http://www.zerohedge.com/fullrss2.xml/wp-content/plugins/uBillboard/Korean en Head Of Collapsed Mt.Gox Exchange Arrested With Half A Billion In Bitcoin Still Unaccounted http://www.zerohedge.com/news/2015-08-01/head-collapsed-mtgox-exchange-arrested-after-half-billion-bitcoin-still-unaccounted <p>Back in its 2013 heyday, when bitcoin soared from below $100 to over $1000 in the span of a few months (in no small part thanks to the collapse of the Cyprus banking system) there was only one real Bitcoin exchange: Magic: The Gathering Online Exchange, or Mt. Gox as it was better known, which had become the world's largest hub for trading the digital currency. And then, as mysteriously as it had appeared, Mt. Gox went dark, and filed for bankruptcy after nearly half a billion dollars worth of bitcoin "disappeared."</p> <p>We <a href="http://www.zerohedge.com/news/2014-02-28/mt-gox-files-bankruptcy-after-473-million-bitcoins-disappeared">wrote at the time</a>: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>For a case study of a blistering rise and an absolutely epic fall of an exchange that i) was named after Magic: the Gathering and ii) transacted in a digital currency which many have speculated was conceived by the NSA nearly two decades ago and was used as a honeypot to trap the gullible, look no further than Mt.Gox which after halting withdrawals for the second (and final time) has finally done the honorable thing, and filed for bankruptcy. As the WSJ reports, "Bitcoin exchange Mt. Gox said Friday it was filing for bankruptcy protection after losing almost 750,000 of its customers' bitcoins, marking the collapse of a marketplace that once dominated trading in the virtual currency. The company said it also lost around 100,000 of its own bitcoins. Together, the lost bitcoins would be worth approximately $473 million at market prices charted by the CoinDesk bitcoin index, although the price of Mt. Gox bitcoin had fallen well below that index after it stopped bitcoin withdrawals in early February."</p> <p>&nbsp;</p> <p>The punchline: speaking to reporters at Tokyo District Court Friday after the bankruptcy filing, Mt. Gox owner Mark Karpelès said technical issues had opened the way for fraudulent withdrawals, and he apologized to customers.</p> <p>&nbsp;</p> <p><strong>"There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble."</strong></p> </blockquote> <p>In other words, oops sorry, several hundred million in Bitcoin is unaccounted for but blame the "system weakness." This promptly led to various artistic interpretations on the Mt. Gox logo, such as this one:</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/02/Mt%20Gox%20logo_0.png" width="496" height="194" /></p> <p>Some were confused if Karpeles was going to get away with nothing more than an excuse, even if - as many speculated - he had personally fabricated exchange data entries and embezzled millions of dollars for his own account. </p> <p>As a reminder, when it filed for bankruptcy in February 2014, Mt. Gox said 750,000 customer bitcoins and another 100,000 belonging to the exchange were stolen due to a software security flaw. The lost funds represented the equivalent of $480 million at the time of the bankruptcy filing. Mt. Gox also said more than $27 million was missing from its Japanese bank accounts. Karpeles, who had blamed hackers for the loss, later said he had recovered 200,000 of the lost bitcoins.</p> <p>Earlier today we got the answer when nearly 18 months after his infamous apology, Mark Karpeles was arrested in Tokyo. FT reports that Japanese police have arrested Mark Karpelès, the head of the bankrupt Japan-based bitcoin exchange Mt Gox. The arrest charge is that he made an illegal entry to the system in February 2013 and increased the balance of his account by $1 million. </p> <p>And yet, a year and a half after the exchange insolvency, nobody truly knows what happened:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The alleged crimes involved are hard to pin down, say police sources, because of the absence of a specific laws governing the virtual currency. <strong>Police have acknowledged privately that there technical elements of the alleged disappearance of nearly $500m that “are still not properly understood</strong>”. </p> <p>&nbsp;</p> <p>Asked by Mt Gox to look into the matter in March Last year, the Tokyo Metropolitan Police were not able to begin their investigation until three months later. Even then, say people close to the investigation, the two police departments in charge — the cyber crime unit and the white-collar crime unit — did not properly share information.</p> <p>&nbsp;</p> <p>The year long investigation, say legal experts, has culminated in an arrest that will allow police to hold Mr Karpelès without charge for 23 days. If he continues to deny any wrongdoing during that time, police may alter the charge, and hold him for another 23 days.</p> </blockquote> <p>While Karpeles may very well be guilty of embezzlement and massive fraud against his clients, could it be the still undetermined "crimes" relating to a virtual currency will become just the excuse to keep unsavory suspects detained and/or under arrest for an indefinite period of time? Because being held for <em>up to 46 days </em>without any charge seems a little <em>Guantanamoish</em>.</p> <p>As the FT adds, "the case has exposed both the complexities of crime relating to the bitcoin virtual currency, and the profound difficulties encountered by the Japanese police as they have attempted to investigate the Mt Gox."</p> <p>Seemingly the complexity was not <strong>as big </strong>as that encountered by US regulators and police who 7 years after the greatest criminal systemic collapse, and after the statute of limitations has now expired, have yet to arrest anyone for a multi-trillion systemic crime far greater than Karpeles' $500 million embezzlement.</p> <p>As for the former Mt. Gox head, today's arrest will hardly come as a surprise as it was expected for over two weeks: Japanese journalists had been encamped outside his Tokyo home for several days. Footage of him being led from his home to a police car showed Mr Karpelès wearing a T-shirt and a baseball cap.</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Mt. Gox bitcoin firm head arrested - The Japan News <a href="http://t.co/t4xFsyCsNy">http://t.co/t4xFsyCsNy</a><br /> <a href="https://twitter.com/hashtag/mtgox?src=hash">#mtgox</a> <a href="https://twitter.com/hashtag/Bitcoin?src=hash">#Bitcoin</a> <a href="https://twitter.com/hashtag/%E3%83%93%E3%83%83%E3%83%88%E3%82%B3%E3%82%A4%E3%83%B3?src=hash">#??????</a> <a href="http://t.co/A2M8Lyz7px">pic.twitter.com/A2M8Lyz7px</a></p> <p>— The Japan News (@The_Japan_News) <a href="https://twitter.com/The_Japan_News/status/627450109467365376">August 1, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>Mr Karpelès could, if found guilty, face up to five years in prison or a fine of as much as Y500,000<strong> which at today's exchange rate is just over $4000. </strong></p> <p>So let's do the math: steal $500 million which only you know where it is, spend 5 years in prison, and be fined $5000. Sounds like a pretty good deal...</p> <p>Anyone curious for more, there was an AMA this morning with a person representing to be Ashley Barr, the first Mt. Gox employee which gives more insight into Karpeles various pathologies. <a href="http://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_barr_aka_adam_turner_the_first_mtgox/">It can be found here</a>.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="603" height="494" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/Karpeles.jpg?1438447388" /> </div> </div> </div> http://www.zerohedge.com/news/2015-08-01/head-collapsed-mtgox-exchange-arrested-after-half-billion-bitcoin-still-unaccounted#comments Bitcoin Japan Twitter Twitter Sat, 01 Aug 2015 16:49:10 +0000 Tyler Durden 510910 at http://www.zerohedge.com Greece May Miss ECB Payment As Germany Says Bailout Timeline Is Unrealistic http://www.zerohedge.com/news/2015-08-01/greece-may-miss-ecb-payment-germany-says-bailout-timeline-unrealistic <p>Greek PM Alexis Tsipras won a hard fought victory over party rivals on Thursday when Syriza’s central committee voted to postpone an emergency congress until after formal discussions on the country’s third bailout program are complete.