news – Page 26366

This Is Not The European Recovery You Were Looking For

As US and European stocks glide effortlessly higher, even the most ardent of US bulls has begun to realize things are getting out of hand. In order to keep his AUM flowing (and afford the next yacht), the friendly local asset gatherer will offer insights like… “there is value overseas” or “Europe is cheap” in hopes that his audience is none the wise as to the true state of affairs elsewhere in the world, let alone in the US. The truth, the gap between US and European earnings has never been wider and with 3 (or 4) false dawns already, European earnings (supposedly the true mother’s milk of the stock market) continue to fall – as the strong ‘whatever-it-takes’ EUR does nothing but stymie their recovery.

S&P 500 earnings are 14% above their 2007 peak while euro-area profits are 53% below their all-time high in March 2008 (of course, this is not firm EBITDA but earnings per share – which is a mirage of low-credit-cost buyback-driven float shrink in some nations of the world… but still)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rDGRm3YLSY0/story01.htm Tyler Durden

Gold and Silver Sentiments Violently Diverged in 2013

by Keith Weiner

There are two reasons why people buy gold and silver. The first is that they’re the monetary metals. Many people don’t want more than a certain exposure to the risks of the banking system. They hold dollars for liquidity and beyond that exchange them for metallic money. This money is not for trading.

The second is to trade or, more specifically, to speculate. They buy with the expectation of a rising price. The gold price, measured in dollars, is really just the inverse of the dollar price measured in gold. As the Fed abuses its credit, the quality of its liability falls. This liability—the dollar—has been falling in quality and price for 100 years. Measured in gold, the dollar is now just under 26mg. Or, measured in silver, it’s around 1.6 grams. Most people look at the inverse, the dollar prices of the metals, currently around $1200 and $19.50.

It makes for a great speculation, that the dollar will continue to fall. At least, it did until 2011. The gold price peaked in 2011 at $1900, and has since dropped 37%. The silver price dropped 60%.

One speculation strategy is to buy when something is going up. Today, there is clearly no upward momentum in gold and silver. The other approach is to try to buy when there’s blood in the streets, as the old trader’s saying goes. OK, but is there blood in the gold and silver streets?

I write the Monetary Metals Supply and Demand Report, a free weekly letter that provides data and analysis of the constantly changing fundamentals of the gold and silver markets. The data shows that gold is significantly scarcer to the market than silver; gold has a small backwardation and silver does not.

For months, I have discussed my hunch that there just has not been the final capitulation in silver as in gold. I have seen the comments on my own and other articles, and in other online forums.

I couldn’t prove it, but it kept nagging at me. Then I put together this graph of inventory held in the two big Exchange Traded Funds: GLD and SLV.

Tonnes of Metal Held by the ETFs, Jan 2009 through Dec 2013
GLD and SLV tonnes of metal

The picture in gold is what you’d expect. Gold metal begins to move out of the GLD inventories around the start of this year, and it has been almost a straight move down. There is no sign yet of a bottom. Gold inventory is down 40% from its peak one year ago.

Silver violently diverged. As one might expect, silver held by SLV peaked on April 25, 2011, the day the price peaked. Metal began moving out of the ETF the next day. The level quickly dropped by 14%, but then stopped falling. Then, at the end of 2012, inventory began to rise. Though the silver price is down 60%, silver holdings are down only 9%.

The reason for metal to flow in or out of an ETF is counterintuitive. It has nothing to do with price moves. The flow of metal depends entirely on the spread between the prices of the ETF and the metal itself. Arbitrageurs buy metal and sell new shares, whenever the share price is above the metal price. They sell metal and buy back shares when the share price is lower.

The graph shows a one-way flow of gold out of GLD. This means that the price of GLD shares has consistently sagged below the price of gold. This corresponds to negative sentiment regarding this metal. By contrast, more metal has flowing into SLV than out.

In general, I caution against just this sort of analysis. It is easy to focus on a highly visible corner of the market and ignore numerous low-profile corners. Both gold and silver have vast inventories; there is no such thing as a
shortage or a glut. Metal can move from one corner to the other without necessarily impacting price or anything else.

But in this case, the reason to study this chart is to understand sentiment among speculators. I suggest that sentiment in silver has not made its nadir, and that silver speculators yet cling to hope against hope that its price will shoot to the moon.

The irony is that my statement is controversial and contra the accepted wisdom in the silver community. If speculators had turned truly pessimistic about silver, then my statement would be uncontroversial, but advising people to buy silver would spark controversy.

