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Tuesday 12.06.2016

Amazon opens a grocery store with no checkout line

Amazon unveiled in a video a new physical store on Monday that sells a mix of "grocery essentials" and ready-made meals. But the key selling point is what it doesn't have: checkout lines.

The video shows how customers check in at the entrance of the store with a new app called Amazon Go, then grab whatever items are needed. Amazon claims it can track the items automatically through a combination of computer vision and deep learning technologies. When you're done shopping, you just walk out.

The first store is located in Seattle, where Amazon is headquartered. For years, there have been rumors the e-commerce company would expand its dominance from digital to physical shopping. Amazon began experimenting with physical bookstores a year ago, but Amazon Go may mark its boldest bet on bricks-and-mortar yet.

By eliminating much of the staff needed to operate a store, Amazon keeps costs lower than traditional competitors. It's also in a strong position to bring together data on its customers shopping habits online and offline to make better suggestions in all situations.

Did Italy Just Kill the European Union?

Another one bites the dust… Italian Prime Minister Matteo Renzi is now the latest establishment puppet to be kicked to the curb by the wave of populism sweeping the planet. The first victim was U.K. Prime Minister David Cameron following Brexit. Then came the Clinton execution in the U.S. presidential election.

And now Renzi gets tarred and feathered, as the Italian people voted overwhelmingly to reject his constitutional overhauls in Sunday’s referendum. Renzi resigned, setting up calls for a new Italian election. That opens up the door for anti-European Union parties like the Five Star Movement to gain power. And that means the future of the EU gets more precarious by the day…

The euro was down 1.4% against the U.S. dollar in early Asia trading following the vote. It hits its lowest level since March 2015. Against the safe haven Japanese yen, the euro fell as much as 2%. It has since rebounded. Markets are nervous but haven’t totally fallen off a cliff.

Short-term investors with no plan are, of course, jittery because Sunday’s referendum was a test of strength of Italian anti-EU forces. And with 59% of the vote, those forces passed with flying colors.

General Mills to cut up to 600 jobs in global restructuring

General Mills is eliminating the position of international chief operating officer and will cut up to 600 jobs as a result of a global restructuring. The food company said Monday it will not to fill the top international position after Christopher O'Leary announced plans to leave the company at the end of the year. Instead, General Mills will divvy up the regions between four group presidents. Jon Nudi will lead North American retail, Bethany Quam will head Europe and Australia, Christina Law will be responsible for Asia and Latin America and Shawn O'Grady will lead convenience stores and food service.

All four will report to Jeff Harmening, president and chief operating officer who is taking on international operations with O'Leary's departure. Jobs will be lost in the U.S., possibly including at the company's headquarters in Golden Valley, and abroad — though the company declined further details. About half of General Mills' approximately 40,000 employees work outside the U.S. and about 3,000 people work at the company's Twin Cities corporate campus.

It is the latest in a series of sweeping cost-saving initiatives taken by the maker of Betty Crocker cake mixes and Nature Valley granola bars. Since 2014, the company has eliminated or announced plans to cut about 5,000 jobs.

The company has told investors it intends to achieve growth through improved sales as well as trimming costs. Project Catalyst and Project Century are two of these large cost-saving initiatives that are reducing company overhead.

NYC wants $35M for Trump's security

US Health Care Tab Hits $3.2 Trillion; Fastest Growth in 8 Years

The nation's health care tab grew at the fastest rate in eight years in 2015, driven by the coverage expansion in President Barack Obama's law and by costly prescription drugs, the government said Friday.

The growth of 5.8 percent in 2015 boosted total health care spending to $3.2 trillion. That's an average of $9,990 per person, although the vast share of that money is spent caring for the sickest patients.

Health spending grew about 2 percentage points faster than the overall economy in 2015, said the report from nonpartisan economic experts at the Department of Health and Human Services. That's a problem because it makes it harder for government programs, employers, and individuals to afford the level of health care that Americans are used to having.

The report was disappointing news for the outgoing Obama administration, which had enjoyed a long stretch of historically low increases in health care spending, and had sought to credit its 2010 health care overhaul for taming costs. It's a reality check for President-elect Donald Trump, who did not focus much on health care during his campaign and implied that problems could be easily fixed.

