Financial news: 12/29/2011

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• IBD: U.S. Economy to show sluggish growth in 2012

• Fox Business: 2011 cost $350 billion in disasters such as Fukushima

• Fiscal Times: Political gridlock could cost economy 1.5% in GDP

• NYT: Wisconsin Judge challenges SEC decision, favors public interest

• DOL: 381,000 unemployment claims were filed the week ending 12/24

• S&P: Case Schiller Index shows October decline in home prices of 1.2%

A look at financial freedom

Everyone knows how to gain financial freedom the hard way, but what isn’t quite so evident, is how to gain financial freedom quickly, easily and with no risk i.e. effortlessly. However, societal structure is not designed for this, but rather to the contrary. Perhaps if all humans were wealthy no one would work. Even so, how does one gain financial freedom in 30 words or less? i.e. with a straight answer that doesn’t wander off into the world of rhetoric, or semantics.

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Since 30 words have already passed, the answer to that question should now be evident. That is to say, the answer to this question is, if financial freedom doesn’t already exist, chances are it can’t be found in 30 seconds or less. That’s a reality hurdle that can make attaining financial freedom that much more possible. Having said that, before explaining how to gain financial freedom, it is important to first define what financial freedom is as it is a loaded term that differs based on perception of what it is.

For one person financial freedom may be living a life of luxury without having to work, but for another it may simply mean being free of the concept of money altogether. The path toward financial freedom is different for both types of financial freedom. Being free of the idea of money altogether is actually harder to do because it is such a prevalent aspect of so many economic systems.

When effort is thought of as overcoming personal, cultural or economic friction, that effort is at least somewhat determined by the level of that friction. For example, one who does what comes naturally i.e. out of  un-manipulated personal choice while earning money doing so, can be thought to be making less effort than one who does something that earns money against his or her will. In such case, the former of the two makes less effort to gain financial freedom because the path to that financial freedom is more effortless. Thus, the first step toward gaining financial freedom effortlessly is to do what comes naturally.

For the person who seeks to avoid training his or her mind to acquire financial freedom, a more literal, and even more effortless notion of financial freedom is alluded to. The lottery winner almost fits this criterion, but is accompanied by the one key caveat of low probability. Thus, how to achieve financial freedom with high probability in addition to minimal effort is the question. The answer to this question is to find the financial opportunity that has high probability of success, is accessible, and requires little or no effort to implement.

Naturally, the next question in how to gain financial freedom might be, if financial opportunity is required, how does one find financial opportunity. Now the notion of financial freedom is gone, and instead replaced by the more accurate question of how to gain financial opportunity that pays. The easy answer is of course to look, but this would be followed up with the question, where does one look? The answer to this question varies, but can be quickly answered by saying, look where money is most easily acquired, but think in a way that is not designed for the macro-economic mass.

Financial News 12/23/2011

• Bloomberg: House passes two month tax cut extension, Senate votes
• BEA: Disposable personal incomes rose  less than .1% in November
• NYT: Economic data a false dawn and temporary reprieve
• MW: DJIA rallies through 12,200, Oil near $100/brl, Dollar Index near 80
• Reuters: European banks still under threat of credit downgrade
• Moody's: Low savings bad for growth, Egyptian bonds downgraded to B2

Season's Greetings From Moneycation

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How to pay bills

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Prioritizing expenses can reduce the cost of debt while also maintaining essential services needed for day to day household functioning. Knowing how to prioritize expenses can also help ensure adequate retirement planning and avoid having important services cut off.

In order to prioritize expenses, it is important to first have a budget that assigns portions of money to the expenses before they are paid. This budget can help maintain consistency in financial planning and facilitates the prioritizing of expenses.

• Utilities and insurance

Without utilities and insurance, living becomes difficult and potentially dangerous. Without the basics of day to day life, performing income generating tasks, and maintaining focus on other priorities is challenged. For this reason, it makes sense to first pay those expenses that allow one to function in such a way that other debt payments are more likely to be made or facilitated.

• Low balance accounts

A debt prioritization technique advocated for in the ‘Military Spouse Finance Guide’ is snowballing debt. This method starts by paying the largest amount to the smallest debt, then rolls over the funds used to pay that expense into the next largest debt. The theoretical affect of snowballing is with each consecutive debt that is paid off, a larger amount of money becomes available to pay off larger debts.  

