Tim Cook and Apple’s Gross Hypocrisy on Taxes

Apple Inc., the US corporate parent of dozens of foreign legal entities, has been hit with a $14.6 billion tax bill by a commission of the European Union. At the heart of the commission’s complaint is an alleged antitrust violation rather than a tax dispute per se: Apple is accused of negotiating a sweetheart arrangement with Ireland, in exchange for creating thousands of new jobs there. Under the arrangement, Apple reportedly funneled millions in European profits to its Irish headquarters – where those profits were taxed at a very low rate. Therefore other EU nations where Apple has operations and/or sales suffered tax losses, due to Ireland’s unfair ‘competitive advantage’ (i.e., lower tax rates). Or, as a bureaucrat might say, Apple receives illegal tax benefits from Ireland.
Politicians and elites viscerally hate any form of tax competition – at least for the plebes. See, for example the Organisation for Economic Cooperation and Development’s ongoing quest for ‘tax harmonization’ among its member nations. See also the seething hatred for ‘offshore’ tax havens, which generally are small, relatively poor island countries trying to attract banking clientele or corporate registrations. Journalist David Cay Johnston, for example – who never saw a tax he didn’t like – has wasted gallons of ink in the New York Timesdecrying wealthy Americans who dare to have a Cayman bank account without duly notifying Uncle Sam.
But in the end, tax competition tends to reward sensible countries and punish rapacious one. Hence the need for supranational quasi-governance from bodies like the OECD and the European Parliament – to prevent the Irelands of the world from treating their taxpayers a bit better.
Aside from the bizarre and unworkable transfer of national sovereignty to an EU body with fuzzy tax and regulatory powers, Apple’s predicament raises questions about its hypocrisy and corporate political power generally. It’s a bit rich to hear Apple CEO Tim Cook suddenly become concerned over the ‘sovereignty of EU member states.’ Cook, after all, is an outspoken progressive who presumably favors the kind of activist international tax and regulatory bodies exemplified by EU bureaucrats. He believes in putting people – and the environment – before profits, telling climate-change deniers to ‘get out’ of Apple stock. And he clearlysubscribes to the ‘stakeholder’ theory of corporate responsibility.

This post was published at Ludwig von Mises Institute on Aug 30, 2016.

Gold Withdrawals From The NY Fed Accelerate, Hit 388 Tons Since 2014

First it was Germany who redeemed 120 tons of physical gold from the NY Fed in 2014; then it was the Netherlandswho “secretly” redomiciled 122 tons of gold; then last May, we learned that Austria would be the third “core” European nation to repatriate most of its offshore gold, held primarily in the Bank of England, redepositing it in Vienna and Switzerland.
That was just the beginning. Thanks to the latest NY Fed data, we now know that beginning in 2014 and continuing through yesterday, the gold “bleeding” from the vault located 90 feet below street level at 33 Liberty Street is not only continuing but accelerating.

This post was published at Zero Hedge on Aug 30, 2016.

Let The Viewer Beware – Case Shiller Lags and Understates the Bubble

Here’s how the Case Shiller Index (CSI) press release spun the data on the state of the US single family housing market today:
The S&P CoreLogic Case-Shiller U. S. National Home Price NSA Index, covering all nine U. S. census divisions, reported a 5.1% annual gain in June, unchanged from last month. The 10-City Composite posted a 4.3% annual increase, down from 4.4% the previous month. The 20-City Composite reported a year-over-year gain of 5.1%, down from 5.3% in May.
The problem is that Case Shiller’s methodology causes price suppression and severe lag. That gives the impression that the US housing market isn’t in a bubble. It’s a misimpression, considering that market prices on average are actually above the 2006 bubble peak. If 2006 was the top of the most extreme bubble in US history, what does that make today’s higher prices?
Case Shiller uses only public record data. The current release, which purports to be June data, is really data culled from government records for recorded sales. The closings were purportedly in June, but the contracts were entered at least a month before, and in most cases 2 months to 3 months prior. So the current CSI release doesn’t represent the current market.
In fact, the lag is even greater than that. Case Shiller doesn’t merely use only the most recent month’s data, as you would think. It uses that month and the two prior months, so that effectively it represents average recorded closed sale prices for the 3 months of April May and June. It’s the average price as of the time midpoint of the period, in this case mid May. Add the typical 45-60 day closing and the current data represents contracts signed in mid to late March. It is now almost September. The Case Shiller data is from 5 months ago.

