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joi, 31 octombrie 2013

Karmel's Story: I No Longer Fear My 'Pre-Existing Condition'

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Karmel's Story: I No Longer Fear My 'Pre-Existing Condition'

Last Monday, President Obama explained that thousands of Americans are signing up for affordable, high quality health insurance thanks to the Affordable Care Act.

Karmel Allison, who stood behind the President that day, had never before been able to shop for health insurance without fear of being rejected because of her medical history. As she said:

I could select from the same set of insurance plans that my healthy-as-a-horse husband could, and I wouldn't have to live in fear of losing my coverage because some mistake had been made.

Read about Karmel’s experience in her own words.

President Barack Obama delivers remarks on the Affordable Care Act during a statement in the Rose Garden of the White House, Oct. 21, 2013. (Official White House Photo by Lawrence Jackson)

What Scares Google?

Posted: 30 Oct 2013 04:05 PM PDT

Posted by Dr-Pete

As SEOs, we spend a lot of our collective time afraid of what Google might do next. This Halloween, I thought maybe it was time to turn the tables. It's easy to think of Google as an unstoppable force, but, like any company, Google has weaknesses and their behavior suggests some very real fears about the future.

Fear #1: Lack of revenue diversity

Google does everything, right? They've got Chrome, Android, Google Glass, Motorola Mobile, self-driving cars, flying WiFi, and now they're even trying to make you immortal. It all makes for great PR, except for one very important factâ€"this is how Google's revenue broke down in Q3 of 2013:

Factor in profitability, and the situation gets even worse (Motorola Mobile operated at a loss in Q3). Compared to physical products or even traditional advertising, AdWords and AdSense are as close to magic money-making machines as you're going to find. Google didn't just find a pot of gold—they found the only key to Leprechaun City, and the door locks from the outside. If the leprechauns escape, Google is in trouble, and no self-driving car is going to find them.

Fear #2: Falling cost-per-click (CPC)

Even as Google's revenues continue to rise, their average CPC has fallen for eight quarters in a row. So far, Google has managed to offset this CPC fall by increasing overall impressions and creating advertising enhancements that drive higher click-through rates (CTRs), but the trend is a very real problem and absolutely tops Google's list of worries. What's driving this trend? That leads us to #3...

Fear #3: Changing face of mobile

Traditionally, mobile ads have just been cheaper than desktop ads, and as mobile devices proliferate, average CPCs have fallen. This problem led Google to take an extreme approachâ€"they forcibly rolled out "Enhanced Campaigns" to all advertisers, effectively removing the option to have separate bids on mobile devices.

The problem for Google is that this sleight-of-hand doesn't remove the reality of how consumers behave on mobile phones and tablets, where traditional search advertising is simply less effective (at least, so far). There's also just less space for ads. Consider this desktop search result for "artificial christmas trees":

Counting paid product placement, there are parts of 14 ad units visible on one screen. There are 19 total ad units on the page (the right-hand AdWords block contains 8 ads). Now compare this to the same query on iOS7 on my iPhone 5S:

On one screen of mobile results, there are only two visible ads, with five total ads (two before and three after the organic results). Google promotes the message that mobile is becoming more like desktop every day, as screen size and resolution increases, and hybrid devices (like "phablets") become more popular. The reality, though, is that mobile is still a unique animal, and will be for the foreseeable future.

Google's development also suggests that they don't really believe this desktop/mobile unification story. Desktop search UI is being driven more and more by advances in the mobile UI. As smartphone traffic grows and Google dives into even more experimental directions (like Google Glass), consumer behavior is evolving quickly, and it's unclear how this evolution will change our interactions with advertising.

Fear #4: Fickle investor confidence

Most days, Google is still a darling to investors, but as a publicly traded company their amazing history is both a blessing and a curse. Google's core revenues (not counting Motorola) have been up every quarter since Q1 of 2011:

It's a great story, except for one problemâ€"Google is a mature company with massive market share. The expectation that Google can continue to grow, quarter after quarter, indefinitely, is unrealistic bordering on ridiculous. Of course, investors don't want to hear that. Google will have a bad quarter, and their investors have been trained on good news for far too long.

