Nightmare on Main Street

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Posted on 1st October 2012 by PlatoPlubius in Economy

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Well, Ross Perot is in the news (I thought this guy was dead) today with his comments that suggest due to our economy’s weakness and fragility that we could be “taken over”…according to the article below he didn’t mention who or how the take over would occur…I’m sure TBPers have many ideas on this.  BTW check out Perot’s duds in this pic

I’m not sure if he was going for the Freddy Krueger look, you decide

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America could be ‘taken over,’ warns Ross Perot

 

Former presidential contender and billionaire Ross Perot is worried that America is a sitting duck for an unnamed foreign invader. In an interview for his new autobiography, Perot said the nation’s weak economy has left us open for a hostile takeover—and neither presidential candidate is the man to save the country.

Citing an impending fiscal cliff,  Perot warned of disaster. “If we are that weak, just think of who wants to come here first and take us over,” the former CEO of info-tech company Perot Systems told USA Today on Monday.

“The last thing I ever want to see is our country taken over because we’re so financially weak, we can’t do anything,” Perot says.

When asked for his take on the presidential race, Perot added, “Nobody that’s running really talks about it, about what we have to do and why we have to do it. They would prefer not to have it discussed.”

However cryptic he may be, this is the first political reckoning by Perot in years, ever since he withdrew from the political landscape after the fall of his Reform Party in the 2000 election. The man who ran the most successful third-party campaigns in contemporary American politics also expressed optimism about the current tea party activism and its efforts to “wake up” both Washington and the electorate.

Still, he thinks that even the fresh voices in the populist, small-government tea party movement aren’t focusing on the real doomsday issue: the deficit. Comparing the Washington establishment to a bunch of fiscal drunks, Perot is still waiting for America to undergo an intervention, before it finds itself owned by a new global power. “It’s like the guy who’s drinking—sooner or later, he’s got to put a cork on the bottle, right?”

http://news.yahoo.com/blogs/ticket/america-could-taken-over-warns-ross-perot-152428497.html

PROMISES ARE EASY, MATH IS HARD, PART………

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Posted on 19th June 2012 by Administrator in Economy

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Zero Hedge and Pew Foundation with more details on the coming implosion of State budgets across this great land of delusion. Politicians are fantastic at making promises. They just have a slight problem with funding those promises. If you are a State worker counting on the taxpayers to fund your promised pension and healthcare benefits, you are living in a fantasy land. It is absolutely hysterical that NJ and California have not funded one single dime towards the healthcare obligations they have made to government workers. I will also stress that the calculation of pension obligations are based on 8% annual returns by the pension funds. BWAAAHHHHAAAA!!!! When you replace that assumption with the reality of 4% returns, the unfunded obligation soars past $2 trillion. So it goes.

US Retirement Benefits Underfunding Rises To Record $1.4 Trillion

 
Tyler Durden's picture

Submitted by Tyler Durden on 06/18/2012 22:41 -0400

The Pew Center has released its annual summary of US pension and retirement health care (under)funding. As of 2010, the total underfunding gap rose by $120 billion from the prior year’s $1.26 trillion deficit to a record $1.38 trillion underfunding. This number consists of $757 billion in pension promises, not backed by any hard cash, representing pension liabilities of $3.07 trillion and assets of $2.31 trillion. In 2000, more than half of the states had their pensions 100 percent funded, but by 2010 only Wisconsin was fully funded, and 34 were below the 80 percent threshold—up from 31 in 2009 and just 22 in 2008. But that pales in comparison to the ridiculous spread between retiree health care liabilities of $660 billion and assets of, drum roll, $33 billion, or a funding shortage that is $627 billion, roughly 19 times the actual assets in the system! Just seven states funded 25 percent or more of their retiree health care obligations: Alaska, Arizona, North Dakota, Ohio, Oregon, Virginia, and Wisconsin. What this means is soon US pensioners will have no choice but to experience not only austerity unlike any seen in Europe, but broken promises of retirement benefits which will never materialize. The response will likewise be proportional.

Sadly, it is only going to get worse:

 
 

The plunge in tax proceeds during the recession made it even harder for states to make their annual retirement contributions. Tax revenues are up in most states but have not returned to previous levels. At the same time, competing, non-pension costs such as Medicaid are rising. Often, elected officials must choose among funding retirement benefits, raising taxes, or paying for schools, roads, and public safety.

Who will pay for the underfunding? In short: someone else:

 
 

Overall, states should have set aside nearly $51 billion to pay for these promises in fiscal year 2010, but they contributed just over $17 billion—about 34 percent of what was annually required. Only Arizona made the full contribution to pay for retiree health care and other non-pension benefits. Thirty six states set aside less than half.

