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NEWS to Disturb the Comfortable...

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“Warren Buffett hates gold. Why do you like it?”

Yes, Buffett Hates Gold

First, let’s go to the source of the question, the exact words of Mr. Buffett. In a 1998 speech at Harvard, Buffett gave no quarter to the yellow metal. Gold, he stated, “gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” Funny, right? If Buffett weren’t an avuncular, ukulele-playing billionaire, he could be a stand-up comic. Then again, people tend to laugh at rich guys’ jokes.

More recently, in his 2011 annual Berkshire Hathaway letter, Buffett took another sharp wire brush to gold. He called gold an “unproductive” asset that will “never produce anything.” Gold, declared Buffett in that same 2011 letter, reflects a “buyer’s hope that someone else… will pay more for [it] in the future.” Indeed, per Buffett, gold as an asset “will remain lifeless forever.” Gold prices are held aloft “by the belief that others will desire it even more avidly in the future.”

OK, you get the idea. Buffett doesn’t like gold. Then again, he’s super rich. He’s neither peasant nor proletariat. He’s far removed from the “99%” — or 99.999% — rest of humanity. Heck, Buffett can “afford” not to like gold because he’s asset rich in so many other ways, as I’ll discuss in a moment. Meanwhile, as Buffett trashes gold, he indirectly talks up his own book of assets and endorses his own brand of investing. Not to put too fine a point on things, but Buffett is a rich guy talking monetary smack and behaving badly.

Barclays fined for lax crime checks in 'deal of century'

Britain's financial watchdog has fined Barclays (BARC.L) 72 million pounds ($109 million) for cutting corners in vetting wealthy customers in order to win a huge transaction described by one senior manager as potentially the "deal of the century."

Barclays arranged the 1.9 billion pound transaction in 2011 and 2012 for a number of rich clients deemed by the regulator to be politically exposed persons (PEPs), or people holding prominent positions that could be open to financial abuse. That should require a bank to conduct more detailed checks on them, but Barclays failed to do so and in fact cut corners with its compliance procedures, Britain's Financial Conduct Authority (FCA) said in a damning report on Thursday.

"Barclays did not follow its standard procedures, preferring instead to take on the clients as quickly as possible and thereby generated 52.3 million pounds in revenue," the FCA said. It said the bank took unusual steps to keep the details of the clients and the transaction off its computer system, where it would normally be recorded.

These included buying a safe specifically for storing some documents relating to the clients and agreeing to pay the clients 37.7 million pounds if their names were ever revealed. "Barclays went to significant lengths to accommodate the client to ensure that it won their business," the FCA said in a 37-page notice on the bank's failings.

Obama Compares Syrian Refugees To Pilgrims In Weekly Address

President Barrack Obama continues to defend his call to allow 10,000 Syrian refugees into the country, comparing the situation to pilgrims coming over on the Mayflower during his Thanksgiving address.

“In 1620, a small band of pilgrims came to this continent, refugees who had fled persecution and violence in their native land,” he said. “Nearly 400 years later, we remember their part in the American story — and we honor the men and women who helped them in their time of need.”

The commander in chief went on to say he is touched by letters sent to him by supporters of his plan.

“Nearly four centuries after the Mayflower set sail, the world is still full of pilgrims — men and women who want nothing more than the chance for a safer, better future for themselves and their families,” he continued. Recent polls show 60 percent of Americans oppose the idea in the wake of the recent terror attacks in Paris. The president stressed refugees will have to go through strong security checks before entering the country, but some lawmakers are skeptical the United States has the capability to vet the amount of people Obama is calling for.

Peter Schiff on the US economy

Online sales hits record for Thanksgiving

Early reports for Thanksgiving Black Friday sales show a record number of consumers using their mobile devices for shopping.

Software firm Adobe, which tracks sales at 4,500 websites, predicts $1.7 billion will be spent for the 24-hour Thursday period. Researcher Shoppertrack says retail stores rang up $3.2 billion in sales last Thanksgiving, while the Thursday/Friday period total was some $12.29 billion in sales at retail.

Thursday, between midnight and 5:30 p.m. ET, some $1 billion worth of sales had been generated in online sales, up 22% from the previous Thanksgiving, with over 26% of sales from mobile devices, says Adobe. The firm projects total mobile sales will be 29%, a record.

Adobe says the average discount is 24%, and that sales were led by Star Wars toy products, the Pie Face Game and Crayola Super Art Coloring Kit, along with tech items like Samsung 4K TVs, the heavily discounted Apple iPad Air 2, videogame consoles xBox One and Sony PlayStation 4 and the Beats by Dr. Dre headphones.

