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Sunday, February 19, 2012

Economic Stories of Relevance in Today's World -- February 19, 2012

Gas prices are highest ever for this time of year - AP - Chris Kahn - Energy Writer - February 18, 2012 - Gasoline prices have never been higher this time of the year. At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April..           
High oil and gas prices now set the stage for even sharper increases at the pump because gas typically rises in March and April.  Every spring, refiners suspend operations to switch the type of gasoline they make. Supplies of wintertime gas are sold off before March, when refineries need to start making a new formula of gasoline that's required in the summer.          That can mean less supply for service stations, resulting in higher gas prices. And summertime gasoline is more expensive to make. The government mandates that it contain less butane and other cheap organic compounds because they contribute to the formation of ground-level ozone, a primary constituent in smog. That means more oil, a costlier component, is needed to produce each gallon.            The Oil Price Information Service predicts that gasoline could peak at $4.25 a gallon by the end of April. That would top the record of $4.11 in July 2008.           The national average for gasoline began the year at $3.28 a gallon. The average price for February so far is $3.49 a gallon. That's up from $3.17 a gallon last February, a record at the time. Back in 2007, before the recession hit, the average for February was $2.25 a gallon.

In Russia, Putin allies sharpen anti-American attacks ahead of elections - The Washington Post - Kathy Lally - February 16, 2012 - A nasty spate of anti-Americanism set off by Vladimir V. Putin has grown into waves of attacks aimed at the new American ambassador and Russian opposition leaders, raising questions about the future of U.S.-Russian relations. The attacks started just before the December parliamentary elections and have intensified as the March 4 presidential vote approaches. Although widely viewed as aimed primarily at a domestic audience, they have grown shriller and more aggressive, provoking debate about whether Russia is deliberately giving a cold shoulder to President Obama’s effort to promote more productive relations.

Exclusive: 2nd N.C. Mother Says Daughter’s School Lunch Replaced for Not Being Healthy Enough - The Blaze - February 17, 2012 - North Carolina officials have said there was a misunderstanding when a preschooler’s homemade lunch was sent home for not meeting certain nutritional requirements, but now a second mother from the same school has come forward exclusively to The Blaze to say the same thing happened to her daughter.       Diane Zambrano says her 4-year-old daughter, Jazlyn, is in the same West Hoke Elementary School class as the little girl whose lunch gained national attention earlier this week. When Zambrano picked Jazlyn up from school late last month, she was told by Jazlyn’s teacher that the lunch she had packed that day did not meet the necessary guidelines and that Jazlyn had been sent to the cafeteria.        The lunch Zambrano packed for her daughter? A cheese and salami sandwich on a wheat bun with apple juice. The lunch she got in the cafeteria? Chicken nuggets, a sweet potato, bread and milk.         “She never eats breakfast or lunch at the school,” Zambrano said of her daughter during an interview with The Blaze. “We always wake up early and make her lunch.” It happens “every so often”        That day, Zambrano said she picked Jazlyn up from school and asked if she ate her lunch.“She’s not picky about food but you have to be on top of her,” she explained.                    When Jazlyn said she didn’t eat what her mother had made her, Zambrano went to her teacher and demanded to know what happened. She said the teacher told her an official had come through that day to inspect students’ lunches and that those who were lacking certain food groups were sent to the cafeteria. After she received her cafeteria food, the teacher told Zambrano, Jazlyn was told to put her homemade lunch back in her lunchbox and set it on the floor. Zambrano said the teacher told her it was not the first time student lunches have been inspected, and that officials come “every so often.”

Price hikes catch up to U.S. food makers - MarketWatch - Matt Andrejczak - February 18, 2012 - U.S. brand-name food makers raised prices throughout 2011 and it’s starting to catch up to them. On Friday, General Mills (GIS +0.37%) blamed “weak volume performance across U.S. retail food categories in December and January” for cutting their fiscal May 2012 outlook to between $2.53 and $2.55 a share from $2.59 to $2.61.          Lately, General Mills and other brand-name food makers have faced softening consumer demand, calling into question exactly how financially strong the U.S. consumer really is despite rising employment numbers...            General Mills is yet another sign brand-name American food makers continue to fight an uphill battle to win over U.S. shoppers, who have been very price conscious during this period of stagnant wage growth. Shoppers have been enamored with cheaper store-brand foods. Campbell Soup (CPB -0.55%) , which Friday beat Wall Street’s profit view for its quarter ended Jan. 29, said shoppers pulled back on food purchases following the winter holidays. On Friday, H.J. Heinz (HNZ +4.49%) also highlighted the mindset of U.S. consumers.                   While reporting strong sales for its namesake ketchup in emerging economies like China and Russia, Heinz said volumes fell 2% in North America after it raised prices for ketchup, Ore-Ida frozen french fries and Classico pasta sauces.

