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Monday, December 30, 2013

Economic Stories of Relevance in Today's World -- December 29, 2013

Art Cashin: (King World News) Director of Floor Operations for UBS Financial Services & CNBC Market Commentator - UBS has over $650 billion under management. Art has over 50 years of Wall Street experience, which gives him the ability to offer valuable insights to investors and traders. When he started in the industry, the Dow Jones Industrial Average was actually in the 700-800 range. He shares his analysis and gives the pulse of the market from the floor of the New York Stock Exchange. Art is one of the most respected people in the world when it comes to analyzing the action in the US stock market and provides an objective and unbiased view of the current market situation. His daily market commentary is read internationally by clients and peers.
King World News Interview - December 28, 2013 - There is no other alternative to the Stock market... will give some push, but there will be a pull back. Yellen (Fed Chief) will be tested in her first year. Mortgage applications have dropped off to levels when Lehman was deconstructed. Mortgage rates creeping up. Fed will have to reverse itself on tapering. Is the Fed in control? Have a history of poor forecasts. Markets may lose faith in the efficacy of the Fed. Europe has verbally held things together. Sovereign debt issue has not be solved. China is in trouble. They have to be careful. Their shadow banking system has created problems... trying to rein in... needs to be stabilized... every China government that has fallen fell because of food. India is concerned about currency flowing out due to Gold. Heavy duties and sanctions imposed. China has been a heavy buyer of gold. Concern for governments to control things. People should be concerned about western governments letting their Gold go. Central Bankers have let it go at low ($) levels. Geopolitics everyone thinks the world just goes up to the cliff, the World can go over the cliff. Austerity will lead to a backlash of protests. Geopolitical concers. Fed might be successful at creating velocity, which could lead to heavy inflation and then the Fed would have to taper at the "speed of sound." Hickory Hound: Taper = rising interest rates.

James Rickards: US 'Heading for Another Recession Soon' - Moneynews - Dan Weil - December 27, 2013 - While many experts were encouraged by the 4.1 percent economic growth reported for the third quarter, James Rickards, portfolio manager for the West Shore Real Asset Income Fund, wasn't one of them.                      "There is good reason to believe that the economy is heading for another recession soon, rather than the more robust growth economists keep predicting," he writes in The Darien (Connecticut) Times.                             "More than 50 million Americans are on food stamps, 26 million Americans are either unemployed, underemployed or have given up looking for work, 11 million Americans are claiming disability payments — effectively a new form of unemployment insurance — and labor force participation is at the lowest level since 1978."

Push of a Button: This Is How Fast They Can Lock Down the Entire Banking System - - Mac Slavo - December 24th, 2013 - Late last week it was learned that some 40 million charge cards were obtained using physical processing systems located in Target retail locations nationwide. Though no details of the how the hack attack was executed have been released by Target, the FBI or other agencies investigating the breach, it is likely that the processing machines themselves were compromised. Target claims that the hack was sophisticated, but on the technical side, once hackers found a way into the credit card processing machines, probably via remote entry from servers somewhere in Eastern Europe or Russia, the theft of credit card data itself would have been fairly straight forward by using scripts or applications that simply capture the data and send it off to servers owned by the hackers.                           This was probably one of the largest credit card thefts in history, though it is not at all surprising. Two years ago we noted that cyber attacks would soon be targeting America’s e-commerce systems and just a few months ago it was noted that rogue terrorist groups were specifically working on sabotage operation to bring down the U.S. economy. While this latest attack on Target stores and their customers fell far short of crashing our economy or financial system, it proves, as did recent breaches of Pentagon military networks, that even the most highly secured systems in the world can be compromised.                               Furthermore, what this attack highlights is that with the right type of “event” the economy and financial system of the United States can be shut down… almost instantly...

Duke Grad Student Secretly Lived In a Van to Escape Loan Debt - Business Insider - Mandi Woodruff - December 27, 2013 - Yahoo editors have selected this article as a favorite of 2013. It first ran on Yahoo Finance on June 10 and was one of the most popular stories of the year. The article details the extreme lengths Ken Ilgunas went to in order to pay back his big student debt bill.                         By the time Ken Ilgunas was wrapping up his last year of undergraduate studies at the University of Buffalo in 2005, he had no idea what kind of debt hole he'd dug himself into.                        He had majored in the least marketable fields of study possible — English and History — and had zero job prospects after getting turned down for no fewer than 25 paid internships.                       "That was a wake-up call," he told Business Insider. "I had this huge $32,000 student debt and at the time I was pushing carts at Home Depot, making $8 an hour. I was just getting kind of frantic."                       Back then, student loans had yet to become the front page news they are today. Ilgunas could have simply deferred his loans or declared forbearance. He also could have asked his parents (who were more than willing to help) for a leg up. He could have thrown up his hands and gone to grad school until the job market bounced back.                      Instead, he moved to Alaska and spent two years paying back every dime. And when he enrolled at Duke University for graduate school later, he lived out of his van to be sure he wouldn't have to take out loans again.                            "I had no idea what I was getting into at the time. I didn't even know what interest was when I was 17," he said. "I just think that's awfully indicative of the incredibly poor personal finance education young people have at that time in their lives."                       In his book, "Walden on Wheels: On The Open Road from Debt to Freedom," Ken chronicles his journey out of debt.                          He was kind enough to share his story with us this week.                       He knew exactly where to go for work. Ken had spent a couple months working at a remote Alaskan truck stop the summer before graduating. So he called up his old contacts and landed a job there as a local tour guide, cook, and basically whatever the locals needed.                    "The day after I graduated, I was on a flight to Alaska and pretty much started work right away," he said. "As ignorant as I was, I did know that if I didn't deal with my loans, I'd have to deal with accumulated interest or delinquency or default. I wanted to pay it off as fast as humanly possible."                        It was a brilliant move for a 20-something needing to pay down debt in a hurry. "It's 250 miles from the nearest store, room and board were included, and there wasn't any cell service," he said. "You can amaze yourself with how much you can save when you reduce your cost of living. Almost every dollar I made went toward my student loans."

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