America
in Worse Fiscal Shape than Detroit-Professor Laurence Kotlikoff (interview) - (www.usawatchdog.com) Boston
University Economics Professor, Laurence Kotlikoff, says, “The country is
in worse fiscal shape by many miles than Detroit. So, the country is
essentially bankrupt.” Dr. Kotlikoff estimates the long term debt and
liabilities of America are more than $200 trillion! He is spearheading a
bill in Congress called The Inform
Act.
It is an attempt to wake up the nation to our dire financial situation so
something can be done to fix this enormous problem. Dr. Kotlikoff
explains, “The bill has been endorsed by over 1,000 economists, including
15 Nobel Prize winners in economics . . .Never in the history of this country
have this many top economists from all political persuasions endorsed a piece
of legislation like this.” Dr. Kotlikoff and his fellow economists
all contend, “The country needs to do honest accounting.” The
professor charges the government is “disguising the true problem.”
Dr. Kotlikoff says, “The government is printing mountains of
money to pay its bills. The Fed is printing 29 cents of every dollar that
Uncle Sam is spending.” What happens if this continues? Dr.
Kotlikoff says, “Eventually somebody recognizes this and starts dumping
the bonds, and interest rates go up, and inflation takes off, and were off to
the races.” In closing, Dr. Kotlikoff warns, “This is going to
crash, but there are different ways for cancer to kill you. It can be
very gradual . . . or it can attack some organ and you can die overnight.
Either of those outcomes can happen.”
GDP revised up, but not as good as it looks - (money.cnn.com) Bring
on the sugar rush: The economy grew at a 3.6% annual pace in the third quarter
-- much stronger than expected, according to a government report released
Thursday. But here's the buzz kill: That number is not nearly as good as it
looks. The main reason that growth in the nation's gross domestic product was
so strong was because businesses are stockpiling larger inventories. Once you
factor out the impact from the inventory boost, GDP growth would have been just
1.9%. "Overall, the report still paints a picture of subdued underlying
growth," said Yelena Shulyatyeva, U.S. economist with BNP Paribas. Why are
businesses adding to their inventories so dramatically? It's not clear. It
could be a sign that companies expect demand will pick up in the future -- so
they are stocking their shelves in advance. Or, it could be an indication that
demand is weaker than expected, and goods are lingering on the shelves longer
than planned as a result.
Pension
postponed: Retire at 69 in U.K. - (money.cnn.com) Most
British workers under 50 will have to work longer than expected after the
government unveiled plans to introduce the highest retirement age in the
developed world. Under the reforms, which were presented as part of a bi-annual
economic update on Thursday, the pension age will be linked to rising life
expectancy and reflect the U.K. government's belief that workers should spend
no more than a third of their adult life in retirement. The state pension age
of 68 will now be enforced in the mid 2030s, about 10 years earlier than
planned. And by the late 2040s it will rise to 69. The new regime will give the
U.K. one of the highest pension ages in the world by the middle of the century,
according to the Organization for Economic Co-operation and Development.
Banks
lobby to underwrite bad loans with no risk retention - (www.ochousingnews.com) Lenders prefer to underwrite loans and pass the
risk to others thus avoiding consequences for shoddy work. Housing advocates
want unqualified borrowers to receive loans even if many borrowers won’t repay
them. Both lenders and housing advocates agree that the Dodd-Frank financial
reform law blocks their agenda, so they formed a coalition to lobby the
agencies responsible for implementing this law. These responsible agencies
capitulated to the coalition in an example regulatory capture. Wikipedia
defines Regulatory
Capture this
way: Regulatory capture is a form of political corruption that occurs when a
regulatory agency, created to act in the public interest, instead advances the
commercial or special concerns of interest groups that dominate the industry or
sector it is charged with regulating. Regulatory capture is a form of
government failure; it creates an opening for firms to behave in ways injurious
to the public
Déjà
vu: Holder deal risks another mortgage crisis - (www.wnd.com) - Administration
forcing bank to fund loans people can't afford. In the new $13 billion JP
Morgan Chase subprime loan deal with the Justice Department, Attorney General
Eric Holder appears to have designed a multi-million dollar, backdoor kickback
for activist groups like the disgraced community organizer ACORN. Critics say
the Obama administration has learned nothing from the mortgage meltdown in
2008-2009, which was prompted by the default of subprime loans packaged into
financial instruments. Instead, the administration is engineering a strategy to
revive the subprime mortgage market by forcing banks to fund left-wing
community organizing groups that would once again place low-income families
into mortgages they can’t afford. As Investor’s Business Daily pointed out in
an editorial Tuesday, “Annex 2” of the JPMorgan settlement agreement, announced Nov. 19, mandates that “JPMorgan
fork over any unclaimed or unpaid damages to a nonprofit group that finances
Acorn clones and other shakedown groups.”
Economy
in U.S. Grows at 3.6% Rate on Bigger Inventory Build - (www.bloomberg.com)
Jobless Claims in U.S. Unexpectedly Drop to Two-Month Low - (www.bloomberg.com)
Jobless Claims in U.S. Unexpectedly Drop to Two-Month Low - (www.bloomberg.com)
Treasury
Chief to Declare Big Gains in Financial Reform - (www.nytimes.com)
U.S. Corporate Debt Seen Hurt by Baucus Repeal of Tax Law - (www.bloomberg.com)
Volcker Rule Won't Allow Banks to Use 'Portfolio Hedging' - (online.wsj.com)
U.S. Corporate Debt Seen Hurt by Baucus Repeal of Tax Law - (www.bloomberg.com)
Volcker Rule Won't Allow Banks to Use 'Portfolio Hedging' - (online.wsj.com)
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