Daily Digest

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Daily Digest 2/1 - Bloomberg Op-Ed Calls For "The End Of Cash," Housing Bubble 2.0 Popping Again

Monday, February 1, 2016, 11:32 AM

Economy

Multinational corp or mafia? Hard to tell difference, says author (richcabot)

Multinational corporations such as Google and Facebook minimize their European income tax bills through "favorable" tax schemes in countries like Ireland (aka the Double Irish), the Netherlands (aka the Dutch Sandwich), and Luxembourg, which they argue are legitimate.

Goldman Sachs executive takes ‘personal leave’ amid Malaysian fund corruption probes (richcabot)

Leissner was seen as a “key player” in cultivating the bank’s very profitable relationships with Kuala’ Lumpur’s banking and government elite, including Malaysian Prime Minister Najib Razak, the Financial Times reports.

Forget The BOJ - It's Still A Rally Market (Aaron M.)

However, the announcement by the Bank of Japan (BOJ) to implement negative interest rates in a desperate last attempt to boost economic growth in Japan was only the catalyst that ignited the bulls. The “fuel” for the buying came from the end of the month portfolio buying by fund managers.

Time to heed warnings of Syriza’s ex-finance minister Yanis Varoufakis (Afridev, richcabot)

The year 2015 started with hope as a result of the Syriza victory; it ended with the betrayed Greeks throwing firebombs to protest EU-imposed pension reform while Syriza privatized fourteen airports and sold them to the Germans as part of the bailout scheme.

Not Leaving Las Vegas——Housing Bubble 2.0 Popping Again (Aaron M.)

Bottom line: They kept building and building ever more expensive condos until suddenly, over the period of a few months, the market crapped itself. This, at a time when foreign currencies buy far less than a year ago, supply is through the roof, and more supply is in the development stages pipeline than since 2006. This is 2007/08 all over again.

Drug smuggling is HSBC’s raison d’etre (richcabot)

And back in 2011, HSBC was revealed to be the UK financial sector’s most enthusiastic user of tax havens, with no less than 556 subsidiary companies based in offshore jurisdictions. Tax havens, as leading expert Nicholas Shaxson notes, “are characterized by secrecy… what they are fundamentally about is escape – escape from the rules, laws, regulations of jurisdictions elsewhere. You move your money offshore and you can then escape the laws that you don’t like”.

Ha Ha: Hillary Clinton’s Top Financial Supporter Now Controls “The Onion” (richcabot)

An extensive New Yorker profile of Saban recalls how Saban publicly described his “three ways to be influential in American politics” in 2009. One was political donations. Another was establishing think tanks (he founded the Saban Center for Middle East Policy at the Brookings Institution in 2002). And the third was controlling media outlets.

So It Begins: Bloomberg Op-Ed Calls For An End Of Cash (PBD)

... while warning to await a full-on coopted media assault about the dangers of cash "which is an anacrhonysm from a bygone era, and that the world will be so much better if only everyone dutifully exchanges the physical currency in their pocket for digital, traceable, and deletable 1s and 0s", none other than Bloomberg issued an editorial Op-Ed in which it had one simple message: "Bring On the Cashless Future."

Feds consider helping fund Elon Musk’s Hyperloop (jdargis)

On Friday and Saturday, the student teams gathered in central Texas to show off their homegrown designs, taking the first step toward building pods and making the future Elon Musk a reality. In these teens and young twenty-somethings, Musk has found not only some of the world’s brightest minds but also believers. Musk had inspired them, and in the students he had found the youthful energy to push forward a brash idea like the Hyperloop.

California’s Rooftop Solar Industry Wins In Head To Head With Utilities (richcabot)

“We commend the Commission for upholding net metering and protecting solar choice for Californians,” Bryan Miller, a senior vice president at Sunrun, said in a statement. “While today’s decision is a compromise that will require the solar industry to adapt, it rejects the utilities’ anti-solar proposals and continues California’s renewable energy leadership.”

