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Monday 01.02.2017

Sorry, Baby Boomers: You're Never Going to Retire

The oldest members of the baby boom generation have turned 70, and thousands more are reaching standard retirement age every day. Yet even as baby boomers approach their golden years, they're doing so with an unprecedented level of pessimism about their financial future. With little savings and the prospect of expensive needs during their retirement, most baby boomers doubt whether they can truly afford to retire -- even as they often find that they have few employment options that will have a major impact on their prospects.

Many articles about saving for retirement focus on how bad Americans are at planning for the distant future. That's not terribly surprising among younger workers, many of whom are still struggling to pay off debts or cover more immediate expenses like housing or transportation. For instance, a survey earlier this year from GOBankingRates found that more than 70% of those aged 18 to 34 have saved less than $10,000 toward retirement, with more than two-fifths having no retirement savings at all. That reflects the general understanding that people neglect to save for retirement until the finish line of their careers gets closer.

The problem for baby boomers is that the impulse to save for retirement hasn't kicked in nearly as much as it should have. The same GOBankingRates survey found that more than a quarter of those aged 55 and up have no retirement savings at all, and fewer than half have more than $50,000 saved for their golden years. A study from the Insured Retirement Institute had an even more pessimistic assessment of the situation, finding that 45% of Boomers have no money saved toward their retirement.

That's a huge barrier to retirement, especially given the costs that baby boomers are likely to face as they age. Fidelity Investments has estimated that the typical couple will spend $260,000 in retirement on healthcare costs, up $15,000 just in the past year. Moreover, when you add in average long-term care needs, that's another $130,000.

Trump is already delivering the jobs he promised America

This week marked another victory for President-elect Donald Trump and his partnership with the American worker.

Two companies, Sprint, the wireless provider, and OneWeb, a satellite internet provider startup — both controlled by SoftBank founder and Japanese billionaire Masayoshi Son — announced that they will be adding thousands of jobs here in the US.

Sprint will be moving 5,000 jobs to these shores; OneWeb will create 3,000 new jobs. Trump, the businessman, brokered the deal.

The news comes a few weeks after the decision by Carrier — which had negotiated with Trump about the matter — to keep 1,100 Indiana jobs that were to move to Mexico. These are real jobs with real benefits. But wait, the naysayers scream. President Obama created 180,000 jobs a month. He did.

Report: The federal government spends $1.5 billion on public relations each year

According to a Government Accountability Office report commissioned by Senate Budget Committee chairman Mike Enzi (R-Wyo.), the federal government spends $1.5 billion each year on public relations.

The report covers the time period between fiscal year 2006-2015, and found that the cost of advertising and PR contracts ranged anywhere from $800 million at the low point in 2012 to $1.3 billion at the high point 2009.

The Department of Defense was the driver of the costs as it employs the most PR staff, and has the highest combined salaries for those positions. The number of PR positions hit a high of 5,238 in fiscal year 2011, with, according to Americans for Tax Reform, a median salary of $90,000:

The federal government has close to 5,000 public relations employees with a combined salary of close to $500 million per year averaged over the past decade. These employees have a median salary of close to $90,000 in 2014. According to the Census Bureau, the average median household income in 2014 was $53,657.

2017 - Ron Paul's New Year Predictions

Economic uncertainty set to dominate 2017

Against the prospects for the ringgit, would the country’s economic growth hold up this year, or potentially slip to below 4%? Views range from positive to cautious. “If crude palm oil prices still rise, then the gross domestic product (GDP) growth may surprise on the upside, meaning a growth rate of 4.5% is possible,” said Pong Teng Siew, head of research, InterPacific Securities.

“With US growth prospects and recovery of US consumption, along with President-elect Donald Trump’s infrastructure spending, we look forward to seeing growth in our exports.

“Together with continued domestic spending, we hope to achieve an economic growth of 45%,’’ said Danny Wong, CEO, Areca Capital. There are external and domestic headwinds that can derail our growth prospects.

“Externally, Trumpnomics, higher US interest rates and a stronger US dollar will likely define this year, which will manifest in financial and exchange rate volatility. “On the domestic front, households and businesses will have to endure adjustments induced by the weak ringgit, continued high cost of living and cost of doing business amidst cautious sentiment,’’ said Lee Heng Guie, executive director, Socio Economic Research Center.

When unpaid student debt leads to a smaller Social Security check

For more than a year, Jamie Chastain had $177 withheld from his Social Security check each month because of an unpaid student loan from three decades ago.

