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Tuesday 04.18.2017

India Outlaws Cash in 75 Cities

Indian Prime Minister Narendra Modi has outlawed cash altogether in 75 cities. He already outlawed the 500 and 1000 rupee. This process of going cashless began at the end of last year. This puts Indians in a difficult position. Cash accounts for 90 percent of transactions in India. The poor, which is most of the country, don’t have debit and credit cards.

The townships were actually selected on the basis of a recommendation by none other than Price Waterhouse Coopers (PWC) furthering the G20 agenda to stamp out tax evasion. The goal is to extend the tax base. Only 1% pay any taxes at all in India.

There are plenty of ways to circumvent the crackdown, such as backdating bills. Nor does the move address the stock of illicit wealth, most of which is stored in assets like property and gold.

However if Modi follows with further radical moves, fear will be widespread. Moves could include a limit on personal holdings of gold or a crackdown on participatory notes, which are widely used to launder money and invest it back into the stock market. It’s also causing a depression in the housing and sales markets, at least in the short term. There is a wider, more global effort to desperately try to completely collapse the world monetary system. He who controls the cash, controls the people.

What Default Rates on Subprime Auto Loans Are Telling Us

About 17% of all U.S. consumers are likely to default on a loan payment over the next year, according to a recent report from UBS. More interesting, perhaps, is who these defaulters are. The UBS Evidence Lab reports that the group’s profile is “middle and upper income, younger, male, urban, and concentrated in the coastal regions.” The UBS researchers also found evidence that defaults on auto loans are likely to spread to more nonprime defaults on credit cards and personal loans.

About 16% of all auto loans outstanding are subprime, amounting to $179 billion out of total auto loans of around $1.07 trillion. Overall subprime debt totals $1.25 trillion in mortgages, student loans and auto loans.

Subprime borrowers (i.e., those with a credit score below 600) have been on investors’ radar screens for at least a year. Now, however, there is evidence that near-prime and prime borrowers are also defaulting more. Some 23% of U.S. banks have forecast an increase in consumer loan delinquencies in 2017, the most in 10 years. And because the banks have been more selective in lending to prime borrowers, it is reasonable to conclude that if high-quality borrowers are about to default, the situation is likely to be worse for subprime borrowers.

The Federal Reserve’s January report on its survey of senior loan officers shows nearly 37% of large banks expect the quality of their credit card loans to deteriorate somewhat in 2017, and just over 38% expect auto loan quality to deteriorate.

Amazon is hiring 5,000 remote workers this year — but there's a catch

If you're looking for part-time work that you can do from home, it's a good time to be in the job market. Amazon recently announced it plans to add 5,000 remote customer service jobs over the next year, as part of a hiring push that will include some 25,000 additional jobs at its fulfillment centers.

But before you quit your office job and set up your home work space, there's a catch: According to Amazon's job posting, these full-time roles pay $10 per hour, just $2.75 more than Federal minimum wage, and are temporary positions lasting a maximum of six months.

Amazon's hiring binge is part of a larger labor market trend. More Americans are working remotely now than ever before, many in salaried positions for top companies. IBM, Xerox, and Allergan are also currently hiring to fill remote positions, and not just in software engineering — jobs in finance, human resources and customer service are available, too.

Recently, remote job search site FlexJobs found that some industries in particular were experiencing a spike in remote job listings. In a January report, which analyzed 100,000 job listings on its website, FlexJobs found that these five fields are adding the most remote workers:

Who 'Provoked And Destabilized' North Korea? China? - Ron Paul

Behind on your student loan? It may cost you a tax refund

Borrowers who have stopped repaying their federal student loans may get an unwelcome surprise during tax season: The refunds they were expecting may be withheld by Uncle Sam. In what is called a tax refund “offset,” the government has the right to withhold funds from student loan borrowers who have fallen into default, and apply the money to the loan balance

“It’s very common,” said Adam Minsky, a Boston lawyer who works with student loan borrowers. When clients seek his help with a loan default, he said, “I assume they’ll have a refund issue.”

