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Friday 07.08.2016

Snipers kill five police officers in Dallas, wound seven others during protest

At least five Dallas police officers were killed and seven others wounded Thursday evening as a protest over recent police shootings was interrupted by chaos. The Dallas police chief said an attacker told authorities “he was upset about the recent police shootings” and “wanted to kill white people, especially white officers.”

After a peaceful march, downtown here suddenly exploded into violence at around 9 p.m. local time when gunshots echoed through the streets, sending protesters and police officers alike scattering for cover. Authorities said two civilians were also injured during the shooting.

“We’re hurting,” David Brown, the Dallas police chief, said Friday morning. “Our profession is hurting. Dallas officers are hurting. We are heart broken.”

Four Dallas Police officers and one Dallas Area Rapid Transit officer were killed by “snipers” perched atop “elevated positions,” officials said. Videos circulating on social media showed an individual with an assault-style rifle shoot a police officer in the back at point-blank range.

Payrolls in U.S. Rose 287,000 in June, Most in Eight Months

America’s job market stirred to life in June as payroll growth accelerated by the most since October after a two-month lull, assuaging fears of broader cutbacks by companies.

Payrolls climbed by 287,000 last month, exceeding the highest estimate in a Bloomberg survey, after a revised 11,000 gain in May, a Labor Department report showed Friday. The median forecast in a Bloomberg survey called for a 180,000 increase. The jobless rate rose to 4.9 percent as more people entered the labor force. Wages advanced less than projected.

The figures will help reassure workers and Federal Reserve policy makers alike that companies are staying the course on hiring in the face of weaker profits and overseas developments such as Britain’s vote to leave the European Union. Even with the outsized June advance, job growth over the last three months averaged 147,000, down from almost 200,000 in the first quarter and a sign of moderation as the economy approaches full employment.

“If you take the last three months and smooth these numbers out -- which is really what you should do -- employment conditions are improving, but there’s no question there’s, to some extent, a slowdown in the improvement,” said Hugh Johnson, chairman at Hugh Johnson Advisors LLC in Albany, New York, whose forecast for payrolls was the closest in the Bloomberg survey. “That’s to be expected when you reach what I would argue is full employment.”

Massive One-Day Record Surge Of Mainstream Gold Investment Demand

The spike in the gold price during the holiday weekend triggered a record ONE-DAY surge in mainstream investor gold demand. Investors in the West watched over the fourth of July holiday weekend as the gold price continued higher on early morning trading on Monday. By the time gold opened on Tuesday, the price was already $15 higher.

Mainstream investors who thought the gold price may come under pressure at Tuesday’s market open, were caught by surprise as the yellow metal continued to rally even higher. This caused a massive one-day surge in mainstream investor Gold ETF’s and Fund demand. How much gold flooded into Gold ETF’s and Funds on July 5th? Take a look at the chart below:

Mainstream investors piled into gold on Tuesday, July 5th, thus pushing the ONE-DAY flow into Gold ETF’s & Funds to a record 1.4 million oz (Moz). Let me tell you… this is one hell of a lot of gold. Even if we go back and look at a six month chart from Sharelynx.com, the amount of gold that flowed into Gold ETF’s & Funds surpassed the previous record in February when investors were fleeing stocks and moving into gold as the Dow Jones and broader markets were getting crushed.

The 1% are recovering from 2008 recession while 99% are still waiting

The top 1% of Americans are finally recovering from the great recession. A new analysis of IRS data revealed that the average income of the top 1% of income earners grew by 7.7% in 2015, reaching $1.36m.

Report author Emmanuel Saez, an economics professor at the University of California-Berkeley, calculated earlier this year that the top 1% had an average income of $1.26m in 2014. And though the world’s wealthiest were able to raise that income to $1.36m within one year, they are still not making as much as they were just before the 2008 recession.

