The current debt we are facing is from tens of trillions of dollars in corporate fraud left without recovery because Obama and neo-liberals suspended Rule of Law and allowed spending cuts to public programs replace the corporate fraud. Consumer confidence when an economic crash larger than the one in 2008 is around the corner because nothing was done about the banks except allowing them to triple in size? Deficit % of GDP changed because the definition of GDP was changed to include the arts and tech industries. Unemployment is not 6.1% ----that is only the number of people collecting unemployment---the unemployment is closer to 25-35%. The stock market is up because US corporations spent the entire Obama Presidency merging and consolidating into global corporations using all the stimulus money given to create jobs to create those jobs overseas. The top 1% tripled their wealth while everyone else became poorer.
WE DO NOT WANT TO PRETEND THAT A NEO-LIBERAL IS BETTER THAN A REPUBLICAN BECAUSE THEY ARE TAG TEAMS FOR GLOBAL CORPORATE PROFIT!
I shared the fact that the FED is tasked with policy-making that builds a stable economy and that keeps unemployment low and all the talk about low unemployment levels and a growing stock market is meant to make people think policy is working.
THESE FIGURES DO NOT REPRESENT EITHER EMPLOYMENT OR A STRONG STOCK MARKET AND THE ECONOMY AND JOB GROWTH HAS BEEN STAGNANT SINCE THE 2008 CRASH....
A stock market is always BULL after an economic crash----to has nowhere to go but up so the rise has nothing to do with policy. The fact that all of the wealth earned in the market went to the rich is the point. All of the stock market activity was simply merger and acquisitions with US global corporations expanding and becoming more attached to foreign corporations-----creating the global status for US corporations. This means that US corporations are now identified as global and less as American. This makes them ever more unaccountable, powerful, and places the American people in the grip of corporations not seeing the US as a sovereign nation to which they are bound. All of that grow of banks and corporations was the opposite of what we voted for in 2008-----when Obama pretended to be progressive and to hold corporations accountable and down-size the banks.
The mergers and acquisitions soared with FED free money and Congress' constant stimulus money for job creation that was simply used to expand overseas.....sure US corporations hired more people----they did it overseas.
The stock market has reach a high because the crash is coming and people are buying and trading to shed what will be a collapsing bond market. None of this is a sign of recovery----this activity happens each time a bubble is ready to burst. This article simply tries to paint a picture before elections of progress made. I like people to remember, much of that money gained in this BULL market these few years was corporate fraud that belongs to us and it tripled in value......
WE THE PEOPLE ARE NOT AS POOR AS THESE CORPORATE OUTLETS WANT US TO BELIEVE. INVESTMENT OF MONEY GAINED THROUGH FRAUD COMES BACK TO THE VICTIMS OF FRAUD!
I don't want to be a pessimist but I hear labor saying their pensions are growing again----well, the coming crash will wipe them out again only more so.....you are not gaining wealth.
Stock Market Made 20 Billionaires $81 Billion Richer Last Year
by Alan Pyke Posted on February 4, 2014 at 8:58 am Updated: February 4, 2014 at 9:03 am
"Stock Market Made 20 Billionaires $81 Billion Richer Last Year"
Twenty of the country’s wealthiest CEOs made a combined $80.9 billion on last year’s surging stock market, the Wall Street Journal and FactSet report.
Renowned investor Warren Buffett led the pack with a $12.7 billion annual gain in his portfolio’s value, with Amazon and Facebook founders Jeff Bezos and Mark Zuckerburg close behind at $12 billion and $11.9 billion, respectively. The volatility of the stock market means those on-paper gains are vulnerable to reversals of fortune unless investors sell, and the Journal notes that Buffett has lost $2.8 billion in the first month of 2014 amid a stock market downturn. While Buffett didn’t sell any of his holdings last year, many others on the list locked in some of their portfolio gains. Microsoft chief Bill Gates sold $2.5 billion worth of stock last year. Google co-founders Larry Page and Sergey Brin each sold a little under a billion dollars’ worth of stock. All three retained massive holdings in their companies after the sales.
