Income Inequality / Inflation Watch: Princeton Endowment Manager’s Edition

Princeton University paid four of its endowment managers a combined $9.2 million in 2013. As Bloomberg reports, this is a 46% increase from a year earlier and four times the increase Harvard University paid its top investors. We are sure they earned it – besides, last year was a difficult year for every asset manager eh (even as the endowment gained only 11.7% last year – average for large endowments? But as one apologist noted “It’s easy to whack these guys,” – yes it is! But while “it looks big in percentage terms, it’s a basis point or two compared to the endowment,” – oh well that makes it ok then. Once again, it pays to be in the ‘elite’.

As Bloomberg reports, Princeton University paid four of its endowment managers a combined $9.2 million in 2013, a 46 percent increase from a year earlier and four times the increase Harvard University paid its top investors.

Andrew Golden, the president of Princeton University Investment Co., the company known as Princo that manages the school’s $18.2 billion endowment, collected $3.9 million in total compensation last year. The 55-year-old’s remuneration included a 94 percent increase in retirement and deferred compensation and a 48 percent jump in bonus pay, according to the university’s latest tax return.


The endowment returned 11.7 percent last year, matching the average return posted by endowments greater than $1 billion, according to the National Association of College and University Business Officers and Commonfund Institute’s 2013 endowment study.

So they deserve the raise, right?

“It’s easy to whack these guys,” Charles Skorina, founder of a San Francisco-based executive search firm specializing in investment management, said by phone. “It looks big in percentage terms, but it’s a basis point or two compared to the endowment.”

And summing it all up…

The number of presidents at public universities who made at least $1 million increased to nine from four during the 2012-2013 school year, according to a report by the Chronicle of Higher Education released Sunday. The Institute for Policy Studies published a report on Sunday that revealed that the public universities with the highest executive compensation also tend to have the fastest growth in student debt and use of lower-paid adjunct faculty.

It’s good to be king.

via Zero Hedge Tyler Durden

Who Is The New Secret Buyer Of U.S. Debt?

Submitted by Brandon Smith of Alt-Market blog,

On the surface, the economic atmosphere of the U.S. has appeared rather calm and uneventful. Stocks are up, employment isn’t great but jobs aren’t collapsing into the void (at least not openly), and the U.S. dollar seems to be going strong. Peel away the thin veneer, however, and a different financial horror show is revealed.

U.S. stocks have enjoyed unprecedented crash protection due to a steady infusion of fiat money from the Federal Reserve known as quantitative easing. With the advent of the “taper”, QE is now swiftly coming to a close (as is evident in the overall reduction in treasury market purchases), and is slated to end by this fall, if not sooner.

Employment has been boosted only in statistical presentation, and not in reality. The Labor Department’s creative accounting of job numbers omits numerous factors, the most important being the issue of long term unemployed. Millions of people who have been jobless for so long they no longer qualify for benefits are being removed from the rolls. This quiet catastrophe has the side bonus of making it appear as though unemployment is going down.

U.S. Treasury bonds, and by extension the dollar, have also stayed afloat due to the river of stimulus being introduced by the Federal Reserve. That same river, through QE, is now drying up.

In my article The Final Swindle Of Private American Wealth Has Begun, I outline the data which leads me to believe that the Fed taper is a deliberate action in preparation for an impending market collapse. The effectiveness of QE stimulus has a shelf-life, and that shelf life has come to an end. With debt monetization no longer a useful tool in propping up the ailing U.S. economy, central bankers are publicly stepping back. Why? If a collapse occurs while stimulus is in full swing, the Fed immediately takes full blame for the calamity, while being forced to admit that central banking as a concept serves absolutely no meaningful purpose.

My research over many years has led me to conclude that a collapse of the American system is not only expected by international financiers, but is in fact being engineered by them. The Fed is an entity created by globalists for globalists. These people have no loyalties to any one country or culture. Their only loyalties are to themselves and their private organizations.

While many people assume that the stimulus measures of the Fed are driven by a desire to save our economy and currency, I see instead a concerted program of destabilization which is meant to bring about the eventual demise of our nation’s fiscal infrastructure. What some might call “kicking the can down the road,” I call deliberately stretching the country thin over time, so that any indirect crisis can be used as a trigger event to bring the ceiling crashing down.