Saez revealed that in 2015, the rich were also taking home larger chunk of the US income. “The share of income going to the top 10% of income earners – those making on average about $300,000 a year – increased to 50.5% in 2015 from 50.0% in 2014, the highest ever except for 2012,” Saez wrote. “The share of income going to the top 1% of families – those earning on average about $1.4m a year – increased to 22% in 2015 from 21.4% in 2014.”

According to him, while the 1% power ahead and continue to reclaim income lost during the recession, a full recovery for the bottom 99% remains elusive. “Six years after the end of the Great Recession, those families have recovered only about 60% of their income losses due to that severe economic downturn,” he said. It should not come as a shock that to many Americans talk of economic recovery rings hollow. The top 1% of families saw their income grow by 37% between 2009 to 2015, from $990,000 to $1.36m. The incomes of the other 99%, however, grew by just 7.6% during that time – from $45,300 in 2009 to $48,800 in 2015.

The world's biggest buyers of gold are getting ready to load up

Central banks are set to pile into gold like they haven't throughout this year as they look for yield, according to Capital Economics.

The World Gold Council said on Thursday that central banks sold more gold than they bought in May — a net 10.6 metric tons.

From January through May, they decreased their reserves by about 8.7 metric tons. The biggest drop came from Venezuela, which is struggling to keep its economy going.

Meanwhile, gold prices have been surging. The metal was the best-performing asset in the volatile first quarter, and has gained 8% since the UK referendum to leave the EU in June. It's those high prices have, in part, kept central banks from buying gold, wrote Simona Gambarini in a note Wednesday.

Federal Reserve Governor Daniel Tarullo on Raising Interest Rates

The Proof Is In From Japan——QE Is An Absolute Failure

Nominal disposable income in Japan fell 4.4% year-over-year in May 2016. In what can only be a sign of the times being far too familiar in Japanese, real disposable income was thus slightly better at “only” -3.9%. For all the hundreds of trillions in new Japanese bank reserves provided by so many QE’s I have lost count, “real” in Japan means better than nominal since the CPI is negative yet again. For the month of May, the overall CPI was -0.38% less than May 2015; excluding imputed rent, the CPI was -0.48% below the same month a year earlier.

On the economic side, household spending fell in the latest update. Like DPI, nominal spending declined year-over-year by 1.6% while real household spending contracted by “only” 1.1%. In the 28 months since January 2014, real household spending has astoundingly fallen in 24 of them. Since the start of QQE in April 2013, spending in real terms is down more than 6%, while real current income is 5% lower. At this point, the fact that QQE didn’t work is a blessing since Japanese households can really bear no more of the monetary genius-ness.

But it opens markets to the distinctive shift that we have observed all over the world. If it is fair to conclude that QQE, the biggest and most impressive (in redundant mainstream and orthodox terms) monetary experiment ever unleashed, didn’t restart the Japanese economy or even lead to anything other than a small, temporary burst in the CPI, then more questions are to be raised about the basics of monetarism right down to its core. In other words, if so much “money printing” in the form of bank reserves doesn’t even affect the CPI as much as the tax hike, then it is fair to suspect whether bank reserves are actually “money printing” in the first place.

The Japanese economy itself is enough of a sample to conclude in the negative on the economic side. Because of that, doubts as to its financial elements are entirely legitimate in a way never before believed even slightly open to criticism and suspicion. Even yen and currency that were supposedly directed exclusively by the Bank of Japan and whatever its monetary policy settings have of late been contradicting in sharp contrast to recent history.

Alan Greenspan’s Gold Flipflop

Under certain circumstances, seemingly decent human beings are capable of horrific things. So it is with Former Federal Reserve Chairman Alan Greenspan, who parlayed his sound money bona fides into the top post at America’s private banking cartel and current issuer of our un-backed currency. In betrayal of his own stated free-market principles, Greenspan spent his tenure at the Fed pumping up financial markets with easy money and enabling runaway government spending commitments.

