Category Archives: Business/Economics

Business/Economics, U.S.

What Economic Recovery? U.S. Postal Service slashes retirement for employees, on the verge of insolvency, Congress wants to slash & burn the USPS

The USPS is in real bad shape, much worse than its counterpart Canada Post.

The USPS stopped about $800 million in contributions to its employee retirement plan.  This is an effort to prevent becoming insolvent, over a $5.5 billion employee health plan payment.

Also, USPS Inspector General David Williams, claims they were overcharged $75 billion for the Federal Employees Retirement System plan, and they want Congress to give it back.

On top of that, a bill has been introduced in Congress that would cut billions of dollars from the postal service, by reducing employees (even more than they have) and reducing hours by going to a five day work week (instead of the current six).  The bill is called the Postal Reform Act.  It was introduced by Kalifornian (sic) Darrel Issa.

The USPS lost $8.5 billion in 2010.  The United States Postal Service does not make money off taxpayers, they are solely funded by the postage they charge.  The problem is that Congress controls the postage they are allowed to charge, and so far Congress has refused to allow postal rates to reflect the actual operating cost of the USPS.

Business/Economics, International, U.S.

No Economic Recovery for the U.S.: Toyota launches new car in India

Toyota announced the premier of a new car, not in the United States, but India!

The new car is a small low priced car called the Etios Liva.  It’s smaller than most Toyota sedans.  The price is about U.S.$9,000.

Toyota also announced that India was becoming its fastest growing car market.  The number of Toyotas sold in India, last year, was double the number sold five years ago.

 

Business/Economics, International, U.S.

No Economic Recovery for the U.S.: Nissan says U.S. no longer target car market, the money is in South America, China, India & Russia

Nissan/Renault announced they plan to expand their global market share by 8% (an increase of about 10 million cars by 2017).  How are they going to do that? Definitely not by selling more cars in the United States.

Nissan/Renault says it will expand sales in China, India and Brazil.  They will boost production in China and India, and build a new factory in Brazil, that will produce 200,000 cars per year.

They will also buy more than 50% stake in Russian car maker Avtovaz.

 

Business/Economics, Idaho, U.S.

Government Incompetence: Home values drop, yet Property Taxes go up?

According to a Fortune article, some counties across the United States are trying to save their budgets by jacking up property taxes.  As a resident of Bannock County, Idaho, I can vouch for that!  Recently Bannock County announced they were jacking up farmland property taxes by at least 90%!!!

The National Association of Counties found that 15% of U.S. counties admitted to arbitrarily raising property taxes, for this year alone.

Real estate analysts say it’s the wrong thing to do, not just ethically, but economically: “Given the situation we’ve been in for the past few years, increasing property taxes is not likely to aid in the short-term recovery of the housing market.” McKay Price, real estate finance analyst Lehigh University

The fear by analysts is that by increasing property taxes homes sales will drop even more. The National Association of Counties says the trend of counties raising property taxes, as property values fall, is increasing.

 

Business/Economics, U.S.

What Economic Recovery? California Dreamin’ turned into Hotel California nightmare, yet people are escaping

It’s now official, for the first time since 1850 the number of people moving to California has declined!  People are actually leaving!  That’s according to the U.S. Census Bureau.

California is still the most populated state: 37 million.

According to the Public Policy Institute of California, 1.5 million middle class people left California in the past ten years.  Where are the people leaving to?  Anywhere that the taxes and cost of living are lower than in California!  (mostly Texas, Colorado, Nevada and Arizona)

Immigrants now make up the majority of people moving to California.  But that is on the decline as well.  Why?  Most migrants from south of the border are saying they can’t find any work!  Those that have work say the cost of living in California is not worth it!

The problem now, is that California is becoming a state of extreme wealth and extreme poverty.  According to the American Human Development Project, the exodus of middle class Californians is creating a state of two classes; rich and poor.

From 2009 to 2010, California’s GDP was in stagnation mode; at 1.8%, lower than many other states.  By the way, when the media calls 1.8% “growth” it shows their economic ignorance.  Anything from 2.9% to 0% is not growth, it’s stagnation.

I luckily escaped California in 1997.  I’m now in Idaho, things are getting bad here as well (economically) but I’ve run out of escape money.

Business/Economics, Technology, U.S.

Corporate Incompetence: Citi hacked, millions of dollars stolen

Citigroup is admitting that a May hack cost cardholders millions of dollars.

On May tenth 3,400 accounts had at least $2.7 million stolen from them.  The total number of accounts that were hacked is more than 360,000.

Citi officials claim they notified customers quickly, yet those notices weren’t sent out until June 3.  So far 200,000 credit cards have been replaced by Citi.

 

 

Business/Economics, U.S.

What Economic Recovery? Official Baseball Bankruptcy

The Los Angeles Dodgers are officially bankrupt.  The team franchise tried to get a new television deal that could have kept it out of bankruptcy, but Major League Baseball blocked that deal.

This comes after a bitter court battle between the two owners.  Frank McCourt was left as the owner, but he believes the blocked TV deal is an effort to force him to sell the LA Dodgers.  McCourt vowed he wouldn’t do that, he thinks the bankruptcy will buy him time to get things turned around.

It was hoped the TV deal would bring the Dodgers $3 billion.  Yes, they need $3 billion to stay alive.  I think this is a sure sign that sports is way overvalued, you might says it’s a another economic bubble about to burst.

Business/Economics, International, U.S.

What Economic Recovery? Obama about to send $145 million in military aid to Africa, $200 million for Yemen

Last week the Pentagon presented Congress with a plan to provide African countries with up to $145 million in military aid.  The aid, in money and equipment, is for so called counter terrorism operations.

The $145 million, to be split between several African countries, doesn’t compare to what just one country got last year.  Yemen, on the Arabian Peninsula, got $155 million in aid last year, paid for by taxpayers.  And this year the Pentagon wants give Yemen $200 million!

Out of the $145 million in military aid going to African countries, only $600,000 is for ‘human rights training’.

 

Business/Economics, International, U.S.

What Economic Recovery? World Banks tightening their grip on money

On Saturday, June 25, the Basel Committee on Banking Supervision announced that all major international banks, and central banks (like the U.S. Federal Reserve) are going to increase their capital reserves.

This means they are going to hold onto more money and issue less loans.  Some banks refer to capital reserves as putting their money to ‘rest’ (aka bank reserves, desired reserves).

The Basel Committee on Banking Supervision refused to give a list of which banks will be holding back on their money.  This is an indication that the major international, and central banks do not expect any short term improvement in the world economies.

The increase in capital reserves is to help banks handle monetary emergencies, like traditional “runs on banks”.  Just how long does the Basel Committee on Banking Supervision think the economy will suck?  The new tighter control on money will be implemented in phases, becoming fully in effect in 2018.  Mmmm, it’s 2011 now, uh oh!

Business/Economics, Idaho, Technology, U.S.

What Economic Recovery? Idaho Micron says demand for computer chips anemic

Idaho based Micron is reporting a drop in demand for computer chips.  One semiconductor analyst calls it “anemic”.

Micron reports sales are down, even though profits are up 4%, from the previous quarter.  How did they make a profit?  Officially Micron calls it ‘reduction in manufacturing costs’.  That means workers got laid off, in fact since 2008 more than 2000 Micron employees lost their jobs.

When you compare net revenues, year to year, Micron still lost money.