Daily Digest

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Daily Digest 6/3 - Seattle To Raise Minimum Wage, Derivatives Russian Roulette

Tuesday, June 3, 2014, 9:58 AM

Economy

Euro Zone Edges Closer to Dreaded Deflation (jdargis)

Gilles Moëc, the chief Europe economist for Deutsche Bank, wrote in a note before the reports on Tuesday that the central bank would very likely move on Thursday to ease monetary policy further, perhaps by cutting its main interest rates and extending more long-term loans to financial institutions, and even by instituting a negative deposit rate — a tax, in effect, on lenders’ holdings kept at the central bank — to encourage more lending.

But he said that investors might be surprised to find that the scale of the central bank’s actions will probably be significantly smaller than those taken by other central banks, including the Federal Reserve in the United States.

What the NSA can (and can’t) mine from intercepted photos (jdargis)

Facebook, for example, encrypts all the images transmitted from its content delivery network to users’ browsers, though the images can still be reached through an unencrypted interface. During our testing, Pwnie Express founder and CTO Dave Porcello found that on an Android 4.1.1 “Jelly Bean” device—admittedly an older phone, but still in wide use—Facebook profile pictures and images were transmitted unencrypted to the Facebook app. Our tests on newer platforms found that the images were encrypted.

Seattle Coucil Passes $15 Minimum Wage (jdargis)

The measure, which would take effect on April 1, 2015, includes a phase-in of the wage increase over several years, with a slower process for small businesses. The plan gives businesses with more than 500 employees nationally at least three years to phase in the increase. Those providing health insurance will have four years to complete the move. Smaller organizations will be given seven years.

The International Franchise Association, a Washington, D.C.-based business group that represents franchise owners, said it plans to sue to stop the ordinance.

Mr. Rickards explains how Fed manipulation hurts emerging markets (Herman J.)

“When the Fed manipulates US interest rates – directly of indirectly – they manipulate every market in the world because the US dollar is the leading reserve currency…I think it’s a little disingenuous for the Fed to ignore the impact they’re having on these markets…I don’t think the Fed appreciates how much damage they can cause.”

Gold Price Slipping Again While Silver Sees Further Risk (Taki T.)

The breakdown now suggests that there is a good possibility that 1,200 will again be tested. The wide trading range between 1,200 and roughly 1,400 has lasted for two years, not unexpected considering the degree of the prior decline. Now the momentum models from all three timeframes, daily, weekly and monthly are all negative, suggesting the decline could continue.

If 1,200 cannot hold, the bear market for Gold that began in 2011 will be extending to a new down-leg and there again would be further risk toward 1,100.

Amid Fear and Pressure, Syrians Vote for President (jdargis)

The election is Syria’s first in more than five decades with more than one candidate. After Mr. Assad’s father rose to power in 1970, he and later his son were re-elected in single-candidate balloting, with the government reporting winning percentages in the high 90s. Two little-known figures, vetted by government and security bodies, are nominally opposing Mr. Assad, but both have praised him.

Russian Roulette - Derivatives Style (GE Christenson)

Except for commissions upfront, derivatives are supposedly a zero sum game. I win, you lose, and the bank gets a fee. It sounds like a bookie in Las Vegas. You put up $1.1 Billion to win $1.0 Billion. Somebody wins, somebody loses, and the casinos (derivative banks) take the $100 Million as a fee – roughly 5% of every dollar bet on either side.

Elastic Wings Promise Greater Aircraft Fuel Efficiency (James S.)

ENAS and its partners have already developed a mechanism that changes the shape of the landing flap to accommodate airflow. And ENAS, along with the Italian Aerospace Research Center and the University of Naples, has developed the software to control the flaps’ shape shifting.


This may be cutting-edge 21st-century technology, but it actually harkens back to the Wright brothers’ historic flight at Kitty Hawk in 1903. Their craft lacked the ailerons and landing flaps of modern aircraft, but had flexible wings whose shape could be warped by lines and pulleys to control air flow.

Gold & Silver

Click to read the PM Daily Market Commentary: 6/22/14

Provided daily by the Peak Prosperity Gold & Silver Group

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