ITS THE ECONOMY......!!! - THE GREAT AWAKENING2024-03-29T06:14:31Zhttp://thegreatawakening.ning.com/forum/topics/its-the-economy?commentId=5235400%3AComment%3A133238&feed=yes&xn_auth=noDavid Stockman on Why Main S…tag:thegreatawakening.ning.com,2024-03-08:5235400:Comment:1588402024-03-08T14:55:14.750Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
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<tbody><tr><td align="left" bgcolor="#FFFFFF" class="h1">David Stockman on Why Main Street Households Are Left High And Dry...</td>
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<tr><td align="left" bgcolor="#FFFFFF">by David Stockman</td>
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<p><br></br>There should be no doubt that the UniParty has left main street households high and dry. During the past five years inflation-adjusted weekly…</p>
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<tbody><tr><td class="h1" bgcolor="#FFFFFF" align="left">David Stockman on Why Main Street Households Are Left High And Dry...</td>
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<tr><td bgcolor="#FFFFFF" align="left">by David Stockman</td>
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<p><br/>There should be no doubt that the UniParty has left main street households high and dry. During the past five years inflation-adjusted weekly earnings have barely limped forward at a <em>0.4%</em> annual rate.</p>
<p>Self-evidently, the Fed’s pro-inflation policy has backfired. Rather than functioning as a stimulant to growth, it has ended up devouring nearly all of the modest nominal wage gains that have been realized by private sector workers in America.</p>
<p><strong>Index of Inflation-Adjusted Average Weekly Earnings, January 2019 to January 2024<br/><br/><img src="https://connect-ucs.xfinity.com/proxy?source=https%3A%2F%2Fcontent.app-us1.com%2FJEgNO%2F2024%2F03%2F07%2F69b1804f-88d7-41a6-b7df-d0a761b73cb1.png%3Fid%3D30581789" height="208" width="490" alt="1.png"/></strong></p>
<p>Needless to say, this has been far from the case historically. In fact, real median family income grew at a robust <em>3.54%</em> per annum between 1954 and 1969. But shortly thereafter, the Fed’s shackles were removed with respect to gold convertibility in August 1971, and it was off to the inflationary races from there.</p>
<p>During the next 53 years, family incomes barely won the footrace against the waves of inflation generated by the nation’s central bank. Real median family income rose by only <strong>0.74%</strong> per annum between 1969 and 2022 or by just 21% of the 1954-1969 average.</p>
<p>That’s right. Median family income growth in inflation-adjusted terms has decelerated by four-fifths since 1969. So the question surely recurs: Did the lapse of fiscal and monetary policy into Keynesian deficits and money-printing actually stimulate the growth of main street living standards and real wealth?</p>
<p>Most surely it did not.</p>
<p><strong>Real Median Family Income, 1954 to 1969.<br/><br/><img src="https://connect-ucs.xfinity.com/proxy?source=https%3A%2F%2Fcontent.app-us1.com%2FJEgNO%2F2024%2F03%2F07%2F3c058f37-081f-472b-afe6-02147e9ad508.png%3Fid%3D30581822" height="458" width="450" alt="2.png"/></strong></p>
<p>To be sure, we don’t believe the Fed is intentionally trying to monkey-hammer the middle class. The explanation is actually both more direct and more sinister. To wit, especially since the arrival of Alan Greenspan at the Fed, the nation’s central bank has increasingly become the outright captive of Wall Street money shufflers and speculators.</p>
<p>Moreover, the latter is inherent in the Keynesian form of modern central banking because its policy transmission mechanism runs right through the canyons of Wall Street. The Fed’s policy-making arm, the FOMC, is not only located on Liberty Street at the foot of the financial district but utterly depends upon Wall Street traders of stocks, bonds, money and their derivatives to transmit its policy directives to the main street economy. That is to say, the Fed funds rate is the financial lever from which the Fed cascades price signals to the money and bond markets and from there to equities, real estate and other financial assets, which, in turn, are supposed to levitate the rate of investment and real growth on main street.</p>
<p>It was never intended to function in this round about manner, however. The original design of the Federal Reserve System as wrought by Carter Glass in 1913 operated through the main street banking system, not the Wall Street capital and money markets. Its essential mechanism of policy transmission was the discount windows of the 12 regional reserve banks.</p>
<p>But in this modality, the policy mechanism was essentially passive. It was not designed to steer the macroeconomy because Congressman Glass and his fellow legislators of that era fully understood that free market capitalism operating on gold standard money was fully capable of generating the maximum growth, prosperity and wealth available from the population and technology of the day.</p>
<p>Accordingly, there was no silly belief, as today, that capitalism was always on the verge of plunging into a black hole of recession or depression or that it was inherently incapable of reaching its "potential" GDP. There was no need, therefore, for an arm of the state to target employment levels, real growth, capital investment, housing starts or inflation rates. All of that was understood to be the province of free men on free markets interreacting through the medium of sound money linked to an enduring weight of gold.</p>
<p>To the contrary, the remit of the Glassian Fed was far more modest and narrower. It was designed to keep the commercial banking system liquid during times of seasonal or financial stress by standing ready to discount sound commercial papers at a penalty rate of interest, which, in turn, floated above the ordinary free market rate.</p>
<p>Accordingly, the Fed was a rate taker, not a rate setter. And it was a lubricator of the commercial loan market, not the financier of government debt. And most of all, it was pro-market, not an incipient monetary politburo.</p>
<p>That made all the difference in the world. The Glassian Fed did not need to be clairvoyant about the economic future since the latter is impossible to know where even a modicum of free market choice and dynamics are operative. It therefore had no bias with respect to whether market interest rates were low, high or in-between at any given point in the business cycle. Nor did it fret about Wall Street based capital markets and the level of stock and bond prices, either.</p>
<p>By contrast, the essential business of Wall Street is speculation in existing financial assets, with the syndication and distribution of new stock and bond issues holding a distinctly secondary status in terms of activity levels and profitability. Consequently, speculators are inherently and irredeemably biased toward low, lower and still lower interest rates.</p>
<p>That’s because speculation in all its forms is ultimately based on the carry trades. That is, a positive spread between the financial cost of carrying a tradeable asset and the returns being earned upon that asset. And this includes, importantly, not merely so-called "cash" market stocks and bonds, but every form of futures and options derivatives, which are priced in part based on the implicit cost of money over their term.</p>
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<p><br/>Beyond that, the yield curve pegged to the money market also sets the capitalization rate or valuation multiple for longer-duration assets. Self-evidently, therefore, speculators want the cost of money to go down since that reduces the funding cost of their trade on the liability side of balance sheets, even as it causes the market to bid up the valuation multiple of their asset.</p>
<p>The very greatest mistake of state economic policy, therefore, is to allow the central bank to become hostage to Wall Street speculators. Everywhere and always they will push central bankers to set rates lower for longer, or even less high for less time whenever inflation breakouts force them to apply the so-called monetary brakes.</p>
<p>For avoidance of doubt just consider a crucial ratio in that regard during the era since Greenspan went full retard with respect to the so-called "wealth effects" doctrine, which is just a conservative sounding cover story for money-printing. To wit, asset prices have soared by orders of magnitude more than wages and incomes, yet there would be no logical or sustainable basis for that on a sound money based free market.</p>
<p>Yet during the one-third century since Q3 1989, real median family incomes have risen by only <em>0.70%</em> per annum, while the real net worth of households has increased by <em>3.18%</em> per annum. That’s a ratio of 4.5X when for all intents and purposes it should have been 1.0X.</p>
<p>Needless to say, even in the scheme of honest capitalism, household asset and net worth holdings are not evenly distributed because contributions of work, enterprise, investment and invention are not evenly distributed, either. But when the natural winners on the free market get an extraordinary boost from central bank-fostered inflation of financial assets, the spiral of ill-gotten gains can quickly compound upon itself, leading to egregiously unfair accumulations of net worth over time.</p>
<p>Thus, between Q3 1989 and Q3 2023, the net worth of the top 0.1% of households rose from $1.75 trillion to $19.85 trillion or by <strong>11.3X</strong>. By contrast, the net worth of the bottom 50% of households rose from $0.71 trillion to $3.64 trillion or by just<em> 5.1X</em>.</p>
