Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Bankruptcy

As Oil Price Drops, Iraq Faces Existential Threat

This article appeared online at TheNewAmerican.com on Monday, February 1, 2016:  

In Iraq the culture of dependency is so great that the drop in the price of oil threatens the country’s very existence. With every Iraqi dependent upon the government for essentials like sugar, tea, rice and cooking oil, and the government dependent upon oil for more than 90 percent of its budget, the existential threat is real.

In January 2015 the government, headed up by President Fuad Masum and Prime Minister Haider al-Abadi, passed a budget that

Keep Reading…

Social Security Inching Its Way Toward Bankruptcy, Says CBO

This article appeared online at TheNewAmerican.com on Monday, January 25, 2016:  

The latest report from the Congressional Budget Office (CBO) on the financial condition of Social Security merely confirms what the Social Security trustees have been saying for years: The welfare-state program that spent nearly a trillion dollars last year isn’t sustainable.

In July Treasury Secretary dazzled the press with his waffle: The program is safe and sound, but it faces problems:

Keep Reading…

Interior Secretary Halts All New Coal Mining on Public Lands

This article appeared online at TheNewAmerican.com on Friday, January 15, 2016:   

 

On Friday President Obama’s Interior secretary, Sally Jewell (pictured above), announced a moratorium on new federal coal leases, claiming that her agency needs time to review the rules:

Keep Reading…

Vulture Funds are Saving American oil

This article was published by The McAlvany Intelligence Advisor on Wednesday, January 13, 2016:  

Over time vultures have gotten a bad rap. Some refuse even to admit that the American Bald Eagle is a vulture, preferring to think of it as a magnificent example of strong individualism and pride. In fact they are birds of prey, scavenging the carcasses of dead animals or, in the case of the Bald eagle, swooping down to snatch an unsuspecting fish from the water with its powerful talons.

Vulture funds work in somewhat the same way. To put it crudely, they

Keep Reading…

Puerto Rico Stiffs Bond Investors on Monday

This article was published by The McAlvany Intelligence Advisor on Monday, January 4, 2015:  

Coat of Arms of Puertor Rico

Coat of Arms of Puertor Rico

Keep Reading…

OPEC Ignores Crude Oil Glut, Vows to Continue Pumping Flat Out

This article appeared online at TheNewAmerican.com on Monday, December 7, 2015:  

Following a contentious six-hour meeting on Friday, OPEC oil ministers meeting in Vienna announced that nothing will change: They will continue to pump at maximum rates despite the growing glut of oil in the world. Predictably, crude oil prices dropped, along with wholesale gasoline prices.

The fragile cartel’s members are pumping close to 31.5 mbd (million barrels per day) and would pump more if they could. They are already above the mythical “ceiling” of 30 mbd. When Iran, which currently provides 2.7 mbd to that number, recovers from U.S.-imposed sanctions, it expects to pump four mbd by next summer, adding further downside pressure on crude oil prices.

At these prices nearly every barrel OPEC members sell to the world market is sold at a loss. But the ministers are persuaded that,

Keep Reading…

Saudi Arabia Announces Its Willingness to “Stabilize” Oil Prices

This article appeared online at TheNewAmerican.com on Tuesday, November 24, 2015:  

On Monday Saudi Arabia’s council of ministers confirmed the rumors that the leader of the OPEC cartel is now willing to “stabilize” world oil prices, saying in its announcement:

Keep Reading…

Fourth Republican Debate: Feisty, Hilarious, Little Change in Polls

This article appeared online at TheNewAmerican.com on Wednesday, November 11, 2015:  

A more orderly and respectful atmosphere surrounded the fourth Republican debate on Tuesday night, a sharp contrast to last month’s debate where the moderators became the issue. That didn’t mean there were no fireworks, or disagreements, just that the tone was more serious, as the candidates tried to shore up their positions and their poll numbers as they approached the final debate in December.

The topics included questions on

Keep Reading…

Home Ownership Rate Lowest Since President LBJ

This article appeared online at TheNewAmerican.com on Wednesday, July 29, 2015:  

English: 904 S. 3rd, Mount Vernon, Washington....

According to the Census Bureau, home ownership in the United States has now dropped to the lowest level since 1967, and estimates are that the decline will continue to the lowest level ever recorded. The rate for the second quarter of 2015 was 63.4 percent, the lowest rate since Lyndon Johnson was president. The rate stands a good chance of reaching the all-time low, 63 percent, set in 1965 when the U.S. government began keeping track of such a statistic.

