Tag: news

Back on January 26, a 58-year-old former senior executive at German investment bank behemoth Deutsche Bank, William Broeksmit, was found dead after hanging himself at his London home, and with that, set off an unprecedented series of banker suicides throughout the year which included former Fed officials and numerous JPMorgan traders.

Following a brief late summer spell in which there was little if any news of bankers taking their lives, as reported previously, the banker suicides returned with a bang when none other than the hedge fund partner of infamous former IMF head Dominique Strauss-Khan, Thierry Leyne, a French-Israeli entrepreneur, was found dead after jumping off the 23rd floor of one of the Yoo towers, a prestigious residential complex in Tel Aviv. 

Just a few brief hours later the WSJ reported that yet another Deutsche Bank veteran has committed suicide, and not just anyone but the bank’s associate general counsel, 41 year old Calogero “Charlie” Gambino, who was found on the morning of Oct. 20, having also hung himself by the neck from a stairway banister, which according to the New York Police Department was the cause of death. We assume that any relationship to the famous Italian family carrying that last name is purely accidental.

Here is his bio from a recent conference which he attended:

Charlie J. Gambino is a Managing Director and Associate General Counsel in the Regulatory, Litigation and Internal Investigation group for Deutsche Bank in the Americas. Mr. Gambino served as a staff attorney in the United Securities and Exchange Commission’s Division of Enforcement from 1997 to 1999. He also was associated with the law firm of Skadden, Arps, Slate Meagher & Flom from 1999 to 2003. He is a frequent speaker at securities law conferences. Mr. Gambino is a member of the American Bar Association and the Association of the Bar of the City of New York.

As a reminder, the other Deutsche Bank-er who was found dead earlier in the year, William Broeksmit, was involved in the bank’s risk function and advised the firm’s senior leadership; he was “anxious about various authorities investigating areas of the bank where he worked,” according to written evidence from his psychologist, given Tuesday at an inquest at London’s Royal Courts of Justice. And now that an almost identical suicide by hanging has taken place at Europe’s most systemically important bank, and by a person who worked in a nearly identical function – to shield the bank from regulators and prosecutors and cover up its allegedly illegal activities with settlements and fines – is surely bound to raise many questions. 

The WSJ reports that Mr. Gambino had been “closely involved in negotiating legal issues for Deutsche Bank, including the prolonged probe into manipulation of the London interbank offered rate, or Libor, and ongoing investigations into manipulation of currencies markets, according to people familiar with his role at the bank.”

He previously was an associate at a private law firm and a regulatory enforcement lawyer from 1997 to 1999, according to his online LinkedIn profile and biographies for conferences where he spoke. But most notably, as his LinkedIn profile below shows, like many other Wall Street revolving door regulators, he started his career at the SEC itself where he worked from 1997 to 1999.

“Charlie was a beloved and respected colleague who we will miss. Our thoughts and sympathy are with his friends and family,” Deutsche Bank said in a statement.

Going back to the previous suicide by a DB executive, the bank said at the time of the inquest that Mr. Broeksmit “was not under suspicion of wrongdoing in any matter.” At the time of Mr. Broeksmit’s death, Deutsche Bank executives sent a memo to bank staff saying Mr. Broeksmit “was considered by many of his peers to be among the finest minds in the fields of risk and capital management.” Mr. Broeksmit had left a senior role at Deutsche Bank’s investment bank in February 2013, but he remained an adviser until the end of 2013. His most recent title was the investment bank’s head of capital and risk-optimization, which included evaluating risks related to complicated transactions.

A thread connecting Broeksmit to wrongdoing, however, was uncovered earlier this summer when Wall Street on Parade referenced his name in relation to the notorious at the time strategy provided by Deutsche Bank and others to allow hedge funds to avoid paying short-term capital gains taxes known as MAPS (see How RenTec Made More Than $34 Billion In Profits Since 1998: “Fictional Derivatives“)

From Wall Street on Parade:

Broeksmit’s name first emerged in yesterday’s Senate hearing as Senator Carl Levin, Chair of the Subcommittee, was questioning Satish Ramakrishna, the Global Head of Risk and Pricing for Global Prime Finance at Deutsche Bank Securities in New York. Ramakrishna was downplaying his knowledge of conversations about how the scheme was about changing short term gains into long term gains, denying that he had been privy to any conversations on the matter. 

