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NEWS to Disturb the Comfortable...

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$1,397 an hour! Top paid McDonald's workers
Worker pay is taking center stage today – as protesters push for $15-an-hour minimum wage from McDonald’s. Here’s how the top executives compare. The top executives at McDonald’s (MCD) were paid an average of $1,220 an hour last year, with the highest paid hitting $1,397 a hour, based on a USA TODAY review of executive compensation in 2014 based on a 40-hour work week. This analysis includes the four executives that reported pay in the company’s summary compensation table, who are still in management positions at the company. The top paid? Douglas Goare, president of McDonald’s Europe business, was paid $2.9 million, based on the compensation measurement as required by the Securities and Exchange Commission. That works out to $1,397 an hour based on a 40-hour a week schedule. That’s 139 times higher than the $10-an-hour paid to many workers in the McDonald’s restaurants. Goare’s pay is equal to $1,117 an hour based on a 50-hour week.

Judge's order bars enforcement in Oregon gold mine dispute
The federal government and southern Oregon gold miners have each taken a step back from tensions over a mining claim where a constitutional activist group has posted armed guards. The U.S. Bureau of Land Management is holding off enforcement action. The miners have agreed not to work the claim until their appeal of the agency's decision against their operation is resolved. The deal was affirmed Wednesday in a decision from an Interior Board of Land Appeals administrative law judge forbidding the BLM to enforce an order halting work at the mine. The judge noted the miners were not going to try to mine, and BLM did not oppose the stay. Rick Barclay, one of the mining claim owners, says this could de-escalate tensions by removing the need for the Oath Keepers to guard the claim to assure the miners get their day in court. "If this is indeed everything the attorney asked for, this will de-escalate the situation for the time being." "It many mean my guests will be going back to their daily lives."

Here's how China’s renminbi becomes a new international reserve currency
By the end of this year, the International Monetary Fund will decide whether the Chinese renminbi will join the euro, the Japanese yen, the British pound, and the US dollar in the basket of currencies that determines the value of its international reserve asset, the Special Drawing Right (SDR). China is pushing hard for the renminbi’s inclusion. Should it be admitted? The IMF created the SDR in 1969 to supplement existing reserve currencies, thereby providing the global financial system with additional liquidity. As it stands, the SDR’s role remains largely limited to IMF operations; its share in global financial markets and central banks’ international reserves is negligible. Nonetheless, adding the renminbi to the SDR basket would be symbolically important, implying recognition of China’s growing global stature. The renminbi is already a major currency for world trade and investment, and accounts for a growing share of international financial transactions and reserve holdings.

Municipal follies and the McDonaldization of America

California Contends With Catastrophic Crude Oil Spill
More than 6,000 gallons of oil had been raked, skimmed and vacuumed from a spill that stretched across 9 miles of California coast in a cleanup effort that is now going 24 hours a day, officials said, but that’s some of the sticky, stinking goo that escaped from a broken pipeline. Investigators took stock of the scope of the spill on Wednesday a day after the pipeline break, finding that up to 105,000 gallons may have leaked out, and up to a fifth of that amount — 21,000 gallons — reached the sea, according to estimates. Federal regulators were investigating the leak as workers in protective suits raked and shoveled the black sludge off the beaches, and boats towed booms into place to corral the two slicks off the Santa Barbara coast. The chief executive of the company that runs the pipeline, Plains All American Pipeline LP, was at the site of the spill Wednesday and apologized for it. “We deeply, deeply regret that this incident has occured at all,”...

Economist says Fed policies could lead to disaster
The Federal Reserve's extended easy-money policies are creating serious risks that could turn a future economic slump into a catastrophe, warns Stephen King, chief economist at HSBC. To be sure, many of the dire predictions about the Federal Reserve's asset-purchasing and low-interest-rate policies over the last few years have not borne out; high inflation has not resulted, the Fed was able to exit their quantitative easing program without incident, and unemployment has indeed fallen dramatically. But King says the real risk actually lies in the future. "The U.S. has had six years of recovery. And normally after six years, there have been plenty of opportunities to rebuild the kind of policy ammunition that policymakers rely upon during subsequent recessions. And normally, you would have higher interest rates, big improvements in the fiscal position, perhaps stabilization and even reduction in government debt. And this time around, none of that has actually happened,"...