A pensions time bomb spells disaster for the US economy

Underfunded government pensions to the tune of $1.3 trillion, with a gap that just can’t be filled, is the ticking time bomb facing the US economy, which faces dramatic cuts in public services and potentially riots reminiscent of Athens six years ago.

Danielle DiMartino Booth is the tough talking former Federal Reserve advisor and President of Money Strong, with an insider’s perspective on finance. As she picks apart the danger signs with the US on the precipice of recession, it’s the impending pensions crisis that’s really keeping her awake at night.

With so few people privy to what little recovery we’ve had and given how stretched pensions are, checks are going to have to be written from Washington sooner than you think, DiMartino Booth told Real Vision TV in an interview.

“The Baby Boomers are no longer an actuarial theory,” she said. “They're a reality. The checks are being written.” The $1.3 trillion pensions deficit just takes into account state and municipal obligations and with promised returns of 8% and funds compounding at 3% for decades it will take nothing short of an economic miracle to recover. “The average state pension in the last

Get Used to It: Economists See "New Normal" of Slow Growth

Americans should get used to a "new normal" of slow economic growth, business economists say. The median estimate from economists surveyed by the National Association for Business Economics calls for the American economy to grow 2.2 percent in 2017, up from a forecast 1.6 percent this year and unchanged from the previous survey in September.

The improved number is still lackluster by historical standards. U.S. economic growth averaged 3.1 percent a year from 1948 to 2015, according to the Congressional Research Service. But the business economists say Americans need to get used to slow growth: 80 percent of those surveyed believe the potential growth rate of the American economy will remain at 2.5 percent or lower over the next five years.

The economy has been hobbled by an aging work force and weak gains in productivity. Still, the economists see the risk of a recession as remote; 90 percent expect the current economic expansion to continue until at least 2018.

They expect employers to add an average 168,000 jobs a month in 2017, down from 180,000 a month so far this year. Those surveyed also predict the unemployment rate, which fell to a nine-year low 4.6 percent last month, will average 4.7 percent in 2017.

The Federal Reserve Just Got Another Major Reason to Raise Interest Rates

U.S. services sector activity hit a one-year high in November, with a surge in production boosting hiring, further evidence of strength in the economy that clears the way for the Federal Reserve to raise interest rates next week.

Monday’s bullish report from the Institute for Supply Management (ISM) followed data last week showing strong job gains in November which helped drive the unemployment rate to a nine-year low of 4.6%.

“The U.S. economy looks solid heading into year-end and, backed by a tightening labor market, the Fed is set to raise rates next week,” said Robert Kavcic, a senior economist at BMO Capital Markets in Toronto.

The ISM said its non-manufacturing activity index jumped 2.4 points to 57.2, the highest reading since October 2015. A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of U.S. economic activity. Services industries reported a 4 point surge in production last month. A measure of services sector employment soared 5.1 percentage points to a 13-month high.

Pence: Obama Can Reach Out to Cuban Dictator, But Trump Can't Take Call From Taiwan's Leader?

The American people are "encouraged" to see President-elect Trump "taking calls from the world, speaking to the world," including the democratically elected leader of Taiwan, Vice President-elect Mike Pence told ABC's "This Week" on Sunday.

"But I think it all begins with relationships, and...that was nothing more than taking a courtesy call of congratulations from the democratically elected leader of Taiwan."

China, which claims Taiwan as its own, has complained about Trump's contact on Friday with the leader of Taiwan, a breach of longstanding diplomatic protocol. The United States, under President Jimmy Carter, broke off formal diplomatic relations with Taiwan in 1979, in deference to communist China, but the U.S. maintains unofficial ties with Taiwan to this day.

Pence told "This Week" host George Stephanopoulos, "It's a little mystifying to me that President Obama can -- can reach out to a murdering dictator in -- in Cuba in the last year and be hailed as a hero for doing it and President-elect Donald Trump takes a courtesy call from a democratically elected leader in Taiwan and it's become -- it's become something of a controversy, because I think the American people appreciate the fact that -- that our president-elect is taking calls from and reaching out to the world and preparing on day one to lead America on the world stage."

Warehouses promised lots of jobs, but robot workforce slows hiring

When Skechers started building a colossal distribution center in Moreno Valley six years ago, backers promised a wave of new jobs. Instead, by the time the company moved to the Moreno Valley, it had closed five facilities in Ontario that employed 1,200 people and cut its workforce by more than half. Today, spotting a human on the premises can feel like an accomplishment.