&nbsp;</p> <p>Syriza has been grappling with bitter infighting since more than 30 MPs in Tsipras’ parliamentary coalition defected during a vote on the first set of bailout prior actions, forcing the PM to rely on opposition votes to clear the way for formal discussions with creditors. The party dispute was exacerbated by reports that ex-Energy Minister and incorrigible Grexit proponent Panayiotis Lafazanis (along with several Left Platform co-conspirators) planned to storm the Greek mint and seize the country’s currency reserves.&nbsp;</p> <p>Fed up, Tsipras told 200 members of Syriza’s central committee on Thursday that essentially, they could either hold a party referendum on the bailout on Sunday or wait until September to sort things out, leading us to note that "were Syriza to vote on whether or not Greece should follow through on the agreement with creditors, the market could be in for an event that is far more dramatic and important than the original referendum."&nbsp;</p> <p>Lafazanis refused to go along with the idea.<strong> "How many referenda are we going to hold? We’ve already done one and we won with 62 per cent of the vote", he said. </strong>Ultimately, the party approved a September congress. This gives Tsipras some "breathing space," <a href="http://www.ft.com/intl/cms/s/0/bef98f44-36ab-11e5-bdbb-35e55cbae175.html">FT notes</a>, "but Thursday’s highly charged debate signalled that the Left Platform, which supports an end to austerity and a 'Grexit' from the euro, would continue to oppose a fresh bailout."</p> <p>And the party’s radical leftists aren’t alone in their opposition to the third program for Athens. On Thursday, <a href="http://www.zerohedge.com/news/2015-07-30/lagarde-says-no-imf-aid-greece">FT reported</a> that according to "strictly confidential" minutes from the IMF’s Wednesday board meeting, the Fund will not support the new bailout until the debt relief issue is decided and until it’s clear that Greece "has the institutional and political capacity to implement economic reforms."</p> <p>Somehow, all of this must be worked out in the next three weeks. Greece must make a €3.2 billion payment to the ECB on August 20 and if the bailout isn’t in place by then, it's either tap the remainder of the funds in the EFSM (which would require still more discussions with the UK and other decidedly unwilling non-euro states) or risk losing ELA which would trigger the complete collapse of not only the Greek economy but the banking sector and then, in short order, the government. The question is whether Germany can be reasonably expected to take it on faith that i) the Greek political situation will not eventually result in Athens walking back its austerity promises, and ii) that the IMF will eventually hold up its end of the deal once Berlin approves some manner of debt re-profiling for the Greeks.&nbsp;</p> <p>Now, <a href="http://www.focus.de/finanzen/news/staatsverschuldung/griechenland-krise-zeitplan-nicht-zu-halten-berlin-sieht-athen-hilfen-in-gefahr_id_4853359.html">according to Focus magazine</a>, there are questions as to whether the timetable for cementing the bailout agreement is realistic. German lawmakers may now have to postpone a Bundestag vote and Athens has already discussed the possibility of taking a second bridge loan from the EFSM, Focus says. Here’s more (Google translated):</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>The timetable for the negotiations on a third aid package in favor of Greece is to look for an internal assessment of the federal government any more. According to the already contemplated for mid-August special session of the German Bundestag must be moved, according to government sources in Berlin.</em></p> <p>&nbsp;</p> <p><strong><em>The objective pursued by the EU Commission scheduling is too closely knit, criticize experts.This was reported in its latest issue of FOCUS.</em></strong></p> <p>&nbsp;</p> <p><em>Accordingly, the negotiations should be completed before August 10.On August 11, the euro zone finance ministers would approve the results before the agreement of other euro countries ratified and approved by the Parliament in Athens.Also, the Bundestag must still approve.</em></p> <p>&nbsp;</p> <p><em>Due to delay Greece threatens a serious cash problem.The government in Athens must, at the latest on August 20, 3.2 billion euros, the European Central Bank to transfer (ECB), which should be possible without new loans from the third aid package barely.</em></p> <p>&nbsp;</p> <p><strong><em>Therefore already searched in circles of the EU Commission for ways to temporarily raise money from another pot. Speaking here a renewed bailout from the European Financial Stabilisation Mechanism is (EFSM)</em></strong></p> <p>&nbsp;</p> <p><em><strong>This is difficult, however, because the EU states will again require an indemnity outside the euro-zone in this case.</strong> As early as September Greece must further loans operate: The International Monetary Fund (IMF) then expected repayments totaling € 1.56 billion in four tranches.In addition, running on 4 September from short-term government bonds in the amount of 1.4 billion euros, which Greece must also refinance.</em></p> </blockquote> <p>And here’s the summary from Bloomberg:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em><strong>German parliament meeting that was considered for mid-August might have to be postponed as European Commission’s schedule for aid talks is "much too tight," </strong>Focus magazine reports, citing unidentified people in German govt.</em></p> <p>&nbsp;</p> <p><em>Greece has to pay EU3.2b to the ECB by Aug. 20, which it may not be able to do without third aid package.</em></p> </blockquote> <p>In other words, Greece will likely need <strong>yet another bridge loan</strong> from the EFSM and that will once again require the approval of non-euro countries that will, for the second time in a month, be asked to put their taxpayers at risk in order to keep the ill-fated EMU project alive and preserve the now thoroughly discredited notion that the currency union is "indissoluble."&nbsp;</p> <p>And make no mistake, Greece and its EMU "partners" had better hope things go smoothly after August because one more bridge loan and the EFSM is tapped out, which means Brussels will have to devise some other circular funding mechanism in the event the third program (which is itself nothing more than a dressed up ponzi scheme) isn't in place by September.&nbsp;</p> <p>Or, summarized in one picture:</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/07/Tsipras_0.png" width="572" height="325" /></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="572" height="325" alt="" src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/Tsipras_17.png?1438444421" /> </div> </div> </div> http://www.zerohedge.com/news/2015-08-01/greece-may-miss-ecb-payment-germany-says-bailout-timeline-unrealistic#comments Creditors European Central Bank Germany Google Greece International Monetary Fund Sat, 01 Aug 2015 16:00:45 +0000 Tyler Durden 510908 at http://www.zerohedge.com German Government Launches Investigation of Journalists for Treason http://www.zerohedge.com/news/2015-08-01/german-government-launches-investigation-journalists-treason <p><em><a href="http://libertyblitzkrieg.com/2015/07/31/history-is-repeating-german-government-launches-investigation-of-journalists-for-treason/">Submitted by Mike Krieger via Liberty Blitzkrieg blog</a>,</em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>If it were up to the Federal Attorney General and the President of the German Domestic Security Agency, two of our reporters would soon be in prison for at least two years. Today, we were officially informed about investigations against our Markus Beckedahl, Andre Meister and an unknown“ party. The accusation: Treason.</em></p> </blockquote> <p>– From Netzpolitik.org: &nbsp;Suspicion of Treason“: Federal Attorney General Announces Investigation Against Us In Addition To Our Sources</p> <p>Widespread outrage across Germany is erupting following the revelation that the nation’s Attorney General has launched an investigation into treason charges for two journalists working for Netzpolitik.