Tag Archives: america

Business/Economics, U.S.

Occupy America, What Economic Recovery? Forget percentages, unemployment numbers already worse than 1930s Great Depression. Federal Reserve quietly preps banks for worse to come!

At the peak of the Great Depression, in 1933, 12.8 million people were officially unemployed in the United States.  According to the U.S. Bureau of Labor Statistics we’re already past that; 13.9 million officially unemployed!

Now take into account that some sources are saying that the Bureau of Labor is intentionally under reporting the numbers; they should read 17 million unemployed!  Then there are those that say if older unemployment counting methods were used, we’re actually double the officially reported numbers!

Now enter the Federal Reserve (the privately run central bank of the United States).  On November 22, Ben Bernanke quietly asked 19 top banks/financial institutions to conduct a stress test, for the third time since 2009.

The second stress test was completed in March 2011, and several banks failed, including Bank of America!  It was not publicly reported!

Reports say this latest “comprehensive capital analysis and review” would include scenarios like a 6.9% to 8% drop in the U.S. economy, a 21% drop in housing prices, and the potential for 23.2 million people out of work!

Bernanke also asked the six top banks (JPMorgan, Bank of America, Citigroup, Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley) to predict how much money they would lose in such scenarios.

The results are due on January 9, 2012.

 

Business/Economics, U.S.

Occupy America, What Economic Recovery? The truth is finally told about how much the Federal Reserve spent to bail out the too big to fail banks; nearly $8 Trillion! Ron Paul is right!!!

“This is an issue that can unite the Tea Party and Occupy Wall Street.”-Sherrod Brown, U.S. Senator from Ohio

Lies, scandals, cover ups, all part of the “too big to fail’s” plan to squeeze the United States dry.  Now there’s proof!

Bloomberg Markets magazine has gotten a hold of a 29,000(!) page document, that shows just how much the big banks lied and cheated to the tune of U.S.$7.77 trillion, and that’s not counting the taxpayer funded bailouts!

The bottom line is everybody close to the process lied like crazy.”-Naked Capitalism

Ever since 2007, when the Federal Reserve (a privately run bank) began bailing out the “too big to fail” banks, like Bank of America, the exact amount of the bail outs had been kept secret.  Ben Bernanke even said it was because if the public knew how much it really cost it would cause more problems.  He’s right!

While the average American in the United States lost their credit, lost their home, and lost their job, Corporate America got a $7.77 trillion bailout from the Federal Reserve. That’s a record!  And that doesn’t even count the taxpayer funded bail outs!!!

By the way, average Americans in the United States are still losing their credit, their homes and their jobs, because of bailed out Corporate America!!!

Here’s some more interesting facts about the Federal Reserve bailouts:

1; On December 5, 2008, a record $1.2 trillion was issued on one day!!! 

2; The Federal Reserve actually set up the supposed bail out “loans” so that some members of Corporate America made a profit off of paying back those loans!  How would you like to be paid for paying back your loans?  Corporate America made an estimated $13 billion off some of the bail out loans!

3; Citigroup made the most money off of the Federal Reserve loans, to the tune of $1.8 billion!

4; In fact the top U.S. banks (JPMorgan, Bank of America, Citigroup, Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley) used the bail out loans to increase their power. By September 2011, their combined assets had increased to $9.5 trillion!!!

5; Most of these bail out loans were issued when the “too big to fail” banks (case in point Bank of  America and JP Morgan Chase & Company) were telling their stockholders that they were in no trouble at all!

6; Most of these bail out loans were issued at the same time that the government was giving away taxpayer dollars to save Corporate America!  Treasury Department boss Timothy Geithner was well aware of how much money the Federal Reserve was loaning to the “too big to fail’s”!

7; The U.S. Treasury Department’s taxpayer funded TARP program cost a record $700 billion, but that is now dwarfed by the newly revealed Federal Reserve bail outs.

8; The six biggest U.S. banks, got $160 billion of taxpayer TARP funds, and, as much as $460 billion from the Federal Reserve!

Bloomberg got the 29,000 page document after winning a lawsuit (amazingly) against the Federal Reserve, and the country’s biggest group of banks, know as the Clearing House Association.

