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 Young Guns of Gold Podcast – ‘The Everything Bubble’
– Precious Metal Roundtable discuss gold in 2017 and outlook
– Gold +9.1% year to date; Performing well given Fed raising rates, lack of volatility and surge in stock markets
– “People are expecting too much from gold”
– Economy: Inflation indicators, recession on the horizon, global debt issues
– Global demand: ETF inflows, Russia central bank purchases, Germany investment figures and international coin demand bode well for gold
– “First monetary inflation, then asset inflation, next is price inflation …”
– Gold bull market resumed; silver should outperform gold

Indicators point to inflation, a recession is on the horizon and the ‘Everything Bubble’ is the great threat to financial stability – these are the conclusions of the Young Guns of Gold who hosted a Precious Metal Roundtable, this week.

Jan Skoyles from GoldCore and Jordan Eliseo of Australia’s ABC Bullion were hosted by Ronald Stoeferle of Incrementum in a reboot of their Young Guns of Gold podcast.

The Young Guns of Gold discussion was broken into three parts:

1. Gold, Markets and Macro
2. Gold’s Role in a Portfolio, 2017 and beyond
3. Gold on the international stage
4. Engagements and buying diamonds : )

Executive Summary

Gold and Silver Bullion – News and Commentary

Gold gains on weaker dollar (Reuters)

Stocks Gain, With Japan at Decade High; Euro Rise: Markets Wrap (Bloomberg)

China Is Said to Meet Bankers for First Dollar Bond Since 2004 17 (Bloomberg)

Chinese central-bank chief talks of reforms aimed at lifting yuan’s status (Marketwatch)

LME to expand trading around gold and silver reference prices (Reuters)

Allocation to gold contributes to outperformance. Source: Bloomberg

Gold A Good Hedge Against Against Market Turmoil – Research (Bloomberg)

Video: Geopolitical bid and lack of tax reform should push gold higher (Bloomberg)

Rickards Warns “The Market’s Got It Wrong” (Zerohedge)

Are the foundations of London property finally crumbling? (Citywire)

Britain can’t cope with a fall in house prices – here’s why (Independent)

Gold Prices (LBMA AM)

11 Oct: USD 1,290.20, GBP 978.62 & EUR 1,091.90 per ounce
10 Oct: USD 1,289.60, GBP 977.77 & EUR 1,094.61 per ounce
09 Oct: USD 1,282.15, GBP 976.23 & EUR 1,092.01 per ounce
06 Oct: USD 1,268.20, GBP 970.43 & EUR 1,083.93 per ounce
05 Oct: USD 1,278.40, GBP 969.28 & EUR 1,086.51 per ounce
04 Oct: USD 1,275.55, GBP 960.87 & EUR 1,085.11 per ounce
03 Oct: USD 1,270.70, GBP 959.00 & EUR 1,081.87 per ounce

Silver Prices (LBMA)

11 Oct: USD 17.15, GBP 13.00 & EUR 14.51 per ounce
10 Oct: USD 17.12, GBP 12.98 & EUR 14.53 per ounce
09 Oct: USD 16.92, GBP 12.86 & EUR 14.41 per ounce
06 Oct: USD 16.63, GBP 12.73 & EUR 14.20 per ounce
05 Oct: USD 16.66, GBP 12.64 & EUR 14.19 per ounce
04 Oct: USD 16.83, GBP 12.67 & EUR 14.29 per ounce
03 Oct: USD 16.61, GBP 12.53 & EUR 14.13 per ounce

Recent Market Updates

– London House Prices Are Falling – Time to Buckle Up
– Perth Mint Gold Coins Sales Double In September
– Gold Investment In Germany Surges – Now World’s Largest Gold Buyers
– Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold
– Safe Haven Silver To Outperform Gold In Q4 And In 2018
– Plan For Run On The Pound
– Russia Gold Rush Sees Record Reserves For Putin Era
– China Catalyst To Send Gold Over $10,000 Per Ounce?
– Gold Matches S&P 500 Performance In First 3 Quarters; Up 12% 2017 YTD
– Gold Standard Resulted In “Fewer Catastrophes” – FT
– Financial Advice From Man Who Made $1+ Billion in 1929 – Importance Of Being Patient and “Sitting”
– “Gold prices to reach $1,400 before the end of the year” – GoldCore
– Commodities King Gartman Says Gold Soon Reach $1,400 As Drums of War Grow Louder