Once Unstoppable, Tar Sands Now Battered from All Sides (PBD)

What a difference 18 months makes. The price of oil today has plummeted to around $30 a barrel, well below the break-even point for tar sands producers, and the value of the Canadian dollar has fallen sharply. President Obama killed the Keystone XL project in November, and staunch opposition has so far halted efforts to build pipelines that would carry tar sands crude to Canada’s Pacific and Atlantic coasts.

Navajo water contamination more horrific than Flint Michigan's (richcabot)

Navajo water has long been contaminated by Peabody Coal mining on Black Mesa, uranium spills, strewn radioactive tailing from the Cold War uranium mining, and recently the EPA's poisoning of the Animas and San Juan Rivers.

Further, the US government knew when it relocated Navajos to the Sanders, Arizona, area that radiation from the Church Rock, N.M., uranium spill would poison their water by way of the Rio Puerco wash. In the Four Corners region, three coal fired power plants poison the water in runoffs.

Gold & Silver

Click to read the PM Daily Market Commentary: 1/29/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

8 Comments

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1513
Philly municipal pension mess

http://mobile.philly.com/beta?wss=/philly/news/politics&id=367166611

"These are likely to be big and disturbing numbers," Donald J. Boyd, senior fellow at the Nelson A. Rockefeller Institute of Government, said of Philadelphia's situation.

And the future looks even worse.

"If you think you will be in Philadelphia in five years, this is bad news," Boyd said, pointing out that taxpayers will be on the hook to make up the losses.  [Phew! I plan to be gone in 3.4 years.]

After the Great Recession ended in 2009, the Pension Fund had five good years, averaging a return of 12 percent on investments in the neighborhood of $4.6 billion. The Pension Fund was feeling so good that last summer it shared - as mandated by a 2007 law that Mayor Kenney authored while on City Council - the wealth with three-quarters of its 30,000 pensioners, doling out a total of $61 million to retirees with at least 10 years in the system.  [Some have cynically claimed Kenney bought the votes of retired city employees with that $61 million. wink]

The good times, however, ended suddenly.

Fiscal year 2015, which ended June 30, finished with a return of only .8 percent: $37.4 million. It had originally assumed a return of 7.8 percent, earning $365 million.

And Fiscal Year 2016 is looking much worse, according to the Pension Board's estimate.

By the end of December (six months into Fiscal Year 2016), the $4.68 billion investment fund had lost 4.75 percent of its value, said City Finance Director Rob Dubow. That's roughly $220 million.  [Breathtaking, huh?!]

Although the city is still anticipating a return of 7.8 percent this fiscal year and beyond, it will be on a smaller investment fund.

All this drama on a pension fund for which the NPV is less than 48%.

And why might city taxes go up in five years?  Why not two, or four?  Well, the mayor just began his four year term in Jan. '16 and neither he nor City Council will want to bring this up until they're reelected four years from now.  It may not be a good situation, but at least it's predictable and from that plans can be made. cool

"Welcome to the Hunger Games. And may the odds be ever in your favor."

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1428
The Onion - Does Anyone Read It Anymore?

The Onion was originated at UW-Madison by a Wisconsin born Lit Major who liked to drink.  That comedy paper I always held up as an example of great editing: no spelling or grammatical errors...and funny!  Then it was sold to a NYC private equity fund and all changed.  Does anyone read it anymore?

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4062
National debt now over $19 trillion

19,012,827,698,417.93

Tall's picture
Tall
Status: Platinum Member (Offline)
Joined: Feb 18 2010
Posts: 564
Good news Monday

Historic deal to protect Canada rainforest from logging

 

British Columbia on Monday unveiled a historic agreement to protect a massive swath of rainforest along its coastline, having reached a deal that marries the interests of First Nations, the logging industry and environmentalists after a decade of often-tense negotiations.

http://www.reuters.com/article/us-canada-environment-rainforest-idUSKCN0VA2NC

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3125
Tall wrote: Historic deal to
Tall wrote:

Historic deal to protect Canada rainforest from logging

 

British Columbia on Monday unveiled a historic agreement to protect a massive swath of rainforest along its coastline, having reached a deal that marries the interests of First Nations, the logging industry and environmentalists after a decade of often-tense negotiations.

http://www.reuters.com/article/us-canada-environment-rainforest-idUSKCN0VA2NC

That is indeed good news.  Now if they could only agree to leave the tar sands in its natural state.