Today, however, the “maestro” of central banking is today playing a very different tune. He’s warning against an inevitable crisis resulting from the very policies he helped implement.

Perhaps it’s a late-life crisis of conscience. Perhaps he feels guilty. Perhaps at age 90, he just feels free to speak his mind in a way that most current and former Fed officials don’t. In any event, Alan Greenspan is very concerned about the legacy he will leave and now seems genuinely worried about the country’s financial future.

Following the Brexit shock and the market volatility that followed in its aftermath, Greenspan scolded British officials for the “mistake” of allowing the vote to leave the European Union to take place. He predicted more dominos would fall. In an interview with Bloomberg last week he said, “We are in very early days of a crisis which has got a way to go.”

Fannie Mae: Americans feel less confident about housing

The Fannie Mae Home Purchase Sentiment Index decreased in June, down from May’s all-time survey high as more consumers report mixed views toward housing and income growth. The HPSI decreased by 2.1 points to 83.2 in June, down from May’s 85.3.

The HPSI distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey into a single number. The number reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making.

“The HPSI’s pullback in June from last month’s survey-high reading suggests a slight weakening in the 12-month outlook for housing activity,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “Pending home sales have pulled back in the face of continued home price growth, and we’re seeing some softening in the higher priced components of the market.”

Among those surveyed, those who say now is a good time to sell a home increased by five percentage points to a high of 18%. After three straight months of declines, the Americans who say now is a good time to buy a home rose three percentage points to 32%. Mortgage rates could be causing Americans to say that now is a good time to buy. After the U.K.’s vote to leave the European Union, mortgage rates plummeted to just above 2012’s all-time lows.

Obama's top economic adviser doesn't like the idea of giving people money not to work

President Obama's top economic adviser does not sound too excited about universal basic income. In a speech at New York University on Thursday, Jason Furman — the chair of the president's Council of Economic Advisers — talked about artificial intelligence and the effect it is having, and will have, on the US economy.

And when one mentions AI, the subject of universal basic income (UBI) is often not far behind. UBI is more or less exactly what it sounds like: You give every citizen a set amount of money, whether they work or not.

But Furman, despite declaring at the top of his speech that he worries we're not utilizing robots and AI enough in the US, said a solution for any future economic tension created by the proliferation of robotics is unlikely to come in giving every citizen money.

Furman argued that policymakers ought to first focus on the skills, training, and job-search-assistance programs that can help foster increasing employment opportunities for citizens even in an ever-shifting labor landscape. Additionally, Furman said both the shortfalls of our current tax system and social assistance programs, as well as the benefits of a universal basic income, are overstated.

Jamie Dimon: Not Too Late to 'Go Back on Brexit'

Americans' Self-Reports of Spending Down Slightly in June

Americans' daily self-reports of spending averaged $88 in June, a retreat from the higher levels recorded in April ($95) and May ($93).

These results are based on Gallup Daily tracking interviews conducted throughout June. Gallup asks Americans each night to report how much they spent "yesterday," excluding normal household bills and major purchases such as a home or car. The measure gives an indication of discretionary spending.

Americans' spending in June started out strong, with U.S. adults' estimates of their spending averaging $95 from June 1 through June 15 -- essentially in line with spending in April and May. But consumers appeared to pull back significantly in the second half of the month, with daily reports of spending averaging a much lower $82. Gallup did not observe meaningful differences in first-half versus second-half spending estimates in May or in any prior June.

Although the precise relationship between consumers' evaluations of the economy and their personal spending is unclear, Gallup's Economic Confidence Index also fell slightly in the second half of June compared with where it was in the first half. That decline was apparent prior to Britons' voting to leave the European Union, a move that sent financial markets around the world tumbling. U.S. stocks have since recovered most of the losses.

The Big-Bank Bloodbath: Losses Near Half a Trillion Dollars

Since the start of 2016, 20 of the world’s bigger banks have lost a quarter of their combined market value. Added up, it equals about $465 billion, according to FactSet data.

