Arizona Legislature Ends Income Taxation on Gold and Silver
Sound money advocates scored a major victory today when the Arizona state senate voted 16-13 to remove all income taxation of precious metals at the state level. The measure heads to Governor Doug Ducey, who is expected to sign it into law.
Under House Bill 2014, introduced by Representative Mark Finchem (R-Tucson), Arizona taxpayers will simply back out all precious metals “gains” and “losses” reported on their federal tax returns from the calculation of their Arizona adjusted gross income (AGI).
If taxpayers own gold to protect themselves against the devaluation of America’s paper currency, thanks to the inflationary practices of the Federal Reserve, they frequently end up with a “gain” when exchanging those metals back into dollars. However, this is not necessarily a real gain in terms of a gain in actual purchasing power. This “gain” is often a nominal gain because of the slow but steady devaluation of the dollar. Yet the government nevertheless assesses a tax.
Sound Money Defense League, former presidential candidate Congressman Ron Paul, and Campaign for Liberty helped secure passage of HB 2014 because it begins to dismantle the Federal Reserve’s monopoly on money.
Auto Loan Fraud Soars in a Parallel to the Housing Bubble
Borrower fraud in U.S. auto loans is surging, and may approach levels seen in mortgages during last decade’s housing bubble, according to a startup firm that helps lenders sniff out bogus borrowers.
As many as 1 percent of U.S. car loan applications include some type of material misrepresentation, executives at data analytics firm Point Predictive estimated based on reports from banks, finance companies and others. Lenders’ losses from deception may double this year to $6 billion from 2015, the firm forecast.
Those fraud rates are coming closer to the over-1-percent level for mortgages in 2009, when the financial crisis was boiling and more lenders started reporting incidents to one another, Frank McKenna, chief fraud strategist at the firm, said in an interview. While those losses will sting lenders, the impact on the overall economy will likely be much more muted than with the housing crisis, just because there’s less car debt outstanding.
Even so, “We see an extraordinary amount of parallels between the auto and mortgage industries, in terms of the rising levels of hidden fraud,” McKenna said. For home loans, it’s hard to know how widespread the deception was before 2009, because lenders often didn’t report information to one another and may not have even investigated incidents of probable lying much on their own, McKenna said.
Postal Service, Citing Losses, Seeks Higher Stamp Prices
The U.S. Postal Service is hoping it can soon raise stamp prices by a penny or more. The postal service on Wednesday reported a quarterly loss of $562 million, despite growth in package delivery, due to continued erosion in the use of first-class mail as well as expensive mandates for its retiree health care obligations. It also attributed losses to a forced reduction in stamp prices last year.
The postal service is generally barred under federal law from raising prices more than the rate of inflation. But it is seeking greater regulatory leeway to increase prices, including a one-cent rate hike provided in a measure being considered by Congress. The current cost of a first-class stamp is 49 cents.
"America deserves a financially stable postal service that can continue to play a vital role in our economy and society," said Postmaster General Megan J. Brennan. She said the postal service continues to aggressively cut costs.
The financial report shows what it described as "controllable" income of more than $12 million for the three months that ended on March 31. But when taking into account expenses to prefund retiree health care and other items considered beyond the management's control, it posted a loss. Operating revenue came to $17.3 billion, a decrease of $474 million from the same time last year.
Catherine Austin Fitts-They're Trying to Centralize Control
Federal government records $182.4 billion budget surplus
The federal government ran the second highest monthly surplus on record this April as tax revenues were pushed higher by a change in the deadline for corporate tax payments. In its monthly budget report, the Treasury Department said Wednesday that the surplus for April totaled $182.4 billion, the second largest surplus after a record $189.8 billion surplus set in April 2001.
The government generally runs surpluses in April reflecting the annual tax deadlines. This year's surplus was inflated because of a deadline change that allowed corporations until April to make their final tax payments for last year. The deadline had previously been March.