<p>The point is, the distributional pattern from the natural winners of capitalism was already in full force as of 1989. There is no reason at all why the net worth gain of the top 0.1% was more than double the relative gain of the bottom 50%. In fact, however, those that have the assets are far better positioned to engage in leveraged gambling with FU money than average households struggling to make ends meet in the face of the relentless goods and services inflation—a scourge embraced by the Fed as a matter of fundamental policy.</p>
<p>Accordingly, when these figures are put in the practical term of net worth per household the distortion becomes abundantly clear. In 1989 the 92,000 households comprising the top 0.1% had net worth of $18.86 million each. That was <strong>1,230X</strong> the $15,300 average net worth of the bottom 50% or 46.4 million households.</p>
<p>However, the gain over the next 34 years was <em>$138 million</em> each for the top 0.1% or 131,000 households compared to the gain of <strong>$44,000</strong> each for the bottom 50% or 65.7 million households. That’s a ratio of <strong>3,175X</strong>.</p>
<p>In short, when it comes to central bank money printing owing to its captivity by Wall Street speculators and traders the old saying about the rich getting richer could not be more apropos.</p>
<p>Moreover, the data leave no doubt that the gains from financial asset inflation are systematically asymmetrical. Over this 34-year period, net worth has increased as follows by wealth bracket:</p>
<ul>
<li>Top 0.01%: +$18.1 trillion or 11.3X.</li>
<li>Next 0.99%: +$20.7 trillion or 8.1X.</li>
<li>Next 9%: +$43.6 trillion or 6.6X.</li>
<li>Next 40%: +$36.6 trillion or 6.0X.</li>
<li>Bottom 50%: +$2.9 trillion or 5.1X.</li>
</ul>
<p>So the question recurs. What would happen if the Fed’s open-ended mandate owing to decades of mission creep were to revert to the Glassian Discount Window model?</p>
<p>We’d suggest several outcomes, all of which would be more than welcome.</p>
<ol>
<li>The banking system would remain liquid and safe.</li>
<li>Economic growth and prosperity would be a function of the free market, which cannot be improved upon by the state in any event, as the record since 1987 amply proves.</li>
<li>There would be no massive monetizaiton of government paper or explosive growth of the public debt because deficits would be honestly financed in the bond pits, causing crowding out, rising interest rates and potent political reactions.</li>
<li>Inflation of both asset prices and goods and services on main street would end.</li>
<li>The government contribution to the growing maldistribution of wealth would be eliminated.</li>
</ol>
<p>What’s not to like about that?</p>
<p><strong>Distribution of U.S. Household Wealth</strong></p>
<p>Note: The share gains since 1990 have been concentrated in the top 0.1% and next tier of the top 1%.</p>
<p><strong><img src="https://connect-ucs.xfinity.com/proxy?source=https%3A%2F%2Fcontent.app-us1.com%2FJEgNO%2F2024%2F03%2F07%2F173aa1c3-57c7-4b23-a486-deefbb5f6fd4.png%3Fid%3D30582096" height="160" width="450" alt="3.png"/><br/><br/><img src="https://connect-ucs.xfinity.com/proxy?source=https%3A%2F%2Fcontent.app-us1.com%2FJEgNO%2F2024%2F03%2F07%2F49acaf3f-e67c-46ab-8209-31d381c8dcf6.jpeg%3Fid%3D30582105" height="587" width="450" alt="4.jpg"/></strong></p>
<p>Editor’s Note: Whether it’s groceries, medical care, tuition, or rent, it seems the cost of everything is rising.</p>
<p>It’s an established trend in motion that is accelerating, and now approaching a breaking point.</p>
<p>At the same time, the world is facing a severe crisis on multiple fronts.</p> Illinois Employers Will Face…tag:thegreatawakening.ning.com,2023-12-15:5235400:Comment:1546502023-12-15T14:24:41.204Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
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<div class="cf mv2 mv4-l"><div class="br-l b--light-gray fl-l pl2-l pr4-l w-70-l"><div class="jds-main-content"><div>A plethora of federal, state and local employment laws will take effect in 2024. Here is what employers must know:</div>
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<div><strong><u>Federal Law</u></strong></div>
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<div><u>Department of Labor (DOL) Exemption Thresholds</u></div>
<div> </div>
<div>On August 30, 2023, the DOL announced a <a href="https://www.dol.gov/newsroom/releases/whd/whd20230830">notice</a> of proposed rulemaking that would increase the salary basis threshold under the Fair Labor Standards Act (FLSA) for “white collar” exemptions (executive, administrative and professional) from minimum wage and overtime requirements. The proposal would increase the salary exemption from $35,568 to $55,068 per year. The proposal would also increase the threshold salary for highly compensated employees from $107,432 to $143,988 per year. The DOL will likely publish a final rule in the first quarter of 2024.</div>
<div> </div>
<div>For more on this proposal, see Gould & Ratner’s HR Blog <a href="https://www.gouldratner.com/publication/new-dol-proposal-would-expand-overtime-pay-to-millions-of-workers">here</a>.</div>
<div> </div>
<div><strong><u>Illinois Law</u></strong></div>
<div> </div>
<div><u>Salary Transparency Requirements Under the Equal Pay Act</u></div>
<div> </div>
<div>Effective January 1, 2025, employers with 15 or more employees must include pay ranges in postings for jobs in Illinois. This amendment to the Illinois Equal Pay Act will only apply when employers create job postings and will not require employers to make such postings in the first place.</div>
<div> </div>
<div>The amendment requires covered employers to include “pay scale and benefits” in their job postings and defines that phrase as:</div>
<div> </div>
<ul>
<li>the wage or salary, or wage or salary range, and</li>
<li>a general description of the benefits and other compensation that the employer reasonably expects in good faith to offer for the position.</li>
</ul>
<div>Benefits and other compensation include, but are not limited to:</div>
<div> </div>
<ul>
<li>bonuses,</li>
<li>stock options,</li>
<li>or other incentives the employer reasonably expects in good faith to offer for the position.</li>
</ul>
<div>When an employer creates a job posting, it can provide the pay scale and benefits by including a hyperlink to a publicly available webpage that includes the pay scale and benefits. Employers may also satisfy the benefits posting requirement by posting a relevant and up-to-date general benefits description in an easily accessible, central and public location on the employer's website.</div>
<div> </div>
<div>If an employer uses a third party (such as a recruiter or job posting website) to post, publish or otherwise make known a job posting, the employer must provide the third party with the pay scale and benefits or a hyperlink to them, which the third party must use in the job posting. A third party is liable for failing to post the required information unless it can demonstrate that the employer did not provide such information.</div>
<div> </div>
<div>For more on Illinois’s salary transparency requirements, see Gould & Ratner’s HR Blog <a href="https://www.gouldratner.com/publication/illinois-new-salary-transparency-law-takes-effect-jan-1-2025-are-you-prepared">here</a>.</div>
<div> </div>
<div><u>Child Extended Bereavement Leave Act</u></div>
<div> </div>
<div>Effective January 1, 2024, employees who experience the loss of a child by suicide or homicide may take unpaid bereavement leave under the <a href="https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=4447&ChapterID=68#:~:text=Leave.,child%20by%20suicide%20or%20homicide">Child Extended Bereavement Leave Act</a>. Under the law, “child” means an employee’s biological, adopted or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis.</div>
<div> </div>
<div>Employees of large employers (250 or more full-time employees in Illinois) may take up to 12 weeks of leave, while employees of small employers (at least 50, but less than 250, full-time employees in Illinois) may take up to 6 weeks of leave.</div>
<div> </div>
<div>Child Extended Bereavement Leave may be taken in a single continuous period or intermittently in increments of at least four hours. Unlike leave under the Family Bereavement Leave Act, which requires leave to be taken within 60 days of notice of death, child extended bereavement leave may be taken within one year of when the employee notifies the employer of the loss. An employer may require reasonable documentation of the loss.</div>
<div> </div>
<div>Employees entitled to take paid or unpaid leave (including family, medical, sick, annual, personal or similar leave) from employment, pursuant to federal, state or local law, a collective bargaining agreement, or an employment benefits program or plan may elect to substitute any period of such leave for an equivalent period of Child Extended Bereavement Leave.</div>
<div> </div>
<div><u>Employee Blood and Organ Donation Leave Act</u></div>
<div> </div>
<div>Effective January 1, 2024, the amended and renamed <a href="https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2700&ChapterID=68">Employee Blood and Organ Donation Leave Act</a> requires Illinois employers with at least 51 employees to provide employees who serve as organ donors with up to 10 days of paid leave in any 12-month period, in addition to providing employees with one hour of paid leave to donate blood every 56 days (which was required under the prior Employee Blood Donation Leave Act).</div>