This post was published at Wall Street Examiner by Lee Adler ‘ August 30, 2016.

Food Deflation Driving “Least Profitable Year In 20 Years” As Farmers And Grocers Get Crushed

Sinking food prices, while good for the consumer, is devastating for almost everyone else in the supply chain from the farmer all the way to the grocers. Farmers suffer as their key input cost, labor, is actually increasing in many states from the rash of minimum wage hikes around the country while fuel seems to move wildly with any number of daily rumors about production freezes in the middle east. Meanwhile, grocers suffer as already thin margins get compressed even further as existing inventories get marked down.
Food prices have come under extreme pressure in 2016 due primarily to lower Chinese consumption resulting from a weak Chinese economy and a strong U. S. dollar. This slack in demand has resulted in massive supply gluts for several commodities as producers failed to adjust supply quickly enough to meet new levels of demand. In fact, the USDA recently provided a $20mm “bailout” to cheese producers and reports have surfaced that milk producers have been dumping excess milk on fields.
With the base inputs of corn, wheat and soybeans all tanking, food deflation has been pervasive with almost every commodity down substantially YoY.
Proteins, which represent nearly 20% of the typical consumer’s shopping basket, are trending flat to down 8% so far in 2016.

This post was published at Zero Hedge on Aug 30, 2016.

SP 500 and NDX Futures Daily Charts – Slow Bubble

Notice from the charts that the equities have by and large been chopping sideways in a range for the last couple of weeks.
I expect some action towards the month end this week, and of course around the Non-Farm Payrolls, but no real moves until September and October.
The market is fully valued fundamentally, but with the central banks cramming liquidity top down through the financial system there is no telling what the financialized economy may do, and how far it may diverge from the real economy.
That is the very definition of a bubble: too much money mispricing risk too greatly.

This post was published at Jesses Crossroads Cafe on 30 AUGUST 2016.

Central Bankers Know We Are In A Recession, They Are Just Not Telling The Public – Episode 1062a

The following video was published by X22Report on Aug 30, 2016
Euro zone economic indicator shows people are pessimistic about the economy. The Italian people are giving up looking for a job. US Government says consumer confidence is way up but Gallup shows confidence is declining. More college grads are working from home. Global recession alert, Boeing is not rising its prices, last time this happened the US was in a recession. Dallas Fed says that statistics will show that we are already in a recession. The German people are taking their currency out of the banks and placing it into safes. BoJ is now instructed to purchase US Treasuries.

Soros Seeks To “Reshape American Justice System” By Pouring Funds Into “Powerful” District Attorney Races

With hundreds of millions of dollars poured into presidential and congressional elections in the United States it can be difficult, even for mega donors like George Soros, to truly understand how much influence is being “bought.” That’s why Soros is pursuing a new strategy to dump millions into the campaigns of local district attorneys, a position which “exercises the greatest discretion and power in the system.” So far, Soros has funneled $3 million into seven local DA races over the past year but his support is “expected to intensify in the next few years, thanks to longer-term planning and candidate recruitment.” In general, Soros looks to fund progressive DAs running on platforms to “reduce racial disparity in sentencing” and support prison “diversion programs” for drug offenders instead of trials that could result in jail time. As Politico points out:

This post was published at Zero Hedge on Aug 30, 2016.

Gold Daily and Silver Weekly Charts – Stanley Steamer

Bernanke’s mentor and Fed Vice-chair Stanley Fischer performed for the financial class as expected this morning, making hawkish sounds on interest rates.
More specifically he cast doubt on the notion of a ‘one and done’ for interest rate increases this year.
Well, Stan, let’s see if you all have enough resolve to give the markets ‘one’ 25 bp raise before you start talking your book too aggressively about more. So far the FOMC has as much conviction to do the right thing as a drunken sailor in a bar on a late Friday night.
As well they might. Its a good thing they are on fat salaries and not piece work, because so far they have failed at just about every thing they have done, and often spectacularly so.
Except that they ‘saved the Banks’ and Wall Street’s bloated corpse, for which we are supposed to be grateful. Give a decent person with good common sense and practical judgement nine or ten trillion dollars in walking around money, and I suspect that they will do a lot more with it, guaranteed. And you will see something tangible out of it, besides overpriced condos and a proliferation of commercial rent traps.
Well, at the end of the day, they just want to get farther off the zero bound so they have room to perform their policy rites when the next crash comes as a result of their policy errors and serial bubbles in financial assets.

This post was published at Jesses Crossroads Cafe on 30 AUGUST 2016.