We tend to believe that someone has to beat Google at their own game, and that a competitor like Bing has to best them at search. The reality is that Google is fighting their own market expectations, and if Google fails to meet expectations by enough, they may start to unravel.

Fear #5: The Facebook factor

We tend to focus on whether Facebook can ever compete with Google on search, but there's one area where the social giant dominates Google. People go to Facebook and stayâ€"they go to Google to leave as quickly as possible. Google's entire model flies in the face of the traditional advertising philosophy of doing everything possible to increase pageviews and time-on-site.

Google is keenly aware of this problem. In addition to Google+, they've made many moves in the past year that seem to be designed to increase pageviews. For examples, carousels (including the local carousel) and related searches in Knowledge Graph boxes don't lead to outside sitesâ€"they lead directly to more search results. Google is testing new Knowledge Graph entities that use data from third-party sites but then link prominently to more Google searches. For example, we recently spotted this KG entry in testing:

All of the blue links in this box (there are 7 visible in this image) go to additional Google searches. Only the smaller, light-gray links go to the original source websites.

Put simply, while Facebook may be struggling to define its revenue model, the social giant is a platform. It's a place people go to do things, and it's a place people spend a lot of time. For most of us, Google is a place we go to for quick answers and then leave. The faster and better Google is at search, the faster we leave, and for a company with 84% of its revenue tied up in advertising, this is a serious problem.

Fear #6: Government regulation (US/EU)

I put this one last for one reason â€" while I think US and/or EU regulators could theoretically cause significant harm to Google, I don't think either government has the political will to crack down on an industry giant. Google's problem, though, is that they can't simply play nice. They have to push the envelope with advertising, and that's going to mean an ongoing battle with regulators.

Take this recent example of a paid shopping result we spotted in testing (the live version is a bit different):

Other than the "Sponsored" designator at the top, this paid shopping result looks a lot like a Knowledge Graph entry. The test version is even placing one selected provider and [Shop now] button before the specs and other information. With CPCs falling, Google is going to keep pushing harder, and they're going to keep testing government regulators' limits.

Why should we care?

This is not a "gotcha" post, and I don't necessarily think that Google is doomed to fail. What I do think is that it's vital to maintain a healthy perspective about Google's motives and possible futures. Last year, I said that my #1 SEO tip for 2013 was to diversify. If I wrote that article again, I doubt I'd change much. If your entire business is built on Google, you're riding a wave that's eventually going to crash into the shore. It may be because Google changes the rules, or it may be because they fail, but you've built your future on something you absolutely can't control. If you understand Google's fears and aspirations, you may at least start to appreciate why it's critical to build your business on more than one marketing channel.

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Seth's Blog : Godin's first law of pizza

Godin's first law of pizza

Pizza quality is inversely proportional to flexibility . At some places, the inflexibility can be appropriately confused with callous indifference or even rudeness.

Saying yes to every prospect and every request isn't the point of most organizations. The point is to do work that people seek out, that changes things for the better, to bring ideas that spread to the world.

Some of the legendary families that serve great pizza in New York aren't in the customer service business. They're in the great pizza business.

Saying yes to every request is one way to do business, but it's not the only way.

• Email to a friend •

miercuri, 30 octombrie 2013

Mish's Global Economic Trend Analysis

Scathing Attack on Rajoy in Spanish Press; Spain on Brink of Deflation, CPI Goes Negative
How the NSA Hacked Google and Yahoo! - Part Two - Man in the Middle - "Flying Pigs", "Hush Puppy"
NSA Breaks Into Secure Communication Links of Google and Yahoo; Italian Magazine Claims NSA Monitors Pope
Illinois Teachers Pension Fund is 40% Funded, Drops Deeper Into Hole Despite Investment Return of 12.8%; What's the Solution?

