Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64739 Fri, 24 May 2019 17:21:56 GMT Dow heads for fifth straight negative week, longest losing streak since 2011 http://implode-explode.com/viewnews/2019-05-24_Dowheadsforfifthstraightnegativeweeklongestlosingstreaksince2011.html Stocks were headed for weekly losses on Friday as investors worry the U.S.-China trade war is hurting economic growth.

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U.S. durable goods orders dropped 2.1% last month amid a slowdown in exports and a buildup in inventories. This is the latest economic data set showing cracks in the economy while the world's largest economies engage in a trade war. IHS Markit said Thursday that U.S. manufacturing activity fell to a nine-year low.

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"The growing worries around a US/China elongated trade battle and its implications on the tech space are heavily weighing on the minds of both investors and the companies themselves caught in the cross hairs," Dan Ives, analyst at Wedbush Securities, wrote in a note to clients. "The ‘poster child' for the US/China trade wars continue to be Apple with the stock under heavy pressure as many competitors are yelling fire in a crowded theater around the potential China impact to Cupertino if this situation worsens.

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iehi-feed-64722 Sun, 19 May 2019 17:11:35 GMT Deutsche Bank Suppressed Trump, Kushner Money Laundering Alarms; Fired Whistleblower http://implode-explode.com/viewnews/2019-05-19_DeutscheBankSuppressedTrumpKushnerMoneyLaunderingAlarmsFiredWhis.html Anti-money laundering specialists at Deutsche Bank recommended in 2016 and 2017 that multiple transactions involving legal entities controlled by Donald J. Trump and his son-in-law, Jared Kushner, be reported to a federal financial-crimes watchdog.

The transactions, some of which involved Mr. Trump's now-defunct foundation, set off alerts in a computer system designed to detect illicit activity, according to five current and former bank employees. Compliance staff members who then reviewed the transactions prepared so-called suspicious activity reports that they believed should be sent to a unit of the Treasury Department that polices financial crimes.

But executives at Deutsche Bank, which has lent billions of dollars to the Trump and Kushner companies, rejected their employees' advice. The reports were never filed with the government.

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Ms. McFadden [a longtime anti-money laundering specialist in Deutsche Bank's Jacksonville office] said she was terminated last year after she raised concerns about the bank's practices. Since then, she has filed complaints with the Securities and Exchange Commission and other regulators about the bank's anti-money-laundering enforcement.

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Ms. McFadden said she had reviewed the transactions and found that money had moved from Kushner Companies to Russian individuals. She concluded that the transactions should be reported to the government -- in part because federal regulators had ordered Deutsche Bank, which had been caught laundering billions of dollars for Russians, to toughen its scrutiny of potentially illegal transactions.

... Typically, such a report would be reviewed by a team of anti-money laundering experts who are independent of the business line in which the transactions originated -- in this case, the private-banking division -- according to Ms. McFadden and two former Deutsche Bank managers.

That did not happen with this report. It went to managers in New York who were part of the private bank, which caters to the ultrawealthy. They felt Ms. McFadden's concerns were unfounded and opted not to submit the report to the government, the employees said.

Ms. McFadden and some of her colleagues said they believed the report had been killed to maintain the private-banking division's strong relationship with Mr. Kushner.

After Mr. Trump became president, transactions involving him and his companies were reviewed by an anti-financial crime team at the bank called the Special Investigations Unit. That team, based in Jacksonville, produced multiple suspicious activity reports involving different entities that Mr. Trump owned or controlled, according to three former Deutsche Bank employees who saw the reports in an internal computer system.

Some of those reports involved Mr. Trump's limited liability companies. At least one was related to transactions involving the Donald J. Trump Foundation, two employees said.

Deutsche Bank ultimately chose not to file those suspicious activity reports with the Treasury Department, either, according to three former employees. They said it was unusual for the bank to reject a series of reports involving the same high-profile client.

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iehi-feed-64711 Fri, 10 May 2019 21:10:38 GMT Uber Drives Into a Ditch for its IPO http://implode-explode.com/viewnews/2019-05-10_UberDrivesIntoaDitchforitsIPO.html ``Shares of Uber fell more than 7% on its first day of trading Friday, marking a rocky Wall Street debut for a company that endured plenty of bumps on its long road to going public. Uber opened at $42 a share, below its IPO price of $45, and ended the day even lower at $41.57.

