Central Perk: 16 dec. 2013

luni, 16 decembrie 2013

Mish's Global Economic Trend Analysis

Congress Base Pay $174,000: House Working Days 155 (Adjourned): Senate Working Days 146 (and Counting): Bills Passed 57 vs. 40-year Average of 242
Rich Pay All The Taxes (Yes, Including Payroll Taxes, Social Security, Medicare) Take II
District Court Judge Rules NSA Phone Taps Likely Unconstitutional; 68 Page Ruling Cites "Orwellian Technology" and Unreasonable Searches
Majority Hate Their Job but Only 25% Looking; How to Find Your Way to an Authentic Career
Sharp Decline in France PMI; Private Sector Employment Drops 21st Time in 22 Months

Congress Base Pay $174,000: House Working Days 155 (Adjourned): Senate Working Days 146 (and Counting): Bills Passed 57 vs. 40-year Average of 242

Posted: 16 Dec 2013 05:41 PM PST

Inquiring minds may be asking "How much do our representatives make, and where do there spend their time?" Those are good questions, and here are some answers.

While You're Working, Congress Isn't

Please consider six factoids plucked from the Yahoo!Finance report While You're Working, Congress Isn't

Congressional Base Pay is $174,000 per year
Retirement benefits and other perks worth up to $110,000 additional per year more
Congress passed 57 bills in 2013, compared with an average of 282 passed bills per year from 1973 through 2012
The House recently adjourned for the year after being in session for only 155 days in 2013.
The Senate has logged 146 days in session so far this year.
In Congress's first year, 1789, members were in session for 168 days. They got paid $6 per day, the equivalent of a $26,000 salary today, and when Congress adjourned that fall, many members went home to help run the family farm or business. That group of part-time legislators, perhaps the most important Congress ever, passed many of the laws that formed the framework of the U.S. government for the next 220 years.

Article author Rick Newman states "In 2013 members of Congress worked less, got paid a lot more and struggled to produce anything of significance. If America really is in decline, it starts on Capitol Hill."

Indeed!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Rich Pay All The Taxes (Yes, Including Payroll Taxes, Social Security, Medicare) Take II

Posted: 16 Dec 2013 02:59 PM PST

In response to Rich Don't Pay Most of the Taxes (They Pay All of Them); Reflections on the "Almost Rich" several people complained that I am ignoring payroll taxes such as Social Security and Medicare.

They are wrong.

Here is a repeat of the key facts, followed by an addendum.

Buried inside a Congressional Budget Office report this week was this nugget: when it comes to individual income taxes, the top 40 percent of wage earners in America pay 106 percent of the taxes. The bottom 40 percent...pay negative 9 percent.

The key table is in Box 1 on PDF page 11 (report page 7) of Distribution of Household Income and Taxes. The report was released in December 2013 but data is for 2010.

Highlighting is mine.

Key Facts

The bottom 20% had average income of $8,100 but received $22,700 in annual assistance, netting $30,800 in after-tax income.
The second quintile had average income of $30,700 but received $15,200 in annual assistance, netting $43,400 in after-tax income.
The middle quintile received a bit more than they paid out, with $2,600 in annual assistance to be precise.

That money had to come from somewhere, and it did.

The highest quintile paid $52,500 more in taxes each year than they got back.
The second-highest quintile paid $8,800 more in taxes each than they got back.

Wells concludes ...

Fair or not, I will let you be the judge. People who make more should pay more, generally speaking. In America, they are. Yes, the rich (and almost rich) are getting richer. When it comes to individual income taxes, they're also covering the entire bill. And leaving a tip.

Addendum:

Several people stated the above statistics ignored payroll taxes (Social Security and Medicare).

That claim is easy to prove wrong, from the very page I cited! Here it is, spelled out as noted above on PDF page 11 (report page 7) of Distribution of Household Income and Taxes.

Source: Congressional Budget Office. Notes: Market income is composed of labor income, business income, capital gains, capital income (excluding capital gains), income received in retirement for past services, and other sources of income. Government transfers are cash payments and in-kind benefits from social insurance and other government assistance programs. Federal taxes include individual and corporate income taxes, social insurance (or payroll) taxes, and excise taxes. After-tax income is the sum of market income and government transfers, minus federal tax liabilities

That should not have been too hard to find, but it was, because the subject keeps coming up.