In the past several months, the Fed taper of QE and subsequently U.S. bond buying has coincided with steep declines in purchases by China, a dump of one-fifth of holdings by Russia, and an overall decline in new purchases of U.S. dollars for FOREX reserves.

With the Ukraine crisis now escalating to fever pitch, BRIC nations are openly discussing the probability of “de-dollarization” in international summits, and the ultimate dumping of the dollar as the world reserve currency.

The U.S. is in desperate need of a benefactor to purchase its ever rising debt and keep the system running. Strangely, a buyer with apparently bottomless pockets has arrived to pick up the slack that the Fed and the BRICS are leaving behind. But, who is this buyer?

At first glance, it appears to be the tiny nation of Belgium.

While foreign investment in the U.S. has sharply declined since March, Belgium has quickly become the third largest buyer of Treasury bonds, just behind China and Japan, purchasing more than $200 billion in securities in the past five months, adding to a total stash of around $340 billion. This development is rather bewildering, primarily because Belgium’s GDP as of 2012 was a miniscule $483 billion, meaning, Belgium has spent nearly the entirety of its yearly GDP on our debt.

Clearly, this is impossible, and someone, somewhere, is using Belgium as a proxy in order to prop up the U.S. But who?

Recently, a company based in Belgium called Euroclear has come forward claiming to be the culprit behind the massive purchases of American debt. Euroclear, though, is not a direct buyer. Instead, the bank is a facilitator, using what it calls a “collateral highway” to allow central banks and international banks to move vast amounts of securities around the world faster than ever before.

Euroclear claims to be an administrator for more than $24 trillion in worldwide assets and transactions, but these transactions are not initiated by the company itself. Euroclear is a middleman used by our secret buyer to quickly move U.S. Treasuries into various accounts without ever being identified. So the question remains, who is the true buyer?

My investigation into Euroclear found some interesting facts. Euroclear has financial relationships with more than 90 percent of the world’s central banks and was once partly owned and run by 120 of the largest financial institutions back when it was called the “Euroclear System”. The organization was consolidated and operated by none other than JP Morgan Bank in 1972. In 2000, Euroclear was officially incorporated and became its own entity. However, one must remember, once a JP Morgan bank, always a JP Morgan bank.

Another interesting fact – Euroclear also has a strong relationship with the Russian government and is a primary broker for Russian debt to foreign investors. This once again proves my ongoing point that Russia is tied to the global banking cabal as much as the United States. The East vs. West paradigm is a sham of the highest order.

Euroclear’s ties to the banking elite are obvious; however, we are still no closer to discovering the specific groups or institution responsible for buying up U.S. debt. I think that the use of Euroclear and Belgium may be a key in understanding this mystery.

Belgium is the political center of the EU, with more politicians, diplomats and lobbyists than Washington D.C. It is also, despite its size and economic weakness, a member of an exclusive economic club called the “Group Of Ten” (G10).

The G10 nations have all agreed to participate in a “General Arrangement to Borrow” (GAB) launched in 1962 by the International Monetary Fund (IMF). The GAB is designed as an ever cycling fund which members pay into. In times of emergency, members can ask the IMF’s permission for a release of funds. If the IMF agrees, it then injects capital through Treasury purchases and SDR allocations. Essentially, the IMF takes our money, then gives it back to us in times of desperation (with strings attached).  A similar program called 'New Arrangements To Borrow' (NAB) involves 38 member countries.  This fund was boosted to approximately 370 billion SDR (or $575 billion dollars U.S.) as the derivatives crisis struck markets in 2008-2009.  Without a full and independent audit of the IMF, however, it is impossible to know the exact funds it has at its disposal, or how many SDR's it has created.

It should be noted the Bank of International Settlements is also an overseer of the G10. If you want to learn more about the darker nature of globalist groups like the IMF and the BIS, read my articles, Russia Is Dominated By Global Banks, Too, and False East/West Paradigm Hides The Rise Of Global Currency.

The following article from Harpers titled Ruling The World Of Money,” was published in 1983 and boasts about the secrecy and “ingenuity” of the Bank Of International Settlements, an unaccountable body of financiers that dominates the very course of economic life around the world.

