First, it's wildly innacurate to lump all public employees together, since their pension plans vary all over the map. While it may be common for public safety people (police and fire) to retire after 20 years, most others cannot, not if we mean with a pension that can be lived on. There is a vast difference between a retirement system being structured to allow retirement after X number of years versus the number of years needed to receive a livable pension. Most systems multiply the years of service times a percentage factor times the base salary, with the percentage factor being reduced for retirement at younger ages. I put in 34 years as a California teacher and waited until age 61 and a half in order to get a decent pension; both the years and the age were necessary to the computation. The percentage multiplier for those with less than 30 years of service is 2% at age 60 and 1.4% at age 55. The absolute maximum multiplier is 2.4% at age 63 (age 61 and a half with 30 or more years of service). Far from being a "leach", I contributed 8% of my salary to the system during each of the 34 years - there is an employer match. Somebody's irrational resentment is misplaced. No wonder this particular Anonymous Drive-by has chosen to remain anonymous; he's a troll.
Oh no, no, no. Don't you all know that "it" is really the government's fault? Who better to tell us this than Steve Wynn who knows. . . "The governmental policies in the United States of America are a damper, a wet blanket," Wynn said. "They retard investment; they retard job formation; they retard the creation of a better life for the citizens in spite of the rhetoric of the president."
It's doesn't count imports, exports. I'm cracking a side joke on Moore's law in that because of transistor die size yield, computational speed increases and people's computer's quickly become out of date. They have to buy new.
That total manufacturing new orders drop includes aircraft.
CDOs derive ultimately from packages of mortgages.
The collateral for these instruments is the mortgage basket. Each of these mortgages has a debtor with a credit rating. It is relatively simple to come up with a combined credit score for the CDO if you base it on the weighted average of the credit score for all of the mortgages representing the CDO.
Rating can be done anonymously without compromising the privacy of the debtors. If it is not done by the banks or rating agencies, we will never learn the risks and the sorry history of this decade will repeat itself.
This proposal is politically naive. Mortgages have demographics and ethnicity like everything else and there lies a mine field.
"Manufacturing new orders dropped -2.0%, while machinery new orders is up 8.6% and computers a whopping 12.6%. (Moore's law, ain't it swell?) Autos were ok, new orders up 2.5%, yet semiconductors shipments were down -20.6%."
There is more to this if you factor in $12 billion in non oil trade deficit.
The shipments of computers are all servers not going for export, and not PCs which show up as imports. Machinery new orders is every kind of business machine. Perversely, domestic cap goods purchases are negative to trade - so we do not export them. Autos should only be cap goods if business related. But hey, everybody is writing off their car and truck these days.
Moore's law is MIPS not dollars. If the dollars of servers shipped grows,
the MIPS shipped is spectacular and that is a 10 year trend.
Pay teachers 40K in high cost areas? Are we suffering from the money illusion? Back in the good old days (1962) when campus recruiters were offering 5,000 a year to teach school, 6,000 a year for sales jobs (we were about to graduate college and 6K was about what we could earn on a loading dock in Jersey, but that was a union job), in business, 10K a year was considered the mark of success. A Ford Fairlane sold for $3,000, and a good house for maybe 18K to 20K. A member of congress made about22K – today, the CPI compounding puts it at $158,539 (and who said those guys weren’t smart?)
Based on the CPI, a car (Ford) should cost 21,618. A house maybe $144,000. Inflation adjusted, a teacher’s starting salary might be $36K, but none of us expect to stay at entry level forever. Since teachers are often expected to get an advanced degree, 40K is not so much. Principals and administrators at that level, who might have made 8K to 10K now need at least $58K to $70K just to stay even with cost of living.
If anyone thinks teachers are overpaid, I challenge you to take your 4-year degree and try it – I would not last a week managing brats who do not want to be there just to teach something worth learning to the others. Having taught in a university, I know the difference in having a classroom full of motivated people with a real interest.
But the cost of providing education is important if we are going to have real jobs in America, and not just be tour guides and chambermaids for our wealthy Chinese landlords forty years from now.
Frank T.