Capt Debtcrash's picture
Capt Debtcrash
Status: Member (Offline)
Joined: Feb 1 2016
Posts: 7
Frustration but thanks to Peak Prosperity

Still a bit frustrated that Bloomberg seemingly ripped off my post without citing my work with the above post, Bring on the Cashless Future.  Credit is always nice but it's mainly because they paint the Crypto E Dollar concept as a wonderful solution and my post is a warning.  It feels as if the two stories are a bit too similar to be a coincidence but hey that's for readers to be the judge.  As a new member thank you all for being so inviting, Chris especially.  

Bloomberg: For much of the past decade, central banks in the rich world have been hampered by what economists call the zero lower bound, or the inability to impose significantly negative interest rates… A digital legal tender could resolve this problem.

My post: Under an E-Dollar system any physical cash removed from the banking system would lose value against the E Dollars retained in an account, this would effectively eliminate the zero lower bound. Central banks would be free to implement significantly negative rates.

Hey that’s life I guess, it’s a dog eat dog world. 

TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 366
problem with digital Currencies

Capt DebtCrash Wrote:

"Credit is always nice but it's mainly because they paint the Crypto E Dollar concept as a wonderful solution and my post is a warning."

I very much dislike Digital currency:

1. Dependant on electronic infrastructure. During a regional power loss, you have no access to capital when you most need it. Hurracanes & other major storms can knock out power to an entire region for more than week. With physical cash you can always walk into a store and make a purchase. The US shutdown about 18 GW of coal fired plants due to tigher regulations. By 2023-2024 all coal plants will be mandated to shutdown (unless the CCA policy is reversed). Its very likely in the future the US grid will become unstable and frequent blackouts will become common.

2. Much easier theft. We already seen too many cases of fraund (Mt Gox as example). The problem with electronic financial systems is that they can be hacked from thousand of miles away. The majority of people are vulernable to phishing scams and other social engineering techniques to rob people of their money. Perhasp you are not vunerable to social engineering but the majority of people are not. More than half of the US population is extremely vulerable (the young - more trusting, and the old - low tech skills).

3. Big Brother, Big Gov't control. BitCoin has opened huge new doors as a means to control the population. Any Digital currency will become 100% control by gov'ts. Since Gov'ts will end up controlling all aspect of digital currency system they can instantly seize control of all your money no matter where you are. Gov't will also monitor everything you buy and will use algorythms that will assign a risk profile to you and apply automatic decisons to determine if your a terrorist or an enemy of the state. Perhaps you make a public comment that is critical against the gov't, the gov't can easy put a freeze on your entire savings in a instant.

4. Gov't will have more control over what you pay in taxes. For instance if you make a mistake or the gov't makes a mistake, they can just take whatever money they deemed is approprate and let you try to appeal, instead of the other way around. 

5. There is no way any gov't is going to permit a free, non-regulated digital currency. Most likey BitCoin will be hijacked or shutdown if they can't figure out away to control it.

6. Data Loss, if you have your digital currency stored on electronic media, it can be lost caused by data loss or data corruption. Once a BitCoin is lost, it can never be recovered. Since BitCoin has a extremely limited number of coins that can be circulated, over years, decades the majority of coins will be permanently lost, rendering it unusable. I believe something like a million BitCoins have already been permanently lost.

Bottom line Digital currency promotes fraud, theft, & totalitarianism. 

pyranablade's picture
pyranablade
Status: Silver Member (Offline)
Joined: Nov 8 2010
Posts: 205
I sometimes read the Onion

Yes Kugs, I sometimes still read The Onion. But I read it online now. When Iived in Madison (2002-2004) I enjoyed getting it in paper for free.

According to an NPR piece, all the original writers worked  together at that liquor store on State Street, the one with hand-drawn snarky advertising posted on its windows. 

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