What got ignored today
All the best news comes out when they think you aren't looking.
Obama makes an interesting admission
First of all, I haven’t commented on WikiLeaks generally. The conclusions of the intelligence community with respect to the Russian hacking were not conclusive as to whether WikiLeaks was witting or not in being the conduit through which we heard about the DNC e-mails that were leaked.
In his final press conference, beginning around 8 minutes 30 seconds in, Obama admits that they have no evidence of how WikiLeaks got the DNC material....Most crucially of all Obama refers to “The DNC emails that were leaked”. Note “leaked” and not “hacked”
Trump's first executive move (remember he's in real estate)
The Trump administration overturned a mortgage-fee cut under a government program that’s popular with first-time home buyers and low-income borrowers.
A letter from the Department of Housing and Urban Development on Friday said the agency is canceling a reduction announced last week while President Barack Obama was still in office. The Federal Housing Administration had planned to cut its annual fee for most borrowers by a quarter of a percentage point to 0.60 percent, effective on Jan. 27.
Bondholders Left Holding Stockholders' Bag
Debt investors have enabled top-rated companies to sell a staggering amount of debt to start 2017.
They've quickly absorbed the record $125 billion of investment-grade bonds issued so far this year. Not only that, but they're also pricing in a lower potential risk of the borrowers being unable to repay them.
This is especially remarkable because these corporations have been on an almost decade-long borrowing binge. And it doesn't entirely make sense for bondholders, especially considering that one of the most popular uses for this borrowed money has been buying back stock.
This is basically taking money from debt buyers to pad the pockets of equity holders. It has no obvious benefit to the company's long-term prospects; in fact, quite the opposite. As Fitch Ratings said in a report on Thursday, "leveraged share buybacks and other shareholder friendly actions are an ongoing risk to bondholders as borrowing costs remain historically low."
Analysts have high expectations for this year's share buybacks in large part because of the change in the U.S. government. The officials who are taking control are expected to ease corporate taxes, prompting companies to bring back money that's stashed overseas to avoid the current levies. Much of this money may go to repurchasing shares.
But the tax code hasn't changed yet, and until it does, companies will most likely continue to use borrowed money for share buybacks. This trend is potentially harmful for bond investors.
As a result, Generation X and older millennials are the most debt-laden people in U.S. history. Back in 2014, researchers at the Federal Reserve Bank of St. Louis looked at how debt levels varied by the age of the head of household. Their findings confirm that despite aggressive deleveraging since the financial crisis, the problem remains acute:
Generation X (born between 1965 and 1980) were the most aggressive borrowers prior to the financial crisis, and their cumulative debt increases to date remain the largest in percentage terms among all age groups… Early (millennials) also borrowed aggressively.
But there’s one more cost of debt that gets discussed less often -- loss optionality. If I’m a young person with a bank account in the black, my life choices are many. I can start a business, bum around teaching English in Europe, go to grad school, or try to become a musician. But if I have tens of thousands of dollars in student loan debt, I have to get a job, in order to make my monthly payments.
Similarly, suppose I’m 38 years old, with a secure job at a company, and I’m loaded down with a mortgage, car loans and credit-card debt. For me to leave my employer to start a business, even if I have a good idea, would be an incredible risk -- one lapse in venture funding, and I would miss my monthly payments, and my credit rating would go down the tube.
Option value, as any finance professor knows, is important. Debt reduces it. One fundamental reason for this is borrowing constraints -- it isn't so easy to just take out more debt to make monthly payments on existing debt. That means debt forces you to choose a lifestyle that maintains monthly cash flow. Another reason is that debt has an all-or-nothing structure -- if you miss one payment, you’re technically in default. Your credit rating instantly begins to suffer, and you may incur other penalties. That means even a little risk-taking can be intolerable for someone with lots of debt.
When debt kills your life optionality, your employer also has much more power over you. If you demand a raise, your boss may turn you down, knowing that if you quit you’ll miss your mortgage payments. You may have to put in those extra hours of night or weekend time. Your outside options are just less attractive, given the millstone of debt.
Standard economics, as usual, says that these aren’t much of a problem. Rational people will take on exactly as much debt as they want, and encouraging them to borrow less would simply get in the way of their freedom to choose. But there are two big reasons why this could be wrong.
First of all, people might just not be smart about debt. They might underestimate their true risk of losing their job or taking a pay cut -- in fact, plenty of research says overoptimism is pervasive. Or they might simply ignore the importance of optionality. How many undergrad students, having never held a full-time job, can imagine how student loans will yoke them to their employers 10 years down the line?
Next, excessive household debt might be sucking the dynamism out of the economy. Economists are fretting about the steadily declining rate of new business formation in the U.S. Since about 2000, fewer new companies have been started. Because fast-growing startups employ lots of people, invent new technologies, and disrupt highly concentrated markets, we want a lot of them. Spiraling household debt levels may be a big part of the reason why we’re not getting them.
