Tag Archives: financial

Treasury Debt Has Been Frozen For 21 Days

Treasury Debt Has Been Frozen For 21 Days

Debt Has Been Frozen at $18,112,975,000,000

National Deficit Federal debt

According to the Daily Treasury Statement for Friday, April 3, which was published by the U.S. Treasury on Monday, April 6, that portion of the federal debt that is subject to a legal limit set by Congress closed the day at $18,112,975,000,000—for the 21st day in a row.

$18,112,975,000,000 is about $25 million below the current legal debt limit of $18,113,000,080,959.35.

The debt first hit $18,112,975,000,000, according to the Daily Treasury Statement, on March 13, which was the day Treasury Secretary Jacob Lew sent a letter to House Speaker John Boehner and other congressional leaders saying that he was planning to declare a “debt issuance suspension period.”

national debt obama debt deficit budget

This was necessary, Lew explained, because in 2014 Congress enacted legislation that “suspended” the debt limit until March 15 and then reinstated it on that date at whatever level the debt had reached by then.

“As you know, in February 2014, Congress passed the Temporary Debt Limit Extension Act, suspending the statutory debt limit through March 15, 2015,” Lew said in his March 13 letter. “Beginning on Monday, March 16, the outstanding debt of the United States will be at the statutory limit. In anticipation of reaching that date, Treasury has suspended until further notice the issue of State and Local Government Series securities, which count against the debt limit.”

State and Local Government Series securities, the Congressional Research Service explains, are “customized securities available for state and local governments to hold proceeds of bond sales,” and are considered part of the federal government debt that is held by the public.

“Because Congress has not yet acted to raise the debt limit,” Lew said in his March 13 letter, “the Treasury Department will have to employ further extraordinary measures to continue to finance the government on a temporary basis. Therefore, beginning on March 16, I plan to declare a ‘debt issuance suspension period’ with respect to investment of the Civil Service Retirement and Disability Fund and also suspend the daily reinvestment of Treasury securities held by the Government Securities Investment Fund and the Federal Employees’ Retirement System Thrift Savings Plan.”

Lew noted that these same actions had been taken “during previous debt limit impasses.”

For example, as CNSNews.com reported, when Secretary Lew declared a debt issuance suspension period in 2013, the Treasury reported the debt subject to the limit was frozen at $16,699,396,000,000 for 150 days, running from mid-May to mid-October of that year.

On March 16 and 17 Lew sent additional letters to Congress further explaining the actions he would be taking during the “debt issuance suspension period” that began on March 16. The Treasury also postedFrequently Asked Question sheets that explained the actions and their statutory basis.

“Under current law, if the Secretary of the Treasury determines that the issuance of obligations of the United States may not be made without exceeding the debt limit, a ‘debt issuance suspension period’ may be determined,” the Congressional Research Service explained in a report published on March 27. “This determination gives the Treasury the authority to suspend investments in the Civil Service Retirement and Disability Trust Fund, Postal Service Retiree Health Benefit Fund, and the Government Securities Investment Fund (G-Fund) of the Federal Thrift Savings Plan.

“In addition,” said CRS, “this gives Treasury the authority to prematurely redeem securities held by the Civil Service Retirement and Disability Trust Fund and Postal Service Retiree Health Benefit Fund.”

“The total federal debt consists of debt held by the public and intragovernmental debt,” the CRS explained in a report published in 2011. “Debt owed to the public represents borrowing from entities other than the federal government, and includes borrowing from state and local governments, the Federal Reserve System, and foreign central banks, as well as private investors in the United States.

“Intragovernmental debt,” said CRS, “consists in debt owed by one part of the federal government to another, which are mostly held in trust funds.”

The net effect of the Treasury’s actions is that although the publicly held debt of the government continues to fluctuate–as the Treasury redeems maturing debt held by the public and issues new debt held by the public—the overall debt subject to the limit set by Congress closes each business day at $18,112,975,000,000.

As of March 13, according to the Daily Treasury Statement, the federal debt held by the public was $13,083,880,000,000. By April 2, it had risen to $13,096,592,000,000; and, by April 3, it had risen to $13,113,626,000,000.

But on all days from March 13 through April 3, the federal debt subject to the legal limit set by Congress was 18,112,975,000,000.

