How Facebook & Google Threaten Public Health… And Democracy

Authored by Roger McNamee, op-ed via The Guardian,
The sad truth is that Facebook and Google have behaved irresponsibly in the pursuit of massive profits. And this has come at a cost to our health…
In an interview this week with Axios, Facebook’s original president, Sean Parker, admitted that the company intentionally sought to addict users and expressed regret at the damage being inflicted on children.
This admission, by one of the architects of Facebook, comes on the heels of last week’s hearings by Congressional committees about Russian interference in the 2016 election, where the general counsels of Facebook, Alphabet (parent of Google and YouTube), and Twitter attempted to deflect responsibility for manipulation of their platforms.
The term ‘addiction’ is no exaggeration. The average consumer checks his or her smartphone 150 times a day, making more than 2,000 swipes and touches. The applications they use most frequently are owned by Facebook and Alphabet, and the usage of those products is still increasing.
In terms of scale, Facebook and YouTube are similar to Christianity and Islam respectively. More than 2 billion people use Facebook every month, 1.3 billion check in every day. More than 1.5 billion people use YouTube. Other services owned by these companies also have user populations of 1 billion or more.
Facebook and Alphabet are huge because users are willing to trade privacy and openness for ‘convenient and free.’

This post was published at Zero Hedge on Nov 11, 2017.

Doug Noland: “Money” on the Move

This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
It’s been awhile since I’ve used this terminology. But global markets this week recalled the old ‘Bubble in Search of a Pin.’ It’s too early of course to call an end to the great global financial Bubble. But suddenly, right when everything looked so wonderful, there are indication of ‘Money’ on the Move. And the issue appears to go beyond delays in implementing U. S. corporate tax cuts.
The S&P500 declined only 0.2%, ending eight consecutive weekly gains. But the more dramatic moves were elsewhere. Big European equities rallies reversed abruptly. Germany’s DAX index traded up to an all-time high 13,526 in early Tuesday trading before reversing course and sinking 2.9% to end the week at 13,127. France’s CAC40 index opened Tuesday at the high since January 2008, only to reverse and close the week down 2.5%. Italy’s MIB Index traded as high as 23,133 Tuesday before sinking 2.5% to end the week at 22,561. Similarly, Spain’s IBEX index rose to 10,376 and then dropped 2.7% to close Friday’s session at 10,093.
Having risen better than 20% since early September, Japanese equities have been in speculative blow-off mode. After trading to a 26-year high of 23,382 inter-day on Thursday, Japan’s Nikkei 225 index sank as much as 859 points, or 3.6%, in afternoon trading. The dollar/yen rose to an eight-month high 114.73 Monday and then ended the week lower at 113.53. From Tokyo to New York, banks were hammered this week.

This post was published at Wall Street Examiner by Doug Noland ‘ November 11, 2017.

Market Talk – November 10th, 2017

Asian cash responded to the US news of possible Tax Plan delays and we saw profit-taking and nerves for the first time in a while. Interesting that this has occurred on our November temporary pause expected. The Nikkei has returned -0.8% which has added to yesterdays decline but is falling from the 26 year high. Values were lower in morning trading but recovered much in afternoon trade. The Yen, uncharacteristically, has been content to play in a very narrow range which is a good indication that many players sit on the side-lines. Normally, we see the Yen strengthen in a flight to safety, but this sell-off feels to have less people concerned as they wait anxiously for lower prices in order to buy. China’s Shanghai index off-set the Hang Seng close with the two returning very little either way. The talk in China today was the move towards opening its market by increasing the amount of percentage available to foreign companies in JV’s. This is another stage in the creativity opening the Chinese financials markets and a move which many will welcome. Little by little these changes demonstrate their contention as the next global financial centre.

This post was published at Armstrong Economics on Nov 11, 2017.

Chart of the Week: Another Compelling Note of Caution

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
Leveraged loan prices and WTI tracked each other pretty well during the ‘rising dollar’, unsurprising given that the oil sector was over-represented in most new deals as the one truly booming part of the domestic US economy. That was the case on the rebound, too, where leveraged loan prices rose at the same time oil prices did. And then both started falling again earlier this year in March.
Only leveraged loan prices continued to fall, diverging noticeable from WTI in June/July. With prices still almost two years after the bottom significantly less than before the ‘rising dollar’, it’s an unmistakable note of caution amplified in the diverging trend recently from oil (indicating broader risk concerns than just US shale producers).
It’s a gentle downturn in prices at this point, but a persistent one (eight month so far). The last time this leveraged loan price index diverged so much from WTI? Summer 2013.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ November 10, 2017.