It is my belief that Belgium, as a member of the G10 and the GAB/NAB agreements, is being used as a proxy by the BIS and the IMF to purchase U.S. debt, but at a high price. I believe that the banking elite are hiding behind their middleman, Euroclear, because they do not want their purchases of Treasuries revealed too soon. I believe that the IMF in particular is accumulating U.S. debt to be used later as leverage to absorb the dollar and finalize the rise of their SDR currency basket as the world reserve standard.

Imagine what would happen if all foreign creditors abandoned U.S. debt purchases because the dollar was no longer seen as viable as a world reserve currency.  Imagine that the Fed's efforts to stimulate through fiat printing became useless in propping up Treasuries, serving only to devalue the domestic buying power of our currency.  Imagine that the IMF swoops in as the lender of last resort; the only entity willing to service our debt and keep the system running.  Imagine what kind of concessions America would have to make to a global loan shark like the IMF.

Keep in mind, the plan to replace the dollar is not mere "theory".  In fact, IMF head Christine Lagarde has openly called for a "global financial system" to take over in the place of the current dollar based system.

The Bretton Woods System, established in 1944, was used by the United Nations and participating governments to form international rules of economic conduct, including fixed rates for currencies and establishing the dollar as the monetary backbone. The IMF was created during this shift towards globalization as the BIS slithered into the background after its business dealings with the Nazis were exposed. It was the G10, backed by the IMF, that then signed the Smithsonian Agreement in 1971 which ended the Bretton Woods system of fixed currencies, as well as any remnants of the gold standard. This led to the floated currency system we have today, as well as the slow poison of monetary inflation which has now destroyed more than 98 percent of the dollar’s purchasing power.

I believe the next and final step in the banker program is to reestablish a new Bretton Woods style system in the wake of an engineered catastrophe. That is to say, we are about to go full circle. Perhaps Ukraine will be the cover event, or tensions in the South China Sea. Just as Bretton Woods was unveiled during World War II, Bretton Woods redux may be unveiled during World War III. In either case, the false East/West paradigm is the most useful ploy the elites have to bring about a controlled decline of the dollar.

The new system will reintroduce the concept of fixed currencies, but this time, all currencies will be fixed or “pegged” to the value of the SDR global basket. The IMF holds a global SDR summit every five years, and the next meeting is set for the beginning of 2015.

If the Chinese yuan is brought into the SDR basket next year, if the BRICS enter into a conjured economic war with the West, and if the dollar is toppled as the world reserve, there will be nothing left in terms of fiscal structure in the way of a global currency system. If the public does not remove the globalist edifice by force, the IMF and the BIS will then achieve their dream – the complete dissolution of economic sovereignty, and the acceptance by the masses of global financial governance. The elites don’t want to hide behind the curtain anymore. They want recognition. They want to be worshiped. And, it all begins with the secret buyout of America, the implosion of our debt markets, and the annihilation of our way of life.

via Zero Hedge Tyler Durden

Don’t You Dare Call Your GM Car A “Decapitating”, “Kevorkianesque”, “Rolling Sarcophagus”, Or “You’re Toast”

Instead of “defective”, GM suggests its employees use the phrase “does not perform to design” according to just released documents in the GM recall probe. However, the internal presentation provides a glimpse into the internal thinking at GM as it suggests the following 69 words should not be used in a company memo… including “Hindenburg”, “spontaneous combustion”, and “Kevorkianesque.”


Via WSJ,

The full 69 words…


always, annihilate, apocalyptic, asphyxiating, bad, Band-Aid, big time, brakes like an “X” car, cataclysmic, catastrophic, Challenger, chaotic, Cobain, condemns, Corvair-like, crippling, critical, dangerous, deathtrap, debilitating, decapitating, defect, defective, detonate, disemboweling, enfeebling, evil, eviscerated, explode, failed, flawed, genocide, ghastly, grenadelike, grisly, gruesome, Hindenburg, Hobbling, Horrific, impaling, inferno, Kevorkianesque, lacerating, life-threatening, maiming, malicious, mangling, maniacal, mutilating, never, potentially-disfiguring, powder keg, problem, rolling sarcophagus (tomb or coffin), safety, safety related, serious, spontaneous combustion, startling, suffocating, suicidal, terrifying, Titanic, unstable, widow-maker, words or phrases with a biblical connotation, you’re toast