That disappointing first day performance sets Uber apart from the vast majority of its tech peers. In the past five years, only 10% of venture capital-backed US technology IPOs finished the first day in the red, according to data provided to CNN Business from Renaissance Capital, which manages IPO-focused exchange-traded funds.

Uber did succeed in raising $8.1 billion in one of the largest public offerings ever, a substantial war chest that should fund the company's expansion into new cities and service categories. But that amount was still at the low end of what Uber originally set out to raise.

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shares in Lyft fell below their IPO price on their second day of trading and have continued to tumble since. The stock is now down about 25% from the IPO price... tech companies that have come to market in recent years with massive losses -- including Lyft and Snap -- are currently "not trading above their IPO price."

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iehi-feed-64710 Wed, 08 May 2019 22:57:51 GMT Cost of living between 2000 and 2019: Inflation has played a big part in shrinking the American middle class http://implode-explode.com/viewnews/2019-05-08_Costoflivingbetween2000and2019Inflationhasplayedabigpartinshrink.html iehi-feed-64704 Sun, 05 May 2019 21:39:01 GMT Facebook Building Cryptocurrency-Based Payments System http://implode-explode.com/viewnews/2019-05-05_FacebookBuildingCryptocurrencyBasedPaymentsSystem.html One idea under discussion is Facebook paying users fractions of a coin when they view ads, interact with other content or shop on its platform--not unlike loyalty points accrued at retailers, some of the people said.

This would reward the kind of genuine interaction that Facebook, beset by bots and hate speech, has been trying to encourage. It could also blunt criticism that the company makes billions of dollars on the backs of its users, sometimes in troubling or invasive ways.

Creating a so-called stablecoin backed by government currency better positions it as a legitimate payment method rather than a speculative bet. The volatility of bitcoin and other cryptocurrencies that aren't backed by hard assets has hampered their usefulness in payments.

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Now Facebook must bend a variety of stakeholders to its vision. Most immediately are Visa and Mastercard Inc., whose networks handle the vast majority of credit and debit card payments in the U.S.

If it succeeds, the project threatens the card networks' dominance over global payments. Facebook comes armed with more than 1.5 billion daily users, many of them in developing countries where social-media sites provide the backbone of internet commerce.

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iehi-feed-64702 Sun, 05 May 2019 00:47:04 GMT Sullivan & Cromwell's Rodge Cohen: The Untold Story of the Fed's $29 Trillion (NOT $17T) Bailout http://implode-explode.com/viewnews/2019-05-04_SullivanCromwellsRodgeCohenTheUntoldStoryoftheFeds29TrillionNOT1.html "The enacted 1991 amendment to Section 13(3) authorized the Fed to make emergency loans to nonbanking firms as long as those loans are ‘secured to the satisfaction of the [Fed],' and the amendment also gave the Fed broad discretion to accept almost any type of collateral from the borrowing firms."

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During Cohen's interview with the FCIC, he is asked if the Fed's financial assistance with Bear was the first time the Fed had used its 13(3) authority to help a nonbank. Cohen states that "To my knowledge it is the first time and the initial but fleeting reaction was we've never done it before, what sort of precedent are we creating for ourselves."

It was not the first time the Fed had used 13(3) to assist a nonbank. It was simply the first time the Fed had showered money like a drunken sailor with an unlimited ATM card to the Fed's discount window. According to a history provided by David Fettig, a Senior Advisor to the Minneapolis Fed, Section 13(3) "was used sparingly, and just 123 loans were made" from 1932 to 1936. The loans totaled $1.5 million -- that's $27.3 million in today's dollars. The 1936 loans were the last time 13(3) was invoked until 2007.

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iehi-feed-64685 Wed, 17 Apr 2019 14:58:52 GMT Trump tax cuts: Most people didn't even notice http://implode-explode.com/viewnews/2019-04-17_TrumptaxcutsMostpeopledidntevennotice.html ``As Americans rush Monday to finish with their own tax filings, their judgment on Trump's beloved tax cut bill is pretty clear: Most really don't like it. Multiple polls show a majority of Americans don't think they got a tax cut at all -- even though independent analyses show they did. And only about a third of the country approves of the legislation itself, the Tax Cuts and Jobs Act, passed by Congress at the end of 2017.''

