[Most Recent Quotes from www.kitco.com]

"Economics with Attitude"

NEWS to Disturb the Comfortable...

We don't tell you what to think,

but we give you something to think about.

Boeing says considering moving work overseas due to Ex-Im saga

Boeing Co Chairman Jim McNerney said on Wednesday the company was actively considering moving "key pieces" of the company to other countries given the ongoing debate in the U.S. Congress over the future of the Export-Import Bank.

"We are now forced to think about this differently," McNerney said in an interview hosted by the Economic Club of Washington, adding that Boeing may move some operations to countries that did offer export credits.

McNerney, who retired as Boeing's chief executive of the company on July 1 after 10 years in the job, said he was questioning his decision to maintain production and jobs in the United States given the debate over export financing.

"I'm beginning to think that maybe I made the wrong decision," McNerney said.G

Fed leaves interest rates unchanged

With Wall Street looking for any clues that tighter policy is coming, the Federal Reserve on Wednesday declined to raise interest rates or provide any clues about when a hike is on the way.

In a move widely expected on Wall Street, the U.S. central bank's Open Market Committee kept its key funds rate near zero. There had been some anticipation the FOMC would provide at least few code words indicating that it was ready to move, but there was scant evidence in the post-meeting statement.

Market reaction was generally positive though not decisively so.

"On the margins it was very upbeat on the economy, much more so than I think is warranted—a little too liberal with the use of the term 'transitory' with respect to commodity prices," said Greg Peters, senior investment officer at Prudential Fixed Income. "I viewed it as slightly more hawkish than anything else."

Average US vehicle age hits record 11.5 years

In the age of Apple's CarPlay, a lot of cars on the road still have tape decks.

The average vehicle in the U.S. is now a record 11.5 years old, according to consulting firm IHS Automotive, a sign of the increased reliability of today's vehicles and the lingering impact of the sharp drop in new car sales during the recession.

Drivers behind the wheel of older cars aren't enjoying some of the latest advanced safety features or infotainment systems that effectively turn cars into cellphones on wheels. Then again, they don't have to worry about hackers finding their way in to the car's computer network through the cassette or CD player.

IHS said U.S. registrations grew to a record 257.9 million cars and trucks, up 2 percent from a year earlier.

The average age of vehicles has been climbing steadily since IHS began tracking the number in 2002. As quality and reliability have improved, people have been holding on to their cars and trucks for longer. The average length of ownership for a new vehicle is now almost 6.5 years, IHS said. For a used vehicle, it's five years.

Leon Cooperman: U.S. economy is growing at a sub-par level

Chinese hackers targeted United Airlines

Passenger information could have been stolen.

United Airlines, the world’s second-largest airline by seat capacity, was the target of a group of Chinese hackers who were behind one of the largest breaches of government data in U.S. history.

The airline detected an attack on its computer systems in May or early June, several people familiar with the probe told Bloomberg. Among the data stolen from United are manifests that contain information on flights’ passengers and their movements across the world, added Bloomberg.

If it proves accurate, the amount of data amassed by the same group of hackers is staggering, and the potential for cross-referencing across different databases is endless. The hack in July on the U.S. Office of Personnel Management compromised the sensitive information of 21.5 million people, including social security numbers for current and former federal workers, contractors, friends, and families.

IMF's Lagarde: World economy fragile, faces downside risks

International Monetary Fund chief Christine Lagarde says the world economy is recovering but fragile and "faces some downside risks."

In an online press conference Wednesday, Lagarde described the United States "a strong performer" and China "resilient" despite a recent drop in Chinese stock prices.

She also expressed optimism for the 19 countries that use the euro. The IMF expects the eurozone economy to grow 1.5 percent this year and 1.7 percent in 2016; it expanded just 0.8 percent in 2014.

"The euro area is beginning to turn the corner ... We have a more upbeat forecast than we have in a long time," she said.

Lagarde called again for Greece's creditors to reduce its debt burden. She said Greece needs to enact reforms that will make its economy more efficient and expressed confidence the IMF can work with Greece's left-wing government, which has criticized IMF policies.