The credit crisis is a consequence of the massive over leveraging of debt. Current US policy is making our debt problem worse, resulting in a financial system that is now more fragile and at a greater risk of deflationary collapse than when the recession started in December, 2007. Recent accounting changes allow banks to no longer mark their toxic assets to market valuations which results in bank financial statement numbers that are now pure fantasy. Get a good understanding of the $684 trillion dollar OTC derivatives market—including credit default swaps (CDS)—and why Harry Markopolos, whistle blower on Bernie Madoff, believes, “the evildoers that come to light when the unregulated OTC derivatives market goes bankrupt will make Madoff look small time.” www.theastuteinvestor.net
A New York Times article, points to the hiring away of a credit rating agency's (Fitch) derivatives modeling expert. Then the silly rating agencies gave the Banksters their evaluation models, making it much easy to game a CDO.
Now hiring away someone so you can reserve engineer a technique is pretty common actually in engineering. One works around their own patents all of the time. That said, I think there should be a series of NDAs, confidentiality agreements and I also believe the ratings agencies should have some sort of intellectual property protection on their own proprietary models.
In tech at least, walking into a competitor with any documents, code, well anything owned by the past company can get you into huge trouble and most are ethical, would never do such a thing. That said, if someone write a technique, odds are they can design around that very design to something new.
But the bottom line here is CDOs by their nature cannot be verified and thus easily rigged and that is without knowledge of how the credit ratings agencies are assessing them.
But the reason to amplify it in a hearing is because they are going to pass Financial Reform and there is nothing in there to stop these obvious conflicts of interest, then the same stuff is still going on to this day. The banksters are still their customers, the ones paying their bills.
We're seeing a lot of rehash of material and I believe it was Barry Ritholtz who especially pounded on the credit ratings agencies, wrote about a lot of this, before the meltdown hit.
Of course these poor guys who were canned because they dared pipe up is new. One has to give them a break or anyone who gets fired, their career probably destroyed, simply because they are trying to do the right thing, often their actual job description.
That's why I'm summing it all up in "Blogger speak". It's not new, although some of this evidence I have not seen before (the 24MB). They need to separate out completely credit ratings agencies from who actually pays them, in my view.
Most are assuming that home prices will drop after the tax credit expires, the later half of this year. We just had a blow out in terms of new home sales, all attributed to the expiring tax credit. This affect should be into July.
Rents have dropped as well, due to doubling up, yet some regions they are increasing.
PPI this week was a blow out and I expect that to affect CPI.
So, button line it looks good that barring another oil speculation/futures bubble, inflation will be tame, at least for awhile, but it is showing up.
Government intervention in the housing market - most notably the first-time homebuyer tax credit - "have distorted the inflation numbers," he says.
This is hugely important because shelter is 40% of CPI, Bianco notes. "The other 60% has been in an uptrend since last summer," helping explain why most Americans feel like they're experience in the real-world is much different than the government's inflation stats.
Custodians are being privatized out of jobs, and the clerical unions are up next. Teachers in our community have taken cuts for the last 3 contract negotiations. This contract, they are being asked to take a 10% pay cut, pay for family covered on their medical insurance, pick up 20% of their own insurance premium, and to pay the State another 3% more towards retirement. Nowhere did they get a cut in hours or repsonsibilities in return. The stipends they used to get for coaching or doing student clubs after school have been eliminated, yet, they are expected to do them anyway. All of this just to put up with smart assed kids and smart assed parents who don't appreciate what they do anyway.
All of this is happening in the third richest county in the US - not some inner city school.
7K a year per student to educate our children is out of control spending. Let it die? Sure, the hell with a whole generation of kids who get sacrificed to the slaughter and to hell with careers in education because we've got too many good jobs in this country anyway. And while we are at it, to hell with with public education as a policy. Who needs people that can read and write in the jails anyway.
What's screwed up is our priorities! We don't need more teachers. We need more tests! We don't need more money for our schools, we need more money for banks, wars, and jails! Failing inner city schools aren't a result of a failing society, they are the result of failing teachers. Way to blame somebody else.
and probably the MNCs. At least from the stock market. What I want to know, because we have record profits from the Banksters, is precisely the details on where they are making their money. We haven't talked about mark-to-market and FASB accounting for a while, or what the Fed is now holding in terms of MBS and supposedly that's going to stop.
Sanders lost by 2? votes an amendment to break up the big banks and then there is nothig about audit the Fed, highly desired by the House, the majority of the American people.
So, we're looking at another ramrod and probably lucky to get Lincoln's derivatives bill passed out of committee so far.
