[Most Recent Quotes from www.kitco.com]

"Economics with Attitude"

NEWS to Disturb the Comfortable...

We don't tell you what to think,

but we give you something to think about.

ECB's Draghi says money printing already helping recovery
Bond-buying by the European Central Bank will reinforce the euro zone's economic recovery, its president, Mario Draghi, said on Thursday, adding that there was already evidence that the scheme was taking effect. "Monetary policy is reinforcing the cyclical recovery. I insist in saying 'cyclical' because this recovery is not structural," he told a parliamentary committee hearing, in a reference to long-term problems such as unemployment. Draghi told lawmakers in Italy's parliament that recent data releases "are comforting about the contribution that monetary policy is supplying to reinforce the cyclical recovery". He said there has been a particularly noticeable effect in lowering the level of the euro against other currencies. The ECB has cut interest rates to record lows, lent banks billions of euros in cheap funds and begun buying sovereign bonds to try to bolster the euro zone economy...

Paul Volcker Former Fed chairman: Gold Was the Enemy
Paul Volcker is a living financial legend. As a chairman of the Federal Reserve in the early 80s, he was singlehandedly responsible for quashing stagflation by raising interest rates to an unheard of 20 percent by June of 1981. What ensued was an unprecedented economic expansion and bull market in stocks, which was only seriously stopped by the Internet bust in 1999, caused by the lax monetary policy of Volcker’s successor Alan Greenspan. As part of a meeting of the Committee for Monetary Research and Education, Volcker (88) gave us rare insights into his story, the working of the Fed, and current financial issues at the University Club in New York, on March 25. Mr. Volcker serves under both democratic and republican presidents but got along well with both. “When I became chairman, we had pretty bad inflation. President Carter was under some pressure. He recognized inflation was a big problem and something had to be done about it,” he said.

Broke in the USA: Half of All American Families Have No Savings
With the unstable economic situation in the US, many Americans have learned to live on a budget. But what happens when one faces a substantial cost outside their budget? According to Chief International Economist at Deutsche Bank, Torsten Sløk, nearly half of American households don’t save any of their money, leaving themselves with harsh economic consequences should the economy turn and they lose their jobs. Over a million people lost their homes in 2008 due to the economic collapse, according to Foreclosures.com. Since the recession, which began in December 2007, the US unemployment rate has risen 4 percentage points, changing the labor market substantively. The rate peaked at 10% in October, 2009, and has decreased substantially to 5.5% in February, 2015.

Jim Rickards: When A Panic Starts No Amount Of Reserves Is Enough

Yahoo's plan to spend another $2B buying back its own stock
Online media company Yahoo (YHOO) announced Thursday it plans to spend another $2 billion buying back shares of its own stock. The new repurchase plan gives the company to right to buy back its stock through March 31, 2018. The newest buyback plan is on top of $726 million in buying power that remains in the existing stock buyback plan. Yahoo has been under pressure to more aggressively return its impressive pile of $53.0 billion in cash and investments to investors. The company has received an influx of cash from its sale of Chinese e-commerce company Alibaba (BABA) as part of the initial public offering. And Yahoo has created a plan to spin off the rest of its stake into a separate company to transfer the money to investors. Yahoo has been aggressively buying back shares of its own stock. The company has spent more than $4 billion buying back stock over the past four quarters, says S&P Dow Jones Indices.

What If Janet Yellen Is Dead Wrong on the Strength of the U.S. Economy?
Yesterday, economists at the Atlanta Fed’s Center for Quantitative Economic Research notched down their forecast for real GDP growth – the seasonally adjusted annual rate – to a tepid 0.2 percent for the first quarter of 2015. The revision from the earlier forecast of 0.3 percent followed yesterday’s durable goods report that showed a dramatic decline of 1.4 percent in February on a seasonally adjusted basis. Durable goods are products like refrigerators, washing machines or computers, items expected to last for at least three years. Because durable goods carry higher price tags than most other consumer outlays, a weakening in durable goods can be a warning of a tapped out or retrenching consumer. This first quarter forecast stands at odds with the Federal Reserve Board’s FOMC statement of March 18, 2015 which singled out “strong job gains” and rising household spending.