Visual summary of Pension obligation funding…

And this is the good news. Behold US retiree health “benefits”, or rather, the complete lack thereof. The really bad news? New Jersey has 0.0% of its retiree health benefits funded ($71 billion needed), while California has at 0.1% of its $77 billion in funding needs “covered.”

Those who wish to find out more, which would mean everyone both politicians, those in charge, and everyone who believes they will actually get the benefits they have been promised, can read more here.

Eurozone Contagion…I mean “Bailout”: Shell Game Continues

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Posted on 31st October 2011 by PlatoPlubius in Economy

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I don’t know if my title could be any subtler about the Alice-in-Wonderland-feelings when reading mainstream news outlets’ headlines; for those avid TBP readers I digress. 

Portugal, Spain urge G20 members to help ease crisis

http://m.foxbusiness.com/quickPage.html?page=32811&content=59561808&pageNum=-1

(excerpt):

Spain and Portugal said on Saturday the euro zone’s debt crisis is a global problem, calling on the United States and other G20 powers to help contain the fallout.

 Spanish Prime Minister Jose Luis Rodriguez Zapatero urged the G20 countries least affected by the crisis to provide “urgent stimulus plans” to shield the global economy.

I emphasize, “calling on the United States and other G20 powers to help contain the fallout“  Did they just liken this to “nuclear fallout”?  I guess that would fit, that or a deadly outbreak or contagion, right?!  Fitting indeed

or Zombie Apocalypse?

What I see occurring is a global hot potato-like scenario unfolding.  Imagine the hot-potato is actually all the derivative losses, toxic assets….then compound that with the fact that these losses are mixed in with the prime-valued assets sitting on banks’ balance sheets. (rabbit trail:  these prime-valued assets could be sold during a bankruptcy scenario and possibly bought by the same criminals who created this crisis in 2008) Bank of America holding company has recently been caught trying to dump some of its losses onto the public’s shoulders by moving their acquired toxic assets from an investment firm Merrill Lynch and placing them on the depositors’ accounts at the 4th largest bank, based of market capitalization, in the United States…Ironically and a bit unnerving is that this is where the reinactment of Glass Steagall legislation would have prevented such outright fraud like the socialization of legalized casino-losses made by the banks placed on the American citizens’ backs. 

So what does this have to do with Europe?! Well, it’s a deja vu moment if you ask me.  What we now know, which is not everything mind you, is that the Federal Reserve loaned money out through TARP funds, passed through coercion by Congress, to foreign banks and corporations from South Korea to Scotland without the approval of the United States Congress, the President nor the American people.  Isn’t this what the European finance ministers are asking for?  Fool us once, shame on you, fool us twice shame on us?

Another way to explain what is happening is to liken the creation of slush funds like TARP and EuroTARP, or the FEDERAL RESERVE and all central banks for that matter, to a  global shell game.

The most complete definition of a shell game I could find, IMHO, was from http://www.yourdictionary.com/shell-game

1.  a game, typically a swindle, in which spectators are challenged to bet on the location of a small object ostensibly concealed under one of three cups or nutshells manipulated by sleight of hand.

The powers that be are simply moving the losses around, extending the day of reckoning, and placing all HOPE in hope that stimulus funds (more debt) will provide the necessary rebound time for the housing market and global GDP to stop lagging and post increases.

Which if you take into consideration this article

Euro zone inflation stays at 3 percent, could delay rate cut

http://www.msnbc.msn.com/id/39435196/ns/business-world_business/t/portugal-spain-urge-g-members-help-ease-crisis/

then will not be for a very, VERY long time.

Here are a few key points from the article dated 10/31/11:

The Organization for Economic Cooperation and Development slashed its 2012 growth forecast for the euro area to 0.3 percent from 2.0 percent in May.

Underscoring that, Eurostat said the jobless rate in the euro zone rose slightly to 10.2 percent in September from a revised 10.1 percent in August, nudged up by Spain, where unemployment reached 22.6 percent.

“The latest euro zone inflation and unemployment data might leave the hawks at the ECB concerned about underlying price pressures,” said Jennifer McKeown, an economist at Capital Economics. “The rate has now been above the ECB’s 2 percent price stability ceiling for 11 months running, perhaps suggesting that high inflation is becoming entrenched.”

You could say that inflation will be here to stay for sometime…I tend to think we will get hyperinflation due to these wreckless policies being enacted and encouraged by spineless politicians.

Whether it be fallout from a financial nuclear armaggedon or the spread of a killer debt contagion what our children and ourselves have to look forward to this next decade is a decreased standard of living, continued assaults on personal liberties through internet censorship and expansion of the police surveillance state, wars and rumors of wars, decreased wages and decreased availability of single-wage-earner salaries. Some are more to blame than others, but we ALL share some responsibility for how and why things are the way they are right now.

On that note, everyone have a Safe and Happy All Hallow’s Eve!