U.S. Recovery's 2-Year Anniversary Arrives With Little To Celebrate
"The spoils have really gone to capital, to the shareholders," says David Rosenberg, chief economist at Gluskin Sheff + Associates in Toronto.
Corporate profits are up by almost half since the recession ended in June 2009. In the first two years after the recessions of 1991 and 2001, profits rose 11 percent and 28 percent, respectively.
And an Associated Press analysis found that the typical CEO of a major company earned $9 million last year, up a fourth from 2009.
Driven by higher profits, the Dow Jones industrial average has staged a breathtaking 90 percent rally since bottoming at 6,547 on March 9, 2009. Those stock market gains go disproportionately to the wealthiest 10 percent of Americans, who own more than 80 percent of outstanding stock, according to an analysis by Edward Wolff, an economist at Bard College.
But if the Great Recession is long gone from Wall Street and corporate boardrooms, it lingers on Main Street:
-- Unemployment has never been so high -- 9.1 percent -- this long after any recession since World War II. At the same point after the previous three recessions, unemployment averaged just 6.8 percent.
-- The average worker's hourly wages, after accounting for inflation, were 1.6 percent lower in May than a year earlier. Rising gasoline and food prices have devoured any pay raises for most Americans.
-- The jobs that are being created pay less than the ones that vanished in the recession. Higher-paying jobs in the private sector, the ones that pay roughly $19 to $31 an hour, made up 40 percent of the jobs lost from January 2008 to February 2010 but only 27 percent of the jobs created since then.
Berkshire's Charles Munger: Housing Bubble Caused By 'Megalomania, Insanity, And Evil'
Charles Munger, the always-quotable vice chairman of Berkshire Hathaway, wasn’t mincing words on Friday.
“The bubble in America was caused by some combination of megalomania, insanity and evil in, I would say, investment banking, mortgage banking,” Munger said at a conference in Pasadena.
In assigning responsibility for the housing bubble that precipitated the financial-sector collapse of 2008, and ushered in a period of prolonged economic contraction, Munger also took issue with the accounting industry, calling it "contemptible" for its role in the debacle.
And he had particular scorn for Richard Fuld, the former chairman and CEO of Lehman Brothers.
“I would guess that Dick Fuld has not a single ounce of contrition wherever he sits today,” Munger said.
He had a qualified compliment for former Federal Reserve chairman Alan Greenspan, whom he called “a smart man” but one who “totally overdosed on Ayn Rand at a young age.”
A preliminary examination of executive pay in 2010, based on data available as of April 1, found that the paychecks for top American executives were growing again, after shrinking during the 2008-9 recession.
The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.
Philippe P. Dauman, the CEO, Viacom, $84.5 million (top of the list)
Leslie Moonves, CBS Corporation, $56.9 million (32% raise)
Michael White, DirecTV, $32.9 million
Brian L. Roberts, Comcast, $28 million
Robert A. Iger, Walt Disney Company, $28 million
Gregg W. Steinhafel, Target, $23.5 million
Michael E. Szymanczyk, Altria, $20.77 million
Richard C. Adkerson, Freeport-McMoRan Copper & Gold, $35.3 million
Most ordinary Americans aren’t getting raises anywhere close to those of these chief executives. Many aren’t getting raises at all — or even regular paychecks. Unemployment is still stuck at more than 9 percent.
Bank Of America CEO Brian Moynihan Subpoenaed By New York Attorney General
NEW YORK -- New York Attorney General Eric Schneiderman is not backing off a civil fraud probe into whether Bank of America deliberately misled shareholders about the massive losses on Merrill Lynch's books before its 2008 purchase of the investment bank.
The NY AG, who took over from Andrew Cuomo this year, has subpoenaed Bank of America Corp. CEO Brian Moynihan and other executives of the Charlotte, N.C.-based bank seeking new depositions, The Wall Street Journal reported online late Friday, citing unidentified people familiar with the matter.
A spokeswoman for the New York AG's office declined to comment.
A Bank of America spokesman was not immediately able to be reached for comment. The bank has said that the charges are unfounded.
Ever hear of "REIT"s? Real Estate Investment Trusts...?
WalMart has... They're beating the states out of MILLIONS in taxes by playing games. Create a dummy company, the company owns the land, they pay the "Trust" their rent, then deduct it off their taxes... I got wind of this trick in 2006... I was able to give the Secretary of the Treasury in New Mexico a heads-up about the practice... New Mexico closed the loophole and collected over $11 million in back taxes... Colorado just passed HR 1093, to close the same loophole...
Of course, WalMart isn't the only one...Other corporations have jumped on the bandwagon...But WalMart has it down to a science... Many states are now beginning to close the loophole...
Yessireebob, those fine, upstanding corporations have the community's best interests at heart.....