<div> </div>
<div><u>Paid Leave for All Workers Act</u></div>
<div> </div>
<div>Effective January 1, 2024, covered employers under the Paid Leave for All Workers Act (PLAWA) must provide employees with up to 40 hours of paid leave during a 12-month period. The law applies to all private-sector employers, regardless of size, but exempts seasonal workers, as well as college students working temporary jobs for their universities. Note that PLAWA does not apply to employers covered under Chicago or Cook County paid leave/paid safe and sick leave ordinances (their employees will continue to be covered by those existing ordinances rather than PLAWA).</div>
<div> </div>
<div><em>Importantly, for employers with existing paid leave programs (such as a PTO or vacation policy), that existing leave program will satisfy the requirements of the act if (1) employees have at least 40 hours of paid time off in a 12-month period and (2) can take leave for any reason.</em></div>
<div> </div>
<div>Under PLAWA, employees can use paid leave for any reason, do not have to explain the reason for their absence and cannot be required to provide documentation or certification as proof or for support. Employers must permit employees to begin using their accrued paid time off no later than 90 days following commencement of their employment or 90 days following the effective date of the act, whichever is later. Employers can determine the minimum increment in which such leave can be taken if the minimum increment is not larger than two hours.</div>
<div> </div>
<div>For more on Illinois’s Paid Leave Law, see Gould & Ratner’s HR Blog <a href="https://www.gouldratner.com/publication/illinois-enacts-new-paid-leave-law">here</a>.</div>
<div> </div>
<div><u>Day and Temporary Labor Services Act</u></div>
<div> </div>
<div>Effective August 4, 2023, the Illinois Day and Temporary Labor Services Act (DTLSA) was amended to include certain training requirements and a section requiring temporary workers assigned to work at a third-party client for more than 90 calendar days to be paid not less than the rate of pay and equivalent benefits as the third-party client’s lowest-paid, directly hired employee with the same level of seniority at the company who is performing the same or substantially similar work. In lieu of providing the actual benefits, the staffing agency may pay the hourly cash equivalent of the actual cost of the benefits.</div>
<div> </div>
<div><em>Subsequent Amendment re: Equal Pay and Benefits</em></div>
<div> </div>
<div>On November 9, 2023, the Illinois General Assembly passed <a href="https://www.gouldratner.com/publication/governor-pritzker-signs-dtlsa-amendment-delaying-equal-pay-and-benefits-provision">HB3641</a>, which among other things, amends the start date for the calculation of the 90 calendar days under the new equal pay and benefit section of the DTLSA. This amendment will mean that staffing agencies will not have to pay equal pay and benefits to temporary employees until they have actually worked for a third-party client for more than 90 workdays after April 1, 2024.</div>
<div> </div>
<div>For more on the DTLSA amendments, see Gould & Ratner’s HR Blog <a href="https://www.gouldratner.com/publication/sweeping-changes-to-illinois-law-governing-temporary-staffing-agency-workers">here</a>.</div>
<div> </div>
<div><u>Freelance Worker Protection Act</u></div>
<div> </div>
<div>Effective July 1, 2024, the <a href="https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=4441&ChapterID=68">Freelance Worker Protection Act</a> (FWPA) provides new protections for “independent contractors” who contract with any (non-governmental) person or entity to provide products or services in Illinois, or with an entity located in Illinois, worth at least $500 (either in a single contract or in the aggregate of all contracts with a single entity) within a 120-day period.</div>
<div> </div>
<div>Under the FWPA, the “contracting entity” must pay the freelance worker all compensation due under a contract within 30 days of the worker completing their contracted work (or an earlier date if determined by the contract). The statute bars a contracting entity from conditioning on-time payment to the freelance worker on their acceptance of less compensation than the amount of contracted compensation.</div>
<div> </div>
<div>The FWPA also requires that contracts between freelance workers and contracting entities be in writing and include, at a minimum, the following information:</div>
<div> </div>
<ul>
<li>the name and contact information of both parties, including the contracting entity’s mailing address;</li>
<li>an itemization of all products and services the freelance worker will provide, including the value of the products and services and the rate and method of compensation for such products and services;</li>
<li>the date on which payment is due to the freelance worker or the mechanism by which the payment date will be determined; and</li>
<li>the date by which a freelance worker must submit a list of products or services rendered under the contract to the contracting entity if such a list is required to meet any internal processing deadlines of the contracting entity for the purposes of timely compensation.</li>
</ul>
<div>The contracting entity must retain the contract for at least two years and make the contract available to the Illinois Department of Labor (IDOL) upon request. The IDOL will publish on its website model contracts in English and other common languages.</div>
<div> </div>
<div>In addition, contracting entities may not threaten, intimidate, discipline, harass or deny a freelance opportunity to, or take any other action that penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from, exercising or attempting to exercise any right guaranteed by the FWPA, or from obtaining a future work opportunity for exercising such right.</div>
<div> </div>
<div><u>Illinois Personnel Record Review Act</u></div>
<div> </div>
<div>Effective January 1, 2024, the <a href="https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2395&ChapterID=68">Illinois Personnel Record Review Act</a> (IPRRA) will remove certain restrictions for employees seeking to obtain copies of their personnel records. Under the amendment, employers must provide employees copies of their personnel records via email or mail even if the employee is able to inspect the records in person. Employers may still charge a fee for providing the requested records, limited to the actual cost of duplicating the materials.</div>
<div> </div>
<div><u>HB 3733</u></div>
<div> </div>
<div>Effective January 1, 2024, <a href="https://www.ilga.gov/legislation/fulltext.asp?DocName=10300HB3733ham001&GA=103&LegID=148991&SessionId=112&SpecSess=0&DocTypeId=HB&DocNum=3733&GAID=17&Session=">HB 3733</a>, which also amended IPRRA, amends the Illinois Minimum Wage Law, Illinois Equal Pay Act, Illinois Wage Payment and Collection Act, Illinois Child Labor Law, and Illinois Day and Temporary Labor Services Act by requiring employers with employees who do not regularly report to a physical workplace to distribute the mandatory notices under these laws by:</div>
<div> </div>
<ul>
<li>email;</li>
<li>posting the materials conspicuously on the employer’s website, if the employer regularly uses the website to communicate work-related information to employees and employees can regularly access the website; or</li>
<li>posting the materials on the employer’s intranet site if the employer regularly uses the intranet site to communicate work-related information to employees and employees can regularly access the site.</li>
</ul>
<div>Notably, the amendment states that the DTLSA requirement applies to day and temporary labor service agencies, not third-party clients. However, third-party clients should confirm that service agencies comply with these requirements, as they share legal responsibility and liability with such agencies under the law, including for the payment of wages under the Illinois Wage Payment and Collection Act and the Minimum Wage Law.</div>
<div> </div>
<div><u><strong>Chicago Ordinances</strong></u></div>
<div> </div>
<div>Effective December 31, 2023, Chicago’s Paid Leave and Paid Sick and Safe Leave Ordinance (the Ordinance) will replace Chicago’s current Paid Sick Leave Ordinance, which provided for up to 40 hours of paid sick leave.</div>
<div> </div>
<div>The Ordinance requires employers with employees working in Chicago to provide up to 80 hours of paid leave per year, as follows:</div>
<div> </div>
<ul>
<li>Up to 40 hours of leave usable for any purpose (called Paid Leave), and</li>
<li>Up to 40 hours of leave for illness, injury or medical appointments (called Paid Sick Leave).</li>
</ul>
<div>The changes for employers with employees in Chicago are significant and may impact existing paid leave, paid sick leave and “unlimited” paid time off policies.</div>
<div> </div>
<div>For more on the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, see Gould & Ratner’s HR Blog <a href="https://www.humanresourceslawblog.com/chicago-enacts-new-paid-leave-and-paid-sick-and-safe-leave-ordinance/">here</a>.</div>
<div> </div>
<div><strong><u>Cook County and 37 Surrounding Townships Ordinances</u></strong></div>
<div> </div>
<div><u>Transportation Benefits Program Act</u></div>
<div> </div>