One can never be certain about sentiment changes, but it’s a strong possibility that silver speculator pessimism rises to match that in gold. If this happens, the silver price could drop several more dollars. This is a time to be cautious with silver, though I never advise naked shorting a monetary metal.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/e_r849xUEEk/story01.htm Monetary Metals

Utah Gets Ready To Do Without the Feds

Federal land fault line Sometimes, I suspect that a
century from now, representatives of the government of the rump
remains of the United States of America will go to Salt Lake City
to beg the Republic of Deseret for kinder terms on a loan to fund
the continuing U.S. war on anything innovative or profitable. The
American representatives will have to order chips and salsa before
they’ll be served the 3.2 beer in which they’ll drown their sorrows
over the progress of the negotiations. Their hosts will drive a
hard bargain, still nursing resentment over long-gone dominance by
D.C. Utah is already establishing the grounds for that future
meeting. Like most westerners, Utahns are
pissed about
federal control of land and purse strings. Unlike most, though,
they seem serious about reshaping that relationship.

In 2012, Utah passed the
Transfer of Public Lands Act, essentially demanding that the
federal government surrender the two-thirds of the state controlled
by Washington, D.C.
Other western states are considering
similar measures, but Utah paved the way.

But Utah is preparing to go a step further and plans for a
future that isn’t funded by federal largesse. The state passed a
series of bills as part of a Financial Ready Utah movement. The
problem, as the group backing the move
explains, is that “More than 40 cents of every dollar the state
of Utah spends comes from the federal government that borrows
and/orprints more than 40 cents of every dollar it sends to Utah.”
Since “The current fiscal trajectory of the federal government is
unsustainable,” (a point agreed to by the
Congressional Budget Office), Utahns foresee a day when
whatever they want done will have to be paid by local funds.

Recently, Reason Foundation Director of Government Reform
Leonard Gilroy interviewed
Utah State Representative Ken Ivory, who plays a key role in
increasing his state’s autonomy. Ivory links his role in taking
local control of public land in the state to the state’s need for
increased financial self-reliance. Said Ivory:

In the 2011 session—when we realized that over $5 billion of our
state revenue comes from a federal government that’s broke—that’s
when we started to flesh out how serious those numbers were.
Something on the order of 40% of our state revenue comes from an
unsustainable source in our federal governing partner. We looked at
the magnitude of this risk and started to think about how we could
broaden our revenue base and get to a point of economic
self-reliance.

You’re not going to close a revenue gap in the billions of
dollars by tweaking the tax code with minor adjustments; you’d have
to more than double the income tax and kill the economy. You’d have
to increase corporate taxes by more than 1000%, again, killing the
economy in an attempt to close that gap. On top of the general
fiscal gap, in Utah we are $2.6 billion below average in annual
per-pupil funding. There’s no amount of nipping, tucking and
tweaking in the tax code that even closes decimals on that gap. The
magnitude is tremendous.

Yet, what we know from the U.S. Government Accountability Office
is that there’s more recoverable oil in Utah, Colorado and Wyoming
than the rest of the world combined. There’s a study from earlier
this year by the Institute for Energy Research that there’s $150
trillion in mineral value locked up in the federally controlled
lands throughout the West. Right now the forests—which were a
renewable resource, with the revenue funding schools, roads and
public safety—have been shut down to timber harvesting, and now
they’re basically tinder boxes. We’ve got so much dead wood
standing in the forests that, in fact, the FBI is even warning our
state foresters that terrorists are encouraging wildfires as a form
of jihad. The forests are so dense now that the trees can’t defend
themselves and fend off natural diseases and pests, so forests
throughout the West are largely dead or dying just waiting for any
spark to ignite the next catastrophic wildfire.

So we looked at these conditions. And as you pointed out, more
than 50% of all land in the western United States is owned and
controlled by the federal government. This is in a nation that was
founded on the principles of inherent, inalienable rights to life,
liberty and property. World-renowned economist John Kenneth
Galbraith made a statement in the mid-1980s that “where the
socialized ownership of land is concerned, only the U.S.S.R. and
China can claim company with the United States.”

Ivory says the enabling acts authorizing statehood for western
states, including Utah,
contain the same language about transfer of public lands from
the federal government to state authorities as the enabling acts
for states such as Nebraska. But the transfers took place for
Nebraska and other states, and not for their counterparts further
west. That’s the lynchpin for the drive to take control of lands
that are now claimed by the federal government, and to gain the
financial benefits from them.

