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DUMP GENERAL MILLS: They Support Homosex “Marriage”

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Published on: June 25, 2012

I never thought that by eating Cheerios for breakfast I would be supporting gay marriage. Your decision to pander to same-sex marriage activists has forced me to choose between your food products and my conscience. As long as food is produced by other companies my conscience is going to win out over the desire for another bowl of Lucky Charms. Until you stop supporting this radical social agenda I must, in good conscience, look for substitutes that I can purchase instead of the following brands.

  • Betty Crocker
  • Good Earth
  • Muir Glen
  • Big G Cereals
  • Green Giant
  • Nature Valley
  • Bisquick
  • Haagen-Dazs
  • Old El Paso
  • Bugles
  • Hamburger Helper
  • Pillsbury
  • Cascadian Farm
  • Jus-Rol
  • Pillsbury Atta
  • Cheerios
  • Kix
  • Progresso
  • Chex
  • Knack & Back
  • Total
  • Cinnamon Toast Crunch
  • La Saltena
  • Totino’s/Jeno’s
  • Diablitos Underwood
  • Larabar
  • Trix
  • Fiber One
  • Latina
  • V. Pearl
  • Food Should Taste Good
  • Liberte
  • Wanchai Ferry
  • Frescarini
  • Lucky Charms
  • Wheaties
  • Fruit Snacks
  • Macaroni Grill
  • Yoplait
  • Gardetto’s
  • Monsters
  • Yoplait France
  • Gold Medal
  • Mountain High


Your diversity policy claims to respect “not just the primary areas such as gender, race and sexual orientation – but also cultural aspects including values, preferences, beliefs, and communication styles.” However, your public opposition to the Minnesota Marriage Amendment overtly disrespects the values and beliefs of many of your employees. To avoid misleading the public and potential employees regarding the true position of General Mills, I ask that you remove this misrepresentation from your website and any written materials unless or until you decide to actually follow through on your commitment to true diversity.

It’s not the role of corporate management to unilaterally endorse a controversial political issue unrelated to a company’s core business – particularly when doing so will alienate a large percentage of customers, employees and shareholders. I urge you to reconsider your decision to support same-sex marriage and to publicly oppose the Minnesota Marriage Amendment.



Fear and Trembling in West Virginia (W.V. Dems Run From Bammy!)

Original Article - Fear and Trembling in West Virginia (W.V. Dems Run From Bammy!)

Fear and trembling in West Virginia

Sen. Joe Manchin (D-W.Va.)

In a year when the Obama administration’s “war on coal” could signify a Republican victory of landslide proportions in West Virginia, three of the state’s top Democrats recently announced they would not attend their party’s national convention that will renominate the president on Labor Day weekend.

Rep. Nick Joe Rahall, Sen. Joe Manchin, and Gov. Earl Ray Tomblin—all of whom who faced stiff re-election challenges in their last races and now face strong Republican opponents this fall—have said they want to spend Labor Day weekend campaigning in or working for West Virginia rather than attend their party’s convention in Charlotte, North Carolina.

This is problematic for that state’s Democratic Party, whose state convention recently enacted a resolution calling on all Democrats running for office to support all elected Democrats—particularly the president. Rahall has endorsed the president for re-election, but Tomblin and Manchin, who made a strong speech hailing Obama at the 2008 Democratic convention, have not. All three are super delegates to the convention this year.


Eurozone Nations Are Stuck in a ‘Doom Loop’

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Published on: June 23, 2012

Original Article - Eurozone Nations Are Stuck in a ‘Doom Loop’

The euro was a very bad idea yet fiscal union is far worse and will fail, but not before it spreads bitterness across Europe.

‘These global economic problems have their roots in the fools’ paradise we all used to live in,” observed Lord Peter Mandelson on Friday, to a packed seminar at the St Petersburg International Economic Forum.

“Pretty much everyone borrowed and spent beyond their means and that’s now catching up with us,” continued the former Cabinet Minister. “And it’s the inter-twining of the sovereign debt and banking crises that makes any eurozone resolution extremely difficult.”

On this point, Lord Mandelson is correct. Years of extreme lending and reckless trading by Western banks brought serious sector weakness. The disgracefully cosy relationship between our political and financial classes and the even more disgraceful use of banking blackmail, has meant, in Lord Mandelson’s words, that massive banks losses “have, in one way or another, landed on sovereign balance sheets”.

Such is the reality that plagues the eurozone, with toxic bank liabilities raising deep concerns about sovereign insolvency and the resulting sky-high bond yields destroying commercial sentiment and throttling growth, making dodgy banks weaker still. This bank-sovereign-bank “doom loop” has brought Western Europe back to the brink of recession, with related systemic fears casting a very dark shadow over the entire global economy.

If only Angela Merkel would agree a big bail-out, we’re told, everything will be fine. The German Chancellor retorts that the only way Berlin could possibly agree to back-stop debts of more profligate eurozone members would be if Germany has more control over the spending of other governments.

On Friday, the latest round of this tortured debate took place in Rome, where Merkel met her French, Italian and Spanish counterparts. The world’s most powerful woman once again dismissed calls for the eurozone to issue common debt and spray more cash around to stabilise financial markets.

Just ahead of tomorrow’s implementation of a €100bn (£80.6bn) bail-out of Spain’s busted banks, Merkel closed this disastrous Rome meeting by crystallized her dilemma. “If I give money to Spanish banks, I’m the German Chancellor but I can’t say what these banks can do,” she said.

