THE OBAMA DOCTRINE: FUCK THE POOR FOR THE RICH!
Thus, communities hit by high unemployment and poverty are being deliberately targeted in an effort to boost Obamacare enrollment.
More than five years after Obama signed the legislation into law, and on the eve of its third year of operation, American working families turning to the Affordable Care Act for health care coverage—either out of desperation to find health coverage or under threat of financial penalties—are coming face to face with a health care abomination.
Obamacare enrollment deadline: Fines mount for failure to buy costly, barebones insurance
By Kate Randall
16 December 2015
Tuesday was the last day to choose a health plan under the Affordable Care Act (ACA) for coverage beginning January 1. Penalties for those who fail to obtain insurance coverage for 2016 will rise dramatically—more than sevenfold—compared to the first two years of the ACA.The “individual mandate” of Obamacare, as the ACA is popularly known, requires people who are not insured through their employer or a government program to purchase coverage from private insurance companies on the health care exchanges set up under the legislation. Low-income individuals and families who qualify are eligible for modest subsidies to offset rising insurance premiums. Anyone who does not have coverage in at least nine months of 2016, and who does not qualify for an exemption, will face tax penalties.
The Obama administration is seeking to use the spiking penalties to browbeat those uninsured who did not buy coverage in the first two years of the ACA into purchasing plans in 2016. This coercion for the benefit of the insurance giants is yet another exposure of Obamacare, which aims to force people to buy coverage from for-profit insurers under financial threat. Meanwhile, people on the insurance exchanges are finding that the least expensive ACA plans come with massive deductibles, co-pays and other out-of-pocket costs.
Those exempt from the “individual mandate” penalty include undocumented immigrants (who do not qualify for ACA subsidies), those with incomes so low they do not file taxes, and some 5 million additional people with incomes below 138 percent of the poverty line who, under the ACA, are supposed to be covered by Medicaid, the federal program for the poor, but live in states that have refused to expand Medicaid eligibility. These millions are exempt from the penalty but remain uninsured.
For 2016, those who are uninsured and not exempt from the individual mandate will pay the greater of two amounts, as calculated by the Kaiser Family Foundation in a new analysis:
* A flat dollar amount equal to $685 per adult, plus $347.50 per child, up to a maximum of $2,085 for a family.
* Two-and-a-half percent of family income in excess of the 2015 income tax filing thresholds ($10,300 for a single person and $20,600 for a family).
The penalty cannot exceed the national average premium for “bronze” plans, the lowest level of coverage under the ACA. In 2015, this average annual premium was $2,484 for single coverage and $12,420 for a family with three or more children.
The maximum household penalty has risen more than sevenfold in three years: from $285 in 2014, to $975 in 2015, to $2,085 in 2016. Kaiser estimates that the average household penalty for those uninsured and eligible to enroll in an ACA plan will rise to $965 in 2016, up from $661 in 2015, a 47 percent hike.
Referring to the penalties, Kevin Counihan, CEO of the federal insurance exchange HealthCare.gov, told shots.net, “It got people’s attention. And there seems to be more of a discussion in their head about whether it made sense to pay the penalty and not get something for it.”
Last year, the Department of Health and Human Services allowed people who owed money because they didn’t have insurance in 2014 to sign up for 2015 insurance during a special enrollment period. Counihan said the agency was offering no such reprieve for 2016. “We’re not offering that this year,” he said. “The deadline for enrollment is January 1. That’s a solid deadline.”
In early November, President Obama personally challenged 20 communities around the country to compete with one another to sign up the uninsured for the ACA. The metropolitan areas chosen have large pools of uninsured people. They include some of the most economically ravaged—Detroit, Philadelphia, Chicago, Milwaukee. Thus, communities hit by high unemployment and poverty are being deliberately targeted in an effort to boost Obamacare enrollment.
As of June 30, about 9.9 million people had obtained coverage through the federal and state marketplaces set up under the ACA. The Centers for Medicare and Medicaid Services (CMS) reported Monday that more people are simultaneously shopping on HealthCare.gov than at any time this year or last year.
