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Thinner wallets: Americans see biggest monthly income drop in 20 years

empty purse income drop
Feeling poorer?

Americans saw their income drop so dramatically in January that it marked the deepest one-month decline in 20 years.

Personal income decreased by $505.5 billion in January, or 3.6%, compared to December (on a seasonally adjusted and annualized basis). That's the most dramatic decline since January 1993, according to the Commerce Department.

It's something of a combination of one-time events, though.

Monthly income was unusually high in December because companies paid out early dividends to avoid upcoming tax hikes. Companies like Wal-Mart, Oracle, and Costco Wholesale Corp paid special dividends to their shareholders at the end of 2012, instead of waiting until 2013.

In doing so, they helped their high-income shareholders (individuals earning at least $400,000 a year, or married couples earning $450,000) avoid paying higher taxes on their gains. In their last-minute fiscal cliff deal, lawmakers decided to raise dividend tax rates for high-income households from 15% to 20%.

The payroll tax cut's expiration also played a role in January's drop, because most workers have to pay 2 percentage points more in taxes this year. The Commerce Department's "personal income" calculation subtracts out individuals' contributions to government social insurance programs like Social Security, which are funded by the payroll tax.

Excluding those special factors, the Commerce Department estimates that after-tax income actually increased 0.3% in January.

Meanwhile, economists are closely watching consumer spending, which accounts for about two-thirds of the U.S. economy.

They're waiting to see how the payroll tax hike will affect the broader recovery.

Comment: The Consumer "Confidence" Index is, like all other government statistics, nothing but smoke and mirrors, just like the "employment" rate. Just reverse everything the government say, and you are far more likely to be near the truth.


Black Magic

Insanity: Japan to restart six nuclear reactors

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© AFP Photo / Jiji PressThis picture taken on April 12, 2012 shows the third and fourth reactor building of the Ohi nuclear power plant of the Kansai Electric Power Co at Ohi town in Fukui prefecture, western Japan.
Japan's major supplier of nuclear power generating equipment, France's Areva group, has announced Tokyo's plans to restart six reactors by the end of 2013. The other reactors will be restarted later - except the Fukushima-type made in the US.

In addition to two reactors already put back into operation in Japan "there could be half a dozen reactors that will restart by the end of the year," the Chief Executive Officer of the French state-owned nuclear group announced at a press conference.

"I think two-thirds of reactors will restart" within several years, specified future plans Areva's CEO Luc Oursel.

Oursel noted though that it will take years to get the green light for all Japan's nuclear reactors and some of them, like the notorious reactors at devastated Fukushima power plant, produced in the US by General Electric Company, would remain closed forever.

While Japan's foreign partners remain optimistic about resurrection of nuclear power industry in the country, Japanese Kyodo press agency believes country's nuclear power generation facilities will remain frozen through 2013.

Japan shut down all of its nuclear power generation facilities after the disastrous catastrophe at the Fukushima nuclear power plant in 2011, caused by a powerful earthquake followed by a devastating tsunami. The cooling systems of two reactors at the station went out of order and nuclear fuel melted down, flowing out of reactors' active zones and contaminating the territory irreparably.

As a result, Tokyo declared complete outage of nuclear facilities in the country.

Comment: The people of Japan may not be happy about this latest resurgence of the nuclear program:
People Power! Thousands March in Japan Against Nuclear Power as Final Reactor Switches Off
Nuclear Titanics: The Perils of Technological Hubris
Japan's nuclear disaster caps decades of accidents and fake reports
Is Japan's Elite Hiding a Weapons Program Inside Nuclear Plants?


Stormtrooper

Police brutality: Allegations of police excessive force at Mardi Gras

A still from the video.
A still from the video.
New South Wales police will conduct an investigation after being accused of using excessive force during last weekend's Mardi Gras.

A video apparently shot at this weekend's Mardi Gras shows an unidentified reveller in handcuffs being thrown to the ground by a policeman, who then stands on the man's back.

The footage does not show clearly what happened immediately before the man is thrown to the ground.

Police said an 18-year-old man had been issued with a field court notice for the offences of assaulting police, resisting arrest and using offensive language following an incident at the intersection of Riley Street and Oxford Street in Surry Hills on Mardi Gras night.

