Tag: Opinion

Opinion: Hundreds of retired Major League players denied pensions because of union error
Social Security Disability

Opinion: Hundreds of retired Major League players denied pensions because of union error

Biscuits pitcher J.D.
Martin talks about learning to be that rare pitching sight, a knuckleballer.
Stacy Long Six hundred forty four people who played Major League Baseball are being denied pensions by both the league and the union representing the current players, the Major League Baseball Players’ Association, because of a error the union committed 38 years ago.
In order to avert a threatened 1980 Memorial Day Weekend walkout by the players, MLB made the following sweetheart offer to union representatives: going forward, all a post-1980 player would need to be eligible to buy into the league’s premium health insurance plan was one game day of service; all a post-1980 player would need for a benefit allowance was 43 game days of service.
According to the IRS, a current MLB retiree can receive a pension of up to $220,000.
The pre-1980 players alive at the time were each awarded payments of $625 per quarter, up to 16 quarters, for every 43 game days of service the man had.
Even though Forbes recently reported that the current players’ pension and welfare fund is valued at $2.7 billion, MLBPA Executive Director Tony Clark — the first former player ever to serve as leader of the union — has never commented about these non-vested retirees, many of whom are filing for bankruptcy at advanced ages, having banks foreclose on their homes and are so sickly and poor that they cannot afford adequate health care coverage.
Patty Hilton lost her spouse only six months ago, on Sept. 17.
His widow perhaps put it best: the MLBPA “is a soul-crushing organization.” Unions are supposed to help hard working women and men in this country get a fair shake in life.
But the so-called MLBPA labor leader doesn’t seem to want to help anyone but himself — Clark receives a MLB pension and an annual salary of more than $2.1 million, including benefits, for being the head of the union.

Opinion: Top 10 signs it’s time to sell U.S. stocks

Opinion: Top 10 signs it’s time to sell U.S. stocks

The yield curve is the spread between long Treasury bond yields and short-term bond yields, typically the 10 year vs the two year.
This means it fell below the “non-accelerating inflation rate of unemployment” (NAIRU).
Softening labor market Many strategists watch for signs of a tight labor market as a signal of overheating and inflation.
Over the past year, the average was around 190,000.
That’s because higher inflation means higher costs for companies, and lower profit margins.
This make sense, but it remains to be seen, given the tight labor markets, which typically spark wage inflation.
Rising bond yields Higher bond yields have been a great signal of looming problems for stocks over the past five decades.
Garthwaite at Credit Suisse puts the critical level at 3.5%.
Analysts also watch the gap between high-yield debt and safer debt in the corporate sector.
Sustained market decline The stock market itself is one of the best leading economic indicators.

Opinion: Paul Ryan leaves behind an unfixable mess

Opinion: Paul Ryan leaves behind an unfixable mess

Here’s his legacy: He spent his career, first as chair of the House Budget and Ways and Means committees, and later as speaker, devoted to cutting taxes so much it would force deep cuts in popular entitlement programs, mostly Social Security and health insurance, that actually dominate the non-defense part of the federal budget.
That’s bad enough, not least since the economy has been doing reasonably well before Congress and President Donald Trump administered the twin stimuli of a very large tax cut for corporations and the rich, followed weeks later by a $1.3 trillion spending bill that boosted federal spending, mostly to expand a defense budget that was already bigger than those of the next half-dozen nations with big military establishments put together.
But the real news was further down in the report — where CBO projected that the tax cuts and spending increases will only boost economic growth for about a year, after which things will stagnate.
Let’s put that $1 trillion deficit in perspective, especially since — unlike the trillion-dollar deficits in fiscal 2009 through 2013 — it’s happening when the economy is at full employment, rather than fighting off the worst recession since the 1930s.
And then, you have to take your pick of eliminating essentially all of Social Security, or all of Medicare and most of Medicaid (or vice versa).
Or you can whack all of the disability and SSI program, all of Medicaid, and all of domestic discretionary.
According to CBO, even with just the cake-and-candy policies Ryan and Trump have passed already will produce relative stagnation by 2020, with monthly job gains slowing to just 62,000 on average, though unemployment will still be low.
And it would get much worse if you really whacked the whole non-defense, non-entitlement parts of the federal government, plus most of Social Security, and then headed into a recession.
That’s the massive fraud Paul Ryan always was, even before Trump.
Fixing the budget damage he’s done is impossible if Republicans stay in control of Congress and cling to last year’s tax cut.

