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Tuesday 10.21.2014

Crashing Oil Prices Mean Something Different For Everyone
Since June, oil's price has dropped by 26%. The lower prices will help importing countries including Europe, Japan, China, and India, and will hurt oil exporters such as OPEC and Russia. The US is expected to possibly feel a neutral impact (oil-economy states will suffer, but the average consumer will be better off.) "Looking ahead, then, it is plausible that the current oil supply glut will lead to a shortage of oil, and higher prices, by the end of this decade, while actions that could have produced useful alternatives may not occur. The current oil price disruption has many possible causes, objectives, and effects, including challenges to the political stability of Russia and many OPEC nations, as well as the shape of the energy industry," writes Robert Vodra. Because there are many equally likely possibilities in the energy sector, Vodra recommends that financial advisors don't commit their clients to any one specific outcome.

Apple crushes expectations, sells 39.3 million iPhones in fourth quarter
Apple blew past expectations Monday as it reported its fourth-quarter earnings -- boosted by the blockbuster debut of its latest iPhone models. The company reported that it has sold 39.27 million iPhones in the past three months, sending profits up 13 percent. The firm reported earnings of $1.42 per share on $42.1 billion in revenue; Wall Street analysts expected earnings of $1.31 per share on revenue of $39.85 billion. In the same period last year, after the introduction of the iPhone 5c and iPhone 5s, Apple reported selling a record 33.8 million phones. The sales figures include the debut of Apple's latest smartphone models, the iPhone 6 and iPhone 6 Plus, which more than balanced out sliding iPad sales. Both phones have larger screens than any previous Apple smartphone -- a move many saw as a reaction to the success of larger-screened phones from Samsung, LG and other device makers. Apple chief executive Tim Cook has said that the launch has been the most successful iPhone debut in history...

Ben Stein: US Should Pay Ransom in ISIS Kidnappings
Ben Stein has a solution to dealing with the murders of innocent civilians at the hands of the Islamic State (ISIS): pay a ransom. In a commentary for CBS News that aired Sunday, Stein said it's time for the U.S. government to give in to terrorists' demands by paying ransom for the prisoners' release. "The U.S. does not pay ransom to terrorists. Same goes for the U.K.," Stein said. "This sounds fine and noble and high and mighty if you're sitting in a comfy office in the White House or on Downing Street. "But maybe it's not so smart or so kind. Why don't we pay ransom? France apparently pays ransom. The Germans, who we don't think as softies, pay ransom. What's so great about not paying ransom?" Stein then referenced the ransom the U.S. paid for the release of Army Sgt. Bowe Bergdahl, who was traded for five members of the Taliban who were being held at Guantanamo Bay. The United States, Stein added, "bribed local sheiks with planeloads of money to be on our side" during the Iraq War.

Up to 34 MILLION blank 'green cards' and work permits to be ordered ahead of Obama illegal immigrant 'amnesty'
U.S. Citizenship and Immigration Services plans to seek a vendor to produce as many as 34 million blank work permits and 'green cards' – the paperwork that authorizes illegal immigrants to live and work in the United States – as the White House prepares to issue an executive order after the Nov. 4 midterm elections. According to a draft solicitation published online, the government agency will look for a company that can produce a minimum 4 million cards per year for five years, and 9 million in the early stages. President Barack Obama has pledged that he will make a move on immigration reform this year. His original timetable called for a decision by the end of the summer. Republicans have decried the plan as an 'amnesty' for millions of illegal immigrants, including hundreds of thousands of unaccompanied minors who have come across the U.S.-Mexico border this year. Obama's high numbers of illegal immigration 'removals'...

Ending QE Will Plunge US Into Severe Recession - Peter Schiff

No ‘Soft Landing’ for China’s Economy, Report Says
China’s economic growth will slow much faster than expected over the coming decade, falling to an average of 3.9% between 2020 and 2025, but China still represents a “huge and dynamic opportunity” for foreign firms, according to the Conference Board. In a report published Monday, the research group said China’s projections of a “soft landing” for its economy, with a period of growth in the current range of 7% to 8% for the foreseeable future, are overly optimistic. “Companies planning on sustained 7[%] to 8% growth in China are likely in for a rude awakening,” the Conference Board warned, forecasting that growth will slow to an average of 5.5% between 2015 and 2019 and then decline further as productivity nose dives and the country’s leaders fail to push through tough measures to remake the economy. “The course of China’s growth has always harbored the potential for deceleration at least as rapid as its acceleration,” David Huffman, a co-author of the report, said in a news release.

