Madoff Bankruptcy Costs Top $1 Billion Six Years Later
Unwinding the biggest Ponzi scheme in U.S. history isn’t cheap. Six years after Bernard Madoff’s fraud collapsed, the cost of liquidating his defunct investment advisory firm to repay thousands of victims has topped $1 billion, though the con man’s former customers aren’t footing the bill. The fees, paid by the industry-backed Securities Investor Protection Corp., which is managing the case, have financed a team of lawyers who this week surpassed $10 billion in recoveries for victims, or almost 60 percent of the principal that vanished after Madoff’s arrest in December 2008. Irving Picard, the bankruptcy lawyer who’s leading the effort as trustee for Madoff’s company, included the new fee total in an interim report posted today on his website. A bankruptcy judge in Manhattan regularly approves the fees, sometimes over the objections of victims’ groups.The victims, who believed their investments were used to buy securities, have been paid almost $6 billion by Picard...
Money Printing: The U.S. Fed Is No Match for China
The phenomenal credit expansion in China has taken many forms and has accomplished many phenomenal things, from building entire ghost cities to turning ambient air into a toxic cocktail. In the process, the credit bubble turned China into the second largest economy. Some of this freshly created money has been spread around. Hence, the growing middle class. Those with significant accumulation of wealth are trying to get some of it out of China before it all blows up or before the corruption crackdown or a purge or some other business misfortune takes it all down. In China’s state-controlled system, credit expansion is largely done by state-owned banks that have to keep lending no matter what. Then there’s the increasingly important shadow banking system. And finally, the People’s Bank of China – and no central bank is a match for it. The chart below compares the growth of the balance sheets of the major central banks, starting in 2003, when the index was set at 100.
Majority Say Not Gov't Duty to Provide Healthcare for All
For the third consecutive year, a majority of Americans (52%) agree with the position that it is not the federal government's responsibility to ensure that all Americans have healthcare coverage. Prior to the start of Barack Obama's presidency in 2009, a majority of Americans consistently took the opposite view. The most recent data were collected in Gallup's annual Health and Healthcare poll, conducted Nov. 6-9. Gallup first asked this question in 2000, when 59% of Americans said it was the federal government's responsibility to make sure all Americans have healthcare. This sentiment peaked at 69% in 2006. Americans' attitudes began to shift in the 2008 poll, conducted just after Obama was elected, and became evenly divided after Obama took office in 2009. During this time, Republicans and independents became more likely to say universal healthcare was not the government's responsibility, most probably in reaction to Obama's campaign promise that he was going to attempt to do just that.
Gerald Celente: First Financial Calamity then War
Fannie Mae: Don't expect 2015 to be a breakout year for housing
While the year of the purchase mortgage is coming to a close in less than two months, 2015 is not likely to waiver off of 2014’s trends. At the end of 2013, Freddie Mac said that for the first time since 2000, the industry is going to see the mortgage market dominated by purchase activity as the refinance share drops below 50%, creating a purchase dominated market. Now heading into 2014, the year is expected to produce much of the same. “The housing market continues to grind its way upward, but we don’t expect a breakout performance in 2015 as the fundamentals remain somewhat muted,” said Fannie Mae Chief Economist Doug Duncan in its November 2014 Economic Outlook. While homebuilding activity improved during the third quarter due primarily to the multifamily segment, which is expected to grow further next year, the single-family segment has been relatively flat for some time. And while rates are hovering around 4%, the temporary burst in refinance activity appears to have subsided...
