Tag: finance

Meet The Tens Of Millions Of Forgotten Americans That The U.S. Economy Has Left Behind

Authjored by Michael Snyder via The Economic Collapse blog,

The evidence that the middle class in America is dying continues to mount.  As you will see below, nearly half the country would be unable “to cover an unexpected $400 expense”, and about two-thirds of the population lives paycheck to paycheck at least part of the time.  Of course the economy has not been doing that well overall in recent years.  Barack Obama was the only president in all of U.S. history not to have a single year when the economy grew by at least 3 percent, and U.S. GDP growth during the first quarter of 2017 was an anemic 0.7 percent.  During the Obama era, it is true that wealthy enclaves in New York, northern California and Washington D.C. did thrive, but meanwhile most of the rest of the country has been left behind.

Today, there are approximately 205 million working age Americans, and close to half of them have no financial cushion whatsoever.  In fact, a new survey conducted by the Federal Reserve has found that 44 percent of Americans do not even have enough money “to cover an unexpected $400 expense”…

Nearly eight years into an economic recovery, nearly half of Americans didn’t have enough cash available to cover a $400 emergency. Specifically, the survey found that, in line with what the Fed had disclosed in previous years, 44% of respondents said they wouldn’t be able to cover an unexpected $400 expense like a car repair or medical bill, or would have to borrow money or sell something to meet it.

Not only that, the same survey discovered that 23 percent of U.S. adults will not be able to pay their bills this month…

Just as concerning were other findings from the study: just under one-fourth of adults, or 23%, are not able to pay all of their current month’s bills in full while 25% reported skipping medical treatments due to cost in the prior year. Additionally, 28% of adults who haven’t retired yet reported to being grossly unprepared, indicating they had no retirement savings or pension whatsoever.

But just because you can pay your bills does not mean that you are doing well.  Tens of millions of Americans barely scrape by from paycheck to paycheck each and every month.

In fact, a survey by CareerBuilder discovered that 75 percent of all Americans live paycheck to paycheck at least some of the time…

Three-quarters of Americans (75 percent) are living paycheck-to-paycheck to make ends meet, according to a survey from CareerBuilder. Thirty-eight percent of employees said they sometimes live paycheck-to-paycheck, 15 percent said they usually do and 23 percent said they always do. While making ends meet is a struggle for many post-recession, those with minimum wage jobs continue to be hit the hardest. Of workers who currently have a minimum wage job or have held one in the past, 66 percent said they couldn’t make ends meet and 50 percent said they had to work more than one job to make it work.

So please don’t be fooled into thinking that the U.S. economy is doing well because the stock market has been hitting new record highs.

The stock market was soaring just before the financial crisis of 2008 too, and we remember how that turned out.

The truth is that the long-term trends that have been eating away at the foundations of the U.S. economy continue to accelerate, and the real economy is in substantially worse shape this year than it was last year.

Just about everywhere you look, businesses are struggling and stores are shutting down.  Yes, there are a few wealthy enclaves where everything seems wonderful for the moment, but for most of the country it seems like the last recession never ended.

In a desperate attempt to stay afloat, a lot of families have been turning to debt to make ends meet.  U.S. household debt has just hit a brand new all-time record high of 12.7 trillion dollars, but we are starting to see an alarming rise in auto loan defaults and consumer bankruptcies.  This is precisely what we would expect to see if the U.S. economy was moving into another major recession.

In fact, we are seeing all sorts of signs that point to a major economic slowdown right now.  Just check out the following from Wolf Richter’s latest article…

Over the past five decades, each time commercial and industrial loan balances at US banks shrank or stalled as companies cut back or as banks tightened their lending standards in reaction to the economy they found themselves in, a recession was either already in progress or would start soon. There has been no exception since the 1960s. Last time this happened was during the Financial Crisis.

 

Now it’s happening again – with a 1990/91 recession twist.

 

Commercial and industrial loans outstanding fell to $2.095 trillion on May 10, according to the Fed’s Board of Governors weekly report on Friday. That’s down 4.5% from the peak on November 16, 2016. It’s below the level of outstanding C&I loans on October 19. And it marks the 30th week in a row of no growth in C&I loans.

