Thread: The strongest economy in the world

Originally Posted by Black Heart

This obviously means all of the QE 1, 2, 3, etc has NOT worked.

It has if kicking the can down the road was the intention.

Originally Posted by MrG

Originally Posted by rickschoppers

So should I have felt guilty making $175K per year as a pharmacist director while pediatricians were averaging $125K? I don't think so.

Pharmacist Director of a hospital...? pharma company...? drug store...? Just curious.

Several hospitals, but not all at once.

Investors knew it was going to be an ugly earnings season. But some of the losses are simply obscene.

There are 11 companies in the broad Russell 3000 index, including a whole host of energy companies like Apache (APA), but also industrial conglomerate General Electric (GE) and struggling online portal Yahoo (YHOO), that have reported staggering net losses in the just completed calendar year, according to a USA TODAY analysis of data from S&P Global Market Intelligence. Each of these companies reported net losses of $4 billion or more last year -- dwarfing even the impressive $1 billion net loss reported Thursday by struggling retailer Sears (SHLD).



There's no question the imploding price of oil is largely to blame. Of the 11 companies that posted the massive losses, eight are in the energy sector. Highlighting the sudden and swiftness of the destruction, eight of the 11 companies were profitable in 2014, indicating just how fast business has dropped off. Investors have certainly surprised. Shares of these 11 companies, on average, have lost half their value in the past 12 months. Shares of all but one, General Electric, are down over the past 12 months.



Such huge losses add dramatic emphasis to what's been a very difficult earnings season. More than 90% of the companies in the Standard & Poor's 500 have reported their fourth-quarter results so far, and profit during the quarter dropped 4.5% from the same year-ago period, says S&P Global. It's the second quarterly drop in profit for the companies. For the year, profits at S&P 500 companies dropped 0.7%.

Investors had low expectations going in the quarter, but reality has been even worse. Just 65% of S&P 500 companies were able to beat profit forecasts for the quarter, which is slightly below the long-term historical average of 66%, says S&P Global.



Massive profit declines are certainly a reason for that. Apache holds the distinction of reporting the biggest net loss of any company in the Russell 3000 index - totaling a whopping $23 billion. The energy exploration company's loss is a whopper on several accounts. Not only did Apache lose more money than it brought in as revenue last year, $6.4 billion, but it lost dramatically more than the $2.9 billion loss in 2014. It's an epic loss matched with an epic decline in the stock price, which has fallen 45% over the past 12 months. Shockingly, analysts currently expect the company to report another adjusted net loss of $760 million in 2016.
It's not just energy companies with the massive losses.



Yahoo is the only information technology company to post an outsized net loss in 2015 to the tune of $4.4 billion. The company is struggling to find a profit in a media world where profit margins are contracting for many competitors. Shares of Yahoo are down 29% over the past 12 months, even though investors expect the media company to make a major change to its structure this year including its lucrative stake in Chinese e-commerce company Alibaba (BABA). Analysts, nonetheless, are expecting Yahoo to post an adjusted profit of $502 million this year.


Some of the losses are more of a function of accounting than the underlying health of the business. The best example is General Electric, which has been aggressively restructuring itself to focus on core and profitable manufacturing businesses like power generation and transportation. The company reported a net loss of $6 billion in 2015, but the loss is entirely the result of businesses that GE has discontinued or sold. General Electric reported more than $7.4 billion in net losses from "discontinued operations." Excluding those units, GE was profitable to the tune of $1.7 billion from continuing operations. Shares of GE are up more than 12% over the past 12 months. Analysts expect GE to report a massive adjusted profit of nearly $14 billion in 2016.



Nonetheless, it's been a rough year for corporate profits. And an expensive one for investors.



11 companies just lost obscene sums of money

For the first time since the data was compiled starting in 1929.

U.S. Has Record 10th Straight Year Without 3% Growth in GDP

By Terence P. Jeffrey | February 26, 2016


(CNSNews.com) - The United States has now gone a record 10 straight years without 3 percent growth in real Gross Domestic Product, according to data released by the Bureau of Economic Analysis.