The government notifies borrowers ahead of time that their refunds (and other expected government payments) may be withheld. However, borrowers may not always receive the notices, perhaps because they have moved. Or they may simply be overwhelmed by their financial circumstances and fail to open their mail, said Betsy Mayotte, director of consumer outreach at American Student Assistance.

Even if a borrower does receive the notification letter and opens it, letters from the Treasury Offset Program use a lot of bureaucratic jargon, Minsky said, so many people still don’t understand that the payments they may be expecting, including tax refunds, will be withheld. “Most people don’t know it’s coming,” Minsky said. The average federal tax refund is about $2,800, according to the Internal Revenue Service — which means that missing out on a refund may have a big impact on a borrower’s finances.

Boeing to Dismiss Hundreds of Engineers Amid Sales Slowdown

Boeing Co. plans to lay off hundreds of engineers in Washington state and other locations -- and may eliminate more jobs later this year as the planemaker contends with slowing aircraft sales.

The latest workforce reduction, which should take effect June 23, follows a separate exodus of 1,500 mechanics and 305 engineers and technical workers who agreed to leave voluntarily earlier this year. Both union and non-union workers will be affected, Doug Alder, a Boeing spokesman, said Monday.

Additional engineering job cuts may follow later this year depending on “our business environment and the amount of voluntary attrition,” John Hamilton, vice president of engineering for the commercial airplanes unit, said in a letter to employees Monday.

The Chicago-based company, which emerged as the face of U.S. manufacturing under President Donald Trump, has been winnowing employment for more than a year as a record jetliner sales spree fades. Boeing trimmed the workforce in the Seattle area, its traditional manufacturing base, by 9 percent to 70,640 employees over the past year. The company’s total headcount has shrunk 7.6 percent to 146,962 since March 2016.

Wells Fargo chairman and CEO buy shares as bank aims to bounce back

Wells Fargo & Co Chief Executive Tim Sloan and Chairman Stephen Sanger together bought nearly 100,000 shares of the company's stock as the bank tries to bounce back from a sales scandal that tarnished its once-spotless image as an industry leader.

Sanger, who led an internal inquiry after the third-largest U.S. bank said it had opened as many as two million unauthorized customer accounts, acquired 58,342 shares, according to a regulatory filing on Monday.

Sloan, who became CEO after the scandal led to the resignation of his predecessor, John Stumpf, bought 39,000 shares.

A Wells Fargo spokesman said the bank and Sloan had no immediate comment. Sard Verbinnen, a public relations firm which represents the Wells Fargo board of directors, did not immediately respond to inquiries. Wells Fargo shares were up 1.31 percent to $52.03.

Fannie Mae: Meaningful economic growth appears unlikely in 2017

Fannie Mae held its economic growth forecast steady in April at 2% for the year, saying policy changes that could result in meaningful economic growth seem unlikely for this year, according to the company’s economic and strategic research group’s April 2017 Economic and Housing Outlook.

The outlook explains that while confidence among consumers and in the industry is currently high, near-term risk of a potential government shutdown could bring confidence levels down.

Last month, Fannie Mae announced it would be taking a “wait and see” approach to some of President Donald Trump’s policies. “Our economic forecast remains unchanged in April as we continue to await details on the new Administration’s plans,” Fannie Mae Chief Economist Doug Duncan said. “We’re intrigued by the disparity between elevated consumer and business optimism and signs of decelerating first-quarter economic growth.”

“However, we expect growth to rebound this quarter as special factors that weighed on growth partially unwind,” Duncan said. Fannie Mae explained that some economic data, such as consumer spending and auto sales, are tending lower. Weak economic news and increased geopolitical risks moved long-term rates lower.

Fed: Tearing up NAFTA would hurt U.S. companies

American businesses that export to Mexico would be hurt if the Trump administration scraps NAFTA. That's the message Monday in a blog post from the New York Federal Reserve. It's one of the clearest signs of resistance from within the federal government to scrap the free trade deal between Mexico, the U.S. and Canada since President Trump took office.