Perhaps we will be very fortunate and break this pattern that has held up all the way back to the 1960s.

But I wouldn’t count on it.  Here is what Zero Hedge has to say about this alarming contraction in commercial and industrial loans…

Here’s the bottom line: unless there is a sharp rebound in loan growth in the next 3-6 months – whether due to greater demand or easier supply – this most accurate of leading economic indicators guarantees that a recession is now inevitable.

We are way overdue for a recession, the hard economic numbers are screaming that one is coming, and the financial markets are absolutely primed for a major crash.

As Americans, we tend to have such short memories.  Every time a new financial bubble starts forming, a lot of people out there start behaving as if it can last indefinitely.

But of course no financial bubble is going to last forever.  They all burst eventually, and now the biggest one in U.S. history is about to end in spectacular fashion.

Trump will get a lot of the blame since he is the current occupant of the White House, but the truth is that the conditions for the next crisis have been building up for many years, and the horrors that the U.S. economy is heading for were entirely predictable.

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Seth Rich Plot Thickens: “DC Insider” Speaks Of “Complete Panic” At Highest Levels Of DNC

Last week, Fox News dropped a bombshell report officially confirming, via anonymous FBI sources, what many had suspected for quite some time, that murdered DNC staffer Seth Rich was the WikiLeaks source for leaks which proved that the DNC was intentionally undermining the campaign of Bernie Sanders. In addition to exposing the utter corruption of the DNC, the leaks cost Debbie Wasserman Shcultz her job as Chairwoman.

Of course, if it’s true that WikiLeaks’ emails came from a DNC insider it would destroy the “Russian hacking” narrative that has been perpetuated by Democrats and the mainstream media for the past several months.  Moreover, it would corroborate the one confirmation that Julian Assange has offered regarding his source, namely that it was “not a state actor.”

Meanwhile, the plot thickened a little more over the weekend when Kim Dotcom confirmed via Twitter that he was working with Seth Rich to get leaked emails to WikiLeaks.

 

Which was followed up by the following posts on 4Chan’s /pol/ subgroup that high-ranking current and former Democratic Party officials are terrified of the Seth Rich murder investigation.

“Anons, I work in D.C.

 

I know for certain that the Seth Rich case has scared the shit out of certain high ranking current and former Democratic Party officials.

 

This is the reason why they have backed away from impeachment talk. They know the smoking gun is out there, and they’re terrified you will find it, because when you do it will bring the entire DNC, along with a couple of very big name politicians.

 

It appears that certain DNC thugs were not thorough enough when it came time to cover their tracks. Podesta saying he wanted to “make an example of the leaker” is a huge smoking gun.”

The post went on to claim that a “smoking gun in this case is out of the hands of the conspirators” which has resulted in near “open panic” in DC circles.

“The behavior is near open panic. To even mention this name in D.C. Circles [sic] will bring you under automatic scrutiny. To even admit that you have knowledge of this story puts you in immediate danger.

 

If there was no smoke there would be no fire. I have never, in my 20 years of working in D.C. Seen [sic] such a panicked reaction from anyone.

 

I have strong reason to believe that the smoking gun in this case is out o [sic] the hands of the conspirators, and will be discovered by anon. I know for certain that Podesta is deeply concerned. He’s been receiving anonymous calls and emails from people saying they know the truth. Same with Hillary.”

And here is the original tweet:

 

Meanwhile, Kim Dotcom has promised more information will be released on his interaction with Seth Rich by tomorrow.

 

This raises several questions.  First, if Kim Dotcom knew that Seth Rich was, in fact, the WikiLeaks source, why is he just now coming forward with such information?  Second, while Seth Rich may explain the DNC leaks we still don’t know who is responsible for the “Podesta Files” which we’re certain will continue to be attributed to “Russian hackers.”

Which leads to the most improtant queistion of all: is this all just another fake news diversion, or is there more to the Seth Rich murder?

