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Tuesday 05.09.2017

74% Of Americans Plan To Work Past Retirement Age

For those wondering about the true strength of the US economy, look no further than Americans' post-"retirement" plans revealed in the latest Gallup survey, according to why only 25% of Americans plan to stop working past retirement age. Meanwhile, nearly two in three employed U.S. adults, or 63%, responded they plan to work past retirement age on a part-time basis, while an additional 11% said they will work full time once they hit retirement age.

These results come from Gallup's Economy and Personal Finance survey, conducted April 5-9. As in 2011 and 2013, the two previous times Gallup asked this question, working adults are most likely to say they intend to "continue working, and work part time." As one would expect, over the same time period, the percentage who say they plan to "stop working altogether" has ticked up. However, in a surprising twist, of those who say they will continue working, but only full time, the majority plan to do so because they want to, not because they have to.

Regardless of their retirement-age plans -- whether they work full time, work part time or stop working -- employed adults mostly say their choice is out of preference rather than necessity. The vast majority of those who plan to stop working say it is because they want to rather than will need to. Also, by a better-than 2-to-1 ratio, those who plan to continue working part time say it is something they want to do, rather than will have to do.

Still, whatever the underlying dynamics, the trend is stark. Nonretired U.S. adults are split on when their "retirement age" actually will be, but the greatest percentage (39%) say they expect to retire after age 65, about the same as last year. Roughly one in four expect to retire at exactly age 65, while 29% believe they will retire before then. While the trends has remained relatively consistent this decade, there has been a seismic shift since 1995 in the age at which nonretirees believe they will retire. In two polls conducted that year, an average of 14% said they expected to retire after 65 and 49% before 65. These percentages have flipped in the last two decades, as the age to start collecting Social Security has risen to 67 and more Americans feel a financial need to stay in the workforce.

GM to lay off over 600 at Delta Township Assembly Plant

General Motors' Lansing Delta Township Assembly Plant will shut down for a month starting this week to prepare for the launch of the new Buick Enclave and Chevrolet Traverse.

The plant closes after second shift on Friday to phase out production of the GMC Acadia. When it resumes on June 12, the third shift will be gone along with more than 600 workers.

Back in March, when the cuts were first announced, GM believed it might have to lay off as many as 1,100 at the plant. "At this point, we anticipate approximately half the number of people reported in the WARN notice to be impacted by the shift reduction," said Erin Davis, GM's Lansing spokeswoman.

Of the roughly 600 who will be laid off, 500 could be brought back in the first quarter of 2018, Davis said, when production and demand for the Enclave and Traverse is expected to be in full swing.

Goldman says U.S. economy may be slowly growing into the longest expansion in history

Since the financial crisis, the economy has never been called robust, but it may be in the longest expansion on record, with a couple more years to go.

Goldman Sachs economists said, in a recent note, that their model shows an increased, 31 percent chance for a U.S. recession in the next nine quarters. That number is rising. But it's a good news, bad news story, and the good news is there is now a two-thirds chance that the recovery will be the longest on record.

"The likelihood that the expansion will break the prior record is consistent with our long-standing view that the combination of a deep recession and an initially slow recovery has set us up for an unusually long cycle," they wrote.

The current expansion has already lasted 95 months, now third-longest in US history in 33 business cycles going back to 1854, the economists said. "Only the expansions from March 1991 to March 2001 [120 months] and from February 1961 to December 1969 [106 months] were longer," they wrote.

Is Gold Just A Dollar Play Right Now? - Rick Rule

Fed's Mester Warns Against Falling Behind With Rate-Hike Pace

Federal Reserve Bank of Cleveland President Loretta Mester said the central bank should continue on its gradual path of raising interest rates to prevent the risk of overheating the U.S. economy.

“It’s important for the FOMC to remain very vigilant against falling behind as we continue to make progress on our goals,” Mester said in the text of a speech Monday in Chicago, referring to the policy-making Federal Open Market Committee.

“If we delay too long in taking the next normalization step and then find ourselves in a situation where the labor market becomes unsustainably tight, price pressures become excessive and we have to move rates up steeply, we could risk a recession,” she said.

After raising rates in March, Fed officials left interest rates unchanged at a meeting last week in Washington, but signaled they’re still on track to hike two more times this year. In doing so, they brushed aside a first-quarter slowdown in the economy they described as “transitory.” U.S. Labor Department data on Friday affirmed that view, showing employers created a greater-than-expected 211,000 new jobs in April as unemployment fell to 4.4 percent, the lowest since 2007.

