Banks are lending to companies and individuals at the fastest pace since the financial crisis, helping propel profits to near-record levels.
U.S. banks posted $40.24 billion in net income during the second quarter, the industry’s second-highest profit total in at least 23 years, according to data from research firm SNL Financial. The latest profits are just below the record $40.36 billion recorded in the first quarter of 2013.
Banks are lending to companies and individuals at the fastest pace since the financial crisis, helping propel profits to near-record levels. Saabira Chaudhuri joins MoneyBeat with Paul Vigna. Photo: Getty Images.
The rebound comes even as bank executives say rising costs of regulation are hurting their businesses.
Banks set aside less money to cover soured loans, helping to boost profits. At the same time, overall loan growth increased at its fastest quarterly pace since the financial crisis, topping $8 trillion in total loans outstanding for the first time since SNL began tracking the data in 1991.
Commercial lending rose at an annualized 12.6% rate in the second quarter.
Growth in consumer lending, particularly student lending, auto loans and credit cards, also has picked up, to about 6% from 3% a year ago.
On the heels of the financial crisis, some lawmakers, regulators and consumers complained that banks weren’t lending enough. But steady improvement in credit quality, or borrowers’ ability to repay loans, is prompting banks not only to lend more but also to ease their standards.
The improving picture reflects a healing of the U.S. economy five years after the official end of the recession that began in late 2007. White House officials on Friday said the U.S. labor market is about 80% back to precrisis levels.
“Everyone is delighted to see a resurgence of bank earnings that is consistent with the economic recovery nationwide,” said John Kanas, an industry veteran who is now chief executive officer of BankUnited Inc., a lender based in Miami Lakes, Fla.
So far, the results haven’t impressed investors, who remain concerned about a range of headwinds facing the industry, from growing regulatory costs and stubbornly low interest rates to steep slowdowns in mortgage lending and securities-trading revenue. Such issues have weighed on other measures of bank health, such as the returns lenders generate on their equity.
The KBW Bank Index, which tracks the stocks of 24 banks, is down 0.9% so far this year, compared with a 4.8% rise for the S&P 500 index.
Still, it has taken years for the nation’s banks to get back on track since getting pummeled in the financial crisis by soured loans and bad investments.
“The second quarter was an inflection point in the profitability story for banks,” said SunTrust analyst Eric Wasserstrom. “The bad is starting to bottom out, the good is starting to gain momentum.”
In part, the recovery has been slow because the depth and breadth of the financial crisis took many bank executives by surprise, coming after years of bumper profits driven by the housing boom and low default rates on loans. Banks earned $40.21 billion in the last three months of 2006, the industry’s third-most-profitable quarter, as mortgage lending surged. Figures from SNL, which is based in Charlottesville, Va., aren’t adjusted for inflation.
This time, the growth is being driven primarily by business loans.
“It’s definitely a lot easier [to get a loan]. There is no question about it,” said Randy McCullough, chief executive of Charles & Colvard Ltd, a jewelry company based in Morrisville, N.C. The company recently closed on a three-year, $10 million credit facility with Wells Fargo WFC -0.12% & Co.
Banks’ willingness to lend has also been good news for STW Resources Holding Corp., a water-reclamation and oil-field-services company that recently received a $3.5 million line of credit.
“Credit lines are opening up nicely in the form of equipment and project finance,” said Paul DiFrancesco, the head of finance and business development for the Midland, Texas, company. Mr. DiFrancesco declined to name the bank that granted the credit.
Regional banks reported the strongest growth in commercial and industrial lending during the second quarter. Cleveland-based KeyCorp, for example, posted a 13.4% increase in commercial, financial and agricultural loans from the year-earlier period, to $26.4 billion, helping to drive a 5.5% gain in loans overall.
The higher loan levels come as banks are easing up on their underwriting standards to borrowers. A Federal Reserve survey of senior loan officers released last week found that lenders were loosening standards and loan terms for commercial and industrial loans and commercial real-estate loans.
Several large banks had said they had eased standards, raised credit limits and reduced the minimum required credit score for credit-card loans, according to the survey.
Banks also saw their second-quarter profits lifted by a reduction in the amount of money they set aside to cover future bad loans. So-called provision expenses fell to $6.59 billion in the second quarter from $7.61 billion in the first quarter and $8.53 billion in the second quarter of 2013.
Big banks are still releasing some of those reserves, an action that pumps up profits. The four largest U.S. banks—J.P. Morgan Chase, Citigroup, Bank of America Corp.BAC -0.17% and Wells Fargo—released a total of $2.25 billion of reserves in the second quarter, up about 20% from the first quarter.
The improving profit picture isn’t trickling down to bank investors, however, because analysts and investors remain concerned about the long list of obstacles facing the industry.
