It’s all in the math

We have beaten the drum for years, here at the blog.

Pension security is nothing more than a math equation.  Whether you’re talking about private pension plans, multiple employer pensions, or the grandadday of them, Social Security, you cannot continue to pay existing benefits without bankrupting the fund.  It’s simple math.

pension cutsIt’s emotional, too.  Especially if you’re passed your optimim working age, and have made your financial plan using the rules at hand.  It’s not like you can  just jump back into the workforce.  This is a situation that we Baby Boomers are going to have to face, and overcome if our retirement years are anything like we desire.

And now, one of the nation’s largest private pensions is crying uncle.  Uncle Sam, that is.  they have applied to the US Treasury for a waiver of the rules, allowing them to reduce their pension payments.  Significant reductions:

“This is going to be a national crisis for hundreds of thousands, and eventually millions, of retirees and their families,” said Karen Friedman, executive vice president of the Pension Rights Center.

It’s the math.  You can argue with me all you want, but it doesn’t change the math.  Time to get busy, folks.  Nobody is going to do it for you.

Source

 

 

 

Get the Strategic Petroleum Reserve Filled Now

About a year ago, the Obama administration ordered the release of several million barrels of oil from the SPR at a time of high oil prices.  It has not been replenished.

sprCurrently the SPR is about 30 million barrels shy of full capacity.  source

I can’t think of a good reason not to get it back to full capacity, especially since prices are at a multi-year low.

Can you?

RINO spending bill Grubers the american voter

We are so screwed.

One of the provisions of the Boehner spending bill places the full exposure of the US derivatives market on the backs of the US taxpayer (aka the FDIC).

The bill would reverse Dodd-Frank requirements that banks “push out” some of derivatives trading into separate entities not backed by the FDIC.  Ever since being enacted, banks have been pushing to reverse the change. Now, the rules would go back to the way they used to be.   source

 

boehner spending bill-wapoThe FDIC insurance fund, which  guarantees $12 Trillion customer deposits in 7500 banks across the country is around $40 Billion, after going negative in 2009, and 2010.  This is still less than the statutory 1.15 % required reserve amount.  That amount is supposed to go to 1.35 by 2020 under Dodd-Frank.  IKR!

And how big is the US Derivatives Market?  Nobody really knows.  It’s a black box.  The estimate I’ve seen is $ One Quadrillion in notional value.  Estimating the amount of cash at risk using only 1%  still leaves an exposure of $10 TRILLION, which will now be backed up by you and I.

This is just the beginning.  Now that the get out of jail free card has been issued by the RINOs, we can only expect this market to grow unrestrained, like a weed in your flower garden.  Capitalism for the bankster profits, and socialism for the inevitable crash.

This isn’t what the Republicans were elected to do.  It is not why they were given the majorities in both houses of Congress.  It a complete and utter backhand to the voters who sent a clear message, received lip service, and received a giant Gruber in return.

Get ready.  It won’t be long now.

 

Zero

For the first time since 1945, the federal government reported a net monthly job change of  Z-E-R-O.

“The bottom line is this is bad,” Diane Swonk, chief economist with financial services firm Mesirow Financial, told CNBC Friday.

source

Kind of adds a whole new dimension to the nick-name “zerobama”, doesn’t it?

Top 10 recession proof careers

h/t Candice

Recession Proof - 10 Hot Careers
Created by: Online Graduate Programs

DOES A WEAK AUSSIE DOLLAR SIGNAL A SLOWDOWN IN BUSINESS?

The economic turmoil witnessed over the past few weeks is a reminder that fundamentals play an important role in determining price trends in our various trading markets. A debt crisis is a basic fundamental, and due to the interdependence of our global markets, it can send shockwaves felt around the globe. Currencies weaken and strengthen. Commodity and futures markets react since the price for farming exports will be impacted down the road come harvest time. Balances between exports and imports become disrupted. Inventories may have to be revalued. Management teams must suddenly review their near term plans and adjust where necessary.

The European debt crisis and the uncertainty surrounding the Euro and its future were quick to cause the expected flight of capital to safe havens. In this case the U.S. Dollar and the Japanese Yen were the primary beneficiaries in the forex market. The flight into precious metals, Gold and Silver, was more pronounced. Traders, that had graduated from forex demo accounts and had dabbled in the “carry trade” business, raced to their respective trade desks to unwind unprofitable positions.

