Tag: news

With food-stamp recipients dominated by ‘working age Americans’ for the first time in history; and 1.4 million having recently dropped off the benefits rolls, we suspect, extremely sadly, that the following breakdown of homelessness in America is about to get worse. Los Angeles has by far the greatest number of unsheltered homeless in America and New York City the largest population – at around 65,000 – of homeless people in the US. One wonders at the State of the Union tomorrow…

 

 

Via Vizual-Statistix,

The PIT estimates are based on counts of all sheltered and unsheltered homeless persons on a single night

 

…

 

Those who are identified as “unsheltered” live in places not meant for human habitation, such as streets, vehicles, parks, campgrounds, abandoned buildings, etc.

In general, the number of homeless people tracks population density, so the upper map shows homeless persons per 1,000 state population.

 

The top states are HI, NY, CA, and OR, though these are all less than half the per capita tally in DC.

 

Had I used raw counts of homeless people (without normalizing by population), CA would have had the highest value at 137,000. The next highest counts are NY (77,000) and FL (48,000).

 

The balance of sheltered and unsheltered is largely influenced by climate; more extreme climates found in the northern and eastern parts of the country have lower percentages of unsheltered homeless people. ND is an exception to this trend – it has approximately 2,000 homeless people, two-thirds of whom are unsheltered.

Data source: http://ift.tt/1nayonl

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

“I don’t think we’re going to get enough young people signing up to make this bill work as it was intended to financially,” warned Democrat Virginia Representative Jim Moran. The Democrat, as The Daily Caller reports, seemingly daring to break ranks with his peers, added that he understood Millennial lack of signing up as “frankly, there’s some legitimacy to their concern because the government spends about $7 for the elderly for every $1 it spends on the young.” This stunning declaration, of course, fits with the narratives that most mathematically-capable human beings can comprehend but starkly refutes the hopes and dreams of the President’s healthcare policy… The reason that Jim Moran could be so honest… after 12 terms of toeing the lying line, he has announced his retirement.

Via The Daily Caller,

A top House Democrat slammed Obamacare’s inability “to work” — but only after he announced his impending retirement from Congress.

 

12-term Virginia Rep. Jim Moran, an Appropriations Committee member who said this month that he will not seek re-election in 2014, said that not enough young people are signing up for Obamacare coverage to make the law work.

 

“I’m afraid that the millennials, if you will, are less likely to sign up. I think they feel more independent, I think they feel a little more invulnerable than prior generations. But I don’t think we’re going to get enough young people signing up to make this bill work as it was intended to financially,” Moran said in an interview with WAMU American University Radio.

 

“And, frankly, there’s some legitimacy to their concern because the government spends about $7 for the elderly for every $1 it spends on the young,” Moran said.

 

“I just don’t know how we’re going to do it frankly. If we had a solution I’d be telling the president right now,” Moran said.

 

Moran voted for President Obama’s Affordable Care Act, which depends on young healthy “invincibles” to sign up for health insurance exchanges to offset the high number of older, sicker people that drive rates up and make Obamacare plans more expensive.

 

…

 

read more here

Perhaps there is a lesson in this for all of us – do not trust a politician until he has retired (and we suggest – not even then).

via Zero Hedge http://ift.tt/L4PKTe Tyler Durden

“I don’t think we’re going to get enough young people signing up to make this bill work as it was intended to financially,” warned Democrat Virginia Representative Jim Moran. The Democrat, as The Daily Caller reports, seemingly daring to break ranks with his peers, added that he understood Millennial lack of signing up as “frankly, there’s some legitimacy to their concern because the government spends about $7 for the elderly for every $1 it spends on the young.” This stunning declaration, of course, fits with the narratives that most mathematically-capable human beings can comprehend but starkly refutes the hopes and dreams of the President’s healthcare policy… The reason that Jim Moran could be so honest… after 12 terms of toeing the lying line, he has announced his retirement.

Via The Daily Caller,

A top House Democrat slammed Obamacare’s inability “to work” — but only after he announced his impending retirement from Congress.

 

12-term Virginia Rep. Jim Moran, an Appropriations Committee member who said this month that he will not seek re-election in 2014, said that not enough young people are signing up for Obamacare coverage to make the law work.

 

“I’m afraid that the millennials, if you will, are less likely to sign up. I think they feel more independent, I think they feel a little more invulnerable than prior generations. But I don’t think we’re going to get enough young people signing up to make this bill work as it was intended to financially,” Moran said in an interview with WAMU American University Radio.

 

“And, frankly, there’s some legitimacy to their concern because the government spends about $7 for the elderly for every $1 it spends on the young,” Moran said.

 

“I just don’t know how we’re going to do it frankly. If we had a solution I’d be telling the president right now,” Moran said.

 

Moran voted for President Obama’s Affordable Care Act, which depends on young healthy “invincibles” to sign up for health insurance exchanges to offset the high number of older, sicker people that drive rates up and make Obamacare plans more expensive.

 

…

 

read more here

Perhaps there is a lesson in this for all of us – do not trust a politician until he has retired (and we suggest – not even then).

via Zero Hedge http://ift.tt/L4PKTe Tyler Durden

Submitted by Doug Noland of The Prudent Bear blog,

Backdrops conductive to crises can drag on for so long – sometimes seemingly forever – as if they’re moving in ultra-slow motion. Invariably, they lull most to sleep. Better yet, such environments even work to embolden the optimists. This is especially the case when policy measures are aggressively employed along the way, repeatedly holding the forces of crisis at bay. In the face of mounting risk, heightened risk-taking and leveraging often work only to exacerbate underlying fragilities. But eventually a critical juncture arrives where newfound momentum has things unwinding at a more frenetic pace. It is the nature of such things that most everyone gets caught totally unprepared.