‘Gun Letter’ Informs Pawn And Gun Shop Owner His Bank Accounts Are Being Closed

‘Gun Letter’ Informs Pawn And Gun Shop Owner His Bank Accounts Are Being Closed

Andy Raymond, gun store owner
Andy Raymond, gun store owner

A gun and pawn shop owner in Florida received what he was told is “one of the gun letters” from his bank last month informing him that his business is no longer welcome.

Steve Champion, who opened American Gun & Pawn in Brooksville last year, received a letter from SunTrust on March 20, stating that he’ll have to close his accounts by April 20.

“At first I thought it must be a hoax,” Champion told WFLA. “This is the craziest thing I’ve ever seen,” he wrote on his Facebook account, where he also posted the SunTrust letter.

Related: Homeland Security Stockpiling ‘Special Ammunition’ For Riots

The letter matches others sent to pawn shops and gun store owners across the country. Though banks and the federal government have remained tight-lipped about the closures, they are believed to be related to Operation Choke Point, a Department of Justice initiative ostensibly aimed at ending bank fraud. Choke Point has identified nearly 30 types of businesses as being at “high-risk” for fraudulent and illegal activities. The “high-risk” list includes gun shops, pawn shops, coin dealers and payday lenders.

“SunTrust continuously reviews its products, markets, and client relationships to ensure that we are able to provide the best possible client services,” reads SunTrust’s letter to Champion.

“As a result of a recent account review, we regret to inform you that SunTrust is no longer able to provide some of the financial services you require. We respectfully request that you immediately begin closing all of your SunTrust deposit accounts, safe deposit boxes and credit cards by 4/20/2015,” the letter continues, noting that the decision cannot be reversed.

While Operation Choke Point does not explicitly force banks to end relationships with “high-risk” companies, it is believed that maintaining those relationships opens banks up to more scrutiny. Rather than deal with more oversight, some banks seem to have chosen to stop doing business with such companies altogether.

Naturally, Champion is not happy with the decision and has vowed to spread word of SunTrust’s actions.

“I’ve worked my whole life to open a business,” he told WFLA. “I have a near-perfect credit score. I have zero debt.”

“There is no reason other than they don’t want to do business either with a gun store or a pawn shop, period,” he said. “So they’re discriminating.”

“We’re a legitimate business that’s licensed through the federal government so why am I being singled out and why is my account being canceled?” he continued. “It’s just unacceptable, and I told them I will tell everyone that wants to listen.”

A spokesman for SunTrust told WFLA that the bank began severing relationships with pawn shops last year. He said that gun stores are not being targeted. Many pawn shops across the U.S. also sell guns.

But Champion questions the accuracy of that statement, given what a SunTrust customer service representative told him.

Americans Not in Labor Force Exceed 93 Million for First Time

Americans Not in Labor Force Exceed 93 Million for First Time

62.7% Labor Force Participation Matches 37-Year Low

unemployed unemployment job jobless work out of

The number of Americans 16 years and older who did not participate in the labor force–meaning they neither had a job nor actively sought one in the last four weeks–rose from 92,898,000 in February to 93,175,000 in March, according to data released today by the Bureau of Labor Statistics.

That is the first time the number of Americans out of the labor force has exceeded 93 million.

Also from February to March, the labor force participation rate dropped from 62.8 percent to 62.7 percent, matching a 37-year low.

Five times in the last twelve months, the participation rate has been as low as 62.8 percent; but March’s 62.7 percent, which matches the participation rate seen in September and December of 2014, is the lowest since February of 1978.
labor chart

BLS employment statistics are based on the civilian noninstitutional population, which consists of all people 16 or older who were not in the military or an institution such as a prison, mental hospital or nursing home.

In March, the civilian noninstitutional population was 250,080,000 according to BLS. Of that 250,080,000, 156,906,000 — or 62.7 percent — participated in the labor force, meaning they either had or job or had actively sought one in the last four weeks.

Of the 156,906,000 who did participate in the labor force, 148,331,000 had a job and 8,575,000 did not have a job but actively sought one. The 8,575,000 are the unemployed. They equaled 5.5 percent of the labor force—or the unemployment rate of 5.5 percent (which matched the unemployment rate seen in February 2015).

According to the BLS, the aging of the baby boom generation is a key factor affecting the labor force participation rate:

“The baby boomers’ exit from the prime-aged workforce and their movement into older age groups will lower the overall labor force participation rate, leading to a slowdown in the growth of the labor force,” explains the BLS.