A “carry trade” is a strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a higher yielding security, a bond or stock, in a different currency.  A trader using this strategy attempts to capture the difference between the rates, which can often be substantial, depending on the amount of leverage used. If the destination currency weakens, then the trader is exposed to a loss unless he has hedged his bets.

Many hedge funds and traders have used the Dollar and Yen as the “base” currency and invested where rates were higher, typically in Australia and New Zealand this time around. The Australian economy has been one of the strongest of the G20 countries.

The unwinding of carry trade volume could signal a further downturn in the Aussie Dollar. If it breaks through 0.85, then deeper cuts can be expected.

The Australian economy has outperformed many around the globe. GDP was up 2.7% in 2009, unemployment is half of what other countries are experiencing, machinery and equipment spending is also up, and China’s demand for resource exports remains unabated. The Central Bank has raised interest rates, and it appears that Australia may have skirted the global recession that has gripped Europe and America.

If the Australian economy is performing at near trend, then what are businessmen to make of all of this global turmoil? Fear and uncertainty, not market fundamentals, drove the Aussie Dollar to an eight-month low of 0.8517 on Wednesday. The consumer sentiment index showed a seven per cent slide for May, its biggest percentage drop since the height of the credit crunch in October 2008. Global turmoil and uncertainty suggest caution as the best strategy, or as the old adage goes, when in doubt, hold onto your position.

SEIU mortgage shakedown

Tired of paying your mortgage? Here’s an idea …

Just demand to see the original note on your mortgage.

And, to make it easier,your friends at  SEIU offer this handy-dandy tool to contact your bank.

In a few days the mortgage bank must tell you if they do in fact have your original mortgage note. And if not, then welcome to Easy Street. I suspect, if your mortgage is post 2006, the chances are good they won’t be able to produce the note.

Hello systemic financial meltdown.

Or, maybe not. This “crisis” has all the makings of a grand shakedown.

Consider this:  Linkage between SEIU and Barack Obama is well-documented and without question.  So, why would Obama veto the recent foreclosure moratorium bill, and take a position in direct opposition to his co-religionists at SEIU?

I think Obama is triangulating, and just maybe this was the plan all along.

From Zero Hedge

If these issues do in fact escalate, the Administration may try to broker some sort of settlement… The endgame will likely end up being the extraction of material concession from the banking syndicate, in the form of systemic mortgage writedowns, with Obama’s blessing, which will likely put the 25% of homeowners who are underwater on equal footing with the other 75%.

October Black Swan Roundup

1) Stuxnet is “Something Big”
How Stuxnet is Scaring the Tech World Half to Death

To date, no one knows exactly what Stuxnet was doing in the Siemens PLC. “It’s looking for specific things in specific places in these PLC devices,” Digital Bond CEO Dale Peterson told PC World. “And that would really mean that it’s designed to look for a specific plant.” Tofino Security Chief Technology Officer Eric Byres was even more ominous, saying, “The only thing I can say is that it is something designed to go bang.”

2) Massive Mortgage Mess

CNBC’s Diana Ollick who is by and far the company’s best (and only) investigative reporter, confirms various so far unfounded rumors, that the government is planning to institute a 90 day foreclosure moratorium as it deals with the realization of just how big and pervasive the mortgage problem is, and even worse, will soon be.

3. Consumer bankruptcies at 1.6M run rate Good thing that recession thingy is over.

September consumer bankruptcy filings once again are on the rise, with the monthly total hitting 130,329, 4.4% higher than the prior month. Overall, YTD bankruptcies of 1,046,449 are 11% higher than compared to the same period last year, as America revels in its newly found post-recession reality by going straight to bankruptcy go and not passing go. As Dow Jones reports, “the bankruptcy filings so far in 2010 represent the highest total since 2005” and are on track to hit a record 1.6 million by the end of the year.

What if they gave a recovery, and nobody came?

Recession Ends, No One Notices

If the recession’s over, maybe no one told the economy.

That’s one conclusion from the latest ABC News Consumer Comfort Index. In last week’s results, optimism for the economy’s future reached its lowest since March 2009. This week, the CCI’s index of current conditions stands at a dismal -46 on its scale of +100 to -100.

That’s even though the National Bureau of Economic Research declared last week that the recession ended in June 2009. Clearly, the public’s economic yardstick is a different one. [snip]

This week 89 percent of Americans rate the economy negatively, 75 percent say it’s a bad time to spend money and 55 percent rate their own finances negatively. The CCI’s -46 compares to a record low -54, a record-high +38 in early 2000 and a long-term average of -13. Recession or not, we’re still in the weeds.