…

Virtually the entire EM “complex” has been enveloped in protracted destabilizing financial and economic Bubbles. In particular, for five years now unprecedented “developed” world central bank-induced liquidity has spurred unsound economic and financial booms. The massive investment and “hot money” flows are illustrated by the multi-trillion growth of EM central bank international reserve holdings. There have of course been disparate resulting impacts on EM financial and economic systems. But I believe in all cases this tsunami of liquidity and speculation has had deleterious consequences, certainly including fomenting systemic dependencies to foreign-sourced flows. In seemingly all cases, protracted Bubbles have inflated societal expectations.

…

For a while, central bank willingness to use reserves to support individual currencies bolsters market confidence in a country’s currency, bonds and financial system more generally. But at some point a central bank begins losing the battle to accelerating outflows. A tough decision is made to back away from market intervention to safeguard increasingly precious reserve holdings. Immediately, the marketplace must then contend with a faltering currency, surging yields, unstable financial markets and rapidly waning liquidity generally. Things unravel quickly.

…

The issue of EM sovereign and corporate borrowings in dollar (and euro and yen) denominated debt has speedily become a critical “macro” issue. More than five years of unprecedented global dollar liquidity excess spurred a historic boom in dollar-denominated borrowings. The marketplace assumed ongoing dollar devaluation/EM currency appreciation. There became essentially insatiable market demand for higher-yielding EM debt, replete with all the distortions in risk perceptions, market mispricing and associated maladjustment one should expect from years of unlimited cheap finance. As was the case with U.S. subprime, it’s always the riskiest borrowers that most intensively feast at the trough of easy “money.”

So, too many high-risk borrowers – from vulnerable economies and Credit systems – accumulated debt denominated in U.S. and other foreign currencies – for too long. Now, currencies are faltering, “hot money” is exiting, Credit conditions are tightening and economic conditions are rapidly deteriorating. It’s a problematic confluence that will find scores of borrowers challenged to service untenable debt loads, especially for borrowings denominated in appreciating non-domestic currencies. This tightening of finance then becomes a pressing economic issue, further pressuring EM currencies and financial systems – the brutal downside of a protracted globalized Credit and speculative cycle.

In many cases, this was all part of a colossal “global reflation trade.” Today, many EM economies confront the exact opposite: mounting disinflationary forces for things sold into global markets. Falling prices, especially throughout the commodities complex, have pressured domestic currencies. This became a major systemic risk after huge speculative flows arrived in anticipation of buoyant currencies, attractive securities markets, and enticing business opportunities. The commodities boom was to fuel general and sustained economic booms. EM was to finally play catchup to “developed.”

Now, Bubbles are faltering right and left – and fearful “money” is heading for the (closing?) exits. And, as the global pool of speculative finance reverses course, the scale of economic maladjustment and financial system impairment begins to come into clearer focus. It’s time for the marketplace to remove the beer goggles.

No less important is the historic – and ongoing – boom in manufacturing capacity in China and throughout Asia. This has created excess capacity and increasing pricing pressure for too many manufactured things, a situation only worsened by Japan’s aggressive currency devaluation. This dilemma, with parallels to the commodity economies, becomes especially problematic because of the enormous debt buildup over recent years. While this is a serious issue for the entire region, it has become a major pressing problem in China.

This week the markets seemed to begin taking the unfolding Chinese Credit crisis more seriously. There was talk early in the week of concerted efforts to save the troubled $496 million (“Credit Equals Gold No. 1”) trust product from a possible end-of-month default.

…

Savers, investors and speculators will indeed learn painful lessons in China Credit – and it’s difficult for me to envisage this learning process going smoothly. “Credit Equals Gold No.1” is the proverbial tip of the Iceberg for a Credit system today suffering from a historic gulf between saver perceptions of “moneyness” and the poor and deteriorating quality of much of underlying system Credit. Incredible quantities of finance have flowed freely into risky Credit vehicles with the expectation that the banks and governments (local and central) will not allow losses nor ever tolerate a crisis. This is precisely the recipe for Credit accidents and even disaster.

…

Now officials confront a dangerous situation: Acute fragility in segments of its “shadow” financing of corporate and local government debt festers concurrently with ongoing “terminal phase” excess throughout housing finance. China’s financial and economic systems have grown dependent upon massive ongoing Credit expansion, while the quality of new Credit is suspect at best. It’s that fateful “terminal phase” exponential growth in systemic risk playing out in historic proportions. Global markets have begun to take notice.

There are critical market issues with no clear answers. For one, how much speculative “hot money” has and continues to flood into China to play their elevated yields in a currency that is (at the least) expected to remain pegged to the U.S. dollar? If there is a significant “hot money” issue, any reversal of speculative flows would surely speed up this unfolding Credit crisis. And, of course, any significant tightening of Chinese Credit would reverberate around the globe, especially for already vulnerable EM economies and financial systems.

…

I have surmised that the so-called “yen carry trade” (borrow/short in yen and use proceeds to lever in higher-yielding instruments) could be the largest speculative trade in history. Market trading dynamics this week certainly did not dissuade. When the yen rises, negative market dynamics rather quickly gather momentum. From my perspective, all the major
speculative trades come under pressure when the yen strengthens; from EM, to the European “periphery,” to U.S. equities and corporate debt.

…

U.S. speculators and investors have become accustomed to hasty comments or policy measures in response to the first sign of market weakness. Chairman Bernanke’s (past June) Comment that the Fed would “push back” against any “tightening of financial conditions” worked wonders on market sentiment and “animal spirits.” But I don’t expect the exiting Bernanke to ride to the markets’ rescue. I also don’t expect Bill Dudley and fellow FOMC doves to upstage the new chair Janet Yellen. And it would as well appear alarming to the marketplace if Yellen felt the need for public statements prior to the official start of her reign. With a Fed meeting scheduled for next week, an “emergency” meeting or other public statement over the weekend would also seem unlikely. This might actually be the beginning of a new environment where Fed officials are reluctant to jump to the markets’ defense at the first sign of nervousness.