"Following vision of the event being made available to police, an internal investigation will be launched to determine the full circumstances leading up to and surrounding the incident," a police spokesman said.

The 18-year-old man is due to appear in Downing Centre Local Court on April 1.

Another man has claimed that police handled him roughly during Mardi Gras celebrations. Leaders in the gay community have expressed concern.

"I'll be calling for an investigation," said the state MP for Sydney, Alex Greenwich. "From what we can see it does appear to be heavy handed and extremely concerning."

The video was uploaded by an account called SydneyMardiGras2013 which claims the footage was shot near Oxford Street about 11:30 pm on Saturday.

Question

FAA investigating report of drone spotted near NYC

UFO?
© Todd Plitt/USA TODAY
Was that a drone flying over metro New York Monday?

That's what a pilot for Italian carrier Alitalia reported seeing from the cockpit of a flight landing at New York's JFK Airport. The pilot informed the air traffic control tower, and now his spotting has drawn the attention of both Federal Aviation Administration and counter-terrorism officials.

"The FAA is investigating a report... he saw a small, unmanned or remote-controlled aircraft while on final approach to Runway 31 Right," FAA spokeswoman Laura Brown says in a statement quoted by CNN. "The sighting was approximately four to five miles (from) the airport at an altitude of approximately 1,500 feet."

New York's Joint Terror Task Force also is investigating, according to both ABC News and the New York Post report. Both cite unnamed sources.

"He was very clear as to what he saw," a source tells the Post about the pilot's account of "a black drone."

Other than the pilot's sighting, the Alitalia flight landed at JFK without incident.

Info

Venezuelan President Hugo Chavez has died

Hugo Chavez
© Getty A man walks past a mural portraying the Venezuelan flag, President Hugo Chavez and South American liberator Simon Bolivar at the 23 de Enero neighbourhood, in Caracas on March 5, 2013.
Venezuelan President Hugo Chavez lost his battle with cancer Tuesday, silencing the leading voice of the Latin American left and plunging his divided oil-rich nation into an uncertain future.

Vice President Nicolas Maduro, who struggled to hold back tears as he announced Chavez's death, said the government had deployed the armed forces and police "to accompany and protect our people and guarantee the peace."

Chavez had named Maduro as his heir, but the Venezuelan opposition is sure to press for fresh elections and tensions have been mounting over government allegations that its domestic rivals are in league with its foreign foes.

Grey Alien

E.T. is coming! Science channel series explores possible alien invasion

Aliens Coming
© Science ChannelA new series from the Science Channel explores a possible way that aliens could invade the Earth.
A new cable television series premiering tonight (March 5) reveals a fresh take on how aliens could invade Earth.

The Science Channel's Are We Alone? is a two-part miniseries that uses expert testimony and some creative science fiction to explore how a technologically advanced species could travel to Earth and invade the planet.

"It's like nothing you've seen before," Hakeem Oluseyi, a Florida Institute of Technology astrophyscist interviewed in the series, told SPACE.com.

Are We Alone? chronicles an alien invasion from start to finish. Interstellar travelers arrive on Earth, dropping capsules that begin multiplying when they reach the surface of the planet. Are We Alone? attempts to explore every aspect of the invasion, from how the biological components could take over the Earth to how humans would react to the aliens.

Heart - Black

Two-thirds of forest elephants killed by ivory poachers in past decade

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© Courtesy of TEAM Network/Conservation InternationalThere are about 100,000 forest elephants remaining in the forests of central Africa, compared with about 400,000 of the slightly larger savannah elephants.
The threat of extinction is growing for African forest elephants, according to a study released at the Cites summit in Bangkok

The forest elephants of Africa have lost almost two-thirds of their number in the past decade due to poaching for ivory, a landmark new study revealed on Tuesday. The research was released at an international wildlife summit in Bangkok where the eight key ivory-trading nations, including the host nation Thailand and biggest market China, have been put on notice of sweeping trade sanctions if they fail to crack down on the trade.

"The analysis confirms what conservationists have feared: the rapid trend towards extinction - potentially within the next decade - of the forest elephant," said Samantha Strindberg of the Wildlife Conservation Society (WCS), one of 60 scientists on the research team.

