Specialist Mario Picone, right, watches the numbers as he works on the floor of the New York Stock Exchange, Friday, Aug. 21, 2015. The Dow Jones industrial average has plunged more than 530 points and is in a correction amid a global sell-off sparked by fears about China’s slowing economy. Oil tumbled below $40 per barrel for the first time since the financial crisis. (AP Photo/Richard Drew)
The financial markets are melting down. Here’s why.
A couple of months ago, the Shanghai bourse began the Mother of all Corrections. Within a few weeks, it had lost 30% of its value.
This first go-round of market mayhem was greeted with pretty much of a yawn in Europe and the US. This was especially so after the government in Beijing stepped in to prop up the markets.
However, that propping up failed to calm the markets. Beijing decided to let the market work, and the sell-off commenced again.
Now, though, there is the added component of a fear of a major Chinese slow-down in its broader economy. To paraphrase that old saw: When China sneezes, the world catches a cold.
The fear of a significant downturn in the Chinese economy is spooking markets all over the world like a bump in the night spooks wild horses. Without knowing exactly what’s coming down the pike out of China, markets are in a panic.
On This Day: President Obama greets people following his remarks at the Ford Motor Company Chicago Assembly Plant in Chicago, Ill., Aug. 5, 2010 (Photo by Pete Souza)
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Today (all times Eastern)
12:30: White House press briefing
1:45: VP Biden Delivers Remarks at U.S.-Africa Business Forum
2:45: President Obama delivers remarks and participates in the U.S.-Africa Business Forum
9:30: The President and First Lady host a dinner at the White House for African heads of state – Lionel Richie performs
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President Obama meets with advisors in the Roosevelt Room of the White House, Aug. 4, 2014 (Photo by Pete Souza)
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The Week Ahead
Wednesday: The President participates in Summit Leader Meetings as part of the U.S.-Africa Leaders Summit.
First Lady Michelle Obama, in partnership with former First Lady Laura Bush and the Bush Institute, will host a day-long spouses symposium at the Kennedy Center focused on the impact of investments in education, health, and public-private partnerships.
Thursday & Friday: Attends meetings at the White House
President Barack Obama is announcing $14 billion in commitments by U.S. businesses to invest in the continent of Africa.
Obama plans to make the announcement Tuesday at the U.S.-Africa Business Forum in Washington. The forum is bringing together African heads of state and American business leaders to find ways to boost economic ties. It comes on the second day of a U.S.-Africa summit involving nearly 50 African heads of state.
The White House says the investments include industries like construction, banking, information technology and energy.
WH.gov: The First Lady at the U.S. – Africa Leaders Summit
On August 6, 2014, the Office of First Lady Michelle Obama, the George W. Bush Institute, and the U.S. Department of State will host Investing in Our Future at the U.S. – Africa Leaders Summit.
The day-long symposium will bring together First Lady Michelle Obama, Mrs. Laura Bush, African first spouses from nearly 30 countries, leaders from non-governmental and non-profit organizations, private sector partners, and other leading experts.
The symposium will highlight the important role first spouses play and will focus on the impact of investments in education, health, and economic development through public-private partnerships. This collaboration builds on the Bush Institute’s 2013 African First Ladies Summit, Investing in Women: Strengthening Africa, held in Tanzania.
Although the enemies of health reform will never admit it, the Affordable Care Act is looking more and more like a big success. Costs are coming in below predictions, while the number of uninsured Americans is dropping fast, especially in states that haven’t tried to sabotage the program. Obamacare is working. But what about the administration’s other big push, financial reform? The Dodd-Frank reform bill has, if anything, received even worse press than Obamacare, derided by the right as anti-business and by the left as hopelessly inadequate. But also like Obamacare, financial reform is working a lot better than anyone listening to the news media would imagine. The decision to create a Consumer Financial Protection Bureau shouldn’t have been controversial, given what happened during the housing boom.
At this point, however, all accounts indicate that the bureau is in fact doing its job, and well — well enough to inspire continuing fury among bankers and their political allies. A recent case in point: The bureau is cracking down on billions in excessive overdraft fees. how do you rescue the banking system without rewarding bad behavior? The answer is that the government should seize troubled institutions when it bails them out, so that they can be kept running without rewarding stockholders or bondholders who don’t need rescue. In 2008 and 2009, however, it wasn’t clear that the Treasury Department had the necessary legal authority to do that. So Dodd-Frank filled that gap, giving regulators Ordinary Liquidation Authority, also known as resolution authority, so that in the next crisis we can save “systemically important” banks and other institutions without bailing out the bankers.
