A financial bubble is where a rapid expansion in a particular market or asset is followed by a steep contraction. Prices often rise far above where they should be, considering fundamentals or intrinsic value. The aftershocks of the housing bubble still plague many Americans, but an even bigger bubble is raising red flags.
The skyrocketing price of a college education is causing an epidemic with student loans as more people rack up unsustainable amounts of debt to further their education. These loans are often bundled together and sold in a bond offering. While the appetite for risky assets is strong as the Federal Reserve punishes savers with low interest rates, investors are not willing to take a chance on some bonds backed by student loans.
Read the Rest @ Is the College Debt Bubble Starting to Crack? | Wall St. Cheat Sheet.
NEW YORK (Reuters) – More than 40 percent of recent U.S. college graduates are underemployed or need more training to get on a career track, a poll released on Tuesday showed. The online survey of 1,050 workers who finished school in the past two years and 1,010 who will receive their degree in 2013 also found that many graduates, some heavily in debt because of the cost of their education, say they are in jobs that do not require a college degree. Thirty-four percent said they had student loans of $30,000 or less, while 17 percent owed between $30,000 to $50,000.
… More than half of graduates said it was difficult finding a job, but 39 percent were employed by the time they left college. Sixty eight percent said they are working full time, while 16 percent are in part-time positions.
Read the Rest @ Recent U.S. college graduates disillusioned, underemployed: poll – Yahoo! News.
BAIER: The administration has insisted from the beginning there was no help available for the Americans under assault in Libya. None that could arrive in time to change the outcome in Benghazi. Tonight is the first of three exclusive reports charging that claim is just not true. Because the special operator in this piece is fearful of reprisal, we have agreed to conceal his identity.
Correspondent Adam Housley has the story. (BEGIN VIDEOTAPE)
HILLARY CLINTON, FORMER SECRETARY OF STATE: Many Americans are asking indeed, I asked myself. How could this happen?
ADAM HOUSLEY, FOX NEWS CORRESPONDENT (voice-over): In a seven months since the Benghazi attacks on 9/11, information from the administration has been incomplete at best. Details and timelines provided by the state department, the U.S. military and the CIA had been contradictory and failed to answer many questions. In December, a state department review concluded
ADM. MIKE MULLEN (RET), FMR JOINT CHIEF CHMN: There simply was not enough time for U.S. military forces to have made a difference. Having said that, it is not reasonable nor feasible to tether U.S. forces at the ready to respond to protect every high risk post in the world.
HOUSLEY: But members of the military who are monitoring events in Benghazi disagree. Only a few dozen people in the world know what happened that night and Fox News spoke exclusively with a special operator who watched the events unfold and has debriefed those who are part of the response.
By Susan Crabtree
President Obama on Tuesday said he was unaware of complaints from Benghazi whistleblowers inside his own administration who contend that they are being intimidated over their cooperation with investigators into the September 2012 attack, but pledged to look into the matter.
“I’m not familiar with this notion that anybody’s been blocked from testifying,” Mr. Obama said in response to a question during a press conference in the White House briefing room. “What I’ll do is find out what exactly you’re referring to.”
… At least four career officials at the State Department and the Central Intelligence Agency have hired lawyers or are in the process of doing so and are complaining that administration officials are trying to intimidate them as they prepare to cooperate with congressional investigators, according to a Fox News report.
Victoria Toensing, a former Justice Department official and GOP counsel to the Senate Intelligence Committee, represents one of the State Department employees. She said her client and others have been threatened by unnamed Obama administration officials not to cooperate with Congress on their Benghazi probes. The U.S. ambassador to Libya and three other Americans were killed in the assault on the U.S. diplomatic compound.
Read the Rest @ Obama ‘not familiar’ with intimidation of Benghazi whistleblowers – Washington Times.
By Moe Zulfiqar
As central banks around the world have taken money printing and easy monetary policy, such as low interest rates, as their key tools to boost economic growth, there are concerns among investors about what happens once they actually stop and bring their monetary policy back towards normalization—raising interest rates and no longer printing money like they are doing now.
For example, the Federal Reserve is printing $85.0 billion a month, and its balance sheet has already ballooned more than $3.0 trillion after the financial crisis brought the U.S. financial system to near collapse. On top of all this, the Fed is also keeping interest rates near zero. Similarly, the Bank of Japan is taking the same measures and plans to increase its money supply extensively.
