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Friday 10.24.2014

Ebola outbreak: NY doctor Craig Spencer 'tests positive'
A New York doctor who had recently travelled to the Ebola-ravaged West African country of Guinea has tested positive for the disease, US media have reported, citing New York officials. Dr Craig Spencer, who worked for Medecins Sans Frontieres (MSF), came down with a fever on Thursday. He is the first Ebola case diagnosed in New York, the largest city in the US. More than 4,800 people have died of Ebola - mainly in Liberia, Guinea and Sierra Leone - since March. Dr Spencer fell ill with a fever and diarrhoea on Thursday and was taken to New York City's Bellevue Hospital, where he was immediately placed into isolation, the officials said. Health department officials fanned out into the city in an effort to trace his contacts and identify anyone at risk of having caught the disease from Dr Spencer. Ebola patients are only infectious if they have symptoms, and the disease is only transmittable through bodily fluids, experts say.

73 Swiss banks ask U.S. to revise proposed tax amnesty deals
Lawyers representing 73 Swiss banks seeking to avoid a tax-evasion probe by U.S. authorities wrote a letter to the U.S. Department of Justice raising questions over a dozen demands, including the banks' cooperation with other nations. In the letter dated Oct. 21, the lawyers questioned the terms of a proposed non-prosecution agreement over how banks can achieve amnesty through the disclosure program announced last year. The disclosure program that allows some Swiss banks to pay fines to avoid or defer prosecution over tax evasion by their U.S. customers was signed by more than 100 Swiss banks in December, Bloomberg reported earlier. In the 11-page letter seen by Reuters, lawyers from 18 law firms have requested the U.S. DOJ to discuss issues which present substantial obstacles to their clients’ to "cooperate fully with . . . any other domestic or foreign law enforcement agency designated by the Department,” among a wide range of other changes.

Fannie Mae Expects Slow But Sure Housing Growth in 2015
Where the U.S. housing market is concerned, Fannie Mae chief economist Doug Duncan said he is anticipating overall weaker home sales in 2014 than in 2013. But he expects that overall home sales in 2015 will post their best performance since 2007 despite seeing only moderate growth for the year. The forecast on the state of the nation's housing market and on the overall economy were included in the Fannie Mae Economic & Strategic Research Group's October 2014 Economic Outlook, published on Thursday. "We lowered our expectation for housing starts just slightly to one million units for 2014, but our view of mortgage originations has not changed," Duncan said. "Our estimate for 2013 was in line with the recent release of 2013 data under the Home Mortgage Disclosure Act, and our projection of total production in 2014 is little changed at approximately $1.1 trillion. For 2015, we are cautiously optimistic that ongoing labor market improvements, low mortgage rates, rising inventories...

Does Raising the Minimum Wage Hurt Employment? Evidence from China
Raising the minimum wage is a polarizing issue. One side worries that raising it will lower employment. The other side downplays the impact on employment and plays up the positive impact on the living standards of the poor. Both sides are able to cling to their beliefs as the evidence, much of which comes from high-income (“advanced”) economies, is mixed. The majority of the global labor force, however, is in the emerging markets. Moreover, for a number of these countries, instituting a minimum wage or raising it is squarely on the policy agenda. But little is known about the impacts of minimum wages on employment and living standards in emerging markets. My recent work with Yi Huang and Gewei Wang tries to fill this gap by studying the impact of minimum wage policies on employment in China. As China accounts for nearly 25 percent of the global labor force, this evidence is important in its own right; it may also be more relevant for other emerging markets than the evidence from high-income countries.