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

via http://ift.tt/2wOOtZC GoldCore

 

via http://ift.tt/2yd8MS3 Tyler Durden

In a shocking move that completely upends Chicago’s endless pursuit of higher taxes and an overly-regulated nanny state, the Cook County Finance Committee took the unprecedented step of voting to actually repeal their unpopular ‘soda tax’ last night.  The 15-1 vote followed an outcry from local residents and small business retailers who say their soda sales crashed 90% after the original ban was passed.  Per ABC:

The vote to repeal the sweetened beverage tax was one spawned by revolt from people and business owners across the county, many who packed the board meeting Tuesday afternoon.

 

“I’m about 10 percent of where my soda sales used to be. It’s really hurt me deeply in the pocket and my workers also. I’m very happy you are understanding this and going to repeal this tax,” said Ken Blum, a blind vendor.

 

“I believe what we heard over the last ten and eleven months is that our residents are fed up, and they finally said enough. Tax fatigue has sunk in,” said Cook County Board Commissioner Sean Morrison.

 

“I have heard from the people in my district overwhelmingly, the business owners, the retailers, as well union members in this building who are opposed to this tax,” said Commissioner John Daley.

 

“Let me tell you I’m overjoyed and elated that this tax is going to go away. I mean the people in my district by an overwhelming majority don’t want this tax,” said Commissioner Richard Boykin.

The repeal of the tax still faces a vote from the full board which is expected later today.  That said, the repeal will not take effect until December 1, which is when the new budget is set to go into effect.

Of course, not everyone was happy with the repeal vote as Public Defender Amy Campanelli, who depends on dipping in the taxpayer-funded trough for her livelihood, complained that tax cuts would require her to make some difficult decisions.  Apparently Ms. Campanelli doesn’t understand that that is kind of the point.

The calls for repeal were countered with concerns about the impact losing the projected $200 million in revenue will have on county services. Elected leaders made a last ditch effort to keep the tax at the meeting.

 

“To meet an 11 percent cut we would be subject to massive layoffs. My office in its present form would no longer exist. To meet the target number, we would have to eliminate approximately 134 positions from my 680 budgeted staff, or about 20 percent of my office. The effects would be nothing short of devastating,” said Cook County Public Defender Amy Campanelli.

Meanwhile, a representative from the American Heart Association complained that she just can’t see how “repealing this tax creates a healthier community.” 

“I don’t see how this repealing this tax creates a healthier community. I think you’re going to see — I think this is a recipe for disaster,” said Julie Mirostaw with the American Heart Association.

Sure, and while you’re at it maybe just apply a massive tax to fast food, all restaurant dishes that are fried, bacon, cheese, candy, pizza, processed meats…pretty much everything that Americans eat on a daily basis.  Perhaps when the nanny state of Illinois takes full control of every decision that its residents make then they will finally be able to mold the healthy population that Julie Mirostaw desires?

Then again, maybe local/state/federal government entities could just stop promoting poor health decisions by subsidizing junk food with taxpayer-funded entitlements like food stamps.

As we pointed out several months ago, a study released by the USDA offered a stunning look at just how much of the money spent on food stamps goes toward the purchase of soft drinks and other unnecessary junk foods.  Per the study, nearly $360mm, or 5.4% of the $6.6BN of food expenditures made by SNAP recipients, is spent on soft drinks alone.  In fact, soft drinks represent the single largest “commodity” purchased by SNAP participants with $100mm more spent on sodas than milk and $150mm more than beef.

Soft drinks were the top commodity bought by food stamp recipients shopping at outlets run by a single U.S. grocery retailer.

 

That is according to a new study released by the Food and Nutrition Service, the federal agency responsible for running the Supplemental Nutrition Assistance Program (SNAP), commonly known as the food stamp program.

 

By contrast, milk was the top commodity bought from the same retailer by customers not on food stamps.

