Posts
All Comments
\ABS\Auto Blog Samurai\data\How Gold Is Mined\themoneygame\PinExt.png "Pin It")
Google Finance
This comes in the wake of a lackluster personal income and spending report and a huge Chicago PMI report.
PMI for the midwest region surged to 58.7 from 49.0 a month ago. Economists were looking for a reading of 50.0.
Please follow Money Game on Twitter and Facebook.
Follow Sam Ro on Twitter. Tags: Markets | Get Alerts for these topics »
Bonds have been tumbling for most of the month, and most analysts have warned that it could get even uglier. In a note to clients yesterday titled "Bubble, Bubble, Toil & Trouble," Bank of America Merrill Lynch strategist Michael Hartnett warns that the "risks of a bond crash are high."
More from his note (emphasis added):
As we have argued in recent years, history shows that major breakouts in equity markets tend to coincide with major inflection points in bond yields (Chart). This is now happening, which is why we continue to favor stocks, particularly banks, over bonds. The ideal scenario would be a repeat of the early 1960s, when both equities and bond yields rose in an orderly fashion, a "Velvet Rotation". But it’s hard to believe that the greatest bond bull market in history will end without some bloodshed.
Bank of America Merrill LynchMeanwhile, UBS is taking the other side of the trade, advising clients to "Buy Treasuries."
Please follow Money Game on Twitter and Facebook.
Follow Sam Ro on Twitter. Tags: Treasuries, Bond Bubble, Crash, Michael Hartnett | Get Alerts for these topics »
U.S. futures are in the red this morning. But they are way off of their lowest levels seen at around 6:00 AM ET.
Dow futures are down 77 points.
S&P 500 futures are down 8.4 points.
Nasdaq futures are down 13.2 points.
Here's a look at this morning's action in S&P futures via FinViz:
FinViz
Please follow Money Game on Twitter and Facebook.
Follow Sam Ro on Twitter. Tags: Markets | Get Alerts for these topics »
Bong Wie/Iowa State University, Ames This isn't it. But it'll look something like this.Art Cashin, UBS's man on the NYSE trading floor, is a fan of astronomy. In his note this morning, he spends some time talking about an astronomic phenomenon that has remarkable accuracy in predicting tops and bottoms.
"[A]stronomic movements are as much a part of Wall Street cocktail conversation as politics and sports," he said.
This was his lead into today's hot astronomic movement that traders are chatting about. From this morning's Cashin's Comments:
Recently, there has been some buzz about a huge asteroid name "1998 QE2", which will buzz by earth (at a relatively safe distance) today.
The watering hole buzz on 1998 QE2 has little to do with its proximity or its size. Rather, traders are a bit hooked on its name.
The year 1998 was when Long Term Capital Management blew up. Further, QE used to be best known as an ocean liner but now it is a central bank policy at several spots around the globe.
So, the temporary proximity of a large object with a somewhat ominous name may put traders on extra alert until it is officially time for the cubes to fall into the glass.
According to Space.com, the asteroid is so big it actually has a moon orbiting around it.
Watch the 1998 QE2 sail by earth live at Space.com.
Please follow Clusterstock on Twitter and Facebook.
Follow Sam Ro on Twitter. Tags: Art Cashin, Asteroid | Get Alerts for these topics »
REUTERS/Jason ReedApple CEO Tim Cook (C) appears before a Senate homeland security and governmental affairs investigations subcommittee hearing on offshore profit shifting and the U.S. tax code, on Capitol Hill in Washington, May 21, 2013.*Two presidents have failed to kill 'check the box' rule.
* For Treasury Department, a trail of unintended consequences.
* Even lawmakers who oppose loopholes have voted to extend it.
WASHINGTON, May 30 (Reuters) - As the U.S. economy crumbled in early 2009, President Barack Obama offered a plan that he said would save American jobs: a crackdown on corporate tax loopholes that encourage companies to send profits abroad to avoid paying billions of dollars in U.S. taxes each year.
Tax lobbyist Ken Kies was not worried. A decade earlier, he had led a fight to preserve a key loophole — known in Treasury Department shorthand as the "check the box" rule — when another Democratic president, Bill Clinton, had tried to kill it.
"I told my clients, 'Don't sweat this. This is never going to happen,'" recalled Kies, who has advised corporate giants Microsoft and General Electric on the issue.
Kies was right.
Business groups rose up against Obama's plan, arguing that it could damage U.S. businesses already threatened by the weak economy. Democrats in Congress balked, Obama dropped the idea and the loophole survived.
The story of the "check the box" loophole, which allows U.S. companies to choose for themselves how to classify their subsidiaries for tax purposes, and a companion policy known as the "look-through" rule, shows how Washington bureaucrats, lobbyists and politicians have worked together — sometimes wittingly — to save money for American corporations and deprive the federal government of billions in tax revenue each year.
What began in 1996 as an effort by the Treasury Department to simplify the U.S. tax code mistakenly ended up as a massive tax loophole for corporate America, which seized upon it and has never let go.
