The Vanishing Middle Class: Prejudice and Power in a Dual Economy, Author: Peter Temin.
By Lynn Parramore – America is not one country anymore. It is becoming two, each with vastly different resources, expectations, and fates.
In one of these countries live members of what Temin calls the “FTE sector” (named for finance, technology, and electronics, the industries which largely support its growth). These are the 20 percent of Americans who enjoy college educations, have good jobs, and sleep soundly knowing that they have not only enough money to meet life’s challenges, but also social networks to bolster their success. They grow up with parents who read books to them, tutors to help with homework, and plenty of stimulating things to do and places to go. They travel in planes and drive new cars. The citizens of this country see economic growth all around them and exciting possibilities for the future.
They make plans, influence policies, and count themselves as lucky to be Americans.
The FTE citizens rarely visit the country where the other 80 percent of Americans live: the low-wage sector. Here, the world of possibility is shrinking, often dramatically. People are burdened with debt and anxious about their insecure jobs if they have a job at all. Many of them are getting sicker and dying younger than they used to. They get around by crumbling public transport and cars they have trouble paying for. Family life is uncertain here; people often don’t partner for the long-term even when they have children. If they go to college, they finance it by going heavily into debt.
They are not thinking about the future; they are focused on surviving the present. The world in which they reside is very different from the one they were taught to believe in. more> https://goo.gl/LKhYy6
Posted in Banking, Book review, Business, CONGRESS WATCH, Economy, Education, Healthcare, Leadership
Tagged Capital, Debt, Government, Health, Jobs, Leadership, Space, United States
By Chris Bryant Tara Lachapelle – The global M&A boom has left a giant footprint on corporate balance sheets, and we’re not just talking about all that debt. Goodwill — the difference between what assets are worth on paper and how much an acquirer paid for them — is also soaring, and that could spell trouble for corporate earnings.
At S&P 500 companies, goodwill has risen by two-thirds over the past decade and accounts for more than one-third of net assets.
In the past two years, takeover targets have sold for a median of 11 times Ebitda — essentially 11 years of profit — whereas the multiple was only about 7-9 times in the years leading up to the recent merger frenzy.
As for who’s sitting on the most absolute goodwill, beer takes the cake. Anheuser-Busch InBev SA’s goodwill doubled to a cool $136.5 billion after its $100 billion takeover of SAB Miller Plc.
Impairments deplete shareholder equity, which makes lenders and bondholders nervous. Companies that financed takeovers with lots debt are particularly exposed. more> https://goo.gl/Ube7e8
Posted in Banking, Business, Economy, Education, History, Leadership, Media, Net
Tagged Business, Capital, Debt, Financial crisis, Government, Leadership, M&A
By Lisa Abramowicz – The biggest foreign buyers of U.S. government bonds are quickly retreating after years of absorbing record amounts of the securities.
This is an important dynamic to understand when looking at the potential fate of the $13.6 trillion Treasury market in 2017.
For years, many countries were huge buyers of Treasuries as they built up their foreign-currency reserves. Many now need the money and are cashing out.
China, for example, is using tons of cash to support its depreciating yuan and bolster its financial system, which is showing signs of stress as the government seeks to curb riskier lending practices. Brazil’s economy is in shambles, meaning that nation needs all the free cash it can get to plug its budget gaps. more> https://goo.gl/eov5dm
Posted in Banking, Economy, History, Leadership, Media
Tagged Banking reform, Bonds, Capital, Debt, Financial crisis, Government, United States