 

In calendar year 2011, according to the study, food stamp recipients spent approximately $357,700,000 buying soft drinks from an enterprise the study reveals only as “a leading U.S. grocery retailer.”

 

That was more than they spent on any other “food” commodity—including milk ($253,700,000), ground beef ($201,000,000), “bag snacks” ($199,300,000) or “candy-packaged” ($96,200,000), which also ranked among the top purchases.

Even worse, when we added up all of the commodities that would typically be considered “junk food” (i.e. soft drinks, candy, cakes, energy drinks, etc.), we found that roughly $950mm, or just over 14% of the aggregate $6.6BN of food expenditures made by SNAP recipients, is spent on unnecessary, unhealthy products.

Of course, that kind of logic has no place in government.

via http://ift.tt/2zgBPnY Tyler Durden

Scientists from the US Geological Survey who breezily informed the public that there’s “nothing to worry about” with regards to the Yellowstone caldera, a supervolcano that should it erupt could cause potentially hundreds of thousands of deaths, should be eating their words.

Since about mid-July, the earth beneath the volcano has been shifting in a sign that magma could be rushing into the caldera’s main chamber. Since then, there have been roughly 2,500 small-scale earthquakes recorded near the volcano, the largest stretch on record. Previous estimates had assumed that the process that led to the eruption took millenniums to occur.

The same estimates that USGS based their warning on.

As the New York Times explains, the Yellowstone caldera is a behemoth far more powerful than your average volcano. It has the ability to expel more than 1,000 cubic kilometers of rock and ash at once, 2,500 times more material than erupted from Mount St. Helens in 1980, which killed 57 people. That could blanket most of the United States in a thick layer of ash and even plunge the Earth into a volcanic winter.

As the Times points out, scientists expect a supervolcano eruption to scar the planet once every 100,000 years.

To reach their conclusion, the team of scientists spent weeks at Yellowstone’s Lava Creek Tuff – a fossilized ash deposit from the volcano’s last supereruption, where they gathered samples and analyzed the volcanic leftovers. The analysis allowed the scientists to pin down changes in the lava flow before the last eruption. The crystalline structures of the rocks recorded changes in temperature, pressure and water content beneath the volcano just like tree rings do.

“We expected that there might be processes happening over thousands of years preceding the eruption,” said Christy Till, a geologist at Arizona State, and Ms. Shamloo’s dissertation adviser. Instead, the outer rims of the crystals revealed a clear uptick in temperature and a change in composition that occurred on a rapid time scale. That could mean the super eruption transpired only decades after an injection of fresh magma beneath the volcano.”

Thanks to this research, scientists are beginning to realize that the conditions that would lead to a supervolcano eruption could emerge during a human lifetime. As the research continues, scientists hope they will be able to spot more signs of a coming eruption.

“It’s one thing to think about this slow gradual buildup – it’s another thing to think about how you mobile 1000 cubic kilometers of magma in a decade,” she said.

While scientists at the USGS have brushed off the threat of a supervolcano eruption, scientists at NASA have at least acknowledged the threat to the US population. The agency has devised a potential strategy to try and defuse an eruption should one appear imminent, though according to several the techniques involved – specifically, pumping water directly into the volcano’s magma chamber – involve significant risks.

But who knows? If the research is accurate, an eruption could emerge as a serious threat to the US – and possibly the global population – population as the fallout kills crops and livestock, causing widespread famine, while clouds of choking ash and debris spread for hundreds, if not thousands, of miles.

via http://ift.tt/2gdfjaQ Tyler Durden

Authored by Simon Black via SovereignMan.com,

The Great Financial Crisis happened because Wall Street was financing homes for people who couldn’t afford them.

Leading up to the GFC, there was a voracious appetite from investors for “AAA”-rated mortgage debt. So lenders would make lots of loans to subprime borrowers and sell them to Wall Street. Wall Street would pool them together and one of the major ratings agencies (like Moody’s or Standard & Poor’s) would stamp the steaming pile of garbage with AAA.

AAA by Moody’s definition means the investment “should survive the equivalent of the U.S. Great Depression.” In other words, it’s rock solid.

The reasoning was that one subprime mortgage was risky. But if you bundled thousands together, you get AAA… Because they couldn’t all go bad at once. And, hey, you can’t lose money in real estate.