Millennials have jobs, but still live with mom and dad

It might seem shameful to previous generations, but Millennials are in no rush to move out of mom and dad's -- even after they've landed jobs.

As the economy has improved, more Millennials have jobs than they did five years ago, yet more of them are living at home now, according to a new report from the Pew Research Center.

Today, 42.2 million Milliennials are living with their parents, compared to 41.9 million in 2010.

In the same period, the unemployment rate for 18 to 34 year-olds has fallen to 7.7% from 12.4%.

And wages have grown too, though it hasn't been that fantastic. Weekly median earnings for young adults has risen to $574 from a low of $547 in 2012.

Obama Threatens to Veto VA Accountability Act

President Obama threatened to veto the Veterans Affairs Accountability Act in a statement on Wednesday.

The President called the bill “counterproductive” and said it would create “a disparity in the treatment of one group of career civil servants.” President Obama’s statement also said the bill would “have a significant impact on VA’s ability to retain and recruit qualified professionals and may result in a loss of qualified and capable staff to other government agencies or the private sector.”

“These provisions remove important rights, protections, and incentives which are available to the vast majority of federal employees in other agencies across the government and are essential to ensure that federal employees are afforded due process,” the statement said.

The bill would expand the VA’s ability to fire incompetent or corrupt employees. It is a follow-up to the 2014 Veterans Access, Choice, and Accountability Act, which extended that ability to top executives at the agency. The new bill would go beyond just executives to lower level employees.

Gold Manipulation: It’s Much Bigger Than You Think

The gold price manipulation scheme will go down as the biggest financial market scandal in US history for numerous reasons. They include the destruction of the free market system in the United States. The manipulation of the gold and silver prices eventually led to the manipulation of US interest rates via the Fed, the stock market via the Plunge Protection Team, and to the currency markets. – Bill Murphy, GATA.org

The gold manipulation scheme has taken on historic proportions. It’s been going on for several decades – witness the London gold pools of the 1960s which were implemented to prevent the price of gold from taking off because the U.S. was running out of gold with which to back the Treasury debt it had issued to foreign creditors who were redeeming their Treasury notes for gold per the Bretton Woods Agreement.

Ultimately this scheme failed when Charles de Gaulle famously began redeeming France’s Treasuries for gold because he had calculated that the U.S. had issued significantly more Treasuries than it had gold to back those Treasuries. France pulled out of the London gold pool operation and a couple years later Nixon was forced close the gold window or, rather, end the convertibility of foreign-owned Treasuries into gold.

The War On Cash: Why Now?

You’ve probably read that there is a “war on cash” being waged on various fronts around the world. What exactly does a “war on cash” mean?

It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.

These limits are broadly called “capital controls.”

Why Now? Before we get to that, let’s distinguish between physical cash — currency and coins in your possession — and digital cash in the bank. The difference is self-evident: cash in hand cannot be confiscated by a “bail-in” (i.e., officially sanctioned theft) in which the government or bank expropriates a percentage of cash deposited in the bank. Cash in hand cannot be chipped away by negative interest rates or fees.

Cash in the bank cannot be withdrawn in a financial emergency that shutters the banks (i.e., a bank holiday).

Merchants seek to void US$6 billion Visa, MasterCard, AmEx settlements

Dozens of retailers are seeking to void nearly US$6 billion of U.S. antitrust settlements with Visa Inc , MasterCard Inc and American Express Co after learning that opposing lawyers exchanged confidential information, potentially tainting the accords.

A group of retailers filed papers that remain under seal in the Brooklyn, New York federal court to scuttle their US$5.7 billion accord with Visa and MasterCard, which won court approval in 2013, the retailers' lawyer Owen Glist said in an email.

Similar papers were made public in the American Express case on Wednesday in the same court, where retailers opposing the US$79 million accord include Wal-Mart Stores Inc , Target Corp and Home Depot Inc among others.

Retailers claimed that the settlements were rigged in light of the discovery of an exchange of emails and other documents between Gary Friedman, a lawyer who represented them, and Keila Ravelo, a lawyer who represented MasterCard while she was a partner at Willkie Farr & Gallagher.