Brexit isn’t all to blame. True, bank stocks have plummeted since the U.K. voted last month to leave the European Union. But they have been losing value since the start of the year, when a group of factors—the Chinese economy, the path of U.S. interest rates, oil prices—weighed on the markets.

More than pride is at stake. Sharp share-price falls will make it much more difficult, and expensive, for banks to raise capital if that is what is ultimately needed to shore up their balance sheets.

Just as bad, a serious decline in market value can breed inaction among bank executives. Instead of selling equity when they can, executives may wait for share prices to recover, only to find themselves in a worse situation as stocks drop even further.

Is the Scale Going to Tip the Other Way for Gold?

NC State: Calling America ‘A Land Of Opportunity’ Is A Microaggression

A “microaggression tool” published by North Carolina State University’s faculty ombuds informs the school’s employees that phrases such as “America is a land of opportunity” or “I believe the most qualified person should get the job,” are “microaggressions” and shouldn’t be used.

The tool was published last month by NC State faculty ombuds Roy Baroff. In an accompanying blog post on June 29, Baroff — who did not return a request for comment — said the topic of microaggressions “is important as we seek to build a more collegial environment and based on the concerns that faculty members bring to the NC State Faculty Ombuds Office.”

The tool defines microaggressions as “the everyday verbal, nonverbal, and environmental slights, snubs, or insults, whether intentional or unintentional, that communicate hostile, derogatory, or negative messages to target people based solely upon their marginalized group membership.”

One example microaggression, listed under the theme of the “myth of meritocracy,” is the phrase “I think the most qualified person should get the job.” The “message” hidden in this microaggression, according to the tool, is: “People of color are given extra unfair benefits because of their race.”

Janet Yellen and Monopoly money

While top US Federal Reserve officials squabble over the health of the world's largest economy, one of the world's top bond investors has warned that slowing credit growth is threatening to undermine economic activity and the likely future returns from risky assets such as shares, high-yield bonds and real estate.

Minutes of the US Federal Reserve's June policy meeting, just released, pointed to a deep rift among top policymakers about the strength of the US labour market, and the outlook for future growth and inflation. In these circumstances, Fed officials agreed that it was "prudent to wait" for more information on the economy before taking any action.

Fed officials had spent much of April and May preparing investors for a mid-year rate hike. They had hoped that improvement in the US labour market would translate into stronger wage growth, which would fuel inflationary pressures.

But investors now see little chance that Fed officials will raise interest rates at their July meeting. They believe the Fed's plans for raising rates have been put on hold indefinitely amid signs that US job growth is slowing, and the uncertainty arising from Britain's decision to leave the European Union. At the same time, the latest Fed minutes could dent investor confidence by exposing the deep divisions that exist among top policymakers.

Economic Warning Signs

Consumers are growing anxious about the economy, and that’s leading to some unease in the restaurant industry, too.

Signs are ominous that almost every sector in the $783 billion restaurant industry is in trouble. Although breakfast sales at fast-food restaurants rose 2 percent during the first quarter of 2016, far more critical lunch sales were down 3 percent, while dinner sales were off 2 percent, reports The NPD Group.

It’s as if consumers who never fully recovered from the last recession are now preparing for the next one, says Bonnie Riggs, restaurant industry analyst at NPD. “I’m not an economist, but I’ve studied all the past recessions and how consumers behaved, and we’ve never experienced anything quite like this before,” she says.

If there’s one clear sign that something might be amiss in the restaurant industry, it’s this: even the high-flying fast-casual dining sector has hit turbulence. For years, the fast-casual industry grew at an explosive pace. But uncertainty is settling in, as it has in the rest of the restaurant industry, and the onus is not just on troubled Chipotle, which has faced a series of health and safety-related issues. Even with Chipotle factored out, fast-casual sales fell 1 percent in May of 2016 versus May of last year, according to NPD. With Chipotle factored in, the sector’s sales fell 4 percent in that time.

