Posts Tagged ‘emergency loans to states’

More State Woes…

More State Woes…

Courtesy of Jake at Econompic Data

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.

Those states were just the beginning. Economic Populist with the details:

$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.

loans to states from federal unemployment account

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.

What’s $50 billion amongst friends?

Source: DOL


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Zero Hedge

More Young Americans Live With Their Parents Than At Any Time Since The Great Depression

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As we've reported, while millennials continue to earn less and drown in debt, they have resorted to living at home in order to cut costs and save money.

...



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Phil's Favorites

UPS Fears $3.8 Billion Liability Over Bankrupt Central States Pension Plan

Courtesy of Mish.

In 2007, UPS dumped its pensioners into the Central States Pension Fund, a fund now destined for bankruptcy.

As part of the collective bargaining agreement, UPS agreed to pick up future payments if benefits are cut.

That provision may cost UPS $3.8 billion or more.

Let’s backtrack and fill in some details.

In December, the Central States Pension Fund informed the US Treasury department that the fund would run out of money in 10 years at the current rate of $3.46 in pension benefits for every $1 it receives from employers.

The plan proposed pension cuts of up to 60%.

Also in December, ...



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Chart School

Secular Trends in Residential Building Permits and Housing Starts

Courtesy of Doug Short's Advisor Perspectives.

Yesterday we reported separately on the latest residential building permits and housing starts in the government's monthly report, courtesy of the Census Bureau and the Department of Housing and Urban Development. Despite the fact that both are monthly SAAR series (seasonally adjusted annualized rate), they are exceptionally volatile and subject to extensive revisions. Thus it is unwise to assign much credibility to a single month.

Over the long haul, however, the two offer a compelling study of trends in residential real estate, especially ...



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ValueWalk

Goldman Sachs' Favorite Books List - "Exaggerated Depictions of The Darker Side of The Industry"

By Jacob Wolinsky. Originally published at ValueWalk.

Goldman Sachs’ Favorite Books List

Goldman Sachs put together a list of the best books and it is impressive and long – unfortunately it is hard to sift through since it just has the title and the author without any information on the book so we are helping you out by filing in that info. If you want to find the full list go here we also list it below at the bottom along with descriptions. Note: we do not endorse the ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Global Stocks Broadly Higher, Reversing Early Losses (Wall Street Journal)

Global stocks climbed Tuesday, while the dollar strengthened against the euro and yen.

Shares, dollar climb as markets play Fed waiting game (Reuters)

European shares were heading for their best day in over a month on Tuesday as the waiting game to see whether the U.S. raises interest rates again next month sent the euro to its lowest since March.

Asian shares had stumbled to near 2-1/2-month lows ove...



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OpTrader

Swing trading portfolio - week of May 23rd, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

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. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Kimble Charting Solutions

Gold- Two-thirds odds prices fall on a support break

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

Since the peak in 2011, Gold remains in a downtrend, creating a series of lower high and lower lows.

Gold’s rally in 2016 is attempting to break this 5-year falling trend, as it is attempting to break a series of lower highs.

Over the past 6-months, Gold could be creating a rising wedge pattern. This pattern two-thirds of the time, suggests lower prices are ahead.

...

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Digital Currencies

The Biggest Bitcoin Arbitrage Ever?

Courtesy of Chris at CapitalistExploits

Do you remember when you were growing up and all your friends were allowed Atari game consoles but you weren’t?

Well, I do and the things seemed as foreign to me as Venus. Mostly because the little time I managed to spend on the gaming consoles when my friends weren’t hogging them I found it all a bit silly. I never “got” computer games, and to this day still have poor comprehension of things like Angry Birds.

I suspect that many people around the world view Bitcoin in the same way as I view Angry Birds: with mild amusement and a general lack of understanding as to what the hell all the fuss is about.

I was thinking of this since a buddy of mine recently started ...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

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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Mapping The Market

About that debate last night

Although we try to stay focused on finding and managing promising trade ideas, the comments in the comment section sometimes take a political turn (for access, try PSW — click here!). So today, Jean Luc writes,

The GOP debate last night was just unreal – are these people running to be president of the US or to lead a college fraternity! Comparing tool size? The only guy that looks semi-sane is Kasich. The other guys are just like 3 jackals right now. 

And something else – if Trump is the candidate, that little Romney speech yesterday is probably already being made into a commercial. And all these little snippets from the debate will also make some nice ads! If you are a conservative, you have to be scared now. 

Phil writes back,

I was expecting them to start throwing poop at each other &n...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

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.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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