by Matthew Milner
Late last year, Amazon.com announced the use of “drones” to deliver packages.
Drones are remote-controlled aircraft. They’re mainly used for military purposes.
At the time, it smelled like a publicity stunt…
Flying saucers delivering little brown boxes of books and shampoo?
Really, Mr. Bezos?
But as it turns out, it’s legitimate.
Continue Reading at DailyReckoning.com…
Former LTCM General Counsel Jim Rickards Expects the Worst, and Not in the Distant Future
by Michael Ide
Well we know what the most pessimistic bear case is: former Long Term Capital Management general counsel Jim Rickards warns that a 70% – 80% stock market crash followed by rioting and the rise of neo-fascism is one of the possible outcomes from growing systemic instability, and the other two are terribly rosy either. In an interview with Christoph Gisiger at leading Swiss business newspaper Finanz und Wirtschaft, Rickards explains that why he believes the US is actually in a recession and that monetary policy is merely papering over deep structural problems.
Continue Reading at ValueWalk.com…
by Nicholas Larkin
Russia added about 9.4 metric tons of gold valued at $400 million to reserves in July as it expanded holdings for a fourth consecutive month to the highest in at least two decades.
The country’s stockpile, the fifth-biggest, increased to 35.5 million ounces (1,104 tons) last month from 35.2 million ounces at the end of June, data posted on the central bank’s website showed. The amount of gold now held is the most since at least 1993, according to International Monetary Fund data.
Russia’s reserves, which overtook those of Switzerland and China this year, almost tripled since the end of 2005, IMF data show. The ruble declined about 6.3 percent against the dollar since June as the worst standoff with the U.S. since the Cold War intensified. The conflict, stemming from President Vladimir Putin’s annexation of Ukraine’s Crimea peninsula in March, has led to sanctions that have hurt trade and threatened to send Russia’s $2 trillion economy into a recession.
Continue Reading at Bloomberg.com…
by John Morgan
The same kinds of complex, confusing derivatives that almost brought down the global financial system in 2008 are back in spades, according to the Financial Times. As one trader put it: “We’ve reformed nothing.”
The U.K. newspaper suggested investors may be fooled by a false sense of security, and are therefore “chasing levered returns via certain types of US credit derivatives that Wall Street is willingly providing in the current climate of low interest rates and moribund volatility.”
The developments suggest that the financial industry learned little from the 2008 meltdown and that reforms put in place since then are ineffective.
Continue Reading at MoneyNews.com…
by Linda Goldberg and Signe Krogstrup
World Economic Forum
Could the dollar lose its status as the key international currency for international trade and international financial transactions, and if so, what would be the principal contributing factors?
Speculation about this issue has long been abundant, and views diverse. After the introduction of the euro, there was much public debate about the euro displacing the dollar (Frankel 2008). The monitoring and analysis included in the ECB’s reports on “The International Role of the Euro” (e.g. ECB 2013) show that the international use of the euro mainly progressed in the years prior to 2004, and that it has largely stalled since then. More recently, the euro has been displaced by the renminbi as the debate’s main contender for reducing the international role of the dollar (Frankel 2011).
Continue Reading at ForumBlog.org…
from Zero Hedge
Remember all those allegations that Obamacare would be an unmitigated disaster for businesses, especially smaller companies? Well, now we have proof.
As the Philly Fed, which mysteriously soared at the headline level even as the vast majority of its components tumbled, reported moments ago, “in special questions this month, firms were asked qualitative questions about the effects of the Affordable Care Act (ACA) and how, if at all, they are making changes to their employment and compensation, including benefits.”
What the survey found was very disturbing: not only did businesses report that as a result of Obamacare the number of workers they employ is lower than higher (18.2% vs 3.0%), that there has been an increase in part time jobs (18.2% higher vs 1.5% lower), leading to a big increase in outsourcing and most importantly, Obamacare costs are being largely passed on to customers (28.8% reporting higher vs 0.0% lower), the punchline was that while there is basically no change in the number of employees covered (17.6% higher vs 14.7% lower and 67.6% unchanged), there has been a big jump in Premiums, Deductibles, Out-of-pocket maximums, and Copays, which has been “matched” by a far greater reduction in the range of medical coverage and the size of the network.
Continue Reading at ZeroHedge.com…
by Jason Simpkins
One of the taxes implemented by the Affordable Care Act in January is a 2.3% charge on medical device sales.
But thanks to flawed collection methods, there’s roughly a $300 million shortfall.
That is, the IRS had originally estimated that the tax would bring in about $1.2 billion in the second and third quarters of 2013 – but it only received $913.4 million.
That’s troubling considering the medical device tax was supposed to be a major pillar in paying for the healthcare law, slated to rake in $20 billion through 2019.
Continue Reading at OutsiderClub.com…
by Karl Denninger
Officer “Go **** Yourself” apparently has been “suspended.”
A police officer who pointed an assault rifle at people in Ferguson on Tuesday night and threatened to kill them has been relieved of duty and suspended indefinitely, authorities said.