TPM: Israel-Hamas Truce Sets Stage For Talks On Gaza
Israel and Hamas began observing a temporary cease-fire on Tuesday that sets the stage for talks in Egypt on a broader deal on the Gaza Strip, including a sustainable truce and the rebuilding of the battered, blockaded coastal territory.
Israel withdrew its ground forces from Gaza’s border areas, and both sides halted cross-border attacks as the three-day truce took effect at 8 a.m. (0500 GMT) Tuesday. The shelling stopped and in Gaza City, where streets had been deserted during the war, traffic picked up and shops started opening doors.
If the calm holds, it would be the longest lull in almost a month of fighting that has killed nearly 1,900 Palestinians and 67 Israelis.
For the last two hours we’ve heard nothing but sonic booms and the sound of rockets and mortars. Shells have fallen on our street a few hundred yards from my father-in-law’s house, where my wife and I, and our five kids, are staying, and on the street behind us.
My wife, Hanna, is arguing with the kids over what to buy to celebrate Eid, the holiday that marks the end of Ramadan. She has forbidden them to go to the grocery store, and she’s adamant that they won’t visit the Internet cafes or the PlayStation shop near my father’s place. They don’t understand the impossibility of shopping at a time of war.
Last night, we all became convinced that the tank fire would soon reach the Jabaliya refugee settlement, where our families live. All night long the tanks fired on the eastern side of the camp. The buildings on our street creaked and lurched, as if about to fall. Everything shifts with each strike. It’s as if you’re an extra in a disaster movie.
BBC: Ebola Crisis: World Bank Announces $200M Emergency Fund
The World Bank has announced that it is allocating $200m (£120m) in emergency assistance for West African countries battling to contain the Ebola outbreak. The money will be distributed to the governments of Liberia, Sierra Leone and Guinea as well as to the World Health Organization (WHO). The number of people killed in the outbreak has reached 887, the WHO says.
The World Bank’s announcement came as African leaders including 35 presidents discuss the crisis in Washington. World Bank President Jim Yong Kim – an expert on infectious diseases – said that he was “deeply saddened” by the spread of the virus and how it was contributing to the breakdown of “already weak health systems in the three countries”.
Watch Rand Paul run away from a DREAMer who confronts him and Steve King:
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Ed Kilgore: In the Middle of An August Friday Night
If you want to do something politically dangerous in Washington that you’d just as soon not draw widespread notice, doing it late on a Friday night before the August Congressional Recess begins is about as good as it gets. And that’s exactly what House Republicans did on Friday night, passing an insultingly small “border resources” package that will vanish without a trace if and when Congress returns and gets serious about the issue, and then passing another bill prohibiting continuation of the Deferred Actions for Childhood Arrivals program, which has enabled children and young adults (usually collectively known as DREAMers) under strict conditions to avoid deportations.
When I looked at the news aggregators this morning, there was zippo about this whole topic, which dominated political chatter last week. It’s as though quite literally nothing of interest happened Friday night.
The Obama administration took a “historic” step in changing the drug war Friday, activists said, when Attorney General Eric Holder said the rationale prosecutors often use to defend mandatory-minimum sentences was worthless. “Some have suggested that these modest changes might somehow undermine the ability of law enforcement and prosecutors to induce cooperation from defendants in federal drug cases,” Holder said in remarks before the National Association of Criminal Defense Lawyers conference in Philadelphia, according to prepared remarks posted to the Justice Department website.
“But the reality is that nothing could be further from the truth,” Holder went on, citing his own past as a federal prosecutor. “Like anyone who served as a prosecutor in the days before sentencing guidelines existed and mandatory minimums took effect, I know from experience that defendant cooperation depends on the certainty of swift and fair punishment, not on the disproportionate length of a mandatory-minimum sentence,” Holder said. The speech was a big deal, said Families Against Mandatory Minimums. Price’s spokesperson, Mike Riggs, was more direct. “It’s pretty damn historic,” he said.