• Revolving credit

Revolving credit has a greater affect on credit rating than installment debt such as auto loans according to the Fair Isaac Corporation, paying down revolving credit such as credit cards has the greatest impact on credit score in terms of debt payment. Due to this, and the idea that credit cards often tend to have higher interest rates than auto loans and other types of installment loans, prioritizing credit expenses first can be a good idea.

• High interest debt

Naturally, high interest debt should also be paid. Even if it is just minimum payments, keeping this type of debt in check and on slow balance decline is useful in reducing overall debt and improving credit score. If this type of debt only constitutes a small fraction of total income and a large amount of total expenses, paying it off slowly helps maintain a credit history.

• Retirement expense

Saving for retirement may be put off and neglected for more immediate financial concerns. To an extent this makes sense, but eliminating retirement expenses from a budget altogether can be a bad idea. The earlier one starts contributing to a retirement fund, the less money is needed to include this expense among financial priorities so it makes sense to start early even if it means paying debt off more slowly.

Another key factor in properly prioritizing debt is managing new expenses. If the U.S. Bureau of Economic Statistics is a valid indicator, the U.S. national saving rate ranged between approximately one and seven percent between 2004-2010. This means a high rate of expenditure is prevalent throughout the country and that prioritization of debt can be helpful.

In light of national savings levels, new expenditures might best be avoided in order to lower debt to income, and credit to credit limit ratios. Since many people have higher debt and credit ratios, the task of prioritizing debt is made more difficult. However, if no new expenses are taken on, and expenses are less than 99 percent of total income, the prioritization of expenses can be beneficial when budgeted for accordingly.

Financial News 12/22/2011

 Source: Bureau of Labor Statistics

• BLS: 3.5 million to be affected by congressional delay of EUC & EB
• BLS: 364,000 jobless claims were filed the week ending
• BEA: 3Q 2011 spending on travel and tourism dropped 1 percent
• BEA: 3Q 2011 GDP revised down to 1.8% from 2%
• Bloomberg: British securities dealers stung by crisis and competition
• Courier Mail: 33% of South-Asians are forced to pay bribes
• Zero Hedge: Derivatives market will cease to exist per Mark Faber

Why bi-weekly paychecks are better

U.S. Civilian Employment Compensation 2002-2011

Source: Bureau of Labor Statistics

Being able to see more earned income sooner is usually advantageous to seeing income later. Although biweekly literally means twice per week, the term is often used to refer to every two weeks. Several benefits exist to receiving bi-weekly paychecks, and those advantages can save money, reduce potential scheduling conflicts and even earn more money.

26 checks per year

Since bi-weekly is not twice a month, but every two weeks, there are 26 paychecks a year on this type of schedule. This means for two months of the year, three paychecks will be given to people getting paid on a bi-weekly basis. For example, if a year beings on January 1, by July the first day of the most recent pay cycle falls on July 1st, making the 2nd on July 15, and the third on July 29. The pattern repeats again with three biweekly paychecks in December.



Available funds

Although paychecks all amounts to the same income total, it can be helpful to have a continual cash flow. In other words, an advantage of bi-weekly paychecks is a stream of income that is more frequent allows one to have more personal financial liquidity. Moreover, insufficient funds can cause checks to bounce, or overdraft fees to be triggered causing more cost than benefit.

Bill paying

With more liquidity, bill paying is often better facilitated making another advantage of bi-weekly paychecks.  Since bills may become due on separate dates throughout a calendar month, receiving bi-weekly paychecks can help ensure there is a new money installment to pay those bills with varied due dates. Although sometimes some loan bills can be rescheduled with a bank, this process generally cannot be repeated. The advantage of biweekly paychecks is that alternative solutions like this are less needed.

Budgeting

Since budgeting involves managing money in such a way that bills are paid on time, and that money is allocated optimally, having a bi-weekly paycheck can also be beneficial to a budget. For example, without bi-weekly pay checks, everything is left to either the beginning or end of the month. This can create a greater workload for which time management also becomes essential. With bi-weekly paychecks, time for budgeting can also be spread out.