One important measure of bank profitability is return on equity, or the amount of profit a bank generates as a percentage of shareholders’ equity.
RBC Capital Markets analyst Gerard Cassidy notes that the 20 largest banks he covers reported a median return on equity of 9.3% in the second quarter, up from 8.4% in the first quarter. But a return on equity below 10% “is one of the biggest obstacles to higher stock valuations,” he said.
U.S. jobs pay an average 23% less today than they did before the 2008 recession, according to a new report released on Monday by the United States Conference of Mayors.
In total, the report found $93 billion in lost wages.
Jobs lost during the recession paid an average $61,637. As of 2014, jobs in the same sectors paid an average of $47,171 annually.
“Under a similar analysis conducted by the Conference of Mayors during the 2001-2002 recession, the wage gap was only 12% compared to the current 23%–meaning the wage gap has nearly doubled from one recession to the next,” stated the Conference of Mayors in a statement.
The report also found that 73% of metro area households earn salaries of less than $35,000 a year.
President Barack Obama, who is on a two-week vacation at Martha’s Vineyard, has yet to comment on the dour economic findings.
What else is new you say…. Would Tariffs solve this problem? Weigh in below…
President Barack Obama says U.S. corporations that adopt foreign addresses to avoid taxes are unpatriotic. His own administration helped one $20 billion American company do just that.
As part of the bailout of the auto industry in 2009, Obama’s Treasury Department authorized spending $1.7 billion of government funds to get a bankrupt Michigan parts-maker back on its feet — as a British company. While executives continue to run Delphi Automotive Plc from a Detroit suburb, the paper headquarters in England potentially reduces the company’s U.S. tax bill by as much as $110 million a year.
The Obama administration’s role in aiding Delphi’s escape from the U.S. tax system may complicate the president’s new campaign against corporate expatriation. After a wave of companies announced plans to shift addresses this year, Obama last month labeled the firms “corporate deserters.”
The Delphi case also highlights how little attention the administration paid to the tax avoidance technique until recently. Only this year did Obama include a measure in his annual budget proposal to prevent some tax-driven address changes, which are known as “inversions.” Thanks to gaps in a Congressional ban on contracts with inverted companies, his administration continues to award more than $1 billion annually in government business to more than a dozen corporate expats.
The Obama administration is now trying to rescind the tax benefits of the Delphi deal that it helped broker. In June, the Internal Revenue Service told Delphi that the 2009 address change should be disregarded for tax purposes, and that Delphi must pay taxes as a U.S. company. Delphi says in a securities filing that it will “vigorously contest” the IRS’s demand.
“The recent rise in inversion transactions has the IRS and Treasury and the president understandably rattled, so they’re now trying to play catch up,” said Julie Roin, a tax professor at University of Chicago Law School. “They were worried about other things in 2009.”
U.S. companies have been inverting for decades. The pace of departures began to quicken about two years ago, as a series of drugmakers sought to become Irish. The issue caught the attention of lawmakers and the Obama administration this year. The companies are trying to escape the country’s 35 percent corporate income tax rate,the highest in the developed world.
With some of the country’s biggest companies, including Deerfield, Illinois-based Walgreen Co. and New York-based Pfizer Inc., having considered such plans, legislators are increasingly concerned that the U.S. corporate income tax base will dwindle. One Congressional estimate puts the cost of inaction at $19.5 billion in forgone revenue over the next decade.
The Treasury Department said yesterday that it is examining options for curbing inversions that wouldn’t require Congress to act. Such changes could limit inverted companies’ ability to claim interest deductions that reduce their U.S. taxable income.
To be sure, the administration’s goal in helping Delphi in 2009 was to prop up its main customer, Detroit-based General Motors Co. — not the corporate tax base. The Treasury Department said at the time that it wouldn’t micro-manage GM or force changes for government policy reasons, although it did intervene in the politically sensitive area of executive pay.
Adam Hodge, a Treasury Department spokesman, said the department’s work with Delphi was limited to providing funding through GM in order to shore up a crucial supplier for the automaker.
Saving Car Industry
“We weren’t involved in that decision regarding the tax implications in their emergence from bankruptcy,” he said, adding that he got his information from the former Treasury officials who worked on the bailout. “We were focused on trying to save the auto industry.” He declined to answer specific questions, citing the pending IRS dispute.Timothy Geithner, the Treasury secretary during Obama’s first term, also declined to comment.
Claudia Tapia, a Delphi spokeswoman, declined to comment on the IRS dispute or the government’s role in Delphi’s address change. The company’s shares have more than tripled since a 2011 initial public offering.
“Delphi was on its deathbed. They had to do something to keep the company from being liquidated,” Roin said. The favorable tax treatment may have helped save Delphi, she said.