</p> <p>The charge is treason. The crime is journalism.</p> <p>We learn from <a href="http://www.theguardian.com/world/2015/jul/31/german-government-accuses-news-website-of-treason-over-leaks">The Guardian</a> that:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Germany has opened a treason investigation into a news website a broadcaster said had reported on plans to increase state surveillance of online communications.</em></p> <p>&nbsp;</p> <p><em>German media said it was the first time in more than 50 years journalists had faced treason charges, and some denounced the move as an attack on the freedom of the press.</em></p> <p>&nbsp;</p> <p><em>“The federal prosecutor has started an investigation on suspicion of treason into the articles … published on the internet blog Netzpolitik.org,” a spokeswoman for the prosecutor’s office said.&nbsp;</em></p> <p>&nbsp;</p> <p><em>The public broadcaster ARD reported Netzpolitik.org had published an article on how the BfV was seeking extra funding to increase its online surveillance, and another about plans to set up a special unit to monitor social media, both based on leaked confidential documents.</em></p> <p>&nbsp;</p> <p><em>"This is an attack on the freedom of the press," Netzpolitik.org journalist Andre Meister, targeted by the investigation along with editor-in-chief Markus Beckedahl, said in a statement. "We’re not going to be intimidated by this."</em></p> </blockquote> <p>Cory Doctorow at <a href="http://boingboing.net/2015/07/31/german-prosecutors-give-spies.html">Boing Boing</a> accurately notes the shadiness and hypocrisy of it all:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong><em>The German prosecutors who dropped all action against the US and UK spy-agencies who trampled German law and put the whole nation, up to and including Chancellor Angela Merkel, under surveillance, have decided instead to open an investigation into the bloggers at Netzpolitik, who revealed the wrongdoing.</em></strong></p> <p>&nbsp;</p> <p><strong><em>Netzpolitik are an important source of independent news, analysis and campaigning for privacy and freedom in Germany. This is a genuinely shameful moment for the nation. We stand with Netzpolitik and its supporters around the world.</em></strong></p> </blockquote> <p>While this is horrible news, there is a silver lining. The main reason the German government feels a need to go overtly fascist, is because they are scared shitless. They are scared of the truth, of the light and of their own citizens. Such a corrupt and compromised government can’t last very long.</p> <p>Additionally, we should commend the bravery of the journalists involved. As reported <a href="https://firstlook.org/theintercept/2015/07/31/german-journalists-investigated-treason-publishing-surveillance-leaks/">by the Intercept</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Asked if Netzpolitik would continue to report using materials gained from whistleblowers, Meister replied, "That’s our job, so of course we will continue to report about publicly relevant information, which obviously includes information from whistleblowers from state and private entities. As a matter of fact, just [yesterday] we have exposed the new ‘cyber strategy’ of the German Federal Military ‘Bundeswehr’ about offensive cyber attacks."</em></p> <p>&nbsp;</p> <p><em>"If anything, all the support is showing that we must be doing the right thing, so we will continue what we do and maybe even step up the pace. … To paraphrase a Google engineer after yet another NSA leak: 'Fuck those guys!'"</em></p> </blockquote> <p>Bravo. These guys deserve our complete and total support.</p> <p>* &nbsp;* &nbsp;*</p> <p>For related articles, see:</p> <p><a href="http://libertyblitzkrieg.com/2014/09/25/standard-poors-warns-on-germany-as-anti-euro-political-party-soars-in-popularity/">Standard &amp; Poor’s Warns on Germany as Anti-Euro Political Party Soars in Popularity</a></p> <p><a href="http://libertyblitzkrieg.com/2014/06/19/video-of-the-day-end-the-fed-rallies-are-exploding-throughout-germany/">Video of the Day – "End the Fed" Rallies are Exploding Throughout Germany</a></p> <p><a href="http://libertyblitzkrieg.com/2013/06/07/martin-luther-king-everything-adolf-hitler-did-in-germany-was-legal/">Martin Luther King: "Everything Adolf Hitler did in Germany was Legal"</a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="191" height="177" alt="" src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/Facism.png?1438440785" /> </div> </div> </div> http://www.zerohedge.com/news/2015-08-01/german-government-launches-investigation-journalists-treason#comments Germany Google Sat, 01 Aug 2015 15:14:00 +0000 Tyler Durden 510907 at http://www.zerohedge.com Chinese Company Replaces Humans With Robots, Production Skyrockets, Mistakes Disappear http://www.zerohedge.com/news/2015-08-01/chinese-company-replaces-humans-robots-production-skyrockets-mistakes-disappear <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>"I believe that anyone who has a job and works full time, they should be able to pay the things that sustain life: food, shelter and clothing. I can't even do that."</em></p> </blockquote> <p>That rather depressing quote is from 61-year old Rebecca Cornick. She’s a grandmother and a 9-year Wendy’s veteran who spoke to <a href="http://www.cbsnews.com/news/debate-over-minimum-wage-increase-heats-up/">CBS News</a>. Rebecca makes $9 an hour and her plight is representative of fast food workers across the country who are campaigning for higher pay.&nbsp;</p> <p>The fast food worker pay debate is part of a larger discussion as "states and cities across the country [wrestle] with the idea of raising the minimum wage," CBS <a href="http://www.cbsnews.com/news/debate-over-minimum-wage-increase-heats-up/">notes</a>, adding that "right now, 29 states have minimums above the federal $7.25 an hour [and] four cities, including Los Angeles, have doubled their minimum to $15."</p> <p>Proponents of raising the pay floor argue that it’s simply not possible to live on minimum wage and indeed, there’s <a href="http://www.zerohedge.com/news/2015-05-22/no-state-can-minimum-wage-worker-afford-one-bedroom-apartment">plenty of evidence</a> to suggest that they’re right. Opponents say forcing employers to pay more will simply mean that companies will fire people or stop hiring and indeed, as <a href="http://www.zerohedge.com/news/2015-07-31/economics-101-wal-mart-hikes-minimum-wages-prepares-fire-1000">we highlighted on Friday</a>, it looks as though WalMart’s move to implement an across-the-board pay raise for its low-paid workers may have contributed to a decision to layoff around 1,000 people at its home office in Bentonville.&nbsp;</p> <p>"The reality is that most business are not going to pay $15 dollars an hour and keep their doors open," one Burger King franchisee told CBS. "It just won't happen. The economics don't work in this industry. There is a limit to what you're going to pay for a hamburger."&nbsp;</p> <p>Yes, there’s only so much people will pay for a hamburger which is why Ronald McDonald has made an executive decision to hire more efficient employees at some locations:</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/07/LovinIt.png" width="514" height="334" /></p> <p>With all of that in mind, consider the following from TechRepublic who tells the story of Changying Precision Technology Company, which has replaced almost all of its human employees with robots to <a href="http://www.techrepublic.com/article/chinese-factory-replaces-90-of-humans-with-robots-production-soars/">great success</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong><em>In Dongguan City, located in the central Guangdong province of China, a technology company has set up a factory run almost exclusively by robots, and the results are fascinating.</em></strong></p> <p>&nbsp;</p> <p><em>The Changying Precision Technology Company factory in Dongguan has automated production lines that use robotic arms to produce parts for cell phones.&nbsp;</em></p> <p>&nbsp;</p> <p><em>The factory also has automated machining equipment, autonomous transport trucks, and other automated equipment in the warehouse.