Category Archives: Business/Economics

Business/Economics, U.S.

Republican & Media Incompetence: California Republican Darrell Issa, and some mainstream media sources, say the Postal Service gets money from tax payers. Idiots!!!

“The Postal Service still seems to hold the misguided belief that accounting gimmicks and an increased reliance on taxpayer support will give it flexibility to push back insolvency for a few more years.”-Darrel Issa, Republican Representative from California

California Republican Darrel Issa has just revealed himself to be a liar or an idiot!

First off: Postal officials have been straight forward with their financial mess.  And most of that mess has been caused by Congress!!!  Read my September posting of the PBS interview with the Postmaster General, and the president of the National Association of Letter Carriers union.

Secondly: The United States Postal Service does not make money off taxpayers, they are solely funded by the postage they charge (prices are controlled by U.S. Congress, not the USPS), and other products they sell.  The cuts being made to the USPS will have no affect on U.S. government debt!!!

Darrel Issa is a California Republican, yet he doesn’t know that two other California Republicans pushed for the USPS to become self supporting?  Yeah, those guys were Richard Nixon and Ronald Reagan!!!

In 1970, under Nixon the Postal Reorganization Act was passed and signed into law.  This act ceased tax payer funding for the USPS (prior to the Reorganization Act it was known as the Postal Department), and forced it to become self supporting (although it does not have to make a profit).

In 1982, under Reagan, another act was passed and signed that added U.S. postage stamps to the “postal products” that the USPS could support itself with (until then the Government took all the money from sales of stamps).

Perhaps Darrel Issa is talking about the “Postal Service Fund”?  This is a fund set up by Congress, paid for with taxes, to cover the postage free mailing for all legally blind persons, and for mail in election ballots sent from U.S. citizens living overseas, and, for providing address information to state and local child support enforcement agencies.  It does not cover any other operations of the USPS!

Perhaps Darrel Issa wants to end the free mailings for blind people, for absentee election ballots, and for providing addresses to state and local child support agencies?

Whatever the reason, this is a clear case of politicians, and the media, of being incompetent, or intentionally misleading the general public.

 

Business/Economics, U.S.

What Economic Recovery? Postmaster General says Draconian cuts needed for self supporting U.S. Postal Service

“Both bills have elements that delay tough decisions and impose greater constraints on our business model.”-Patrick Donahoe, Postmaster General of the United States

The Postmaster General was referring to bills proposed by the U.S. Congress.  He’s still pushing for the more drastic changes he wants, like ended Saturday deliveries, and laying off more employees than proposed by the Congressional bills.

The biggest postal union, the National Association of Letter Carriers, says it’s close to a cost cutting deal with the Postmaster General.

The USPS is dealing with a 20% drop in letter business, just for this year.  Also, Congress created rules that forced the self supporting USPS to pay into Federal retirement programs.  The payments stolen by Congress, I mean, paid in advance, amounted to a decade’s worth of retirement fund payments.  So far Congress has refused to refund the over payments, although their proposed bills would give some money back, but only for use to buy out thousands of Postal workers.

When Postmaster General Donahoe talks about a “business model” he’s referring to the fact that in the 1980s Congress forced the USPS to become self supporting, meaning no more tax payer support.  The plan meant for the USPS to operate as a private business, so far Congress has actually interfered with that.

Whether Congress gets its way, or the Postmaster General, the result will be thousands more people unemployed.

The United States Postal Service does not make money off taxpayers, they are solely funded by the postage they charge (prices are controlled by U.S. Congress, not the USPS), and other products they sell.  The cuts being made to the USPS will have no affect on U.S. government debt!

 

Business/Economics, International, U.S.

Revised GDP report; what the mainstream media doesn’t tell you, inflation up, military spending up, non-military spending down, workers producing more but not being paid more

On November 22, the U.S. Department of Commerce, Bureau of Economic Analysis (BEA) released another revised Real GDP report.  It says the second revision of GDP for the third quarter 2011 was a stagnant 2%.