 

Levin than asked: “Did you ever have conversations with a man named Broeksmit?” Ramakrishna conceded that he had and that the fact that the scheme had a tax benefit had emerged in that conversation. Ramakrishna could hardly deny this as Levin had just released a November 7, 2008 transcript of a conversation between Ramakrishna and Broeksmit where the tax benefit had been acknowledged.

 

Another exhibit released by Levin was an August 25, 2009 email from William Broeksmit to Anshu Jain, with a cc to Ramakrishna, where Broeksmit went into copious detail on exactly what the scheme, internally called MAPS, made possible for the bank and for its client, the Renaissance Technologies hedge fund. (See Email from William Broeksmit to Anshu Jain, Released by the U.S. Senate Permanent Subcommittee on Investigations.)

 

At one point in the two-page email, Broeksmit reveals the massive risk the bank is taking on, writing: “Size of portfolio tends to be between $8 and $12 billion long and same amount of short. Maximum allowed usage is $16 billion x $16 billion, though this has never been approached.”

 

Broeksmit goes on to say that most of Deutsche’s money from the scheme “is actually made by lending them specials that we have on inventory and they pay far above the regular rates for that.”

It would appear that with just months until the regulatory crackdown and Congressional kangaroo circus, Broeksmit knew what was about to pass and being deeply implicated in such a scheme, preferred to take the painless way out.

The question then is just what major regulatory revelation is just over the horizon for Deutsche Bank if yet another banker had to take his life to avoid being cross-examined by Congress under oath? For a hint we go back to another report, this time by the FT, which yesterday noted that Deutsche Bank will set aside just under €1bn towards the numerous legal and regulatory issues it faces in its third quarter results next week, the bank confirmed on Friday.

In a statement made after the close of markets, the Frankfurt-based lender said it expected to publish litigation costs of €894m when it announces its results for the July-September period on October 29.

 

The extra cash will add to Deutsche’s already sizeable litigation pot, where the bank has yet to be fined in connection with the London interbank rate-rigging scandal.

 

It is also facing fines from US authorities over alleged mortgage-backed securities misselling and sanctions violations, which have already seen rivals hit with heavy fines.

 

Deutsche has also warned that damage from global investigations into whether traders attempted to manipulate the foreign-exchange market could have a material impact on the bank.

 

The extra charge announced on Friday will bring Deutsche’s total litigation reserves to €3.1bn. The bank also has an extra €3.2bn in so-called contingent liabilities for fines that are harder to estimate. 

Clearly Deutsche Bank is slowly becoming Europe’s own JPMorgan – a criminal bank whose past is finally catching up to it, and where legal fine after legal fine are only now starting to slam the banking behemoth. We will find out just what the nature of the latest litigation charge is next week when Deutsche Bank reports, but one thing is clear: in addition to mortgage, Libor and FX settlements, one should also add gold. Recall from around the time when the first DB banker hung himself: it was then that Elke Koenig, the president of Germany’s top financial regulator, Bafin, said that in addition to currency rates, manipulation of precious metals “is worse than the Libor-rigging scandal.”

It remains to be seen if Calogero’s death was also related to precious metals rigging although it certainly would not be surprising. What is surprising, is that slowly things are starting to fall apart at the one bank which as we won’t tire of highlighting, has a bigger pyramid of notional derivatives on its balance sheet than even JPMorgan, amounting to 20 times more than the GDP of Germany itself, and where if any internal investigation ever goes to the very top, then Europe itself, and thus the world, would be in jeopardy.

Which is why perhaps sometimes it is easiest if the weakest links, those whose knowledge can implicate the people at the top, quietly commit suicide in the middle of the night… 

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

We've repeatedly warned that this strain of Ebola might be spread by aerosols.

But there is a fascinating and terrifying wrinkle to this …

You might assume that hot, steamy places would be more likely to spread deadly germs than developed countries. But the opposite might be true.