The rating agencies weren’t as dumb as they appeared, though… Investigations following the crisis showed lots of incriminating emails, like this one from a Standard & Poor’s exec:

“Lord help our fucking scam . . . this has to be the stupidest place I have worked at.”

Like everyone else, they played along because they wanted to make money.

To generate enough mortgages to meet demand, lenders would do anything…

– Sell a house for no money down

 

– Offer a teaser rate (which temporarily reduces monthly payments, then jumps to market rates)

 

– And even offer to pay part of your mortgage for a couple months (most small lenders could sell a loan to Wall Street in a month or two, erasing their liability. If the origination payment was more than cash out of pocket, they still came out ahead).

They called the worst of the subprime loans “NINJAs” as in “No income, No job, No assets.”

When they couldn’t actually write enough mortgages to meet demand, Wall Street got creative. They started bundling together bundles of mortgages, something called a CDO-Squared. Then they created synthetic CDOs, which were just derivatives of subprime mortgages and even other CDOs (essentially a
way for people to gamble on the mortgage market without actual mortgages).

As we all know, it ended in disaster… because the people who took out the mortgages they couldn’t afford to buy overpriced homes stopped paying. And the CDOs, CDOs-squared and synthetic CDOs (which had been spread around the world) went bust.

Remember, it all started with selling people homes they couldn’t afford.

Which brings me to today…

There’s a record high $1.4 trillion of student debt in the US. And millennials are struggling to pay off those balances.

The National Association of Realtors polled 2,000 millennials between the ages of 22-35 about student debt and homeownership… Only 20% of those surveyed owned a home… Of the 8 in 10 that didn’t own, 83% of them said student debt was the reason. And 84% said they’d have to delay a home purchase for years (seven years being the median response).

And that’s all bad for the home-selling business. Once again, the lenders are getting creative…

Miami-based homebuilder, Lennar Homes, recently announced it would pay a big chunk of a student loan for any borrower buying a home from them.

Through its subsidiary Eagle Home Mortgage, the company will make a payment to a buyer’s student loans of as much as 3% of the purchase price, up to $13,000.

Debt has become such a keystone of our society, that the only way we can afford something is to swap one type of debt they can’t afford with another type of debt.

A recent study by the Pew Charitable Trust showed 41% of US households have less than $2,000 in savings – a full one-third have zero savings (including 1 in 10 families with over $100,000 in income). Another study showed 70% of Americans have less than $1,000 in savings.

The point is, America is broke… A single, surprise expense like a flat tire or a doctor’s visit would wipe most people out.

And it’s only getting worse.

Back in August, I calculated the average household account at Bank of America (which has $592 billion in consumer deposits from 46 million households)… It’s only $12,870 per household… And that includes savings, investments, retirement… EVERYTHING.

Also keep in mind, that’s the average… So accountholders with huge balances skew the numbers higher.

It’s no wonder Americans have $1.021 trillion in credit card debt – the most in history.

Auto loans are also at a record high $1.2 trillion.

And let’s not forget the US government, which is in the hole more than $20 trillion. The US’ debt is now 104% of GDP… And total debt has grown 48% since 2010.

The liability side of the balance sheet keeps expanding. Meanwhile assets and productivity aren’t keeping up.

But people continue buying homes, cars, TVs and college educations by taking on more and more debt… And now, by swapping one type of debt for another.

Wealth is built on savings and production. Not on playing tricks with paper and going deeper into debt.

I can’t tell when this house of cards falls. But rest assured, it will come tumbling down.

Will you be ready when it does?

Do you have a Plan B?

via http://ift.tt/2g3Fltb Tyler Durden

By Chris at http://ift.tt/12YmHT5

In the late 90’s and early 2000’s, I spent a lot of time travelling through a host of the world’s airports.

This naturally meant spending an inordinate amount of time staring at random people, wandering about aimlessly (no business class lounges when you’re an impoverished backpacker living on noodles), and traipsing through duty free stores, puzzling on how it is woman can spend so much on perfume and men so much on big ugly watches.

