Widespread phone-based wiretapping has become the norm in the U.S., sneaked by legislators by information-hungry agencies using national security as a shield against civil liberty infringements. Now there’s news the government wants to expand tapping powers to the Net too.
A report in the New York Times purports to blow the lid on plans by federal officials to push for new legislation that will require “all services that enable communications” to be tappable, including encrypted mobile email systems like BlackBerry’s and social networking sites and VoIP services like Skype.
The FBI’s general counsel Valerie Caproni is quoted in defense of the plans, noting it’s all about “lawfully authorized intercepts” and that the moves aren’t about “expanding authority. We’re talking about preserving our ability to execute our existing authority in order to protect the public safety and national security.” But if you read her words carefully, they’re a fine example of political rhetoric. “Lawfully authorized” seems an okay phrase, but that means the authorities get to decide what’s lawful–whatever it may be. And if these moves aren’t about expanding authority, then why make them at all? Why not stick with simple phone taps?
And there are other concerns–the demands are to increase tapping powers of the Net for U.S. security reasons, but the Net is unlike the phone network, which requires centralized communications hubs. The Net is distributed, which gives it part of its great resilience to damage, and due to the nature of its design lots of non-U.S. traffic flows through U.S. Net infrastructure. In other words, the moves could increase the risk of damage to the Net thanks to virus writers and simultaneously allow U.S. authorities to snoop on traffic belonging to citizens of other nations without requiring any pesky diplomacy.
One other thing to think about is how this may affect the providers that “enable communications.” Firstly, the scope of who these people are is important: Are we talking cell phone network operators, or every ISP–since most mobile devices can hop on to available wireless Net access points? Is Apple implied in the plans, because its FaceTime app enables face-to-face communications that could let nefarious types communicate messages that couldn’t otherwise be spied on? Will Google comply with requests to enable decrypted-snooping on Google Voice calls?
The thought of Google’s involvement in this situation is particularly odd, given how bullish the company was being about human rights abuses in China and its provision of uncensored Net access–with Chinese authorities heavily implicated in hack attacks to get data on dissident voices inside China who were using Google to communicate. Should Google comply with equally morally gray requests from the authorities of its home country, or does it in fact have the sheer might (backed by billions of dollars and the might of its role in dominating Net tech) to stand up to the U.S. government?
There’s another angle to these snooping requests that could prove particularly thorny, and it is, as ever, about the money, and the question whether it’s going to cost companies to comply with the new law. For some firms, it will require tweaks and engineering changes for sure–possibly on a rolling basis, as particular spying requests come from the authorities. These changes, be they physical or in terms of re-writing code, will definitely cost. Will the companies be liable for these costs? If so, it could prove a fiscal problem for smaller firms. They may be able to apply for financial compensation, and indeed the government may have to fork out cash to pay for certain of these requests, maybe even every time they need to snoop. This compensation cash has to come from somewhere … and because the federal government is funded by federal dollars, this means the money will come from the taxpayer. Is the U.S. citizenry happy to pay more tax dollars in order to allow its own government to spy on its own people rather than paying for more health care?
As you can see, the implications of this type of legislation move far beyond the simple civil liberties domain, and that’s with just the first pass of thinking about the issues. If you add in the diplomatic concerns of U.S. allies about the sanctity of their data passing through the U.S.’s network, then things get even more tricky.
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Obama the communist shows his true colors.
SAY NO TO INVASION OF PRIVACY. SAY NO to government spying.
Where is all the outraged leftists when Bush wanted to pass the patriot act?!
Oh that is right, half this country consists of bigots who care more about feeling better about themselves than fighting for the individual rights and liberties for which this great country now stands.
This is a DIRECT attack on the freedoms of the American people and the U.S. constitution. Hell YES every single company should fight the damn government, or anyone that wants to force them to give up our data.
George Orwell’s 1984 is coming true. How long before we invite the Nazis and hate-mongers?
Vote every crooked politician OUT in November. Left, right, middle, doesn’t matter who or what. They’ve betrayed America for even thinking of passing this and violated every single freedom-loving person in this world.
Obamacare Healthcare Is Stupid this article caught my interest. Yes you read that right, Democrats are running against the health care reforms.
This is why the Tea Party was made. We’re tired of the stupid hypocritical bullshit that goes on out there. To be fair, maybe these are the dems that always knew obamacare was a stupid fucking idea, or they see the light. Either way I am glad more people are against this fucking Obamanation. The more the merrier. It matters not though in the end, we’re going to kick out all the stupid communists and socialists from this country, from both parties, and enact true conservative reforms. Unfortunately there is going to be a temporary shock to the lower classes as all the fat lazy leechers off the system get cut off. Riots, looting, and mass rape will occur so be sure to register and stockpile your guns today.