This is 100% what we expected; if you don't make tax cuts economically significant for most people, duh, they won't notice. It never mattered if peanuts were being thrown to the proles while large cuts were being given to the wealthy and major corporations. Why would it? You can stoke fake hysteria about immigrants and muslim terrorists all you want, and certain people will buy into that -- precisely because it's imaginary -- but you can't fake what's in people's wallets. Trump told his fans he'd make them "so rich", and that clearly didn't happen. Of course, one could only have believed that if one fell for the con of a seasoned con artist...

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iehi-feed-64679 Thu, 11 Apr 2019 22:18:31 GMT Fed minutes show re-starting QE purchases already on the table http://implode-explode.com/viewnews/2019-04-11_FedminutesshowrestartingQEpurchasesalreadyonthetable.html The minutes revealed a debate inside the Fed about when the bank should resume purchases of Treasurys after it ends it balance-sheet runoff... Several wanted to resume purchases "relatively soon," the minutes showed, but "some" preferred to let the average level of reserves decline naturally for awhile in the hopes that it would give the Fed a sense of underlying demand by banks.

The outcome of such a debate, though arcane, is important. Some outside critics contend the Fed balance-sheet process contributed to the stock-market meltdown in December. Senior Fed officials want to make sure whatever they do reduces instability in the U.S. financial system.

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iehi-feed-64678 Thu, 11 Apr 2019 22:10:49 GMT Newmont shareholders back $10-billion Goldcorp takeover http://implode-explode.com/viewnews/2019-04-11_Newmontshareholdersback10billionGoldcorptakeover.html Newmont Mining Corp. shareholders have voted resoundingly in favour of the company's US$10-billion acquisition of Vancouver's Goldcorp Inc., removing the last major obstacle to what will likely be the second-biggest deal ever in the gold sector.

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The deal is expected to close later this quarter and means Newmont will bypass Barrick Gold Corp. and take the triple crown as biggest gold company in the world by market value, production and reserves.

The deal announced in January was eventful from the start. About a month after it was announced, Barrick made a hostile takeover bid for Newmont and urged Newmont to drop its quest for Goldcorp. Even later, when Barrick dropped its effort to acquire Newmont, more uncertainty arose when Goldcorp announced it had agreed to almost triple the retirement package of Ian Telfer, its chairman, to US$12-million. The payout angered some shareholders at Goldcorp, especially considering Mr. Telfer agreed to sell the company with its stock near a historical low.

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Much of the drama evaporated when Newmont sweetened the pot by agreeing to pay a special dividend to its shareholders worth US$470-million if a yes vote was achieved. That dividend will now be paid out on May 1 to people who hold shares as of April 17.

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iehi-feed-64667 Mon, 08 Apr 2019 04:53:11 GMT Gold Bullion Latest News: China Adds for 4th Month http://implode-explode.com/viewnews/2019-04-08_GoldBullionLatestNewsChinaAddsfor4thMonth.html China, the world's top gold producer and consumer, is facing signs of a slowing economy, even as progress is being made in trade negotiations with the U.S. The latest data from the PBOC indicate that the country has resumed adding gold to its reserves at a steady pace, much like the period from mid-2015 to October 2016, when the country boosted holdings almost every month. Should China continue to accumulate bullion at the current rate over 2019, it may end the year as the top buyer after Russia, which added 274 tons in 2018.

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Governments worldwide added 651.5 tons of bullion in 2018, the second-highest total on record, according to the World Gold Council. ... Spot gold fell for a second month in March even after the Federal Reserve signaled it would pause rate hikes, which led to a surge in equities instead.

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China has previously gone long periods without revealing increases in gold holdings. When the central bank announced a 57 percent jump in reserves to 53.3 million ounces in mid-2015, it was the first update in six years. The latest pause was from October 2016 until December last year.