Part-time jobs put millions in poverty or close to it
Seven million Americans are stuck in part-time jobs. They are unable to get full-time work and the benefits and stability that come with it. It's a constant struggle for these families and a worrying sign for America's recovery. Overall U.S. unemployment has fallen steeply in the past year (from 7.2% in October 2013 to 5.8% in October 2014), but too many people can only find part-time positions. The number of people working part-time involuntarily is more than 50% higher than when the recession began. There was a similar spike in part-time workers in prior recessions, but it dropped quickly. That's not happening this time around. In fact, some states have seen an increase during the recovery in people languishing in part-time jobs who want something more. Dead-end jobs: Paige Stevenson is caught in the part-time job trap. She started working six months ago as a legal assistant for 30 hours a week in Annapolis, Maryland, a state where involuntary part-time has doubled since the recession began.
Obama grants amnesty to millions of illegals
In a prime-time speech to the nation Thursday evening, President Obama declared that he will unilaterally halt deportations of millions of illegal aliens despite strong objections of many in Congress and widespread opposition from the American public. “That’s the real amnesty – leaving this broken system the way it is,” Obama said. “Mass amnesty would be unfair. Mass deportation would be both impossible and contrary to our character. What I’m describing is accountability – a common-sense, middle-ground approach: If you meet the criteria, you can come out of the shadows and get right with the law. If you’re a criminal, you’ll be deported. If you plan to enter the U.S. illegally, your chances of getting caught and sent back just went up.” Obama also challenged Congress on the legality of his actions. “The actions I’m taking are not only lawful, they’re the kinds of actions taken by every single Republican president and every Democratic president for the past half-century.
Inflation Creeping Back; Economy Strong Overall
Underlying inflation pressures rose in October, even as falling gasoline prices kept overall U.S. consumer prices in check, bolstering expectations of a mid-2015 interest rate hike from the Federal Reserve. Other data on Thursday showed vigor in the economy, with home resales rising at their fastest pace in a year in October and factory activity in the mid-Atlantic region expanding in November to its highest level since December 1993. The Labor Department said on Thursday its so-called core Consumer Price Index, which excludes food and energy, increased 0.2 percent, the largest increase in five months, after nudging up 0.1 percent in September. In the 12 months through October, the core CPI rose 1.8 percent after rising 1.7 percent in September, which should ease fears about deflation. However, falling gasoline prices, which offset rising rent, household furnishings, airline, recreation, new motor vehicles and medical costs, left the overall CPI unchanged last month after a 0.1 percent gain in September.
Winter Weather and the Holiday Shopping Season
Iran deal by Monday? Don't bet on it
As Secretary of State John Kerry arrives in Vienna days before a deadline for a nuclear deal with Iran, sources close to the process say a final agreement appears unlikely this month. But after years of behind-the-scenes lobbying to try and prevent a deal, skeptical U.S. allies in the Middle East are increasingly resigned to the idea that the comprehensive agreement sought by President Obama will become a reality. The overwhelming consensus among roughly a dozen sources from the U.S., Europe and the Middle East is that the nuclear talks will be extended next week into early 2015. But Israeli and Arab officials who share Prime Minister Benjamin Netanyahu’s opposition to a deal say they’ve largely given up hope of convincing the Obama administration that it should adopt a much sterner negotiating position with Iran, and are bracing for an eventual agreement that they expect to be too soft on the Islamic Republic. “From our point of view there is no good deal on the table now,”...
The man who called the last stock crash is already blaming the Fed for the next
The investment adviser who accurately predicted the crash of 2008 is once again sounding the alarm. This time around, Peter Schiff, the chief executive officer of Euro Pacific Capital who memorably predicted the collapse of the housing market in 2008 and the global financial crisis of 2010, is speaking out against the Federal Reserve, which, he claims, has inflated the prices of stocks and bonds with its ultraloose, unconventional monetary policies. “The recession the Fed is fighting is the cure,” Schiff said in an interview with MarketWatch. Schiff espouses the view that a good, old-fashioned recession may be exactly the catharsis the markets require, in the wake of a fleet of quantitative-easing measures that have merely buoyed stock values temporarily. Schiff was right about the housing market’s myriad flaws in 2006, but his predictions about the fall of the dollar, hyperinflation, the collapse of the U.S. economy, and global economic decoupling remain unfulfilled.
