Rescue of Rich

 

When Government Pay for Rich, Poor get Poorer - This is called capitalism

 

U.S. poverty totals hit a 50-year high

The government’s efforts to save the banks is basically paying poor people's money ( stealing and extorting) and giving it to rich to enjoy life. The whole exercise of QE1 and QE2 are just efforts in saving the funding lobbies and their interest so that they can get funding for next elections.

All these easing has made life more difficult for the poor. It has made basic staple food affordability not only in poor countries but also in USA. More than 15% are poor who can have healthcare, housing and education.

 

Soaring Poverty Casts Spotlight on 'Lost Decade'

 

Reporting from Washington—

In a grim portrait of a nation in economic turmoil, the government reported that the number of people living in poverty last year surged to 46.2 million — the most in at least half a century — as 1 million more Americans went without health insurance and household incomes fell sharply.

 

The poverty rate for all Americans rose in 2010 for the third consecutive year, matching the 15.1% figure in 1993 and pushing many younger adults to double up or return to their parents' home to avoid joining the ranks of the poor.

Taken together, the annual income and poverty snapshot released Tuesday by the U.S. Census Bureau underscored how the recession is casting a long shadow well after its official end in June 2009.

The number of poor children younger than 18 reached its highest level since 1962, said William Frey, a demographer at the Brookings Institution.

 

Poverty reached a record high for Latino children, who Frey said accounted for more than half the overall increase in poor children last year.

Blacks had the highest child poverty rate at 39%, up more than 3 percentage points from last year.

Overall, poverty was generally higher than the national rate in states with high unemployment and in the South. Mississippi had the highest poverty rate last year, at 22.7%, and New Hampshire had the lowest, 6.6%.

 

Overall, the number of 25- to 34-year-old men and women who were living with their parents last spring totaled 5.9 million — a 25.5% increase since the recession began in 2007.

The census report, coming shortly after President Obama unveiled a proposed $447-billion package of tax cuts and spending to revive job growth and the recovery, was seen as intensifying the debate over the government's role in helping the poor and unemployed at a time of budget deficits and painful cutbacks in public services.

 

JP Morgan Chief Says Bank Rules 'Anti-US'

 

America Should Pull Out of Basel - Because they are Anti American

America is Out of Kyoto - Because they are Anti America

America is Out of ICC - It is illegitimate

What suits to America is Americanism - What suits to World and Principle of Justice is Anti America - This is what exactly Americanism

 

EU-US Economies - Will Another Lehman-Style Crisis Be Prevented? - CNBC

No it is not possible. The crisis cannot be prevented. When we look at present situation not much has been changed and the causes of the previous collapse are still existent in the market.

•          Too Big to Fail -- The companies which were affected and needs rescue have become bigger, the systematic risk of collapse of the system has not removed or reduced, over the years it has increased.

•          Off Balance Sheet Transaction - Derivatives and swaps are there and nobody really knows how much each of them owe. How much risk or swaps or derivatives they have played. Derivatives are still off balance sheet and not governed by the Financial Authorities.

•          Toxic assets are still there on the balance sheet sitting and looking pretty beautiful. No one knows how much toxic each of them has and what is its worth.

•          Credit Rating Agencies are same, methods are same and methodology is the same. They are still beyond control and again started playing the dirty game.

•          Auditors are same - they have not changed their behavior and practices. They are not controlled and supervised.

•          Housing is going down, mortgage is under water and bond for them are in market.

 

Corona Relief -The Governing Council decided the following:

(1) To launch a new temporary asset purchase programme of private and public sector securities to counter the serious risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the outbreak and escalating diffusion of the coronavirus, COVID-19.

This new Pandemic Emergency Purchase Programme (PEPP) will have an overall envelope of €750 billion. Purchases will be conducted until the end of 2020 and will include all the asset categories eligible under the existing asset purchase programme (APP).

A waiver of the eligibility requirements for securities issued by the Greek government will be granted for purchases under PEPP.

The Governing Council will terminate net asset purchases under PEPP once it judges that the coronavirus Covid-19 crisis phase is over, but in any case not before the end of the year.

The Governing Council of the ECB is committed to playing its role in supporting all citizens of the euro area through this extremely challenging time. To that end, the ECB will ensure that all sectors of the economy can benefit from supportive financing conditions that enable them to absorb this shock. This applies equally to families, firms, banks and governments.

 

As central banks implement coronavirus rescue plans, has moral hazard been forgotten?

 

One of the most important challenges facing a central bank (CB) when it must act as a lender-of-last-resort to stabilize a financial crisis is to avoid fostering moral hazard. This trap occurs when market participants perceive little-to-no consequences for potentially excessive risk taking, as they come to believe that they will be protected should things go awry. Quick and decisive action by major CBs has stabilized international financial markets during the pandemic downturn, setting the stage for a broad economic recovery.

But coming on the heels of large-scale CB accommodation during the 2008-2009 Global Financial Crisis (GFC), officials have reinforced the market’s belief that CBs will time and time again take policy measures to protect financial markets from widespread losses.