For committing a felony you get suspended? Not even fired for cause with a permanent black mark on your employment record — suspended?
“The unified command strongly feel these actions are inappropriate, and not indicative of the officers who have worked daily to keep the peace,” Schellman said in an e-mail.
Pointing a weapon at someone who is not a threat to your safety and openly threatening to kill them is a serious felony. It is a felony irrespective of who you are and where you do it.
Continue Reading at Market-Ticker.org…
Penalty is the largest ever reached with a single U.S. company
by WSJ Staff
Bank of America Corp. agreed to pay a settlement of $16.65 billion over its mortgage lending, capping a legal odyssey that has dogged it since the depths of the financial crisis.
The deal resolves a government investigation that stems largely from the bank’s purchases of Merrill Lynch & Co. and Countrywide Financial Corp. as they teetered in the housing crisis.
The settlement amount is the largest ever reached between the U.S. and a single company, and is approximately equal to the Charlotte, N.C., bank’s BAC, +1.51% total profit for the past three years. Bank of America has spent more than $60 billion on legal woes stemming from the financial crisis, and the latest settlement would push the tab to close to $80 billion.
Continue Reading at MarketWatch.com…
by Andy Tully
Oil and gas are at the heart of the Russian economy and are largely responsible for keeping Moscow’s government budget in balance. But the recent decline in the price of oil from the North Sea and Texas has now spread to Urals crude, giving President Vladimir Putin one more economic headache.
The price of Urals crude fell just below $100 per barrel on Aug. 18, an 18-month low. On Aug. 19, it dropped to less than $97 per barrel. These declines coincided with similar drops in the price of Brent crude from the North Sea and U.S. oil.
The reasons are fairly easy to recognize. First, the United States has been on a drilling tear, extracting oil at record levels to increase its supply at a time when demand is waning. Second, though more tentative, is that conflicts in North Africa and the Middle East are so far not interfering with oil production in these regions.
Continue Reading at OilPrice.com…
by Dr. Paul Craig Roberts
There are reports that American police kill 500 or more Americans every year. Few of these murdered Americans posed a threat to police. https://www.dojmedia.com/u-s-police-have-killed-over-5000-civilians-since-911/ Police murder Americans for totally implausible reasons. For example, a few days before Michael Brown was gunned down in Ferguson, John Crawford picked up a toy gun from a WalMart shelf in the toy department and was shot and killed on the spot by police goons. http://www.msnbc.com/msnbc/family-man-killed-cops-walmart-demands-surveillance-video Less than four miles from Ferguson, goon thugs murdered another black man on August 19. The police claims of “threat” are disproved by the video of the murder released by the police. http://www.huffingtonpost.com/2014/08/20/kajieme-powell-shooting_n_5696546.html
Continue Reading at PaulCraigRoberts.org…
by Chuck Butler
Good Day! … And a Tub Thumpin’ Thursday to you! Get the brooms out! The Cardinals finally swept a team instead of just winning the series! Now that looks more like the team I expected to see this year! But before I go out and buy playoff tickets (not that I do that anyway) I have to temper this enthusiasm because this team has found a way to fall right back into a funk all year… Maybe, this time they won’t, eh? Just wishin’ and hopin’ and thinkin’ and prayin’!
Well… Let’s see… The Fed’s FOMC Meeting Minutes or FFMM, as my friend the Mogambo Guru would put it, printed yesterday afternoon… Recall that I said yesterday morning, that the markets were looking forward to hearing what Janet Yellen had to say about what she called a “slack in the labor markets”… I kidded that she would not deliver the goods, Hehehe…
Continue Reading at DailyPfennig.com…
by Charles Hugh Smith
Of Two Minds
The Federal Reserve’s communications and policies are a form of crazy-making double bind.
Systems theorist/anthropologist Gregory Bateson developed (with others) the concept of double bind, a psychological and social conflict in which contradictory demands generate a form of schizophrenia:
Unlike the usual no-win situation, the subject has difficulty in defining the exact nature of the paradoxical situation in which he or she is caught. The contradiction may be unexpressed in its immediate context and therefore invisible to external observers, only becoming evident when a prior communication is considered. Typically, a demand is imposed upon the subject by someone who they respect (such as a parent, teacher or doctor) but the demand itself is inherently impossible to fulfill because some broader context forbids it. For example, this situation arises when a person in a position of authority imposes two contradictory conditions but there exists an unspoken rule that one must never question authority.
Continue Reading at OfTwoMinds.com…
from The Daily Bell
Nobel economists say policy blunders pushing Europe into depression … German Chancellor Angela Merkel defends eurozone and says it is hard to manage a currency for 18 states … Professor Joseph Stiglitz said austerity policies had been a ‘disastrous failure’ and are directly responsible for the failed recovery. – UK Telegraph
Dominant Social Theme: The central bankers have done a miserable job of managing the EU and the euro.
Free-Market Analysis: If only the latest crop of central bankers had been smarter, wiser, more dynamic, then this crisis – or that one – could have been avoided. This is always the lament.