Scathing Attack on Rajoy in Spanish Press; Spain on Brink of Deflation, CPI Goes Negative

Posted: 30 Oct 2013 08:04 PM PDT

Spain's CPI has declined for four consecutive months and eight out of the last twelve. A decline of .4 percentage points in October pushed the CPI negative for the first time since 2009.

Via translation from El Economista

The Consumer Price Index (CPI) fell four tenths of a percent in October to -0.1% due to falling prices of food and non-alcoholic beverages and the lower rise in university education, according to the leading indicator of the evolution of prices in Spain released Wednesday by the National Statistics Institute (INE).

Deflation requires a fall in prices over an extended period of time, but with the decline in October, the annual chained CPI shows four consecutive months of declines.

"It's not the first time that consumer prices fall in annual figure in Spain during the crisis. But it is striking that they do when the optimism about the recovery takes hold among economic agents and authorities," said Jose Luis Martinez, a strategist Citi in Spain.

Scathing Attack on Rajoy

Rarely does one see a scathing attack of government officials in mainstream media, but this attack by El Confidencial (mainstream to Spain) qualifies.

Via translation please consider Recession Continues and Spain on Brink of Deflation

Liars, irresponsible and heartless have brought misery to the poor and middle class crushed with confiscatory taxes. These are the qualifications of prime minister Rajoy and his henchmen who hypocritically celebrate deception to a people. They have not taken Spain out of the recession, but they have brought us to the brink of deflation that will bring more poverty, pain and tears.

The reported GDP and employment figures for the third quarter of 2013 are clearly incompatible. A job loss of 70,000 people in seasonally adjusted terms is not compatible with a rise of GDP (albeit marginal) given the fall of 98% of its components. It's an impossible metaphysical.

As Jean Claude Trichet, former ECB president said "Spanish statistics are hard to believe." Since then Spain's official GDP figure exceeds actual around 30%.

Nonetheless, Rajoy has started marketing the same lies as Zapatero regarding green shoots of 2009, that have not yet arrived.

Even though taxes have risen to a confiscatory level, they have cut wages, pensions, unemployment and imposed all kinds of misery on more than 3 million people.

Job losses continue at an unaffordable rate: 500,000 people through September and more than a million since Rajoy became prime minister. Social Security contributors are down 1.1 million workers. And if we go into the fine print, the issue is even worse: The number of permanent contracts in the third quarter fell by 146,300 while that of temporary workers increased by 169,500.

How can the stock market go up when the results of the Ibex are the worst in the Western world? The reason is simple: the entry of speculative money, by the enormous amount of liquidity but not moving the debt market.

Yet, Rajoy and his minions tell us that "the recession is over, we grow at 0.1%.

We're not coming out of recession. It's impossible. No country can get out of a recession with annual wastage of 10% of GDP by corrupt state officials and a financial system that has already cost us over 40 billion euros with guarantees of another 280 billion of which a good portion is not viable.

It's impossible with interest rates of 12 to 16% solvent customers.

Many analysts applaud the Government's actions more taxes, lower wages and drastic cuts to the weakest. These pseudo-experts overlook that confiscatory tax policy, the government deficit, and the lack of credit.

The crisis is not only unseemly, it is also vile.

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

How the NSA Hacked Google and Yahoo! - Part Two - Man in the Middle - "Flying Pigs", "Hush Puppy"

Posted: 30 Oct 2013 03:00 PM PDT

In response to NSA Breaks Into Secure Communication Links of Google and Yahoo I received a few comments worth exploring.

Reader "Fury" commented "True encryption using the RSA algorithm is unbreakable today. No way can the NSA break the prime number encryption that is used, I don't care how many supercomputers they have."

A knowledgeable friend commented "The secure parts are impenetrable by computer technology. A break-in is impossible unless Google let them in or the NSA somehow got the encryption key. The latter would require human agents."

The article I linked to above came from an October 30 article in the Washington Post. Here is the chart in question.

Man in the Middle

Mainstream media is nearly always late to these stories, and so was I. The answer to how the NSA hacked Google and Yahoo! comes from Schneier on Security a "blog covering security and security technology".

