Bits Bucket for April 17, 2015
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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If there were a Grexit at this point, would it have any effect on markets, being so widely anticipated and all?
wsj dot com
Brussels Beat
Europe Braces for Brinkmanship Over Greece
Three scenarios loom as possibilities: an easy deal, a hard deal, or no deal
Greek flags in Athens. Policy makers across the eurozone are bracing themselves for brinkmanship in the coming weeks over Greece’s bailout. Photo: Associated Press
By Marcus Walker
Updated April 16, 2015 3:35 p.m. ET
Europe is losing hope that Greece will adopt the economic policies needed to unlock bailout funds before it runs out of money.
Policy makers across the euro currency zone are bracing themselves for brinkmanship in coming weeks that could lead to a resolution—of one kind or another—but only in the face of further political and financial turmoil in Greece.
“Greece is moving ever closer to the abyss,” Slovakia’s Finance Minister Peter Kazimir said this week. Financial markets seem to agree: Yields on Greece’s three-year bonds shot up to nearly 28% on Thursday as investors priced in a high chance of default.
…
Brinkmanship (also brinksmanship) is the practice of pushing dangerous events to the brink of disaster in order to achieve the most advantageous outcome.
It’s a lot less nerve-wracking when over money rather than nuclear weapons
Europe is too big to collapse. It uses 20 per cent of the world’s goods and services. It could collapse no easier than the U.S. could.
One of the biggest financial scams going is CDOs sold as “insurance” for risky loans. If a default event is declared - and the issuers of CDOs have always managed to avoid meeting the criteria for “default event” - then whoever is on the other side of those derivatives is going to take it in the shorts, big-time. Of course, the Fed will ensure that all losses are transferred to taxpayers, but it could still cause market upheaval.
Greece’s infamous new drug, sisa, is basically meth and filler ingredients like battery acid, engine oil, shampoo, and cooking salt. The majority of its users are poor, often homeless, city dwellers reeling from the psychological and physical impacts of a country in the grip of economic collapse.
https://www.youtube.com/watch?v=Uo37vW2SW-U
“…city dwellers reeling from the psychological and physical impacts of a country in the grip of economic collapse.”
Yep, cuts to welfare.
“Oh, the austerity!”
“Oh, the austerity!”
Recall that bumper sticker, “Support mental health or I’ll kill you.”
62% unemployment under 25 years old…If thats not full fledged meltdown what is….That video was pretty disturbing…I new it was bad, but had no idea it was that bad…Reading about it is one thing…Seeing it with your eyes is quite another…
The inevitable end-state of all corrupt socialist states when they run out of other people’s money and can’t keep the promises they made that got them elected by the votes-for-benefits mob. Paying attention, ‘Muricans?
The money that was “loaned” to Greece really went to pay off the German banks, so now the European taxpayers are the ones who will be footing the bill if Greece quits the Euro. Greece should just load up on the wine, bread and cheese, flip the finger to the Euro Zone, and keep partying until things pick up, which they will once Greece gets its own currency back.
Yea right, it does not help to depreciate your currency if you stopped making everything. Meanwhile they lose all the EU subsidies. Always interesting to see a left wing government run out of OPM.
Always interesting to see a left wing government run out of OPM ?
Interesting ?? Is that what you call it Adan ??…Only a lawyer can have the stone-cold heart to call Greece a “interesting” situation…
Only a lawyer can have the stone-cold heart to call Greece a “interesting” situation…
As the Chinese would say, the Greeks live in interesting times.
Chinese ??
Ruthless, heartless, Communist….Kind of like Lawyers…
When did Christine Lagarde come down with a case of Spitzer face?
How close is Greece to Grexit?
By Paul Kirby BBC News
17 April 2015
From the section Europe
The Greek government is running out of time and money.
If it fails to come to a deal with eurozone partners on 24 April, there is a real chance it could default on its loans.
That could push the Greek government towards leaving the single currency.
Is Greece about to default?
It feels as if we have been here before, but there is a growing belief that without a deal on Greek reforms, the left-led Syriza government will run out of cash.
Debt interest payments are piling up. It has to pay off an €80m interest bill to the European Central Bank (ECB) on 20 April and €200m to the International Monetary Fund (IMF) on 1 May.
But the one that is stirring jitters around Europe is a €760m (£550m; $810m) interest payment to the IMF that is due on 12 May.
IMF head Christine Lagarde has emphasised that Greece will not be allowed to delay its repayments
Greece is faced with a difficult choice: either pay up its debts or continue to fund pensions and public sector salaries. Already there are reports that the Athens government has made a vain plea to delay its debt repayments to the IMF.
Can it stay afloat?
It is barely managing, denying reports that it has used reserves from the health service to help pay off its debts, despite meeting its April payment to the IMF of €448m.
For a populist, left-wing party like Syriza, swept to power on a wave of anger at austerity, it will be difficult to stop paying pensions and the decision appears inevitable.
Syriza swept to power vowing an end to austerity, but these public sector workers want Greece’s debts written off too
Greece has already been rescued by two EU/IMF bailouts to the tune of €240bn since 2010.
The aim of the 24 April talks is to unlock a €7.2bn bailout tranche. Even then Greece might still need a third bailout worth tens of billions. But if Greece’s reform package fails to satisfy its creditors, there will be no new cash.
What if it does default?
Greek banks are already on life support. They are relying on €74bn in emergency liquidity assistance (ELA) from the European Central Bank.
If the government defaults on its loans, it risks cutting off its liquidity from the ECB, which is keeping both the banks and the government afloat.
A “forced default” would create a downward spiral.
Greek Prime Minister Alexis Tsipras remains confident that a deal can be done to avert default
Tens of billions of euros have already been withdrawn from private and business accounts and deposits could leave even faster.
To halt a run on the banks there might be a ban on withdrawals.
How serious for us is the Greek tragedy?
Does that mean Grexit?
Greece’s future in the euro is looking so shaky that UK bookmaker William Hill has stopped taking bets on the chances of a Grexit.
And a forced default, seen as the worst possible option, could plunge Greece out of the euro.
The Bank of Greece would have to return to the drachma and Greeks would face devaluation if they left the euro
“A forced default is where the coffers are empty, you stop paying employees and say, ‘We’re using all our resources to pay the hospital bills’,” says Prof Iain Begg of the London School of Economics.
Greece would return to the drachma, suffer instant devaluation and inflation and there would be a banking crisis.
It could end up a pariah in the international markets for years, much like Argentina in 2002, warns Prof Begg.
Greeks want to stay in the single currency, but a forced default would likely push them out.
Is Grexit inevitable?
There could be a deal on 24 April that keeps the euros rolling in and maintains the eurozone’s lifeline to Athens.
It seems unlikely although, to many observers, both sides appear to be calling each other’s bluff - a high-stakes game of poker.
German Finance Minister Wolfgang Schaeuble says no-one has a clue how a deal can be reached with Greece
However, even failure to find a deal would not necessarily mean forced default or Grexit. Nor would missing its next debt payments.
For some economists, potentially the best option would be for Greece to pursue a “managed default”.
That could mean more relaxed and longer terms on servicing the debt on its eurozone loans.
But it could also mean Greece remaining in the eurozone with strict capital controls to stop money from flooding out of Greece.
One idea, reportedly under consideration in Germany, would be for the ECB to continue funding Greek banks while considering them in default, in return for strict guarantees for structural reform.
Is there a risk of contagion?
The European Union has worked hard to cordon off the banking difficulties of one member state from the other 27 and the idea no longer scares eurozone partners such as Germany. But the IMF has warned that “risks and vulnerabilities remain”.
Default would mean a steep loss for the ECB, possibly €110bn for its exposure to banks and around €20bn in the money spent on buying up Greek government bonds.
As a central bank, the ECB could simply print the money to recapitalise itself, but that is considered anathema to Germany.
Market contagion is difficult to predict, but there is also the potential of political repercussions. Several governments facing anti-euro movements will be watching developments in Greece nervously.
…
Is there a ‘Beijing put’ to save China stocks from losses if growth tanks?