That’s why Germany insists these latest bail-out funds are channelled through the Spanish government, which Berlin theoretically can influence. But that adds yet more billions to Spain’s state debts, intensifying the bank-sovereign-bank doom loop. Investors also fear bail-out loans will subjugate existing private sector creditors – another reason why, since this bail-out was announced two weeks ago, Spanish yields have spiked.

Yet domestic political pressures mean Merkel can’t pay the cash directly to foreign banks – a move that would make a mockery of existing Europe treaties, to say nothing of Germany’s constitution.

Our financial and political “leaders” desperately want “fiscal union”. If Germany agrees to “debt pooling” and a “banking union”, together with more QE-style measures by the European Central Bank, then bond yields elsewhere in the eurozone would plummet and, across Europe and the world, equity markets would soar.

Yet sustainable fiscal union is never going to happen. Debt mutualisation and “special monetary measures” could well snap the patience of German voters. The Bundesbank, too, is openly critical of such moves. Since Germany joined the euro in 1999, with no referendum, not a single national opinion poll has recorded a majority in favour of entry. I doubt one ever will. German citizens, prosperous by dint of their own hard work and skill, have a lot to lose. And money-printing and bail-outs of the profligate are anathema to the German psyche.

Even if Merkel does stitch together some kind of compromise on fiscal union, assuming she wants to, any bearable pooling arrangements will prove inadequate. To be sustainable in the long run, a monetary union also requires a “transfer union” – with explicit payments from stronger to weaker members. This is what happens in the US, with richer states financing poorer states, the whole edifice held together by hundreds of years of nation-building and a common identity. Europe doesn’t have that – and never will.

Back in 1977, the eurocrats commissioned the Scottish economist, Donald MacDougall, to examine what scale of fiscal transfers would be needed annually to hold together a stable monetary union. MacDougall’s report, based in part on US experience, suggested a level approaching 10pc of eurozone GDP – a massive figure that dwarfs even the already bloated European Union budget.

Will voters in the likes of Germany, the Netherlands and Finland really accept that kind of money – almost a quarter of their total tax revenues – being transferred to Portugal, Greece and Spain, to fund Mediterranean welfare and pension payments? I think not.

These “strong” Northern countries anyway have fiscal problems of their own. For all the talk of Germany’s budgetary fire-power, Berlin is itself shouldering enormous sovereign debts – well over 130pc of GDP if you include the country’s European Central Bank debts and other off-balance-sheet liabilities.

Fiscal union also won’t be enforceable. When it comes to something as fundamental as tax and spending, elected governments will always do what their local electorates want, rather than following strictures from Brussels – or Berlin. It’s as simple as that. A stiffer fiscal treaty will just mean the rule-breakers apply more fudge.

Are we really to believe, after all, that under “fiscal union” the voters of Spain, Greece – France! – are going to accept, month after month, year after year, what the German government tells them to do? Of course they won’t. Tensions will escalate, civil unrest will abound. Europe will become mired in conflict.

Having attended the St. Petersburg Forum, I can confirm that Lord Mandelson still possesses the oratorical ability, when he shoots from the hip, to electrify an audience. Having said that, like so many other ardent supporters of “the European project” and the slew of craven City economists, he is wrong on fiscal union.

Lord Mandelson now agrees that “currency union cannot exist without more unified fiscal and banking arrangements – and, in the long-term, the eurozone is not sustainable without those changes”. This is something he refused to acknowledge, as did practically all supporters of UK euro membership, during the bitter disputes on that subject during the New Labour years.

“The euro isn’t a failed project, it’s an incomplete project that doesn’t have the institutions and collective sharing of responsibilities needed to deal with this crisis,” Lord Mandelson told the St Petersburg crowd, before going on to describe the need for “pooled funds” and “a transfer union”.

But then, while thinking aloud, he seemed to concede the point. “Populations are constantly being told that more Europe and more integration is required,” he said. “This quite often falls on deaf ears, given that the public have integration fatigue. They wonder if, in a union of democracies, the measures needed are a pipe-dream”.

Of course they’re a pipe-dream, Peter. Sustainable fiscal union in the eurozone won’t happen, not in my life-time, nor that of my children. That’s because it requires the reversal of 500 years of European history.

The euro was a very bad idea yet fiscal union is far worse. If attempted, if will fail, but not before it spreads bitterness across Europe. The idea of fiscal union is, anyway, nothing but a fig-leaf for yet more ECB money-printing – an action that would spark another asset price “sugar rush”, but do nothing to solve bank and sovereign insolvency, nor address the fundamental contradictions at the heart of the eurozone.

Monetary union must be scaled back. Those peripheral countries that want to should exit and devalue. Then we clean up the mess, and we all move on.


Pelosi: Obama Should Unilaterally Eliminate The Debt Ceiling By Declaring It Unconstitutional!

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Published on: June 23, 2012

Original Article - Pelosi: Obama Should Unilaterally Eliminate The Debt Ceiling By Declaring It Unconstitutional!

She does realize he’s not a dictator, right?


House Minority Leader Nancy Pelosi, D-Calif., thinks that President Obama should unilaterally eliminate the debt ceiling, rather than negotiate with Congress to spend more money when the United States hits the debt ceiling later this year.

“I would like to see the Constitution used to protect the country’s full faith and credit, as the Constitution does,” Pelosi told reporters Wednesday. She was endorsing the idea that Obama should use the 14th Amendment — which states that “The validity of the public debt of the United States . . . shall not be questioned” — to circumvent House Republicans who want spending cuts in exchange for another debt ceiling hike.

“I think he should [declare the debt ceiling unconstitutional],” Pelosi said, though she wouldn’t predict Obama’s move. “I’m in a different branch of government. In the minority, in the House. What do I know about what the president’s going to do?”