Delphi’s official home base is now an hour’s train ride east of London, at a plant and research compound in the county of Kent. Inside windowless gray factory walls, workers in navy blue uniforms make pumps for diesel engines. Employees there said last week that top executives rarely visit.
These days, most U.S. companies trying to escape the domestic tax system do so by buying a smaller company abroad and adopting its address. Delphi took a different route, through a courtroom in Manhattan.
The journey began in 1999, when GM, the largest U.S. automaker, spun off some of its parts-making operation as an independent company. The plan was to separate Delphi so that it could thrive on its own, supplying not just GM but rivals around the world.
That didn’t work out so well. Saddled with legacy obligations to union workers, Delphi filed for bankruptcy protection in federal court in 2005. By 2009, with the nation in recession and GM itself tottering, Delphi was still limping along in bankruptcy, sustained by occasional cash infusions from GM.
Facing the worst car market in decades, GM and Auburn Hills, Michigan-based Chrysler were themselves running out of cash. Some officials said they feared an economic catastrophe if the automakers were forced to liquidate and put hundreds of thousands out of work.
In December 2008, the outgoing Bush administration approved $17.4 billion in rescue loans for GM and Chrysler. In February, Obama assembled a task force led by Steven Rattner, a Wall Street financier, to oversee the bailout.
The Treasury task force had broad authority at the automakers, because the terms of the government loans propping them up gave it veto power over major decisions.
One of the team’s first jobs was to fix Delphi. GM still depended on its former subsidiary for crucial parts like steering assemblies. A liquidation of the supplier could end up shutting down many of GM’s assembly lines, too. But the team members didn’t want GM to dump money into Delphi indefinitely. In March, the night before GM was slated to get court approval to hand over another $150 million to Delphi, the task force rejected the plan.Delphi would get no more cash from GM unless it was part of an exit from bankruptcy.
Negotiations ensued between Rattner’s task force, GM, Delphi’s executives, and its creditors.
By June 1, the task force found a solution it could endorse: the bulk of Delphi’s assets would be sold to Platinum Equity LLC, a Los Angeles-based private-equity firm. GM would provide most of the financing, and then separately would buy Delphi’s steering unit and four U.S. factories.
In his 2010 book about the bailout, “Overhaul,” Rattner credits his team with sealing the Platinum deal, working through sleepless nights to “put the parts company onto a glide path toward successful resolution.”
He doesn’t mention one detail of the transaction that was disclosed three weeks after the Platinum agreement in a public court filing: Platinum was considering registering the new Delphi in tax-friendly Luxembourg rather than in the U.S. The following month, Platinum took steps to carry out the plan, dispatching lawyers to register two Luxembourg entities. Both bore the name Platinum used for its Delphi project: Parnassus, the mountain in Greece where, according to legend, the oracle of Delphi issued her prophecies.
Meanwhile, GM made its own trip through bankruptcy court to shed its debts. On July 10, 2009, it emerged under the formal control of the Treasury Department, which had swapped some of its debt for stock and now held 61 percent of the shares. Rattner stepped down, and his task force began disbanding, handing much of its authority to a reconstituted GM board.
In an interview, Rattner said as far as he can remember, he wasn’t aware of any plan for Delphi to take a foreign address until Bloomberg News asked him about it a few weeks ago. He said others on his team handled the details of the Delphi negotiations, which he said contributed to the industry’s revival.
“The companies are making money. They’re hiring more workers. The whole supplier base, including Delphi, is doing well,” Rattner said. “In 2009, they were about to evaporate from the planet.”
The deal with Platinum soon ran into trouble.
Creditors including Elliott Management, the hedge fund run by New York billionaire Paul E. Singer, said Platinum was buying the company too cheap. So Elliott and another hedge fund, Greenwich, Connecticut-based Silver Point Capital LP, put in their own bid for the company, offering to swap their debt for new shares. On July 26, 2009, they agreed with GM to cut Platinum out of the deal.
In some ways, the Elliott deal was similar to the one Rattner’s task force approved the previous month. GM would provide crucial financing for the new company — a $1.7 billion direct investment in its equity, making it a shareholder alongside the hedge funds. GM would also buy the steering business and other assets for about $1.1 billion.
All this spending would depend on the Treasury Department’s approval. After it emerged from bankruptcy, GM ended up with $16 billion of Treasury Department funds in a special escrow account that could be tapped only with the government’s blessing.
Another detail remained the same as well: GM and the hedge funds agreed to register the new Delphi in Luxembourg or another, mutually agreeable foreign country.
The agreement was “the result of complex and extensive arms-length discussions among Delphi and its various stakeholder groups,” including creditors, GM, and the Treasury Department, Delphi said in a July 27, 2009, court filing.