That’s not a universally accepted legal interpretation of the
enabling acts, but there’s no doubt that federal dominance
economically hobbles the western states. There’s also no doubt that
greater financial independence would allow for more policy
variation and experimentation at the state level—especially in a
region that is rather ideologically
distinct from the East. It would also help to insulate states
from the ongoing fiscal disaster in Washington, D.C.

Read the rest of the very interesting interview here.
And don’t miss Jesse
Walker’s take on how immigration from California has made Idaho
more conservative.

By the way, as much as I respect Utah’s foresight, I’m hoping
that Arizonans get to watch that future meeting in Salt Lake City
from the disinterested—in either party—sidelines.

from Hit & Run http://reason.com/blog/2013/12/26/utah-gets-ready-to-do-without-the-feds
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This Christmas, Edward Snowden Wants the World to Rediscover the Gift of Privacy

England’s Channel 4 offers up an alternative to the Queen’s
Christmas message every December. This year, the channel passed
along a message from National Security Agency whistleblower

Edward Snowden, recorded in Russia:

An important section for those who can’t watch the video:

“A child born today will grow up with no expectation of privacy
at all. They’ll never know what it means to have a private moment
to themselves – an unrecorded, unanalyzed thought. And that’s
important because privacy matters. Privacy is what allows us to
determine who we are and who we want to be. The conversation
occurring today will determine the amount of trust we can place
both in the technology that surrounds us and the government that
regulates it. Together we can find a better balance, end mass
surveillance, and remind the government that if it really wants to
know how we feel, asking is always cheaper than spying.”

A couple of thoughts come to mind listening to this:

There needs to be more work making a better case for privacy.
It’s excellent that a millennial like Snowden has become the face
of this fight, given that his generation has become famous for
sharing everything it does online. Don’t treat this as a criticism
of social media – in general, being able to share so much more of
our lives across great distances has made communicating so much
easier and effective. But Snowden’s statement about why privacy
matters lacks punch. It feels unfinished. How does government data
collection affect our ability to determine who we are and who we
want to be?
There is still little or no significant cultural push beyond
the strongest privacy and security advocates or activists for any
sort of consequences for this systemic, entrenched breach of the
public trust. The
chorus calling for consequences (either termination or
prosecution – or both) for Director of National Intelligence head
James Clapper for lying to Congress under oath about the extent of
the federal collection of Americans’ data is still small. The
National Security Agency still feels comfortable appearing on
60 Minutes to
mislead the public about what it is doing. And the media
obviously doesn’t feel enough public pressure yet to resist
allowing surveillance supporters from invoking terrorism threats an
9/11 as a
defense, despite the lack of evidence this data collection has
helped at all.

Will privacy become an election issue in 2014 or will Obamacare
overwhelm all arguments? Do we have to wait for the next
presidential election to really have this fight? (Or will there
even be an actual fight?)

from Hit & Run http://reason.com/blog/2013/12/26/this-christmas-edward-snowden-wants-the
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Christmas Eve? What a Perfect Time for a Vaguely Worded Obamacare Deadline Delay!

Here’s how the Obama administration celebrated
Christmas Eve: by issuing a vague, kinda-sorta extension of
Obamacare’s deadline to enroll in private coverage by January 1.

Via The New York Times:

The Obama administration said Tuesday that it would provide more
time for people to complete their applications for health insurance
if they could show that they missed the deadline because of
problems with the federal health care website.

And how, exactly, will that work? The New York Times
reports that…that is a good question:

It was not clear on Tuesday how many people would be affected,
or how consumers would prove that website errors had prevented them
from signing up by the deadline on Tuesday night.

The announcement itself was vague, saying only that if website
problems had prevented any consumers from enrolling, they might
qualify for what the government has called “a special enrollment
period.” The administration did not say how long that would last.
Nor did it define what website errors might be involved.

So, that’s helpful.

Remember that this is not the first time the administration has
delayed the deadline to sign up for coverage that begins on the
first day of 2014. The original date was December 15, which was
extended to December 23, which was then extended,
semi-unofficially, to December 24.