In 1995, scientists from the US Army Medical Research Institute of Infectious Diseases (USAMRIID) reported in the International Journal of Experimental Pathology:

We also demonstrated aerosol transmission of Ebola virus at lower temperature and humidity than that normally present in sub-Saharan Africa. Ebola virus sensitivity to the high temperatures and humidity in the thatched, mud, and wattel huts shared by infected family members in southern Sudan and northern Zaire may have been a factor limiting aerosol transmission of Ebola virus in the African epidemics. Both elevated temperature and relative humidity (RH) have been shown to reduce the aerosol stability of viruses (Songer 1967). Our experiments were conducted at 24⁰C [i.e. 75 degrees Fahrenheit] and < 40% RH, conditions which are known to favour the aerosol stability of at least two other African haemorrhagic fever viruses, Rift Valley fever and Lassa (Stephenson et a/. 1984; Anderson et a/. 1991). If the same holds true for filoviruses [Ebola is a type of filovirus], aerosol transmission is a greater threat in modern hospital or laboratory settings than it is in the natural climatic ranges of viruses.

Peter Jahrling was one of the authors of the report.  Jahrling was discoverer of the Reston strain of Ebola, and is now chief scientist at the U.S. National Institute of Allergy and Infectious Diseases.

In 2012, scientists from USAMRIID published a report in the journal Viruses finding:

Aerosol transmission is thought to be possible and may occur in conditions of lower temperature and humidity which may not have been factors in outbreaks in warmer climates.

H/t Kit Daniels.

via Zero Hedge http://ift.tt/1rxCMwx George Washington

 

Preface: If you are an atheist (or adherent of another faith) and believe that the Catholic faith is crazy, you are obviously entitled to your belief.  But please remember that very few Americans are atheists … and the majority don’t trust atheists.  More importantly, it's wise to work with allies on core issues, such as fighting corruption … even if you would normally disagree with them. 

In this case, the Pope just may speak for a lot of allies.  After all, there are more than a billion Catholics worldwide.  Some 85% of the American population identifies itself as Christian, and 78 million Americans have been baptized into the Catholic Church. The U.S. has the world's fourth largest Catholic population.
 

Legal authorities have done nothing to crack down on Wall Street corruption.  The U.S. government admits that it refuses to prosecute fraud … pretty much as an official policy.

Sure, a few "small fish" are indicted … but the big boys go free.  Indeed, there are two systems of justice in America … one for the Wall Street  fatcats, and one for everyone else.

In reality,  the government helped cover up the crimes of the big banks, used claims of national security to keep everything in the dark, and changed basic rules and definitions to allow the game to continue. See this, this, this and this.    Because fraudsters weren’t prosecuted and the banks weren’t broken up, the fraudsters are now committing bigger and bigger crimes, and banks are now bigger than ever … leaving the economy open to an even bigger crash than occurred in 2008.

Even the President of the New York Federal Reserve Bank has repeatedly said that bankers have to improve their ethics … but to no avail.

Why isn't the government cracking down on corruption and fraud?  Because most government workers are themselves corrupt.

Yesterday, Pope Francis gave a powerful speech, directly addressing these problems (Google translate):

The scandalous concentration of global wealth is possible due to the connivance of public leaders with the powers that be. The corruption is itself a process of death … when life dies, there is corruption.There are few things more difficult than opening a breach in a corrupt heart: "So is he who lays up treasure for himself and is not rich with God" (Luke 12:21). When the personal situation of the corrupt becomes complicated, he knows all the loopholes to escape as did the dishonest steward of the Gospel (cf. Lk 16.1 to 8).

 

The corrupt through life with shortcuts opportunism, with the air of one who says, "It was not me", coming to internalize his mask as an honest man. It's a process of internalization. The corrupt can not accept criticism, dismisses anyone who provides criticizes, tries to belittle any moral authority to question him, does not value the other and insults anyone who thinks differently.  If the balance of power permits, he  prosecutes anyone who contradicts him.

 

Corruption is expressed in an atmosphere of triumphalism because the corrupt fancies himself a winner. In that he struts to belittle others. The corrupt knows no fraternity or friendship, but complicity and enmity.

The corrupt does not perceive his corruption. It's a little like what happens with bad breath … it's hard for those who have it to know, unless someone else tells them.