S&P 500 Q4 Profit Margins Decline By 27 basis points, 52 basis points Excluding Apple - Zero Hedge - Tyler Durden - February 18, 2012 - What a difference a quarter makes: back in Q4 2011, in light of the imploding global economic reality, the only recourse equity bulls had to was to point out that corporate profitability was still at all time highs, and to ignore the macro.....       America's self-delusion skills are legendary. But when it comes to corporate profit margin math, things are all too clear: the corporate profitability boom is over. As Goldman points out: with the bulk of companies reporting, in Q4 corporate profits have now declined by a significant 27 bps sequentially, and an even more significant 52 bps excluding Apple.......                 While we won't comment on the fact that Apple is accountable for half the margin delta in the S&P (or that the entire InfoTech space ex. Apple would have recorded a 2% EPS Growth and 8% sales growth instead of the 19% and 16% in EPS and Revenue otherwise reported), it is now clear that the "record profit" story is well and truly dead. As a result, the only "upside" case is for the delusion-driving US decoupling to continue, until such time as Europe is "fixed." Then again, since Europe's capacity for self-delusion is also quite impressive, it is not unrealistic to expect the continent to onboard the hopium pipe with the reckless abandon... of America.

Definition of 'Basis Point - BPS - A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.

20 Signs You Might Be A Typical American Worker
- the Economic Collapse Blog - Once upon a time, anyone that was relatively competent and willing to work hard could go out and easily get a job that would enable that person to financially support a family. Unfortunately, that is simply no longer true anymore. Well paying "middle income jobs" are being rapidly replaced with "low income jobs" and part-time jobs. As the economy crumbles, it is becoming increasingly difficult for the typical American worker to survive from month to month. The number of companies that provide benefits such as health insurance has fallen steadily over the past ten years, and paychecks have not been keeping up with the rising prices of food and gas. Average American families are seeing their budgets squeezed like never before, and many of them are going into huge amounts of debt in order to make up the difference. Sadly, this is a problem that has developed over an extended period of time and that is not going to be reversed overnight. Over the past four decades, the ratio of wages and salaries to GDP in America has fallen dramatically. The typical American worker is not as valued as much as he or she used to be, and if current trends continue even more of us will be working part-time jobs or "low income jobs" in the years ahead.

In this economy, a good paying full-time job is incredibly precious. If you still have one, you should consider yourself to be very fortunate. Check out the following chart. It is a chart that shows the level of wages and salaries as a percentage of GDP in the United States since the late 1940s. As you can see, the slice of the pie being taken home by American workers has been dropping like a rock since about 1970....

Is that a clear trend or what?   And it is going to continue year after year as long as we continue to pursue the same foolish economic policies.      As our politicians continue to allow millions of American jobs to be shipped overseas, competition for the jobs that remain inside this country is becoming extremely intense.    Back in 1967, 97 percent of all U.S. men with a high school degree between the ages of 30 and 50 had jobs.  Today, that figure is down to 76 percent.   As you read this, there are hordes of hard working American workers sitting at home staring at their televisions as they wonder why nobody will hire them.     Right now, if you gathered together all of the unemployed people in the United States, they would constitute the 68th largest country in the world.        That is absolutely insane.

But even if you do have a job that does not mean that you are in good shape.  The percentage of "low income jobs" just continues to climb.  Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.
Many Americans work as hard as they can and still find that they must turn to the government for financial assistance.  According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.

 Since the year 2000, we have lost 10% of our middle class jobs even though our population has increased by more than 30 million since then.  In the year 2000 there were about 72 million middle class jobs in the United States, but today there are only about 65 million middle class jobs.
The lack of good jobs in America has some very real consequences.  In particular, our young adults are really feeling the pain of not being able to find quality employment.

Foreclosure abuse still rampant across U.S., experts say - Report found 84 pct of San Francisco disclosures illegal - Reuters - Tim Reid - February 18, 2012 - A report this week showing rampant foreclosure abuse in San Francisco reflects similar levels of lender fraud and faulty documentation across the United States, say experts and officials who have done studies in other parts of the country.
The audit of almost 400 foreclosures in San Francisco found that 84 percent of them appeared to be illegal, according to the study released by the California city on Wednesday.           Across the country from California, Jeff Thingpen, register of deeds in Guilford County, North Carolina, examined 6,100 mortgage documents last year, from loan notes to foreclosure paperwork. Of those documents, created between January 2008 and December 2010, 4,500 showed signature irregularities, a telltale sign of the illegal practice of "robosigning" documents.               Robosigning involves the use of bogus documents to force foreclosures without lenders having to scrutinize all the paperwork involved with mortgages. The practice was at the heart of the foreclosure scandal that led to a $25 billion settlement between the U.S. government and five major banks last week. The banks have never formally admitted any wrongdoing.

20 Lies Every American Should Know!

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