and in case you needed a little more help… here is some more translations…



“Trust” them.. they’re from the government

via Zero Hedge Tyler Durden

The Keynesian Economy In One Chart

Submitted by David Stockman via Contra Corner blog,

Sometimes a chart is worth a thousand words, and this is one. Real Median household income peaked way back in 1999 at $56,000 and by 2012 it was down 9% – an unprecedented decline. It goes without saying that Washington’s Keynesian ministrations on the money printing and national debt front didn’t much help.


In fact, the Fed’s balance sheet has expanded from $450 billion  to $4.4 trillion during that period or by nearly 10X. Likewise, the national debt has nearly quadrupled  to $17 trillion during the same period.

Well, all this monetary and fiscal profligacy did apparently help in one precinct: Namely, the Washington beltway where median household income reached its all-time high in 2012 (the last year available) of $65,200 and undoubtedly continues to rise. By contrast, 30 states reached their peak real household incomes more than a decade ago, and some reached that point more than two decades back.

The provinces have thus not kept pace with the imperial capital. Not by a long shot.

As also shown in the table below, 30 states have experienced a 10% or more decline since their peak year, and in 10 states the decline has ranged from 19% to 27%. Those figures do not represent merely a dip or even an extended setback. They amount to a devastating shrinkage in the standard of living being experienced by tens of millions of households.


Yet the mainstream narrative blathers on that the business cycle expansion is back on track and that last month’s numbers were a tad better than the month before. The table above says that’s all Keynesian bread and circuses – the fleeting uptick interval between the serial bubbles and busts that our Washington overlords have condemned the people to endure.

via Zero Hedge Tyler Durden

Coal: A ‘Million Dollar Mile’ Getting Longer In the U.S.

By EconMatters


With cheap domestic natural gas prices and tighter environmental regulations, U.S. demand for coal has fallen in recent years. So coal export has become ever more important to domestic coal producers. With accelerating growth in economy and power demand, Asia is the obvious new export target for U.S. coal. U.S. coal shipments outside the country in 2014 are expected to surpass 100 million tons for the third year (see chart below). 


Data Source: EIA, U.S. Energy Dept.


Further Reading: The Power Race: Coal vs. Gas

East, Pacific Northwest, Gulf?


Typically, coal is transported via rail, truck to the port terminal and then exported by large dry bulk cargo ships. But the aging port infrastructure in the U.S. is already struggling with capacity issue. The capacity along the east coast is strained with increasing US coal exports to Europe.


Map Source: Platts 


Theoretically, Pacific Northwest would be the best location for new coal terminals to serve the booming Asian market. The western region (including the Power River Basin) is the top coal producing area in the U.S. according to the U.S. Energy Dept. However, active environmentalism in Washington and Oregon has managed to block almost every major proposal for now coal terminal.


Data Source: EIA, U.S. Energy Dept.

Frustrated, coal producers in the Powder River Basin are willing to pay a higher transit fee to use terminals in Vancouver, Prince Rupert, and British Columbia, Canada. But Canadian ports are also having capacity issue handling the surging coal export volume from the U.S. For now, Gulf of Mexico, where local governments and citizens are friendlier to the traditional energy and fossil-fuel industries, seems the best option where additional capacity in the near-term could be more likely.



China, Europe or South America?


As a result, some U.S. producers have shifted to target markets that are closer, such as Europe and Brazil. Europe is implementing more pollution-control measures on power plants to wean itself from nuclear power after Japan’s Fukushima disaster, as well as natural gas to reduce the supply dependency on Russia. In fact, UK was the top foreign buyer of American coal in 2013.




Increasing Global Coal Demand


According to IEA, although U.S. coal demand has dropped to 24-year low, the black rock is still the world’s fastest-growing energy source, forecast to rise 2.3 percent a year through 2018 and is the second-largest source behind oil.


World Energy Demand by Fuel

Chart Source: Coal Medium Term Market Outlook 2013, IEA 


The coal demand growth is driven mostly by non-OECD countries with China leading the way. China is world’s top coal producer, but the nation is also plagued by dangerous coal mining conditions and transport congestion. So China will continue to need more coal to feed its energy requirement. As long as China’s economy holds up, U.S. coal companies should benefit.