Mining CEO Explains Why Silver Could Reach $136.67

His remarks started off like dozens of presentations that I had heard so many times before. . . “Without silver,” began the speaker, “our entire society would go back to the Stone Age.” The speaker was the CEO of one of the largest silver mining companies in the world, and he was a special keynote at the annual closed-door meeting of the Atlas 400. CEOs of mining companies almost always start their presentations talking about how important their mineral is. “If we didn’t have cobalt we would all be cave men again. . .” or “Without molybdenum our modern technology would cease to exist.”

It sounds impressive, but the same story applies to just about every industrial commodity in the world, from copper to lumber to recycled steel. It’s hardly an original argument and doesn’t impress me enough to be bullish on their mineral. The real investment thesis about silver is that it’s a precious metal that has industrial qualities and a long-standing tradition of value.

Like gold, silver was an ancient form of money. And for good reason. Out of the 118 known elements that exist on the periodic table, gold and silver share certain chemical properties that made them ideal as a medium of exchange to our ancestors. Gold and silver are solid at normal temperatures (as opposed to Helium). They’re not radioactive (like Plutonium)

They’re not explosive when they come into contact with water (like Cesium), nor do they rust when they get wet (like Iron). Most importantly, gold and silver are rare enough to be valuable, but not so rare that it would be almost impossible to mine more. Between the two, gold is obviously more rare… hence the higher price.

Central Bank Market Rigging: Horrified About The Biggest Global Bank Run In History

The Fed and Central banks are manipulating the gold and silver price because they are horrified that the biggest global BANK RUN in history will take down the entire system. Unfortunately, a lot of investors are still being misled about the fundamentals of precious metals market manipulation. While the Fed and Central bank are indeed intervening in the gold and silver market, they are also propping up the majority of asset values across the board. This is especially true for most stocks, bonds and real estate.

Yes, it is also true that billions of Dollars worth of paper gold and silver are dumped into the market in nanoseconds during very light trading days. Thus, the impact is to cap the gold and silver price, making sure that 99% of investors stay fast asleep. These are the very same investors who the Central banks are working extremely hard to keep their funds placed firmly in stocks, bonds and real estate. However, there is some method to their madness.

I continue to receive emails from individuals who believe the Central banks can push the price of gold or silver anywhere they please. This is total RUBBISH. It is a crying shame that there are still analysts out there misleading their followers with that sort of superficial nonsense.

All the Fed and Central Banks can do is to keep the gold and silver price from exploding higher. They cannot push the value of gold or silver (too far) below its cost of production. Here is a chart from my previous article showing the gold price versus the top two gold miners (Barrick and Newmont) cost of production:

The gold market price was always HIGHER than Barrick and Newmont’s cost of production. So, as we can plainly see, the Fed and Central Banks NEVER pushed the annual gold price below Barrick and Newmont’s cost of production from 2000 to 2016.

Guaranty Bank closing 107 Branches

Guaranty Bank was shut down by the federal Office of the Comptroller of the Currency late Friday, with First Citizens Bank & Trust Co. of Raleigh, N.C., assuming all of its deposits.

The Glendale-based Guaranty Bank began operating as a division of First Citizens Bank Saturday morning. However, 107 in-store Guaranty Bank branches in Wisconsin, Illinois and Minnesota will not re-open. The remaining 12 Guaranty Bank stand-alone branches re-opened Saturday morning.

According to the Federal Deposit Insurance Corp., as of March 31, Guaranty Bank had approximately $1 billion in total assets and $1 billion in total deposits. In addition to assuming all of the deposits of the failed bank, First-Citizens Bank & Trust Co. agreed to purchase $892.6 million of the failed bank's assets. The FDIC will retain the remaining assets for later sale.

Guaranty had been under orders by federal regulators since 2009 to improve its financial condition, but the bank struggled to return to profitability and boost its capital to required levels. The bank has about 1,000 employees.

Debt Ceiling Crisis 2017: Profound Consequences If No Solution Found

The most important news in the United States that nobody is paying attention to is the debt ceiling crisis 2017. The situation is forcing Uncle Sam to dig deep into its reserve funds just to stay solvent, and there’s barely a peep from the mainstream media. Most everyone assumes that the U.S. debt ceiling crisis will blow over, and that life will continue on as before. But what if it doesn’t? What if there are factors which may prevent a last-minute resolution, as witnessed during the last crisis, in autumn 2015? It’s not as crazy as it sounds.

How much is the U.S. debt ceiling in 2017 and what’s it all about? As it stands currently, the U.S. is operating under a debt ceiling suspension. Prior to the previous debt ceiling agreement, which expired on March 15, 2017, government spending was officially “capped” at $18.113 trillion. This was courtesy of a last-ditch effort that Barack Obama struck with Congress to avert a crisis in autumn 2015. On March 16, however, the previous debt ceiling expired, and aggregate debt reset to account for all issuance since autumn 2015. The national debt total now officially stands at approximately $19.8 trillion, up a whopping $1,414,397,000,000 during that time.

