra early.
The study I highlighted yesterday on New York pensions has hit the mainstream this morning, with a quite massive write up in the New York Times. There is a lot more detail in the story so I encourage a read through for anyone interested. (story here) Recall I was looking for the ages of these retirees so there are some eye openers in the piece! I am always fascinated by public opinion as well, so for a look through of the avalanche of comments already washing ashore go here.
As I’ve written for the past 3 years, I believe eventually (if trend lines continue without any fixes) we’re going to see some social issues arise in the U.S. due to the growing inequity between the public v private sectors. Especially since it appears a massive bailout will eventually be needed to "keep promises" to this select class. Wherever you fall on this debate, any system that pays out MORE in pension than a person ever earned in a working year is beyond belief. But when you can game the system by adding a ton of overtime in your last year – it’s all just ‘dealing with the cards we were dealt’. (On a side note I did not realize pensions were FREE of state and local taxes – maybe it’s only a New York thing, I do not know)
Much like the deficit stood in shadows for years as some vague ‘issue’ (I still doubt 8 in 10 Americans could tell you the total debt within $2 trillion), I just don’t think most Americans have a clue yet about the growing problem – hence this sort of transparency we saw in the study is going to be an eye opener for those who don’t troll in certain financial blogs.
In Yonkers, more than 100 retired police officers and firefighters are collecting pensions greater than their pay when they were working.One of the youngest, Hugo Tassone, retired at 44 with
The New York Times article Padded Pensions Add to New York Fiscal Woeshas been making the rounds. At least 20 people sent me the link. Let’s take a look at few snips, then a look at a followup Times article on addressing the problems.
In Yonkers, more than 100 retired police officers and firefighters are collecting pensions greater than their pay when they were working. One of the youngest, Hugo Tassone, retired at 44 with a base pay of about $74,000 a year. His pension is now $101,333 a year.
It’s what the system promised, said Mr. Tassone, now 47, adding that he did nothing wrong by adding lots of overtime to his base pay shortly before retiring. “I don’t understand how the working guy that held up their end of the bargain became the problem,” he said.
According to pension data collected by The New York Times from the city and state, about 3,700 retired public workers in New York are now getting pensions of more than $100,000 a year, exempt from state and local taxes. The data belie official reports that the average state pension is a modest $18,000, or $38,000 for retired police officers and firefighters. (The average is low, in part, because it includes people who worked in government only part time, or just a few years, as well as surviving spouses getting partial benefits.)
Some will receive the big pensions for decades. Thirteen New York City police officers recently retired at age 40 with pensions above $100,000 a year; nine did so in their 30s.
The Times article is 4 pages long so please give it a closer look.
Undoubtedly Mr. Tassone is not as stupid as he sounds. He knows full well he gamed the system, but it was legal.
Tassone argues he held up his end of the bargain. Excuse me for asking what end is that? Public unions are legalized mobs. They coerce votes from corrupt politicians willing to buy there patronage.
There is no "public end" because there is no one working on the public’s behalf. Indeed the public in general has been crucified with never ending tax hikes to support union thugs who pack every school board in the country, and promise Armageddon if police or firefighters get laid off.
A vote on a new end for unemployment benefits will not come until next week. On Thursday morning, Sen. Max Baucus (D-MT) and Rep. Sandy Levin (D-MI) proposed amending H.R. 4213 to extend benefits until December 31, 2010.
The amended bill, American Jobs and Closing Tax Loopholes Act, would extend COBRA health benefits until the end of the year.
Other plans accompany the benefits extension effort. Rep. Bob Filner (Dist. 51) plans to help San .Diegans in economic trouble by passing George Miller’s Local Jobs for America Act. Filner says the city would get 3,263 jobs, with more jobs expected in the other county communities. The bill targets communities with high unemployment.
Rep. Susan Davis (Dist. 53), on Wednesday, was one of three legislators introducing the COBRA Health Benefits Extension Act, H.R. 5324. The unemployed could receive COBRA benefits past the standard 18 months, as long as they needed. At least until Obama’s health exchanges arrive.
Damn, I am sure glad there is a nascent economic recovery. Otherwise, who knows how bad this could get.
Las Vegas’ firefighters union has taken a hard stance against the city’s budget cuts, alleging that reductions will hurt emergency responses along with fire insurance rating for homes and businesses.
City officials, meanwhile, said the union is engaging in irresponsible “scare tactics” at a time when the city is facing economic difficulties.