I'll be updating my new post later, as I can locate the pertinent video clips.
is coming out big-time over public schools as they are taking big cuts. The comments are straight from the Tea Party bunch and they do work hard. If you ever wondered about their commitment to public schools, now we know. They want to wreck them. The "drive-by" comments are everywhere today venting about their hot buttons: union, pensions, class sizes, people of color, demonizing children and their parents, overpaid administrators. They are even more active then they were about health care. If I fight back, they tend to hit the abuse button. Give them "E" for effort.
The only place I've seen this story published was in England.
A former leading lawyer for the US Securities and Exchange Commission blocked several investigations of Allen Stanford, the financier charged with defrauding investors of $7 billion (£4.5 billion), before going on to work for him, according to investigators.
Spencer Barasch, the former head of enforcement for the SEC in Fort Worth, Texas, “repeatedly attempted to represent Mr Stanford in connection with the investigation he had blocked for seven years”, a report by the SEC’s inspector-general says.
The report has revealed a damning picture of failure and inertia at the SEC, despite widely held suspicions within the agency dating back to 1997 that Mr Stanford was running a Ponzi, or pyramid, scheme. He was not charged until last year.
It has found that the SEC’s Fort Worth examination group conducted investigations of Mr Stanford in 1997, 1998, 2002 and 2004, concluding in each case that he was likely to be operating a Ponzi scheme or something similar. As early as 1997, one official said that the purported above-market returns on the certificates of deposit sold by Stanford companies were “absolutely ludicrous”.
Firstly, see that "reply" link? You need to click that to reply to a comment. Comments are threaded and tracked but only when one hits the reply. If you don't hit reply then in "my account", you cannot see if you have a reply to your comment.
Every month when the unemployment report comes out, I write up and midtowng also often writes up an analysis of the report.
See Uemployment March 2010 and there are monthly reports in the same forum category (or should be the same, labor economics).
In each one are civilian population, those changes, the "missing", U6, workforce size and so on, all about capturing the not reported. The under-employed is another category. This is when you've got say a PhD in Physics working at the home depot. That person is counted as a retail sales worker, instead of an unemployed physicist and it's much harder to show those numbers, mainly because the BLS only does yearly occupational categories and even worse, they count foreign guest workers (the dual of offshore outsourcing) in their employment stats, which artificially represses the real unemployment rates and underemployment is "swept under the rug".
I have a tendency to ignore initial unemployment claims because it's always revised to look better than last week and has some serious data anomalies that one needs to look at. It's at best a very rough indicator and also had to be taken on an average. Way too much noise in it to think the weeklies are accurate indicators in my view.
First, it's wildly innacurate to lump all public employees together, since their pension plans vary all over the map. While it may be common for public safety people (police and fire) to retire after 20 years, most others cannot, not if we mean with a pension that can be lived on. There is a vast difference between a retirement system being structured to allow retirement after X number of years versus the number of years needed to receive a livable pension. Most systems multiply the years of service times a percentage factor times the base salary, with the percentage factor being reduced for retirement at younger ages. I put in 34 years as a California teacher and waited until age 61 and a half in order to get a decent pension; both the years and the age were necessary to the computation. The percentage multiplier for those with less than 30 years of service is 2% at age 60 and 1.4% at age 55. The absolute maximum multiplier is 2.4% at age 63 (age 61 and a half with 30 or more years of service). Far from being a "leach", I contributed 8% of my salary to the system during each of the 34 years - there is an employer match. Somebody's irrational resentment is misplaced. No wonder this particular Anonymous Drive-by has chosen to remain anonymous; he's a troll.
Oh no, no, no. Don't you all know that "it" is really the government's fault? Who better to tell us this than Steve Wynn who knows. . . "The governmental policies in the United States of America are a damper, a wet blanket," Wynn said. "They retard investment; they retard job formation; they retard the creation of a better life for the citizens in spite of the rhetoric of the president."
It's doesn't count imports, exports. I'm cracking a side joke on Moore's law in that because of transistor die size yield, computational speed increases and people's computer's quickly become out of date. They have to buy new.
That total manufacturing new orders drop includes aircraft.
CDOs derive ultimately from packages of mortgages.
The collateral for these instruments is the mortgage basket. Each of these mortgages has a debtor with a credit rating. It is relatively simple to come up with a combined credit score for the CDO if you base it on the weighted average of the credit score for all of the mortgages representing the CDO.
