Sometime in the early summer of 1497, a small caravel, the Matthew, with a crew of 18 men, spied land after weeks of perilous sailing across the dangerous, then-unknown waters of the northwest Atlantic Ocean. Captained by an Italian seaman, John Cabot, whose original name was Giovanni Caboto, the ship had departed Bristol in late May with King Henry VII’s blessing to look for new lands across the ocean. What Cabot and his men saw was a rugged coastline of deep, narrow bays, towering cliffs, and soaring headlands teeming with nesting seabirds — a landscape not unlike many portions of the coastline of Britain and Ireland. Cabot was undoubtedly inspired by the success, only a few years earlier, of fellow Genoese mariner Christopher Columbus, in discovering the islands of the Caribbean. But this was no subtropical paradise peopled with friendly natives; the seas here were rough, cold, and full of icebergs carried south from Greenland. Instead of waving palm trees, the land was forested with fir and spruce, with the more exposed headlands as barren as the Arctic tundra. John Cabot had discovered the eastermost portion of North America, the huge island that soon came to be known as Newfoundland.
New York's Eric Schneiderman is the only Attorney General who doesn’t like the foreclosure settlement agreed to by the major banks behind the mortgage-backed-securities (MBS) and foreclosure (robo-signing and faked-documents) frauds that helped bring on the economic crisis in 2008. And he is feeling the heat. In exchange for a small fine, the settlement agreement would end the years-long investigations by New York and other states into the frauds, and would prevent them or any of the investors hurt by the frauds from ever bringing additional charges in the future.
But Schneiderman’s investigation into the shady practices behind the development and sale of MBSs isn’t complete, and signing off on such an agreement now would end his efforts and forever protect the banks from further public exposure to their back office practices. Danny Kanner, a spokesman for Schneiderman, said, “The attorney general remains concerned by any attempt at a global settlement that would shut down ongoing investigations of wrongdoing related to the mortgage crisis.” And it’s the “ongoing investigations” that the banks would like to end, and they’re willing to pay a token amount to make the whole issue go away.
Wisconsin Governor Scott Walker's nationally known political victory over the powerful labor unions in his state has inspired yet another state to tackle its public-employee unions. Michigan, where organized labor is perhaps more entrenched than anywhere else, is on the verge of enacting a law that would require local governments to cap healthcare spending or lose state aid. The legislation would have the practical effect of requiring school system employees to pay more of their healthcare costs.
Unsurprisingly, local government associations have criticized the measure. Ben Bodkin, legislative affairs director for the Michigan Association of Counties, commented:
The state has never been involved in negotiating our benefits before. We believe helping counties specifically with additional tools to help control their costs themselves are a good idea across the board, but we do not support mandates.
In his report to a Senate subcommittee Postmaster General Patrick Donahoe spelled out clearly why the U.S. Postal Service can’t make any money: too many cooks in the kitchen. Hamstrung and limited by rules and “stakeholders” with differing and often competing agendas, what’s remarkable is that the postal service isn’t deeper in the hole.
Heaven knows, he’s trying. Through agreements finally reached with the letter carrier unions, he has been able, over the past two years, to eliminate 12,000 carrier routes and to consolidate others, saving 20 million man hours in labor costs. He has been able to whittle away at the massive employee base, cutting about 200,000 from his payrolls over the past 10 years. He has set up thousands of Automated Postal Centers (APCs), each of which generates more revenue than 19,000 of the 31,000 current fully staffed post offices. He has come up with incentive programs for high volume users, and wants to offer shipping of lightweight parcels through regular mail. He continues with massive customer surveys to determine customer preferences on Saturday deliveries, Priority Mail deliveries, potential rate increases, and satisfaction ratings.
His challenges, however, are daunting.
When Henry Blodgett explained that the reason for the decline in the price of Bank of America’s stock was because Wall Street thinks that Bank of America is worth less — much less — than what the bank itself thinks, bank spokesman Larry DiRita responded, “Mr. Blodgett is making exaggerated and unwarranted claims … [and that] as of June 30th, our tangible book value per share was $12.65.” At the time, B of A stock was selling for $6.42 a share.
The bank’s sharp retort caught Blodgett by surprise:
I was eating a tuna sandwich when I saw the news clip across Bloomberg TV. I almost choked.