Having learned from the positive impacts of their actions during the GFC, major central banks quickly jumped into action to stabilize the situation when international financial markets plunged in March as the COVID-19 pandemic struck. The US Federal Reserve (Fed) implemented huge securities purchase programs, some without limits, going beyond US treasuries and agencies to buy corporate bonds including those below investment grades (which CBs traditionally do not touch).

The Fed also offered credit facilities to many market players, including money market funds and corporations. Importantly, in response to the US dollar funding crisis among non-US banks, the Fed arranged currency swap lines with several major central banks and US Treasury repurchase agreement lines with many other monetary authorities. As a result, the Fed balance sheet quickly increased from $4.2 trillion in February to a peak of $7.2 trillion in mid-June.

Similarly, the European Central Bank (ECB) launched a €750 billion Pandemic Emergency Purchase Program, later increasing it by another €600 billion. Under these programs, the ECB can purchase government and corporate bonds in member countries, without previous constraints on how much it can acquire in each member country. Consequently, the ECB balance sheet has increased from €4.7 trillion in mid-April to €5.6 trillion in June.

 

Timely central bank actions have helped international equity markets recover most of the 30 to 40 percent losses suffered in February and March. Portfolio capital flows have more than reversed their earlier net outflows from risk assets. Borrowers including those below investment grades have been able to issue significant volumes of bonds. For example, global corporations have issued more than $6.4 trillion of bonds—on course to reach a record high this year. Emerging market sovereigns have also issued $123.5 billion of hard currency bonds in the first half of the year.

But the swift recovery of financial markets seems to be at odds with the underlying economic reality—where unemployment remains widespread and bankruptcies remain quite elevated. Moreover, financial market buoyancy is persisting even as the Fed balance sheet has shrunk from $7.2 trillion to $6.9 trillion in late July; and the ECB balance sheet has also declined modestly in recent weeks—reflecting investors’ reduced reliance on CB support. This is a clear indication of moral hazard at work. Markets no longer need central banks to add liquidity to do well; all they require is just the conviction that CBs are there ready to provide support when needed. While providing breathing room in the short term, this expectation of CBs coming to the rescue will likely lead to continued risk taking by the market, which could threaten future financial bubbles and stability risks.

Another manifestation of moral hazard is the fact that plentiful CB liquidity and low interest rates continue to sustain most companies, including unproductive ones. The number of zombie companies—those generating insufficient profits to pay interests on their debt— has noticeably risen as a share of the corporate universe. According to Deutsche Bank Securities, zombies currently make up 20 percent of US companies, having doubled since 2013. The share of zombies in Europe is likely similar given that in 2016, a BIS study estimated the zombie share at 12 percent for fourteen advanced economies under study (mostly in Europe). The United States and Europe could be falling into the same trap Japan did three decades ago, when the country kept zombie companies alive with easy financing conditions so that their share reached almost 35 percent in the mid-1990s, ushering in decades of slow growth.

 

Federal Reserve's $3 trillion virus rescue inflates market bubbles

The Federal Reserve’s $3 trillion bid to stave off an economic crisis in the wake of the coronavirus outbreak is fuelling excesses across U.S. capital markets.

The U.S. central bank has pledged unlimited financial asset purchases to sustain market liquidity, increasing its balance sheet from $4.2 trillion in February to $7 trillion today.

While the vast majority of these purchases have been limited to U.S. Treasuries and mortgage-backed securities, the Fed’s pledge to bolster the corporate bond market has been enough to spur a frenzy among investors for bonds and stocks.

Global Poverty and Increasing Wealth of Rich

 

Richest 1% now owns half the world’s wealth

The wealthiest 1 percent of the world’s population now owns more than half of the world’s wealth, according to a new report.

The total wealth in the world grew by 6 percent over the past 12 months to $280 trillion, marking the fastest wealth creation since 2012, according to the Credit Suisse report. More than half of the $16.7 trillion in new wealth was in the U.S., which grew $8.5 trillion richer.

But that wealth around the world is increasingly concentrated among those at the top.

Are 26 billionaires worth more than half the planet? The debate, explained.

Here’s a wild statistic: The 26 richest people on earth in 2018 had the same net worth as the poorest half of the world’s population, some 3.8 billion people.

World's Richest 1 Percent Own Twice as Much as Bottom 90 Percent

The more than twenty-one hundred billionaires globally own more of the world's wealth than the 4.6 billion people at the bottom of the global wealth pyramid, a report from Oxfam International finds.

According to the report, Time to Care: Unpaid and Underpaid Care Work and the Global Inequality Crisis (64 pages, PDF), the number of billionaires globally has doubled over the last decade, while the richest 1 percent have accumulated twice as much wealth as 90 percent of the global population, some 6.9 billion people. And global wealth inequality is worsening, in part because billionaire portfolios have enjoyed an average annual return of 7.4 percent over the last ten years — helped by low taxes and a 31 percent increase in dividends to shareholders — even as the average wage in G7 countries rose only 3 percent. Evidence of "a flawed and sexist economic system" is everywhere, the report's authors write.

 

The world’s 2,153 billionaires have more wealth than the 4.6 billion people who make up 60 percent of the planet’s population, reveals a new report from Oxfam today ahead of the World Economic Forum (WEF) in Davos, Switzerland.