Last year was extraordinary on so many levels. Too be sure, a “couple” Trillion of global QE made for some abnormal market dynamics. Typically, trouble at the “periphery” would lead to de-risking, de-leveraging and resulting contagion effects that begin their journey toward the “core.” But in 2013, with unprecedented global liquidity coupled with unprecedented speculation, initial cracks in “periphery” Bubbles spurred a speculative onslaught on “core” equities and corporate debt markets.

I would argue that 2013 dynamics significantly exacerbated global systemic fragilities. Over all, global financial systems and economies became only further dependent upon abundant cheap liquidity. The liquidity backdrop may have held EM crisis dynamics somewhat at bay, but it also prolonged a dangerous expansion of late-cycle debt. Meanwhile, “developed” market speculative Bubbles inflated precariously. “Money” flowed freely into all types of risky securities, instruments and products. Most importantly, inflated securities prices became only further detached from deteriorating fundamental prospects.

…

In striking contrast to “The May/June Dynamic,” Treasury yields have recently been declining as opposed to moving higher. Treasuries, bunds and other “developed” sovereign debt are enjoying a safe haven bid, likely bolstered by heightened global disinflationary forces. And while this makes life somewhat easier for those managing so-called “risk parity” strategies, this important change in market behavior surely complicates myriad other strategies. Those short Treasuries or bunds as hedges (or funding sources) for various leveraged “carry trade” strategies suddenly face an unfavorable dynamic.

It’s worth noting that most spreads reversed course and widened meaningfully this week. This comes after what appeared to be the whole world coming to realize the fun and easy profits of selling/writing CDS and other forms of Credit insurance (“writing flood insurance during a drought”). This backdrop would seem ripe for a bout of risk aversion, where abruptly shifting markets force players to pare back some exposure to “alternative” Credit strategies and myriad leveraged trades. This would provide a more traditional mechanism for transmitting market tumult at the “periphery” toward the “core.”

In a year that at this point seems poised to see a significant reduction in Federal Reserve liquidity creation, I would expect a return of a more “risk on, risk off” trading dynamic. This would seem to ensure that increasingly serious problems at the “periphery” have contagion effects that risk engulfing the “core.”

via Zero Hedge http://ift.tt/LhRvgO Tyler Durden

Submitted by Doug Noland of The Prudent Bear blog,

Backdrops conductive to crises can drag on for so long – sometimes seemingly forever – as if they’re moving in ultra-slow motion. Invariably, they lull most to sleep. Better yet, such environments even work to embolden the optimists. This is especially the case when policy measures are aggressively employed along the way, repeatedly holding the forces of crisis at bay. In the face of mounting risk, heightened risk-taking and leveraging often work only to exacerbate underlying fragilities. But eventually a critical juncture arrives where newfound momentum has things unwinding at a more frenetic pace. It is the nature of such things that most everyone gets caught totally unprepared.

…

Virtually the entire EM “complex” has been enveloped in protracted destabilizing financial and economic Bubbles. In particular, for five years now unprecedented “developed” world central bank-induced liquidity has spurred unsound economic and financial booms. The massive investment and “hot money” flows are illustrated by the multi-trillion growth of EM central bank international reserve holdings. There have of course been disparate resulting impacts on EM financial and economic systems. But I believe in all cases this tsunami of liquidity and speculation has had deleterious consequences, certainly including fomenting systemic dependencies to foreign-sourced flows. In seemingly all cases, protracted Bubbles have inflated societal expectations.

…

For a while, central bank willingness to use reserves to support individual currencies bolsters market confidence in a country’s currency, bonds and financial system more generally. But at some point a central bank begins losing the battle to accelerating outflows. A tough decision is made to back away from market intervention to safeguard increasingly precious reserve holdings. Immediately, the marketplace must then contend with a faltering currency, surging yields, unstable financial markets and rapidly waning liquidity generally. Things unravel quickly.

…

The issue of EM sovereign and corporate borrowings in dollar (and euro and yen) denominated debt has speedily become a critical “macro” issue. More than five years of unprecedented global dollar liquidity excess spurred a historic boom in dollar-denominated borrowings. The marketplace assumed ongoing dollar devaluation/EM currency appreciation. There became essentially insatiable market demand for higher-yielding EM debt, replete with all the distortions in risk perceptions, market mispricing and associated maladjustment one should expect from years of unlimited cheap finance. As was the case with U.S. subprime, it’s always the riskiest borrowers that most intensively feast at the trough of easy “money.”

So, too many high-risk borrowers – from vulnerable economies and Credit systems – accumulated debt denominated in U.S. and other foreign currencies – for too long. Now, currencies are faltering, “hot money” is exiting, Credit conditions are tightening and economic conditions are rapidly deteriorating. It’s a problematic confluence that will find scores of borrowers challenged to service untenable debt loads, especially for borrowings denominated in appreciating non-domestic currencies. This tightening of finance then becomes a pressing economic issue, further pressuring EM currencies and financial systems – the brutal downside of a protracted globalized Credit and speculative cycle.

In many cases, this was all part of a colossal “global reflation trade.” Today, many EM economies confront the exact opposite: mounting disinflationary forces for things sold into global markets. Falling prices, especially throughout the commodities complex, have pressured domestic currencies. This became a major systemic risk after huge speculative flows arrived in anticipation of buoyant currencies, attractive securities markets, and enticing business opportunities. The commodities boom was to fuel general and sustained economic booms. EM was to finally play catchup to “developed.”