The 68-year-old has been struggling to pay off his debt since 1982 when he borrowed about $12,500 to get a Master's degree in Liberal Arts from the University of Southern Florida. It took him nearly a decade to find a steady job, and he defaulted on his loans before finding work at a community college as a media technician and humanities instructor. The government garnished his wages by about $400 a month throughout most of his career to collect the debt.

Chastain estimates he's paid back three times what he originally borrowed. But because of the interest, the loans still weren't paid off when he retired in 2014. So the government began garnishing his Social Security checks.

There are more people over the age of 65 with student loan debt than ever before, according to a new report from the Government Accountability Office. And those who are in default may have faced decades of reduced wages and benefits. In 2015, the government reduced Social Security checks for a total of 173,000 Americans, up 380% from 36,000 in 2002. That includes younger people receiving Social Security disability payments as well.

Accounting Gimmicks Won’t Stop The U.S.A. Titanic From Sinking

The U.S. Government has gone to great lengths in using accounting gimmicks to prop up the financial system and domestic economy. One area where this is readily apparent is the disconnect between the rising U.S. debt versus the annual budget deficits.

Mish Shedlock wrote about this in his article, U.S. Deficit at $590 Billion But Debt Up $1.2 Trillion: Sleight Of Hand Magic:

The US deficit is up $590 billion so one might think total US debt would rise by that amount or at least something close to that amount. Instead, total US debt for the fiscal year that just closed soared by over $1.2 trillion. What’s going on?

The shortest answer is “deficit lies”. The longer answer involves numerous off budget items like social security do not count towards the deficit but do count towards debt.

Federal Reserve: Yellen faces a rocky final year

After three years of almost single-handedly juicing up the slow-growing economy, Janet Yellen and the Federal Reserve should be looking at easier days ahead. Yellen, in what will probably be her last full year as Fed chair, may finally get help from somewhere else in Washington.

Tax cuts and infrastructure spending planned by President-elect Donald Trump, if backed by the Republican-controlled Congress, would lighten the load for a Fed whose easy-money policies have been the primary economic support for the nation.

She is already breathing easier on the Fed's employment mandate; the jobless rate has fallen to a nine-year low of 4.6 percent. Inflation, too, is under control and, by all accounts, creeping toward the central bank's optimal level of 2 percent.

And yet, Yellen may come under as much economic and political pressure as ever, on both the Fed's policy and the independence of the institution. The Trump administration is almost certain to push back as she and her colleagues lift interest rates from historical lows. The Fed began with a small increase in its benchmark rate this month, only the second rise in more than a decade. But officials signaled a quickening of rate hikes in 2017.

Keiser Report: Outlook for 2017 (E1013) (ft.Gerald Celente)

After 'a year of two halves', where is gold headed in 2017?

In a year dominated by unexpected global events and roiling uncertainty, the movements in the gold price have defied expectations. Following the US Federal Reserve’s decision to raise interest rates last December for the first time in nearly a decade, gold watchers had been anticipating a lacklustre 2016, with some forecasting the precious metal to fall to multi-year lows below the US$1,000 mark.

But within a week into the new year, gold prices gained more than 3 per cent to breach the US$1,100 mark as a brutal sell-off engulfed global stock markets. The surge into safe-haven assets was also fuelled by crude oil prices sliding below US$30 a barrel to 12-year lows, mounting worries about a softening Chinese economy and the Bank of Japan’s (BOJ) unprecedented move to adopt a negative interest rate policy.

Even top forecasters of the yellow metal were caught off guard by the events in January, which propelled gold prices to a strong start in 2016.

“The strong moves in the first month surprised everyone who was expecting a negative year. To be honest, I was one of them,” ABN Amro’s commodity strategist Georgette Boele told Channel NewsAsia. Rated by Bloomberg as the most accurate forecaster for gold, the Amsterdam-based analyst had initially predicted an end-2016 target of US$900 amid the likelihood of further rate hikes in the US, which would bolster the greenback.

Is 2017 The Year Silicon Valley Experiences The Dark Side Of “It’s Different This Time”?

With 2016 now in the rearview mirror. The one thing that was supposed to be included in that vision was the successful resurgence of IPO’s across “The Valley”. 2016 was supposed to be “the year” of the comeback for unicorn cash-out dreams after what can only be described as a “not as advertised” 2015. For if one needs remembering: 2015 was the worst year for tech IPO’s since 2009.

Here’s another problem nobody seems willing to discuss: 2015 may have been the high-water mark going forward when compared to 2016. Yet, not too worry we’re told! For has been reported via many a media source 2017 is shaping up be? Hint: The year it comes back.