The big profits of payday lenders may be over
About twelve million Americans take out payday loans every year. It's a big -- and controversial -- business. The U.S. Consumer Financial Protection Bureau called these loans "debt traps" and proposed new rules Thursday to curb the industry's worst practices. Payday loans typically come with interest rates of over 100% -- far higher than the 15% to 30% annual interest rates on credit card debt. The stocks of America's top payday lenders fell sharply in reaction to the news of the additional regulations in the works. EZCorp (EZPW), which owns the EZMoney loan stores, dropped nearly 6% Thursday, and Cash America , which runs Cash America, Cash Land and Pay Day Advance stores, slipped more than 4%.

Celente: “Greece should have never been in the euro”

Real estate mogul owes nearly $74M in back taxes, Montana agency says
One-time billionaire and Yellowstone Club founder Tim Blixseth owes almost $74 million in back taxes, penalties and interest in Montana, state revenue officials said Tuesday, after a tax board ruled that the real estate mogul diverted huge sums from the luxury resort for personal use. Revenue officials said the Washington state resident and his former wife misappropriated more than $270 million from a 2005 Credit Suisse loan to buy luxury cars, jets and high-priced properties in Mexico, Scotland and elsewhere. Taxes also were assessed for unreported income during 2002 to 2004 and 2006. Blixseth said the purchases were legitimate business expenses as he sought during the last decade to expand the Yellowstone Club ski and golf resort near Big Sky into an international club for the ultra-wealthy. But the Montana Tax Appeal Board said in a series of rulings in recent months that Blixseth had failed to make his case.

Why U.S. Economic ‘Statistics’ Get More and More Absurd – Jeff Nielson – Sprott Money News
Many recent commentaries have noted a distinct devolution in the numerical lies which the U.S. government calls its “economic statistics”. Numbers which used to be mere exaggerations (i.e. used to somewhat mirror the real world) have now become literally perverse: opposite to reality. As U.S. “retail sales” collapsed at the end of last year (and now into this year) with a string of negative numbers; we’re told that somehow U.S. “consumer spending” surged by 4.3% in the fourth quarter of 2014, something which is mathematically impossible, since the two numbers must mirror each other. With the U.S. economy showing even more obvious weakness than in previous years of this fantasy “recovery”; we’re supposed to believe that the U.S. economy just enjoyed its strongest quarters of growth in well over a decade. The economic lies are not merely far-fetched, they are totally ludicrous.

Chinese investments pour into US
Chinese investors have been in the limelight during the just concluded 2015 SelectUSA Investment Summit in Washington, DC. "Fuyao has three investments in the US state of Michigan, Alabama and South Carolina, with good profits. Since 2013, we have made new investments in the state of Ohio and Illinois," said Fuyao Glass Industry Group Chairman Cao Dewang during the two-day Summit. Fuyao Glass Industry Group is the largest automotive glass supplier in China with about 70 percent of the market share. In 2014 Fuyao set up a new American subsidiary in Moraine, Ohio and bought a factory in the state of Illinois, expanding its glass production with $200 million. Similarly, many Chinese enterprises have begun or expanded their investment in the US in the last few years, at an average annual growth rate of 41 percent from 2009 to 2013, according to data from the Commerce Department.

Majority of U.S. Investors Anticipate Interest Rate Hike
Before the Federal Reserve recently indicated that it may start raising interest rates this summer, the majority of U.S. investors already thought interest rates would go up. About half said they think interest rates will "go up a little" and another 5% said they will "go up a lot." While few investors expected rates to drop, one-third thought they would stay the same. These findings are from the Wells Fargo/Gallup Investor and Retirement Optimism Index survey for the first quarter of 2015, conducted Jan. 30 to Feb. 9. For this survey, investors are defined as U.S. adults who have at least $10,000 invested in stocks, bonds or mutual funds. The Fed has not raised interest rates since 2006, after lowering them to practically zero during the recession. That means any increase could be a shock to the market and investors who have become accustomed to extremely low rates. While low rates have been a plus for borrowers, they may have compelled investors to...

