Hand-picked by Majority Whip Roy “Abramoff-R-Us” Blunt early in his tenure to be a deputy whip, sort of an official water-carrier, Cantor moved up swiftly through the ranks as a Blunt protégé, because he was cheerfully obedient when sitting in the room with Friends of Abramoff and because he was unusually good at the money. “He’s about the money,” one wag offers admiringly.But he was never about conservative principles. Instead, Cantor is one of those post-Reagan Republicans who have managed to reduce conservative policy to such grandiose, content-free platitudes that there is never any danger that their stump speeches at home, or even on the floor of the House, will get in the way of doing Washington business as usual. There are certain litmus tests that cogently demonstrate the difference between platitude and principle—-and one of them pertains to the matter of crony capitalist subsidies and tax breaks for big business. On that score, I once heard Cantor give a stem-winder in behalf of free markets at a conference full of business and financial types who nodded, applauded and whooped it up. But that was just a pro forma sermon. The next day he was back in Washington making sure that the Ex-Im bank authorization was extended for another 3-years...
The Generational Short: Banks, Wall Street, Housing and Luxury Retail Are Doomed - June 14, 2014 If Gen-Y cannot afford to buy Boomers’ houses at bubble-level prices, then what will keep housing prices at these elevated levels? Mish recently posted excerpts of a Brookings Institution study on changing generational values: How Millennials Could Upend Wall Street and Corporate America. The gist of the report is that Gen-Y (Millennials) view money, prestige, adversarial confrontation and managerial methods differently from the Baby Boom and Gen-X generations, and that this set of values will change Corporate America, the economy and the culture as Boomers exit managerial positions and their peak earning/spending years. Though we have to be careful in characterizing tens of millions of individuals as all reflecting one set of generational values, the basic idea is simply one of context:people who grow up in a specific milieu are naturally prone to sharing broadly similar perceptions and values. The Brookings authors claim that Millennials do not favor the adversarial style of the Boomers (competition and confrontation as means of advancing one’s cause/position) nor do they place great value on luxury goods as evidence of exclusivity. They actively distrust/loathe the banking sector and are financially conservative, preferring cash to investing in Wall Street. Asked to choose their ideal (corporate/state) job, their choices reflect preferences for a mix of security, idealism and technology. The big flaw in this career questionnaire (as far as I can discern) is that it did not offer the alternatives of self-employment/ entrepreneurship. Anecdotally, it seems clear that there is a strong entrepreneurial drive in Gen-Y–for example, What I’ve learned in my first year as a college dropout. One factor the report did not address fully is real estate/housing, which depends on bank-issued debt (mortgages) and the belief that a lifetime of paying a mortgage will magically result in financial security, based on the greater fool notion that someone in the future will be willing to pay more for an asset that hasn’t changed either qualitatively or quantitatively (other than needing more maintenance as it ages). This raises two issues: if Gen-Y cannot afford to buy Boomers’ houses at bubble-level prices, then what will keep housing prices at these elevated levels? Answer: nothing.Without strong demand for housing at sky-high prices, valuations will drop to whatever level demand can support. That level can be far lower than conventional housing analysts believe possible because they are still extrapolating Baby Boomer preferences and earnings into a future which will be quite different from the housing bubble decades. The second issue is a question: how much of the Boomers’ housing wealth will trickle down to Gen-Y when they actually need housing, i.e. when they’re starting families? The answer may well be: very little. If Gen-Y is unwilling or unable to take on enormous mortgages to buy bubble-priced housing, we can project a housing market in which Boomers are unloading millions of primary homes as they seek to downsize/raise cash for retirement but there aren’t enough Gen-Y buyers willing or able to buy these millions of homes at bubble valuations. In this scenario, home prices must decline to align with Gen-Y’s salaries (i.e. their ability to qualify for huge mortgages) and their willingness to shoulder bank-based debt.
Millennials 'overwhelmed' by debt - CNN Money - Blake Ellis - June 11, 2014 - Four in 10 millennials say they are "overwhelmed" by their debt -- nearly double the number of baby boomers who feel that way, according to a Wells Fargo survey of more than 1,600 millennials between 22 and 33 years old, and 1,500 baby boomers between 49 and 59 years old. To try to get out from underneath it, 47% said they spend at least half of their monthly paychecks on paying off their debts. On average, respondents put the biggest chunk of their income toward paying credit card bills, followed by mortgage debt, student loan debt, auto debt and medical debt. But even as they struggle financially -- with more than half living paycheck to paycheck -- many are making sure to at least tuck a little money away for savings. More than half of respondents said they are currently saving for retirement. Of that group, 46% are saving between 1% and 5% of their income. Another 31% are saving between 6% and 10%, while 18% are saving more than 10%. "The silver lining of the recession that started over five years ago is that a majority of millennials get that saving is a necessity and even equate it with 'surviving' tough times," said Karen Wimbish, director of Retail Retirement at Wells Fargo.
