Congressional Budget Office
The death of the middle class in America has become so painfully obvious that now even the New York Times is doing stories about it. Millions of middle class jobs have disappeared, incomes are steadily decreasing, the rate of homeownership has declined for eight years in a row and U.S. consumers have accumulated record-setting levels of debt. Being independent is at the heart of what it means to be "middle class", and unfortunately the percentage of Americans that are able to take care of themselves without government assistance continues to decline. In fact, the percentage of Americans that are receiving government assistance is now at an all-time record high. This is not a good thing. Anyone that tries to tell you that the middle class is going to be "okay" simply has no idea what they are talking about. The following are 28 signs that the middle class is heading toward extinction...
"Markets were over-priced coming into 2014," warns Sam Zell (noting that he does not believe in the Fed's wealth effect perspective on market-growth helping buying and selling decisions in the real economy), but while he sees a benign outlook for residential real estate, among his biggest concerns are "half-assed" Obamacare's "deleterious effect on the USA" and its "need to be radically changed." Supportive of Carl Icahn and his 'capitalist activism', Zell adds rather frankly that he believes Tom Perkins was correct about the "the 1%... for political convenience," and reminds Bloomberg TV's Betty Liu that "the politics of envy, the politics of class warfare are what has separated America from many parts of the rest of the world," until now.
- Goldman to Fidelity Call for Calm After Global Stock Wipeout (BBG)
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- Small Banks Face TARP Hit (WSJ)
- As Sony prepares PCs exit, pressure mounts for reboot on TVs (Reuters)
- IBM Uses Dutch Tax Haven to Boost Profits as Sales Slide (BBG)
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Earlier we reported how, in the CBO's own words, Obamacare would result in (at least) 2.5 million (soon to be revised much higher) workers departing the labor force over the next decade, that would stay there were it not for the skewed incentives provided by this latest welfare Ponzi scheme. Sure enough, it took the White House mere moments to share its canned retort seeking to control the major fallout this report generated as it goes, once again, against all of Obama's promises. From Reuters: "The White House on Tuesday refuted arguments that Obamacare reforms will hurt jobs, and said a new report from the Congressional Budget Office finds the reforms will spur hiring during the 2014-2016 period. "Claims that the Affordable Care Act hurts jobs are simply belied by the facts in the CBO report," the White House said in a statement about the report, contradicting assessments that said the CBO showed reforms will result in a cut to hours." So job losses after 2016, but before then the surge in hiring - of part-time workers - offset by mass layoffs of full-time workers as employers seek to game Obamacare. Just say that then.
When the "impartial" Congressional Budget Office first attempted to predict the impact on the US labor force as a result of the administration healthcare ponzi scheme, also known affectionately as Obamacare and less affectionately by other names, it estimated that 800,000 Americans would drop out of the labor force by 2021. Moments ago it just revised that projection, admitting that it was off by the usual 100% or so: the hit to the US labor force due to Obamacare is now estimated to so0ar to 2.3 million through 2021, and furthermore the CBO just admitted that the enrollment rate will be dramatically below the White House's baseline estimates, with 2 million fewer people signing up this year than previously estimated.
It is still all about the Yen carry which overnight tumbled to the lowest level since November, dragging the Nikkei down by 4.8% which halted its plunge at just overf 14,000, only to stage a modest rebound and carry US equity futures with it, even if it hasn't helped the Dax much which moments ago dropped to session lows and broke its 100 DMA, where carmakers are being especially punished following a downgrade by HSBC of the entire sector. Also overnight the Hang Seng entered an official correction phase (following on from the Nikkei 225 doing the same yesterday) amid global growth concerns and has filtered through to European trade with equities mostly red across the board. Markets have shrugged off news that ECB's Draghi is seeking German support in the bond sterilization debate, something which we forecast would happen a few weeks ago when we pointed out the relentless pace of SMP sterilization failures, with analysts playing down the news as the move would only add a nominal amount of almost EUR 180bln to the Euro-Area financial system. Elsewhere, disappointing earnings from KPN (-4.3%) and ARM holdings (-2.5%) are assisting the downward momentum for their respective sectors.
