Before 2009, the Fed did not pay interest on banks’ excess reserves held at the Fed. This practice was introduced as a taxpayer-funded subsidy to the banks during the crisis (taxpayer-funded because the Fed turns over any profit at the end of the year to the Treasury).
After beginning this practice, the Fed’s chief trader, Simon Potter, realized it could be used to raise interest rates without expelling excess reserves from the Fed, by sucking liquidity out of the short-term markets. In fall 2015, it began raising the interest rate on excess reserves, with the anticipated effect.
At a current rate of about $36 billion a year, this is a cost to the Treasury that is indefensible. This amount is about half the budget for food stamps, for example, which politicians want to cut. There is no provision for these funds ever to be paid back. It is welfare for the bankers.
If the banks had been required to take excess reserves back onto their books it would have required financial disclosure of their quality, which is probably toxic for many. However, with the Financial Accounting Standards Board recently promulgating Financial Accounting Statements 56 and, previously, 157, the “extend and pretend” statement, it would seem they feel less and less need for financial disclosure of any kind. FAS 56 states that the government does not have to disclose what it spends taxpayers’ money on because of national security concerns.
Finally, much akin to the situation in Europe, where trillions of dollars are held at negative interest rates (which are supposed to make people “spend,” but which in fact are an abomination and a crime against nature, IMHO), the Fed’s recent interest rate increases represent a far-from-equilibrium situation, that, much like a currency peg, may be subject to abrupt reversal.
Until a modicum of transparency is returned to financial accounting, both monetary and fiscal policy are flying blind. The world staggers under its load of bad (i.e., unpayable) debt being carried on banks’ books.
As stocks soar to all-time highs (ignoring fundamentals and a weak US macro outlook for 2H19), it’s worth noting that millions of underemployed and over-indebted Americans (mostly millennials) are currently holding a total of $1.5+ trillion in federal student loan debt.
A total of 43 million Americans have student debt. The average household with student debt owes approximately $48,000 and more than 5 million borrowers are in default in 2019.
Millennials with no credit history and no guaranteed employment borrow tens of thousands of dollars through scheming loan programs by the US Department of Education.
Zerohedge has spent almost a decade covering the student debt crisis and has shared numerous reports that explain how the crisis has materially worsened.
A new study by LendEDU, revealed where Americans on a geological basis have the highest levels of student loan debt. Researchers examined data from 922 colleges and universities, including data from the graduating classes of 2007 through 2017.
The study found Pennsylvania, from 2007 to 2017, had the highest debt per borrower of $35,988, a 51.26% increase over the ten years. Rhode Island was number two, with debt per borrower at $35,371, a 44.48% increase over the ten years. Delaware ranked third on the list, had $34,144 of debt per borrower, a 98.51% increase over the decade. Utah, Nevada, and Alaska had the lowest debt per borrower, at an average of about $20,687 over the ten years.
The table below represents the percent change over the period of how the average percentage of grads with student loan debt changed in all states and Washington D.C. The most significant percentage increase over the decade was in Delaware, Hawaii, and Tennessee.
The study illustrates how the average student loan debt per borrower changed in each state from 2007 to 2017 according to the percent value on a detailed map. It appears that most of the country has deadbeat millennials with insurmountable debt loads.
Another map shows the difference in the percentage of graduates with student loan debt has changed from 2007 to 2017. It seems that the Mid-Alantic and East Coast saw the largest increases in debt load size per borrower.
Overall student debt carried by Americans is not limited to one geopgrahic area. The report shows the problem is widespread and the country as a whole is a deadbeat nation.
via ZeroHedge News http://bit.ly/2Jh17ti Tyler Durden
In recent months there’s been a lot of talk about 5G – the next generation of wireless technology. 5G is being touted as a necessary step to the ‘internet of things’ – a world in which our refrigerators alert us when we’re low on milk, our baby’s diapers tell us when they need to be changed, and Netflix is available everywhere, all the time.
But what we’re not hearing is that evidence-based studies worldwide have clearly established the harmful effects of human exposure to pulsed radiofrequency radiation from cell towers, cell phones and other devices – and that 5G will make the problem exponentially worse.
Most people believe that the Federal Communications Commission (FCC) carefully assesses the health risks of these technologies before approving them. But in testimony taken by Senator Blumenthal of Connecticut, the FCC admitted it has not conducted any safety studies on 5G.
Telecom lobbyists assure us that guidelines already in place are adequate to protect the public. Those safety guidelines, however, are based on a 1996 study of how much a cell phone heated the head of an adult-sized plastic mannequin. This is problematic, for at least three reasons:
+ living organisms consist of highly complex and interdependent cells and tissue, not plastic.