What this proves is that Corporate America is one big ass FAIL!!!  Either they were in the financial hole and really did need the bail outs, which means they had already failed as Capitalist Captains of Industry, or, they were not in the hole, as they repeatedly told their stockholders, and they just pulled off the biggest scam in world history!!!

The result is that the Untied States is now toast: “…we’re absolutely, totally, 100% not prepared for another financial crisis.”-Ted Kaufman, former U.S. Senator from Delaware

Ron Paul is right!!!

 

 

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

Corporate Hypocrisy: FMC spends money to take over companies that clean up pollution, yet refuses to clean up Idaho Super Fund site? FMC issues millions in debt notes, to join the growing trend of stock buybacks by Corporate America.

From 1949 to 2001, U.S. based FMC operated a phosphorus processing plant in southeastern Idaho, just west of Pocatello and Chubbuck.  Ten years later that plant is now an EPA Superfund site, and locals are still waiting for FMC to clean it up!

The hypocrisy is that FMC has been going around spending money buying up companies that specialize in environmental clean up!  The most recent purchase was Canada’s Adventus Intellectual Property: “Adventus presents an exceptional opportunity for FMC to broaden its growing portfolio of advanced specialty solutions serving the global site remediation market.”-Mark Douglas, FMC Industrial Chemicals

FMC site, west of Pocatello and Chubbuck, south of Fort Hall Reservation

So if FMC can buy up companies that specialize in environmental clean up, why can’t FMC clean up it’s old phosphorus plant in southeastern Idaho?

FMC claims to have annual sales of approximately $3.1 billion!  Yet FMC has just completed the sale of U.S.$300 million worth of debt notes.  Why does it need to do that?  According to FMC officials they’re jumping on the new trend of Corporate America buying back their stocks.  FMC wants to buy back at least $200 million of their own shares!  Instead, shouldn’t they spend that on cleaning up their Idaho Superfund site?

Recently the Environmental Protection Agency held public meetings in southeastern Idaho, to discuss ways to clean up the old FMC site.  Capped ponds at the site are emitting toxic phosphine gas.  There was also decades of dumping before the EPA was created. There is concern that contamination is leaking into the ground water, and nearby rivers.

 

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

Corporate Incompetence & What Economic Recovery? Another U.S. computer company, Dell, spends big, and loses big, in Taiwan. Want to work for Dell? Move to Taiwan

Taiwan’s Ministry of Economic Affairs named U.S. based Dell their third biggest foreign buyer, after Hewlett Packard and Toshiba.

This comes after Dell was ordered (some says ‘suggested’) by the Taiwan government to honor a pricing mistake on 19 inch monitors and pricey laptop computers.  The monitors were mistakenly priced at U.S.$15.00 and the laptops at $563.40.

Dell tried to get customers to pay full price, but was threatened with a $759,000 fine by the Taiwan government.

“To avoid further confusion to our customers and to facilitate further investigation Dell has made the difficult decision to close our Taiwan online store.”-Dell statement

Dell is still trying to get the Taiwan government to let them recoup their loses, and avoid something like this in the future, after all Dell spends about $10 billion on Taiwanese made products every year!

Buy the way, if you want to work for Dell, be willing to move to Taiwan.  As of November 27, Dell has at least 40 openings in Taiwan: “Thank you for considering a career in Taiwan at Dell”

Business/Economics, Technology, U.S.

Corporate Incompetence: Hewlett Packard cancels TouchPad, turns out it’s the number two selling tablet in the U.S.!

“76% of consumers who purchased a non-Apple tablet didn’t even consider the iPad, an indication that a large group of consumers are looking for alternatives, and an opportunity for the rest of the market to grow their business.”-Stephen Baker, NPD Group

On August 18, HP announced it was stopping production of its TouchPad tablet, citing poor sales.   Yet a survey by NPD Group says the HP TouchPad was the number two selling tablet in the United States, in 2011!

HP’s decision to cancel their TouchPad came just seven weeks after it was released.  That’s not long enough to give a new product a chance.  However, part of the reason for the HP TouchPad grabbing the number two spot, is that the price was dropped from $499 to an incredible $99!

