WASHINGTON Regardless of who wins the presidential election in November or what compromises Congress strikes in the lame-duck session to keep the economy from automatic tax increases and spending cuts, 160 million American wage earners will probably see their tax bills jump after Jan. 1.
That is when the temporary payroll tax holiday ends. Its expiration means less income in families pocketbooks the tax increase would be about $95 billion in 2013 alone at a time when the economy is little better than it was when the White House reached a deal on the tax break last year.
Independent analysts say that the expiration of the tax cut could shave as much as a percentage point off economic output in 2013, and cost the economy as many as one million jobs. That is because the typical American family had $1,000 in additional income from the lower tax.
But there is still little desire to make an extension part of the negotiations that are under way to avert the huge tax increases and across-the-board spending cuts, known as the fiscal cliff, that will start in January without a deal. For example, without any action, the Bush-era tax cuts will expire and the military and other domestic spending programs will be reduced.
WASHINGTON (CBSDC) The Baby Boomer generations overall health has been on a sharp decline.
Australian researchers from Adelaides three universities have completed the first stage of a report on the generation born between the end of the Second World War and the mid-1960s.
Obesity among baby boomers is more than double the rate of their parents at the same age, and boomers with three or more chronic conditions was 700 percent greater than the previous generation.
We have to do something now in terms of reducing obesity as a risk factor if were going to manage health costs into the future, but I think more importantly if baby boomers are going to be able to lead active and productive lives in their later years, he told ABC.
The Fed's announcement of QE Unlimited was a clear departure from past strategy: Rather than seeing asset purchases as an amount of money injected into the financial system, the Fed is now aggressively using the power of future guidance.
It's a step in the direction of Nominal GDP targeting, the hot idea endorsed recently by Michael Woodford at the Jackson Hole conference.
But while Woodford is one of the most respected monetary academics in the world, the economist who deserves the most credit for taking a wonky idea and making it mainstream is Bentley economics Professor Scott Sumner who writes the blog The Money Illusion.
Tyler Cown of Marginal Revolution writes:
I havent seen anyone else say it yet, so I will. The Feds policy move today might not have happened probably would not have happened if not for the heroic blogging efforts of Scott Sumner. Numerous other bloggers, including the market monetarists and some Keynesians and neo Keynesians have been important too, plus Michael Woodford and some others, but Scott is really the guy who got the ball rolling and persuaded us all that there is something here and wouldnt let us forget about it.
And Matt Yglesias writes:
Professors at Bentley University who've never published a famous book don't normally shift the public debate. But Sumner's vigorous and relentless blogging throughout the crisis on the potential of expectations-focused monetary policy really broke through. It all began with some links from Tyler Cowen and perhaps a tiff with Paul Krugman. I became a regular reader and his ideas have done a lot to influence me, and you can clearly see the influence on Ryan Avent at the Economist, Matt O'Brien at the Atlantic, Ramesh Ponnuru at National Review, Josh Barro at Bloomberg, and a few of the Wonkblog contributors. Outside the exciting world of online economics punditry, NGDP targeting hasn't (yet!) caught fire as rapidly but it gained explicit allegiance from Christina Romer, Krugman, the economics team at Goldman Sachs, and eventually Chicago Federal Reserve President Charles Evans who started out with a different but similar-in-spirit program.
Not sure I agree with QE Infinity but this is interesting.
UNITED NATIONS (Reuters) - Muslim leaders were in unison at the United Nations this week arguing that the West was hiding behind its defense of freedom of speech and ignoring cultural sensitivities in the aftermath of anti-Islam slurs that have raised fears of a widening East-West cultural divide.
A video made in California depicting the Prophet Mohammad as a fool sparked the storming of U.S. and other Western embassies in many Islamic countries and a deadly suicide bombing in Afghanistan this month. The crisis deepened when a French magazine published caricatures of the Prophet.
Turkish Foreign Minister Ahmet Davutoglu said it was time to put an end to the protection of Islamophobia masquerading as the freedom to speak freely.
"Unfortunately, Islamophobia has also become a new form of racism like anti-Semitism. It can no longer be tolerated under the guise of freedom of expression. Freedom does not mean anarchy," he told the 193-nation U.N. General Assembly on Friday.
Despite a text message claiming otherwise, President Barack Obama is definitely not paying your cellphone bill.
Scammers have been spreading text messages promising that the president will cover your bill in full, and all you have to do to take advantage of this amazing deal is to send your account number to a bank account number included in the text.
A SecurityNewsDaily employee received the text, which listed the account number as 211770145, and included a routing number, 211211, as well.
It seems simple enough, right? But then, as with all clever phone and email scams, the trouble slowly creeps in. After initially seeing their account balance drop to zero, those who send their cellphone account to "Obama" receive a returned payment message the next day, plus a $35 bounced check fee. And in most cases, the phone scam asks you for your Social Security number, something you should be incredibly skeptical about giving out.
Since the "Obama phone" thing is going viral this might be something to watch out for.
On June the 30th 2009 oil mysteriously jumped by more than $1.50 a barrel during the night, to reach its highest price in eight months, the kind of swing that is caused by a major geopolitical event.
The amazing, true cause of this price spike has now been released by a Financial Services Authority investigation (FSA).
Although not authorised to invest company cash in trades Steve Perkins, a long standing, senior broker at PVM Oil Futures, had managed to spend $520 million on oil futures contracts throughout the night.
