Headline News Archives

Wednesday 01.18.2017

US Homeland Security Testing Blockchain To Track People, Goods Across Borders

The US Department of Homeland Security is testing Blockchain technology for cameras and other devices at U.S. ports of entry, including borders and airports to better detect and stop intruders who try to impede the devices or manipulate the data they collect.

According to a report in the Washington Post by Kim S. Nash, the Blockchain project is, in part, intended to thwart spoofing, where someone tries to divert data moving over a network, or to control devices on the network, by mimicking authorized senders or receivers. The idea is to better protect data exchanged between the devices and human agents guarding borders.

Late last year, Factom and Customs and Border Protection completed a small project to prove that blockchain technology can secure data from sensor-equipped devices. Now they are further testing the security and speed of the technology for handling extensive IoT feeds, he said. Factom received a $199,000 grant from DHS in last June.

The agency could put blockchain ledgers into wider use, perhaps in international trade to verify the provenance of goods coming into the U.S. and international travel to identify high-risk flyers and speed up security checks for common travelers, Mr. McAleenan said.

GM to Add or Keep 7,000 US Jobs, Make $1B Factory Investment

General Motors plans to invest $1 billion in U.S. factories and add thousands of new white-collar jobs, measures that have been in the works for years but were announced Tuesday after criticism from President-elect Donald Trump.

In all, the Detroit automaker said it will create or keep 7,000 jobs in the next few years, including about 2,000 at factories. Another 5,000 new positions will be created at its auto financing arm and to develop advanced technology, electric and autonomous vehicles and information technology.

Trump has demanded the auto industry build more cars in the U.S. GM said these latest actions have been in the works since well before the election, although spokesman Patrick Morrissey acknowledged it's a good time to announce new jobs in the U.S. Trump will be sworn in as the nation's 45th president Friday.

"There's no question there is an emphasis on job creation in the U.S. right now," he said. "This is good timing for us to share what we are doing." Morrissey said most of the new positions would be in Michigan, with exact locations to be revealed at a later date. The long-planned new white-collar jobs will come in the next two or three years.

The disconnect between global elites and the middle class

Social Security has a looming $11 trillion shortfall

President-elect Donald Trump has said he will preserve Social Security, though if he and Congress do nothing to fix the funding, the financial reckoning will be huge — as much as $11.4 trillion down the road.

The last time Congress changed Social Security in a significant way with a series of benefit cuts and payroll tax increases was in 1983 under President Ronald Reagan.

Back then, the federal government needed to fill a funding gap of about 1 percent of taxable workers' wages. By the time Social Security's trust funds are projected to run out in the early 2030s, the federal government will have to plug a hole of more than 3 percent, according to estimates by Charles Blahous, a senior research fellow at George Mason University's Mercatus Center.

"Just to keep the system afloat from year to year at that point they would have to inflict near-term pain over three times as severe as was the case in 1983," Blahous said. Though the Trump transition team has yet to make any proposals about Social Security, one Republican lawmaker has detailed how he would change it.

Pelosi: Were It Not for Obama, $19,951,756,200,280 Debt Would Be Higher

House Minority Leader Nancy Pelosi (D-Calif.) said on Friday that were it not for "the work" of President Barack Obama, the federal debt would have increased even more than the $9 trillion that it has increased over the eight years of his presidency.

“Absent the work of President Obama this national debt would be even higher,” Pelosi said at her weekly briefing with reporters at the Capitol when asked about the increase in the federal budget under Obama.

According to the U.S. Treasury, the federal debt rose from $10,626,877,048,913.08 when Obama was inaugurated on Jan. 20, 2009 to $19,951,756,200,280.98 on Jan. 11, 2017, the latest day for which the number is available. That is an increase of $9,324,879,151,367.90. asked Pelosi: “The federal debt has increased by more than $9 trillion during Obama’s time in office. Do you regret that President Obama never balanced the budget?” “As I’ve said over and over again: Show me your budget, show me your values,” Pelosi said. “And we see today on the reconciliation a clue. We haven’t seen the full budget because that will come later.”

Be Skeptical of the Fed's Rate Signals

At its last policy meeting, in December, the Federal Reserve decided to increase the federal funds rate by 25 basis points. It also indicated that it expected to increase interest rates three times in 2017, as Chair Janet Yellen painted a rosy picture of the prospects for the U.S. economy that pushed up Treasury yields and hit emerging market equities and currencies hard. Minutes of the meeting released Jan. 4 reiterated the Fed’s expectation of faster economic growth this year.