This just seems like Corporate Incompetence to me.

 

 

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

What Economic Recovery? Is Hewlett Packard lying about investing in U.S. operations? Spends tens of billions of dollars in Taiwan, hires hundreds of Taiwanese while laying off hundreds of Americans

On November 25, the Taiwan government’s Ministry of Economic Affairs (MEA) recognized U.S. based Hewlett Packard (HP) as the number one foreign buyer of Taiwan made computer related products.

The MEA refused to give an exact dollar amount but said it was at least 10% more than what HP spent in 2010.  In 2010 HP spent U.S.$25 billion on Taiwanese products!

HP officials told the Taiwan media they plan on buying $30 billion worth of Taiwanese made products in the next two years.  On top of that they plan to hire hundreds of Taiwanese for their Taiwan operations.

This greatly contrasts with what Hewlett Packard is doing with it’s U.S. operations.  Slashing and burning operating budgets and laying off hundreds of U.S. employees.

In a recent interview, the new CEO of HP, Meg Whitman, said this: “We’re relatively pessimistic about the economic outlook in two of our three major regions. 2012 just looks tough to me.”

Apparently the United States is one of the two regions she’s pessimistic about, because that’s not what HP officials are saying about their Taiwan operations.  Several Taiwan media sources reported that HP officials feel very “upbeat” about the economic situation in Taiwan, and Asia in general.

In July HP bought back $10 billion of their own stocks, then laid off 500 U.S. employees in September.  At the beginning of November, news of more lay offs was leaked by people claiming to work at HP’s Boise, Idaho, factory.  Idaho media contacted HP and was told that a press release was in the works.  So far no press release.

 

 

 

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

Global Economic War: Start calling it Amazon China

“The Chinese e-commerce market will have a lot of winners, and Amazon China will be one of them.”-Wang Hanhua, president of Amazon China

In 2004 U.S. based Amazon entered the Chinese market, by taking over Joyo.com, a Chinese online book store.  They now have a new name: Amazon China.

The new name is a result of explosive growth thanks to the domestic Chinese economy.  Amazon China just opened the largest operations center outside of the United States, in Kunshan, Jiangsu province.  According to Chinese media it covers 120,000 square meters (1,291,669 square feet)!

“We are fully aware of the potential of this business, but we need to be prepared in logistics, packing center and operation systems.”-Wang Hanhua, president of Amazon China

Amazon China accounts for one third of all of Amazon’s global sales!

Wang Hanhua says one of the secrets to Amazon’s success in China is continued investment into marketing innovations: “Amazon China’s strategy is to invest continuously and focus on the long term market; that’s the reason why Amazon didn’t question its investment into China when it didn’t produce high returns.”

Now why can’t more Corporate America companies do that here in the United States?

Business/Economics, Idaho, U.S.

What Economic Recovery? Corporate layoffs & stock market games, part of Corporate America’s stock buy back scheme. Hewlett-Packard case in point

“We’re relatively pessimistic about the economic outlook in two of our three major regions. 2012 just looks tough to me.”-Meg Whitman, new CEO of Hewlett-Packard

“It’s an extraordinarily unimaginative way to use money.”-Robert Reich, former U.S. Secretary of Labor

What’s the former U.S. Secretary of Labor talking about? Why Corporate America buying back its own stocks.  Companies are able to do this because they are not spending money on research and development, and, according to a New York Times article, it’s the real reason companies are still laying off employees. They’re using the money they would have paid for the labor to buy back company stocks.

In November employees at the Boise, Idaho, Hewlett-Packard (HP) factory reported that layoffs were in the works.  In July HP bought back U.S.$10 billion of their own stocks, then laid off 500 employees in September.  HP officials avoided directly answering questions about layoffs in Idaho by saying they were working on a “press release”.  It’s been a couple of weeks now and no press release.

A lot of problems are being created by the way Corporate America is buying back their stocks.  For one it artificially increases the value of their stocks:  “Unless earnings per share are adjusted to reflect the buyback, then to base a bonus on raw earnings per share is problematic. It doesn’t purely reflect performance.”-John L. Weinberg, University of Delaware

Number two, it’ll delay any economic recovery: “It’s a symptom of a deeper problem, which is a lack of investment in the long term. If we’re not investing in research, innovation and entrepreneurship, we’re going to be a slow growth country for a decade.”-William W. George, Harvard Business School

And thirdly, it’s increasing unemployment, which is only adding to the downward spiral of the economy.