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Michael Flynn To Plead The Fifth, Will Decline Senate Subpoena

Confirming last week’s report that Michael Flynn will not comply with requests to testify before the Senate Intel Committee, moments ago AP reported that Flynn has indeed declined the subpoena and plans to officially invoke the Fifth Amendment sometime on Monday.

Furthermore, according to Dow Jones, Flynn is refusing to turn over documents that were subpoenaed by the Senate Intel Committee.

Flynn previously offered to testify before the Senate and House Intelligence committees in exchange for immunity, but neither committee accepted the offer.

Last week, Senate Intelligence Committee Chairman Richard Burr said that Flynn was “not cooperating” so far with the committee’s investigation, but that he hadn’t received a “definitive” answer on whether Flynn would testify.

As a reminder, also last week CNN reported that the FBI had first issued subpoenas relating to Flynn’s business records, so the ousted National Security Adviser is now at at the center of both investigations and at least for the time being, he is refusing to comply with the Congressional probe. And while pleading the Fifth is a popular legal tactic, especially for those who do not have apriori immunity from prosecution such as virtually the entire Clinton campaign in their FBI testimonies, it is largely an admission of guilt in the court of public opinion and will prompt a new round of question over just what Flynn is hiding.

Developing

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Bannon, Priebus Return To Washington As Trump Trip Continues

For Trump’s two main White House policy advisors (aside from Goldman Sachs, of course) chief of staff Reince Priebus and chief strategist Stephen Bannon, the confusion over the “orb” event may have been too great.

That, or perhaps there was another fallout between Trump and his two key advisors.

Whatever the reason, according to CNN, both Priebus and Bannon returned to Washington after just the first leg of Trump’s global tour, when the President concluded his visit to Saudi Arabia on Sunday.

“He was planning to come for the first stop and then head back for the budget roll out,” White House spokeswoman Sarah Huckabee Sanders said about the return. To avoid the perception of another breakdown in relations between Trump and the two men, White House officials told CNN that Bannon’s departure was also planned. A Trump adviser said Priebus wanted time to get ready for Trump’s return to the U.S.

To be sure, there is a lot of work to be done ahead of Trump’s return next weekend: the president is facing a series of growing controversies at home including the possible hiring of outside legal counsel in the Russia probe, the selection of a new FBI director, and the effort to pivot back to the President’s domestic agenda.

Furthermore, in the run-up to the trip, analysts noted it would be odd for the chief of staff to spend so many days traveling with the President. “I will say, I think it’s unusual for the chief of staff to go on a trip, particularly on a trip this long,” said Tamara Wittes, senior fellow at the Brookings Center for Middle East Policy, quoted by CNN.

“The chief of staff is usually more of a chief operating officer in the White House itself, and normally when your principal — whether it’s the president himself or the head of Cabinet agency — goes abroad, you have his deputy and those folks staying behind to help manage operations in his absence, and also to be that communications link between that principal who’s on the plane and the folks back home.”

To make a favorable impression on the Saudi king, Trump brought most of his advisers along on the trip, including Ivanka, Jared Kushner and his spokespeople. Only Mike Pence remained in the US, as did Trump counselor Kellyanne Conway.

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Key Events In The Coming Week: FOMC Minutes, GDP, BOC, OPEC And More

The key highlights in the coming week are the Fed minutes, the Eurogroup meeting on Greece, the OPEC meeting and Bank of Canada rate decision. We also get GDP releases in the US, Eurozone, and UK, while a murder (or gaggle) of Fed speaker will highlight virtually every single day, starting with 4 today. Also there will be monetary policy meetings in Colombia, South Africa, Korea, Hungary, Thailand and Ukraine. Ratings in Kuwait&Qatar

In the US, key economic releases this week are the durable goods report and Q1 GDP revision on Friday. The minutes of the May FOMC statement will be released on Wednesday at 2PM. In addition, there are several scheduled speaking engagements by Fed officials this week

Detailed event breakdown:

  • Looking for dovish signs in the Fed minutes? The minutes on the May statement will be closely watched as the market tries to assess the potential of a communication tweak. The last statement dismissed the impact of weak 1Q GDP and March consumer inflation. With recent data being on the weak side, a dovish sign in the minutes may put emphasis on downside risks.
  • Also watch for Eurogroup meeting on Greece and OPEC: A Eurogroup meeting is scheduled for 22 May. All eyes will be on the outcome because of Greece. Markets are optimistic that a compromise can be reached on Greece – we remain sceptical. Red lines around debt relief and IMF participation are the same and there is potential for complications in the run-up to the summer redemptions.
  • Our commodity strategists cover the likely outcome at next week’s OPEC meeting. We think that Saudi, Russia, and most OPEC members will try sending the oil price forward curve in backwardation/ensuring no further drops in spot oil prices. Staying the course with ongoing cuts remains the most likely course of action as OPEC meets.
  • The week ahead in Emerging Markets: here are monetary policy meetings in Colombia, South Africa, Korea, Hungary, Thailand and Ukraine. We forecast Colombia’s BANREP to cut 25bp and Ukraine’s NBU to cut 50bp. Sovereign ratings reviews in Kuwait and Qatar.

In other data

  • In the US, we mainly await 1Q GDP (2nd release), home sales, durables & capital goods orders and FOMC Meeting Minutes. We also hear from a number of FED speakers.
  • In the Eurozone, we wait for PMIs and GDP prints along with German IFO.
  • In UK, the main release is 1Q GDP on Thursday.
  • In Japan, Manufacturing PMI, trade balance and CPI are the main releases. BOJ’s Kuroda speaks in Tokyo.
  • In Canada, focus is on the Bank of Canada Rate Decision.
  • In Australia, main releases include skilled vacancies and construction.
  • In Scandies, we get unemployment data for both and PPI in Sweden. Norges Bank Governor Olsen speaks.
  • In Switzerland, sight deposits are the only release of consequence.

Visually:

And here is a detailed breakdown of just the US events, together with estimates, courtesy of Goldman:

Monday, May 22

  • 10:00am Philadelphia Fed President Harker (FOMC voter) speaks: Philadelphia Fed President Patrick Harker will deliver the commencement speech at Thomas Jefferson College on the topic of physical and economic wellbeing.
  • 10:30am Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will deliver welcoming remarks at the Opportunity and Inclusive Growth Conference in Minneapolis.
  • 7:30 pm Fed Governor Brainard (FOMC voter) speaks: Fed Governor Lael Brainard will speak at the Opportunity and Inclusive Growth Conference in Minneapolis on the topic of “Opportunity and Inclusion in Strengthening the US Economy.” Speech text and audience Q&A is expected.
  • 09:10 pm Chicago Fed President Evans Speaks (FOMC voter) speaks: Chicago Fed President Evans will speak at a private symposium in Shanghai. Speech text is expected.

 Tuesday, May 23

  • 9:00am Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will hold a media Q&A session.

    09:45 AM Markit Flash US manufacturing PMI, May preliminary (consensus 53.1, last 52.8); 09:45 AM Markit Flash US services PMI, May preliminary (consensus 53.3, last 53.1)

  • 10:00 AM New home sales, April (GS -3.5%, consensus -1.8%, last +5.8%): We estimate new home sales fell 3.5% in April, retracing some of its 5.8% March increase, as we believe the combination of constrained inventories and the decline in single-family permits are suggestive of a pullback, despite a favorable fundamental backdrop. Additionally, note that March new homes sales showed minimal impact of Winter Storm Stella.
  • 10:00 AM Richmond Fed manufacturing index, May (consensus +15, last +20)
  • 3:00 pm Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will speak on the topic of “Homeownership in Indian Country” at a roundtable event.
  • 5:00 pm Philadelphia Fed President Harker (FOMC voter) speaks: Philadelphia Fed President Patrick Harker will speak on the economic outlook at the Harvard Club of New York.