<div>Effective January 1, 2024, the <a href="https://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=103-0291">Transportation Benefits Program Act</a> (TBPA) will require that Illinois employers in 38 designated transit zones with 50 or employees at an address within one mile of a fixed-route transit service, and within designated transit zones to provide transit benefits to certain covered employees. Covered employees under the TBPA are full-time employees of a covered employer who work an average of at least 35 hours per week for compensation.</div>
<div> </div>
<div>Under the TBPA, covered employers must provide a pre-tax commuter benefit to covered employees. The benefit must allow employees to use pre-tax dollars for the purchase of a transit pass via payroll deduction, so that the costs for transit pass purchases may be deducted from the employee’s taxable compensation up to the maximum amount permitted by Internal Revenue Code Section 132(f).</div>
<div> </div>
<div>A covered employer may also comply with the TBPA by participating in a program offered by the Chicago Transit Authority or the Regional Transportation Authority.</div>
<div> </div>
</div>
</div>
</div>
</div>
<div class="io-ox-signature"><div class="default-style"><div> </div>
<div>Be Well, Be Blessed, Be Free and Be the Change you wish to see,</div>
</div>
<div class="default-style"><strong>φ</strong></div>
</div> tag:thegreatawakening.ning.com,2023-08-18:5235400:Comment:1500902023-08-18T15:08:44.977Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
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<p></p> tag:thegreatawakening.ning.com,2023-08-18:5235400:Comment:1497842023-08-18T14:33:17.396Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
<p><img src="https://connect-ucs.xfinity.com/proxy?source=https%3A%2F%2Ffiles.illinoispolicy.org%2Fwp-content%2Fuploads%2F2023%2F08%2FIPI-230811-Ididthat-HZ-1024x506.png" alt="Illinois' gas tax hikes: Pritzker did that"/></p>
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<p><img src="https://connect-ucs.xfinity.com/proxy?source=https%3A%2F%2Ffiles.illinoispolicy.org%2Fwp-content%2Fuploads%2F2023%2F08%2FIPI-230811-Ididthat-HZ-1024x506.png" alt="Illinois' gas tax hikes: Pritzker did that"/></p>
<p><img src="https://connect-ucs.xfinity.com/proxy?source=https%3A%2F%2Ffiles.illinoispolicy.org%2Fwp-content%2Fuploads%2F2023%2F08%2FIPI-230811-Ididthat-HZ-1024x506.png" alt="Illinois' gas tax hikes: Pritzker did that"/></p> In three months, AI could be…tag:thegreatawakening.ning.com,2023-08-13:5235400:Comment:1499182023-08-13T19:55:10.163Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
<div class="featured-post-advertisement clear" id="home-area-top"><div class="widget widget_mmpazk_zone_widget" id="mmpazk_zone_widget-22"><div class="widget-wrap"><div id="mmpazk_309087ec"><div class="adzerk_zone_featured_content"><p>In three months, AI could be smarter than Einstein…</p>
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<div><a target="_blank" href="https://engine.moneymappress.com/r?e=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&s=WPE9N8WPrbZ23KrERstfzQRt0jA&url=https://pro.moneymappressinfo.com/m/2227486" rel="nofollow noopener"><img src="https://dr8bbpnzz48yg.cloudfront.net/2023/08/07162512/Click-here-to-play.png" align="left" border="0"/></a><p><span>AI Singularity refers to the exact millisecond when AI breaks free from its shackles to grow BILLIONS of times more powerful than humans. Goldman Sachs says this technology could eventually automate up to 66% of American jobs… Like flipping a switch — lights out. That’s why everyone is pouring money into AI like it’s the last lifeboat on the Titanic. And once the singularity hits, the prices of AI companies will go into overdrive… <a href="https://pro.moneymappressinfo.com/m/2227486" target="_blank" rel="noopener"><strong>Click here</strong></a> to view "The Singularity Clock " now.</span></p>
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<br />
<h1 class="entry-title">Here's the Secret to Timing the Market Perfectly</h1>
<p class="entry-meta">By<span> </span><span class="entry-author"><a href="https://moneymorning.com/author/gbaldwin3/" class="entry-author-link" rel="author"><span class="entry-author-name">GARRETT BALDWIN</span></a></span>,<span> </span><span class="author-title">Executive Producer</span>,<span> </span><span class="author-attribution">Money Morning</span><span> </span><span class="sep">•</span><span> </span>August 13, 2023</p>
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<div class="entry-content"><div class="author-portrait"><a href="https://moneymorning.com/author/gbaldwin3/"><img src="https://moneymorning.com/wp-content/blogs.dir/1/files/2023/07/Picture62.png" alt="Garrett Baldwin" width="105" height="123"/><span>GARRETT BALDWIN</span></a></div>
<p><span><strong>Postcards </strong><strong><em>from the florida republic</em></strong></span></p>
<p><span><strong><em>An independent and profitable state of mind.</em></strong></span></p>
<p> </p>
<p><img class="alignright wp-image-1244491" src="https://moneymorning.com/wp-content/blogs.dir/1/files/2023/08/Capture11.jpg" alt="" width="175" height="78" title=""/></p>
<p> </p>
<p>I give away these Momentum readings for free every day.</p>
<p>These are the ultimate equalizer for retail investors against big, greedy institutions.</p>
<p>No guessing. No silliness. No chasing headlines from journalism majors who don’t understand finance.</p>
<p>When momentum goes RED, it aligns with the START of major net outflows in equity markets (read: there’s MORE HEAVY selling than buying). Could last a day… could last two months…</p>
<p>The reading also suggests that a major liquidity event is happening in major economies.</p>
<p>Best of all, it indicates that a very important pattern of behavior is on our radar — and a very profitable one.</p>
<p>Today – I’ll let you in on this secret.</p>
<p>Then, you’ll see the exact chart telling you when to load up on equities.</p>
<p>Listen up.</p>
<h2 class="force-h3"><span><strong>We’ve Seen This Before… A LOT.</strong></span></h2>
<p>The last time momentum went red <em>across the board</em> (all three readings) was March 7 - just before the Regional Banking crisis.</p>
<p>The markets sold off, we largely moved to cash, and we waited to reenter new positions.</p>
<p>After Silicon Valley Bank collapsed – the Federal Reserve <em><s>bailed out the banks</s></em> swapped capital for long-duration bonds to its member banks. This shored up the financial sector (for now).</p>
<p>After this <s>bailout</s> policy direction… a subset of “in-the-know” investors piled into their “favorite” stocks.</p>
<p>Those stocks then took off like a rocket.</p>
<p>The same pattern happened during a crisis in September 2022.</p>
<p>Red momentum, then a major global event (<em>England’s Gilt Crisis</em>), a policy reaction from central banks, and then the same activity among the same group of investors.</p>
<p>It also happened in June 2022. And March 2020. And December 2018. And August 2011. And March 2009. And October 2008.</p>
<p>Again… each time… four steps.</p>
<p>1) Big adverse market event…</p>
<p>2) Big move by policymakers.</p>
<p>3) Big buying by the same group of investors.</p>
<p>4) The markets rebounded – and these investors got rich.</p>
<p>There is ONE more VERY important month that I didn’t mention…</p>
<p>It might be the most important today.</p>
<p>It aligns with why markets have sold off in the last two weeks.</p>
<h2 class="force-h3"><span><strong>What Causes Such Outflows?</strong></span></h2>
<p>I’ll admit: When momentum turns red and outflows accelerate, no one tends to know right away why it has happened.</p>
<p>The selling took us negative on March 7. But we’d been in a choppy sideways market since a top on February 2, which accompanied an early signal to start taking gains.</p>
<p>We didn’t know why it went negative until a week later:</p>
<p>The regional banking crisis.</p>
<p>Do a Google News search for “regional banks” on and before March 7, 2023.</p>
<p>You won’t find much mention of regional banking problems.</p>
<p>The following week – however – you couldn’t shake the story.</p>
<p>Every financial publication wrote about it, setting off a panic in regional banking stocks.</p>
<p>We got out of the way… <em>a week prior</em>. From March 7 to March 24, the <strong>SPDR S&P Regional Banking ETF</strong> (KRE) fell more than 30%. At that point, those buyers loaded up on their favorite stocks.</p>
<p>The same pattern happened on June 8 of last year.</p>
<p>Our reading turned Red, and suddenly the market collapsed.</p>
<p>We wouldn’t know until a week later that it was the largest hedge fund selloff in 15 years.</p>
<p>The S&P 500 fell about 12% in nine days.</p>
<p><img class="aligncenter wp-image-1244513" src="https://moneymorning.com/wp-content/blogs.dir/1/files/2023/08/Picture6-1.png" alt="" width="675" height="214" title=""/></p>
<p>Sometimes the situation was more obvious.</p>
<p>When this went red on February 21, 2020, and we sold many equities, it was COVID.</p>
<p>The market would crash by 33% not long after it went red.</p>
<p><img class="aligncenter wp-image-1244512" src="https://moneymorning.com/wp-content/blogs.dir/1/files/2023/08/Picture7.png" alt="" width="673" height="215" title=""/></p>
<p>We’d buy back – based on the reading – on April 6, 2023. Of course, that curious subset of investors was also buying BIG.</p>
<p>And they made a killing while most people were afraid to buy.</p>
<p>That should<span> </span><strong><a href="http://unbeatable2023.com/">capture your attention</a></strong>.</p>
<p>Who the heck are these people?</p>
<h2 class="force-h3"><span><strong>Why Is Momentum Red Now?</strong></span></h2>
<p>Before we get to them, let’s discuss recent events.</p>
<p>This week’s negative turn has been a bit more questionable…</p>