‘Beijing put’ may be driving China’s stock-market fever
By Laura He
Published: Apr 16, 2015 10:35 p.m. ET
The Shanghai market has doubled in value over the past 10 months — and many observers believe the government is behind it
Reuters
HONG KONG (MarketWatch) — China’s stock markets are climbing to feverish heights as a record number of ordinary Chinese, including teenagers, flood into equities.
But in the eyes of many, the share-buying frenzy and wild bull market are all due to one thing: The Chinese government wants it that way.
…
But in the eyes of many, the share-buying frenzy and wild bull market are all due to one thing: The Chinese government wants it that way.
Which means the masses of bagholders who rushed into the Chinese ponzi market are going to be directing their full rage at the government for promoting and enabling the bubble in the first place.
The only growth is in the stock market itself. It’s the last refuge for all the money that was formerly wasted on ghost cities and unneeded factories. I don’t think there’s anything the government can do to stop it from crashing at some point. Just like real estate, it grew too much too fast.
I have been waiting for China crash since 07. US will crash before china does.
I would guess about the same time (but my view is tainted by this morning’s news…).
Was it mainly worries about China, weak U.S. corporate earnings, a Grexit or their Bloomberg terminals that had Wall Street traders so spooked today?
Europe Markets
Stocks Tumble as Greece Crisis Roils Markets
German debt buoyed by ECB stimulus and investors’ concerns over Greek default risk
By Josie Cox and Andrea Tryphonides
Updated April 17, 2015 11:54 a.m. ET
Jitters over the financial future of Greece roiled global markets on Friday, with equities falling sharply and demand surging for assets considered safest during times of stress such as German government bonds.
The Stoxx Europe 600 index ended the day 1.7% lower, mirroring similar losses across individual country indexes. Athens’ main stock exchange fell 3%, taking declines so far this year to almost 12% and over the last 12 months to over 41%, making it one of the world’s worst performing indexes. Financial markets have started to price in the heightened risk of a Greek default – but just how close is the country to the financial abyss? The Eurogroup of finance ministers meet late next week to discuss bailout money for Greece, but hopes are low the two sides will reach an agreement this time.
In the U.S., stocks opened lower and continued selling off in early trading. The Dow Jones Industrial Average recently was off 1.5%, or 263 points, at 17,842. The declines in the Standard & Poor’s 500 and Nasdaq Composite were more moderate.
Strategists said that a lack of progress in negotiations between beleaguered Greece and its international creditors had substantially increased the risk of Greece defaulting on its debt and even exiting the euro.
“In the absence of a deal in the next few weeks, the government might not be able to avoid default, which, we fear, would likely raise the risk of Grexit,” economists at UBS wrote in a note.
“The government’s budget situation is increasingly precarious while the negotiations on the reform program are continuing only very slowly,” they added.
“Athens will have to give in to its creditors demands” if it wants to avoid default, said Eirini Tsekeridou, a fixed income research analyst at Swiss private bank Julius Baer, adding that only “real gamblers” would currently have any exposure to the country.
On Friday, the yield on Greece’s 10-year bonds was at 12.71%, close to a two-year high, while two-year yields were at 26.37%, close to their highest since being issued.
Yields fall as bond prices rise.Bond prices fall as yields rise.An inverted yield curve, where shorter-term debt yields more than longer-dated bonds, signals that investors foresee a very high risk of default.
Exacerbating Friday’s selloff in equities and ballooning risk-aversion were fears surrounding China, with the world’s second largest economy allowing fund managers to lend stocks for short-selling to increase the supply of shares, the Securities Association of China said on its website on Friday.
The Chinese stock market slumped over 5% in post-close trading, weighing on sentiment in Europe.
“Monday seems like a long way away at the moment, but there are fears that we could see a sharp sell off in Asia at the start of the week, which markets in Europe already appear to be anticipating,” said Jeremy Batstone-Carr, chief economist at Charles Stanley in London.
German government bonds, broadly seen as a low-risk haven for investors during times of stress, rose sharply to fresh record highs, extending gains earlier this week which were triggered by the European Central Bank reiterating its commitment to a massive quantitative easing program.
The yield on the country’s benchmark 10-year government bond traded at 0.05%, breaking through Thursday’s all-time low. Investors said that it was now only a matter of time before the yield on those bonds turns negative.
In currency markets, the euro was trading marginally lower against the dollar at $1.075, though traders said this was more to do with dollar strength than euro weakness, after data showed that U.S. consumer prices increased for the second consecutive month in March. By contrast, figures showed that consumer prices across the European Unionfell for a fourth straight month in March.
In commodity markets, Brent crude lost 0.1% to trade at $63.88 a barrel. Gold, also considered a safe asset in unstable market conditions was up 0.5% at $1,203.90 per troy ounce.
…
A 50% collapse in GPD growth in China is nothing short of collapse…. and still falling.
East Asians are compulsive gamblers, and the huge rush of Chinese housewives into their stock market bubble, who are going to get their fool heads handed to them, is likely to trigger social unrest if enough “small investors” are wiped out in a market crash.
is there an etf that’s shorts the chinese market that’s sold here?
YANG. triple China bear
(FXP)
The idiot Chinese “investors” who bought at the peak of the market are probably feeling squeazy right about now.
http://data.cnbc.com/quotes/.SSEC
Yes. Here is just another example of the collapse, vehicle sales will only rise over 8% in China, this year the horror, also Chinese wage gains this year will probably only be 9% instead of ten percent, we need to start a charity. Car sales:
http://www.shanghaidaily.com/business/UBS-Slower-auto-sales-growth-in-China/shdaily.shtml
Whatever. When the Shanghai market reopens, I’ll have my popcorn ready.
http://www.zerohedge.com/news/2015-04-17/chinese-stocks-are-still-crashing
The U.S. government would not allow the stock market to drop 7% because it, correctly, lacks faith in the fundamentals of the economy. 10% corrections use to be quite normal in the U.S. until government rigged the market.
True corrections are a thing of the past. Buy the dip today and brag about your investing brilliance next week.
True corrections are a thing of the past
This is classic bubble thinking - permanently high plateau and all of that. Corrections are a thing of the past until the next one comes along.
Hey now, don’t fight the Fed.
“Corrections are a thing of the past until the next one comes along.”
I’ll believe it when and if I see it. Meanwhile I am maintaining the hypothesis that corrections are henceforth unpossible.
Why are Wall Street futures traders so glum tonight?
Why do you care so much about the rigged market? It will go up in no time.
I happened to be up in the middle of the night, and found the large negative futures numbers puzzling. I guess with HFT, these can vanish in a matter of a few minutes.
just buy stocks and homes.Dont complicate it.
Is there any moral hazard when worker bees see all these people getting free money buy watching cnbc all day?
Marketwatch dot com
Need to Know
When sex isn’t selling, it might be time to get defensive
By Shawn Langlois
Published: Apr 17, 2015 5:45 a.m. ET
Critical intelligence before the U.S. market opens
Beware the struggling hookers.
The consumer price index comes out today. As does consumer sentiment. We already absorbed retail sales and housing starts earlier this week. Lots of economic data to crunch, chew and shape into some sort of thesis to help guide you through the next market phase.
But here’s a tip: Forget about all that and focus on a less used, but perhaps even more accurate, indicator of where this economy is headed: vice spending. Andrew Zatlin of Moneyball Economics says it’s been waving an ominous red flag lately.
“Everyone knows that when consumers have more money in hand, they spend it on fun and luxury goods. That includes gambling, prostitutes, booze and narcotics,” he wrote on the Financial Sense blog. “Like any other luxury good, vice spending is a leading indicator: Demand is quick to pick up when times are good and turns down fast when belt-tightening is the order of the day.”
Zatlin examines the Moneyball Economics Vice index, and what the trend — which includes increasingly tough times for prostitutes and gambling — is telling him about imminent belt-tightening.
…
imminent belt-tightening.
No pun intended, I am sure.
“Futures fall as China cracks down on stock financing”
http://www.usatoday.com/story/money/markets/2015/04/17/wall-street-stock-futures-markets/25924041/
We’re doomed!
