U.S. airstrikes kill 3 top ISIS leaders
U.S. airstrikes have killed two top-level and one mid-level ISIS leader, a senior U.S. military official tells CNN. Haji Mutazz was Abu Bakr al-Baghdadi's deputy in Iraq; Abd al Basit was his military emir in Iraq; and Radwan Talib was his Mosul emir. Their deaths resulted from multiple strikes going back to mid-November -- it has taken until now to determine conclusively they were killed. "I can confirm that since mid-November, targeted coalition airstrikes successfully killed multiple senior and mid-level leaders within the Islamic State of Iraq and the Levant," said Pentagon press secretary Rear Adm. John Kirby, in a statement on Thursday. "We believe that the loss of these key leaders degrades ISIL's ability to command and control current operations against Iraqi Security Forces, including Kurdish and other local forces in Iraq," he said. News of the killings was first disclosed by Joint Chiefs Chairman Martin Dempsey in an interview with the Wall Street Journal.
IRS warns of possible shutdown
The IRS is considering its own temporary shutdown due to recent budget cuts enacted by Congress, its chief said Thursday. IRS Commissioner John Koskinen said furloughs — forced unpaid days off for employees as part of an IRS closure — is one idea reluctantly being tossed about to save money, though they are hoping they will not have to go there. “People call it furloughs; I view it as: Are we going to have to shut the place down? And at this point, that will be the last thing we do, … but there is no way we can say right now that that wont happen,” Koskinen told reporters at a Thursday press conference on the upcoming tax season. “Again, I would stress that would be the last option.” He said a shutdown would mean the IRS would “close the agency for a day, two days, whatever days it would take to close the gap that we can’t otherwise close in a reasonable way.” The agency estimates each closed day would save $29 million.
Fannie Mae Forecasts Economic Growth in 2015 Despite Ending Year On a Low Note
Fannie Mae's Economic & Strategic Research Group predicts in its December 2014 Economic Outlook that the U.S. economy will strengthen heading into 2015 following an up-and-down 2014 that ended on an unspectacular note. The Group is forecasting full-year growth of 2.1 percent for 2014, a full point below 2013's rate of growth, due to the reverse in the final quarter of some unsustainable forces that boosted the economy in the third quarter. However, the Group is predicting economic growth of 2.7 percent for 2015 based on firming consumer income prospects, rising consumer and business confidence, a broadening housing recovery, and reduced fiscal headwinds. "The December forecast is relatively little changed from the November forecast. We expect a weaker fourth quarter to follow a stronger third quarter, but we don’t see it as a sign of overall weakness," Fannie Mae chief economist Doug Duncan said. "Although real consumer spending growth has disappointed this year...
Chinese Shopping Agents Cash in on Russian Currency Slide
Chinese workers and overseas students in Russia have been snapping up goods at low prices caused by the steep fall in Russian rouble rates before brands can adjust them. These shopping agents, known as “daigou,” stockpile the products before selling them at a profit to buyers back home. In Blagoveshchensk on Russia’s side of the Chinese border, Mou Jiani has turned her home into a warehouse, stocking up on Apple Inc iPhones, handbags and milk powder to sell back home as Chinese shoppers take advantage of the rouble’s slide. Chinese workers and overseas students in Russia have been snapping up goods at low prices caused by the steep fall in Russian rouble rates before brands can adjust them. These shopping agents, known as “daigou,” stockpile the products before selling them at a profit to buyers back home. “In the last few weeks more people have contacted me on messaging apps Weibo and WeChat than I have time to reply to,” said Mou, a trading company worker, who acts as a daigou in her spare time.
Russian Billionaires Face a Tough Week
There Is Hope In Understanding That A Great Economic Collapse Is Coming
If you were about to take a final exam, would you have more hope or more fear if you didn’t understand any of the questions and you had not prepared for the test at all? I think that virtually all of us have had dreams where we show up for an exam that we have not studied for. Those dreams can be pretty terrifying. And of course if you were ever in such a situation in real life, you probably did very, very poorly on that test. The reason I have brought up this hypothetical is to make a point. My point is that there is hope in understanding what is ahead of us, and there is hope in getting prepared. Since I started The Economic Collapse Blog back in 2009, there have always been a few people that have accused me of spreading fear. That frustrates me, because what I am actually doing is the exact opposite of that. When a hurricane is approaching, is it “spreading fear” to tell people to board up their windows? Of course not. In fact, you just might save someone’s life.
Files of More Than 40,000 Federal Workers Breached
The computer files of more than 40,000 federal workers may have been compromised by a cyberattack at federal contractor KeyPoint Government Solutions, the second breach this year at a major firm handling national security background investigations of workers at federal agencies, the government confirmed Thursday. Concerned that some data might have been exposed, the Office of Personnel Management has begun notifying workers that their files were in jeopardy. Nathalie Arriola, speaking for the personnel office, said it will offer credit monitoring at no cost to those affected by the breach. KeyPoint became the largest private clearance firm working for federal agencies several months ago after rival contractor USIS lost its investigations business with the government following a devastating cyberattack reported earlier this year. The USIS breach, similar to previous hacking episodes traced to China, tainted the files of at least 25,000 Department of Homeland Security...