Banks Should Defer Bonuses 10 Years, Tap Them For Fines: Fed Official
Banks should defer bonus payments for 10 years and tap the bonus pool to pay any regulatory fines, a top Federal Reserve official said on Monday, taking aim at continued lapses across the industry even after the 2007-9 financial crisis. New York Federal Reserve Bank President William Dudley said banks should move toward paying employees in debt securities for their annual incentive pay, rather than in equity. Dudley's sharp comments came at the end of a one-day conference held by the New York Fed, titled, "Workshop on Reforming Culture and Behavior in the Financial Services Industry." "How will a firm know if it is making real progress?" Dudley asked in prepared remarks. "Not having to plead guilty to felony charges or being assessed large fines is a good start." Fed Governor Daniel Tarullo, the Fed's top official overseeing bank supervision and regulation, also gave his view on bank compensation at the closed-door event.

The Truth Hidden by IBM’s Buybacks
For many years, the International Business Machines Corporation’s earnings glided smoothly upward. Every quarter, IBM would report higher earnings per share. Even Warren Buffett invested in the company, disregarding his long-held aversion to technology companies as too challenging to forecast. Virginia M. Rometty, IBM’s chief executive — and recently anointed the most powerful woman in business by Fortune magazine — has talked a good game about focusing on “shareholder value.” For the first several years of her tenure, she managed to prop up the stock by buying back shares by the cartload. In the first six months of this year, the company spent more than $12 billion — that’s billion with a “b” — on its own shares. She’s also been sending shareholders thank-you presents in the form of large dividends. But all these “shareholder friendly” maneuvers have been masking an ugly truth: IBM’s success in recent years has been tied more to financial engineering than actual performance.

Obama: Hey, all these red-state Democrats running away from me are strong supporters who vote with me!
President Barack Obama appeared on Al Sharpton’s radio show today to send a campaign message seemingly calculated to drive folks like Sens. Mark Pryor and Mary Landrieu to drink. “Well, look, here’s the bottom line,” said Obama, “We’ve got a tough map. A lot of the states that are contested this time are states that I didn’t win. And so some of the candidates there, you know, it is difficult for them to have me in the state because the Republicans will use that to try to fan Republican turn-out. The bottom line is, though, these are all folks who vote with me. They have supported my agenda in Congress. They are on the right side of minimum wage. They are on the right side of fair pay. They are on the right side of rebuilding our infrastructure. They’re on the right side of early childhood education. “So, this isn’t about my feelings being hurt. These are folks who are strong allies and supporters of me. And I tell them, I said, you know what, you do what you need to win.

Apple, Amazon and Raoul Pal on the financial Internet & Jim Bruce on the Fed

19 Very Surprising Facts About The Messed Up State Of The U.S. Economy
Barack Obama and the Federal Reserve are lying to you. The "economic recovery" that we all keep hearing about is mostly just a mirage. The percentage of Americans that are employed has barely budged since the depths of the last recession, the labor force participation rate is at a 36 year low, the overall rate of homeownership is the lowest that it has been in nearly 20 years and approximately 49 percent of all Americans are financially dependent on the government at this point. In a recent article, I shared 12 charts that clearly demonstrate the permanent damage that has been done to our economy over the last decade. The response to that article was very strong. Many people were quite upset to learn that they were not being told the truth by our politicians and by the mainstream media. Sadly, the vast majority of Americans still have absolutely no idea what is being done to our economy. For those out there that still believe that we are doing "just fine"...

U.S. issues new protocols for treating Ebola patients
The United States issued stringent new protocols on Monday for health workers treating Ebola victims, directing medical teams to wear protective gear that leaves no skin or hair exposed when caring for patients infected with the virus. The new guidelines from the U.S. Centers for Disease Control and Prevention in Atlanta come as 43 people who were exposed to the first patient diagnosed in the United States were declared risk free, easing a national sense of crisis over the spread of Ebola. Under the CDC protocols, Ebola healthcare workers must undergo special training and demonstrate competency in using protective equipment designed to prevent their exposure. Use of the gear, now including coveralls, and single-use, disposable hoods, must be overseen by a supervisor to ensure proper procedures are followed. A key element is that no skin can be exposed by doctors, nurses or technicians taking care of a person infected with Ebola, which is transmitted through direct contact...

