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Thursday 04.24.2014

Man Eats Twelve Gold Bars To Avoid Taxes
When a team of Indian surgeons opened up the stomach of a patient complaining of abdominal pain, they had no idea they'd extract a fortune. The patient, whose name was not released, was hiding 12 gold bars in his belly. He apparently smuggled them into India to evade import duty, police and doctors said Tuesday. Each bar weighed 33 grams, said C.S. Ramachandran, who conducted the surgery at a hospital in New Delhi on April 9. The 63-year-old patient, an Indian citizen, visited the hospital a day before with severe stomach pain and nausea.

Arizona Gov. Jan Brewer vetoes 2 pro-gun bills
PHOENIX — To the surprise of the bill's sponsor, Gov. Jan Brewer vetoed a bill Tuesday that that would have allowed concealed-carry permit holders to take their guns into government buildings. Rep. Brenda Barton, R-Payson, said she was disappointed and surprised because she believes she addressed many of the issues that the governor had with a similar bill during a prior legislative session. But Brewer stated in her veto letter that the new bill still did not meet concerns she had with similar legislation in the 2011 and 2012 sessions. House Bill 2339 would have allowed people with concealed-carry permits to bring weapons into government buildings unless security measures — including armed guards, metal detectors and gun lockers — are in place. The measure excluded public K-12 schools, community colleges and universities.

Homebuilder And Home Construction ETFs Falter At The Real Estate Altar
Is the enthusiasm for the real estate market built on a solid foundation? Existing home sales fell in March to their lowest pace since July of 2012. Worse yet, sales have declined for seven out of the previous eight months, ever since the the Federal Reserve signaled its intent to slow the pace of its Treasury bond purchases. Surprisingly, a number of media reports have accentuated the positives. For example, the rate of declining home sales has slowed. Some economists interpreted this fact as a sign of stabilization. Others continued to blame the unusually harsh winter weather for the past while simultaneously expressing optimism for the spring and summer buying seasons. Still others emphasized a modest uptick in builder sentiment. All is certainly not well with real estate, however. The fact that the average 30-year fixed mortgage is a full percentage point higher than a year ago coupled with a double-digit year-over-year increase in asking prices severely strains affordability.

Postal workers to protest at Staples
Staples shoppers could face a postal workers' picket line on Thursday. The American Postal Workers Union has organized protests at 50 of the office supplies stores in 27 states to oppose a deal where U.S. postal products and services are sold at Staples. It's not the first postal worker protest against the Staples (SPLS, Fortune 500) mini post offices, but it will be the largest so far this year, according to the union. Members of other postal unions are also expected to join the protests. Since November, 82 Staples stores have been selling traditional mail services as part of a short-term "pilot project" scheduled through September. According to the union, the postal service plans to expand the pilot project to 1,500 stores nationwide. The unions' beef is that the mini post offices are operated by lower-wage Staples staff instead of U.S. Postal Service employees.

Buffett laughs at the 'persecuted' 1%

Many low-wage workers not protected by minimum wage
President Obama's push to raise the federal minimum wage to $10.10 an hour, coupled with recent state-level increases, is welcome news for many people getting by on small paychecks. But not every low-wage worker has to be paid the minimum wage. That's because a crazy patchwork of rules and exemptions lets employers pay some kinds of workers below the full minimum wage -- in some cases, well below. The rules are complex at the federal and state levels. But here's a partial list of how they treat certain classes of workers. Disabled workers: Under federal law, employers may apply for a special certificate to pay less than the minimum wage to anyone "whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury."

US stock market falls in midday trading, following a six-day rise; Intuitive Surgical slumps
KEEPING SCORE: The Standard & Poor's 500 index fell three points, or 0.1 percent, to 1,876 as of 3:12 p.m. Eastern time. The Dow Jones industrial average fell eight points, or less than 0.1 percent, to 16,506 and the Nasdaq composite lost 28 points, or 0.7 percent, to 4,132. ROBOT REPAIR: Surgical robot maker Intuitive Surgical dropped $46.60, or 11 percent, to $375.14 after a drop in first-quarter earnings. Intuitive Surgical sold only half has many robots in the last quarter as it did in the same period a year earlier. The company warned two weeks ago that earnings would come in far below expectations, causing its stock to fall sharply from a recent high of $540.63 reached April 3. FLYING HIGHER: Airline stocks were among the biggest advancers. Delta Air Lines rose $1.64, or 5 percent, to $36.60. Delta's first-quarter earnings climbed after the company filled more seats on planes and paid less for fuel. Plane maker Boeing rose $2.76, or 2.2 percent, to $130.31.

Gold & Silver Stocks Begin Oversold Bounce
The bottoming process for gold and silver shares has been arduous as they’ve oscillated back and forth for almost a year. We noted a month ago that the failed breakout in March was strong evidence that an interim top was in place. Heading into this week it looked like the miners would fall further before finding support. However, over the past two days the sector clearly reversed its short-term course. For now this appears to be a rebound from an oversold bounce. We plot GDX, GDXJ and SIL in the chart below. As of Monday’s low, the miners were very oversold in a small space of time. From recent highs GDX was down 18%, GDXJ 27% and SIL 21%. Thus the miners were ripe for a bounce. The bullish reversal on Monday coupled with confirmation on Tuesday signals that a rebound is underway. The initial upside targets are the open gaps from six days ago and the 50-day moving averages.