Besides fueling an explosion in earnings that U.S. companies keep abroad — now more than $1.8 trillion, the Commerce Department estimates, double the amount from less than a decade ago — the loophole has become a symbol of how difficult it can be to repeal a tax benefit once it becomes entrenched.
At congressional hearings last week, several lawmakers blasted Apple Inc. for using the "check the box" loophole and other international tax strategies to avoid paying what they estimated as $9 billion in potential U.S. taxes in 2012.
Two of Apple's most aggressive questioners, Democratic Senator Carl Levin of Michigan and Republican Senator John McCain of Arizona, have called for closing the "check the box" loophole. But even they have voted to keep it alive several times in recent years when it has been inserted into other legislation.
Levin's office did not respond to requests for a comment. McCain declined to comment for this story.
"Once a policy mistake is made that is favorable to taxpayers, and particularly to big taxpayers, it is extremely difficult to reverse," said a former Treasury Department official who helped write the "check the box" rule and was involved in Obama's effort to repeal it.
The former official spoke on condition of anonymity, citing the sensitive nature of the tax break.
The "check the box" loophole — which costs the United States about $10 billion per year, according to the White House — also has been a reflection of Washington's "revolving door" culture of policy-making and lobbying. Some of the bureaucrats who helped to write the rule went on to work for corporations that used it to lower their tax bills.
They include William Morris, who was Treasury's associate international tax counsel when the rule was imposed.
Morris, who did not respond to requests for comment on this story, joined GE in 2000 and is now director of the company's global tax policy. The company, like many other big multinationals, keeps its tax burden well below the official U.S. corporate rate of 35 percent in part by taking advantage of "check the box" and other international tax strategies.
GE's annual reports indicate that the company does so largely because many of its profits are directed to its vast network of foreign subsidiaries. In a filing with the U.S. Securities and Exchange Commission in February, GE said its overseas affiliates were holding $108 billion in offshore profits, which is more than any other U.S. company.
Morris's precise role in GE's tax strategy is unclear. The company declined to comment for this story.
Other former IRS and Treasury officials involved in shaping the tax loophole now hold senior positions at law and accounting firms in Washington and New York.
Offshore tax shelters have bedeviled the U.S. government virtually since the inception of the tax code in 1913.
A 1962 compromise between President John Kennedy and Congress imposed U.S. taxes on "passive" income such as royalties and interest earned abroad, but not on "active" income from regular business operations.
That law, known as Subpart F, made the tax code increasingly complex as businesses grew larger and more diverse. The law was revised 10 times between 1969 and 1996 as the U.S. Internal Revenue Service tried to figure out how to classify, and then tax, tens of thousands of corporate units.
In 1996 the Treasury Department moved to simplify matters with a rule that enabled companies to "check the box" on a tax form to describe a given corporate entity - including whether it was, for tax purposes, irrelevant, a so-called "disregarded entity."
For a company and its subsidiaries that all operate in the United States, the rule streamlined tax filing by allowing the subsidiaries' income to be reported on the same forms as the parent company's income.
When applied to U.S.-based multinational companies, however, the "disregarded entities" status could be used to set up high-volume subsidiaries in low-tax jurisdictions such as Luxembourg or Ireland. A key part of Apple's tax strategy, for example, is having a subsidiary in Ireland that takes in all of the income from Apple's retail stores in Europe.
Treasury had given little thought to how the "check the box" rule might affect U.S.-based multinational corporations, according to several people involved in the effort.
Treasury officials realized they had created a massive loophole when they noticed a spike in cross-border financing shortly after the rule took effect.
"The mistake was extending it to foreign entities," Donald Lubick, Treasury's top tax official at the time, told Reuters. "That was apparent pretty quickly."
Clinton's Treasury Department moved to revoke the "check the box" rule in early 1998. But multinational companies such as Hallmark, Coca-Cola, IBM and Philip Morris launched a full-court press to convince Congress to keep the rule in place.
Enter Kies, a former tax specialist for Congress' Joint Tax Committee who was eager to put his expertise and contacts to work as a tax lobbyist.
Kies's former Republican bosses — Representative Bill Archer of Texas and Senator William Roth of Delaware — accused the IRS and Treasury of overstepping their authority in trying to take away the loophole.
Kies, meanwhile, says he pursued a strategy that he figured would resonate with businesses, lawmakers and regular citizens: He argued that eliminating the "check the box" loophole would damage U.S.-based multinational companies by forcing them to pay more taxes not only in the United States, but also to high-tax nations such as France.
Roth's Senate Finance Committee passed a bill in April 1998 to prevent Treasury from making any changes to "check the box." That language was watered down to a non-binding resolution by the time the measure passed the Senate the next month, but Congress' message was clear: Don't mess with the loophole.
Treasury soon gave up its effort to revoke it.