A few weeks later, Elliott and Silver Point dispatched lawyers in London to register a new limited-liability partnership, Delphi Automotive LLP, using the law firm’s address near Finsbury Square.
In October, GM, with authorization from the Treasury Department, pumped $1.7 billion from its government escrow account into its new English partnership with the hedge funds. GM’s contribution entitled it to about half of the initial cash generated by Delphi, dropping to about 35 percent over time.
English Home Base
England wasn’t an obvious choice as a new home base. For years, Delphi had sought to diversify its customer base and shift production to lower-cost nations around the world; only about 5 percent of its workforce remained in the U.S. Still, the U.S. was its biggest market, and GM its largest customer. Most top executives lived near the company’s headquarters in Michigan. Delphi had some factories and employees in the U.K., but it had more in the U.S. And the three lead investors in the new Delphi — Elliott, Silver Point, and GM — were all American.
One reason for choosing England was its tax system, according to two people who were involved in the discussions and who spoke on condition of anonymity because the matter is politically sensitive. Given Delphi’s long struggle to achieve viability, a lower tax rate would give it a “fighting chance,” one of the people said.
Lower Corporate Taxes
Along with Ireland and the Netherlands, the U.K. is becoming increasingly popular with companies seeking to flee the U.S. system. In addition to Pfizer, AbbVie Inc., an Illinois drugmaker with a market value of about $85 billion, announced plans last month to become a U.K. taxpayer.
The U.K. not only has a lower corporate tax rate – 21 percent — than the U.S., but it taxes companies only on their domestic earnings. U.S. companies must pay taxes on the profits of their foreign operations — a major hindrance for Delphi, whose factories are spread around the world.
Judge Robert Drain, who approved the sale in bankruptcy court, declined to comment. Spokesmen at Elliott and Silver Point also declined to comment, and Mark Barnhill, a partner at Platinum, didn’t respond to requests for comment.
Hedge Funds Win
The Delphi takeover proved to be a huge win for the hedge funds, and for Treasury-controlled GM. Stripped of its debts and its U.S. tax domicile, the company surged in value.
GM sold its stake back to Delphi in 2011, recognizing a $1.6 billion after-tax gain. Elliott did even better, according to the New York Post. Singer’s fund turned a $300 million investment into $1.3 billion by the time Delphi sold shares to the public that year, the Post reported at the time.
After Delphi got its New York Stock Exchange listing in 2011, its stock continued to advance. With a market capitalization of about $20 billion, it’s now among the biggest and most profitable U.S. corporate expatriates.
Going public required Delphi to switch from partnership to corporate form. Becoming a U.K. corporation, though, would have required an accounting change that could have threatened its eligibility for inclusion in the Standard & Poor’s 500 Index of the largest U.S. companies. Instead, Delphi incorporated in the tiny English Channel island of Jersey, a self-governing Crown dependency that didn’t require the accounting change. Still, Delphi retained an English address for tax purposes.
Under U.K. law, a company incorporated elsewhere can be deemed domestic if it’s “managed and controlled” from there. Chief Executive Officer Rodney O’Neal, 60, an Ohio native who studied engineering at a GM-sponsored college, continues to work in Troy, Michigan, along with most of his top officers.
Delphi meets the “managed and controlled” requirement by holding the majority of its board meetings in England, said Tapia, the Delphi spokeswoman. Ten of the 11 Delphi board members are Americans. The other is from Germany.
One cloud on Delphi’s horizon is the IRS case.
In September 2009, just before GM and the creditors bought Delphi, the IRS surprised them by issuing a noticeinterpreting a five-year-old law meant to prevent companies from shifting their legal addresses offshore. This reading of the law threatened to imperil the tax benefit of Delphi’s shift to England. In securities filings, Delphi said its lawyers disagree with the interpretation.
In June of this year, the tax agency sent Delphi a notice saying that it is still a U.S. company for tax purposes. Although the back taxes it would owe wouldn’t be material, Delphi said in a securities filing, its future annualized effective tax rate would rise to 20 percent to 22 percent if the IRS prevails. That’s well below the U.S. statutory rate of 35 percent, but 3 to 5 points more than the effective rate of 17 percent Delphi paid last year. Most U.S. companies pay less than the statutory rate because of various breaks, including tax credits and deferred taxes on foreign earnings.
Analysts expect Delphi to earn about $2.2 billion before taxes next year, according to the median estimate of 12 surveyed by Bloomberg. Based on that estimate, an additional 3 to 5 percentage points in its tax rate would cost Delphi $66 million to $110 million. The analysts expect pre-tax profit to increase the following year. The IRS declined to comment.