Today, smart phones have come to rescue us but these things were far from ubiquitous back then. Instead, we had trusty newsstands. Remember them? Magazines and newspapers duelled it out for shelf space. Vanity fair, PC Magazine, New Yorker, the FT, you name it.

What kept the newsprint industry alive was advertising revenues.

When it came to newspapers, people bought them to read about the local politician caught fornicating with a ladyboy while on holiday in Bangkok… or to read about some girl named Mildred who had become a movie star after 70,000 auditions and how proud her parents were.

Nobody read them for the silly pictures of Marlboro man on a horse or for the pictures of some freshly-shaven suit flashing a Rolex while sipping champagne on a private jet. But we still had tons of ads because without them there’d have been no stories of Mildred or ladyboy antics. It’s what kept the industry alive.

At its peak, ad rates were astronomical, but the only way to tell people about a new computer was to buy a page in Computer Shopper. And the only way the suits at Goldman Sachs could let you know they were there to screw guide you through the complexities of the market was to buy a full page in the FT.

Then it all imploded.

The internet has been at once the greatest and the most destructive commercial invention in media history. They said it couldn’t happen. Then it did. Playboy? Dead. Rolling Stone? Buried. Citadel? Whoosh!

Two decades ago, if you were an editor at a large rag, you were king of the world. Expense accounts, lavish office space, wielding Schwarzenegger-like power with every institution grappling for your attention. Today, if you’re still alive, you’re bandaging your business together… and you’ve already taken everything online. But guess which god you’re now praying to?

The same guys who now control ad spend.

You see, advertising revenue never went away. It just changed hands.

This chart is a couple years old but shows the overall makeup of the ad market.

And here’s the stellar growth of ad revenue for Google.

Google revenue growth

It’s been a helluva run for both:

For their part, investors clearly aren’t paying for revenues. A forward price to cash flow of 19.71x? Ouch!

And the big boy, Alphabet:

Based on the numbers…investors are buying “Growth”.

Benjamin Graham wouldn’t be turning over in his grave. He’d be backflipping.

Where to Now?

So are we to sail into the sunset with Google and Facebook leading the charge in the advertising space? For how long?

Or is there a coming pressure on ad revenue, meaning millennials will find themselves carrying catheters around and playing bingo to a different world… one not ruled by these two? Or could it all happen even sooner than that?

Ad growth can take place by acquiring new markets as well as maintaining existing revenues. If you’re adding new customers while existing ones are dropping off faster or even at the same pace as additions, you’re a hamster on a wheel, and that “growth” that investors are currently paying such a premium for risks being repriced.

Here at Capitalist Exploits HQ there isn’t a week that goes by without Natasha, or Henry, or Alec (this week’s one) hitting me up with the promise that I can grow my business much faster with SEO/UX/CRM and ad spending with Google, Facebook, and a bunch of other “social media” juggernauts”.

I don’t begrudge these folks. They’re just trying to make a crumb. But unfortunately that usually means promising me they know just the tricks of the trade, and I can pay them to place ads for me and “manage” my online presence. The ROI will come, I just need to be patient. Maybe they’re right, but I doubt it. Know why?

I’ve spoken with many others running online businesses, and you’d have more luck finding the yeti than anyone who’s had the ability to say with certainty that any of their ad spend is driving meaningful numbers over and above dollar spend. Site hits? Sure. But no conversions.

It’s a world of obfuscation with the promise of gold always lurking over the horizon… but never in reach.

A while ago a company run by some friends spent a godawful amount with what is the equivalent of Google’s SAS.

The promise from the Google boys was it’d pay off in a big way — just be patient — and it required a substantial downpayment.

That was nearly a year ago, and the patience has long since worn off. For an excellent breakdown on the murky world of ad trading, I’d strongly suggest Raoul Pal’s GMI report on the topic, which you can find by signing up to Real Vision TV.

I agree with Raoul when he says:

I think that as this story develops, Google and Facebook will begin to come under pressure. They are making super – normal profits based on total sham. They aren’t the villains but they own the eco-system and they clearly can’t be left in charge of it.

I’ve had similar experiences.

In the past, I hired an advertising agency who were considered “best in biz” to build a landing page for me and run a campaign complete with targeting traffic (which I paid for separately) for an event I was hosting.

