Headline News Archives

Tuesday 11.29.2016

German Central Bank Tests Blockchain Trading Prototype

Germany’s central bank has built a new blockchain prototype focused on securities trading. The Bundesbank developed the prototype in partnership with exchange operator Deutsche Börse, with further testing between the two sides planned over the next few months. The German central bank said today that the project constitutes the first joint initiative with Börse, describing it as “purely a conceptual study”.

The prototype is said to enable the transfer of both electronic securities as well as “digital coins”, as well as functions for coupon payments and the redemption of mature securities, using code from the Hyperledger project as a basis. Deutsche Börse is a member of that initiative, and has been exploring its own applications since early 2015.

According to the Bundesbank, the project is aimed at providing a basis for further exploring the use of the tech in the securities trading space.

Bundesbank executive board member Carl-Ludwig Thiele said in a statement: "With the blockchain prototype, the Deutsche Bundesbank and Deutsche Börse want to work together to find out whether this technology can be used for financial transactions, and if so, how this can be achieved. The Deutsche Bundesbank hopes that this prototype will contribute to a better practical understanding of blockchain technology in order to assess its potential.”

Could a “Greek-Style” Carry Tax on Cash Come to the US?

As we keep warning, India is not the “last stop” in the global financial elites’ war on cash. Indeed, as ZeroHedge noted earlier today, officials are proposing a tax on cash withdrawals in Greece. They’re also proposing only permitting digital cash or cards for various transactions.

The claim behind this policy is that it would stop cash being used in the black market. This is similar to other claims that implementing a carry tax on physical cash or banning it altogether would stop money laundering or other illicit activities.

The REAL reason that ANYONE is even considering a cash ban or carry tax is because cash withdrawals represent a massive risk for insolvent financial institutions such as those in Greece. When you deposit your capital in a bank, it is recorded as a liability on the bank’s balance sheet. Yes, your money is a liability for the bank. Why?

Because at any point you could request your money back. Technically, the bank should maintain certain liquidity and capital requirements to insure this would never be a problem. But if the bank has been making loans to anyone with a pulse for years as European banks did during the housing bubble, and if those same loans are technically now worthless, and if the authorities have been doing everything in their power to hide this fact, including implementing bail-ins, confiscating wealth, and even engaging in wealth taxes… …then your decision to take your cash out of the bank might be the proverbial “straw that breaks the camel’s back.”

U.S. Debt – This Looming Crisis Could Ruin Many

We must deal with the debt if we are going to survive . We have two options: Simply stop spending or grow the economy. “Stop spending” is easier said than done. And boosting growth is going to be difficult too. Total debt this year rose by 6.8%, almost double our growth rate. Not the right direction. After eight years of the slowest economic recovery in history, growing our debt dramatically faster than we are growing our country—even when we include inflation.

This is not the 1980s environment that Reagan encountered. Stock markets are at highs, not lows, as they were in his term. Today, the market capitalization is 196% of GDP… versus 40% when Reagan took office.

Reagan also had a falling-interest-rate environment. Plus, he had a huge demographic shift to work with… baby boomers who were coming of age. Reagan also had his recession at the beginning of his term, so the economy was coming off its lows. There was a great deal of pent-up demand. This is not presently the case. All of these factors were a great help in spurring the economy when combined with tax cuts.

The Reagan tax cuts certainly increased the deficit, but when they were combined with the Clinton/Gingrich budget controls, we were soon paying down the debt and growing much faster. The debt became far less of a problem, at least in terms of GDP.

Will you need Santa's help to pay off your holiday bills?

Uber Drivers to Join Protest for $15 Minimum Wage

Those working with the leading on-demand company have a demand of their own: a fair minimum wage. Uber drivers are planning to take to the streets on Tuesday as part of a broader protest calling for a $15 hourly minimum wage.

“Hundreds” of drivers will protest alongside fast food workers, airport employees and home care aides for what is being billed as a “Day of Disruption,” according to Fight for $15, the group organizing the effort.