+ those being exposed to radiofrequency radiation include fetuses, children, plants, and wildlife – not just adult male humans.
+ the frequencies used in the mannequin study were far lower than the exposures associated with 5G.
5G radiofrequency (RF) radiation uses a ‘cocktail’ of three types of radiation, ranging from relatively low-energy radio waves, microwave radiation with far more energy, and millimeter waves with vastly more energy (see below). The extremely high frequencies in 5G are where the biggest danger lies. While 4G frequencies go as high as 6 GHz, 5G exposes biological life to pulsed signals in the 30 GHz to 100 GHz range. The general public has never before been exposed to such high frequencies for long periods of time.
This is a big deal. It turns out that our eyes and our sweat ducts act as antennas for absorption of the higher-frequency 5G waves. And because the distances these high-energy waves can travel is relatively short, transmitters will be required closer to homes and schools than earlier wireless technologies: the build-out will add the equivalent of a cell tower every 2-10 houses.
But former FCC Chairman Tom Wheeler has made it clear the Telecom-dominated FCC does not put health first:
“Stay out of the way of technological development,” he said. “Unlike some countries, we do not believe we should spend the next couple of years studying… Turning innovators loose is far preferable to letting committees and regulators define the future. We won’t wait for the standards.” In response to questions about health concerns, Mr. Wheeler said: “Talk to the medical people”.
Good idea.
The “medical people” have conducted over 2,000 international evidence-based studies that link health impacts with pulsed radiowave radiation from cell towers, routers, cell phones, tablets, and other wireless devices. These studies tell us that RF radiation is harmful at even low and short exposures, and that it impacts children and fetuses more rapidly than adults. Among the findings are that RF radiation is carcinogenic, causes DNA damage, affects fertility and the endocrine system, and has neurological impacts. Pulsed electromagnetic frequencies have also been shown to cause neurological symptoms: depression, anxiety, headaches, muscle pain, attention deficits, insomnia, dizziness, tinnitus, skin tingling, loss of appetite, and nausea.
The U.S. Government has known of these risks since at least 1971, when the Naval Medical Research and Development Command published a bibliography containing 3,700 references reporting 100 biological and clinical effects attributed to microwave and radio-frequency radiation.
Recent findings, such as the $30 million 2018 U.S. National Toxicology Program (NTP) Study, have corroborated the findings of all well-designed heart and brain cancer studies of people with 10 or more years’ exposure to cellular radiation from cell towers and cell phones. They all agree: RF radiation causes cancer.
What has been the response to these findings?
Scientists are urging the World Health Organization (WHO) to update its classification of RF from a Group 2B Carcinogen to a Class 1 carcinogen – making RF and 5G comparable to arsenic and asbestos. Annie Sasco, former Chief of WHO’s Research Unit of Epidemiology for Cancer Prevention, says, “Enough is enough, how many more deaths would be needed before serious action is taken? Evidence just continues to accumulate.”
Ronald Melnick, the designer of the NTP study, says that the study “shows clear evidence of a causal link between cancer and exposure to wireless cell phone signals.” He adds that “An important lesson that should be learned from the NTP studies is that we can no longer assume that any current or future wireless technology, including 5G, is safe without adequate testing.”[5] Meanwhile, 231 scientists from 42 nations have signed the 5G Appeal, which urgently calls for a moratorium on the technology. Steps are being taken to slow the deployment of 5G in Italy, Belgium, Israel, Switzerland, and The Netherlands, and in the states of California, New Hampshire, Massachusetts, and Oregon.
But so far, not enough political leaders have been willing to heed the warnings. Or perhaps they are deferring to President Trump, who said that 5G antennas “must cover every community and they must be deployed as soon as possible…. No matter where you are you will have 5G and it is going to be a different life. I don’t know that it will be better… but I can say that technologically it won’t even be close.”[6]
Wireless technology has become so ubiquitous that most of us have been lulled into believing it is safe. Now, the hazards are about to be ratcheted up dramatically. More citizens and legislators need to join those who are actively resisting the reckless push for 5G.
via ZeroHedge News http://bit.ly/2VRCeLP Tyler Durden
Last month, we reported that the US Army was considering whether it should purchase Future Attack Reconnaissance Aircraft (FARA) to replace its aging fleet of Boeing AH-64 Apache and Bell OH-58D Kiowa Warrior copters. Now it seems the Army’s Future Vertical Lift (FVL) modernization priority, a competition to design, build, and test the FARA prototypes is ahead of schedule and exceeding expectations, stated Army Combat Capabilities Development Command Aviation & Missile Center Public Affairs.