US drug agents 'went to sex parties funded by cartels' - report
Released on Thursday, the federal report details a number of cases of inappropriate behaviour at the Drug Enforcement Administration (DEA) and other federal law enforcement agencies. It found that some allegations were not fully investigated or went unreported. The report also highlighted communication lapses and potential security breaches at the agencies. One section of the report details that DEA agents attended sex parties with prostitutes in a foreign county. The report did not disclose where the parties took place, but a federal law enforcement official told the Associated Press the parties occurred in Colombia. According to the report, the parties were held at government-leased quarters where agents' phones and laptops were present. But DEA investigators at the time did not report the allegations because they "did not believe that the special agents' conduct rose to the level of a security risk requiring a referral".

Australia close to joining Asian bank

Google is paying its new CFO $70 million in bonuses and grants
Google will be paying its new CFO, former Morgan Stanley CFO Ruth Porat, a salary of $650,000, with a one-time signing bonus of $5 million, according to a new SEC filing. She'll also be getting a $25 million new hire grant and a $40 million biennial grant in 2016. Not bad, considering Porat made $29.6 million in total compensation at Morgan Stanley from 2010 to 2013, according to Reuters. When former CFO Patrick Pichette took the job in 2008, he had a salary of $450,000, with a signing bonus of $500,000, another $500,000 cash bonus after 6 months, and another bonus that brought his total to about $4.3 million, excluding stock options. Here's the information from the filing: The material terms of Ruth’s offer letter, as approved by the Leadership Development and Compensation Committee (LDCC) of the Board of Directors of Google, are as follows: Ruth’s annual base salary will be $650,000.

Walmart Would Really Rather Not Pay That $151M That Court Says It Owes Employees
For more nearly a decade, Walmart has been fighting to avoid paying $151 million in damages to more than 187,000 current and former employees in Pennsylvania for regularly compelling them to work without proper compensation. And even though the state’s highest court recently affirmed that penalty, the retailer isn’t ready to hand over that money just yet. This case actually dates back to a class action filed in 2002, alleging that Walmart systematically and deliberately forced employees to work off the clock, through mandated break times, or through meal breaks. In its appeal of the 2006 jury verdict, Walmart claimed the case had been a “trial by formula,” which means that the plaintiffs didn’t present comprehensive data showing that each of the class members had been affected in the same way, but instead relied on the testimony and analysis of expert statisticians who reviewed Walmart time sheets and determined the extent to which workers were harmed.

US Recovery in Doubt Ahead of GDP Figure
After reaching as high as 100.33 on March 13th, the US dollar index (DXY) has been gradually selling off and as of this writing is trading at 96.6940. The selloff accelerated significantly after the March 18th meeting of the FOMC, in which the Fed eliminated the word “patient” from the text of its statement, but downwardly revised GDP growth and CPI inflation estimates in the economic projections. The high in the US dollar index came one week after the Bureau of Labor Statistics reported a better than expected non-farm payrolls number and a two tenths point decline in the U.S. unemployment rate. While employment data has been steadily improving — in large part due to many people simply giving up on finding a job — the real economic situation in the United States may be grimmer than the rosy picture painted by the employment numbers. With expectations for a Fed rate hike continuing to support the greenback, the likelihood of an upward movement in interest rates by June is becoming more and more distant.

$1 billion water spending plan heads to California governor
A plan to pump $1 billion of water spending into drought-stricken California cleared the Legislature on Thursday and was sent to Gov. Jerry Brown, who is expected to sign the legislation. The California Assembly voted unanimously, 74-0, on AB91 a day after the Senate approved bills that would expedite infrastructure spending; offer aid to communities hit hard by dry conditions; and authorize fines for illegal diversions of water that hurt fish. "The severity of the drought requires us to start now," said Assembly Speaker Toni Atkins, D-San Diego. "Delay for the sake of addressing every single outstanding issue or need would be irresponsible." The legislation includes $267 million to be provided in grants to water-recycling projects and expand drinking water supplies in small and poor cities. More immediate spending includes $75 million in drought relief to aid communities with dry wells, fish in vanishing streams and other needs.