A new record yet again: 95,385,000 Americans not in labor force. The army of non-working Americans continues to grow.

We continue to live in a country with two very different stories to tell. In one of the stories, we have a country with a very low unemployment rate and a record in the stock market. In the other story we live in a place where 95,385,000 Americans are not in the labor force. This new record was reached in the latest set of data released by the Bureau of Labor and Statistics (BLS). This is a bigger issue than most would like to admit. Many older Americans are drawing substantially from the government and we now have a younger American population working in low wage positions. This is a new record that isn’t something to be proud about.
Another record of those not in the labor force
The number of Americans not in the labor force is troubling when you dig deep into the data. Part of this is being governed by Americans retiring but millions of these people are falling into this category for harder to characterize reasons.

This post was published at MyBudget360 on Nov 11, 2017.

Government Recycling Programs Waste Valuable Resources

The government tells us we must recycle all kinds of stuff: bottles, cans, paper, plastics etc. They say that recycling reduces the number of products made from natural resources, which means more resources are conserved and our energy costs are lower. Superficially, this seems plausible. Surely it is more wasteful to manufacture products by digging resources out of the ground than to use discarded resources which already exist above ground – right? Not necessarily.
Resource Allocation through Market Prices Our objective is to minimize the use of resources (including energy) in the manufacturing process for all products. In order to achieve our objective, we must be guided by market prices, without exception. As long as prices are allowed to freely adjust to changes in supply and demand, resources will be allocated to their most highly valued uses, and resource conservation will be maximized. The capitalistic process of profits and losses ensures these outcomes.
Profits tell us that a firm has taken various factors of production (labor, raw materials, land, buildings, machines etc.) and combined them in such a manner that they are now valued by consumers of those products – which means these resources have not been wasted. Furthermore, profits are a signal that consumers approve of the manner in which a firm is utilizing resources.
In contrast, losses tell us that a firm has taken various factors of production and combined them in such a manner that they are now worth less than the sum of their parts – which means these resources have been wasted! Losses are a signal that consumers disapprove of the manner in which a firm is utilizing resources. If the firm does not improve, it will be forced out of business, thereby conserving these resources for others who can utilize them more efficiently.

This post was published at Ludwig von Mises Institute on Nov 11, 2017.

Global Banks, City of London Raise ‘Disorderly Brexit’ Alarm

Shifting trillions of euros of derivatives positions could be hugely disruptive.
The growing prospect of a hard or disorderly Brexit is sending jitters through the global financial community. This week the Financial Times reported that a group of ‘large financial institutions with big London operations’ had met with US Commerce Secretary Wilbur Ross to express their dissatisfaction with the lack of progress in Brexit negotiations.
‘The fears over a potential Brexit no-deal are rising, as we move within 16 months of the UK’s exit from the EU,’ said Joshua Mahony, market analyst at IG.
While New York stands to benefit from some of the disruption caused by the UK’s separation from the EU, there is rising concern that Brexit could set off global ripples. That fear was compounded on Friday after Teresa May announced plans to set the UK’s departure date and time (March 29, 2019 at GMT 23:00) from the EU in law, warning she will not ‘tolerate’ any attempt to block Brexit.
‘[The banks] are becoming nervous,’ said City of London Corporation’s policy chief Catherine McGuinness after meeting representatives of US banks earlier this week. ‘It wasn’t just curiosity, it was concern at the lack of progress that we have been making, and nervousness that it had implications beyond Europe’s borders in terms of causing disruption to markets.’

This post was published at Wolf Street by Don Quijones ‘ Nov 11, 2017.

Financial Experts Release Video on How Wall Street Loots the U.S. Economy

If you feel lost in the cacophony of contrasting claims that Wall Street was adequately reformed under the Dodd-Frank legislation of 2010 or that it remains an insidious wealth transfer system for the 1 percent, then you need to invest one-hour of your time to listen carefully to some of the smartest experts in America address the topic.
A free one-hour video is now available (see below) which should settle the debate once and for all that the Dodd-Frank legislation of 2010 has failed to deliver the needed reforms to Wall Street’s corrupt culture and fraudulent business models and that nothing short of restoring the Glass-Steagall Act is going to make the U. S. financial system safe again.
Don’t let the grainy quality of the video turn you off (it was made from a live webinar): the integrity of the voices will quickly reassure you that you are watching something powerful and critical to the future of the U. S.