"In light of that reception that this rule got on Capitol Hill, we withdrew the notice," said Philip West, who was then the top international tax official at Treasury and now advises clients on international tax strategy for the law firm Steptoe & Johnson.
By 2004, thanks in part to the "check the box" rule, U.S.-based multinational corporations paid an effective tax rate of about 2.3 percent on $700 billion in foreign earnings, according to the Obama administration.
To make "check the box" tougher to revoke, Kies and other corporate lobbyists urged Congress to turn the rule into a law.
Congress did so in 2006 with legislation that became known as the "look through" rule. It bolstered the "check the box" loophole by giving corporations more latitude to move some types of income from one foreign unit to another without paying a tax.
The "look through" rule became law with little debate, according to congressional records. It was tucked into a broad extension of other tax cuts.
The 2006 law wasn't permanent, but supporters have managed to extend it repeatedly by embedding it in large and important but unrelated pieces of legislation that were headed toward easy passage in Congress.
That is what happened in 2009, when Obama threatened to cut the loophole.
Congress has extended it temporarily twice since then as part of larger pieces of legislation. Both Levin and McCain voted to extend it in January as part of the legislation that kept the U.S. government from going off the "fiscal cliff," a package of across-the-board tax hikes and spending cuts that threatened to plunge the U.S. economy into another recession.
Both also voted to extend it in 2010 as part of a broad tax bill.
Obama has not proposed a repeal of the loophole since 2009.
During the Senate hearing last week on Apple's tax strategy, Mark Mazur, Treasury's assistant secretary for tax issues, said in written testimony that the Obama administration remained "concerned about the misuse of various income-shifting devices, including misuse of the 'check the box' rules."
Mazur noted that the White House has made proposals to discourage profit-shifting offshore. But it's unclear whether Obama will try again to have the "check the box" rule revoked.
For perspective, Obama could read the words of another president who also fell short in his assault on tax shelters, this one failing to raise taxes on overseas holding companies.
"We face a challenge to the power of government to collect uniformly and fairly, and without discrimination, taxes based on statutes adopted by Congress," that president wrote.
The letter was signed by Franklin Roosevelt and dated June 1, 1937.
The April reading of personal income and spending is out, and it's disappointing. Personal income was unchanged from a month ago. Economists expected income to climb by 0.1%.
Spending unexpectedly fell by 0.2%, which was worse than the unchanged level expected.
"The slowing is helping the case of Fed officials arguing against tapering," said High Frequency Economics' Jim Sullivan.
"The 0.2% m/m decline in the nominal value of US monthly consumption in April is not quite as bad as is looks, since it partly reflects the drop back in gasoline prices," said Capital Economics' Paul Ashworth. "Overall, a sobering report for those expecting GDP growth to accelerate sharply."
The savings rate was unchanged at 2.5%.
Markets don't seem to be responding to the news.
Please follow Money Game on Twitter and Facebook.
Follow Sam Ro on Twitter. Tags: Personal Income And Outlays | Get Alerts for these topics »
The talk of the financial world right now is the big decline in emerging market currencies (which we wrote about this morning) and the collapse of the South African Rand (which Matthew Boesler wrote about yesterday).
The Rand (which has the three-letter code ZAR, hence the headline) has been getting whooped by a perfect storm.
There's the dollar strength, the commodity weakness, the bad internal South African economy, and a big miners strike that's ongoing. Everything that could go wrong is.
Via XE.com, here's a one-month chart, showing how the dollar has soared against the Rand.
And here's the intraday chart, showing the big surge in the dollar against the rand just today.
As you can see it was a bit worse earlier in the day.
XE.comPlease follow Money Game on Twitter and Facebook.
Follow Joe Weisenthal on Twitter.
Ask Joe A Question » Tags: Currency | Get Alerts for these topics »
Since hitting a 2012 low of ¥77.12 to the dollar on September 13, the yen has devalued all the way to current levels around ¥101.00.
Because the Japanese government has not yet taken up structural programs in order to boost competitiveness and potential growth in the Japanese economy, the dollar-yen exchange rate has been the primary yardstick for the vaunted "Abenomics" program of fiscal and monetary stimulus that has been underway in Japan since December, when former Prime Minister Shinzo Abe was re-elected to office, six years after his resignation from the post in 2007.
Morgan Stanley Japan equity strategist Hajime Kitano says not to read too much into the yen's recent decline in terms of ushering in "structural change" to the Japanese economy.
In a note to clients, Kitano points out that long yen declines like this actually happen about every seven years:
Since the switch to the system of floating exchange rates in 1973, the dollar/yen rate has risen for at least seven consecutive months on six occasions including the present. It is a phenomenon that occurs once every seven years. We thus think it is too early to judge whether eight consecutive months of yen depreciation would reflect ‘structural change,’ as suggested by the Nikkei.