If the market gains that made these billionaires even wealthier translated into similar gains for the American public at large, perhaps none of this would be newsworthy. But they do not. Stock market gains are great the already wealthy who hold substantial portions of their net worth in the markets, but the vast majority of the country either doesn’t have any such wealth or has it concentrated in the value of a home or other durable investment property. As a result, stock market gains make the wealth gap between rich and middle-class families even wider when they’re not accompanied by a broader economic recovery. Last year was a strong year for the stock market, but it also continued an overall market rally that’s been underway for a few years that has allowed people who were wealthy prior to the crisis to weather the Great Recession far more comfortably than working people.
It is little wonder, then, that the American middle class is evaporating. It’s not just economists saying that: Fewer Americans than ever believe they are members of the middle class, and businesses that rely on middle-class customers are struggling as product lines targeted to the rich are growing rapidly.
A wealth recovery for the non-wealthy might still be a long way off. The housing market has shown signs of stabilizing in recent years, but with millions of foreclosures over that period and millions more homeowners still underwater on their mortgages, the future of homeownership as a source of wealth is murky. Wall Street sees an opportunity in the breakdown of the traditional linkage between homeownership and middle-class prosperity and has bought up hundreds of thousands of homes in hopes of becoming the country’s landlord and extracting wealth from the new bumper crop of working-class renters. Those same workers have seen their wages fall since the crisis and have suffered a “lost decade” in earnings despite raising their overall productivity by about 25 percent since the turn of the century.
As you see below the economy has not been producing jobs------around 175,000 jobs each month are needed to stay even and this has happened very rarely in several years which is why unemployment is closer to 25-35%. This is higher than European nations with media saying they are heading for a recession. Europe still has a working media----the US has corporate hype.
The point for most is that long-term unemployment is high but even those hired often took part time or entry-level work. THE JOB MARKET IS STAGNANT FOLKS---THEY ARE LYING TO US.
Again, the reason they pretend the economy is growing and jobs are being created is that these policies by the FED and all of the stimulus money -----hundreds of billions -----need to seem they did something. The fact that the FED policy never was meant to do anything other than make the rich richer----means the FED is acting illegally. This is why the FED is called CRONY all over the world. Sadly, neo-liberals are pushing these policies on central banks all over the world meaning this same wealth inequity is happening in nations around the world. These are the new partners our US corporations have merged with to make global corporations and none of them feel allegiance to any of those nations. This is what the Trans Pacific Trade Pact is about----and why it is hated all over the world. It is simply a global corporate tribunal wanting to write laws for all countries in ways that allow profit to drive all policy.
Keep in mind that a Living Wage has income at $30,000 for an individual to be just above poverty!
THERE HAS BEEN NO GROWTH-----
Hype and Reality: American Economic Numbers
Posted: 10/09/2014 9:12 pm EDT Updated: 10/10/2014 9:59 am EDT Huffington Post
It is true that the rate of economic growth has quickened, but that rate is still low by pre-recession standards. In July the IMF actually cut the U.S. growth forecast for 2014 to just 1.7 percent, the CBO's in August was just 1.5 percent. These are not stellar growth numbers.The official rate of unemployment is falling, and jobs are coming back: but the numbers flatter to deceive. Too great a part of the improvement in the unemployment numbers reflects a shrinkage in the labor force seeking employment -- down 97,000 again in September -- leaving the overall labor market participation rate at less than 63 percent, the lowest since 1978. In December 2007, the participation rate was 66 percent. Since then, 8 million Americans have simply dropped out of the labor force. Had they stayed, the unofficial unemployment rate would be nearly double its current level. The number of long-term unemployed remains high (at 3 million) and so too does the number of those only able to find part-time employment (at 7.1 million). And the rate of job growth still falls short of the numbers required to match labor force growth.
The September job creation number (at just under 250,000) is one of only six months of such job growth since 2008. In the 1990s, there were 47 such months, one reason why "the Hamilton Project estimates we will not reach our former level of employment, when factoring in new labor-force entrants, until mid-2019."