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

Utter Insanity: National Parks

Who could have seen this coming.…..
The National Park Service has announced a proposal to more than double the peak-season entrance fees at the country’s busiest national parks, including Shenandoah, Yosemite, Yellowstone and Grand Canyon.
The park service said Tuesday that it needs the revenue expected from the fees to address its nearly $12 billion backlog of deferred maintenance. But the announcement has been met with worries that higher prices will push the parks out of reach for many Americans.
I was honestly blown away that there was a $30 per vehicle fee to come into the Grand Canyon park last summer. For what amounts to a “day pass” for many people that’s ridiculous. Further, the camping fees are quite high and thus you would think they’d absorb the vehicle fee there, since you’re already paying to be in the park in the camping fee. And make no mistake — we’re talking about pay showers here when it comes to nickel-and-dimeing you to death — you have to toss $2 in for four minutes of hot water.
Doubling that is prohibitive for a whole lot of people, and in fact it’ll keep me out even though I can afford it. Beyond not buying the “deferred maintenance” argument (I sure as hell didn’t see evidence of that) there are all the nickel and dime “fees” along with rampant concessionaire granting that makes for utterly-silly pricing on anything inside (like a beer or a coke) more-akin to a football stadium than a national park.
Interestingly enough the one place this won’t hit is the Smokey Mountains. The reason is that in exchange for state support for cutting 441 over the pass between Cherokee and Gatlinburg both states required that the Federal Government not toll the road.

This post was published at Market-Ticker on 2017-11-11.

High Prices and Zombie Housing

‘The inventory coming, but people are buying faster than it can get here,’ GLVR President David Tina told Channel 8. ‘We have 5,000 available houses, but we sell 3,000 a month.’ The Business Press backs this up, ‘By the end of September, GLVAR reported 4,969 single-family homes listed for sale without any sort of offer. That’s down 33.1 percent from one year ago. For condos and townhomes, the 680 properties listed without offers in September represented a 41.4 percent drop from one year ago.’
Dennis Smith of Home Builders Research points out, ‘There are still boatloads of homes underwater, or almost underwater, essentially keeping those owners from selling their home and buying another. However, there have been a lot of out of town buyers that have propped up the market and have kept the recovery moving forward.’
What Tina and Smith don’t mention Eli Segall does in the Las Vegas Review-Journal,’Some 2.17 percent of homes in the Las Vegas area, or a total of 14,334 properties, are vacant. That’s up from 2.15 percent, or 13,896 properties, in 2016, according to Attom [Data Solutions].’
That’s three months of inventory off the market.

This post was published at Ludwig von Mises Institute on Nov 11, 2017.

Skynet Makes Its Move: Ford Wraps Workers In Exoskeleton

The secret to crustaceans and insects belonging to the phylum Arthropoda family are their exoskeleton. Ants, lobsters, hermit crabs, spiders, and beetles are all creatures whose life is made possibly by their exoskeleton body plan. Although humans do not have exoskeletons, but rather endoskeletons, it hasn’t stopped the U. S. Defense Advanced Research Projects Agency (DARPA) in pursing this technology.
Over the years, DARPA has invested millions into exoskeleton suits for ground troops. This wearable robotic system gives soldiers the ability to carry heavier objects, run faster, and even leap over large obstacles.
From the battlefield to North American manufacturing plants, Ford is now pilot testing upper body exoskeletal technology called EksoVest. This wearable technology alleviates stress and supports the Ford assembly line worker, who might have to do a task up to 4,600 times per day and up to a million times per year.

This post was published at Zero Hedge on Nov 10, 2017.

The Unstated Logic of Every Minimum Wage Law

A deputy sheriff pays a visit to a small business. He confronts the owner.
DS: I see you got a “help wanted” sign in your window.
Owner: That is correct.
DS: How much is the starting wage?
Owner: The federal minimum wage.
DS: We got a local minimum wage of $15 an hour.
Owner: I cannot afford that much.
DS: That don’t cut it with me, boy. The city government says you got to pay a living wage.
Owner: I already do. All of my employees are alive.
DS: You trying to make me look stupid, boy?
Owner: You don’t need any help from me.
DS: I see. A smart ass. Well, we got ways of dealing with smart asses. I’m writing you up. You’re going to pay a $10,000 fine, I expect.
Owner: That’s outrageous.
DS: No, it ain’t. $334,000 is outrageous. That’s what Seattle collects. We’re real lenient around here.
Owner: But I cannot afford to pay $15/hour.
DS: Well, then, you need to go into another line of work.
Owner: But I have invested everything I own in this business. I took out a large loan.
DS: Then you better have gotten someone to co-sign the note.