Out of eight proposals, five had been awarded for prototype agreements as of April 23, well ahead of schedule.
“FARA represents the leap-ahead technology we’ve been talking about,” said Col. Craig Alia, FVL Cross-Functional Team chief of staff. “It’s a critical program in that it fills an existing capability gap created by the divestiture of the OH-58.”
Dan Bailey, Army Combat Capabilities Development Command (CCDC), is the lead project manager on the FARA program. He told the Army Public Affairs office that FARA solicitation to private defense firms was publicly announced in late 2018 with anticipated awards this summer, indicating the program is two months ahead of schedule.
“What’s exciting about the new process the Army has put in place through the Army Futures Command and cross-functional teams … is that we’ve gone from concept … to awards in basically a one-year period of time,” said Bailey.
The Army’s requirements for FARA include complete integration of government equipment: engine, M230 chain gun and rocket launcher, a minimum speed, specific target gross weight, a maximum 40-foot diameter rotor, and an affordable price tag.
Extended range, payload, and endurance were among the other requirements the Army expects. Separate from those mandates, the timing of the execution plan, funding profile requirements, acceptable risk level, statute requirements and the ability to have helicopters in series production by the mid-2020s for fielding by 2028, were also considered.
“We’re at an inflection point where we can’t afford not to modernize,” said Alia, echoing a similar tune from Brig. Gen. Walter Rugen FVL director. “We know that the current fleet is fantastic and has done a great job for us, but we can’t indefinitely continue to incrementally improve 1970s and 1980s technology,” Alia added.
The five awards were initiated six months after the initial solicitation went out in October 2018. Bailey said initial designs would be submitted to the Army by February 2020. “Those are designs of the aircraft, updated plan to execute the entire approach and risk assessments of proceeding, followed by another evaluation process,” he said.
Baily said the five vendors understand that only two will make it to the next phase. “The awards made this week were not just for phase one; it was for the entire execution all the way through flight test on these vehicles” he explained. “We looked at all aspects of being able to execute, not only the CP effort through flight test in 2023, but also their ability to execute an (engineering manufacturing and development) phase follow-on and a production phase afterward,” Bailey explained.
The most likely FARA candidates will be the Sikorsky S-97 Raider and the Bell V-280 Valor.
Video: Sikorsky S-97 Raider flight test
Video: Bell V-280 Valor flight test
via ZeroHedge News http://bit.ly/2ZWaC7j Tyler Durden
Things keep heating up in Venezuela, with possible “military options” now being seriously discussed at the Pentagon. And of course you know what that means! That’s right, it means we can expect to see even more lies and manipulations from the political/media class as the narrative managers try to get their rapey little fingers into our minds to manufacture support for unconscionable acts.
This can create a very confusing environment for everyone, where up means down and black means white and “humanitarian intervention” means “murdering thousands and thousands of innocent human beings”. With that in mind, here’s a handy translation key to help you understand what the establishment mouthpieces are really saying:
“I stand with the people of Venezuela” = I stand with some of the people in Venezuela, specifically the ones who support US government interests.
“Interim President” = Some guy most Venezuelans had never heard of until January of this year.
“Brutal dictator” = Elected leader who opposes US dictates.
“Usurper” = The guy calling the shots and leading the country.
“The people of Venezuela are starving” = Oil! Oil! Oil!
“All options are on the table” = One option is on the table.
“Popular uprising” = Unpopular uprising.
“Grassroots activists” = Let’s pretend the CIA’s not a thing.
“Freedom and democracy” = US control of Venezuela’s petroleum resources.
“Humanitarian aid” = Pretext for further escalations.
“Failed socialist policies” = Inability to overcome US economic warfare.
“Foreign interference” = An ally of Venezuela supporting its ally.
“We support the National Assembly” = Foreign interference.
“The Venezuelan Constitution” = Our convenient interpretation of the Venezuelan Constitution.
“We can’t just sit around and do nothing” = I have learned nothing since the Iraq War.
“54 countries recognize Guaido as president” = 141 countries don’t recognize Guaido as president.
“Troika of tyranny” = John Bolton’s second-favorite masturbatory fantasy.
“Special Envoy to Venezuela” = Convicted war criminal.
“The Monroe Doctrine” = I think all the countries on this side of the planet are my personal property.
“Operación Libertad” = Operación Libertad para el Petróleo de Venezuela.
“Shut the fuck up, bitch.” = Standard talking point from Venezuela coup narrative managers on social media.
“Talk to Venezuelans” = Talk to the wealthier, English-speaking Venezuelans with abundant free time and internet access who support a coup.