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iehi-feed-64660 Wed, 03 Apr 2019 00:28:48 GMT Why bitcoin is surging http://implode-explode.com/viewnews/2019-04-02_Whybitcoinissurging.html iehi-feed-64654 Mon, 01 Apr 2019 20:27:30 GMT Lyft's Stock Falling Is a Worrying Sign for Other Unicorns http://implode-explode.com/viewnews/2019-04-01_LyftsStockFallingIsaWorryingSignforOtherUnicorns.html [The underwriting bankers] will all be watching anxiously over the coming days to see whether the stock recovers, said Tom White, a senior analyst at D.A. Davidson. "At an emotional level I'm sure the company and the bankers don't want to see it break the price that it went out at," he said. "It will take a couple of days before we get a clear sense of where it stabilizes."

Lyft is a model of the unicorn class of companies that secured valuations in excess of $1 billion from private investors and will soon seek validation from the public. These are high-growth companies, with even higher propensities to burn through capital, and they're built around compelling narratives of world-altering potential.

Lyft has said it can fundamentally alter transportation and eventually usher in a world of self-driving cars. The same can be said of Uber, which is expected to publicly file paperwork for its own IPO this month. Slack makes similar promises of reinventing how workers communicate and Postmates of how people shop for food and other goods.

Such story-driven stocks tend to be volatile and polarizing among investors, said Jake Fuller, managing director of equities research at Guggenheim Securities LLC. "People kind of shake out on one side or the other on the debate."

At the center of the debate is how to value a company that lost almost $1 billion last year. Even after the declines, the market still values Lyft above its last private valuation. On a price-to-sales basis, Lyft's market cap far exceeds that of other internet companies, wrote Mandeep Singh, an analyst for Bloomberg Intelligence. "The reality is setting in," he wrote. "The valuation is too high for Lyft."

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iehi-feed-64643 Sun, 24 Mar 2019 19:16:16 GMT "Is the world running out of gold?" - Mainstream Catching On http://implode-explode.com/viewnews/2019-03-24_IstheworldrunningoutofgoldMainstreamCatchingOn.html The murmurs that the world is running out of gold deposits have grown louder in the past two years... Gold production reaching its peak levels is nothing new. The production of the yellow metal has reached its highest levels on at least four occasions in the past before witnessing sharp declines.

But many say there is something that makes the current gold peak stand out: There is simply no new major gold deposit left to be discovered.

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Gold has been hovering around the psychological level of $1,300 an ounce since the beginning of this year -- a far cry from the highs of $1,800 an ounce witnessed in 2011-12. Analysts estimate that a minimum price of $1,500 per ounce is needed to maintain current production levels.

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The prospective impact of a lack of "world class" discoveries on future gold production can be gauged from the fact that such mines account for nearly half of the global gold production today.

The average grade of the new gold deposits -- the amount of gold that can be extracted per ton -- has also been declining. The average mine grade has fallen from over 10 gram per ton in the early 1970s to around 1.4 grams per ton today, according to Metals Focus, a precious metals consultancy.

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Analysts expect gold prices to rise in the longer term as gold mine supply struggles to expand. High prices and technological advancements are expected to push miners to explore new frontiers for the precious metal, including the seabed and possibly even asteroids.

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"In future most of the gold supply will come from recycling and not mining," Miller said.

The World Gold Council expects the demand for gold in jewelry to increase over the next 30 years "in a richer, more middle-class, connected world."

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iehi-feed-64642 Fri, 22 Mar 2019 20:28:14 GMT U.S. Treasury Yield Curve Inverts for First Time Since 2007 http://implode-explode.com/viewnews/2019-03-22_USTreasuryYieldCurveInvertsforFirstTimeSince2007.html The Treasury yield curve inverted for the first time since the last crisis Friday, triggering the first reliable market signal of an impending recession and rate-cutting cycle.

The gap between the three-month and 10-year yields vanished as a surge of buying pushed the latter to a 14-month low of 2.416 percent. Inversion is considered a reliable harbinger of recession in the U.S., within roughly the next 18 months.

Demand for government bonds gained momentum Wednesday, when U.S. central bank policy makers lowered both their growth projections and their interest-rate outlook. The majority of officials now envisage no hikes this year, down from a median call of two at their December meeting. Traders took that dovish shift as their cue to dig into positions for a Fed easing cycle, pricing in a cut by the end of 2020 and a one-in-two chance of a reduction as soon as this year.