</em></p> <p>&nbsp;</p> <p><em>There are still people working at the factory, though. Three workers check and monitor each production line and there are other employees who monitor a computer control system.<strong> Previously, there were 650 employees at the factory. With the new robots, there's now only 60. Luo Weiqiang, general manager of the company, told the People's Daily that the number of employees could drop to 20 in the future.</strong></em></p> <p>&nbsp;</p> <p><em>The robots have produced almost three times as many pieces as were produced before. According to the People's Daily, <strong>production per person has increased from 8,000 pieces to 21,000 pieces. That's a 162.5% increase.</strong></em></p> <p>&nbsp;</p> <p><em>The increased production rate hasn't come at the cost of quality either.<strong> In fact, quality has improved. Before the robots, the product defect rate was 25%, now it is below 5%</strong>.</em></p> </blockquote> <p>So to anyone planning on picketing the local McDonald’s in an attempt to secure a 70% wage hike, be careful, because this "guy" is ready to work, doesn’t need breaks, and never makes a mistake:</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/07/Robot.png" width="402" height="424" /></p> <p>Let’s just hope he doesn’t become self aware.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="402" height="240" alt="" src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/RobotTeaser.png?1438437164" /> </div> </div> </div> http://www.zerohedge.com/news/2015-08-01/chinese-company-replaces-humans-robots-production-skyrockets-mistakes-disappear#comments China Reality Sat, 01 Aug 2015 14:30:54 +0000 Tyler Durden 510899 at http://www.zerohedge.com Don't Exaggerate Significance of SNB's Loss http://www.zerohedge.com/news/2015-08-01/dont-exaggerate-significance-snbs-loss <p>&nbsp;</p> <p>The Swiss National Bank reported a record CHF50.1 bln loss. It has got the chins wagging, but the real implications are minor. &nbsp;The losses are not realized and are unlikely to be repeated. &nbsp;In fact, if the SNB's report had covered the month of July, the loss would likely have been smaller. &nbsp;</p> <p>&nbsp;</p> <p>More of the SNB's loss stemmed from the valuation of its foreign currency holdings in the face of franc appreciation, especially after the cap was abandoned in mid-January. &nbsp;Here in July the franc fell nearly 3% against the US dollar and about 1.3% against the euro. &nbsp;These two currencies account for nearly 3/4 of the SNB's reserves. &nbsp;The franc fell 2% against sterling and 1.5% against the yen. &nbsp;These four currencies together account for nearly 90% of the reserves. &nbsp;</p> <p>&nbsp;</p> <p>It addition to the currency valuation markdown, the SNB reported a CHF3.2 bln euro loss on its gold holdings. &nbsp; Gold lost another 5% in July in franc terms. &nbsp;These losses reduce the SNB's equity to CHF3.425 bln, which amounts to just shy of 6% of its assets.&nbsp;</p> <p>&nbsp;</p> <p>There are two implications, and they have nothing to do with the solvency of the Swiss National Bank. &nbsp;The first implication, and one that central banks are sensitive to is reputational risk. &nbsp;If the central bank losses money, doesn't it undermine its credibility to manage the country's economy? &nbsp;While it is difficult to show that the SNB's reputation has been harmed, its performance provides its critics with fodder.&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;Switzerland's parliamentary election will be held in mid-October. &nbsp;These losses allow for a politicalization of monetary policy that may not be particularly helpful. &nbsp;A couple of parliamentarians are pressing the SNB to adopt a new cap for the franc (euro floor) at CHF1.15. &nbsp; While this is highly unlikely to be implemented, it illustrates the frustration with the franc's appreciation.&nbsp;</p> <p>&nbsp;</p> <p>The SNB appears to have been given a free pass on its effort to stem the rise of the franc. &nbsp;In 2013, Switzerland's current account surplus was 10.7% of GDP. &nbsp;Last &nbsp;year, it fell back to 7%. &nbsp;The OECD expects its to be 10.1% of GDP this year and 10.5% next year. &nbsp; Countries with such substantial surpluses often come under international pressure to reduce the imbalance. &nbsp;</p> <p>&nbsp;</p> <p>However, a closer inspection of the Swiss current account composition suggests that it is not particularly sensitive to currency appreciation. &nbsp;There are three main drivers of the Swiss current account surplus and trade is not one of them. &nbsp;</p> <p>&nbsp;</p> <p>First, the largest contributor is from investment income. &nbsp;These are mostly coupon and dividends on foreign portfolio investment. &nbsp;In this context we note Japan is evolving in the same direction. &nbsp;Its investment income often overwhelms the trade balance on the current account. &nbsp;</p> <p>&nbsp;</p> <p>Second, financial services are important but are not driven by currency fluctuations. &nbsp;Third, officials point to what is called "merchanting." &nbsp;It is the sales of goods that do not cross Swiss borders. &nbsp;This arises primarily from the commodity trading businesses that are located in Switzerland. &nbsp;This activity can account for 1/4-1/3 of the Swiss current account surplus.&nbsp;</p> <p>&nbsp;</p> <p>The other implication of the SNB's loss is that it may be unable to make its customary payout to the federal government and cantons. &nbsp;Some cantons depend on payment from the SNB to reach their fiscal targets. &nbsp;The failure to make a payment in 2013 due to the fall in gold saw criticism heaped on the central bank.&nbsp;</p> <p>&nbsp;</p> <p>The record loss of the SNB is embarrassing, and it gives its critics fresh ammunition ahead of the national election. &nbsp;It could squeeze the finances of a few cantons, but it already has distributed CHF1 bln earlier this year based on last year's profits. &nbsp;Its losses, largely an accounting function and not realized, is of little economic or financial consequence.&nbsp;</p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="320" height="240" alt="" src="http://www.zerohedge.com/sites/default/files/images/user113905/imageroot/Swiss-National-Bank.jpg?1438438066" /> </div> </div> </div> http://www.zerohedge.com/news/2015-08-01/dont-exaggerate-significance-snbs-loss#comments Central Banks Japan Monetary Policy Swiss National Bank Switzerland Trade Balance Yen Sat, 01 Aug 2015 14:07:51 +0000 Marc To Market 510898 at http://www.zerohedge.com Near-Term Dollar Outlook http://www.zerohedge.com/news/2015-08-01/near-term-dollar-outlook <p>The unexpectedly record low increase in Q2 US Employment Cost Index unwound the some of the dollar's weekly gains and neutralized the near-term technical outlook. &nbsp;Next week's nonfarm payrolls are still critical, and the weakness may put even greater burden on the jobs data to demonstrate that slack is indeed being absorbed. &nbsp;</p> <p>&nbsp;</p> <p>The Dollar Index was poised to challenge the three-month high set on July 21 near 98.15, but the sell-off following the ECI report reversed the gains scored on the back of the FOMC statement and Q2 GDP (and upward revision in Q1). &nbsp; The five-day moving average barely crossed below the 20-day average for the first time since late-June. &nbsp;It did not close below 96.40 (a retreacement objective and 100-day moving average), but instead finished the week and month near the middle of the 96.00-98.00 trading range. &nbsp;</p> <p>&nbsp;</p> <p>The euro's five-day moving crossed above the 20-day average a day before the FOMC statement. &nbsp;After the Q2 GDP data and a threat that the Greek government would collapse saw the euro briefly trade below $1.09. &nbsp;It rebounded with the help of month-end demand and signs that the Greek government will survive until at least September. &nbsp;Before the weekend, nearly covered the entire week's range. &nbsp; Both the RSI and MACDs are consistent with a further push higher in the euro, but how fast it reversed the pre-weekend gains, and the relatively soft close suggests the bears are still in control. &nbsp;Initial support is seen near $1.0950. &nbsp;It may require greater confidence of a September rate hike before the $1.08 level can be breached. &nbsp; &nbsp;&nbsp;</p> <p>&nbsp;</p> <p>The dollar was pushing above JPY124.50, the upper end of its range since mid-June and was stopped cold by the disappointing ECI. &nbsp;The fact that Japan's CPI excluding food and energy rose to 0.6% also discourage ideas that the BOJ the needs to provide additional stimulus. Support for the dollar is seen in the JPY123.00-JPY123.30 area. &nbsp; A break that could signal a move into the JPY122.00-JPY122.50 &nbsp;band.