Exhibit 1 shows the average dollar/yen rate in the 12 months before and after the month when these record-duration phases of yen depreciation ended. After an approximately 6% decline over 5–6 months, the dollar/yen rate starts to rise again. This is of course only the average pattern, with the year following the end of record-duration phases seeing a further 13% rise for the 1996 occasion, and a 14% decline in the case of 1990. Indeed, it is only with the benefit of hindsight that we know when a record-setting phase of yen depreciation ends.
Here's Exhibit 1:
Bloomberg, Morgan Stanley Research
Aside from historical patterns, though, Kitano cites another reason to be skeptical: the relationship between yen-selling interventions by the Japanese government and the value of the currency.
The intervention in August and November 2011 had a total scale of ¥13.6 trillion," says Kitano. "We think that this certainly could have affected the dollar/yen rate after a lag."
The chart below shows the relationship between the 12-month average of yen-selling intervention value as a percentage of trade volume and the year-over-year change in the dollar-yen exchange rate.
Bloomberg, Morgan Stanley Research
"If this supposition is correct, then we think that it eliminates one justification for the structural argument that 'this time is different'," says Kitano. "Experience tells us that when the mass media bring up a 'structural argument,' it is advisable to doubt the market’s sustainability."
The weakness in Japanese markets is pretty unreal.
After being a can't lose market up until a week ago, now nothing can stop the bleeding.
After a mediocre up day during normal Nikkei trading, futures trading has been urgly, losing about 2.5%.
Via FinViz, check out how bad it's been this morning.
(HT: @finansakrobat)
Please follow Money Game on Twitter and Facebook.
Follow Joe Weisenthal on Twitter.
Ask Joe A Question » Tags: Nikkei | Get Alerts for these topics »
In a recent note to clients, Bank of America Merrill Lynch's Michael Hartnett warned that the risks of a bond market crash were high. This comes in the wake of the Fed Chairman Ben Bernanke suggesting that the Fed could soon taper its quantitative easing program — the Fed's effort to stimulate the economy by buying bonds to lower interest rates. In theory, the taper would put pressure on the bond markets because a major buyer (i.e. the Fed) scales back.
Hartnett notes that the other areas of the financial markets are getting slammed by taper fears and they are signaling worse times are ahead for bonds
Now the bad news. While the turn in housing should be welcomed by Main Street, the recent melt-up in stock prices in the US and Japan, in combination with surging home prices (annualizing gains of 16% in Q1), threatens to remove the liquidity “punch bowl”. And following the decline in a number of safe haven asset prices, we now see a host of “canaries in the bond-mine” indicating that markets are getting very nervous about QE tapering and the prospect of much higher bond yields. In recent weeks, mortgages, REITs, utility stocks as well as lumber prices have all tumbled (Chart).
Check out Hartnett's ugly chart.
Bank of America Merrill LynchPlease follow Money Game on Twitter and Facebook.
Follow Sam Ro on Twitter. Tags: Bond Bubble, Treasuries, Michael Hartnett | Get Alerts for these topics »
The biggest story of the week in global markets has been the swift rise in U.S. Treasury yields as investors have unloaded their bond holdings.
Earlier this week, the market saw its highest daily trading volume ever, and yields hit their highest levels in over a year.
This morning, bonds are selling off again, and the yield on the 10-year Treasury bond has risen 5 basis points to 2.16%, pushing toward a new high, as the chart below illustrates.
Business Insider/Matthew Boesler, data from Bloomberg
The chart below shows price action in 10-year Treasury futures this morning. They really started selling off when the stock market opened at 9:30 AM ET, and continued to tumble after positive surprises from the Chicago PMI and University of Michigan consumer confidence releases at 9:45 and 9:55, respectively.
Now, they are trading down 0.4% on the day.
Thinkorswim
Lately, one of the themes in the Treasury market has been increased sensitivity to economic data releases.
Because the Federal Reserve has bought up so much of the bond market through quantitative easing programs designed to provide monetary stimulus in recent years, the effects of weekly and monthly changes in economic data on bond prices have been diminished.
However, since the Fed introduced the "Evans rule" at its December monetary policy meeting, which ties the outlook for when the central bank will begin tightening stimulus directly to economic data benchmarks, bond prices have become more reactive to the data.
Please follow Money Game on Twitter and Facebook.
Follow Matthew Boesler on Twitter. Tags: Bond Market, Treasuries | Get Alerts for these topics »
REUTERS/Mike StoneUPDATE: The consumer confidence report is out. The headline index rose to 84.5 in May from 76.4 in April.
Economists expected the number to come in at 83.7, matching the preliminary estimate published by the University of Michigan earlier this month.
The economic conditions sub-index rose to 98.0 from 89.9 in April, exceeding the preliminary May estimate of 97.5.
The economic outlook sub-index rose to 75.8 from 67.8 in April, beating the preliminary estimate of 74.8.
Inflation expectations one year ahead and five years ahead were both unchanged from April at 3.1% and 2.9%, respectively.
Click here to refresh for the latest >
Please follow Money Game on Twitter and Facebook.