It wasn’t supposed to happen. In 1995 after the rate dipped to a breath-taking, eye-popping 64.7 percent from the previous 50-year average of 65.3 percent, according to the Census Bureau, the Clinton administration issued a call to arms! The government must do something!

When then-President Bill Clinton announced his “National Homeownership Strategy” in May 1995, he said,

Keep Reading…

Social Security Disability Trust Fund Could Be Depleted by Late 2016

This article appeared online at TheNewAmerican.com on Thursday, July 23, 2015:  

Every year the language of the trustees of the Social Security system becomes more strident, and every year the managers of the program kick the can further down the road. In its report issued on Wednesday, the Social Security and Medicare Board of Trustees stated that “Social Security’s Disability Insurance (DI) Trust Fund now faces an urgent threat of reserve depletion, requiring prompt corrective action by lawmakers if sudden reductions or interruptions in benefit payments are to be avoided.” The report noted:

Keep Reading…

Is Puerto Rico America’s Greece?

This article appeared online at TheNewAmerican.com on Monday, July 6, 2015: 

After running deficits every year since 1973 and paying for them by borrowing, the U.S. commonwealth of Puerto Rico has finally run out of options. On June 28, the island’s Governor Garcia Padilla admitted that its $73 billion “debt is not payable.… We will [shortly] be in a death spiral.” Padilla added: “There is no other option. I would love to have an easier option. This is not politics, this is math.”

The math is persuasive.

Keep Reading…

Schumpeter’s Gale Blows Away Colt

This article was published by the McAlvany Intelligence Advisor on Wednesday, June 17, 2015:

Glock 17 9mmPara (erste Ausführung - Februar 1986)

Glock 17

 

Schumpeter’s Gale is the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Often credited with first developing this first axiom of the free market, Austrian economist Joseph Schumpeter was merely expanding on Karl Marx’s hopeful prediction that capitalism would eventually destroy itself. Out of the ashes would rise communism.

Marx and Schumpeter were half right:

Keep Reading…

Colt Gun Maker Declares Bankruptcy

This article first appeared online at TheNewAmerican.com on Tuesday, June 16, 2015:

Colt Defense, the once high-flying iconic manufacturer of the Colt .45 single action Army revolver known as the “Peacemaker” — the “gun that won the West” — and the 1911 semi-automatic pistol designed by John Moses Browning, ran out of airspeed and altitude on Sunday, and declared bankruptcy.

In his press release, Keith Maib, chief restructuring officer of Colt Defense, LLC, put the best face he could on a disaster that has been unfolding for years: 

Keep Reading…

Do Negative Interest Rates Portend a Negative Economy?

This article first appeared online at TheNewAmerican.com on Monday, May 4, 2015:

Last Thursday the London Daily Telegraph’s assistant editor, Jeremy Warner, reported an astonishing statistic: Almost a third of all government debt in the eurozone is paying negative interest rates. That’s more than $2 trillion in government bonds, and, it appears, investors are happy that they aren’t paying even more.

Fifty percent of French bonds now trade with a negative yield, while 70 percent of Germany’s bonds trade at a negative yield. More remarkably, in Spain, which was on the verge of insolvency just a few years ago, 17 percent of its government bonds now trade with a negative yield.

This is counterintuitive, which explains why Keynesians, those who believe that “demand” in an economy can be artificially increased by manipulating taxes and the money supply, have no explanation for it. In theory,

Keep Reading…

Hybrid Owners Trading Them in for SUVs

This article was first published by The McAlvany Intelligence Advisor on Friday, April 24, 2015:

English: A Tesla Roadster, Reva i and Ford Th!...

A Tesla Roadster, Reva i and Ford Th!nk electric

 

Back before his credibility had been so greatly tarnished along with his confidence in government as a solution to every problem, President Obama made a promise in his 2011 State of the Union speech that realists knew he couldn’t keep: he was going to put one million electric and hybrid vehicles (EVs) on the road by 2015:

With more [government funded] research and [tax credit] incentives, we can break our dependence upon oil … and become the first country to have a million electric vehicles on the road by 2015.

The Department of Energy (DOE) called his proclamation a “key milestone toward dramatically reducing dependence on oil and ensuring that America leads in the growing electric vehicle manufacturing industry.” The agency boasted that already those manufacturers were ramping up to produce more than 1.2 million EVs by 2015, thanks to government subsidies, consumer tax credits, federally funded programs to help cities prepare for the growing demand for EV charging stations, as well as continued and increasing “support” [read: grants and loans] for R and D.

