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Monday 04.21.2014

JPY Drops, Nikkei Pops As Japanese Trade Balance Nears Record Deficit (36th In A Row)
Another month, another colossal miss for the "waiting-for-the-j-curve" Japanese trade balance. At 1.7tn, this month's adjusted trade balance is the 2nd largest on record, and is the 36th month in a row. Exports missed dramatically (+1.8% vs 6.5% expected) so, so much for devaluation driving competitiveness in a globally interdependent product development cycle - nearly the lowest YoY gain in exports since Abenomics began. Imports rose more than expected (+18.1% vs 16.2%) as the devalued JPY makes living standards more difficult to maintain. The result of this dismal data - JPY weakness which can mean only one thing - a 120 point rally in the Nikkei. Export growth is collapsing... as imports surge as a devalued JPY makes the picture for importing everything uglier and uglier... As we have noted previously, the J-Curve ain't coming.

Why China is a positive and not a negative for the gold price going forward
Last week a report from the World Gold Council suggested that around 1,000 tonnes of gold is being used as collateral in Chinese commodity financing deals that would be unwound if the shadow banking complex was to collapse. Not surprisingly news of such a supply overhang depressed the gold price. Since then analysts have pointed out that this is an assumption and based on little more than an estimate of gold imports. Moreover, last year gold experienced significant volatility and high local premiums in China that would not have made it ideal for financing. Copper is the usual commodity of choice for such deals. You don’t use assets carrying large premiums either.So it looks like a rather poor piece of work that has unnecessarily damaged the gold price based on supposition rather than facts. Indeed, ArabianMoney has always argued that China is a valuable support for the gold price and also a reason why it will eventually head much higher.

'Living wage' inflation?
A state bill introduced last week to force large retail and food businesses to pay workers $15 an hour would add to New York's growing patchwork of wage laws, and could draw national scrutiny if it gains traction. The existing laws, along with their seemingly interchangeable names—minimum wage, "living" wage, "fair" wage, prevailing wage—apply to different businesses depending on their circumstances. Last year's increase of the state minimum wage to $9 in 2016 opened the door for liberal activists to inflate pay beyond the state minimum (and above the $10.10 President Barack Obama has proposed nationally). Earlier this year, Mayor Bill de Blasio tried to persuade Gov. Andrew Cuomo to allow him to raise the city's minimum wage to $11 an hour, but the governor shot him down. The mayor is also pushing to expand the city's living-wage law, which requires firms that receive $1 million in taxpayer subsidies to pay their workers $10 an hour with benefits—or $11.50 without.

Exporting Oil Will Lower Your Gasoline Bill?
Since 1975, U.S. exports of crude oil have been largely banned under restrictions imposed by Congress in the aftermath of the 1973 Arab oil embargo. But with the U.S. entering into what many have termed a new era of oil abundance, U.S. lawmakers are now seriously thinking about lifting the ban. Some worry that exporting U.S. oil could raise domestic gasoline prices, eating into consumers' disposable incomes and hindering economic growth. But according to a new study, lifting the ban would actually result in lower prices at the pump, in addition to a plethora of other economic benefits. The economic benefits of allowing U.S. oil exports. The study, conducted by consultancy ICF International and commissioned by the American Petroleum Institute, found that exports of U.S. crude oil would increase global oil supplies, exerting downward pressure on global oil prices and, therefore, on U.S. gasoline prices, which are more closely linked to global oil prices than they are to domestic ones.

Researchers Use Twitter to Predict Crime
Hidden in the Twittersphere are nuggets of information that could prove useful to crime fighters -- even before a crime has been committed. Researchers at the University of Virginia demonstrated tweets could predict certain kinds of crimes if the correct analysis is applied. A research paper published in the scientific journal Decision Support Systems last month said the analysis of geo-tagged tweets can be useful in predicting 19 to 25 kinds of crimes, especially for offenses such as stalking, thefts and certain kinds of assault. The results are surprising, especially when one considers that people rarely tweet about crimes directly, said lead researcher Matthew Gerber of the university's Predictive Technology Lab. Gerber said even tweets that have no direct link to crimes may contain information about activities often associated with them.