“You love Maduro” = I don’t have an argument for your opposition to US interventionism.
“You’re just a socialist who loves socialism” = I don’t have an argument.
“Go live in Venezuela if you love socialism so much” = I don’t have an argument.
“Maduro is killing his own people” = Yeah I’m just making shit up now.
“Maduro refuses to let in aid” = I just believe whatever the TV says.
“Trump is liberating the people of Venezuela” = I just believe whatever QAnon says.
“This US regime change intervention will be different” = I have replaced my brain with shaving cream.
* * *
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For over two years, anyone who suggested that the Russia investigation was a sham was harshly ridiculed by establishment mouthpieces as a conspiracy theorist. The notion that the Obama Justice Department (led by Eric “wingman” Holder and then Loretta “tarmac” Lynch) could have conspired with other US intel agencies and foreigners to paint Donald Trump as a Russian stooge was considered beyond the pale.
Then we found out that virtually the entire FBI’s top brass absolutely hate Donald Trump and supported Hillary Clinton; the former of whom the FBI launched a counterintelligence investigation against, while giving Hillary a pass despite destroying evidence from her homebrew basement server while under subpoena. We were asked to believe that the FBI’s extreme biases played no role in their investigations, while the left insisted that special counsel Robert Mueller was going to confirm fairy tales of Russian collusion peddled by a Clinton-funded dossier.
And then the Mueller report came out – blowing the Russian collusion narrative out of the water, while painting a damning picture that suggests the entire genesis of the FBI’s counterintelligence investigation, Crossfire Hurricane, was a setup.
Dan Bongino
One of those brave enough to risk his reputation laying out this setup before the Mueller report dropped is conservative commentator and former US Secret Service agent Dan Bongino – who has repeatedly mentioned the suspicious role of self-described Clinton Foundation memberJoseph Mifsud,who seeded the rumor that Russia had ‘dirt’ on Hillary Clinton to Trump campaign adviser George Papadopoulos on April 26, 2016 – shortly after returning from Moscow, according to the Mueller report.
Two weeks later, Papadopoulos would be bilked for information by Australian diplomat (another Clinton ally) Alexander Downer at a London bar, who relayed the Kremlin ‘dirt’ rumor to Australian authorities, which alerted the FBI (as the story goes), and operation Crossfire Hurricane was thus hatched.
We have now pinned Peter Strzok’s boss, Bill Priestap, in London the week of May 6th, 2016 and on the 9th. The day before Alexander Downer was sent to spy on me and record our meeting. Congress must release the transcripts and embarrass the deep state.
As Bongino lays out, there are two working theories about Mifsud. The first is that he’s a Russian asset who tried to bait the Trump campaign. The second is that Mifsud was working for US intelligence services and seeded Papadopoulos with the ‘dirt’ rumor in order to kick off the FBI’s counterintelligence operation.
“So either we have a Russian asset who’s infiltrated the highest echelons of friendly Intelligence Services, or we have a friendly who was setting up @GeorgePapa19 – That’s the real scandal. This was not spying, this was entrapment.” pic.twitter.com/wGnV8HHur1
Bongino went into greater detail last month on Fox News – including that Mifsud’s lawyer says he’s connected to western, “friendly” intelligence:
We know that Papadopoulos met multiple times with Mifsud in the first half of 2016:
March 14 2016 – Papadopoulos first meets Mifsud in Italy – approximately one week after finding out he will be joining the Trump team.
March 24 2016 – Papadopoulos, Mifsud, Olga Polonskaya and unknown fourth party meet in a London cafe.
April 18 2016 – Mifsud introduces Papadopoulos to Ivan Timofeev, an official at a state-sponsored think tank called Russian International Affairs Council.
April 26 2016 – Mifsud tells Papadopoulos he’s met with high-level Russian government officials who have “dirt” on Clinton. Papadopoulos will tell the FBI he learned of the emails prior to joining the Trump Campaign.
May 13 2016 – Mifsud emails Papadopoulos an update of “recent conversations”.
Note: Papadopoulos and Mifsud reportedly both worked at the London Centre of International Law Practice. –The Markets Work
In short – based on what we know, it appears that Joseph Mifsud was part of a setup by Western intelligence services on then-candidate Donald Trump.
Did You Know:
A Company Whose Director Represents Joseph Mifsud Changed Its Name To “No Vichok Ltd” After The Salisbury Attack
“Novichok” was the nerve agent used to poison fmr GRU agent Sergei Skripal when the UK govt was caught lying about the analysis from Porton Down
Great claims require great evidence, however, which is why Rep. Devin Nunes (R-CA) has requested a wide swath of documents about Mifsud from several federal agencies.