Gold:1311.70 down $10.90
Silver 18.58 down 18 cents
In the access market 5:15 pm
Gold: 1311.30
Silver: 18.61
For the August gold contract month, we had a good sized 59 notices served upon for 5900 ounces. The total number of notices filed so far for delivery: 14,258 for 1,425,800 oz or tonnes or 44.348 tonnes. The total amount of gold standing for August is 44.348 tonnes.
In silver we had 1 notice served upon for 5,000 oz. The total number of notices filed so far this month: 506 for 2,530,000 oz. The amount standing in silver: 2,530,000 oz
As I reminded everybody last night, that tomorrow is options expiry day for the London’s OTC/LBMA contracts. Their contracts are much bigger in quantity than the comex options. So its no wonder why the crooks decided to raid today. The good news is that it ends tomorrow afternoon.
In silver, the raids wiped out a huge number of longs. I doubt now if we will have anything greater than 15 million oz stand. However in gold, I expect around 8 tonnes will be left standing which would be huge. Normally only .5 tonnes stands in an off delivery month.
Let us have a look at the data for today.
In silver, the total open interest FELL BY 3,036 contracts DOWN to 190,711. The open interest again fell PRETTY HARD DESPITE THE FACT THAT THE SILVER PRICE WAS UP 11 CENTS IN YESTERDAY’S TRADING . In ounces, the OI is still represented by just LESS THAN 1 BILLION oz i.e. .953 BILLION TO BE EXACT or 136% of annual global silver production (ex Russia &ex China). the crooks are doing a great job fleecing unsuspecting longs
In silver we had 1 notice served upon for 5,000 oz
In gold, the total comex gold fell 1,387 contracts despite the fact that the price of gold ROSE BY $1.40 yesterday . The total gold OI stands at 559,043 contracts
With respect to our two criminal funds, the GLD and the SLV:
we had no changes today at the GLD
Total gold inventory rest tonight at: 956.59 tonnes of gold
we had no changes at the SLV, / THE SLV Inventory rests at: 357.844 million oz.
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on August 30, 2016.

After Its “Predatory Tax Grab”, Europe Prepares Crackdown On Amazon, McDonald’s

In the aftermath of the EU’s latest escalation in its tax war with US multinational corporations, the rebuke from the US was swift, stretching from the US Treasury all the way to Congress: according to Kevin Brady, the House Ways and Means Chairman, the EU Apple decision was “predatory and naked tax grab.” Chuck Schumer, the third-ranking Senate Democrat on the committee, said that the EU is unfairly undermining U. S. companies’ ability to compete in Europe. Naturally, the Treasury also chimed in, and a spokesperson said that “the Commission’s actions could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the U. S. and the EU.”
Naturally, the US would confine itself only to heated words: after all, there was little chance Washington would do anything to truly jeopardize trade relations between the two core trading partners, and Europe knows it.
However, with Europe desperate to boost its dwindling public coffers and only beginning its anti-tax avoidance campaign, AAPL was merely the start in the European Commission’s crackdown. As the WSJ writes, following today’s ruling that Apple got an unfair advantage over its competitors because of help it got from Ireland government’s, the EU’s antitrust regulator is likely next to turn to two other ongoing tax investigations on its docket:Amazon.com and McDonald’s.

This post was published at Zero Hedge on Aug 30, 2016.

Awareness of Fed Credibility Problems Going Mainstream

The nation’s pre-eminent central planners just held their annual gathering at an exclusive resort just outside Jackson Hole, Wyoming and discussed how to interfere even more deeply in markets. In a speech entitled ‘The Federal Reserve’s Monetary Policy Toolkit: Past, Present and Future,’ Fed chair Janet Yellen outlined why zero interest rate policy (ZIRP), purchases of toxic mortgage securities, and monetization of Treasury debt just aren’t adequate. Officials must add negative interest rates (NIRP) and purchases of even more sketchy assets to their ‘toolkit.’
Yellen has spent more than a year floating the idea of negative rates, so it is no surprise she is hustling the ludicrous policy once again. In fact, very little of what she said Friday is new. It was the usual mess of contradictions.
She started with a familiar trope about the economy being close to escape velocity. The Fed chair said she expects to wind down stimulus soon. She then followed by admitting the Fed is currently in a lousy position for handling the next crisis or downturn. Given interest rates are already near zero, officials would need to push them into negative territory. And they should consider buying other types of assets.
We also know from prior statements that Yellen views ‘helicopter money’ is a legitimate tool, an extreme measure which entails printing money and dropping it directly into the hands of consumers.

