Looting Made Easy——The $2 Trillion Stock Buyback Binge

by MIKE WHITNEY at Counterpunch Corporations are taking the retirement savings of elderly public employees and using them to inflate their stock prices so wealthy CEOs and their shareholders can enrich themselves at the expense of their companies. And it’s all completely legal. Under current financial regulations, corporate bosses are free to repurchase their own company’s shares, push stock prices into the stratosphere, skim off a generous bonuses for themselves in the form of executive compensation, and leave their companies drowning in red ink. Even worse, a sizable portion of the money devoted to stock buybacks is coming from  “massively underfunded public pension” funds that retired workers depend on for their survival. According to Brian Reynolds, Chief Market Strategist at New Albion Partners,  “Pension funds have to make 7.5%,” so they are putting their money “in these levered credit funds that mimic Long-Term Capital Management in the 1990s.” Those funds, in turn, “buy enormous amounts of corporate bonds from companies which put cash onto company balance sheets…and they use it to jack their stock price up, either through buybacks or mergers and acquisitions…It’s just a daisy chain of financial engineering and it’s probably going to intensify in coming years.”   (“How a Public Pension Crisis Is Driving an Epic Credit Boom“, Financial Sense) So, once again, ordinary working people are caught in the crosshairs of a corporate scam that could blow up in their faces and leave them without sufficient resources to muddle through their retirement years. The amount money that’s being funneled into buybacks is simply staggering. According to Dave Dayen at the Intercept: “Last year, companies spent $553 billion to repurchase outstanding shares, just short of the record $589.1 billion in 2007. Large companies like Apple, General Motors, McDonald’s, Pfizer, Microsoft and more have engaged in buybacks in recent years. Returning profits toOriginally appeared at: http://davidstockmanscontracorner.com/looting-made-easy-the-2-trillion-stock-buyback-binge/

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Labor Day 2028

In 1928, famed British economist John Maynard Keynes predicted that technology would advance so far in a hundred years – by 2028 – that it will replace all work, and no one will need to worry about making money. “For the first time since his creation man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.” We still have thirteen years to go before we reach Keynes’ prophetic year, but we’re not exactly on the way to it. Americans are working harder than ever. Keynes may be proven right about technological progress. We’re on the verge of 3-D printing, driverless cars, delivery drones, and robots that can serve us coffee in the morning and make our beds. But he overlooked one big question: How to redistribute the profits from these marvelous labor-saving inventions, so we’ll have the money to buy the free time they provide? Without such a mechanism, most of us are condemned to work ever harder in order to compensate for lost earnings due to the labor-replacing technologies. Such technologies are even replacing knowledge workers – a big reason why college degrees no longer deliver steadily higher wages and larger shares of the economic pie. Since 2000, the vast majority of college graduates have seen little or no income gains. The economic model that predominated through most of the twentieth century was mass production by many, for mass consumption by many. But the model we’re rushing toward is unlimited production by a handful, for consumption by the few able to afford it. The ratio of employees to customers is already dropping to mind-boggling lows. When Facebook purchased the messaging company WhatsApp for $19 billion last year, WhatsAppOriginally appeared at: http://robertreich.org/post/128058937635

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BitGold Enables Gold Savings through a New App and Global Network

BitGold designed a new software that automatically links buyers to bullion dealers and storage companies. With this move, the company makes it easier for people to own gold as a hedge against inflation and as a store of value. The Toronto-based company began offering its service to the public in May and had already racked up more than 168,000 global users by the end of July, with about $7 million in transactions. BitGold pairs together the ease and convenience of digital payments and online gold savings with the integrity and stability of gold. The company’s mission is to make physical gold accessible to everyone. Minimizing or removing fees everywhere possible became our purpose. The platform user-friendly features allow users to send and receive gold payments as well as grants them access to traditional retail spending with the company’s BitGold Prepaid cards. Users can redeem their physical gold as 10g GoldCubesTM or 1kg Bullion Bars anytime. Deposits into BitGold Accounts can be done online with digital deposits or in one of the BitGold network ATMs. The system charges a 1% fee to exchange cash into gold and back but storage is free but it also allows users to transfer their gold value to a prepaid credit card, so they can actually do shopping with their gold holdings. The company became inspired by the possibilities of Bitcoin, which allows global financial transactions without going through banking systems. Like Bitcoin, BitGold allows free transfers between users, including an international money-transfer option that is in the works. But the key difference is that gold is the best store of value. Gold could be a good investment in countries where you can’t trust the national currency or government and a real good investment when it comes to hedge against inflation as an alternative store of value. Now withOriginally appeared at: http://www.newsbtc.com/2015/08/31/bitgold-enables-gold-savings-through-new-app-and-global-network/