As the Washington Examiner reports, Nunes – the House Intelligence Committee ranking member, “seeks information about who Mifsud was working for at the time and wrote in a letter that special counsel Robert Mueller “omits any mention of a wide range of contacts Mifsud had with Western political institutions and individuals” in his report on Russian interference in the 2016 election.”
The special counsel’s sentencing memo to the District Court for the District of Columbia said Papadopoulos hindered the FBI’s ability to get to Mifsud. “The defendant’s lies undermined investigators’ ability to challenge the Professor or potentially detain or arrest him while he was still in the United States. The government understands that the Professor left the United States on February 11, 2017 and he has not returned to the United States since then,” the memo said.
In his letter, Nunes says it is “still a mystery how the FBI knew to ask Papadopoulos specifically about Hillary Clinton’s emails” if the bureau had not spoken with Mifsud. –Washington Examiner
“If he is in fact a Russian agent, it would be one of the biggest intelligence scandals for not only the United States, but also our allies like the Italians and the Brits and others. Because if Mifsud is a Russian agent, he would know all kinds of our intelligence agents throughout the globe,” said Nunes during a recent interview with Fox News‘ Sean Hannity.
Look deeper at the Report re: Mifsud. One interesting omission —
Why are there zero citations to Mifsud’s 302 in the Mueller Report?
A Northern California public school district may remove a mural of George Washington from the halls of George Washington High School due to concerns that it’s offensive and demeaning to Native Americans and African-Americans.
The controversy comes after a working group determined the mural, made up of several panels, “traumatizes students and community members.” But advocates for keeping the 83-year-old mural say that removing it ignores the intent of the artist and represents an attempt to erase history.
In 1936, Victor Arnautoff painted the 13 panels that make up the “Life of Washington” mural at the San Francisco Unified School District campus. Arnautoff was a prominent Russian-American painter who created the murals as part of a Works Progress Administration project undertaken during the New Deal.
But a working group that met in recent months determined the artwork is highly problematic and should be archived after being removed from the walls of the school.
“SFUSD convened a ‘Reflection and Action Working Group’ that was comprised of members of the local Native American community, students, school representatives, district representatives, local artists and historians,” Laura Dudnick, spokeswoman for the district, wrote in an email to The College Fix.
The group held four public meetings between December 2018 and February 2019 during which it received input on what to do with the mural. The group’s recommendation? Archive the mural to protect the experience of students.
“At its conclusion the group voted and the majority recommended that the ‘Life of Washington’ mural be archived and removed because the mural does not represent SFUSD values,” Dudnick’s email to The Fix continued, adding that the group considered the legacy of the artist when deciding whether or not to keep the mural up.
However, concern for the experience of students won out.
Two of the 13 panels are coming under fire for containing objectionable images, accordingto the Richmond District Blog.
One of the images involves involves Washington gesturing toward a group of explorers who are walking by the body of a presumably deceased Native American depicted in the color gray. Another depicts Washington next to several slaves performing various types of manual labor, a YouTube video of the murals showed.
The Richmond District Blog reports the group’s conclusion:
We come to these recommendations due to the continued historical and current trauma of Native Americans and African Americans with these depictions in the mural that glorifies slavery, genocide, colonization, manifest destiny, white supremacy, oppression, etc. This mural doesn’t represent SFUSD values of social justice, diversity, united, student-centered. It’s not student-centered if it’s focused on the legacy of artists, rather than the experience of the students.
But Fergus M. Bordewich, a historian, wrote in The Wall Street Journal that the intention of the artist should be taken into account when considering the intent of the images:
The mural’s painter, Victor Arnautoff, was a protégé of Diego Rivera and a communist. He included those images not to glorify Washington, but rather to provoke a nuanced evaluation of his legacy. The scene with the dead Native American, for instance, calls attention to the price of “manifest destiny.” Arnautoff’s murals also portray the slaves with humanity and the several live Indians as vigorous and manly.
Bordewich, in a phone interview with The Fix, said there “is a deeply wrongheaded habit to project today’s norms, values, ideals backwards in time to find our ancestors inevitably falling short.”
“It betrays a very troubling intolerance of art and the ambiguity of art and the aspirations of art,” he said.
The mural’s future is up in the air, according to Dudnick.
“The superintendent and staff are now reviewing the recommendation and considering the best course of action,” she wrote. “At this time there hasn’t yet been any recommendation put forth before the SF Board of Education on this matter.”