This post was published at Gary North on November 09, 2017.

Dramatic Footage: Bahrain Oil Pipeline Explodes, Bursts Into Giant Flames

#BREAKING : Huge #fire resulted in a gas pipeline explosion in #Bahrain while ago. (exact cause yet to be confirmed)
— (@HSajwanization) November 10, 2017

An oil pipeline in Bahrain exploded, and burst into giant fireball, as numerous videos posted on social media showed. According to the Saudi Gazette, an explosion caused a fire in an oil pipeline near Buri village. It adds that no injuries have been reported, and that civil defense teams are extinguishing the fire.
More from Al-bilad Press (google translated):
A large explosion of one of the oil pipelines near the area of ??Buri overlooking the market Waqif, and evacuate all houses near the scene of the explosion. The Waqif market was completely closed so firefighters could control the fire. The Ministry of the Interior through its official account on the site “Twitter” there is no casualties at the scene. It also announced the cutting off of traffic on the Crown Prince’s road towards Hamad City.
The representative of the “country” from the heart of the pipe fire in the village of Buri that a huge fire block devoured a group of cars parked off the village and Souq Waqif.
The delegate added that the civil defense mechanisms rushed to the scene of the incident from the area centered in the village of Damastan and began to block the flames of escalating fire and has been strengthened from the number of other centers.

This post was published at Zero Hedge on Nov 10, 2017.

Weekend Reading: It’s The Debt, Stupid

As I noted last Friday, the recently approved budget was an anathema to any fiscally conservative policy. As the Committee for a Responsible Federal Budget stated:
‘Republicans in Congress laid out two visions in two budgets for our fiscal future, and today, they choose the path of gimmicks, debt, and absolutely zero fiscal restraint over the one of responsibility and balance.
Passing fiscally irresponsible budgets just for the sake of passing ‘tax cuts,’ is, well, irresponsible. Once again, elected leaders have not listened to, or learned, what their constituents are asking for which is simply adherence to the Constitution and fiscal restraint.’
I then followed this up this past Monday with ‘3 Myths Of Tax Cuts’ stating:
‘Tax cuts do not pay for themselves; they can create growth, but in the amount of tenths of percentage points, not whole percentage points. And they certainly cannot fill in trillions in lost revenue. Relying on growth projections that no independent forecaster says will happen isn’t the way to do tax reform.
As the chart below shows there is ZERO evidence that tax cuts lead to stronger sustained rates of economic growth. The chart compares the highest tax rate levels to 5-year average GDP growth. Since Reagan passed tax reform, average economic growth rates have only gone in one direction.’

This post was published at Zero Hedge on Nov 10, 2017.

The Ponzi scheme that’s more than 100x the size of Bernie Madoff

By January 1920, much of Europe was in total chaos following the end of the first World War.
Unemployment soared and steep inflation was setting in across Spain, Italy, Germany, etc.
But an Italian-American businessman who was living in Boston noticed a unique opportunity amid all of that devastation.
He realized that he could buy pre-paid international postage coupons in Europe at dirt-cheap prices, and then resell them in the United States at a hefty profit.
After pitching the idea to a few investors, he raised a total of $1,800 and formed a new company that month – the Securities Exchange Company.
Early investors were rewarded handsomely; within a month they had already received a large return on investment.
Word began to spread, and soon money came pouring in from dozens, then hundreds of other investors.

This post was published at Sovereign Man on November 10, 2017.

Is Fed Chair Nominee Jay Powell, Count Dracula?

