Don’t worry everybody. Federal Reserve Chairman "Helicopter Ben" Bernanke says that the U.S. economy is going to be just fine, and that if it does slip up somehow the Federal Reserve is ready to rush in to the rescue. That was essentially Bernanke’s message to an annual gathering of central bankers in Jackson Hole, Wyoming on Friday. Bernanke insisted that even though the Federal Reserve has already cut interest rates to historic lows it still has plenty of tools that could be used to stimulate the U.S. economy if necessary.
Well, considering Bernanke’s track record, the "don’t worry, be happy" mantra is just not going to cut it this time. After all, if Bernanke and his team were such intellectual powerhouses the "surprise" financial crisis of 2007 and 2008 would not have caught them with their pants down. The truth is that just before the "greatest financial crisis since the Great Depression" Bernanke was telling everyone that the economy was just fine. So are we going to let him fool us again?
But Bernanke insists that this time is different. This time the Federal Reserve really has got a handle on things. During his remarks at Jackson Hole, Bernanke said that the Fed will adopt "unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly."
Could that be a thinly veiled way of saying that Helicopter Ben and his pals will do as much "quantitative easing" as they feel is necessary to keep the economy moving forward?…
As jobs dry up, people are rushing to find some other source of income.
Both statistically and anecdotally, a rush to tap non-wage sources of income is underway. While shopping in an old-line hardware store slated for closure, the clerk assisting us noted as an aside, "I’m 62, so I can retire." He is not alone, as correspondent Craig M. sent in this story describing a leap in Social Security applications: Social Security Applications Almost Double Because of Recession
Applications for Social Security benefits rose almost 50 percent more than expected this year because of the recession, according to the federal retirement program.
“We are seeing a significant increase in both retirement and disability applications as a result of the recession,” said Mark Lassiter, a Social Security spokesman.
The 150,000 extra retirees may add to the financial pressure on the entitlement program. In May, Social Security trustees said expenses would exceed revenue beginning in 2016, one year earlier than their previous forecast.
The Social Security Administration had projected an increase of 315,000 applicants for the 12 months ending Sept. 30 partly because the first baby boomers — those born right after World War II — are starting to retire.
The actual increase was higher. Agency statistics show that 2.57 million people requested benefits, up from the 2.10 million applications received during the previous 12 months. That’s an increase of 465,000, or 47 percent higher than the expected rise.
Another standard source of non-wage income is disability and workers compensation. Social Security is receiving more applications for disability, and at least anecdotally there is some evidence that people about to get laid off are attempting to tap the workers compensation system as a backup source of income, in effect saving their unemployment insurance. Filing a "stress claim" just prior to being laid off freezes the worker’s employment status: they remain employed but are not costing the employer wages.
Eventually, the workers compensation fund paid by employers is depleted and the rates employers pay into the system will rise--but as a stopgap, an injury or stress claim relieves both employer and employee.
This being a litigious society, I suspect there is a rise in employment-related lawsuits. One of our friends who operates a small restaurant was just served with…
Here’s a credit-crisis video retrospective from the Wall Street Journal. It is chapter one of a three part series. Notice the Wall Street meme that subprime borrowers caused the crisis which is patently false. It’s all about dodgy credits and Fannie and Freddie? Total rubbish.
Easy money, as the clip says, is the culprit. And this money went into credit cards, leveraged buy outs, residential housing, student loans, commercial property and on down the line. It’s not about subprime, my friends I like the rest of it, but remember the Wall Street Journal has a certain bias and it is reflected here.
Chapter One: In the first of this three-part series, WSJ reporters explain how the housing bubble inflated and burst, and why easy money led to the collapse of Wall Street’s biggest financial institutions.
This is part two of the End of Wall Street series the Wall Street Journal is producing.
Chapter Two of A WSJ series: What was going through the minds of CEOs, corporate boards, fund managers and mortgage lenders as they created hard-to-understand derivatives Warren Buffett once called "weapons of financial mass destruction."
You have to love how it starts off with Alan Murray saying “There’s plenty of blame to go around. I think in retrospect lots of people who were doing stupid things.” Then the famous NYSE opening bell goes off and they cut to a shot of Alan Greenspan.
I couldn’t help but think about Tim Iacono’s site when I saw this. Watch this video. They really takeoff the gloves here. Regulators and the rating agencies get a severe beat-down. Well-done.
European stocks and Asian shares rose, U.S. equity futures were unchanged and the yen surged after the BOJ shocked markets and kept its QE program unchanged, defying market expectations of a big boost to its monetary stimulus program.
The session's key event, last night Bank of Japan policy announcement, the most anticipated in years, was - as we predicted yesterday when we said that it would be impossible for the central bank to...
A choppy morning led to some buying in the afternoon and minor gains for both indexes as the S&P 500 advanced 0.16% and the NASDAQ 0.30%. All was quiet on the news front as investors kept their eyes on earnings.
Here are the longer term charts of the indexes – the S&P 500 is in quite a base building situation; of course we have to consider the idea that this base follows through to the downside; if that were the case we’d look for the May 2015 highs which were such resistance for a long while to now provide a support. The NASDAQ is rushing towards the fall 2015 high of 5177.
“Major indices remain in consolidation phases with no clear directional bias on a day-to-day basis,” said Katie Stockton, chief technical strategist at BTIG.
By Jacob Wolinsky. Originally published at ValueWalk.
NetSuite Inc (NYSE:N) is soaring this morning as Oracle Corporation (NASDAQ:ORCL) has made a bid to buy the company for $9.3 billion. This deal has been rumored for some time but obviously few expected such a large premium or did not think the bid was certaintly coming as the stock is up about 18 percent at the time of this writing which is a lot for a tech giant. Here is what the sell side is saying.
NetSuite – analysts react
Should the transaction take place, Oracle would pay about 9x NTM EV / revenue (based on consensus estimates for NetSuite), above the average multiple paid in our precedent SaaS Software acquisitions analysis of 6.8x . Additionally, Oracl...
The following are the M&A deals, rumors and chatter circulating on Wall Street for Wednesday July 27, 2016:
Sequenom Being Acquired by Lab Corp for $2.40/Share in Cash
Laboratory Corporation of America Holdings (NYSE: LH) and Sequenom, Inc. (NASDAQ: SQNM) announced Wednesday, that they have entered into a definitive agreement aunder which LabCorp would acquire all of the outstanding shares of Sequenom in a cash tender offer for $2.40 per share, for an equity value of $302 million.
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After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
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Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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