Then there is the issue of the quality of the jobs being created: the bulk are in low-paying sectors, not in manufacturing. In September, leisure and hospitality added 33,000 jobs. Retail added 35,000. Employment in manufacturing, by contrast, flat over the last three months, added just 4000 jobs. This helps explain that most intriguing of trend-lines in the current U.S. economy: job creation rising, but wages -- for the vast majority of Americans -- remaining stuck: and where they are rising, still on catch-up from their levels in 2007. The median income may now be going up, but it is still short of its 2007 peak (of $55,589) by 3.1 percent: indeed, there were 36 states in the Union, plus the District of Columbia, that saw no rise at all in the median income of their citizens between 2012 and 2013. That was in part because overall, half of all the jobs lost during the post 2008 recession were in high-paying manufacturing and construction, while since 2010 the fastest growing employment sectors have been the low-paying accommodation and food sectors. The result: "the annual wage in sectors where jobs were lost during the downturn was $61,637, but new jobs gained through the second quarter of 2014 showed average wages of only $47,171. This wage gap represents $93 billion in lost wages."
So the squeeze on the middle-class is still on, inequality remains entrenched and poverty is still a daily reality for far too many Americans. The Center for American Progress's recent report on middle class living standards contrasted stagnant wages with rising costs. As they put it, "the costs of key elements of middle-class security -- child care, higher education, health care, housing and retirement -- rose," for a family with two children, "by more than $10,000 in the 12 years from 2000 to 2012, at a time when this family's income was stagnant."
Below you see why the US GDP is high right now------first, the GDP had added new products like entertainment and technology giving the GDP a boost.....no growth, just new categories added. The big propaganda on GDP is the soaring municipal bond leveraging as current GDP.
The reason they had to go with this cover-up is that with all of the money taken from a nation's economy to off-shore accounts and funding global corporations overseas----THEY HAVE TO PRETEND THERE IS ECONOMIC ACTIVITY AND BALANCE DOMESTICALLY----WHEN IT IS A HORROR STORY. Think what will happen in this coming crash when all these data are simply window-dressing.
'So what is happening now, is that every time a state promises more money to someone 25 years in advance, even if they wont receive anything for 25 years, it is counted as a monetary transaction on the GDP. So instead of the GDP being an indicator of our economic transactions, it will now be that mixed with our debt'.
Gross Domestic Product Definition (GDP) & New Components
May10 by Survival Guy on May 10, 2013 at 1:00 pm Posted In: Economics and Money, News Posts, Politics Gross Domestic Product Definition (GDP) & New Components from Wikimedia
GDP or Gross Domestic Product is a very simple term to understand. Why does it seem so hard? Because everyone wants you to be confused by it. Not today. I am going to explain it and some news about how it is changing.
First GDP is the measure of the dollar value of goods and services produced by an economy. It is measured a couple different ways, but they all generally come out to the same number. We can determine it using production, income, or expenses.
- Production: The production approach is to extimate the value of products and services produced by an economy by using the value of materials used to produce it, or how it transfers to analytical data within the economy.
- Income: this is basically the addition of wages, corporate profits, farming profits, investment profits, and other businesses that don’t fit these molds.
- Expenses: This one is the most commonly used. It is the sum of Consumption, Investing, Government Spending, and Net Exports.
Typically this kinda works to be an economic indicator based on the assumption that everything that someone is paid, they will spend, on everything made. We as a society actually DO spend everything. This also doesn’t measure individual quality of life, but society as a whole based on financial activity. The majority of people can become poorer, but GDP go up if financial transactions go up by some big players.
Gross Domestic Product Definition (GDP) & New Components from Wiki (click for larger)
So if GDP is an indicator of our economy, what about inflation? Well there is a GDP deflation factor that gets multiplied to deflate the current year based on the dollar value of the previous year.
Now let me tell you what has happened very recently that should concern all of us. According to Zero Hedge, we are now adding corporate promises to the number. This is what they, sometime in the future, no matter how far in the future, will, may or might pay. This also includes adding unfunded liabilities to the GDP. Let me tell you what this means for us. Before when stupid states like Illinois had a insane amount of Unfunded Pension Liabilities, it was counted as debt. What is an unfunded liability really? It is the debt that the state owes for one reason or another, and they have no idea, today or in the future, how that debt can be paid. This is the debt that doesn’t have a plan to be paid with money OR EVEN MORE DEBT. Any company that has a pension will have this money counted as income, even though it may NEVER be paid.
