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  • Goldman Showers Execs With $100 Million In Early Bonuses To Avoid Trump Tax Hit

    Goldman Sachs has accelerated nearly $100 million in stock awards to top executives before the end of the year in order to avoid unfavorable changes in the new tax code, according to public filings posted Friday.
    The most sweeping overhaul of U. S. tax code in 30 years includes a provision which caps a corporate deduction for executive pay; under current law, corporations can deduct up to $1 million per executive’s base salary, however there’s no cap on deductions for performance-based pay, such as bonuses.
    Under the new provisions, both base salary and performance bonuses count towards to $1 million cap – which is why Goldman accelerated $94.8 million in bonuses originally scheduled for January, 2018. By paying the bonuses early, the bank will save money on its own tax bill.

    This post was published at Zero Hedge on Sat, 12/30/2017 –.


  • China’s Bike-Share Startup Frenzy Turns into Money-Suck

    Fresh startups with millions of dollars in funding run out of cash and collapse. Bike-sharing companies – with their capital-intensive, cash-burning, ride-subsidizing business model – were among the hottest startups in China. They’ve attracted $2 billion in venture funding over the 18 months of the frenzy. They now count over 40 platforms, though the industry is dominated by huge piles of mutilated, stolen, and abandoned bicycles and by two unicorns (valued over $1 billion), Mobike and Ofo, that kicked off the frenzy and carve up 95% of the market.
    But this is how quickly a frenzy can deflate.
    On Thursday, Chinese media reported that Mingbike, with operations in major cities, had laid off 99% of its staff, after consumers had complained that they’d been unable to get their deposits of 199 yuan (about $30) back. Some of the laid-off employees ‘posted complaints on social media saying their salary had been withheld for several months,’ according to the South China Morning Post:
    Calls by the South China Morning Post to Mingbike’s main phone line were not answered. The last post on the company’s Weibo account was in earlier October and its WeChat account has not been updated since November 10.
    In response to the latest closure and growing risk of deposit refunds, Chinese authorities have stepped in, with Ministry of Transport spokesman Wu Chungeng saying on Thursday that local governments would play a major role in ensuring protection of consumer rights. He added that regulations for the industry were being drawn up by authorities.

    This post was published at Wolf Street on Nov 26, 2017.


  • NFL Ratings Slump Worsens As ESPN Forced To Slash $80 Million In Salary Costs

    As the NFL continues to try to address the ongoing civil war between Dallas Cowboys owner Jerry Jones and Commissioner Roger Goodell, not to mention the intermittent hostile fire from the White House, viewers are increasingly deciding they’ve had enough and are abandoning professional football viewership altogether. As the NY Post points out today, the embattled league saw ratings dip 6.3% in Week 11 meaning 1 million fewer people tuned in to see players take a knee during the national anthem versus last year.

    The TV audience for NFL games steepened its slide in Week 11, losing 1 million viewers versus last year’s season-to-date average.
    The 6.3 percent slump – worsening from comparable declines of 5.6 to 5.7 percent during the previous three weeks – plagued a week whose off-the-field drama made gridiron tackling seem almost tame by comparison.
    After starting 11.8 percent behind last year’s TV audience for NFL games in Week 1, league viewership had either held its own or narrowed the gap through Week 8.

    This post was published at Zero Hedge on Nov 23, 2017.


  • Spain’s Pension System Hits Crisis Point (and Everyone Ignores it)

    But how did things get this bad?
    By most measures sun-blessed Spain is an idyllic place to grow old in. Life expectancy is among the highest in the world, and the national pension fund’s payout ratio (pension as percent of final salary) is the second highest in Europe after Greece. But if current trends are any indication, that may soon be about to change.
    The country’s Social Security Reserve Fund, which was meant to serve as a nationwide nest egg to guarantee future pension payouts, given Spain’s burgeoning ranks of pensioners, has been bled virtually dry by the government. This started ever so quietly in 2012 when the government began withdrawing cash from the fund. Some of it was used to fill part of the government’s own fiscal gaps while billions more were tapped to cover the Social Security system’s growing deficits. As a result the pension pot has shrunk from over 66 billion in 2011 to just 15 billion in 2016.
    To avoid wiping out the fund altogether this year, the Spanish government extended a 10.1 billion interest-free loan to Spain’s social security system, which enabled it to pay out the two extra pension payments due in June and December. That way, only 7-7.5 billion will be tapped from Spain’s public pension nest egg. Emptying the pot altogether this year would have been politically unpalatable, says El Pas. Instead, it will be emptied next year as the social security system racks up yet another massive annual shortfall.