* * *

Wednesday, May 24

  • 09:00 AM FHFA house price index, March (consensus +0.5%, last +0.8%): Consensus expects the FHFA house price index to rise 0.5% (mom sa) in March on top of a 0.8% gain in February. The FHFA house price index has a wider geographic coverage than the S&P/Case-Shiller home price index, but is based only on properties financed with conforming mortgages. On a year-over-year basis, FHFA home prices rose 6.4% in February.
  • 10:00 AM Existing home sales, April (GS -2.5%, consensus -1.1%, last +4.4%): We look for a 2.5% drop in April existing homes sales, following last month’s 4.4% gain. Regional housing data released so far suggest a moderate retrenchment in closed homes sales, somewhat sharper than the 0.8% drop in March pending homes sales (which represent contract signings). Existing home sales are an input into the brokers’ commissions component of residential investment in the GDP report.
  • 02:00 PM FOMC Minutes from the May 2-3 meeting: The May FOMC meeting did not contain any significant surprises. The FOMC’s post-meeting statement acknowledged, but downplayed weak GDP growth in Q1, noting that it expects the slowdown to be “transitory,” and made no changes to the discussion of balance sheet policy. We will look for further discussion of the soft March inflation data in the minutes. The minutes should also provide more detail on the balance sheet outlook from a timing and operational perspective. We expect little change in the discussion of the funds rate outlook, however, based on Fed speeches since the meeting.
  • 6:00 pm Dallas Fed President Kaplan (FOMC voter) speaks: Dallas Fed President Robert Kaplan will speak at the C.D. Howe Institute Annual Directors’ Dinner. in Toronto.
  • 6:30 pm Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will speak at a town hall in Ashland, Wisconsin sponsored by the Chamber of Commerce.

* * *

Thursday, May 25

  • 08:30 AM U.S. Census Bureau Advance Economic Indicators Report: Advance goods trade balance, April preliminary (GS -$64.9bn, consensus -$64.7bn, last -$64.2bn); We estimate the goods trade deficit widened $0.7bn to $64.9bn in April. While imported container volumes appeared to slow, export port traffic fell more dramatically, suggestive of renewed deterioration in the trade balance. We expect minimal impact of oil prices on the nominal petroleum deficit this month.
  • 08:30 AM Wholesale inventories, April preliminary (consensus +0.2%, last +0.2%); 8:30 AM Initial jobless claims, week ended May 20 (GS 235k, consensus 238k, last 232k); ontinuing jobless claims, week ended May 13 (consensus 1,925k, last 1,898k): We estimate initial jobless claims rebounded 2k to 235k in the week ended May 20. Claims in California appeared somewhat depressed in the prior week, and we expect a rebound in that state. Continuing claims – the number of persons receiving benefits through standard programs – have trended down further in recent weeks, suggestive of additional labor market improvement that we expect to continue.

    10:00am Fed Governor Brainard (FOMC voter) speaks: Fed Governor Lael Brainard will speak at Center for Global Development in Washington, D.C on the topic of “Global Economic Issues.” Audience Q&A is expected.

  • 11:00 AM Kansas City Fed manufacturing index, May (consensus +9, last +7)