Oh, wait! Look at this chart! A … a … miracle has occurred!
http://finance.yahoo.com/q?s=ymm15.cbt
Looks more like a waterfall than a miracle. So sad to think how much money 0.1% peops are losing today…
They have middle-class taxpayers and Yellen’s printing press to cover all losses.
Can anyone explain how short sellers cancause a market decline? Seems like if you tried to sell short but prices kept rising, you would lose money. Unless some stock owners were selling at lower prices…
marketwatch dot com
Market Pulse
China regulatory moves rattle global markets
By Barbara Kollmeyer
Published: Apr 17, 2015 8:07 a.m. ET
Fresh regulation out of China on Friday opened the door for fund managers to lend shares for short-selling and will also expand the number of stocks investors can short sell. The moves were announced by the Securities Association of China on Friday, and many believe it is aimed at increasing supplies of securities and cooling down markets there. Various forms of government stimulus and a frenzy of buying by investors have driven the Shanghai Composite index up by 33% year-to-date, while the Hong Kong Hang Seng index is up 17% year-to-date. The news drove sharp losses for Chinese stock-index futures, which in turn triggered drops in U.S. stock futures and European equities. At the same time on Friday, the China Securities Regulatory Commission “banned the margin trading business of brokerages from taking part in umbrella trusts,” Bloomberg News reported. By allowing mutual funds to lend shares to short sellers, that will mean it’s easier for traders to bet on a pullback on the Hang Seng.
…
First China is driving the market higher and then in few posts, China is driving the market lower, you guys need to get your story straight.
Sounds like they changed the rules while the game was in progress.
Are they allowed to sell US stocks sbort, too? (Sure seems that way based on today’s selloff. ..)
well I would assume if there weren’t enough buyers to handle all the shares being sold short sh@t would probably hit the fan to the downside.
The fed has been a master of creating short covering rallies over the past 5 years. When it looked like markets were gonna crater someone was wheeled out to say something about more money printing.
Short sellers do NOT cause market declines.
In fact - they add liquidity to a market as they have to “cover” their shorts by buying shares in the company they are shorting.
Agree the market is totally rigged and manipulated, but the financial reckoning day is inevitable and may be at hand.
“Can anyone explain how short sellers cancause a market decline?”
If price equals value people then all you have to do is find a way to beat down the price and then value will be beaten down right along with it. It’s stupid, but there it is.
But that’s only part 1 of stupid; Part 2 of stupid involves just who it is that decides what the price should be.
Part 2 of stupid involves the price being decided by multitudes of strangers who are asking themselves “What is everybody else doing?” If the answer is SEEMINGLY everybody else is selling then one should then sell. If the answer is SEEMINGLY everybody else is buying then one should buy.
And if one is in a position to SEEMINGLY make it look as if everyone else if selling or everyone else is buying then he finds himself in an interesting position because then he is in a position whereby he can control prices, and in a price-equals-value market controlling prices ends up controlling values.
In a RATIONAL market - one where values are separate from prices - one could not create mass selling when he made prices fall, instead he would create mass buying when he made prices fall (think Macy’s).
But in a price-equal-value market if it is easy to make prices fall then it is easy to cause mass selling because in such a market when you make prices fall you then make values fall, and people just cannot stand to have the values of what they own fall.
It hurts. It’s painful. And the only to stop the pain is to sell. So that’s what people do.
A month ago I went all in on buying up stock of The Grilled Cheese Truck, Inc (GRLD) at six bucks a share and last week I was despondent as hell because the price had gone down to $1.21, but this morning I am ELATED because yesterday’s close was ONE SEVENTY!
Yes! I am ELATED! And that’s because the VALUE of GRLD is MAKING A COMEBACK, and this comeback is clearly demonstrated by IT’S RISING PRICE!
Your investing genius is confirmed.
Can anyone explain how short sellers cancause a market decline?”
More sellers than buyers in a short period of time = Gap down
Might be time to sell more stocks ? Something about Bulls and bears and pigs comes to mind..
“More sellers than buyers in a short period of time = Gap down”
What does that have to do with short sales? Mom and Pop can easily sell their stocks without making a high fallutin’ short sale transaction.
If its institutional short sellers they can use leverage and sell allot of shares.
Stocks usually go down faster than they go up.
marketwatch dot com
Bulletin
Consumer prices edge up 0.2% in March
Need to Know
There is nothing quite like the smell of stock correction in the morning
By Shawn Langlois
Published: Apr 17, 2015 8:21 a.m. ET
Critical intelligence before the U.S. market opens
Everett Collection
Apocalypse Now?
Is that the acrid smell of correction in the air?
It certainly seemed that way as U.S. stocks swiftly fell out of bed Friday on the heels of what appears to be a pair of odd events in the global markets.
Perhaps the most interesting is a Chinese regulatory announcement that may add more fuel to the Wild-West-style trading playing out in China stock markets.
A triple-digit plunge in U.S. stock-index futures at about 6 a.m. Eastern Time coincided with news that China was allowing fund managers to short stocks. In other words, investors can now bet that highflying China shares will crater.
And if that wasn’t enough, Bloomberg’s ubiquitous financial terminals — arguably one of the most widely used tools in the financial markets—had a world-wide meltdown shortly after the European markets opened for trading.
Here’s what a spokesman for Bloomberg, founded by former New York City Mayor Michael Bloomberg, had to say about the massive disruption: “We are currently restoring service to those customers who were affected by today’s network issue and are investigating the cause.”
What followed is what traders have described as “panic and technical levels being wiped out.”
Ouch!
It is all pretty frenetic action for a Friday morning, with index futures taking their cue to tumble. It isn’t clear how U.S. markets will react when stocks open for regular trading, but it is looking grim before a handful of economic reports roll out, including the consumer-price index and a reading on consumer sentiment.
…
The quote
“It’s too instant. I don’t think the speed helps dialogue. I think it’s why everything is kind of f***ed up and polarizing, because people are going too fast, they’re trying to react too quickly.” — Comedian Louis C.K., on why he’s quitting Twitter.
…
Oh no, not the Bloomberg terminals!
Markets
Bloomberg Terminals Go Down Globally
Disruption causes U.K. to postpone buyback of government debt
A Bloomberg terminal fails to connect at The Wall Street Journal’s office in central London on Friday. Photo: George Downs/The Wall Street Journal
By Josie Cox in London and Anjani Trivedi in Hong Kong
Updated April 17, 2015 8:58 p.m. ET
Bloomberg LP was hit by a massive computer-network outage Friday, forcing its terminals out of action for hours and leading to major disruptions for traders around the world who rely heavily on the machines.
The blackout, which started shortly after European markets opened, also caused the U.K. to postpone a scheduled multibillion buyback of government debt. The £3 billion ($4.5 billion) tender was rescheduled for the afternoon.
Not long after the blackout began, Chinese officials tightened trading regulations, and the outage made it difficult for some traders to react quickly.
The snafu was less disruptive on Wall Street, as the blackout began in the early morning Friday before U.S. markets were open. Many terminals were online by the time U.S. markets opened, and a Bloomberg spokesman said service had been “fully restored” by early Friday afternoon in New York.
Bloomberg’s data-and-information terminals are used by bond, stock, commodities and foreign-exchange traders to deal, but another key component is the electronic chat system through which many market participants communicate. That system also was affected by the disruptions Friday.
Peter Gorra, a senior foreign-exchange trader at BNP Paribas in New York, said he was unable to trade currencies on the terminal for several hours.
We “went ‘old school’ and picked up the phone,” Mr. Gorra said. “It was an orderly market where people didn’t panic.”
…
Jon Corzine (Obama’s former campaign “bundler”) steals $1.6 billion from MF Global accounts and walks the streets a free man, with no prospect of criminal consequences. Smaller fry are not so lucky.
http://www.cnbc.com/id/102593354
The Real Student Loan Crisis Is The One Obama Created
Investor’s Business Daily | 4-16-15 | Editorial
Irresponsibility: A new report finds that 27.3% of student loans are delinquent. Why does this matter? Because thanks to President Obama, about $1 trillion dollars of student loan debt is owed to the federal government.