CNN: NYC Hatchet Attacker Was 'Radicalized' by Islamic State Propaganda

Why Gold Is Undervalued
Gold has been in a bear market for three years. Technical analysts are asking themselves whether they should call an end to this slump on the basis of the "triple-bottom" recently made at $1180/oz, or if they should be wary of a coming downside break beneath that level. The purpose of this article is to look at the drivers of the gold price and explain why today's market value is badly reflective of gold's true worth. First, I think a reminder would be timely. Those who seek to trade gold are at substantial disadvantage: They line themselves up against too-big-to-fail banks which have the implicit backing of the taxpayer to bail them out of their trading positions; furthermore markets have become so manipulated and dangerous that gold should be considered as insurance against systemic risk instead of a punt. Because the majority of market investors don't fully grasp these risks, when the current global financial bubbles eventually burst, there will only be a tiny minority who end up possessing gold...

Sears disputes report of 116 store closures, nearly 6,100 layoffs
Cash-strapped Sears Holdings rose 4.5% to $35.95 Thursday following a report that it plans to close 116 Sears and Kmart stores and lay off nearly 6,100 employees, many ahead of the Christmas shopping season. Seeking Alpha, a financial news and market tracker, cited liquidation sale notices sent out last month that will lead to the closure of 55 Kmart stores, 30 Sears department stores and 31 Sears Auto Centers. Many of the stores are in Pennsylvania, Michigan and Indiana, according to Seeking Alpha, but closures are also set for stores in Alabama, California, Florida, Illinois, Iowa, Kansas, Kentucky, Maryland, Maine, Minnesota, Missouri, Montana, New Jersey, New Mexico, New York, Ohio, Vermont, West Virginia and Wisconsin. Sears shares surged 23% after the company announced Monday that it planned to raise $625 million in a debt rights offering to raise cash and lease seven Sears store locations to European retailer Primark.

Ferguson Protester: Things Will 'Never Be The Same' If Darren Wilson Isn't Indicted
Five people, including a legal observer who said he was simply walking back to his car, were arrested outside the Ferguson Police Department Wednesday night as protesters gathered to call for the arrest of Darren Wilson, the police officer who killed 18-year-old Michael Brown in August. The officer's case is currently being reviewed by a grand jury, which must decide whether or not to indict Wilson by January 2015, though a decision expected within the next several weeks. Amid rampant speculation that the jury will side with Wilson, protesters on site predicted more turmoil in Ferguson in the event of an acquittal. Authorities estimated that about 200 people gathered outside the Police Department Wednesday. The crowd was largely peaceful, though some members of the crowd knocked over barricades that had been set up to block access to the department's parking lot. A St. Louis County Police spokesman said that when officers attempted to clear the lot, they were "immediately pelted with rocks and bottles."

Keiser Report: Market Cycle Horrors

Fed to Stress-Test Banks for Dire Stock, Housing Scenarios
The Federal Reserve said it will scrutinize how 31 large U.S. banks, including JPMorgan Chase & Co. and Citigroup Inc., would respond to a plunge in equity and housing prices and a sharp downturn in the global economy. The annual tests, based on hypothetical scenarios, are the cornerstone of the Fed’s efforts to prevent a repeat of the 2008 financial crisis and to gauge the ability of banks to withstand economic turmoil. The Fed uses the exams to prod lenders into building up capital buffers. Firms that fail may have to forgo stock buybacks and higher dividends. The “adverse and severely adverse scenarios” are designed to assess “the strength of banking organizations and their resilience to adverse economic environments,” the Fed said in documents released today. The “adverse” scenario outlined by the Fed differs from last year’s in a higher, flatter yield curve for Treasuries -- much like the one released two years ago, according to the Fed.

The terrifying idea that the economy might stay stuck forever just got more terrifying
The U.S. economy has fallen, and it can't get up. At least that's the way it seems. That's because our slump hasn't really ended, even though the Great Recession officially did more than five years ago. Growth has been low, unemployment is still high, and it'd be even more so if the labor force hadn't shrunk so much. And all this, remember, has happened despite interest rates being zero the whole time. It's the opposite of what we would have expected: big crashes are usually followed by big comebacks. So why has this time been different? Well, it hasn't — not if you compare it to other recoveries from financial crises. These, as economists Carmen Reinhart and Ken Rogoff have shown, tend to be nasty, brutish, and long: it takes, on average, eight years just to make up lost ground. But even so, this doesn't fully explain the kind of persistent economic weakness we've seen here and most everywhere else. Look at Japan.

