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    Daily Digest 8/1 – Rush To Buy Gold Amid Uncertainty, The Excess Of Less

    by DailyDigest

    Monday, August 1, 2016, 11:55 AM


Prospect of US rate rise recedes as key Fed voter urges caution (jdargis)

Yet Dudley was coy on just how many rate increases he envisioned, saying only that he expected the central bank to move at least more aggressively than current futures-market predictions for only one rate increase by the end of 2017.

While the world’s most influential central bank struck some confident tones in a policy statement last week, more recent data showing the US economy has expanded at an annual rate of roughly 1% so far this year emboldened those who thought the Fed would not tighten monetary policy any time soon.

Political and economic uncertainty creates a rush to buy gold (nervous nelly)

“Gold is scarce, it doesn’t corrode, it’s got these magical qualities that people prize, the ancient Egyptians loved it, the Romans loved it,” said Eric Kirzner, who teaches finance at the University of Toronto.

“It’s been something that people have held for thousands of years, in fact. But it doesn’t have investment qualities,” cautions Kirzner.

The Excess Of Less (jdargis)

Like extreme thinness, minimalism can be a boast, a way to signal that you have the resources and the time to maintain a streamlined existence. Remember how gluten-free food is more expensive? Remember the excoriation of the Moon Juice Lady, whose costly diet of food-like substances became, for a hot second, the Internet’s most gleeful hate-read?

500 Years Of Stock Panics, Bubbles, Manias, & Meltdowns (In 1 Simple Chart) (jdargis)

From the “over-expansion of credit” leading to banking failures in 1255-62 in Italy to 2015’s “‘end’ of The Fed’s zero interest rate policy,” stock markets have risen and fallen and risen some more on the back of wars, manias, crises, and panics since The Middle Ages….

Why Renewable Power Can Still Be Wasteful (jdargis)

Inefficiencies in new economic infrastructure aren’t exactly new. Because the state doesn’t centrally plan and roll out new technologies in a completely rational fashion—matching demand, distribution, and supply—wrinkles and bubbles develop. Incentives may be available for one component of the technology but not for others. And so overinvestment in one stage of the process coincides with underinvestment in another stage. Which is why we have bubbles. The earliest telegraph lines from Boston to New York City stopped at the Hudson River—and messages had to be carried across the Hudson on a boat. In the 1990s, information would travel at rapid speeds across the country on fast cables but slow down in the last mile. (I wrote a book about this in 2007.)

Volkswagen could have a fix for its 2.0L diesels, air regulator says (jdargis)

In June, VW Group agreed to a $15 billion settlement with the Department of Justice. The agreement mandates that the automaker buy cars back from their owners at the price their vehicles were worth before VW Group’s cheating scandal came to light. Owners and lessees of affected diesels will also receive $5,100 to $10,000, depending on the vehicle (a graduated table of settlement payments can be found here). If CARB approves a fix for the affected diesels, owners could also opt to pass up the buyback and have their car fixed for free. That would save VW Group money out of the $10 billion set aside for buybacks.

Climate Change Divide Bursts to Forefront in Presidential Campaign (jdargis)

The divide between the two parties over the issue is the widest it has been in the decades since it emerged as a public policy matter. That is all the more remarkable given that during the 2008 election, the Democratic and Republican positions on climate change were almost identical.

That year, Mr. Obama and the Republican nominee, Senator John McCain of Arizona, spoke of the need to address the human causes of global warming, and they proposed a nearly identical policy — a “cap-and-trade” plan, which would have limited carbon dioxide emissions and created a market for trading pollution credits.

Gold & Silver

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  • Mon, Aug 01, 2016 - 12:58pm



    Status Platinum Member (Offline)

    Joined: Apr 27 2010

    Posts: 1422

    Philly lawyer salaries ringing the bell at the top of the market

    Salaries for first-year lawyers at big firms in Philadelphia are topping out at $180,000 a year to keep pace with New York competitors.

    The venerable Wall Street firm of Cravath, Swaine & Moore got the ball rolling in June with the announcement that it would be raising first-year associate salaries by $20,000, to $180,000, and that associates with up to eight years at the firm would also get increases.

    In Philadelphia, Dechert L.L.P. matched Cravath's salary increase for first-years and also boosted pay for associates with more experience.

    Reed Smith, a global firm based in Pittsburgh with a large Philadelphia office, hiked associate salaries in Philadelphia, Wilmington, and Princeton to $160,000 from $145,000, effective Jan. 1.

    In New York, Washington, Chicago, Houston, and California, first-year associate salaries will increase from $160,000 to $180,000.