Last Friday, the Education Department released a memo saying that it had overstated student loan repayment rates at most colleges and trade schools and provided updated numbers.When The Wall Street Journal analyzed the new numbers, the data revealed that the Department previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country.
The new analysis shows that at more than 1,000 colleges and trade schools, or about a quarter of the total, at least half the students had defaulted or failed to pay down at least $1 on their debt within seven years.
Comments
Stock buybacks: It's a form of insider trading that was illegal
until early in the Reagan administration. Since then, corporations have spent more than $2 Trillion on this wholly unproductive practice. It's socially useless and only serves the wealthiest of the stock owning class.
It should be outlawed again - it's waste.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
stock buybacks, if i understand correctly,
transform what would once have been dividend income into capital gains income -- thus rendering a lower tax rate for people with six-figure+ incomes.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
@UntimelyRippd @UntimelyRippd If the stock goes
If the stock goes up - and it usually does when the float decreases - it may bounce up 25% or so. Sell your shares and the tax is figured as a capital gain, which you point out, and the Wealther pays less tax.
Since the average dividend is 2 -3 %, it's a windfall that produces zero.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
Stock buybacks should be made illegal like they were before
Reagan. The market is completely distorted. Students with loan debt should all just default. Force jubilee.
"Those who make peaceful revolution impossible will make violent revolution inevitable." - JFK | "The more I see of the moneyed peoples, the more I understand the guillotine." - G. B. Shaw Bernie/Tulsi 2020
Both sensible suggestions. Surely there must be some way
to organize a legal defense for 1000s defaulting on their burdensome student loans. I think that would be a worthy pursuit and it has a chance to free a lot of people from the chains of debt.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
Remember Occupy the Debt
A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.
@divineorder Occupy forced most
Occupy forced most Americans to look at conditions in the USA that they had either avoided or, more likely, was not available to them because it was not in the interest of those who control the commercial mass media to present.
A jubilee for student debt is indeed what is needed. Thanks for raising this excellent point and reminding us of this facet of Occupy.
"The justness of individual land right is not justifiable to those to whom the land by right of first claim collectively belonged"
My dughter, BSRN, could borrow from USDA for her house.
Already several flips of mortagers, but she is back in Medical College to get her NP. And then may be fleeing to the South of NY.
Hey! my dear friends or soon-to-be's, JtC could use the donations to keep this site functioning for those of us who can still see the life preserver or flotsam in the water.
A crackdown on peaceful protests
link
Of course
Because how else would they deal with the likely outcome of their other legislation, but to criminalize the massive civil disobedience it is likely to occasion?
And Obama ends characteristically--
in that I still can't tell whether he's someone who is entrapped by the entrenched corruption of the PTB that actually run the country into doing things that he knows are not in the best interest of the country, nor, actually particularly smart--like suffocating the free press, prosecuting whistleblowers, creating a class of untouchables who don't need to obey the same laws and regulations as the little people--or whether he's their willing ally, spouting things that sound good because he knows none of the things he says will ever come to fruition.
Goodbye, Mr. President. This isn't how I thought it was going to turn out.
"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha
"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver
Trapped? Some said that about Sanders. How could we ever know?
A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.
@divineorder Well, it's fairly
Well, it's fairly obvious, for instance, that Hillary is not trapped. Nor Cheney. Nor, probably GW Bush, though his frequent mixing of anxiety meds with booze while President may indicate a tormented conscience of sorts.
Some of these people are pretty obviously fine with what they're doing. It's not that hard to get a read on some of them. Some are harder to read, and I find Obama one of the hardest of all.
However, that is for me a matter of intellectual curiosity, not moral judgement; my feeling is that if you can do nothing else--because you're under threat--you should simply give some excuse and retire.
"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha
"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver
IMO, it is obvious
by the actions that BO took. What did he get all hot and bothered about? TPP.
Yeah, he was trapped alright; trapped right into that nice 8200 sq ft home.
dfarrah
@dfarrah Actually, I think
Actually, I think what Obama is is essentially a Reagan Republican with delusions of being a small-r republican. I think the police state stuff, especially within the United States, is not particularly to his taste. But there's no fucking way he's going to risk one bit of his prosperity or well-being pushing back against the powerful. If there's one thing that's obvious about Obama, it's that he has no interest in pissing off powerful people.
Economically? Oh, yeah, he's absolutely pro-plutocrat. No way he's trapped into the TPP or cutting Soc Sec and Medicare. He seems to be fine with that. It's the police state stuff at home, and the stuff abroad that might lead to World War III, that I think he has some problem with. But see above: it doesn't matter what his personal views are, because he has no intention of doing anything to rock his own very nice yacht.
"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha
"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver
I think BO
is fine with police state stuff, as evidenced by his expanding the spying powers, his punitive-ness toward whistle blowers (despite his pardon of Manning), etc.