    This post was published at Wolf Street on Nov 18, 2017.


  • The Great Retirement Con

    The Origins Of The Retirement Plan
    Back during the Revolutionary War, the Continental Congress promised a monthly lifetime income to soldiers who fought and survived the conflict. This guaranteed income stream, called a “pension”, was again offered to soldiers in the Civil War and every American war since.
    Since then, similar pension promises funded from public coffers expanded to cover retirees from other branches of government. States and cities followed suit — extending pensions to all sorts of municipal workers ranging from policemen to politicians, teachers to trash collectors.
    A pension is what’s referred to as a defined benefit plan. The payout promised a worker upon retirement is guaranteed up front according to a formula, typically dependent on salary size and years of employment.
    Understandably, workers appreciated the security and dependability offered by pensions. So, as a means to attract skilled talent, the private sector started offering them, too.
    The first corporate pension was offered by the American Express Company in 1875. By the 1960s, half of all employees in the private sector were covered by a pension plan.
    Off-loading Of Retirement Risk By Corporations
    Once pensions had become commonplace, they were much less effective as an incentive to lure top talent. They started to feel like burdensome cost centers to companies.
    As America’s corporations grew and their veteran employees started hitting retirement age, the amount of funding required to meet current and future pension funding obligations became huge. And it kept growing. Remember, the Baby Boomer generation, the largest ever by far in US history, was just entering the workforce by the 1960s.

    This post was published at PeakProsperity on Friday, November 17, 2017,.


  • Robert Rubin’s Selective Memory and the Collapse of Citigroup

    According to the now publicly available transcript of the testimony that former U. S. Treasury Secretary Robert Rubin gave before the Financial Crisis Inquiry Commission (FCIC) on March 11, 2010, he was not put under oath, despite the fact that the bank at which he had served as Chairman of its Executive Committee for a decade, Citigroup, stood at the center of the financial crisis and received the largest taxpayer bailout in U. S. history.
    The fact that Rubin was not put under oath might have had something to do with the fact that he showed up with a team of six lawyers from two of the most powerful corporate law firms in America: Paul, Weiss, Rifkind, Wharton & Garrison and Williams & Connolly. One of Rubin’s lawyers from Paul, Weiss was Brad Karp, the lawyer who has gotten Citigroup out of serial fraud charges in the past.
    As one reads the transcript, it becomes alarmingly apparent that a man making $15 million a year at Citigroup for almost a decade has not involved himself in very many intricate details of how the firm is being run or has a very selective memory. (Rubin gave up his $14 million annual bonus when the bank was blowing up during the financial crisis but kept his $1 million salary. According to widely circulated estimates, Rubin’s total compensation for his decade at Citigroup was over $120 million, for a job which he concedes included no operational role and with just two secretaries reporting to him.)
    To many of the questions posed by Tom Greene, Executive Director of the FCIC, Rubin responded ‘I don’t remember.’ Rubin used that phrase 41 times during the interview.
    At one point, Rubin’s own lawyer, Brad Karp, appears to nudge Rubin on his failing memory. Greene asks Rubin if he attended a tutorial for the Board of Directors on September 17, 2007 on the risk environment. Rubin answers as follows: ‘It is interesting. I don’t remember either going or not going.’ Karp then says to Rubin: ‘Bob, they have the minutes of this meeting.’

    This post was published at Wall Street On Parade on November 8, 2017.


  • Matt Taibbi Exposes The Great College Loan Swindle

    How universities, banks and the government turned student debt into America’s next financial black hole…
    On a wind-swept, frigid night in February 2009, a 37-year-old schoolteacher named Scott Nailor parked his rusted ’92 Toyota Tercel in the parking lot of a Fireside Inn in Auburn, Maine. He picked this spot to have a final reckoning with himself. He was going to end his life.
    Beaten down after more than a decade of struggle with student debt, after years of taking false doors and slipping into various puddles of bureaucratic quicksand, he was giving up the fight. “This is it, I’m done,” he remembers thinking. “I sat there and just sort of felt like I’m going to take my life. I’m going to find a way to park this car in the garage, with it running or whatever.”
    Nailor’s problems began at 19 years old, when he borrowed for tuition so that he could pursue a bachelor’s degree at the University of Southern Maine. He graduated summa cum laude four years later and immediately got a job in his field, as an English teacher.
    But he graduated with $35,000 in debt, a big hill to climb on a part-time teacher’s $18,000 salary. He struggled with payments, and he and his wife then consolidated their student debt, which soon totaled more than $50,000. They declared bankruptcy and defaulted on the loans. From there he found himself in a loan “rehabilitation” program that added to his overall balance. “That’s when the noose began to tighten,” he says.
    The collectors called day and night, at work and at home. “In the middle of class too, while I was teaching,” he says. He ended up in another rehabilitation program that put him on a road toward an essentially endless cycle of rising payments. Today, he pays $471 a month toward “rehabilitation,” and, like countless other borrowers, he pays nothing at all toward his real debt, which he now calculates would cost more than $100,000 to extinguish. “Not one dollar of it goes to principal,” says Nailor. “I will never be able to pay it off. My only hope to escape from this crushing debt is to die.”