Trump labeled NAFTA a "one-sided deal" in January, arguing Mexico has reaped all the benefits while the U.S. has only lost jobs and companies.

Without naming Trump, the New York Fed threw a subtle jab at his threats to potentially withdraw from the agreement -- a view still posted on the White House's website, even though lately, the rhetoric from the administration has gotten softer.

"Often forgotten in the debate about NAFTA are the benefits to U.S. companies," wrote the authors -- Mary Amiti, a New York Fed researcher, and Caroline Freund, a senior fellow at the Peterson Institute for International Economics. They caution that U.S. companies that sell into Mexico would face much higher tariffs, or taxes, than Mexican companies that sell into the U.S. if the deal goes away.

Bad News For Neiman Marcus: Rich People Are Bargain-Hunting Online, Using Purses For Multiple Years

Why is the high-end department store Neiman Marcus reportedly restructuring its debt and maybe even seeking a buyer? It turns out that catering to very rich people isn’t a guaranteed way to keep money coming in, since even rich people are turning to online bargain-hunting.

Neiman Marcus and its Bergdorf Goodman sibling stores used to have a very simple approach to making more money, The Wall Street Journal explains. The chain began in oil-rich Texas at the beginning of the 20th century. “I’d rather have one customer spending $5 million, than five million customers spending $1,” former CEO Burt Tansky liked to say. Its shoppers have historically not been people who were sensitive to prices.

However, the world’s wealthiest shoppers have realized they don’t need to pay more — or even leave the house. The fanciest luxury brands are now all available online, sometimes for less than what you’d pay in a swanky boutique or high-end department store.

“Even a very rich person can say, ‘Enough is enough,’ when it comes to price,” the chain’s former men’s fashion director told the WSJ. Those very rich people instead go shop for their favorite designer brands online, or make the even more shocking move of buying a classic handbag and using it for multiple seasons instead of buying a new one every year.

The retail apocalypse is creating a 'rolling crisis' that is rippling through the US economy

Retailers are closing thousands of stores and going bankrupt at a rate not seen since the recession, and tens of thousands of people are losing their jobs as a result.

The effects of these job losses will hit local economies hard, according to Mark Cohen, the director of retail studies at Columbia Business School. "This is creating a slow-rolling crisis," Cohen told Business Insider. "The people that work in retail stores will lose their jobs, then spend less money in retail stores because they are no longer employed. That creates a a cascade of economic challenges."

Since October, 89,000 workers in general merchandise stores have lost their jobs, which is more than the number of people employed in the entire US coal industry, reports The New York Times. During his campaign for the White House, President Trump used coal miners as an example of workers who never recovered from the recession, as the Times pointed out.

Like coal miners, retail workers don't typically have a set of skills that's easily transferable to another industry, according to Cohen. The retail industry, which employs one out of every 10 American workers, typically pays low wages but provides employment to people in every age bracket, including those who are low-skilled and need flexible scheduling options. So when these workers lose their jobs, they can have a hard time finding other employment.

IMF’s Lagarde: ‘Frexit’ would lead to ‘major disruption’ in global economic stability

Americans Feel Better About Their Savings -- but They Shouldn't

You need to save money. It's the most basic and important financial advice you'll ever hear. Whether you're saving up for a rainy day, a down payment on a home, or retirement, there are plenty of good reasons why we should all be stashing some cash.

So how are Americans doing when it comes to putting that advice into practice? It turns out many people think they're doing better with saving this year -- but on the whole, we're not putting aside nearly enough money to accomplish important savings goals.

A survey of more than 1,000 adults conducted byPrinceton Survey Research Associates International on behalf of Bankrate found Americans' Financial Security Index was at a record high in March of 2017. Americans reported increased satisfaction with both their net worth and their savings.In fact, for the first time in more than six years of polling, a higher percentage of Americans described feeling comfortable with their savings, rather than uncomfortable. While 27% of respondents in the 2016 survey said they were "uncomfortable" with their savings, just 19% reported discomfort this year. In prior polling, the respondents feeling uncomfortable always outnumbered those who felt more comfortable.