The BEA has calculated GDP for each year going back to 1929 and it has calculated the inflation-adjusted annual change in GDP (in constant 2009 dollars) from 1930 forward.

In the 85 years for which BEA has calculated the annual change in real GDP there is only one ten-year stretch—2006 through 2015—when the annual growth in real GDP never hit 3 percent. During the last ten years, real annual growth in GDP peaked in 2006 at 2.7 percent. It has never been that high again, according to the BEA.

U.S. Has Record 10th Straight Year Without 3% Growth in GDP

The Ameristani financial rating agency Moodys, who judged so many "strong" companies so badly wrong in the past has downgraded China's Government Credit Rating.

Moody's Downgrades China's Credit Outlook From Stable To Negative - Full Text | Zero Hedge

"Moody's changes outlook on China's Aa3 government bond rating to negative from stable; affirms Aa3 rating Singapore, March 02, 2016 -- Moody's Investors Service has today changed the outlook to negative from stable on China's government credit ratings, while affirming the Aa3 long-term senior unsecured debt, issuer ratings, and (P)Aa3 senior unsecured shelf rating.


The key drivers of the outlook revision are:

1. The ongoing and prospective weakening of fiscal metrics, as reflected in rising government debt and in large and rising contingent liabilities on the government balance sheet.
2. A continuing fall in reserve buffers due to capital outflows, which highlight policy, currency and growth risks.
3. Uncertainty about the authorities' capacity to implement reforms -- given the scale of reform challenges -- to address imbalances in the economy.

At the same time, China's fiscal and foreign exchange reserve buffers remain sizeable, giving the authorities time to implement some reforms and gradually address imbalances in the economy. This underpins the decision to affirm China's Aa3 rating."


One wonders what the Ameristani, EU, Japanese, UK and Australia's ratings are. Or do they fear government "displeasure" if they are junked.


Isn't there a Chinese credit rating agency, have they done similar? Would they dare?



From a report yesterday Ameristani financial health has continued to weaken. There is no problem because "exceptionally" the Ameristani government is audited by it's own in house auditors.


US Government Releases 2015 Financial Statements: "Keeps Getting Worse" | Zero Hedge


"And once again, the US government’s financial condition has declined significantly from the previous year.

For 2015, the government reports $3.2 trillion in total assets.
This includes everything from financial assets like bank balances to physical assets like tanks, bullets, aircraft carriers, and the federal highway system.

Curiously, the single biggest line item amongst these listed assets is the $1.2 trillion in student loans that are owed to the government by the young people of America. This is pretty extraordinary when you think about it. 37% of the government’s total reported assets are student loans, which is now considered one of the most precarious bubbles in finance. $1.2 trillion is similar to the size of the subprime mortgage market back in 2008. And delinquency rates are rising, now at 11.5% according to Federal Reserve data. Plus, it’s simply astonishing that so much of the federal government’s asset base is tantamount to indentured servitude as young people pay off expensive university degrees that barely land them jobs making coffee at Starbucks.

On the other side of the equation are a reported $21.5 trillion in liabilities, giving the government an official net worth of negative $18.2 trillion. This is down from last year’s negative $17.7 trillion and $16.9 trillion the year prior. It just keeps getting worse.


But there’s one thing that’s even more incredible about all of this. You see, each year these financial statements are audited by the government’s in-house agency known as the Government Accountability Office (GAO).

All big companies do this. They publish financial statements, which are then reviewed by an independent audit firm.
Auditors are a critical component of the financial reporting process. It’s their responsibility to make sure that shareholders and the public can have confidence in a company’s financial statements.


When Apple publishes an annual report, auditors go through all the books of the company and make sure that management is accurately representing the company’s true condition. Thus when an auditor issues a failing grade, or what’s known as a qualified opinion, there’s usually hell to pay. At the very hint of impropriety a company’s stock price will tank immediately. People get fired. SEC investigations are launched. And now based on US securities law and section 404 of the Sarbanes-Oxley Act from 2002, senior executives can face criminal charges if their companies receive a failing grade from their auditors.