    "For us it came down to investing in the strongest talent, both from a recruitment and a retainment standpoint," said Casey Ryan, a labor and employment partner at Reed Smith, who also serves as the firm's head of legal personnel.

    At Duane Morris, a Center City-based firm with 700-plus lawyers, salaries for first-years will be rising from $150,000 to $160,000 as of Sept. 1.

    With the latest announcement of pay raises at many firms, the trend of eye-catching compensation for young lawyers at big firms has come full circle.

    The last time firms competed so heatedly for top law-school talent was just before the start of the 2008-09 recession, and salaries for first-year lawyers in New York, Washington, Los Angeles, and a few other cities hit $160,000. At the big firms in Philadelphia, the pay scale was lower, $145,000 to start.

    The collapse of financial markets hit some firms so hard that they canceled classes of incoming lawyers, and in some instances cut salaries and instituted widespread layoffs.

    Since then, the market has slowly recovered. While incoming freshman classes are still smaller than at the zenith of the last law-firm boom in 2007, hiring has become more competitive and law firms are making more offers.

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  • Mon, Aug 01, 2016 - 2:28pm



    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2922

    QE-forever cycle will have an unhappy ending

    QE-forever cycle will have an unhappy ending

    Financial Times6 hours ago
    Debt monetisation and artificially suppressed or negative interest rates are a de facto tax on holders of money and sovereign debt. It redistributes wealth over …

    Germany makes over a billion euros – from its debt

    Deutsche Welle6 hours ago
    States borrowing money from investors normally pay interest on debts they pile up. … State bonds issued with negative interest rates flushed around 1.5 billion …

    Global Earnings Tumble as Companies Dig Deeper for Cost Savings

    Bloomberg14 hours ago
    A turn in commodity prices should buoy emerging-market growth and stimulus may help Europe turn the corner, Paulsen said. With an uptick in the global …

    US corporate defaults on course to hit 2009 levels – Moody's

    Reuters16 minutes ago
    "We saw the amount of defaulted debt jump 123% to US$45bn, which matched … The overall US speculative-grade default rate rose to 5.1% from 4.4% in the …

    Asian Shares Rise as Chance of US Rate Increase Wanes

    Wall Street Journal8 hours ago
    Prime Minister Shinzo Abe will unveil Tuesday a stimulus package expected to total ¥28 trillion ($273 billion). Markets are bracing for disappointment, however, …

    MUFJ's Brown: BOJ Already Running Helicopter Money

    Bloomberg2 hours ago
    He argues that the Bank of Japan's current stimulus programme already amounts to helicopter money. This is a Bloomberg podcast. To download, watch or …

    Abe to Announce Stimulus Package Details on Tuesday

    Bloomberg13 hours ago
    Japan's government will reveal details of its latest fiscal stimulus package worth $273B on Tuesday, the 26th such package since markets crashed in 1990.

    Abe's Fiscal Plan Follows a Long Road of Packages That Failed

    Bloomberg16 hours ago
    A Goldman Sachs Inc. study found that markets gave up their gains in the first month after the cabinet approved the stimulus in 18 of the 25 packages it studied …

    Bank of England prepares to cut rates into uncharted territory

    Reuters3 hours ago
    BoE chief economist Andy Haldane said he wanted to use "a sledgehammer to crack a nut", but another policymaker, Kristin Forbes, said the central bank …

    European Stocks Advance on Central Bank Stimulus Expectations

    Nasdaq – ‎4 hours ago‎
    European equities were trading higher on Monday morning amid expectations that central banks will expand monetary stimulus to counter slowing global growth and the impact of Britain's decision to leave the European Union. Euro-region and US …


    Step up in stimulus needed in China to avert feared economic contraction

    BDlive – ‎3 hours ago‎
    BEIJING — Activity in China's manufacturing sector eased unexpectedly in July as orders cooled and flooding disrupted business, an official survey showed, adding to fears the economy will slow in coming months unless the government steps up a huge …

    Chinese Investors Balk at Company Bonds From Riskiest Province

    Bloomberg21 hours ago
    … of weak growth, high debt, and a stagnant population, face growing challenges.” … The province's fiscal revenue dropped 19 percent to 118.8 billion yuan …

    Spain 10-Year Yield Approaching 1% Shows Central Bank Supremacy

    Bloomberg1 hour ago

    ECB data on Monday may signal that the euro region's central bank has started to front load its 80 billion-euro monthly asset-buying program before a summer ..

