Be Careful Evaluating Official Government Statistics

While computers and software grow ever more powerful, government analysts can be prisoners of the past. It is possible to perform robust assessments of economic trends, yet our government and other western ones generally refuse to do so. Many in the press are not truly comfortable with numbers--after all, they are gifted writers. This piece shows that private sector jobs (on a full-time equivalent basis) remain under peak 2008 levels inside America. Even so, real wages per job have risen only slightly. We are in a massive global labor glut, and the worst is yet to come--much more powerful, silent, and pliant machines stand ready to add more downward pressure on human incomes.

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Here is another important point to consider about Hillary's Wall Street connections. This is a cover letter I sent to the SEC as a whistle blower's claim. Please read it for the frauds being conducted against pension funds. Date: February 23rd, 2016 From: Michael La Crone MBA., DBA. To: Carlos Vasquez Senior Counsel, Division of Enforcement U.S. Securities and Exchange Commission 44 Montgomery St., Ste. 2800 San Francisco, CA 94104 Senior Counsel Vasquez, Below is a summary of my arguments concerning gift stock compensation. As you can see, the title of my research is “Fraud on the Market: A Whistleblower’s Claim,” where I present my case. The purpose of this research is to argue fraud on the market. This specific case involves transfer of at-the-money secondary market stockholders’ equity to compensate corporate management insiders. This study will show that: (1) A vast amount of at-the-money stockholders’ wealth has been, is now, and will continue to be transferred to management insiders in the form of gift stock, award of stock, and optioned stock from the secondary equity market. (2) This wealth transfer constitutes a form of skimming of a select group of at-the-money secondary market investors, creating for them a real loss at a specific point in time. (3) Other secondary market investors do not suffer the same real loss as do the at-the-money investors. (4) No at-the-money investor has been given a value-for-value exchange for this insider compensation. (5) Secondary market equity is not owned by the corporation, and the corporation has no right to transfer at-the-money investors’ wealth to themselves and their managers. A corporation’s management access to secondary market stockholders’ wealth has no more legitimacy than if General Motors’ claimed the right to take back used cars traded in by new car buyers for the purpose of paying its executives a bonus. Break the boundary of ownership and you break the legitimacy of ownership. (6) Corporate boards are self-dealing when compensating themselves and their managers by cashing out at-the-money secondary market equity with gift stock that has no intrinsic money value. (7) The rationale used to transfer wealth from at-the-money secondary market investors does not align the interest of managers and at-the-money investors. The wealth transfer is a zero-sum, one-sided game. There is an inverse relationship between corporate insiders’ gains and at-the-money investors’ losses; in other words, what management insiders gain, at-the-money stock investors lose. (8) Many stock buybacks, which are used by corporate management to reflate stock prices after wealth transfers, benefit a select few stockholders, leaving at-the-money investors at a loss. Using corporate earnings, corporate buybacks are a wash trade by management insiders to generate activity and increase the price. (9) Insider wealth transfer from at-the-money secondary market investors is not an open-market transaction; it is accomplished by stealth and deception in the form of asymmetric information embedded in the equity stock purchase. (10) Regulation by disclosure and education does not work. With a doctorate in business and experience teaching graduate-level university finance, it took me five years to discover the root-cause information needed to understand insiders’ motives and actions. Information provided by the Securities and Exchange Commission is a needle in a haystack in a haystack. In 2001, I lost $xxx,000 in three months out of my retirement stock account with Charles Schwab. At the time, Schwab was promoting these stocks with a buy rating. I have a doctorate and had recently returned from Korea where I taught graduate-level finance to the military through Troy State University. Given all the information of my graduate-level finance education and stock research, I could not explain this loss. I did not invest in the stocks because I knew they were poorly valuated by the market. I bought stock with billion-dollar capitalization. I was determined to find out how this could happen. It took me five years to find an answer. The enclosed research is the culmination of my research up to 2015. I am submitting to you my original research that shows how a select group of stock investors are being skimmed by corporate executive insiders using bonus gift stocks. I have developed analytic tools that have never been used before to specifically identify the relationship between a select group of at-the money secondary market investors and corporate gift stock bonus compensation involving hundreds of millions of shares. Without my graphical model of investor exposure at the money, no one would be able to build a case of fraud on the market. The graphical tools in my model have been copyrighted in two books that I have published. Please prioritize this investigation. If a Wall Street president is elected to replace President Obama, this opportunity could be lost. I am certain that President Obama will support you with this challenge. Insider wealth transfers must be stopped sooner or later. Better sooner! As more wealth is transferred and controlled by fewer people, democracy will be weakened and corruption strengthened. Cash flows will be leveraged to gain more political power and economic strength while also being used to weaken the position of Americans’ individual rights. Without putting a stop to defunding stock market retirements, the United States will continue to grow a wealth gap in economic distribution. America’s wealth transfers will lead to a decline in the standard of living, and the poor will get poorer. Regulators have been captured. To cite one case, before her appointment as chair of the SEC, Mary Schapiro was compensated with gift stocks as a board member of Kraft Foods and Duke Energy. In my view, she had a huge conflict of interest by accepting these gifts and then not being able to find anything wrong with gift stock compensation. As long as bankers and corporate insiders are allowed to give themselves free money, they will never reform their practices. There will be no reform until these wealth transfers are brought to court. Legislating against this form of free-money compensation will just be a temporary hurdle for the bankers and corporate insiders. The challenge to your office is to bring back the ownership rights and the rule of law, and stop the corrupt practices of banks and corporations. The recent Supreme Court decision upholding fraud on the market against Halliburton might be a starting point. After reading my research, you’ll see that the following recommendations have material relevance and include the necessary action steps required by the Justice Department to effect positive change. Enclosed is a bound copy containing a list of executive gift stocks and award of stocks distributed to executives in five companies between 2003 and 2011 (211 pages). Although stock options are in the detail, they were not counted. Many executives blocked their disclosures, which are then identified as not supplied. The reader could not discern the meaning of this type of transaction. Content of this copy is merely a partial sample of company executives in a small sample of corporate insiders. Included in the submission of this report is my goal to establish a whistleblower’s claim. Thank you for your attention and support. Dr. Michael R. La Crone 650-834-6256