Follow Matthew Boesler on Twitter. Tags: Consumer Confidence Index, Economic Data | Get Alerts for these topics »
Pre-retirees (age 55 or older) who dropped stocks from their 401(k) by the first quarter of 2009 and never rebalanced have seen their balances grow by only 25.9% through the first quarter of 2013, according to a new report from Fidelity. Their average balance rose during this period from $80,200 to $101,000.
Most people are doing much better.
The average pre-retiree 401(k) balance has nearly doubled since the depths of the downturn, rising from $130,700 to $255,000.
“There is a valuable lesson to be learned from the minority of pre-retirees who abandoned equities altogether and experienced significantly less progress,” said James M. MacDonald, president, Workplace Investing, Fidelity Investments. “It underscores the combined importance of a proper asset allocation and savings behavior as they planned for retirement within all that life entails.”
Overall, the 401(k) picture is looking brighter. 401(k) balances are at their highest level since the market crash, Fidelity found, reaching $80,900 in the first quarter –– an 8.4% bump over the last year and 75% higher than at the market low in 2009.
Two-thirds of that growth can be attributed to gains in the stock market. At the same time, workers have been upping their personal contributions, as well as employers.
Still, $225,000 isn't exactly all that much to live on through your golden years. Retirees are expected to need as much as $220,000 saved up just for health care costs alone, according to another study by Fidelity earlier this month.
Mark Hebner, President of Index Fund Advisors, has long been a proponent of the Jack Bogle line of thinking –– that keeping your savings in a low-cost index fund that tracks the market, keeping your head down even through tough times, and rebalancing as you age is the safest and surest way to grow your wealth.
But even with a wealth of research to support the index funds approach, even he couldn't convince all of his clients to stay the course after the crash.
"One client came to see me on the very bottom day, March 9, 2009," Hebner told us. "I had talked her out of selling numerous times, but she told me, 'I see nothing but darkness on the horizon and I don't want to lose any more money.'
That's a fear that sets in, especially if you're a single widow in your late 60s and all you want do is stop the pain. You're scared to death and you think your investment advisor just wants to make money off you or whatever or that I have a bias and therefore I'm talking her into doing what may be against her best interests."
Fidelity is the nation's largest administrator of 401(k) plans. It's analysis is based on a survey of its accounts, including employees who have worked more than 10 years with their employer.
U.S. Treasury securities have been tumbling, sending interest rates higher. Trading volume has been massive, and top analysts like Goldman Sachs are convinced the sell-off is for real.
However, UBS is coming up on the other side of this trade in a brief note titled "Buy Treasuries."
"In our opinion, Treasury yields have risen too far, too quickly," said Mike Schumacher.
He provides three points, which we present verbatim:
The market seems to be overreacting to the slim possibility that the Fed could begin tapering fairly soon;Our model indicates that the 10yr Treasury yield is about 50bp above fair value; andPositive seasonals. Treasuries and Bunds typically perform well in June-September."We typically avoid big duration calls, because we believe they typically offer poor risk/return trade-offs," he added. "However, we are making an exception."
"The yield has not been this far out of line since August 2012," he wrote regarding his model. "Briefly, the model contains two predictor variables. One is a function of economic surprises, and the other is linked to eurozone peripheral spreads. Confidence intervals are critical, and our range for this model is +/- 40bp."
Here's Schumacher's chart:
UBSPlease follow Money Game on Twitter and Facebook.
Follow Sam Ro on Twitter. Tags: Treasuries | Get Alerts for these topics »
Emerging markets are starting to take a beating as the commodity supercycle appears to be winding down and the U.S. dollar is strengthening around the world.
BofA Merrill Lynch Chief Investment Strategist Michael Hartnett says the "big story" in this week's fund flow data is the "Exit from Emerging Markets."
Emerging market equity funds saw their largest weekly outflows ($2.9 billion, or 0.3% of assets under management) in 18 months, and emerging market debt funds saw their first weekly outflows ($0.2 billion, or 0.1% of assets under management) in a year.
Although emerging markets may be the big story, equity funds around the globe recorded $2.8 billion in weekly outflows, a sharp reversal from some of the big inflows we've seen in recent weeks.
Below is a full breakdown, via Hartnett.
Flows by Asset Class
Equities: $2.8bn outflows ($1.2bn via ETF's); just the second week of redemptions in 2013
Bonds: $1.4bn inflows = 22 straight weeks
Commodities: $1.0bn outflows (16 straight weeks)
Money Market Funds: $8.5bn inflows
Flows by Equity Region
Largest weekly outflows from EM equity funds since Dec'11 ($2.9bn)
With that said, our EM Flow Trading Rule is still a ways from a contrarian "buy" signal
Note that Brazil funds have now seen 14 straight weeks of redemptions (longest outflow streak on record)
European equities also see largest outflows in 4 weeks ($1.0bn)
Despite market consolidation, modest inflows to US ($0.4bn) and Japan ($0.5bn)
By sector, banks and real estate funds continue to see solid inflows ($1.1bn combined)
Flows by Fixed Income Sector
Inflows concentrated in IG bond funds ($2.4bn) even as YTD total return turns negative and floating-rate debt ($1.1bn), which offers rate protection
Otherwise, EM debt funds see first outflows in 51 weeks ($0.2bn)
7 straight weeks out of TIPS ($0.3bn)
3 straight weeks out of Govt/Tsy ($0.9bn)
First outflows from HY bond funds in 7 weeks ($0.3bn)
Eurozone unemployment hits a new record of 12.2%.