Why The Real Shadow Banking Risks Are In The US And Europe, Not Just China

Dan Steinbock says the world’s shadow banking has returned to the high levels of the 2008-9 global crisis. While international concerns focus on China’s shadow banking, new data shows that the largest risks are by far in the United States, Europe, the UK and Japan.

In August, the Financial Times reported that 11 Chinese shadow banks had written an open letter to the top party official in Hebei province asking for a bailout. Soon afterwards, Foreign Policy magazine ran a story headlined, “Shadow banking is killing China’s stock markets.” And, just days ago, the Wall Street Journal reported that Chinese banks are “looking to shadow banking for growth”, which is contributing to new risks.

The common denominator here is that China’s shadow banking poses a risk to the world. Yet, international data shows very clearly that shadow banking risks involve mainly the largest advanced economies.

Shadow banks perform similar functions and have similar risks to traditional banks but operate outside the formal banking sector and with less regulatory oversight. While they lack public deposit insurance and lender-of-last-resort facilities from central banks, they may support economic growth by making financial services more affordable and more broadly available.

Barclays hit by $109M fine for mishandling super-rich

Barclays was hit with a £72 million ($108.5 million) fine on Thursday, with a U.K. regulator claiming that it had worked with "ultra-high-net-worth clients" in a manner that could have helped financial crime take place.

The Financial Conduct Authority (FCA) said the U.K. bank, which has a market capitalization of £37.6 billion ($56.7 billion) went to "unacceptable lengths to accommodate the clients." This is in relation to a £1.88 billion transaction that Barclays conducted in 2011 and 2012 on behalf of these rich clients, which was the biggest of its kind that the bank had executed for individuals.

The fine is the largest ever imposed for financial crime failings by the regulatory body, or its predecessor, the Financial Services Authority (FSA).

"Barclays ignored its own process designed to safeguard against the risk of financial crime and overlooked obvious red flags to win new business and generate significant revenue. This is wholly unacceptable," Mark Steward, director of enforcement and market oversight at the FCA, said in a news release on Thursday. "Firms will be held to account if they fail to minimize financial crime risks appropriately and for this reason the FCA has required Barclays to disgorge its revenue from the transaction."

John Deere worldwide revenues fall 25% in fourth quarter

Deere & Company released quarterly earnings Wednesday morning showing worldwide net sales and revenues have decreased 25 percent.

Net income attributable to Deere & Company was $351.2 million, or $1.08 per share, for the fourth quarter ended October 31, compared with $649.2 million, or $1.83 per share, for the same period of 2014.

Deere reports that “weakness in global markets for farm and construction equipment leads to decline in sales and earnings.”

Deere & Company stock closed Tuesday at $76.35. The earnings report follows: Deere Announces Earnings of $351 Million for Fourth Quarter and $1.94 Billion for Full Year • Weakness in global markets for farm and construction equipment leads to decline in sales and earnings for quarter and full year. • All businesses remain solidly profitable, helped by sound execution and disciplined cost management. • 2016 forecast calls for sales decline of about 7% and earnings of approximately $1.4 billion.

The Most Dangerous Time in Our History?

‘Made in USA’ solar company sold Chinese panels

A Texas green-energy company that boasted it never took a dime in government subsidies will pay $8.5 million for misrepresenting the source of its solar panels.

Farmers Branch-based 1SolTech Inc. will pay $5.8 million in civil penalties and attorney’s fees, as well as more than $2.7 million in restitution to consumers, including the federal government.

The state attorney general’s office sued 1SolTech and the company’s three principals: Sandy Fardi, Hossein “Zak” Fardi and Ali Enrique Razavi. Under an agreed judgment filed in Travis County District Court, the defendants were ordered to stop misrepresenting the origins and certifications of their solar panels.

1SolTech claimed its products were manufactured in the United States, when they were actually imported from China. According to state investigators, the defendants labeled the panels with “Made in the USA” stickers and shipped the Chinese panels to buyers. Among the customers was the U.S. government, which installed the panels on military bases and airports. American-made materials were required for the taxpayer-funded projects.

Family earning over $1 million living in NYC public housing

It pays to live in public housing.

PIX11 Investigates has found over 1,500 households earning six-figure salaries while living in New York City Housing Authority apartments. “They should move them out,” said Carmen Santiago, an Alfred E. Smith Houses resident. Housing records obtained by PIX11 Investigates show a family reported making nearly a million dollars while paying only $1,574 in monthly rent for a three-bedroom apartment.

The household’s annual income was $497,911 and the head of household owned real estate “that produced $790,534 in rental income between 2009 and 2013,” according to a report by the Inspector General for the U.S. Department of Housing and Urban Development.