Rating can be done anonymously without compromising the privacy of the debtors. If it is not done by the banks or rating agencies, we will never learn the risks and the sorry history of this decade will repeat itself.
This proposal is politically naive. Mortgages have demographics and ethnicity like everything else and there lies a mine field.
"Manufacturing new orders dropped -2.0%, while machinery new orders is up 8.6% and computers a whopping 12.6%. (Moore's law, ain't it swell?) Autos were ok, new orders up 2.5%, yet semiconductors shipments were down -20.6%."
There is more to this if you factor in $12 billion in non oil trade deficit.
The shipments of computers are all servers not going for export, and not PCs which show up as imports. Machinery new orders is every kind of business machine. Perversely, domestic cap goods purchases are negative to trade - so we do not export them. Autos should only be cap goods if business related. But hey, everybody is writing off their car and truck these days.
Moore's law is MIPS not dollars. If the dollars of servers shipped grows,
the MIPS shipped is spectacular and that is a 10 year trend.
Pay teachers 40K in high cost areas? Are we suffering from the money illusion? Back in the good old days (1962) when campus recruiters were offering 5,000 a year to teach school, 6,000 a year for sales jobs (we were about to graduate college and 6K was about what we could earn on a loading dock in Jersey, but that was a union job), in business, 10K a year was considered the mark of success. A Ford Fairlane sold for $3,000, and a good house for maybe 18K to 20K. A member of congress made about22K – today, the CPI compounding puts it at $158,539 (and who said those guys weren’t smart?)
Based on the CPI, a car (Ford) should cost 21,618. A house maybe $144,000. Inflation adjusted, a teacher’s starting salary might be $36K, but none of us expect to stay at entry level forever. Since teachers are often expected to get an advanced degree, 40K is not so much. Principals and administrators at that level, who might have made 8K to 10K now need at least $58K to $70K just to stay even with cost of living.
If anyone thinks teachers are overpaid, I challenge you to take your 4-year degree and try it – I would not last a week managing brats who do not want to be there just to teach something worth learning to the others. Having taught in a university, I know the difference in having a classroom full of motivated people with a real interest.
But the cost of providing education is important if we are going to have real jobs in America, and not just be tour guides and chambermaids for our wealthy Chinese landlords forty years from now.
Frank T.
The credit crisis is a consequence of the massive over leveraging of debt. Current US policy is making our debt problem worse, resulting in a financial system that is now more fragile and at a greater risk of deflationary collapse than when the recession started in December, 2007. Recent accounting changes allow banks to no longer mark their toxic assets to market valuations which results in bank financial statement numbers that are now pure fantasy. Get a good understanding of the $684 trillion dollar OTC derivatives market—including credit default swaps (CDS)—and why Harry Markopolos, whistle blower on Bernie Madoff, believes, “the evildoers that come to light when the unregulated OTC derivatives market goes bankrupt will make Madoff look small time.” www.theastuteinvestor.net
A New York Times article, points to the hiring away of a credit rating agency's (Fitch) derivatives modeling expert. Then the silly rating agencies gave the Banksters their evaluation models, making it much easy to game a CDO.
Now hiring away someone so you can reserve engineer a technique is pretty common actually in engineering. One works around their own patents all of the time. That said, I think there should be a series of NDAs, confidentiality agreements and I also believe the ratings agencies should have some sort of intellectual property protection on their own proprietary models.
In tech at least, walking into a competitor with any documents, code, well anything owned by the past company can get you into huge trouble and most are ethical, would never do such a thing. That said, if someone write a technique, odds are they can design around that very design to something new.
But the bottom line here is CDOs by their nature cannot be verified and thus easily rigged and that is without knowledge of how the credit ratings agencies are assessing them.
But the reason to amplify it in a hearing is because they are going to pass Financial Reform and there is nothing in there to stop these obvious conflicts of interest, then the same stuff is still going on to this day. The banksters are still their customers, the ones paying their bills.
We're seeing a lot of rehash of material and I believe it was Barry Ritholtz who especially pounded on the credit ratings agencies, wrote about a lot of this, before the meltdown hit.
Of course these poor guys who were canned because they dared pipe up is new. One has to give them a break or anyone who gets fired, their career probably destroyed, simply because they are trying to do the right thing, often their actual job description.