However, a lot of the upside of coal export hinges on new export capacity gets approved and built in the U.S. and ocean bulk freight stays low.


Coal companies are eager to pour money into new terminals. Bloomberg reported that Oakland, California just recently rejected a coal export facility proposed by Bowie Resource Partners LLC despite the promise of ‘thousands’ of new construction jobs and a $3 million-a-year payroll in city. The message from Oakland: “Whatever the economic benefit would’ve been, it wasn’t worth destroying the planet over.” (Note: Oakland’s unemployment rate is higher than that of the national average as well as California.)


As the environmental cause has evolved from NIMBY (Not in My Back Yard) to NIYBY (Not in Your Back Yard), coal industry needs to address oppositions not only on coal dust from train, but also on potential global climate impact. So even though many producers are hopeful of new export facilities eventually coming online, status-quo seems more likely the near-term outlook.


Ocean Freight Could Bite


Currently, ocean freight rates are at historical low because of vessel overcapacity. This has allowed US coal to be more competitive in international markets. But freight rate will not stay this low for too long. By then, the U.S. coal will have a difficult time competing with producers in Indonesia, Australia and Russia that are closer to the Asian key markets.


According to WSJ, while shipping coal from a U.S. mine to a customer in Asia adds $50 to the per-ton price, Australian producers can get coal from their mines to China and other Asian markets for half that.


Near Term Outlook 


China will continue to import coal from U.S. mines via Canadian coal terminals operated by companies such as Westshore Terminals Ltd. Westshore has raised its annual handling capacity to 33 million tonnes this year from 24 million tons in 2007 and are sending as much as 3.76 million tons a month abroad.


In the U.S., CONSOL Energy (NYSE: CNX) has some export advantage over peers since the company owns the Baltimore Marine terminal.  Bloomberg noted this is the only terminal wholly owned by a coal company in the U.S.  Other coal companies will have to pay fees to CONSOL to use the terminal with 15 million tons a year capacity.


Rail companies like CSX (NYSE: CSX), Norfolk Southern (NYSE: NSC), and top U.S. coal companies Peabody Energy (NYSE: BTU), Alpha Natural Resources (NYSE:ANR), and Arch Coal Inc. (NYSE: ACI) also jointly or individually own a few terminals on the East Coast and Gulf of Mexico.


Houston-based terminal operator Kinder Morgan (NYSE: KMP) last year said it plans to invest more than $450 million in coal terminal expansion projects. That already caused air quality concerns at Houston Ship Channel among local environmentalists. This suggests U.S. Gulf Coast states may seem more accommodating to oil and gas in the past, the coal dust air pollution problem means new coal facilities may still have a tougher time getting approved.


A Million Dollar Mile Awaits


The recent trend suggests U.S. regulators are increasingly taking into consideration the global-warming impacts of coal pollution problem in Asia as they decide on new coal terminal proposals. But I see the logic more like this: The law of supply and demand means Asia will get its coal (oil and gas) from somewhere else, if not from the U.S., to feed its energy hunger.  Until Asian developing nations get their environmental standards and regulations together, the global warming impact will go on even if U.S. totally bans all energy export to Asia.


Bloomberg said CONSOL employees call a long coal train a “million dollar mile,” which is a reference to the cargo’s total value at current prices.  For now, until the coal industry can properly address the coal dust air pollution issue and get approvals for new export capacity, the line for the “Million Dollar Mile” could get even longer.


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via Zero Hedge EconMatters

56% Of Recent Black College Graduates Get A Job That Does Not Require A College Degree, CEPR Finds

With everyone focused on what is undisputedly the next mega credit bubble in the form of student loans, which in the most recent quarter hit a record high of over $1.1 trillion, the topic of college education, and specifically its utility, has gotten much press coverage over the past month. As we summarized most recently two days ago, the key variables involved when calculating the costs and benefits revolve around whether one uses (generous amounts) of student loans and what area of specialization one picks. But according to a recent report published by the Center for Economic and Policy Research titled “A College Degree is No Guarantee“, there is another, perhaps more important variable when it comes to getting the most out of one’s college education: race.