On the morning of the 30th an admin clerk called Mr Perkins to ask why he had bought 7 million barrels of crude during the night. Mr Perkins had no recollection of the transactions, and it turned out that he had made the trades during a drunken blackout.
Between the hours of 1.22am and 3.41am, Mr Perkins gradually bought 69 percent of the global market, whilst driving prices up from $71.40 to $73.05, by bidding higher each time.
Submitted by Tyler Durden on 10/13/2011 10:08 -0400
Today, instead of the traditional market observations by the Chairman of the Fermentation Committee, we share with readers a critical historical lesson from Art Cashin, focusing on an event that took place 89 years ago, which as Cashin says is "one of the most devastating economic events in recorded history and an important backdrop to Europe today. It all began with the efforts of a few, well-intentioned government officials." Many will know what we are talking about already...
Originally, on this day (-2) in 1922, the German Central Bank and the German Treasury took an inevitable step in a process which had begun with their previous effort to "jump start" a stagnant economy. Many months earlier they had decided that what was needed was easier money. Their initial efforts brought little response. So, using the governmental "more is better" theory they simply created more and more money.
Lets take a different tack. To understand the incomprehensible scope of the German inflation maybe its best to start with something basic .like a loaf of bread. (To keep things simple well substitute dollars and cents in place of marks and pfennigs. Youll get the picture.) In the middle of 1914, just before the war, a one pound loaf of bread cost 13 cents. Two years later it was 19 cents. Two years more and it sold for 22 cents. By 1919 it was 26 cents. Now the fun begins.
In 1920, a loaf of bread soared to $1.20, and then in 1921 it hit $1.35. By the middle of 1922 it was $3.50. At the start of 1923 it rocketed to $700 a loaf. Five months later a loaf went for $1200. By September it was $2 million. A month later it was $670 million (wide spread rioting broke out). The next month it hit $3 billion. By mid month it was $100 billion. Then it all collapsed.
Currencies, Culture And Chaos If it is difficult to grasp the enormity of the numbers in this tale of hyper-inflation, it is far more difficult to grasp how it destroyed a culture, a nation and, almost, the world.
Peoples savings were suddenly worthless. Pensions were meaningless. If you had a 400 mark monthly pension, you went from comfortable to penniless in a matter of months. People demanded to be paid daily so they would not have their wages devalued by a few days passing. Ultimately, they demanded their pay twice daily just to cover changes in trolley fare. People heated their homes by burning money instead of coal. (It was more plentiful and cheaper to get.)
The middle class was destroyed. It was an age of renters, not of home ownership, so thousands became homeless. But the cultural collapse may have had other more pernicious effects.
Whereas earlier today we presented one of the most exhaustive presentations on the state of the student debt bubble, one question that has always evaded greater scrutiny has been the very critical default rate for student borrowers: a number which few if any lenders and colleges openly disclose for fears the general public would comprehend not only the true extent of the student loan bubble, but that it has now burst. This is a question that we specifically posed a month ago when we asked "As HELOC delinquency rates hit a record, are student loans next?" Ironically in that same earlier post we showed a chart of default rates for federal loan borrowers that while rising was still not too troubling: as it turns out the reason why its was low is it was made using fudged data that drastically misrepresented the seriousness of the situation, dramatically undercutting the amount of bad debt in the system.
Luckily, this is a question that has now been answered, courtesy of the Department of Education, which today for the first time ever released official three-year, or much more thorough than the heretofore standard two-year benchmark, federal student loan cohort default rates. The number, for all colleges, stood at a stunning 13.4% for the 2009 cohort. The number is stunning because it is nearly 50% greater than the old benchmark, which tracked a two year default cohort, and which was a "mere" 8.8% for the 2009 year. Broken down by type of education, and using the new improved, and much more realistic benchmark, for-profit institutions had the highest average three-year default rates at 22.7 percent, with public institutions following at 11 percent and private non-profit institutions at 7.5 percent. In other words, more than one in five federal student loans used to fund private for-profit education, is now in default and will likely never be repaid!
And while it is impossible using historical data to extrapolate with precision what the current consolidated federal student loan default rate is, we do know that there is now $914 billion in federal student loans (which also was mysteriously revised over 50% higher by the Fed just a month ago). Using simple inference, all else equal (and all else has certainly deteriorated), there is now at least $122 billion in federal student loan defaults. And surging every day.
Ladies and gentlemen: meet the new subprime
WASHINGTON Extremists from groups linked to al Qaida struck the U.S. consulate in Benghazi, Libya, in a deliberate and organized terrorist attack, the top U.S. intelligence agency said Friday, as it took responsibility for the Obama administrations initial claims that the deadly assault grew from a spontaneous protest against an anti-Islam video.
The unusual statement from the Office of the Director of National Intelligence appeared to have two goals: updating the public on the latest findings of the investigation into the assault, and shielding the White House from a political backlash over its original accounts.
In the immediate aftermath (of the assault), there was information that led us to assess that the attack began spontaneously following protests earlier that day at our embassy in Cairo, spokesman Sean Turner said in the statement. We provided that initial assessment to executive branch officials and members of Congress, who used that information to discuss the attack publicly.
The Office of the Director of National Intelligence, which coordinates and sets policies for the 16 other U.S. intelligence agencies, is led by retired Air Force Gen. James Clapper, who was appointed by President Barack Obama in August 2010.
Read more here: http://www.mcclatchydc.com/2012/09/28/170078/intelligence-office-says-it-got.html#storylink=cpy
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