Opinion: John Williams, qualified white male, leaves damsels in distress

Opinion: John Williams, qualified white male, leaves damsels in distress

Bloomberg Protests from diversity advocates notwithstanding, the Federal Reserve Bank of New York selected another white male, John Williams, to lead what is arguably the most important of the 12 district banks, charged as it is with implementing monetary policy through the conduct of open-market operations.
Williams has been president of the San Francisco Fed since 2011.
He is a widely respected Ph.D. economist, whose recent research has focused on the neutral rate of interest — an unobservable rate that is consistent with full employment and stable prices — and alternate frameworks for the conduct of monetary policy, such as price-level targeting.
(Under such a regime, the Fed would allow inflation to exceed its annual 2% target to offset six years of chronic undershoot.)
When word leaked out last week that Williams was the likely pick for the post, Democratic Sens.
“The New York Fed plays a powerful and outsized role in overseeing Wall Street and shaping our nation’s economic and regulatory policy, and needs a leader who will put the interests of working families first and bring diversity and a different perspective to the table,” Gillibrand said in a statement last week.
While Gillibrand and Warren were protesting Williams’ appointment to head the New York Fed, Raphael Bostic, the first African-American to lead one of the regional Fed banks, gave a rousing endorsement of Williams, a graduate school classmate at Stanford.
The interests of working families; African-American and Hispanic unemployment; pay equity for women: These are important issues facing the nation, but addressing them is not part of the Fed’s job description.
The Fed’s job is the conduct of monetary policy.
That may not be the kind of diversity Warren and Gillibrand had in mind, but diverse views on how the economy operates would make for better policy decisions.

Opinion: For the Fed, is it ‘Mission Impossible’ or ‘Mission Ill-Defined’?

Opinion: For the Fed, is it ‘Mission Impossible’ or ‘Mission Ill-Defined’?

“It faces odds of failure — and little alternative path.” Ip’s premise is based on the notion that the Fed is forecasting economic growth of 2.7% this year, almost a full percentage point above estimates of potential gross domestic product, at a time when the unemployment rate is below what is deemed sustainable in the long run and projected to fall further, and inflation is finally expected to hit and breach its 2% target.
What’s the Fed to do?
For example, potential growth is determined by the growth in the labor force and in productivity.
Just as it took years for the innovations in information technology to show up in the productivity data, so too did it take economists years to accept that the productivity slowdown was not a residual from the Great Recession but something that had begun well in advance, in 2004.
Similar questions surround the non-accelerating inflation rate of unemployment, or NAIRU: the unemployment rate below which inflation will accelerate.
While the NAIRU may be unobservable, wages should rise when the labor market is tight as employers try to attract workers to meet increased demand for goods and services.
Both prices and wages rise in response to an increase in aggregate demand, which is a function of the Fed’s money creation.
Last but not least is the estimate for the neutral funds rate, or the rate that will keep the economy growing at its non-inflationary potential.
So is the Fed on a mission to raise the unemployment rate?
Instead, the yield on the 10-year Treasury note TMUBMUSD10Y, -0.85% is up a mere 50 basis points since the Fed began raising its benchmark rate.

Opinion: This is what the U.S. can expect from Putin 4.0

Opinion: This is what the U.S. can expect from Putin 4.0

But what is that mandate?
And what are we to expect from Russia in the global arena?
This year’s election was in part an attempt to “put to rest ghosts of the past” by preventing displays of public discontent and demonstrating to audiences — domestic and foreign — a sense of order, continuity and strength.
That said, it’s likely that Putin will focus not on the shortcomings of the Russian economy in his next term, but on his capacity for intervention abroad that has, in the minds of most pundits around the world, restored Russia’s prestige as a global player.
Putin has managed a constructive relationship with China, thanks to Chinese President Xi Jinping’s approach to Russia.
The most important thing for the Russian president seems to be that these projections of strength and purpose continue to play well with his domestic constituency.
Furthermore, the prospect of succession often turns leaders’ attention from the immediate challenges that usually draw their focus to problems of the future.
So back to the question: What is Putin’s mandate for the next six years?
But what he will do concerning domestic reforms remains to be seen, especially if he keeps relying on the same old strategy rather than on innovative new measures.
If, on the foreign policy front, Putin’s mandate gives him the confidence to take on new issues — ones that underscore problem-solving more than they emphasize his perception of Russia’s unfair treatment on the global stage — Moscow may yet find common ground with the West.