University of Phoenix under federal investigation over its business practices

The University of Phoenix, which runs an online college popular among military veterans, is under federal investigation for possible deceptive or unfair business practices, its parent company the Apollo Education Group told shareholders Wednesday.

The for-profit, publicly traded company is the largest recipient of federal student aid for veterans and often a sponsor at military education and employment events. Since 2009, when the GI Bill expanded student aid benefits for veterans, the University of Phoenix online program has collected more than $488 million in tuition and fees for veterans — a figure that dwarfs nearly every other institution identified as a GI recipient by the Department of Veterans Affairs.

In a filing to the Securities and Exchange Commission, the company disclosed that it had received a "civil investigative demand" from the Federal Trade Commission this week. According to the document, investigators asked for information on a "broad spectrum" of matters, including marketing, recruiting, enrollment, financial aid, tuition, academic programs, billing and debt collection, as well other facets of the business. The filing lists "military recruitment" as one of the areas the FTC is examining.

The filing said Apollo is "evaluating the demand and intends to cooperate fully with the FTC."

Fed ready to hike if data hold

Pending home sales slow

Pending home sales slowed unexpectedly in June amid a tight housing inventory, after five straight months of increases.

The National Association of Realtors (NAR) said Wednesday that its Pending Home Sales Index, which is based on contract signings, fell 1.8 percent to 110.3 in June. It remains 8.2 percent above the June 2014 level.

Lawrence Yun, the NAR chief economist, said that although pending sales decreased, the overall trend in the past few months supports a solid pace of home sales this summer.

“Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers' comfort level,” Yun said.

Subway app to start taking PayPal

By the end of the year, users of Subway’s mobile app will be able to pay for their foot-long subs using something they’d typically associate with eBay: Pay Pal.

On Wednesday, Subway and the mobile payments company Paydiant announced plans to add Pay Pal functionality to Subway’s new mobile app. Customers will also be able to use PayPal when paying for an online order at order.subway.com.

Subway is the first joint customer of Paydiant and PayPal since the ecommerce payment company spent $280 million for Paydiant back in April. The deal gives PayPal a major restaurant chain, the world’s largest in terms of unit count, and bolsters Paypal’s efforts to emerge from ecommerce and into brick-and-mortar stores.

“This provides a lot of convenience to a lot of customers, and attracts new customers to come to Subway who are loyal PayPal users,” said Ken Moy, director, global payments and emerging commerce at the Milford, Conn.-based Subway. “At the end of the day, digital devices are changing lifestyles for consumers. Digital lifestyles are something consumers expect from their favorite brands.”

Biggest Myths About Gold

Gold. People either love it or hate it. There aren’t many who feel ambivalent toward it. Unfortunately, gold is deeply misunderstood by investors, and that misunderstanding is keeping a valuable asset class out of portfolios. Many in the in¬vestment community trot out the old myths about gold: that it is a bad investment; that it is very risky; that it is not a good inflation hedge. But is there anything behind these assertions? If investors take the time to examine the facts, these commonly held beliefs simply do not stand up to scrutiny. It is precisely because these myths have become so prevalent that gold is still undervalued. Once the general public realizes these beliefs are not valid, the price of gold will be much higher.

A frequently cited argument is that since it peaked at $850 per ounce (all amounts in U.S. dollars unless otherwise noted) in 1980, gold’s return has been poor compared to the major stock indices. However, that peak price was a short-lived, single-day aberration. Investors who avoided the mania phase and purchased gold one year earlier in 1979 at its average price of $306 per ounce also avoided any significant losses during the subsequent bear market. The performance of different asset classes varies from cycle to cycle. The previous cycle from 1968 to 1980 saw the Dow Jones Industrial Average remain flat with significant volatility, while gold increased by 2,300 percent.

Fast food visits continue to decline in US

While overall foodservice customer traffic is at its highest level in six years thanks to breakfast popularity and spending is up, customer counts at QSR burger chain restaurants continue to slip, according to new data from The NPD Group.