Cheap Oil: Too Much Of A Good Thing?
The 40% drop in oil prices over the past 6 months has garnered a lot of attention recently, most of it focused on the economic stimulus lower oil prices should provide the global economy, the impact on currency and fixed-income markets and the increase in economic pain suffered by exporters such as Iran and Russia. In this article, I draw on historical data to assess the potential increase in geopolitical tail risk that lower oil prices may represent. I believe this is an overlooked consequence of lower oil prices that, while low probability, would have an outsize impact on the global economy - a classic "fattening of the tail". I look at monthly and aggregate data to smooth out daily fluctuations and avoid having us mistake the forest for the trees. The data shows that in the 1980s, the most-cited oil price war, the average price of oil dropped from approximately $28/barrel in 1985 to a low of $11.58/barrel in July 1986 (US Energy Information Administration data for monthly average...
David Stockman: Energy Crunch Will Morph Into a Replay of the Housing Crash
The spiraling energy meltdown is the new housing crash, according to David Stockman, White House budget chief in the Reagan White House. Just as the 2007-09 housing plunge did not put a dime into consumers' pockets — even though average home prices tanked by about 30 percent, from $230,000 to $165,000 — the energy crunch likewise is not going to add to consumer wallets, Stockman asserts. At the peak of the mortgage boom, he notes, the U.S. savings rate had actually vanished, falling to about 2.5 percent of personal income from pre-Greenspan rates of 10 percent to 12.5 percent. "Stated differently, the mortgage credit boom exploded uncontrollably in the run-up to the financial crisis because free-market pricing of debt and savings had been totally distorted and falsified by the monetary central planners at the Fed," Stockman writes on his Contra Corner blog. "Drastic mispricing of savings and mortgage debt in this instance touched off a cascade of distortions in spending...
A new paradigm for oil?
Cuba has more economic - not political - freedom
As the United States prepares to enter a new era in its relations with Cuba, it will encounter an island that has undergone significant economic changes in the past few years. Since taking control of the government from an ailing Fidel Castro in 2008, Cuban President Raúl Castro has implemented a series of economic changes that have shifted more than 500,000 workers from the state-run economy to private enterprises. For the first time, Cubans can buy and sell their homes and their cars. Castro asked for suggestions on how to improve the economy shortly after assuming power, leaving a population used to taking orders more willing to openly express their reservations. "When you go to Cuba now, the services are better," Elaine Diaz, 29, a professor at the University of Havana who is studying at Harvard, said of the new class of private business owners. "There are more restaurants, places to fix your computer, more recreational activities.
Junk Bonds Are Going To Tell Us Where The Stock Market Is Heading In 2015
Do you want to know if the stock market is going to crash next year? Just keep an eye on junk bonds. Prior to the horrific collapse of stocks in 2008, high yield debt collapsed first. And as you will see below, high yield debt is starting to crash again. The primary reason for this is the price of oil. The energy sector accounts for approximately 15 to 20 percent of the entire junk bond market, and those energy bonds are taking a tremendous beating right now. This panic in energy bonds is infecting the broader high yield debt market, and investors have been pulling money out at a frightening pace. And as I have written about previously, almost every single time junk bonds decline substantially, stocks end up following suit. So don’t be fooled by the fact that some comforting words from Janet Yellen caused stock prices to jump over the past couple of days. If you really want to know where the stock market is heading in 2015, keep a close eye on the market for high yield debt.
Brent steady below $60, heads for fourth weekly decline as oversupply persists
Brent crude held below $60 a barrel near a 5-1/2-year low on Friday as a global oversupply of oil showed little sign of receding, even as companies cut upstream investments next year. Oil prices were on track for a fourth straight week of declines after OPEC members last month decided against cutting production in response to a drop of nearly 50 percent in prices since late June. Brent crude for February delivery LCOc1 was up 4 cents at $59.31 a barrel by 0341 GMT (10:41 p.m. EST). The contract had settled down $1.91 on Thursday, after trading as high as $63.70 a barrel in a volatile session. "Following the long and steep decline in oil prices, we have seen some buying interest in recent days," said Ken Hasegawa, commodity sales manager of Newedge Japan. "But there is still a lot of selling pressure." Oil companies have been announcing cuts in exploration and capital spending as crude's price decline makes projects uneconomical.
The Swiss are now at a negative interest rate due to the Russian ruble collapse
The initials “SNB” for the Switzerland’s central bank, the “Swiss National Bank” are about to become just as familiar as the initials ECB for the European Central Bank. Today, the SNB announced it would cut interest rates for banks that keep large amounts of money at the SNB to -.25%. Yes – a negative interest rate. The SNB’s negative interest rate surprise is bigger news than it seems. Switzerland has strong reasons to turn to new monetary policy tools. The lackluster economic growth Switzerland has had since the Financial Crisis in late 2008–visible in the graph of Switzerland’s real GDP in the chart above–has brought inflation down until now it hovers around around zero. The Swiss economy is heavily dependent on exports to the eurozone, which hasn’t fared well lately. And the Swiss economy has had troubles of its own. This past September, BBC News ran the headline headline “Swiss economy fails to grow as EU stagnates,”...