Obama keeps trying to portray the student loan crisis as a problem suffered by students burdened by a mountain of debt when they graduate, and who are unable to make enough money to pay it back.
But that’s not the real crisis.
The problem isn’t even that, at nearly $1.2 trillion, the total amount of student loan debt now exceeds that of auto loans or credit card debt.
The real crisis is one Obama himself manufactured since taking office.
In 2010, Obama eliminated the federal guaranteed loan program, which let private lenders offer student loans at low interest rates. Now, the Department of Education is the only place to go for such loans.
Obama sold this government takeover as a way to save money — why bear the costs of guaranteeing private loans, he said, when the government could cut out the middleman and lend the money itself?
The cost savings didn’t happen. In fact, the Congressional Budget Office just increased its 10-year forecast for the loan program’s costs by $27 billion, or 30%.
What did happen was an explosive growth in the amount of federal student loan debt. President Clinton phased in direct federal lending in 1993 as an option, but over the next 15 years the amount of loans was fairly stable. The result of Obama’s action is striking. In each of the past six years, federal direct student loan debt has climbed by more than $100 billion. (See chart.)
And since Obama keeps making it easier and easier to avoid repaying those loans, it’s a problem that taxpayers will eventually have to shoulder.
Through words and actions, Obama has encouraged irresponsibility on the part of student borrowers. He constantly talks as if student debt were an unfair burden they unknowingly had foisted upon them.
At the same time, he’s made it easier and easier to avoid paying back student loans in full. Earlier this year, for example, Obama expanded eligibility for his “pay as you earn” program, which limits loan payments to 10% of income, with any debt left after 20 years forgiven.
I’m pretty angry about Obama too
It hurts my head to think too much sometimes, so it’s alot easier when Sheldon Adelson purchases the candidate I vote for, then I don’t have to think too hard about it
“Earlier this year, for example, Obama expanded eligibility for his “pay as you earn” program, which limits loan payments to 10% of income, with any debt left after 20 years forgiven.”
Obama expanded eligibility?
“with any debt left after 20 years forgiven”
But….but….but - I thought the year of jubilee happened every 7 years.
Wall Street up to its old tricks of bundling toxic-waste junk and hiving it off on credulous Japanese “investors” and pension funds.
http://wolfstreet.com/2015/04/17/dumping-american-junk-in-japan-clo-leveraged-loan-currency-hedge/
It is almost as if this is being done on purpose. Instant debt slavery for life just to get an education.
Only bigger and bigger government with more and more regulations and higher and higher taxes can solve this.
Only 37 percent of borrowers are current on their loans???
Insanity. Pure government insanity.
Quick - throw more money at the problem.
————-
Fed: People with old student loans are struggling to pay them back
Bloomberg
Janet Lorin - 4/17/2015 - Yahoo Finance
Student debt continues to increase, especially for people who took out loans years ago. Those who left school in the Great Recession, which ended in 2009, had particular difficulty with repayment, with many defaulting, becoming seriously delinquent or not being able to reduce their balances, the New York Fed said today.
Only 37 percent of borrowers are current on their loans and are actively paying them down, and 17 percent are in default or in delinquency.
“In spite of thinking of student loans as young persons’ debt, by 2014, two-thirds of all balances were owed by people over 30,” Andrew Haughwout, an economist and senior vice president, said at a presentation at the New York Fed.
When you vote for the Democrat party you are voting for ISIS
http://mobile.wnd.com/2015/04/top-democrat-fundraiser-pushed-for-iran-ties
Fortunately, Sheldon Adelson has $36,000,000,000 and he can afford to purchase the candidates who will “shrink government” and “lower taxes” by launching a three front war in Iraq/Syria, Ukraine, and Iran
Forward
This is the top headline on the Drudge Report right now
King Obama is putting spikes on the White House fence
http://www.usatoday.com/story/theoval/2015/04/17/obama-white-house-fence-spikes-cbs-news-cnn/25925073/?showmenu=true
After I clicked that link, I got so angry that I went and voted for a candidate that Sheldon Adelson purchased
Forward
Concertina wire next?
It is for the children
You are dead on about Rhode Island yesterday. Talk about a moribund economy dominated by public service unions, crushing property taxes and fees.
I guess next door Massachusetts must be one of the most prosperous states in the country because of its anti-union, small government, pro-business, red state policies.
Massachusetts elects just enough Republican governors to keep it from going off the blue state deep end. Including but not limited to Romney.
“I guess”
Yeah you do alot of that.
Including but not limited to Romney.
And, of course, Romney’s biggest achievement as governor was a health care law that Obamacare was based on.
“Based on”. However, under our constitution states have more power to regulate the affairs of their citizens then the federal government. States also do not have the power to print money to pay for the programs so the programs must be affordable. Key differences, but in the end Obamacare will be dialed back so it would be nothing more than Romney care on a national level and big business will like it enough that their appointees on the SCT will continue to ignore that it is unconstitutional. It is great that Obama was so incompetent that he wasted his political power on Obamacare. Ronald Reagan accomplished ten times more politically and his party never controlled the house. Had he had strong control of the House and Senate like Obama did and he would have roll backed the entire New Deal.
I have worked in DC, I would have put the spikes on 40 yrs ago and a moat. Smart man.
I would have put the spikes on 40 yrs ago and a moat.
And alligators in the moat.
I love the smell of napalm in Ponzi Markets and asset bubbles in the morning…it smells like VICTORY.
http://www.businessinsider.com/global-market-update-april-17-2015-4
US stock futures down 0.7%…
Yawn.
The fed had helicopters and a printing press
This was the top headline on the Drudge Report an hour ago
Robot Hillary tries to look like a humanoid
http://www.dailymail.co.uk/news/article-3042625/Hillary-ditches-Scooby-flies-New-Jersey-wrapping-three-day-Iowa-campaign-tour-totes-luggage.html
After I heard this I got so angry I threw the remote at the TV and then I voted for a candidate that Sheldon Adelson purchased
Forward
The sheeple will nod approvingly at Hillary carrying her own bags and flying coach. This must mean she’s one of us…and the same vegetables who fell for “hope ‘n change” will flock to the polls to elect this so-faux “champion of the middle class.” The stupidity, it burns.
‘It is untrue to say that Hillary Clinton is anti-Wall Street, former Obama aide Steven Rattner said Friday.’
“She has been someone who-I’m going to call her constructive on Wall Street- believes that Wall Street has a roll to play in the economy,” Rattner said on CNBC’s “Squawk Box.” “She believes that our capital markets are the best in the world and have a role to play in our enormous success.”
‘Rattner said times have changed since Clinton last ran in 2008, and he defended her right to express a new point of view based on today’s realities. “As John Maynard Keynes said, ‘When the facts change, you change your mind,’” he said. “It’s become clear that Wall Street does not always act constructively in the country’s interests, so she can change her mind.”
Wall Street owns her double-wide a$$.
Who owns yours?
Word to the sheeple who are voting for HillaryJeb in 2016: nothing is going to change.
https://www.rutherford.org/publications_resources/john_whiteheads_commentary/no_matter_who_wins_the_white_house_the_new_boss_will_be_the_same_as_the_old
William Kristol wrote this article
http://m.weeklystandard.com/blogs/five-points-iran-deal_922041.html
I heard on the radio that the best way to “shrink government” and “lower taxes” is to put boots on the ground in Iran
Forward
Remember when Clinton bombed Serbia to help the Muslims in Kosovo, and the Serbs stated that they were fighting radical Muslims?
http://www.iraqinews.com/iraq-war/200-kosovars-fight-isis-iraq-syria/
Nothing like a little war to get a dress off the headlines…
Remember when Bush said Iraq had weapons of mass destruction? I wonder how many American soldiers died in Kosovo versus Iraq? Hmmm…
I wonder how many American soldiers died in Kosovo versus Iraq?
Is the number of Americans killed your only measure of a mistake? Then I guess Johnson due to Vietnam was ten times worse than W.