Through the first seven months of the current budget year, the government is running a deficit of $344.4 billion, down 2.4 percent from the same period a year ago. The Congressional Budget Office is projecting that the deficit for the full budget year, which ends on Sept. 30, will decline 4.6 percent to $559 billion. That would compare to a 2016 deficit of $585.6 billion.
The CBO's deficit estimate is based on current law remaining unchanged. President Donald Trump has called for a program of tax cuts for individuals and businesses, and increased government spending in such areas as the military and repairing the nation's aging infrastructure.
Abercrombie & Fitch's latest sale may be itself
Abercrombie & Fitch may be for sale, and its stock is soaring on the news. Shares of the struggling retailer rose more than 10% Wednesday, after Reuters reported that Abercrombie & Fitch, which also owns the Hollister apparel chain, had hired investment bankers to look for potential offers.
Abercrombie & Fitch (ANF) told CNNMoney that it did not comment on market rumors. It's not clear who would want to buy the company. Shares are near their lowest level since 2000. (Maybe the name dropping of A&F in the 1999 song "Summer Girls" by LFO proved to be the height of the retailer's popularity.)
Sales have been sluggish for years. The company is expected to report another quarterly loss and decline in revenue when it releases its latest results on May 25. New CEO Fran Horowitz, who was promoted from chief merchandising officer to the top spot in February, has taken steps to get the company back on track. But it's been an uphill battle.
Former CEO Mike Jeffries left the company in December 2014 after a series of controversies. Jeffries made remarks about only wanting "cool, good-looking people" to wear his company's clothes.
New Amazon Building In Seattle Will Include A Homeless Shelter
The idea of mixed-use development isn't new. But today Amazon announced that a new building it plans to construct in Seattle will feature a decidedly uncommon mix: its own high-tech offices, and a homeless shelter with space for 65 families.
The company said it will donate more than 47,000 square feet of space, or about half of the new six-story building, to Mary's Place, which operates several family shelters. Last year, Amazon invited Mary's Place to set up a shelter inside a former Travelodge it owns. That building will be torn down, but its replacement will include a permanent shelter space with room for about 200 homeless women, children, and families.
Homelessness is a huge problem in Seattle, where tent cities have sprung up under the interstates. King County and Seattle had the third-largest population of homeless people last year. A report from the U.S. Department of Housing and Urban Development counted 10,730 homeless people in Seattle and King County in 2016. Washington state had the second-highest total increase in homeless people (1,408) between 2015 and 2016, according to the report.
Seattle's leaders declared a homelessness state of emergency in 2015. The Seattle Times reported that the city's mayor called homelessness a human tragedy "seldom seen in the history of our city."
Owner of Snapchat stock plunges after IPO expenses run up a $2.2 billion loss for the first quarter
Snap reported quarterly financial results for the first time on Wednesday, posting revenue that missed estimates and slower-than-expected user growth.
Shares plummeted more than 25 percent in after-hours trading. The company spent $2.0 billion on stock-based compensation expenses after its initial public offering, widening net losses for the quarter to $2.2 billion.
CEO Evan Spiegel got a $750 million bonus for taking Snap public. He told analysts on a conference call that the company was focused on improving quality for users during the first quarter, especially for those with Android mobile phones.
Despite the steep loss during the quarter, Snap is "still in investment mode," Snap's chief financial officer, Drew Vollero, said on a conference call with analysts.
Aetna Is Latest Health Insurer to Quit Obamacare Markets
Aetna Inc. will leave the few remaining states where it had been selling Obamacare plans next year, making it the latest health insurer to pull out of the health law as Republicans attack the program as failing and work to dismantle it.
While the move is likely to attract outsize political attention, the decision affects just Delaware and Nebraska. The Hartford, Connecticut-based insurer already said last year it would pull out of 11 states, and in the last month announced plans to exit Iowa and Virginia.