With thanks to reader "marvinmartian" for the link, please consider Bruce Schneier's September 13 post New NSA Leak Shows MITM Attacks Against Major Internet Services.

The Brazilian television show "Fantastico" exposed an NSA training presentation that discusses how the agency runs man-in-the-middle attacks on the Internet. The point of the story was that the NSA engages in economic espionage against Petrobras, the Brazilian giant oil company, but I'm more interested in the tactical details.

The video on the webpage [NSA Documents Show United States Spied Brazilian Oil Giant] is long, and includes what I assume is a dramatization of an NSA classroom, but a few screen shots are important. The pages from the training presentation describe how the NSA's MITM attack works:

However, in some cases GCHQ and the NSA appear to have taken a more aggressive and controversial route -- on at least one occasion bypassing the need to approach Google directly by performing a man-in-the-middle attack to impersonate Google security certificates. One document published by Fantastico, apparently taken from an NSA presentation that also contains some GCHQ slides, describes "how the attack was done" to apparently snoop on SSL traffic. The document illustrates with a diagram how one of the agencies appears to have hacked into a target's Internet router and covertly redirected targeted Google traffic using a fake security certificate so it could intercept the information in unencrypted format.

Documents from GCHQ's "network exploitation" unit show that it operates a program called "FLYING PIG" that was started up in response to an increasing use of SSL encryption by email providers like Yahoo, Google, and Hotmail. The FLYING PIG system appears to allow it to identify information related to use of the anonymity browser Tor (it has the option to query "Tor events") and also allows spies to collect information about specific SSL encryption certificates.

Flying Pig Screenshot

Spying on Petrobras – Brazil's Largest Company

Let's take a closer look at NSA Documents Show United States Spied On Brazilian Oil Giant

One of the prime targets of American spies in Brazil is far away from the center of power – out at sea, deep beneath the waves. Brazilian oil. The internal computer network of Petrobras, the Brazilian oil giant partly owned by the state, has been under surveillance by the NSA, the National Security Agency of the United States.

These new disclosures contradict statements by the NSA denying espionage for economic purposes.

The information was found by journalist Glen Greenwald, co-author of this story along with TV Globo Reporter Sonia Bridi, amid the thousands of documents given to him by Edward Snowden in June.

This statement addressed to "The Washington Post" this week highlights that 'The department does ***not*** engage in economic espionage in any domain, including cyber.'"

However, a top secret presentation dated May 2012 is used by the NSA to train new agents step-by-step how to access and spy upon private computer networks – the internal networks of companies, governments, financial institutions – networks designed precisely to protect information.

The name of Petrobras – Brazil's largest company – appears right at the beginning, under the title: "MANY TARGETS USE PRIVATE NETWORKS."

The documents are classified as "top-secret", to be seen only by those named by the Americans as "Five Eyes" – the five countries allied in spying: the United States, Australia, Canada, Great Britain and New Zealand.

The name of Petrobras appears on several slides, as the training goes deeper in explaining how data from the target companies is monitored.

Individual folders are created for each target – and contain all the intercepted communications and IP addresses – the identification of each computer on the network – which should be immune to these attacks.

Petrobras has two supercomputers, used mainly for seismic research – which evaluate oil reserves from samples collected at sea. This is how the company mapped the Pre-salt layer, the largest discovery of new oil reserves in the world in recent years.

There is no information on the extent of the spying, nor if it managed to access the data contained in the company's computers. It's clear Petrobras was a target, but no documents show exactly what information the NSA searched for. But at any rate, Petrobras has strategic knowledge of deals involving billions of dollars.

The NSA presentation contains documents prepared by the GCHQ – the British Spy agency, from a country that appears as an ally of the United States in spying. The British agency shows how two spy programs operate. "Flying Pig" and "Hush Puppy" also monitor private networks which carry supposedly secure information. These networks are known as TLS/SSL.

The presentation explains how data is intercepted, through an attack known as "Man in the Middle". In this case, data is rerouted to the NSA central, and then relayed to its destination, without either end noticing.