Up until the bombing of Serbia, the U.S. had good relations with Russia (post cold war). After that, we have been on the downward path. If we have a thermonuclear war with Russia, historians if there are any left, will point to that war as one of the events that led to the war. Russia historically has strong ties to the Serbs and our intervention was widely denounced in Russia. Kosovo was one big effing mistake, even if the direct costs were low.
We had “good relations” with them because with the drunkard Yeltsin at the helm, the US sent Harvard-trained “economic experts” like Jeffrey Sachs to teach the “Russian” oligarchs so-called shock therapy. They looted the state enterprises of their most valuable assets and sold them to their oligarch pals for a song before decamping to London to buy Mayfair mansions with their ill-gotten loot.
“…Kosovo was one big effing mistake, even if the direct costs were low….”
Yeah, but you remember how bombing it distracted everyone from Monica Lewinsky who was set to testify before Ken Starr’s kangaroo court the next day?
Vietnam wasn’t a mistake. It was a crime against humanity.
+1…MM
Vietnam was an incredibly stupid war, and I wouldn’t defend anyone who got us there, but it followed logically from the doctrine of containment. But the way we were lied into the Iraq war takes cynicism and incompetence to a whole new level.
Don’t forget Laos and Cambodia.
http://tinyurl.com/nxxa955
The current wars price tag is $6 trillion (calculated in 2013, so perhaps higher).
The world is a pretty scary place
I never got to learn math with exponents because they said I wasn’t smart enough, but I know that exponents are like abbreviated big numbers, and that’s what makes article titles like this sound so scary
http://www.breitbart.com/national-security/2015/04/16/study-iranian-cyber-warfare-capabilities-increasing-exponentially
And since Obama won’t do anything about these threats, I’m gonna vote for the candidate that Sheldon Adelson purchased, because they’re gonna “shrink government” and “lower taxes”
Forward
The Washington Times is an important newspaper, I heard they got nominated for a Pulitzer for their investigative journalism that proved Obama is a Muslim
http://www.washingtontimes.com/news/2015/apr/16/david-horowitz-anti-semitism-as-social-justice-on-
Those anti-semitic college students should prove they don’t hate America and “shrink government” and “lower taxes” by putting their boots on the ground in Iran
Forward
Sometimes I get confused and then I pray to Jesus for guidance of where America should put boots on the ground
http://www.foxnews.com/opinion/2015/04/10/christian-lives-matter/
Obama is not a Christian, but Sheldon Adelson and William Kristol both are
Forward
The Bible speaks of lending to broke ass loosers. Luke 6:32:
32 “If you love those who love you, what benefit is that to you? For even sinners love those who love them. 33 And if you do good to those who do good to you, what benefit is that to you? For even sinners do the same. 34 And if you lend to those from whom you expect to receive, what credit is that to you? Even sinners lend to sinners, to get back the same amount. 35 But love your enemies, and do good, and lend, expecting nothing in return, and your reward will be great, and you will be sons of the Most High, for he is kind to the ungrateful and the evil. 36 Be merciful, even as your Father is merciful.
“And forgive us our debts, as we forgive our debtors.”
Got Rev. Wright?
Obama is not a Christian, but Sheldon Adelson and William Kristol both are ??
yeah….Sin-City Sheldon….What a POS….
The word Judeo-Christian must have been coined to describe them.
Jews for Jesus.
From Chinamining.org:
Platts)
Updated: 2015-04-16 09:09
Counter:
China produced 69.48 million mt of crude steel in March, up by 12% from February’s 61.95 million mt, but down 1% from the same month last year, data released Wednesday, April 15, by the National Bureau of Statistics showed.
On a daily basis, crude steel output in March edged up 1.3% on month to 2.24 million mt, according to Platts calculations.
This has risen since December, and was the highest since September last year.
Over January-March, China’s crude steel output totaled 200.1 million mt, down 1.7% on year.
The country’s crude steel output has been falling on an yearly basis since the start of 2015.
China produced 60.25 million mt of pig iron in March, up 6.96% on month but down 2.4% on year.
Over January-March, China’s pig iron output fell 2.3% on year to 176.54 million mt.
One mill source in Hebei province’s Tangshan city said the slight increase seen in the daily crude steel output figure for March was within market expectations.
“End-user demand in northern China recovered since the second half of March due to warmer weather, and had continued growing into April,” he said, adding that better demand should lead China’s steel output to continue rising mildly in April.
Another mill source in eastern China said steel output at his mill had been fairly stable since January, and it would continue to keep production at the current level.
But he also expected China’s overall steel output to have risen marginally since March, because of an improvement in northern China’s demand and a slump in the iron ore market.
One Shanghai-based analyst said while steel mills’ profitability had improved since March, many steel mills are still incurring losses in April, which would cap potential increases in output this month.
Bloomberg has a different take:
China Steel Output Slides to Worst First Quarter in 20 Years
by Martin Ritchie
8:17 PM PDT April 14, 2015
China Steel Output
Steel production takes place at the Baosteel Group Corp. facilities in Shanghai. Photographer: Doug Kanter/Bloomberg
…
Bloomberg? There is your answer the U.S. banksters’ mouth piece does not like China’s entry into banking, it is trying to keep China from dethroning the dollar. The Hamptons are quaking and not due to an earthquake. So where are the numbers from the article, is it just how they are spinning the numbers or are they claiming different numbers.
A country whose economy is reliant on exports and mercantilism can never have a reserve currency. China is a spoiled little child pretending to act like an adult.
You can only employ so many out of 7billion globally.
You can only employ so many out of 7billion globally
And China is making sure as many of those people reside in China as possible, why isn’t our government doing the same?
Because the workers here do not want to work in sweatshops for slave labor wages. They do not think their slaves should consume as much as middle class people do.
What difference does it make how much steel they produce if it’s not going to be used to build anything? It’s steel demand that matters, not steel production.
if it’s not going to be used to build anything?
Once again assuming facts not in the record. The steel is getting used in cars, railroads etc. The amount of steel being used is flat but what is being produced now is being used.
“The amount of steel being used is flat but what is being produced now is being used.”
Yes, it’s being used to drive up the numbers.
“Cornerstone Macro reports, “Our China Real Economic Activity Index Slowed To Just 1.6% YY In 1Q.” The indicator in question looks at many of the components shown above, such as retail sales, car sales, rail freight, industrial production, and several others, to determine an accurate indicator of the true state of China’s economy. It finds that not only is China’s economic growth rate not rising at a 7.0% Y/Y rate, but is in fact the LOWEST IT HAS BEEN IN MODERN HISTORY! … it has nothing to do with the winter, and everything to do with China hard landing into a brick wall.”
Cornerstone Macro? Sorry but I think I will stick with organizations such as the IMF instead. But what do they say the U.S. rate is, -5%?
Yes, who needs to rely on real measures of economic activity when you have China Daily to tell you how rosy everything is?
How about just balancing out the propaganda in the MSM. Show me how China Daily is printing any information that is not the truth.
Wikipedia on China Daily:
” It is often used as a guide to government policy.”
Yep, guiding people into thinking exactly what the Chinese government wants them to think.
Show me how China Daily is printing any information that is not the truth ??
No Adan….You have it reversed…You show us how the print in China Daily “IS” the truth…
No, I have posted many times the 7% number appearing in many other publications other than China Daily. If you do not believe my source it is incumbent on you to show how the numbers on wrong, if you cite to a source and I find the numbers are incorrect, it is incumbent on me and I do point out the inaccuracy. You can’t do it Scdave because China Daily unlike the Huffington Post has a reputation for accuracy.
has a reputation for accuracy ??
Reputation ?? LOL…I guess that means its golden…Weak…
From Wikipedia, I am sure these type of people read it because it is propaganda (not):
China Daily US Edition, based in New York City,[15] was launched in 2009. It publishes 16 pages Monday to Friday, with a 24-page insert on Fridays. Circulation includes the United Nations Headquarters, government agencies of the United States and Canada, universities, think tanks, major financial institutions, and many leading international corporate entities.