Yield

An additional advantage of bi-weekly paychecks is more time for money to compound. For example, $100 placed in an account earning four percent compounded continuously on the 14th of January, and repeated every four weeks throughout the year has two extra weeks of compounding per month. Moreover, the yield earned on those deposits will be higher than it would be had the same amount of money from a monthly paycheck been placed in the exact same financial instrument.

Budget alternatives for saving money

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If cash flow isn't a problem, yet negative monthly balances are, having no budget isn’t necessarily the problem. The core problem in some instances where having no budget isn't the root cause of  saving too little could be spending too much.  In such an instances simplified living is one way to save money without a budget and can be sustainable according to June, 2010 report in USA Today.

Budgets are not an absolute necessity when it comes to saving money because something more important underlies the capacity to save, specifically personal cash flow. The following non-budget saving tips may be of utility. In addition to saving money, these tips can also save time because money saving methods such as budgets often require account entries in financial software or a financial record keeping system.

Reassess expenditures

Reassessing expenditures can help save money without a budget. This involves reviewing your financial profile and seeing where the money pits and vacuums are. If there’s something like a low mileage vehicle, or high credit card debt using up most of your cash, it may be possible to approach the debt in a different way in order to increase savings. For example, with a high credit card debt, you could refinance at a lower rate, and reduce monthly payments in order to save more.

Calculate mentally

If you can add, subtract and multiply, you can probably calculate mentally as well. Keeping a mental tally of accounts and expenditures isn’t that much different from remembering how many eggs are in your fridge, or when the milk expires. Similarly, knowing which bills are paid and which aren’t will help avoid late fees and save unnecessary charges.

Minimize numbers

Remembering a lot of numbers takes mental capacity. Minimizing mental calculations, account balances and transactions can be helpful to the overall goal of saving money without a budget. For example, the one number method just uses a single number, the balance of your checking account. By remembering what the balance is, you will be aware of how much extra money you have for saving after all expenses are paid.

Time finances

Another way to save money without a budget is to pre-pay your savings account. This is also referred to as paying yourself first. For example, before you spend money on anything, transfer money to your savings account, and you’re done. The reason why this method works is timing. By transferring money before paying bills, buying things or investing, savings can consistently increase if this practice is periodically continued without withdrawals.

By reducing the amount of goods and services in your life, costs go down regardless of whether or not you have a budget. For example, more expensive cars can cost more in property insurance than some used cars, and too many paid memberships or services lower balances. To save money without a budget it can help to avoid overspending and increase savings.

Financial News 12/21/2011

• Chicago Tribune: Private equity lenders may benefit from banking policy
• Reuters: Chamber of Commerce hacked; Chinese servers suspected
• Business Insider: Senate goes on vacation after House rejects bill
• Bloomberg: Refinancing refinanced commercial mortgages is a hazard
• MarketWatch: 523 European banks request €489 billion in funding
• WSJ: Euro LTRO addresses short-term financing, not solvency

Obstacles to financial planning success

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To claim a single reason why some people fail to achieve financial freedom would be questionable, as semantically, we don't really know 'who' of the 'some' we are referring to. However, taken less literally, and more approximately, there are several reasons why some people fail to achieve financial freedom. These reasons include far more than closely correlated financial concepts such as arbitrage investing, effectively rolling over retirement plans, and taking advantage of available tax deductions.

Priorities

Some people fail to achieve financial freedom because priorities can compete among each other. For example, if one has a top priority of restoring a car, the cost of that restoration must be lower that than the top priority unless the top priority is amended to include restoring a car within a budget.

The example of automotive restoration accents the importance of integrating priorities so they do not conflict. Thus budgeting, and financial planning ideally go hand in hand with life goals so together they all improve and in the case of money, lead to financial freedom.

Skill

Growing money is a skill that more often than not requires adeptness at applying a certain amount of know how. Basic principles of money management are essential to achieving financial freedom, but more may be needed to achieve financial freedom. The inability to execute financial skill via  an effective financial plan is another reason why some people fail to achieve financial freedom.

In other words, people who fail to achieve financial freedom may benefit from a flexible, productive, intuitive and demonstrable financial plan. If the results of that financial plan cannot be measured as consistently moving toward financial freedom within an applicable time frame, then evidence of a strong financial plan is questionable.
a xenophobia. How will you eat yours?

