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Monday 06.13.2016

Florida Nightclub Shooting, Worst in US History

A gunman wielding an assault-type rifle and a handgun opened fire inside a crowded gay nightclub early Sunday, killing at least 49 people before dying in a gunfight with SWAT officers, police said. It was the deadliest mass shooting in modern U.S. history.

Authorities were investigating the attack on the Florida dance club as an act of terrorism. The gunman's father recalled that his son recently got angry when he saw two men kissing in Miami and said that might be related to the assault.

The shooter called 911 shortly before the attack and referenced ISIS, FBI agent Ronald Hopper said. At least 53 people were hospitalized, most in critical condition, officials said. A surgeon at Orlando Regional Medical Center said the death toll was likely to climb. "There's blood everywhere," Orlando Mayor Buddy Dyer said. All of the dead were killed with the assault rifle, according to Rep. Alan Grayson, a Florida Democrat.

Witnesses described a chaotic scene when the gunfire began shortly before the club known as Pulse was to close. "Some guy walked in and started shooting everybody. He had an automatic rifle, so nobody stood a chance," said Jackie Smith, who had two friends next to her get shot. "I just tried to get out of there."

Is $10,000 gold on the horizon? One commodities expert says yes!

As gold continues to rally in 2016, one of Wall Street's most closely followed commodities watchers says we could be in the early days of a historic rally for the precious metal.

However, the catalyst for gold's gains could stem from a nerve-wracking sequence of events. "We should expect the next global financial panic soon," said Jim Rickards on CNBC's "Futures Now" last week. "We have imploded twice in the last 16 years so get ready for the third one."

Rickards has penned numerous New York Times best sellers on the relationship between commodities and currencies. His latest book, "The New Case for Gold," defends the rationale that gold always has been, and always will be, a true safe haven during volatile times. He therefore urges investors to think of the commodity as insurance, not an investment.

He cited the financial meltdown of 2008, where U.S. banks teetered on the brink of collapse before the government's multi-billion dollar bailout. Before that, in 1998, Wall Street bailed out Long-Term Capital Management when it collapsed. Rickards explained that, given the consistency of a financial panic every 10 years, investors should brace for another disaster in 2018. Yet, this time around, Rickards believes that its the U.S. government itself that may trigger the next crisis.

Paul Singer Joins Icahn, Soros; Warns "It's A Very Dangerous Time To Be In The Market", Buys Gold

Over the past month, between Stan Druckenmiller, Carl Icahn and most recently George Soros, it has become positively cool to be a billionaire who has turned their back on the rigged market, and has decided to either get out of stocks or go outright net short (Soros and Icahn), while concurrently buying gold. Over the weekend, yet another billionaire made waves, when Paul Singer told Institutional Investor in an interview that not only has the Fed's "monetary extremism" hindered economic expansion, blasting monetary policy as adding to not only the world's debt but its social problems (including lack of wage growth), warns that "at the moment we’re either in a stage of stagnation or rollover, possibly in the early stages of a global recession", predicts that "it’s a very dangerous time in the financial markets" and concludes that "we’re very bullish on gold, which is the anti–paper money, of course, and is underowned by investors around the world."

As Institutional Investor writes, one of the keys to Elliott’s success has been Singer’s ability to avoid losing money during market dislocations. “If you break even in a bear market or crash or financial crisis, you’re way ahead of the game,” he says. The legendary investor, who will be receiving an IInvestor Lifetime Achievement Award at the firm's annual Hedge Fund Industry Awards dinner on June 23 at the Mandarin Oriental in New York, recently spoke with Michael Peltz about the challenges he sees in the current global macroeconomic environment.

He was very, very bearish. Why have developed economies been unable to achieve the growth they had prior to the global financial crisis?

I believe the reason is a bad policy mix due to an unwillingness on the part of all of the governments of the developed world to take the normal and obvious fiscal steps to increase growth. Instead, in the absence of pro-growth policies on the fiscal side, the sole support in the developed world has been monetary policy.

