Mish's Global Economic Trend Analysis

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Obamashock! Hits Employees of Sodexo, "World's Largest Quality of Life" Service Company Posted: 10 Nov 2013 06:44 PM PST Some employees of Sodexo, the "World's largest quality of life services company" have been hit with a massive case of "Obamashock!" because of the way Obamacare identifies part-time employment. An email from reader "Mark" will explain. Hello Mish I thought you would be interested in another new angle regarding fallout from the ACA. Yesterday we received a notice of cancellation of our eligibility in the large group health plan through my wife's employer.  They state that this is due to the Affordable Care Act. My wife has worked for Sodexo, USA for about 3 years.Sodexo is a contract food service provider at literally thousands of institutions around the world. Her job is at a small private college in Iowa. The notice we received states that, "Sodexo has aligned how we define full-time employees eligible for benefits with the Affordable Care Act". As such, she no longer qualifies as a full time employee, and can no longer be part of the benefit plan, as of January 1, 2014. The new definition is that a full time employee must average 30 hours a week over the past 12 months. The cafeteria at a private college is not open 12 months of the year, and does not operate an average of 30 hours per week over 12 months. It is impossible to attain this number of hours when they are not available. I am self employed. We will not qualify for any 'exchange subsidies'. She worked this just over minimum wage job solely for access to the health plan. Now our options seem to be either to pay $19,600.52 per year for the COBRA plan, or $12,636 for an individual family plan with a deductible that is 3 times our current plan. We are definitely in Obamashock! Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

ECB Following Path of Japan, Including Similarly Ridiculous Statements Posted: 10 Nov 2013 07:29 AM PST Rather than writeoff bad loans at European banks, the ECB has chosen the bury your head in the sand, extend-and-pretend path of Japan. This is despite the fact the Japanese plan has taken multiple decades without producing meaningful results. "More Room For Rate Cuts" For example, ECB Executive Board member Benoit Coeure says "ECB Can Cut Rates Further, Offer Liquidity". The European Central Bank can trim interest rates further and provide the banking system with liquidity, ECB Executive Board member Benoit Coeure said on Saturday after last week's rate cut to a record low. "We can still cut interest rates if needed, and as we said clearly last Thursday we can provide liquidity to the euro zone financial system if needed to ensure they don't have problems refinancing," he said on France Inter radio. "All that's possible, but what counts is that the banks transmit the decrease in the cost of refinancing to the economy," he said. What Good Can Additional Rate Cuts Do? Let's be realistic. The ECB's lending rate is .25%. Although the ECB can cut rates 25 more times, 1 basis point at a time, the idea that such a move can produce anything meaningful is ridiculous. Japan made similar moves multiple times, cutting rates a few basis points at a time. It served no purpose other than to let the Bank of Japan say "we are acting". The BOJ never once added the truth "but it's meaningless". And now Benoit Coeure makes the same useless statement, also without adding "rate cuts cannot do a damn thing for Europe". Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com  Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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