Gross Domestic Product is the “the output of goods and services produced by labor and property located in the United States”.   Real GDP means it’s been adjusted for inflation, specifically: “‘Real’ estimates are in chained (2005) dollars.”

The BEA report has some other important information, that the mainstream media rarely reports.

Inflation: Overall prices increased 1.9% in the third quarter, and 3.3% in the second quarter.

Expenses: Overall consumption expenditures increased 2.3% in the third quarter, 0.7% in the second quarter.

Property Investment: Non-residential property investment increased 14.8% in the third quarter, 10.3% in the second quarter.  Residential property investment increased 1.6% in the third quarter, 4.2% in the second quarter.

Exports: Products made in the U.S. and shipped to other countries increased 4.3% in the third quarter,  3.6% in the second.

Imports: Products brought into the U.S. increased 0.5% in the third quarter, 1.4% in the second quarter.

Government: Federal spending on the military increased 4.7% in the third quarter,  7.0% in the second. Federal spending on non-military decreased 3.8% in the third quarter, decreasing 7.6% in the second. State and local spending decreased 1.4% in the third quarter, decreasing 2.8% in the second.

Production: Real Gross National Product increased 2.1% in the third quarter, and 2.2% in the second.

Value of Products Produced: Market value increased 4.6% in the third quarter, 4.0% in the second quarter.

Income: Real Gross Domestic Income increased 0.4% in the third quarter, and 0.2% in the second.

To be significant the amount of change should be 3% or greater. Between 0% and 3% should be considered stagnation, below 0% is retraction.

Notice the huge jumps in property investment.

Notice that U.S. exports are above 3%.  This corresponds to the increase in production.  The value of products produced are more than 4%!  Yet look at the income of U.S. workers, a 0.4% pittance!  Some reward for making more products and providing more service!

The BEA’s data on production and income shows you that Corporate America views labor as slave wage workers. After all it’s obviously not the workers who’re benefiting from the increased production, and the increased value of their products and services!

What about government spending of your tax dollars? The BEA report shows what many are dealing with, a drop in State and local government spending (social services and education are the big ones), and a huge drop (more than 7% in the 2nd quarter, more than 3% in the 3rd) in Federal non-military spending (again, social programs, education, etc).  But look at the huge jump in military spending, it almost matches the cuts in non-military spending!

The BEA’s data on government spending is a real indicator of who the government really cares about!

Business/Economics, Technology, U.S.

What Economic Recovery? Netflix says 2012 will be so bad they will not make any profits. Looking to investors to float them. Blame competition & inflation

Netflix announced on November 21, that they do not expect to make a profit in 2012.  The on demand movie service went from having $366 million in cash, to almost nothing predicted for 2012.

Netflix officials blame it on several things; a huge subscriber loss, increased competition and a huge jump in licensing fees (inflation).

Like most of Corporate America, Netflix thought it could trick its customers into paying more for less. It backfired, company officials now estimate they will lose one million subscribers as a result.

Netflix says it’s seeing a jump in competition, not just from Hulu and Redbox, but from Amazon and Google.

Now comes the licensing fees.  In 2010 Netflix paid $180 million, now that’s jumped to $2 billion for 2012!!!  Company officials say they can not pay the fee upfront and will have to spread payments out over several years.

Under text book economic rules Netflix should pass on the increased licensing fees to its customers, but they already tried that and lost a huge amount of customers.  Netflix will try to ride out 2012 by issuing a crap load of stocks and bonds.  They hope they can get investors to buy at least $400 million worth of stocks and bonds, even though they admit they’re not going to make any profit for 2012.

 

Business/Economics, International, U.S.

Corporate Incompetence: British MF Global following in footsteps of Japanese Olympus?

“I’m flabbergasted. The bottom line is, there’s going to be a haircut involved. It’s devastating, what this has done to the industry.”-Tom Ward, retired Chicago Board of Trade member whose two sons have been blocked from accessing their money

Officials with MF Global, formerly Man Financial, are now admitting that they lost much more money than first reported. They’re now saying they lost $1.2 billion!