The results where absolutely hopeless, and after three months and about US$15,000 down it was clear to me there was only one group making money on this gig… and it wasn’t the guy I saw in the mirror.

I fired them, took down the landing page, sat down, and wrote a short message to my existing list. No special copywriting skills, or emotional wording. Nothing. Just what I was up to. Bam! Success. Weird, heh?

Now, I realise that my data sample is admittedly tiny in the grand scheme of things, but the thing is I’ve enjoyed substantial organic growth (thanks to you readers for sharing my content with friends). But the targeting ad side, while only done a couple of times, has been spectacularly useless 100% of the time.

I remembered all of this when last week I came across this article about Procter & Gamble’s dialling back on ad spend.

The world’s largest advertiser slashed spending on ‘crappy’ digital ads by over $100 million — and still saw sales increase

We will vote with our dollars and will not waste our money on a crappy media supply chain—so we can invest in what really matters—better advertising and innovation to drive growth.

You may be thinking that US$100m is a drop in the bucket for the duopoly of Google and Facebook, and you’d be right. What isn’t a drop in the bucket, however, is Procter & Gamble entire annual marketing budget. A whopping US$2.4 billion!

P&G’s Marc Pritchard was pretty frank in a speech given at the Interactive Advertising Bureau’s annual leadership meeting in Hollywood earlier this year.

Frankly, there’s, we believe, at least 20 to 30 percent of waste in the media supply chain because of lack of viewability, nontransparent contracts, nontransparent measurement of inputs, fraud and now even your ads showing up in unsafe places,

He has given the duopoly a one year ultimatum to clean up their act or risk losing P&G’s 2018 budget.

P&G are not the only ones as they’re joined by Unilever and Bank of America to name a few.

Digging deeper I found this from a few months back:

French advertising giant pulls out of Google and YouTube

Havas becomes first major global marketing company to pull entire ad spend after talks with tech company break down.

The problem that humans have is that we need data to understand and make rational decisions.

The entire digital advertising industry has been so new and so fast-moving that businesses haven’t had the time to accumulate meaningful data on which to make calculated rational decisions.

Additionally, the dynamic has been changing so quickly that what may have worked for a few months suddenly no longer works. It’s been like trying to fit a hubcap on a moving car. You just get chewed up.

The rush to get, gain, and retain “online presence” has led to a FOMO and subsequent massive boom in ad agencies and, of course, social media companies themselves.

Attempting to value the ad spend companies have opted to just spraying money at ad agencies in the hope that they know what the hell they’re doing. Investors, finding it impossible to value companies such as Google and Facebook, have chosen instead to just spray money at them buying the “growth”.

Speed Bumps

There are a couple that spring to mind:

1. More government regulation

It’s coming and here’s why.

Whether or not you believe that the Russians are hacking US elections or not is missing the point. Believing that foreign governments don’t or aren’t trying to influence elections is naive at best and deluded at worst. And this goes for all governments.

That manipulation no longer takes place via newsprint journalism. Today it’s Twitter, Facebook, and Google where the battleground lies. Right now, it’s the Wild West.

That’s unlikely to remain unregulated.

China has already banned and regulated both. Facebook isn’t allowed and Google is hamstrung. In Europe, Zuckerberg is increasingly regulated. The US remains relatively untouched, but I think the trend will assert itself. Importantly, as an investor, it’s clear to me that right now none of this is priced into these stocks all the while they’re sporting valuations that cause blood to shoot from the eyes of value investors.

2. Hard data spoiling the party

As mentioned above, the industry chorus is growing louder and louder.

Every business model matures, and Google and Facebook’s is no different. Businesses have had over a decade now to analyse ad spend and ROI. When entire industries find they can no longer square spending with ROI, we’re likely to see them seeking alternatives. It’s tough to envision this being good for either of these two.

Question

Cast your vote here and also see what others think will happen

– Chris

via http://ift.tt/2zgGUfW Capitalist Exploits

Back in July, the state of Illinois narrowly avoided a junk bond rating with a last minute budget deal that included a 32% in hike in income taxes.  Republican Governor Bruce Rauner vetoed the budget and called it a “disaster,” but both houses of the state legislature voted to override his veto.  Meanwhile, S&P and Moody’s were apparently both convinced that the budget deal was sufficient for the state to remain an investment grade credit and all lived happily ever after, if just for a few months.