Companies renouncing their U.S. tax citizenship became a front-page issue in April, when the drugmaker Pfizer announced plans for a British address. A few days later, Rattner wrote a column in the New York Times urging Congress to revamp the tax code, and take quick action in the meantime to prevent such tax flights.
“These days, tax avoidance feels like a full-fledged business strategy, with American citizens as the losers,” hewrote.
President Obama took up the theme last month in a speech at a college in Los Angeles, where he called for an end to what he called an “unpatriotic tax loophole.”
“My attitude is I don’t care if it’s legal — it’s wrong,” the president said. “You shouldn’t get to call yourself an American company only when you want a handout from American taxpayers.
This article is about criminal bankers in London. I’ll tell you right now, and very plainly: America’s bankers are every bit as evil—and worse. Also, our government protects those here, just like European governments do over there.
From Wall Street Insights & Indictments : “Justice? Not When There’s This Much Money.”
Lloyds just paid $350 million fine for its part in manipulating the Libor, the London Interbank Offered Rate, only the most important interest rate on the planet.
The Libor is so important because bankers use it to calculate the cost, value and price of trillions of dollars of loans from sea to shining sea.
That Lloyds got caught isn’t the travesty.
That’s just the cost of doing business.
The travesty is that Lloyds suspended two traders linked to the manipulation scheme. Not fired –suspended.
But it gets better.
One of the traders, who isn’t supposed to be named – psst, it’s Clive Jones – has been suspended before. That’s right. Jones rejoined Lloyds in mid-2012 as global director of money markets after being suspended for presumably manipulating Libor.
Of course, Jones said he didn’t do that. And, of course, the bank’s internal investigation team presumed he didn’t, so they let him come back to work on his next bonus.
The other derivatives trader the bank suspended, who you’re not supposed to know, is John Argent(while British, I don’t think he’s related to Rod Argent of “Hold Your Head Up” fame). And he’s probably going to get his job back, too.
These sociopaths add nothing to the real economy. They produce no products, provide no necessary services, but make part of their gains by playing complex games with numbers, and the rest by skimming fees from others—in that regard, they’re like toll booth operators on the financial highway who personally invest nothing to build or maintain the road.
They bet high and win, and they get big bonuses. They bet high and lose, and you (the taxpayer) bail them out, because they’re “too-big-to-fail,” of course. They manipulate and break the law to reap trillions, and pay a fine of a few hundred million or a billion, and keep on rolling.
All of this made possible by the Federal Reserve, and Central Banks around the world, who exist almost solely to protect the criminality and its gains, and to invest a part of their booty in buying politicians who will keep the show going.
Who owns the stock of the so-called Federal Reserve? Private banks do. And you think the Fed cares about protecting you, not the banks? Puh-leeze!
Read more at Political Outcast
This is a NATIONAL EPIDEMIC of Highway Robbery!
We have written many times about “civil forfeiture” or “asset forfeiture” (see here,here, here, etc). It involves the police taking your property. The idea is that you should lose what you have gained by crime. But the law works so that you don’t have to be convicted. If the cops grab it you have to prove that you should get it back.
According to Radley Balko in the Washington Post , “Rand Paul introduces bill to reform civil asset forfeiture.”
The law, called the Fifth Amendment Integrity Restoration (FAIR) Act, would require the government to prove its case in a court of law before it could seize assets.
The bill would also require states “to abide by state law when forfeiting seized property.” This is important. Currently, a number of state legislatures across the country have passed reform bills to rein in forfeiture abuses. The problem is that the federal government has a program known as “adoption” or “equitable sharing.” Under the program, a local police agency need only call up the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives or similar federal agency. That agency then “federalizes” the investigation, making it subject to federal law. The federal agency then initiates forfeiture proceedings under the laxer federal guidelines for forfeiture. The feds take a cut and then return the rest — as much as 80 percent — back to the local agency.
What really bothers me about this bill is that no one has done it before. Why not? We have had conservatives in Congress and even in the Senate before Ron Paul. We virtually owned the government from 2000 to 2006. Yet never before has any Republican offered such a basic law to restore civilization?
Why is that?
How can you justify Civil Asset Forfeiture?
* My cash or possessions can be taken by The State upon mere SUSPICION that they were used in a crime
* I must then PROVE my innocence to regain my property — the exact OPPOSITE of “innocent unless proven guilty.”
This isn’t a rare event. It’s commonplace. Cops depend on it to fund their budgets and buy military equipment for their departments. This isn’t “law enforcement.” It’s organized crime.
In contrast, the 5th Amendment says…
“No person shall be… deprived of… property, without due process of law.”
Eternal justice says…
“The accuser must prove the accused is guilty.”
Morality at even the toddler stage says…
“Don’t take what doesn’t belong to you.”