“In 2000, baby boomers were aged 36 to 54 years and were in the group with the highest participation rates: the prime-aged group 25 to 54 years old. The participation rate for women in this group was 76.7 percent and for men was 91.6 percent, so that the overall participation rate of the group was 84.0 percent. The participation rate of the next-older age group, that 55 years and older, was 32.4 percent, so the difference between the two age groups was 52 percentage points. With the passage of every year after 2000, a segment of the baby-boomer population passes into the 55-years-and-older age group and thus moves from a group with a high participation rate in the labor force to an age category with a much lower particiption rate, causing the overall participation rate to decrease,” states BLS.

Amazon Slams FAA Drone Policy, Says Delays Hurt US UAV Industry

Amazon Slams FAA Drone Policy, Says Delays Hurt US UAV Industry

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Drone flight
An Amazon representative said this week that by the time the FAA approved the company’s drone test, the prototype was outdated.

Amazon has accused the federal government of being too slow to create an effective commercial drone testing policy. While the Federal Aviation Administration has given Amazon permission to test its delivery drone program, the e-commerce giant warned that the U.S. is allowing other nations to get a head start on unmanned aerial vehicles (UAVs).

It was exactly the FAA’s approval, though, that seemed to raise Amazon’s ire. Paul Misener, the company’s vice president for global public policy, told a Senate subcommittee that the prototype went out of date during the six months the company waited for permission.

“We don’t test it anymore. We’ve moved on to more advanced designs that we already are testing abroad,” Misener said in written testimony issued to the Senate Subcommittee on Aviation Operations, Safety and Security. “Nowhere outside of the United States have we been required to wait more than one or two months to begin testing.”

The FAA has proposed a set of rules that would permit a variety of commercial drone flights. Yet Amazon’s intention to launch a fleet of package delivery drones was all but shot down by the stipulations that pilots keep drones within their line of sight and don’t fly their craft higher than 500 feet.

Misener didn’t go so far as to ask Congress to create legislation to trump the FAA rules, but U.S. Sen. Cory Booker, D-N.J., plans to introduce a bill, the Commercial UAV Modernization Act, that could give businesses more leeway until the FAA finalizes its drone rules, Forbes reported. Initial reports suggest the bill would authorize pilots who have passed a “knowledge test” to fly drones during daylight and under the FAA’s altitude limit.

Feds Urge Banks To Call Cops On Customers Who Withdraw $5,000 Or More

Feds Urge Banks To Call Cops On Customers Who Withdraw $5,000 Or More

War on cash intensifies

by PAUL JOSEPH WATSON

Feds Urge Banks to Call Cops on Customers Who Withdraw $5,000 or More

The Justice Department is ordering bank employees to consider calling the cops on customers who withdraw $5,000 dollars or more, a chilling example of how the war on cash is intensifying.

Banks are already required to file ‘suspicious activity reports’ on their customers, with threats of fines and even jail time for directors if financial institutions don’t meet quotas.

But as investor and financial blogger Simon Black points out, last week, “A senior official from the Justice Department spoke to a group of bankers about the need for them to rat out their customers to the police.”
Assistant attorney general Leslie Caldwell gave a speech in which he urged banks to “alert law enforcement authorities about the problem” so that police can “seize the funds” or at least “initiate an investigation”.

As Black highlights, according to the handbook for the Federal Financial Institution Examination Council, such suspicious activity includes, “Transactions conducted or attempted by, at, or through the bank (or an affiliate) and aggregating $5,000 or more…”

Black provides a chilling scenario under which an attempt to withdraw your own money from your bank account could end with a home visit from the cops.

“As you pull into your driveway later there’s an unexpected surprise waiting for you: two police officers would like to have a word with you about your intended withdrawal earlier,” writes Black, who accuses banks of already operating as “unpaid government spies”.

“Do you need to withdraw cash to purchase a used car from a private seller? Or perhaps you are pulling out some emergency cash for a loved one,” writes Mac Slavo.

“Either one of these activities are now considered suspicious and if your cash withdrawal amounts to even a few thousand dollars your bank teller is under a legal requirement to alert officials about your suspected criminal activity. And before you argue that you can’t possibly be a suspect because you have done nothing wrong, consider that even being suspected of being a suspect is now enough to land you on a terrorist watchlist in America.”

The war on cash is intensifying as authorities attempt to crack down on one of the few remaining modes of anonymity.