But, with the state’s past due payables hovering around a record $16 billion…

…which is a 3-fold increase over the past two years…

…one has to wonder, as we have on many occasions, just how solid Illinois’ credit rating really is.

But as staggering as Illinois’ $16 billion in unpaid contractor bills is, per a report from the Associated Press today, it may not even fully reflect the true extent to which the state has stiffed its vendors.

Illinois is chasing a moving target as it tries to dig out of the nation’s worst budget crisis, and a review obtained by The Associated Press shows $7.5 billion worth of unpaid bills — as much as half the total — hadn’t been sent to the official who writes the checks by the end of June.

 

Although many of those IOUs have since been paid, a similar amount in unprocessed bills has replaced them in the last three months, Comptroller Susana Mendoza’s office said Monday. That’s in addition to $9 billion worth of checks that are at the office but being delayed because the state lacks the money to pay them.

 

The mound of past-due bills tripled over the two years Republican Gov. Bruce Rauner and Democrats who control the General Assembly were locked in a budget stalemate, which ended in July when lawmakers hiked income taxes over Rauner’s vetoes.

Of course, in the end, it’s Illinois taxpayers who end up getting hurt the most as the state is racking up penalties of 1% per month on unpaid bills that are outstanding for more than 90 days.  As the AP points out, there is roughly $5.5 billion worth of trade claims that are past 90 days overdue meaning that taxpayers are paying just over $650 million a year to cover interest payments on unpaid contractor bills.

In some cases, agencies were waiting to send their receipts to Mendoza because lawmakers haven’t approved the spending. For example, the Department of Corrections had $471 million in unpaid bills on hand as of June 30 largely for that reason.

 

“Ascertaining the precise nature of the state’s past-due obligations and liabilities is an essential component of responsible cash and debt management,” the Democratic comptroller wrote in a letter to Republican Rep. David McSweeney, a budget hawk from Barrington Hills who requested the review.

 

Mendoza and McSweeney plan to use the findings to urge lawmakers to override Rauner’s veto of legislation that would require monthly reporting of bills not yet submitted for processing. The measure, authored by Mendoza’s office, would include a breakdown of how old each bill is and which ones have received legislative approval to be paid.

 

The age of bills is important because many that are 90 days or older face a 1 percent-per-month late-payment fee; about $5.5 billion of the current $15.9 billion backlog is subject to the penalty. Mendoza estimates the state will ultimately pay $900 million in late-payment fees on the existing pile of debt.

 

The Department of Central Management Services, which handles personnel, procurement and employee health care, has most of the June 30 bundle, with $5.8 billion. That’s mostly doctor’s bills owed to employee medical providers under the state group health insurance plan.

Add that to the state’s $130 billion pension underfunding…

…and you start to understand why Illinois bonds are trading well over par and near all-time highs…makes perfect sense really.

via http://ift.tt/2kHd4Or Tyler Durden

Gabriel Sherman, the former New York Magazine journalist whose reporting helped topple former Fox News chief Roger Ailes, has published a wide-ranging piece in Vanity Fair where he says private grumblings of senior administration officials are spilling out into the open as Trump's behavior has grown more erractic, and that many of the administration's key players are close to a breaking point.

Sherman begins his piece by claiming that Tennessee Sen. Bob Corker’s infamous interview with the New York Times, where he reportedly fretted that Trump would start “World War III” and compared the White House to “adult daycare” represents an inflection point in the Trump presidency. The interview, Sherman claims, “brought into the open what several people close to the president have recently told me in private: that Trump is “unstable,” “losing a step,” and “unraveling.”