March 30, 2011: President Obama greets James Brady in Press Secretary Jay Carney’s West Wing office at the White House. Brady’s wife Sarah, right, and son Scott, center, joined him for the meeting (Photo by Pete Souza)
Michelle and I send our deepest condolences to the family of former White House Press Secretary James Brady on his passing. Jim is a legend at the White House for his warmth and professionalism as press secretary for President Reagan; for the strength he brought to bear in recovering from the shooting that nearly killed him 33 years ago; and for turning the events of that terrible afternoon into a remarkable legacy of service through the Brady Campaign to Prevent Gun Violence. Since 1993, the law that bears Jim’s name has kept guns out of the hands of dangerous individuals. An untold number of people are alive today who otherwise wouldn’t be, thanks to Jim.
Every day, reporters and White House staffers walk past a plaque marking the day in 2000 that the White House Briefing Room was renamed the James S. Brady Press Briefing Room. It reads, “May his courage and dedication continue to inspire all who work in this room and beyond.” Those words will endure, as will his legacy. Our thoughts and prayers are with Jim’s wife Sarah, who has been Jim’s steadfast partner in advocacy, and their children Scott and Melissa.
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Elite Daily: Happy Birthday, Mr. President: 26 Times Barack Obama Has Killed The Game
President Obama waits to be introduced at a luncheon for U.S. Senate candidate Alexi Giannoulias of Illinois at the Palmer House Hilton in Chicago, Ill., Aug. 5, 2010. Right to left, Trip Coordinator Jordan Whichard, Bobby Schmuck, political affairs staff assistant, and Director of Political Affairs Patrick Gaspard, wait with the President (Photo by Pete Souza)
President Obama talks on the phone at the Palmer House Hilton in Chicago, Ill., Aug. 5, 2010. From left, Chief of Staff Rahm Emanuel, Eric Whitaker and Senior Advisor Valerie Jarrett work nearby (Photo by Pete Souza)
President Obama signs memorabilia as he talks on the phone at the Chicago Cultural Center in Chicago, Ill., Aug. 5, 2010 (Photo by Pete Souza)
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President Obama arrives at the White House after spending the night at Camp David on Sunday, August 5, 2012 in Washington, DC.
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President Obama meets with former Negro League baseball players in the Cross Hall of the White House, Aug. 5, 2013 (Photo by Pete Souza)
Sara Kliff: Don’t Look Now, But Obamacare Might Just Hit A Sign-Up Projection
Three million people have signed up for private insurance coverage through the health law marketplaces, according to Health and Human Services. Health and Human Services says that at least 800,000 people signed up for coverage through this week. So this new figure shouldn’t be seen as representing overall January enrollment–that number will likely inch up a bit, when the Obama administration releases a monthly enrollment report in February. Back in September, the Obama administration had projected 1.1 million people would sign-up in the first month of 2014–and these new figures suggest that enrollment could easily hit that number.
A federal court has temporarily blocked Missouri officials from restricting organizations in the state from helping people sign up for health insurance as part of the federal health-overhaul law.
The U.S. District Court for the Western District of Missouri granted an injunction Thursday blocking the Missouri insurance department from enforcing a state law passed last year that limited the activities of people seeking to enroll the uninsured through new insurance exchanges.
Judge Ortrie Smith granted a preliminary injunction on the grounds that the plaintiffs, St. Louis Effort for AIDS and Planned Parenthood of the St. Louis Region and Southwest Missouri, were likely to prevail in their argument that the state had improperly tried to override the federal government’s efforts to implement the health-care overhaul.
Edward Lucas: Edward Snowden: Did The American Whistleblower Act Alone?
Spy agencies engage in espionage, an inherently disreputable trade: it involves stealing secrets. When details leak, they look shocking. But the hypocrisy of the Snowdenistas is as jarring as their naivety. Our enemies – notably Russia and China – are spying on us. So too are our allies. France runs a mighty industrial espionage service for the benefit of its big companies. Germany has an excellent signals intelligence agency, the Kommando Strategische Aufklärung. Germany’s spies were recently caught spying on their Nato ally, Estonia, using an official who was also spying for the Russians. Far from denigrating American intelligence, we should applaud it. It helps catch terrorists, gangsters and spies. Moreover, its oversight and scrutiny is the toughest in the world. America has taken the most elusive and lawless part of government and crammed it into a system of legislative and judicial control.