Adaptability

Adversity can have a dramatic affect on financial goals, even those with financial know how. For example, a successful financial manager who loses a job, a sudden unpredictable tragedy in life, or an error in what may otherwise be a good financial plan can all have a negative affect or result in set backs of the goal of financial freedom.

To deal with adversity it is good to be able to have risk tolerance, accept loss, and have financial resilience. Being resourceful, adapting to change and seeing opportunities in situations where there seems to be none are ways to work toward financial freedom during times of adversity.

Capacity

Different people have varying capacity to obtain financial freedom. Capacity includes skill, but is not limited to skill. Capacity to achieve anything requires focus, understanding, willingness, and circumstance. It represents the overall probability of achieving financial freedom.

Not having the capacity to achieve financial freedom is a major obstacle to that goal. Some people might not achieve financial freedom due to this. Capacity also includes things like leverage, low costs, career, birthright, and other measures of financial strength. Capacity is not unattainable in most circumstances but is ideally built before implementing a financial plan leading to financial success.

All the above reasons are rather around the point of direct cause and effect relationships that build wealth. That is to say, they are often one or more step removed from actual financial relationships such as consistently investing in an IRA or maintaining a budget and growth investing via a well-optimized financial portfolio. The above are reasons why people don't get to the point of being able to optimize their portfolios that are in some cases among the last steps to financial freedom.

Financial News 12/20/2011

• CNBC: Southwest Airlines pilots have best 401(k) nationwide
• Bloomberg: FBI using wiretapping to nab insider trading
• Telegraph: IMF Chief states world is at a dangerous juncture
• FastMarkets: IMF to receive $195.6 billion in funding from Eurozone
• Options Queen: Home security from dogs at daycare threaten insurance
• UK Guardian: Spain plans corporate tax cuts for 2012; bond yields also fell

Financial News 12/19/2011

• Reuters: Congressional action needed to prevent 2% payroll tax increase
• IOL: Basel Banking Committee seeks higher international bank reserves 
• UK Guardian: Britain hesitates on £25 billion IMF loan for Eurozone
• NYT: Saudi Prince spends $300 million on Twitter investment
• Bloomberg: Loan default ratio in Spain has reached 7.42%
• The Economist: Indian GDP growth has declined 3.1-4.1% to 6.9%

Financial News 12/16/2011: FDI Comes From a Small Basket of Countries

Capital investment inflows into national Treasury securities and via foreign direct investment are money trails that serve as indicators of investor confidence and interest. Both China and the U.S. have experienced recent declines in capital inflows, ABC News recently reported  a large decline in the purchase of U.S. Treasury Securities; additionally, Russia plans on dumping more of its U.S. Treasury holdings to help out Europe. The net purchases of U.S. Treasuries in October, 2011 was $7.5 billion per Marketwatch.

The majority i.e. 84 percent of U.S. FDI or Foreign Direct Investment is accounted for by a small basket of just eight countries per the U.S. Department of Commerce. Since the U.K., Japan and France are among the top four, capital investments in those countries could negatively impact the U.S. as FDI is a contributor to domestic job growth. Interestingly, Switzerland is the highest supplier of FDI into the U.S.

The U.S. is not the only place that has experienced a decline in foreign capital inflow; China, the world's second largest economy, and second largest recipient of foreign direct investment experienced an $8.76 billion decline in its FDI per Bloomberg. However, according to the United Nations Conference on Trade and Development, China's 2010 FDI was over $106 billion, and according to China Daily, the country is on track for a year over year rise as its 11 month 2011 FDI is $103.77 billion.

The collection and tabulation of FDI data varies according to Jimmy Zhan in a research report prepared for the World Association of Investment Promotion Agencies. This is evident in the World Bank FDI data for China which places 2010 Net FDI at $185 billion, higher than the UNCTD data.