Gold And Oil Prices Driving You Up The Wall?
Aside from the recent volatility in stock prices, you've probably noticed big swings in the price of oil. By "swings" I mean drops. Cash prices for West Texas Intermediate (WTI), the basis grade traded on the NYMEX division of the Chicago Mercantile Exchange, have fallen to levels not seen in two years. At the same time, a new dollop of fear has spiced the gold market, pushing prices off an intermediate bottom under $1,200. Dismal expectations for global growth are driving gold up and oil down. The interplay between these two commodities is captured by the gold/oil ratio - a metric that's used by some pundits as a leading economic indicator. The ratio's simply a quotient derived by dividing the spot gold price by that of oil's. It tells you how many barrels of oil can be purchased with one ounce of bullion. Last week, the ratio punched through resistance, and a long-term average, to trade at 15 barrels per ounce. The ratio had been rangebound between 11 and 14 barrels for the past 15 months.

FBI: ‘No indication’ JPMorgan was hacked because of sanctions against Russia
FBI officials on Monday said there was no evidence that the hack of JPMorgan Chase and other U.S. banks’ networks was payback for western sanctions against Russia. “There’s no indication that [they came] as a result of the sanctions,” said FBI Cyber Division Assistant Director Joseph M. Demarest, speaking to reporters and rejecting suggestions raised in earlier media reports that the intrusions were in retaliation for sanctions. Officials also said that they still have not determined whether it was a foreign government — such as Russia — or criminals who were behind the network intrusions at JPMorgan and other banks. Demarest said there have been cases where hackers who work for foreign governments moonlight as criminals, using the expertise learned at their day job to earn money. “There’s a blending,” said Demarest, speaking after an event hosted by the Financial Services Roundtable. “They may be working as criminals by evening or dark of night and then during the day they’re working on...

What Will Be Gold’s Peyton Manning Touchdown Pass This Week?

Sources: Yahoo In Talks To Buy Video Ad Platform BrightRoll For Around $700M
Yahoo has been building up its video and video advertising content, and we have heard that it may make another key acquisition in the area to further raise its game. The company is in talks to acquire BrightRoll, the cross-platform digital video advertising service. TechCrunch has heard that term sheets have been signed, and that the price, if the deal is completed, could be anywhere from $500 million to $1 billion, but looks likely to be in the region of $700 million – $725 million. Yahoo is currently under pressure from activist investor Starboard Value to consider a breakup and/or sale of the company. This could potentially have an impact on negotiations. Tim Armstrong, the CEO of AOL — Starboard’s target for a merger — earlier today said that a Yahoo sale does not figure as part of AOL’s future plans. Were a BrightRoll acquisition to go through, you can see Yahoo’s logic: BrightRoll is a strong competitor against the likes of Google and its leading online video property YouTube...

Central banks to the rescue! ECB plays "Boy Wonder" to Fed's "Batman"
Stocks are fluctuating to start the trading week, continuing some of the volatility that reigned last week. Despite the volatility, the Federal Reserve appears to be holding its current course, and maintaining plans to wrap up its bond buying by the end of October, as expected. Dallas Fed President Richard Fisher said in an interview with CNBC this morning that he is not concerned about inflation, recent market volatility has not changed his view that QE3 should end next week as planned. Last week, St. Louis Fed President James Bullard bucked that idea. In an interview with Bloomberg TV, Bullard said the Fed should consider extending the program given falling inflation expectations. “We have to make sure that inflation, inflation expectations remain near our target, and for that reason, I think a reasonable response of the Fed in this situation would be to invoke the clause on the taper that said that the taper was data-dependent, and we could go on pause on the taper at this juncture.”