No, Reagan Did Not Offer An Amnesty By Lawless Executive Order
Progressive media is in full spin to mitigate the anger Americans are expressing about President Obama’s decision to offer legal status to millions of people who broke the law. That spin has taken many forms, including the novel arguments that the executive branch is empowered to act whenever the legislative branch declines and that the executive branch’s enforcement discretion includes the affirmative grant of benefits not otherwise authorized by law. Most recently, however, Progressive columnists have settled on an old favorite tactic: justify Democratic misbehavior by claiming (falsely, as you will see) that a Republican did it first. Democrats across print, web, and cable have been repeating the claim that Obama is doing nothing more than what Presidents Reagan and Bush 41 did first. They point to executive actions taken in 1987 and 1989 that deferred the removal of certain aliens. But, as usual for Progressive commentators, they elide the crucial facts that distinguish those actions from Obama’s.
$4.15 Per Pound: Ground Beef Climbs to Another Record High
he average price for a pound of ground beef climbed to another record high -- $4.156 per pound -- in the United States in October, according to data released today by the Bureau of Labor Statistics (BLS). In August, the average price for a pound of all types of ground beef topped $4 for the first time, hitting $4.013, said the BLS. In September, the average price jumped .083 cents to $4.096 per pound, an increase of 2.1 percent in one month. In October, which is the latest data from the BLS, the average price for a pound of ground beef ($4.156) increased 1.4 percent from September. A year ago, in October 2013, the average price for a pound of ground beef was $3.389 per pound. Since then, it has climbed 76.5 cents, or about 22.6 percent in one year. Five years ago, in October 2009, the average price for a pound of ground beef was $2.177, according to the BLS. The price has since climbed by $1.977 per pound, or 90.8 percent.
Wal-Mart defends employee food drive
Wal-Mart on Thursday came under fire from the Making Change at Walmart organization, after the labor group posted an image to its Facebook page showing a food drive for employees at an Oklahoma store. Wal-Mart spokeswoman Kayla Whaling quickly responded to the criticism, saying the drive was planned by one of the store's employees, who was collecting food for two co-workers who were on a leave of absence and unable to work. Whaling added that Wal-Mart, which is frequently the subject of attack over its pay practices, never plans this type of event at the corporate level. Dawnne Sulaitis, who has worked at Wal-Mart for 19 years, said she asked for permission to hold the food drive when she found out that two families would be down to one income over the holidays. "It just really comes down to wanting to lend somebody a helping hand," Sulaitis said. She added there are two medium-size boxes for donations in the store, and each is about three-quarters of the way full.
The U.S. government thinks China could take down the power grid
China and "probably one or two other" countries have the capacity to shut down the nation's power grid and other critical infrastructure through a cyber attack, the head of the National Security Agency told a Congressional panel Thursday. Admiral Michael Rogers, who also serves the dual role as head of U.S. Cyber Command, said the United States has detected malware from China and elsewhere on U.S. computers systems that affect the daily lives of every American. "It enables you to shut down very segmented, very tailored parts of our infrastructure that forestall the ability to provide that service to us as citizens," Rogers said in testimony before the House Intelligence Committee. Rogers said such attacks are part of the "coming trends" he sees based on "reconnaissance" currently taking place that nation-states, or other actors may use to exploit vulnerabilities in U.S. cyber systems.
Administration ‘erroneously’ overcounted Obamacare enrollees
The Obama administration recently inflated Obamacare enrollment statistics by as many as 400,000 people by including stand-alone dental plans in their official count, according to a House committee investigation. The administration in September said 7.3 million people at the time were enrolled in health plans through the Affordable Care Act insurance marketplaces. The House investigation, first reported by Bloomberg, found that this number also counted people enrolled in just dental coverage, a change from how previous enrollment figures have been counted that the Obama administration did not disclose. Without counting those dental plans, enrollment would have been 6.97 million. That 7.3 million figure reported by the Department of Health and Human Services was down from the 8 million people who had signed up through the end of April. HHS hasn't provided a comprehensive accounting of why enrollment fell — such as how many people didn't pay their premiums...