They are finding increased premiums and coverage that is declining in quality, both from the standpoint of services offered and out-of-pocket costs. According to the government’s own projections, ACA enrollees face on average a 7.5 percent premium rate increase in 2016. Other sources predict rate hikes in excess of 20 percent.
The average deductible for a bronze level plan in 2015 was $5,200. The Fiscal Times reported last month that bronze deductibles for 2016 will average over $5,700, a nearly 10 percent rise. The deductible must be paid in full before any health coverage kicks in, except for those services deemed “essential” by the ACA.
The Robert Wood Johnson Foundation found that the share of mid-tier, Silver level preferred health organizations, or PPOs, on the ACA marketplace with no maximum for out-of-pocket costs increased from 14 percent this year to 30 percent for 2016. These deductibles will force patients to forgo vital medical services for themselves and their families, resulting in needless suffering and even death due to undiagnosed and untreated conditions.
While premiums and deductibles continue to rise, the plans offered are steadily deteriorating in quality. The Robert Wood Johnson Foundation reported last month that PPOs, which provide health insurance that pays for both in-network and out-of-network health providers, are dwindling as an option on the Obamacare exchanges.
People shopping for insurance in the ACA “marketplace” are increasingly finding the offerings limited to health maintenance organizations (HMOs) and exclusive-provider organizations, both of which provide extremely limited coverage when patients want to visit an out-of-network health care provider.
The availability of PPOs on the HealthCare.gov exchange is expected to fall by 41 percent between 2015 and 2016. As of this year in New York City, no PPOs were offered either through Obamacare or on a private insurance exchange, but were available only through employer-provided coverage.
For a patient suffering from a debilitating disease, restriction to an HMO likely means he will no longer be able to visit a specialist, such as an oncologist or rheumatologist, with whom he has established a relationship over months or years. The impact is potentially life-threatening.
More than five years after Obama signed the legislation into law, and on the eve of its third year of operation, American working families turning to the Affordable Care Act for health care coverage—either out of desperation to find health coverage or under threat of financial penalties—are coming face to face with a health care abomination.
It is becoming increasingly clear to millions that all of Obama’s claims—that the ACA would provide near-universal coverage, that “if you want to keep your plan, you can keep your plan” and “if you like your doctor, you can keep your doctor”—were lies. The aim of Obamacare is to restructure an already class-based delivery of health care even more in line with the interests of the corporations, particularly the private insurance companies and giant pharmaceuticals, while cutting costs for employers and the government.
At the same time, Obamacare prepares the way for the privatization of Social Security and Medicare and their transformation into voucher programs, and provides the impetus for an assault on employer-provided health insurance, the means by which about half of all Americans currently receive coverage.
The hourglass society: Middle-income households no longer the majority in the US
By Andre Damon
11 December 2015
For the first time in more than four decades, “middle-income households” no longer constitute the majority of American society, according to a study published Wednesday by the Pew Research Center. Instead, the majority of households are either low or higher-income.The study concluded, “Once in the clear majority, adults in middle-income households in 2015 were matched in number by those in lower- and upper-income households combined.” Pew called its findings “a demographic shift that could signal a tipping point” in American society.
The study also found a sharp fall in household incomes and wealth, particularly for low-income households, noting that only “upper-income families realized notable gains in wealth from 1983 to 2013.”
Together with the decline in the relative numbers of middle-income earners, the incomes of households in this group has fallen substantially in recent decades. The median income of middle-income households fell by four percent between 2000 and 2014, while their median wealth fell by 28 percent over approximately the same period.
The study notes that since 1983, the total share of income accruing to high-income households has grown significantly. The study found that “fully 49% of US aggregate income went to upper-income households in 2014, up from 29% in 1970.” Meanwhile the share “accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.”
These findings reflect the persistent declines in wages for US workers following decades of de-industrialization, which has been accompanied by significant increases in the yields of financial assets, helping to increase the wealth and earnings of the financial elite, along with a section of upper middle-class households.