In San Francisco, Uber’s hometown, drivers are planning to march at the airport with signs that say, “Your Uber Driver is Arriving Striking.” In other cities, drivers will idle their cars or march with low wage workers from other sectors.

“Everyone says the gig economy is the future of work, but if we want to make that future a bright one, we need to join together like fast-food workers have in the Fight for $15 and demand an economy that works for all,” Justin Berisie, an Uber driver base in Denver, said in a statement. Reps for Uber did not immediately respond to a request for comment.

Data Breaches Expose 34 Million Records to Date; Army Wants to Be Hacked

Last week the U.S. Department of Defense launched a “white hat” hacking program to test the security of its public websites. The DoD also launched a new program, called “Hack the Army,” that follows a similar program launched last April called “Hack the Pentagon” that allowed about 1,400 Pentagon-approved hackers to test the security of five DoD websites for security vulnerabilities.

The new program is open to all hackers who promise to “do no harm” when hacking into one of the Pentagon’s public websites as long as they report any vulnerabilities directly to Defense Department officials. Details on how to sign up are available at the HackerOne website.

The April program resulted in the discovery of 138 vulnerabilities, and the white-hat hackers received payments totaling $75,000 for their efforts. The “Hack the Army” program also offers a bounty on reported vulnerabilities, and instructions for signing up are also available from a different link at HackerOne.

The latest data breach count from the Identity Theft Resource Center (ITRC) reports that there have been 901 data breaches recorded this year through November 22, 2016, and that more than 34 million records have been exposed since the beginning of the year. The total number of reported breaches increased by 28 since ITRC’s last report on November 9.

Cyber Monday Is Now Pretty Pointless

Since 2005, Cyber Monday has been the end of Thanksgiving week, as office workers’ brains haven’t quite returned to work, and they use the time to shop online. At least, this is what online retailers must themselves as they schedule sales and other promotions for the additional shopping holiday. Yet is Cyber Monday still a thing, or do we all have shopping holiday fatigue by the time it comes around?

Then there’s the problem specific to the holiday season. Over the last few years, retailers both online and offline have been engaging in Black Friday creep, making their sales start earlier and last longer. Consumers have deal fatigue.

You probably aren’t in a shopping frenzy right now, and few other people are, because shopping online is now commonplace. We carry small computers full of shopping apps in our pockets, and our email accounts are stuffed full of solicitations from our favorite retailers year-round. Mere discounts aren’t enough.

This year, according to the Associated Press, Adobe projects that we’ll spend about as much online today as on Black Friday. Cyber Monday shopping has increased every year since the non-holiday began, but online shopping on Black Friday simply increased more.

Will we ever be able to retire? Boomers and Gen X-ers are worried.

Another new survey out last week shows that Americans are worried big time about when and whether they will be able to retire. The Addison Group’s Third Annual Workplace Survey found that 51 percent of American workers surveyed are concerned that they will not be able to retire when they want.

Those concerns about retirement were strongest among women. Only 43 percent of women surveyed felt they would be financially able to retire. And by generation, the biggest concerns came from baby boomers and Gen X-ers. Millennials, meanwhile, were significantly more confident about their retirement prospects.

Fifty-five percent of boomers and 58 percent of Gen X-ers were not confident that they would be in a financial position to retire when they were ready. But 53 percent of older millennials and 61 percent of younger millennials felt confident that they would be able to do so.

Nearly half of the workers surveyed worried that they would have to retire at an age older than their parents. That included 55 percent of boomers and half of the Gen X-ers in the survey. Only 35 percent of those in the survey thought they would retire at the same age of their parents, and 18 percent thought they would retire at a younger age than their parents.

Poll: Most Americans Ready for Change in Obamacare

Most Americans are ready for a change in U.S. healthcare. "The vast majority of Americans want to see the law changed," a recent Gallup poll found. "This includes the 37 percent who want it repealed and replaced, along with a total of 43 percent of Americans who want the law kept, but with major changes."

