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Larry Kotlikoff: Detroit Today, Washington Tomorrow

"The debt Uncle Sam publicly acknowledges is now $12 trillion. But the true measure of our debt -- the one suggested by economic theory -- is the fiscal gap, which totals $222 trillion. The fiscal gap is the present value of all future expenditures, including servicing outstanding official federal debt, minus the present value of all future receipts. Detroit's main means of hiding its true liabilities was discounting its future obligations at a rate far higher than appropriate, thus giving the appearance that less saving was needed to cover the shortfall. Washington's dirtier trick has been to keep virtually all of its future liabilities off the books." Continue reading →

Continue ReadingLarry Kotlikoff: Detroit Today, Washington Tomorrow

This amazing, animated chart shows the aging of America

"This is a mesmerizing little animation created by Bill McBride of Calculated Risk. It shows the distribution of the U.S. population by age over time, starting at 1900 and ending with Census Bureau forecasts between now and 2060. As McBride points out, you can see a big 'baby bust' before and during the Great Depression, right before prosperity returns and the Baby Boom strikes. (You can also see the bulge of Baby Boomers ripple through the charts in the latter half of the 20th century.)" Continue reading →

Continue ReadingThis amazing, animated chart shows the aging of America

Economist: Obamacare Will Cost 4 Million Jobs

"A contraction of 3% means big job losses. About 4 million jobs, to be precise. This would, of course, end up added to the current jobs deficit of more than 8 million, according to the Economic Policy Institute. Obamacare, meanwhile, purports to enable access to insurance coverage to tens of millions of new people. 'What we are describing is a huge increase in the demand for care,' says Goodman. 'But the Affordable Care Act does nothing to increase supply. This is virtually guaranteed to put upward pressure on prices. To the extent that prices are prevented from rising, it will create enhanced rationing by waiting.'" Continue reading →

Continue ReadingEconomist: Obamacare Will Cost 4 Million Jobs

Robert Kiyosaki: I Don’t Trust the Financial System, But I Do Trust Gold

"Financial expert Robert Kiyosaki points out, 'The rich are getting richer than ever before, but the middle class is shrinking . . . . Both Obama and Romney promised to save them, and when politicians promise to save your butt, you know your butt is gone.' Kiyosaki, author of the mega best seller, 'Rich Dad/Poor Dad,' goes on to say, 'If you trust Obama or the Republicans or the Democrats, then you don't need to buy gold. But I don't trust them. I don't trust Bernanke. I don't trust the financial system, but I do trust gold." Continue reading →

Continue ReadingRobert Kiyosaki: I Don’t Trust the Financial System, But I Do Trust Gold

Justice Department sues to block US Airways-American merger

"In a surprise move Tuesday, the U.S. Justice Department sued to block the $11 billion merger of American Airlines and US Airways, which would create the world's largest airline. The Justice Department said it would harm competition and U.S. consumers, as just four airlines would control more than 80 percent of the U.S. commercial air travel market. The department took action against this merger, yet recently let go other combinations between major airlines. Industry experts said the move was out of step with past practices and would potentially leave US Air and American, which is emerging from bankruptcy, at a competitive disadvantage." Continue reading →

Continue ReadingJustice Department sues to block US Airways-American merger

Eric Holder Owes the American People an Apology

"Last year when U.S. Attorney General Eric Holder boasted about the successes that a high-profile task force racked up pursuing mortgage fraud, the numbers he trumpeted were grossly overstated. Originally the Justice Department said 530 people were charged criminally as part of a year-long initiative by the multi-agency Mortgage Fraud Working Group. It now says the actual figure was 107 -- or 80 percent less. Holder originally said the defendants had victimized more than 73,000 American homeowners. That number was revised to 17,185, while estimates of homeowner losses associated with the frauds dropped to $95 million from $1 billion." Continue reading →

Continue ReadingEric Holder Owes the American People an Apology

‘London Whale’ Bruno Iksil Won’t Be Prosecuted By Justice Department

"Former JPMorgan Chase employee Bruno Iksil will not be prosecuted by the Justice Department, the Wall Street Journal reports, citing a person close to the situation. Iksil is the so-called 'London Whale' at the center of the trading scandal that lost JPMorgan, the country's biggest bank by assets, some $6.2 billion in 2012. The New York Times reported Friday that U.S. authorities planned to arrest two former JPMorgan employees for their roles in the scandal, and Iksil will need to play a role in any arrests related to the trades, Reuters reported Thursday." Continue reading →

Continue Reading‘London Whale’ Bruno Iksil Won’t Be Prosecuted By Justice Department

Investors euphoric as US margin debt reaches ‘danger’ levels

"Bank of America’s monthly survey of investors showed a dramatic rise in confidence in August, with a net 72pc expecting growth to accelerate over the next year. It is the highest in reading since 2009. Almost everybody expects bond yields to rise as deflation fears evaporate, with just 3pc still worried about the risk of an economic relapse. Managers have slashed their bond allocation to a 28-month low. The exuberant mood comes as margin debt on Wall Street hovers near $377bn, just below its all-time high and well above peaks before the dotcom crash and the Lehman crisis." Continue reading →

Continue ReadingInvestors euphoric as US margin debt reaches ‘danger’ levels

U.S. 10 Year Bond Yields in Perspective (1790-Present)

"The move in the 10 year yields has led to all sorts of speculation as to the underlying cause. Since none of this is within our my control, all we can do is look at this from a longer term perspectives to put this into broader context. Three takeaways: 1) Bond Yields can be driven to extreme son the upside and on the downside. 2) It takes many years or decades to unwind a move like that 3) Rates could go appreciably higher if the 30 year bond bull market is over. Looking at yields from an historical perspective, there is still plenty of room for yields to rise if they simply 'normalize.'" Continue reading →

Continue ReadingU.S. 10 Year Bond Yields in Perspective (1790-Present)