That's why I'm summing it all up in "Blogger speak". It's not new, although some of this evidence I have not seen before (the 24MB). They need to separate out completely credit ratings agencies from who actually pays them, in my view.
Most are assuming that home prices will drop after the tax credit expires, the later half of this year. We just had a blow out in terms of new home sales, all attributed to the expiring tax credit. This affect should be into July.
Rents have dropped as well, due to doubling up, yet some regions they are increasing.
PPI this week was a blow out and I expect that to affect CPI.
So, button line it looks good that barring another oil speculation/futures bubble, inflation will be tame, at least for awhile, but it is showing up.
I knew this in 2008. People are talking this up now like its something new. New for the media maybe.
I also knew AIG was tanking in July 2008.
Imagine what the banks books would look like if Mark to Market was still in effect?
They just now stopped buying MBS on the market. Lets see what effects that has on mortgage rates over the next year.
The artificial stimulus is fading away and they cannot go to the cookie jar for more this time. Game over.
The Fed is All Wrong about Inflation
Custodians are being privatized out of jobs, and the clerical unions are up next. Teachers in our community have taken cuts for the last 3 contract negotiations. This contract, they are being asked to take a 10% pay cut, pay for family covered on their medical insurance, pick up 20% of their own insurance premium, and to pay the State another 3% more towards retirement. Nowhere did they get a cut in hours or repsonsibilities in return. The stipends they used to get for coaching or doing student clubs after school have been eliminated, yet, they are expected to do them anyway. All of this just to put up with smart assed kids and smart assed parents who don't appreciate what they do anyway.
All of this is happening in the third richest county in the US - not some inner city school.
7K a year per student to educate our children is out of control spending. Let it die? Sure, the hell with a whole generation of kids who get sacrificed to the slaughter and to hell with careers in education because we've got too many good jobs in this country anyway. And while we are at it, to hell with with public education as a policy. Who needs people that can read and write in the jails anyway.
What's screwed up is our priorities! We don't need more teachers. We need more tests! We don't need more money for our schools, we need more money for banks, wars, and jails! Failing inner city schools aren't a result of a failing society, they are the result of failing teachers. Way to blame somebody else.
That is weird. Is the FDIC so busy closing down banks they decided to just do it "one state at a time"?
and probably the MNCs. At least from the stock market. What I want to know, because we have record profits from the Banksters, is precisely the details on where they are making their money. We haven't talked about mark-to-market and FASB accounting for a while, or what the Fed is now holding in terms of MBS and supposedly that's going to stop.
Sanders lost by 2? votes an amendment to break up the big banks and then there is nothig about audit the Fed, highly desired by the House, the majority of the American people.
So, we're looking at another ramrod and probably lucky to get Lincoln's derivatives bill passed out of committee so far.
I'll be updating my new post later, as I can locate the pertinent video clips.
is coming out big-time over public schools as they are taking big cuts. The comments are straight from the Tea Party bunch and they do work hard. If you ever wondered about their commitment to public schools, now we know. They want to wreck them. The "drive-by" comments are everywhere today venting about their hot buttons: union, pensions, class sizes, people of color, demonizing children and their parents, overpaid administrators. They are even more active then they were about health care. If I fight back, they tend to hit the abuse button. Give them "E" for effort.
The only place I've seen this story published was in England.
Firstly, see that "reply" link? You need to click that to reply to a comment. Comments are threaded and tracked but only when one hits the reply. If you don't hit reply then in "my account", you cannot see if you have a reply to your comment.
Every month when the unemployment report comes out, I write up and midtowng also often writes up an analysis of the report.
See Uemployment March 2010 and there are monthly reports in the same forum category (or should be the same, labor economics).
In each one are civilian population, those changes, the "missing", U6, workforce size and so on, all about capturing the not reported. The under-employed is another category. This is when you've got say a PhD in Physics working at the home depot. That person is counted as a retail sales worker, instead of an unemployed physicist and it's much harder to show those numbers, mainly because the BLS only does yearly occupational categories and even worse, they count foreign guest workers (the dual of offshore outsourcing) in their employment stats, which artificially represses the real unemployment rates and underemployment is "swept under the rug".
I have a tendency to ignore initial unemployment claims because it's always revised to look better than last week and has some serious data anomalies that one needs to look at. It's at best a very rough indicator and also had to be taken on an average. Way too much noise in it to think the weeklies are accurate indicators in my view.
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