Pelosi is in a different branch of government — the only one that has the authority to “borrow Money on the credit of the United States,” as Article 1, Section 8 of the Constitution establishes. And she is in the minority, which increases the likelihood that Obama will have to agree to spending cuts in order to get a debt-ceiling increase.

Who knows, though? Obama has already decided to “work his way around Congress,” as he did with last week’s illegal immigration enforcement maneuver. He has also declared that Congress is out of session, in order to make ‘recess’ appointments, even though Congress said it was in session. Maybe he’ll decide to “borrow Money on the credit of the United States,” too.


Hey Unions? Welcome to Politics. Watch That Bloody Nose

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Published on: June 22, 2012

Original Article - Hey Unions? Welcome to Politics. Watch That Bloody Nose

The U.S. Supreme Court, in a hat tip to common sense, decided yesterday that nonunion members can opt out of union fees that are targeted towards political purposes.
“Labor unions must give nonmember workers ‘fresh notice’ of unplanned increases in fees or assessments — money that might be used for political purposes — the Supreme Court ruled Thursday,” according to CNN.

For labor unions around the country, it serves as a painful reminder that when they decided to go all-in for Obama in 2008, they alienated the rest of us non-government, non-union members- the 99 Percent- who have to go out and earn our keep every day. And that alienation is being felt in political defeats by unions around the country.

“The 7-2 decision is a victory for Dianne Knox,” says CNN, “a California state employee, who sought to opt out of a $12 million assessment imposed by the Service Employees International Union Local 1000. She did not belong to SEIU, unlike most of her fellow government workers.”

The SEIU was imposing fees on nonunion members in order to build a war chest to defeat several ballot measures in California.

“There is no justification for the SEIU’s failure…,” wrote Justice Alito for the majority. “[The law] rests on the principle that nonmembers should not be required to fund a union’s political and ideological projects unless they choose to do so after having ‘a fair opportunity’ to assess the impact of paying for nonchargeable union activities.”

In addition, Alito found that the SEIU’s collection practices violated the First Amendment saying that nonunion members have a right to opt out of political activity. By contrast “no constitutional right of the union is violated because it has no constitutional right to receive any payment [editor’s emphasis] from those employees.”

I’m wondering if the unions are starting to regret their investment in Obama.

Unions dumped $450 million into the Obama effort in 2008, according to the New York Times, hoping that they’d buy political clout with Obama that they don’t actually own on Main Street. But besides the auto bailout, and a few years of government stimulus spending, the strategy has been pretty much a disaster.

“This is not about payback,” the A.F.L.-C.I.O.’s director of government affairs told the New York Times. “We’re looking to work with the new administration on a shared set of priorities that focus on lifting workers and improving the economy.”

I think he meant “lifting workers’ wallets.”

Because on the other counts, I think you can call their strategy a failure: No payback for unions and no improving economy.

And just another fine job for liberals, who don’t seems to be able to accomplish even those things that they say they desire.

Instead, the mass of the country has turned on unions, union members, bloated union benefits and even- gasp!- public teachers- who used to be as iconic in America as baseball, hot dogs, apple pie and, um… Chevrolet?

The laundry list of failures for the union agenda is really staggering. They spent the most money ever. The elected the greatest president EVER and finest political mind since Roy “this is not a salad bar” Rogers opened his burger joint in cooperation with the Marriott Corporation under the supervision of the Reverse Vampires, in conjunction with the Rand Corporation.

And what have they bought? The union has faced the longest string of defeats since the losing streak that started at the First Battle of Bull Run.

Well, they wanted to be politics. Congrats, Mr. Union. You are now in politics.

Card check? The union equivalent of forced busing and segregation? Voters completely checked the box denying approval for card check.

Then there was Madison, WI and the recall rebuke when Scott Walker took on teachers unions. What do you call it when voters vote a governor back in by recall with a wider margin than he originally received in the general election? A permission slip to give the unions detention.

How about that union fiasco with the National Labor Relations Board trying to stop Boeing Corporation from opening a $1 billion plant in South Carolina because it wasn’t a union shop? Another union disaster where they had to lower their colors.

Boeing’s CEO, Jim McNerney, is calling the regulatory climate for business the worst in U.S. history.

From MarketWatch:

Asked by a reporter if regulations are any worse now than in decades past, McNerney gave an emphatic yes. “It’s different today. The attitude is different,” he said. “Unless you live it it’s hard to see it.”

McNerney said the Roundtable “hears about it all day long” from member companies. The group represents large U.S. firms that employ more than 14 million people and generate sales in excess of $6 trillion a year.

Many of those regulatory hurdles are put there just to coddle unions.

But not for long Mr. Union man. Not. For. Long.

Welcome to politics. Watch that bloody nose.


General Motors Plant Flies Gay Pride Flag

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Published on: June 21, 2012

Original Article - General Motors Plant Flies Gay Pride Flag

A Gay Pride rainbow flag is flying high above the Fort Wayne G-M Assembly Plant. A viewer submitted a photo to WANE on Monday using our Report!t feature of a Gay Pride flag at the Fort Wayne GM Plant.

The flag is stirring controversy for some but making others like Jerry Lawson hopeful equality is on its way.

“I think that they’re just setting a very huge example for Fort Wayne that equality is pretty much on its way,” Lawson said.

GM put the rainbow flag up earlier this week. Officials there said they notified employees about it. They’re hoping this will spark some conversation.

The President of the IPFW United Sexualities group said they already have people talking.