This is serious stuff.

Yet year after year the GAO gives the federal government a failing grade in its audit report of America’s financial statements."




Truly an "exceptional" house of cards.

Lastly a report looks at China. The report headlines with 5 to 6 million redundancies over the next 2 to 3 years. Mainly from the "State" enterprises.

China's Mass Unemployment Wave Begins: Six Million Workers To Get Pink Slips | Zero Hedge

"Today, Reuters finally peels away the first layer of just how bad China's mass layoff wave will be when it reports that China aims to lay off 5-6 million state workers over the next two to three years as part of efforts to curb industrial overcapacity and pollution. This admission, the first of many, will cost China.

As Reuters adds, "China's leadership, obsessed with maintaining stability and making sure redundancies do not lead to unrest, will spend nearly 150 billion yuan ($23 billion) to cover layoffs in just the coal and steel sectors in the next 2-3 years."

That number, coming from the government, is laughably lower that what our own estimate of how much it would cost China to preserve the peace, a number which will likely be in the CNY11+ trillion range. Needless to say, the overall figure is likely to rise as closures spread to other industries and even more funding will be required to handle the debt left behind by "zombie" state firms.

The term refers to companies that have shut down some of their operations but keep staff on their rolls since local governments are worried about the social and economic impact of bankruptcies and unemployment. Shutting down "zombie firms" has been identified as one of the government's priorities this year, with China's Premier Li Keqiang promising in December that they would soon "go under the knife".

As forecast here all throughout 2015, it was just a matter of time before China had no choice but to unleash the mass pink slips, and that is about to happen: "the government plans to lay off five million workers in industries suffering from a supply glut, one source with ties to the leadership said."

A second source with leadership ties put the number of layoffs at six million. Both sources requested anonymity because they were not authorized to speak to media about the politically sensitive subject for fear of sparking social unrest.
Putting this number in context, the hugely inefficient state sector employed around 37 million people in 2013 and accounts for about 40 percent of the country's industrial output and nearly half of its bank lending.

According to Reuters, this would be China's most significant nationwide retrenchment since the restructuring of state-owned enterprises from 1998 to 2003 led to around 28 million redundancies and cost the central government about 73.1 billion yuan ($11.2 billion) in resettlement funds."


Compared to past "restructuring the announced numbers today are of an order of magnitues less.

HHeeeerre's Jimmy!


Jim Rogers: There's a 100% Probability of a U.S. Recession Within a Year
But buy the greenback anyway.

Jim Rogers: There's a 100% Probability of a U.S. Recession Within a Year - Bloomberg Business

Agence France-Presse has launched a weekly series of reporters' blogs taking readers behind the scenes of the 2016 US election for a look at the events and attitudes shaping the White House race.

Read more at: Flint: US city of blight, flight and poisoned water

WMD for the sheeple.

The U3 rate is not only inaccurate, but a lie. Here's former Fed governor Kevin Warsh

Labor market not as strong as unemployment rate suggests, former Fed official says

By GREG ROBB
SENIOR ECONOMICS REPORTER


WASHINGTON (MarketWatch) — The U.S. labor market is not nearly as strong as the unemployment rate suggests, said former Federal Reserve Governor Kevin Warsh, on Tuesday.

The unemployment rate was 4.9% in February, matching an eight-year low.

In a speech to the National Association for Business Economics, Warsh said the decline in the unemployment rate was caused by the unwanted drop in participation by males of primary working age, a steep decline in productivity and modest economic growth.

“Hardworking Americans” are living on stagnant incomes and are wondering when the wealth-effect of quantitative easing will trickle down to them, Warsh said.

These workers are increasing precautionary savings because they know they will be the hardest hit when the economy falters, he added.