Yet the reaction of markets may have been premature: The Fed's outlook deserves to be treated with a big dose of skepticism, particularly given the central bank's record in recent years. The Fed has largely gotten it wrong since 2009, as it repeatedly forecast a rapid pickup of the U.S. economy that would be accompanied by several rate increases. In fact, it has raised the federal funds rate by only two baby steps since the 2008 financial crisis, and there's little reason to believe it has now regained credibility.

A critical error in the Fed’s reaction has been the low importance bank officials have accorded to global developments that have required them to revise forecasts. The threat of a Greek default in 2010, and Italy’s debt crisis and political turmoil as Prime Minister Silvio Berlusconi resigned in 2011, along with the Chinese market tumult last January after the Fed hiked in December 2015, were just a few of the international developments that forced the Fed to change course.

The Fed’s aggressive posture is not supported by international finance theory, either. The U.S. cannot hike rates while central banks elsewhere maintain near-zero or negative rates, unless the U.S. is willing to accept a sharply appreciated dollar, which President-elect Donald Trump has made very clear he wouldn't abide.

Brexit: Theresa May Lays Out Her Plan For A Sharp Break With The EU

Britain's prime minister said Tuesday that the United Kingdom will walk away from the European Union's single market and unified court system, making a sharp break with its largest trading partner.

In a speech delivered about six months after voters passed a referendum requiring Britain to leave the EU, Prime Minister Theresa May laid out a plan for what that split would look like, emphasizing limits on migration into the country.

"We will ensure we can control immigration to Britain from Europe," May said, continuing: "In the last decade or so, we have seen record levels of net migration in Britain, and that sheer volume has put pressure on public services, like schools, stretched our infrastructure, especially housing, and put a downward pressure on wages for working class people. As home secretary for six years, I know that you cannot control immigration overall when there is free movement to Britain from Europe."

The speech signaled that "controlling borders and limiting immigration are more important that the benefits of free trade with the EU," NPR's Frank Langfitt reported from London. "That will play well with the 52 percent of voters who backed Brexit last June," he continued. "But economists say, in the long run, it will make the U.K. poorer."

Walmart to boost U.S. job count by 10,000

Retail giant Walmart said Tuesday that it will create 10,000 new retail jobs in the U.S. this year, the latest American company to promote its domestic-focused hiring and investment ahead of Friday's transfer of power from President Obama to president-elect Donald Trump.

Trump, of course, won the White House partly on his "America First" focus. The new Walmart hires will work at new soon-to-be-opened stores, expanded existing stores and e-commerce services, the company said Tuesday. In addition, Walmart said an estimated 24,000 construction jobs will support its plans to open new stores and remodel existing ones.

"With a presence in thousands of communities and a vast supplier network, we know we can play an important role in supporting and creating American jobs," Dan Bartlett, Walmart's executive vice president for corporate affairs, said in a statement. Walmart (WMT) shares rose 2.2%. The retailer's shares rose nearly 13% in 2016.

The low-price retailer, which is well into the second year of its pay increase plan, touts an hourly pay rate ranging from $9 per hour to $24.70 per hour, according to a year-ago press release announcing 2016 pay hikes for associates that went into effect last February. The average wage for full-time workers was $13.38 per hour, and $10.58 per hour, on average, for part-time workers, according to a Walmart press release.

The 'War On Cash' Has Nothing To Do With Fighting Crime

Don’t be hoodwinked by the relentless propaganda into believing that the efforts being made to eliminate physical cash are motivated by a desire to reduce crime and corruption. Fighting crime/corruption is just a pretext.

The logic behind the propaganda goes like this: Criminals often use physical cash in their dealings, therefore cash should be eliminated. This makes as much sense as saying: Criminals often use cars, therefore cars should be banned. From an ethical standpoint, the fact that criminals use an item will never be a good reason to prevent law-abiding citizens from using the item.

That being said, the anti-cash propaganda is not just wrong from an ethical standpoint; it is also wrong from a utilitarian standpoint if we assume that the stated reasons (to reduce the amount of crime and strengthen the economy) are the real reasons for wanting to eliminate physical cash. This is because neither logic nor historical data provide any basis for believing that forcibly reducing the use of physical money will reduce crime or boost the economy.

With regard to the crime-fighting claim, yes, criminals often use cash due to cash transactions being untraceable, but no criminal is going to change his ways and ‘go down the straight and narrow’ in response to physical money becoming obsolete. If physical money were eliminated then genuine criminals would find some other way of doing their financial transactions. Perhaps they would start using gold, which would give governments a pretext for the banning of gold.