I’m not fucking kidding either lol.
ANCHORAGE, Alaska – Sen. Lisa Murkowski was booted from office in the Republican primary Tuesday by a little-known conservative lawyer in arguably the biggest political upset of the year.
Joe Miller, backed by Sarah Palin and the Tea Party Express, became the latest newcomer to the national political stage to take down an incumbent in 2010 amid deep dissatisfaction with the Washington establishment.
Miller’s win was a major victory for the tea party movement and marked the first time it had defeated a sitting senator in a primary.
Tea partiers had knocked off Utah Sen. Bob Bennett at a state convention in May, and emboldened tea partiers now have set their sights on Delaware where they are backing Christine O’Donnell against the more moderate Rep. Mike Castle in the GOP Senate primary.
Murkowski is the third senator to lose this year, along with Bennett and Arlen Specter, D-Pa.
Murkowski trailed Miller, a Fairbanks attorney, by 1,668 votes after the Aug. 24 primary. Election officials began counting absentee and outstanding ballots Tuesday, and Murkowski made slight gains. But after more than 15,000 ballots were counted, she remained 1,630 votes behind.
“We all know that this has been a long week, a terribly long week,” she said at campaign headquarters while conceding. She said that while there were still outstanding votes, “I don’t see a scenario where the primary will turn out in my favor, and that is a reality that is before me at this point in time.”
“And for that reason, and for the good of the state of Alaska … I am now conceding the race for the Republican nomination.”
The stunning result was a huge validation of the political power of Palin as the former Alaska governor has been playing kingmaker in midterm elections ahead of a potential 2012 White House run.
Miller, 43, is an Ivy League-educated lawyer, West Point graduate and decorated Gulf War veteran who cast Murkowski as too liberal and part of the problem in an out-of-control Washington. It is a campaign strategy that has helped oust other incumbents this year and that Republicans will employ again in November as they look to take back Congress.
Reached by phone in Fairbanks, Miller told The Associated Press that the answer to the country’s financial solvency crisis is to transfer power back to the states.
Federal aid has been considered an industry in Alaska, but the government’s impending financial crisis will eventually force a reduction in funding to the state, he said.
“We have to be prepared for that, and the way to do it, of course, is to progressionally transfer holdings of the federal government to us,” he said. “And of course, also by reducing federal regulatory burdens over the lands that we do control so that we can develop them more freely and more economically.”
Murkowski has proudly touted her seniority after eight years in office, and said her roles on the appropriations and energy committees put her in a strong position to ensure Alaskans’ voices are heard. Alaska has long been heavily reliant on federal money to run — a legacy largely carved out by former Sen. Ted Stevens before his death in an August plane crash.
After keeping a low profile for much of the race, Palin recorded a robocall for Miller in the campaign’s final days and touted him as a “man of the people” on her Facebook page. She also repeated a claim that Murkowski had waffled on her position on repealing the federal health care overhaul — claims the senator has called false.
Palin has been on a losing streak as of late with her candidates faltering, and many were expecting similar results in Alaska with Murkowski holding such a name-recognition and fundraising advantage. Palin also still remains a highly divisive figure in her home state.
“Do you believe in miracles?!” Sarah Palin tweeted Tuesday night. “Congratulations, (at)JoeWMiller! Thank you for your service, Sen. Murkowski. On to November!”
But as the results began coming in on election night, it became increasingly clear that Miller connected with the voters and tapped into anti-incumbent anger among Republicans.
Aside from a failed legislative bid in 2004, the Kansas-raised Miller had no experience running in political races before jumping into the race to take on Murkowski. He is friends with Sarah and Todd Palin, and they both endorsed him.
Miller also had the blessing from within the tea party crowd. The California-based Tea Party Express said it spent nearly $600,000 to help Miller — most of that in the race’s final weeks, when Miller’s camp said it sensed momentum was on its side and that Miller would win.
The Tea Party Express’ PAC, Our Country Deserves Better, tweeted Tuesday night: “Murkowski concedes!!! Thanks to all who helped make this possible. A great moment for the movement.”
Palin and the Murkowski family have a complicated history.
Palin trounced Murkowski’s father, Frank, in the 2006 gubernatorial primary — the race that would launch her national political career. Last year, she said she’d raise money for Lisa Murkowski, and even contributed to her campaign, quieting widespread speculation that Palin would challenge Murkowski for the seat. But the women have clashed on issues like health care, though they’ve denied any bad blood between them.