This post was published at GoldSeek on 30 August 2016.

ICI Lists Three Ways The Market Is “Weird”

In the latest note from ICI’s Glenn Schorr, the analyst points out something that so many others have previously noted: namely, that the market is “weird.” And it’s not just one way. According to Schorr there are at least three different reasons why “it’s still a little weird to us to see equity markets near all-time highs”:
Eequity Capital Markets volume is down ~50%, we’re in our 10th straight month of down y/y volume and volumes are below average as a percentage of GDP. Reasons for the disconnect include a combination of macro fears spurred by oil’s nosedive, Brexit (EMEA is the slowest region), terrorism and investors being wary about a market propped up by QE and insanely low interest rates. Additionally, PE funds are doing more selling vs IPO’ing lately (500bps above average) and block trades are 3x their normal percentage of secondary volume as sellers look to take the money and run instead of taking the next 2 years to work their way out of a position. Finally, several industries (like energy, biotech/health care and parts of technology) have been lesser participants given their own fundamental and/or regulatory challenges lately. Here are the details:

This post was published at Zero Hedge on Aug 30, 2016.

When it Comes to Spending, the US Is a Typical Western Welfare State

Most Americans have heard the common refrain: The US spends almost nothing at all on social benefits compared to other Western welfare states. And even worse, what little the US does spend on social benefits is mostly in the form of non-cash benefits such as food stamps. By spending so little on social benefits, and by cutting back on cash benefits, the poor suffer not only deprivations, but indignity as well.
While there is no doubt that poverty generally involves both deprivation and indignity, it is not the case that the US is different from all other welfare states, nor is it true that the US is especially miserly with cash benefits. Indeed, in both respects, the US is not especially noteworthy in any way.
Comparing Across States
Contrary to the enduring myth that the United States is spends next to nothing on social benefits, the US is hardly an outlier when it comes to the amount of public spending devoted to social benefits.1
In fact, as of 2012, the most recent year available for international comparisons, government spending on social benefits is equal to 18.7 percent of GDP in the United States which places it between Australia and Switzerland:

This post was published at Ludwig von Mises Institute on AUG 30, 2016.

Here’s what really happened in Jackson Hole

The scenic mountain resort of Jackson Hole in Wyoming played snowy host this weekend to the world’s major central bankers, meeting in conclave to discuss their latest victories over the world economy.
Thronged by adoring savers, the so-called Ja’ss Holes (the J is silent) were quick to point out that they were nowhere near running out of fatuous experiments with untested monetary policies or making it up as they go along.
‘We still have plenty of tools,’ remarked a spokesperson: ‘Janet Yellen, Mark Carney, Andy Haldane, Mario Draghi – does any remote, unelected bureaucracy anywhere in the world have a bigger set of tools?’
The theme of the meeting is ‘What, if anything, will be left when we have finished?’
Given the Fed’s stated intention not to surprise financial markets, it is believed that the next 25 basis point rise in fed funds will come, as it did last year, in December – but as part of its forward guidance policy, the decision will be announced by means of a ‘policy dove’ that will be released at the end of the weekend, after a ritual of Native American dancing and hallucinogenic drug-taking, and sent circling around the world with its message of peace and extremely modest monetary tightening.
In the event that the ‘policy dove’ is incapacitated or shot out of the sky, it will be replaced by a ‘policy Elk’ from the National Elk Refuge nearby.

This post was published at Sovereign Man on August 30, 2016.

Asian Metals Market Update: August-30-2016

The next week is very crucial for gold, silver and crude oil. Either they rise or they start another bearish phase. One needs to remain on the sidelines in every metal and energy. Controlled aggression will be the key to make maximum profits in September for short term traders. Firm yet flexible with no emotions to losses.
Economic news and other news will start from today. Asians are not buying aggressively as they believe that a short term bottom is yet to be formed. A big rise in gold and silver will be there if and only if the short term outlook for gold and silver is hyper bullish. Gold and silver jewelers and large importers will not buy extra if the price outlook is stable to negative.

This post was published at GoldSeek on 30 August 2016.