• BLS: November consumer prices unchanged, 12 month all items up 3.4%
• Reuters: Tests using capital requirements reveal 47 Eurozone bank failures
• Marketwatch: Foreign banks borrowed $54 billion from the Federal Reserve
• Bloomberg via S.F. Chronicle: Euro-Area PMI contracting in December
• Bloomberg: Britain's veto of E.U. Treaty was to protect its financial industry
• Federal Reserve: U.S. industrial production declined .2% in November

Financial News 12.15.2011

• DOL: 366,000 jobless claims were filed in the week ending 12/10/2011
• BEA: U.S. 3Q account deficit declined on lower imports
• Bloomberg: Federal Reserve withholds additional aid to European banks
• Reuters: White House pressures legislators to resolve budget issues
• Marketwatch: HSBC Chinese PMI rises to 49 from 47.7, still in contraction
• Businessworld: Indian inflation rose to 9.11% in November

Financial News 12/14/2011: Chinese Economic Policy is 'Counter' Protectionist

China has a protectionist economic policy. This is evident in a recent tariff hike on U.S. auto manufacturers, that according to InAutoNews, increases the tariff cost of exporting vehicles to over 25 percent. This is on top of an already tough business environment that deliberately targets foreign businesses with regulatory violations per Bloomberg. Intellectual property violations, a pegged Yuan-Renminbi, and repeated cyber attacks do little to remedy the economic challenge.

Of course what country is not protectionist at some level. Every state has its economic interests and that includes the U.S. auto industry which was bailed out via congressional intervention along with the financial system via the Troubled Asset Relief program (TARP). Perhaps this is China's way of saying, "touche" to these policies and Department of Commerce anti-dumping regulations. Yet, despite having been 'targeted' for regulatory violations, Walmart is one of China's best customers and a large importer of Chinese products.

• Marketwatch: The dollar index reached new six-month high
• Reuters via CNBC: NAR double counted home sales since 2007
• Bloomberg: Congress wrangles on payroll-tax cut extension
• Reuters: Italian bond yields reach new highs, and higher cost
• BLS: 3.27 million job openings were listed in October
• U.K. Guardian: £30 billion U.K. bill for IMF Euro-zone bailout loan

Financial News 12/13/2011-Federal Reserve Bank Meeting Today

Today the Federal Reserve Bank is scheduled to meet. According to the Reuters news agency, additional monetary stimulus will be side-stepped due to economic recovery in the United States. Some Federal Reserve decisions can be short lived in order to adapt monetary policy to changes in the economy. 

The Federal Reserve Board has a number of credit and liquidity programs such as central bank liquidity swaps that it uses to achieve monetary goals such as international banking regulation. Alternative monetary tools used by the Federal Reserve include partially undisclosed lending programs per Bloomberg. Moreover, even if direct economic stimulus is not implemented, this does not necessarily mean action via these alternative programs will not take place. 

• U.S. Treasury: Government overspent in November by $137.3 billion
• Bloomberg: Gingrich spending plan calls for $1.3 in deficit spending
• U.S. Census: $399.3 billion in November retail sales; short of expectations
• NFIB: Small business optimism about capital outlays increased 
• Bloomberg via FP: Forecasters predict drop in the Euro to $1.3145
• NYT: Occupy movement and others advocate 'Robin Hood Tax'

Financial News 12/12/2011

• Bloomberg: Secretive Federal Reserve bank program stirs controversy
• CNBC: Occupy movement seeks to blockade west coast ports
• The Hill: Congress makes attempt at self-regulation of insider trading
• Moody's: EU Sovereign credit ratings to be 'revisited' in Q1, 2012
• Reuters: Italian bond yields are unsustainable
• The Economist: Fiscal discipline and joint-liability essential in Europe
• MediaCorp: Japanese consumer pessimism indicator is high at 38.1

Financial News 12/09/2011

The U.S. trade deficit shrank due to a larger decrease in imports than exports. Three large French banks have been downgraded by Moody's, England chooses not to partake in a new European Union deal and economic indicators from Germany China, and Japan point downward.

• BEA: U.S. imports declined more than exports; trade deficit shrinks
• MW: Britain rejects Euro-deal, no treaty change, but closer fiscal union
• Moody's: Societe Generale, one of Frances largest banks downgraded to C-
• Bloomberg: German exports fell 3.6% in October
• WP: Chinese inflation slows to 4.2% with slowing economy
• Reuters: Japanese 3Q economic growth revised down 10 basis points

Tens of Thousands of Americans debilitated by federal student loan debt

American students and graduates are heavily indebted to the government and financial institutions for debt incurred via investment in education. According to Consumer Reports, the total amount of this debt exceeds $1 trillion an amount approximate to 7 percent of the nations annual gross domestic product. Federal Reserve Bank data indicates this $1 trillion in national student loan debt accounts for 40.7 percent of total consumer debt which includes revolving credit, real estate mortgages, and car loans.