This article says that 30 percent of the 2.7 million Iraq and Afghanistan veterans have PTSD and/or traumatic brain injuries
http://www.washingtonpost.com/politics/when-veterans-return-their-children-also-deal-with-invisible-wounds-of-war/2015/04/16/df161026-cd7a-11e4-a2a7-9517a3a70506_story.html?hpid=z1
And after you “shrink government” and “lower taxes” by putting boots on the ground in Iran there will be alot more of that
I heard that William Kristol personally thanked each affected veteran with a handwritten note, but that’s just the kind of Christian love he has in his heart for America’s brave warriors
Forward
Shrink government?
What a novel idea. It really hasn’t been done before.
Where should be start?
2014 US Federal Budget:
Department of Defense: 17%
Entitlements: 60%
Interest on Debt: 6%
http://en.wikipedia.org/wiki/United_States_federal_budget#/media/File:U.S._Federal_Spending_-_FY_2011.png
Department of Defense: 17% ??
Yeah…17% that equals the biggest military budget against the rest of the world combined…Nice try 2-fruit…
Johannesburg!
http://www.dailymail.co.uk/news/article-3041886/South-Africa-woman-latest-victim-rioting-sparked-anti-immigrant-protests.html
B…b…but I thought Nelson Mandela’s enlightened “rainbow” nation was an example of peace, love and understanding. The MSM told me so.
Boots / Goon / In Colorado…..anyone there confirm any of this? Is this a false flag or fear mongering - what say you?
Why would a train loaded with military equipment be headed north out of the Denver area? It clearly was not being moved to a port for shipment overseas. This was equipment destined for domestic use.
http://investmentresearchdynamics.com/is-government-preparing-for-martial-law/
Because a NG unit is going on Annual Training?
Because an Active unit is going to a training area (like NTC or JRTC)?
Because a unit is getting new equipment or transferring equipment?
Because a depot is moving inventory?
Not everything is a conspiracy…
Not everything is a conspiracy ??
No conspiracy but its sure a great way to PISS AWAY A LOT OF MONEY
Ft. Carson is in Colorado, but that’s south of Denver.
NBC’s Conduct in Engel Kidnapping Story is More Troubling than the Brian Williams Scandal
‘In other words, NBC executives at least had ample reason to suspect that it was anti-Assad rebels who staged the kidnapping, not pro-Assad forces. Yet they allowed Engel and numerous other NBC and MSNBC personalities repeatedly and unequivocally to blame the Assad regime and glorify the anti-Assad rebels, and worse, to link the hideous kidnapping to Iran and Hezbollah, all with no indication that there were other quite likely alternatives. NBC refused to respond to The NYT‘s questions about that’
‘The Brian Williams scandal is basically about an insecure, ego-driven TV star who puffed up his own war credentials by fabricating war stories: it’s about personal foibles. But this Engel story is about what appears to be a reckless eagerness, if not deliberate deception, on the part of NBC officials to disseminate a dubious storyline which, at the time, was very much in line with the story that official Washington was selling (by then, Obama was secretly aiding anti-Assad rebels, and had just announced – literally a week before the Engel kidnapping — “that the United States would formally recognize a coalition of Syrian opposition groups as that country’s legitimate representative”). Much worse, the NBC story was quite likely to fuel the simmering war cries in the West to attack (or at least aggressively intervene against) Assad.’
‘That’s a far more serious and far more consequential journalistic sin than a news reader puffing out his chest and pretending he’s Rambo. Falsely and recklessly blaming the Assad regime for a heinous kidnapping of Western journalists and directly linking it to Iran and Hezbollah, while heralding the rebels as heroic and compassionate — during a brewing “regime change” and intervention debate — is on the level of Iraqi aluminum tubes.’
‘There were — and are — a lot of shadowy interests eager to bring about regime change in Syria and to malign Iran and Hezbollah with false claims. Whether by intent or outcome, that’s what this story did. If it was not only false at the time, NBC executives repeatedly broadcast it, but recklessly disseminated with ample reason to suspect its falsity, that is a huge journalistic scandal.’
‘Professor AbuKhalil this morning emailed this comment about what happened here at NBC: ‘This is a culture: they all were part of a charade to promote and champion the Free Syrian Army when that very army was kidnapping innocent Lebanese Shi’ites and killing people on sectarian grounds. They didn’t want to believe it.’
‘He also passed a long an email from a Western correspondent based in the region, asking not to be identified, who said: “Everybody knew that it was a Sunni group tied to the [Free Syrian Army] that had kidnapped [Engel] from the moment it happened: people were talking about it in South Turkey, journalists, opposition people.”
Heh, I remember when this happened and thinking at the time that it was totally staged. In fact (and here’s where I’m totally embarrassed and my memory is not so good) there was some other event that occurred at the time that totally knocked Engel’s kidnapping off the front pages and relegated it to a footnote. I recall seeing a shot of Engel in some desert setting with a couple of other folks looking like a smacked ass, all hangdog and “what about me, folks, I wuz kidnapped”.
Oh, yeah, here’s a little background on this pathetic POS:
http://en.wikipedia.org/wiki/Richard_Engel
“His father, Peter, a former Goldman Sachs financier, and mother Nina, who ran an antiques store, feared for their son’s future prospects because of his dyslexia”
I don’t see anything about the rumor that he possibly is CIA embedded with the media.
I think it was Hurricane Sandy that interfered with Engel’s little morality play. I really got a kick out of the fact that nobody gave a rat’s patootie what happened to Engel.
Engel: “Oh, oh, oh, what about MEEEEEEEEEEEEE! I wuz fakenapped! Woe is MEEEEEEEEEEEE! Sigh. A pox on Hurricane Sandy.”
December price for Brent is around $70, getting close to that $80 mark, already. Back in January, Brent was selling for $45 a barrel:
http://finance.yahoo.com/news/oil-prices-fall-opec-production-010112192.html
Update: Oil Sinks; Heads To $50/Barrel Level
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
Schlumberger announces another round of firings….
http://abc13.com/business/schlumberger-announces-another-round-of-layoffs/664329/
obviously as insiders they know oil is headed back to $80. lol.
slow train wreck
Actually, it does mean that oil is headed to $80, if the oil companies could make money drilling at anywhere near these prices Schlumberger would not have to lay-off workers now.
Actually, it does mean that oil is headed to $80, if the oil companies could make money drilling at anywhere near these prices Schlumberger would not have to lay-off workers now ??
More defense plaintiff attorney logic….Lay-off workers so the price of your product will rise….Brilliant….
….Lay-off workers so the price of your product will rise….Brilliant….
Their product is not oil, it is drilling services. They do not determine when to drill their customers determine when they want their services. At today’s prices or even at the futures price which they could lock-in, the customers do not want to drill. Since we are already at around $70 a barrel for December, it is reasonable to assume that it will take a price of $80 or above for December to cause drilling to increase.
http://www.rigzone.com/news/oil_gas/a/138176/US_Oil_Rigs_Slide_For_19th_Week_As_Record_Retreat_Drags_On
Excerpt from link that will post soon:
U.S. oil production fell 20,000 barrels a day to 9.38 million in the week ended April 10, erasing an 18,000-barrel gain in the seven days prior, Energy Information Administration data show. The agency said in an April 13 report that output from tight-rock formations such as North Dakota’s Bakken shale will decline 57,000 barrels a day in May.
“If that pace is maintained for a year, U.S. oil production would fall by over a million barrels a day in 12 months,” James Williams, president of energy consulting company WTRG Economics, said in an e-mailed report on Thursday. “The bottom line is that the Saudi policy is working.”
LOL! nice top spin Billy J. King.
Repeating from late yesterday because I suspect very few people grasp how the wealthy use federal deficit spending to enrich themselves:
“WASHINGTON — The House of Representatives voted Thursday to give a tax break worth $269 billion to the richest few thousand estates in the country, and add that cost to the federal debt.” Same ploy as the Bush tax cuts (which Obama extended for the most part).
Crime of the Century: when taxation is less than expenditures, the deficit is financed with Treasuries. Now when the sub 1% are given a substantial tax cut during an era of deficits, they are in essence given money that is financed by the entire population (especially the middle class) and especially our children. Cue Dick Cheney, “deficits don’t matter.”