Technically, the U.S. government is operating under what is known as “extraordinary measures” provisions, which are accounting maneuvers that the government can use to temporarily keep the debt under the “limit.” The government is still paying its bills through three funds operated by the Treasury Department: 1) the savings plan for federal employees (also known as the G Fund); 2) the Exchange Stabilization Fund, and 3) the Civil Service Retirement and Disability Fund. The problem is, these three funds are supposed to be earmarked for things like pensions and savings for federal workers. The U.S. government is essentially stealing from the cookie jar to pay off liabilities elsewhere.

Will those funds still be there for federal workers when they are needed? Will the government replenish the funds that it depleted if the crisis blows over? Either way, this is one way that the crisis is affecting ordinary Americans, mainly federal workers, in the here and now.

The Great Wealth Transfer is Here … Now What?

This year, the oldest members of the Baby Boom generation crossed a crucial threshold. They turned 70.5 years-old. Why does that matter? U.S. law currently requires anyone 70.5 or older to begin annual withdrawals from their tax-sheltered retirement accounts and pay taxes on those distributions.

It’s the unofficial kick-off of what economists have been calling the Great Wealth Transfer, and it will unfold over the next 30 years with younger members of Generation X and — crucially – the millennial generation inheriting roughly $30 trillion in assets from their aging parents and grandparents. This massive migration of assets will have a dramatic impact in virtually every industry.

Most commentators who have been following this issue have tackled it from the perspective of the wealth management industry, attempting to project how different generational cohorts will invest this vast sum. But there’s much more to this phenomenon than investing alone.

Tax, for one, will be impacted significantly, and depending upon how the current debate surrounding the estate tax is resolved, there could be several wildly different scenarios playing out as inheritances change hands. The other major factor is consumer spending. Flush with $30 trillion in newfound cash, gen Xers and millennials are certain to change current patterns in spending on home ownership, autos, and other big ticket-items that could drive a shift in the U.S. economy. That could affect the fortunes of many different kinds of companies.

The Long, Hard, Unprecedented Fall of Sears

In 1989, Sears Roebuck & Co. ruled America as its biggest retailer. It loomed over rivals from a perch high above Chicago, inside what was once the world’s tallest building—one bearing the company’s name. The fall from that height may finally be nearing an end.

Over the course of almost three decades, the company experienced what industry observers described as one of the most monumental collapses in business history. Despite its union with Kmart—the second-largest retailer from that era—and a stated belief that it can still turn things around, Sears is teetering on the edge of disaster.

The latest bad news was revealed in March, when Sears acknowledged “substantial doubt” about its future, sending the stock plummeting, its worst decline in more than two years. S&P Global Market Intelligence declared Sears the U.S. retailer most vulnerable to defaulting in the next year. A Fitch Ratings study of retail bankruptcies also listed it as a company with a high risk of failure.

The combined decline of Sears and Kmart, in terms of sales, is unprecedented, said Greg Portell, an analyst at A.T. Kearney. The seeds were planted by poor decision-making in the 1980s, during which time the company made a real estate play instead of focusing on selling stuff. No senior executive over the next 28 years was able to put stops in place to prevent the slide. “The management mistake that Sears made, in retrospect, was that they never got to a spot where they could stop the free fall,” said Portell.

Hypocrites Hide Obamacare’s Flaws

CareFirst is requesting a 50% increase premiums for its plans offered on the Maryland Obamacare exchanges in 2018. This follows a 25% increase in 2017. Yet in a May 5 op ed in the Washington Post, University of Pennsylvania professor Ezekiel Emanuel, my friend and one of the architects of Obamacare, calls Republicans callous for trying to repeal the program.

Tell that to a 22-year old mother who is now paying $700 a month for a CareFirst policy for herself and her 18-month old child, and who faces premiums of over $1,000 per month next year. No, Zeke, it’s not Republicans who are callous—it’s the people who put Obamacare into place.

Emanuel proposes that the government “enforce the mandate so more healthy Americans buy in the exchanges.” Since he’s presumably insured for a few more years by his employer, the University of Pennsylvania, before he has to go on Medicare, he has not had to grapple with the cost or the bureaucracy of the exchanges.

One reason that Obamacare is so expensive for healthy Americans is that the cost for younger Americans, such as a 22-year old mother, was artificially raised so that older Americans, such as Emanuel, would pay less. Before Obamacare, premiums for older people were about five times as much as for younger people. But, under Obamacare, older people can be charged only three times as much as younger people. Since insurance companies could not lower premiums for the old, they raised premiums for the young. I’m sure Emanuel would agree that the true insurance costs for him are far more than three times the insurance costs for a 22-year old.