A few pages ahead, the document lists the results obtained. "Results - what do we find?" "Foreign government networks", "airlines", "energy companies" – like Petrobras - and "financial organisations."

TLS/SSL networks are also the security system used in financial transactions, such as when someone accesses their bank account through an ATM. The connection between a remote terminal and the bank's central goes through a sort of secure tunnel through the internet. No one is supposed to see what travels through it.

Later, the NSA presentation shows in detail how the data of a chosen target is rerouted through spy filters beginning at the very source, until they reach the NSA's supercomputers.

In this document the NSA names Latin America as a key target of the "SILVERZEPHYR" program, which collects the contents of voice recordings, faxes, as well as metadata, which is the overall information being transmitted in the network.

"Flying Pigs", "Hush Puppy", "SILVERZEPHYR"

The NSA was clearly caught lying.

What else besides corporate espionage? Political enemies? (Why not given the target on friends?) State trials? Client attorney privileges?

Once again, I praise Edward Snowden as a national hero for leaking these documents. We would otherwise not know about any of this stuff, and without that leak, it is 100% certain nothing about this would have been done.

Instead, Big Brother would likely have expanded to look at every document, every phone call, every corporation, every blog, and literally everything written or said by everyone on the planet, with taxpayers footing the bill.

My fear is that happens regardless.

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

NSA Breaks Into Secure Communication Links of Google and Yahoo; Italian Magazine Claims NSA Monitors Pope

Posted: 30 Oct 2013 11:46 AM PDT

The Washington Post reports NSA infiltrates links to Yahoo, Google data centers worldwide, Snowden documents say

In this slide from a National Security Agency presentation on "Google Cloud Exploitation," a sketch shows where the "Public Internet" meets the internal "Google Cloud" where user data resides. Two engineers with close ties to Google exploded in profanity when they saw the drawing.

According to a top secret accounting dated Jan. 9, 2013, NSA's acquisitions directorate sends millions of records every day from Yahoo and Google internal networks to data warehouses at the agency's Fort Meade headquarters. In the preceding 30 days, the report said, field collectors had processed and sent back 181,280,466 new records — ranging from "metadata," which would indicate who sent or received e-mails and when, to content such as text, audio and video.

The NSA's principal tool to exploit the data links is a project called MUSCULAR, operated jointly with the agency's British counterpart, GCHQ. From undisclosed interception points, the NSA and GCHQ are copying entire data flows across fiber-optic cables that carry information between the data centers of the Silicon Valley giants.

The infiltration is especially striking because the NSA, under a separate program known as PRISM, has front-door access to Google and Yahoo user accounts through a court-approved process.

At Yahoo, a spokeswoman said: "We have strict controls in place to protect the security of our data centers, and we have not given access to our data centers to the NSA or to any other government agency."

Note the Smiley

Please note the Smiley in the lower center part of the image. The adjacent text says "SSL added and removed here!".

For those interested in "SSL" technology, Wikipedia offers this explanation.

Transport Layer Security (TLS) and its predecessor, Secure Sockets Layer (SSL), are cryptographic protocols which are designed to provide communication security over the Internet. They use X.509 certificates and hence asymmetric cryptography to assure the counterparty whom they are talking with, and to exchange a symmetric key. This session key is then used to encrypt data flowing between the parties. This allows for data/message confidentiality, and message authentication codes for message integrity and as a by-product message authentication. Several versions of the protocols are in widespread use in applications such as web browsing, electronic mail, Internet faxing, instant messaging and voice-over-IP (VoIP). An important property in this context is perfect forward secrecy, so the short term session key cannot be derived from the long term asymmetric secret key.

The diagram suggests the NSA is somehow able to add its own "secure" layer or simply remove the security layers of Google and Yahoo!

Italian Magazine Claims NSA Monitors Pope

This story is not yet confirmed but Reuters reports Italian magazine says U.S. spies listened to pope, Vatican says unaware.

An Italian magazine said on Wednesday that a United States spy agency had eavesdropped on Vatican phone calls, possibly including when former Pope Benedict's successor was under discussion, but the Holy See said it had no knowledge of any such activity.