Keiser Report: Ukraine's Big Oil & Big Angst

Surrender talks set with separatists in Ukraine as standoff lasts into Easter
A senior mediator from Europe’s OSCE security body is due to start negotiating the surrender of pro-Russian separatists in eastern Ukraine on Sunday, although hopes for a rapid end to the crisis are limited. Gunmen occupying public buildings in Donetsk and other Russian-speaking border towns refuse to recognize an accord in Geneva on Thursday by which Russia, Ukraine and Kiev’s U.S. and EU allies agreed that the OSCE should oversee the disarmament of militants and the evacuation of occupied facilities and streets. The coming days may determine whether unrest following the overthrow of Ukraine’s pro-Moscow president can be contained. Russia, which annexed Crimea last month in the worst East-West crisis since the Cold War, denies directing the separatists or planning to invade. Western powers threaten more economic sanctions if Moscow does not persuade the militants to give up.

Ca Teacher fired after abuse allegations RE-HIRED at another school
According to the Contra Costa Times, a new California state law that was written to protect students from teachers’ sexual misconduct had a brief loophole that allowed a teacher who was fired for alleged child sex abuse to be hired at another school. Ron Guinto, 32, had been held last autumn on multiple charges: kidnapping, forcible lewd acts on a child, sending lewd images to a minor over the Internet, forcible oral copulation on a minor and forcible sodomy on a child while he was working at Making Waves Academy in Richmond. He was fired in November, but hired in January to teach at was hired to teach at the Mira Vista Elementary School in the West Contra Costa Unified School District. Guinto had previously worked in that district as a substitute teacher. He was arrested on March 5, apparently to face the earlier charges.

Public smoke-out marks pot holiday in Colorado
DENVER — Tens of thousands of revelers raised joints, pipes and vaporizer devices to the sky Sunday at a central Denver park in a defiant toast to the April 20 pot holiday, a once-underground celebration that stepped into the mainstream in the first state in the nation to legalize recreational marijuana. The 4:20 p.m. smoke-out in the shadow of the Colorado capitol was the capstone of an Easter weekend dedicated to cannabis in states across the country. Although it is still against the law to publicly smoke marijuana in Colorado, police only reported 63 citations or arrests on Sunday, 47 for marijuana consumption. "It feels good not to be persecuted anymore," said Joe Garramone, exultantly smoking a joint while his 3-year-old daughter played on a vast lawn crowded with fellow smokers.

Documents Detail Another Delayed GM Recall
Government documents show that General Motors waited years to recall nearly 335,000 Saturn Ions for power steering failures despite getting thousands of consumer complaints and warranty repair claims. Additionally, the National Highway Traffic Safety Administration didn't seek a recall of the 2004-2007 compact cars even though it opened an investigation more than two years ago. The government's auto safety watchdog found the problem caused 12 crashes and two injuries. The documents, posted on the NHTSA's website Saturday, show yet another delay by GM in recalling unsafe vehicles.

Weak Barbie sales weigh on Mattel 1Q
EL SEGUNDO, Calif. (AP) — Toy maker Mattel says weak sales of Barbie and markdowns to clear out excess inventory left over from a sluggish holiday season led to an unexpected first-quarter loss. Its shares fell almost 5 percent in premarket trading. Toy makers are facing a weak environment globally due to the uncertain economy and popularity of electronic gadgets. The first quarter is the seasonally smallest for toy makers, coming after the key holiday quarter which can account for up to 40 percent of revenue. In addition, Mattel Inc. has been struggling with weakness in core brands like Barbie, which had a 14 percent drop in sales, and Fisher-Price, down 6 percent.