Now, Bubbles are faltering right and left – and fearful “money” is heading for the (closing?) exits. And, as the global pool of speculative finance reverses course, the scale of economic maladjustment and financial system impairment begins to come into clearer focus. It’s time for the marketplace to remove the beer goggles.

No less important is the historic – and ongoing – boom in manufacturing capacity in China and throughout Asia. This has created excess capacity and increasing pricing pressure for too many manufactured things, a situation only worsened by Japan’s aggressive currency devaluation. This dilemma, with parallels to the commodity economies, becomes especially problematic because of the enormous debt buildup over recent years. While this is a serious issue for the entire region, it has become a major pressing problem in China.

This week the markets seemed to begin taking the unfolding Chinese Credit crisis more seriously. There was talk early in the week of concerted efforts to save the troubled $496 million (“Credit Equals Gold No. 1”) trust product from a possible end-of-month default.

…

Savers, investors and speculators will indeed learn painful lessons in China Credit – and it’s difficult for me to envisage this learning process going smoothly. “Credit Equals Gold No.1” is the proverbial tip of the Iceberg for a Credit system today suffering from a historic gulf between saver perceptions of “moneyness” and the poor and deteriorating quality of much of underlying system Credit. Incredible quantities of finance have flowed freely into risky Credit vehicles with the expectation that the banks and governments (local and central) will not allow losses nor ever tolerate a crisis. This is precisely the recipe for Credit accidents and even disaster.

…

Now officials confront a dangerous situation: Acute fragility in segments of its “shadow” financing of corporate and local government debt festers concurrently with ongoing “terminal phase” excess throughout housing finance. China’s financial and economic systems have grown dependent upon massive ongoing Credit expansion, while the quality of new Credit is suspect at best. It’s that fateful “terminal phase” exponential growth in systemic risk playing out in historic proportions. Global markets have begun to take notice.

There are critical market issues with no clear answers. For one, how much speculative “hot money” has and continues to flood into China to play their elevated yields in a currency that is (at the least) expected to remain pegged to the U.S. dollar? If there is a significant “hot money” issue, any reversal of speculative flows would surely speed up this unfolding Credit crisis. And, of course, any significant tightening of Chinese Credit would reverberate around the globe, especially for already vulnerable EM economies and financial systems.

…

I have surmised that the so-called “yen carry trade” (borrow/short in yen and use proceeds to lever in higher-yielding instruments) could be the largest speculative trade in history. Market trading dynamics this week certainly did not dissuade. When the yen rises, negative market dynamics rather quickly gather momentum. From my perspective, all the major speculative trades come under pressure when the yen strengthens; from EM, to the European “periphery,” to U.S. equities and corporate debt.

…

U.S. speculators and investors have become accustomed to hasty comments or policy measures in response to the first sign of market weakness. Chairman Bernanke’s (past June) Comment that the Fed would “push back” against any “tightening of financial conditions” worked wonders on market sentiment and “animal spirits.” But I don’t expect the exiting Bernanke to ride to the markets’ rescue. I also don’t expect Bill Dudley and fellow FOMC doves to upstage the new chair Janet Yellen. And it would as well appear alarming to the marketplace if Yellen felt the need for public statements prior to the official start of her reign. With a Fed meeting scheduled for next week, an “emergency” meeting or other public statement over the weekend would also seem unlikely. This might actually be the beginning of a new environment where Fed officials are reluctant to jump to the markets’ defense at the first sign of nervousness.

Last year was extraordinary on so many levels. Too be sure, a “couple” Trillion of global QE made for some abnormal market dynamics. Typically, trouble at the “periphery” would lead to de-risking, de-leveraging and resulting contagion effects that begin their journey toward the “core.” But in 2013, with unprecedented global liquidity coupled with unprecedented speculation, initial cracks in “periphery” Bubbles spurred a speculative onslaught on “core” equities and corporate debt markets.

I would argue that 2013 dynamics significantly exacerbated global systemic fragilities. Over all, global financial systems and economies became only further dependent upon abundant cheap liquidity. The liquidity backdrop may have held EM crisis dynamics somewhat at bay, but it also prolonged a dangerous expansion of late-cycle debt. Meanwhile, “developed” market speculative Bubbles inflated precariously. “Money” flowed freely into all types of risky securities, instruments and products. Most importantly, inflated securities prices became only further detached from deteriorating fundamental prospects.

…

In striking contrast to “The May/June Dynamic,” Treasury yields have recently been declining as opposed to moving higher. Treasuries, bunds and other “developed” sovereign debt are enjoying a safe haven bid, likely bolstered by heightened global disinflationary forces. And while this makes life somewhat easier for those managing so-called “risk parity” strategies, this important change in market behavior surely complicates myriad other strategies. Those short Treasuries or bunds as hedges (or funding sources) for various leveraged “carry trade” strategies suddenly face an unfavorable dynamic.

It’s worth noting that most spreads reversed course and widened meaningfully this week. This comes after what appeared to be the whole world coming to realize the fun and easy profits of selling/writing CDS and other forms of Credit insurance (“writing flood insurance during a drought”). This backdrop would seem ripe for a bout of risk aversion, where abruptly shifting markets force players to pare back some exposure to “alternative” Credit strategies and myriad leveraged trades. This would provide a more traditional mechanism for transmitting market tumult at the “periphery” toward the “core.”