&nbsp;</p> <p>&nbsp;</p> <p>Since the middle of July, sterling has tried and failed to rise above $1.5700 a handful of times. &nbsp;The technical indicators suggest the bulls may have been luck next week. &nbsp;The BOE meeting is expected to see 2-3 hawkish dissents to what is anticipated to be a majority decision to keep policy on hold. &nbsp;The minutes and the inflation report, with an update in macro-forecasts will be announced at the same time. &nbsp; Before the weekend, sterling traded on both sides of Thursday's range. &nbsp;Even though it finished the week at its highest close in two week, it was still neutral. &nbsp;A move above $1.57 would encourage a run toward $1.5800. &nbsp; Support is seen in the $1.5540-$1.5560.&nbsp;</p> <p>&nbsp;</p> <p>The Australian dollar nearly posted a potential key reversal before the weekend by making fresh multi-year lows (~$0.7235) before rallying to new highs for the week (almost $0.7370), but like sterling, the close was neutral. &nbsp;The 20-day moving average is found near $0.7380, and the Aussie has not closed above this average since June 25. &nbsp;It also roughly corresponds with the top end of a near-term down channel. &nbsp; There is a bullish divergence in the RSI, and the MACDs are turning higher. &nbsp;The market may be poised test the downtrend line drawn off May, June and July highs. It is found near comes in near $0.7420 by the end of next week. &nbsp;If the RBA cuts rates next week, especially given that it would surprise participants, the modestly positive technical developments would likely be negated. &nbsp;</p> <p>&nbsp;</p> <p>News that the Canadian economy unexpectedly contracted in May sent the Canadian dollar lower. &nbsp;This was partly masked by US dollar weakness. &nbsp;The greenback failed to take out the July 24 multi-year high just above CAD1.3100. &nbsp;The US dollar closed on its highs, however, and additional near-term gains are likely. &nbsp; The next important technical target is some distance away at CAD1.3450. &nbsp;Support is seen near CAD1.2940. &nbsp;</p> <p>&nbsp;</p> <p>The September light crude futures contract has fallen for seven consecutive weeks. &nbsp;It has consistently recorded lower highs and lower lows. &nbsp;The MACDs are trying to turn, but the RSI has drifted lower. &nbsp;Initial support is seen near $46.70 and then $45. &nbsp; Resistance is seen near $50.&nbsp;</p> <p>&nbsp;</p> <p>The fact that the US 10-year yield was little changed on the week masks the 12 bp increase seen in the first four sessions last week. &nbsp;Yields reversed lower on Thursday, and the weak ECI on Friday, pushed the 10-year yield below 2.20% for the first time since July 7-9, which itself was the first time since the beginning of June. &nbsp; Although the 2.0% level is more significant, yields may find support near 2.08%-2.14%. &nbsp; The 2.30% area likely represents the near-term cap.&nbsp;</p> <p>&nbsp;</p> <p>The S&amp;P 500 flirted with the 200-day moving average at the start of the week. &nbsp;By the end of the week, it was about 2.5% above the lows set on Monday. Nevertheless, the close before the weekend was poor, on session lows. &nbsp; &nbsp;Over the past three months, buying interest has dried up near 2130. &nbsp;The S&amp;P 500 has been in a broad 2040-2135 range since early February. &nbsp;It is not clear what is going to drive it out of that range.&nbsp;</p> <p>&nbsp;</p> <p>Observations based on the speculative positioning in the futures market: &nbsp;</p> <p>&nbsp;</p> <p>1. &nbsp;There were no significant (more than 10k contracts) adjustments to gross speculative currency positioning in the CFTC reporting week ending July 28. &nbsp;The run-up to the FOMC meeting may have deterred activity. &nbsp;</p> <p>&nbsp;</p> <p>2. &nbsp;A clear pattern was speculators to reduce short euro, yen and sterling positions, and expand the short position in the other currencies. &nbsp;Similarly, speculators cut gross long Australian and Canadian dollar futures.</p> <p>&nbsp;</p> <p>3. &nbsp;The divergence of monetary policy, which we argue is the key driver, also benefits sterling, where the BOE is also expected to raise rates. &nbsp;The net short sterling position is the smallest since last November. &nbsp;We would not be surprised if it turned positive in the coming weeks. &nbsp;The net position in the Swiss franc is moving in the opposite direction. &nbsp;Speculators have been net long francs since mid-March. &nbsp;It is on the verge of turning short. &nbsp;</p> <p>&nbsp;</p> <p>4. The net short Canadian dollar position (56.1k contracts) is the largest since March 2014. &nbsp;It is likely to grow further. &nbsp;The net short Mexican peso position continues to grow, setting a new record each time it does. &nbsp;</p> <p>&nbsp;</p> <p>5. &nbsp;Speculators turned to a net long US 10-year Treasury futures position in the previous reporting week and grew it further over the past week to stand at 65.6k contracts. &nbsp;The bulls added 31.9k contracts, lifting the gross long position to 491.5k contracts. &nbsp;The bears covered 6.3k short contracts, leaving 425.9k.</p> <p>&nbsp;</p> <p>6. Bulls and bears added to gross positioning the light sweet crude oil futures. &nbsp;The gross longs rose by 11.6k contracts to 476k. &nbsp;The gross shorts increased 21.9k contracts to 232.6. &nbsp;This resulted in a 10.3k contract reduction in the net long position, leaving 243.4k contracts. &nbsp;</p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="400" height="269" alt="" src="http://www.zerohedge.com/sites/default/files/images/user113905/imageroot/cat%20reading.jpg?1438437562" /> </div> </div> </div> http://www.zerohedge.com/news/2015-08-01/near-term-dollar-outlook#comments Aussie Australian Dollar BOE Canadian Dollar CPI Crude Crude Oil Futures market Monetary Policy Swiss Franc Technical Indicators Yen Sat, 01 Aug 2015 13:59:29 +0000 Marc To Market 510897 at http://www.zerohedge.com Osama bin Laden Sister, Stepmother Killed In Private Jet Crash http://www.zerohedge.com/news/2015-08-01/osama-bin-laden-sister-stepmother-killed-private-jet-crash <p>Last October, when we first read about the crash of a business jet on take off in Russia's Vnukovo airport, we didn't think much about it, until a few hours later it was revealed that the <a href="http://www.zerohedge.com/news/2014-10-20/anti-petrodollar-ceo-french-energy-giant-total-dies-freak-plane-crash-moscow">main passenger on the plane was none </a>other than Christophe de Margerie, CEO of Europe's second largest oil producer, Total. Margerie had risen quickly to prominence in geopolitical circles three months earlier when in July 2014 he uttered the heretical phrase: "<strong>There is no reason to pay for oil in dollars</strong>", suggesting that the Petrodollar's reign at the top of global reserve currencies was coming to an end. </p> <p>Three months later the CEO died on takeoff. </p> <p>Likewise yesterday morning when we read reports that a 2010 Embraer Phenom 300 private jet, with a Saudi Registration HZ-IBN, crashed at a car auction site in Hampshire, we didn't think much of it. </p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Aircraft involved in <a href="https://twitter.com/hashtag/Blackbushe?src=hash">#Blackbushe</a> accident was a 2010 Embraer EMB-505 Phenom 300, Saudi registration HZ-IBN <a href="http://t.co/k1CiRmbGWD">pic.twitter.com/k1CiRmbGWD</a></p> <p>— AviationSafety (@AviationSafety) <a href="https://twitter.com/AviationSafety/status/627177473424408577">July 31, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>The jet was attempting to land at Blackbushe Airport near London when it crashed on to dozens of cars and burst into flames on Friday afternoon. </p> <p>As <a href="http://www.rt.com/uk/311278-plane-crash-hampshire-aircraft/">reported by RT</a>, Daphne Knowles, 70, told local reporters he was in a field with cattle when he heard an aircraft “coming very, very fast from behind me.” “Two people said they thought it had to swerve to miss another aircraft as it went in, but I didn’t see that myself and can’t confirm, then there was a huge black cloud of smoke which went up.” Knowles said it appeared the aircraft “tried to land at Blackbushe having travelled northwards.”