This is not the first time the murals have come under fire. In the late 1960s, protesters called for its removal, which the school responded to by installing another set of murals titled “Multi-Ethnic Heritage: Black, Asian, Native/Latin American.” These murals display more positive images of ethnic minorities, the Richmond District Blog reported.
“One of the main reasons why it is controversial is because back in the [1930s] when it was painted, George Washington was the saint of the people,” one student at George Washington High School told the Golden Gate Express. “I’ve talked to a bunch of students here and I honestly think that they agree it is the true depiction of history and that we all have to know who George Washington really was.”
Bordewich added that the “mural is not a celebration of genocide, it’s a challenge to westward expansion.”
“It’s incredibly stupid if we try to erase history,” he said. “It still happened, and you should argue about its meanings.”
via ZeroHedge News http://bit.ly/2VcVLqi Tyler Durden
As thousands of college students prepare to graduate in the upcoming weeks, many of them will be stressed out, deeply in debt, and very hungry according to a new survey from Temple University’s Hope Center for College, Community and Justice.
A senior at Lehman College in the Bronx dreams of starting her day with breakfast. An undergraduate at New York University said he has been so delirious from hunger, he’s caught himself walking down the street not realizing where he’s going. A health sciences student at Stony Brook University on Long Island describes “poverty naps,” where she decides to go to sleep rather than deal with her hunger pangs.
…
It was at a pantry at SUNY Stony Brook where Jocelyn Chen, a volunteer there, spoke of her poverty naps. She said that many students are unable to visit the food pantry between classes, or to go off campus to find cheap food without a car.
“When you’re in class for, like, three hours, it’s hard to concentrate when you’re hungry,” she said. Back at the dorm, she explained, it’s easier to take “poverty naps” than to forage for something to eat. –NYT
According to the survey, 44% of students from over 100 institutions said they had been “food insecure” over the past 30 days.
Lehman College senior Kassandra Montes counts herself among them – having to take out a $5,000 loan this year in order to graduate, while living in a Harlem homeless shelter while attending classes. She says she works two part-time jobs and can only set aside $15 per week for food. Most of her groceries come from the campus food pantry, and she almost always skips breakfast in order to feed her 4-year-old son.
“I feel like I’m slowly sinking as I’m trying to grow,” said Montes.
Kassandra Montes, Calvin Ramsay
Another struggling student, Calvin Ramsay, accumulated “massive amounts of debt” while attending NYU, and told the Times that “food was a major obstacle — especially in Manhattan.”
Being the first person from his family to go to college, he said he didn’t fully understand how much debt he was going into with his student loans. After two years on campus, Mr. Ramsay said he moved back home to Queens and started to use Share Meals, a digital platform created in 2013 that informs students about free food on campus. –NYT
Ramsay says he will need to borrow around $40,000 more to graduate, but says he’s not willing to go into more debt to do so. “Why do I need to go into debt,” he asked, “to eat?”
One solution used by CUNY has been to sign students up for SNAP – the Supplemental Nutrition Assistance Program, which has helped. The school has also brought in Single Stop USA – a nonprofit which connects individuals with social services. The group, along with other partners, has helped over 122,000 CUNY students, which have received around $3,000 of annual benefits each, according to Single Stop USA national education director, Sarah Crawford.
Other solutions to help hungry students around the country include expanded campus food pantry programs, such as Nassau Community College’s NEST (Nassau Empowerment and Support for Tomorrow)
“The role of a campus food pantry has gone beyond just providing food,” said Sharon Masrour, an organizer with NEST, who adds that the program is an opportunity for a school to check in on a student’s well-being in general.
“It’s now a basic-needs hub,” she said.
Programs like Share Meals and Swipe Out Hunger (both of which let students donate their extra dining hall meal swipes to those in need) are helping. Additionally, there’s a national movement to redirect unused food from campus dining halls and corporate events.
Sodexo USA, one of the nation’s largest college dining hall operators, has produced a successful pilot program at Northern Arizona University, where students are alerted about leftovers from catered events. This is now an option to any of the colleges that use its services. –NYT
Keep in mind that once these hungry students graduate, they can add crippling debt and a job hunt to their woes.
via ZeroHedge News http://bit.ly/2H2cow7 Tyler Durden
A larger volume of CMBS loans are being issued with interest-only (I0) structures, but this rise may put the CMBS market in a dicey position when the economy reaches its next downturn. To put things in perspective, interest-only loan issuance reached $19.5 billion in Q3 2018, six times greater than fully amortizing loan issuance. In comparison, nearly 80% of all CMBS issued in the FY 2006 and FY 2007 was either interest-only or partially interest-only loans.