“What did the CFTC know three weeks ago and what do they know now?  If the amount has changed that much over three weeks, where did the money go? What were (regulators) looking at before?”-Tim Butler, attorney representing group of MF Global customers

MF Global originated in England, but after several moves, ended up in New York City in 2009.  They were a primary trader of U.S. sovereign debt (bonds).

Regulators have taken over the company, and are now liquidating it. The process has frozen $5.45 billion of customers’ money!

MF Global says they lost the money making a bad trade deal with the very bonds they deal with!  The latest reports say that MF Global may have used its customers’ investment money to make the deals for itself, a violation of regulations.

Investors are trying to get their money back, so far it takes hiring an attorney, but not everyone can do that: “Unlike the big banks, the average farmer who lost money in this fiasco can’t afford to hire an attorney and attend proceedings in a Manhattan courtroom.”-Chuck Grassley, U.S. Senator from Iowa

MF Global filed bankruptcy on October 31.

 

Business/Economics, Idaho, U.S.

Occupy America! Diesel disparity in Idaho. Gas prices way down, Diesel way up. Blame increase in U.S. exports! Blame pricing games! Warning for California. Fracking really for fuel production. Grow your own!

In eastern  Idaho, the difference between the price of one gallon of regular gasoline, versus diesel, is now a full one dollar.

Phillips 66, next to the Bannock County court house, Pocatello, Idaho

On November 19, the average price, in the Pocatello/Chubbuck area, hit $3.18 per gallon for regular gasoline, and $4.18 for diesel.

The U.S. Energy Information Administration (USEIA) says gas prices are falling, in general, due to the usual seasonal drop in usage.  I’ve never seen it drop by this much, here in eastern Idaho.  Back in May, the average price was $3.65 per gallon, and it stayed that way through most of the summer.  In the past two or three months the price has dropped almost 60 cents.

The USEIA also says regional fuel refining has a lot to do with prices, but back in September I discovered that PADD 4 gasoline production was being kept below demand. The latest data on PADD 4 gas production shows that, after months of keeping it around 290 thousand barrels per day, regional refineries are now pushing out more than 324 thousand barrels per day.  This is why gas prices, in the Rocky Mountain area (PADD 4) are, or should be, dropping.

In California it’s a different story.  The latest gasoline price survey shows the average price around $3.54 per gallon, with many areas paying $3.79.  California taxes are one reason for the higher prices, but the other reason is that California refines its own fuel, and the refineries are in trouble.

According to the USEIA, despite having the third largest refinery industry in the country California’s refineries are maxed out, there’s just too many people driving too many vehicles.  The USEIA is warning of a fuel price catastrophe in California: “California refineries need to be running near full capacity to meet the State’s gasoline demand. If more than one of its refineries experiences operating problems at the same time, California’s gasoline supply may become very tight and prices can soar. Even when supplies can be obtained from some Gulf Coast and foreign refineries, they can take a relatively long time to arrive due to California’s substantial distance from those sources. The farther away the necessary relief supplies are, the higher and longer the price spike will be.”

Regarding the rising cost of diesel fuel, it looks like some of what I warned about back on November 5 is coming true.  Bottom line; around the world diesel production is down, while international demand is going up and up.

The latest reports on diesel commodity prices show a slight decrease.  The decrease is so small that the global increase in demand for diesel will still cause pump prices to go up.

And how does the global demand affect us here in the U.S.?  According to the American Petroleum Institute (API), most diesel fuel produced in the Untied States is actually being exported to other countries (a 37.6% increase, in both diesel and gasoline exports, in the past year).  That means less diesel for the domestic market.

Diesel fuel is part of the “distillates” family of fuels.  In the U.S. ultra low sulfur diesel is referred to as “Distillate Fuel Oil 15 ppm (parts per million) and under of Sulfur”.  According to USEIA records, ultra low sulfur production, in the United States, varies between 3.2 million and 3.6 million barrels per day.  Now realize that international demand has gone up, and that U.S. refineries are exporting much of their diesel.  Since overall production is remaining in the 3 million to 4 million barrels per day rang, that doesn’t leave much for us.  The result is diesel prices will continue to go up, until U.S. distillate refiners greatly increase production.