“It makes a statement that they’re inclusive and that they celebrate diversity within their company,” President of IPFW United Sexualities Chris Gunderson said.

GM had this to say about putting up the Gay Pride flag “Recently, Fort Wayne Assembly plant leadership decided to permanently move a POW flag from a pole in front of its administration building to the facility’s primary flag and truck display along Interstate 69. This gave the plant an opportunity to fly other flags, which include the Indiana state flag, the UAW flag, and any of the flags representing GM’s official Employee Resource Groups. Currently the GM PLUS rainbow flag is flying for one week in support of Pride month. It’s our hope that ongoing support of our employees will foster constructive dialogue on the importance of diversity at GM.”

The Prisoners of War and Missing in Action flag is flying in a more prominent location in front of GM by I-69.

People who are a part of the gay community believe by GM flying the flag they’re inching closer to having equality.

“We’re not screaming for special rights but it’s a very good thing to see us on our way to equal rights,” Lawson said


$9 Billion in ‘Stimulus’ for “Green” Projects Created 910 Jobs – $9.8 Million Per Job!

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Published on: June 21, 2012

Original Article - $9 Billion in ‘Stimulus’ for “Green” Projects Created 910 Jobs – $9.8 Million Per Job!

The Obama administration distributed $9 billion in economic “stimulus” funds to solar and wind projects in 2009-11 that created, as the end result, 910 “direct” jobs — annual operation and maintenance positions — meaning that it cost about $9.8 million to establish each of those long-term jobs.

At the same time, those green energy projects also created, in the end, about 4,600 “indirect” jobs – positions indirectly supported by the annual operation and maintenance jobs — which means they cost about $1.9 million each ($9 billion divided by 4,600).

Combined (910 + 4,600 = 5,510), the direct and indirect jobs cost, on average, about $1.63 million each to produce.

As explained in a report by the National Renewable Energy Laboratory, which is part of the U.S. Department of Energy, the American Recovery and Reinvestment Act (“economic stimulus”) of 2009 included Section 1603, a grant program run through the Treasury Department.

The 1603 program offered “renewable energy project developers a one-time cash payment” to reduce the need for green energy companies “to secure tax equity partners” and also help them to achieve “ ‘the near term goal of creating and retaining jobs’ in the renewable energy sector.”

The National Renewable Energy Laboratory (EREL) tracked the grant program from its inception in 2009 through Nov. 10, 2011. Its report is entitled, Preliminary Analysis of the Jobs and Economic Impacts of Renewable Energy Projects Supported by the 1603 Treasury Grant Program.

The report explains that the program provided “approximately $9.0 billion in funds to over 23,000 PV and large wind projects.” PV stands for photovoltaic, which is the method by which solar power is turned into electricity, usually with solar panels or solar cells. There were specifically 197 large wind projects and 23,692 PV projects that received funds, according to the EREL report.

For calculating the number of green jobs created, the EREL did not actually count the people working at the facilities but instead relied upon Jobs and Economic Development Impact, or JEDI, computer models.

In its summary, the EREL report states that for the 2009-11 timeframe there were an average 52,000-75,000 “direct and indirect jobs per year” created for the construction, installation, and related work on the wind and solar projects.

These were temporary jobs, construction and installation work at the facilities, not long-term positions at the green energy sites.

The number of these “indirect,” temporary construction jobs averaged between 43,000 and 66,000, according to the EREL, and the “direct” jobs “supporting the design, development, and construction/installation of systems” averaged out to about 9,400 per year.

For the operation and maintenance (O&M) of the photovoltaic and large wind systems, however, the report states there are “between 5,100 and 5,500 direct and indirect jobs per year on an ongoing basis over the 20- to 30-year estimated life of the systems.”

President Barack Obama signed an economic stimulus law, now determined by the CBO to cost $821 billion, at the Denver Museum of Nature & Science on Feb. 17, 2009. (AP photo)

The report further clarifies that from that number there are 910 direct jobs and 4,200-4,600 indirect jobs per year.

The 910 jobs are “directly supporting the O&M of the systems” and that number “is significantly less than the number of [indirect] jobs supporting manufacturing and associated supply chains.”

Through the grant program, $9 billion was spent to, in the end, establish 910 jobs that will last upwards of 30 years. That means those jobs cost, in the end, about $9.8 million to create.

Add in the indirect jobs — high estimate of 4,600 — and there are 5,510 total jobs (direct and indirect). Starting with the $9 billion in grants, the end result to establish 5,510 jobs averages out to $1.63 million per job.


Iranian-American woman says Apple Refused to Sell Her an iPad

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Published on: June 20, 2012

Original Article - Iranian-American woman says Apple Refused to Sell Her an iPad

N.J. resident Jim Otun reads a dua from the Quran on his iPad (Rich Schultz/AP)19-year-old Sahar Sabet says an Apple Store in Georgia refused to sell her an iPad after a store representative overheard her speaking in Farsi.

“Very hurtful, very embarrassing. I actually walked out in tears,” Sabet told WSBTV about her experience.

When a reporter from the station returned to the same Apple Store with Sabet, the employee once again reiterated that it is Apple company policy to not sell products to anyone from Iran. The WSBTV reporter recorded video of the exchange on her phone.

Sabet is a U.S. citizen and a student at the University of Georgia but the iPad was to be a gift for a cousin living in Iran.

“When we said ‘Farsi, I’m from Iran,’ he said, ‘I just can’t sell this to you. Our countries have bad relations,’” Sabet said.