Over in France, Finance Minister Michel Sapin hailed the introduction of measures set to come into force in September which will restrict French citizens from making cash payments over 1,000 euros.

The new regulations, introduced in the name of fighting terrorism, will also see cash deposits of over 10,000 euros during a single month reported to anti-fraud authorities.

Meanwhile, in the UK, HSBC is now interrogating its account holders on how they earn and spend their money as well as restricting large cash withdrawals for customers from £5000 upwards.

Back in America, purchasing Amtrak train tickets with cash is being treated as a suspicious activity as part of a number of behaviors that are “indicative of criminal activity”.

Banks are also making it harder for customers to withdraw and deposit cash, with Chase imposing new capital controls that mandate identification for cash deposits and ban cash being deposited into another person’s account.

In October 2013, we also reported on how Chase instituted policy changes which banned international wire transfers while restricting cash activity for business customers (both deposits and withdrawals) to a $50,000 limit per statement cycle.

92,898,000 Americans Not Working

92,898,000 Americans Not Working

62.8%: Labor Force Participation Has Hovered Near 37-Year-Low for 11 Months

jobs unemployment work

The labor force participation rate hovered between 62.9 percent and 62.7 percent in the eleven months from April 2014 through February, and has been 62.9 percent or lower in 13 of the 17 months since October 2013.

Prior to that, the last time the rate was below 63 percent was 37 years ago, in March 1978 when it was 62.8 percent, the same rate it was in February.

participation rate

“The civilian labor force participation rate, at 62.8 percent, changed little in February and has remained within the narrow range of 62.7 to 62.9 percent since April 2014,” the BLS said in its release on the February employment data.

92,898,000 Americans were not in the labor force in February, according todata released from the Bureau of Labor Statistics (BLS) on Friday.

The labor force participation rate is the percentage of the civilian noninstitutional population who participated in the labor force by either having a job during the month or actively seeking one.

In February, according to BLS, the nation’s civilian noninstitutional population, consisting of all people 16 or older who were not in the military or an institution, reached 249,899,000. Of those, 157,002,000 participated in the labor force by either holding a job or actively seeking one.

The 157,002,000 who participated in the labor force was 62.8 percent of the 249,899,000 civilian noninsttutional population, which matches the 62.8 percent rate in April, May, June, and October of 2014 as well as the participation rate in March of 1978. The participation rate hit its lowest level since February 1978 (62.7 percent) in September and December of 2014.

BLS points to the aging of the baby boom generation as a key factor affecting the labor force participation rate:

“In 2000, baby boomers were aged 36 to 54 years and were in the group with the highest participation rates: the prime-aged group 25 to 54 years old. The participation rate for women in this group was 76.7 percent and for men was 91.6 percent, so that the overall participation rate of the group was 84.0 percent. The participation rate of the next-older age group, that 55 years and older, was 32.4 percent, so the difference between the two age groups was 52 percentage points.”

But, with the passage of every year after 2000, a segment of the baby-boomer population passes into the 55-years-and-older age group, thus moving from a group with a high participation rate in the labor force to an age category with a much lower participation rate, causing the overall participation rate to decrease, BLS explained.

“The baby boomers’ exit from the prime-aged workforce (with the highest participation rates) into the 55-years-and older age groups (with much lower participation rates) will ultimately lower the overall labor force participation rate, leading to a slowdown in the growth of the labor force.”

In February, 92,898,000 people did not participate in the labor force. These Americans did not have a job and were not actively trying to find one. When President Obama took office in January 2009, there were 80,529,000 Americans who were not participating in the office, which means that since then, 12,369,000 Americans have left the workforce.

Of the 157,002,000 who did participate in the labor force, 148,297,000 had a job, and 8,705,000 did not have a job but were actively seeking one -– making them the nation’s unemployed.

The 8,705,000 job seekers were 5.5 percent of the 157,002,000 Americans actively participating in the labor force during the month of February. Thus, the unemployment rate for that money was 5.5 percent.

Economy Improving? Target to cut jobs several thousand jobs

Economy Improving? Target to cut jobs several thousand jobs

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Target’s chief executive, Brian Cornell, said Tuesday the retailer will cut several thousand jobs within the next two years as part of a $2 billion cost-savings plan.

The Minneapolis-based company also announced 2015 guidance of $4.45 to $4.65 adjusted earnings per share. Wall Street expected Target’s guidance at $4.50 adjusted earnings per share.