<p>As I’ve noted, there are many negative stories in the markets.</p>
<p>Japan’s Yield Curve Control could spell trouble for U.S. bonds. In the U.S., inflation is running hot again. In addition, the Treasury Department is facing problems as it needs to get investors to buy long-term bonds and not load up on short-term debt that needs to be rolled over in two years.</p>
<p>And then, there is the recent downgrade by Moody’s of<span> </span><strong>one-seventh of the American banking system</strong>.</p>
<p>Bond markets tell us that the Fed isn’t done hiking, that inflation is likely heading higher, and that the Treasury Department faces problems getting people into long-term bonds.</p>
<p>But the other BIG problem we’ve highlighted here is China.</p>
<p>On June 1, China’s central bank eased – helping propel an undeniable market rally.</p>
<p>The same thing happened in January this year. See the yellow boxes for moves on the<span> </span><strong>S&P 500 SPDR ETF</strong><span> </span>(SPY).</p>
<p><img class="aligncenter wp-image-1244511" src="https://moneymorning.com/wp-content/blogs.dir/1/files/2023/08/Picture8.png" alt="" width="674" height="214" title=""/></p>
<p>But in mid-July –when a U.S. Senator hedged his portfolio against the Nasdaq 100 – China tightened by more than what they had eased in June.</p>
<p>The nation was trying to provide support for its currency.</p>
<p>That’s how you end up with a big drop in global liquidity – as referenced by CrossBorder Capital in this recent chart.<span> </span><a href="https://capitalwars.substack.com/p/whoa-skidding-lower"><strong>Behind this paywall</strong></a>, authors point to a sizeable reduction in their Global Liquidity Index from June to July.</p>
<p><img class="aligncenter size-full wp-image-1244510" src="https://moneymorning.com/wp-content/blogs.dir/1/files/2023/08/Picture9.png" alt="" width="398" height="261" title=""/></p>
<p>China is facing renewed problems.</p>
<p>The financial press is starting to pay attention.</p>
<p>Stories are trickling out from this notoriously censorious nation. They show two serious issues.</p>
<p>First, China’s Consumer Price Index (CPI) came in at NEGATIVE 0.3% for July.<span> </span><em>Bloomberg</em><span> </span>noted Friday that<span> </span><strong><em>deflation</em></strong><span> </span>is now the nation’s greater market risk. That was Friday.</p>
<p>Second, there’s a big problem in China’s real estate market.</p>
<p>The<span> </span><em>Wall Street Journal</em><span> </span>noted August 5 the following:</p>
<p>Shares and bonds of property giant Country Garden Holdings dollar-denominated bonds maturing in January 2024 are trading at 25% of their notional value, compared with 81% as recently as mid-June.</p>
<p>This is a big deal.</p>
<p>We’re now two years past a huge debacle involving China’s property giant Evergrande. And… eight years after another crisis nearly tore down the nation’s economy.</p>
<p>On Thursday, Mike Shedlock (<a href="https://mishtalk.com/economics/bonds-of-chinas-largest-property-developer-crash-to-25-percent-of-notional-value/">FREE required reading</a>) noted again that China has a serious demographic issue that will weigh on them. The nation has been trying to achieve rapid growth – and the only way to do so has been through massive government spending and debt. The entire situation is very similar to Japan’s long-deflationary challenges.</p>
<p>Now – here’s the thing. China’s problems can and will weigh on global equity markets. And China has two choices – pretty much the same choices that all major central banks have today.</p>
<p>Because they are so debt-heavy, China can allow assets to crash.</p>
<p>Yet, the Chinese Communist Party (CCP) risks having the nation’s real estate market take them down with it (talk about a Black Swan event).</p>
<p>Or – the People’s Bank of China (PBOC) can “print” more money.</p>
<p>After all, this is the way that central banks try to tackle deflation by easing policy.</p>
<p>Yeah!</p>
<p>Maintain power and keep pumping asset prices higher and higher so that they<span> </span><strong>end up pricing out the youngest members of society from owning real assets like housing.</strong></p>
<p>Do those two things sound familiar?</p>
<p>They should. Both are happening in the United States as the same cabal that created the problems for 30 years cling to power.</p>
<h2 class="force-h3"><span><strong>How to Address China</strong></span></h2>
<p>Momentum is negative.</p>
<p>We’re mainly sitting in cash over in the Republic.</p>
<p>We’re going to the northern beaches.</p>
<p>We’re floating around in the backyard pool.</p>
<p>This could get rocky over the next few weeks.</p>
<p>But I anticipate that China’s central bank will return to its usual ways – providing more support to its economy and keeping the shell game running.</p>
<p>We want to see two things happen.</p>
<p>First, we’ll pay close attention to the policy response from the PBOC. That response, however, might not be immediate.</p>
<p>It could require another trip to Beijing for Janet Yellen – or broader questions about China’s plan for the BRICS currency.</p>
<p>Could, for example, China work with Saudi Arabia to provide some support for its currency?</p>
<p>I’m not a Chinese policy expert, though.</p>
<p>So, I don’t care what they do… just that something’s done.</p>
<p>I’m watching the news feed and waiting for a positive response from the<span> </span><strong>Direxion Daily FTSE China Bull 3X Shares ETF (YINN)</strong>. More on that ETF this week, but it will provide clues that something happened, and we are on the verge of rebounding.</p>
<p>Second, if things get nasty for the global markets, we want to monitor that specific subset of investors that BUY when we see major policy changes.</p>
<p>Those investors are corporate insiders (CEOs, CFOs, 10% owners, board directors, and Chairpersons) at S&P 500 companies.</p>
<h2 class="force-h3"><span><strong>How to Address U.S. Markets</strong></span></h2>
<p>Look at this chart.</p>
<p><img class="aligncenter wp-image-1244509" src="https://moneymorning.com/wp-content/blogs.dir/1/files/2023/08/Picture10.png" alt="" width="624" height="174" title=""/></p>
<p>This is the insider buying-to-selling ratio of S&P 500 stocks.</p>
<p>It shows the actions of executives buying their stock in periods of turmoil.</p>
<p>When that insider buying ratio is HEAVILY tilted to the buyers, it signals they are collectively calling a bottom on the market.</p>
<p>When the BLUE LINE is at the top and moves higher – it’s time to buy, even if it’s just for a few weeks or months.</p>
<p>Look at January 2016.</p>
<p>That was the marked end of the Chinese market turbulence period that had lasted months.</p>
<p>In January 2016, central banks around the globe announced intentions to keep interest rates low in response to weak Chinese growth. The markets had just experienced about a 14% drop from mid-December 2015 to the lows of January 2016.</p>
<p>After markets cratered that month, central banks accommodated policy changes… including actions from the PBOC and the Bank of England.</p>
<p>Well, wouldn’t you know it?</p>
<p>Corporate insiders loaded up on stocks faster since the start of the Fed’s Quantitative Easing in March 2009. <strong>It’s RIGHT THERE.</strong></p>
<p><img class="aligncenter wp-image-1244508" src="https://moneymorning.com/wp-content/blogs.dir/1/files/2023/08/Picture11.png" alt="" width="626" height="175" title=""/></p>
<p>After that HUGE round of insider buying, the S&P 500 gained more than 16% from the bottom of January 2016 until September 2016.</p>
<p>Well-timed buying, indeed.</p>
<p>But look at the other periods on this chart.</p>
<p>You’ll see – again – periods of turmoil, followed by a policy response and heavy amounts of insider buying.</p>
<h2 class="force-h3"><span><strong>This Isn’t a One Time Pattern</strong></span></h2>
<p><strong>October 2008</strong></p>
<ul>
<li>Event: Lehman Brothers collapsed, creating a global credit crisis.</li>
<li>Policy Response: The U.S. government authorized its first bailout plans.</li>
<li>Insiders: loaded up on their stock.</li>
</ul>
<p><strong>March 2009</strong></p>
<ul>
<li>Event: Global credit crisis accelerates.</li>
<li>Response: The Federal Reserve announced its first Quantitative Easing (QE) program that injected a massive amount of capital into the system.</li>
<li>Insiders: Doubled down off the October period.</li>
</ul>
<p><strong>August 2011 —</strong></p>
<ul>
<li>Event: Black Monday, a major market downturn after a downgrade to the U.S. credit system by S&P Global due to the U.S. debt ceiling crisis. Followed QE2 period.</li>
<li>Policy Response: Debt ceiling raised. European bailouts.</li>
<li>Insiders: Loaded up.</li>
</ul>
<p><strong>December 2018 —</strong></p>
<ul>
<li>Event: Bond markets panicked in October, with a frenzy spilling into the final weeks. The S&P 500 lost 20% in a month.</li>
<li>Policy Response: Federal Reserve pivoted, cut interest rates, and began increasing its balance sheet.</li>
<li>Insiders: Loaded up.</li>
</ul>
<p><strong>March 2020</strong></p>
<ul>
<li>Event: COVID lockdowns.</li>
<li>Policy Response: U.S. created 1/3 of all dollars in existence—massive Congressional stimulus.</li>
<li>Insiders: Loaded up on their stock.</li>
</ul>
<p><strong>January 2022</strong></p>
<ul>
<li>Event: After the selloff from November 2021.</li>
<li>Policy Response: Fed and Treasury Department attempted to argue that inflation was transitory. It wasn’t.</li>
<li>Insiders: Loaded up that month. S&P 500 rebounded 7% despite chopping into April.</li>
</ul>
<p><strong>October 2022</strong></p>
<ul>