    This post was published at Zero Hedge on Nov 5, 2017.


  • China’s Mortgage Debt Bubble Raises Spectre Of 2007 US Crisis

    In an inglorious echo of 2007 America, many young homeowners in booming cities owe more than they earn, and some even falsify salary details to get bigger mortgages…
    ***
    Young Chinese like Eli Mai, a sales manager in Guangzhou, and Wendy Wang, an executive in Shenzhen, are borrowing as much money as possible to buy boomtown flats even though they cannot afford the repayments.
    Behind the dream of property ownership they share with many like-minded friends lies an uninterrupted housing price rally in major Chinese cities that dates back to former premier Zhu Rongji’s privatisation of urban housing in the late 1990s.
    Rapid urbanisation, combined with unprecedented monetary easing in the past decade, has resulted in runaway property inflation in cities like Shenzhen, where home prices in many projects have doubled or even tripled in the past two years.

    This post was published at Zero Hedge on Oct 15, 2017.


  • Millennials Are Delaying Marriage Because Men Aren’t Earning Enough

    Economists and social scientists have gathered multitudes of data about Millennials’ tendency to delay the traditional milestones of maturity (starting a career, getting married, buying a home, having kids) in favor of a prolonged adolescence.
    But in a new study examining household formation patterns in the US, Pew Research Center has isolated the biggest factor behind the rise in those households without a partner or spouse: ‘The declining ability of men to earn a salary large enough to sustain a family.’

    This post was published at Zero Hedge on Oct 13, 2017.


  • London House Prices Are Falling – Time to Buckle Up

    – London house prices fall in September: first time in eight years
    – High-end London property fell by 3.2% in year
    – House sales down by over a very large one-third
    – Global Real Estate Bubble Index – see table
    – Brexit, rising inflation and political uncertainty causing many buyers to back away from market
    – U. K. housing stock worth record 6.8 trillion, almost 1.5 times value of LSE and more than the value of all the gold in world
    – Homeowners and property investors should diversify and invest in gold
    Editor Mark O’Byrne
    In what might be a sign of things to come, London house prices have fallen for the first time in eight years.
    London house sales have fallen by a third as years of frenzied bidding come to a shuddering halt.
    The capital remains expensive. Housing still costs 10 times the average salary and only 50% of Londoners own their own homes, the EU average is 70%.
    Currently the rest of the UK appears to be benefiting from the lack of affordability and stock in London. Buyers are moving further out of the capital in order to secure their footing on the housing ‘ladder’… no snakes here …

    This post was published at Gold Core on October 10, 2017.


  • Here’s How the Unemployment Rate Dropped Last Month While U.S. Lost 33,000 Jobs

    This morning’s September jobs data from the Bureau of Labor Statistics (BLS) does not actually capture the extent of the economic misery in the U. S. mainland last month. The data showed a stunning loss of 33,000 jobs (the first time the U. S. has had a negative figure since 2010) while simultaneously reporting that the unemployment rate dipped to 4.2 percent from 4.4 percent in August.
    But here’s the quirky thing about how the U. S. government’s counts people as being employed: according to the official web site of the U. S. Department of Labor’s Bureau of Labor Statistics, an individual can be counted as employed even if they didn’t receive a dime in salary during the week the data is collected. The BLS explains its rationale as follows: (Italic emphasis added.)
    People are considered employed if they did any work at all for pay or profit during the survey reference week. This includes all part-time and temporary work, as well as regular full-time, year-round employment. Individuals also are counted as employed if they have a job at which they did not work during the survey week, whether they were paid or not, because they were:
    On vacation;
    Ill;
    Experiencing child care problems;
    On maternity or paternity leave;
    Taking care of some other family or personal obligation;

    This post was published at Wall Street On Parade By Pam Martens and Russ Marte.