Here is a chart from an article just this past August titled “Tech IPO Clog Poised To Burst” To wit:

The prevailing premise, once again, throughout “The Valley” is that “next year” should be the return of those unicorn dreams. After all, how could 2016 be any worse than 2015 was the premise at the beginning of year. The issue? Look at the above chart for clues. Or, as we like to say here in reality, “A whole lot worse!” For 2016 now makes not only 2008 look good. It makes 2009 look terrific in comparison.

U.S. jobs vanishing at an alarming rate

Among the job market’s twists and turns are also dead ends. CareerCast, a job search company that tracks “endangered” jobs, has some surprising predictions about occupations most in danger of disappearing over the next several years. They include insurance underwriters, disk jockeys and broadcast journalists. Yes, mail carriers top the list of largest expected employment declines -- hardly a surprise in the email era. But the second-largest projected drop, by absolute numbers, is in a field purportedly bursting with opportunity: computer programming.

It’s the first time in CareerCast’s annual survey that computer programmers have appeared on the endangered list, said Kyle Kensing, an online content editor with the job services site.

“It’s an outlier in the IT sector,” Kensing said. Coding “is a skillset that’s become more integrated into other jobs in the industry as a whole. The more tedious tasks can be outsourced.”

CareerCast’s forecast jibes with government estimates. While the economy is expected to produce more than a half-million new computer and math jobs by 2024, according to the U.S. Bureau of Labor Statistics, the agency forecasts some 26,000 fewer jobs for programmers.

Retail Employment Sees a Major Shift to Cyberspace

Online retailers have seen a significant surge in employment over the years while department stores have actually lost workers, a federal report detailed Thursday.

Online shopping has revolutionized how people buy goods and services. More people continue to rely on the internet instead of shopping in a more traditional way. The Bureau of Labor Statistics (BLS) found the trend has also had a significant impact on employment.

“Employment in the electronic shopping and electronic auctions industry increased over 400 percent from October 1990 to October 2016, from 45,000 to 229,000,” the report detailed. “Over the same period, employment in department stores, except discount, decreased 36 percent.”

Consumers have been turning to online shopping at an ever increasing rate with no signs of slowing down. The United Parcel Service found in its annual survey June 8 that for the first time shoppers made the majority of their purchases online–at 51 percent.

Argentina Is A Warning To American Populists

I live with my wife and young son in a country very with familiar with populism and its risks: Argentina. Similar to in the United States, three of the biggest challenges facing working families in Argentina nowadays are housing, health care, and education. Yes, crime and inflation are a real concern, but because of how they affect these three issues.

A mortgage that leaves you money for groceries when rates go up. Tuition costs that don’t leave you bankrupt or your children in debt for years, along with an education that gives them training and skills that the job market actually values. And a choice of health insurance plans that give you reasonable coverage at a reasonable price, given the risks your health profile present. Any political movement or party that can make discernible progress on these three issues will reap electoral benefits, and the latest emergence of a populist movement in America should certainly focus on these issues.

But that’s the problem. Progressives would also love to solve these problems, and that unfortunately tends to mean lots of government doing, rather than undoing what government so often does wrong and which creates these problems in the first place. Unless statesmen guide the will of the people, their demands can fuel a progressive agenda of looting each other based on grievances, which leads to power concentrated against the very people demanding government redress and ultimately makes their problems worse.

The effects of such populist economic policy have a rather tragic showcase in Argentina. What failed policies have done in this South American country to housing, health care, and education is sobering, even if, as in much of Latin America, the causes also have deeper cultural roots.

U.S. liberals go on gun-buying spree

Star Wars card firm Topps hit by 'unforgiveable' hack

The maker of iconic collectable trading cards has said hackers could have stolen customers' credit and debit card numbers along with their associated security codes in a recent breach. Topps' products include Star Wars, Disney's Frozen, Top Gear and the UEFA champion league. The New York firm told the BBC that the vulnerability had since been fixed.

But a security researcher said he had previously warned the firm about security weaknesses. Topps declined to say how many people were affected or why the payment card numbers were at risk. In most hack attacks, companies assure users that they do not store such financial data in a form that can be exposed.

In an email to customers Topps wrote that on 12 October "one or more intruders gained unauthorised access" to its systems.

"[They] may have gained access to names, addresses, email addresses, phone numbers, credit or debit card numbers, card expiration dates and card verification numbers for customers [who made purchases] between approximately 30 July 2016 and 12 October 2016," it added.

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