America’s Crumbling Infrastructure Will Drag the Economy Down With It
America’s economy, particularly over the past few years, has dodged a lot of bullets. The housing crisis, dwindling employment numbers, and rising income inequality are just a few examples of issues that have made America’s leadership pivot in multiple directions in an effort to keep the economic health of the country at a reasonable level. The next bullet in the chamber is America’s infrastructure and an overall lack of willingness to do anything about it by political leadership. Experts and analysts have warned us about the impending infrastructure crisis for years, but it always seems to be one of those topics that gets pushed to the back burner as fresh problems are thrust into the limelight, like ISIL or the Ebola scare. But every once in a while, a rather large-scale incident puts the issue right back into the forefront of our minds, such as the collapse of a bridge section of Interstate 5 in Washington state, or the bridge collapse in Minnesota.

Heat is on for Ukraine elections
A few days before Sunday's parliamentary elections in Ukraine, Svetlana Borispolets was looking forward to her first hot shower in months. The timing may not be coincidental. Ukraine's pro-Western President Petro Poroshenko ordered the country's Soviet-era heating plants to restart this week after idling since June to preserve gas for the winter. Sunday is a key step for Ukraine to secure the political and economic reforms that many people here fought last winter for when they ousted the previous pro-Russian regime, triggering a massive conflict that is still simmering today. Borispolets, 75, like most other Ukrainians, has been living without hot water or heat since June, but she insists it's worth the price for closer integration with Europe. "We want to live free," she says. "We're optimistic and we think everything will be good." Poroshenko called the parliamentary elections on Oct. 26 early to consolidate power and boost ties with the West as well as push through a modernization plan.

All The Easy Gold Is Gone - Discovery’s Gold Rush Crew

50 Percent Of American Workers Make Less Than 28,031 Dollars A Year
The Social Security Administration has just released wage statistics for 2013, and the numbers are startling. Last year, 50 percent of all American workers made less than $28,031, and 39 percent of all American workers made less than $20,000. If you worked a full-time job at $10 an hour all year long with two weeks off, you would make $20,000. So the fact that 39 percent of all workers made less than that amount is rather telling. This is more evidence of the declining quality of the jobs in this country. In many homes in America today, both parents are working multiple jobs in a desperate attempt to make ends meet. Our paychecks are stagnant while the cost of living just continues to soar. And the jobs that are being added to the economy pay a lot less than the jobs lost in the last recession. In fact, it has been estimated that the jobs that have been created since the last recession pay an average of 23 percent less than the jobs that were lost.

Newspaper Ad Revenue Fell $40 Billion in a Decade
The fact of the decline of the newspaper business is not news. But a recent essay from the Brookings Institution contains some specific numbers that make clear just how bad things have gotten: In just more than a decade, from 2000 to 2013, advertising revenue for America's newspaper fell from $63.5 billion to $23 billion. The report's author, Washington Post veteran Robert Kaiser, says that the advertising money pie is being chipped away by Google and Facebook, who are able to sort and target audiences in a way newspapers can't. He also predicts that ad revenue will plummet further, as advertisers are partly contributing to print out of habit. Add Craigslist, which has largely replaced once-lucrative classified ads, to that equation for even less revenue for the papers. 2013 was the second year that Google crossed the $50 billion line in annual revenue, with advertising driving most of those earnings. Dollars spent on mobile advertising is forecasted to swell to nearly $18 billion this year...