The employee showed them Apple’s corporate policy on export sales, which reads:


The U.S. holds complete embargoes against Cuba, Iran, North Korea, Sudan, and Syria

The exportation, reexportation, sale or supply, directly or indirectly, from the United States, or by a U.S. person wherever located, of any Apple goods, software, technology (including technical data), or services to any of these countries is strictly prohibited without prior authorization by the U.S. Government. This prohibition also applies to any Apple owned subsidiary or any subsidiary employee worldwide.

The Council on American-Islamic Relations (CAIR) released a statement after the incident, calling on Apple to change its corporate policy on sales to Iran.

“Apple must revise its policies to ensure that customers do not face discriminatory treatment based on their religion, ethnicity or national origin,” said CAIR National Executive Director Nihad Awad. “If the actions of these Apple employees reflected company policy, that policy must be changed and all employees retrained.”

Sabet says she later called Apple’s corporate customer relations, where an employee reportedly apologized and told her she could buy an iPad online.


Tax Shelters: Why Israel Could Be the Next Switzerland

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Published on: June 19, 2012

Original Article - Tax Shelters: Why Israel Could Be the Next Switzerland

It looks like Israel is going to be the next Switzerland — at least as far as the Department of Justice’s investigation into offshore tax avoidance is concerned.

On June 14, the Department of Justice unsealed an indictment against three American tax preparers for helping clients avoid taxes by moving money to Israel.

The transgressions detailed in the indictment were relatively small-time. The indictment said the father and son duo of David and Nadav Kalai and their colleague David Almog at a firm called United Revenue Service helped several clients duck taxes by moving money to two Israeli banks, identified only as “Bank A” and “Bank B.”

Most of the financial transactions detailed were small — in the tens or hundreds of thousands of dollars. The men could not be reached for comment.

But the indictment revealed the existence of a grand jury that is almost surely going after much bigger fish. And the details provided in it appear to suggest that “Bank A” is Bank Leumi, whose private banking operation is headquartered in Tel Aviv, and “Bank B” is Bank Hapoalim, which also maintains its global private banking center in Israel’s second-biggest city.

Calls to Bank Leumi for comment were not returned. Bank Hapoalim provided CNBC with a statement from its chief spokesperson, Ofra Preuss, who said, “we read the press reports and are checking into them.”

To date, the U.S. government has successfully cracked the code of Swiss bank secrecy, forcing UBS, Switzerland’s largest bank, to turn over thousands of names of American account holders to investigators, and taking similar actions against other Swiss institutions.

Sources tell CNBC the new case is just the beginning of a potential series of indictments, which may snare some of the wealthy American clients who have hidden money in Israel, many for generations. That’s likely to be politically controversial, especially at a time when the U.S. and Israel are working closely together to contain a geopolitical threat from Iran.

Add to that the political sensitivity of an Obama administration Department of Justice in an election year targeting a group of clients of whom many are likely to be Jewish or have historical family ties to Israel.

“There are a substantial number of Americans with unreported assets in Israel,” said Scott Michel, a partner at the law firm Caplin & Drysdale who specializes in criminal tax fraud investigations. “I wouldn’t be surprised if it is on a par with Switzerland.”

Attorney Bryan Skarlatos, a partner at the firm Kostelanetz & Fink LLP, said that he has clients who are being questioned in the wide-ranging investigation into Israeli bankers.

“I have special agents asking questions about specific banks,” Skarlatos said. “They need evidence that somebody spoke to a banker and the banker had a sense that they were dealing with a U.S. person — they’re asking ‘did you give them your U.S. passport?’”

Both Michel and Skarlatos spoke of allegations of cash-transfer banking, in which overseas bankers match up American clients who want to withdraw and deposit the same amount of cash with the foreign bank.

The bankers appear in the U.S., typically at a hotel, and arrange for couriers to bring the cash to the hotel from the depositing customer, and later turn it over to the withdrawing customer, only later crediting each account for the transaction back in the foreign bank offices.

It can be a dangerous way to avoid taxes, Skarlatos said.

“Some people don’t want to pay taxes, but they’ll risk their lives having someone show up on their doorstep with $3 million in cash,” he said.

In a highly technical and global economy, it’s getting more and more difficult for Americans to hide their assets overseas — and keep it hidden from the IRS. And that means the days of $3 million cash transfers may be coming to an end.


Bloomberg’s NYC ONLY Major U.S. City to See Rise in Joblessness Over the Year

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Published on: June 19, 2012

Original Article - Bloomberg’s NYC ONLY Major U.S. City to See Rise in Joblessness Over the Year

New York Mayor Michael Bloomberg / AP

New York City’s unemployment rate shot up to 9.7 percent through May 2012, despite adding thousands of jobs to the economy. The near one percent increase from May 2011 made the Big Apple the only major U.S. city to see joblessness increase over the year and gave it the second highest unemployment rate among big cities, according to the U.S. Bureau of Labor Statistics.

The unemployment increase alarmed political leaders in the city.

“Over-regulation and over-taxation have driven our small and mid-size businesses out—the net effect of these types of policies is not job creation, but job loss and the unemployment numbers speak to that,” said Councilman Dan Halloran (R., Queens). “The mayor is stuck working with a Council with 47 Democrats and only three Republicans and that has led to soaring taxes and fees on property [owners], commuters, and small business owners.”

The city had managed to avoid much of the pain caused by the recession since 2008, averaging lower unemployment rates than the rest of the country through 2011 and creating jobs at a nation-leading pace.

“Private sector payroll jobs grew by 78,900 [in 2012]—or 2.4 percent; that’s faster than the rate of the nation,” said Patrick Muncie of the city’s Economic Development Corporation. “That’s the most apt analysis to use … unemployment rates are not the best measure; they come from a much smaller sample.”