While the study’s metrics are too broad to capture the enormous concentration of society’s wealth in the hands of the top 1 and 0.1 percent, they reflect the reality that a “middle class” lifestyle is increasingly out of reach for the broad majority of the US population.
The Pew study, an analysis of data from the Census Bureau’s current population survey, defines “middle-income” households as those earning between two-thirds and twice the US median household income, or between $42,000 to $126,000 for a household of three. Those classified as low-income made less than two-thirds the typical income, while those classified as high-income made twice the median income.
The study added that the fastest growing sections of the population were those at the extremes of the income distribution: the very rich and the very poor. “The movement out of the middle has not simply been at the margins—the growth has been at the extreme ends of the income ladder,” with “the fastest-growing numbers… in the very lowest and very highest income tiers.”
The study found that, after dividing US households into fifths based on household income, “In 2015, 20% of American adults were in the lowest income tier, up from 16% in 1971. On the opposite side, 9% are in the highest income tier, more than double the 4% share in 1971.” Meanwhile the share of adults in the lower middle or upper middle income brackets have remained unchanged.
The report added, “The growth at the top is similarly skewed,” as “the share of adults in highest-income households [has] more than doubled, from 4% in 1971 to 9% in 2015. But the increase in the share in upper-middle income households was modest, rising from 10% to 12%.”
The study further noted the impact of the 2008 crisis on the wealth of middle-income households. It stated, “Before the onset of the Great Recession, the median wealth of middle-income families increased from $95,879 in 1983 to $161,050 in 2007, a gain of 68%. But the economic downturn eliminated that gain almost entirely. By 2010, the median wealth of middle-income families had fallen to about $98,000, where it still stood in 2013.”
The wealth of higher income households has largely been protected from the 2008 financial crash. “Upper income families more than doubled their wealth from 1983 to 2007 as it climbed from $323,402 to $729,980. Despite losses during the recession, these families recovered somewhat since 2010 and had a median wealth of $650,074 in 2013, about double their wealth in 1983.”
The Pew figures also show the impact of the persistent economic slump on a broad range of households, noting, “Americans are less well-to-do now than at the start of the 21st century. For all income tiers, median incomes in 2014 were lower than in 2000. These reversals are the result of two recessions—the downturn in 2001 and the Great Recession of 2007-09—and economic recoveries that have been too anemic to fully repair the damage.”
The conclusion that the incomes and wealth of all sections of society have declined since the start of the 2008 crisis is attributable to the fact that the study’s methodology is too broad to encompass the most dramatic change in American society: the enormous concentration of wealth and income in the hands of the financial oligarchy. The handful of multi-millionaires and billionaires in this social group are wealthier than ever.
Figures published last year by professors Emmanuel Saez and Gabriel Zucman showed that the wealthiest 0.5 percent of American society saw their share of the country’s wealth double, from about 17 percent in 1978 to just under 35 percent in 2012. The top 0.1 percent (one one-thousandth of the population) now controls more than 20 percent of all wealth, up from about 8 percent in the late 1970s.
The vast growth of social inequality is not the result of an impartial and merely objective process, but is rather the result of policies pursued by the government for decades aimed at slashing the wages and benefits of American workers while enriching the financial oligarchy that dominates wealth and political power in the US. This process has been dramatically accelerated under the Obama administration.
The persistent growth of social inequality is the most conspicuous and defining characteristic of contemporary American society. It is this process, facilitated by the financialization of the economy and the continuous diversion of resources away from productive investment, that underlies the erosion of democratic forms of government and the endless promotion of war and militarism.
This process expresses, moreover, a deep social crisis to which the financial elite, obsessed with the expansion of its own wealth and social privilege, can offer no solutions.
Middle 'CRASH': Pew says middle class 'losing ground, falling behind financially'
The end is here for America's middle class, seemingly forever the backbone of the country.
Pew Research Center reported late Wednesday that the middle class is falling behind other income groups and "is no longer the majority."
Said Pew: "After more than four decades of serving as the nation's economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point."