“I’d suggest that is why the politics of 2016 seem quite at odds with the official government statistics, which the Fed describes in meeting after meeting as nearing full employment,” Warsh said.

Monetary policy can be improved by fresh thinking about the “stale, static models” the U.S. central bank relies on, Warsh said.

For instance, he said the Fed’s models ignore contemporaneous market signals but then the central bank rushes to respond in a way that only validates market assumptions that the central bank will rescue investors from falling stock prices.

Labor market not as strong as unemployment rate suggests, former Fed official says - MarketWatch

We Are Being Killed On Trade – Rapidly Declining Exports Signal A Death Blow For The U.S. Economy
[​IMG] By Michael Snyder, on March 15th, 2016
[​IMG]

Exports fell precipitously during the last two recessions, and now it is happening again. So how in the world can anyone make the claim that the U.S. economy is in good shape? On my website I have been repeatedly pointing out the parallels between the last two major economic downturns and the current crisis, and I am going to discuss another one today. Since peaking in late 2014, U.S. exports have been steadily declining, and this is something that we never see outside of a major recession. On the chart that I have shared below, the shaded gray bars represent the last two recessions, and you can see that exports of goods and services plunged dramatically in both instances…

[​IMG]

And this chart does not even show the latest numbers that we have. During the month of January, U.S. exports fell to a five and a half year low…

The U.S. trade deficit widened more than expected in January as a strong dollar and weak global demand helped to push exports to a more than 5-1/2-year low, suggesting trade will continue to weigh on economic growth in the first quarter.

Entire: We Are Being Killed On Trade ? Rapidly Declining Exports Signal A Death Blow For The U.S. Economy

Caterpillar still in the red after xxx years. They were the global leader in their field, quality and presence.

Known as a "bell weather" stock for decades. Global competition and lack of politically engineered orders have, IMHO, been the main causes. Other once dominant Ameristani companies also feel the chill will of the current unexceptional empires futile efforts in all areas.




"And what is more confusing is that CAT has not only not had a positive monthly increase in retail sales in a record 39 months, or more than double the length of the Financial Crisis' 19 months and the longest in history, but the February drop was the biggest one month decline in 5 years!"

This Simply Does Not Compute: If Caterpillar Data Is Right, The Industrial Depression Has Never Been Worse | Zero Hedge

For the first time since April 2014, New Home Sales have fallen YoY for 2 consecutive months. The 6.1% drop YoY in February is the biggest annual drop since June 2014 and confirms recent housing data weakness. Average new home prices fell to $348,900 - the lowest since August.

The housing "recovery"... Only The West saw an increase in sales (151k from 109k) as Northeast (-24%), Midwest (-17.9%) and South (-4.1%) all tumbled.



New Home Sales Plunge Most Since June 2014 | Zero Hedge

^Either the buyer are tapped out of savings or when the mortgage company values the for sale property, their assessment, of it's resale value now and maybe 5 years down the road, is much lower.

The Atlanta Fed has released 1st quarters GDP growth figures. The are updated weekly and available at their web site.



As indicated the consensus started at 2.5% for GDP growth for the whole of 2016. In February it went up a down a little but officially ended at 2.1%. At the end of March that expected annual GDP growth figure has slumped to 0.6%.

For those invested in US quoted companies included in the S&P 500, here is probably a chart worth perusing.



Q1 GDP Crashes To 0.6%: Latest Atlanta Fed Estimate | Zero Hedge

Americans fear a life of 'dead-end crap jobs with crap wages'
by Heather Long @byHeatherLong
March 16, 2016

Americans fear a life of 'dead-end crap jobs with crap wages' - Mar. 16, 2016

The unemployment rate has been declining. More people are finding part-time jobs in service industries like bartending and waitressing. I like the the term "might."

Part-timers might account for labor-force surge

Published: Apr 1, 2016 12:14 p.m. ET

More Americans find work, but pay and hours appear to lag

By
JEFFRY
BARTASH


More Americans are finding jobs at retail stores, but they aren’t getting the kind of pay and hours they’d like.