Job creation in NYC continues to outpace the 1.8 percent annual growth of the rest of the nation. The city has recovered 205 percent of the jobs lost during the recession, with sharp gains in the profitable technology, professional, and tourism sectors, according to Muncie. In May, the private sector added more than 15,000 jobs—about 25 percent of all jobs created nationally during the month.

But that was not enough to stem an uptick in unemployment.

“The job growth did not keep up with the expansion of the city workforce,” Muncie said.

May could mark the start of an economic slowdown in New York, according to several fiscal experts. The city had been able to sustain its economy better than most U.S. cities thanks in large part to the $700 billion bailout of the finance industry. The financial boost kicked the can further down the road for city lawmakers, who now face a $3 billion deficit for next year.

“New York got too dependent on Wall Street and financial sector jobs, and it shrank more slowly than it should have thanks to these bailouts,” Manhattan Institute scholar Nicole Gelinas said. “We never had to make any hard budgetary choices before because of Wall Street growth; now we’ll have to start.”

Even with the bailout, banks shed nearly 19,000 jobs since its 2007 peak, leaving average wages down nearly 5 percent since 2008, according to Gelinas. That could pose major problems for a city that has increased spending by about 8 percent during a time when tax revenues are down and banks continue to curb hiring and cut back on the bonuses that feed city coffers.

“Bloomberg programmed a lot of the city’s capital projects and big-ticket budget items on the Wall Street boom baseline,” financial risk analyst Chris Whalen said. “We’re downsizing the financial sector and I don’t know if the city is ready in a fiscal sense for a financial sector half of what it was.”

Jeff Stier, a longtime Manhattan resident and risk analyst for the National Center for Public Policy Research, said Bloomberg took his eye off the ball in preparing for a Wall Street-lite economy.

“The mayor has expended a great deal of political capital focusing on his personal agenda with sodas, cigarettes, and salt, rather than focusing on the basic needs of New Yorkers to find jobs,” he said. “He should have seen this coming and tried to make New York a welcoming place for business; New York is the financial capital of the world, which makes it especially sensitive to global issues.”

The pension and health-care benefits of city workers are high on the list of things to reform. The city spent $8 billion on benefits for retired workers last year—double the 2005 costs. Those costs are expected to explode as more Baby Boomers retire.

“When he first ran, the mayor promised that he was going to stand up to public sector unions, that he was going to tame them—we’re in year 11 of 12 years and he hasn’t done it,” Halloran said. “Pension reform is absolutely critical and we have not cut significantly enough.”

Bloomberg has stayed on the sidelines in the battle to control pension costs. Rather than tackle the city’s public employee pension problem head on, Bloomberg ceded the fight with labor unions to Democratic Gov. Andrew Cuomo. The end result was a watered down bill that cut benefits, and increased retirement ages for new public sector employees, but did nothing to address the city’s current crisis.

“I don’t think he ever paid very much attention to these benefits; it was never his focus,” Gelinas said. “The time to fix these things is when everything is going well.”

Bloomberg, whose term will come to an end in 2013, has left the city $84 billion short of fulfilling its obligation to retirees, according to the most recent estimates. That is about $15 billion higher than the city’s entire 2012 budget. The city will be forced to choose between service cuts and higher taxes in the future, as it pays increasing amounts to retired workers.

“If we’re spending $8 billion a year on pensions and $7 billion on employee healthcare, that’s $15 billion we can’t use for infrastructure or public safety or tax cuts or libraries and parks,” Gelinas said. “That will deteriorate the quality of life that attracts so many people to New York.”

Councilman Halloran, who backs pension reform, said Gelinas’s scenario is not far off.

“I’m not comfortable with the direction the city is headed; we’re going to have to cut vital services, in fact we already have: We haven’t hired a fire class in four years,” he said. “There’s not much you can do if you keep spending more than you’re taking in.”

Muncie said that the Bloomberg administration is proud of its job creation record and will continue to attract jobs to the city.

“The [job creation] numbers represent a positive sign for our economy, but we know that there are people unemployed who are hurting,” he said. “There is still a lot to do and we are continuing to work hard to put people back to work.”


J.C. Penney Says President Francis Is Leaving (He Ran Homosex Ads)

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Published on: June 19, 2012

Original Article - J.C. Penney Says President Francis Is Leaving (He Ran Pro-Homosex Ads)

The Pro-Homosex Ad that J.C. Penny recently ran. Notice how this article does not mention the Pro-Homosex position of J.C. Penny at all!

In the latest sign of turbulent times at J.C. Penney Co., the mid-price department store chain said Michael Francis, the former Target Corp. executive brought in to help redefine the brand, is leaving the company.

In a terse statement issued late Monday, the department store operator gave no reason for the abrupt departure of Francis, who had been on the job for a little over eight months. As president, Francis was responsible for the marketing of a controversial new pricing plan that aims to get rid of hundreds of sales events. He was also oversaw merchandising and product development.

Shares fell nearly 6 percent in after-hours trading.

Penney said that Ron Johnson, the former Apple executive and new chief executive, will assume direct responsibility and oversight of the company’s marketing and merchandising functions.

The surprise move comes as the department store chain is scrambling to reverse a sharp drop in customer counts and plummeting sales after Johnson’s new pricing strategy ended up turning off customers, who are accustomed to coupons and big markdowns. The plan was implemented Feb. 1.