Joe Firestone: Using Generational Warfare to Divert Attention from Oligarchy and Corporatism
Some of the favored children of the economic elite who have a public presence, work hard in their writing and speaking to divert attention from inequality and oligarchy issues by raising the issue of competition between seniors and millennials for “scarce” Federal funds. That’s understandable. If millennials develop full consciousness of who, exactly, has been flushing their prospects for a decent life down the toilet, their anger and activism might bring down the system of wealth and economic and social privilege that benefits both their families and the favored themselves in the new America of oligarchy and plutocracy. Here and here, I evaluated Abby Huntsman’s arguments for entitlement “reform,” and, of course, Pete Peterson’s son, Michael fights a continuing generational war against seniors in pushing the austerian line of the Peterson Foundation.

MSNBC's Harris-Perry Mocks People Who Lost Insurance: Suggests Dems Say 'Just Deal With That'
On the Sunday, April 20, Melissa Harris-Perry show on MSNBC, as host Harris-Perry chastised Democrats for not bragging about ObamaCare for the year's midterm elections, she at one point mocked Americans angry about having their health insurance plans cancelled, which she referred to as "crappy plans," as she lamented that Democrats are not boasting about ObamaCare or declaring, "Yeah, you can't keep your crappy plans. Just deal with that!" Her mockery of the ObamaCare-induced insurance cancellations came as she compared Republicans to people who flip houses and brag about doing only a little work, as she characterized Democrats, by contrast, as people who do substantial work on houses but fail to boast about it adequately to potential buyers. Harris-Perry: You can have some people -- let's call them Republicans -- who will go into a fallen down blighted house, slap on some granite counter tops, while ignoring real problems, and declare their work is the best thing ever.

BNP Banker, His Wife And Nephew Murdered In Belgium
In the beginning it was banker suicides. Then about two weeks ago, suicides were replaced by outright murders after the execution-style killing of the CEO of a bank in otherwise sleepy (and tax evasive) Lichtenstein by a disgruntled client. Then on Friday news hit of another execution-type murder in just as sleepy, if not so tax evasive, Belgium, where in the city of Vise, a 37-year-old Director at BNP Paribas Fortis was murdered alongside his wife and a 9 year old nephew in a premeditated and orchestrated drive-by shooting. According to Marcel Neven, Mayor of Vise, nothing can yet explain what caused the violent shooting that rocked the neighborhood sports hall of his town this Friday, April 18, late at night. A man of 37 years, Benedict Philippens, bank manager Ans-Saint-Nicolas, was shot. A little 9 year old boy, living in Dolhain, was also killed. A lady, the wife of the man and the boy aunt and godmother, Carol Haid, 37 also died of his injuries on Saturday, in the morning.

Ford Marks 50 Years of Muscle with Limited Edition Mustang

Bad dogs: 96,000 lbs. of Oscar Mayer wieners recalled
NEW YORK — Kraft Foods is recalling 96,000 pounds of its Oscar Mayer wieners because they may mistakenly contain cheese. The U.S. Department of Agriculture's Food Safety and Inspection Service said Sunday that Kraft's "Oscar Mayer Classic Wieners" may instead contain the company's "Classic Cheese Dogs." The agency said the product labels are incorrect and do not reflect the ingredients associated with the pasteurized cheese in the cheese dogs. Those products were made with milk, a known allergen, which is not declared on the label.

Fuels made from corn actually worse than gasoline, study says
According to a new study, commissioned by the federal government, says that biofuels made from the leftovers of harvested corn plants are actually worse than gasoline -- when it comes to global warming in the short term. The research published in the journal Nature Climate Change challenges the Obama administration's conclusions that biofuels are a much cleaner oil alternative and will help fight climate change. The study is being criticized by the biofuels industry and Obama administration as flawed.