* * *

Friday, May 26

  • 08:30 AM GDP (second), Q1 (GS +1.1%, consensus +0.9%, last +0.7%): Personal consumption, Q1 (GS +0.7%, consensus +0.4%, last +0.3%)
  • We expect a four-tenths upward revision in the second vintage of Q1 GDP report (to +1.1% qoq saar), driven by a faster pace of growth in consumption, business equipment investment, and housing investment. We look for real personal consumption to be revised up 0.4pp to +0.7%. Our forecast reflects revisions to monthly source data released since the advance GDP report, as well as the net strength in consumer spending categories of the Q1 Quarterly Services Survey (released on Friday).
  • 08:30 AM Durable goods orders, April preliminary (GS flat, consensus -1.5%, last +0.9%) : Durable goods orders ex-transportation, April preliminary (GS +0.7%, consensus +0.4%, last flat)
  • Core capital goods orders, April preliminary (GS +0.5%, consensus +0.5%, last +0.5%); Core capital goods shipments, April preliminary (GS +0.4%, consensus n.a., last +0.5%): We estimate durable goods orders were unchanged in April, as lower non-defense aircraft orders indicated by company-reported data were likely offset by continued firming in manufacturing demand more generally. Manufacturing production was strong in April, highlighted by a 1.2% increase in the capex-sensitive business equipment category. Furthermore, capital goods company results and commentary have been encouraging, with mounting evidence of accelerating growth in the industrial economy. Accordingly, we estimate solid core capex shipments and orders growth of +0.4% and +0.5%, respectively. We estimate durable goods orders ex-transportation rose 0.7%.
  • 10:00 AM University of Michigan consumer sentiment, May final (GS 97.0, consensus 97.5, last 97.7): We expect the University of Michigan consumer sentiment index to pull back 0.7pt to 97.0 in the May final estimate, reflecting the decline in the stock market and recent developments in Washington, D.C.. The preliminary report’s measure of 5- to 10-year ahead inflation expectations edged down to 2.3%, despite the early-month rebound in gas prices (which has since reversed). 10:00pm St. Louis Fed President Bullard (FOMC non-voter) speaks St. Louis Fed President James Bullard will speak at Keio University in Tokyo Japan on topic of the economy and monetary policy.

Source: GofA, Goldman

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The “Smart Money” Is Sensing a BREXIT-Type Event.

The “smart money” is flashing a signal that the US economy and ultimately the financial system, are in serious trouble.

CNBC and other media outlets like to focus on stocks because they tend to be more volatile and therefore more exciting. But BONDS are the “smart money” for the financial system.

The Bond market is larger, more liquid and involves more sophisticated investors than stocks. As such it usually picks up on major issues much earlier.

On that note, the Bond market yield curve is flattening rapidly. It has already broken through the election night lows and is now approaching the BREXIT lows.

What does this mean?

That the “smart money” is more nervous today, than it has been since the UK LEFT THE EU.

If you don’t remember what happened in the week that followed BREXIT, many EU banks were limit down losing 15%-20% in a matter of days.

The bond market is sensing that kind of issue right now.

Some VERY smart people, who manage VERY LARGE amounts of money, are positioning for an “event” like BREXIT… and stocks are completely clueless.

We offer a FREE investment report outlining when the bubble will burst as well as what investments will pay out massive returns to investors when this happens. It's called The Biggest Bubble of All Time (and three investment strategies to profit from it).

We made 1,000 copies to the general public.

As I write this there are just 27 are left.

To pick up your FREE copy…

CLICK HERE!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

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Russian Hackers Infected 1 Million Bank Customer Smartphones

For all the accusations that Russian hacking only focuses outside the country – most notably to allegedly impact the outcome of democratic elections by exposing politicians’ dirty laundry – a Reuters report overnight revealed that Russian cyber criminals were just as eager to focus on their fellow countymen, using malware planted on Android mobile devices to steal from domestic bank customers and were planning to target European lenders before their arrest. The enterprising hackers targeted customers of state lender Sberbank, and also stole money from accounts at Alfa Bank and online payments company Qiwi, exploiting weaknesses in the companies’ SMS text message transfer services.

Russia’s Interior Ministry said a number of people had been arrested, including the alleged gang leader. This was a 30-year-old man living in Ivanovo, an industrial city 300 km (185 miles) northeast of Moscow, from where he had commanded a team of 20 people across six different regions. Four people remain in detention while the others are under house arrest, the ministry said in a statement.

“In the course of 20 searches across six regions, police seized computers, hundreds of bank cards and SIM cards registered under fake names,” it said.

The gang got their malware on to victims’ devices by setting up applications designed to mimic banks’ genuine apps. When users searched online, the results would suggest the fake app, which they would then download. The hackers also inserted malware into fake mobile apps for well-known pornography sites. After infecting a customer’s phone, the hackers were able to send a text message to the bank initiating a transfer of up to $120 to one of 6,000 bank accounts set up to receive the fraudulent payments.