If you support this atrocity how can I EVER trust you to “govern” me?.
This is why I need you to support Sen. Rand Paul’s S.2644, the FAIR Act, which would…
* require CLEAR AND CONVINCING evidence that property was used in a crime
* require CLEAR AND CONVINCING evidence that the owner of the property was complicit to the use of their property in the commission of a crime
* end federal-state “partnerships” that reward asset seizures
* end the “profit motive” in federal law enforcement by having any forfeiture proceeds go to the Treasury instead of the Justice Department
MORE MASSIVE HYPOCRISY! Aid Israel in Killing of Palestinians due to “Hamas” …. Aid Qatar while they affiliate with ‘Hamas’(WHO is HAMAS?)
Apaches and Javelin defense systems are heading off to Qatar as part of our wonderful relationship with the terror-sponsoring nation that also happens to share close ties with Hamas and Al Qaeda. The weapons are valued at $11 billion.
Examiner.com reported that the Qataris will also be privy to “the main sub-components of the ECS [Engagement Control System]..The ECS is air conditioned, pressurized (to resist chemical/biological attack), and shielded against electromagnetic pulse (EMP).”
Qatarian royal family with Ismail Haniya Hamas terrorists Organization leader
That is very ironic given we aren’t even protecting ourselves from EMPs and we could do so relatively cheaply.
Qatar is the country where the five Taliban terrorists were released in exchange for deserter Bowe Bergdahl.
Congressman Brad Sherman recently called out Qatar for its funding of Hamas.
Qatar’s royal family are tied to Al Qaeda. They tipped off Khalid Sheik Mohammed when we were hunting him down.
Our ally, Saudi Arabia, has threatened to blockade Qatar over their terrorism resulting from their close ties with Egypt’s Muslim Brotherhood.
We are giving $11 billion to these friends of Hamas, who are at war with our ally Israel, while we are at the same time preparing to fire 30,000 soldiers over the next 17 months so we can bring our Army down to the size of Turkey’s. Also at the same time, Congress is pushing the Enlist Act which will encourage illegal aliens to join the military. The Pentagon is also looking to keep and seek out Muslim military.
Former Al Jazeera Head on Quitting, the Arab Spring, and Qatar’s Role
Qatar’s foreign domestic workers face abuse and exploitation, Amnesty warns
Victims of forced labour and human trafficking describe 100-hour weeks, as well as physical and sexual abuse from employers – more HERE
cant wait for all money to be electronic so the garnishing will be easier… NOT! The EPA can start with itself, and its controllers!
Accused violators of pollution laws would have little recourse
The Environmental Protection Agency has quietly floated a rule claiming authority to bypass the courts and unilaterally garnish paychecks of those accused of violating its rules, a power currently used by agencies such as the Internal Revenue Service.
The EPA has been flexing its regulatory muscle under President Obama, collecting more fines each year and hitting individuals with costly penalties for violating environmental rules, including recently slapping a $75,000 fine on Wyoming homeowner Andy Johnson for building a pond on his rural property.
“The EPA has a history of overreaching its authority. It seems like once again the EPA is trying to take power it doesn’t have away from American citizens,” Sen. John Barrasso, Wyoming Republican, said when he learned of the EPA’s wage garnishment scheme.
Others questioned why the EPA decided to strengthen its collection muscle at this time.
EPA officials did not respond to repeated questions by The Washington Times about why they thought it was necessary to garnish people’s wages.
The EPA announced the plan last week in a notice in the Federal Register, saying federal law allows it “to garnish non-Federal wages to collect delinquent non-tax debts owed the United States without first obtaining a court order.”
The agency cited authority under the Debt Collection Improvement Act of 1996 that centralized federal collection operations under the Treasury Department, which oversees garnishments of wages or tax refund checks.
Under the law, every federal agency has the authority to conduct administrative wage garnishment, provided the agency adopts approved rules for conducting hearings where debtors can challenge the amount of debt or terms of repayment schedule, a Treasury official said.
Still, the rule would give the EPA sweeping authority to dictate how and whether Americans could dispute fines and penalties, even as the amount of EPA fines collected from individuals, businesses and local governments steadily increase.
Putting the collection powers on a fast track, the agency announced it in the Federal Register as a “direct final rule” that would take effect automatically Sept. 2, unless the EPA receives adverse public comments by Aug. 1.
The EPA said it deemed the action as not a “significant regulatory action” and therefore not subject to review.
The negative reactions began almost immediately.
In a comment letter submitted to the EPA, the conservative Heritage Foundation faulted the rule for giving the government “unbridled discretion” in controlling the process for challenging fines and wage garnishment, such as dictating the site of a hearing without consideration of the time and travel expense placed on the accused debtor.