In a year that at this point seems poised to see a significant reduction in Federal Reserve liquidity creation, I would expect a return of a more “risk on, risk off” trading dynamic. This would seem to ensure that increasingly serious problems at the “periphery” have contagion effects that risk engulfing the “core.”

via Zero Hedge http://ift.tt/LhRvgO Tyler Durden

Following his WSJ letter comparing the “progressive war on the 1% in America” to fascist Nazi Germany persecution of the Jews and “just as Kristallnacht was unthinkable in 1930, the descendant ‘progressive’ radicalism in American thinking is unthinkable now“, Tom Perkins appeared on Bloomberg TV to explain himself. His first step was to apologize for the analogy but not the message that “the creative 1% is being threatened.” The interview with Emily Chang is fascinating and wends it way from Rolexs, yachts, and underwater airplanes to trailer parks; and from disconnects with reality to implying Krugman’s craziness. However, Perkins sums his message up thus:”the solution is less interference, lower taxes and let the rich do what the rich do – that is get richer… and they will bring everyone else along with them when the system is working.” It appears the ‘system’ needs a different final solution.

 

Clip 1

CHANG: So more than 90 Jews were killed in Kristallnacht, 30,000 people put in concentration camps. What were you going for (inaudible) analogy?

PERKINS: The Jews were only 1 percent of the German population. Most Germans had never met a Jew, and yet Hitler was able to demonize the Jews and Kristallnacht was one of the earlier manifestations, but there had been others before it. And then of course we know about the evil of the Holocaust. I guess my point was that when you start to use hatred against a minority, it can get out of control. I think that was my thought. And now that as the messenger I’ve been thoroughly killed by everybody, at least read the message.

CHANG: You mentioned the word hatred. Do you feel threatened?

PERKINS: I don’t feel personally threatened, but I think that a very important part of American, namely the creative 1 percent, are threatened.

[Jerry Brown]tells me the number-one problem in America is inequality, and that’s probably and possibly true. And I think President Obama’s going to make that point tomorrow night. But the 1 percent are not causing the inequality. They are the job creators. Silicon Valley is – I think Kleiner Perkins itself over the years has created pretty close to a million jobs and we’re still doing it. It’s absurd to demonize the rich for being rich and for doing what the rich do, which is get richer by creating opportunity for others.

CHANG: How do you feel threatened?

PERKINS: I said I didn’t feel personally threatened. I feel however that as a class I think we are beginning to engage in class warfare. I think the rich as a class are threatened through higher taxes, higher regulation and so forth. And so that is my message.

…

I think the 99 percent is struggling and really struggling to get along in America. We have ever-increasing regulation, higher costs I think caused by more government than we need. Small businesses – it’s difficult to form and prosper in a small business these days. It’s difficult to hire. And that in my view is what is hurting and causing – hurting the 99 percent and causing the inequality.

So I think that the solution is less interference, lower taxes. Let the rich do what the rich do, which is get richer. But along the way, they bring everybody else with them when the system is working.

PERKINS: I regret the use of that word. It was a terrible misjudgment. I don’t regret the message at all. In fact —

 

CHANG: What is the message?

PERKINS: The message is any time the majority starts to demonize a minority, no matter what it is, it’s wrong and dangerous. And no good ever comes from it.

Clip 2

As far as Perkins is concerned Kleiner Perkins disavowal of his Op-Ed is them “throwing him under the bus” and missing the warning that any time a majority

Perkins goes on to note that his partner Kleiner fled Austria and Hitler and would have agreed with him…

CHANG: All right. Well let’s talk a little bit about the solution here. You mentioned your friend Eugene Kleiner, the late Eugene Kleiner, fled Austria, fled Hitler. Do you think he would have agreed with you?

PERKINS: Yes, I think he would have because I – I was not talking about the Nazis. I was talking about the persecution of a minority by the majority. And Kleiner always distrusted those sorts of trends in American politics.

CHANG: You have conservatives out there though like Marc Andreessen calling you leading A-hole in the state.

PERKINS: Yes. It wasn’t a very nice word. And considering that he doesn’t know me and I don’t know him, I don’t think he’s entitled to his opinion. If he knew me, perhaps. Paul Krugman called me crazy in today’s New York Times.

 

CHANG: Paul Krugman also pointed out that rising income inequality can have very negative economic and financial consequences in the sense that if there is – if it leaves us more economically vulnerable and the people who are rich can’t pay for stuff, then everyone suffers.

PERKINS: Well, just what you said is such a contradiction of intermixed ideas. He won the Nobel prize in economics. I can’t argue economics with him, but to demonize the job creators is crazy and to demonize the rich who spend and buy things and stimulate the economy is crazy. I heard on the news hour with – gosh, name escapes me. Anyway, New York Times, and they got into a discussion about the idiocy of Rolex watches and why does any man need a Rolex watch and it’s a symbol of – of terrible values and it’s – et cetera. Well, I think that’s a little silly. This isn’t a Rolex {it’s a Richard Mille}. I could buy a six pack of Rolexes for this, but so what?

CHANG: You were called the king of Silicon Valley I believe at one point. How would you describe yourself?

PERKINS: I certainly have enough arrogance to be royal, but I – I’m an old man. I look back upon my career with great happiness. I think I’ve accomplished a lot. If I had to do it again, I don’t know what I’d change. And I’m at peace with myself. And the fact that everybody now hates me is part of the game. And I’m sorry about that, but that isn’t what I meant to do.

via Zero Hedge http://ift.tt/LhL8de Tyler Durden

Following his WSJ letter comparing the “progressive war on the 1% in America” to fascist Nazi Germany persecution of the Jews and “just as Kristallnacht was unthinkable in 1930, the descendant ‘progressive’ radicalism in American thinking is unthinkable now“, Tom Perkins appeared on Bloomberg TV to explain himself. His first step was to apologize for the analogy but not the message that “the creative 1% is being threatened.” The interview with Emily Chang is fascinating and wends it way from Rolexs, yachts, and underwater airplanes to trailer parks; and from disconnects with reality to implying Krugman’s craziness. However, Perkins sums his message up thus:”the solution is less interference, lower taxes and let the rich do what the rich do – that is get richer… and they will bring everyone else along with them when the system is working.” It appears the ‘system’ needs a different final solution.