For those of us in the Rocky Mountain (PADD 4) area, the USEIA shows an up and down pattern for “Distillate Fuel Oil 15 ppm (parts per million) and under of Sulfur”.  From March through May, diesel production was stuck at about 160 thousand barrels per day.  By the end of July it increased to 195 thousand barrels per day.  Since the end of August it’s dropped, to 185 thousand.  That explains why diesel pump prices in the Rocky Mountain area are going up.

But here’s one more reason, and one that many diesel fuel users have speculated on; the high pump prices of diesel is an attempt by producers to make a bigger profit, since they’ve actually been keeping gasoline pump prices artificially low.  A Reuters article states just that: “This in turn crimps diesel output until the cost of the fuel gets high enough to offset losses from additional gasoline sales.”

The Reuters article explains, not very well, that ultra low sulfur refining requires hydrocracking, a process involving hydrogen.  It’s also used for gasoline.  The problem is that many refineries in the U.S. can not produce both diesel and gasoline.  This might explain the swings in production; one month gasoline production up, and diesel down, the next month it’s reversed.

The push for fracking natural gas, is actually for the fuel refining industry, because it turns out that using the hydrogen in natural gas is a good cheap way to conduct hydrocracking in fuel refining.

Eventually more diesel will be produced, because of the global demand.  Several companies in the Gulf Coast area have invested billions of dollars to build new refineries to extract the hydrogen from natural gas to hydrocrack new diesel fuel.

Diesel fuel users should really look into making their own biodiesel, even though you could get into trouble with the Federal and State tax collectors, as well as the EPA.  Here’s some links:  Backwoods Home Official BioDiesel Home BioDiesel Diesel Master JR Whipple (good for moonshine too, remember diesel is a distillate) There plenty more sites on the internet about making your own diesel, do the research.

 

Business/Economics, International

United Police Kingdom: Privatization plans, disgused as austerity measures, backfires. Prison Guards threaten to join protestors, after government cuts pension plan, and prisons fill with record number of people

Thousands of British prison officers say they might join the planned nationwide strikes on November 30.

The Prison Officers Association has 35,000 members, and at least 15,000 will go on strike.  That’s enough to shut down the operations of British prisons.  To make matters worse, the number of people now in British prisons hit a record 87,945 last week.  The prisons are nearly maxed out.

The U.K. government wants to cut retirement plans, and that seems to be the straw that is breaking the prison guards’ back: “We are hoping that we can come to a settlement on pensions, but if we can’t, then we will support the November 30 day of action.”-Steve Gillan, Prison Officers Association

Business/Economics, U.S.

Occupy America! Corporate Lobbyists present plan to shut down OWS & Tea Party, more proof that the elites want turn the U.S. into a Prison Planet

MSNBC revealed a memo, written by former employees of U.S. House Speaker John Boehner, which basically asks for money to research ways to shut down the OWS and Tea Party movements.

Part of its goal is to prevent Democrats from joining the OWS movement, because that would threaten Corporate America: “This would mean more than just short term political discomfort for Wall Street…It has the potential to have very long lasting political, policy and financial impacts on the companies in the center of the bullseye.”

The proposal was written on the letterhead of the lobbying firm Clark Lytle Geduldig & Cranford and addressed to the American Bankers Association. It asks for more than $850,000 to conduct a 60 day study, which would include identifying Democratic candidates that are anti-Corporate America.

The Clark Lytle Geduldig & Cranford proposal also suggests that members of the Tea Party are close to joining forces with the OWS movement, and that upcoming end of year bonuses for corporate officials could result in Tea Party and OWS becoming one powerful movement: “Well known Wall Street companies stand at the nexus of where OWS protestors and the Tea Party overlap on angered populism…This combination has the potential to be explosive later in the year when media reports cover the next round of bonuses and contrast it with stories of millions of Americans making do with less this holiday season.”