And while I am at, may as well discuss multiple disputes regarding "the top 40 percent of wage earners in America pay 106 percent of the taxes."

Numerous people said that was impossible, even though the very next sentence explained how: The bottom 40 percent...pay negative 9 percent.

It nets out to 100% if you do the actual math.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

District Court Judge Rules NSA Phone Taps Likely Unconstitutional; 68 Page Ruling Cites "Orwellian Technology" and Unreasonable Searches

Posted: 16 Dec 2013 12:21 PM PST

In a rare victory for constitutional freedoms, U.S. District Court Judge Richard Leon, ruled NSA phone program likely unconstitutional.

A federal judge ruled Monday that the National Security Agency program which collects information on nearly all telephone calls made to, from or within the United States is likely to be unconstitutional.

U.S. District Court Judge Richard Leon found that the program appears to run afoul of the Fourth Amendment prohibition on unreasonable searches and seizures. He also said the Justice Department had failed to demonstrate that collecting the so-called metadata had helped to head off terrorist attacks.

"Plaintiffs have a very significant expectation of privacy in an aggregated collection of their telephone metadata covering the last five years, and the NSA's Bulk Telephony Metadata Program significantly intrudes on that expectation," wrote Leon, an appointee of President George W. Bush. "I have significant doubts about the efficacy of the metadata collection program as a means of conducting time-sensitive investigations in cases involving imminent threats of terrorism."

"I cannot imagine a more 'indiscriminate' and 'arbitrary invasion' than this systematic and high-tech collection and retention of personal data on virtually every single citizen for purposes of querying it and analyzing it without judicial approval," Leon added.

Similar lawsuits challenging the program are pending in at least three other federal courts around the country.

Digging into the 68 Page Ruling

Those wishing to read the entire 68 page ruling can do so at Legal Times.
Unfortunately the PDF is in image form.

Here are a image clips of sections not mentioned elsewhere by others.
Click on any image for sharper view.

Leon Blasts Government for "Wanting It Both Ways" - page 38

Plaintiffs Are Likely to Succeed on Merits of Their Fourth Amendment Claim page 42

"Collection and Analysis of Telephony Metadata Constitutes a Search" page 43

"Almost-Orwellian Technology" - page 49

"Significant Likelihood Searches are Unreasonable" - Page 56

On the same page Leon notes "As a general matter, warrantless searches are per se unreasonable under the fourth amendment".

On page 61 Leon stated "The government does not cite a single instance in which analysis of the NSA's bulk metadata collection actually stopped an imminent attack."

Government Barred from Bulk Data Collection

You have to love the end!

On page 67-68

Rare Victory

This is a rare victory for common sense and the constitution. However, the ruling is subject to review from a higher court.

Expect Obama to fight hard to maintain unreasonable searches.

Thank Snowden

We can thank patriot and true American hero Edward Snowden for this important victory. In contrast, House speaker John Boenner stands with President Obama in making a constitutional fool of himself.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Majority Hate Their Job but Only 25% Looking; How to Find Your Way to an Authentic Career

Posted: 16 Dec 2013 10:14 AM PST

If you don't like your job, you are not alone. Forbes notes Unhappy Employees Outnumber Happy Ones By Two To One Worldwide.

That statistic comes from a Gallup Study that reviewed 25 million responses in 189 different countries. Globally, the study found only 13% of workers feel engaged by their jobs.

In the US, the survey shows that of the 100 million people who hold full-time jobs, only 30% are engaged and inspired at work while roughly 20 million (20%) employees are actively disengaged.

In short, 30% are happy, 20% are miserable, and the rest are going through the motions, at best.

Young and Unhappy?

The Huffington Post says Young And Unhappy With Your Job? Just Keep Waiting. Maybe Forever.

I assure you there is better advice than the conclusion of the Huffington Post article which ends with "So it may take more than just 30 years of waiting for today's young workers to end up in careers that make them as happy -- and as rich -- as their older colleagues."