So what is happening now, is that every time a state promises more money to someone 25 years in advance, even if they wont receive anything for 25 years, it is counted as a monetary transaction on the GDP. So instead of the GDP being an indicator of our economic transactions, it will now be that mixed with our debt.
Debt is bad. We all know that. A huge indicator of our national wealth is the Debt vs. GDP. So if I say now that debt brings up the GDP, now the ratio gets way out of whack. Now the government gets to fudge the numbers so as we do really stupid stuff as states and a nation with debt, it actually helps our economic numbers!
On a personal level, this would be like you promising me 500 in cash 10 years from today, but counting that as your income this year, because everything you spend, you have to get paid from your job. Now go ahead and do your household budget on this number and see how the debt racks up, which in turn can make your budget grow. YAY!!!!
So when you see our economists say that the GDP is WAY UP next time around, you will know that it is all smoke and mirrors, and there is NO real wealth there.
But don’t worry guys, it will be alright. Your working class, in debt, financial advisors will take care of you. The government will take care of you. Don’t worry about the man behind the curtain. Now remember, never attribute something to intent that can be explained by stupidity.
I hope this post will push you to learn what you can about our economic state, but more importantly, to look into hard assets and skills to be utilized when people are hurting and struggling to get by. These may be the difference in poverty vs. wealth at that time.
The Real Inflation Fear - US Food Prices Are Up 19% In 2014
Submitted by Tyler Durden on 03/26/2014 10:20 -0400
We are sure the weather is to blame but what happens when pent-up demand (from a frosty east coast emerging from its hibernation) bumps up against a drought-stricken west coast unable to plant to meet that demand? The spot price (not futures speculation-driven) of US Foodstuffs is the best performing asset in 2014 - up a staggering 19%...
Is America Hiding Its True Inflation Rate, and Could the U.S. Be as Insolvent as Greece?
By Michael Suede March 5, 2012
CBS News recently reported that the rate of inflation, as calculated by the American Institute for Economic Research (AIER), clocked in at a whopping 8% over the past year. This number is in stark contrast to the relatively modest inflation rate of 3.1% being reported by the government’s Bureau of Labor Statistics.
The AIER calculates what they refer to as an Every Day Price Index (EPI). The EPI only looks at the cost of goods the average household buys every month and factors in only those costs which are subject to price fluctuation. For example, mortgages are typically stable over the course of a year so those numbers are ignored. They wouldn’t change unless a person moves or refinances, so they don’t act as a good measure of inflation from month to month.
Another measure of inflation comes from John Williams’ Shadow Stats. Williams calculates the consumer price index (CPI) using the same model as the government did prior to 1990. Williams also calculates the CPI using the same model as the government did prior to 1980. In each case, the government changed the way it calculated inflation in order to give the appearance of less inflation.
If we calculate the inflation rate the exact same way the government did prior to 1990, the inflation rate is averaging around 6.5%, which is basically double the official rate. However, if we measure inflation the same way the government did back prior to 1980, the inflation rate clocks in at a mind-numbing 11%.
In the current official model, the state makes widespread use of hedonics and substitution to hide real inflation rates. It must do so in order to keep the interest it pays on Treasury Inflation-Protected Securities (TIPS) and Social Security cost of living adjustments low. If the government used real consumer inflation rates, it would become readily apparent that the U.S. is completely insolvent in much the same way Greece is insolvent today.
If other nations should catch on to this, they would begin dumping U.S. treasuries in order to protect themselves from a U.S. default, the same situation Greece is facing today. People don’t want to hold Greek debt because they fear they will not be paid back with money that has any value. In other words, they fear that the Greek state will simply print money to make the interest payments.