What else is there to say?
Business Insider/EuroStatPlease Note: Business Insider will never share your information with any other companies. You also have the ability to unsubscribe from these newsletters at any time simply by following the unsubscribe link located at the bottom of each email Please follow Money Game on Twitter and Facebook.
Follow Joe Weisenthal on Twitter.
Ask Joe A Question » Tags: Chart Of The Day, Euro Crisis, Unemployment Rate | Get Alerts for these topics »
To embed this post, copy the code below and paste into your website or blog.
xThe Chart of the Day widget displays the latest published chart from Business Insider. To embed, copy the code below and paste into your website or blog.
There's a huge protest outside of the European Central Bank today.
From Reuters:
May 31, 2013 German riot police scuffle with protestors in front of the European Central Bank (ECB) head quarters during a anti-capitalism "Blockupy" demonstration in Frankfurt, May 31, 2013. Several thousand people take part in demonstrations against capitalism and austerity.
REUTERS/Kai PfaffenbachPlease follow Money Game on Twitter and Facebook.
Follow Joe Weisenthal on Twitter.
Ask Joe A Question » Tags: ECB, Austerity | Get Alerts for these topics »
As the debt crisis blew up around the world, many economists and politicians have argued for austerity in their efforts to reduce deficits and scale back debt. While many continue to debate the economic effectiveness of austerity, the social impact seems to be more clear.
In a new piece for Project Syndicate, Robert Shiller discusses the impact of austerity on morale. He addresses and criticizes those who believe austerity is somehow good for social morale:
Austerity, according to some of its promoters, is supposed to improve morale. British Prime Minister David Cameron, an austerity advocate, says he believes that his program reduces “welfare dependency,” restores “rigor,” and encourages the “the doers, the creators, the life-affirmers.” Likewise, US Congressman Paul Ryan says that his program is part of a plan to promote “creativity and entrepreneurial spirit.”
Some kinds of austerity programs may indeed boost morale. Monks find their life’s meaning in a most austere environment, and military boot camps are thought to build character. But the kind of fiscal austerity that is being practiced now has the immediate effect of rendering people jobless and filling their lives with nothing but a sense of rejection and exclusion.Shiller maintains his position that the best way to dig out of the world's economic woes is through fiscal stimulus, which wouldn't harm morale."For morale, we need a social compact that finds a purpose for everyone, a way to show oneself to be part of society by being a worker of some sort," he writes. "And for that we need fiscal stimulus – ideally, the debt-friendly stimulus that raises taxes and expenditures equally."Shiller expands on all of this. Read his whole piece at Project Syndicate.Please follow Money Game on Twitter and Facebook.
Follow Sam Ro on Twitter. Tags: Robert Shiller, Austerity | Get Alerts for these topics »
Forgot username or password?
Login with Twitter Login with Facebook Login with LinkedIn Login with Google Register
Money Game Home Tech SAI Enterprise Science 
GOLDMAN: Here's What We Want Apple To Unveil At Their Big Conference In Two Weeks GOLDMAN: Here's What We Want Apple To Unveil At Their Big Conference In Two Weeks 
Microsoft Invented A Tablet A Decade Before Apple And Totally Blew It 
Scientists Have Figured Out How Much Radiation Would Hit Astronauts Traveling To Mars Finance Clusterstock Your Money 
This Reuters Editorial Is The Most Stinging Indictment Of Wall Street Bankers We've Read In A While This Reuters Editorial Is The Most Stinging Indictment Of Wall Street Bankers We've Read In A While 
Obamacare Is Driving Some Doctors To Stop Taking Insurance Altogether Markets 
Chinese Manufacturing PMI Beats Expectations, Rising To 50.8 Politics Politics Defense Law & Order 
Americans Won't Like Hearing The Real Reason That Silicon Valley Is Pushing So Hard For Immigration Reform Americans Won't Like Hearing The Real Reason That Silicon Valley Is Pushing So Hard For Immigration Reform 
10 Habits From The Military That Stay With You Forever 
Leaked Photos Show Oscar Pistorius Crime Scene For The First Time Strategy Strategy Careers Small Business 
How The Anxiety Epidemic In The American Workplace Is Ruining Your Health How The Anxiety Epidemic In The American Workplace Is Ruining Your Health 
There Are So Many Reasons Why New Grads Should Join Startups How The Anxiety Epidemic In The American Workplace Is Ruining Your Health Entertainment 
Topless Protestors Reveal Why They Ambushed Heidi Klum's 'Top Model' Finale Advertising 
Actually, Beyoncé WAS Totally Photoshopped In This Ad Retail 
A New Jersey Frozen Yogurt Chain Is Being Called 'The Hooters Of Froyo' Sports 
The Marlins Are On Pace To Be The Worst Team In Modern Baseball History Life The Life Transportation 
Hauntingly Beautiful Pictures Show Budapest Then And Now Hauntingly Beautiful Pictures Show Budapest Then And Now 
ELON MUSK: The 'Hyperloop' Would Be 10 Times Cheaper Than High-Speed Rail More Latest Video Lists The Hive Your News BI Intelligence Events About BI Events BI Intelligence Money Game Home Economy Markets Investing ETFs HiveContributors Documents Jobs Follow us on Facebook and get updates from Money Game posted directly to your news feed Enter your email address and zip code to set up customized email alerts. Email Zip From To Email Sent! You have successfully emailed the post. 10 Things You Need To Know This Morning Matthew Boesler | May 31, 2013, 7:33 AM | 4,081 | 1 EmailMoreShare on TumblrTweet!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs");EmailShare on Tumblr 
REUTERS/Larry Downing
BI Intelligence, a new subscription research service from Business Insider, provides in-depth insight, data, and analysis of the mobile industry.