“We will not offer on- or off-exchange individual plans in Delaware or Nebraska for 2018, and at this time have completely exited the exchanges,” Aetna said in a statement Wednesday.
Aetna had indicated it might pull out earlier this month, when Chief Financial Officer Shawn Guertin said the company would take steps to limit its financial losses in the program. Aetna has said it expects to lose more than $200 million on individual health plans this year in the four states where it’s still selling Affordable Care Act plans.
Fed's Kashkari: Keep Dodd-Frank regulations in place for big banks
Minneapolis Federal Reserve Bank President Neel Kashkari said on Wednesday that there should not be any relaxation of regulations that have tightened oversight of Wall Street.
"Progress has been made. I wouldn't want to roll that back off the biggest banks," Kashkari said at an event in Minneapolis, when asked about the fate of the Dodd-Frank reform act that was passed in part to prevent big banks from causing a repeat of the 2007-2008 financial crisis.
"I do want to roll back some of that ... off of the little banks that are not systemically risky for the country that are being caught up in the same regulatory net," he added.
Last year, Kashkari proposed forcing banks to hold much more capital in order to make them safer and avoid taxpayer bailouts in the event of another financial crisis.
Is There Still A Case For Gold? Absolutely, Says This CEO
'Don't treat us like a pariah': In rare interview, Sears CEO blames media for company's downward spiral
Sears CEO Eddie Lampert on Tuesday said that the struggling retailer was "fighting like hell" to stay afloat but that unfair media coverage was making it difficult for the company to turn business around.
In a rare interview, Lampert told the Chicago Tribune that Sears "clearly" had its challenges but in many ways was ahead of the rest of the industry.
"I feel like we're ahead of JCPenney, we're ahead of Macy's, we're ahead of Target, in some aspects of where the world is going," he told the Tribune. But news articles speculating on a Sears bankruptcy are holding the company back, he said.
"Every time people use the word bankruptcy, somebody who reads that doesn't get past that word," he said. "It makes it very unfair for us, and it's a very uneven playing field for us." Lampert said the media was focused only on Sears' challenges and gave preferential treatment to other retailers. "Costco came out last year with a new card and everyone was talking about it and writing about it," he said. "When we come out with our card, people only talk about closing stores. It is true that on the left, we're closing stores. We're not making money. On the right is where we're going."
Retail Funk: Stores Face Biggest Challenges Since Recession
It's starting to look a lot like the Great Recession redux for retailers. More than twice as many stores have closed this year than at the same point last year. Bankruptcies are far outpacing last year's rate. Retailers slashed jobs at the sharpest pace in seven years this spring. And retailers collectively could report the biggest drop in first-quarter profits since 2009.
This time, the culprit's not the economy but shoppers whose habits have changed profoundly and permanently, as they shop online more and look for deals. The results this week from department stores like Macy's, Kohl's and J.C. Penney are expected to illustrate the latest damage by the spending shift and the dominance of Amazon.
"The first-quarter reports will show how difficult the mountain retailers will have to climb," said Ken Perkins, president of research firm Retail Metrics LLC. "Things are far better from an economic perspective than before when the sky was falling." But he says people are increasingly spending on experiences and shopping on phones and tablets, "and stores are facing pressure from off-price stores and Amazon.com."
Perkins estimates that the 114 retailers he tracks will see an average drop of more than 5 percent in first-quarter earnings, marking the second straight quarter of declines and third in the last six quarters. But he thinks there's even a chance they could surpass a 7.1 percent drop in the fourth quarter of 2013 that would make it the worst quarter since 2009.
Something Big Changed In The U.S. Gold Market In 2017
Most Americans didn’t realize it, but something BIG changed in the U.S. gold market in the beginning of 2017. While precious metals sentiment and buying in the U.S. has dropped off considerably in the first quarter of 2017, the East continues to acquire gold, HAND OVER FIST.