Murkowski has fought back against Miller and Palin’s claims. A radio ad on the election’s eve called Miller out as twisting the truth about Murkowski’s position on the federal health care overhaul. Miller has stood by his statements.
“Alaskans deserve to know the honest truth,” she said, “and they haven’t gotten it from Miller.”
The race was disrupted when Stevens died in a plane crash, with both candidates briefly suspending campaigning.
Murkowski was appointed to the Senate at the end of 2002 by her father and won her first term in 2004.
She said she was proud of the campaign she ran, which she called “honest” and “upright.” She said it stayed focused on the issues and the “high road.”
Previously, she had criticized Miller for running an unfair fight.
“This was not a race about Lisa Murkowski,” she said during her concession speech. “This was a race about Alaska.”
During a speech in which her voice wavered at times, she said confidently that once she completes her term, “I’m coming back home.”
“I’m looking forward to coming back home with my family and looking forward to building this great future, a great future that will not only be with my family but helping to fulfill Alaska’s promise, because there’s still so much work that remains to be done.”
“You are WHO I AM,” she told Alaskans.
Miller will face Democrat Scott McAdams, a small-town mayor, in the November general election.
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As long as the economy stays shit, expect more angry voters to kick out every single lazy asshole, Republican , Democrat, whomever. Right now the Tea Party will redefine the Republicans and weed out all the stupid RINO’s we got plaguing our base. Not to mention clearing out all the democrats that are just as fiscally retarded as their right-wing counterparts. I think the people have finally realized that there are idiot politicians hiding behind labels to scam the American people. But unfortunately for them, the scam has been revealed.
By the looks of things, banks are still being uber-skittish with regard to lending, while plowing their money into government securities.
But at least according to those Senior Loan Officers surveyed by the Federal Reserve, these banks are slowly getting ready to lend again.
It’s not dramatic, mind you, but across various categories, there’s clearly a loosening bias, rather than a tightening bias. And demand is apparently picking up.
If lack of lending really was one of the key factors preventing a rebound (rather than merely a symptom), then this is definitely a trend to watch, and a reason to be a little hopeful.
Could this actually be the start of a real thawing that actually translates into meaningful economic traction?
It’s possible.
Mike O’Rourke of BTIG theorizes as to what’s going on: basically it’s a response to mediocre earnings and the rapidly compressing yield curve (which makes the lend-to-the-government play less and less profitable).
What we believe is happening here is that banks are begrudgingly being forced back into banking by the market and investors. Think about when Q2 earnings season commenced last month, the banks set the tone with revenue misses on the top line as earnings beat on the bottom line. We would speculate that the banks will likely be punished again if they don’t exhibit improvement in coming quarters. The key problem during Q2 was the weakness of the capital markets business. It is safe to say that business has not picked up here in Q3. Investor’s don’t want to see these institutions operate as if they are in runoff mode not replenishing maturing loans with new ones, leading to that shrinking C&I chart depicted below. Likewise the banks can only use conservatism and prudence as a mantra for so long while they are releasing credit reserves, and keeping a $1 Trillion parked at the Fed for emergencies. In addition it is highly likely credit written here in 2010 is likely to be among the best vintages in a very long time. Instead of writing new loans the banks have been providing financing to the U.S. Government and the GSE’s by purchasing Treasuries and Agency MBS.
Hiding behind securities backed by the U.S. Government, explicitly and implicitly has been the “safe” way for banks to earn during the early stages of the recovery. As is clearly obvious, as these yields continue to compress the risk reward ratio will actually shift in favor of lending to a business for an actual spread rather than parking in 2 year Treasuries for less than 50 basis points. Finally, one last data point form the Fed Survey is that 22.6% of banks have increased their willingness to make consumer installment loans. Similar to the case for business lending the demand is not there yet. It is lagging business demand, but it is moving in the direction where it can stabilize in the coming months.
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The global yield curve is starting to get steeper, meaning it’s more profitable to lend. Greed is coming back to wall street and it has finally overtaken massive banker fear. About fucking time too. I was pissed that they took all our money, destroyed our financial system, got a huge bailout and then did fucking nothing for years. But at least things will pick up again.
Time for everyone to start making money, and probably not a moment too soon. Especially for Obama who will need a recovering economy to get re-elected again, though many Obamabots believe he’s still a good president. Heh some things don’t ever change.
Gen. Stanley McChrystal, who was forced to retire in July after an embarrassing Rolling Stone article quoted him and his staff making disparaging remarks about top White House officials, is taking a job at Yale, POLITICO has learned.