President responds, but not enough

A petition to the Whitehouse has been signed by over 32,000 debtors demanding action to a real problem. This is just one of several large scale efforts to shed light on the issue. President Obama addressed this nationwide problem of unsustainable student loan debt and interest. A recent  executive order allows student loan repayment terms for new graduates to go in effect in 2012, and eases income contingent payment plans to 10% of discretionary income. It also shortens terms of forgiveness to 20 years of repayment. The San Francisco Chronicle outlines additional details of these changes, however what these changes do not allow are relief to students already in repayment according to Mark Kantrowitz of the New York Times. Moreover, graduates in repayment are subject to a generational law that serves to facilitate student loan repayment under far different economic conditions, from a different time.

Federal law endorses double standard

A double standard also exists between how the government loans and private debt are handled. Essentially, government loans claim sovereign immunity from debt that would otherwise be able to be restructured or forgiven under Chapter 11 and Chapter 13 bankruptcy law. The purpose of these latter laws are to help individuals and families bogged down in unrealistically high debt rebuild their lives and contribute to a health economy with manageable bills rather than sink in to a sea of eternal repayment of interest that subjugates individual and small business development via financial dysfunction. Additionally, if a graduate in repayment loses a job or enters forbearance for medical reasons, the 25 year conditional repayment forgiveness resets. In other words, these loans can't  ever be forgiven is borrowers don't have a perfect life that doesn't cause interruptions in their loan repayment schedule; it's unrealistic.

Lender terms and practices are oppressive

Lower interest rates via consolidation do help, but lenders such as Nelnet, Inc. that claim to comply with federal regulations are not required to do anything more. For example, Nelnet, Inc. claims no correspondence is legally required to warn a secondary owner of a consolidation loan that reapplication for income contingency plan is about to expire. If the primary loan owner does not inform the secondary owner, then any bonus interest savings acquired from years of on-time repayment are automatically disqualified upon late payment. These small changes can vastly affect a student's ability to repay their loan both functionally and realistically with little consequence to lenders.

Financial News 12/08/2011

• BLS:  381,000 unemployment claims filed for the week ending 12/03/2011
• BBC: 132 economic protestors arrested in D.C. and San Francisco
• Reuters: French credit rating downgraded to 'A-' by Chinese rating agency
• MarketWatch: Bank of England leaves interest rates unchanged at .5%
• ICI: Investors withdrew $17.560 million from U.S. equities in November
• ECB: Fixed rate lending facility lowered to 1%

Zero Hedge Website Review

Zero Hedge, some describe it as a fiscal doomsday cult led by a copyright infringing ex-securities dealer. Others refer to it as a good source of financial research. In terms of information, Zero Hedge's Manifesto is to improve upon the media by liberating 'oppressed' information and provide skeptical critique of events among other things. The view of Zero Hedge appears to be that the Internet is a better place because of it since the information it presents provides insights into financial events that are occasionally reported in a less revealing analytical light.

Who is Tyler Durden?

Tyler Durden is the name of the publisher on the site and a movie character. The author's picture, up to this point in time, is a an image of Brad Pitt's character in the movie 'Fight Club'. There is one post in the Zero Hedge blog by a person named 'Cornelius', however the blog 'Naked Capitalism' and New York Media, LLC refer to a former Securities Dealer named 'Daniel Ivandjiisk' as openly having stated to a hedge fund publication that he writes for Zero Hedge, but not as the sole author. Judging by the number of in depth posts, including guest posts per day, there is reason to agree with that statement.

What does Zero-Hedge mean?

Zero hedge is referring to the fact that on a long enough time horizon, risk off is the name of the game. In other words, we all die, therefore all attempts at risk management ultimately fail. Steven Hawking has a similar reasoning regarding the fate of the Earth, but not necessarily the human species as it at least has a chance of buying time if it can be relocated to other planets per  'Big Think'.