It’s 2015. The manifesto proclaimed from on high in January 2011 has fallen a little short:

Keep Reading…

Boston University Economist Calls Out Congress on Enormous Fiscal Gap

This article first appeared online at TheNewAmerican.com on Thursday, March 12, 2015:

Logo of the United States Government Accountab...

Logo of the United States Government Accountability Office

During his annual trek to Washington, D.C., to lecture Congress on its spendthrift habits, Boston University economist Laurence Kotlikoff took the gloves off this year. He dressed down Senator Mike Enzi, chairman of the Senate Budget Committee, along with the committee’s members:

Let me get right to the point. Our country is broke. It’s not broke in 75 years or 50 years or 25 years or 10 years.

 

It’s broke today.

 

Indeed, it may well be in worse fiscal shape than any development country, including Greece.

It isn’t just Enzi, or his committee, or the present Congress, that’s responsible for a fiscal gap that’s vastly larger than that projected by the Congressional Budget Office (CBO). It’s the idea that the country can borrow without limit because

Keep Reading…

Moody’s Downgrades Chicago Again

This article first appeared online at TheNewAmerican.com on Tuesday, March 3, 2015:

English: in Chicago, Illinois, USA.

Downtown Chicago, Illinois

Within hours of Moody’s Investors Service announcing another downgrade to Chicago’s general obligation bonds last Friday, Mayor Rahm Emanuel’s administration responded, saying that Moody’s was out of touch with reality:

We strongly disagree with Moody’s decision to reduce the city’s credit rating and would note that Moody’s has been consistently and substantially out of step with the other rating agencies [Standard & Poor’s and Fitch Ratings], ignoring progress that has been achieved.

At the moment those other two agencies rate Chicago’s debt at A-plus or A-minus, each with a negative outlook. But in light of an imminent court ruling that could invalidate efforts to cut pension benefits, along with the crushing and increasing burden of those benefits, observers are just waiting for the next two shoes to drop.

As Moody’s noted, its downgrade will stand even if the court validates those pension modifications: 

Keep Reading…

Will this be OPEC’s Final Failed Gamble?

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, February 18, 2015: 

Cover of "The Prize: The Epic Quest for O...

Six years ago historian Daniel Yergin wrote in The Prize about OPEC’s failed gamble in 1986. The cartel tried to secure its preeminent place among the world’s oil producers by forcing crude oil prices down:

Was the price now poised for a great fall? Most of the exporters [primarily OPEC] thought so, but they expected no more than a drop [from more than $30 a barrel] to $18 or $20 a barrel, below which, they thought, production … would not be economical….

 

Actually, operating costs – the cash costs to extract oil – were only $6 per barrel [at the time], so there would be no reason to shut down production at any price above that.

The cartel was hoping to squeeze out marginal producers, which would result in cuts in supply, allowing it to raise prices at will. It didn’t work then, and it isn’t working now. The Saudis apparently suffer from an appalling lack of understanding about how the free market works.

Keep Reading…

Judge Approves Detroit’s “Grand Bargain” to End Bankruptcy

 

English: City seal of Detroit, Michigan.

City seal of Detroit, Michigan.

This article first appeared at TheNewAmerican.com on Monday, November 10, 2014:

 

 

The party began immediately after bankruptcy Judge Steven Rhodes approved the plan to get Detroit out of bankruptcy last Friday. Rod Meloni, a local journalist who has been following Detroit’s woes from the beginning, was there:

There was nothing short of a party atmosphere around the federal courthouse….

Attorneys hugged, shook hands, slapped backs, promised to get together soon and said goodbye.

The only thing missing was the signing of yearbooks!

This was evidence of the rule that no matter who takes a haircut in a bankruptcy, the attorneys always get paid first, one hundred cents on the dollar. As of October 2013, those fees had mounted to

Keep Reading…

Stockton Bankruptcy Judge Hammers CalPERS

This article first appeared at The McAlvany Intelligence Advisor on Friday, October 3, 2014:

English: CalPERS headquarters at Lincoln Plaza...

CalPERS headquarters at Lincoln Plaza in Sacramento

All Franklin Templeton Investments wanted was a fair shake. All CalPERS wanted is what it already has: exemption from bankruptcy laws. As attorneys for CalPERS – the California Public Employees Retirement System – tried to defend the country’s largest pension plan from contentions that it was getting off scot-free in the Stockton bankruptcy reorganization plan while other creditors were getting hammered, they sounded rather silly.

They claimed that a combination of state laws and statutes dating back into history protected the $300 billion that CalPERS manages from sharing the pain with other creditors in bankruptcy proceedings. They referred to something called

Keep Reading…

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.