The back-and-forth comes as the city readies for a series of town hall meetings scheduled from January to March to hear resident feedback on what city services are most important.
It also comes as the city is considering back-to-back 8 percent salary rollbacks and freezes for all employees, including firefighters, although a union official declined to comment today on the union’s positions on these wage proposals.
The union has created a Web site as well as a radio advertisement warning that cuts could increase response times, result in fewer people on duty, reduce the city’s ability to respond to disasters and hurt the city’s fire insurance rating, which is at the highest level.
This discussion is just one part of the ongoing wrangling over the city’s budget, which has seen an ever-widening deficit since the economic downturn began.
The city has already cut operating costs, eliminated vacant positions and announced some layoffs. City management has also proposed an 8 percent wage rollback in each of the next two budget years to avoid layoffs, a proposal being evaluated by the unions that represent city workers.
My recommendation to Las Vegas is to declare bankruptcy and let the unions see what they can get in court.
The Simi Valley City Council on Wednesday approved a new agreement with the Simi Valley Police Officers’ Association for an 18-month employee contract that includes a 3 percent salary decrease for sworn police officers and sergeants.
The unanimous approval came after the council went into a closed session meeting late Wednesday afternoon with attorneys and representatives from both the city and police association.
Significant provisions of the MOU approved Wednesday include:
The California Public Employees’ Retirement System (Calpers) and the California State Teachers’ Retirement System (Calstrs) were hit by the real estate slowdown and the slump in global equities. Calpers said the fall in the value of its assets was the most severe in its history.
“This result is not a surprise; it is about what we expected, given the collapse of markets across the globe,” said Joe Dear, investment chief at Calpers.
The value of Calpers assets fell 23.4 per cent for the year to June 30, raising concerns that state employees and local governments might have to increase their ontributions to cover the shortfall.
But Calpers presented a bullish view. “The system has more than enough cash through contributions and income from investments to meet our present liabilities, so we are in a good position to ride out the current downturn and come out stronger,” said Mr Dear.
The market value of Calpers assets was $180.9bn (£110bn) on June 30, down from $237.1bn on the same date the previous year. The value of the portfolio had fallen to $160bn in March of this year but rebounded by $20bn by the end of June thanks to a partial recovery in equity markets.
Both organisations shifted a portion of their portfolios out of equities and into fixed income and real estate during the year to take advantage of lower prices.
Calpers also said it was “realigning relationships with hedge funds and private equity partners”. This would lead to “reduced fees, better alignment of interests, and more mutually beneficial long-term relationships”.
The value of Calpers real estate and private equity investments fell by 35.8 per cent and 31.4 per cent respectively in the year to June 30.
Calstrs was hit by the same macro-economic factors, with the value of its assets falling from $162.2bn to $118.8bn in the 12 months to June 30.
The organisation wrote down the value of its property holdings rather than spread the
Urban.org provides a nice background on Unemployment Insurance benefits and the problems certain states faced at the end of 2008:
The states finance UI benefits with payroll taxes paid by employers into state trust funds maintained at the U.S. Treasury. State balances earn interest income. The Treasury also makes loans to states whose trust funds have been exhausted. At the end of 2008, trust fund balances were low in several states, and three (Indiana, Michigan, and South Carolina) had already borrowed to maintain benefit payments to eligible workers.
$10.9 billion. That’s the amount of money currently lent by Federal Department of Labor (DOL) to a group of 15 states whose unemployment insurance (UI) trust funds have run dry.
How did we get here? Back to Urban.org (bold mine):
For the aggregate U.S. economy, the highest-ever payout rate was 2.22 percent of payroll experienced during January-December 1982. Before the current recession, reserves across 51 state UI programs totaled $37.6 billion in December 2007 and represented just 0.80 percent of total payroll for the year. The RRM at the end of 2007 was 0.36, that is, the reserve ratio of 0.80 percent divided by the high cost rate of 2.22 percent. Reserves totaled about a third of the recommended actuarial standard and represented roughly four months of benefits at the highest-ever payout rate.
In other words, based on the level of unemployment insurance needed in the 1982 recession, states only had about 4 months worth of unemployment ready to pay out. Thus, the following can’t be a surprise. Back to Economic Populist:
And it’s about to get a whole hell of a lot worse. By the end of the year that number will likely have have grown to 35 states. Total DOL emergency loans to states at that time? Nearly $50 billion dollars. The situation will be far worse for some states than others. The states appearing in red on the map below are those that will need DOL loans to keep unemployment benefits rolling.