I believe any liberal-leaning effort of his in the last days are done just for show; there have been writers who have noted a regular pattern over the decades amongst the dems where they talk a good game, but when in power, they don't produce. I guess we now get to hear endless bs from BO about how bad the repubs are and the dems will continue to swallow his bs. What a joke.
dfarrah
I think he's a captive.
I think somewhere in the process of becoming the Candidate, an awareness arises that the last president to stand up to the CIA died of a gunshot wound to the head. Or something else or worse, like if the candidate doesn't do exactly what the rogue state dictates, something worse than his own death will occur, like an anthrax attack that's much worse than the one that killed 5 people.
@divineorder There seems to be a
There seems to be a real appetite for blaming the little guy in America. It's always "us" that is the problem.
That would be a fine attitude, if we lived in a democracy. Or even a republic.
"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha
"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver
@Cant Stop the Macedonian Signal And then when we try
And then when we try to actually organize against the insufferably evil policies of our 'leaders', we get vilified as criminals and are attacked by the police power of the state... See how neatly that works out?
Pilger always worth a read
Of course he is right, "the enemy is us", as it were. And in that sense, perhaps Obama was 'trapped', in the same sense that all of us are. We live in a society literally built around prodigious consumption of fossil fuels and constant growth; but we have come to realize that the foundations of this society are incompatible with both basic human decency and the continuation of life on earth. This is not an easy thing to turn around.
But I think Obama deserves some particular blame for having been in a position to effect meaningful change, and failing utterly to make use of the opportunity. This was true on so many levels: vs the crimes of the banksters, vs the war crimes of the Bush administration; vs the failed US policy of aggression in the Middle East; vs burgeoning carceral state in the US. All very "teachable moments", which Obama seemed unable to take advantage of.
Obama was not a leader. He was a smooth apologist for the status quo, who was more interested in cementing his family's place amongst the elites than in governing for the People. Much like the Clintons.
@solublefish California started
California started charging for plastic bags...10 cents/bag. It's already changed public behavior in 6 weeks.
Something like this is truly frightening and mind-numbing,
at the same time. If there were true justice in the american legal system, how would killing a protester obstructing a highway, ever be considered an accident.
Another interesting note--
Obama in saying that he doesn't pay any attention to Mr. Assange's tweets, is indicating that he didn't commute Manning's sentence with the notion of some quid pro quo. In other words he is (very oddly for him) letting Assange off the hook.
"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha
"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver
That is interesting
Doubtful though that his sentiment (if that is how he feels) will be respected.
@janis b Yes, but since it was
Yes, but since it was Obama who commuted the sentence, that essentially lets Assange off the hook as far as turning himself in to the US government is concerned. If Trump demands it, Assange can say "You're not the one who commuted the sentence, and indeed, everything you've said has indicated you wouldn't have done it."
Again, interesting timing by Obama on this action toward Manning.
He keeps me guessing, I'll say that.
"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha
"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver
@Cant Stop the Macedonian Signal Julian Assange knows who
Julian Assange knows who leaked the DNC emails.
If that person is dead there would no longer be the same ethical requirement to maintain confidentiality. In fact, if the person died under suspicious circumstances it could be argued that there is a moral obligation to disclose the identity of the person who leaked the emails.
This might also explain the decision to release Manning.
Extra thumb up, asterisk
-- A dire cornerstone for transparency.
What also got ignored today, as always,
was wealth inequality and the 99%.
You are on fire, gjohnsit.
Awesome stuff.
"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981
Obama is a lawyer
after all.
"You can't just leave those who created the problem in charge of the solution."---Tyree Scott
But would you hire him?
I have several lawyers hired now. Not in the USA. Incredibly expensive. But of all the attorneys in Congress now, I would trust none.
Hey! my dear friends or soon-to-be's, JtC could use the donations to keep this site functioning for those of us who can still see the life preserver or flotsam in the water.
Protestors need to arm themselves for self-protection.
An anti-tank weapon would be ideal.
Or not!
I think we ought better to arm ourselves with the courage of our convictions. There is no need to give the militarized police an excuse for violence. Fight inhumanity with humanity, else you lose the argument on the first blow.
I applaud your courage,
but I'm done with giving the police, the politicians, and the nut cases a free ride, and I will respond to violence with violence. I think protestors should, wherever it's legal, be doing open carry of AR-15-style rifles. Probably best if people doing that keep some separation between themselves and other protestors, to try to avoid them being caught in the crossfire, but since the nutjobs go apeshit over a single incident (or fake incident) thousands of miles away as if it just happened to them, I don't know if it would help much.
@tle We cannot win a war of
We cannot win a war of metal bullets. They have so many more of them. Our families and our communities are hostage, in addition to our own lives.
We need to arm ourselves with cameras and keyboards to waken the the sleeping, raging giant of public outrage. We need to tear down the artificial silos of race and gender and political party and join with all the other oppressed. There are many more of Us than of Them.