Andy Hoffman-Cartel Cannot Stop Gold & Silver Bull Market

How Banks Learned To Stop Worrying And Love The Blockchain

When bitcoin first appeared a little over eight years ago, early adopters saw the potential to disrupt the big banks of the world. It's all there in the very first line of the abstract to the paper that introduced the cryptographically powered currency. "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution," wrote bitcoin’s mysterious creator, Satoshi Nakamoto.

The new form of digital money attracted attention from fans of Occupy Wall Street and contrarian businesspeople alike, including Overstock CEO Patrick Byrne, who is perhaps known as much for his battles with Wall Street brokers as for his online retail success; in 2007, Overstock sued Morgan Stanley and Goldman Sachs over alleged stock market manipulation that Byrne claimed caused his company's shares to drop.

But while big banks have generally avoided dealing in bitcoin and other cryptocurrencies, many have become quite taken with the underlying technology behind these alternative monetary systems: the digitally shared ledgers known as blockchains. In fact, within the past year or so, a Who’s Who list of the world’s largest banks—from Goldman Sachs and BNY Mellon to Deutsche Bank and Mitsubishi UFJ—have all very publicly announced plans to explore blockchain technology.

"This kind of feels like when the Internet started," says Suresh Kumar, BNY Mellon’s chief information officer. "There is an expectation that, okay, this is something new and different, so there is some value to leveraging it, and the question is: Okay, what are the implications of that for the traditional services, and what kind of services can be enabled that were not practical before?"

Millennials Need to Grow Up and Get a Job

Millennials are not lazy, but actually represent a very innovative and connected cloud-oriented phase of our new world order. According to the data they are needed in our thinly skilled labor pool, but more and more they have chosen to swim elsewhere. Unemployment has fallen to just 4.7% and our Central Bankers perceive inflation inducing full employment is at our doorstep. The Federal Reserve is very anxious to force interest rates higher and apply the brakes to our anemic but somehow overheating economy. However, free market interest rates are falling due to concern about a stalling economy. Central Banks from other countries are still pumping currency into space, but our supreme Fed is ignoring the marketplace consensus.

This has been an unusual economic recovery. How can unemployment be so low and workers so hard to find, yet wage inflation and consumption remain subdued? How can so many workers of all age groups be leaving the workforce with record Job Openings and cries of skilled worker shortages? Since the tech bubble peak in the late 1990’s, participation in the workforce has been in steep decline. It’s estimated that “real” unemployment would be closer to 10% today had all the people who left the labor force since the 2008 crash continued to look for work. “5% or 10% unemployment?” Depending upon your perspective we are at full employment near an economic peak or still in a recession waiting for liftoff. The truth may lie in between as we remain in one of the slowest economic recoveries in history marred by continual slack, but there is no “recession”.

There are many reasons given for this rapid secular drop in worker participation rates. Republicans would like to think it’s due to the terrible economy and lack of high paying jobs. The sharp growth in lower-paying Leisure and Hospitality jobs and elevated “real” U6 Unemployment of marginally attached workers at 9.7% support this claim. Democrats dismiss this as just an ongoing trend exacerbated by aging Boomers entering retirement. The next chart partially supports this thesis as the bulging Baby Boom portion of the population has just entered its normal retirement phase and those leaving the workforce have predictably soared higher. This age group will continue to rise into the 2020’s.

Both theories fail to make sense of the prime working age population that has been increasing its nominal worker exodus and rate of eligible workers opting out. There are brief periods of heightened economic boom when prime age laborers stay and seek jobs, but for decades, this group has been increasingly exiting the workforce with declining participation rates.

A clear sign that 'the most miserable country in the world' is almost out of cash

People have been saying Venezuela is on the verge of collapse for years, but its been a slow burn.

Now, the nation that economist Steven Hanke has called "the most miserable country in the world" for two years running is really starting to show signs that it is running out of cash.