Existing-home sales fall as prices race higher
The sales price of existing homes raced higher last month, with annual growth reaching the fastest pace since January 2014, according to data released Thursday. The National Association of Realtors reported that the median price of an existing home rose to $219,400 in April, up 8.9% from the prior year. The supply of homes is “lagging” demand, said Lawrence Yun, NAR’s chief economist. “Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars,” Yun said. The number of existing homes available for sale dropped almost 1% over the past year, according to NAR. The sales pace for used homes fell 3.3% in April to a seasonally adjusted annual rate of 5.04 million, pulling back from a jump higher in March. Economists polled by MarketWatch had expected a sales rate of 5.24 million for April compared with an originally estimated 5.19 million for March. On Thursday NAR revised March’s rate to 5.21 million.

'If You Aint Cheating, You Aint Trying': The Brazen Greed of the Currency-Manipulating Bankers
Were they greedy, or were they just foolish? It’s one of the big questions from the 2008 economic crisis that remains open to debate. Did the world’s banking system nearly collapse because financiers were grabbing money wherever they could, no matter the costs, or was it because bankers failed to understand the risks caused by a housing bubble and credit crunch? In at least one case, there’s a ready answer: They were both greedy and foolish. An agreement between five banks and the federal government, announced Wednesday, forces five banks to pay a combined $5.6 billion and plead guilty to rigging markets. Four banks—Barclays, Citigroup, JPMorgan Chase, and the Royal Bank of Scotland—pled guilty to antitrust violations. UBS received immunity in the antitrust case, but will plead guilty to manipulating the London Interbank Offer Rate, or LIBOR, a benchmark interest measure. (An earlier federal agreement with UBS was rejected by a federal judge as too lenient.)

Yen breakout

Fast-track trade bill passes U.S. Senate hurdle in win for Obama
President Barack Obama on Thursday moved closer to winning the power to speed trade deals through the U.S. Congress when the Senate advanced legislation important to his Asian trade push. Senators voted 62-38 to set up a speedy decision on the "fast-track" trade negotiating authority the president needs to complete the Trans-Pacific Partnership (TPP) trade deal. The TPP is part of Obama's so-called pivot to Asia, a strategy to counter China's rising economic and diplomatic clout in Asia. Thirteen of 44 Democrats backed the legislation in the Senate's second procedural vote. Some supported moving ahead with fast-track after Senate Majority Leader Mitch McConnell, a Republican, assured them he would set a vote next month on a bill to renew the Export-Import Bank's charter, according to leading Democratic senators. The charter is due to expire at the end of June. They were joined by 49 of 54 Republicans, giving supporters of the legislation more than the 60 votes needed to proceed in the 100-member Senate.

Better paydays may be coming for Americans
One major concern about the U.S. economy as it recovers from the Great Recession is number of "underemployed" Americans -- skilled workers stuck in part-time or lower-paying jobs. Many analysts believe wage growth is essential if the economy is to regain momentum. Or as Eric Green, head of U.S. economic research at TD Securities pointed out in a recent analysis, "more job demand leads to better job offers, higher worker mobility, and rising wages," which in turn strengthens the overall economy. However, even as the unemployment rate has fallen, Americans' wages have been slow to improve. But that trend might be changing. A new report from global outplacement firm Challenger, Gray & Christmas says wages are usually "the last piece of the employment mix to recover," and that salaries are poised for an overall increase. Since the recovery began around five years ago, the U.S. has added an average of 182,500 new jobs per month, and job gains over the last year increased to an average of 250,000 per month.

Deutsche Bank faces shareholder ire at annual meeting
Deutsche Bank, Germany's biggest lender, faced the wrath of shareholders over its poor profitability and wave of scandals at the annual meeting Thursday, while promising to make improvements. "We have made progress, but our work is not complete... We know you are disappointed," one of the co-chief executives Anshu Jain told around 4,000 shareholders who attended the meeting in Frankfurt's trade fair hall. "We have a clear strategy.... We are convinced we are on the right path." Shareholders, however, did not appear to be convinced. "Management should step down. The horrendous fines are eating away profits and as a result there's no money left for sensible projects," complained one small-time investor, Walter Liehmann. "I'm deeply disappointed and frustrated," said another, Peter Simm. Deutsche Bank's good reputation was "in tatters. People who bought the bank's shares for their pensions are the fools," Simm said.