"It looks like the global slowdown worries have been confirmed and the market is beginning to price in Fed easing, potential recession down the road," said Kathy Jones, chief fixed-income strategist at Charles Schwab & Co.

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iehi-feed-64639 Wed, 20 Mar 2019 00:02:34 GMT Wall Street's Latest Love Affair With Risky Repackaged Debt http://implode-explode.com/viewnews/2019-03-19_WallStreetsLatestLoveAffairWithRiskyRepackagedDebt.html Just as they did in much of 2007 and 2008, before the markets exploded in a crisis of epic proportions, investors in the debt market, which is even larger than the equity market, are feverishly chasing higher yields and are too eagerly buying up the risky securities that will deliver those yields without demanding the proper premium for the risks being taken. A decade ago, the high-yield investment du jour pushed by Wall Street was mortgage-backed securities -- home mortgages that had been packaged up and sold as "safe" investments all over the world. Nowadays bankers and traders are pushing another form of supposedly "safe" investment, the "collateralized loan obligation," or C.L.O.

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C.L.O.s are nothing more than a package of risky corporate loans made to companies with less than stellar credit. The big Wall Street banks make these loans to their corporate clients and then seek to move them off their balance sheets as quickly as possible, in the same way that a decade ago they packaged up and offloaded risky mortgage securities. Just as with mortgage-backed securities, to move the loans out the door the banks have been counting on the nearly insatiable demand for higher yields ... This is not a tiny slice of the market. Of the trillions of dollars of corporate loans outstanding in the United States, roughly $1.2 trillion of them are considered "leveraged loans," or loans to companies considered bigger credit risks.

In a speech before the Economic Club of New York in November, Mr. Powell said he thought that investors in C.L.O.s would bear the brunt of an uptick in corporate bankruptcies, rather than the big Wall Street banks. Those investors include Japanese banks as well as investors in hedge funds, mutual funds and pension funds (in other words, you and me).

Janet Yellen, Mr. Powell's predecessor, aired the same concern in December, in a conversation with the Times columnist Paul Krugman. Ms. Yellen said she worried that corporate indebtedness was "quite high": it's now more than $9 trillion, up from $4.9 trillion, in 2006, according to the Securities Industry and Financial Markets Association. "I think a lot of the underwriting of that debt is weak," she said. "I think investors hold it in packages like the subprime packages," which became so popular before the 2008 crisis. "The same thing has happened. It's called C.L.O.s, or collateralized loan obligations."

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After a brief moment of sanity in December, the loopy demand for high-risk debt has once again heated up. More than $13 billion of leveraged loans were sold in February, and they will soon worm their way into the financial markets as C.L.O.s. The existential question remains: Why do investors fail to learn the harsh lessons about risk, even though the consequences of them still remain so fresh?

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iehi-feed-64632 Wed, 13 Mar 2019 22:10:54 GMT The housing market is turning: Millennials unhappy with purchases; CA supply at highest since 2012 http://implode-explode.com/viewnews/2019-03-13_ThehousingmarketisturningMillennialsunhappywithpurchasesCAsupply.html iehi-feed-64628 Sun, 10 Mar 2019 00:10:38 GMT Colorado Joins Wyoming With New Securities-Exempt Digital Blockchain Token Law http://implode-explode.com/viewnews/2019-03-09_ColoradoJoinsWyomingWithNewSecuritiesExemptDigitalBlockchainToke.html iehi-feed-64622 Mon, 04 Mar 2019 21:52:10 GMT Major US Grocery Chain Kroger Ditches Visa, In Discussions With Bitcoin Lightning http://implode-explode.com/viewnews/2019-03-04_MajorUSGroceryChainKrogerDitchesVisaInDiscussionsWithBitcoinLigh.html iehi-feed-64616 Sat, 02 Mar 2019 15:36:53 GMT The New 30-Something: On The Umbilical To Boomer Parents http://implode-explode.com/viewnews/2019-03-02_TheNew30SomethingOnTheUmbilicalToBoomerParents.html Hold the eye roll and exasperation about millennials and their failure to launch or the gushing of financial resentment for a moment, and consider the unforgiving economics of trying to make it in this country today. Wages have stagnated, while real-estate, medical and child care costs have skyrocketed. As one economic analysis concluded recently: "For Americans under the age of 40, the 21st century has resembled one long recession."