Since announcing abysmal first-quarter results last month, Penney has been making changes to its advertising and marketing to better explain the three-tier pricing strategy that entails everyday low prices that are 40 percent lower than a year ago; monthlong sales that are deeper and are on select items; and clearance sale events or “Best Price Friday” sales.

The company has also been backpedaling as well. It added five “Best Price Friday” sales throughout the year, including one on the Friday before Memorial Day weekend. That’s in addition to the Best Price Friday sales, which are held on the first and third Friday of every month. The company is also resurrecting the word “sales” in its advertising, a word that was taboo under Johnson’s original plan

“Everything we’ve done hasn’t been perfect … We haven’t communicated our pricing change in a way that customers understand yet,” Johnson said in an address to investors at the Piper Jaffray Consumer Conference, held earlier this month. “It’s just been kind of confusing.”

Still, analysts were surprised by the sudden departure of Francis, who injected a quirky, whimsical style in Penney’s advertising even though critics said they didn’t properly inform shoppers about the new pricing strategy.

In one TV spot, a dog continuously jumps through a hula hoop that a young girl is holding. The text reads: “No more jumping through hoops. No coupon clipping. No door busting. Just great prices from the start.” The company also came out with a stylish monthly magazine that highlighted key items for sale.

“What they were doing hasn’t worked. (Francis) is the fall guy,” said Walter Loeb, New York-based retail consultant. But he said ultimately, people have to look at Johnson, who directed the pricing plan.

Brian Sozzi, NBG Productions analyst, noted, “the sudden nature of the departure underscores, in our opinion, the big-time mistakes J.C. Penney has made in articulating the new image and policies.”

Francis is among a number of big-name executives Johnson has brought in to help transform everything about the retailer, from the brands it carries to the store experience. The riskiest move, however, is the elimination of hundreds of sales events in favor of more predictable low prices.

Penney reported last month a bigger-than-expected loss for the first quarter. Revenue also dropped 20 percent as customer traffic slipped 10 percent. Meanwhile, revenue at stores open at least a year — a comparison used to measure a retailer’s health — dropped 18.9 percent.

Investors were spooked by Monday’s announcement. Shares of J.C. Penney Co., which closed down more than 2 percent at $24.33, fell nearly 6 percent more in after-hours trading Monday on the news.

After Johnson laid out his vision for the new pricing strategy to analysts at the end of January, shares soared, peaking at $43.13 on Feb. 9. But they have lost almost half of their value since then.


Job Openings Report Shows Market Is…Really, Really Bad

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Published on: June 19, 2012

Original Article - Job Openings Report Shows Market Is…Really, Really Bad

Job openings fell to a five-month low in April and showed their sharpest percentage decline in about seven and a half years, according to a government report Tuesday that helped confirm a slowdown in the labor market.

The Job Openings and Labor Turnover Survey, or JOLTS, indicated 3.4 million job openings at the end of April, an 8 percent decline from the previous month.

The pace of total hiring also slowed, with 160,000 fewer jobs filled during the month.

Moreover, the drop showed weakness across the employment spectrum, with manufacturing seeing 62,000 fewer job openings and construction dropping by 2,000.

“Given the global economic slowdown and the impact a growing economy had on the fortunes of the sector on the way up, that is a worrying statistic and goes hand-in-hand with regional Fed surveys and is consistent with weakness in recent payroll readings,” said Andrew Wilkinson, chief economic strategist at Miller Tabak in New York.

Hiring rates remained virtually unchanged for the year, while the “quits rate,” which gauges the willingness of workers to change jobs, also remained unchanged and was at 2.1 million, up from the 1.8 million at the official end of the recession in June 2009.

“The reading for April job openings offered by employers retreated sharply from its highest since July 2008, validating claims that the sharp slowdown in the labor market is a major threat to the economic recovery,” Wilkinson said.

Leisure and hospitality, which had been leading job growth, saw 3,000 fewer openings, while government job openings fell 42,000 amid belt-tightening particularly at the state and local levels.

The numbers come just two weeks after the government reported a paltry 69,000 new jobs created in May and sharp downward revisions to the previous two months, while the unemployment rate rose to 8.2 percent.

Federal Reserve policy makers also could view the trend as reason to enact more quantitative easing measures to boost the economy. The Fed’s Open Markets Committee begins is two-day meeting today.

“The U.S. economic news remains somber,” said economists at Goldman Sachs, which predicts the Fed will announced another round of easing this week.


Researchers Whose Work Was Cited to Justify Bloomberg’s Large Soda Ban Explain Why it Won’t Work

Original Article - Researchers Whose Work Was Cited to Justify Bloomberg’s Large Soda Ban Explain Why it Won’t Work

In trying to justify his proposed regulation banning large-size sodas, New York Mayor Michael Bloomberg cited the work of economists Brian Wansink and David Just. In this recent Atlantic article, Wansink and Just explain that he got their work wrong:

New York City’s mayor proposed a restaurant ban for any soft drink over 16-ounces. The hope is that by banning big drinks people will drink less and weigh less. He and others cited our research as the science behind the policy. Indeed, a dozen of our studies show when you randomly give people large sizes of food like popcorn and French fries, they overeat….

There’s a critical difference between the lab and Lexington Avenue that the mayor’s office didn’t account for: when Joe the Plumber and Bob the Banker buy soft drinks, they buy the size they want. They aren’t randomly forced to take a 44-ouncer when they really wanted a 12-ouncer. Moreover, their Coke or Pepsi doesn’t magically refill itself. If that happened, they’d overdrink. Instead, most restaurants give us a choice of a small or large drink — just as nearly every fast food outlet gives us a choice of small, medium, or large fries, and every movie theatre gives us a choice of small, medium, or large popcorn. People who want a little buy a little, and people who want a lot figure a way to get it.