Global inequality is shockingly entrenched and vast and the number of billionaires has doubled in the last decade. Oxfam India CEO Amitabh Behar, who is in Davos to represent the Oxfam confederation this year said: “The gap between rich and poor can't be resolved without deliberate inequality-busting policies, and too few governments are committed to these.”

“Our broken economies are lining the pockets of billionaires and big business at the expense of ordinary men and women. No wonder people are starting to question whether billionaires should even exist,” Behar said.

Fight inequality, beat poverty

Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.

Oxfam’s report, ‘An economy for the 99 percent’, shows that the gap between rich and poor is far greater than had been feared. It details how big business and the super-rich are fuelling the inequality crisis by dodging taxes, driving down wages and using their power to influence politics. It calls for a fundamental change in the way we manage our economies so that they work for all people, and not just a fortunate few.

New and better data on the distribution of global wealth – particularly in India and China – indicates that the poorest half of the world has less wealth than had been previously thought.  Had this new data been available last year, it would have shown that nine billionaires owned the same wealth as the poorest half of the planet, and not 62, as Oxfam calculated at the time

 

25 richest Americans paid little to nothing in federal income taxes: Report

 

The 25 richest Americans, including Jeff Bezos, Michael Bloomberg and Elon Musk, paid relatively little — and sometimes nothing — in federal income taxes between 2014 and 2018, according to an analysis from the news organization ProPublica that was based on a trove of Internal Revenue Service tax data.

The analysis showed that the nation’s richest executives paid just a fraction of their wealth in taxes — $13.6 billion in federal income taxes during a time period when their collective net worth increased by $401 billion, according to a tabulation by Forbes.

The documents reveal the stark inequity in the American tax system, as plutocrats like Mr. Bezos, Mr. Bloomberg, Warren Buffett, Mr. Musk and George Soros were able to benefit from a complex web of loopholes in the tax code and the fact that the United States puts its emphasis on taxing labor income versus wealth.

 

Top US Companies Pay No Income Tax

 

At least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite enjoying substantial pretax profits in the United States. This continues a decades-long trend of corporate tax avoidance by the biggest U.S. corporations, and it appears to be the product of long-standing tax breaks preserved or expanded by the 2017 Tax Cuts and Jobs Act (TCJA) as well as the CARES Act tax breaks enacted in the spring of 2020.

The tax-avoiding companies represent various industries and collectively enjoyed almost $40.5 billion in U.S. pretax income in 2020, according to their annual financial reports. The statutory federal tax rate for corporate profits is 21 percent. The 55 corporations would have paid a collective total of $8.5 billion for the year had they paid that rate on their 2020 income. Instead, they received $3.5 billion in tax rebates.

Their total corporate tax breaks for 2020, including $8.5 billion in tax avoidance and $3.5 billion in rebates, comes to $12 billion.

This report is based on ITEP’s analysis of annual financial reports filed by the nation’s largest publicly traded U.S.-based corporations in their most recent fiscal year. All data presented here come directly from the income tax notes of these reports. Some companies with unusual fiscal years have not yet filed such reports. Some publicly traded corporations paid nothing on profits in their most recent fiscal year but are not included in this report because they are not part of the S&P 500 or Fortune 500.

No-Tax Corporations Continue a Decades-Long Trend

For decades, the biggest and most profitable U.S. corporations have found ways to shelter their profits from federal income taxation. ITEP reports have documented such tax avoidance since the early years of the Reagan administration’s misguided tax-cutting experiment. A widely cited ITEP analysis of an eight-year period (2008 through 2015) confirmed that federal tax avoidance remained rampant before the TCJA.

Now, with most corporations reporting their third year of results under the new corporate tax laws pushed through by President Donald Trump in 2017, it is crystal clear that the TCJA failed to address loopholes that enable tax dodging—and may have made it worse.

The companies avoiding income taxes in 2020 represent very different sectors of the U.S. economy:

Food conglomerate Archer Daniels Midland enjoyed $438 million of U.S. pretax income last year and received a federal tax rebate of $164 million.

The delivery giant FedEx zeroed out its federal income tax on $1.2 billion of U.S. pretax income in 2020 and received a rebate of $230 million.

The shoe manufacturer Nike didn’t pay a dime of federal income tax on almost $2.9 billion of U.S. pretax income last year, instead enjoying a $109 million tax rebate.

The cable TV provider DISH Network paid no federal income taxes on $2.5 billion of U.S. income in 2020.

The software company Salesforce avoided all federal income taxes on $2.6 billion of U.S. income.

 

The U.S. income, current federal income tax and effective tax rates in 2020 for all 55 of the zero-tax companies are shown in the following table.

 

Analysts determined that the 55 companies, all part of the S&P 500 or Fortune 500, would have paid a combined total of $8.5 billion last year if they had paid at a 21% rate (the statutory federal corporate tax rate) on their profits.

Not only did they avoid paying any taxes on their profits, but these companies also received $3.5 billion in tax rebates, according to ITEP, a left-leaning, non-profit research group that analyzed each firm’s annual financial reports.