New robots patrol for security in Silicon Valley
Kmart Gives Employees A Choice: Work On Thanksgiving Or Be Fired
The retail chain is one of many coming under fire for creeping the traditional Black Friday 2014 sales onto Thanksgiving itself. The store will open at 6 a.m. on Thursday and remain open for 42 hours, leaving stores strapped for employees and often denying requests for time off. The controversy over Kmart’s Thanksgiving hours was made public thanks to Jillian Fisher, who started a petition on Coworker.org calling on Kmart to give its employees time off to spend with family. Fisher also collected information from Kmart workers nationwide, who told her that management was forcing them to work on the holiday. One employee claimed that the store’s human resources department told employees, “if you do not come to work on Thanksgiving, you will automatically be fired… I made the request to work a split shift on Thanksgiving and was denied.” “I am a lead at a Kmart and it is mandatory for me to work on Thanksgiving,” another Kmart worker noted.
Alibaba Completes $8 Billion Bond Deal As Shares Continue Rally
Chinese e-commerce giant Alibaba Group has raised $8 billion in its first-ever bond offering, Bloomberg Bloomberg reported on Thursday evening. Alibaba received $57 billion in orders for the six-part bond offering, which will be used used to refinance the company’s existing credit facilities. At $8 billion, the sale is the largest dollar denominated offering by a Asian company, according to Bloomberg data, eclipsing a recent $6.5 billion offering from Bank of China Bank of China. For Alibaba, the deal underscores U.S. investors’ comfort and interest in the highly profitable and fast growing tech titan, which was founded by Chinese billionaire Jack Ma. Ratings agencies Moody's, Standard & Poor’s and Fitch assigned the equivalent of an A+ rating — to Alibaba bonds earlier this November. Those ratings make Alibaba the highest-rated non-state owned Chinese issuer, data provided by Fitch show. The company’s debt ratings are also ahead of tech giants like eBay...
Daily Volatility Does Not Worry Me - BIG GOLD Newsletter Producer
As the ‘Sanctions War’ Heats Up, Will Putin Play His Gold Card?
The topic of ‘currency war’ has been bantered about in financial circles since at least the term was first used by Brazilian Finance Minister Guido Mantega in September 2010. Recently, the currency war has escalated, and a ‘sanctions war’ against Russia has broken out. History suggests that financial assets are highly unlikely to preserve investors’ real purchasing power in this inhospitable international environment, due in part to the associated currency crises, which will catalyze at least a partial international remonetization of gold. Vladimir Putin, under pressure from economic sanctions, may calculate that now is the time to play his ‘gold card’. A Brief History of the Currency War. "We're in the midst of an international currency war. This threatens us because it takes away our competitiveness." Brazilian Finance Minister Mantega uttered these words in September 2010, about two years after the spectacular global financial crisis of late 2008.
Ferguson Protests Are Coming to Your City
Demonstrations in nearly 100 cities will follow Officer Darren Wilson's grand jury announcement. On Wednesday evening in Ferguson, Missouri, a number of protesters gathered outside the police station for a spirited demonstration. And, for the first time, in several nights, a boisterous gathering yielded some arrests. As Reuters reported, five people were arrested as many in the St. Louis suburb await the grand jury decision relating to the August shooting death of Michael Brown. Earlier in the day, the Ferguson School District announced its plans to possibly close its 23 schools early depending on when the report is announced. But the fallout from the decision, however it goes, will hardly be a local affair. In recent days, activists from have ramped up efforts to organize protests in cities and towns across the country and beyond. As Bloomberg reports, "The Ferguson National Response Network and Ferguson Action, a coalition of groups in the St. Louis area, list details of demonstrations...
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