“If you’re making more than the mayor of New York City, you should not be living in public housing,” said Councilman Ritchie Torres, who is chairman of the Public Housing Committee. The city housing authority isn’t urging its deep-pocketed tenants to pack up and leave anytime soon.

“We’ve encouraged, as has HUD, mixed-income communities. It’s a very small percentage,” said Shola Olatoye, the chairwoman of NYCHA. HUD has urged its public housing authorities to evict tenants who make too much money to qualify for government subsidies. “This audit, like others, provides HUD an opportunity to re-evaluate policies and initiatives and make improvements where necessary,” said Jereon M. Brown, an agency spokesman.

Oil Rig Count Drops by 9 as Inventories Continue to Rise

In the period ended November 25th, the number of rigs drilling for oil in the U.S. totaled 555 compared with 564 in the prior week and 1,572 a year ago. Including 189 other rigs drilling for natural gas there are a total of 744 working rigs in the U.S., down from 757 week-over-week, and down 1,173 year-over-year. The data comes from the latest Baker Hughes Inc. (NYSE: BHI) North American Rotary Rig Count released Wednesday ahead of the Thanksgiving holiday.

WTI crude oil for January delivery fell closed last Friday at $41.90 and rose to close at $42.87 on Tuesday following the shooting down of a Russian plane by the Turkish air force.

U.S. crude oil inventories rose by 1 million barrels last week according the Energy Information Administration, adding to pricing pressure for crude. In electronic trading today WTi traded down about 0.6% at around $42.75 after dropping as low as $42.65.

The number of rigs drilling for oil in the U.S. is down by 1,017 year-over-year, and down by 9 week-over-week. The natural gas rig count dropped by 4 to total 189 as of Wednesday. The count for natural gas rigs is down by 155 year-over-year.

Are bankers' bonuses worthwhile?

Fattest-Ever U.S. Cattle Herd Signals End to Record Beef Prices

Cattle in the U.S. are now the fattest they’ve ever been, signaling an end to the seven-year run of record beef prices just as losses begin to mount for American feedlot owners.

Tom Fanning, who manages a feedlot herd of 30,000 in Buffalo, Oklahoma, says he loses $100 to $300 on each animal he sells to slaughtering plants, even though they are bigger and produce more meat than ever. Its worse for other producers. On average, industry losses began in December and ballooned to $420 a head this month, the Livestock Marketing Information Center estimates.

Cattle futures have plunged 23 percent from an all-time high a year ago as the U.S. herd began a long-awaited expansion and consumers switched to cheaper chicken and pork. That’s squeezed feedlot owners who buy year-old steers and raise them on a diet of mostly corn for more than four months. To ease the pain, operators like Fanning are taking advantage of ample, low-cost grain supplies by holding cattle for almost a month longer than normal, which means the animals get bigger and generate more revenue.

“It still makes economic sense to put on as many pounds as efficiently as you can” to minimize losses, said Fanning, 50, who has been managing Buffalo Feeders LLC for 15 years. His cattle spend about 150 days eating grain before they are sold, about 25 days more than two years ago, adding about four pounds of weight gain per day, he said.

Bank Of America Forecasts No Recession Until 2027 (If Ever), Sees S&P; At 3,500 In 10 Years

A year and a half ago, in May of 2014, when Bank of America's chief economist Ethan Harris decided to try his hand at long term (really long-term) forecasts, he made several predictions: that 2015 GDP would be 3.3%, that the long-term potential growth rate of the economy is 2.2%, and that the long-term unemployment rate is 6%.

One year later, we yet again see just why economists tend to be a source of amusement everywhere they go, because moments ago the same Mr. Harris just admitted that 2015 GDP would actually be 2.5% (at best, and realistically 2.1% if Q4 GDP ends up being 1.8% as the Atlanta Fed forecasts), that the long-term growth rate is now lower at 2.0%, even as the long-term unemployment rate has mysteriously declined to 5%, or in other words, a lower potential growth rate results in lower unemployment.

And yet one thing that hasn't changed in the past 18 months is that like then, so now, Bank of America refuses to forecast a recession any time in the next 12 years! To wit: Obviously, there is considerable uncertainty in forecasting many years out, so these should be viewed as rough baseline numbers. For example, if history is our guide, at some point in the next decade the US will experience a recession, but predicting a recession far in advance is almost impossible.

So predicting a recession at some point in the next 12 years impossible, but predicting next year's GDP is "possible"... assuming one has a 25% error rate tolerance.

Are U.S. malls ready for Paris-style terror attack?