Panorama magazine said that among 46 million phone calls followed by the U.S. National Security Agency (NSA) in Italy from December 10, 2012, to January 8, 2013, were conversations in and out of the Vatican.

In a press release before full publication on Thursday, Panorama said the "NSA had tapped the pope". It cited no source for its information.

Panorama said the recorded Vatican phone calls were catalogued by the NSA in four categories - leadership intentions, threats to the financial system, foreign policy objectives and human rights.

Reflections on Monitoring "God's Work"

The humorous comment of the day goes to Zerohedge who said "We can only assume this means keeping on top of Goldman's activities around the globe: after all, when one intercepts god's phone calls, one is mostly interested what the bank that does god's will is doing."

In case you missed the connection, in November 2009 Goldman Sachs' CEO Lloyd Blankfein claimed "Goldman is doing God's work". For details, please see God's Work and Goldman's Prayer.

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

Illinois Teachers Pension Fund is 40% Funded, Drops Deeper Into Hole Despite Investment Return of 12.8%; What's the Solution?

Posted: 30 Oct 2013 12:56 AM PDT

In spite of a 12.8% annual return, with an 8% return assumption, the Illinois Teachers Retirement System (TRS) fell another $3.5 billion in the hole. TRS pension underfunding grew to $55.73 billion as of June 30, 2013.

Via email, the Illinois Policy Institute explains the growing liability.

First, TRS only has $0.40 in the bank for every dollar it should have today to make necessary pension payouts in the future. That means the high investment returns in 2013 were earned on less than half of the assets that TRS should have

TRS acknowledged this in a recent press release:

"Despite these strong returns, TRS cannot invest its way out of the funding hole we are in," Ingram added. "This increase in the System's unfunded liability, even with good investment results, is another wake-up call to state officials and our members that TRS long-term finances continue to head in the wrong direction."

"Without changes to the pension code to ensure sustained and adequate funding, TRS faces the very real possibility that in a few decades the System will not have enough money to pay benefits to retirees. We cannot guarantee that TRS will have enough money to pay the pensions promised to every member in the System."

Second, the inherent flaws of the state's defined benefit pension system have driven up the shortfall significantly. According to the Commission on Government Forecasting and Accountability, the state's pension shortfall grew by $41 billion from 1996 to 2012.

Of that amount, nearly $23 billion came from some form of missed "assumption" that continually plagues defined benefit pension plans:

The investment returns for the state's five pension funds were lower than their assumed 8% expectation. Cost to taxpayers: $9.5 billion.

Unplanned benefit increases for employees. Cost to taxpayers: $1.1 billion.

Changes in actuarial assumptions. Cost to taxpayers: $4.9 billion.

"Other" actuarial factors. Cost to taxpayers: $7.2 billion.

TRS fails to acknowledge the failures of the defined benefits plan and instead chooses to blame taxpayers for not contributing enough to the system.

Who is to Blame for Shortfalls?

Please consider the Illinois Policy Center report State pension contributions: Taxpayers bear the brunt of increasing pension costs

A common refrain sounded by public sector unions is that government workers have consistently "paid their share" into Illinois' pension systems and the state has not. However, the facts tell a different story.

While government worker contributions to Illinois' five pension systems have increased by 75 percent since 1998, taxpayer contributions have increased by 427 percent over the same period. In 2012 alone, Illinois taxpayers contributed $3.5 billion more to the pension systems than state workers did.

Government workers' share, as a percentage of total contributions, has continued to decline when compared to taxpayers' contributions. In 1998, government workers paid for 47 percent of the state's total pension contribution; today, they only pay 21 percent. By 2045, government workers will be expected to pay only 17 percent of total pension contributions.