McChrystal will teach grad students a course in leadership at the Jackson Institute for Global Affairs in New Haven, which is opening this fall. He’ll be in good company: McChrystal will join John Negroponte, the former U.S. ambassador and former deputy secretary of state, as well as former Mexican President Ernesto Zedillo at the institute.
McChrystal had been considering a number of opportunities from a wide range of places, from large corporations to nongovernmental organizations and even some wounded warrior groups seeking his leadership, sources said. And he will undoubtedly have a future on the speaker’s circuit.
But he’s taking a different tack, at least for now, in agreeing to be a lecturer at an Ivy League school such as Yale, which seems as far away from the world McChrystal has known as a terrorist-killing Special Forces operator. (See: Petraeus downplays July 2011)
Many retired four-stars become consultants to the defense industry, mentors to the military or members of a variety of defense-related corporate boards. And McChrystal’s high profile most likely prompted curiosity if not fear within the White House that he would align himself with a Republican running in the midterms who would denigrate the White House’s execution of the war or its judgment in national security. (See: Petraeus: Iraq needs new gov’t soon)
But that doesn’t appear to be McChrystal’s plan. The Institute for Global Affairs was just created last year after a $50 million gift from John and Susan Jackson. According to the Yale website, the institute will offer courses for students at Yale who are interested in global affairs and provide career counseling and placement services for students interested in careers in diplomatic service or with international agencies. McChrystal appears to be one of four senior fellows appointed to teach there; four more tenured faculty members are assigned there as well. (See: Morning Defense: McChrystal’s new gig)
Yale University’s public affairs department was not available early Monday morning to comment on the hire.
McChrystal was forced to retire in July after the Rolling Stone profile portrayed comments he and his staff made about their civilian overseers.
Despite the controversy, McChrystal was given a hero’s send-off at a retirement ceremony at Fort McNair that was attended by a number of senior officers and officials, including Defense Secretary Robert Gates. Gates said McChrystal had one of the “sharpest and most inquisitive minds” in the Army, known for his intellectual appetite and disciplined constitution. (See: Gates staying through 2011)
But his career in the Army was clearly also defined by his operational acumen. “No single American had inflicted more fear, more loss of freedom and more loss of life” on American enemies, Gates said of the retiring general.
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Tough and honest, Stanley won’t bullshit people and I hope he is able to pass this on to all his students; the world needs more toughness and honesty these days.
REDWOOD SHORES, Calif. (AP) — Oracle Corp. said Thursday it has filed a patent and copyright-infringement lawsuit against Google Inc.
Oracle said in a statement that Google’s Android system for mobile phones infringes on its patented Java technology.
Google spokesman Andrew Pederson said the company can’t comment because it has not yet reviewed the lawsuit.
Oracle, which makes database software and other technology, acquired the Java computer programming language and related technology when it bought Sun Microsystems. That deal that closed in January.
Java can be used as a platform for building applications for computers, websites and smart phones and other mobile devices.
In its complaint, filed with the U.S. District Court for the Northern District of California, Oracle said Google’s Android operating system software consists of Java applications and other technology. As such, it infringes on one or more parts of seven different patents — something Google should know, Oracle argues, because it has hired former Sun Java engineers in recent years.
Oracle also said Google’s Android also infringes on Oracle’s copyrights in Java.
Oracle is seeking an injunction to stop Google from further building and distributing Android, plus higher monetary damages for willful and deliberate infringement.
Google says about 200,000 Android-powered phones are being sold each day.
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Larry Ellison is probably scared to shit of Google’s android. Since apple is taking too much heat for waging proxy war lawsuits against HTC and google phones (Justice department is starting to get pissed off for anti-trust violations), Larry is helping out his buddy steve jobs and taking on Google.
Lawsuits and shit happen every fucking day. They may range from the most idiotic (Robber slips on a banana peel while robbing a victim, sues for injury, and wins) to the most serious such as “patent” infringement.
Google’s not dumb as I am sure they know to isolate programmers and independently come up with their own shit to power android, which is a legal defense against infringement generally. Yes Google hired former Java engineers but so what? They can pass their knowledge on to “virgin” googlers who NEVER programmed in java, write up new code for android that looks, feels, and behaves similar or better to Java, and run that baby on Android phones. I’m sure Google did something like this (this is how you reverse engineer code and ideas and prevent getting sued) so this will be at most hopefully just an annoying headache. Even if they lose the monetary damages may not be much but the injunction will be agitating. I’d imagine Google’s contingency plan right now is to develop yet another new suit of software that will be different and put that on Androids.
All in all though, I wouldn’t worry much about this.
The 99ers took a stand on Wall Street Thursday.