America is also part of the world’s only successful no-spy agreement, with its close allies – notably Britain, Canada, Australia and New Zealand. A list of countries that would trust Germany or France not to spy on them would be rather shorter. Instead, the great grievance of the Snowden camp is what they see as the arbitrary power of the NSA and GCHQ. Who gave these agencies the power to bug and snoop? The real answer to that is simple: the elected governments and leaders of those countries, the judges and lawmakers charged with supervising the intelligence services, and the directors of those agencies in the exercise of their lawful powers. The question deserves to be posed in the other direction. What gives the Snowdenistas and their media allies the right to leak our most closely guarded and expensive secrets?
The Snowden affair is a story of secrecy and deception – but not on the side of the intelligence agencies. Far too little attention has been paid to the political agendas of the most ardent Snowdenistas – people such as the bombastic Brazil-based blogger, Glenn Greenwald, hysterical “hacktivist” Jacob Appelbaum, and Wikileaks founder Julian Assange. They cloak their extreme and muddled beliefs in the language of privacy rights, civil liberties and digital freedoms.
Think Progress: Why Target’s Part-Time Employees Will Be Better Off Under Obamacare
Chain retailer Target announced on Wednesday that it will stop offering health insurance to employees who work less than 30 hours per week, instead sending these workers to Obamacare’s insurance marketplaces to buy new plans. Target will continue offering insurance to those who work for 30 hours or more per week, the threshold Obamacare sets for large employers with 50 or more employees. The company won’t be cutting anyone’s work week in order to save on its bottom line, will employ consultants to help workers sign up for new health plans, and will give them a one-time cash payment of $500 to help with the cost.
The sorts of plans that retailers and restaurants offer to part-time workers are nothing approaching comprehensive. By contrast, Obamacare’s marketplace plans have to offer comprehensive benefits, including for mental health services and prescription drugs, and cannot place annual or lifetime limits on coverage. A 27-year-old non-smoking Target employee named Jane makes $12 per hour and works 29 hours per week. Jane has a pre-tax annual income of about $16,704, meaning she is at about 145 percent of the Federal Poverty Level (FPL). The Kaiser Family Foundation’s (KFF) subsidy calculator shows that Jane would pay less than $52 per month for a mid-level “Silver” plan under Obamacare after getting her premium subsidy.
Since Jane makes less than 2.5 times the poverty level, she’d be eligible for even more Obamacare cost-sharing subsidies that would limit her yearly deductible and hold her maximum out-of-pocket medical expenses at $2,250 per year. An employee who made even less, like a 24-year-old non-smoker making $9 per hour, would qualify for Medicaid if he or she lived in a state that took place in Obamacare’s expansion of the program, or would have to pay just $20 per month for a Silver plan on the marketplaces.
An astonishing two-thirds of the 730,000 men and women released from America’s lockups each year have either substance abuse problems, mental health problems, or both. Very often, those problems were largely responsible for getting them locked up in the first place. Most addicted and mentally ill prisoners receive little or no effective treatment while they’re incarcerated or after they’re turned loose, so it’s little surprise that, like Sanders, they soon wind up back in jail. But for some, that revolving door may stop spinning this year, thanks to a little-noticed side-effect of President Obama’s Affordable Care Act. Obamacare, it turns out, might be a crime-fighting tool.
Among many other reforms, the ACA is drastically expanding Medicaid, the federal insurance scheme for the poor. Previously, able-bodied childless adults were generally not covered by Medicaid, regardless of how impoverished they might have been. But starting this year, any American citizen under age 65 with a family income at or below 138 percent of the federal poverty line—about $25,000 for a family of three—is eligible for Medicaid (at least in the two dozen states that have so far agreed to participate in this aspect of Obamacare). Meanwhile, citizens and legal immigrants earning between 138 percent and 400 percent of the poverty line are now entitled to subsidies to help pay for private insurance. Taken together, those two provisions mean that tens, perhaps hundreds, of thousands of the inmates released every year are now eligible for health insurance, including coverage for mental health and substance abuse services.
Providing treatment to those former prisoners could yield enormous benefits for all of us. The average cost to incarcerate someone for a year is roughly $25,000. That means if only one percent of each year’s released inmates stay out of trouble, taxpayers will save nearly $200 million annually— “Success in implementing the Affordable Care Act has the potential to decrease crime, recidivism, and criminal justice costs, while simultaneously improving the health and safety of communities,” sums up a recent report by the federal Department of Justice.