<li>Event: Rising interest rates hammer central banks around the world. Markets elicit concerns about England’s GILT.</li>
<li>Policy Response: Over the next few weeks, we saw large policy changes from the Bank of England, the U.S. Federal Reserve, the People’s Bank of China, and the Bank of Japan.</li>
<li>Insiders: Bought the bottom, doubling down on January purchases. This coincided with the lows of the last two years in terms of global liquidity.</li>
</ul>
<h2 class="force-h3"><span><strong>Why We Watch the Insiders</strong></span></h2>
<p>There are no guarantees that this market will crater in the weeks ahead – but this is a seasonal period of weakness. The last thing I want is for retail investors to start panicking… without understanding how policy impacts markets…</p>
<p>There remain many questions about inflation, Fed policy, and more. And as far as I’m concerned – there may be another major factor in the markets that is driving this negative momentum – and it just hasn’t hit the news cycle yet.</p>
<p>But we can take away one important factor from these periods of volatility and uncertainty.</p>
<p>If there is a deep selloff and changes in central bank policy to soften the blow, the insiders will tell us when to buy.</p>
<p>If we see a BIG spike in the coming weeks in buying – to complement a central bank pivot – we will start buying too.</p>
<p>Until then, hit the beach, have a drink, and maybe get away from your computer. There’s more to life than this stuff.</p>
<p>That’s why we aim to keep it simple in the Republic.</p>
<p>Stay positive,</p>
<p>Garrett Baldwin</p>
</div> tag:thegreatawakening.ning.com,2023-04-05:5235400:Comment:1448562023-04-05T12:48:57.586Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
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TRANSCRIPT A…tag:thegreatawakening.ning.com,2023-04-02:5235400:Comment:1448312023-04-02T02:57:31.957Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
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<div class="post"><h1>Yes, We’re Heading for a Recession – Here’s How to Protect Yourself</h1>
<div class="publish"><span class="the_author">Shah Gilani</span><span> </span><span class="the_time">Mar 31, 2023</span></div>
<p>There was a time – in fact, it was just three weeks ago – when analysts and economists were debating whether we were heading for a “soft landing” or “no landing.” Recession fears seemed to have melted into the background as more and more economic indicators showed an economy at full tilt.</p>
<p>Then the banking grey swan spread its wings and all hell broke loose, and headlines came bounding right back to doom and gloom.</p>
<p>So, which is it?</p>
<p>Well, I’m here to say it: we’re heading into a recession, and not a “soft landing” kind of recession. And you need to get ready for it now.</p>
<p>In spite of the stock market’s resilience and the chance of a melt-up, there are deep-rooted problems in America’s banks that are exponentially complicated by persistent inflation.</p>
<p>The combination is going to keep rates elevated no matter what the “terminal” rate on fed funds is, and it will lead to another round of bank failures and a credit crunch starting in the second half of this year.</p>
<p>And whenever banks are struggling, the whole economy struggles along with them, sometimes for years to come. So when the next wave of problems hits, a recession will follow immediately on its heels.</p>
<p>But there’s good news: because I’m about to tell you what’s coming down the road, you’ll be able to prepare, protect your capital, and even make money along the way.</p>
<p>Here’s everything you need to know and what you need to do about it right now.</p>
<h3>Problem #1: Unmatched Books and Depositor Demand</h3>
<p>The first order problem facing banks is that they’re not running matched books. Not that banks have ever run matched books, but the concept is you match the duration of your liabilities (deposits, or CDs, or other funding sources, including equity) with your assets. If you take in a one-year CD and you make a one-year loan against that deposit, you’d be running a matched book.</p>
<p>But what if you take in free deposits, say trillions of dollars’ worth during the COVID-19 pandemic, and buy 10-year Treasuries or make 5- and 10-year loans? You’re not matched, and if those free deposits leave, you’re in big trouble.</p>
<p>That trouble started in 2022 when rising rates made money market funds a lot more attractive than bank deposits. Year-to-date in 2023, money market funds were seeing weekly inflows averaging $23 billion. The week ending March 17 (aka the week Silicon Valley Bank failed), $121 billion flooded into money market funds. The following week saw another $165 billion of inflows, according to Goldman Sachs.</p>
<p>In the digital age, depositor money can exit very quickly, as in a matter of a few clicks, so rule number one is that banks have to have enough money on hand to pay exiting depositors. Rule number two, because most of the assets on banks’ balance sheets are funded with deposits, and because those liabilities become realized liabilities when they leave, they have to be replaced as financing tools supporting assets.</p>
<p>SVB couldn’t meet depositor demands, so it was shut down. It wasn’t even a matter of what was left supporting their balance sheet assets. The panic caused by SVB forced the Federal Reserve to announce a new lending program from its Discount Window, the Bank Term Funding Program. The program was a crisis response to immediately fund banks experiencing massive depositor withdrawals.</p>
<p>But when you get into the fine print, it’s not as good a deal as it sounds like it is, and it’s not even a real solution for what banks are facing.</p>
<h3>Problem #2: Overborrowing and the Credit Crunch</h3>
<p>The BTFP allows banks to get loans up to a year on the collateral they post. Because of the crisis, the Fed said that collateral would be valued at 100 cents on the dollar, as opposed to only being able to borrow as much as your diminished value collateral allows.</p>
<p>Discount Window borrowing totaled $308 billion in the week ending March 17, up from only $5 billion a week earlier. Of that $308 billion, $233 billion was borrowed from the San Francisco Federal Reserve Bank.</p>
<p>Banks also scrambled for “advances” from their regional Federal Home Loan Banks to the tune of $304 billion the week SVB collapsed, not only to meet depositor outflows, but as is the case with Discount Window borrowing, to backstop assets on balance sheets.</p>
<p>Thing is, none of that borrowed money is cheap.</p>
<p>The fed funds target range is now 4.75%-5%, it was 0%-0.5% during the pandemic. That means the cheapest that banks can borrow from the Discount Window is somewhere within the range of fed funds. Last week the cost averaged 4.85% at the Window – that’s very expensive considering the cost to borrow from depositors was zero.</p>
<p>FHL Banks are owned by the constituent banks they serve and borrow money in global capital markets at favorable rates because they’re considered a Government Sponsored Enterprise, though they’re not explicitly backstopped by the government or the Fed. Still, they make advances to their member banks at rates priced at a premium over the cost of their consolidated obligations. Currently banks are paying interest north of 5% on the shortest advances (30 days) they’re taking and a lot more for longer term borrowing.</p>
<p>Just because there’s money to pay depositors and money to shore up capital needed to support assets, which are mostly underwater, it doesn’t mean banks are out of the woods, not by a longshot.</p>
<p>The cost of all the borrowing banks are forced to avail themselves of will seriously impair their net interest income, their net interest margin, their earnings, profitability, their capital… and of course, excess or retained earnings they’d use for share buybacks.</p>
<p>Higher costs of funding at banks will be passed along to borrowers, which will tighten lending. On top of that (or maybe I should say “underneath that” because I’m referring to what underlies assets), diminished loan valuations will be a problem for borrowers trying to refinance, which will cause banks to raise credit standards and impart tougher covenants on borrowers.</p>
<p>And that’s if the banking crisis is over. If it isn’t (and I’m saying it isn’t; it’s only starting to show up), share prices of banks could get further decimated, lowering their vital TCE (tangible common equity), and other capital ratios which will force them to either sell underwater balance sheet assets at a loss or raise equity in an unfavorable capital markets environment.</p>
<p>That’s why we’re headed into a recession, and it won’t be a “soft landing” kind of recession.</p>
<h3>What You Need to Do Now</h3>
<p>So this is what we’re facing. The first step to protecting yourself is a very simple one: any profits you garner in the current rally we’re having, you need to backstop by employing tight trailing stops. I’m talking about a range of no more than 5-10%, but you’ll need to take volatility into account – the bigger the movements in the stock price are, the more room you need in order to give it a chance to ebb and flow.</p>
<p>Second, be careful about betting on banks recovering and getting drawn into their “cheap” shares when they look like they’re bouncing. It’s a head fake, and if you play it straight, you’ll lose.</p>
<p>Instead, use options to bet<span> </span><em>against</em><span> </span>whatever short-term direction you see them moving in.<span> </span><strong>SPDR S&P Regional Banking ETF</strong><span> </span>(KRE) is a great instrument for buying put options whenever you see it spike, and likewise, buy calls on<span> </span><strong>ProShares UltraShort Financials ETF</strong><span> </span>(SKF) whenever it dips.</p>