Link

What’s wrong with this picture?

Homework Assignment: Try running your household or your business like this and tell me how it works out for you.

Hat tip: George Ure

Quote of the Day

You could take what Obama knows about small business and the mindset of the people who own them and shove it up an ant’s ass and it would rattle around like a marble in the Super Dome.

Neal Boortz

File this under, “wish I had said that.”


Pucker up

Did you see Joe Wiesenthal’s one-word reaction to Dow theorist Richard Russell in today’s Business Insider?

“WHOA!”

Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country. They’ll retort, “How the dickens does Russell know — who told him?” Tell them the stock market told him.

Read more

Hardcore Visa

How competitive is the credit card business getting?

If the new Visa Black commercial is any indication, the only thing left in the near future will be passing out free cocaine to new cardholders.

Here is the Video LINK

How bad is it in Detroit?

Is this is any indication?

Nearly 35 years after taxpayers spent $55.7 million building the Pontiac Silverdome and a year after a $20 million sale fell through, city officials have sold the arena once called the most desirable property in Oakland County.

The price: $583,000.

“This was a giveaway,” said David J. Leitch, a broker with an Auburn Hills based realty firm.

By my calculations, that’s about 1% of the actual cost to build the dome.

The winning bidders also got the surrounding 127 acres thrown in for free.

So, how bad is it in Detroit?

Scary bad.

FDIC Friday: Nine more banks fail

from AP:

Regulators shut nine banks Friday, including Los Angeles-based California National, as the still-weak economy produces a stream of loan defaults.

The banks were units of privately held FBOP Corp., a Chicago-based bank holding company.

The Federal Deposit Insurance Corporation said U.S. Bank in Minneapolis agreed to assume the deposits and most of the assets of the banks.

The banks are mostly in the West and had combined assets of $19.4 billion at the end of September.

The closings boost the number of failed U.S. banks this year to 115. The nine banks closed Friday were the most the agency has shut in one day since the financial crisis began taking down banks last year. In 1989, at the height of the savings-and-loan crisis, the FDIC closed 534 banks, or about 10 a week.

Commercial real estate is the next shoe to drop.

Green shoots, anyone? Seems like yesterday we were hearing the recession was over.

How’s that hope and change working for ya’?

Walmart takes aim at cell phones

Beginning this weekend, the cell phone business will get a healthy dose of competition: Walmart style.

The new Straight Talk cell phone plans from Wal-Mart will drive down the prices.

The company said yesterday that its $30 dollar monthly cell phone plan includes many goodies. It will have 1,000 minutes, 1,000 texts, 30MB of mobile Web access, nationwide coverage and 411 calls at no extra charge. For these types of services we are all paying an average of $78 dollars a month. The New Walmart cell phone plans are designed to say the consumer nearly 500 dollars a year.

Another plan that Walmart will provide is for $45 dollars.

The company says that its $45 dollar cell phone plan will give the consumer the following services. It will have unlimited services such as minutes, text and mobile web. The Walmart 45 dollar plan will also have a nationwide coverage and 411 Information calls at no extra charge.

I’m currently paying for 5 cell-phone lines, contract is due to expire in another month. I’ll be able to save quite a bit by switching.

Thanks Wally!

Gas prices continue upward climb

2009-Jan 01/05 173.7 01/12 183.5 01/19 189.8 01/26 189.0
2009-Feb 02/02 194.4 02/09 197.8 02/16 201.6 02/23 196.3
2009-Mar 03/02 198.8 03/09 199.3 03/16 196.4 03/23 201.4
2009-Apr 04/06 209.0 04/13 210.4 04/20 211.2 04/27 210.2
2009-May 05/04 212.9 05/11 229.0 05/18 236.0 05/25 248.5
2009-Jun 06/01 257.2 06/08 267.3

source

You may notice that the average retail price of gas that President Obama inherited was around $1.89.

Five months into the Obama presidency, the price has increased by 41%.

The price spikes of 2008 brought calls for nationalization of the oil industry by a handful of Democrats, but at the time nobody took those calls seriously.  It would have been simply unimaginable.

But then, who would have imagined government ownership of GM, AIG, and Citi?

Is this the “change” America voted for? So far, Obama he has managed to apologize to terrorists and give them Miranda rights, run up the largest budget deficit in the history of the Republic, propose nationalization of health care, call the United States “a muslim nation,” appoint a record number of tax cheats to his Cabinet, bring an affirmative action appointee to the Supreme Court, and invent the creative phrase “create or save” with respect to jobs …

Obama’s been busy.