President-elect Donald Trump said he would repeal and replace Obamacare once in office. More recently, though, he said he would keep at least two parts of the Affordable Care Act intact including the provision which prohibits health insurers from denying coverage to people with pre-existing health conditions and the exception allowing people to stay on their parents' insurance until they are 26.

Disapproval of Obamacare, implemented in 2010, has been common since Gallup started tracking responses four years ago.

Fifty-three percent of adults polled from Nov. 9-13 said they disapproved of Obamacare, while 42 percent said they approved. Of the adults who approve of the ACA, 66 percent want changes, while 70 percent of those who disapprove say they want the law to be repealed and replaced.

Gulf Marine Fabricators sheds 251 jobs

Offshore manufacturer Gulf Marine Fabricators plans to trim 251 jobs at its Aransas Pass facility during the next six weeks.

This will be the second time in 17 months the company has shed positions in San Patricio County. Notices were sent out to employees on Nov. 16, according to a Worker Adjustment and Retraining Notification report released Monday by the Texas Workforce Commission. The layoffs were expected to be completed by Jan. 16, report said.

Attempts to reach company officials for comment were unsuccessful Monday. The company, headquartered in Houston, did not issue a statement on the workforce reduction.

Monika de la Garza, a spokeswoman for Workforce Solutions of the Coastal Bend, said members of the agency's Rapid Response Team have reached out to Gulf Marine Fabricators to offer displaced employees its services. Among the services it provides are crisis counseling, stress management and job-search assistance.

OPEC Leaves Venezuela Floundering With No Decision On Oil Production

The Organization of Petroleum Export Countries (OPEC) ended its meeting Monday without coming to a formal agreement about reducing oil production.

OPEC began flooding the global marketplace with oil in 2014. The group of oil-producing countries pumped out 31.3 million barrels per day by May 2015, the highest level of oil production since August 2012. As a result of the deluge, the price of oil on the barrel head fell from $107.5 in June 2014 to $45 in January 2015. Currently, the price per barrel of oil is just $46.93.

Many expected OPEC to reach an agreement Monday, and none hoped for a decision more than Venezuela.

The economy of the socialist nation is almost entirely dependent upon the oil industry, as it has the world’s largest oil reserves. Oil accounts for almost all of Venezuela’s exports, and comprises nearly half of its annual income. With little diversity in the nation’s economy, Venezuela is extremely vulnerable to declining oil prices.

Why Millennials Should Embrace Tradition

Migrant crisis: Italy sees record arrivals from North Africa

This year's total is now more than 171,000, the interior ministry said, beating the previous record of 170,100 in 2014. About 4,690 migrants have died or gone missing trying to cross the Mediterranean in 2016, the UN says, which is also a record number.

The arrivals are putting increasing pressure on Italy's asylum system. More than 176,000 people are now being housed in reception centres across the country.

The majority of migrants arriving in Italy come from African countries, the interior ministry said, including 36,000 from Nigeria, 20,000 from Eritrea and 12,000 from Guinea.

Many intend to travel north, with Germany and Sweden among the popular destinations. The rise in numbers reaching Italy comes after migrant routes via Greece and the Balkans were largely closed down by an agreement between the EU and Turkey in March. In 2015 more than a million migrants arrived in Europe, mainly through Turkey.

Obama Admin. Ships 6,051 Kids to American Communities in October

So that immigration crisis you never hear about on your evening news? It’s not over. Not by a long shot. With only a few months left to go before a new president obtains the keys to the Oval Office, the Obama administration released another 6,051 unaccompanied alien children into American communities in the month of October, averaging about 195 kids per day.

According to recent stats released by the Executive Office for Immigration Review, only about 45 percent of all immigration cases opened for unaccompanied minors since July of 2014 have been closed. EOIR data also shows that nearly 40 percent of all illegal alien children ordered to appear before an immigration judge won’t show up for their final court hearing.