 

For this reason, the corrupt can hardly get out of their internal state by way of remorse of conscience. Corruption is a greater evil than sin. More than forgiven, this evil must be cured.

Corruption has become "natural" to the point of getting to statehood linked to personal and social custom, a common practice in commercial and financial transactions, in public procurement, in any negotiation involving State agents. It is the victory of appearances over reality …

 

***

 

There are now many international conventions and treaties on the matter … not so much geared to protect the citizens, who ultimately are the latest victims – particularly the most vulnerable – but how to protect the interests of operators of economic markets and financial companies.

 

The penalty is selective. It is like a net that captures only the small fish, while leaving the big [fish] free in the sea.

(Note: I tried to improve Google translate's rough translation. My Italian is rusty, and I would welcome a better translation from a fluent Italian speaker.)

What Does it Mean to Do God's Work?

The head of Goldman Sachs said he’s doing “God’s work” with his banking activities.

The head of Barclays also told his congregation that banking as practiced by his company was not antithetical to Christian principles.

Are they right? Is big banking as practiced by the giant banks in harmony with Christian principles?

Do Justice

Initially, the Bible does not counsel us to ignore the breaking of laws by the the powerful.

In fact, the Bible mentions justice over 200 times — more than just about any other topic. The Bible asks us to do justice and to stand up to ANYONE — including the rich or powerful — who do injustice or oppress the people.

Indeed, one of the first things God asks of us is to do justice:

He has told you, O man, what is good; and what does the Lord require of you but to do justice, and to love kindness, and to walk humbly with your God? (Micah 6:8)

While many churches and synagogues have become obsessed with other issues, many have arguably ignored this most important of God’s demands of us. As pointed out by a leading Christian ministry, which rescues underage girls trapped as sex slaves in third world countries:

In Scripture there is a constant call to seek justice. Jesus got upset at the Pharisees because they neglected the weightier matters of the law, which He defined as justice and the love of God . . . Isaiah 58 complains about the fact that while the people of God are praying and praying and praying, they are not doing anything about the injustice.

Should Christians just pray for justice and leave the rest to God?

That’s not what the Bible asks us to do. Instead, Hebrews 11:33 tells us that we are God’s hands for dispensing justice, and God uses us to “administer justice.”

We have to “walk our talk” and put our prayers into action.

God demands that we do everything in our power to act as “God’s hands” in bringing justice. And as Saint Augustine reminds us, “Charity is no substitute for justice withheld.”

Indeed:

The Lord looked and was displeased that there was no justice. He saw that there was no one, He was appalled that there was no one to intervene. (Isaiah 59:15-16)

This is the only place in the Bible where the word “appalled” is used for the way God feels — in other words, the only thing which we know God is appalled by is if people are not doing justice.

There are hundreds of other references to justice in the Bible, including:

• Blessed are they who maintain justice . . . . (Psalm 106:3)

• This is what the LORD says: Maintain justice and do what is right . . . . (Isiah 56:1)

• This is what the LORD says: Do what is just and right. (Jeremiah 22:3,13-17)

• Follow justice and justice alone. (Deuteronomy 16:19, 20)

• For the LORD is righteous, he loves justice . . . . (Job 11:5,7)

• Learn to do right! Seek justice . . . . (Isaiah 1:17)

So if the powerful players in the giant banks broke the laws, they must be held to account.

Fraud and Manipulation of Money

The big banks have engaged in systemic, continuous ongoing criminal fraud.

Allowing the banks to commit crime with impunity is not what Jesus would do. What would Jesus do? Turn over the tables of the money-changers. (economists agree.)

Moreover, the giant banks manipulate currency through the use of schemes such as manipulating interest rates (gaming interest rates in different regions – Libor, Eurobor, etc. – can in turn drive their currencies up or down), high frequency trading and artificially suppressing gold prices (which artificially inflates the value of fiat money) .

As Ron Paul notes, the Bible forbids altering the quality of money (which, at the time and place, was entirely in the form of coins):

Even the Bible is clear that altering the quality of money is an immoral act. We are instructed to follow the rules of “just weights and measures.” “You shall do no injustice in judgment, in measurement of length, weight, or volume. You shall have just balances, just weights, a just ephah, and a just hin” (Leviticus 19:35-36). “Diverse weights are an abomination to the LORD, and a false balance is not good” (Proverbs 20:23). The general principle can be summed as “You shall not steal.”