Looking at all this; there is a notion among investors that the stock markets are currently going higher because the central banks are printing money—not because of real reasons, such as earnings growth. When the economy is flooded with money, it usually has to find a home; the money is flowing into the stock market. Once they start normalizing their monetary policy, the stock market may come crashing down.
This opens the floor to debate; does money supply actually dictate the direction of the stock market?
Read the Rest @ Stock Market to Crash When Central Banks Stop Printing? – Yahoo! Small Business Advisor.
The Supreme Court saved Obamacare by deeming the law’s individual mandate a ‘tax.’ But in that case, the law violates the Constitution’s Origination Clause, which says all tax bills must originate in the House, not the Senate. Letting the law stand sets a dangerous precedent.
… One of the hotly debated features of the Patient Protection and Affordable Care Act (or “Obamacare”) takes effect in 2014. Under the law’s “individual mandate,” nearly everyone who isn’t covered by an employer will have to buy health insurance or pay a penalty. This penalty was officially labeled a “tax” by the Supreme Court, or at least by five of the justices, in its decision on Obamacare last June.
Read the Rest @ Obamacare faces new legal challenge: Its ‘tax’ still violates the Constitution – Yahoo! News.
By Seth Mason
The premise is simple: the wealthy have a disproportionate amount of their net worth in investments, and the Fed has been propping up the stock market and inflating an asset bubble. Therefore, the inflation-driven economic recovery has been robust for the richest 7% while weak to non-existent for everyone else. And never forget, wealth and exposure to inflation are inversely-proportional. In other words, those with less money spend a greater percentage of their incomes on essentials–food, gas, etc.–whose prices have been rising as a result of the asset bubble.
Read the Rest @ ECOMINOES: Fed Liquidity Pumping Good For Wealthy, Bad For Rest.
By Meghan Foley
The Patient Protection and Affordable Care Act — a legislation championed by President Barack Obama — mandates that a minimum set of health insurance benefits be extended to all Americans, regardless of any preexisting conditions, forcing insurers to cover even the sickest applicants. Because of these new requirements, insurers are expecting costs to skyrocket, and as a result, many are preparing to raise premiums to cover these increased expenses.
Maryland’s biggest health insurer, CareFirst, has proposed raising premiums for individual policies by an average of 25 percent next year, according to information received by the Washington Post. However, the CareFirst BlueCross BlueShield plan must still be approved by the state, and regulators will likely give the double-digit increase a close examination. Maryland is among 31 states that have the authority to deny rate increases, giving regulators final authority over whether changes to health coverage required by Obamacare justify the higher premiums.
Read the Rest @ Does Obamacare Justify These High Premiums? | Wall St. Cheat Sheet.
WASHINGTON Reuters – Republican senators on Sunday pressed U.S. President Barack Obama to intervene in Syria’s civil war, saying America could attack Syrian air bases with missiles but should not send in ground troops. Pressure is mounting on the White House to do more to help Syrian rebels fighting against the government of President Bashar al-Assad, which the Obama administration last week said had probably used chemical arms in the conflict.
… More than 70,000 people have died in Syria’s two-year-old civil war. So far, the United States has limited its involvement to providing non-lethal aid to rebels.
… The U.S. fears anti-Assad Islamist rebels affiliated to al Qaeda could seize the chemical weapons, and Washington and its allies have discussed scenarios where tens of thousands of ground troops go into Syria if Assad’s government falls.
Read the Rest @ U.S. lawmakers press Obama to take action on Syria – Yahoo! News.
Do we even know who the rebels are? The fact that there are Al Qaeda type groups mixed in there should make all politicians think twice about their eagerness. If for some reason we do participate it should rest upon a multitude of conditions for everyone’s best self interests, otherwise, what’s the point?
By Jeff Franks
“The main difference,” says Ramis, pointing toward the Straits of Florida, barely visible in the darkness, “is that everyone wants to leave.”His use of the word “everyone,” is an overstatement, but he has touched on one of the Cuban government’s biggest problems – youthful discontent with a system many view as lacking opportunity for a better life.It is not a problem unique to the Caribbean island, which like many underdeveloped countries struggles to hold on to its best and brightest, but unlike most others faces the added difficulty of doing so at the doorstep of a hostile superpower with an open door immigration policy for Cubans.