Children who come across the border unlawfully and without a parent or guardian are being released at an alarming rate that corresponds with the increasing number of kids currently being apprehended along the U.S.-Mexico border. In October alone, Customs and Border Protection reported they apprehended 46,197 illegal aliens crossing into the United States unlawfully via the Southwest U.S. border, including 13,124 members of family units and another 6,754 unaccompanied children.

Apprehensions in October were up by nearly 6,000 individuals from the heaviest month in all of FY2016, when 40,337 illegal aliens were caught back in May. The number of kids coming across the border has ticked steadily upward over the past several years, garnering national attention in FY2014 when a wave of illegal alien children and families overwhelmed border patrol and created a housing crisis.

The 'final nail in the coffin' may be coming for the Federal Reserve's freedom

One of the central tenets of the Federal Reserve and most central banks throughout the developed world in the modern era has been their ability to stay above the political fray.

With a few notable (and fairly disastrous) exceptions, the Fed has acted without fear of political retribution from the executive branch, although the Chair still has to testify to Congress and the President periodically.

The assumption of independence, however, has come under fire in recent months. After President-elect Donald Trump floated the conspiracy theory that the Fed was intentionally manipulating interest rates to help President Barack Obama and Hillary Clinton, a hostile Congressional questioning of Chair Janet Yellen in September, and the possibility of Trump packing the Board of Governors with sympathetic members, it no longer is a given that the Fed will be able to maintain its freedom going forward.

In fact, Elga Bartsch, the chief European economist at Morgan Stanley, said in the bank's outlook for 2017 that one more financial cataclysm could be all that it takes for independence to end. "Having been overburdened for a long time, many central banks might just be one more economic downturn or financial crisis away from a full-on political backlash," said Bartsch in a note to clients. "Such a political backlash could call into question one of the long-standing tenets of modern monetary policy making - central bank independence."

France’s François Fillon pulls off primary victory

Protesters Across India Rail Against Countrywide Cash Crunch

Across India, protesters rallied Monday against a controversial government decision to void the country's largest-denomination bank notes. All existing 500- and 1,000-rupee notes have been canceled. Critics say the currency move, which was designed to combat corruption and target the black market, has been mismanaged and has made life disproportionately difficult for India's poorest people.

The protests were organized by several different opposition parties and was billed as a "Day of Rage," The Associated Press reported. But the response was "patchy," according to the wire service, "with the protests only affecting daily life in opposition-ruled states."

Still, the demonstrations are a sign of the uneasy transition to "demonetize" the primarily cash-based economy. Three weeks ago, Prime Minister Narendra Modi declared that the government was effectively wiping out 86 percent of India's cash in terms of value overnight, NPR's Julie McCarthy reported.

That has caused a major cash crunch, with citizens waiting in hours-long bank lines to deposit their money. They had 50 days to do so from the time of the announcement. The amounts of new bills they can withdraw are limited and many ATMs are empty, Julie said. In short: "Ninety-seven percent of all transactions are in cash. People don't have it. This is a problem."

Delta Slaps Lifetime Ban on Passenger After Pro-Trump Outburst

Delta Air Lines Inc. banned a passenger who disrupted a flight by yelling statements in favor of President-elect Donald Trump.

“This individual displayed behavior that was loud, rude and disrespectful to his fellow customers,” Delta Chief Executive Officer Ed Bastian said in a letter to employees. “He will never again be allowed on a Delta plane.”

The man on Flight 248 from Atlanta to Allentown, Pennsylvania, shouted and clapped “Donald Trump, baby,” before telling his fellow passengers “He’s your president” and “If you don’t like it, too bad.” He also swore at them, according to a video that drew widespread attention on social media.

Delta publicly apologized Saturday for the incident and said the passenger should have been removed from the flight.

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