Proverbs 11:1 also provides:

Dishonest scales are an abomination to the LORD, but a just weight is His delight.

So to the extent that the giant banks have engaged in any dishonest acts or the manipulation of currencies, they are violating scripture.

Oppression of the Poor

The Bible condemns oppression of the poor for the benefit of the affluent:

He that oppresses the poor to increase his riches, and he that gives to the rich, shall surely come to want. (Proverbs 22:16)

To the extent that the giant banks have oppressed the poor to increase their riches, they are violating scripture.

Due to their looting, inequality is now worse in American than in Egypt, Tunisia, Yemen, most Latin American banana republics … and ancient Rome.

Waging War

Bankers are often the driving force behind war. "Blessed are the peacemakers" (Matthew 5:9), and Jesus would not have taken kindly to waging wars for profit based upon false pretenses.

Jesus Was Killed for Standing Up to Corruption

Reverend Howard Bess notes:

Jesus did not go to the temple to cleanse. He came to the temple to announce the destruction of a whole way of life. Those who operated the temple had no power to silence Jesus and put him to death. Those powers were held by the Roman retainers.

 

The charges that were leveled against him can be summed up as insurrection. There were three specific charges: encouraging non-payment of taxes, threatening to destroy property (the temple), and claiming to be a king. It was the temple incident that took Jesus from being an irritating, but harmless country rebel from the rural north to a nuisance in a city that controlled the great tradition. Rome’s retainers killed him on a cross.

In other words, Jesus wasn't sentenced to death until he challenged the money changers.

Resurrection: Christ's Ministry

Christ – and his ministry – lives to the extent that we act as God's hands to confront the big banks which are warping our economy and our world.

But Isn't the Economy Still Too Fragile?

Shouldn't we wait until the economy is stronger before prosecuting fraud?

Nope …

Ecclesiastes 8:11 notes:

When the sentence for a crime is not quickly carried out, people’s hearts are filled with schemes to do wrong.

Nobel prize winning economists agree.

Postscript: Not all bankers are bad people. For example, many bankers at smaller banks and credit unions are good people who are trying to help their communities. Each must be judged by his or her own acts.

via Zero Hedge http://ift.tt/1zqmMFq George Washington

Submitted by Ron Holland via The Daily Bell,

Although there are no firm statistics on the number of Americans living outside the US, the US State Department estimates that somewhere between 3 and 6 million Americans now live offshore. I think this is a low estimate and the number is clearly growing.

I now live in Canada but often travel back to the United States. Driving through Customs near Buffalo is usually not a big ordeal but it does involve a time-wasting delay much like visiting the post office or any other US government bureaucracy. But governments should police their borders, as this is one of the few legitimate functions of a central government.

Still, whenever I’m there I do notice the America I grew up in and once knew has really changed since 9/11. The trend toward a more militarized and aggressive police force continues to quicken. I know most Americans accept this as part of the consequences of the War on Terror just as they do the loss of financial privacy, increased fines and asset seizures.

The Canadian government recently warned citizens to be careful when taking cash to the US because of the risk of police taking their cash for hyped-up offenses. Did you know that in the last 13 years, over $2.5 billion has been stolen by law enforcement in almost 62,000 cash seizures? I have to say that as an American, I’m outraged at the situation and always on guard when in the USSA.

I fear many Americans who don’t travel internationally might have become somewhat immune to the intrusive, arbitrary nature of today’s American government and its institutions. Here in Canada, law enforcement is almost always professional and courteous and even the bureaucrats are friendly and helpful, which simply amazes me.

So to my American family, friends and business associates, I want you to know it is still possible to achieve the American Dream of a simple life with opportunity for wealth creation, fun, freedom and good times without an overly intrusive, threatening government … just not in the United States. Many other nations, in Central and South America and elsewhere, certainly also experience corruption and inefficiencies but government threats remain outside of everyday life for most citizens and expats.