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More than half (53 percent) of Americans aged 21 to 37 have received some form of financial assistance from a parent, guardian or family member since turning 21, according to a 2018 report by Country Financial, a financial services firm in Bloomington, Ill. This may include paying bills for a cellphone (41 percent), groceries and gas (32 percent), rent (40 percent) or health insurance (32 percent).

Then there are the free services. Ms. Palmer, who is 39 and lives near Washington, D.C., said that the free 20 to 25 hours of child care she receives every month from her parents contributed to her family's decision to have a third child

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On average, each millennial parent receives $11,011 per year in combined financial support and unpaid labor, the 2017 TD Ameritrade Millennial Parents Survey found, for an annual total of $253 billion in America.

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Those who do not have parental assistance in their 30s, however, continue to be at a disadvantage. "They are grappling with paying off student-loan debt, their savings might not be as strong because of that, and many are taking care of other family members," said Iimay Ho, 32, the executive director at Resource Generation, an organization that works with people age 18 to 35 with wealth or class privilege to engage on issues of inequality.

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Evidence suggests that purchasing a home, a life event that many hope to reach in their 30s and one of the primary ways people build wealth, is essentially out of reach in most major cities unless your family has generated a good deal of wealth. (Nationally, homeownership rates are falling for millennials, and only two in 10 have a mortgage or home loan.)

The "21st century as one long recession" comment is dead-on.

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iehi-feed-64602 Sun, 24 Feb 2019 00:07:09 GMT American Workers -- Even Well-To-Do Ones -- Increasingly Miserable http://implode-explode.com/viewnews/2019-02-23_AmericanWorkersEvenWellToDoOnesIncreasinglyMiserable.html even in a boom economy, a surprising portion of Americans are professionally miserable right now. In the mid-1980s, roughly 61 percent of workers told pollsters they were satisfied with their jobs. Since then, that number has declined substantially, hovering around half; the low point was in 2010, when only 43 percent of workers were satisfied, according to data collected by the Conference Board, a nonprofit research organization. The rest said they were unhappy, or at best neutral, about how they spent the bulk of their days. Even among professionals given to lofty self-images, like those in medicine and law, other studies have noted a rise in discontent. Why? Based on my own conversations with classmates and the research I began reviewing, the answer comes down to oppressive hours, political infighting, increased competition sparked by globalization, an "always-on culture" bred by the internet -- but also something that's hard for these professionals to put their finger on, an underlying sense that their work isn't worth the grueling effort they're putting into it.

This wave of dissatisfaction is especially perverse because corporations now have access to decades of scientific research about how to make jobs better. "We have so much evidence about what people need," says Adam Grant, a professor of management and psychology at the University of Pennsylvania (and a contributing opinion writer at The Times). Basic financial security, of course, is critical -- as is a sense that your job won't disappear unexpectedly. What's interesting, however, is that once you can provide financially for yourself and your family, according to studies, additional salary and benefits don't reliably contribute to worker satisfaction. Much more important are things like whether a job provides a sense of autonomy -- the ability to control your time and the authority to act on your unique expertise. People want to work alongside others whom they respect (and, optimally, enjoy spending time with) and who seem to respect them in return.

And finally, workers want to feel that their labors are meaningful. "You don't have to be curing cancer," says Barry Schwartz, a visiting professor of management at the University of California, Berkeley. We want to feel that we're making the world better, even if it's as small a matter as helping a shopper find the right product at the grocery store. "You can be a salesperson, or a toll collector, but if you see your goal as solving people's problems, then each day presents 100 opportunities to improve someone's life, and your satisfaction increases dramatically," Schwartz says.

This was a predictable consequence of an increasingly unstable, insecure economy. There is really no refuge from it; even the rich know they have to always be searching for the next "score" (the middle class and below obviously have it even worse -- but with the meso-rich feeling the pain, at least the problem is becoming impossible to ignore). At this site, this is the sort of thing we've expected as a consequence of the long-run gutting of the financial economy, with low interest rates and disincentives to save and invest in long-term, stable enterprises (VC money and credit cards are NOT a suitable substitute for traditional commercial and merchant banking).

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