The rule allows the EPA to decide whether a debtor gets a chance to present a defense and then picks whomever it chooses to serve as a hearing officer, even someone not trained as an administrative law judge, wrote David S. Addington, group vice president for research at The Heritage Foundation.
It also puts the burden of proof on the debtor, not the EPA, he said.
The EPA has been on the front lines of the battle over Mr. Obama’s climate change agenda, including issuing proposed rules that would require coal-fired power plants to cut carbon dioxide emissions by 30 percent over 15 years.
Critics say it will cause massive increases in the cost of electricity, lead to power shortages and eliminate jobs, while making scant impact on the amount of greenhouse gasses emitted worldwide.
The agency has been a magnet for criticism over new rules on things such as wood-burning stoves and small streams or ponds on private land, including waterways on farms and golf courses.
Storm the Gates!
By Barry Donegan
Via Ben Swann
Ever since Janet Yellen took over as Chair of the Federal Reserve, life has changed for the other well-to-do residents of her Georgetown-area, Washington DC gated community. The Wall Street Journal notes that an armed encampment has formed outside of one of her neighbor’s houses in the Hillandale community, and the federal government is paying thousands per month to rent an adjacent town home, which had at one point been equipped with a massive, brightly-lit camera on the roof, peering down on disgruntled neighbors. 7,000 pound security trucks noisily plow through the neighborhood to pick her up each morning, spilling fluids on the street in violation of Hillandale’s rules.
Upset neighbors have penned a lengthy list of complaints about the uniformed, taxpayer-funded security detail. Vans full of armed police speed through Hillandale in violation of its 15 mile-per-hour speed limit, intimidating residents. Officers behave in an unprofessional manner, loudly socializing, smoking cigarettes, and scarfing down fast food. Also, the extreme visibility of the police presence offends other homeowners, who chose the neighborhood for its strict, privately-enforced rules aimed at keeping the community quiet and aesthetically pleasing. FBI Director Bob Mueller lives in the neighborhood as well, and his security detail stands in stark contrast to the one protecting Yellen. A neighbor who chose to remain anonymous out of fear of federal retaliation told The Wall Street Journal, “Bob Mueller, who you would think would have a much more dangerous job dealing with terrorists all over the world, had people who were businesslike, didn’t socialize and waited for him outside the gate. Now we have this group, overweight, wearing the most ridiculous blue uniforms with the most ridiculous blue caps, and they have guns that are visible.”
Some residents in the area are pushing for new rules to be adopted by the gated community to prevent security outfits from renting property in the neighborhood. The Hillandale Board and Covenant Committee maintains strict rules and enforces them on the other homeowners in the area in the interest of protecting property values, as homes in Hillandale sometimes sell for millions of dollars. The president of the Hillandale board, a real estate agent, has been accused of having self-interested motives and throwing neighbors under the bus by renting a town home to the Federal Reserve.
The heightened police presence doesn’t comfort everyone living in Hillandale. Said another resident, “Some neighbors say it’s great, all the security that is in the neighborhood. But these characters are only here for Janet Yellen. They’re not going to be distracted by robbers, rapists or any other thing. Besides, these guys couldn’t catch a thief if their lives depended on it.”
A number of residents are calling for the Federal Reserve, the FBI, or an independent, third-party consultant to conduct an investigation into the security detail to see if it can be done in a more cost-effective, professional, and less intrusive manner. It is worth noting that the Federal Reserve, a private bank, was given this armed police force as a part of the USA PATRIOT Act. Under Title III, Subtitle B, Section 364 of the law, the Federal Reserve was granted armed officers to protect the bank’s property and top officials.
Read More at Ben Swann
The world’s first such opportunity for patients and growers to interact and build relationships will take place over Independence Day weekend.
Discerning medical marijuana users will have a new way to get the weed they need over Independence Day weekend.
The world’s first medical marijuana farmers market is set to take place in L.A. from July 4-6, allowing patients to purchase cannabis directly from growers.
The market hopes to create a better relationship between growers and patients, giving them a new way to safely access marijuana from trustworthy suppliers.
“This is an opportunity that unfortunately is not seen as much as we would like,” California Heritage Market executive administrator Paizley Bradbury said of the chance for patients and growers to interact. “We’re hoping that the California Heritage Market can bridge this gap and provide a new and affordable experience for those who need safe access they can trust.”
The market also seeks to educate users, with the author of Modern Marijuana Living slated to be there.
The market will take place from July 4-6 from 10 a.m.-8 p.m. in East Los Angeles, at the new West Coast Collective dispensary at 1500 Esperanza Street.
Globalism ….. Work more get paid less, pay more for everything. DECENTRALIZE AND REPEAL!