As the WSJ reports, “among those with a job in 2013, more than half of black recent college graduates—56%–were in an occupation that typically doesn’t require a college degree, according to a report Tuesday by the Center for Economic and Policy Research, a left-leaning Washington think tank.”

But while one may be inclined to accuse the authors of pandering or, gasp, racism, the reality is almost just as bad for all races:

Among all recent college grads with a job, the rate still was a very high 45%. (The report defines a recent college grad as someone between the ages of 22 and 27 with a four-year degree.)

The follow through from here is logical: upon graduation some 56% of blacks fall into a state defined as “underemployment”, not to be confused with the same term used by the BLS,  “in which college-educated workers aren’t getting high enough salaries to pay off their student debt and achieve a middle-class lifestyle.”

An additional variable, although far less important, is experience: “experience makes a difference, with workers further out of school tending to hold better jobs than recent college graduates. Among all employed black college graduates—regardless of when they earned their degree—about 42% were in a job that didn’t require a degree in 2013. Among all employed college graduates regardless of race, the figure was 35%. The weak labor market comes at a time when young college graduates also are carrying higher debt loads than previous generations to cover rising college costs.”

The punchline, by the CEPR report’s author Janelle Jones (who incidentally is also black, which has no bearing on this topic… which is why we note it):

“Black workers have been told for a generation that the way for you to do better is go to college. These are people who go to college in the face of rising tuition, needing to work to support themselves, not having a family structure. They finish college and then they end up finding a job that job doesn’t end up requiring a degree and pays less than those that do require a degree.”

Well, to be honest Janelle, all workers have been told for a generation, and actually much longer than that, that the way to do better is go to college.

So while we appreciate the study’s conclusion, which is what we expected, namely that nearly half of college graduates end up in jobs that do not require a college education (and certainly do not pay well enough to repay the student loans) and as such the delinquencies on student loans are guaranteed to skyrocket in the coming years, we are amused by yet another attempt to make this into a black, non-black i.e., “race” issue, although we have a very distinct feeling that when the topic of student loan forgiveness (and its monetization by the Fed) becomes the pressing political issue in a couple of years, along racial lines is precisely just how this latest government hand out will be approached.

via Zero Hedge Tyler Durden

Is The Economic Recovery Only Statistical?

Submitted by Lance Roberts of STA Wealth Management,


via Zero Hedge Tyler Durden

VIX Tumbles To 9-Month Lows Leading Volumeless Stock Surge

Wednesday is the new Tuesday. From the moment equities closed yesterday, they rallied on another macro data-less day. The US open sparked another JPY-based run higher and then the pump-and-dump after FOMC cleared the way for VIX – which closed at its lowest in 9 months (on the day the FOMC warns of complacency concerns) – to lead stocks back to the week's highs. Credit was not as excited – just like Monday (before Tuesday's reality-check for stocks). Goldman took the shine off things late on by explaining to BTFD'ers that "there were no surprises" and stocks faded modestly. Treasury yields closed higher (2-3bps) but rallied post-FOMC. Gold down modestly, USD flat, and WTI crude up to almost $104.


VIX… at 9-month lows on the day the Fed said " LOW VOLATILITY IN MARKETS MAY INDICATE COMPLACENCY"


The S&P 500 never looked back from yesterday's close…




As shorts were squeezed once again…

When stocks ran to the highs, it was all VIX…


As Bonds and JPY disconnected…



Just as stocks disconnected from credit in Monday and reconnected on Tuesday, so we saw Wednesday so the same…



Treasuries rallied post-FOMC (as stocks did)


The USD dumped after the FOMC…


and here's your day across asset classes…


Charts: Bloomberg

via Zero Hedge Tyler Durden

Martin Armstrong Warns Out Of Control Unions Are The Real Poison Pill Of Western Society

Submitted by Martin Armstrong via Armstrong Economics blog,


Unions have been the real plague of society. There is not much they have not really destroyed. They wiped out New York City as a port. No ships dock in New York City any more. They serious reduced the American auto industry reducing quality that opened the door for foreign cars. The big three US auto manufactures are General Motors (NYSE:GM), with 17.9 percent market share, Ford (NYSE:F), with 15.9 percent market share, and Chrysler, with 11.5 percent market share. That is just 45.3% with the rest going to foreign. Toyota (NYSE:TM) alone has 14.3 percent market share.