Strike at Nike, Adidas China supplier halts output
TOKYO — Striking workers at a shoe factory in China halted production for a fifth day in a dispute over company contributions to employees' social security and housing funds. The stoppage at Yue Yuen Industrial Holdings Ltd., shoemaker for sportswear brands including Nike, Adidas and Asics continued Friday while Yue Yuen communicates with workers about an offer to increase the social security benefit starting May 1, said George Liu, a spokesman for the Hong Kong-based business. Monitoring group China Labour Bulletin said on its website strikers at the Dongguan, China facility numbered at least 10,000. Some of the factory's more than 40,000 workers began protests earlier this month over what labor advocacy organizations have said were unpaid contributions by the company to a government social security program and a fund to help workers buy homes. China Labour Bulletin cited a worker saying the company may owe employees as much as 1 billion yuan ($161 million) in arrears.

RadioShack Mired in Talks With Lenders Over Closings
RadioShack Corp. RSH -18.93% is mired in negotiations with its lenders over plans to close as many as 1,100 stores, complicating the struggling consumer-electronics retailer's turnaround efforts, said people familiar with the talks. The delay also is intensifying tensions with some lenders, who were surprised by the store-closing plan when RadioShack publicly disclosed it on March 4, the people said. The company, which operates about 4,300 stores in the U.S., said at the time that the plan still needed permission from its lenders, adding that its credit agreements allowed it to close only about 200 stores without the approval of lead lenders Salus Capital Partners and GE Capital, a unit of General Electric Co. The company also said in March that it planned to spend the next month hammering out an agreement with its lenders before choosing a liquidator to wind down the stores.

Bankrate: Mortgage Rates Continue to Drop
Mortgage rates fell further this week, with the benchmark 30-year fixed mortgage rate retreating to 4.43 percent, according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.33 discount and origination points. To see mortgage rates in your area, The average 15-year fixed mortgage rate fell to 3.48 percent, while the larger jumbo 30-year fixed mortgage rate dropped to 4.43 percent. Adjustable rate mortgages decreased as well, with the 5-year slipping to 3.32 percent; and the 7-year and 10-year falling to 3.56 percent and 3.84 percent, respectively. “Mortgage rates dropped for the second week in a row amid mixed economic news abroad and in the United States,” said Polyana da Costa, senior mortgage analyst at Bankrate.com. “Despite some recent economic news, the United States is still perceived by investors as one of the safest places to park their money.

IHS Economist: 'Living Standards Will Suffer' as Food Prices Surge
Food prices are registering sharp gains, climbing 0.4 percent in both February and March and threatening to put a damper on the economy. The 0.4 percent increase compares with smaller gains for the overall consumer price index of 0.1 percent in February and 0.2 percent in March. What's happening is that wholesalers have raised the prices they charge grocers, and grocers in turn have passed along the increases to their customers, USA Today reports. That obviously creates a hardship for consumers, who account for about 70 percent of GDP. Editor's Note: These 38 Dates Are Key to Bagging $313,038. "Living standards will suffer, as a larger percentage of household budgets are spent on grocery store bills, leaving less for discretionary spending," Chris Christopher, an economist at IHS Global Insight, told USA Today.

Dr. Jim Willie End of 2014, Dollar Mortally Wounded

Ex-city leader of Bell, California gets 12 years in prison for corruption scandal
The former city manager of Bell was sentenced Wednesday to 12 years in prison and ordered to make restitution of $8.8 million in a corruption scheme that nearly bankrupted the small, blue-collar city. Robert Rizzo apologized during sentencing in Los Angeles County Superior Court, telling the judge he breached the public's confidence. Rizzo previously pleaded no contest to 69 counts including conspiracy, misappropriation of public funds and falsification of public records. It was revealed in 2010 that Rizzo was giving himself an annual salary and benefits package of $1.5 million in the city where a quarter of the population lives below the federal poverty line. His $800,000 in wages alone was double that of the president of the United States. On Monday, Rizzo was sentenced separately to 33 months in federal prison for income tax evasion after he acknowledged reporting more than $700,000 in phony deductions to reduce tax liability on money authorities say he stole from Bell.

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