</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Small plane crashed into car auction at Blackbushe airport <a href="http://t.co/lxHLF76WIf">pic.twitter.com/lxHLF76WIf</a></p> <p>— Nathan Greenwood (@NathanGFilm) <a href="https://twitter.com/NathanGFilm/status/627126194660614144">July 31, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>Just like one year ago, the reason for the importance of the crash was made apparent only hours later.&nbsp;</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Very sad people died please remember that and im not interested in selling rights its not right please no more offers <a href="http://t.co/7UafZDqNdH">pic.twitter.com/7UafZDqNdH</a></p> <p>— Tubman Thomas (@tubman89) <a href="https://twitter.com/tubman89/status/627137371969036288">July 31, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">URGENT: Light aircraft crash at car auction at Blackbushe Airport, firefighters at the scene (video by <a href="https://twitter.com/tubman89">@tubman89</a>)<br /> <a href="https://t.co/dSDLhaY85o">https://t.co/dSDLhaY85o</a></p> <p>— RT UK (@RTUKnews) <a href="https://twitter.com/RTUKnews/status/627141664855883779">July 31, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>Shortly after the crash, reports in UK media outlets, including the Daily Mail and Mirror, alleged that the $11 million jet was owned by Jeddah-based Salem Aviation, a company named after Osama bin Laden’s elder cousin, who himself was an amateur pilot and died in a plane crash. Among the other casualties: Osama bin Laden's sister and stepmother. </p> <p>And indeed, the <a href="http://www.ft.com/intl/cms/s/0/50a6d104-3832-11e5-8613-07d16aad2152.html#axzz3hZJkmr1w">FT itself confirmed </a>that on board the plane at the time of the crash were relatives of none other than al-Qaeda founder, Osama bin Laden. "<strong>Saudi ambassador to the UK, Prince Mohammed bin Nawaf Al Saud, offered his condolences to the large and wealthy Bin Laden family, who own a major construction company in Saudi Arabia."</strong></p> <p>The statement, translated by the BBC, said: “His Royal Highness Prince Mohammed bin Nawaf Al Saud&thinsp;.&thinsp;.&thinsp;.<strong>&thinsp;has paid his condolences to the family and relatives of Mohammed bin Laden at Blackbushe Airport in Britain for the great loss they have suffered as a result of the crash of the plane that was carrying the family</strong>.”</p> <p>The Saudi Embassy in London also confirmed the identities of the two notable passengers:</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en"><a href="https://twitter.com/hashtag/Saudi?src=hash">#Saudi</a> Emb in London confirms Osama Bin <a href="https://twitter.com/hashtag/Laden?src=hash">#Laden</a> stepmother &amp; his sister among 4 dead in plane crash in Blackbushe<br /> <a href="https://t.co/QBnpsSxcfY">https://t.co/QBnpsSxcfY</a></p> <p>— SaadAbedine (@SaadAbedine) <a href="https://twitter.com/SaadAbedine/status/627259056961404928">July 31, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>The Phenom was reportedly returning from Milan and was attempting to land when it crashed. Blackbushe Airport issued a statement that the plane had crashed at the end of the runway while landing.</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Sister &amp; stepmother of Osama Bin Laden reportedly killed in UK plane crash. <a href="http://t.co/Qtr3YlaDVh">http://t.co/Qtr3YlaDVh</a> <a href="http://t.co/qY5BGxhIG5">pic.twitter.com/qY5BGxhIG5</a></p> <p>— Jim Roberts (@nycjim) <a href="https://twitter.com/nycjim/status/627347967016615936">August 1, 2015</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>What is especially curious is that the jet’s registration number, HZ-IBN, was used by Osama bin Laden’s father, Mohammed. who was also a victim of an aircraft accident, and used the same ID when he crashed in a small Beechcraft plane in 1967. </p> <p>The family is believed to have retained the number, and now there have been two fatal airplane crashes with the identical registration number, resulting in the death of even more family members of Osama bin Laden whose official death took place, according to the US government in 2011 when he was killed by US special forces in Pakistan's Abbottabad. Many members of the special forces team subsequently died under strange circumstances themselves.</p> <p>We are confident many will be curious to learn the reasons for the crash and the contents of the black box, whose unsealing we hope will be less of a tainted political farce than what happened one year ago with the "black box" discovery of the tragic MH-17 flight over east Ukraine.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="900" height="500" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/saudi%20explosion.jpg?1438436406" /> </div> </div> </div> http://www.zerohedge.com/news/2015-08-01/osama-bin-laden-sister-stepmother-killed-private-jet-crash#comments None Private Jet Saudi Arabia Twitter Twitter Ukraine Sat, 01 Aug 2015 13:40:39 +0000 Tyler Durden 510896 at http://www.zerohedge.com "There's A Bubble In Pessimism Worldwide, Come On, You Read Zero Hedge!" http://www.zerohedge.com/news/2015-07-31/theres-bubble-pessimism-worldwide-come-you-read-zero-hedge <p>GFI's John Spallanzani came on CNBC today and decided to make the case that there is a bubble. But not a bubble in stocks which are trading 1% off their all time highs, at a <a href="http://www.zerohedge.com/news/2015-07-20/q1-gaap-eps-lowest-2012-sp500-now-trading-over-20x-pe-using-unadjusted-earnings">20x real P/E multiple, </a>and 1400 days without a 10% correction, mind you, <strong>but a bubble in pessimism. </strong></p> <p>Here is his "argument", deconstructed in its several key components. </p> <ul> <li><strong>"If there's a bubble in bonds, there has to be a bubble in pessimism."</strong></li> </ul> <p>Apparently, Mr. Spallanzani does not quite grasp that the only reason bond prices are as high as they are (to him, that means a bubble), is because the central banks are now buying more than 100% of all net issuance. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/02/central%20bank%20interventions_1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/02/central%20bank%20interventions_1_0.jpg" width="405" height="450" /></a></p> <p>It also appears that the very logical conclusion that if there is a bubble in bonds, then there is clearly a bubble in stocks, because once the bond bubble bursts and interest rates soar, what happens to earnings? Or perhaps GFI employees just haven't covered yet the arcane linkage between the balance sheet and the income statement.</p> <p>Ironically, in the very next sentence the CNBC guest says that "there is a shortage of quality assets in the world" (which actually is spot on as we <a href="http://www.zerohedge.com/news/2013-05-01/desperately-seeking-112-trillion-collateral-or-how-modern-money-really-works">showed in May of 2013</a>), but apparently another class not discussed at GFI is that "quality assets" are bonds, not 100x (or Div/0) biotech stocks. </p> <p>Then there is a lot of even more confused words, followed by this pearl: <strong>"the only way the Fed is going to hike is basically the S&amp;P going toward 2200. If we stay at 2100 or below, the Fed doesn't go in September.</strong>"</p> <p>Then comes even more confusion: "<strong>the only game in town right now are equities to drive the balance sheet of the individual investor and also the consumer."</strong></p> <p>Uh, what?