Gold’s Relationship With The U.S. Dollar Is Complicated - WGC
Gold still has an important role to play in an investor’s portfolio, even as the U.S. dollar holds near 12-year high, according to the latest research from the World Gold Council (WGC). In its latest Gold Investor report, the WGC looks at the relationship between gold and the U.S. dollar. In an interview with Kitco News, Juan Carlos Artigas, director of investment research at the WGC, said that because of a general negative correlation, short-term strength in the U.S. dollar is expected to continue to weigh on gold prices. However, he added that gold plays a much more complex role in the global marketplace. “The U.S. dollar-gold relationship has evolved and continues to do so. Changes in global markets and the structure of the gold market should soften the dollar’s influence on gold in the long run,” he said in the report. “And while the fact that the gold price is quoted in U.S. dollars gets a lot of attention, its relevance is overstated.”

EU Seeks to Lighten Burdens of Smaller Lenders
European Commissioner Jonathan Hill Thursday outlined the new direction the EU commission plans to take, including diverging from global banking regulations when necessary to avoid overburdening smaller lenders. “Nothing is bigger than the priority of jobs and growth,” Hill said Thursday in prepared remarks to the 13th Annual EU Financial Services Conference. “And with 24 million Europeans out of work, I think we need to have a real sense of urgency,” listing the commission’s recent launch of a 315 billion euro investment plan, pressing ahead with free trade agreements like the Transatlantic Trade and Investment Partnership, and the pending launch of a “major new drive on the single market” – in energy, digital services, and Hill’s own area of capital markets. The commission is also bringing “a new approach to regulation,” and this year will be bringing forward only one-fifth of the amount of new legislation as in a typical year in previous commissions.

Officials point to gas line for NYC blast
The New York Fire Department reported a "major building collapse" and a seven-alarm fire in Manhattan's East Village on Thursday afternoon. Four buildings on 2nd Avenue between 7th Street and St. Marks Place were affected by the incident, according to officials. Local media reports suggested an explosion occurred in a restaurant near the ground floor of the building, and fire spread to apartments on the upper floors. The FDNY told CNBC it could confirm at least 12 were injured in explosion and resulting collapse, with three of those individuals in critical condition. New York Mayor Bill de Blasio said in a media conference just after 5:30 p.m. ET that there had not been any reports of additional missing individuals. De Blasio said the original explosion appeared to have occurred at 121 2nd Avenue, and that a preliminary investigation suggested that it was a "gas-related explosion" caused by plumbing and gas work in the building.

Germanwings Crash: How Pilots Secure the Cockpit

Why Gas Could Plunge Below $2 a Gallon This Summer
The price of gasoline has plunged 30 percent in the past year to $2.45 a gallon nationwide, giving major relief to American consumers. Plunging oil prices have driven the drop and have given a reprieve to consumers who have been paying nearly $4 a gallon for gas for most of the past four years. But the discount on gasoline may not be over. Just as the summer driving season approaches, drivers may get another reprieve. This time, the oil boom that is driving the U.S. toward energy independence could backfire and provide a massive discount on gas for consumers. Within a few months, we may be below $2 a gallon again. The latest problem for the oil industry is that there's nowhere for all of the country's oil to go. In 2014, the industry pumped 8.7 million barrels a day, and despite low oil prices the U.S. Energy Information Administration is expecting production to increase to 9.3 million barrels a day in 2015 and 9.6 million barrels in 2016.

The U.S. Just Took Ownership of a New Iraq War
By taking over the stalled fight for Tikrit, the U.S. is assuming leadership of a widening war. The new one could be different from our last—but it’s likely to be just as open-ended. Don’t hold your breath for a formal announcement, but the U.S. just declared ownership over the war in Iraq. The newest round of airstrikes take American military power out of a supporting role and into the lead. Wednesday’s Pentagon statement that the U.S. would begin conducting airstrikes to support an Iraqi military campaign was a high water mark for intervention in Iraq. But the military mission has been expanding since airstrikes were first launched last August to protect small teams of U.S. advisers and Iraqi minorities besieged by ISIS. At first the air war responded to emergencies, then it grew to assisting Kurdish forces and striking key ISIS targets to weaken the group and halt its advance. Now, with Iraqi forces stalled in their first major counterattack against ISIS, the U.S. is stepping in...

Friday 03.27.2015

NEWS to Disturb the Comfortable...

We don't tell you what to think,

but we give you something to think about.