Access all reports, research updates, presentations, data and chart libraries plus much more with your free trial.
Click here to start your subscription>> Follow 10 Things Before the Opening Bell and never miss an update! Get updates in your Facebooknews feed.
Get updates in your inbox.
Email Country United StatesAfghanistanAland IslandsAlbaniaAlgeriaAmerican SamoaAndorraAngolaAnguillaAntarcticaAntigua And BarbudaArgentinaArmeniaArubaAustraliaAustriaAzerbaijanBahamasBahrainBangladeshBarbadosBelarusBelgiumBelizeBeninBermudaBhutanBolivia, Plurinational State OfBosnia And HerzegovinaBotswanaBouvet IslandBrazilBritish Indian Ocean TerritoryBrunei DarussalamBulgariaBurkina FasoBurundiCambodiaCameroonCanadaCape VerdeCayman IslandsCentral African RepublicChadChileChinaChristmas IslandCocos (keeling) IslandsColombiaComorosCongoCongo, The Democratic Republic Of TheCook IslandsCosta RicaCote D'ivoireCroatiaCubaCyprusCzech RepublicDenmarkDjiboutiDominicaDominican RepublicEcuadorEgyptEl SalvadorEquatorial GuineaEritreaEstoniaEthiopiaFalkland Islands (malvinas)Faroe IslandsFijiFinlandFranceFrench GuianaFrench PolynesiaFrench Southern TerritoriesGabonGambiaGeorgiaGermanyGhanaGibraltarGreeceGreenlandGrenadaGuadeloupeGuamGuatemalaGuernseyGuineaGuinea-bissauGuyanaHaitiHeard Island And Mcdonald IslandsHoly See (vatican City State)HondurasHong KongHungaryIcelandIndiaIndonesiaIran, Islamic Republic OfIraqIrelandIsle Of ManIsraelItalyJamaicaJapanJerseyJordanKazakhstanKenyaKiribatiKorea, Democratic People's Republic OfKorea, Republic OfKuwaitKyrgyzstanLao People's Democratic RepublicLatviaLebanonLesothoLiberiaLibyan Arab JamahiriyaLiechtensteinLithuaniaLuxembourgMacaoMacedoniaMadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall IslandsMartiniqueMauritaniaMauritiusMayotteMexicoMicronesia, Federated States OfMoldova, Republic OfMonacoMongoliaMontenegroMontserratMoroccoMozambiqueMyanmarNamibiaNauruNepalNetherlandsNetherlands AntillesNew CaledoniaNew ZealandNicaraguaNigerNigeriaNiueNorfolk IslandNorthern Mariana IslandsNorwayOmanPakistanPalauPalestinian Territory, OccupiedPanamaPapua New GuineaParaguayPeruPhilippinesPitcairnPolandPortugalPuerto RicoQatarReunionRomaniaRussian FederationRwandaSaint BarthelemySaint HelenaSaint Kitts And NevisSaint LuciaSaint MartinSaint Pierre And MiquelonSaint Vincent And The GrenadinesSamoaSan MarinoSao Tome And PrincipeSaudi ArabiaSenegalSerbiaSeychellesSierra LeoneSingaporeSlovakiaSloveniaSolomon IslandsSomaliaSouth AfricaSouth Georgia And South Sandwich IslandsSpainSri LankaSudanSurinameSvalbard And Jan MayenSwazilandSwedenSwitzerlandSyrian Arab RepublicTaiwan, Province Of ChinaTajikistanTanzania, United Republic OfThailandTimor-lesteTogoTokelauTongaTrinidad And TobagoTunisiaTurkeyTurkmenistanTurks And Caicos IslandsTuvaluUgandaUkraineUnited Arab EmiratesUnited KingdomUnited States Minor Outlying IslandsUruguayUzbekistanVanuatuVenezuela, Bolivarian Republic OfViet NamVirgin Islands, BritishVirgin Islands, U.s.Wallis And FutunaWestern SaharaYemenZambiaZimbabwe Zip Code Privacy Policy Please Note: Business Insider will never share your information with any other companies. You also have the ability to unsubscribe from these newsletters at any time simply by following the unsubscribe link located at the bottom of each email Recommended For You
Why Are So Many Facebook Execs Quitting To Work With This Man? Here's his explanation.
