Teachers’ Retirement Funds are Piling into Manhattan Real Estate at Record High Prices
by Michael Krieger
Posted January 30, 2015
Rather than buying equity interests in buildings, TIAA-CREF and KTCU are seeking to invest in mortgages backed by office towers, retail properties, warehouses and apartments in major U.S. cities. The venture between the two companies, which manage teachers’ savings in their respective countries, is 51 percent owned by TIAA-CREF and 49 percent held by Seoul-based KTCU.
This is a classic case of groupthink amongst asset managers. Everyone thinks these assets are safe and untouchable, so they are all piling into the same trade. It appears clear that pension funds are being set up as the ultimate bag holders when the latest Central Bank bubble pops, and in the meantime, they are a perfect source of illegal fee gouging. A win-win for financial oligarchs. More…
Evidence Grows Showing Wall Street as a Negative Economic Force
By Pam Martens and Russ Martens
Posted January 29, 2015
Wall Street’s overarching function today is that of an institutionalized wealth transfer mechanism, propped up by compromised regulators and a dysfunctional Congress. As the PBS program Frontline reported in 2013, if your work career spans 50 years and you receive the historic return of 7 percent on stocks in your 401(k) plan, the 2 percent typical fee charged by Wall Street mutual funds will gobble up almost two-thirds of your account.
The Frontline program was called “The Retirement Gamble.” Wall Street On Parade checked the math and found this was not a gamble but a certainty: “under a 2 percent 401(k) fee structure, almost two-thirds of your working life will go toward paying obscene compensation to Wall Street; a little over one-third will benefit your family – and that’s before paying taxes on withdrawals to Uncle Sam.” More…
The Trans-Pacific Partnership Will Sink the Middle Class
By Thom Hartmann
Posted January 28, 2015
Six years into his presidency, President Obama is now taking heat from a surprising place: congressional Democrats, who are lining up against his plan to force the Trans-Pacific Partnership (TPP) through Congress without any debate whatsoever.If approved, the TPP, or as I like to call it, the Southern Hemisphere Asian Free Trade Agreement — SHAFTA — would create a whole new set of rules regulating the economies of 12 countries on four different continents bordering the Pacific Ocean.
Unfortunately, because the TPP is being negotiated almost entirely in secret, we don’t know a lot about it. What we do know about it, though, comes almost entirely from leaks, and those leaks paint a pretty scary picture. More…
The TPP has been referred to as “NAFTA on Steroids”. Remember when presidential candidate Ross Perot warned about about that sucking sound of jobs disappearing if NAFTA was passed? Well, it turns out he was right. Now “our leaders” want even more powerful version of NAFTA.
What is TTIP? And six reasons why the answer should scare you
by Lee Williams
Posted January 27, 2015
Have you heard about TTIP? If your answer is no, don’t get too worried; you’re not meant to have.
The Transatlantic Trade and Investment Partnership is a series of trade negotiations being carried out mostly in secret between the EU and US. As a bi-lateral trade agreement, TTIP is about reducing the regulatory barriers to trade for big business, things like food safety law, environmental legislation, banking regulations and the sovereign powers of individual nations. It is, as John Hilary, Executive Director of campaign group War on Want, said: “An assault on European and US societies by transnational corporations.”
Since before TTIP negotiations began last February, the process has been secretive and undemocratic. This secrecy is on-going, with nearly all information on negotiations coming from leaked documents and Freedom of Information requests. But worryingly, the covert nature of the talks may well be the least of our problems. Here are six other reasons why we should be scared of TTIP, very scared indeed: More…
The Anatomy of a Bail-In
By Andy Sutton
Posted January 25, 2015
When it all crumbles and everyone starts scrambling, bear in mind that the law has now made your bank deposits available to do a bail-in and make good on that bad bet. And since you’re now an unsecured creditor rather than a depositor, you
a) have no FDIC protection
b) have no recourse.
Congratulations. You woke up on a Friday morning having $25,000 in bank deposits and literally by the time the bank opens Monday you have x shares in a busted bank. And yes it can happen that fast. Anyone who doesn’t think it can, should remember Lehman in 2008. While it wasn’t a bail-in at that point, look at the velocity with which that outfit hit the mat, never to get up. Look at Cyprus. Friday afternoon there are tremors and by Monday morning, the banks are locked up like Fort Knox and the ATMs are out of money.
