iftttwall

You didn’t think the US could at first slowly, and then all of a sudden, expropriate retirement accounts and invest them in the “no risk, guaranteed return” MyRA Ponzi scheme introduced by Obama during the State of the Union address without lots of behavior-modifying indoctrination in the “friendly press” first now did you? Sure enough, here is the first major propaganda salvo, coming from none other than the US Treasury Secretary, Jack Lew, which will be published tomorrow across the McClatchy media empire.

* * *

Just out from the US Treasury Department, “In an op-ed to be published in the January 31, 2014 editions of McClatchy Newspapers, Treasury Secretary Jacob J. Lew discusses myRA –  a simple, safe and affordable starter savings account to help low and moderate-income Americans begin building towards a more secure financial future.”

myRA: A start to a secure retirement

Over the past five years, our country has accomplished a number of big things.  The economy has grown stronger after being shaken to the core by the worst recession in our lifetimes.  Our businesses have created more than 8 million jobs.  The financial system is more resilient, with better protections for consumers and investors.  And investments in domestic energy production have helped put the promise of American energy independence in sight. 

In the meantime, health care costs have grown at their slowest rates in years while millions of families now have access to affordable health care coverage so they are not one hospital visit away from falling into financial ruin.  Our auto industry is surging even as home values are rebounding.  And the federal deficit has been cut by more than half.

So we have made clear progress.  But we all understand that we are not where we want to be yet.  Too many Americans cannot find a job.  Too many Americans who do have a job are not getting paid enough to support their families and make ends meet.  And too many Americans do not have the skills they need to succeed in today’s economy. 

As President Barack Obama made clear in his State of the Union address, it is time to focus on restoring opportunity for all.  That means helping to make sure more Americans can take part in our growing economy and build some economic security for the long term.  To get that done, we are putting forward real, concrete solutions to our most pressing problems—from college affordability and job training to fair wages and a stable retirement. 

Now, when it comes to retirement, you would think that the vast majority of working Americans would be putting some money away for their future.  But the truth is, many are not.  For millions of working men and women, it is not easy to save for the long haul.  Many employers do not offer a retirement plan.  And setting up a retirement account and maintaining it can often be too difficult, expensive and time-consuming. 

The statistics paint a stark picture.  Only about half of all workers have access to an employer-based retirement plan, such as a 401(k).  And left on their own, few workers save.  It is estimated that fewer than one out of 10 eligible workers actually contribute to an IRA.

Still, every American deserves the chance to build a secure retirement.  That is why the Obama administration has designed a new way for working Americans to start saving for the future.  This program, which will begin later this year, is called myRA or My Retirement Account. 

This account is designed to help low- and middle-income workers, who are too often overlooked or ignored, begin saving for retirement.  We are talking about the waitress who is holding down two part-time jobs to support her kids; the recent graduate who landed a job but is grappling with student loans; the janitor who has never been given the chance to invest in a retirement account.

Here is how myRA, which is simple, safe and affordable, will work.

You will be able to start saving with an initial deposit of as little as $25 and contribute as little as $5 each payday.  If an employer chooses to participate, contributions are made through automatic payroll deductions, making them hassle-free. 

There are no fees—100% of any contribution goes into the account and is invested in a Treasury security.  That means it will be backed by the full faith and credit of the United States, will earn the same interest rate that is available to federal employees for their retirement savings, and the balance will never go down.

Finally, myRA is not tied to any one employer—it belongs to the worker, not the workplace.  In other words, the account is portable and can be easily rolled into a Roth IRA.  And if myRA savers ever need to, they can withdraw their contributions tax-free, at any time.

MyRA is a specific way in which we can help hardworking Americans save for the future.  But there are other things we can do.  In particular, the President has consistently called on Congress to help tens of millions of middle class Americans save for the future by opening up access to automatic IRAs in the workplace. 

And we will continue to look for ways to help increase economic security, strengthen the middle class, and provide more ladders of opportunity into the middle class.  That is how we will help make sure every American can take part in this recovery.  And that is how we will help usher in a stronger, more prosperous future for our country.

Jacob J. Lew is the secretary of the Treasury.

via Zero Hedge http://ift.tt/1fABKL4 Tyler Durden

You didn’t think the US could at first slowly, and then all of a sudden, expropriate retirement accounts and invest them in the “no risk, guaranteed return” MyRA Ponzi scheme introduced by Obama during the State of the Union address without lots of behavior-modifying indoctrination in the “friendly press” first now did you? Sure enough, here is the first major propaganda salvo, coming from none other than the US Treasury Secretary, Jack Lew, which will be published tomorrow across the McClatchy media empire.