</p> <p>Unwilling to risk a subdural hematoma from trying to decipher what, if anything, that sentence even means, we trudge on:</p> <p>"If you take energy out right... energy really cratered... the earnings are not that bad", and when someone interjects that revenues are <em>bad</em>, John's response is: "<strong>obviously we can debate that</strong>." </p> <p>Actually, <a href="http://www.zerohedge.com/news/2015-07-26/revenue-recession-investors-are-paying-too-much-growth-barclays-says">no we can</a>'t:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/07/BarclaysRevenueGrowth1.png"><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/07/BarclaysRevenueGrowth1_0.png" width="397" height="185" /></a></p> <p>... and as <a href="http://www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight_7.31.15">Factset notes</a>, "Revenue Growth Not Expected to Return Until 2016"</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/07/2015%20revenue%20growth.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/07/2015%20revenue%20growth_0.jpg" width="400" height="259" /></a></p> <p>But ignore reality because John plows on: "the trajectory of earnings is up, we're not going into a recession, therefore all the liquidity that's sitting on a sideline has to go somewhere and that place that it's eventually going to is equities, that's what happens."</p> <p>Uh, what... again? Some circular argument which is made whole not because of some cause-effect link but because "<em>that's what happens</em>"?</p> <p>At this point we are getting concerned that Mr. Spallanzani has absolutely no idea what he is talking about.</p> <p>For better or worse, his CNBC hosts did too, and the camel's back finally broke when asked if he has any clue about ETF flows (he does because&nbsp; "<em>I trade ETFs all day"</em>) he, surprisingly accurately, notes that&nbsp; "flows are going into IWM, into biotechs and going into QQQs", which incidentally are only the story stocks, those trading in triple digit or higher PE, Spallanzani totally cracked, and having no response at all, came out with the following absolute stunner:</p> <ul> <li><strong>"There's a bubble in pessimism worldwide, come on you read Zero Hedge.</strong>"</li> </ul> <p>And cue laughter.</p> <p>So there you have it: when you are fresh out of any legitimate arguments, what do you do? You name drop Zero Hedge and use its readership as a benchmark of rationality or, as the case may in this particular very, very confused case, hope it's sufficient to "prove" that there is a bubble in pessimism... or something. It wasn't exactly clear by this point in the interview what John's point was, or if he even had one.</p> <p> And while we probably should be grateful for that assessment, because for whatever reason Zero Hedge traffic was indeed an all time high in July, the fact that it originates from someone as confused, albeit a religious reader of this website, as Spallanzani we'll just avoid commenting altogether.</p> <p><iframe src="https://www.youtube.com/embed/rgOZVp4y_M8" width="600" height="450" frameborder="0"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="684" height="542" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/spallanzani.jpg?1438368071" /> </div> </div> </div> http://www.zerohedge.com/news/2015-07-31/theres-bubble-pessimism-worldwide-come-you-read-zero-hedge#comments Bond Central Banks Reality Recession Sat, 01 Aug 2015 03:41:15 +0000 Tyler Durden 510792 at http://www.zerohedge.com Economics 101: Wal-Mart Hikes Minimum Wages, Prepares To Fire 1000 http://www.zerohedge.com/news/2015-07-31/economics-101-wal-mart-hikes-minimum-wages-prepares-fire-1000 <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>"<strong>Please remember, these people are our neighbors and friends. You have a skill that will be very much in need when this goes down.</strong> You are experts in the job market and you know what it takes to get hired. This is a time for us to step up and do what we can to help."</em></p> </blockquote> <p>The quote above is from an internal memo sent to employees of Northwest Arkansas recruiting firm Cameron Smith &amp; Associates and references an expected wave of layoffs at WalMart’s home office in Bentonville. </p> <p>The memo was <a href="http://www.arkansasonline.com/news/2015/jul/29/firm-preps-staff-for-wal-mart-layoffs-2/">obtained by the Arkansas Democrat-Gazette</a>, who spoke with Cameron Smith himself via e-mail. </p> <p>"The last time Walmart had a large layoff (800 plus), we were unprepared and overwhelmed with phone calls, emails, resumes and walk-ins," Smith told the paper, referring to a series of cuts at WalMart in 2009.&nbsp;<span style="font-size: 1em; line-height: 1.3em;">The next round of layoffs are just around the corner and could affect as many as 1,000 employees Smith contends, citing conversations with company insiders.&nbsp;</span></p> <p>As those who follow the retailer closely are no doubt aware, context is key here.&nbsp;</p> <p>Back in April, we asked why WalMart was mysteriously shuttering geographically distinct stores nationwide for "plumbing problems." The company, citing the need to repair persistent "clogs and leaks", closed five stores across the country almost simultaneously. The 2,500 affected employees were in some instances given almost no notice whatsoever. </p> <p>After a few enterprising reporters determined that no plumbing permits had been filed in any of the locales where the shuttered stores were located, conspiracy theories sprung up, the most outlandish of which posited a link between the store closings and the Jade Helm 15 military drills which began earlier this month in Texas and six other states.&nbsp;</p> <p>For our part, we argued that the store closures were more likely the result of two things: i) the need to cut costs, and ii) the desire to close a "problem" store in California that had for years served as a hotbed for union activism. For now, we won’t dive into the union issue, but for those interested, see <a href="http://www.zerohedge.com/news/2015-04-17/did-walmart-close-california-store-punish-employees-who-protested-wages-and-working-">here</a>, <a href="http://www.zerohedge.com/news/2015-05-20/presenting-walmarts-leaked-anti-union-training-video">here</a>, and <a href="http://www.zerohedge.com/news/2015-04-20/walmart-workers-take-plumbing-mystery-labor-board">her</a>.&nbsp;</p> <p>As for cost cutting, consider the following, excerpted from "<a href="http://www.zerohedge.com/news/2015-04-15/why-walmart-mysteriously-shuttering-stores-nationwide-plumbing-issues">Why Is WalMart Mysteriously Shuttering Stores Nationwide For Plumbing Issues?</a>":</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Earlier this year, WalMart became one of several corporate heavyweights to lift wages for its meagerly compensated workers, around 500,000 of which are now set to receive at least $9/hour and $10/hour by Q1 2016 (that of course assumes they make it on $9 an hour for another 12 months and don’t seek out other employment by sheer necessity).&nbsp;</em></p> <p>&nbsp;</p> <p><em><strong>Meanwhile, the move by the country’s largest retailer to pay a few extra pennies to its (basically) minimum wage employees comes at a cost to the company’s suppliers because when you operate on the thinnest of margins in order to be the "low price leader," someone has to pay for those wage hikes and you can’t pass along the costs to customers because many of your low-income patrons are operating from the same tax bracket as your low-paid employees.</strong> As such, the supply chain is forced to lower their prices and of course they’re going to comply because well, you’re WalMart meaning you’re your vendors’ biggest account pretty much by default. The outcome is that "while WMT (or MCD or GAP or Target) boosts the living standards of its employees by the smallest of fractions, it cripples the cost and wage structure of the entire ecosystem of vendors that feed into it, and what takes place is a veritable avalanche effect where a few cent increase for the lowest paid megacorp employees results in a tidal wave of layoffs for said megacorp's vendors."</em></p> <p>&nbsp;</p> <p><em>If that doesn’t turn out to be enough in the face of an economy which isn’t really recovering and in which low-income shoppers are constrained by lackluster (and by that we mean nonexistent) wage growth, some sacrifices may have to be made.