As Democrat Bernie Sanders has been warning, the rich are essentially getting richer, creating a huge income gap with the shrinking middle class in the middle.
"The nation's aggregate household income has substantially shifted from middle-income to upper-income households, driven by the growing size of the upper-income tier and more rapid gains in income at the top. Fully 49 percent of U.S. aggregate income went to upper-income households in 2014, up from 29 percent in 1970. The share accruing to middle-income households was 43 percent in 2014, down substantially from 62 percent in 1970," said Pew.
The full analysis is here.
In a release, the research giant added:
Middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.
Although the middle class has not kept pace with upper-income households, its median income, adjusted for household size, has risen over the long haul, increasing 34% since 1970. That is not as strong as the 47% increase in income for upper-income households, though it is greater than the 28% increase among lower-income households.
Some demographic groups have fared better than others in moving up the income tiers, while some groups have slipped down the ladder. The groups making notable progress include older Americans, married couples and blacks. Despite this progress, older Americans and blacks remain more likely to be lower income and less likely to be upper income than adults overall. Those Americans without a college degree stand out as experiencing a substantial loss in economic status.
These findings emerge from a new Pew Research Center analysis of data from the U.S. Census Bureau and the Federal Reserve Board of Governors. In this study, "middle-income" Americans are defined as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three.
Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com.
Pew Research Center reported late Wednesday that the middle class is falling behind other income groups and "is no longer the majority."
As Democrat Bernie Sanders has been warning, the rich are essentially getting richer, creating a huge income gap with the shrinking middle class in the middle.
The full analysis is here.
In a release, the research giant added:
Middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.
These findings emerge from a new Pew Research Center analysis of data from the U.S. Census Bureau and the Federal Reserve Board of Governors. In this study, "middle-income" Americans are defined as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three.
Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com.
A new tipping point in the global economic crisis
By Nick Beams
The announcement by the global mining giant Anglo American that it will sack 85,000 workers world-wide, put 60 percent of its assets up for sale, and reduce its mining sites from 55 to just 20 signifies that the crisis of the world capitalist economy is heading toward a new tipping point. The world economy is threatened by a plunge into deep slump, coupled with a financial crisis even more devastating than that which erupted in 2007–2008.
The immediate cause of the Anglo American decision is the plunge in prices for all major industrial commodities—iron ore, coal, copper, nickel and manganese—to name but a few. Having reached their lowest levels since 2009, they are continuing to fall, signifying that, despite the trillions of dollars poured into financial markets over the past seven years by the world’s central banks, the over-riding tendency in the world economy is towards recession.
Nowhere is this more sharply expressed that in China, the centre of global manufacturing. Earlier this week, official data showed that Chinese exports slowed markedly in November due to falling global demand, while the currency, the renminbi, hit its lowest level in four years. The expectation is that if Chinese financial authorities withdraw support, the renminbi will rapidly fall still lower, sending another deflationary wave through the global economy.
The lack of confidence in the country’s growth prospects in the upper echelons of the financial and economic elites is exemplified by the flight of capital, with foreign exchange reserves recording their third-largest monthly fall in November.
In the years immediately following the 2008 financial crisis, the conventional wisdom was that the so-called BRICS countries together with emerging markets would provide a new base of stability for world capitalism. That rose-tinted scenario has been shattered.
The downturn in China is now ripping through world markets. The Brazilian economy is experiencing a contraction on a scale not seen since the Great Depression of the 1930s, Russia is in recession, India faces mounting corporate debt problems, and South Africa, together with economies across the continent, is being hit by falling commodity prices. The future for emerging markets is exemplified in Venezuela, the site of some of the largest oil reserves in the world, where the economy is set to shrink by 10 percent this year.
In its quarterly review of the world economy issued earlier this week, the Bank for International Settlements warned that the “uneasy calm” that had characterised global financial markets could soon be disrupted by the motion of “deeper economic forces that really matter.”
Over the past period, financial markets, sustained by the flood of cheap money from central banks, have seemingly been able to continue ever upwards in defiance of deepening global recessionary trends. However, the conditions have been created for this house of cards to collapse as the “deeper forces” assert themselves.