When you see some well-off dude taking out a nice sailboat from the marina, don’t be shy about asking to go along for a ride. After all, you helped pay for it.
Sheldon Adelson is worth Thirty-Six Billion Dollars
A portion of which financed by $18.1T public debt … but worth it, look at all the trickle down job creatin’ Sheldon is doing!
That’s right. All of the money that he spends attempting to influence elections must put provide work for some people.
I love trickle down too! Corporate profits are at all time highs and just look at all the jobs. We need to cut taxes [even more] on the upper .02 % so they can spend more. Right now they are being held back due to that 17% tax rate. lol!
JEB 2016 - Vote like a Saudi!
This CEO takes trickle down to a higher level:
http://mobile.nytimes.com/2015/04/14/business/owner-of-gravity-payments-a-credit-card-processor-is-setting-a-new-minimum-wage-70000-a-year.html?_r=2
CEO slashes his salary from $1 mil to $70k, and raises the minimum wage of all employees to $70k. An interesting experiment. His overhead hasn’t changed, just the distribution of salaries. If his staff is very happy and highly motivated, generating higher profits, this CEO will make more by paying more.
There’s nothing like doing favors for the one percent of the one percent this tax cut was designed for. I wonder why the House didn’t pass a tax cut for everybody else? Oh yeah, there’s an election coming up, and Boehner needs to get the campaign contributors juices flowing.
Yes or no.
Should people pay taxes on everything they own to include cash in the bank (that they have earned and already paid taxes on) and assets (bought with cash they already paid taxes on) just because of a natural event called death?
Why?
And FYI - as we have seen with liberals/progressives - these taxes ALWAYS migrate down to middle and lower classes. And already we have had effects before the estate tax threshold was raised (by republicans).
Dad - why are we selling the family farm? Because grandpa died and the government thinks they deserve 28% of it.
And yes - corporations do not pay estate taxes.
Classic example #1.
Social Security was sold as a 1% TAX ON THE RICH.
Now it is a 15.5% tax on every working person in America.
It’s nearly impossible to actually find a family farm that had to be sold to pay inheritance taxes.
Talk of Lost Farms Reflects Muddle of Estate Tax Debate
By DAVID CAY JOHNSTON
Published: April 8, 2001
WELLSBURG, Iowa— Harlyn Riekena worried that his success would cost him when he died. Thirty-seven years ago he quit teaching to farm and over the years bought more and more of the rich black soil here in central Iowa. Now he and his wife, Karen, own 950 gently rolling acres planted in soybeans and corn.
The farmland alone is worth more than $2.5 million, and so Mr. Riekena, 61, fretted that estate taxes would take a big chunk of his three grown daughters’ inheritance.
That might seem a reasonable assumption, what with all the talk in Washington about the need to repeal the estate tax to save the family farm. ”To keep farms in the family, we are going to get rid of the death tax,” President Bush vowed a month ago; he and many others have made the point repeatedly.
But in fact the Riekenas will owe nothing in estate taxes. Almost no working farmers do, according to data from an Internal Revenue Service analysis of 1999 returns that has not yet been published.
Neil Harl, an Iowa State University economist whose tax advice has made him a household name among Midwest farmers, said he had searched far and wide but had never found a case in which a farm was lost because of estate taxes. ”It’s a myth,” Mr. Harl said.
Even one of the leading advocates for repeal of estate taxes, the American Farm Bureau Federation, said it could not cite a single example of a farm lost because of estate taxes.
http://www.nytimes.com/2001/04/08/us/talk-of-lost-farms-reflects-muddle-of-estate-tax-debate.html?pagewanted=1
Look the Estate tax debate is exhibit A demonstrating how billionaires really control both political parties but I would say the Democrats in particular. Billionaires want to make sure they never face a tax or tax rate that is targeted just at them. Obviously, they never want to admit that publicly and they must use a ruse to prevent that from happening. The best way to prevent that from happening is for their allies in both parties to make competing arguments that both have some validity but then have them assert them in unreasonable ways.
Start with the Democrats: they argue that concentrating too much wealth hurts a democracy and you need an estate tax to prevent too much wealth accumulating from generation to generation. True, but then you find them wanting to impose the tax at levels that do impede family farms and small businesses from being passed on, sorry even by taxing $20 million dollar estates, you do impact that transfer.
Now the Republicans use the Democratic position against them by pointing out correctly that the tax should not fall on small businesses and family farms but then take the extreme position that there should be no estate tax period. The parties should be able to set the tax at somewhere between $20 million and $100 million and achieve both legitimate goals but then it would be a tax that both Soros and Koch would hate, a tax that would be imposed only on billionaires or at least only the very wealthy. The fact that if would protect the free enterprise system probably just makes it worse to billionaires. Their future competition comes from millionaires and competition erodes margins.
Look the Estate tax debate is exhibit A demonstrating how billionaires really control both political parties but I would say the Democrats in particular. ‘
what he said
https://www.ncdc.noaa.gov/sotc/
This is for you DAN what do u think ?
Cactus, may have to respond tomorrow since I am having trouble opening links right now.
Here is a more recent article:
—————-
The Economic and Fiscal Effects of Eliminating the Federal Death Tax
By John L. Ligon, Rachel Greszler and Patrick Tyrrell - September 23, 2014
The federal estate tax (often referred to as the death tax) is a tax on a person’s lifetime accumulated property. In 2014, the death tax applies a 40 percent tax to all accumulated wealth above $5.34 million.[1] While the death tax applies to relatively few Americans and raises only tiny amounts of revenue for the federal government, it imposes substantial costs on the American economy in terms of lost jobs and reduced growth rates. It can be—and has been—devastating to family businesses and the communities in which they operate.
One of the worst features of the death tax is the effect it has on U.S. family-owned businesses. Many estates subject to the death tax are small or family businesses that are asset rich but cash poor; that is, their wealth is not sitting in liquid assets, such as stocks and bonds, but consists of physical assets, such as buildings, land, and machinery.[2] When the owner of a business dies and the heirs are forced to cough up 40 percent of the business’s value, they often have to sell off assets, or even the entire business.[3] These businesses are often sold to large corporations with weak ties to the local business community—which has resulted in disastrous consequences for the people who live in those communities.[4]
Companies under threat of being destroyed by the death tax range from a minority-owned shrimp business in Biloxi, Mississippi, to one of the best-managed and most popular Section 8 housing properties in New Orleans. Jobs and vital community investments are likely to disappear when companies such as Hancock Lumber, a sixth-generation family business in Casco, Maine, or the Drummond mining company in Sipsey, Alabama, are forced to pay the death tax.
The burden of taxation on U.S. small businesses is already extraordinarily high. The majority of U.S. business owners face very high marginal tax rates during their working years, often close to 50 percent when counting payroll taxes.[6] A 40 percent tax on what is left when an owner dies is just piling on even more.
—-
Bearden , Arkansas . When the Anthony Timberlands logging company was started a century ago, there were nearly 20 other privately owned timber companies in Arkansas. Today, every one of them, with the sole exception of Timberlands, has been claimed by the death tax—as have the small communities that depended on them.
Sipsey , Alabama . In 1935, H. E. Drummond opened a coal mine in the little town of Sipsey. When he died in 1956, his son Larry took over the business and eventually made it the largest mining company in the state, with 3,500 employees and 1,500 contractors. Larry Drummond has maintained his father’s commitment to serving his community. The Drummond Company contributes more than $1 million to local charities each year and has engaged in such diverse community projects as school construction, establishing health clinics, funding job training centers, building fire departments, and coordinating United Way fund drives.
Paying the death tax has placed the business in considerable financial duress in the years following my father’s death. We were forced to reallocate useful assets in order to make cash available for our yearly payments. This is due to the fact that coal mining is a very capital intensive business. All cash must be reinvested in purchasing the best equipment, exploring new sources, and employing workers to extract the material. Retaining cash in order to pay for the death tax prevents reasonable expansion and investment and results in fewer new jobs created.