Low-Volatility Stocks At Risk As Credit Cycle Ends, UBS Warns A Crash Is Coming

UBS’ Paul Winter believes we are witnessing the end of the credit cycle – earnings growth rates are flat, and the stock market impact has been increasing. Importantly, from a risk perspective, Winter warns that Systemic Risk is rising, and Economic Policy Uncertainty has hit all-time highs, warning that the key risk today lies in low-volatility stocks and the broad market’s equity risk premia – “either earnings need to pick up dramatically, or alternately, equities would need to correct by around 20% to bring the equation back into equilibrium.”
The age of excess liquidity and inexpensive debt is over, according to Winter, and that makes it harder for management to use credit to satiate investors’ demands for corporate profits
UBS notes that “77% of stock crashes are driven by earnings announcements,” and more companies are likely to disappoint the market in the future.
We are currently witnessing the end of the credit cycle. Credit spreads have been increasing, global earnings growth rates are in aggregate flat and market impact has been increasing.

This post was published at Zero Hedge on Aug 30, 2016.

When Work Is Punished Again: “If You Accept This Raise, You Fall Off The Welfare Cliff”

Four years ago we first exposed the dismal fact that in the U. S., for the lowest income American Dreamers, work is punished. Sadly, the situation has grown worse as buying votes amid a burgeoning welfare state has left millions in the so-called ‘low-wage-trap’ leaving Americans teetering on the welfare cliff.
The situation can be summed up perfectly, as Foundation for Economic Education’s Howard Baetjer explains, “If you accept this raise… you fall off the welfare cliff”…
Pretend you are a poor, single parent of two in Chicago, earning $12 an hour, working full time, and determined to do what is best for your family. And suppose your employer, impressed with your work, offers you training for and promotion to a new job paying $15. Should you take the offer?
It sounds like a no-brainer, but it’s not.
At your present $12 an hour you are eligible for refundable tax credits, food assistance, housing assistance, child care assistance, and medical assistance worth $41,465 combined. Together with your earned income after taxes of $22,121, you are now bringing home to your kids about $63,586 a year.
If you take your employer’s offer, you’ll earn $5,451 more after taxes, $27,572. You will also become eligible for an Affordable Care Act (ACA) premium tax credit. But at that level of earned income all your other benefits would decrease by $8,336, more than your increase in net pay. That means the income you would bring home would decrease from $63,586 to $60,701.

This post was published at Zero Hedge on Aug 30, 2016.

Metabolizing Japan, the World’s Oldest Nation

Getting old can be a drag, for both people and nations. As people age, they tend to become less physically active. This leads to loss of muscle mass and the gain of fat, which causes the body’s metabolism – the process of converting nutrients into energy – to decrease. When the population of a nation ages, a similar effect plays out. The labor pool dwindles, fatty debts build up, and the nation’s economic muscle, or labor productivity, atrophies, leading to a decrease in the nation’s metabolic rate and slower growth overall.
Listen to Interview With Stratfor’s Reva Goujon
The National Bureau of Economic Research released a study in July that examined how an aging population can impair economic growth. In analyzing the economic response to aging in the United States since 1980, the study emphasized a drop in labor productivity as the chief economic consequence of a graying society and estimated that the aging of a society can shave as much as 1.2 percent off gross domestic product growth, a considerable amount given that a 2 percent growth rate in an advanced industrial economy is a cause for celebration these days.
Demographics matter – a lot. This is a big part of why central bankers in the developed world are banging their heads against the wall trying to concoct new monetary and fiscal cocktails to stimulate growth when even crawling to 2 percent growth seems like an uphill battle. A graying society simply cannot burn off as many calories as economists, politicians and voters would like. Tackling the roots of demographic decline is no easy task, either. Population growth is considered stable at a 2.1 total fertility rate, meaning mom and dad are producing enough offspring at least to replace themselves. But a more urbanized world means a higher cost of living and tighter living quarters, leaving less physical and financial room to seat a big family around the dinner table. And as more women seek higher education and professional careers, childbearing gets put off until an age when fertility drops. Add to this picture longer life expectancy enabled by advancements in medicine and technology, and you have yourself a demographic crunch.

This post was published at FinancialSense on 08/30/2016.

(Too) Great Expectations

While there are many things to ‘worry’ about in today’s markets, there is one “great expectation” that it appears everyone is dreaming about…
As Bloomberg’s Mark Gilbert notes, there’s increasing chatter about the prospect of fiscal action from governments, which is shorthand for borrowing money to spend on infrastructure projects, thereby creating jobs, boosting growth and investing in the future. The U. S., the U. K., Japan and the euro zone are all being urged to ease up on austerity and open their pocketbooks.

This post was published at Zero Hedge on Aug 30, 2016.