There are now only about 550 people working at one cavernous warehouse, which is about as big as two Staples Centers combined. Many of them sit behind computer screens, monitoring the activities of the facility’s true workhorses: robotic machines.

It’s a sign of things to come. In the last five years, online shopping has produced tens of thousands of new warehouse jobs in California, many of them in Riverside and San Bernardino counties. The bulk of them paid blue collar people decent wages to do menial tasks – putting things in boxes and sending them out to the world.

But automated machines and software have been taking up more and more space in the region’s warehouses, and taking over jobs that were once done by humans. Today, fewer jobs are being added, though some of them pay more.

Some IRS refunds to be delayed until Feb. 15

Attention holiday shoppers: You might not be able to count on receiving a federal tax refund in January to pay for those gift bills.

In a congressionally-approved change aimed at battling tax refund fraud and identity theft, the IRS must hold tax refunds until Feb. 15 for the millions of Americans who claim the Earned Income Tax Credit or the Additional Child Tax Credit.

"This is an important change as some of these taxpayers are used to getting an early refund," IRS Commissioner John Koskinen cautioned in an announcement as the year-end giving season approached. "We want people to be aware of the change for their planning purposes during the holidays. We don't want anyone caught by surprise if they get their refund a few weeks later than in previous years."

The Earned Income Tax Credit benefits taxpayers with low to moderate incomes. For a single head of household with two dependent children, the maximum annual income to qualify for the program in 2016 is $44,648, IRS data shows. For married couples who file jointly and have two children, the threshold is $50,198.

Renzi suffers resounding referendum defeat

Christmas trees are now going for $1K in NYC

Yuletide capitalism is running rampant this year — with the cost of a Christmas tree topping $1,000 in one Manhattan neighborhood.

Longtime Greenwich Village tree seller Heather Neville said Sunday that her tallest — and priciest — offering will command an astonishing $77 per foot from any buyer who can’t haul it home. “This 13-foot tree — a beautiful fir — is $750, and with delivery, installation with a stand and tip would be $1,000,” said Neville, who bills herself as the NYC Tree Lady.

Neville, 40, broke down the add-ons as $200 for the stand, $25 for delivery and setup and $20 each to the three or four men needed for the job. She also justified the sky-high price tag — which could pay for 600-plus meals for the homeless at the Bowery Mission — by pointing to the exotic nature of the white fir on display at Seventh Avenue and 11th Street

“They are not a traditional Christmas tree, so they are harder to get,” she said. “Not many farmers grow them. To find a good one is difficult.” Neville, who runs five other spots across Manhattan, gets all her holiday greenery from a secret source she identified only as “The Farmer.” She priced a hypothetical 15-footer at a whopping $1,200, including delivery and setup.

Mexico prepares its defense of NAFTA

Mexican auto industry officials are lining up their arguments to defend the North American Free Trade Agreement (NAFTA) against President-elect Donald Trump's campaign promise to renegotiate the pact or throw it out altogether.

The officials, armed with data and economic studies, have boiled their arguments down to a simple message: The U.S. is much better off with the 1994 trade deal than without it. In an era of global competition, they say, Mexico complements the U.S. and Canada more than it competes with them.

Although nervous about eventual talks between Mexico and the Trump administration, the industry leaders say they have a winning argument since the pact has woven trilateral ties that cannot be torn apart without major damage to the North American auto industry.

That warning may appeal to Trump's instincts as a businessman who knows his way around the world, and as a politician who wants to deliver on his promise to protect American manufacturing jobs. "Mr. Trump has said that he is going to be the president that promotes jobs, and in order to have jobs you have to be competitive," Eduardo Solis, president of the Mexican Automotive Industry Association, said last week at an industry gathering.

Eurozone agrees debt relief for Greece

Eurozone finance ministers on Monday (Dec 5) approved new debt relief measures to relieve Greece's colossal debt mountain in the wake of its huge 86-billion-euro bailout, but at levels far short of those demanded by the IMF.

"The Eurogroup endorsed today the full set of short-term measures" including extending the repayment period and an adjustment to interest rates, the eurozone's 19 finance ministers said in a statement.