* * *

Just out from the US Treasury Department, “In an op-ed to be published in the January 31, 2014 editions of McClatchy Newspapers, Treasury Secretary Jacob J. Lew discusses myRA –  a simple, safe and affordable starter savings account to help low and moderate-income Americans begin building towards a more secure financial future.”

myRA: A start to a secure retirement

Over the past five years, our country has accomplished a number of big things.  The economy has grown stronger after being shaken to the core by the worst recession in our lifetimes.  Our businesses have created more than 8 million jobs.  The financial system is more resilient, with better protections for consumers and investors.  And investments in domestic energy production have helped put the promise of American energy independence in sight. 

In the meantime, health care costs have grown at their slowest rates in years while millions of families now have access to affordable health care coverage so they are not one hospital visit away from falling into financial ruin.  Our auto industry is surging even as home values are rebounding.  And the federal deficit has been cut by more than half.

So we have made clear progress.  But we all understand that we are not where we want to be yet.  Too many Americans cannot find a job.  Too many Americans who do have a job are not getting paid enough to support their families and make ends meet.  And too many Americans do not have the skills they need to succeed in today’s economy. 

As President Barack Obama made clear in his State of the Union address, it is time to focus on restoring opportunity for all.  That means helping to make sure more Americans can take part in our growing economy and build some economic security for the long term.  To get that done, we are putting forward real, concrete solutions to our most pressing problems—from college affordability and job training to fair wages and a stable retirement. 

Now, when it comes to retirement, you would think that the vast majority of working Americans would be putting some money away for their future.  But the truth is, many are not.  For millions of working men and women, it is not easy to save for the long haul.  Many employers do not offer a retirement plan.  And setting up a retirement account and maintaining it can often be too difficult, expensive and time-consuming. 

The statistics paint a stark picture.  Only about half of all workers have access to an employer-based retirement plan, such as a 401(k).  And left on their own, few workers save.  It is estimated that fewer than one out of 10 eligible workers actually contribute to an IRA.

Still, every American deserves the chance to build a secure retirement.  That is why the Obama administration has designed a new way for working Americans to start saving for the future.  This program, which will begin later this year, is called myRA or My Retirement Account. 

This account is designed to help low- and middle-income workers, who are too often overlooked or ignored, begin saving for retirement.  We are talking about the waitress who is holding down two part-time jobs to support her kids; the recent graduate who landed a job but is grappling with student loans; the janitor who has never been given the chance to invest in a retirement account.

Here is how myRA, which is simple, safe and affordable, will work.

You will be able to start saving with an initial deposit of as little as $25 and contribute as little as $5 each payday.  If an employer chooses to participate, contributions are made through automatic payroll deductions, making them hassle-free. 

There are no fees—100% of any contribution goes into the account and is invested in a Treasury security.  That means it will be backed by the full faith and credit of the United States, will earn the same interest rate that is available to federal employees for their retirement savings, and the balance will never go down.

Finally, myRA is not tied to any one employer—it belongs to the worker, not the workplace.  In other words, the account is portable and can be easily rolled into a Roth IRA.  And if myRA savers ever need to, they can withdraw their contributions tax-free, at any time.

MyRA is a specific way in which we can help hardworking Americans save for the future.  But there are other things we can do.  In particular, the President has consistently called on Congress to help tens of millions of middle class Americans save for the future by opening up access to automatic IRAs in the workplace. 

And we will continue to look for ways to help increase economic security, strengthen the middle class, and provide more ladders of opportunity into the middle class.  That is how we will help make sure every American can take part in this recovery.  And that is how we will help usher in a stronger, more prosperous future for our country.

Jacob J. Lew is the secretary of the Treasury.

via Zero Hedge http://ift.tt/1fABKL4 Tyler Durden

The IMF’s woeful forecasting record, chronicled extensively before, has just taken yet another hit, following the latest flip flop on emerging markets. Try to spot the common theme of these assessments by the IMF.

IMF Chief economist Olivier Blanchard, April 11, 2011 (source):

“In emerging market economies, by contrast, the crisis left no lasting wounds. Their initial fiscal and financial positions were typically stronger, and the adverse effects of the crisis were more muted. High underlying growth and low interest rates are making fiscal adjustment much easier. Exports have recovered, and whatever shortfall in external demand they experienced has typically been made up through increases in domestic demand. Capital outflows have turned into capital inflows, due to both better growth prospects and higher interest rates than in the advanced economies. The challenge for most emerging market economies is thus quite different from that of the advanced economies—namely, how to avoid overheating in the face of closing output gaps and higher capital flows.”

IMF Chief economist Olivier Blanchard, July 9, 2013 (source):

“If you look country by country it seems to be specific . . . so in China it looks like unproductive investment, in Brazil it looks like low investment and in India it looks like policy and administrative uncertainty. But you wonder whether there is not something behind. I think behind this is a slowdown in underlying growth – not the cyclical component but just the average rate. It’s clear that these countries are not going to grow as fast as they did before the crisis.”