The US has already crafted its resolution mechanisms along with most of the G20. The EU has just ordered its member nations to the do the same. In my opinion, anyone who stores more than a trivial amount of cash in a commercial bank should be sentenced to spend the next month in Massachusetts figuring out how many of Tom Brady’s precious pigskins were improperly inflated. More…
The 1% Dine in Davos as Latin America Pulls People Out of Poverty
By Cyril Mychalejko
Posted January 26, 2015
The world’s billionaires and political elites have swooped into the Swiss resort town of Davos in about 1,700 private jets this week to rub elbows at cocktail parties and glad-hand at the annual World Economic Forum. Some time after paying at least $71,000 to get there, and in between networking and sealing business deals, these world leaders are also expected to solve some of the globe’s most pressing problems as outlined in the World Economic Forum Global Risks 2015 report.
However, the biggest risk the world faces may be the Forum’s continued neoliberal economic policies its members advocate that have created the crises it supposedly seeks to redress. These crises include climate change, resource scarcity, high structural underemployment, violent interstate conflicts, and the failure of national governance. Davos is all about casting the super rich as being the good guys, the heroes. It’s about perpetuating the myth that the rich can save the world with their kindness and philanthropy. More…
A Billionaire Lectures Serfs in Davos –
Claims “America’s Lifestyle Expectations are Far Too High”
by Michael Krieger
Posted January 25, 2015
Just when you thought it couldn’t get any worse, it has. Enter billionaire Jeff Greene, who’s comments at Davos make Sam Zell look enlightened.
Billionaire Jeff Greene, who amassed a multibillion dollar fortune betting against subprime mortgage securities, says the U.S. faces a jobs crisis that will cause social unrest and radical politics.
“America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence,” Greene said in an interview today at the World Economic Forum in Davos, Switzerland. “We need to reinvent our whole system of life.”
Wait a minute, “we” need to reinvent our whole system of life? I’m curious, Mr. Greene, how specifically will YOU be adjusting your lifestyle expectations? I didn’t think so. More…
If It’s Not A Hard Asset, It’s No Asset
by Tom Chatham
Posted January 17, 2015
In normal times, little pieces of paper or plastic make everyday life possible but when normal times end you need something in hand you can actually use. Keep in mind that any wealth you have invested or in the bank or retirement account is potential wealth. It only becomes actual wealth when you trade it in for something you actually need or want. It only becomes wealth when you trade it for hard assets.
There is a reason people give lists of physical goods to deal with a crisis. You cannot use potential wealth to provide everyday needs, it takes physical goods. Many people like to say you cannot eat gold, well a paper certificate does not make a very good meal either. The primary difference is that gold has a store of value because it takes work to produce it just like copper, nickel or any other metal, it just happens to be worth more because it is harder to produce than others due to lower quantities in the ground. More…
Vermonters Lobby for Public Bank—And Win Millions for Local Investment Instead
by Alexis Goldstein
Posted January 15, 2015
Advocates didn’t get the public bank they wanted. But the compromise they reached in the end was still a rare and significant win over Wall Street banks. Right before 2014 came to a close, Wall Street won an enormous victory in the year-end spending bill. The so-called “CRomnibus” bill, which included language written by Citigroup lobbyists, gutted a key piece of Wall Street reform meant to prevent future bailouts of big banks with taxpayer money.
This win came after the financial industry spent years chipping away at the Dodd-Frank Wall Street Reform and Consumer Protection Act, which passed in 2010. Wall Street lobbyists gained little victories along the way, but never stopped asking for more. By making bold and ongoing asks, Wall Street was able to win, even when lawmakers sought a compromise.
There’s another group of Americans, however, with a different agenda for the future of banking—people who are also pushing hard for policy change. They’re advocates of public banking, and they want to see new banks created that would be owned and operated by the government, usually at the state or city level. (This would greatly increase the amount of investment capital available for small business development, local infrastructure, and affordable public transportation, none of which are much favored by private banks seeking a high return on investment.) More…
The crash of 2016: Wall Street gets ready
By Mike Krauss
Posted January 10, 2015
In the more than six years since the 2008 Wall Street crash, nothing has been done to rein in the abuses of the parasites in pin stripes that were its cause. Another crash is inevitable.
My guess is, it will come in late 2016, when the banksters have selected the candidate for president that will be as dependable an ally as the incumbent he or she will replace, as they did in 2008, to insure maximum political protection.
But it could come sooner, unscripted, set off perhaps by a bad bet in the almost $300 TRILLION (yes with a T) derivatives casino. But whenever it comes, what happens next? Another panic on Wall Street, the banksters desperate to call in their bets and not be the one left standing when the music stops, forced into bankruptcy? More…