The price-fixing mechanism – central banking – is never at fault. Only the bankers that run it. They are never worthy of its awesome power. They are the “little men” who have not translated their opportunity into a satisfactory reality.
Continue Reading at TheDailyBell.com…
by David Stockman
David Stockman’s Contra Corner
Earlier this week Bloomberg published a devastating chart showing real hourly wage growth for the first 60 months of every cycle going back to 1949. The 11 cycle average gain was 9% and the largest was 19% a half century back.
Fast forward to the 60 months of ZIRP and QE since the Great Recession officially ended in June 2009, however, and you get a drastically different picture: Real hourly wages have risen by just 0.5%, and in the great scheme of things that’s a rounding error.
Continue Reading at DavidStockmansContraCorner.com…
by Wolf Richter
“Here’s when US equity and bond markets will change direction,” Cali Money Man grumbled a few days ago. He is a wealth manager and has been on the job at brokerage firms and large banks through three phenomenal crashes. Unlike others, he hasn’t forgotten the craziness that led up to them.
“When investors come to fear the next Fed-talk, that’s when markets will change direction,” he said. “Now they bid up risk in advance on confidence – and afterwards on reassurance – that ZIRP will continue. But eventually they’ll focus on the start and pace of tightening. Fed-speak will assume an aura of bad news.”
Continue Reading at WolfStreet.com…
by Ed Steer
Ed Steer’s Gold & Silver Daily
Yesterday In Gold & Silver
The gold price flopped and chopped in a tight five dollar price range through all of Far East and London trading on Wednesday. But thirty minutes after the Comex close—and at precisely 2 p.m. EDT, the price got smacked for five bucks as the HFT boyz spun their algorithms. However, the gold price gained half that back by the 5:15 p.m. EDT electronic close.
The high and low ticks, such as they were, were reported by the CME Group as $1,299.30 and $1,288.70 in the December contract.
Gold closed in New York on Wednesday at $1,291.40 spot, down another $3.80 from Tuesday. Net volume was very light once again at around 76,000 contracts.
Continue Reading at CaseyResearch.com…
from Zero Hedge
The soft July data have once again generated expectations of monetary easing from China. Goldman however thinks further monetary easing would have incrementally less of an impact and would come at the cost of financial stability. This diminishing impact, they argue, would result as overcapacity/oversupply restricts long-term borrowing demand and due to interest rate deregulation, which tends to move the long-term risk-free interest rate to a higher equilibrium, as seen in recent data. As the tradable sector continues to recover on the back of an improved global outlook, Goldman believes that a combination of sectoral policies aimed at easing financial stress and structural adjustment would be a better policy option. They do not expect broad macro easing or an interest rate cut in what remains of this year.
Continue Reading at ZeroHedge.com…
by Mike “Mish” Shedlock
MISH’S Global Economic Trend Analysis
The spin in media reporting, in both directions (but typically bullish), is pervasive.
Here is a case in point. Markit reports Japan PMI Points to Strongest Manufacturing Expansion Since March.
Does “strongest since March” mean “strong”?
Here are the Key Points:
Continue Reading at GlobalEconomicAnalysis.Blogspot.com…
by Ken Moraif
The market has been setting all-time highs — it’s up almost 200% since the lows of March 2009. Over three-quarters, 77%, of companies reporting earnings beat estimates. We can look forward to the market rise that historically occurs after midterm elections.
I think we’re on track to see 18,000 on the Dow Jones Industrial Average.
While the market seems to be on a positive track, retirees should be concerned by how similar current circumstances are to what happened during the Great Depression. These similarities could be a harbinger of danger to their retirement plans.
Continue Reading at MarketWatch.com…
from King World News
Today King World News is pleased to share with its global readers a fascinating piece from legendary hedge fund manager Doug Kass. In his piece, which was originally published on TheStreet, Kass shares his thoughts on the final page in an age of innocence and a long journey from Woodstock to Wall Street.
By Legendary Hedge Fund Manager Doug Kass
August 21 (King World News) – The Final Page In An Age Of Innocence
From Woodstock to Wall Street: What a long, strange trip it has been.
Continue Reading at KingWorldNews.com…
by Patrick Barron
The following are six of the most prevalent economic myths that appear time and again in the mainstream media. I will give a brief description of each and a brief description of the economic reality, as seen from an Austrian perspective.
Myth 1: Increased money leads to economic prosperity.
This Keynesian myth postulates that increasing aggregate demand through increasing the money supply will lead to more spending, higher employment, increased production, and a higher overall standard of living.
Continue Reading at Mises.org…
by Chris Waltzek
Best-selling author and radio personality, Charles Goyette outlines how the end of the cold war was a crowning achievement of modern geopolitics / military strategy / economics. Nevertheless, tensions are once again flaring between the West with Russia, over the Ukraine border standoff threatening to culminate with perhaps a global military conflict. Currency troubles are brewing around the globe, in particular, Argentina is facing another default, a devastating blow to the economy for all but those who had the foresight to exchange their currency for gold and silver, both of which have subsequently skyrocketed in value.
Click Here to Listen to the Audio
Continue Reading at Radio.GoldSeek.com…