Obama and the Asian-Pacific Trade Deal

FedEx Sued For CA Bus Crash
The mother of a 17-year-old honors student who was among 10 people killed in a fiery Northern California bus crash sued FedEx on Tuesday, alleging that its trucks have a history of catching fire. The negligence suit that seeks $100 million in damages is the first filed in connection with the April 10 freeway crash in Orland, said A. King Aminpour, the attorney for the plaintiffs. The suit was filed in Los Angeles County Superior Court on behalf of Rosa Rivera, mother of Jennifer Bonilla of Los Angeles.

Detroit CFO says post-bankruptcy oversight critical for city
Detroit's future once it exits the biggest municipal bankruptcy in U.S. history will depend on oversight, the city's chief financial officer said on Wednesday. "I believe the post-bankruptcy structure is absolutely critical and that right now is a big question mark," John Hill told a conference sponsored by the Federal Reserve Bank of Chicago and the Civic Federation, a Chicago-based government finance watchdog group. U.S. Bankruptcy Judge Steven Rhodes, who is overseeing Detroit's case, recently raised the idea of a court-appointed monitor. Michigan Governor Rick Snyder, a Republican, has mentioned the possibility of a control board similar to one used for New York City's fiscal crisis in the 1970s. While Kevyn Orr, the city's state-appointed emergency manager who took Detroit to bankruptcy court, is expected to leave his position in September, Hill said the state has the option of replacing him if necessary.

‘It’s Not a Dare, It’s a Promise’: Gov. Rick Perry Warns Feds Over Concerns of New Land Grab in Texas
Texas Gov. Rick Perry warned the federal Bureau of Land Management to stay away from Texas amid new concerns that it may be looking to claim thousands of acres of land in the northern part of the state. Not only does the federal government already own “too much land,” Perry told Fox News, the feds are “out of control.” “At issue are thousands of acres of land on the Texas side of the Red River, along the border between Texas and Oklahoma. Officials recently have raised concern that the BLM might be looking at claiming 90,000 acres of land as part of the public domain,” the Fox News report states. However, any potential action would reportedly be years away as the federal government is only in the preliminary review phase. Further, the BLM claims it is “not expanding Federal holdings along the Red River.”

420 Revelers Leave SF Golden Gate Park with 10000 Pounds of Garbage
The mellow, "peace now," countercultural, environmentally conscious “420” celebration deposited 10,000 pounds of garbage on what is known as Hippie Hill in Golden Gate Park, leaving volunteers and park workers to clean up the mess. According to the San Francisco Chronicle’s website SF Gate, this year’s celebration drew a massive amount of revelers estimated at between 10,000 and 15,000. The pot smokers' untidiness will cost the city more than $10,000 in cleanup costs. The immense load of empty bags of chips, candy wrappers, and snack containers left behind was evidence that it was indeed the remnants of weed smokers with a case of the munchies on steroids. The SF Gate reported that one father, Dan Kling, who had taken his 2½-year-old daughter to the park for some family time, was repulsed by the behavior of the “420” partiers. Although he didn’t mind that there was a party, he objected to the pigsty that they left behind. "If you can't be responsible for yourselves, you can't have a party," he said.

KFC 'doubles down' on China

How Gold Will Respond to Declining Discovery
As metals prices boomed during the last decade, small explorers and big miners spent billions of shareholder dollars seeking new deposits. Investors wanted the high rewards of a discovery as metals soared in price. At $1,900 per ounce of gold, even mediocre finds could make money. Richard Schodde, of MinEx Consulting, has studied past exploration cycles in detail. He says we are seeing a tightening of the sector, as the availability of capital has plummeted. Costs of exploration are coming down as companies cut back on high-salaried employees and reduce operating costs. The amount of money spent exploring rose during the last decade from $2.9 in 2002 to $29.4 billion in 2012, before falling back to $21 billion in 2013 says Mr. Schodde. Over the time-frame 2002-12 $136 billion was spent world-wide on non-bulk exploration, resulting in 647 significant new discoveries, of which only 18 are considered to be ‘top tier.’

'Super thin' 5.5-inch iPhone 6 reportedly delayed due to supply constraints
Reports indicate that the alleged larger variant of Apple's next iPhone, which is rumoured to come in two display sizes (5.5-inch and 4.7-inch model), might only be announced by the end of this year due to supply constraints. G4Games cites a report from Taiwan's Commercial Times, which claims that the alleged iPhone 6 with 5.5-inch display will sport a 'super thin' profile and will pack battery cells that are 2mm in thickness, instead of the normal thick battery components. However, the Taiwanese publication notes that the biggest challenge for Apple has been its battery cell suppliers, who have been unable to meet company's strong demand for the sleeker battery cells. Further, the report speculates that the rumoured 5.5-inch iPhone 6 launch might be delayed to 2015 if the yield issues with special battery components are not resolved eventually.