The government prides itself on providing free healthcare and education to its people, but in an economy handicapped by inefficiency and a longstanding U.S. trade embargo, monthly salaries average the equivalent of $20 a month.
Read the Rest @ Cuba’s young see bleak future, many want to leave – Yahoo! News.
The thing about socialism is that, yes, it makes everyone equal… equally poor.
President Obama’s sequester scare strategy has been a political flop, but his government keeps trying. The latest gambit is to force airline flight delays until enough travellers stuck on tarmacs browbeat enough Republicans to raise taxes again.
This week the Federal Aviation Administration (FAA) began furloughing each of its air-traffic controllers for one day out of every 10 to achieve roughly $600 million in savings this fiscal year. The White House dubiously claims that the furloughs are required by the sequester spending cuts enacted in 2011.
Capitol Hill Republicans say the White House is free to make other cuts instead. House Transportation and Infrastructure Chairman Bill Shuster suggests the FAA first take a whack at the $500 million it’s spending on consultants, or perhaps the $325 million it blows on supplies and travel.
In case there’s any doubt about the President’s ability to prioritize, at least two GOP Senators, Jerry Moran and Roy Blunt, have written bills to clarify Mr. Obama’s authority to make sensible spending decisions. He’s not interested, and Senate Democrats have blocked such reforms. Making smart choices about federal sending would spoil the fun of creating flight delays and then blaming Republicans.
So this week the FAA has managed to turn the first stages of a 5% budget cut into hours of delays at the nation’s airports. The furloughs are landing on air-traffic controllers as much as they are on less vital FAA jobs. Officials at the Department of Transportation, the FAA’s parent bureaucracy, say it would be bad for morale to impose heavier furloughs on the employees who don’t direct airplanes. DOT has also ruled out any reductions in the FAA workforce to achieve the needed savings, along with most other obvious options that a private business would explore.
Read the Rest @ Review & Outlook: Flight Delays as Political Strategy – WSJ.com.
By Nancy Cook | The National Journal
Who would have guessed that the air-traffic controllers and meat inspectors would be the first ones lucky enough to avoid the across-the-board spending cuts known as sequestration?
So it went on Friday, when Congress passed legislation to give the Federal Aviation Administration special flexibility in implementing its sequester cuts. The bill exempted air-traffic controllers from furloughs, which had caused flight delays at major airport hubs throughout the Northeast for the past five days. Meat inspectors also received a carve-out in late March following a powerful lobbying push and under the guise of ensuring food safety.
Now, with two sequester tweaks on the books, other special-interest groups, unions, and lobbyists are planning to rev up their efforts to undo the cuts bit by bit or, in this case, by a few billion dollars here or there. The actions of the FAA over the past week, alongside airline groups and unions, offer a playbook for others to use as they too seek exemptions.
“What you’re seeing now is an unraveling of the sequester. This is predictable as the sun rising in the east, and it will happen piece by piece over the next 60 to 90 days,” says Steve Bell, senior director of economic policy at the Bipartisan Policy Center and a former staff director for the Senate Budget Committee.
Read the Rest @ A Playbook for Undoing the Sequester – Yahoo! News.
The House gave final approval Friday to a bill designed to end the furloughs of air-traffic controllers, but not before a partisan floor fight over who is to blame for the thousands of flight delays this week.
… Republicans on Friday were accusing the Obama administration and Democrats of political posturing in the air-traffic controller furloughs, and even accused the FAA of handling its $600 million sequester cut poorly.
“I think we all agree the FAA and the administration has handled the sequester poorly,” Latham said. “The FAA has negotiated in bad faith with the FAA employees, the airlines, the flying public, and the Congress, and the administration has played shameful politics with sequestration at the cost of hardworking American families.”
Boehner, in a statement after the vote, said: “The disruption to America’s air-traffic system over the past week was a consequence of the administration’s choice to implement the president’s sequestration cuts in the most painful manner possible.”
“It’s unacceptable that the FAA chose not to plan for sequestration or utilize the flexibility it already has. Americans were rightly fed up, and it’s unfortunate that the House and Senate were forced to step in and fix the problem when the president chose not to act,” he said.
Read the Rest @ FAA Furloughs to End, but Who Is to Blame for All the Flight Delays? – Yahoo! News.