Keiser Report: The Dream Thieves & Sick Economies

Economic Spying by China Spurs New Tactics From U.S. Prosecutors
The Justice Department is revamping the way it fights the increasing theft of U.S. trade secrets by foreign governments, particularly China, a top U.S. official said. “The threat has changed,” Assistant Attorney General John Carlin said in an interview. “We are seeing powerful, dedicated nation-state activity focused on our private sector with the goal of stealing as much as they can.” Carlin’s remarks come the same week the Justice Department unveiled a 32-count indictment charging six Chinese citizens with stealing wireless technology from two U.S. firms and sharing it with the Chinese government. The charges, announced on Tuesday, represented the latest move by the U.S. government to pressure Beijing to stop what American officials call the widespread theft of trade secrets to benefit China’s commercial and military industries. U.S. officials have said economic espionage costs the U.S. economy hundreds of billions of dollars each year.

Cannabis Company Fights Silicon Valley Shade
MassRoots has been called the Facebook for pot smokers, but this online social website for the cannabis community is fighting cannabias. The Denver-based mobile network was launched in July of 2013, went public in 2015 and now has over 325,000 registered users, yet it fights to be recognized as a legitimate business. Cannabias is a term coined for cannabis businesses that are treated as inferior due to the nature of their industry. Last year the Apple App Store removed MassRoots and created a rule that all social cannabis applications were prohibited. For a mobile company like MassRoots, this was devastating news and highly ironic since it was widely known that Apple's AAPL +0.98% founder Steve Jobs smoked pot and used LSD at one time. MassRoots went on a fierce campaign to get their position in the app store restored and Apple capitulated in mid-February. The loss of the Apple access cost MassRoots some time for adding users, but they now hope to reach their goal of 500,000 registered users...

The Unemployment Rate Dropped for Foreign-Born Workers in 2014
The unemployment rate for foreign-born workers in the U.S. fell to 5.6% in 2014 from 6.9% in 2013, the Bureau of Labor Statistics reported Thursday, reflecting the overall firming up of the labor market last year. The unemployment rate for the native-born fell to 6.3% last year from 7.5% in 2013. Since 2009, when the national unemployment rate peaked, joblessness among foreign-born workers has fallen by 4.1 percentage points. The drop was 2.9 percentage points for the native born. The report is compiled annually from the Current Population Survey. Foreign-born workers are those living in the U.S. who were not U.S. citizens at birth and who were born outside the country to parents who were not themselves U.S. citizens, according to the BLS. The number of foreign-born workers kept rising. Last year, there were 25.7 million in the U.S., up from 25.3 million in 2013. They accounted for 16.5% of the labor force in 2014, up from 16.3% the year before and 15.5% in 2009, the year the recovery began.

Oil Spill Worse Than Previously Thought

Britain moves closer to becoming a cashless society
Notes and coins lost the crown as the most popular form of payments in Britain for the first time last year, according to data from the Payments Council. Cash accounted for 48 per cent of all payments, including those made by businesses, falling from 52 per cent in 2013. However, cash remained the most popular way to pay among consumers, who used it for 52 per cent of transactions in 2014. But this number is also set to fall below 50 per cent by next year. Young people lead the way in using digital payments, with almost half carrying less than £5 in cash at any given time, found separate research by think money.co.uk. The introduction of Apple Pay, which allows people to use their phone for contactless payments and comes in later this year, will no doubt hasten the switch. The pros and cons of cards. Payments by card are better for buyer protection, especially those made by credit card. This is because the law states that a credit card provider must step in and help if you buy good or services...

Americans still spending more -- but not on what they want
A majority of Americans -- 55 percent -- say they are spending more than they did last year on groceries, the area in which Americans continually report spending more, according to a new poll by Gallup Inc. Since last June, the top three categories with the highest percentages of consumers saying they are "spending more" (groceries, utilities and healthcare) have stayed in the top five. Of these, only groceries showed a modest decline in the percentage of Americans saying they are spending more (three percentage points), while utilities and healthcare both inched up slightly (three points and two points, respectively). None of these changes, however, is statistically significant, Gallup says. Consistent with the steep decline in gasoline prices over the past year, the only category to show a major shift in spending is "gasoline or fuel," in which 21 percent of Americans in March said they were spending more, compared with 50 percent in June 2014. Thirteen percent said they were spending less on gas...