At this point, it’s all got to be pretty confusing for folks who
aren’t, say, spending Monday morning of Christmas week scanning for
the latest in unannounced changes to Obamacare’s sign-up deadlines,
or staying up late on Christmas Eve to find out what new, cloudy
exceptions the administration has in store for the next few
days.

from Hit & Run http://reason.com/blog/2013/12/26/christmas-eve-what-a-perfect-time-for-a
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Amazon Reveals Its Online Shopping Best Sellers

The Chinese population may be engulfed in a gold-buying spree to take advantage of low precious metal prices, but when it comes to sheer breadth of materialistic interests, they have nothing on the US consumer. And while previously we highlighted the products that filled online buyers’ shopping carts during Walmart’s record-breaking cyber Monday sales, they were, in a word, boring. So to get a sense of just how expansive the imagination of the US consumer is when armed with the trusty old credit card, and an internet connection, we go to Amazon which has just laid out it holiday best sellers. So without further ado, this is what Americans just couldn’t live without this shopping season.

Amazon.com holiday best sellers:

Tablets: Kindle Fire HD; Kindle Fire HDX 7”; Kindle Fire HDX 8.9”
TVs: Samsung 32” Smart LED HTDV; Samsung 40” LED HDTV; Samsung 22” Slim LED HDTV
Laptops: Samsung Chromebook; ASUS Transformer Book; Acer Chromebook
Cameras: Canon EOS Rebel T3i; Canon PowerShot A2500; Fujifilm Instax Mini 8 Instant Film Camera
Video Games: Call of Duty: Ghosts – Xbox 360; Just Dance 2014 – Nintendo Wii; Grand Theft Auto V – Xbox 360
Toys: Snap Circuits Jr. SC-100 Kit; Spot It; LEGO Green Building Plate
Baby: Baby Einstein Take Along Tunes; Lamaze Cloth Book; Baby Einstein Bendy Ball
Books: “Diary of a Wimpy Kid: Hard Luck, Book 8” by Jeff Kinney; “Things That Matter: Three Decades of Passions, Pastimes and Politics” by Charles Krauthammer; “Rush Revere and the Brave Pilgrims: Time-Travel Adventures with Exceptional Americans” by Rush Limbaugh
Kindle Books: “Sycamore Row” by John Grisham; “The Book Thief” by Markus Zusak; “The Goldfinch” by Donna Tartt
Music: “Artpop” by Lady Gaga; “Wrapped in Red” by Kelly Clarkson; “The Marshall Mathers LP2 (Deluxe)” by Eminem
Amazon MP3: “The Marshall Mathers LP2” by Eminem; “Artpop” by Lady Gaga; “Pure Heroine” by Lorde
Movies & TV: “Despicable Me 2” (Blu-ray + DVD + Digital Copy); “Star Trek Into Darkness” (Blu-ray + DVD + Digital Copy); “Man of Steel” (Blu-ray + DVD + Digital Copy)
Amazon Instant Video: “We’re the Millers”; “Man of Steel”; “Monsters University”
Prime Instant Video: “Alpha House” Season 1; “Downton Abbey” Season 3; “Falling Skies” Season 3
Home: Darice 80-Piece Deluxe Art Set; Black & Decker Dustbuster 15.6-Volt Cordless Cyclonic Hand Vacuum; Swarovski 2013 Annual Edition Crystal Star Ornament
Kitchen: Tovolo Ice Molds; Artisan Metal Works Silicone Non-Stick Baking Mat Sets; Cuisinart GR-4N 5-in-1 Griddle
Jewelry: Sterling Silver and Amethyst Flower Earrings; Sterling Silver “I Love You To The Moon and Back” Two Piece Pendant Necklace; Alex and Ani Bangle Bar “Tree of Life” Russian-Silver Expandable Bracelet
Women’s Clothing: Columbia Women’s Benton Springs Full-Zip Fleece Jacket; Carhartt Women’s Sandstone Duck Quilt Flannel Lined Active Jacket; Columbia Women’s Arcadia Rain Jacket
Men’s Clothing: Levi’s Men’s 501 Jean; Levi’s Men’s 505 Straight Fit Jean; Levi’s Men’s 550 Relaxed Fit Jean
Shoes: Clarks Originals Men’s Desert Boot; Tamarac Men’s Camper Moccasin; Bearpaw Women’s Emma 10″ Shearling Boot
Beauty: Infiniti Pro by Conair Curl Secret; D & G Light Blue By Dolce & Gabbana For Women Eau De Toilette Spray; Olay Pro-X Advanced Cleansing System
Health & Personal Care: Fitbit Flex Wireless Activity + Sleep Wristband; Philips Sonicare Essence 5600 Rechargeable Electric Toothbrush; Braun Series Pulsonic Shaver System
Tools & Home Improvement: Mini CREE Led Flashlight Torch Adjustable Zoom Light Lamp; O’Keeffe’s Working Hands Cream; WBM Himalayan Natural Crystal Salt Lamp with Bulb and Cord
Pets: KONG Cozie Marvin the Moose Dog Toy; Nylabone Durable Dental Dinosaur Chew Toy; Greenies Treat-Pak for Dogs, Original
Sports & Outdoors: LifeStraw Personal Water Filter; Magnesium Fire Starter; SKLZ Pro Mini Basketball Hoop
Grocery: Miracle-Gro AeroGarden 7-Pod Indoor Garden by AeroGrow; Donut Shop K-Cup for Keurig Brewers; Keurig My K-Cup Reusable Coffee Filter Set