Opinion: The Federal Reserve is making a huge policy mistake

Opinion: The Federal Reserve is making a huge policy mistake

As everyone knows, the U.S. central bank raised the federal-funds rate by a quarter of a percentage point, to a target range of 1.5% to 1.75%.
And by planning to boost rates two more times this year and three times next year, the Fed can do real damage to housing markets, consumers — and, most importantly, the standard of living of middle-class workers who have been left behind by the booms in upper- end incomes, net worth and financial markets for the last 45 years.
Growth is accelerating?
Much has been made of the fact that job growth has picked up the last two months, but nothing about 2017 growth was extraordinary —- not in jobs or gross domestic product.
Even the Fed, which should know better, is overreacting to the 552,000 new jobs reported in the last two months, implicitly assuming President Donald Trump’s tax cut and spending increases will drive bigger gains.
The same is true of growth.
The economy grew 2.3% in Trump’s first year in office — better than 2016, but slower than 2014 or 2015.
Yet the Fed’s forecast is that growth will pick up to 2.7% this year.
Presumably, three more next year would make it $12 billion.
It’s vital, even historic, for the Fed to weigh in heavily for the fortunes of the middle class.

Opinion: The one thing that will make Powell’s inflation problem disappear

Opinion: The one thing that will make Powell’s inflation problem disappear

Presiding over a robust economy, pressures are mounting to raise the federal funds rate four times this year instead of the heretofore planned three.
Over the last three quarters, gross domestic product growth has averaged nearly 3% That’s remarkable as compared to the 2.2% accomplished during the eight years of Obama recovery but hardly superlative when measured against the Reagan and Clinton presidencies — even factoring in recessions, that period that averaged 3.4% growth.
Over the last six months, core consumer price inflation is running at 2.6% annual rate, as compared to the prior six months.
And bond markets and analysts are keenly focused on the January jobs report, which showed wages up 2.9% year-over-year, and other indicators of a tightening job market.
Consequently, the 10-year Treasury rate has surged more than 50 basis points this year and contributed to a stock-market correction.
Factoring in 1% annual labor productivity growth — the pace accomplished over the last decade — wage pressures on prices are right in line with the Fed’s 2% goal for inflation.
Stronger productivity growth could mitigate all these pressures on prices.
White House economists are confident that deregulation, business investment prodded by tax cuts and pro-business initiatives will restore the lost era of strong productivity gains — those averaged 2.3% a year from 1947 to 2009.
That’s why the former see the tax cuts as primarily demand stimulus and after a brief period of stronger growth, the economy slowing to a pace in line with the Obama recovery.
In contrast, the White House and few others see growth speeding up to nearly 3% longer term.

Opinion: Seven reasons why inflation will haunt investors this year

Opinion: Seven reasons why inflation will haunt investors this year

4: Weak dollar As I guessed might happen in this column last July, the dollar continued to fall in the second half of 2017.
This trend will continue for two reasons.
A weak dollar boosts U.S. growth and therefore causes inflation, because it attracts foreign demand for U.S. goods.
That’s not the only reason a weak dollar causes inflation.
Commodities are priced in dollars.
Given the weakness of the dollar last year, this is already happening.
Producer prices are rising at about 3%-4% year over year, notes Paulsen, or much higher than the 2.1% for consumer prices.
If they don’t, it’s still bad for stocks, because they’ll take a hit in margins and earnings growth.
“The stock and bond markets are re-pricing themselves for a very different character in the economy,” says Paulsen.
He expects inflation to be a problem for stocks and bonds this year.

Opinion: Blockchain will make today’s accountants (and many Wall Street jobs) obsolete

Opinion: Blockchain will make today’s accountants (and many Wall Street jobs) obsolete

If immutable distributed ledgers become a reality, their audit and accounting divisions will eventually become obsolete, with a huge human impact.
At just under 40% of their combined $127 billion in revenues, the firms’ audit and assurance divisions directly employ around 300,000 people.
These firms are exploring how this disruptive technology could affect their clients.
What will become clear to them is that accounting as we know it—as a quarterly exercise in which teams of people review samples of past transactions to judge the integrity of past events—will become obsolete.
And the Big Four’s audit divisions are just the tip of the accounting business iceberg.
It’s not just the big-name auditors at risk; it’s every auditor—including companies’ internal auditors.
Machines will input the financial data, analyze the financial data, and audit the financial data—all within a few minutes, if not seconds.
Even government bond traders march to the drum of delayed, audited releases of financial information, in their case economic indicators on estimates of inflation, unemployment, and GDP growth.
What happens to the work culture?
Nonetheless, the legal industry is also in for a huge shakeup.