A Date with Dracula
The gray hue of dawn quickly slipped to a bright clear sky as we set out last Saturday morning. The season’s autumn tinge abounded around us as the distant mountain peaks, and their mighty rifts, grew closer. The nighttime chill stubbornly lingered in the crisp air.
Like Jonathan Harker’s journey to Transylvania roughly 120 years ago, we also traveled eastward. Our route, however, did not take as through Vienna and Budapest. Nor did it take us upward into the Carpathian Mountains.
Instead, we traversed along the foothills of the San Gabriel Mountains, passing from the Angeles National Forest to the San Bernardino National Forest. Then we climbed upward to the mile-high Oak Glen village, up above the outermost rim of the Los Angeles Basin. We had finally outrun Southern California’s seemingly endless sea of concrete.
At this mountain hamlet, we didn’t witness a single stoplight or franchise drive-thru. Billboards, transmission lines, rail corridors, and graffiti art did not blight the countryside. The built milieu hardly scarred the natural landscape.
There was only a windy narrow mountain road and a smattering of apple orchards, which filled the gentle slopes that nestle between the larger and steeper topographic terrain. Upward we climbed, to where the pine woods canopied across the roadway and the sparse clouds danced to the glint of the sunlight.
Like Harker, our destination had a very specific intent. We had a date with Dracula

This post was published at Acting-Man on November 11, 2017.

China Accounts For A Third Of Global Corporate Debt And GDP… And The ECB Is Getting Very Worried

There is a certain, and very tangible, irony in the central banks’ response to the Global Financial Crisis, which was first and foremost the result of unprecedented amounts of debt: it was to unleash an even greater amount of debt, or as BofA’s credit strategist Barnaby Martin says, “the irony in today’s world is that central banks are maintaining loose monetary policies to generate inflation…in order to ease the pain of a debt “supercycle”…that itself was partly a result of too easy (and predictable) monetary policies in prior times.”
The bolded sentence is all any sane, rational human being would need to know to understand the lunacy behind modern monetary policy and central banking. Unfortunately, it is not sane, rational people who are in charge of the money printer, but rather academics fully or part-owned, by Wall Street as Bernanke’s former mentor once admitted (see “Bernanke’s Former Advisor: “People Would Be Stunned To Know The Extent To Which The Fed Is Privately Owned“). Actually, when one considers where the Fed’s allegiance lies (to its owners), its actions make all the sense in the world. The problem, as Martin further explains, is that “clearly if central banks remain too patient and predictable over the next few years this risks extending the debt supercycle further.”
Translated: the bubble will get even bigger. Unfortunately, it is already too big. As Martin shows in chart 9 below, which breaks down global non-financial debt growth over the last 30yrs split by type (household debt, government debt and non-financial corporate debt), “it is currently hovering around the $150 trillion mark and has shown few signs of declining materially of late. Yet, the “delta” of debt growth over the last 10yrs has been on the non-financial corporate side. Government debt growth has slowed down recently as countries have clawed back to fiscal prudence. Households have also deleveraged over the last few years given their rapid debt accumulation prior to the Lehman event.”

This post was published at Zero Hedge on Nov 10, 2017.

Sam Zell Is Stumped: “For Amazon’s Value To Be Justified, It Has To Be Worth 25% Of The US Economy In 5 Years”

When it comes to the last financial crisis, few timed the peak quite as well as Sam Zell, who sold his Equity Office Properties Trust, the largest office REIT, to Blackstone in 2007, literally days before the bottom fell out of the market. So, with Goldman dying to know when the next crash will take place, it is no surprise that it picked Zell as one of the people to ask. Unfortunately, Zell was unable to provide the much desired answer, and instead when Goldman’s Allison Nathan asked him “how much longer do you think the current economic expansion can last?” His answer was anticlimatic: “Frankly, I don’t have any idea. If I knew the answer to that, I would be rich. A year and a half ago, I said we were in the eighth or ninth inning of the expansion. But I think the election of Trump has changed that. There is more optimism in the business sector now, which has given us extra innings. So this expansion may last a little longer than everybody thinks.”
(Indicatively, when Zell says he “would be rich”, it is unclear just what number he envisions besides “more”: his current net worth is $5 billion according to Forbes.)
What, according to Zell is the cause for this “business sector optimism”? Surprisingly, his answer – as has been the case for a while – is Donald Trump:
Allison Nathan: Has your initial optimism post the election waned given the challenges Trump has faced in making progress on his legislative agenda?
Sam Zell: No, just the opposite. Despite all of the public tweeting and noise surrounding our president, the reality is that the steps he’s taken on deregulation, reversing executive orders, and so forth are confidence-building and very positive. The possibility of changing Dodd-Frank to increase lending to small businesses, for example, could have a very big impact. And I think that’s why the economy is responding in the same positive manner as is the stock market.
Allison Nathan: If tax legislation doesn’t pass, would that make you more pessimistic?

This post was published at Zero Hedge on Nov 10, 2017.