One of the most significant areas to which cheap money has flowed is the financing of high-yielding “junk” bonds, often issued by energy companies. With the price of oil reaching over $100 per barrel as recently as the early months of 2014, it seemed to be a viable strategy. But with oil now trading at below $40 and threatening to plunge even further, possibly down to $30, it is rapidly unravelling.
The rise of energy-related debt defaults is only a symptom of a more general process.
Last Friday, the Financial Times reported that more than $1 trillion in US corporate debt had been downgraded so far this year, as defaults climbed to their highest levels since the 2008 financial crisis. Analysts with the three major credit rating agencies—Standard & Poor’s, Moody’s and Fitch—expect the default rates to increase over the next 12 months, a process that could be accelerated if the Federal Reserve decides to lift is base interest rate next week.
An analysis by Deutsche Bank, portions of which were published on the Financial Times ’ web site this week, pointed to the potential for a rapid shift in financial markets.
“Late stages of every credit cycle,” it noted, “… are built on the theory as to why this time is different. This type of attitude was prevalent going into 2015, when credit markets largely dismissed the oil sector distress, choosing to believe this was an isolated issue and will stay that way.”
But, as the assessment went on to elaborate, this has proven not to be the case, as the percentage of corporate bonds designated as being “in distress” has steadily risen.
“From its starting point in energy a year ago, it has now reached other commodity-sensitive areas such as transportation, materials, capital goods and commercial services. But it did not stop here and is also visible in places like retail, gaming, media, consumer staples and technology—all areas that were widely expected to be insulated from low oil prices, if not even benefiting from them.”
The growing potential for a renewed financial crisis was also highlighted in a report issued by the US investment bank Goldman Sachs last month. It noted that corporate leverage in the US was now at its highest level in a decade.
Low interest rates and the incessant profit demands of speculators had encouraged corporate America to go on a spending spree, financing share buybacks, dividend hikes and a series of merger and acquisition deals, funded through the issuing of bonds. But the flow of cash has not kept pace with bond issuing, with the result that the total amount of debt on balance sheets is “more than double pre-crisis levels.”
Goldman reported that even after the energy sector was stripped out, the net debt to earnings ratio was at its highest point since the financial crisis. “The spectre of rising rates, potential global disinflation (dare we say ‘deflation’?), declining operating profits and wider credit spreads continues to create near-term consternation for weak balance sheet stocks,” the report concluded.
The Bank of England has added its voice to those expressing concern over the stability of financial markets, warning of the consequences of the divergence between the policies of central banks, as the Fed moves towards tightening while the European Central Bank and the Bank of England maintain a loose monetary policy.
The bank’s Financial Policy Committee said it was difficult to predict how markets would react to any increase in the Fed rate. The minutes of a meeting held at the end of last month and released on Wednesday state, “Capital flows had been sensitive to diverging prospects for monetary policy around the world and there was a risk of further volatility as that policy divergence progresses.”
The deepening global economic crisis is one of the driving forces for the eruption of militarism, especially over the past month. At the same time, the escalation of the war drive can only exacerbate the economic and financial situation. This underscores the fact that the mounting world economic and political disorder is not the result some kind of temporary or passing disequilibrium, but the expression of an ongoing and deepening breakdown of the global capitalist system.
AMNESTY: THE HOAX TO KEEP WAGES DEPRESSED AND PASS ALONG THE REAL COST IN WELFARE TO THE AMERICAN PEOPLE
"The U.S. now ranks at, or near, the top of developed countries for income inequality. Job creation has lagged far behind population growth. Automation has erased some jobs, but corrupt, inept government leadership is responsible for the deplorable job- deficit-low wage situation."
"It is clear that the overarching goal of a succession of administrations and many members of Congress, irrespective of political party affiliation, is to keep our borders open and take no meaningful action to stop that flow of aliens into the United States."
326,000 Native-Born Americans Lost Their Job in November: Why This Remains the Most Important Jobs Chart
By Tyler Durden
ZeroHedge.com, December 5, 2015
. . .