The number of able-bodied Americans entering the labor force has surged since last fall. But in a marked change from earlier in the recovery, more of them are finding jobs right away instead of just looking for work.

What’s going on? It’s hard to say for sure, but circumstantial evidence in the latest U.S. jobs report suggests many of these newly employed workers have found part-time work with mediocre pay.

Part-timers might account for labor-force surge - MarketWatch

^You may want to see the "trends" for customer numbers/spend at "restaurants" and bars. They appear to be declining due to customer belt tightening.

Not only wages and hours. Mandatory Zero hour contracts the norm. Health care costs and other "benefits" have already been abolished in some countries.

Originally Posted by OhOh

^You may want to see the "trends" for customer numbers/spend at "restaurants" and bars. They appear to be declining due to customer belt tightening.

GDP growth was weak in the recent report. Very weak.

Not only wages and hours. Mandatory Zero hour contracts the norm. Health care costs and other "benefits" have already been abolished in some countries.

Yeah, "zero hour" contracts are a British term, but it's the same concept in the US.

Lots of part-time jobs.

Benefits? I'm not even sure what those are anymore.

Two weeks ago Ameristani GDP was as 0.6% growrth. It's now down at 0.1%.




Atlanta Fed Slashes Q1 GDP Estimate To Only 0.1% | Zero Hedge

Consumers have been the missing link in the U.S. economic recovery and are likely to remain so absent a major change in sentiment.
Despite the seemingly endless stream of Wall Street economists who believe the U.S. is about to snap out of its malaise, most Americans think the economy is bad and getting worse, according to several recent surveys.


One of the more glaring examples of how strong pessimism has become is Gallup's U.S. Economic Confidence Index. The measure gauges the difference between respondents who say the economy is improving or declining. The most recent results are not good.


Fully 59 percent say the economy is "getting worse" against just 37 percent who say it is "getting better." That gap of 22 percentage points is the worst since August, according to Gallup, which polled 3,542 adults. The index carries a sampling error of plus or minus 2 percentage points.


Those numbers come amid a moribund retail sales climate, with March showing a 0.3 percent decline, worse than even the modest 0.1 percent uptick the Street had been expecting. Consumer prices showed only modest 0.1 percent gains across the board, while producer prices were down 0.1 percent.
Gross domestic product likely grew little if at all in the first quarter, with the Atlanta Fed's latest forecast anticipating a 0.3 percent increase.



Still, many on Wall Street continue to tout the consumer's pivotal role as the driver of future growth. JPMorgan Chase (JPM) CEO Jamie Dimon, on an earnings call Wednesday, said consumer activity was a key component in the nation's largest bank's ability to beat Wall Street earnings expectations in the first quarter, even though the company's annual profit fell 6.7 percent.
Those waiting for consumers to step up to the plate, however, had better be patient.



"There's a lot of the country that hasn't participated in the substantial improvements that have occurred elsewhere," Mark Hamrick, senior economic analyst at Bankrate.com, said in an interview. "The income inequality is among the biggest challenges not only for the economy but also the democracy."
Hamrick sees the rise of populist presidential candidates Donald Trump and Bernie Sanders as direct outgrowths of Americans' frustrations with the pace of economic growth as well as its distribution.


Trump has stoked his support base by maintaining that the U.S. is losing out to China and Mexico because of unfair trade deals negotiated by weak leaders. Likewise, Sanders has bemoaned the trade deals while promising to break up big Wall Street banks and provide free college and an even broader expansion of public health care to bridge the wealth gap.


"There's a clear feeling through the campaign that helps explain what the data don't tell us," Hamrick said. People have "a frustration with the lack of underlying momentum and vitality" in the economy.