Unfortunately, feeling better about saving and actually being better at saving aren't the same thing. Only 48% of Americans are actually saving any money at all, and 25% are saving only 1%-5% of their incomes. Only 25% reported socking away in excess of 10% of their incomes this year, which is still less than the minimum recommended by most financial experts.

Fed Will Cause a 2008 Redux

Truth is a rare commodity on Wall Street. You have to sift through tons of dirt to find the golden ore. For example, main stream analysis of the Fed's current monetary policy claims that it will be able to normalize interest rates with impunity. That assertion could not be further from the truth.

The fact is the Fed has been tightening monetary policy since December of 2013, when it began to taper the asset purchase program known as Quantitative Easing. This is because the flow of bond purchases is much more important than the stock of assets held on the Fed's balance sheet. The Fed Chairman at the time, Ben Bernanke, started to reduce the amount of bond purchases by $10 billion per month; taking the amount of QE from $85 billion, to 0 by the end of October 2014.

The end of QE meant the Fed would no longer be pushing up MBS and Treasury bond prices (sending yields lower) with its $85 billion per month worth of bids. And that the primary dealers would no longer be flooded with new money supply in the form of excess bank reserves. In other words, the Fed started the economy down the slow path towards deflation.

One of the greatest economic indicators is the steepness of the Treasury yield curve. A steep curve indicates inflation and strong growth; whereas a flat yield curve is indicative of economic stagnation and deflation. Therefore, the view that the Fed has been in tightening mode for the past three years can be proven by the fact that the spread between the 10 and 2-Year Note yield began to collapse on the very month that the Fed began to Taper QE. That difference was 260 basis points in December 2013, but narrowed all the way down to just 76 basis points by the summer of 2016. Then, after a small recovery to 134 bps -- mostly due to the enthusiasm caused by the election of Donald Trump -- the spread is quickly retreating back towards 100 bps.

More Americans suffering from stress, anxiety and depression, study finds

More Americans than ever before are stressed, depressed and anxiety-ridden, and many are unable to get the help they need, a new study suggests. An estimated 8.3 million American adults — about 3.4 percent of the U.S. population — suffer from serious psychological distress, an evaluation of federal health data concluded. Previous estimates put the number of Americans suffering from serious psychological distress at 3 percent or less, the researchers said.

“Mental illness is on the rise. Suicide is on the rise. And access to care for the mentally ill is getting worse,” said lead researcher Judith Weissman. She’s a research manager in the department of medicine at NYU Langone Medical Center in New York City.

This increase is likely a lasting after-effect of the Great Recession that began in late 2007 — a stress-filled time that caused long-term emotional damage to many Americans, Weissman suggested.

Many people psychologically affected by the Great Recession haven’t been able to get the help they need, either because they can’t afford it or because their condition hampers their ability to seek out treatment, she said. As a result, hundreds of thousands of Americans live with serious psychological distress, an umbrella term that runs from general hopelessness and nervousness all the way up to diagnosable conditions such as depression and anxiety, Weissman explained.

Illegal Immigrants Filing Tax Returns Dropping under Trump

While Americans are scrambling to meet the 2016 tax filing deadline, the number of illegal immigrants submitting their returns in the present climate are reportedly down significantly. Also, a Treasury Inspector General for Tax Administration (TIGTA) report exposing significant refund fraud has “most certainly contributed to it,” says the taxpayer advocate department within the IRS.

The Internal Revenue Service stated that millions of people who do not have Social Security numbers (SSN), most of these illegal aliens, filed federal tax returns last year, reported NPR the day before the tax deadline. Many of those who are ineligible for SSN use “ITIN,” or Individual Taxpayer Identification Numbers when filing.