Celldex Therapeutics, Inc. (Nasdaq: CLDX) today announced that it is offering 6.5 million shares of its common stock in a proposed underwritten public offering. The offering is subject to market conditions and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering. The shares will be issued pursuant to a prospectus supplement to be filed as part of a shelf registration statement filed with the Securities and Exchange Commission (SEC) on Form S-3.
Jefferies LLC and Leerink Swann LLC are acting as the joint book-running managers and underwriters for the proposed offering.
A shelf registration statement relating to the shares was filed with the SEC and is effective. A preliminary prospectus suppleme...
The drone issue is just another topic in which President Barrack Obama has proven himself to be a world-class liar and master of deception. Despite his claims that drone strikes do little damage to civilian populations, in July we discovered that “of the 746 people killed in drone strikes in Pakistan from 2006-2009, an incredible 20% were civilians and 94 (13% of the total) were children.”
Here's the latest weekend update from Serge Perreault, a Chartered Professional Accountant and market technician located near Montreal, Canada. Serge has been following the U.S. market in a series of weekly charts. Here is his update on the S&P 500.
The S&P 500 remains neutral, on 6.3% above-average volume for the week and on falling momentum. The index has been closing at this level for a 3rd week in a row. Some correction would come at no surprise.
BIG – Big Lots, Inc. – Shares in the largest U.S. broadline closeout retailer are down big today, with the stock dropping nearly 14% to $32.00, the lowest level since August 23rd., after Big Lots posted a wider than expected third-quarter loss of $0.18 a share on revenue that came in below the average analyst estimate for the metric.
December expiry options changing hands on Big Lots in the early going today indicate some traders are positioning for the price of the underlying to sell down further during the next couple of weeks. Traders appear to have purc...
As the charts last week indicated might happen, the S&P 500 has fallen four straight days and failed to hold its breakout above 1800 while the Dow Jones Industrials lost 16,000. Only the NASDAQ is still holding on to its breakout above 4000. Although the Basic Materials sector was the leader on Wednesday, the Technology sector was strong, as well, and in fact Tech stocks have been the strongest over the past week and the past month.
As markets finally show a willingness to pullback somewhat from their torrid pace, the bears are trotting out every naysayer they can lay their hands on to scare investors away, including smart folks like Carl Icahn, who is “very cautious,” and Nobel Prize winner Robert Shiller and his stock market “bubble” assertions. Sure, valuations are high on a historic...
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This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
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These rallies are becoming familiar. In early July we saw a streak of 12 of 13 sessions in a row up, early September 11 of 12, and mid October 11 of 13 (current streak). It is a bit uncanny the similarities and how the escalator goes straight up in vertical ascent as we see indexes come out of mini corrections during QE. So we are about at the same stage where the last two began to tire, so it will be interesting if this is similar or if the current consensus of the market that there is nothing to worry about until next year as the Fed and D.C. are both off the table and this 3% annual growth rate in earnings we are now seeing in the S...
Welcome to the fouth update of the IRA Virtual Portfolio. First I am going to summarize the current state of the Portfolio then I will get into all the activity we had during September expiration.
Profit and Loss – Net of closed positions the portfolio is up a total of $769
Market Commentary – Last expiration I said, "I would like to put a total of $20,000 to work by the end of SEP expiration. If the VIX pops up to around 20 I plan to put about $50,000 total to work." The market didn't quite reach the goal but I did manage to deploy $15,000 of buying power. I still feel the market is too high and expect a correction during October. If the vix pops up to around 20 I still plan to put about $50,000 to work. If a correction doesn't happen I still plan to have a total of $25,000 in buying power put to work by October expiration. Now on to the act...
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Come and get it! Read all about it! Biotechs, biotechs and more biotechs to buy buy buy for your portfolio! To date, almost 30 biotech companies have hit the market. Most of the time, there are fewer than 10-12!
For the last five years, biotechs have had issues obtaining offer prices above expectations. In 2013, that trend looks to be broken. According to BiotechNow, the offer prices are 4% above expectations! In addition, biotechs are going public with little more than a wing and a prayer (pre-clinical or Phase 1 data only). Really? What this means is that the drug or technology looks good in mice, rats, or dogs, etc, but there is no smidgen of evidence that it will work in humans. That's what is called an appitite for RISK!
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