For the 12 months ended in May 2015, restaurant and foodservice visits were 61.1 billion, compared with 60.6 billion visits during the comparable period ended May 2010. However, customer traffic at QSR burger chain restaurants has declined by 3% over the past five years.

However, traffic at independent burger restaurants was actually up 1% for the year ended May 2015 and is up 3.5% since the 12 months ended in May 2011. Traffic has dipped 2% at independents overall (all menu types) in the past five years.

Here’s Why the Federal Reserve Will Raise Short-Term Interest Rates Next Year

Nearly 80% Of Americans Hold Some Form Of Debt

When most people think of debt, they probably conjure up a vision of consumers struggling to make ends meet after making unwise financial decisions. But that actually isn’t the case for most Americans. In fact, like other things, debt in moderation is actually a good thing.

That’s according to a new report from Pew Charitable Trusts that found debt is a routine but complicated aspect of U.S. households’ with nearly 80% of Americans holding at least some form of debt.

The report, titled “The Complex Story of American Debt,” examines how four generations of consumers’ hold debt and their views toward it.

Of the 80% of consumers holding debt, most is connected to mortgages. The median amount of debt for consumers across all generations was $67,900.

Unsurprisingly, the divide in the amount of debt held by consumers finds that middle-aged consumers have the most, while those entering the later stages of life and those just entering adulthood have the least.

Firm preps staff for Wal-Mart layoffs

Northwest Arkansas recruiting firm Cameron Smith & Associates is preparing its employees for "a surge of phone calls, emails and resumes" related to layoffs at the Wal-Mart Stores Inc. home office in Bentonville.

Wal-Mart management, including CEO Doug McMillon, has publicly discussed being too bureaucratic at the headquarters level, and the company added $1 billion for employee wages and training initiatives to its budget this year with more raises coming in February. Cameron Smith & Associates employees, in an internal memo dated Monday, were given a plan of action in the event there are layoffs at Wal-Mart's Bentonville hub.

"Please remember, these people are our neighbors and friends. You have a skill that will be very much in need when this goes down. You are experts in the job market and you know what it takes to get hired. This is a time for us to step up and do what we can to help," according to the memo obtained by the Arkansas Democrat-Gazette.

Wal-Mart spokesman Deisha Barnett said the company is evaluating "our management structure as every high-performing company would. Speculating any further would be premature."

Dodd-Frank dragging down economic recovery, House Committee says

The House Financial Services Committee held a full committee hearing Tuesday to examine America’s economic prosperity in the five years since the Dodd-Frank Act became law.

It was the latest in a series focused on the impact Dodd-Frank has on the economy, lenders and capital markets.

When he signed Dodd-Frank into law five years ago this month, President Obama claimed Dodd-Frank would “lift the economy,” but the Republican majority says that it has done the opposite, making it harder for Americans to fulfill their aspirations and achieve their dreams for themselves and their families.

“Under the Obama economic strategy of which Dodd-Frank is a central pillar, our anemic recovery has created 12.1 million fewer jobs than the average recovery since World War II,” said Chairman Jeb Hensarling, R-Texas. “For more than a year now, the share of able-bodied Americans in the labor force has hovered at the lowest level in nearly 40 years.

Fast food visits continue to decline in US

While overall foodservice customer traffic is at its highest level in six years thanks to breakfast popularity and spending is up, customer counts at QSR burger chain restaurants continue to slip, according to new data from The NPD Group.

For the 12 months ended in May 2015, restaurant and foodservice visits were 61.1 billion, compared with 60.6 billion visits during the comparable period ended May 2010. However, customer traffic at QSR burger chain restaurants has declined by 3% over the past five years.

However, traffic at independent burger restaurants was actually up 1% for the year ended May 2015 and is up 3.5% since the 12 months ended in May 2011. Traffic has dipped 2% at independents overall (all menu types) in the past five years.

Thursday 07.30.2015

NEWS to Disturb the Comfortable...

We don't tell you what to think,

but we give you something to think about.