History

Zero Hedge began as a blog in July 24, 2009 with a post about the challenges facing legacy media products. The New York Times is an example of a legacy media product. The blog then goes on to dicuss Max Keiser, former Wall Street Broker and host of Russian Television's Keiser Report. Zero Hedge also favors the use of the word 'kleptocracy', used by Keiser to refer to those in power who wield authoritative decisions in an effort to steal. By July 29, 2009, only five days later, the Zero Hedge blog moved to the website http://www.zerohedge.com.

Copyright Infringement

Copyright infringement and violation of registered trademarks are apparently not an enormous concern for Zero Hedge.  There are a lot of posts on the website, whether or not all the texts, documents, slide shows, videos and images comply with the DMCA, fair use or applicable copyright licensing is up for debate and would take some research. In 2009 cease and desist notices were sent by Merrill Lynch to 'Tyler Durden' per the Citizen Media Law Project. For a publisher so bent on kleptocracy, Durden has a double-standard that echoes or hints of a similar agenda to WikiLeaks founder Julian Assange. Only thing is, Assange's content is probably copyright protected per  Plagiarism Today. Perhaps the Law Offices of Jeff Martin OR Goodman Acker could help 'him' out when they're not working on traffic claims as they both have license to the exact same commercial and attempt to give an  intimidating impression.

Where is the Zero-Hedge Server located? Switzerland, and the IP address for the website  is 178.209.48.14. Tyler Durden may even knowingly or unknowingly be a Russian propaganda agent bent on undermining the confidence of investors in U.S. markets. That is 100% pure tongue in cheek speculation based on symmetries in anti-banking themes and terminology between Zero Hedge and the Keiser Report. The Zero-Hedge Google website traffic rank is 6 of a possible 10, and it has over 12,000 backlinks per Alexa Website Traffic Stats.

Financial News 12/07/2011

• Bloomberg: Obama advocates ending 'deficit of trust'
• Forbes: Citigroup to layoff 4,500 and pay $400 million for it
• Reuters: France to lose 'AAA' credit rating in 3 months per economists
• UK Guardian: Euro debt saga continues with no clear resolution
• AP: China slowdown evident in housing, manufacturing and exports
• Nasdaq: Europe pushing for Iranian oil embargo, OPEC concerned

Financial News 12/06/2011: Why Keynesian Economics is Getting Bashed

A key premise of Keynesian economics is that government spending spurs growth per the Cato Institute. Many argue this is little different than throwing good money after bad. Pointing to the Japanese economy as an example, the Wall Street Journal highlights how a decade of government stimulus did not amount to a whole lot of GNP growth.

Perhaps what anti-Keynesian economics is overlooking is what will happen if stimulus spending does not occur. Government spending may not grow an economy by much, but it has prevented it from getting worse. However, as Chris Edwards of the Cato Institute suggests, long-run fiscal reforms are a suitable context with which to provide extended payroll tax cuts, a form of economic stimulus. 

The reasoning behind calls for fiscal responsibility and anti-Keynesian sentiment is the undeniable growing national debt; a debt that the 'Congressional Super-Committee' failed to come to terms with per USA Today. That's just the fiscal side of things; the Federal Reserve Bank has also been spending to buy with massive balance sheet expanding bond purchases, loan loss backstops, commercial paper funding, 'QE1 and QE2' etc. The CNN Money 'Bailout Tracker' illustrates just how massive the spending has been.

The U.S. no longer controls more than 25 percent of global manufacturing, as evident in U.S. manufacturing employment data in a Reason Foundation report by Anthony Randazzo. Additionally, U.S. GDP as a percent of Global GDP translates to increased competition for global market share from Asia according to data from the International Monetary Fund.  In other words, U.S. national wealth is not growing like it used to, but spending like it still is continues.

• Reuters: S&P ratings agency puts Eurozone on credit watch
• ISM: November non-manufacturing index slowed by .9%
• Zero Hedge: Euro zone banks borrowed €252 billion to lose .35%
• Asia Development Bank: East Asia growth rates to moderate
• The Economist: Britain entering recession despite fiscal policy
• Reuters India: Chinese service sector index declined 1.6% in November

Financial News 12/5/2012-Patronage Declines Proportional to Income Gap Increases

Money buys a lot, including people and when that fiscal patronage starts to slip, things like the Occupy movement start to occur.  It is clear that income disparity is on the rise, it has been noted time and time again, year after year. The Organization for Economic Cooperation and Development (OECD) is among the more recent of institutions issuing an official statement on the matter. Specifically, the OECD reported this gap is at a 30 year high among the 34 OECD countries.