The ministers accorded Athens the small measures to reduce Greece's debt as a reward for completing the latest round of reforms demanded in the country's massive bailout programme - its third since 2010.

"We will start implementing them in the next weeks," said Klaus Regling, the head of the European Stability Mechanism, the eurozone's bailout fund. However the ministers refused to officially sign off on the bailout's second review as expected, telling Athens that there still remained a few open questions on Greece's reform efforts.

India’s Demonetization – the First Cash Domino in war on cash?

Just recently, millions of Americans voted against Hillary Clinton because, among other reasons, we thought she would raise taxes or otherwise take our money. Most of us didn’t notice what happened on the other side of the world that very same day. Indian Prime Minister Narendra Modi really did take everyone’s money.

Citizens of India learned, with only a few hours’ notice, that their 500 and 1,000-rupee notes were no longer legal tender. Those are—or were—the country’s largest-denomination bills and the foundation of a huge underground economy. Now they’re just paper.

The results were what you would expect: confusion, chaos, and fear. Nevertheless, you can bet other governments watched closely. India could be just the first cash domino to fall.

Just like that, billions of currency notes suddenly became unusable. They will retain their value until the end of the year, but the only way to use them is by going to the bank and exchanging them for smaller notes, up to a limit of 4,000 rupees (about US$60). People can also deposit them in a bank account and then use a debit card or electronic transfers for purchases. That sounds simple enough, but it quickly became a mess. Lines formed at banks, with people waiting for days, only to find the bank ran out of smaller bills. Those without bank accounts had no way to make routine transactions. Already impoverished people had to spend their work time waiting to exchange their money. New bills intended to replace the old ones were scarce.

NASDAQ CEO: Trump will grow the economy

Venezuela is printing a 20,000 bolivar note

The central bank said Sunday it will issue six new bills starting Dec. 15 worth between 500 and 20,000 bolivars. That's 200 times the biggest note currently in circulation -- the 100 bolivar. Hyperinflation means very little can be bought with 100 bolivars, which is officially worth 15 U.S. cents, or just 2 cents based on widely-used unofficial exchange rates.

The currency collapse means people are having to carry their money around in bags, rather than wallets. "For example, a pair of pants is about 40,000 bolivars, which means you currently need to carry 400 bills of 100 bolivars each to be able to buy them," said Luis Oliveros, an economic professor at the Caracas Metropolitan University.

He said the central bank move was long overdue. "People have used credit cards so much that electronic payment systems have recently collapsed. This is a very serious problem."

Inflation in Venezuela is expected to rise to nearly 500% this year and to a whopping 1,660% in 2017, according to the International Monetary Fund.

Hackers steal $31.4 million from Bank of Russia

Hackers have stolen RUB 2 billion ($31.4 million) from correspondent bank accounts at Bank of Russia, the country’s central bank.

The hackers managed to get access to the accounts by forging a client’s credentials, it is understood. The bank has revealed the criminals intended to take RUB 5 billion ($78.5 million), but did not succeed.

Special recommendations were sent out to banks in Russia by the central bank on how they should prepare for additional attacks.

Just a month or so ago, Bank of Russia revealed that five Russian banks were hit by a major DDoS cyberattack. Among these were state-owned Sberbank and Alfa-Bank (Russia’s largest privately-owned bank).

Obama family travel, vacations, cross $85 million mark

The first family has spent over $10 million a year on travel and vacations, and the still growing bill has crossed over $85 million in eight years, according to a watchdog group.

Judicial Watch, which has charted the travel of presidents for years, on Monday said that it has received a new batch of bills for the first family's Christmas break in Hawaii, bringing that trip to nearly $5 million. The Obama's are expected to return to Hawaii this Christmas.

The expenses cover items such as security, flights and hotel rooms for staff and U.S. Secret Service. They do not include the price of prepositioning ships and aircraft in the area or much of the communications costs.

From Judicial Watch: Judicial Watch announced today that it obtained records from the U.S. Secret Service revealing that its travel expenses for the First Family's 2015 Hawaiian vacation cost taxpayers $1.2 million, which bring the total cost of the vacation trip to at least $4.8 million. This was the Obamas' eighth Hawaiian family vacation. The trip has become an annual event for the Obamas. To date, Obama's and his family's travel expenses total at least $85,029,819.

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