IMF Chief economist Olivier Blanchard, January 23, 2014 (source)

“Finally, we forecast that both emerging market and developing economies will sustain strong growth“

A few days later, EMs around the globe crashed, and central banks virtually everywhere had to step in to bail out their crashing currencies, and hit the tape with even more impressive verbal intervention every several hours.

Finally, today we get IMF economist Alejandro Werner, January 30, 2014 (source)

“Conditions in global financial markets will stay tighter than they were before the U.S. central bank’s “taper talk” in the first half of 2013, translating into higher international borrowing costs, particularly with the recent volatility in emerging markets…. sustained turbulence in emerging markets could tighten global financial conditions further…. Rebuilding fiscal buffers, and using monetary policy and flexible exchange rates to absorb shocks where possible, remains the order of the day.“

In other words, going from a forecast of “high underlying growth”, to “not going to grow as fast as they did”, to “sustain strong growth”, to violent EM crash, to “turbulence”, “volatility”, and urging EMs to “using monetary policy to absorb shocks”, what is clear is that nobody knows what is going on, nobody has any handle on the future of Emerging Markets, but let’s all just pretend that the MIT central-planners in control, are in control, and all shall be well.

via Zero Hedge http://ift.tt/1bCulIn Tyler Durden

The IMF’s woeful forecasting record, chronicled extensively before, has just taken yet another hit, following the latest flip flop on emerging markets. Try to spot the common theme of these assessments by the IMF.

IMF Chief economist Olivier Blanchard, April 11, 2011 (source):

“In emerging market economies, by contrast, the crisis left no lasting wounds. Their initial fiscal and financial positions were typically stronger, and the adverse effects of the crisis were more muted. High underlying growth and low interest rates are making fiscal adjustment much easier. Exports have recovered, and whatever shortfall in external demand they experienced has typically been made up through increases in domestic demand. Capital outflows have turned into capital inflows, due to both better growth prospects and higher interest rates than in the advanced economies. The challenge for most emerging market economies is thus quite different from that of the advanced economies—namely, how to avoid overheating in the face of closing output gaps and higher capital flows.”

IMF Chief economist Olivier Blanchard, July 9, 2013 (source):

“If you look country by country it seems to be specific . . . so in China it looks like unproductive investment, in Brazil it looks like low investment and in India it looks like policy and administrative uncertainty. But you wonder whether there is not something behind. I think behind this is a slowdown in underlying growth – not the cyclical component but just the average rate. It’s clear that these countries are not going to grow as fast as they did before the crisis.”

IMF Chief economist Olivier Blanchard, January 23, 2014 (source)

“Finally, we forecast that both emerging market and developing economies will sustain strong growth“

A few days later, EMs around the globe crashed, and central banks virtually everywhere had to step in to bail out their crashing currencies, and hit the tape with even more impressive verbal intervention every several hours.

Finally, today we get IMF economist Alejandro Werner, January 30, 2014 (source)

“Conditions in global financial markets will stay tighter than they were before the U.S. central bank’s “taper talk” in the first half of 2013, translating into higher international borrowing costs, particularly with the recent volatility in emerging markets…. sustained turbulence in emerging markets could tighten global financial conditions further…. Rebuilding fiscal buffers, and using monetary policy and flexible exchange rates to absorb shocks where possible, remains the order of the day.“

In other words, going from a forecast of “high underlying growth”, to “not going to grow as fast as they did”, to “sustain strong growth”, to violent EM crash, to “turbulence”, “volatility”, and urging EMs to “using monetary policy to absorb shocks”, what is clear is that nobody knows what is going on, nobody has any handle on the future of Emerging Markets, but let’s all just pretend that the MIT central-planners in control, are in control, and all shall be well.

via Zero Hedge http://ift.tt/1bCulIn Tyler Durden

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Here's the global financial crisis in a nutshell: access to easy credit can solve a temporary liquidity problem, but it can't increase the value of collateral or generate income.

The Chinese culture has a wonderful vocabulary of colorful analogies and metaphors, and today's title refers to the typhoon of liquidity (freely available credit) that has flooded the global economy for the past five years.

The source of the phrase is Liu Chuanzhi, the Chairman of Lenovo and the iconic figure of Chinese manufacturing. When asked a few years ago why 60% of Lenovo Group’s profit came from asset investment and only 40% came from manufacturing. He said “when the typhoons come, even a pig can fly in the sky. Everybody is profiteering from this. Why can’t we?”

The typhoon in this case is China's credit/liquidity-driven real estate speculative frenzy, in which the only losers are those who don't borrow to the hilt in the shadow banking system and buy, buy, buy empty flats in vacant buildings.