    Deutsche Bank Says U.S. GDP Flop Is a Sign of Secular Stagnation

    Bloomberg3 hours ago
    "If the economy can only muster growth in the vicinity of 1 percent when the labor … with consumption growth eventually slowing along with labor input growth.

    California pension funds caught in ever-tighter income-outgo squeeze

    Sacramento Bee (blog)59 minutes ago

    Overall, California's state and local pension obligations top $1 trillion. … unfunded pension debt, at least $300 billion now and as much as $1 trillion with lower ..


    Plunging Oil Prices Create Bad-Loan Headache for Singapore Banks

    Bloomberg11 hours ago
    That includes efforts to extend the maturity of debt and loosen covenants requiring … Oil-related firms have S$1.4 billion of Singapore-dollar securities maturing …

    Cheap Oil Squeezes South Asia's Cash Lifeline

    Wall Street Journal19 hours ago
    Such funds totaled $64.7 billion in South Asia in 2015, in what appears to be the … Sri Lanka's current-account deficit was equal to 2.4% of gross domestic …

    Europe in Crisis: The Elections to Watch for Political Risk

    Bloomberg15 hours ago
    … the next administration will seek to cut the deficit for a second year and steer a …. The government plans to set aside as much as 100 billion yuan ($15 billion) …

    Households hit by growing 'debt stress' as low wages, weak labour …

    The Sydney Morning Herald13 hours ago
    The share of households who believe they will be unable to service their debts has risen significantly, a new survey suggests, as many struggle to get enough …

    Health Care Insurance Expected to Rise: $10345 Per Person

    WJON News30 minutes ago
    Health Care assistance is all national says Goligowski … eligibility, but does not have any responsibility for collecting or setting prices for insurance costs.


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  • Mon, Aug 01, 2016 - 11:58pm



    Status Platinum Member (Offline)

    Joined: Apr 13 2011

    Posts: 1815

    CHS: The Elites Benefit from a Fractured Society

    CHS writes today:

    Social Fragmentation Suits the Powers That Be

    July 29, 2016

    Lasch's The Revolt of the Elites and the Betrayal of Democracy … links Elite dominance of the media, higher education and cultural narratives to the erosion of democracy as a functioning institution.

    Extreme concentrations of wealth and power are incompatible with democracy, as Elites buy political influence and promote cultural narratives that distract the citizenry with emotionally charged issues.

    A society that has fragmented into a media-fed cultural war of hot-button identity-gender-religious politics is a society that is incapable of resisting concentrations of power and wealth in the hands of the few at the expense of the many.

    Or as Catherine Austin Fitts says:

    While we argue about transgender bathrooms they take the money.

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  • Tue, Aug 02, 2016 - 2:58am



    Status Platinum Member (Offline)

    Joined: Apr 13 2011

    Posts: 1815

    Zero Days: New Docu-Drama about Cyberwarfare

    From Rotten Tomatoes on the new movie Zero Days (limited release, July 8, 2016)

    A documentary thriller about the world of cyberwar. For the first time, the film tells the complete story of Stuxnet, a piece of self-replicating computer malware (known as a "worm" for its ability to burrow from computer to computer on its own) that the U.S. and Israel unleashed to destroy a key part of an Iranian nuclear facility, and which ultimately spread beyond its intended target. This is the most comprehensive accounting to date of how a clandestine mission hatched by two allies with clashing agendas opened forever the Pandora's Box of cyberwarfare.

    I just finished reading a post-apocalyptic novel, The Loyal Nine, in which the US power grid is overloaded and destroyed by a group of 3 hackers working for hire.

    I don't know nearly enough about cybersecurity or hacking to have a realistic personal assessment of this kind of threat.  But what I am hearing is that it IS feasible and real.  If so, I'm categorizing a grid-down cyber-event as the most likely way for the system to be blown up.  More likely than an EMP or a kinetic war.

    Hmmmm.  Maybe I should get a few extra solar panels……..

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  • Tue, Aug 02, 2016 - 5:31am



    Status Platinum Member (Offline)

    Joined: Jun 08 2011

    Posts: 2221

    Overly Theatrical

    Watching as this "election" conveniently partitions the masses right down the middle. Setting things up for the next "main event", or so it would seem. Need cover for the nasty drop in the ""markets""- otherwise who is to blame?

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  • Tue, Aug 02, 2016 - 11:24am

    Reply to #4


    Status Bronze Member (Offline)

    Joined: Feb 07 2010

    Posts: 315

    Thanks for the recommendation

    I really appreciate your pointing me to The Loyal Nine.  Always looking for novels in this genre that aren't zombie novels or novels written on a 6th grade level.  Thank you.


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