Indeed, other indicators besides the Gallup survey tell the same story.
A gauge called the Money Anxiety Index, which measures uncertainty and financial anxiety through a variety of economic indicators, is at its highest level since September. Also, the Real Clear Politics average of attitudes on the economy shows 66.1 percent of Americans believe the country is on the wrong track.


http://www.cnbc.com/2016/04/14/most-...ting-worse.htm

But its all China's fault because they only have a growth rate of between 6% and 7%.

Forget the numbers, we all know they are "transparent".


Here's an image, which some might understand.

Originally Posted by birding

Consumers have been the missing link in the U.S. economic recovery and are likely to remain so absent a major change in sentiment.
Despite the seemingly endless stream of Wall Street economists who believe the U.S. is about to snap out of its malaise, most Americans think the economy is bad and getting worse, according to several recent surveys.


One of the more glaring examples of how strong pessimism has become is Gallup's U.S. Economic Confidence Index. The measure gauges the difference between respondents who say the economy is improving or declining. The most recent results are not good.


Fully 59 percent say the economy is "getting worse" against just 37 percent who say it is "getting better." That gap of 22 percentage points is the worst since August, according to Gallup, which polled 3,542 adults.

Yeah, I read this today in my morning read-ups.

Once again, it shows the massive DIVIDE between the media personality - news readers - and the ACTUAL people who are working, living, and plowing through in life.


The recent claims of an improved labor market only shows 2 stats that are considered good.


1. U3 Unemployment is down. More people do have jobs. And a lot of these jobs are part-time low paying jobs and full-time low paying jobs.

2. Workers are resigning/quitting their jobs more often, meaning they have the confidence to get another job, or already have another job lined up.

Outside of these 2 numbers, there is not data that says things are "improving."

County officials across Mississippi are warning of job losses and deep deficits as local jails are being deprived of the state inmates needed to keep them afloat. The culprit, say local officials, is state government and private prisons, which are looking to boost their own revenue as sentencing and drug-policy reforms are sending fewer bodies into the correctional system.

In the late 1990s, as the overcrowded Mississippi prison system buckled under the weight of mass incarceration, the state asked local governments to build local correctional institutions to house state prisoners. It was billed as a win-win: The Mississippi Department of Correction would foot the bill for each prisoner, and the counties would get good jobs guarding them. The state guaranteed that the local jails would never be less than 80 percent occupied, and the locals would get a 3 percent boost in compensation each year.



After a few years, say local officials, the state offered a new deal: Instead of the 3 percent bump, they would give the locals more and more prisoners, thus boosting total revenue. Today, the state pays $29.74 per day per prisoner to the regional facilities, a deal that worked for everybody as long as the buildings were stuffed full with bodies.

Scott Strickland, president of the Stone County Board of Supervisors, said reforms at the state and local levels have shrunk the prison population. "Federal laws took some part in that -- allowing prisoners to serve only a certain percentage of their term," he said. "Also, they've reduced prison sentences for certain drug-related offenses."


As the wave of mass incarceration begins to recede, the Mississippi controversy has local and state officials talking openly about how harmful locking up fewer people up will be for the economy, confirming the suspicions of those who have argued that mass incarceration is not merely a strategy directed at crime prevention. " Under the administrations of Reagan and Clinton, incarceration, a social tool used for punishment, also became a major job creator ," Antonio Moore, a producer of the documentary "Crack in the System," wrote recently.


“I don’t think it necessarily started out this way, but the inmate population has become the backbone of some of these counties that are involved,” said Mississippi Corrections Commissioner Marshall Fisher as the controversy heated up.
The prisoners have value beyond the per diem, county officials add, when they can be put to work. State prisoners do garbage pickup, lawn maintenance and other manual labor that taxpayers would otherwise have to pay for. Convict labor has made it easier for local governments to absorb never-ending cuts in state funding, as tea party legislators and governors slash budgets in the name of conservative government.

The state knows it, and now demands that local jails house state convicts who perform labor for free, George County Supervisor Henry Cochran told The Huffington Post. The counties take the deal. "You're either gonna go up on everybody's garbage bill, or you've gotta house those inmates," Cochran said. "You're using that inmate labor, so [taxpayers are] getting a little good out of that inmate for their tax dollars. You either gotta hire a bunch of employees or keep that inmate. It's like making a deal with the devil."