Following are a few things I’ve noticed recently pertaining to international real estate and lifestyle decisions many people are considering, ranging from a new presidential executive order to mouth-watering Austrian chalets.

I mention the latest presidential executive order not because it concerns your lifestyle or real estate but because this is how you are likely to lose more liberties, have your gold confiscated or your bank safe deposit box frozen during a future real or contrived crisis. Roosevelt used this governmental tool to illegally confiscate private gold in 1933 and there is no immediate defense or remedy to a presidential executive order. Yes, Congress can act over time but exactly how this would help after the fact is a question no one can answer.

When retiring overseas, many countries require a minimum pension or retirement income in order receive the coveted benefits of expat retirement and your Social Security benefits can be all or part of this package. Therefore, leaving the US does not mean you lose your “promised but not guaranteed” Social Security benefits … at least not until Congress starts to “means test” Social Security in order to end benefits to the wealthy and middle class. It is possible to continue to receive your benefits. Read more here.

A couple of weeks ago I was flying back to Canada from a Casey Research conference in historic San Antonio, TX. The American Airlines flight magazine had an excellent article on the radical transformation of Colombia from a crime haven to a tourist haven and now the toast of South America. I have visited Colombia several times recently and you must put this exciting country on your bucket list for a visit. Read about it in “A Radical Transformation.”

I don’t have a compulsive bone in my body except for being on time and I unrealistically expect everyone else to be on time. This is a minor problem for me in the United States, Canada or Europe – other than in Switzerland where everyone and everything is done in a timely manner. But in Central and South America, nothing happens by the clock. This is something potential expats and others considering living in Latin cultures will want to be aware of. While this article focuses on Ecuador, it provides excellent insight into the entire region.

The Colombia economy is booming and is viewed increasingly by international investment managers as a good candidate for global diversification. The earlier long years of political upheaval and guerilla violence means that much of the reserves of this resource rich country including oil, gold and coal have not been explored and the reserves are still unaccounted for. Read what the NASDAQ has to say about the country at “Colombia Represents A New Vision in South America.”

Of course, going offshore isn’t restricted to the lower cost, tropical venues of Central and South America. Some people may enjoy the opportunities for cold weather sports and the history of a wonderful country like Austria. Think of Austria as similar to Switzerland or Germany but a place where locals and visitors alike have a lot more fun. While Austrian real estate is not a bargain as it still is in South America, compared to Switzerland it is an excellent value. Here are a few chalets to tempt your wandering eye.

The opportunities still available are truly amazing and I encourage you to takes steps to ensure your lifestyle and wealth now, while you can.

via Zero Hedge http://ift.tt/1nDpn9M Tyler Durden

If, as the smart chaps on financial media continuously remind hungry investors, “earnings are the mothers milk of stock market rallies” then WTF is going on in the chart below… (Hint: “perenially too optimistic”)

 

 

As ValueWalk’s Michael Ide notes,

European equities had their 42nd straight month of earnings downgrades in September, with an average of 100 downgrades per working day since March 2011, says a recent report from UBS. That’s not quite as bad as Japan’s 51-month downgrade streak in the early nineties, and fortunately there are signs that estimates could finally turn around.

 

“Bottom-up consensus earnings estimates have tended to be perennially too optimistic across many Global Equity markets. But even by these standards, the sheer persistence of downgrades in Europe over recent years has been dramatic,” write UBS strategists Nick Nelson and Karen Olney.

*  *  *

Dramatic, persistent, irrelevant… as long as Draghi keeps the dream alive

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

Submitted by Michael Snyder of The Economic Collapse blog,

The Social Security Administration has just released wage statistics for 2013, and the numbers are startling.  Last year, 50 percent of all American workers made less than $28,031, and 39 percent of all American workers made less than $20,000.  If you worked a full-time job at $10 an hour all year long with two weeks off, you would make $20,000.  So the fact that 39 percent of all workers made less than that amount is rather telling.  This is more evidence of the declining quality of the jobs in this country.  In many homes in America today, both parents are working multiple jobs in a desperate attempt to make ends meet. Our paychecks are stagnant while the cost of living just continues to soar.  And the jobs that are being added to the economy pay a lot less than the jobs lost in the last recession.  In fact, it has been estimated that the jobs that have been created since the last recession pay an average of 23 percent less than the jobs that were lost.  We are witnessing the slow-motion destruction of the middle class, and very few of our leaders seem to care.