The critical distinction to make about typhoons of credit-driven speculation (in China, Japan, the U.S., Europe, etc.) is between liquidity and valuation.

Let's take a household as an example to explain the difference. Say the household owns a $300,000 house with a $150,000 mortgage. The household has home equity of $150,000.

Let's say one of the household loses their job and the sole remaining income is not enough to pay the monthly bills. This is a liquidity crisis. The household could borrow money based on the collateral of the home equity to tide them over until the second worker finds a new job.

A valuation crisis is different: let's say the household decides to sell the house and discovers the market value is only $150,000–the same as the mortgage. After deducting the real estate transaction costs, the household has negative equity. So instead, the owners claim the house is worth $250,000 and try to get a home equity line of credit to solve their income/liquidity crisis.

Here's the global financial crisis in a nutshell: access to easy credit can solve a temporary liquidity problem, but it can't increase the value of collateral or generate income. The owner can misrepresent the value of the asset to borrow money based on phantom collateral, but that doesn't change the market value of the underlying asset or increase the income needed to make loan payments.

Simply put, credit/liquidity cannot solve valuation/collateral crises. Correspondent J.B. recently addressed this issue:

"RE: accounting and real life. Sometimes they differ but over the long run they always synch up. For instance let's say a bank has a lot of quality assets but a liquidity issue. It will take that good paper to the Fed to get liquidity for the bank to get through the hard time (no write down required and it works out). On the other hand if the bank has a bunch of bad assets, it now has a solvency issue and not a liquidity issue (i.e. not marking to market does not agree with reality). Sure if CRE goes bad it can postpone marking it to market for a while but soon it has no cashflow and accounting does not matter because it cannot pay its bills, payroll or redeem demand deposits. The failure to properly mark assets to market will not save it and ultimately accounting and reality will re-synch."

The world's central banks and governments have tried for the past five years to fix a valuation/collateral/income crisis with liquidity. No wonder they've failed–enabling insolvent owners to borrow more money doesn't make the borrowers any less insolvent.

Once the liquidity typhoon dies down, the insolvent pigs will plummet back to earth. That's what we're seeing in the periphery economies and shadow banking systems around the world.

via Zero Hedge http://ift.tt/1ie2gfu Tyler Durden

Following NY Rep. Michael Grimm’s apology yesterday for threatening to break a reporter in half and throw him off a balcony, none other than former NY Rep. Anthony Weiner had some advice for the cantakerous congressman. Wring in the New York Daily News, Weiner began: “First, if you don’t want to talk about a scandal in which you’re embroiled, whatever that scandal may be, maybe it’s best that you don’t do interviews for a while…” but the snark and irony surges from there.

 

Weiner’s New York Daily News Op-Ed advice begins…

First, if you don’t want to talk about a scandal in which you’re embroiled, whatever that scandal may be, maybe it’s best that you don’t do interviews for a while.

 

For that matter, you may not want to attend community meetings, visit your office or go a sporting event. Fact is, an investigation that’s hanging over your head is the kind of thing people might be curious about. People ask you about embarrassing stuff even when you want to talk about other things. Especially when you want to talk about other things.

But gets a little snarky…

Better yet, if you don’t want to talk about your fund-raising scandal, maybe just maybe don’t have one to begin with. I only know what I read in the papers about all this. (OK, maybe I know a bit more.) But it does seem like a lot of people are being investigated and indicted in connection with Mikey Suits’campaign.

 

I’ll leave it to the authorities who are probing this in New York, Washington, Texas and Israel to work out what happened, but it seems like we may be headed for another of those Nixon/Christie “mistakes were made” moments.

And then, in the irony of the decade (given Weiner’s outrageous outbursts to his voters and reporters alike)…

If you ignore the first two rules, try answering the questions posed to you, calmly.

 

 

I know that “can you tell us about the status of the ethics investigation into you?” sounds like fighting words. But it can actually be an invitation to explain some of the messy doings that have swirled around you since nearly the moment you were elected.

Weiner concludes…

Bottom line, notwithstanding the fact that there are lousy reporters — and that we all pay too much attention to scandals and not enough to all the people in public life who get up every day to do the best they can to do good work — the basic deal of representative government is this: The people who get elected have to be held accountable by the people who pay their salaries.

 

Sometimes that means getting a certificate of appreciation from the local Kiwanis Club, and sometimes it means having a reporter ask a question you don’t like. If you are living right, there are many many more of the former than the latter. But being an elected official is a high honor. You roll with the punches.

 

…

 

I did a terrible job following these rules. I did embarrassing things and made them so much worse by being dishonest about them.

So, people that live in glass houses shouldn’t screw there?

via Zero Hedge http://ift.tt/1iQ4jcq Tyler Durden