A throng of desperate job-hunters — who’ve been out of work so long their unemployment benefits ran out — staged a protest rally on the steps of Federal Hall.
“Are you going to tell us, President Obama and Congress, that our lives are not worth saving?” asked 99er Connie Kaplan.
She had to move in with her daughter in Astoria, Queens to survive and gets food from food banks.
The grassroots political group, which sprang up after jobless Americans started commiserating online, is demanding that unemployment benefits be extended to include them. Sen. Chuck Schumer (D-N.Y.) co-sponsored a recently introduced bill that would create extensions in states with unemployment rates of 7.5% or higher.
“My family is broken up,” 99er and former public relations director Anne Strauss, 58, of Smithtown, L.I., told the Daily News.
Her house is for sale and her husband, also unemployed, has moved in with his son in Albany to take a commission-only job.
Strauss applied for a job at a bakery. One question on the application form asked of the job, “Will it interfere with your after-school activities?”
Pedro Coniconde, 45, of Tompkinsville, Staten Island, lost his job as a file clerk at Bank of New York in February 2008. He held a sign saying, “Pls. Do Not Treat Us the Unemployed Like Lepers and Criminals.”
About 1.4 million Americans have been out of work more than 99 weeks, according to the U.S. Bureau of Labor Statistics. That’s when unemployment benefits run out in states with the highest unemployment rates.
“A man without a job is like a man that does not exist,” said 99er Rubin Edwards, 48, of Clinton Hill, Brooklyn, who came to the rally dressed n a suit and tie. “I hope and pray for my future in America today.”
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New York just fucking sucks. Period. It’s shocking to read how well educated older adults are so broke that they have to live in with their kids. Makes you wonder how financially ahead families there are out there, if any.
Scary.
Since most people were trained to go get jobs instead of learning how to create them (meaning build businesses) well, this is what happens. I’ve always said that we need more business owners as a percentage of the population of those who wants jobs to the proportion of people who want to start their own business (people like me).
America’s fate was sealed loooong ago. This is just the beginning.
When we sold our startup in 1998 I suddenly got a lot of money. I now had to think about something I hadn’t had to think about before: how not to lose it. I knew it was possible to go from rich to poor, just as it was possible to go from poor to rich. But while I’d spent a lot of the past several years studying the paths from poor to rich, I knew practically nothing about the paths from rich to poor. Now, in order to avoid them, I had to learn where they were.
So I started to pay attention to how fortunes are lost. If you’d asked me as a kid how rich people became poor, I’d have said by spending all their money. That’s how it happens in books and movies, because that’s the colorful way to do it. But in fact the way most fortunes are lost is not through excessive expenditure, but through bad investments.
It’s hard to spend a fortune without noticing. Someone with ordinary tastes would find it hard to blow through more than a few tens of thousands of dollars without thinking “wow, I’m spending a lot of money.” Whereas if you start trading derivatives, you can lose a million dollars (as much as you want, really) in the blink of an eye.
In most people’s minds, spending money on luxuries sets off alarms that making investments doesn’t. Luxuries seem self-indulgent. And unless you got the money by inheriting it or winning a lottery, you’ve already been thoroughly trained that self-indulgence leads to trouble. Investing bypasses those alarms. You’re not spending the money; you’re just moving it from one asset to another. Which is why people trying to sell you expensive things say “it’s an investment.”
The solution is to develop new alarms. This can be a tricky business, because while the alarms that prevent you from overspending are so basic that they may even be in our DNA, the ones that prevent you from making bad investments have to be learned, and are sometimes fairly counterintuitive.
A few days ago I realized something surprising: the situation with time is much the same as with money. The most dangerous way to lose time is not to spend it having fun, but to spend it doing fake work. When you spend time having fun, you know you’re being self-indulgent. Alarms start to go off fairly quickly. If I woke up one morning and sat down on the sofa and watched TV all day, I’d feel like something was terribly wrong. Just thinking about it makes me wince. I’d start to feel uncomfortable after sitting on a sofa watching TV for 2 hours, let alone a whole day.
And yet I’ve definitely had days when I might as well have sat in front of a TV all day—days at the end of which, if I asked myself what I got done that day, the answer would have been: basically, nothing. I feel bad after these days too, but nothing like as bad as I’d feel if I spent the whole day on the sofa watching TV. If I spent a whole day watching TV I’d feel like I was descending into perdition. But the same alarms don’t go off on the days when I get nothing done, because I’m doing stuff that seems, superficially, like real work. Dealing with email, for example. You do it sitting at a desk. It’s not fun. So it must be work.