We are confident that one can make the case that there are considerations on both the labor demand-side (whether US employers have a natural tendency to hire foreign-born workers is open to debate) as well as on the supply-side: it may be easier to obtain wage-equivalent welfare compensation for native-born Americans than for their foreign-born peers, forcing the latter group to be much more engaged and active in finding a wage-paying job.
However, the underlying economics of this trend are largely irrelevant: as the presidential primary race hits a crescendo all that will matter is the soundbite that over the past 8 years, 2.7 million foreign-born Americans have found a job compared to only 747,000 native-born. The result is a combustible mess that will lead to serious fireworks during each and every subsequent GOP primary debate, especially if Trump remains solidly in the lead.
. . .
http://www.zerohedge.com/news/2015-12-05/326000-native-born-americans-lost-their-job-november-why-remains-most-important-jobs
A new tipping point in the global economic crisis
By Nick Beams
10 December 2015
The announcement by the global mining giant Anglo American that it will sack 85,000 workers world-wide, put 60 percent of its assets up for sale, and reduce its mining sites from 55 to just 20 signifies that the crisis of the world capitalist economy is heading toward a new tipping point. The world economy is threatened by a plunge into deep slump, coupled with a financial crisis even more devastating than that which erupted in 2007–2008.The immediate cause of the Anglo American decision is the plunge in prices for all major industrial commodities—iron ore, coal, copper, nickel and manganese—to name but a few. Having reached their lowest levels since 2009, they are continuing to fall, signifying that, despite the trillions of dollars poured into financial markets over the past seven years by the world’s central banks, the over-riding tendency in the world economy is towards recession.
Nowhere is this more sharply expressed that in China, the centre of global manufacturing. Earlier this week, official data showed that Chinese exports slowed markedly in November due to falling global demand, while the currency, the renminbi, hit its lowest level in four years. The expectation is that if Chinese financial authorities withdraw support, the renminbi will rapidly fall still lower, sending another deflationary wave through the global economy.
The lack of confidence in the country’s growth prospects in the upper echelons of the financial and economic elites is exemplified by the flight of capital, with foreign exchange reserves recording their third-largest monthly fall in November.
In the years immediately following the 2008 financial crisis, the conventional wisdom was that the so-called BRICS countries together with emerging markets would provide a new base of stability for world capitalism. That rose-tinted scenario has been shattered.
The downturn in China is now ripping through world markets. The Brazilian economy is experiencing a contraction on a scale not seen since the Great Depression of the 1930s, Russia is in recession, India faces mounting corporate debt problems, and South Africa, together with economies across the continent, is being hit by falling commodity prices. The future for emerging markets is exemplified in Venezuela, the site of some of the largest oil reserves in the world, where the economy is set to shrink by 10 percent this year.
In its quarterly review of the world economy issued earlier this week, the Bank for International Settlements warned that the “uneasy calm” that had characterised global financial markets could soon be disrupted by the motion of “deeper economic forces that really matter.”
Over the past period, financial markets, sustained by the flood of cheap money from central banks, have seemingly been able to continue ever upwards in defiance of deepening global recessionary trends. However, the conditions have been created for this house of cards to collapse as the “deeper forces” assert themselves.
One of the most significant areas to which cheap money has flowed is the financing of high-yielding “junk” bonds, often issued by energy companies. With the price of oil reaching over $100 per barrel as recently as the early months of 2014, it seemed to be a viable strategy. But with oil now trading at below $40 and threatening to plunge even further, possibly down to $30, it is rapidly unravelling.
The rise of energy-related debt defaults is only a symptom of a more general process.
Last Friday, the Financial Times reported that more than $1 trillion in US corporate debt had been downgraded so far this year, as defaults climbed to their highest levels since the 2008 financial crisis. Analysts with the three major credit rating agencies—Standard & Poor’s, Moody’s and Fitch—expect the default rates to increase over the next 12 months, a process that could be accelerated if the Federal Reserve decides to lift is base interest rate next week.