How much gold? Well, let’s just say…. U.S. gold exports have nearly doubled during JAN-FEB 2017 versus the same period last year:
Total U.S. gold exports JAN-FEB 2017 surged to 101 metric tons (mt), compared to 56.5 mt last year. This is quite interesting because total U.S. gold mine supply plus gold imports for JAN-FEB 2017 only equaled 80 mt. Thus, the U.S. suffered a 21 mt gold supply deficit in the first two months of the year. Which means, someone had to liquidate an additional 21 mt of gold from their vaults to export to the East….. where they still understand the vital role of gold as REAL MONEY.
And where did the majority of U.S. gold exports head to? You got it….. Hong Kong-China & India.
Very Few Americans Have Heard of the ‘Gig Economy’
The overwhelming majority of Americans have no idea what the gig economy is despite its rapidly growing use and popularity, according to a survey released Tuesday.
The gig economy involves freelance work typically facilitated by an internet platform or app. Its increased use in recent years has started to shape the overall economy. The American Staffing Association (ASA), however, found in a new poll that 75 percent of Americans have never even heard of the term “gig economy.”
The ASA poll also found 29 percent of people don’t know how to define the term while 31 percent of people cannot identify specific types of gig work. The majority of people polled, at 85 percent, believe they have worked in the gig economy when not provided a definition. The results drop to 20 percent when the term was defined.
“The ASA Workforce Monitor findings demonstrate that many Americans are puzzled by the term, ‘gig economy,’” ASA President Richard Wahlquist said in a statement. “Despite this confusion, and even if it is just a new term for an old approach to work, the majority of Americans don’t believe that gig work will be a dominating force in the economy in the coming years.”
Are We in a Tech Bubble?
The NASDAQ and S&P 500 are trading in record territory as investors continue to be afraid to miss out on strong gains that have come since Donald Trump won the U.S. election. Stock valuations were already in nosebleed territory before the election. The optimism since then has sent stock valuations to even higher—and more unsustainable—levels. But has investor euphoria sent stocks, and in particular the NASDAQ, into a tech bubble? And will the 2017 tech bubble burst or deflate quietly?
If history is any indicator, the current tech bubble will echo the dotcom crash of 2000. It will come out of the blue and it will be severe. It’s not as easy or straightforward to explain the 2000 tech bubble as one might think. What we do know is that the NASDAQ was on a tear in the second half of the 1990s as investors grappled with how to monetize the Internet.
The 2000 tech bubble was born on speculation and died on reality. Like 2017, investors were afraid to miss out on huge daily gains in the late 1990s. And I do mean daily. It’s pretty hard to find someone who didn’t make money on tech stocks in the late 1990s. Tech companies with decent ideas but no real business plan had sky-high stock valuations; and investors didn’t care.
The fear of missing out on the untapped potential of tech companies like Pets.com, eToys.com, and theGlobe.com sent the NASDAQ to an all-time high of 5132.52 on March 10, 2000. Then, with no warning, tech stocks started to sell off, in what Wall Street pundits called “profit-taking.” This resulted in a crash.
EpiPen price hike was ‘intentional’: AllergyKids Founder
Homeowners continue to overestimate their home value
Homeowners and appraisers continue to hold conflicting views on the value of their home, a gap that widened once again in April, according to the Home Price Perception Index from Quicken Loans.
Appraised home valued came in 1.9% lower than what homeowners expected as many Americans continued to overvalue their home. This marks the fifth consecutive month where the gap between appraiser and homeowner opinions widened.
Although the gap continued to widen, appraised valued increased in April. The National Home Value Index, which measures home prices based solely on appraised values, shows home prices increased 1.06% in from March and 5.08% from April 2016. The gap between homeowners and appraisers of 1.9% is up from last month’s gap of 1.77%.
“The appraisal is one of the most important data points in a mortgage transaction,” said Bill Banfield, Quicken Loans vice president of capital markets. “This single number can impact how much money a buyer needs to bring to closing, or the equity that is available to the homeowner on a refinance.”