With time, as with money, avoiding pleasure is no longer enough to protect you. It probably was enough to protect hunter-gatherers, and perhaps all pre-industrial societies. So nature and nurture combine to make us avoid self-indulgence. But the world has gotten more complicated: the most dangerous traps now are new behaviors that bypass our alarms about self-indulgence by mimicking more virtuous types. And the worst thing is, they’re not even fun.
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I use to trade forex back in 2006 and 2007, right before the great recession started in the summer 2007. I lost everything, and worse, a lot of friends I cared about lost a lot of faith in me. It was very devastating to see them see me get so burned. Ever since then I went back to college and took finance to learn more about this fucking crazy world of money making money, to see if I could make sense of all the mumbo jumbo you read and see out there.
He is right, of course. I didn’t have any alarm bells go off when I borrowed 3000$ in credit card debt to finance my forex. I actually thought it was an “investment” and that in all investments there are risks, so it wasn’t much different from say buying stocks and bonds. My real hope was to get the 50x times interest on my money but as you know, anything that is leveraged is bound to make no money. Leverage is only good for insurance, in case your position tanks, your options or derivatives gain in value correspondingly (over time or the bigger the price differential, the closer the correlation is to “1″ or the delta approaches “1″. This means for $1 of the asset change, there should be a corresponding $1 change as well.
Of course I didn’t know about any of this shit then. I was just too busy trying to make money and being an idiot. So yeah, I pay for it to this day.
I lost maybe about $1000 in stocks over 2 or 3 years. The good news is I KNEW it was going to happen so I bought various kinds of positions. I also made a lot of money but I lost a lot of it too. In the end you gotta do the warren buffet way and take unleveraged positions in any asset class. Mathematically anything that is leverage will over time lose everything. Consider that you get a leveraged etf like say… QLD (Nasdaq 2x ETF leveraged).
Let us pre-suppose that the Nasdaq is at 2500 points today. It goes up 100 points for a gain that day of 2600/2500 – 1 or 4%. Qld, worth say $60 therefore, would gain 8% or $4.80 to end at $64.8
Ok so people are happy, they made some capital gains. Tomorrow, the markets open and I don’t know, the fed chairman is having sex with hookers and the wife just found out and is PISSED off like a banshee. Market confidence tanks at the “shock” that if powerful men will cheat on their lovely wives, then none of our women and men are safe. Morale suffers, stock prices tank. Close of market on Nasdaq is now 2500 or 3.84616% loss. Qld therefore tanks by 2x this amount for 7.69232%.
Qld at $64.80 x .9230768 = $59.815376. Funny the Nasdaq is worth the same today as it was previous the 100 point gain. Qld though has lost value.
So in essence, over time, you income approaches zero because the ups and downs of markets will eventually erode your securities value. This is why gamblers like me lose money. It is also why I sell call options because I know gamblers will lose over time. This is also why Warren Buffet generally just buys unleveraged stock positions to control or manage companies.
Granted, QLD does come back up is or not always delta=1 every day but that is because QLD itself is not leveraged, despite representing a basket of securities that are put together and that is leveraged. The point is don’t use margin and don’t borrow money. You have to invest $1 for every $1 worth’s of a security, which can be stock, currency, whatever. If you are leveraged, you will magnify the losses illustrated above. That is why it is proven scientifically that you cannot make money in forex over the long term. You have to trade it, and even then I don’t know if big hedge companies out there can do it.
So unless you’re a professionally trained day trader (that’s not me), you have to invest for the future, not trade for it.
Don’t lose your time and money. It will take away a part of your soul and morale. It fucking sucks.
Well, perhaps everyone should these days. Consumer spending accounts for roughly two-thirds of U.S. gross domestic product, or the value of all goods and services produced in the nation. And spending by the rich now accounts for the largest share of consumer outlays in at least 20 years.
According to new research from Moody’s Analytics, the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments.
By contrast, the bottom 80% by income account for 39.5% of all consumer outlays.
It is no surprise, of course, that the rich spend so much, since they earn a disproportionate share of income. According to economists Emmanuel Saez and Thomas Piketty, the top 10% of earners captured about half of all income as of 2007.
What is surprising is just how much or our consumer economy is now dependent on the rich, and how that share has increased as the U.S. emerges from recession. In the third quarter of 1990, the top 5% accounted for 25% of consumer outlays. That held relatively steady until the mid-1990s, when it started inching up past 30%. It dipped in 2003 and again in 2008, but started surging in 2009 amid the greatest bull market rally in history, with the Dow Jones Industry Average rising nearly 50% in the last nine months of the year.