How do we know? The state oil company PDVSA is getting really slow to pay the oil companies with which it's doing business. We spotted this telling nugget in a note from HSBC, after analysts met with representatives from companies like Royal Dutch Shell. Here's the bit you need to read:

Venezuela running out of cash: Several BP tankers carrying c.2mmbbls are stuck outside Venezuelan crude import terminals unable to discharge, because PDVSA hasn't paid for the oil. The Venezuelan economy is under intense strain due to the collapse in oil receipts, coupled with chronic power shortages due to a severe drought. Risks to oil production are rising as a result: Schlumberger and Halliburton have both curtailed activity in the country in recent weeks due to lack of payment. European majors involved in Venezuela include ENI and Repsol: both are involved in the Perla gas offshore field, as well as heavy oil production. Both majors have said they expect some payment "delays," and have outstanding receivables of around USD100m reach.

Oil companies face worker shortages after 350,000 layoffs

There could be a growing shortage of skilled workers in the oil industry. That may seem counterintuitive in an industry that has been rapidly shedding workers, with more than 350,000 people laid off in the oil and gas industry worldwide.

Texas is one place feeling the pain. Around 99,000 direct and indirect jobs in the Lone Star state have been eliminated since prices collapsed two years ago, or about one third of the entire industry. In April alone there were about 6,300 people in oil and gas and supporting services that were handed pink slips. Employment in Texas’ oil sector is close to levels not seen since the aftermath of the financial crisis in 2009. "We're still losing big chunks of jobs with each passing month," Karr Ingham, an Amarillo-based economist, told The Houston Chronicle.

But the damage to the oil industry’s workforce could be exactly why companies could face a skills shortage in the months and years ahead.

North Dakota had nearly 1,000 drilled but uncompleted wells as of March, and more companies are showing some signs that they might step up completions now that oil prices are above $50 per barrel. But they might find it difficult to ramp up the rate of completions if they cannot field enough workers. There are only about eight fracking crews left in the state, down from 45 two years ago, according to Reuters. Fracking crews are brought in to frack and complete wells for oil producers.

Global Peace Index – Only 10 Counties Not At War

This is the tenth edition of the Global Peace Index (GPI), which ranks 163 independent states and territories according to their level of peacefulness. Produced by the Institute for Economics and Peace (lEP), the Global Peace Index is the world’s leading measure of global peacefulness. This tenth anniversary report presents the most comprehensive analysis to date on the trends in peace and violence over the past ten years.

In addition to presenting the findings from the 2016 Global Peace Index and a trend analysis, this year’s report includes an updated assessment of the economic value of peace and new research on the systemic nature of Positive Peace. Given the importance of the new United Nations Sustainable Development Goal 16 on peace, justice and strong institutions, there is also a detailed audit of the current data to determine how measurable Goal 16 is and where there are gaps in coverage.

The Global Peace Index is composed of 23 qualitative and quantitative indicators from highly respected sources and now ranks 163 independent states and territories, covering 99.7 per cent of the world’s population. The 2016 edition expands its coverage by including Palestine for the first time. The index gauges global peace using three broad themes: the level of safety and security in society; the extent of domestic or international conflict; and the degree of militarization.

The tenth edition of the Global Peace Index finds that overall global levels of peace continue to deteriorate while the gap between the most and least peaceful countries continues to widen. The rising global inequality in peace is important to highlight as it masks some positive trends. While some of the most peaceful nations have reached historic levels of peace, the least peaceful nations have become even less peaceful. So intense is the violence and conflict in the Middle East and North Africa (M ENA) region that, when looking at the rest of the world, the average levels of peacefulness in fact increased.

Robots Serve You Drinks On This Royal Caribbean Cruise Ship

Is Your Household Income Higher Than the National Average?

We may all have our own unique worries and paths that we take in life, but a nearly unanimous goal we share is to cross the retirement "finish line" on our own terms at some point in our lifetime. Saving and investing are a big part of what helps us achieve our retirement goal, but having a well-paying job and a steady source of income can really help jump-start your ability to save and invest.