Even Above $1,200, Gold Has Room To Move Higher

Gold is seeing strong gains with prices back above $1,200 an ounce, and analysts say that prices still have room to move a little bit higher as geopolitical uncertainty grips markets in North America and Europe.

In overnight action Tuesday, gold prices reached a session high of $1,218.90 an ounce, its highest level since Nov. 22. The market is still holding onto most of those gains with February gold futures last trading at $1,212.20 an ounce, up more than 1% on the day. Since the start of the new year, gold has rallied more than 6%.

One of the biggest tailwinds for gold has been a weakening U.S. dollar. In Davos, Switzerland, at the 2017 World Economic Forum, Anthony Scaramucci, who will become a White House adviser and public liaison to government agencies and businesses, raised concerns about the strength of the U.S. dollar. He warned that a strong greenback could make it difficult for President-elect Donald Trump to follow through with his plans to revitalize the U.S. economy.

"We need to be careful about the rising currency, not just because of what is going on internationally but it will have an impact internally to the United States as well," he said. The U.S. dollar has fallen to its lowest level in more than a month; the U.S. dollar index last trading at 100.4, down 0.77% on the day.

Why is the America middle class disappearing?

Hyundai to invest $3.1 billion in U.S. plants

Hyundai Motor Co. said Tuesday it will invest as much as $3.1 billion in its existing U.S. manufacturing facilities, and is considering a new plant in the world's most profitable auto market that would help to create thousands of new jobs.

The South Korean automotive group, which includes affiliate Kia Motors Corp., said it will spend the money over the next five years on research and development of new technologies such as autonomous vehicles and on upgrading existing facilities.

"The U.S. market is crucial to our success as a global auto maker. We will continue to expand our presence in the key market. Our investment will also help the U.S. efforts to create more jobs," Hyundai Motor President Chung Jin-haeng told a group of foreign media reporters.

The statement comes as auto makers face pressure from the incoming U.S. administration to manufacture more vehicles in the U.S. Last week, Toyota Motor Corp. (7203.TO) intensified efforts to highlight its contribution to the U.S. economy, in the wake of criticism from President-elect Donald Trump, saying that it will plow billions of dollars into the country over the next few years.

Obama administration cuts second $500M check to Green Climate Fund

The State Department announced Tuesday it is sending a second, $500 million payment to the Green Climate Fund.

The payment is the second from the U.S. to support the fund, which is intended to provide climate adaptation money to developing nations, and serves as the financial mechanism of the Paris climate agreement. The fund is supposed to reach $100 billion by 2020, with both public and private funding from around the world.

The move comes just days before the inauguration of President-elect Donald Trump, a man who has called climate change "a hoax" though he has waffled on whether the U.S. should stay in the Paris agreement.

The State Department pulled the money from the fiscal year 2016 Economic Support Fund appropriation, the same appropriation it used for the first $500 million payment last year. Republicans then raged at the use of the money, arguing the administration was spending unappropriated funds. Democrats were elated.

Runaway Credit Card Debt Makes 2017 Look Like 2007

As we prepare to close the book on another $100+ billion holiday shopping season and our seventh consecutive year of economic growth, it’s worth taking stock of where the U.S. consumer currently stands as well as what 2017 likely has in store. Because while things might seem peachy now, they always do until they’re not.

With that in mind, WalletHub put together some personal-finance predictions for 2017 in consultation with a panel of leading industry experts. And without further ado, here’s what we expect to go down. Consumer overleveraging is poised to be one of the biggest themes in personal finance in 2017. WalletHub projects we will end 2016 with a net increase of $80 billion in credit card debt, which would bring outstanding balances to a level not seen since the Great Recession.

Our saving grace so far has been the charge-off rate stubbornly hovering near historical lows, which means people are still able to pay their monthly minimums on time. But delaying what seems inevitable might only make matters worse, giving cardholders more time to rack up debt and positioning us to fall from a greater height. Our spending habits show no signs of slowing, after all, and we certainly aren’t repaying more of what we owe.

When the levy ultimately breaks, with charge-off rates rebounding to historical norms, consumer credit quality will drop and lender underwriting standards will tighten. It might not happen within the new calendar year, but we’ll be a whole lot closer to credit-card-debt catastrophe when 2018 rolls around.

Boeing making a ‘better’ Air Force One for less money

Airplane manufacturer Boeing will be able to create a better Air Force One for a lower cost, the company’s CEO announced after meeting with President-elect Donald Trump Tuesday at Trump Tower.