There are about 100,000 forest elephants remaining in the forests of central Africa, compared with about 400,000 of the slightly larger savannah elephants. The total elephant population was over 1 million 30 years ago, but has been devastated by poaching driven by the rising demand for ivory ornaments in Asia.

Prof Lee White, head of the National Parks Service in Gabon, once home to the largest forest elephant population, said: "A rainforest without elephants is a barren place. They bring it to life, they create the trails and keep open the forest clearings other animals use; they disperse the seeds of many of the rainforest trees - elephants are forest gardeners at a vast scale."

Bad Guys

Bullied boy dies: Bailey O'Neill, 12, dead weeks after school bullying

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A 12-year-old boy has died after being placed in a medically induced coma following a fight at his suburban Philadelphia school.

Bailey O'Neill died Sunday, a family member who did not want to be named, confirmed to ABCNews.com. Bailey turned 12 on Saturday. He was taken off life support Sunday morning.

In January, Bailey was involved in a fight at Darby Township School in Upper Darby, Pennsylvania, west of Philadelphia, Jan. 10. The boy was allegedly jumped by two classmates, one of whom hit him in the face several times fracturing his nose, his father Rob O'Neill told ABC affiliate WPVI.

Bailey was knocked down in the incident, his father told the station, which caused a concussion. From then on, something with the 6th grader wasn't right, his father said.

"He was sleeping. He was moody. He wasn't himself. He was angry a little bit. He wasn't really eating," Rob O'Neill told WPVI last month.

Stock Down

Worst income drop in 20 years: Austerity arrived long ago

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© AP Photo/Julie JacobsonPersonal income posted its biggest monthly drop in 20 years in January, mainly a result of Washington's austerity fever.
As you have probably heard, today is Sequester Day, when the Austerity Badger sneaks into America and sets our money on fire. In truth, austerity is here already.

Personal income plunged 3.6 percent in January, the Bureau of Economic Analysis reported, the biggest drop in 20 years. The decline was driven by a couple of unusual one-time effects, according to the BEA. Both are direct results of Washington's suicidal obsession with budget deficits at a time of persistent economic weakness.

The biggest of these was a reversal of a surge in dividend income in December, as companies rushed to pay stock holders dividends before the "fiscal cliff" hiked dividend tax rates in the New Year. That amounted to about 2.6 percentage points of the total income drop, according to Capital Economics.

The second hit to income was the reinstatement of the federal payroll tax after a long holiday. The 2 percent increase in Social Security withholding cut nearly $127 billion from income in January, according to the BEA, Goldman Sachs economists pointed out (h/t Quartz's Matt Phillips). The bump and decline in dividend income is a wash. The payroll-tax cut is going to be harder to shake off, leaving Americans with smaller paychecks for the rest of the year.

The higher payroll tax, along with the sequester budget cuts that will start to kick in on Friday, and other lingering effects of the "fiscal cliff" that loomed at the start of the year, will cut economic growth this year by 1.5 percent. But economic growth has already been hampered for the past two years by the government's biggest spending cutback since the end of the Vietnam war, as the New York Times pointed out earlier this week. We entered the age of austerity long before the sequester.

Black Magic

China grave-robbers sold dead brides for 'ghost marriages'

Beijing - Four people have been jailed in China for digging up corpses to sell as brides for traditional "ghost marriages" - where dead single men are buried with a wife for the afterlife - local reports said.

Marriage is an important part of Chinese society and, while the practice is increasingly rare, it is still kept up by some families whose young adult sons pass away before having a chance to wed.

Normally it is agreed between the families of the dead, but the Xian Evening News said the group "stole female corpses and after cleaning them, fabricated medical files for the deceased and sold them for a high price".

A court in the northern province of Shaanxi sentenced the four to terms between 28 and 32 months, it said, adding they "took advantage" of the "bad tradition" of ghost marriages in parts of Shaanxi and neighbouring Shanxi province.

Citing the court, the report said the gang made a total of ¥240,000 (Dh143,000) from the sales of 10 corpses.

Source: Agence France-Presse