In theory, the popularity of interest-only loans makes sense, because they provide lower debt service payments and free up cash flow for borrowers. But these benefits are partially offset by some additional risks in the interest-only structure, with the borrower’s inability to deleverage during the loan’s life perhaps being the biggest concern. Additionally, borrowers who opt for a partial interest-only structure incur a built-in “payment shock” when the payments switch from interest-only to principal and interest.
Why are we seeing a spike in interest-only issuance if the loans are inherently riskier than fully amortizing loans? Commercial real estate values are at all-time highs; interest rates are still historically low; expectations for future economic and rent growth are fundamentally sound, and competition for loans on stabilized, income-producing properties is higher than ever. Furthermore, the refinancing pipeline is miniscule compared to the 2015-2017Wall of Maturities, so more capital is chasing fewer deals. This causes lenders to augment loan proceeds and loosen underwriting parameters, including offering more interest-only deals.
Then and Now: Why the Rise in 10 Debt Has Raised Concerns
Between Q1 2010 and Q1 2012, fully amortizing loans dominated new issuance, with its market share amassing as much as 80.4% (Q1 2012). Interest-only issuance was nearly equal to the fully amortizing tally by Q3 2012, as interest-only debt totaled $5.10 billion, only $510 million less than fully amortized loans. Interest-only issuance would soon overtake fully amortizing loan issuance by Q2 2017, as its volume skyrocketed from $5.3 billion in Q1 2017 to $19.5 billion in Q3 2018.
Prior to the 2008 recession, the CMBS market experienced a similar upward trend in interest-only issuance. By 02 2006, interest-only loans represented 57.6% of new issuance, outpacing fully amortizing notes by 38.86%. The difference in issuance between interest-only and fully amortizing loans continued to widen as the market approached the recession, eventually reaching a point where interest-only debt represented 78.8% of new issuance in 01 2007. Even though the prevalence of interest-only debt is mounting, why would this be a concern in today’s market?
IO Loans Are More Likely to Become Delinquent
Interest-only loans have historically been more susceptible to delinquency when the economy falters. Immediately following the recession, delinquency rates across all CMBS loans moved upward. Once the economy began to show signs of recovery, the delinquency rate for fully amortized loans began to decline, while interest-only and partially interest-only delinquencies continued to rise. In July 2012, the delinquency rate for fully amortizing loans was sitting at 5.07% while the interest-only reading reached 14.15%. The outsized delinquency rate for interest-only loans during this time period is not surprising, since many of the five-year and seven-year loans originated in the years prior to the recession were maturing. Many of the borrowers were unable to meet their payments due to significant declines in property prices paired with loan balances that had never amortized.
Over time, the stabilization of the CMBS market led to subsequent declines in the delinquency rates for both the interest-only and partial interest-only sectors. The delinquency rate for interest-only loans clocked in at 3.17% in December 2018, which is down nearly 11 % from its peak. Delinquency rates across all amortization types have failed to return to pre-crisis levels.
Just because a large chunk of interest-only debt became delinquent during the previous recession does not mean the same is destined to happen in the next downturn.
Falling DSCR Levels Could Foretell 10 Distress
Measuring the likelihood of a loan turning delinquent is typically done by calculating its debt-service coverage ratio (DSCR). Between 2010 and 2015, the average DSCR across all interest-only loans was a relatively high 1.94x. Since 2016, the average DSCR for interest-only debt has fallen slightly. If the average DSCR for interest-only loans continues to decline, the inherent risk those loans pose to the CMBS market will become more concerning.
The average DSCR for newly issued interest-only loans in March 2019 registered at 1.61 x, which is about 0.35x higher than the minimum DSCR recommended by the Commercial Real Estate Finance Council (CREFC). In 2015, CREFC released a study analyzing the impact of prudential and securities regulation across the CRE finance sector. In the study, CREFC cited a 1.25x-DSCR as the cutoff point between relatively healthy and unhealthy loans. The value was chosen through loan-level analysis and anecdotal information from conversations with members.
The figure below maps the DSCR for both fully amortizing and interest-only loans issued between 2004 and 2008. Notice that toward the end of 2006, the average DSCR hugged the 1.25x cutoff level recommended by CREFC. Beyond 2006, the average DSCR for interest-only loans oscillated between healthy and concerning levels.
The second figure focuses on CMBS 2.0 loans, where a similar trend can be spotted. After roughly converting interes-tonly loan DSCRs to amortizing DSCRs using underwritten NOI levels and assuming 30-year amortization, the average DSCR for interest-only loans issued between 2010 and mid- 2014 (2.04x) is much greater than that for fully amortizing issuance (1.78x). While part of this trend can be attributed to looser underwriting standards and/or growing competition, the other driver of the trend is due to selection bias. Lenders will typically give interest-only loans to stronger properties and require amortization from weaker properties, so it makes sense that they would also require less P&I coverage for those interest-only loans on lower-risk properties.