The "average" yearly wage in America last year was just $43,041.  But after accounting for inflation, that was actually worse than the year before…

American paychecks shrank last year, just-released data show, further eroding the public’s purchasing power, which is so vital to economic growth.

 

Average pay for 2013 was $43,041 — down $79 from the previous year when measured in 2013 dollars. Worse, average pay fell $508 below the 2007 level, my analysis of the new Social Security Administration data shows.

 

Flat or declining average pay is a major reason so many Americans feel that the Great Recession never ended for them. A severe job shortage compounds that misery not just for workers but also for businesses trying to profit from selling goods and services.

 

Average pay declined in 59 of the 60 levels of worker pay the government reports each October.

And please keep in mind that "average pay" is really skewed by the millionaires and billionaires at the top end of the spectrum.

Median pay in 2013 was just $28,031.02.  That means that 50 percent of American workers made less than that number, and 50 percent of American workers made more than that number.

Here are some more numbers from the report that the Social Security Administration just released…

-39 percent of American workers made less than $20,000 last year.

 

-52 percent of American workers made less than $30,000 last year.

 

-63 percent of American workers made less than $40,000 last year.

 

-72 percent of American workers made less than $50,000 last year.

I don't know about you, but those numbers are deeply troubling to me.

It has been estimated that it takes approximately $50,000 a year to support a middle class lifestyle for a family of four, and so the fact that 72 percent of all workers make less than that amount shows how difficult it is for families that try to get by with just a single breadwinner.

The way that our economy is structured now, both parents usually have to work as hard as they can just to pay the bills.

But there was one group of Americans that did see their incomes actually increase last year.

Those making over 50 million dollars had their pay increase by an average of $12.8 million in 2013.

For everyone else, the news was not good.

And of course this is a trend that has been going on for a long time.

Posted below is a chart that comes from the Federal Reserve.  It shows how real median household income in the United States has declined since the year 2000…

 

Meanwhile, the cost of living has continued to rise at a steady pace.

Needless to say, this is putting a tremendous squeeze on the middle class.  With each passing day, more Americans are losing their spots in the middle class and this has pushed government dependence to an all-time high.  According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month.  This is completely and totally unsustainable, but our long-term economic problems just keep getting worse.

Our politicians have stood by as millions upon millions of good paying jobs have been shipped out of the country.  Millions of other middle class jobs have been lost to technology.  This has resulted in intense competition for the middle class jobs that remain.

And at this point we are even losing lots of lower paying retail jobs.  For example, it is being reported that Sears plans to close 110 more stores and lay off more than 6,000 workers.  Sears says that the report "isn't accurate", but it isn't denying that stores will be closed either…

In an email to USA Today, Sears spokesman Howard Riefs said the store count and closures "isn't accurate,'' but did not provide store closures or layoff numbers.

 

"As we stated in our (second quarter earnings report), we disclosed that we would be closing unprofitable stores as leases expire and in some cases will accelerate closings when it is economically prudent. And that we would consider closing additional stores during the remainder of the year,'' Riefs said. "Make no mistake, we believe the store will continue to play an integral role in our transformation, however, if a store is not generating a profit, it is straightforward that the store should be considered for closure."

No matter how many stores Sears does end up closing over the next few months, the truth is that our economy is a complete and total mess at this point.

Our politicians and the mainstream media are trying to put a happy face on everything, but the cold, hard numbers prove that we are not anywhere close to where we were prior to the last recession.

Because it is so difficult to find a good job in America today, I often recommend to people that they should consider starting their own businesses.

But thanks to the bureaucratic control freaks in the Obama administration and in our state governments, small business ownership in America today is at an all-time low.  It is almost as if they don't want the "little guy" to win.  Every avenue of prosperity for the middle class is under assault, and there does not appear to be much hope that this will change any time soon.

And the truly frightening thing is that this is about as good as things are going to get for the middle class.  We are rapidly approaching the next major wave of our long-term economic decline, but that is a topic for a future article.

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