&nbsp;</em></p> </blockquote> <p>The first such sacrifice (apparently) were the 2,500 or so employees at the five locations with intractable plumbing problems, but clearly that was not enough which is why now, the company is moving to cut 1,000 higher paying jobs in Bentonville.</p> <p>Of course WalMart can’t come out and say that a lackluster economy and nonexistent wage growth for 83% of the nation’s workforce has ironically served to make the company’s own minimum wage hikes untenable and therefore some heads in middle management have to roll, so instead the cuts will be blamed on bureaucratic inefficiencies. Here’s the <a href="http://www.arkansasonline.com/news/2015/jul/29/firm-preps-staff-for-wal-mart-layoffs-2/">Democrat-Gazette again</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em><strong>Cutting through red tape and trimming bureaucracy has been among the goals of McMillon, who took over as CEO in February 2014.</strong> Wal-Mart employs more than 2 million worldwide and has more than 1.4 million employees in the U.S.</em></p> <p>&nbsp;</p> <p><em>McMillon mentioned the size of the company's headquarters as a possible detriment to quicker action at the store level and told retail analysts during a June question-and-answer session that employees should remember "there are no cash registers in the office." <strong>During a store visit last year, McMillon said he encountered an electronics department manager who spent five hours on the phone with the home office to get assistance with a problem.</strong></em></p> <p>&nbsp;</p> <p><em>"We want people to make decisions and move with speed and not have the organization run in a way that causes it to slow down," McMillon said.</em></p> <p>&nbsp;</p> <p><em>He again referred to the "dangers of a big company" during a June 11 retail conference in Springdale.</em></p> <p>&nbsp;</p> <p><em>"As we've grown and time has gone on, we've created pockets of our business, situations where people don't want to share bad news. <strong>Lots of PowerPoints get built, lots of pre-meetings are held to socialize things so people aren't surprised during a meeting," McMillon said. "That is bureaucracy. That slows us down."</strong></em></p> </blockquote> <p>Got it.&nbsp;Too many people are working on PowerPoints and when someone making $10 an hour calls the home office, the hold time is too long. These are clear signs of an elephantine, Washington-esque bureaucracy, which must be done away with. </p> <p>Or something.</p> <p>Just don’t dare suggest that the cuts are the indirect or even direct result of the wage hikes that will cost the retailer around $1 billion this year, because that would mean that critics of the push to hike the pay floor are correct to assert that forcing employers to pay more will immediately result in equal and offsetting layoffs.</p> <p>Only here they aren't necessarily "equal" at all.</p> <p>That's in no way a commentary on the "worth" (in a philosophical sense of the word) of an hourly worker versus a salaried employee, but if layoffs in Arkansas do materialize as&nbsp;Cameron Smith predicts, it seems entirely fair to suggest that the pittance given to hundreds of thousands of low paid workers will ultimately come at the cost of 1,000 or so breadwinner positions. We'll leave it to readers to determine whether that is a net win for the economy.&nbsp;</p> <p>On the bright side for anyone affected by the coming round of job cuts, at least you know that this time around, the staff at&nbsp;Cameron Smith &amp; Associates is "much more prepared" to handle the sudden influx of 1,000 distraught former WalMart employees.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="564" height="309" alt="" src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/WalMart.png?1438348023" /> </div> </div> </div> http://www.zerohedge.com/news/2015-07-31/economics-101-wal-mart-hikes-minimum-wages-prepares-fire-1000#comments default Sat, 01 Aug 2015 02:35:31 +0000 Tyler Durden 510752 at http://www.zerohedge.com Paying In A Broken World http://www.zerohedge.com/news/2015-07-31/paying-broken-world <p><a href="https://projectchesapeake.wordpress.com/2015/07/29/paying-in-a-broken-world/"><em>Submitted by Tom Chatham via Project Chesapeake</em></a>,</p> <p><strong>It is a common reaction to ask, how much is that, when we see something we want or need. </strong>The question is answered with some monetary figure that people will recognize and use to determine if they can afford it. <u><strong>But what happens when the monetary system we know becomes so dysfunctional that common monetary values mean little.</strong></u></p> <p><strong><em>This could happen due to massive inflation, currency collapse or a frozen banking system that prevents you from accessing your funds.</em></strong> If you have no way to pay for something, it does not matter how much or little it costs. It will be out of your reach unless you have some means to pay.</p> <p><u><strong>Some people keep cash on hand for just such a problem.</strong></u> They know they will be able to pay cash when everything else stops working. That will work for a time but eventually paper currency will be looked on as a diminishing asset as physical goods become more valuable to those that need them. Paper currency is not much different than a check you write on your account. If the account is empty your check is no good.</p> <p>The same can be said for those entities that issue paper money. If they are bankrupt or shut down, the value of their printed certificates will be worth the same as the bad check. Nobody will want to accept it after they realize it may not be honored for the value it supposedly holds. While a local store may accept it out of habit, eventually businesses will figure out the truth.</p> <p><u><strong>In times like this alternative forms of money may become more viable to local individuals such as gold and silver.</strong></u> But, that may take some time and most people will not own any of these precious metals for trade. Some may resort to direct barter with some of the things they have amassed over the years to get the necessities they need and under these circumstances values will be variable and disconnected from reality at times.</p> <p><strong><u>Some people have stored barter items for this eventuality rather than precious metals</u> and there is nothing wrong with that if it gives them the feeling of safety they desire.</strong> One of the reasons they desire goods instead of metals is the fear that governments will call in precious metals as they did in 1933 and that is a legitimate fear but must be taken with some reflection on the facts.</p> <p><strong>In 1933, gold and silver coinage was the circulating currency in the nation meaning most people had some in their possession. </strong>That is not the reality today as very few people have any knowledge of the value of metals and do not have them in their possession. The fact that the government can call in metals does not mean they will be able to relieve you of them.</p> <p>In 1933, on the river where I grew up, there was a store on the bank of the river that did a good business with all of the ships that came by. <strong>When the gold was called in in 1933, the store owner did not want to turn it in so he kept it hidden away. </strong>At the time he had a small chest full of gold coins. He kept that chest of coins until the 1970&rsquo;s when gold was legal to own again and then he sold it for a good profit. This is a true story and just one example of how hard it would be for the government to call in all of the metals in private hands.</p> <p><strong>It does not matter what you hold your savings in only that it will retain value when conventional paper currencies become a despised possession.</strong> When that happens you need the ability to buy the things you need with what you physically have on hand. The question you must answer is what will you have on hand when that day comes.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="471" height="325" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150731_pay.jpg?1438376469" /> </div> </div> </div> http://www.zerohedge.com/news/2015-07-31/paying-broken-world#comments Precious Metals Reality Sat, 01 Aug 2015 02:25:00 +0000 Tyler Durden 510816 at http://www.zerohedge.com