Within the U.S., we have a wide gambit of income deciles. According to CNN, 42% of the world's millionaires live in the U.S., and essentially half (49%) of all people who might be defined as the "super rich," those with $50 million or more in assets, reside in the United States. The U.S. is often viewed by the business world as a land of opportunity, and these overwhelming millionaire statistics essentially prove this point.

By a similar token, an inordinately high number of Americans continue to live in poverty. Based on U.S. Census Bureau data from 2013, 14.5% of all Americans, which works out to more than 45 million people, were living below the federal poverty line of $11,490 for a single person or $23,550 for a family of four.

Since 2000, the number of Americans as a percentage of the population who live under the federal poverty line has risen almost precipitously from a low of 11.3% to a peak of 15.1% in 2010. This growth in poverty somewhat coincides with a drop in median household income, which peaked in 1999 and has been pushing lower in most years since then.

Police can now strip the money right off your card

Carrying a lot of cash is dangerous. Criminals may take it and so may the cops, who increasingly view having a lot of cash as evidence of wrongdoing. But now, police have added a new twist -- they've started using a scanner that lets them swipe the money right off prepaid cards. The device is called an ERAD -- Electronic Recovery and Access to Data machine, and Oklahoma's state police began using 16 of them last month. Hundreds of other police departments around the country are also using the device but haven't fessed up to it.

It's all pretty simple. If a state trooper or other police officer suspects you are tied to some type of crime, he can scan your prepaid cards and seize the money on them. No formal charges, no trial, no due process. It's an extension of a long-standing practice of shaking down anyone police think is suspicious. All too often, as the Washington Post demonstrated in a Pulitzer Prize-winning investigation a few years ago, all you need to do to look suspicious is have a lot of money.

The police, of course, say the process is completely straightforward. "We're gonna look for different factors in the way that you're acting,” Oklahoma Highway Patrol Lt. John Vincent said, according to a Washington Post report. “We're gonna look for if there's a difference in your story. If there's some way that we can prove that you're falsifying information to us about your business."

Of course, when Lt. Vincent says police will "prove" you're falsifying information it doesn't mean they'll prove it in court, where you can confront the witnesses and challenge the evidence. And that's what has critics upset. State Sen. Kyle Loveless (R-Oklahoma City) said he will introduce legislation in the next session of the state legislature that will require a conviction in a court of law before anyone's assets are seized. "If I had to err on the side of one side versus the other, I would err on the side of the Constitution,” Loveless said. “And I think that's what we need to do."

Show & Tell

76 million Americans are struggling financially or just getting by

Wages are finally rising. Unemployment is the lowest it's been since 2007. Inflation remains muted. But 31% of American adults, or 76 million people, say they are struggling to get by or just barely making it, according to the Federal Reserve Bank's latest survey on Americans' economic well-being, which looked at 2015.

And that's actually good news. Two years earlier, the Fed found that 38% of Americans were in weak financial shape. Seven years after the end of the Great Recession, millions of Americans have yet to find firm financial footing. That's one reason why the economy remains a top concern in the 2016 presidential election.

Seven years after the end of the Great Recession, millions of Americans have yet to find firm financial footing. That's one reason why the economy remains a top concern in the 2016 presidential election.

"It's important to identify the reasons why so many families face continued financial struggles and to find ways to help them overcome them," said Federal Reserve Board Governor Lael Brainard. The Fed survey highlights many of Americans' continuing economic worries. Some 46% of adults say they can't cover an unexpected $400 expense or would have borrow or sell something to do so. While lower income Americans said they'd have the toughest time handling this emergency charge, some 38% of middle class Americans reported they'd have trouble too. Even 19% of those raking in over $100,000 a year said they couldn't pay the bill promptly.

Why Brexit May Bring The Reality Shock The Market Needs

All eyes will be on the upcoming “Brexit” vote in the United Kingdom next week, now that polls are showing that the Brits are more likely than not to shock conventional wisdom and exit the European Union.

Wherever she is, Margaret Thatcher will be beaming at the wisdom of her former constituents seeing the wisdom of exiting the deeply flawed and ultimately unsustainable confederation of European countries.

