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Monday, January 28, 2013

Economic Stories of Relevance in Today's World -- January 27, 2013

CHART: The Real Inflation Rate Is 11% According To CPI Calculations From 1980s - The Daily Bail -

History of the CPI - By John Melloy - Executive Producer, CNBC's Fast Money - ...Since 1980, the Bureau of Labor Statistics has changed the way it calculates the CPI in order to account for the substitution of products, improvements in quality (i.e. iPad 2 costing the same as original iPad) and other things. Backing out more methods implemented in 1990 by the BLS still puts inflation at a 5.5 percent rate and getting worse, according to the calculations by the newsletter’s web site,

Compound Inflation - The Hickory Hound

How to Get America Online - The New York Times - Susan Crawford - January 23, 2013 -  Although Julius Genachowski, the chairman of the Federal Communications Commission, has challenged the country to build additional gigabit fiber networks — about 100 times faster than most residential connections today — his words won’t advance our digital future unless they are backed up with the leadership necessary to enact pro-growth, pro-innovation and competition-enabling rules.
                        At the heart of the problem lie a few powerful companies with enormous influence over policy making. Both the wireless and wired markets for high-speed Internet access have become heavily concentrated, and neither is subject to substantial competition nor oversight. Companies like Time Warner Cable routinely get their way when they seek to prevent local officials from encouraging competition. At the federal level, Verizon Wireless is keeping the F.C.C. in court arguing over the scope of its regulatory powers — a move that has undermined the agency’s authority.
                     As a result, prices are too high and speeds too slow. A third of Americans opt not to buy high-speed Internet access at home, often because they can’t afford.               Incumbents like Comcast and Verizon Wireless (now cooperating in a joint marketing venture) claim that their market is characterized by robust competition. But where is the competition when 94 percent of new wired high-speed customers bought service from their local cable distributors during the third quarter of 2012? Not surprisingly, America lags behind almost every other industrialized country in high-speed access — even France, the bĂȘte noir of American free-marketeers, has better and cheaper Internet access.              ( The Hound: If you ever want to get a deer in the headlights look, talk to a politician about the need to upgrade the internet infrastructure. First of all, they can't do it because they have been bought off by the telecoms and other media corps. and second they don't understand it, which makes it easier to control them through part one.)

Goldman Sachs Made 400 Million Betting On Food Prices In 2012 While Hundreds Of Millions Starved - The Economic Collapse Blog -  ...Goldman Sachs made about 400 million dollars betting on food prices last year.  Overall, 2012 was quite a banner year for Goldman Sachs.  As I reported in a previous article, revenues for Goldman increased by about 30 percent in 2012 and the price of Goldman stock has risen by more than 40 percent over the past 12 months.  It is estimated that the average banker at Goldman brought in a pay and bonus package of approximately $396,500 for 2012.  So without a doubt, Goldman Sachs is swimming in money right now.  But what is the price for all of this "success"?  Many claim that the rampant speculation on food prices by the big banks has dramatically increased the global price of food and has caused the suffering of hundreds of millions of poor families around the planet to become much worse.  At this point, global food prices are more than twice as high as they were back in 2003.  Approximately 2 billion people on the planet spend at least half of their incomes on food, and close to a billion people regularly do not have enough food to eat.  Is it moral for Goldman Sachs and other big banks such as Barclays and Morgan Stanley to make hundreds of millions of dollars betting on the price of food if that is going to drive up global food prices and make it harder for poor families all over the world to feed themselves?                                This is another reason why the derivatives bubble is so bad for the world economy.  Goldman Sachs and other big banks are treating the global food supply as if it was some kind of a casino game.  This kind of reckless activity was greatly condemned by the World Development Movement report...

So clucked up! Chicken wing prices up ahead of Super Bowl - Life Inc. - Allison Linn - January 25, 2013 - Last summer’s drought has come home to roost in the price you’ll be paying for those Super Bowl party chicken wings.                           The U.S. Department of Agriculture said Thursday that chicken prices were up 6 percent in December, versus a year earlier. That's more than triple how much overall food prices have risen over the same time.                        Food economists had been warning that the price of foods such as meats and dairy would likely rise because of the summer’s severe drought.                     In the case of poultry, the drought led to a rise in prices for the grains that are typically used to feed animals such as chickens and turkeys. That, in turn, has pushed up the price of the chickens.

GOP Moves to Suspend Debt Ceiling Until May - CNBC - Eamon Javers - January 22, 2013 -
House Speaker John Boehner indicated Tuesday that Republicans will vote on an extension of the federal debt ceiling to allow Treasury to borrow money until mid-May. The move would reverse the order of a series of expected debt and spending fights in Washington, an effort designed to put the GOP on more sound political footing.                       The Speaker said the measure would be tied to a provision that would suspend the pay of lawmakers if they do not agree to a budget by April 15th. A vote is expected Wednesday.                             "I think the American people understand that you can't continue to spend money that you don't have," Boehner said.                      At the White House, spokesman Jay Carney indicated the president would likely sign the measure if the Congress passes it. "The House Republicans made a decision to back away from the kind of brinksmanship that was very concerning to the markets, very concerning to business, very concerning to the American people," Carney said.                            Extending the debt limit for a few months without demanding specific spending cuts means the next moment of high political and market drama will occur when the so-called "sequester" or automatic across the board spending cuts, kicks in on March 1. That deadline is itself the result of another temporary maneuver by Congress on New Year's Day to avoid the fiscal cliff. (Hickory Hound - Splat!!!)

My master's wasn't worth it - Be careful what you study. Going to grad school isn't always worth the time, effort and money. - CNN Money - Annalyn Kurtz @CNNMoney - Last updated January 24 2013

Older smokers priced out of Obamacare? - AP through CBS News - January 25, 2013 - Millions of smokers could be priced out of health insurance because of tobacco penalties in President Obama's health care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.                       The Affordable Care Act — "Obamacare" to its detractors — allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting next Jan. 1.                       For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 on top of premiums.                         Younger smokers could be charged lower penalties under rules proposed last fall by the Obama administration. But older smokers could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge.

Manufacturers cutting white-collar jobs now, too - By BERNARD CONDON, AP Business Writers; PAUL WISEMAN, AP Business Writers through - January 24, 2012 - Manufacturers have been using technology to cut blue-collar jobs for years. Now, they're targeting their white-collar workers, too.                      Factory Automation Systems makes machines that help companies cut, bundle and load products faster and cheaper than humans can. But it didn't realize how much technology could help its own business until the Great Recession hit.                       To save money, the Atlanta company cut nine workers doing administrative tasks, like booking flights, answering phones, managing employee benefits and ordering parts and supplies.                        "I had to lay people off to survive, then I noticed it's not such a big deal" to do things myself, President Rosser Pryor says. "When I'm buying something, I can go online. I don't need a buyer."                                    Pryor says do-it-yourself software means he doesn't have to rehire though business has rebounded.                        Other manufacturers are using technology to avoid hiring blue-collar workers when business improves.

Let the Banks Fail - President of Iceland

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