State lawmakers can claim to be acting conservatively, Cochran said, but they're not responsible for the consequences of their decisions. "The state's dumping responsibility on local government," he said.
Fisher said in February the state Corrections Department would begin repossessing prisoners from local institutions in order to "reduce spending by $5 million to comply with Gov. Phil Bryant’s recent order."
In a statement at the time, Fisher said that he was re-evaluating the agency's spending, given "low pay, high turnover, critical staff shortages, and aging facilities."

The state was paying prison guards so little that it couldn't even find staff for its community work centers, which run the convict labor program, Fisher said. Mississippi, in other words, couldn't even afford free labor. "I don’t like having to close community work centers, but we simply don’t have the staff to keep some of them operating. Until we improve the pay of corrections officers, staffing will continue to be a critical issue," Fisher said.



Like Mississippi, neighboring Louisiana, as well as Kansas, have recently become laboratories for conservative policy, with hard-line Republicans slashing taxes and dramatically cutting spending. The argument was that the tax cuts would fuel growth. Instead, the states have become economic basket-cases -- Kansas actually performed worse economically than its neighbors. Deficits in Kansas and Louisiana both soared and basic services have been cut beyond the bone.
The next to fall in Mississippi will be workers at regional jails that have lost 20 percent of their inmates. Officials in Stone County and George County said that around 40 employees in each would be laid off if the jails were forced to close, a necessity if the inmate population or the state reimbursement doesn't increase. The counties are losing $72,000 per month each, officials said. Both counties still owe significant sums on bonds that financed the jails, so even if they shut them down to stop the bleeding, taxpayers will still be on the hook.



"It's a game," said Scott Strickland. "The commissioner of corrections wants raises for all his state employees, so he's trying to cry wolf."
Strickland noted that it costs the state roughly $43 per day to lock people in Mississippi facilities, and that none of the inmates in Stone County were looking forward to being moved. "They treat them rough up there," he said of the state prisons.



Jeffrey Schwartz, a consultant who has advised jails and prisons, said Mississippi's battle is a strange turn of events. "It is a state that has had lots of problems within corrections. This is quite a new twist," he said. "In the great overcrowding days, there were battles between the counties and the state over whether the state had to take inmates from the counties, and the states said we're not taking any more, and the sheriffs said, well you have to." A sheriff, Schwartz recalled, once dropped inmates off at a state prison, handcuffed them to the fence, and drove off.
But local officials are investigating whether the state inmates are instead winding up in private prisons. "According to their reports, they have some private prisons that they are actually paying up to $80 a day. I think it's political favors going around, the reason they're doing that, but that's neither here nor there," Strickland said.



Mississippi contracts with a Utah company called Management and Training Corp. to house some of its prisoners. Stone County Supervisor Dale Bond questioned why the state would send inmates to the private prison at more than double the cost of transferring them to a county facility. "Some of these private prisons have got 1,000 inmates and they're getting that large per diem," he lamented. Management and Training Corp. wasn't immediately able to comment.
"By the end of May, we'll be well over a quarter-million in the red on that facility," said Bond of Stone County's facility. "If they do not send us our inmates back, we can't make it."



Bond said the county supervisors have asked for permission to bring prisoners from out of state to cover the shortfall, but he worried red tape will slow the flow of human traffic. "I don't know how reliable that is. By the time we get that approved, we're gonna be broke," he said.


At a recent meeting with state officials, Bond said, the state Corrections Department offered to pay off one sheriff's bond and close the county facility, but he turned down the offer. "No, we don't want that, we want the jobs," the sheriff said.
For Strickland, something has to give. "In a way, we were sort of devastated. That revenue needs to be made up," he said.



Mississippi Jails Are Losing Inmates, And Local Officials Are 'Devastated' By The Loss Of Revenue