The GOP had better sharpen up their rhetoric, and fast, or this country will collapse under the weight of Obama’s hubris.

Don’t Freak If You Get White Powder In The Mail

If you get an envelope in the mail containing white powder, chances are, it’s nothing to freak out about.

According to local officials, the Bayer Aspirin Company will be deploying a nationwide mass mailing ad campaign that seems a little “misguided.”

Between May 20 and May 29, the Aspirin Company will be sending out 178,000 envelopes. Of those envelopes, 33,561 will contain a sample of Bayer Aspirin Crystals, which is a white powder.

Misguided?  Definitely.
Attention-getting?  Certainly.
Effective promotion?  We shall see.

I would mention that if you get an envelope in the mail that you’re unsure of, please call the authorities.

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Stop the Bailouts!

Question: “What would you do with $27.599?”

h/t Right.org

FDIC Friday

#35 so far this year …

Midland States Bank, Effingham, Illinois,

Assumes All of the Deposits of

Strategic Capital Bank, Champaign , Illinois

May 22, 2009

Midland States Bank, Effingham, Illinois, Assumes All of the Deposits of Strategic Capital Bank, Champaign , Illinois

FDIC Friday on a Thursday

Well, the FDIC pulled a past one Thursday by moving on a Florida bank.

It is the 34th banking insolvency of 2009.

BankUnited Acquires the Banking Operations of

BankUnited, FSB, Coral Gables, Florida

May 21, 2009

BankUnited Acquires the Banking Operations of BankUnited, FSB, Coral Gables, Florida

FDIC Friday

Just one bank failure this week, the 33rd of 2009.

Kitsap Bank, Port Orchard, Washington,

Assumes All of the Deposits of Westsound Bank, Bremerton, Washington

May 8, 2009

Kitsap Bank, Port Orchard, Washington, Assumes All of the Deposits of Westsound Bank, Bremerton, Washington

Chrysler bondholders say threatened by White House

Update: Lauria on FNC

—–

Attorney Thomas Lauria, lead attorney for the Chrysler bondholders who have objected to the Obama restructuring plan, told ABC News that Obama car czar, Steve Rattner, suggested that officials of the Obama White House would embarrass the firm for opposing the Obama administration plan, which President Obama announced Thursday, and which requires creditors to accept roughly 29 cents on the dollar for an estimated $6.8 billion owed by Chrysler.

The White House has denied the allegation.

Lauria said the firm “was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence.”

Obama was highly critical of the bondholders as being “unwilling to sacrifice” in his remarks Thursday.

Lauria said the president saying he doesn’t stand with his clients “kind of sounds like ‘You’re fair game.’ In whatever sense. People are scared. They have gotten death threats. Some have been told people are going to come to their houses. God forbid if some nut did something, I’m just wondering how the president would feel.”

I can’t help but recall that these very same tactics were used by ACORN against AIG employees after Obama singled them out for scorn. Is ACORN behind this latest effort to intimidate the Chrysler bondholders?

FDIC Friday

Two more banks are added to the list for 2009.  That’s 31 32  so far this year (in case you’re counting).

North Jersey Community Bank, Englewood Cliffs, New Jersey,
Assumes All of the Deposits of Citizens Community Bank, Ridgewood, New Jersey
May 1, 2009

North Jersey Community Bank, Englewood Cliffs, New Jersey, Assumes All of the Deposits of Citizens Community Bank, Ridgewood, New Jersey

FDIC Creates Bridge Bank to Take Over Operations of Silverton Bank,

National Association, Atlanta, Georgia

May 1, 2009

FDIC Creates Bridge Bank to Take Over Operations of Silverton Bank, National Association, Atlanta, Georgia

Update:  One more added …

Cache Valley Bank, Logan, Utah, Assumes All of the Deposits of America West Bank,

Layton, Utah

May 1, 2009

Cache Valley Bank, Logan, Utah, Assumes All of the Deposits of America West Bank, Layton, Utah

FDIC Friday: Times like these

Four more bank failures were announced today by the FDIC.  If anyone’s keeping score, that makes 29 so far this year.

Bank Closing Information – April 24, 2009
These links contain useful information for the customers and vendors of these closed banks.

First Bank of Idaho, Ketchum, ID
First Bank of Beverly Hills, Calabasas, CA
Michigan Heritage Bank, Farmington Hills, MI
American Southern Bank, Kennesaw, GA

We are certainly living in some strange times.

TIME NEVER DIES

Sercan Ondem

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