<p>The biggest potential profits here, however, are going to come from targeting individual banks with put spreads as they fall. I’ve been building a list of the worst of these guys, and I’m lining up a lot of trades for my subscribers right now.</p>
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</div> The "Scariest Paper Of 2022"…tag:thegreatawakening.ning.com,2022-09-10:5235400:Comment:1332382022-09-10T21:40:25.431Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
<h1 class="ArticleFull_title__MEgbb">The "Scariest Paper Of 2022" Reveals The Terrifying Fate Of Biden's Economy: Millions Are About To Lose Their Job</h1>
<div class="ArticleFull_headerFooter__authorInfo__2eHVs"><div class="ArticleFull_headerFooter__author__28NvM">BY TYLER DURDEN</div>
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<div class="ArticleFull_headerFooter__date__GYv4c">SATURDAY, SEP 10, 2022 - 12:11 PM…</div>
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<h1 class="ArticleFull_title__MEgbb">The "Scariest Paper Of 2022" Reveals The Terrifying Fate Of Biden's Economy: Millions Are About To Lose Their Job</h1>
<div class="ArticleFull_headerFooter__authorInfo__2eHVs"><div class="ArticleFull_headerFooter__author__28NvM">BY TYLER DURDEN</div>
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<div class="ArticleFull_headerFooter__date__GYv4c">SATURDAY, SEP 10, 2022 - 12:11 PM</div>
<div class="NodeContent_mainContent__t4rGu"><div class="NodeContent_body__6iJOI NodeBody_container__hI8PI"><div>For much of the past year (and certainly at the time, more than a year ago, when the so-called experts, central bankers and macrotourists were still yapping about "transitory inflation" and other things they were wrong about and do not understand), we were warning that at some point the Fed will realize that <em><strong>it is simply impossible to contain supply-driven inflation </strong></em>through stubborn rate hikes which instead would lead to a dire alternative - millions in mass layoffs and newly unemployed workers ...</div>
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<div>... and will revise its 2% inflation target higher, a move which will send every risk asset - from high-beta trash and meme stonks, to blue-chip icons, to bitcoin and cryptos limit up.</div>
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<div class="ac-lre-playlist-slide-title">Investors Have Given Up on a V-Shaped Recovery, BNY's Young Cautions</div>
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<div>To remind readers of this coming phase shift, we most recently warned in June that "<strong>at some point Fed will concede it has no control over supply. That's when we will start getting leaks of raising the inflation target</strong>"...</div>
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<div>Well, it turns out that we were right, and not just about the coming mass layoffs, but also about the inflation target leaks. But first, lets back up a bit.</div>
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<div>A little over one year after <em><strong>nobody </strong></em>expected the Fed would be hiking rates like a drunken sailor until some time in late 2023 or 2024, it has now become fashionable to not only predict that the Fed will keep hiking rates at every FOMC meeting and at the fastest pace since the near-hyperinflation of the 1980s, but that the central bank will somehow manage to avoid a hard landing (i.e., the hiking cycle won't end in a recession or depression), even though every single Fed tightening cycle since 1913 has ended in disaster.</div>
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<div>An example of this was the statement by former Fed vice chair (and PIMCO's "twice-revolving door") Rich Clarida, who told CNBC that "failure is not an option for Jay Powell," adding that "I think they're going to 4% hell or high water. <strong>Until inflation comes down a lot, the Fed is really a single mandate central bank</strong>."</div>
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<div>Of course, if one could hike rates in a vacuum that could work - after all, Clarida himself, who admits he got this year's soaring inflation dead wrong when he was still a daytrading god and part oft he Fed in 2021, said that the Fed may as well have just one mandate, namely <em><strong>to tame inflation</strong></em>. But what so few seem to recall is that the Fed is "<em><u><strong>hiking to spark a recession</strong></u></em>", or as CNBC's Steve Liesman put it, there is no such thing as "immaculate rate hikes" meaning that rate hikes have dire tradeoffs in other sectors of the economy. In other words, if the Fed's intention is to spark a recession, it will spark a recession... leading to millions of Americans losing their jobs, something which even Elizabeth Warren appears to have grasped.</div>
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<div>Yet due to the recency bias of Biden's trillions in stimmies, and a world where workers - whether working form home or the office - have virtually all the leverage, <strong>few today can conceive of a world where inflation is zero or negative and is instead replaced with millions in unemployed workers, </strong>an outcome which one could (or rather should) say is even worse for the ruling democrats than roaring inflation. At least, with runaway prices, most people have a job and their wages are rising (at least nominally, if not in real terms).</div>
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<div>However, the higher rates rise, the closer we get to that inevitable moment when the BLS - unable to kick the can any longer - admits what has been obvious to so many for months: <strong>the US is facing a labor crisis of epic proportions with millions and millions of mass layoffs. </strong>And for those to whom it is not yet obvious, we urge to read a WSJ op-ed published by none other than Jason Furman, who is not some crackpot republican but Obama's own top Economic Adviser from 2013-2017 and currently economic policy professor at Harvard.</div>
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<div>In <em>"<a href="https://www.wsj.com/articles/the-scariest-economics-paper-of-2022-federal-reserve-interest-rates-median-inflation-unemployment-labor-market-job-openings-11662582326">Inflation and the Scariest Economics Paper of 2022</a>"</em>, Furman summarizes a paper written by Johns Hopkins macroeconomist Larry Ball with co-authors Daniel Leigh and Prachi Mishra of the International Monetary Fund released by the Brookings Papers on Economic Activity, whose conclusion is as follows: "<strong>To bring price increases down to 2%, we may need to tolerate unemployment of 6.5% for two years.</strong>"</div>
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<div>In other words, just as we said, inflation - much of which is supply-driven, which the Fed can do nothing about - will force the Fed to crush the economy by keeping rates for much longer, the result of which will be many millions in unemployed workers, or as Furman puts it, the paper "<em><strong>shows why the Federal Reserve will likely need to maintain its war on inflation, even if unemployment continues to </strong></em>rise."</div>
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<div>What is more remarkable about Furman's read of the economist paper is that in addition to its primary theme (the lack of labor slack, or labor tightness, is responsible for some 3.4% of underlying inflation in July 2022), the paper admits <strong>precisely what we have been saying all along </strong>- that the Fed can't control supply-side variables:</div>
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<blockquote><div><strong>The paper also argues, convincingly in my view, for a different measure of underlying inflation</strong>. Fluctuations in energy and food prices are generally due to factors outside the control of macroeconomic policy makers. Geopolitics and weather have elevated the inflation rate in recent years. Plunging gasoline prices are temporarily lowering the inflation rate now. <strong>That’s why economists since the 1970s have focused on “core” inflation, which excludes food and energy.</strong></div>
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<div>But food and energy aren’t the only things people buy that are subject to supply-side volatility. Prices of new and used cars, for example, have gyrated over the past two years for reasons that are mostly unrelated to the strength of the overall economy. Both regular and core inflation are based on taking averages of price increases and can be distorted by large changes in outlier categories. <strong>The median inflation rate calculated by the Federal Reserve Bank of Cleveland drops outliers to remove these distortions.</strong></div>
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<div>According to Furman, median inflation - which is a statistically better measure of the underlying inflation that policy makers can actually control - is well above the Fed’s preferred headline inflation print (which fell to zero in July on a sequential basis and has stabilize) and shows no sign of moderating and has run at a 6.6% annual rate in the last three months.</div>
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<div>But the "scariest" part of the new paper, Furman reveals, <strong>is when the authors use their model to forecast the unemployment rate that would be needed to bring inflation down to the Fed’s 2% target. </strong>He explains why this is so scary:</div>