 

Clip 1

CHANG: So more than 90 Jews were killed in Kristallnacht, 30,000 people put in concentration camps. What were you going for (inaudible) analogy?

PERKINS: The Jews were only 1 percent of the German population. Most Germans had never met a Jew, and yet Hitler was able to demonize the Jews and Kristallnacht was one of the earlier manifestations, but there had been others before it. And then of course we know about the evil of the Holocaust. I guess my point was that when you start to use hatred against a minority, it can get out of control. I think that was my thought. And now that as the messenger I’ve been thoroughly killed by everybody, at least read the message.

CHANG: You mentioned the word hatred. Do you feel threatened?

PERKINS: I don’t feel personally threatened, but I think that a very important part of American, namely the creative 1 percent, are threatened.

[Jerry Brown]tells me the number-one problem in America is inequality, and that’s probably and possibly true. And I think President Obama’s going to make that point tomorrow night. But the 1 percent are not causing the inequality. They are the job creators. Silicon Valley is – I think Kleiner Perkins itself over the years has created pretty close to a million jobs and we’re still doing it. It’s absurd to demonize the rich for being rich and for doing what the rich do, which is get richer by creating opportunity for others.

CHANG: How do you feel threatened?

PERKINS: I said I didn’t feel personally threatened. I feel however that as a class I think we are beginning to engage in class warfare. I think the rich as a class are threatened through higher taxes, higher regulation and so forth. And so that is my message.

…

I think the 99 percent is struggling and really struggling to get along in America. We have ever-increasing regulation, higher costs I think caused by more government than we need. Small businesses – it’s difficult to form and prosper in a small business these days. It’s difficult to hire. And that in my view is what is hurting and causing – hurting the 99 percent and causing the inequality.

So I think that the solution is less interference, lower taxes. Let the rich do what the rich do, which is get richer. But along the way, they bring everybody else with them when the system is working.

PERKINS: I regret the use of that word. It was a terrible misjudgment. I don’t regret the message at all. In fact —

 

CHANG: What is the message?

PERKINS: The message is any time the majority starts to demonize a minority, no matter what it is, it’s wrong and dangerous. And no good ever comes from it.

Clip 2

As far as Perkins is concerned Kleiner Perkins disavowal of his Op-Ed is them “throwing him under the bus” and missing the warning that any time a majority

Perkins goes on to note that his partner Kleiner fled Austria and Hitler and would have agreed with him…

CHANG: All right. Well let’s talk a little bit about the solution here. You mentioned your friend Eugene Kleiner, the late Eugene Kleiner, fled Austria, fled Hitler. Do you think he would have agreed with you?

PERKINS: Yes, I think he would have because I – I was not talking about the Nazis. I was talking about the persecution of a minority by the majority. And Kleiner always distrusted those sorts of trends in American politics.

CHANG: You have conservatives out there though like Marc Andreessen calling you leading A-hole in the state.

PERKINS: Yes. It wasn’t a very nice word. And considering that he doesn’t know me and I don’t know him, I don’t think he’s entitled to his opinion. If he knew me, perhaps. Paul Krugman called me crazy in today’s New York Times.

 

CHANG: Paul Krugman also pointed out that rising income inequality can have very negative economic and financial consequences in the sense that if there is – if it leaves us more economically vulnerable and the people who are rich can’t pay for stuff, then everyone suffers.

PERKINS: Well, just what you said is such a contradiction of intermixed ideas. He won the Nobel prize in economics. I can’t argue economics with him, but to demonize the job creators is crazy and to demonize the rich who spend and buy things and stimulate the economy is crazy. I heard on the news hour with – gosh, name escapes me. Anyway, New York Times, and they got into a discussion about the idiocy of Rolex watches and why does any man need a Rolex watch and it’s a symbol of – of terrible values and it’s – et cetera. Well, I think that’s a little silly. This isn’t a Rolex {it’s a Richard Mille}. I could buy a six pack of Rolexes for this, but so what?

CHANG: You were called the king of Silicon Valley I believe at one point. How would you describe yourself?

PERKINS: I certainly have enough arrogance to be royal, but I – I’m an old man. I look back upon my career with great happiness. I think I’ve accomplished a lot. If I had to do it again, I don’t know what I’d change. And I’m at peace with myself. And the fact that everybody now hates me is part of the game. And I’m sorry about that, but that isn’t what I meant to do.

via Zero Hedge http://ift.tt/LhL8de Tyler Durden

There
appears to be a somewhat interesting controversy afoot in explaining the reason
for the emerging markets panic and in establishing a solution for it. The
approach of Gavekal would simply like to keep the Ponzi scheme of past years
rolling forward. According to that view because the US has the reserve currency
the US current account deficit is theoretically unbounded and the US should use
its domestic demand to drive global growth stimulating the rest of the world
particularly in the developing economies.

Been there.
Done that.

shrink

Instead, of
going back to the old mistakes, we should all be aware that the reason for
these ongoing US deficits has been the export targeting of the US market by
developing economies wishing to tap US domestic demand. They have done this by
keeping their currencies artificially weak and have done this by buying dollars
to keep the dollar strong and by investing in the US… when there has been no
good reason to do so.

It should
be perfectly obvious that with the US unemployment rate having risen, with US
consumption outstripping investment  and
with the US as a relatively high-wage country around the world there hasn’t
really been any reason for firms to invest funds in the US market. Nor were US
banks adept at recycling, choosing instead to over-lend in the US housing
sector. As a result monies that were invested in the US for the purpose of
keeping foreign currencies weak versus the dollar necessarily went hunting for
unproductive investments. Because there were far more funds available than
there were profitable investments to be funded trouble ensured. Can we be
surprised that a crisis developed? Now Gavekal want to do it again.