It appears that this situation may already be taking place with some major U.S. creditors. The Chinese have dumped over $100 billion worth of U.S. treasuries in the month of December, which is a continuation of a trend that has been going on since April of 2011. Chinese holdings of U.S. treasuries are down $300 billion since April of 2011.
This creates a dangerous situation for inflation. If enough governments dump U.S. treasuries because they fear the U.S. is insolvent, the interest rates will skyrocket unless the Fed prints the money to buy those bonds. However, if the Fed buys the bonds, domestic inflation rates will skyrocket.
Meanwhile, corporate news media is making Obama and Wall Street sound just peachy!
Let's look at each statistic given below to see if this is really an economic recovery or is it just propaganda meant to feel good before an election. Remember, the bond market will crash soon so we know we do not have a sound economy.
9/05/2014 @ 3:46PM
Obama Outperforms Reagan On Jobs, Growth And Investing
The Bureau of Labor Statistics (BLS) today issued America’s latest jobs report covering August. And it’s a disappointment. The economy created an additional 142,000 jobs last month. After six consecutive months over 200,000, most pundits expected the string to continue, including ADP which just yesterday said 204,000 jobs were created in August.
One month variation does not change a trend
Even though the plus-200,000 monthly string was broken (unless revised upward at a future date,) unemployment did continue to decline and is now reported at only 6.1%. Jobless claims were just over 300,000; lowest since 2007. Despite the lower than expected August jobs number, America will create about 2.5 million new jobs in 2014.
And that is great news.
Back in May, 2013 (15 months ago) the Dow was out of its recession doldrums and hitting new highs. I asked readers if Obama could, economically, be the best modern President? Through discussion of that question, the number one issue raised by readers was whether the stock market was a good economic barometer for judging “best.” Many complained that the measure they were watching was jobs – and that too many people were still looking for work.
To put this week’s jobs report in economic perspective I reached out to Bob Deitrick, CEO of Polaris Financial Partners and author of Bulls, Bears and the Ballot Box (which I profiled in October, 2012 just before the election) for some explanation. Since then Polaris’ investor newsletters have consistently been the best predictor of economic performance. Better than all the major investment houses.
This is the best private sector jobs creation performance in American history
Bob Deitrick: ”President Reagan has long been considered the best modern economic President. So we compared his performance dealing with the oil-induced recession of the 1980s with that of President Obama and his performance during this ‘Great Recession.’
“As this unemployment chart shows, President Obama’s job creation kept unemployment from peaking at as high a level as President Reagan, and promoted people into the workforce faster than President Reagan.
“President Obama has achieved a 6.1% unemployment rate in his sixth year, fully one year faster than President Reagan did. At this point in his presidency, President Reagan was still struggling with 7.1% unemployment, and he did not reach into the mid-low 6% range for another full year. So, despite today’s number, the Obama administration has still done considerably better at job creating and reducing unemployment than did the Reagan administration.
“We forecast unemployment will fall to around 5.4% by summer, 2015. A rate President Reagan was unable to achieve during his two terms.”
What about the Labor Participation Rate?
Much has been made about the poor results of the labor participation rate, which has shown more stubborn recalcitrance as this rate remains higher even as jobs have grown.
Deitrick: “The labor participation rate adds in jobless part time workers and those in marginal work situations with those seeking full time work. This is not a “hidden” unemployment. It is a measure tracked since 1900 and called ‘U6.’ today by the BLS.
“As this chart shows, the difference between reported unemployment and all unemployment – including those on the fringe of the workforce – has remained pretty constant since 1994.
Source: Bureau of Labor Statistics – Databases, Tables and Calculators by Subject
“Labor participation is affected much less by short-term job creation, and much more by long-term demographic trends. As this chart from the BLS shows, as the Baby Boomers entered the workforce and societal acceptance of women working changed, labor participation grew.
“Now that ‘Boomers’ are retiring we are seeing the percentage of those seeking employment decline. This has nothing to do with job availability, and everything to do with a highly predictable aging demographic.
