Presidential aspirants in both parties are talking about saving the middle class. But the middle class can’t be saved unless Wall Street is tamed. The Street’s excesses pose a continuing danger to average Americans. And its ongoing use of confidential corporate information is defrauding millions of middle-class investors. Yet most presidential aspirants don’t want to talk about taming the Street because Wall Street is one of their largest sources of campaign money.
President Obama’s proposal for tuition-free community college education, and the broader discussion which it has inspired, confirms our belief that it is time for a comprehensive solution to a $1.3 trillion problem: student debt in the United States. We strongly support the concept of tuition-free public higher education, and are encouraged by renewed arguments in its favor. But we must also confront what has been done to the last several generations of students. They have been forced to take on debt that is crippling to them, to our economy and our society. A student debt “jubilee” would reflect both the values upon which this nation was founded, and the economic principles which have sustained it through its greatest periods of growth and prosperity.
According to the U.S. Census Bureau, December, 2014, 1 in 5 of the Millennial generation (birth years from early 1980s to early 2000) live in poverty and have lower rates of employment compared to their Baby Boomer parents of a similar age in the 1980s, one of the most prosperous eras of American history.
Investment banker Catherine Austin Fitts predicts that 2015 is going to be “volatile and violent.” Fitts says, “I think 2015 is going to be a very rough year. I think you have to be prepared for wild swings. We’ve seen oil come down 50%.” Fitts also points out, “The creative destructive aspects are pretty scary.”
A new Wall Street Journal survey finds, barely over one-third of Americans even have enough money to cover a minor car repair or a quick trip to the ER. This means, upwards of 60 percent of the country has to take out a loan or pull out their credit card to cover the cost of any unexpected emergencies.
The absolutely stunning decision by the Swiss National Bank to decouple from the euro has triggered billions of dollars worth of losses all over the globe. Citigroup and Deutsche Bank both say that their losses were somewhere in the neighborhood of 150 million dollars, a major hedge fund that had 830 million dollars in assets at the end of December has been forced to shut down, and several major global currency trading firms have announced that they are now insolvent. And these are just the losses that we know about so far. It will be many months before the full scope of the financial devastation caused by the Swiss National Bank is fully revealed.
In less than two years, if current trends continued unchecked, the richest 1% percent of people on the planet will own at least half of the world’s wealth. That’s the conclusion of a new report from Oxfam International, released Monday, which states that the rate of global inequality is not only morally obscene, but an existential threat to the economies of the world and the very survival of the planet. Alongside climate change, Oxfam says that spiraling disparity between the super-rich and everyone else, is brewing disaster for humanity as a whole.
Following disappointing results from JPM and Wells Fargo yesterday, it was Bank of America’s turn to “surprise” investors with its disclosure just how bad its quarter was. And with the bank reporting a 50% collapse in its sales and trading from Q3, down $600 million from a year ago to just $1.7 billion in Q4, it should come as no surprise that the bank just reported Net Income, before the usual spate of amusing addbacks, of $0.25 well below the $0.31 expected. And while one may argue whether ot not BofA’s EPS deserve non-GAAP adbacks, it was the Revenue of $18.96 billion, which missed expectations of $21.03 billion by over $2 billion (!) and down $2.7 billion from a year ago, that was truly a showstropper and shows that without the Fed’s visible hand manipulating markets every day, banks are a ticking time bomb just waiting to blow.
When the stock market starts to behave like a roller coaster that is a sign that a major move to the downside is right around the corner. But when the waters start getting really choppy, that is a clear indication that stocks are about to plummet. In early 2015, volatility has returned to Wall Street in a big way. At one point on Tuesday, the Dow was up more than 300 points. But then the bottom dropped out. From the peak on Tuesday, the Dow plunged nearly 700 points in less than 30 hours before recovering more than 100 points at the end of the day.
The wealth gap between the country’s upper-income and middle-class families has risen to a record high, according to a new study from the Pew Research Center. “The latest data reinforce the larger story of America’s middle-class household wealth stagnation over the past three decades,” the report states.
Despite positive economic indicators, ‘America’s middle class is in deep trouble,’ says progressive senator Elizabeth Warren.
On Monday, the price of oil fell below $50 for the first time since April 2009, and the Dow dropped 331 points. Meanwhile, the stock market declines over in Europe were even larger on a percentage basis, and the euro sank to a fresh nine-year low on concerns that the anti-austerity Syriza party will be victorious in the upcoming election in Greece.
The oil price drop that has dominated the headlines in recent weeks has been framed almost exclusively in terms of oil market economics, with most media outlets blaming Saudi Arabia, through its OPEC Trojan horse, for driving down the price, thus causing serious damage to the world’s major oil exporters – most notably Russia. While the market explanation is partially true, it is simplistic, and fails to address key geopolitical pressure points in the Middle East.
Before they were great leaders, they were great employees. Most accomplished entrepreneurs and executives built their success on a solid foundation.
Brookings Fellow Richard Reeves explores inequality and opportunity in America with Legos, using them to explain the chances for economic success of Americans born at the bottom of the economic ladder. Reeves shows the chances that the poorest fifth of Americans have to rise to the top, based on their race, the marital status of their mothers, and their level of education.