Yes, we have found that when people are given larger portions, they do drink or eat substantially more. But to claim that these results imply that the ban will be effective is to ignore our larger body of work. In our experiments, subjects were given larger or smaller portions of food in a dining or party setting, where they were unlikely to notice portion size. It is exactly because participants weren’t paying attention that we got the results we did.

The mayor’s approach, however, overtly denies people portions they are used to be able to get whenever they want them. In similar lab settings, this kind of approach has inspired various forms of rebellion among study participants. For example, openly serving someone lowfat or reduced-calorie meals tends to lead to increased fat or calorie consumption over the whole day. People reason that because they were forced to be good for one meal, they can splurge on snacks and desserts at later meals.

As I explained in my previous post on this subject, paternalistic policies are not going be able to prevent obesity merely by restricting sodas or some other specific food or drink. People who like sugary or fatty foods will simply gorge on something else. The only potentially effective paternalistic solution is comprehensive regulation of people’s diets and possibly exercise as well.

I would oppose the soda regulation and others like it even if they did improve health. Individuals should be able to decide for themselves to what extent they are willing to accept health risks in order to satisfy other preferences. I get less than the optimal amount of exercise in part because I spend a lot of time reading and writing. As a result, I am less healthy than I might be otherwise. But that is a tradeoff I should be able to make in a free society. The same goes for people who are willing to accept health risks for other reasons – including because they want to continue eating the types of food they enjoy.

That said, I can at least understand the case for paternalistic regulations that have genuine health benefits. Paternalistic regulations that don’t even work are just gratuitous infringements on freedom without any justification at all.

UPDATE: In my previous post, I explained why these kinds of paternalistic regulations can’t be justified by the existence of externalities caused by government subsidization of health care.

UPDATE #2: For a more extensive look at the relevant evidence showing that soda restrictions are unlikely to improve health outcomes, see this article by well-known law and economics scholars Jonathan Klick and Eric Helland.

UPDATE #3: In the initial version of this post, I accidentally got David Just’s first name wrong. Thanks to readers for pointing this out. The mistake has now been corrected.


Unemployment Data Adjusted Up AGAIN – Unexpected, Really?!

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Published on: June 18, 2012

Original Article - Unemployment Data Adjusted Up AGAIN – Unexpected, Really?!

Back in August 2010, we became concerned that the professional U.S. news media really were being caught with their pants down far too often when reporting economic news, which they were perpetually describing as “unexpected”.

So, we decided to help them out. We shared how we’ve become able to project the future for the number of seasonally-adjusted new jobless claims each week with such a high degree of accuracy. After all, using those methods, we’ve been able to transform this particular economic statistic into the most easy to forecast of all economic data.

So, imagine our surprise when we decided to pay attention to their reporting of the most recent new unemployment insurance claims from Thursday, 14 June 2012 when, well, let’s let Bloomberg tell the story….

Claims for jobless benefits unexpectedly climbed by 6,000 to 386,000 in the week ended June 9 from a revised 380,000 the prior week that was more than first estimated, Labor Department figures showed today in Washington. Economists projected claims would fall to 375,000, according to the median estimate in a Bloomberg News survey.

Really? Unexpected? Again?! Who exactly are these economists that keep getting surveyed who it seems really couldn’t forecast their way out of a wet paper bag?

Let’s try something – let’s take our statistics-based analytical method and find out just how far back in time we could have put ourselves in the right ballpark for predicting last week’s numbers!

For our methods, we need at least six weeks worth of data to establish whether a trend exists, and ideally ten weeks to get a decent statistical picture of it (obviously, the more data the better – these values represent the minimum values we need to put the picture together). Since we confirmed in an update on 3 May 2012 that a new trend in the number of seasonally-adjusted new jobless claims had indeed taken effect, pegging its beginning to the week ending 18 February 2012.

Ten weeks later puts us at the data report for the week ending 5 May 2012. Here is the chart with the projections that we could have generated at that time, using the BLS’ revised data through 28 April 2012:

Now, let’s fill in all the data that has been recorded since….

Based upon just ten weeks worth of data, we could easily have projected the range where each subsequent data point would be some 95% of the time for each week up to at least a month and a half later.

Of course, since we have more data now, why not use it? Here’s what the chart looks like today based on the data reported through the week ending 9 June 2012:

And now you know what “expected” really looks like. In fact, we’ll give you 68.2% odds of the data for the week ending 16 June 2012 coming in between 375,378 and 393,652, and 95% odds that it will fall between 366,240 and 402,789. At least while the current trend holds (it may not for much longer, which we’ll touch on tomorrow!)


Merkel Won’t Budge: Spain And Italy Get Destroyed Financially

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Published on: June 18, 2012

Original Article - Merkel Won’t Budge: Spain And Italy Get Destroyed Financially

The Spanish IBEX 35 and the Italian FTSE MIB got crushed today, after Greek elections failed to reassure markets that anything has changed for the troubled Spain and Italy.

Comments from German Chancellor Angela Merkel worsened the blow. She told reporters near the end of European trading that she will not budge on the terms of the Greece aid package.

In core Europe, the DAX held on to gains to end just slightly higher, but the French CAC 40 fell 1 percent.

That negativity appears to have carried over into U.S. markets, all of which appeared to drop significantly in the wake of those headlines. Only the NASDAQ is holding onto gains.

Here’s Spain, down 3.0 percent:


Yahoo Finance

And Italy, down 2.9 percent:


Yahoo Finance

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