Kelly is reportedly miserable, but is refusing to quit out of a sense of duty to try and keep Trump from making a disastrous decision like ordering a preemptive nuclear strike on North Korea. According to Sherman's sources, Kelly and Secretary of Defense James Mattis have discussed what they would do if Trump ordered a nuclear strike…

According to two sources familiar with the conversation, Trump vented to his longtime security chief, Keith Schiller, “I hate everyone in the White House! There are a few exceptions, but I hate them!” (A White House official denies this.) Two senior Republican officials said Chief of Staff John Kelly is miserable in his job and is remaining out of a sense of duty to keep Trump from making some sort of disastrous decision. Today, speculation about Kelly’s future increased after Politico reported that Kelly’s deputy Kirstjen Nielsen is likely to be named Homeland Security Secretary—the theory among some Republicans is that Kelly wanted to give her a soft landing before his departure.

 

One former official even speculated that Kelly and Secretary of Defense James Mattis have discussed what they would do in the event Trump ordered a nuclear first strike. “Would they tackle him?” the person said. Even Trump’s most loyal backers are sowing public doubts. This morning, The Washington Post quoted longtime Trump friend Tom Barrack saying he has been “shocked” and “stunned” by Trump’s behavior.

But perhaps the most alarming claim in Sherman’s report is that Steve Bannon believes Trump only has a 30% chance of finishing out his first term. And furthermore, the biggest threat to Trump’s presidency isn’t impeachment, but a provision of the twenty-fifth amendment that would allow his cabinet members to exercise emergency measures to remove him from office.

Even before Corker’s remarks, some West Wing advisers were worried that Trump’s behavior could cause the Cabinet to take extraordinary Constitutional measures to remove him from office. Several months ago, according to two sources with knowledge of the conversation, former chief strategist Steve Bannon told Trump that the risk to his presidency wasn’t impeachment, but the 25th Amendment—the provision by which a majority of the Cabinet can vote to remove the president. When Bannon mentioned the 25th Amendment, Trump said, “What’s that?” According to a source, Bannon has told people he thinks Trump has only a 30 percent chance of making it the full term.

For what it’s worth, odds that Trump will be impeached before the end of his first term have been more or less steady around 35% for the past three months. Though PredictIt doesn’t have odds for whether the twenty fifth amendment will be invoked before the end of Trump’s first term.

If Breitbart's coverage is any indication, a rift between Trump and Bannon that erupted when the former supported the doomed candidacy of Republican Senator Luther Strange in a runoff primary vote against former Alabama Chief Justice Roy Moore, who won the primary and will likely go on to replace Strange as the senator holding AG Jeff Session's old seat.

But that doesn’t make Bannon’s remarks – if the report is accurate – any less disconcerting.

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Via StockBoardAsset.com,

Proofpoint, a next-generation American cybersecurity firm, has uncovered a large-scale malvertising  campaign in adverts appearing alongside videos on PornHub (Alexa US Rank 20 and world rank 37 as of this writing).

Researchers at Proofpoint have pinpointed KovCoreG group, the hacker organization behind the “sophisticated social engineering scheme that convinced users to infect themselves” through browser updates. The report states millions of potential victims are in US, Canada, the UK, and Australia. The malvertising scheme was active for more than a year but has since been shut down after PornHub and its ad network were notified of the activity.

According to WIRED, malvertising is the latest sweet spot for cybercriminals’.

As Proofpoint notes, only a handful of hacking groups have penetrated online advertising networks, nevertheless those running on major websites. Several of these groups include:  SadClowns, GooNky, VirtualDonna, and AdGholas.

In KovCoreG case,  PornHub users were redirected to a website which claimed to be offering a software update for Chrome, Firefox, and or the Adobe Flash plugin.

A user would then be tricked into downloading Kovter, a variant of malware that allows the group to track Pornhub users and personal information.

“The combination of large malvertising campaigns on very high-ranking websites with sophisticated social engineering schemes that convince users to infect themselves means that potential exposure to malware is quite high, reaching millions of web surfers”, Proofpoint researchers noted.

 

“While the payload in this case is ad fraud malware, it could just as easily have been ransomware, an information stealer, or any other malware.”

Earlier this year, ADWEEK reports that Google blocked nearly 1.7 billion ‘bad ads’ that violated advertising policies.

So, if you visited PornHub in the last year, you might want to check out Amazon’s list of ‘virus protection’ software.

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Bonus: America and the developed world have a porn addiction beating out The Weather Channel in Alexa website rankings…

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