Casco , Maine . Hancock Lumber was started by the Hancock family six generations ago. It maintains 30,000 acres of timberland in southern Maine. Its sawmills and 10 retail stores throughout the state employ 550 workers. Kevin Hancock, president of the company, explained to Congress the dilemma he faces:
When my mother dies, the estate tax will be a major event for both the business and my entire family. Because we have no liquid assets within the business or outside it, paying the death tax will be very difficult. We are spending $75,000 a year on life insurance, but we have been advised that this will not be enough [to pay the estate tax]. This means that to pay the death tax, we will be forced to sell part or all of the business, depending on the valuation of the company. Either way, some of the forestland will likely be the first to go, since we can more easily recoup those losses than our mills or retail stores….
So, these examples are a coal business and two lumber businesses - no farms. Also. the part about the charitable giving could be said about any tax. For example, if I didn’t have to pay gasoline taxes every time that I fill my tank, I could give more to charities.
I know of a guy who owned a working vineyard, and because of poor planning (he put it into a structure that disallowed subdivision), they needed to sell the whole thing to pay estate tax.
You make a good point that a “death tax” may not be good policy, particularly with family farms or other family businesses. Given that, the correct action by Congress would be to raise income or other taxes on the sub-1% to raise an equal amount of revenue to offset the loss of the estate tax. Anything but finance it through deficit spending, which just makes you and me pay for it…
An estate tax is the best way to stop a class of privileged families from using their inherited wealth to buy influence - imagine how much influence the Koch Brothers would have if they hadn’t inherited daddy’s money.
Imagine how much less influence the rich would have on government if government didn’t grow bigger and bigger every year, get deeper into debt every year, enact more and more regulations every year and raise taxes year after year.
To put another way.
Do you think the rich would bother trying to influence a government that had a simple and flat tax, enforced GAAP and fraud laws unilaterally and kept regulations generally the same (i.e. - the kind of government we used to have pre-1965)?
The bigger government gets - the more the wealthy will try to influence it.
That’s a very good philosophy if this were the 1800’s, but we’re not an agrarian society anymore. You’re saying that we shouldn’t have regulations against pollution, because those regulations are what’s causing the Koch Brothers to try to buy themselves a political party. But if those regulations weren’t there, the Koch Brothers wouldn’t have to buy that political party, because then they could dump as many toxins into the atmosphere as they want. Assuming, of course, that the Koch Brothers live upwind from the toxins, which I’m sure they do.
Imagine how much less influence the rich would have on government if government didn’t grow bigger and bigger every year, get deeper into debt every year, enact more and more regulations every year and raise taxes year after year.
Great for a logic 101 course at the local HS to tear apart. Funny too!
The GOP just raised tax on 99% of us this week, but cutting taxes on the .02%. Pay your bills, cut the spending THEN cut the revenue!
I have no problem with death tax. Since I pay almost 40% of my income in taxes as a well pd W-2r. Let those 1%’rs paying 17% on average catch up to me. Or ditch the thing and go flat tax to even the playing field.
If you want money to buy less influence, you need to pay politicians a lot more.
Seems to work well in Singapore.
you need to pay politicians a lot more ??
No…A lot less…And, restrict the lobby alternative after exit…
Do you think the rich would bother trying to influence a government that had a simple and flat tax, enforced GAAP and fraud laws unilaterally and kept regulations generally the same (i.e. - the kind of government we used to have pre-1965)?
Eisenhower issued his warning about the military industrial complex in 1961.
This tax is for assets above 11M right ?
Family Farms should only be taxed when they are sold
I don’t know much about this tax since I’m not even close to having 11M I guess I’m a poor.
I do know about RSU’s and how many double pay taxes on them if they are not careful..
Until just a few years ago (2011) - the death tax was as low as $1 million.
Not as much as you think with farmland going for $10,000 acre in middle America.
Or with just one small CNC machine going for $100,000.
Repeating from late yesterday because I suspect very few people grasp how the wealthy use federal deficit spending to enrich themselves:
When 95% of your electorate are stupid, it’s a safe bet they can’t or won’t grasp how the .1% are screwing everyone else blind with the collusion of the Fed and legistlation written by lobbyists for future lobbyists, aka “elected officials.”
$5,430,000 for estates of persons dying in 2015,[4] can be given by an individual, before and/or upon their death, without incurring federal gift or estate taxes.[5]
I could swear I heard 11M on NPR just yesterday ??
5.4M much different than 11M
As I said above Cactus, it does not matter whether it is 5 million or 11 million it is set too low and I believe that is a deliberate act by the Democrats to protect the billionaires and at the same time claim they are for the working people. P.S. I also said above I am having trouble opening links that joy of satellite internet in a rural area when the clouds roll in but I will respond tomorrow when I am back in the ABQ area. I did see both elk and coyotes today so it is not all bad.
BTW, I guess this is just more global warming:
http://www.msn.com/en-us/weather/topstories/police-blizzard-conditions-contribute-to-multi-vehicle-crashes-on-interstate-80-in-wyoming/ar-AAb85ob
ABQDAN- ever fly fish the Jemez or Pecos area?
No, I use to fish a lot in Vermont but not fly fish. But I have done very little fishing in the West. Some in Utah but I have let my fishing skills entropy.
Cactus, maybe the NPR reporter was talking about the 11,000 dollar exclusion for gifts which does not count against the estate caused some confusion. I remember when I was in college during the stone age and I had friends lucky enough to receive a chunk of money every year since their parents were estate planning. Meanwhile, I was working my way through college without help from my blue collar parents, however I did not whine about it.
5.4M much different than 11M ??
Thats per spouse…So its X 2….
Greek tragedy sez…”debt is DUMB!!!”
Cap’t Obvious here…”printing money is a BAD idea.”
Do you want to go to money that’s all coins?
LOL.
What’s wrong with Kansas? :
http://www.washingtonpost.com/news/the-watch/wp/2015/04/17/state-seizes-11-year-old-arrests-his-mother-after-he-defends-medical-marijuana-during-a-school-presentation/
Quote of the Day -
” ‘All you need is love’? Yeah? Try payin’ the fuckin’ rent with it.” -Keith Richards
Isn’t that pretty much how hookers pay their rent?
S & P drops 1% in one day, everyone loses their minds. Averages an annual gain of 11% since 1976 and people think “meh.”
When it is down 20% from the last peak, then it is significant.
Save the popcorn for later.
I think we could see a 75% correction at anytime. Why by overvalued assets?
I would say no more than 70% correction and no less than 50% sometime after November 2016.more likely summer of 2017.
Why be in overpriced assets you ask? Because I dollar cost average for the long term. I am bullish on the USA in the long term and bearish 2017 through 2020. If I knew for sure what lies ahead I would be 100% in stocks through the Fall of 2016. Then move everything out to cash in October.
Since I do not know, I make safer bets and am mostly into intermediate and short term government securities outside my retirement plans. I will still have a net worth of 7 figures if the market crashes 70%.
Oh, and the 50% crash would be so ideal for me to continue buying into my Roth 401k and move out of short term securities into stock funds.
I know you aren’t supposed to time the market, but I dumped a significant portion of my meager stock holdings before we went on vacation last week. Call me superstitious, but for some odd reason Mr Market seems to always take a dump around the time we hit the road. Besides that, my Bubble-o-meter has been going all tingly as of late. This happenS alot during periods of a widening gap between the MSM news and underlying economic reality.
Better superstitious than sorry.
In my 25 years of investing I kept mostly in stock funds and dollar cost averaged throughout. In 2000 I inherited 50,000 and decided for the first time to buy individual stocks. Lost 50%. It served me right because it was a sudden move. I learned how to invest in individual stocks after that. Small moves over time.
Investing should be like an oil tanker. Making slow turns is the way to do it successfully.
Here you go AB Dan:
http://www.businessinsider.com/saudi-arabia-is-setting-the-world-up-for-a-major-oil-shock-2015-4
http://tinyurl.com/nxxa955
Because the only solution is more bloody wars, more meddling, and higher taxes. The alternative, peace and the peace dividend is ridiculous.