  • Wall Street Hypocrisy Exposed: Bank Behind “Fearless Girl” Statue Fined For Systemically Underpaying Women

    The bar for Wall Street hypocrisy has just been raised.
    In a controversy that can only be described as hilariously ironic, Boston-based bank and asset manager State Street Corp – which famously created and installed the ‘fearless girl’ statue, purportedly symbolizing Wall Street’s progress toward gender equality in the workplace – to be a symbol of Wall Street’s progress toward gender equality, earlier this year – has agreed to pay $5 million to settle claims that it systematically underpaid female and minority employees, according to the New York Post.
    State Street assented to the fine – but refused to admit wrongdoing – after being audited by the US Department of Labor’s Office of Federal Contract Compliance Programs. The DOL alleges that the firm’s systemic pay discrimination dates back to at least 2010 and affected hundreds of employees, primarily in senior-level positions.
    ‘OFCCP’s analysis demonstrates that a statistically significant disparity in compensation remained even when legitimate factors affecting pay were taken into account,’ the Labor Department said Thursday in its filing. The department alleges that black employees were also discriminated against, with at least 15 individuals being paid less in base salary and total compensation than their ‘similarly-situated’ white peers.
    By installing the statue, State Street hoped to kill two birds with one stone: Burnishing its reputation as a female-friendly employer while helping to market its new ‘SHE’ ETF, which invests in female-led companies.

    This post was published at Zero Hedge on Oct 6, 2017.


  • The Pension Crisis Coming to a Boil

    The BBC has come out and reported that three million savers in Britain in what is known as final-salary pension schemes only have a 50/50 chance of receiving the payouts they were promised, a study has concluded. We issued a special report on the rising Pension Crisis and it has been unfolding on schedule. The odds of those in government receiving what they were promised is probably less than 50/50 worldwide with few exceptions.

    This post was published at Armstrong Economics on Sep 28, 2017.


  • The Working Class Can’t Afford The American Dream

    For millions of middle- and working-class Americans, the “American Dream” is all but dead. Far from being able to afford their own homes, the Fed’s latest survey on the wellbeing of US households revealed that nearly a quarter of Americans are unable to pay their monthly bills on time, and nearly half have less than $400 in the bank…
    But in what’s perhaps the most comprehensive analysis of the financial security of American workers, a study published by HowMuch.net explores the true cost of living for working-class Americans in dozens of US cities.
    What they found is hardly surprising. In most areas of the country, the average working-class household would be running a spending deficit. According to HowMuch’s methodology, the best place to live from a financial perspective on an Average Joe’s salary is Fort Worth, Texas, which would leave a working-class family with a $10,447 surplus at the end of the year. On the flip side, that same family would need an additional $91,184 just to break even in New York City.

    This post was published at Zero Hedge on Sep 1, 2017.


  • Macron Spent $30,000 On Makeup In Three Months

    One year ago, when he was still president, Francois Hollande scandalized the establishment when it emerged that amid record unemployment, painful labor reforms, a sliding economy and the most serious social unrest in decades, the French president’s personal hairdressed was getting paid a gross salary by the state of ~$11,000 per month (more than a European parliament member). As the media reported at the time, “the hairdresser, who the leaked contract names only as Oliver B, is set to earn half a million pounds over the course of Hollande’s current premiership, in exchange for being available at every waking moment and signing a contract promising not to speak about his position.”
    The fact that this was probably not the best way to spend French taxpayers’ money was confirmed this past summer, when Hollande’s approval rating was so low, the socialist president did not even run for re-election: a first in French history. Sadly, this was lost on Hollande’s former Minister of Economy – and current president – Emmanuel Macron who failed to learn from the mistakes of his former boss.
    According to French magazine Le Point, French President Emmanuel Macron spent 26,000 – over $30,000 – on makeup in his first three months as leader of the country.
    As Politico adds, “Macron’s personal makeup artist put in two claims for payment, one for 10,000 and another for 16,000, for doing his makeup during his travels and ahead of press conferences.” When asked about this abuse of taxpayer funds, The Elysee Palace said in response: ‘We called in a contractor as a matter of urgency.’ Still, aides said that spending on makeup would be ‘significantly reduced’ in future, Le Point reported.

    This post was published at Zero Hedge on Aug 25, 2017.


  • Which College Offers The “Best Bang” For Your Tuition Buck?