George Zornick: Justice Department Could Ease Regulations For Legal Weed Businesses ‘Very Soon’
Attorney General Eric Holder announced Thursday that the Obama administration will “very soon” issue some regulations that would make it easier for commercial banks to do business with legal marijuana operations—a seemingly small change, but one that could be seminal in launching legal marijuana into the mainstream. Currently, state-sanctioned marijuana outfits essentially have no access to normal venues for banking and finance. Banks worry that accepting deposits from legal marijuana operations, or giving them loans, could expose the bank to legal or regulatory action, given the patchwork set of laws that make marijuana illegal on the federal level, even if certain states have legalized it.
This is, naturally, a huge problem for commercial marijuana retailers—how can you launch and run a business without any loans? They also often have to pay bills and employees in cash, which is difficult from a logistical perspective. At the University of Virginia on Thursday, Holder cited the problem of undeposited cash and suggested changes are on the way. “You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” he said. “There’s a public safety component to this. Huge amounts of cash, substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited, is something that would worry me, just from a law enforcement perspective.” Holder added that “we will be issuing some regulations I think very soon to deal with that issue.”
Sam Polk: For The Love Of Money **(This piece is a MUST READ. 1% + Greed = Obscene)**
IN my last year on Wall Street my bonus was $3.6 million — and I was angry because it wasn’t big enough. I was 30 years old, had no children to raise, no debts to pay, no philanthropic goal in mind. I wanted more money for exactly the same reason an alcoholic needs another drink: I was addicted. After graduation, I got a job at Bank of America. At the end of my first year I was thrilled to receive a $40,000 bonus. Over the next few years I worked like a maniac and began to move up the Wall Street ladder. I became a bond and credit default swap trader, one of the more lucrative roles in the business. Just four years after I started at Bank of America, Citibank offered me a “1.75 by 2” which means $1.75 million per year for two years.
Now, working elbow to elbow with billionaires, I was a giant fireball of greed. I’d think about how my colleagues could buy Micronesia if they wanted to, or become mayor of New York City. They didn’t just have money; they had power. I wanted a billion dollars. It’s staggering to think that in the course of five years, I’d gone from being thrilled at my first bonus — $40,000 — to being disappointed when, my second year at the hedge fund, I was paid “only” $1.5 million. But in the end, it was actually my absurdly wealthy bosses who helped me see the limitations of unlimited wealth. I was in a meeting with one of them, and a few other traders, and they were talking about the new hedge-fund regulations. Most everyone on Wall Street thought they were a bad idea. “But isn’t it better for the system as a whole?” I asked. The room went quiet, and my boss shot me a withering look. I remember his saying, “I don’t have the brain capacity to think about the system as a whole. All I’m concerned with is how this affects our company.”
From that moment on, I started to see Wall Street with new eyes. I noticed the vitriol that traders directed at the government for limiting bonuses after the crash. I heard the fury in their voices at the mention of higher taxes. These traders despised anything or anyone that threatened their bonuses. I had recently finished Taylor Branch’s three-volume series on the Rev. Dr. Martin Luther King Jr. and the civil rights movement, and the image of the Freedom Riders stepping out of their bus into an infuriated mob had seared itself into my mind. I’d told myself that if I’d been alive in the ‘60s, I would have been on that bus. But I was lying to myself. There were plenty of injustices out there — rampant poverty, swelling prison populations, a sexual-assault epidemic, an obesity crisis. Not only was I not helping to fix any problems in the world, but I was profiting from them. During the market crash in 2008, I’d made a ton of money by shorting the derivatives of risky companies. As the world crumbled, I profited.
Sen. Barack Obama and his wife Michelle Obama take the stage for his victory rally at the Columbia Metropolitan Convention Center January 26, 2008 after winning the South Carolina Democratic primary
President Obama is briefed before the Swearing-in Ceremony for Treasury Secretary Timothy Geithner at the U.S. Treasury Department, Jan. 26, 2009 (Photo by Pete Souza)
President Obama is briefed prior to making phone calls to foreign leaders in the Oval Office, Jan. 26, 2009 (Photo by Pete Souza)
President Obama and Rep. Ben Chandler (D-Ky.), call the University of Kentucky men’s basketball team from the Oval Office to thank them for raising over $1 million to help the relief efforts in Haiti through “Hoops for Haiti,” Jan. 26, 2010 (Photo by Pete Souza)
President Obama exchanges greetings with a supporter after speaking at a UPS facility, Jan. 26, 2012, in Las Vegas