The unions are probably worse in Philadelphia than anywhere. They are driving the city’s Convention Center into the brink of bankruptcy because of their arrogant demands. We had to cancel our conference there because we were not allowed to hire a video company that was not local Philadelphia Union. The German film crew that has been making this move would not be allowed to have their own people. We had to cancel and move. When we called the Marriott with just 1 week to the event, they asked why were we cancelling? The unions?

The Construction Unions are basically criminal organizations. They threaten people who do not use union labor and now a bunch of people are getting indicted for such violent activity. These unions have been destroying equipment of competing firms that are not union. They have goon squads that intimidate people.

The days when unions were necessary to ensure working conditions are long gone. There are all sorts of laws in place that unions are no longer necessary. Nevertheless, we are looking at a major rise in civil unrest coming primarily from state unions. These are teachers ro bureaucrats all demanding more and refusing to reduce their demands. This system is just unsustainable. They have attack advertisements in Pennsylvania blaming school violent on cutting teachers. Governor Christie cannot fund the pensions of state workers. When he said the unions have to give back, they said no – they want more.


The problem is that the only way to pay these unions is to raise taxes. That reduces the disposable income and robs the citizen of their future to fund state workers. It was the unfunded pensions that caused the collapse of the Roman Empire and it wiped out the city of Detroit. More than 50% of tax revenue went to pensions and that means you cannot fund government without it shrinking.

This is the poison pill that will destroy Western Society. This hunt for taxes will destroy the economy and will not save the day in the end game. Just do the math.


via Zero Hedge Tyler Durden

Don’t Overthink The FOMC Minutes, Goldman Suggests: “There Were No Surprises”

While everyone tries very hard to read between the lines of the Fed minutes with the consensus conclusion being that suddenly (as opposed to previously?) the Fed is confused about what the best exit strategy is, with words such as reverse repos thrown around for dramatic impact even though this topic has been around for nearly a year, the reality is that there was absolutely nothing market moving or material in today’s report (which furthermore reduced the use of the word “weather” from 15 instances in March to just 8 in April although no mentions of El Nino just yet). Here is Goldman’s FOMC minutes post-mortem confirming just this.

From Goldman’s Jan Hatzius

No Major Surprises In April Minutes

BOTTOM LINE: The April FOMC minutes contained no major surprises. There was no news on the likely date of the first funds rate hike or the pace of subsequent hikes, and participants’ views on the economic outlook were unchanged. Participants discussed the exit strategy and were in favor of further testing of policy tools, but no new policy decisions were made.


1. The April minutes contained no new information on the likely date of the first fed funds rate hike or the pace of subsequent hikes.

2. Participants discussed the exit strategy in a joint meeting of the FOMC and the Board of Governors, but emphasized that this was intended as “prudent planning” and not an indication that normalization would begin soon. Participants were in favor of additional testing of tools including the term deposit facility, but did not make any new policy decisions with respect to the exit strategy. “A number of participants” suggested providing more information about how long reinvestment of Treasuries and MBS will last.

3. “A number of participants” expressed concern that the slowdown in the housing sector could prove persistent. “A couple” of participants specifically mentioned tight lending standards as a concern for the housing market, in line with comments by Fed Chair Janet Yellen during the March press conference.

4. Participants discussed research on the relationship between labor market slack and inflation at length. “A number” of participants argued that the unemployment rate currently understates total labor market slack and “expressed skepticism about recent studies suggesting that long-term unemployment provides less downward pressure on wage and price inflation than short-term unemployment does.” The staff noted that wage growth, import prices, and commodity prices remain soft, and both “most participants” and the staff continued to forecast that inflation will require a few years to return to the 2% target.

5. The Fed staff did not make any major changes to the medium-term economic forecast and continued to view weakness in the early part of Q1 as transitory and largely owing to the unusually cold and snowy winter weather. Participants did not materially change their views on the economic outlook from March either.

6. Participants discussed financial stability concerns, but were generally not concerned about risks from financial imbalances

via Zero Hedge Tyler Durden