“We made some great progress on simplifying requirements for Air Force One, streamlining the process, streamlining certification by using commercial practices. All of that is going to provide a better airplane at a lower cost, so I’m pleased with the progress there,” Boeing CEO Dennis Muilenburg told reporters after the meeting.

Muilenburg also claimed similar progress on fighter jets, after his discussion with the incoming commander-in-chief.

“And similarly on fighters, we were able to talk about options for the country and capabilities that will, again, provide the best capability for our war fighters most affordably,” the CEO said.

Trump Team: Bayer to Invest $8 Billion in American Research

President-elect Donald Trump's transition team announced Tuesday that Bayer AG will invest $8 billion into American research as part of their acquisition of Monsanto, The Hill reported.

Sean Spicer, the incoming White House press secretary, said Bayer will ensure that none of the 9,000 jobs held at Monsanto in America will be lost, and the deal will create 3,000 more jobs in high-tech areas, which will "drive future innovation in agriculture," according to a joint statement from the companies.

"The United States is a global leader in agriculture, and the combination of Bayer-Monsanto will underscore that role and ensure the United States retains a pre-eminent position as the anchor of the industry," the statement added.

"This is an investment in innovation and people that will create several thousand new high-tech, well-paying jobs after integration is complete, jobs that will keep America at the forefront of agricultural innovation and that serve U.S. farmers by delivering better products and services faster."

All U.S. income growth stuck at the top 20%?

Fed official: Inflation is 'simply not a problem'

Inflation is not in danger of rising out of control and the Federal Reserve is not going to cut off the economic recovery, a top official said Tuesday.

"The risk that the Fed will snuff out the expansion anytime soon seems quite low because inflation is simply not a problem," said William Dudley, the president of the Federal Reserve Bank of New York, speaking at an event in New York City.

Economic recoveries, he explained, "don't simply die of old age." At seven years and seven months long, the current recovery is already longer than the average post-World War II recovery, which lasted just under five years.

Instead, recessions usually begin either when inflation rises high enough that the Fed is forced to respond by raising interest rates and slowing spending or when some sort of shock hits the United States.

Economic Confidence Skyrockets to 9-Year High

Americans’ economic confidence has skyrocketed since Donald Trump’s election as the 45th president of the United States, reaching a new eight-year high of +10 points, according to Gallup’s weekly economic poll.

According to the latest poll released by Gallup Tuesday morning, Americans’ economic confidence stood at a dismal -65 points around the time President Obama was first elected in 2008. While public opinion did improve overall during Obama’s term, Gallup notes the index fell to -54 points shortly before Obama’s reelection in 2012 and hit a peak of just +5 points shortly after the start of 2015, a full seven years after Obama was first elected.

Conversely, economic confidence stood at a relatively low -11 points shortly before the most recent presidential election, indicating a nearly +20 point upward swing over the past two and a half months.

According to Gallup, Americans’ economic outlook – one of two factors used to measure the nation’s overall economic confidence – has remained at historic highs since the election. Gallup notes Americans’ view of the nation's economic future has been improving drastically since the November, hitting a nine-year high of +11 points last December and currently sitting at +10 points. “After nine years of nearly uninterrupted negative economic assessments, Americans' views of the economy brightened significantly after the November presidential election,” Gallup stated in its analysis.

Another Retailer Goes Bankrupt, Shutters Stores, While Tiffany Blames Trump Tower for US Holiday Sales Debacle

This time a year ago, Tiffany & Co. cut its full-year forecast after reporting a drop in holiday sales. It blamed sluggish tourist spending and the strong dollar. Rinse and repeat. But today, it changed the culprit to the brouhaha around Trump Tower, the neighbor of its flagship Fifth Avenue store, where sales over the two-month holiday period plunged 14%.

In its holiday sales update, Tiffany said that in in the Americas, which represent half of its global business, total sales fell 4% year-over-year, to $483 million, over the holiday period, and comparable store sales also fell 4%. The drop in sales was due to “local customer spending,” it said. So this time, it didn’t blame the hapless tourists.

And the ongoing decline in sales in the US was “exacerbated” by the 14% plunge at its flagship store on Fifth Avenue. It attributed this plunge “at least partly” to the “traffic disruptions” around Trump Tower.

These “traffic disruptions,” with the President-Elect holding court next door at Trump Tower, have been a problem not just for Tiffany but also for other retailers nearby. In addition to the enormous security efforts – the barricades, dump trucks, checkpoints, and armed-to-the-teeth police around Trump Tower – there have been protesters, waves of tourists, and an army of journalists that all might discourage some well-heeled shoppers from entering or even getting near Tiffany.

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