Ex Wal-Mart CEO had deferred pay valued at $140 million
Departed Wal-Mart CEO Mike Duke's deferred pay should provide enough money to shop beyond discount retailers for many years. Duke, who retired Jan. 31, had $140.1 million in deferred compensation at year's end, Wal-Mart said Wednesday in its annual proxy filing. That's more than $27 million over what Duke had accumulated in retirement accounts in 2013, when governance experts noted that was more than 6,000 times greater than what the average Wal-Mart employee had stashed in 401K retirement accounts. Duke's fiscal 2014 compensation dropped more than 70% to $5.6 million from $20.7 million in the prior fiscal year, mostly due to the absence of a stock award. Duke gained another $17 million from vested shares and nearly $2.9 million exercising previously awarded stock options. Duke, 64, had been CEO since February 2009 and previously oversaw Wal-Mart International and Wal-Mart U.S. Before joining the company, Duke was with the Federated and May department store chains.

Ex-New York Fed Examiner’s Suit Over Goldman Sachs Dismissed
The Federal Reserve Bank of New York won dismissal of a lawsuit by a former bank examiner who claimed she was fired for refusing to change findings critical of Goldman Sachs Group Inc. Carmen Segarra sued in October, saying she conducted an examination of Goldman Sachs’s legal and compliance divisions in late 2011 and early 2012 and found they lacked a firm-wide conflict of interest policy. She claimed she was fired in May 2012 after refusing to change her findings. U.S. District Judge Ronnie Abrams in Manhattan dismissed the case today, ruling that Segarra failed to make a legally sufficient claim under the whistle-blower protections of the Federal Deposit Insurance Act. The provisions apply to a violation of a law or regulation, while Segarra claimed she was fired for reporting Goldman Sachs’s alleged failure to comply with a 2008 advisory letter by the Fed’s Board of Governors’ Division of Bank Supervision and Regulation, Abrams ruled.

Motels Near Disney Fighting Homeless Problem

Net neutrality dead for good? FCC may endorse pay-for-play deals
FCC Chairman Tom Wheeler confirmed today that proposed rules to replace the net neutrality regulations struck down by a court decision are on track for an FCC vote on May 15. Wheeler didn't detail exactly what those rules would be, but The Wall Street Journal says it has a source who knows. Ruling lets ISPs "block and discriminate against customers’ communications." "The Federal Communications Commission plans to propose new open Internet rules on Thursday that would allow content companies to pay Internet service providers for special access to consumers, according to a person familiar with the proposal," the Journal reported.

The American Middle Class Is No Longer the World’s Richest
The American middle class, long the most affluent in the world, has lost that distinction. While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades. After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans. The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.

Texas County Facing Bankruptcy--Due to Illegal Immigration
The increasing costs of rescuing illegal immigrants in Brooks County, south of Corpus Christi, and the costs of picking up the bodies of the immigrants who don’t make it, is coming close to bankrupting the small county, 1200 WOAI news reports. Brooks County has been at Ground Zero of the immigration wars for decades.Because of the existence of the Border Patrol checkpoint on Highway 281 in Falfurrias, many immigrant smugglers haul their human cargo as far north as just south of the checkpoint and then kick them out into the unforgiving Brush Country, telling them in many cases that Houston and San Antonio are ‘just a few hours walk’ away.Many of the immigrants don’t have food and water, and they get lost in the featureless terrain or die of heat stroke in temperatures that can reach 110 degrees. Despite the fact that the federal government consistently goes to court to assert its right to manage immigration affairs, shooting down efforts by border states to involve themselves in immigration issues.

Borrowers hit with surprise defaults when co-signers die
Student loan borrowers are suddenly being thrown into default when the co-signer on their loan -- often a parent or grandparent -- dies or files for bankruptcy. Even if they are current on their payments, some borrowers are immediately being placed in default and told to repay the loan in full because their co-signer can no longer back them financially, according to a report from the Consumer Financial Protection Bureau. These so-called "auto-defaults" came to light during an analysis of nearly 3,600 student loan and student loan-related debt collection complaints submitted to the CFPB's consumer complaint database between October 1, 2013 and March 31, 2014. "Students often rely on parents or grandparents to co-sign their private student loans to achieve the dream of higher education," CFPB Director Richard Cordray said in a statement. "When tragedy triggers an automatic default, responsible borrowers are thrown into financial distress with demands of immediate repayment."

Peter Munk says Barrick, Newmont merger would benefit investors
Peter Munk, stepping down next week as chairman of Barrick Gold , hails the potential benefits of a merger with Newmont Mining (NEM -0.4%), saying investors should welcome the cost cuts and lower political risk that a combination could deliver. Munk tells FT there are “obviously synergies available” from a potential combination of ABX and NEM, pointing out that the two companies had many assets “cheek by jowl” in Nevada, the top U.S. gold producing state. Such comments could be an indication the companies are keeping open the possibility of resuming high-level negotiations

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