The terrorist attacks on Paris that left 130 dead is raising questions about how well prepared American mall operators are for a similar event. To date, no U.S. mall has been a target of terrorism, but they have been the scene of several fatal shooting incidents.

The carnage in France at the hands of members of the Islamic State of Iraq and Syria (ISIS) has Americans worried about the risk of a domestic attack. A recent CBS News poll showed that a large majority of people think an attack is likely in the U.S. in the new few months.

In February, a video surfaced purportedly from Somalia-based terror group Al Shabaab calling for attacks on shopping centers in western nations, including the Mall of America in Minneapolis. It was Al Shabaab in September of 2013 that attacked the Westgate Mall in Nairobi, Kenya, killing 67 people and wounding 175.

Michael Greenberger, director of the University of Maryland's Center for Health and Homeland Security, said the 2008 siege in Mumbai, India, by Pakistani group Lashkar-e-Taiba first heightened fears of an attack on civilians. Over four days, terrorists used both bombs and conventional weapons in an assault on hotels, a movie theater and other so-called "soft targets," killing at least 167 people and wounding 293.

Keiser Report: Government Giving Burgerly Bad Name

Bill signed imiting Fannie, Freddie CEO pay

In what has become a complete and total rebuke of an effort put forth by Federal Housing Finance Agency Director Mel Watt to award $3 million raises to the CEOs of Fannie Mae and Freddie Mac, President Obama signed into a law a bill that caps the salaries of Fannie Mae CEO Timothy Mayopoulos and Freddie Mac CEO Donald Layton.

According to the White House, President Obama signed the Equity in Government Compensation Act of 2015 on Wednesday.

A statement from the White House states that the President signed S. 2036, the “Equity in Government Compensation Act of 2015,” which "suspends compensation packages approved for 2015 for the chief executive officers of (Fannie Mae) and (Freddie Mac) and any of their affiliates, and reinstates the compensation and benefits previously in effect."

The act, which is based on legislation by Rep. Ed Royce, R-CA, would cap the pay of the Fannie and Freddie’s CEO' at its current level, which is $600,000, instead of the $3 million raises that were awarded to Mayopoulos and Layton earlier this year by the FHFA. Two weeks ago, the House of Representatives unanimously passed the Senate version of the GSE CEO pay limit bill, which was authored by Sen. David Vitter, R-La., and Sen. Elizabeth Warren, D-Mass.

Legislative attempts to fix ‘Black Friday’ are misguided

“It’s become a Thanksgiving holiday tradition,” a colleague told me recently. “We eat the turkey, and then we watch videos of people being trampled at Black Friday sales on YouTube.”

That’s about the gist of it. The holiday shopping phenomena that has good people, otherwise upstanding and model citizens, throwing aside their dignity to stampede and fistfight over discounted merchandise should serve as a mark of national shame.

Indeed, some retailers who once upon a time gleefully stoked the fires of rabid consumerism with “doorbuster” sales — which in some cases were actually beginning on the Thanksgiving holiday — are now sanctimoniously eschewing the whole ordeal. REI, the outdoor sports chain, has announced it won’t open the Friday after the holiday. Other chains such as Lowes, Home Depot, Staples and Game Stop have announced they will, at the very least, remain closed on Thanksgiving day.

But let’s face it. The problem was never really the retailers. The problem is us. We the people. Retailers can advertise all the wild deals they want, but there are no shopping riots without a lot of people choosing to show up and lose their minds over half-priced toaster ovens or something.

Why Obamacare Co-Ops Keep Failing

It's been a no good, very bad month for the Affordable Care Act.

One of the nation's top insurance companies has threatened to pull out of the government-run health insurance exchanges, while others are raising rates by double-digits after realizing that people signing up for insurance tend to be older and sicker than originally hoped.

On top of that, enrollment projections are way off. But perhaps the biggest immediate crisis facing the Obama administration's signature health reform measure is the utter collapse of many of the so-called cooperatives that were set up by states as part of the 2010 law.

The Consumer Operated and Oriented Plan, or Co-Op, portion of the health care law established nonprofit health insurers that would receive federal funding and were intended to compete with private, for-private insurers on the exchanges as a way to lower prices. They were supposed to be small-scale single-payer systems that would be free from the profit motive; a progressive's dream solution to the problem of providing health insurance for all. Instead, they've turned into a nightmare. So far, 12 of the 23 co-ops have failed, defaulting on more than $1.2 billion in federal loans. Only two have been able to break even so far, and most of the remaining co-ops are eyeing massive premium increases—as high as 40 percent in some cases—to stay solvent.

Friday 11.27.2015

NEWS to Disturb the Comfortable...

We don't tell you what to think,

but we give you something to think about.