But actually I’m not claiming anything. I’m just pointing out what seems to me to be self-evident, which is that the market doesn’t believe that Bank of America’s assets are worth what they say they are worth….
Lest some folks at Bank of America actually believe that the bank’s collapsing stock price has something to do with me, I should point out that the stock [has suffered a] 50+% collapse so far this year. And an 85+% collapse in the past 5 years.
Roger Jinkinson is a British writer, and he lives in a remote Greek village on the island of Karpathos. Although the village is not immune to the meltdown of the Greek economy caused by a huge problem with sovereign debt creditworthiness, simmering most furiously in the ancient capital of Athens, 400 kilometers away, the small village has found its own way to survive the crisis.
The fundamentals of the Karpathos economy are straightforward: frugality and thrift that would perplex more cosmopolitan Europeans, hard work in labor that is practical and productive, and the replacement of a government fiat-money economy with a barter economy. Another factor has helped this rural economy work. Young Greeks, depressed by the collapsing system based upon an irresponsible government, are drifting back to places such as Karpathos, where life is not easy, but it is firmly grounded in the fundamentals of life.
Some of the older Greeks in this village either remember the mass starvation in the Second World War and the following years of the Greek Civil War, or they have been reminded of these very hard times by older family members.
Former Federal Reserve boss Alan Greenspan made headlines this week when he said gold is indeed a currency and noted that the euro was falling apart, contradicting top officials on both sides of the Atlantic.
“Gold, unlike all other commodities, is a currency,” he told attendees at a conference in Washington D.C. on August 23, saying he did not think the precious metal was in a bubble despite recently reaching a new record above $1900. And a flight to safety amid inflation fears is what’s causing soaring gold prices.
“The major thrust in the demand for gold is not for jewelry,” Greenspan explained. “It’s not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating.”
Steve Jobs, the CEO for Apple Inc., announced on Wednesday that he could no longer maintain his position at the company. Jobs garnered a reputation for being the man behind the iPhone, iPad, and other devices that virtually put Apple on the map, making it one of the most well-known companies in the world. Unfortunately, his health issues have rendered him unable to continue as CEO.
The Blaze explains, “The move appears to be the result of an unspecified medical condition for which he took an indefinite leave from his post in January… Jobs’ health has long been a concern for Apple investors who see him as an industry oracle who seems to know what consumers want long before they do.”
Jobs has required a number of medical leaves throughout the last few years as a result of pancreatic cancer and a liver transplant.
While U.S. lawmakers wrestle with high unemployment and a mounting federal deficit, 80 percent of them have no academic background in business or economics, according to a new study by the Employment Policies Institute (EPI). The study found that only 8.4 percent of U.S. lawmakers majored in economics, while 13.7 percent studied subjects related to business or accounting. The majority of Congress — 55.7 percent — studied law, government, or humanities.
"How many members of Congress have an academic background that provided them with a basic understanding how the economy works? The answer, it turns out, is not many," the study concluded.
On the Senate budget committee, five out of 23 members — about 20 percent — have a business/accounting or econ background, EPI research fellow Michael Saltsman told POLITICO. And on the House side, eight out of 37 members, or just over 20 percent, hold academic degrees in business or economics fields.
With the raising of the debt ceiling, the “official” federal debt immediately surged past a new and unwelcome benchmark: The national debt now exceeds 100 percent of the gross domestic product for the first time since the Second World War era. With the debt now at $14.58 trillion and climbing vertiginously every day even as the economy continues to stagnate, it will not be very long before the national debt reaches 200 percent and higher. In fact, with over $45 trillion owed to Social Security, Medicare, and Medicaid recipients both present and future, the actual size of the national debt is already more than four times the GDP.
As for the so-called “cuts” enacted by this Congress, the long and rancorous debate produced essentially nothing. In exchange for statutory authority to raise the debt ceiling by another $2.4 trillion, the bill provides for cuts of only $900 billion, and for a special congressional committee to come up with an additional $1.5 trillion in savings — over the next decade in projected future spending. In other words, the bill makes no meaningful cuts in the government while providing for another $1.5 trillion in debt over the next year or so — this in exchange for vague promises of a comparable amount in cuts spaced out over 10 years, while the debt ceiling is raised again and again. Such is the nature of “compromise” in official Washington.