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5IujgP6KPRs/story01.htm Tyler Durden

How Debtors’ Prisons are Making a Comeback in America

Apparently having 5% of the world’s population, but 25% of its prisoners simply isn’t good enough for neo-feudal America. No, we need to find more creative and archaic ways to wastefully, immorally and seemingly unconstitutionally incarcerate poor people. Welcome to the latest trend in the penal colony formerly known as America. Debtors’ prisons. A practice I thought had long since been deemed outdated (indeed it has been largely eradicated in the Western world with the exception of about 1/3 of U.S. states as well as Greece).

From Fox News:

As if out of a Charles Dickens novel, people struggling to pay overdue fines and fees associated with court costs for even the simplest traffic infractions are being thrown in jail across the United States.

Critics are calling the practice the new “debtors’ prison” — referring to the jails that flourished in the U.S. and Western Europe over 150 years ago. Before the time of bankruptcy laws and social safety nets, poor folks and ruined business owners were locked up until their debts were paid off.

Reforms eventually outlawed the practice. But groups like the Brennan Center for Justice and the American Civil Liberties Union say it’s been reborn in local courts which may not be aware it’s against the law to send indigent people to jail over unpaid fines and fees — or they just haven’t been called on it until now.

The Brennan Center for Justice at New York University’s School of Law released a “Tool Kit for Action” in 2012 that broke down the cost to municipalities to jail debtors in comparison with the amount of old debt it was collecting. It doesn’t look like a bargain. For example, according to the report, Mecklenburg County, N.C., collected $33,476 in debts in 2009, but spent $40,000 jailing 246 debtors — a loss of $6,524.

Don’t worry, I’m sure private prisons for debtors will soon spring up to make this practice a pillar of GDP growth.

Many jurisdictions have taken to hiring private collection/probation companies to go after debtors, giving them the authority to revoke probation and incarcerate if they can’t pay. Research into the practice has found that private companies impose their own additional surcharges. Some 15 private companies have emerged to run these services in the South, including the popular Judicial Correction Services (JCS).

from A Lightning War for Liberty http://libertyblitzkrieg.com/2013/12/26/how-debtors-prisons-are-making-a-comeback-in-america/
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Who Drinks The Most Alcohol?

Whether your tipple of choice is a warm dark ale or a clear cool liquor, the price of alcohol is soaring (but there is still no inflation anywhere remember – especially in Europe) and so is demand. From watered-down beer in the UK to rubbing-alcohol split scotch in New Jersey, stealth inflation is growing. So who is most responsible for this demand-pull (and cost-push) driven inflation in alcohol? Germany and Czech Republic (beer) and Russia (liquor) are topping the charts in per-capita demand and it seems the Italians, not content with spending less on gifts are also not drinking much…

Biggest European Beer drinkers…

Heaviest European Liquor consumers…

h/t @Amazing_Maps

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bU_o-YT59iM/story01.htm Tyler Durden

13 Reasons Marijuana Just Had The Best Year Ever

Move over Pope
Francis, because marijuana just had the Best. Year. Ever.

From popular support nationwide to the federal government’s
decision not to oppose Colorado and Washington state’s marijuana
laws, to Uruguay’s marijuana trade legalization, it has been a big
year for the little green plant.

Here are the top 13 reasons why 2013 was the best year ever for
weed:

Read this story at The Huffington Post.

from Hit & Run http://reason.com/blog/2013/12/26/13-reasons-marijuana-best-year-ever
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Jailing Photogs and Smokers, Outlawing Chipotle! Plus Halle Berry! (Nanny of the Year, 2013)

“Jailing Photogs and Smokers, Outlawing Chipotle! Plus Halle
Berry! (Nanny of the Year, 2013)” is the latest video from
ReasonTV. Watch above or click on the link below for video, full
text, supporting links, downloadable versions, and more Reason TV
clips.

View this article.

from Hit & Run http://reason.com/blog/2013/12/26/jailing-photogs-and-smokers-outlawing-c
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