'We're stuck with low interest rates for a long time': Gartman

With the latest minutes from the U.S. Federal Reserve showing little appetite to raise interest rates quickly, influential investor Dennis Gartman told CNBC that investors shouldn't expect any move from the Fed for up to another year.

"There's little to be drawn from the minutes. I think the FOMC used the referendum (on the U.K. leaving the EU) as a reason to do nothing. They would prefer doing nothing and they will probably do nothing for a long period of time. 'Lower for longer' is probably the way to consider what the Fed is going to do for quite some long period going forward," Gartman, the founder and publisher of the Gartman Letter, said on Thursday.

"There is a lack of resolve on the part of the economy here in the U.S. We're moving forward at a very tepid rate and I think we're stuck here at these low levels of Fed funds for a long period of time, certainly until the end of this year and perhaps into the middle of next year."

Minutes from the U.S. Federal Reserve's last meeting in June showed policymakers were divided on the economic outlook for the country.

These people went to prison for the same thing Hillary Clinton did

More than 1,000 Wendy's hit by hackers

Wendy's (WEN) said hackers were able to steal customer's credit and debit card information at 1,025 of its U.S. restaurants, far more than it originally thought.

The hamburger chain said Thursday hackers were able to obtain card numbers, names, expiration dates and codes on the card, beginning in late fall. Some customer's cards were used to make fraudulent purchases at other stores. Wendy's urged customers to check their accounts for any fraudulent purchases.

The Dublin, Ohio, company first announced it was investigating a possible hack in January. In May, it said malware was found in fewer than 300 restaurants. About a month later, it said two types of malware were found, and the number of restaurants affected was "considerably higher."

Wendy's has more than 5,700 restaurants in the U.S.

Is the U.S. economy at a tipping point?

The U.S. economy hit the pause button this spring. On Friday, the world will learn if that was just a blip or if there are legitimate cracks in the economy when the Labor Department releases the June jobs report at 8:30 am E.T. CNNMoney's survey of economists projects 177,000 job gains in June. That would be a massive rebound from May when the U.S. added a mere 38,000 jobs.

The May slowdown was a red flag. It was unexpected. If hiring continues to be low, it's a bad sign because it means businesses are really scaling back and consumers might follow their lead and pull back on spending.

But fear not. Every expert surveyed by CNNMoney predicts hiring picked up in June. They think May was a fluke. Tens of thousands of Verizon workers were on strike that month, so they were counted as unemployed. And the mild winter weather across much of the U.S. could have accelerated a lot of the usual spring hiring to earlier in the year.

"As long as job gains get back above 100,000 a month, then that will help alleviate concerns that what we saw in the spring was a sharp slowing in the U.S. economy," says HSBC economist Ryan Wang.

U.S. Banks Offer Support for London as Financial Center

Four major U.S. investment banks pledged to help London maintain its position as the world’s leading financial center, despite shaky prospects following last month’s referendum by the U.K. to leave the European Union.

Executives of Bank of America Merrill Lynch, Goldman Sachs, JPMorgan, and Morgan Stanley issued a joint statement together with George Osborne, Britain’s chancellor of the exchequer, in support of London. The statement acknowledged the economic challenges posed by the Brexit vote, but signatories pledged to “work together to identify the new opportunities that may now become available so that Britain remains one of the most attractive places in the world to do business.”

The U.S. banks were joined in the statement by the U.K.’s Standard Chartered Bank, which focuses on Asia, Africa, and the Middle East.

“One of Britain’s key economic strengths is that it is a world leading financial centre,” according to the statement. “It has one of the most stable legal systems in the world, a brilliant workforce and deep, liquid capital markets unmatched anywhere else in Europe, all of which are underpinned by world class regulators.”

NEWS to Disturb the Comfortable...

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