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<blockquote><div>The authors present a range of scenarios, so I ran their model using my own assumptions... Under these assumptions, <strong>which are more optimistic than the authors’ midpoint scenario, </strong>if the unemployment rate follows the Federal Open Market Committee’s median economic projection from June that <strong>the unemployment will rise to only 4.1%, then the inflation rate will still be about 4% at the end of 2025. To get the inflation rate to the Fed’s target of 2% by then would require an average unemployment rate of about 6.5% in 2023 and 2024.</strong></div>
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<div>Where is unemployment now: it's 3.7% (6.014 million unemployed workers vs 164.746 million civilian labor force). This matters, because according to one of the most erudite economist Democrats, by the end of the Biden admin in 2024, the unemployment will have to soar to 6.5% for inflation to plunge to the Fed's historical target of 2.0%</div>
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<div>What does this mean in absolute numbers? <strong>Assuming a modest increase in the US labor force, a 6.5% unemployment rate in 2024 would translate into no less than 10.8 million unemployed workers, an 80% increase from the 6 million today!</strong></div>
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<div>Still think that politicians - and especially Democrats - will sit quietly and blindly ignore how high the Fed is hiking rates if it means that to normalize inflation back to 2% it means nearly doubling the number of unemployed Americans (and a crushing recession to boot). Spoiler alert: no, they won't, and this may be one of the very rare occasions when Elizabeth Warren is actually right to worry about what the coming mass layoff wave means for Democrats... and the 2024 presidential election.</div>
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<div>So what should the Fed do? Well, according to Furman, the Fed has four options:</div>
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<ol>
<li>First, place more emphasis on the ratio of job openings to unemployment and median inflation as it assesses the tightness of labor markets and the underlying rate of inflation.</li>
<li>Second, the new paper shows how much easier it will be to tackle inflation if expectations remain under control. The Fed should follow up on Chairman Jerome Powell’s tough talk at Jackson Hole with meaningful action such as a 75-basis-point increase at the next meeting.</li>
<li>Third, be prepared to accept the unemployment rate rising above 5% if inflation is still out of control.</li>
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<div>While we doubt #3 is actionable, what is more remarkable is Furman's final proposal: it's the one that, like the Dude's proverbial rug, ties the room together and sets the stage for what is coming:</div>
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<blockquote><div><strong>Finally, stabilizing at a 3% inflation rate is probably healthier for the economy than stabilizing at 2%—so while fighting inflation should be the central bank’s only focus today, at some point the Fed should reassess the meaning of victory in that struggle.</strong></div>
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<div>And just in case his WSJ proves too complicated for some mainstream experts and economists, here it is in truncated, twitter format:</div>
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<div>And there you have it: remember what we said on <a href="https://twitter.com/zerohedge/status/1539242414698909703">June 21</a>: "<em><strong>At some point Fed will concede it has no control over supply. That's when we will start getting leaks of raising the inflation target.</strong></em>" Well... there it is.</div>
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<div>And while mainstream economists and the market may require quite a few months to grasp what is coming, it is the only way out of a crisis of commodities - as Zoltan has repeatedly and correctly put it - and which central banks have no control over, and thus will have to move not only the goalposts but the <em><strong>entire football field </strong></em>to avoid a social revolt or something even scarier.</div>
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<div>While we wait, we can't help but snicker at what the 79-year-old figurehead in the White House tweeted today...</div>
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<div>... because what Biden calls "the strongest economic recovery in recent history" is - even according to Democrats - about to be the biggest economic disaster in modern history</div>
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</div> tag:thegreatawakening.ning.com,2022-09-10:5235400:Comment:1332372022-09-10T20:54:19.101Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
<p><img src="https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/every%20hiking%20cycles%20ends%20in%20crisis%20DB%20update_5.jpg?itok=kH_3P2lu"/></p>
<p><img src="https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/every%20hiking%20cycles%20ends%20in%20crisis%20DB%20update_5.jpg?itok=kH_3P2lu"/></p> With inflation raging acr…tag:thegreatawakening.ning.com,2022-06-10:5235400:Comment:1277252022-06-10T14:32:08.655Zcarol ann parisihttp://thegreatawakening.ning.com/profile/carolannparis
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<tbody><tr><td id="text_div3579" class="td_text td_block" valign="top" align="left" width="600"><div><span>With <b>inflation</b> raging across the American economy, people are wondering what will be done to tackle this economic dilemma.<br/><br/>Some policymakers in DC are calling for the government to <b>implement price controls to contain inflation</b>. These are regulations that establish a maximum price a business can charge for a specific good or service.<br/><br/>A quick fix, right?<br/><br/>Here’s the thing, <b>price controls</b> are the last economic measure any policymaker should pursue.<br/><br/>Just look down south to see the kind of damage price controls can do to a nation.<br/><br/>From the <b>1950s to the late 1990s</b>, Venezuela was Latin America’s most prosperous country.<br/><br/>However, over the past decade Venezuela has been marked by millions of people waiting in lines at supermarkets to acquire basic goods. Think flour, milk, and toilet paper.<br/><br/>Such bizarre imagery has been the norm in Venezuela for well over a decade and has been covered ad nausea across mainstream outlets.<br/><br/>You’ll generally hear vague terms such as "corruption", "mismanagement" or even low prices to explain this problem.<br/><br/>Here’s the thing, these explanations ignore the <b>elephant in the living room that is government intervention. Namely, price controls.</b><br/><br/>They’ve been a fixture of Venezuelan economic policy in the past few decades.<br/><br/></span><div><span>The Venezuelan strongman <b>Hugo Chavez</b> introduced various interventionist measures to prevent capital flight following a <b>coup attempt against his regime in 2002</b>. <br/></span></div>
<span>Some of the measures included the expropriation of key industries, the implementation of exchange controls, and price controls.<br/><br/>The flow of petrodollars, owing to high oil prices, gave Venezuelan businesses the luxury of importing basic goods and raw materials as a short-term fix, which temporarily masked the harmful aspect of these policies.<br/><br/></span>
<div><span>Despite the high oil prices, shortages of price controlled goods began to slowly surface in 2006 because of exchange and price controls.</span></div>
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<div><span><b>The whole party crashed when oil prices fell</b>. Scarcity would then become a widespread reality in Venezuela due to a price control system that prevented the price system from working in an efficient manner.<br/></span></div>
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<div><span>When inflation entered the mix, Venezuela would double down on its price controls. By passing the <b>Fair Prices Act in 2014</b>, the Venezuelan government attempted to curtail shortages by prohibiting profit margins over 30% and strengthening price ceilings on basic goods.<br/></span></div>
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<div><span>Throughout this period, the Venezuelan regime flunked basic economics. Under normal market circumstances, prices serve as signals to consumers and producers. They tell them how much of a given product is in demand or supply, respectively. <br/></span></div>
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<div><span>But when price ceilings enter the picture, the entire price system is thrown out of whack. A low price that is artificially created via price controls incentivizes consumers to demand more of a good than producers can supply.<br/></span></div>
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<div><span><b>In the case of demand outstripping supply, shortages invariably emerge</b>.<br/></span></div>
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<div><span>Venezuela's experience with shortages should serve as a lesson to other countries about what happens when the state oversteps its economic boundaries.<br/></span></div>
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<div><span>Sadly, the West may fall down that path.</span></div>
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