“What’s now clear is that the Obama administration policies have outperformed the Reagan administration policies for job creation and unemployment reduction. Even though Reagan had the benefit of a growing Boomer class to ignite economic growth, while Obama has been forced to deal with a retiring workforce developing special needs. During the eight years preceding Obama there was a net reduction in jobs in America. We now are rapidly moving toward higher, sustainable jobs growth.”
Economic growth, including manufacturing, is driving jobs
When President Obama took office America was gripped in an offshoring boom, started years earlier, pushing jobs to the developing world. Manufacturing was declining in America, and plants were closing across the nation.
This week the Institute for Supply Management (ISM) released its manufacturing report, and it surprised nearly everyone. The latest Purchasing Managers Index (PMI) scored 59, two points higher than July and about that much higher than prognosticators expected. This represents 63 straight months of economic expansion, and 25 consecutive months of manufacturing expansion.
New orders were up 3.3 points to 66.7, with 15 consecutive months of improvement and reaching the highest level since April, 2004 – five years prior to Obama becoming President. Not surprisingly, this economic growth provided for 14 consecutive months of improvement in the employment index. Meaning that the “grass roots” economy made its turn for the better just as the DJIA was reaching those highs back in 2013 – demonstrating that index is still the leading indicator for jobs that it has famously always been.
As the last 15 months have proven, jobs and economy are improving, and investors are benefiting
The stock market has converted the long-term growth in jobs and GDP into additional gains for investors. Recently the S&P has crested 2,000 – reaching new all time highs. Gains made by investors earlier in the Obama administration have further grown, helping businesses raise capital and improving the nest eggs of almost all Americans. And laying the foundation for recent, and prolonged job growth.
Deitrick: ”While most Americans think they are not involved with the stock market, truthfully they are. Via their 401K, pension plan and employer savings accounts 2/3 of Americans have a clear vested interest in stock performance.
“As this chart shows, over the first 67 months of their presidencies there is a clear “winner” from an investor’s viewpoint. A dollar invested when Reagan assumed the presidency would have yielded a staggering 190% return. Such returns were unheard of prior to his leadership.
“However, it is undeniable that President Obama has surpassed the previous president. Investors have gained a remarkable 220% over the last 5.5 years! This level of investor growth is unprecedented by any administration, and has proven quite beneficial for everyone.
“In 2009, with pension funds underfunded and most private retirement accounts savaged by the financial meltdown and Wall Street losses, Boomers and Seniors were resigned to never retiring. The nest egg appeared gone, leaving the ‘chickens’ to keep working. But now that the coffers have been reloaded increasingly people age 55 – 70 are happily discovering they can quit their old jobs and spend time with family, relax, enjoy hobbies or start new at-home businesses from their laptops or tablets. It is due to a skyrocketing stock market that people can now pursue these dreams and reduce the labor participation rates for ‘better pastures.”
Where myth meets reality
There is another election in just eight weeks. Statistics will be bandied about. Monthly data points will be hotly contested. There will be a lot of rhetoric by candidates on all sides. But, understanding the prevailing trends is critical. Recognizing that first the economy, then the stock market and now jobs are all trending upward is important – even as all 3 measures will have short-term disappointments.
There are a lot of reasons voters elect a candidate. Jobs and the economy are just one category of factors. But, for those who place a high priority on jobs, economic performance and the markets the data clearly demonstrates which presidential administration has performed best. And shows a very clear trend one can expect to continue into 2015.
Economically, President Obama’s administration has outperformed President Reagan’s in all commonly watched categories. Simultaneously the current administration has reduced the deficit, which skyrocketed under Reagan. Additionally, Obama has reduced federal employment, which grew under Reagan (especially when including military personnel,) and truly delivered a “smaller government.” Additionally, the current administration has kept inflation low, even during extreme international upheaval, failure of foreign economies (Greece) and a dramatic slowdown in the European economy.
[Update 10/4/14 - August jobs report revised upward to 180,000 as September jobs creation returns to 248,000 lowering unemployment rate to 5.9% - lowest unemployment number in 6 years.
Update 10/16/14 - Initial claims for unemployment drop to the lowest level in 14 years - all the way back to 2000 - indicating an improved economy, additional jobs and fewer people looking for work.]