While the hacking campaign raised a modest sum by cyber-crime standards, just over 50 million roubles ($892,000), the hacking group also obtained more sophisticated malicious software for a modest monthly fee to go after the clients of banks in France and possibly a range of other western nations.

According to Reuters, members of the cyber-gang tricked Russian banks’ customers into downloading malware via fake mobile banking applications, as well as via pornography and e-commerce programs, according to a report compiled by cyber security firm Group-IB which investigated the attack with the Russian Interior Ministry. The criminals, 16 suspects were arrested by Russian law enforcement authorities in November last year, infected more than a million smartphones in Russia, on average compromising 3,500 devices a day, Group-IB said.

* * *

Russia was just the beginning: despite having operated only in Russia before their arrest, the hackers had developed plans to target large European banks including French lenders Credit Agricole, BNP Paribas and Societe General, Group-IB said. A BNP Paribas spokeswoman said the bank could not confirm this information, but added that it “has a significant set of measures in place aimed at fighting cyber attacks on a daily basis”. Societe General and Credit Agricole declined comment.

The gang, which was called “Cron” after the malware it used, did not steal any funds from customers of the three French banks. However, it exploited the bank service in Russia that allows users to transfer small sums to other accounts by sending an SMS message. Having infected the users’ phones, the gang sent SMS messages from those devices instructing the banks to transfer money to the hackers’ own accounts.

The findings illustrate the dangers of using SMS messages for mobile banking, a method favored in emerging countries with less advanced internet infrastructure, said Lukas Stefanko, a malware researcher at cyber security firm ESET in Slovakia.

 

“It’s becoming popular among developing nations or in the countryside where access to conventional banking is difficult for people,” he said. “For them it is quick, easy and they don’t need to visit a bank… But security always has to outweigh consumer convenience.”

The success of the Cron gang was facilitated by the popularity of SMS-banking services in Russia, said Dmitry Volkov, head of investigations at Group-IB. “Cron’s success was due to two main factors,” Volkov said. “First, the large-scale use of partner programs to distribute the malware in different ways. Second, the automation of many (mobile) functions which allowed them to carry out the thefts without direct involvement.”

The cyber security group said that the existence of the Cron malware was first detected in mid-2015, and by the time of the arrests the hackers had been using it for under a year. The core members of the group were detained on Nov. 22 last year in Ivanovo. Photographs of the operation released by Group-IB showed one suspect face down in the snow as police in ski masks handcuffed him. The “Cron” hackers were arrested before they could mount attacks outside Russia, but plans to do that were at an advanced stage, said the investigators.

Group-IB said that in June 2016 they had rented a piece of malware designed to attack mobile banking systems, called “Tiny.z” for $2,000 a month. The creators of the “Tiny.z” malware had adapted it to attack banks in Britain, Germany, France, the United States and Turkey, among other countries.

 

The “Cron” gang developed software designed to attack lenders including the three French groups, it said, adding it had notified these and other European banks at risk. A spokeswoman for Sberbank said she had no information about the group involved. However, she said: “Several groups of cyber criminals are working against Sberbank. The number of groups and the methods they use to attack us change constantly.” “It isn’t clear which specific group is being referred to here because the fraudulent scheme involving Android OS (operating system) viruses is widespread in Russia and Sberbank has effectively combated it for an extensive period of time.”

Why the public crackdown? Reuters speculates that the Russian authorities, bombarded with allegations of state-sponsored hacking, are keen to show Russia too is a frequent victim of cyber crime and that they are working hard to combat it. The interior and emergencies ministries, as well as Sberbank, said they were targeted in a global cyberattack earlier this month. Still, we very much doubt that this mass arrest of hackers will do anything to dent the media’s favorite hacking narrative, the one in which the Kremlin “hacked” and convinced several hundred thousand middle class Americans to vote for Trump instead of Hillary.

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Dollar Demise Continues To Escalate – Trump-Bump Dumped

It's official, the post-Trump-election gains in the dollar have now been 100% erased as the broad dollar index drops for the 8th day in the last 9 (down 2.4% in that period), to its lowest level since November 6th 2016 – before Trump was elected…

 

So now we assume the narrative flips from "strong dollar" means "strong economy" to "weak dollar" is "great for multinationals" – either way – you buy stocks stupid.