    Is making the investment in a college education still worth it? How much debt can you expect to have after you graduate, and how much money will you make in your career?
    As HowMuch.net details, Nitrocollege.com crunched the numbers from the top twenty public and top twenty private schools in the country and created a visualization to find out. The data was extracted from the U. S. Department of Education and U. S. News & World Report.
    We ranked each school according to the median salary someone can expect to earn ten years after enrolling. We then looked at the median student debt graduates typically carry. Focusing on median debt and median earnings makes a lot of sense – half of all students fall above these numbers, and half fall below. We then color-coded each school in a floating bar chart, making the private schools blue and the public schools yellow.
    Several things immediately jump out of this visualization.
    First off, private schools dominate the top half of the list while public schools by and large fall to the bottom. Graduates from private universities simply earn more money, which suggests that attending a private school pays off in the long run.

    This post was published at Zero Hedge on Aug 16, 2017.


  • Here’s how a few government pension funds are trying to close their $7 trillion funding gap

    There may perhaps be no other group of investors that’s more DESPERATE today than pension funds.
    Pensions, of course, are the giant funds responsible for paying out retirement benefits to workers.
    The idea is that both the employer and the employee typically contribute a set percentage of the employee’s salary throughout his or her career with the promise that, upon retirement, he or she will receive a fixed monthly payment.
    Many state and local governments rely on these ‘defined benefit’ pension pension plans, as do a handful of large corporations.
    The reason that these pension fund are so desperate is that the vast majority of them are underfunded.

    This post was published at Sovereign Man on August 16, 2017.


  • The Global Pension Nightmare – Global pension underfunding will be $400 trillion by 2050.

    Apparently good things do come to an end. The global pension outlook is looking bad and a large part of this stems from people living longer and simply not saving enough while they work. There are some major problems on how pensions are structured and the US, the wealthiest nation in the world is shifting to a ‘work until you die’ retirement plan. And this is for the richest nation so you can imagine how things look in other countries. Most people continue to ignore these massive problems but it is hard to miss the fact that by 2050 global pension funds will be underfunded by $400 trillion. Does this sound sustainable?
    The global pension problem
    There are some major reasons as to why this problem is occurring. For one, long-term growth has slowed and returns are simply not looking great. Many pension funds have optimistic return rates that are just unsustainable. We are in a lower return market.
    Another issue is that people simply do not save enough for retirement. In the US half the country is living paycheck to paycheck. The recommended savings rate is 10 to 15 percent of annual salary but that just isn’t happening across the board. With the shift from defined benefits to 401k casinos, people are now left with virtually nothing for retirement (outside of Social Security).

    This post was published at MyBudget360 on July 27, 2017.


  • The Best-Paid U.S. Jobs Requiring No Bachelor’s Degree

    If you’re looking for a well-paid job but you don’t have the money, time and sheer patience required to complete a four-year bachelor degree, do not fear!
    ***
    As Statista’s Nial McCarthy points out, according to Bureau of Labor Statistics data, plenty of U. S. jobs require an associate degree (usually taking two years), a postsecondary nondegree certificate or a high-school diploma.
    Air-traffic controller offers the highest wages without a bachelor degree with the median annual salary coming to $122,410. Prospective applicants should keep in mind that the job still requires an associate degree.

    This post was published at Zero Hedge on Jul 26, 2017.


  • S&P 500’s Biggest Pension Plans Face $382 Billion Funding Gap

    People who rely on their company pension plans to fund their retirement may be in for a shock: Of the 200 biggest defined-benefit plans in the S&P 500 based on assets, 186 aren’t fully funded. Simply put, they don’t have enough money to fund current and future retirees. The situation worsened for more than half of these funds from fiscal 2015 to 2016. A big part of the reason is the poor returns they got from their assets in the super low interest-rate environment that followed the financial crisis. It’s left a hole of $382 billion for the top 200 plans.
    Of course, the percentage of workers covered by traditional defined benefit plans – those that pay a lifetime annuity, often based on years of service and salary – has been declining for decades as companies shift to defined contribution plans such as 401(k)s. But each time a pension plan is terminated, canceled or altered, thousands of workers are affected.
    Last month, the 70,000 participants in the United Parcel Service Inc. pension plan learned they won’t earn increased benefits if they work after 2022. Late last year DuPont Co. announced it would stop making payments into its pension plan for 13,000 active employees, and Yum! Brands Inc. offered some former employees a lump-sum buyout to offload some of its pension liabilities. General Electric Co. has a major problem. The company ended its defined benefit plan for new hires in 2012, but its primary plan, covering about 467,000 people, is one of the largest in the U.S. And at $31 billion, GE’s pension shortfall is the biggest in the S&P 500.

    This post was published at bloomberg