Please follow Money Game on Twitter and Facebook.
Follow Matthew Boesler onTwitter. Tags: 10 Things Before Opening Bell | Get Alerts for these topics »
Matthew Boesler Contact: e-mail: mboesler@businessinsider.com Work Phone: (646) 403-4840 URL: http://www.about.me/matthewboesler Subscribe to his RSS feed | twitter feed 
Loading Apply To Be An "Insider" » 10 Things You Need To Know This Morning 10 Things You Need To Know This Morning 
Emerging markets falling like dominoes, record high eurozone unemployment again, and Nikkei futures taking a hit in after-hours trading.
You are logged into Facebook
Social: |Your Activity |These articles have been shared on your timeline. You can remove them here:OptionsNotify me when a story is shared.You are logged in with Google
Social: | Your Activity | These articles have been added to your Google activity log. You can remove them here: Options Notify me when a story is shared.
If You Bought An 'iWatch' From Apple, You'd Check it ~95 Times Per Day (And That's Why Apple Is Going To Make A Boatload) 
19 Tiny Lifestyle Changes You Can Make To Get Healthier 
The Rise Of Social Commerce: How Tweets, Pins And Likes Can Turn Into Sales Login with LinkedIn to see what your friends are reading on Business Insider. 
Meet The Top Graduates Of America's Finest Military AcademyInside The Connecticut Gun Factory That Is Leaving The State In ProtestThis Is What Happens When You Get Hit In CombatMost Read Read Commented Recommended 
Mary Meeker's Latest Masterful Presentation On The State Of The Web 973,098 Views
17 Reasons Why Houston Is The Best City In America 489,067 Views
13 Schools Where It's Almost Impossible To Fail 374,981 Views
The Beautiful Young Daughters Of The Baldwin Brothers 320,649 Views
We Think We Know What Elon Musk's Hyperloop Is, And How It Can Get You From LA To San Francisco In 30 Minutes 119 Comments
Obamacare Is Driving Some Doctors To Stop Taking Insurance Altogether 113 Comments
The 7 States That The Rest Of America Would Like To Kick Out Of the Country 111 Comments
This Is The Mixed-Race Cheerios Ad All The Idiots Are Complaining About 99 Comments
Loading, please wait... See more »
Find A Job In partnership with 
Tech JobsMedia JobsFinance JobsC-Level JobsDesign JobsSales JobsSee All Jobs The HiveAbout The Hive »What Smart People Are Reading Right NowStock Market Video Analysis for Week Ending 5/31/13 -AlphaTrends3Rate Shock: In California, Obamacare To Increase IndividualHealth Insurance Premiums By 64-146%3A whole new definition for kindergarten cops -CNN.com2SPY Trends and Influencers June 1, 2013 Capital2:: Hedgeye ::2MoreLessSee All »The Future Of Mobile
Why Social Media Advertising Is Set To ExplodeWhy Mobile Payments Are Set To ExplodeThe Rise Of Social Commerce: How Tweets, Pins And Likes Can Turn Into SalesInsider The Mobile Real-Time Bidding EcosystemAdvertisementThanks to our partners
A-Z Index Companies Authors Categories LatestContributorsVideoFull Archives Tools Job Listings Document Center Lists & RankingsSilicon Alley 100 Digital 100 Silicon Valley 100 Clusterstock 50 The Most Important ChartsThe Life 50 America's Best Colleges Best Business Schools Sexiest CEOsMore Your Account Register Change Your Email Preferences About BI About Jobs at BI Masthead Contact Advertise Mobile Conflict of Interest Policy Contributors FAQ Follow BI Email Newsletters Alerts RSS Twitter LinkedIn Facebook Google+ Verticals Tech Entertainment Wall Street Markets StrategyCareersRetailSportsLifestyleScienceEnterprise ListsPoliticsDefenseLaw & OrderAdvertisingGetting ThereMisc.Your MoneyLatest * Copyright © 2013 Business Insider, Inc. All rights reserved.Registration on or use of this site constitutes acceptance of our Terms of Serviceand Privacy Policy.|Disclaimer| Commerce Policy
Powered by MongoDB|Stock quotes by YCharts|Ad Serving by 24/7 Open AdStream | Made in NYC