It would seem membership in the OECD is to income disparity, as membership in Facebook is to friendship with Mark Zuckerberg. In other words, by definition, economic cooperation means improving economies, not the lives of all people who constitute those economies. In this context, crying foul is a mere complaint about a subscription to capitalism, but are the terms of that subscription negotiable. The Occupy movement seems to think so, and wants to renegotiate the social contract.

• Reuters: U.S. Fed and 17 Euro-banks may fund IMF loans
• Live Leak: Occupy D.C. 'People's Pavilion' torn down
• WSJ: Government corn crop statistical forecasts are faulty
• OECD: Income disparity an issue to be dealt with by governments
• AP: Austerity cuts spreading to Italy via PM proposal to cut $40.5 billion
• Bloomberg: Spanish economy slowing per industrial and service data

Financial News 12/2/2011-Population Growth Outpaces New Hiring (Corrected)

The United States has a population of 312.705 million people per the U.S. Census Bureau;  With what The Economist calls a low birthrate of 4 million babies being born per year, in 18 years, they'll start entering the work force. Thus at that rate, 333,333 will need to be created each month, well below the November job growth rate of 120,000 per month. The outcome of this is reflected by a recent New York Times story that characterizes the plight of children entering a nation with less to go around.

Government employment data is conflicted as well. About 1.909 million work for the civilian government per the Bureau of Labor Statistics.  According to the St. Louis Federal Reserve Bank, via The Wall Street Journal, the 'public sector' has shed nearly 5 percent of its jobs since its 2009 peak. Yet, the Bureau of Labor Statistics claims Federal Government employment is forecast to increase by 9.5% by 2018 despite a proven unsustainable annual deficit spending. 

• BLS: Unemployment rate fell to 8.6% with hires of 120,000
• Reuters: American Airlines employees could lose up to $1 billion 
• OccupyWS and OT conduct Occupy Broad St. and buy nothing day
• Bloomberg: European bond auction showed lower yields
• CNBC: No short-term fix for Euro-debt crisis per German Chancellor
• ET: Indebted nations have less room to maneuver in stemming new crisis

Financial News 12/01/11-Bank of England Governor Sounds Alarm

If the Governor of the Bank of England saying the debt crisis in the Eurozone will cause damage to governments and is evident of systemic crisis is not enough, then perhaps the alarm needs to be louder even though it needn't be. Mervyn King as he is known said European governments have a solvency problem per the Wall Street Journal. If Eurozone governments decide to go all in via fiscal and political union, the strength of Germany will calm the fear that has been causing bond investors to charge higher yields for increasingly downgraded government debts, but will that happen? and how soon?

Many market observers and economists stress the key distinction in the current crisis is between monetary and fiscal decision making. Moreover, the first of these addresses funding and the latter is more a function of operational efficiency. Liquidity from bond purchases, and interest rate adjustments are monetary policy decision that affect how much money is available to financial systems. Moreover, the problem according to Mr. King isn't credit limit as much as the excessive use and abuse of that credit limit for the purpose of running governments ineffectively.

On other side of the pond things are better, but not swimmingly so. National Public Radio surveyed economists only to discover U.S. economic growth is anemic. This is somewhat echoed by a Bloomberg report on its own survey of economists. Even slow economic growth is better than none, however with many Eurozone sovereigns entering recession, and slowdowns in China and India underway is the U.S. economic engine enough to even tow its own weight in the near future. In other words, exports, industrial commodity demand, and investment could slow to the point where the international revenue many U.S. corporations rely on to maintain profit margins could also decline.

• Reuters: Retailers report better than expected November sales 
• Fed:  Price increases and hiring subdued, pickup in consumer spending
• DOL: 402,000jobless claims were filed the week ending 11/26/2011
• Reuters: Factories around the world are 'stalling'
• BBC: Chinese manufacturing index fell to a 32 month low
• WSJ: Bank of England governor sounds alarm on systemic crisis
• NPR: Economic growth not strong enough to lower unemployment