Video: On the third round of quantitative easing and the US economy

The video below is from On the Edge with Max Keiser. I speak to Max during this show from 31 March about the US economy, Federal Reserve policy, financial repression and more. On the issue of financial repression, I think my view is pretty clear from this video. However, I should note that analysts like Marshall Auerback take issue with the whole notion. He wrote me just yesterday on the topic

[Premium] Daily Commentary: On defined contribution pension plans

Some thoughts on defined benefit and defined contribution in today’s world of negative real rates plus today’s links

On Homeric Similes And Spanish Debt

Spain is on a bad course, with recognised debt about to surge rapidly, while investor confidence in the current administration is slipping. Time for another “game changer” I think, since otherwise this car is about to crash

Chart of the Day: International Manufacturing Compensation Costs Compared

Great data from the BLS comparing hourly compensation for manufacturing. The second chart looks at the benefits component of the hourly cost

Welcome to Amazon Town

The Wall Street Journal’s Stu Woo reports on how Amazon ramps up for the Christmas selling season in a much-read write-up for the paper with a focus on the thoughts of holiday season workers like 75-year old Ray Williams and his wife Sarann. Is this what retirement looks like in the

Italian minister breaks down in tears over austerity budget

Italy’s government has come forward with an aggressive 30 billion euro austerity package to prevent the country’s bankrupcty and pave the way for the fiscal integration that Angela Merkel is pushing as the key to solving the European debt crisis. In the video below, Elsa Fornero, the Italian welfare minister, broke down in explaining the provisions. The package also increases taxes on housing, luxury items and via a 23 percent VAT, a measure Ireland is also taking. Approval is expected before Christmas

Ignore Egan-Jones at Your Peril

If you are still inclined to give Greece the benefit of the doubt, I suggest you study the works of Egan-Jones, a credit rating company located in Haverford, Pennsylvania. Contrary to most other rating companies, Egan-Jones does not receive any compensation from bond issuers (a huge conflict of interest in the world of credit rating agencies) and, unlike most of its competitors who haven’t exactly covered themselves in glory in recent years, Egan-Jones has a formidable track record (see it here).

Sean Egan, co-head of Egan-Jones, predicts the eventual haircut on Greece to be close to 90%. He has done his homework and believes that Greece can support no more than €40 billion of debt through tax revenues. That amounts to only 10-15% of outstanding Greek sovereign debt. Sean put his case forward brilliantly in an interview in Barron’s earlier this year

Berlusconi Cuts Deal: Et Tu Brute

Controversial Italian Prime Minister Berlusconi appears to have finally capitulated to international and domestic pressure. Press reports indicate that he has agreed to step down by January. This in turn will bring forward elections, probably to March 2012, a year earlier than Berlusconi had previously insisted

Federal Notice to ALL Working Citizens

A friend sent this to me. It’s a note making the rounds by e-mail. If I get a source, I will link to it

On State and Local Governments

The bottom line is this: Forget about Meredith Whitney. State and municipal governments are carrying a load in operating and pension costs that cannot be sustained through downturns in a secular bear market as the US population ages. These downturns will not be ordinary recessions. They will increase automatic stabiliser spending, decrease tax revenue and crystallise shortfalls in pension programs in a way that is existential for these governments. And that means a spate of defaults will occur

Franklin Roosevelt on Social Security

Below are two messages from Franklin Roosevelt, proposing the Social Security program and signing it into law. The main points to note in the text deal with the purpose and funding of Social Security and unemployment insurance i.e. the why and the how

Pension and Ponzi Schemes

In the US, there is a heated debate about America’s government pension scheme Social Security. The Republican frontrunner for President Rick Perry has called it a ‘Ponzi scheme’, for which he was derided by the previous Republican frontrunner Mitt Romney. Here’s the question: is Rick Perry right. Is social security a Ponzi scheme?

Here’s my take