An analysis by Deutsche Bank, portions of which were published on the Financial Times ’ web site this week, pointed to the potential for a rapid shift in financial markets.
“Late stages of every credit cycle,” it noted, “… are built on the theory as to why this time is different. This type of attitude was prevalent going into 2015, when credit markets largely dismissed the oil sector distress, choosing to believe this was an isolated issue and will stay that way.”
But, as the assessment went on to elaborate, this has proven not to be the case, as the percentage of corporate bonds designated as being “in distress” has steadily risen.
“From its starting point in energy a year ago, it has now reached other commodity-sensitive areas such as transportation, materials, capital goods and commercial services. But it did not stop here and is also visible in places like retail, gaming, media, consumer staples and technology—all areas that were widely expected to be insulated from low oil prices, if not even benefiting from them.”
The growing potential for a renewed financial crisis was also highlighted in a report issued by the US investment bank Goldman Sachs last month. It noted that corporate leverage in the US was now at its highest level in a decade.
Low interest rates and the incessant profit demands of speculators had encouraged corporate America to go on a spending spree, financing share buybacks, dividend hikes and a series of merger and acquisition deals, funded through the issuing of bonds. But the flow of cash has not kept pace with bond issuing, with the result that the total amount of debt on balance sheets is “more than double pre-crisis levels.”
Goldman reported that even after the energy sector was stripped out, the net debt to earnings ratio was at its highest point since the financial crisis. “The spectre of rising rates, potential global disinflation (dare we say ‘deflation’?), declining operating profits and wider credit spreads continues to create near-term consternation for weak balance sheet stocks,” the report concluded.
The Bank of England has added its voice to those expressing concern over the stability of financial markets, warning of the consequences of the divergence between the policies of central banks, as the Fed moves towards tightening while the European Central Bank and the Bank of England maintain a loose monetary policy.
The bank’s Financial Policy Committee said it was difficult to predict how markets would react to any increase in the Fed rate. The minutes of a meeting held at the end of last month and released on Wednesday state, “Capital flows had been sensitive to diverging prospects for monetary policy around the world and there was a risk of further volatility as that policy divergence progresses.”
The deepening global economic crisis is one of the driving forces for the eruption of militarism, especially over the past month. At the same time, the escalation of the war drive can only exacerbate the economic and financial situation. This underscores the fact that the mounting world economic and political disorder is not the result some kind of temporary or passing disequilibrium, but the expression of an ongoing and deepening breakdown of the global capitalist system.
AMNESTY: THE HOAX TO KEEP WAGES DEPRESSED AND PASS ALONG THE REAL COST IN WELFARE TO THE AMERICAN PEOPLE
"The U.S. now ranks at, or near, the top of developed countries for income inequality. Job creation has lagged far behind population growth. Automation has erased some jobs, but corrupt, inept government leadership is responsible for the deplorable job- deficit-low wage situation."
"It is clear that the overarching goal of a succession of administrations and many members of Congress, irrespective of political party affiliation, is to keep our borders open and take no meaningful action to stop that flow of aliens into the United States."
326,000 Native-Born Americans Lost Their Job in November: Why This Remains the Most Important Jobs Chart
By Tyler Durden
ZeroHedge.com, December 5, 2015
. . .
We are confident that one can make the case that there are considerations on both the labor demand-side (whether US employers have a natural tendency to hire foreign-born workers is open to debate) as well as on the supply-side: it may be easier to obtain wage-equivalent welfare compensation for native-born Americans than for their foreign-born peers, forcing the latter group to be much more engaged and active in finding a wage-paying job.
However, the underlying economics of this trend are largely irrelevant: as the presidential primary race hits a crescendo all that will matter is the soundbite that over the past 8 years, 2.7 million foreign-born Americans have found a job compared to only 747,000 native-born. The result is a combustible mess that will lead to serious fireworks during each and every subsequent GOP primary debate, especially if Trump remains solidly in the lead.
. . .
http://www.zerohedge.com/news/2015-12-05/326000-native-born-americans-lost-their-job-november-why-remains-most-important-jobs
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