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Bitcoin Blows Through $2100

Bitcoin is now up over 135% year-to-date, having screamed above $2000 and $2100 overnight as the dollar limped to 6-month lows…

Having shrugged off China crackdowns and worries over ‘hard forks’, it appears the legalization of the virtual currency in Japan (with Peach Aviation now accepting bitcoin for flight ticket purchases) and broader adoption in Russia have fueled demand in recent weeks…

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TINA’s Legacy: Free Money, Bread & Circuses, And Collapse

Authored by Charles Hugh-Smith via OfTwoMinds blog,

TINA's legacy is revealed in this chart of the Venezuelan Bolivar, which has plummeted from 10 to the US dollar to 5,800 to the USD in a few years of rampant money-emission.

Every conventional "solution" to the systemic ills of our economy and society boils down to some version of free money: Universal Basic Income (UBI) schemes– free money for everyone, funded by borrowing from future taxpayers (robots, people, Martians, any fantasy will do); debt jubilees funded by central banks creating trillions out of thin air, a.k.a. free money, and so on.

Free money is compelling because, well, it's free, and it solves all the problems created by burdensome debt and declining incomes for the bottom 95%. Just give every household $100,000 of free money that must be devoted to reducing interest, then give every household $20,000 annually for being among the living, and hey, a lot of problems go away.

But is creating money out of thin air really truly free? There are two appealing answers: yes and yes. If the Treasury literally prints money, it's almost "free," and if the Federal Reserve creates money and buys bonds paying near-zero yields, the money that is borrowed into existence is almost free because the interest due is so minimal.

The problem, of course, is that creating free money is not quite the same as creating new wealth. New wealth is a new gas/oil field that comes online, new cropland that produces a new source of food, new goods and services, etc.

In effect, every dollar of free money reduces the purchasing power of all existing units of currency unless the expansion of output (additional goods and services) matches or exceeds the added dollar.

This line of thinking is driven by two realities: governments have issued many promises to their citizens, employees, corporations, etc. These include pensions, medical care, backstops against losses, tax breaks, subsidies, and on and on in an endless profusion.

In order to fund these promises, governments must borrow immense sums of money that will never be paid back. The only way governments can afford to borrow immense sums that pile up oh-so quickly is if interest rates are kept near-zero for all eternity (or until the current generation of politicians retires, or the currency follows Venezuela's currency to near-zero, whichever comes first).

As long as interest rates are kept near-zero, even $20 trillion in debt is manageable. Never mind if debt triples every few years–it's affordable if interest rates are near-zero.

Everybody can borrow more at near-zero rates: governments, banks, consumers–it's the cure-all to every debt burden. The problem is rates can never rise, lest the house of cards collapses.

$20 trillion at 5% interest requires an annual interest payment of $1 trillion–one-third of all federal revenue. $30 trillion at 10% interest would consume 100% of all federal tax revenues, leaving nothing for all the programs, obligations and promises of the central state.

Allow me to introduce TINA–there is no alternative to low rates forever and emitting of immense sums of new currency (not new wealth or productive output–just new currency) to fund various modern-day versions of bread and circuses for everyone.

TINA's legacy is revealed in this chart of the Venezuelan Bolivar, which has plummeted from 10 to the US dollar to 5,800 to the USD in a few years of rampant money-emission. Free money is certainly compelling, at least to those desperate to cling to power, but sadly, newly emitted currency is never actually free.

At the height of its giveaways of free bread and endless distractions of public entertainment, Rome's population is estimated to have been close to 1 million.

After the collapse of bread and circuses, the population of Rome eventually fell to roughly 25,000. But no worries–this time it's different. We'll get away with it because we buy our own debt, technology is deflationary, and so on. Simply put: the free bread and circuses will never end because we're so powerful and nothing is outside our control.

via http://ift.tt/2qGOj5N Tyler Durden