Wolff and Presad on the Fed hike, a strong dollar and emerging markets
Secret Service, Stretched Too Thin, Needs More Agents, Report Says
The Secret Service “is stretched to and, in many cases, beyond its limits” and needs to hire 85 agents and 200 uniformed officers to sufficiently perform its mission, according to a report released on Thursday by the Department of Homeland Security. The report also said that the fence surrounding the White House must be “changed as soon as possible” and made at least four feet taller. The horizontal bars on it — which make it much easier to surmount — should be replaced with vertical ones. The agency is “starved” for strong leaders, and its next director must be an outsider who would be “removed from organizational traditions and personal relationships” and “will be able to do the honest top-to-bottom assessment this will require,” the report said. The report was completed by four former senior White House and federal law enforcement officials for Jeh Johnson, the secretary of the Department of Homeland Security. He ordered the review in September after the Secret Service failed to stop a man...
Billions in Taxpayer Funded Loans Going to Companies that Serve the Rich
The Small Business Administration exists to help Americans “start, build, and grow” businesses, but an analysis of more than $67 billion worth of SBA loans finds that much of the taxpayer funds went to “wealthy lifestyle” businesses such as members-only country clubs and luxury auto dealers. Open the Books, a project of non-profit group American Transparency, found that more than 35,000 loans and loan guarantees ranging from $1 to $5 million have been granted by the SBA since 2007, and that the recipients are not your average “small businesses.” One major beneficiary of the SBA has been exclusive clubs across the country, ranging from private golf clubs to yacht clubs. $160.867 million in loans have been granted to private clubs since 2007, including $2 million to the Pequonnock Yacht Club in Connecticut, $5 million to the Horseshoe Bend Country Club in Georgia, and $3.282 million on the Frisco Gun Club in Texas.
Will gold tarnish or shine in 2015?
Resurgence in gold demand from China and India, the world's biggest consumers, is set to restore some shine to the yellow metal in 2015 after a lackluster year. "Physical gold demand in China and India were held back in 2014 amid high stocks and import controls, respectively," said Victor Thianpiriya, commodity strategist at ANZ. "Both these shackles have been removed, putting demand on a solid footing as we head into 2015." In China, physical gold demand will return because stocks are depleting, said Thianpiriya, who sees the precious metal ending 2015 at $1,280 an ounce, up from $1,200 currently. "Strong demand through the back half of 2013 and into 2014 resulted in a significant onshore stock build in China. This further resulted in subdued levels of imports through the second half of 2014, which has helped to run down the onshore build-up of stocks," he explained. India, meanwhile, removed restrictions on gold imports late-November in a move that is expected to reduce smuggling...
Minimum Wage to Rise in 21 States by New Year’s Day
By the first day of the new year, more than half the states will have passed legislation raising the minimum wage above of $7.25. Four states approved minimum wage increases in the recent November elections: Alaska will raise the minimum to $8.75 an hour effective February 24, 2015, and to $9.75 an hour on January 1, 2016, with automatic indexed increases beginning in 2017. Arkansas is raising its minimum to $7.50 on January 1st (from $6.25), with $0.50 per hour increases in January of 2016 and 2017. Nebraska is raising its minimum to $8.00 an hour effective January 1, and to $9.00 an hour on January 1, 2016. South Dakota is raising its minimum to $8.50 on January 1st with automatic indexed increases beginning in 2016. Seven additional states passed legislation during 2014 increasing the minimum wage above the federal minimum with the change becoming effective on January 1st: Connecticut, Hawaii, Maryland, Massachusetts, Rhode Island, Vermont, and West Virginia.
WH: Sony hack is 'serious national security issue'
Should the U.S. Get a New Banker?
Hawks in Washington like to warn about China's military buildup. They should be encouraged by Beijing's emerging financial drawdown. China trimmed its mammoth dollar holdings by $13.6 billion in October from the previous month, putting its hoard at a 20-month low. This appears to reflect an economic decision to reduce its stash of Treasuries, which at $1.25 trillion remains the largest in the world. As China works to expand the yuan’s use worldwide, it's moving toward a market-determined exchange rate. That means buying fewer dollars. Whatever the reason, though, the decline means that U.S. ally Japan -- the second-largest holder of Treasuries at $1.22 trillion -- will soon surpass China again, as it did very briefly in 2013. Since 2008, when China took over the No. 1 spot, U.S. officials have fretted about Beijing’s leverage over the American economy. In 2009, then-Secretary of State Hillary Clinton frankly asked former Australian Prime Minister Kevin Rudd, “How do you deal toughly with your banker?”
U.S. holiday sales may recover with help of deep discounts
Despite a disappointing Thanksgiving weekend, U.S. holiday sales may squeak by expectations if steeper and longer-running discounts lure enough shoppers. An uptick in last-minute shopping trips on the all-important weekend before Christmas is likely to benefit consumer electronics chains like Best Buy
US To Sell Final $1.25 Billion Shares Of Ally Financial From Bailout
The U.S. Treasury Department will sell its remaining 54.9 million shares of Ally Financial Inc
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