120 people now being monitored for Ebola in Texas
About 120 people are now being monitored for possible infection with Ebola because they may have had contact with one of the three people in Dallas who had the disease, Texas health officials said Monday. Officials said 43 of 48 people on an original watch list have passed the 21-day maximum incubation period for the viral disease and are now in the clear. But others who cared for a Liberian man who died Oct. 8 at a Dallas hospital remain at risk, along with two nurses he infected and their close contacts. That brings the total to 120 people now being monitored, with their wait period ending Nov. 7, said Dallas Mayor Mike Rawlings. He said the number may fluctuate. Clay Jenkins, the top administrator for Dallas County, said he was unaware that other health officials had allowed one of the nurses, Amber Vinson, onto an airplane the day before she was diagnosed. Vinson had contacted the Centers for Disease Control and Prevention and Dallas County, and she was given permission to fly home...

The $7 Trillion Opportunity: Money Management Tips From The Financial Advisors Of The Future
By some counts, adults born after 1980 — aka, Millennials or Generation Y — control $2 trillion in liquid assets. Within the next six years, that number will surge to $7 trillion. Some may think we’re lazy and entitled, but we’re ripe for the picking — assuming we actually figure out how to grow our wealth. And in a panel at the Forbes Under 30 Summit in Philadelphia on Monday, three of the people trying to figure out how to make financial service sites that Gen Y will actually use gave tips on how to do just that. A 2013 survey noted that “Millennials are the generation that are the least likely to be on track for retirement. … People aren’t paying as much attention to them and they are falling behind and falling further behind.” Alexa von Tobel, Josh Reich and Jon Stein — CEOs and founders of planning site LearnVest, banking service Simple and investing site Betterment, respectively — are paying attention, and they think that smart technology paired with some smart budgeting...

US Regulator: Fannie, Freddie in Deal With Banks
A federal regulator says government-controlled mortgage giants Fannie Mae and Freddie Mac have reached an agreement with major banks that could expand lending. The head of the Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the deal Monday at a conference of the Mortgage Bankers Association in Las Vegas. FHFA Director Mel Watt said the deal clarifies conditions in which banks could be required to buy back mortgages they sell to Fannie and Freddie for misrepresenting the loans' risks. Watt said the agreement in principle is "a significant step forward" that will help make more mortgage credit available without harming Fannie and Freddie's finances. It's currently hard for banks to know whether they'll have to buy back loans, Watt said. That can make banks skittish about lending to borrowers with less pristine credit. An expansion of mortgage credit could help boost the housing market, which has recovered only gradually since the Great Recession.

Big Data Knows When You Turn Off the Lights

Welcome To The Future: I Just Bought Chicken Nuggets With My Dang iPhone
What it’s like to use Apple Pay out in the world. Throw out your wallets. Cut up your credit cards. Burn all your paper currency. Your wallet-less future begins NOW. Today, Apple finally rolled out Apple Pay, the company’s NFC-powered (NFC is a type of short-range wireless communication) one-touch payment system. They’ve got a bunch of banks and retailers signed up and you could argue it’s one of the biggest things Apple has rolled out in years. The idea is simple: Apple, with its money, power, and partnerships, might actually be able to create a digital payments system that could eliminate the pernicious scourge of obtaining one’s wallet with one’s free hand and reaching into it to grasp, pull, and swipe a credit card. Loose change? FOR THE PLEBS. Does it look like 1847 to you? If you’re one of the lucky ones with a brand new NFC-enabled iPhone 6 or 6 Plus and a credit card, today you can walk up to the register with your desired goods, look the cashier deep in the eye, and slam your phone down...

In the Battle for Kobani, ISIS Falls Back. But for How Long?
There was sun and blue sky over the besieged Syrian border town of Kobani on Monday, perfect conditions for airstrikes. But for most of the day there was an eerie quiet. From the Turkish villages nearby we didn’t hear the now familiar sounds of U.S. bombing sorties or the thuds and bangs of light artillery and tank shelling. Instead we heard the crackle of automatic gunfire and we could see gray smoke rising from the eastern side of the town. According to fighters and civilians inside, contacted by phone, this was evidence that the militants of the so-called Islamic State were torching buildings as they pulled out. The belated uptick in well-directed and coordinated U.S. airstrikes, the stubborn almost suicidal resistance of Kobani Kurds—men and women—and Sunday night’s air-drop by U.S. military cargo planes of arms, ammunition and medical gear has shifted the balance. Morale is lifting. Smiles light the faces of Kobani Kurdish refugees and Turkish Kurds who have watched the ebb and flow...

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