Target also expects digital sales to increase 40 percent and same-store sales between 1.5 and 2.5 percent, with modest improvement in gross margins and expense rates. It projects overall 2015 sales to grow between 2 and 3 percent.

The company’s stock closed at $78, or up 0.41 percent.

For 2016, Target expects earnings per share to increase 10 percent and a 5 to 10 percent dividend growth rate.

Last week, the retailer reported earnings of $1.50 per share on revenue of $21.75 billion, beating Wall Street’s expectations of $1.46 per share on $21.63 billion in revenue. The company’s total U.S. sales also grew by 1.9 percent in 2014.

Obama “Very Interested” In Raising Taxes Through Executive Action

Obama “Very Interested” In Raising Taxes Through Executive Action

Conn Carroll

Tea Party: Taxed Enough Already

White House Press Secretary Josh Earnest confirmed Monday that President Obama is “very interested” in the idea of raising taxes through unilateral executive action.

“The president certainly has not indicated any reticence in using his executive authority to try and advance an agenda that benefits middle class Americans,” Earnest said in response to a question about Sen. Bernie Sanders (I-VT) calling on Obama to raise more than $100 billion in taxes through IRS executive action.

“Now I don’t want to leave you with the impression that there is some imminent announcement, there is not, at least that I know of,” Earnest continued. “But the president has asked his team to examine the array of executive authorities that are available to him to try to make progress on his goals. So I am not in a position to talk in any detail at this point, but the president is very interested in this avenue generally,” Earnest finished.

Sanders sent a letter to Treasury Secretary Jack Lew Friday identifying a number of executive actions he believes the IRS could take, without any input from Congress, that would close loopholes currently used by corporations. In the past, IRS lawyers have been hesitant to use executive actions to raise significant amounts of revenue, but that same calculation has change in other federal agencies since Obama became president.

Obama’s preferred option would be for Congress to pass a corporate tax hike that would fund liberal infrastructure projects like mass transit. But if Congress fails to do as Obama wishes, just as Congress has failed to pass the immigration reforms that Obama prefers, Obama could take actions unilaterally instead. This past November, for example, Obama gave work permits, Social Security Numbers, and drivers licenses to approximately 4 million illegal immigrants.

Those immigration actions, according to the Congressional Budget Office, will raise federal deficits by $8.8 billion over the next ten years.

Ground Beef Prices Hit Record High

Ground Beef Prices Hit Record High

Another Record: $4.235 Per Pound for Ground Beef

Ground beef recall

The average price of a pound of ground beef climbed to another record high — $4.235 per pound — in the United States in January, according to data released today by the Bureau of Labor Statistics (BLS).

In August 2014, the average price for a pound of all types of ground beef topped $4 for the first time, hitting $4.013, according to the BLS.

In September, the average price jumped to $4.096 per pound; in October, the average price climbed to $4.154 per pound; and in November, the average price climbed to $4.201 per pound. In December, the price declined slightly to $4.156 per pound. But in January 2015,ground beef hit the highest price ever recorded at $4.235 per pound.

A year ago, in January 2014, the average price for a pound of ground beef was $3.467 per pound. Since then, the average price has increased 22.2 percent in one year.

ground beef graph

Five years ago, in January 2010, the average price of a pound of ground beef was $2.279, according to the BLS. The price has since climbed by $1.956 per pound, or 85.8 percent.

The overall Consumer Price Index measures the relative change in the prices of a basket of goods and services relative to a basis of 100.  Subordinate indexes measure the relative change in price for individual goods or services or categories of goods and services.

While the price of ground beef hit a record high in January, the CPI went down. “The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.7 percent in January on a seasonally adjusted basis,” the U.S. Bureau of Labor Statistics reported today. “Over the last 12 months, the all items index decreased 0.1 percent before seasonal adjustment.”

“The food index was unchanged in January after rising through all of 2014,”states BLS. “Four of the six major grocery store food groups declined in January. The fruits and vegetables index fell 0.9 percent, with the indexes for fresh fruits and fresh vegetables both declining.

“The dairy and related products index also fell 0.9 percent, its largest decline since April 2012. The index for meats, poultry, fish, and eggs fell slightly in January, decreasing 0.1 percent despite the index for beef and veal rising 0.1 percent,” it states.

“The largest increase was posted by the meats, poultry, fish, and eggs group, which rose 8.7 percent with the beef and veal index increasing 19.0 percent,” states BLS.