Mark Zandi, chief economist for Moody’s Analytics, cites two main reasons for the increase. First, the wealthy panicked during the financial crisis and stopped spending. When markets rebounded, they came out of their shells and started spending again. “I think that pent-up demand was unleashed,” he said. “It was an unusually high rate of spending.”
The second reason is that those people in the middle- and lower-income groups are struggling to pay off debt and stay afloat amid rising unemployment, as Friday’s data reminds us. That has crimped their spending.
The data may be a further sign that the U.S. is becoming a Plutonomy–an economy dependent on the spending and investing of the wealthy. And Plutonomies are far less stable than economies built on more evenly distributed income and mass consumption. “I don’t think it’s healthy for the economy to be so dependent on the top 2% of the income distribution,” Mr. Zandi said. He added that, “In the near term it highlights the fragility of the recovery.”
In fact, the recent spending of the wealthy may be unsustainable. Their savings rate has gone from more than 26% in 2008 to a negative 7% in the first quarter of 2010, according to the Moody’s Analytics data. They still have lots of savings. But the massive draw on that in the past two years is unlikely to continue at the same pace.
“I think we’re already seeing a slowdown in spending by this group,” Mr. Zandi says.
And that should be a worry for all of us.
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Gee the left tends to want to be “fair” and take from the rich, which in itself by principle is not fair. Then they want to discourage spending even more by taxing them to death any way they can.
The rich account for 40% of the economy and they don’t want to spend because they are so unsure of what will happen to them in the future. Hmm, do you think taking their money to give to who will help? Heh it doesn’t work like that.
We’re all in this together. Going after one group harms everyone else eventually. See what the liberals never tried understanding is that the rich, or anyone self-responsible really, do not just voluntarily pay taxes. They create laws, bend rules, bribe politicians to pass exemptions to get out of the tax. The left does the same thing too. They go after their enemies which in this case are the “rich” and bribe politicians, bend rules, pass laws that affect all of us just to get to the rich. They don’t just bitch about the inequality in society, they go out and do something about it too.
The problem is, the people in the middle, (me and you), get left holding the bag. This is the real reason the middle class is disappearing.
Somebody has to pay those “new taxes” that the left passed. Guess who that is. That’s right, the PEOPLE. The very same people who voted it in for the rich. Why do you pay so much in taxes? Is it really because of government spending? Nope, that’s a big part of it but it’s really the mindset people have. Dysfunctional thinking of money leads to dysfunctional tax and economic policy. It also doesn’t help that this has severe karmic impacts on society because after all one group of people are advocating stealing of another group of people’s property.
You can call it whatever you want but at the end of the day it is still stealing. The powers greater than humanity cannot be fooled, period. China surprisingly understands this and as a result have a stronger economy but since they are not very liberal with their civil rights (if at all) they will likely fall prey to everyone else in history.
Is anyone surprised by what this article illustrates? You’d think common sense and history would teach people for once but oh well, it always repeats itself. It’ll just happen again and again and again…
All this has happened before, and it will happen again, unless we decide to make real changes in our minds and souls. Will you change? Only you can answer that; I’ve made my choice a looooooooooong time ago.
MIAMI – Paul Skidmore’s office is shuttered, his job gone, his 18-month job search fruitless and his unemployment benefits exhausted. So at 63, he plans to file this week for Social Security benefits, three years earlier than planned.
“All I want to do is work,” said Skidmore, of Finksburg, Md., who was an insurance claims adjuster for 37 years before his company downsized and closed his office last year. “And nobody will hire me.”
It is one of the most striking fallouts from the bad economy: Social Security is facing its first-ever shortfall this year as a wave of people like Skidmore opt to collect payments before their full retirement age. Adding to the strain on the trust are reduced tax collections sapped by the country’s historic unemployment — still at 9.5 percent.
More people filed for Social Security in 2009 — 2.74 million — than any year in history, and there was a marked increase in the number receiving reduced benefits because they filed ahead of their full retirement age. The increase came as the full Social Security retirement age rose last year from 65 to 66.
Nearly 72 percent of men who filed opted for early benefits in 2009, up from 58 percent the previous year. More women also filed — 74.7 percent in 2009 compared with 64.2 percent the previous year.
Jason Fichtner, an associate commissioner at the Social Security Administration, said the weak economy has led more people who lost their jobs to retire early. However, it also has forced some people hard-hit by the recession and in need of a bigger paycheck to push back retirement and stay in the work force longer.
“But we’re seeing more people taking early benefits than staying in the workforce longer,” Fichtner said.
Like Skidmore, 63-year-old Jan Gissel of Tustin, Calif., also was forced into retirement early. She turned to unemployment benefits when her technical support business failed and filed for Social Security last September. Together, the checks are keeping her afloat.
