July 2010

Sunday Morning Comics - Sing Along Edition

Submitted by on

Brought to you by government policies - People are so broke they aren't making funny videos anymore.
Cup O' Joe

 

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies!

 

Goldman Sachs Resort and Casino:

Goldman Sachs is proud to announce a consumer-enriching expansion from the hallowed halls of Wall Street to the glittering neon of Las Vegas. In addition to continuing our world-class wealth-friendly Private Wealth Management and Personal Banking services; our internationally-recognized client-focused Global Investment Research services; our award-winning, growth-facilitating Debt Financing teams, we are excited to unveil plans for the globally diversified, entertainment-enhanced, Goldman Sachs Lounge & Casino, perfect for both the high roller, and the high-net-worth individual, financial institution, corporation and/or government.

Apple's Revolutionary New Product

 

Greedy Executive Pay Gets a Scolding and Not Much Else

Submitted by on

Where have we seen this before? The White House has a lot of talk. Then a pay czar is appointed. After some period, a damning report is issued. Then we have the public scolding, while legislation, policy and amendments are ignored and defeated, often by the very same administration.

Any action on the latest outrage du jour? Nah.

Such is the the Obama administration's pay czar's report. To be fair, the Pay Czar was given no power to actually get the ill gotten gains back. He also was limited to institutions who received TARP funds, not the real bail out going on at the Federal Reserve.

The Special Master for TARP Executive Compensation, Kenneth R. Feinberg, a.k.a. Pay Czar, was chartered to monitor executive compensation of bailed out financial firms. This covered 419 banks who received TARP funds. 17 of those banks handed out ill-advised executive compensation tallying $1.6 billion dollars. $1.6 billion dollars equals 26,666 $60,000 a year salaries. In other words, to feed the executive pig, 26,666 people went without a job.

Friday Movie Night - Big Sugar

Submitted by on

hot buttered popcorn It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

 

First up is the short film, The Cost of a Coke, which shows murders and mayhem to union bust abroad.

 

The Cost of a Coke

 

Next is the CBC documentary, Big Sugar.

Big Sugar explores the dark history and modern power of the world's reigning sugar cartels. Using dramatic reenactments, it reveals how sugar was at the heart of slavery in the West Indies in the 18th century, while showing how present-day consumers are slaves to a sugar-based diet. Going undercover, Big Sugar witnesses the appalling working conditions on plantations in the Dominican Republic, where Haitian cane cutters live like slaves. Workers who live on Central Romano, a Fanjul-owned plantation, go hungry while working 12-hour days to earn $2

 

European Bank Stress Test Results

Submitted by on

The European Bank Stress Tests are in. These are the results from 91 EU banks, which are 65% of the sector.

The aggregate Tier 1 ratio, used as a common measure of banks’ resilience to shocks, under the adverse scenario would decrease from 10.3% in 2009 to 9.2% by the end of 2011 (compared to the regulatory minimum of 4% and to the threshold of 6% set up for this exercise). The aggregate results depend partly on the continued reliance on government support for currently 38 institutions in the exercise.

The aggregate Tier 1 ratio incorporates approximately 197bn € of government capital
support provided until 1 July 2010, which represents 1.2 percentage point of the
aggregate Tier 1 ratio.

As a result of the adverse scenario after a sovereign shock, 7 banks would see their
Tier 1 capital ratios fall below 6%.

The threshold of 6% is used as a benchmark solely for the purpose of this stress test
exercise. This threshold should by no means be interpreted as a regulatory minimum.
All banks that are supervised in the EU need to have at least a regulatory minimum of
4% Tier 1 capital.

The Wall Street Journal lists the banks who failed:

Conference Board Leading Economic Indicators drop -0.2% for June 2010

Submitted by on

The conference board leading economic indicator (LEI) index dropped -0.2% for June. May was a +0.5% increase and April was a-0.1% decrease.

Below is their graph from the report, with both LEI and the coincident index, which was unchanged from May. The Conference Board's lagging economic indicator index increased +0.1% in June.

 

LEI

 

Unfortunately (at least in a press release), the Conference board does not give the formula or weighting of this index. The elements are Average weekly hours, manufacturing, Average weekly initial claims for unemployment insurance, Manufacturers’ new orders, consumer goods and materials, Index of supplier deliveries – vendor performance, Manufacturers' new orders, nondefense capital goods, Building permits, new private housing units, Stock prices of 500 common stocks, M2 of the Money supply, Interest rate spread, 10-year Treasury bonds less federal funds and the Index of consumer expectations.

As one can see there are some elements completely divorced at this point from the real economy, such as corporate quarterly profits and stock values.

The Philadelphia Fed also released state coincident indexes.

 

This is Pathetic

Submitted by on

This story is pathetic. In order to survive, find a job, a woman has to leave her homeland, move to a low cost country, accept super low wages, to offer telephone support to....her own country.

I'm not making this up.

In October 2008, when the world was reeling from the collapse of Lehman Brothers and job markets were freezing up everywhere, Akane Natori waltzed into a new position she liked. “Things went so smoothly after applying online, and before I knew it, I had the job,” said Ms. Natori, who was then a 26-year-old sales assistant at an import-export company in Tokyo.

There was just one catch, one that speaks volumes about the Japanese economy and the challenges younger Japanese face in a country where college graduates used to count on lifetime employment with the company they joined right out of school. Ms. Natori’s new job — working in a call center answering queries from customers in Japan — was in Bangkok.

Wages versus gold: A look at historical data

Submitted by on

One of the most visible measures of the condition of working families is the price level of a day’s wages. So, we figured it might make sense to subject those wages to the same sort of analysis we used in the last post: the withering criticism of an ounce of gold.

Here is a chart of an average day’s wage since 1964, as presented by the Bureau of Labor Statistics:

 Average wages in dollars

Chart 1: Average day's wage in dollars (1964-2010) (Source: bls.gov)

As is befitting a labor force enjoying the prosperity of the freest, most productive, nation on the planet, we have seen our wages rising for the entire period from 1964 to 2010. Even through depressions as intense as that of the Great Stagflation (the first set of green and red bars) and the current Great Recession (the second set of green and red bars) the average day’s wage of American workers has never fallen year over year.

Unfortunately, things are not so rosy when the value of a day’s wage is measured by an ounce of gold:

Chart 2: Average day's wage in gold (1964-2010) (Source: bls.gov)

The bailouts continue

Submitted by on

Most people think that the Wall Street bailouts ended at least a year ago. They would be wrong.

(Reuters) - Increased housing commitments swelled U.S. taxpayers' total support for the financial system by $700 billion in the past year to around $3.7 trillion, a government watchdog said on Wednesday.

Pages