Twenty-Five Percent Looking

A recent Rasmussen Reports survey shows 25% Are Looking for a New Job.

Given the level of reported unhappiness, why isn't the number higher than 25%?

Undoubtedly some feel trapped, others lack motivation, and many have no idea what they really want to do.

Finding Your Way: Book Review

For those motivated enough to do something, I suggest reading Finding Your Way to Your Authentic Career by Adam Taggart.

I just finished reading the book. It is easy to read and understand, and offers practical steps to follow for those in jobs they don't like.

For those who don't know the name, Adam Taggart is president of Peak Prosperity which he co-founded with Chris Martenson.

Although the steps are easy enough to follow, some of them are going to take a great deal of time, and more importantly, lots of motivation.

Adam informs me that he did follow all of the steps.

He switched from being an unfulfilled vice president at a Fortune 300 Silicon Valley tech giant to working as a business partner with Chris Martensen. His story is much like my own story of switching from computer programming to being an economic blogger and investment advisor for Sitka Pacific.

I had an advantage over many. I knew what I wanted to do. I was extremely happy in the mainframe computer world for over 15 years. The next few years were going through the motions until 911 forced me to do something else.

The steps Adam outlines to help you figure out what you want to do are time-consuming, as well as the most difficult part of the process.

So don't think you will pick up the book and be off and on your way. You won't, especially if you need to follow all of the steps to figure out what it is you want to do. But those motivated enough to see the steps through are more likely than others to find a fulfilling career at the end of the process.

Finding Your Way to Your Authentic Career is available in book form or on Kindle.

It's good reading for anyone unhappy with their job and motivated enough to do something about it.

The book also makes a good stocking-stuffer for parents/grandparents who want to help their kids/grandkids find purpose early on in their careers.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Sharp Decline in France PMI; Private Sector Employment Drops 21st Time in 22 Months

Posted: 16 Dec 2013 12:51 AM PST

Those expecting an end of the recession in France got another jolt of reality this morning. The Markit Flash France PMI shows Sharper fall in output at French companies in December.

Key Points

Flash France Composite Output Index falls to 47.0 (48.0 in November), 7-month low
Flash France Services Activity Index drops to 47.4 (48.0 in November), 6-month low
Flash France Manufacturing Output Index slips to 45.3 (48.0 in November), 7-month low
Flash France Manufacturing PMI falls to 47.1 (48.4 in November), 7-month low

Both the manufacturing and service sectors signalled sharper reductions in output than in November. Services activity decreased for the second month running, and at the fastest pace since June. Meanwhile, manufacturers posted a marked decline in production, extending the current sequence of contraction to five months. Respondents indicated that lower new orders was behind the fall in output, in turn linked to caution among clients. New business decreased for the third month running.

Staffing levels also continued to decline during December. Employment in the French private sector has fallen in 21 of the past 22 months. The solid reduction in December was reflective of falls across both the manufacturing and service sectors and was mainly linked by firms to a decrease in new orders.

The rate of input price inflation in the French private sector eased from November and remained much weaker than the series average. Manufacturers posted the slowest rise in input costs in three months, while inflation in the service sector was the weakest since July. Companies continued to lower their output prices during December amid reports from panellists of strong competition for new business.

Comment: Andrew Harker , Senior Economist at Markit and author of the Flash France PMI® , said: "The last flash PMI readings for 2013 paint a worrying picture on the health of the French economy. The return to contraction in November has been followed up with a sharper reduction in December, with falling new business at the heart of this as clients were reportedly reluctant to commit to new contracts. Firms will hope that such reticence ends in the new year as they seek to avoid another protracted downturn. "

France Finance Minister Says Economy has 'Truly Emerged from Recession'

Please recall that on December 10, France Finance Minister Says Economy has 'Truly Emerged from Recession'

I discussed his beliefs the same day in French Industrial Output Drops Unexpectedly; France Finance Minister in Complete Denial; Expect the Unexpected

The data I had on hand to dispute the Finance Minister's optimism was November Markit Data (released on December 4). Now we have "Flash" data for December representing 85% of the survey samples.

Unless the last 15% is an amazing set of numbers, France's Finance Minister, Pierre Moscovici, is off his rocker.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com