If your
view of the US is a suckling pig that must offer a teat to any developing
country that wants one, surely that’s a model for trade to get in trouble.

By now
everyone should be aware that Germany has the largest current account surplus
in the world and it shows no sign of dissipating it. The US is starting to
contract its current account deficit but not because it has improved its
competitiveness but because it’s developing its natural resources namely
energy. The US nonoil deficit continues to get worse. Gavekal is right about exploitable
net demand becoming more scarce.

The Gavekal
explanation of the recent market panic is that the Fed sought a weaker dollar
with negative real interest rates…this is another example of someone arguing
from ‘the facts’ to a convenient –if incorrect- conclusion. Central banks
around the world kept interest rates low; inflation was low too. The US was
aiming its policy at domestic demand, by far the biggest effect from low rates
was on demand at home. There may have been some international fallout but the
Fed was definitely not aiming to weaken the dollar. As someone who has worked
at the Federal Reserve Bank of New York and in the currency area I can assure
you that the Fed does not view itself as the principal architect of US exchange
rate policy. It is widely recognized that that option belongs with the US Treasury
and when it comes to foreign-exchange matters the Fed has a minor toehold to
have some say in the discussion. There can be no doubt the US interest-rate
policy was aimed at the domestic economy and at domestic demand with the
foreign-exchange aspect viewed as a side effect rather than as a principal
policy goal.

 

The US
rarely aims its policy at international matters. But it is a large open economy.
Its policies are aimed at its economy but because the economy is ‘open’ there
are international repercussions.

Still, it
would be far better for the developing economies to balance their growth and to
develop their own domestic demand. China is being forced to do it out of
necessity. China is the quintessential bull in the china-shop that ran such an
aggressive exchange and trade policy that ruined the playing field. China, a developing
economy, ran current account surpluses! China sought to get a growing share of
global production and, as its GDP grew, the consumption share of GDP in China fell…
so much for ‘development.’  China was mercantilist.
China kept its wages low and never allowed its exchange rate to matriculate. China
broke the exchange rules which call for a surplus country’s exchange rate to
rise. And now with the Western economies floundering and so highly in debt,
China can no longer expect to gain the export penetration that once fueled its
growth and it must turn to domestic demand. It’s a lesson that other smaller
developing economies need to learn.

The US central
bank’s reserves also need to be pulled and as a share of GDP and in no way
should we look for those to expand or to take that expansion is a sign of
continued growth or anything good going on in the US economy. In fact these
sorts of arguments made by Gavekal given time would almost certainly bring about
the antithesis argument criticizing these policies for driving the US into even
greater debt and to a larger consumption share of GDP.

 

Instead, in
the time, the US  should be redressing
these excesses.

Panics come
when markets lose their grip or focus. When the paradigm begins to change in a
way that’s inexplicable and when market participants are no longer sure who or
what is in control you can get panic selling. Developing economies need to
change their models. And change can be destabilizing. They need to balance
their growth. They need to develop their own internal demand along with
production. The watchword needs to be balance- not more US dependency.

 

And the US
needs to shrink its current account deficit. And, perhaps ominously for the
rest of the world, it needs to shrink even the nonoil portion. The US needs to
improve the competitiveness of its good sector in order to create jobs. And
developing the energy sector alone is not going to do that.

The
international paradigm is changing. It should change. It must change. This
challenge is bound to create some turmoil. We can hope that at the end of the
turmoil we get policies realigned in the right direction rather than
backtracking on the progress we’ve made. To continue to make more of the same
old problems worse would be a real shame.

via Zero Hedge http://ift.tt/1b2SVSF RobertBrusca

Put down that prom dress. It seems, as ConvergEx's Nick Colas notes, Retail isn’t the only service moving from the brick and mortar world to the virtual one. Online high schools have been popping up (on the internet, of course) more and more often in the last few years: even Stanford University started a program in 2006. Of the 22 million high-school aged (14-18) population in the US, about 1 million are estimated to be enrolled in a class or a full-time high school online. That said, virtual schools are unlikely to replace traditional classrooms anytime soon: they’re still used mostly for supplemental or make-up courses rather than a complete education. But, Colas adds hopefully, the technology points in a positive direction: free high school education means more high school diplomas, which could lead to a higher labor force participation rate, lower unemployment, and higher earnings for those who might have otherwise dropped out.

 

Via ConvergEx's Nick Colas,

Online high schools may not become the norm, and they might not bring graduation rates to 100%, but they could be changing secondary education – and the workforce – for the better.

Note from Nick: Online education is moving upstream, from college to high school. Today Sarah looks at this emerging trend to see what it may mean for long term trends in unemployment, labor force participation, and social welfare.  Bottom line: Americans without a high school education face far worse economic prospects than any other cohort; anything that helps this group is worth exploring.

What if there was a way to add 3 million Americans to the labor force, increase earnings, reduce the unemployment rate, and increase labor force participation? Might sound too good to be true. But there is one way we might accomplish this: send the 25 or so million non-high school graduates back to school to get their diplomas. We’ll get to exactly how we can do that in a minute, but first a brief outline of the problem:

Of the 25 million or so US adults with less than a high school diploma, only 11.3 million are actually in the labor force; their participation rate was a dismal 43.7% in December 2013. In other words, if you don’t finish high school, you’re more likely than not to drop out of the labor force or never engage with it in the first place.

 

Men actually have a much higher rate of participation here – 57.9% – compared to women, of whom only 33.4% are active in the workforce.

 

The unemployment rate for those in the labor force currently stands at 9.8% – a full 3 percentage points above the headline number. That said, 9.8% is a significant improvement from November’s 10.6% and last year’s 11.6%.