The Taxpayer Advocate Service, an independent organization within the IRS, reports that “Without ITINs, approximately 4.6 million taxpayers would not be able to comply with their annual tax filing and payment obligations, or receive tax benefits to which they are legally entitled.”

The advocate service states that ITIN applications and “associated return filings” “have dropped precipitously, down 58 percent between 2011 and 2014.” They write that the “general economic climate and immigration trends” explain part of this drop, but the “IRS ITIN procedures have most certainly contributed to it.”

Trump Spares China the 'Currency Manipulator' Tag

Stockman: We’re Borrowing Our Way to Economic Disaster

David Stockman joined the Fox Business and the show Mornings with Maria to discuss the tax reform highlights for the current White House and GOP platform and what he views as a real threat of economic disaster in the U.S. During the discussion Stockman highlights what to expect from a border adjustment tax possibility, the creation of jobs and the impact on Wall Street in the age of Donald Trump.

Stockman takes to point the cause of tax reform in the current White House. He begins the segment noting, “I think the border adjustment tax will come out of the retailers margin – and it should. We do need revenue. We need to have a consumption tax, or a value added tax or a border adjustment tax – so that we may reduce taxation on wages and income. We desperately need more jobs in this country. If you keep taxing the payroll at 15.5%, which we’re doing today, you’re not going to encourage the creation of jobs. You’re going to take what jobs there are and impact the take-home pay of those jobs.”

David Stockman was then asked about his read on Donald Trump’s border tax proposals and the possibility of what the President described as a ‘reciprocal tax.’ “He has no idea what he’s talking about. He’s making it up as he goes along. Donald Trump is a tourist in the Imperial City of Washington D.C. He’s flipping, flopping and making it up as he goes.”

“The border adjustment tax, or a value added tax is the way to get at the problem he’s talking about. Every other country in the world has a value added tax. You take it off the exports and put it on the imports. There is a proper way to do it and he ought to allow the republicans on the hill who understand that to move forward. The idea that we can have a multi-trillion dollar tax cut and not pay for it with new revenue or spending cuts is dangerous. We are at $20 trillion in debt and it is headed to $30 trillion.”

Surprise: 70% Of Millenials Do Not Want Electric Vehicles

70 percent of millenials do not want to buy an electric car and are much more interested in puchasing a traditional internal combustion engine vehicle, according to a new report. In addition, about two thirds would have significant reservations about riding in a self-driving car.

However, Tesla, the car manufacturer most closely associated with electric vehicles, is the favored brand of 13 to 19-year-olds. Driving Tests, a driving test simulator that mostly caters to young people, surveyed 157,000 visitors to its website from March to April 2017. The results are surprising, if not shocking.

"We used the word 'striking,' founder and CEO Andrei Zakhareuski told me via email. "And it was striking, given a) all the hype around electric cars, and b) polls that show increasing consumer interest. It was also striking for its uniformity across all age groups. Any thoughts that millennials would be more favorably disposed toward electric cars than seniors were not supported by the evidence."

But even when the numbers are broken down by age range, EVs are clearly not attracting a significant slice of the market. Pre-teens, teens, and 20-somethings are almost identical at and around 69%, while there's a small bump in anti-EV sentiment at the 51-64 age group.

Goldman Sachs Managing Director Joins Blockchain Startup Chain

Blockchain startup Chain has named a Goldman Sachs managing director as its new president. Tom Jessop is joining the firm after serving as Goldman's managing director for business technology development since January 2016, according to LinkedIn.

Between 2008 and 2012, he served as managing director for principal strategic investments, serving stints in Hong Kong and New York. He served as a vice president for the Wall Street investment bank between 2000 and 2008. Prior to working for Goldman Sachs, worked for credit ratings firm Standard & Poor’s.

According to Chain, Jessop will be chiefly responsible for pursuing commercial opportunities for the firm. He said in a statement:

"I am excited to collaborate with Chain's team, customers, and strategic partners to accelerate the adoption of blockchain technology in financial services and other industries."

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