“I knew I had to have an income from somewhere, and my business wasn’t giving it to me,” she said. “I just went online and, boom, three weeks later I had the check.”
Gissel wants to continue working but still hasn’t found a job. Although she didn’t expect to be cashing Social Security checks so soon, she’s grateful for the support it has provided.
“I needed it way earlier than I thought,” she said.
In the annual report of the Social Security program released Thursday, the trustees said that pension and disability payments will exceed revenues for this year and 2011, reflecting the deep recession.
The report forecast that the program would return to the black in 2012 through 2014, but that benefit payments will again exceed tax collections in 2015. For every year after 2015, the report projects that Social Security will be paying out more than it receives in tax collections as 78 million baby boomers begin retiring.
The trustees did not focus on the growth of early retirees in their report, as they don’t expect the early retirees to significantly drain funds over the long-term. Early opt-ins receive smaller monthly checks so that they aren’t projected to receive any more money over a lifetime than they would if they had waited to collect Social Security until their full retirement age.
People entitled to full benefits at 66 would receive 75 percent of their check if they began collecting four years early. Conversely, if they waited until they turned 70, collecting four years late, they would earn 32 percent more.
They would receive the decreased — or increased — percentages for the rest of their life.
“From the trustees’ perspective it’s a wash, because they calculate you’ll get the same total benefit,” said Maria Freese, director of government relations and policy at the National Committee to Preserve Social Security and Medicare.
Freese added, though, that beneficiaries generally only opt in early because they have to.
“When you retire early, you are taking a hit in your monthly check, and most people don’t do that voluntarily,” she said. “They either do that because they aren’t healthy enough to keep working or because they lost their job.”
Nora Lopez, 62, of Hialeah, Fla., retired from her job as an elementary school teacher last year and began collecting Social Security. She did so, in part, because of health problems. When her school district offered teachers the option of keeping their health insurance coverage until they qualified for Medicare at 65, she decided she could get by on her pension and Social Security.
“I wanted to work as long as I could,” she said. “But it was hard for me to do that.”
For some, it’s simply a matter of doing the math that prompts them to cash in early. Jack Dixon, 63, of Naples, Fla., stopped working full-time in April as a trolley driver and tour guide, cutting back to one day a week. He decided to do it after his wife figured out they’d be able to get by even with the reduced Social Security benefit.
“Why should I go out there to the hustle and bustle and stress and all the stuff that’s related to work if I don’t have to?” he asked.
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As the economy continues to go to shit, expect more of this to happen. With Chinese labor costs beginning to rise (because the laborers and workers there are demanding more pay/more of the profitable cut) foreigners and American companies will be returning slowly to the United States to restart manufacturing (sadly I should’ve wrote about that article, it was on yahoo finance 2 weeks ago). The cost to manufacture one good is 47 cents per unit in America while it is now 32 cents in China currently. It use to be 16 cents so you can easily imagine why jobs just went “poof” here and over to my brethren overseas.
That’s the good news. The bad news is this will happen slowly, which means unemployment will continue to wallow around. Since the age old rule of “the people forget after a short while” is in effect, people are becoming less and less divided, as a total population percentage over things like healthcare reform or even immigration (gallup.com). Obama’s job approval is slowly dropping and is at about 40 or 47 % depending on which metric you want to use.
The point? Well, with so called rich people’s tax cuts expiring at the end of this year (if the Democrats get their way) expect more people to restrict spending. Many assume most “rich” people, who are different from “small business owners” (like myself) are one and the same so they think it does not matter if they get to keep more of their money as they will either “hire illegal mexicans” or just “ship jobs” overseas. Hostile business environments and business attitudes fuck a person over. Since everybody is looking to suck value out of us, well there’s just no real appreciation for what we bring to the table. Why bother, people just assume we’ll do nothing for the people so they’ll just pass laws to take all our shit away.
Of course by the time people realize that the evil performed by the super-big rich corporations does 90% of all the stupid shit (hiring overseas, hiring illegals, not creating wealth here at home before moving it elsewhere), it will probably be too late. Well, like I said before and I’ll say it again, you better go find a really fucking good Tax CPA and get your income below $50,000 or below after all deductions to qualify for the 15% tax rate. How else do you think Warren Buffet, GE, or Exxon-Mobile pay LESS in taxes than we do? Who’s really screwing who over?
Truth is people vote for what they get. Those who don’t vote or have no representation are basically stuck. There will always be people that game the system but don’t punish all the innocent people alongside the guilty. And poor economic policy combined with idiotic tax levies does just that.