19 Reasons Why You Can Laugh When Anyone Tells You That The Economy Is In Good Shape - The economic Collapse Blog - Michael Snyder - June 10, 2014 - Have you heard the one about the “economic recovery” in the United States? It’s quite funny, but it is not actually true. Every day, the establishment media points to the fact that global stock markets have soared to unprecedented heights as evidence that the economy is improving. But just because a bunch of wealthy people have gotten temporarily even richer on paper does not mean that the real economy is in good shape. In fact, as you will see below, things just continue to get even tougher for the poor and the middle class. Retail stores are closing at the fastest pace since the fall of Lehman Brothers, the rate of homeownership in this country is the lowest that it has been in 19 years, one out of every five families do not have a single member that is employed, and one out of every five children is living in poverty. We are working harder, earning less and going into more debt. With each passing day, the middle class gets a little bit smaller and the ranks of the poor get a little bit larger. But at least the stock market is doing great, eh? If the U.S. economy really was doing well, government dependence would not be at epidemic levels. If the U.S. economy really was doing well, we wouldn’t have more than a million public school children that are homeless. If the U.S. economy really was doing well, the percentage of Americans that have a job would not be lower than it was when the last recession supposedly “ended”. Nobody that takes an honest look at the numbers can honestly say that the U.S. economy has recovered. The following are 19 reasons why you can laugh when anyone tells you that the economy is in good shape…
Bankrate: Mortgage Rates Continue to Climb - PR Newswire - Bankrate, Inc. - June 12, 2014 - Mortgage rates are on the rise again this week, with the benchmark 30-year fixed mortgage rate moving up to 4.34 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.34 discount and origination points. To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/. The average 15-year fixed mortgage rate inched up to 3.43 percent, while the larger jumbo 30-year fixed mortgage rate rose to 4.41 percent. Adjustable rate mortgages were also higher this week, with the 5-year ARM rising to 3.37 percent, the 7-year ARM jumping to 3.58 percent. As 2013 came to a close, the average 30-year fixed mortgage rate was 4.69 percent. At that time, a $200,000 loan would have carried a monthly payment of $1,036.07. After drifting lower for much of the first five months of 2014, the average rate is now 4.32 percent, and the monthly payment for the same size loan would be $994.45, a savings of nearly $42 per month for anyone that waited.
US consumer sentiment slips in June - CNBC.com - June 13, 2014 - U.S. consumer sentiment fell in June as views by consumers with the lowest incomes soured, a survey released on Friday showed. The Thomson Reuters/University of Michigan's preliminary June reading on the overall index on consumer sentiment came in at 81.2, down from 81.9 the month before. It was below the median forecast of 83.0 among economists polled by Reuters. "The change from May was too small to indicate a significant loss in sentiment," survey director Richard Curtin said in a statement. "The small month-to-month variations aside, the main finding from the recent surveys is that consumers have maintained their expectations at reasonably favorable levels for the past six months." The survey's barometer of current economic conditions rose to 95.4 from 94.5 and was below a forecast of 95.7. The survey's gauge of consumer expectations slipped to 72.2 from 73.7, and missed an expected 74.6. The survey's one-year inflation expectation was at 3.0 percent down from 3.3 percent, while the survey's five-to-10-year inflation outlook was at 2.9 percent compared with 2.8 percent...
RadioShack Is Collapsing - Business Insider - Rob Wile and Myles Udland - June 10, 2014 - RadioShack shares were down as much as 21% in premarket trading after the electronics retailer reported a wider than expected quarterly loss. The company posted a net loss of $98.3 million, or $0.97 a share. Analysts were looking for a loss of $0.52 per share. Revenue fell 13% from a year ago to $736.7 million and on a same-store basis, sales fell 14%, which the company said was driven by traffic declines and poor sales in its mobile business. Analysts were expecting revenue of $767.5 million. The electronics retailer said it ended the quarter with total liquidity of $423.7 million, including $61.8 million in cash and cash equivalents and $361.9 million available under a credit agreement. "Overall, our first quarter performance was challenged by an industry-wide decline in consumer electronics and a soft mobility market which impacted traffic trends throughout the quarter," chief executive Joseph Magnacca said in a statement. Magnacca added that the company has taken steps to cut costs, including lowering its corporate head count and reducing discretionary expenses. These charts show RadioShack's performance over the last year and the last decade. It's not pretty...
ObamaCare penalty to hit one million low-income Americans - Fox News - Washington Free Beacon - Elizabeth Harrington - June 10, 2014 - Roughly one million low-income Americans will pay a fine under ObamaCare, according to the Congressional Budget Office (CBO). The CBO estimated that four million people would pay the individual mandate penalty for not having health insurance by 2016 as a result of the president’s health care law, according to a report released last week, “All told, CBO and [the Joint Committee on Taxation] JCT estimate that about four million people will pay a penalty because they are uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf),” the report said. “An estimated $4 billion will be collected from those who are uninsured in 2016, and, on average, an estimated $5 billion will be collected per year over the 2017–2024 period.” A chart accompanying the report revealed that 200,000 of those paying the penalty earn less than 100 percent of the poverty line. An additional 800,000 are considered low-income, earning between 100 and 199 percent of the poverty level. President Barack Obama was once critical of an individual mandate precisely because of its effect on low-income Americans. During a primary debate against Hillary Clinton, then-candidate Obama criticized the idea of a mandate for imposing fines on people who could not afford health insurance.
140 Years Of Gold & Silver In 10 Minutes - Mike Maloney
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