So what would the labor force look like if all of these workers – who represent “only”  7.3% of employed Americans – were to complete their secondary educations, giving them the same employment outlook as high school graduates? We ran a few quick calculations, and this is what we came up with:

More than 3.5 million people would join the labor force. High school graduates – who now make up about 27% of the workforce, would then represent about 38%.

 

Of that number, 3.3 million would be employed – and would make about $10k more a year than they would have without a diploma, according to the Bureau of Labor Statistics earnings data.

 

The overall participation rate would rise to 64.2%. Still not up to par with historical standards, but certainly higher than current rates.

 

Unemployment would drop to 6.5% overall – and the absolute number of unemployed persons would drop by about 40k. Again, not a huge improvement – but it’s getting there.

The US population has been slowly moving towards a labor market with more high school graduates with increasing graduation rates, but there’s one relatively new service that could help us accelerate the process: online high school. Almost every state has founded some form of online primary education in the last decade or so; the idea has actually been around since about 1993 when the EBUS Academy in Canada began offering virtual classes. Originally, it was intended to be supplementary to established high school classes, not a replacement for them: students could take higher level or more challenging courses that may not have been offered locally.

As it’s evolved, though, more and more online schools are offering full-time programs that result in a diploma in four years or less; even Stanford University founded its own online high school in 2006. It’s the luxury version of online education, of course: seminar-style and directed-study courses, full-time or part-time, for $16k a year. And it’s been quite successful; the school is currently home to a few young superstars in science and the arts. But it offers the same essential service as the free public school programs: students dictate their own schedule, and thus learn on their own terms and in their own time.

Still, online high schools are nowhere near replacing their brick and mortar counterparts just yet. While researchers agree they have a few advantages over traditional classrooms, some doubt its efficacy in the short and long term. Here are a few of the facts they highlight in the literature:

Out of about 22 million high school-aged kids in the US, 16 million are enrolled in some sort of high school – but less than 1 million are enrolled in online classes, according to estimates from Anthony Picciano and Jeff Seaman of the Sloan Consortium. More than half of these are online part-time students, or students only taking one supplementary class; very few are enrolled full-time.

 

A 2000 study (Bigbie & McCarroll) found that more than half of the students who completed an online course in Florida scored an A or higher; only 7% received a failing grade. Another study in 2009  by Barbour and Mulcahy showed that in more than 200,000 cases, students enrolled in online classrooms performed as well as traditional classroom students on exams.

 

Not all the news is positive, though. Researchers Ballas and Belyk (2000) reported that participation rates for virtual students were up to 30% lower than classroom-based students; Bigbie and McCarroll (2000) reported that 25-50% of the students they followed dropped out of their virtual courses over the period, skewing the year-end exam results higher.

 

Students in online high school courses tend to come from one of two backgrounds: highly motivated and overachieving, or underperformers required to repeat a class. According to Barbour, this bipolarization skews the literature of virtual school students to focus on the high performers – giving virtual schools a better rep than they might otherwise get. In 2007, the two classes with the highest enrollment in the US were Algebra I and Algebra II – and many of the students enrolled in the course were taking it for the second or third time. Put simply, there is a split between those students who take courses to challenge themselves – like those enrolled at Stanford – and those that John Watson (2008) calls “at-risk” students: those who probably would have dropped out of traditional schools. Online schooling might be effective for the former, but the jury is still out on the latter.

Despite some of these setbacks, its existing and potential advantages make online schooling a theoretical boon for society at large. Aside from offering out-of-reach classes to students who want them, there are three major benefits to virtual schools:

It gives everyone the opportunity to get a high school diploma – anywhere, any time – which means a more educated workforce, a larger workforce, and higher earnings potential. Currently, those without a high school diploma make about $10,000 less per year than someone who graduates: they’re also more likely to be unemployed, if they are even in the labor force. If they’re given the chance to complete their education on their own time and at their own pace, though, it’s possible that graduation rates will rise – quite a few states, in fact, have created public online schools for exactly this reason. With a high school diploma, those who may otherwise have dropped out increase their earnings potential and employment opportunities – and as we showed before, increase the participation rate and reduce unemployment.

 

As Stanford’s experiment exemplifies, it lets schools (and society) identify the all-stars even before they reach college age. It’s no fluke that Stanford’s online student body has so many award winners; they’re specifically selected because of their high potential and intellectual capabilities. Moreover, online education gives Stanford (and other schools) the chance to recruit from abroad, and thus bring the best and brightest in the world. And since the school can shape the education of its students, it would not be surprising if Stanford’s OHS became a funnel for the university: catching the students early on gives the school the possibility of enrolling an exceptionally bright or entrepreneurial student before they’re even teenagers.

 

Finally, like most online operations, virtual schooling helps lower costs. According to UC Berkeley, online classes each take about $50k-$100k to develop; but once they’re finished, they require very little maintenance. Eliminating the classroom, the books, the desks – all leads to lower costs for schooling. Some private online schools cost a pretty penny, yes – Stanford will set you back $16k for a year – but free public schools could benefit from this lower cost alternative to summer school or class repeats. And not to worry, teachers, you’re safe: online classrooms require an instructor, a grader, and a mentor. While you may not be teaching in front of a classroom, you can keep your job – and potentially work in your pajamas.

Again – online high school is not likely to take over the role of the traditional classroom anytime soon. And more research is necessary to determine its efficacy – though school districts in Georgia and Alabama are already touting the benefits of their programs. Overall, though, virtual schooling is a net positive: not only does it foster a larger, more educated workforce, but it also allows us to identify outperformers and lower costs. The only thing it’s missing is the prom.

via Zero Hedge http://ift.tt/1b2SU0V Tyler Durden