On November 22, Meg Witman, former eBay CEO, former California Gubernatorial candidate, and new CEO of Hewlett-Packard, was questioned about HP’s huge cuts in R&D.  Here’s her response: “It’s not (return on investment) in year one or two. I think the investments we make in 2012 you’ll start to see in 2014 and 2015. I wish I could tell you differently but it’s not true. And you’re right. We cut out a lot of muscle in R&D at this company and we have to invest back in it. It’s a long term play. I will tell you, this management team, we are now building HP, we’re building it to last. We’re not building it for next month or next quarter. We are building this company to be great over the next decade. And you’ll see improvements every single year. You’ll be able to measure us on how we’re doing. But we’re making some long term bets here because we can’t continue to run this company for the short term.”

Knowing that the latest trend in Corporate America is buying back their own stock, at the expense of R&D and employment, is that what Whitman means when she says “…we’re making some long term bets…”?

Whitman’s answer is confusing.  Traditional economics tells you that investing in R&D is a long term “bet”.  Yet Whitman calls it “short term”. 

So is that what Whitman means when she says we should see returns on investment in 2014/2015?  The investment meaning buying back their own stocks?

Anyone who’s taken economics, or business courses should know that traditional investment into your own company means R&D; to come up with more efficient ways to produce products, or coming up with new products/services, better marketing, etc.  But it does not mean buying back your own stocks.

Perhaps stock buybacks are the real reason there are layoffs coming for HP’s Boise operation, and officials are still trying to come up with a good sounding reason for their forthcoming “press release”?

Hopefully, since Whitman just started her job as HP CEO, she’s talking about a return to traditional economics. Hopefully it’ll mean an end to HP’s stock buy backs and a return to putting money into R&D and employment, she did say: “We cut out a lot of muscle in R&D at this company and we have to invest back in it.” Oh well, wishful thinking.

 

Business/Economics, Idaho, U.S.

What Economic Recovery? Idaho’s Coldwater Creek continues its fall, but, is this a case of buy low now, and if Coldwater Creek recovers, you can sell high?

“Coldwater Creek (NASDAQ:CWTR) is one of today’s worst performing low-priced stocks…”-Adrienne Chilton, analyst

The month of October and November was so bad for the Idaho company that, maybe, it should be put out of its misery.

During the second week of November, there were reports that Coldwater Creek could be delisted from the NASDAQ.  That’s because in the second half of October their stock price dropped to just a little more than .90 cents per share.  At the begining of November, Coldwater Creek was downgraded to “underperform” by Zacks Investment Research Analysts.

By the end of  the first week of November their stock price jumped back over $1.10.  But more bad news.  By the second half of November their stock price is now below .90 cents; as of November 23 it was trading at .88 cents per share.

Things are so desperate that in a move to motivate investors, and maybe keep from getting delisted, the CEO of Coldwater Creek, Dennis Pence, bought U.S.$7 million worth of his own company’s stock.

At around .90 cents per share that’s a heck of a lot of stocks!

Pence claims this is a case of buy low, sell high.  He claims he still believes in the company and is sure they will turn things around.  If he’s right investors could make a killing.  One analyst thinks investors could end up with a 200%-500% return, over three years!  But that’s assuming a $60 million improvement in Coldwater Creek’s expenses and operating income performance.

The anonymous analyst, going by the nom de plume Violent Capitalist, also admits: “…this is a very very risky investment…”

Another analyst, with the nom de plume of Pimlico, responded to the buy low, sell high sales pitch with: “This one really looks doomed. I have rarely seen shareholder equity decelerate as quicky as I have with this one.”

Investors should wait until November 30, when Coldwater Creek will report its 3rd quarter earnings.  Most analysts surveyed are predicting negative earnings.

Of interest, for the past four months, analysts have advised stock holders to “hold” onto their Coldwater Creek shares (as reported by Reuters). Is there hope?

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!