The Clark Lytle Geduldig & Cranford proposal strongly suggest making examples of anyone who goes against Corporate America: “A big challenge is to demonstrate that these companies still have political strength and that making them a political target will carry a severe political cost.”

You need any more proof that Wall Street/Corporate America runs this country?




Business/Economics, U.S.

Occupy America! What Economic Recovery? Detroit to lay off thousands more city employees, impose more cuts, Detroit is Ground Zero for Corporate America’s attack on the working class

“The mood in Detroit is grim. The workers are very angry. They’ve given concessions over and over and over again without striking. We haven’t struck since 1896.”–Michael Mulholland, Secretary Treasure at AFCME Local 207 in Detroit

In 1983 there were 21,000 Detroit City union employees, now it’s down to about 11,000 and will drop at least another thousand by next year.  After more than 100 years, it looks like the City’s employee union might finally go on strike!

In 2010, Detroit officials legally imposed drastic cuts upon the City employees’ pay and benefits, now they’re threatening more cuts!  In the past two years 2,000 City employees have lost their jobs, now the Detroit Mayor, Dave Bing, wants another 1,000 layoffs.

But, union officials say the Detroit City Council wants to one up the Mayor: “The City Council is competing with him to represent Big Business, apparently, they’re threatening 2,300 layoffs!”-Michael Mulholland, Secretary Treasure at AFCME Local 207 in Detroit

This is part of a sinister plot to privatize Detroit, and the United States: “Detroit has a long history as a leader of the Civil Rights movement, we’re still a 85% Black city.  We have a long history as a leader of the Labor Movement, and I suppose that Big Business figures if they can attack us in Detroit, and get away with it, than they can do it anywhere in the nation, and lower the living standards of the entire population.”-Michael Mulholland, Secretary Treasure at AFCME Local 207 in Detroit





Business/Economics, International, Opinion, U.S.

United Police States of America: More proof that Uncle Sam is THE terrorist Mastermind; FBI behind most “terrorist” plots, it’s another way to round up poor black men for slave labor prisons

“The target, the motive, the ideology and the plot were all led by the FBI.”-Karen Greenberg, FBI tactics specialist, Fordham University

More and more evidence is coming forth, showing that for the past 10 years most “foiled terrorist plots” actually were masterminded by the FBI!  It’s a case of taking entrapment to a whole new level.

“Most of these suspect terrorists had no access to weapons unless the government provided them. I would say that showed they were not the biggest threat to the U.S.”-Mike German, American Civil Liberties Union and former FBI counter terrorism agent

Most of those arrested and convicted of recent terrorist plots were illegal drug users and/or sellers, or illegal immigrants.  Most of them say what happened was they were in dire straights financially and the undercover FBI agents (who’re posing as big time drug dealers) would offer them huge amounts of money to blow something up.  Sometimes they were promised that their debts would be cleared.  Illegal immigrants would be promised legal status.

“Most terrorists have links to foreign terrorist groups and have trained in terrorism training camps. Perhaps FBI resources should be spent finding those guys.”-Mike German, American Civil Liberties Union and former FBI counter terrorism agent

Most recently the FBI tried their drug dealer turned terrorist sting on some Iranians living in Mexico.  The Iranians smelled a rat and tried to get out.  One made it back to Iran, the other was arrested.  The U.S. government tried to present the failed ‘sting’ operation as a sinister plot to assassinate a Saudi Arabian official.  Never mind that it was the FBI who masterminded the sinister assassination plot.

But that’s not the only case the FBI bungled.  For some reason the FBI likes to use former convicted felons as their undercover agents.  In one case the potential ‘terrorists’ became so afraid of the FBI undercover agent that they succeed in getting a court to issue a restraining order against him.  They did not know the guy was an FBI undercover agent, or a former felon.

Bottom line, most of these cases involve poor men, mainly black and mainly Muslim.  There have been cases where they appeal their convictions, yet, even when the judge admits the FBI screwed up, their convictions are upheld.

It sounds to me like this is just another way our Corporate America controlled government is filling up slave labor prisons, especially the for profit Corporate America controlled prisons.  It has nothing to do with terrorists out to get us!