Illinois' Five Pension Systems

Illinois has five state pension systems, and all of them are seriously underfunded:

The Teachers' Retirement System, or TRS, manages pensions for teachers across Illinois (excluding Chicago).With more than 130,000 active members and nearly 95,000 retirees, TRS is the largest pension system in the state. Unfortunately, TRS also has the highest unfunded liability of the state's pension systems. In 2012, TRS was only 40.6 percent funded and officially had more than $53.51 billion in unfunded liabilities. TRS members contribute 9.4 percent of their salary to the pension system.
The State Employees' Retirement System, or SERS, manages pensions for state-level employees across Illinois. It has 62,000 active members and 50,000 retirees. In 2012, SERS was only 33.1 percent funded and had officially $22.13 billion in unfunded liabilities. Under its regular pension formula, SERS members covered by Social Security contribute 4 percent of their salary, and those not covered by Social Security contribute 8 percent of their salary to the pension system.
The State Universities Retirement System, or SURS, manages pensions for employees working at state universities. It has 71,000 active members and more than 45,500 retirees. In 2012, SURS was only 41.3 percent funded and had officially $19.46 billion in unfunded liabilities. SURS members contribute 8 percent of their salary to the pension system.
The Judges' Retirement System, or JRS, manages pensions for judges throughout the state. It is one of the two smaller pension systems, with only 968 active members and 725 retirees. Despite its small size, in 2012 JRS was only 28.6 percent funded and officially had $1.44 billion in unfunded liabilities. JRS members contribute 11 percent of their salary to the pension system.
The General Assembly Retirement System, or GARS, manages pensions for members of the Illinois General Assembly. Despite having only 176 active members and 294 retirees, GARS has the dubious honor of being the worst-funded pension system in the state. In 2012, GARS was only 17.4 percent funded and officially had $251 million in unfunded liabilities. GARS members contribute 11.5 percent of their salary to the pension system.

All Five Systems Bankrupt

TRS, SERS,SURS, JRS, and GARS are all insolvent. None of them can possibly meet their pension obligations. With 10-year treasuries yielding a scant 2.5%, plan assumptions of 8% are preposterously high on a sustained basis.

Yet, TRS went another $3.5 billion in the hole in spite of a 12.8% annual return.

What the hell is TRS going to do in the face of a stock market plunge, a bond market plunge, or both?

GARS, the General Assembly Retirement System is only 17.4% funded. Is it any wonder that state legislators are pressing for more tax hikes?

Beware Tax Hikes!

On October 18, I reported Illinoisans Beware: "Progressives" Seek Massive Tax Hike Again; Fight the Hike!

Pension shortfalls are the reason for the proposed hikes.

A few people commented the "progressive" tax was not as much as they pay. Here is Rep Naomi Jakobsson's proposed scheme.

Property Taxes

What I failed to point out previously is that I pay $14,000 annually in property taxes on a home I can sell for $400K or so.

Sales Taxes

My sales tax rate is 7.75%. But hey, that could be worse. Cicero tops the state with a 9.5% tax. In Chicago, the sales tax is 9.25%.

In spite of all these massive taxes, the entire state is bankrupt!

The Solution

Raising taxes for the benefit of legislators and seriously undeserving public unions is certainly not the answer. The solution is twofold:

Immediately kill all Illinois public defined-benefit pension plans
Drastically lower existing pension plan expectations, via default if necessary

Nothing else can possibly work, and the numbers prove it.

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

joi, 31 octombrie 2013

Karmel's Story: I No Longer Fear My 'Pre-Existing Condition'

What Scares Google?

What Scares Google?

Fear #1: Lack of revenue diversity

Fear #2: Falling cost-per-click (CPC)

Fear #3: Changing face of mobile

Fear #4: Fickle investor confidence

Fear #5: The Facebook factor

Fear #6: Government regulation (US/EU)

Why should we care?

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Seth's Blog : Godin's first law of pizza

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miercuri, 30 octombrie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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joi, 31 octombrie 2013

Fear #1: Lack of revenue diversity

Fear #2: Falling cost-per-click (CPC)

Fear #3: Changing face of mobile

Fear #4: Fickle investor confidence

Fear #5: The Facebook factor

Fear #6: Government regulation (US/EU)

Why should we care?

More Recent Articles

miercuri, 30 octombrie 2013

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