U.S. workers protested job losses to foreign workers by displaying American flags in their cubicles
Computerworld - This is the story of an IT worker who was replaced by a worker on an H-1B visa, one of a number of visa holders, mostly from India, who took jobs at this U.S. company. Computerworld is not going to use the worker’s name or identify the companies involved to protect the former employee from retaliation. For purposes of this story, the worker has been given initials — A.B. (They’re not the person’s real initials.)
At A.B.’s company, about 220 IT jobs have been lost to offshore outsourcing over the last year. A.B. is telling the story because, initially, there was little knowledge among fellow employees about H-1B visa holders and how they are used. They didn’t know that offshore outsourcing firms are the largest users of H-1B visas, or exactly how this visa facilitates IT job losses in the U.S.
“I think once we learned about it, we became angrier toward the U.S. government than we were with the people that were over here from India,” A.B. said, “because the government is allowing this.”
The IT workers at this firm first learned of the offshore outsourcing threat through rumors. Later, the IT staff was called into an auditorium and heard directly from the CIO about the plan to replace them. It would take months for the transition to be completed, in part because of some new system installations.
Training the replacement workers involved holding morning-long WebEx meetings several times a week with offshore outsourcing staff based in India. The sessions were recorded as details about the environment, including diagrams and scripts, were shared.
As they moved closer to the termination date for the U.S. workers, the overseas employees would follow or shadow, via WebEx sessions, everything an IT worker did during the day. The outsourcing firm’s onshore staff helped to coordinate these efforts, but also worked to untangle the meaning of some of the questions.
The overseas workers did not appear to have much practical experience, and the same questions were asked repeatedly, A.B. said.
Before they lost their jobs, A.B.’s co-workers decided to made a subtle and symbolic protest over what was happening: As the H-1B visa workers gradually took over the offices once occupied by U.S. workers, one employee brought in a bunch of small American flags on sticks.
The flags were retrofitted so they could fit into the walls of the cubicles.
(Computerworld viewed a photograph of the cubicle flags, but decided not to publish it to protect A.B’s identity.)
The flags were displayed, cubicle after cubicle, much like way flags are hung on homes in a residential neighborhoods on the 4th of July. They were visible to anyone walking down the hall. “That was the only thing that we could do,” A.B. said. “We felt that we were making a statement. But to be honest, I don’t think the Indian workers fully understood what was going on.”
- Cantor, a reliable ‘yes’ vote for raising the H-1B visa cap, is unseated
- This IT worker had to train an H-1B replacement
- An H-1B cap hike would mean a grim future for workers
- Frustration, anger over new H-1B rule finds voice on U.S. site
- H-1B loophole may help California utility offshore IT jobs
- H-1B applications surge to 172,500, twice the cap
- U.S. hits H-1B cap with ‘high number’ of petitions
- Durbin warns Republicans standalone H-1B hike plan will fail
- Offshore firms took 50% of H-1B visas in 2013
- H-1B visas produce net IT job boost, trade group says
Record Tax Revenue of nearly 2 Trillion for 2013, Govt will still need to “borrow” another 1/2 trillion?
Federal Tax Revenues Set Record Through May; Feds Still Running $436B Deficit
(CNSNews.com) – Federal tax revenues continue to run at a record pace (in inflation-adjusted dollars) in fiscal 2014, as the federal government’s total receipts for the fiscal year closed May at an unprecedented $1,934,919,000,000, according to the Monthly Treasury Statement.
Despite record revenue, the federal government still ran a deficit of $436.382 billion in the first eight months of the fiscal year, which began on Oct. 1, 2013 and will end on Sept. 30, 2014.
In the month of May alone, the federal government ran a deficit of $129.971 billion–bringing in $199.889 billion in revenue while spending $329.860 billion.
The White House Office of Management and Budget has estimated that in the full fiscal 2014, the federal government will collect $3.001721 trillion in taxes, spend $3.650526 trillion, running a deficit of $648.805 billion.
The OMB has also estimated that, while running that deficit, the federal government will collect a record amount in inflation-adjusted tax revenues.
When adjusted for inflation (to constant 2014 dollars), the second-greatest federal tax haul through May was in fiscal 2007. By the end of May that year, the federal government took in approximately 1.908 trillion in total receipts in constant 2014 dollars.
The single largest source for the federal government’s record tax receipts in the first eight months of FY 2014 was the individual income tax, which brought the Treasury $903.024 trillion. The second largest source was what the Treasury calls “Social Insurance and Retirement Receipts,” which includes the Social Security payroll tax, the unemployment insurance tax and other retirement taxes. This accounted for $694.268 billion in tax revenue.
The third largest source of federal revenue in the first eight months of fiscal 2014 was the corporation income tax, which brought in $164.840 billion.