Markets will no doubt react very badly if the vote tracks the current polls, but this type of short-term pain is child’s play compared to what has to happen to return the global economy to some semblance of sanity and growth in the years ahead. Take the U.S. stock market, for instance…

Something radical is certainly required to snap investors out of the complacency. While stocks sold off sharply on Friday, they were flat on the week with the Dow Jones Industrial Average rising 58 points or 0.3% to 17,865.34 and the S&P 500 losing 3 points or 0.15% to close at 2096.07.

‘Abenomics’ doubts drive foreigners off Japanese stocks, volatility spikes

Foreign investors are bailing out of Japanese stocks as a wobbly economy feeds disillusionment about ‘Abenomics’, sparking bouts of volatility in a market increasingly shaken up by policy decisions of the Bank of Japan.

The trouble is that long-term focused foreign funds have turned bearish on doubts that Tokyo can pull Japan out of two decades of economic stagnation, despite more than three years of massive monetary and fiscal stimulus.

“There are many long-term investors who have given up on Japanese stocks as there are no structural reforms being delivered. Meanwhile, monetary policy decisions only have short-term effects,” said Michiro Naito, executive director at equity derivatives at JPMorgan who recently visited Asian investors.

Net selling by foreign investors from January through May was roughly 4.5 trillion yen ($42.07 billion) in Japanese cash equities, according to exchange data, a stark turn from net purchases of about 2.83 trillion yen in the same period last year. Not surprisingly, the benchmark Nikkei share average <.N225> has fallen 13 percent this year, underperforming its global peers. The S&P 500 index <.SPX> is nearly flat, while the pan-European FTSEurofirst 300 <.FTEU3> has fallen 6.8 percent. All of this has occurred amid a bleak backdrop for Japanese equities, as confidence has been sapped by worries over a sputtering economy, anemic inflation, weak external trade and sluggish consumption.

What Jim Cramer Expects to Hear at Next Fed Meeting

LinkedIn Job Postings Plunge to the Worst Month in 10 years

The jobs data in the US has recently taken a nasty spill. Last week it was an ugly jobs report from the Bureau of Labor Statistics. It could bounce off next month, and the current data could be revised higher, but we’re not seeing the signs of this sort of hiring momentum.

Instead, we’re confronted with a sharp and ongoing deterioration of a leading indicator of the labor market: temporary jobs. They rise and fall months ahead of the overall number of jobs.

The sector peaked in December 2015 at 2.94 million. It shed 21,000 jobs in May, and 63,800 since December. This is also what happened in 2007 and 2000, at the eve of recessions.

This week, it was the Fed’s very own Labor Market Conditions Index which dropped to the worst level since the Financial Crisis, a level to which it typically drops shortly before the onset of a recession – and shortly before employment gives way altogether. It still could bounce off as it had done in early 2003, but it better do so in a hurry:

The great smartphone boom is about to bust

The smartphone boom is about to go bust, with sales growth expected to fall to single digits in 2016. That’s a far cry from the 73% growth the industry saw just six years ago.

According to market research group Gartner Inc., worldwide smartphone sales will increase by just 7% in 2016. IDC Research, meanwhile, predicts growth will slow to just 3.1%. Why such a precipitous drop? Simply put, because consumers already have too many smartphones in their hands. Smartphone markets in North America, Europe, Japan and more mature Asia and Pacific markets have already reached 90% penetration, according to Gartner. That’s a lot of smartphones.

China was supposed to be the next big smartphone hotbed to keep sales on their upward trajectory, but Gartner reports that overall sales were flat in the region in 2015 with little growth expected over the next five years. Gartner research director Annette Zimmermann says companies should instead look to India, which she says has the highest growth potential.

Market saturation isn’t the only thing keeping growth relatively stagnant; consumers are now savvier about when and where they purchase their handsets. What’s more, the decision by US carriers to move away from traditionally subsidized two-year smartphone contracts has discouraged consumers from upgrading their smartphones.

Monday 06.13.2016

NEWS to Disturb the Comfortable...

We don't tell you what to think,

but we give you something to think about.