The surge of Americans on Medicaid is nothing to brag about
In his 2006 book, Audacity of Hope, Barack Obama, then the junior senator from Illinois, explained that "perhaps our most pressing task is to fix our broken healthcare system," adding that "the two main government-funded healthcare programs -- Medicare and Medicaid -- really are broken." During the early stages of the healthcare reform debate in 2009, he again emphasized these two "broken" programs. "[T]he ever-increasing cost of Medicare and Medicaid are among the main drivers of enormous budget deficits that are threatening our economic future," President Obama wrote in a June 2009 letter to then-Sens. Ted Kennedy (D-MA) and Max Baucus (D-MT). "In short, the status quo is broken, and pouring money into a broken system only perpetuates its inefficiencies." Medicaid is indeed broken. Many doctors have either decided not to participate or no longer accept patients on this single-payer, government-managed healthcare program, which, as The New York Times noted in December 2013...

Applications for US unemployment aid rise to 283,000, though remain near 14-year low
The number of people applying for U.S. unemployment benefits rose last week after falling to a 14-year low the previous week. Despite the increase, weekly applications remain at historically low levels that suggest hiring is gaining steam. Applications rose 17,000 last week to a seasonally adjusted 283,000, the Labor Department said Thursday. That is the sixth straight reading below 300,000. Applications have fallen 19 percent in the past year. The figures indicate that recent signs of slowing growth overseas and last week's financial market volatility haven't spooked employers. Most appear confident enough to hold onto their staffs. "More encouraging news on the U.S. job front," said Jennifer Lee, an economist at BMO Capital Markets. The report "shows that job creation continued to forge ahead in October." Applications are a proxy for layoffs. The four-week average, a less volatile measure, declined 3,000 to 281,000, the lowest in 14 years.

Amazon’s Q3 Earnings Fall Short Of Already-Low Expectations

Islamic State group earning $1 million per day in black market oil, U.S. says
Islamic State militants are raking in money at a remarkable rate, earning about $1 million a day from black market oil sales alone, a Treasury Department official said Thursday. David Cohen, who leads the department’s effort to undermine the Islamic State’s finances, said the extremists also get several million dollars a month from wealthy donors, extortion rackets and other criminal activities, such as robbing banks. In addition, he said the group has taken in at least $20 million in ransom payments this year from kidnappings. “With the important exception of some state-sponsored terrorist organizations, IS is probably the best-funded terrorist organization we have confronted,” Cohen, undersecretary for terrorism and financial intelligence, said in a speech at the Carnegie Endowment for International Peace in Washington. “It has amassed wealth at an unprecedented pace.” The group extracts oil from territory captured across Syria and Iraq, and sells it to smugglers.

Feds Spend $300K to Develop ‘Underwater Internet’
The National Science Foundation has awarded $300,000 to the State University of New York at Buffalo to develop “underwater internet” or “real-time video streaming in the Internet of underwater things.” The four-year project is not about “trying to stream Netflix to scuba divers,” according to the principal investigator for the project, Tommaso Melodia. “Underwater sensor networks (or underwater internet)” have applications in “national security, border protection, anti-submarine warfare, environmental monitoring, tsunami detection, more accurate weather forecasting, and in the oil and gas industry, among others,” Melodia told CNSNews.com. “The prospect of an ‘Underwater Internet’ has raised significant interest among the general public because of its potential in facilitating many commercial, scientific, and military activities at sea. Still, in spite of the increased attention by the research community in the last few years, underwater networks are still in their infancy,” the grant abstract said.

Sam's Club to offer health insurance for business customers
As small-business owners prepare to comply with health-care rules that require employers offer health insurance, some businesses will have a new option for employees—Sam's Club. The wholesale retailer—a division of Wal-Mart Stores—this week announced new services for small companies including a private health-care exchange for small-business owners and their workers. The health-care exchange will be offered in partnership with Aetna. Another retailer, Costco Wholesale, rolled out its own private insurance exchange for individuals earlier this year. But Sam's Club's health insurance coverage caters to entrepreneurs—Sam's Club's core customers. The idea is that business owners familiar with the discount wholesaler will turn to Sam's Club to meet health-care guidelines, rather than use state exchanges as offered under the federal Affordable Care Act. Available in 18 states, Sam's Club business members with two or more employees will be able to access tools and resources from Aetna.

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