Barney Frank Denies Earlier Reports That He Called for Weakening Dodd Frank Private Equity Reforms
In January, the private equity trade publications widely reported on what looked to be an important political talking point in their campaign to roll back regulations imposed on them as part of Dodd Frank. Mind you, these new rules were weak tea and simply put part of their activities under the purview of the Securities and Exchange Commission by requiring them to register as investment advisers (the broker-dealer activities of private equity firms are still unsupervised, a big regulatory gap). As we’ve chronicled, even the normally toothless SEC was so disturbed by what it found that it took the unusually bold step of having its top exam official, Andrew Bowden, make a speech in May 2014 in which he described the considerable extent of lawbreaking they’d found so far, including at very large firms. It was thus surprising to read in January 2015 that Barney Frank was supporting a rollback of SEC oversight.

White House Ban On Militarized Gear For Police May Mean Little
When riots erupted last fall on the streets of Ferguson, Mo., police in riot gear fanned out armed with assault rifles and armored vehicles made for the battlefield. Analysts said at the time it was just another symptom of the continued militarization of local police forces. This week, the White House announced a series of steps intended to address the kind of policing issues brought to light by the violence in Ferguson and later in Baltimore. One of those steps bans police from obtaining some military-style equipment — including tracked armored vehicles, weaponized aircraft and high-caliber weapons — from the U.S. government. President Obama said the militarization can sometimes make residents feel like there is "an occupying force" in their neighborhood. "It can alienate and intimidate local residents, and send the wrong message," Obama said in Camden, N.J., a city that has been beset by violent crime in recent years. "So we're going to prohibit some equipment made for the battlefield...

Liz Harrington on the Economy and Rising Health Care Premiums

Minimum-Wage Lessons from Puerto Rico
If a policy change results in large numbers of poor people losing their jobs, would The Washington Post downplay the job destruction as a minor effect that can be worked around? That’s how Post reporter Lydia DePillis skirts the horrifying result of a 1970s minimum-wage increase in Puerto Rico, which destroyed one in 11 jobs on the island and forced many of the poor to emigrate. Richard Freeman, who co-wrote the authoritative study of Puerto Rico’s job loss, seems to join DePillis (who interviewed him) in minimizing his old study. DePillis reports that “the island lost nowhere near as many jobs as [Freeman] expected.” His expectations must have been quite dramatic, because even the Great Recession destroyed fewer than one in 11 jobs. Puerto Rico’s minimum-wage increase was like having the Great Recession one and a half times over—and then never getting those jobs back. In the 1992 paper, Freeman and Alida Castillo-Freeman wrote: Imposing the U.S.-level minimum reduced total island employment...

Former Fed Governor Says Fed Lost Credibility To "Stay On Top Of Ticking Monetary Bomb"
Lawrence Lindsey, a Governor of the Federal Reserve from 1991 to 1997, was right before. And got fired for it. Reality was too inconvenient. In December 2002, as George W. Bush’s economic adviser and Director of the National Economic Council at the White House, he fretted out loud that the invasion of Iraq would be a lot more expensive than supporters of it were claiming. Clearly he’d failed to drink the Kool-Aid. Instead of peanuts, it would cost as much as $200 billion, he said. It shook the White House at its foundations, the fact that he had the temerity to say this. The Atlantic explains: Bush instead stood by such advisers as Paul Wolfowitz, who said that the invasion would be largely “self-financing” via Iraq’s oil, and Andrew Natsios, who told an incredulous Ted Koppel that the war’s total cost to the American taxpayer would be no more than $1.7 billion. As it turns out, Lawrence Lindsey’s estimate was indeed off — by a factor of 10 or more, on the low side.

Obamacare Expansion Cash Could Fill Huge Highway Funding Gap
Are Republicans willing to increase taxes or cut infrastructure spending to keep federal taxpayers on the hook for Obamacare expansion? U.S. Rep. Bruce Westerman hopes not, and the freshman Republican from Arkansas is offering another option. Westerman will introduce a bill Thursday to patch a hole in the Highway Trust Fund with money saved by reducing Obamacare expansion’s federal match rate to traditional Medicaid levels. "My bill provides a consistent, long-term solution that is fiscally responsible and prioritizes spending," Westerman said in an email to Watchdog.org. "My solution could also help reduce deficit spending." Obamacare’s expansion of Medicaid to able-bodied, working-age childless adults has been implemented in 29 states and is entirely federally funded. The federal share of expansion costs is set to taper to 90 percent by 2020. Federal funding for traditional Medicaid recipients — pregnant women, poor families, the disabled, and the elderly — is far less, as high as 74 percent...

Friday 05.22.2015

NEWS to Disturb the Comfortable...

We don't tell you what to think,

but we give you something to think about.