Alarms are going off in assorted plunge protecting offices, now that the USDJPY has breached the 102.000 "fundamental" support level, below which the Yen can comfortably soar to sub 100.000 in perfectly even 100 pip increments. The first trading day of February has brought another weaker session across Asia though some equity indices such as the KOSPI (-1.1%) are in catch-up mode given they were shut towards the back-end of last week. Over the weekend, the Chinese government published its latest official manufacturing PMI which showed a 0.5pt drop to 50.5, a six-month low, and consistent with consensus estimates. DB’s Jun Ma believes there was some element of seasonality affecting this month’s result including the fact that Chinese New Year started at the end of January (vs February last year), anti-pollution measures in the lead up to CNY and efforts to control government consumption around the holiday period. The official service PMI was released overnight (53.4) which printed at the lowest level since at least 2011. The uninspiring Chinese data has not helped market sentiment this morning, with the Nikkei plunging -2% and ASX200 once again under pressure. S&P500 futures have fluctuated around the unchanged line this morning although if support below the USDJPY fail solidly, then watch out below. Markets in Mainland China and Hong Kong remain closed for Lunar New Year.
Mr. Speaker, Mr. Vice President, members of Congress, fellow citizens:
...Make no mistake: the consequences of our actions are here. And the days of the United States as the world's dominant superpower are finished.
...No, this may not be the country that you all grew up in. But it is the state of our union... whatever remains of it.
For the first time ever, working-age people now make up the majority in U.S. households that rely on food stamps.
After a botched rollout that was universally panned, it may seem like things are finally moving more smoothly for Obamacare. But 2014 and beyond promise more turbulence for consumers, with premium tax credits likely to be another crisis.
White House Guides Down Obamacare Enrollment Target, Says To Focus On Demographics; Refuses To Give Demographic DataSubmitted by Tyler Durden on 01/06/2014 20:13 -0500
“That was never our target number. That was a target that came from the Congressional Budget Office, and it has become an accepted number. There’s no magic to the 7 million. What there is magic to is that in the month of December a million Americans signed up for insurance.”
– White House aide Phil Schiliro, interview on MSNBC, Dec. 31, 2013
The resilience that has long been one of America's remarkable traits was on display in 2013. Not only did businesses create 2 million jobs, but the struggling economy actually grew and profits and stock prices soared to near-record levels. Still, five years into the Obama presidency, the economy is grossly underperforming. Contrary to the dominant media narrative, it's not bad luck or the financial crisis to blame, but bad policies — from the $860 billion "stimulus" that didn't stimulate to the Dodd-Frank financial reform that killed lending. Last year was a challenging one for entrepreneurs and other productive Americans. No fewer than 13 new taxes were put into place. Big government now consumes one of every four dollars of our GDP and is getting bigger. Entering 2014, we face problems, including taxes and spending, that neither the White House nor Congress is addressing. In the following charts, we look at a few of the more alarming and intractable ones.
The history books will not look kindly on this neglect.
David Stockman's exclamation at the "betrayal" realized within the latest so-called "festerng fiscal" budget deal is taken a step further with Peter Schiff's head-shaking diatribe on Congress' inability to show that it is truly "capable of tackling our chronic and dangerous debt problems." So America blissfully sails on, ignoring the obvious fiscal, monetary, and financial shoals that lay ahead in plain sight. I believe that will continue this dangerous course until powers outside the United States finally force the issue by refusing to expand their holding of U.S. debt. That will finally bring on the debt and currency crisis that we have created by our current cowardice.
CBO estimates that U.S. may be able to push the debt ceiling deadline to as late as June of next year, but OECD is already freaking out about the prospect of a U.S. debt ceiling bind....