What Lies Ahead for the IO Sector?
Rising interest-only loan issuance paired with a drop in average DSCR may spell for a messy future for the CMBS industry if the US economy encounters another recession. At this point, CMBS market participants can breath a little easier since interest-only performance has remained above the market standard. However, this trend is worth monitoring as the larger volume could portend a loosening in underwriting standards.
via ZeroHedge News http://bit.ly/2WnLzIf Tyler Durden
The campaign that nobody asked for is finally about to begin.
After months of traveling around early caucus and primary states, eliciting a barrage of negative press characterizing his yen for higher office as a product of the same delusions of grandeur that have become a hallmark of his tenure in city hall, New York City Mayor Bill de Blasio is finally preparing to announce his campaign for president next week…which would make him the 22nd Democratic contender for the 2020 nomination.
There’s only one problem: de Blasio, whose two terms as mayor have been marred by corruption scandals, soaring economic inequality, a worsening homelessness crisis and a rapidly deteriorating subway, is perhaps the least popular of all the candidates. And as we reported earlier this year, almost nobody – not his wife, not his kids, not his closest aides and employees, or any of his fellow Democrats – thinks a de Blasio 2020 campaign is a good idea.
But he has been undeterred, arguing that he has been the ‘underdog’ in every race he has ever run, and that he fully expects to use that status to his advantage during one of the most crowded primaries in American history.
Even the notoriously liberal, pro-de Blasio Daily News couldn’t help but crack a few jokes about his notorious tendency to be late in a story effectively pre-announcing his announcement.
He’s late again.
Mayor de Blasio will jump into the 2020 presidential race next week, according to four people with knowledge of his plans, entering a crowded field of 21 other Democratic hopefuls and two Republicans – dead last.
The 2020 kickoff could come as early as de Blasio’s birthday on Wednesday, when he’ll turn 58, two sources said.
And not a second too soon. The last-minute announcement by the mayor – whose reputation for being late was cemented by his tardiness to a 2014 event honoring victims of American Airlines Flight 587 – has many politicos scratching their heads.
In a sign of just how low moral is in the de Blasio camp, one of the ‘sources’ who confirmed de Blasio’s plans to the Daily News – likely a campaign insider given their proximity to the mayor – joked that de Blasio would only have a chance if “every Democratic candidate is caught sending racy selfies to minors” – a reference to the downfall of Anthony Weiner, the scandal that effectively transformed de Blasio from a dark horse into the frontrunner for the mayorship in 2014.
“Whatever theoretical bases he may target are already being courted by nationally recognized figures,” one of the sources said. “He may have a shot if every Democratic candidate is caught sending racy selfies to minors.”
De Blasio has said he wouldn’t run if he didn’t think he could make it all the way to 1600 Pennsylvania Ave.
There is little appetite in New York City – or anywhere else in America – for a De Blasio presidential bid. According to one recent Quinnipiac University poll, 76% of city voters don’t want him to run for president.
Even in heavily Democratic New York, few believe De Blasio would be a better president than President Trump.
“I don’t know if he would be any better than the president we have now,” said Mott Haven’s Julio Valdez, 37. “I don’t think he can handle it. He can’t barely handle us right now.”
And with so many problems festering in New York City, few are enthusiastic about the mayor’s plans to effectively govern the city from Des Moines for the next few months (if he even makes it that far before running out of money).
Meanwhile, the problem of solving NYC’s homelessness crisis – something de Blasio pledged to combat in both of his mayoral campaigns, with his now-laughable ‘tale of two cities’ narrative about economic inequality in New York – has been left up to city judges. Case in point: As the New York Post reports, a Manhattan judge has cleared the way for a homeless shelter to be built near “Billionaires Row”, an area just south of Central Park, in a building that was formerly the Park Savoy Hotel. Residents had sued to block the shelter, but a judge has now thrown out their case, triggering paroxysms of NIMBYism in the supposedly liberal wealthy elite.
Amazingly, the Fairness PAC, which is blocking de Blasio, has been bankrolling most of his travel so far. But it’s unclear who’s funding this organization, and how much longer de Blasio will be able to sustain his Quixotic ambitions unless he manages to convince a few megadonors that he’s a horse worth betting on.
via ZeroHedge News http://bit.ly/2PIQiS2 Tyler Durden