Free Trade: The Payoff to America

Researchers have answered a big question about the decline of the middle class

America is getting richer every year. The American worker is not. Far from it: On average, workers born in 1942 earned as much or more over their careers than workers born in any year since, according to new research — and workers on the job today shouldn’t expect to catch up with their predecessors in their remaining years of employment.

Stagnant or falling earnings have put a squeeze on working- and middle-class households. The trend has also widened the gap between the rich and everyone else as, overall, the economy has continued to grow overall but the bulk of those gains have ended up in the pockets of the affluent.

These are some of the conclusions from a new working paper by a group of economists investigating the reasons for the decline of the American middle class. While economists have been concerned about recent data on earnings, the new paper suggests that ordinary Americans have been dealing with serious economic problems for much longer than may be widely recognized.

The new paper includes some “astonishing numbers,” said Gary Burtless, an economist at the nonpartisan Brookings Institution who was not involved in the research. “The stagnation of living standards began so much earlier than people think,” he said. In the study, the economists — from the University of Minnesota, the University of Chicago, Princeton University and the federal government — examined career earnings for workers born in every year since 1932. They did not include those who didn’t work or only rarely worked, instead concentrating on those who spent at least 15 years in the labor force. Using wage and salary data from the federal Social Security Administration, they calculated the career earnings of the median worker born in each year.

Fannie Mae changes affect borrowers with student loans

Fannie Mae has recently outlined changes in the way lenders can qualify potential borrowers who have student loan debt. The policy change is designed to make it easier for more consumers to qualify for mortgages, in part by excluding some non-mortgage debt for income-to-debt calculations. These debts can be things like installment loans, student loans, and other monthly debts as defined in the company's mortgage lending guide.

"If the lender obtains documentation that a non-mortgage debt has been satisfactorily paid by another party for the past 12 months, then the debt can be excluded from the debt-to-income ratio," Fannie Mae said on its website. "This policy applies regardless of whether the other party is obligated on the debt." The move will allow borrowers to purchase a more expensive home, or will allow them to more easily qualify to buy an entry level home if their income is right at the approval threshold.

The policy change also allows lenders to refinance existing loans and apply the home's equity to paying off student loan debt. That, Fannie Mae says, will allow current homeowners to increase their monthly cash flow. But there are things to consider before doing that. “Swapping student debt for mortgage debt can free up cash in your family budget, but it can also increase the risk of foreclosure when you run into trouble,” said Rohit Chopra, senior fellow at the Consumer Federation of America (CFA).

Chopra says the policy may help those with solid income and stable employment. "But for others, they might be signing away their student loan benefits when times get tough,” he said. CFA says the policy change has the potential to make a difference in the mortgage market, especially in its effect on borrowers with student loan debt. At this point, around 43 million Americans owe approximately $1.4 trillion in student loans.

South Korean Economy

Uber is shaking up the rental-car business

Undercutting competition by burning unlimited amounts of investor cash is part of Uber’s business model.

Shares of rental-car conglomerate Hertz Global Holdings closed at $14.98 on Friday, after reaching an all-time low of $14.32 on Thursday. These shares have only been around since last June, when Hertz spun off its equipment leasing division. They’ve plunged 73% from their high last July.

Hertz will report first quarter earnings on Monday. In the fourth quarter, it lost $440 million or $5.30 a share, much worse than “expected.” Expectations for Q1 are so low that it will be hard to report “worse than expected” numbers.

November 9 was its big day. Its shares plunged 52% to $17.20. Carl Icahn had been vociferously hyping and buying the shares, including 15 million shares during the plunge. He has lost money relentlessly. That day, Hertz doused car-befuddled Wall Street analysts with a dose of reality about the auto bubble. Deprecation of its vehicles was soaring as residual values were dropping. It also cited falling rental volume and falling rental rates in the US. In 2015, it was forced to restate earnings due to accounting “errors” going back to 2011 and announced it was being investigated by the SEC.

Tempe Gets $50M From Feds For 3 Miles Of Streetcar

The city of Tempe, Ariz. has received $50 million in taxpayer funds from the federal government for the construction of a 3-mile streetcar system.

Last year, former President Barack Obama designated $75 million for the streetcar system. According to KTAR- TV, the funds from the U.S. Department of Transportation’s capital investment program was part of the appropriations bill signed by President Donald Trump on Friday. Construction should begin next month.

“Streetcar is an important addition to developing a comprehensive transit network in this region. It supports the existing transit system and community with its ability to attract new riders, increase mobility, strengthen existing neighborhoods and create sustainable development,” Tempe’s Valley Metro website says.

I’m sure the federal taxpayers from every other state not named Arizona are convinced the streetcars' ability to "strengthen existing neighborhoods" in Tempe, made it worth millions of their tax dollars.

NEWS to Disturb the Comfortable...

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