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Bitcoinist Weekly News Re-Hash: Bitcoin XT Dies, Bitcoin Price Stabilizes

Bitcoiners breathed a sigh of relief this week when the drama-fueled price decline finally came to a close. The downtrend persisted for the first two days of the week, but the price quickly rebounded and began making small — yet welcome — gains that continued for the rest of the week. This recovery in the markets coincided with the winding down of the Bitcoin XT drama, which began drawing to a close as miners rejected XT in favor of a much more modest BIP 100. Also read: Bitcoinist Weekly News Re-Hash: Bitcoin XT Drama Continues, Global Economic Slowdown Looms Daily Bitcoin Price Action Aug 24: $228.26 Aug 25: $204.02 Aug 26: $220.27 Aug 27: $224.19 Aug 28: $224.15 Aug 29: $231.72 Aug 30 Open: $231.33 Aug 30 Close: $227.50 Total Change: -0.33% Monday, August 24, 2015 opened the week with the Bitcoin price at $228.26, continuing the decline that persisted throughout last week. The price trended downwards for the entire day, actually falling below $200 at 8 PM and hitting a low of $198.12. The markets attempted to recover from this trough in the last few hours of the day, just barely making it back into the $200s. Tuesday opened at $204.02, narrowly making it out of the sub-$200 range. Fortunately, though, the 25th marked the start of a fairly enthusiastic recovery, with the Bitcoin price rising considerably throughout the duration of the day. By midday, Bitcoin returned to the $220s, where it would stay for the rest of the day. Tuesday ended with the Bitcoin price in this $220s range, closing the day ay $220.27. In Tuesday’s news, Bitcoin mining pool F2Pool rejected Gavin Andresen’s and Mike Hearn’s highly controversial Bitcoin XT implementation, opting for the much milder BIP 100 update. Other large pools chose BIP 100Originally appeared at: http://insidebitcoins.com/news/bitcoinist-weekly-news-re-hash-bitcoin-xt-dies-bitcoin-price-stabilizes/34605

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Beware of This ALS Fundraiser Accepting Bitcoin Donations

By Bitcoinist.net Aug 31, 2015 1:00 PM EDT <!––> One of the many reasons why Bitcoin attracts a lot of attention is that virtual currency can be a powerful tool for charities around the world. Rather thanOriginally appeared at: http://insidebitcoins.com/news/beware-of-this-als-fundraiser-accepting-bitcoin-donations/34603

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How A Real Plunge Protection Team Works—–China Rolls Out The Paddy Wagons, Snatches 200 Rumor-Mongers

By CHUNHAN WONG at Marketwatch BEIJING—Chinese authorities said they punished nearly 200 people for spreading online rumors in connection with recent major news events, in a government crackdown on politically sensitive discourse. The sweep targeted people who the government said spread false Internet rumors regarding events such as the stock-market turmoil and deadly explosions earlier this month in the port city of Tianjin, the Ministry of Public Security said Sunday. The ministry said the accused expressed remorse for their actions, in which they “misled society and the public, generated and spread fearful sentiment, and even used the opportunity to maliciously concoct rumors to attack [Communist] Party and national leaders.” Separately on Monday, the official Xinhua News Agency said authorities detained a journalist at a Chinese financial-news magazine for allegedly concocting and spreading false information related to securities and futures trading. Xinhua also said that authorities detained four senior executives at Citic Securities Co. for what they called insider trading, as well as an employee at the securities regulator for alleged insider trading, forgery and receiving bribes. Wang Xiaolu, a reporter at the Caijing business-news magazine, was detained on Sunday after allegedly confessing to collaborating with other people to fabricate information about securities and futures trading, Xinhua said. Wang couldn’t be reached for comment, and it wasn’t clear if he had legal representation. Caijing editors couldn’t immediately be reached. Source: China ‘punishes’ nearly 200 for spreading rumors – MarketWatch Originally appeared at: http://davidstockmanscontracorner.com/how-a-real-plunge-protection-team-works-china-rolls-out-the-paddy-wagons-snatches-200-rumor-mongers/

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Commonwealth Virtual Currencies Working Group Issues Statement about Bitcoin’s …

This week, the Commonwealth Virtual Currencies Working Group made up of Australia, Barbados, Kenya, Nigeria, Singapore and Tonga, together with the International Monetary Fund and World Bank, concluded a three-day conference in London with a consensus: “Member states should consider the applicability of their existing legal frameworks to virtual currencies and where appropriate they should consider adapting them or enacting new legislation to regulate virtual currencies.” The group has come up with the consensus because it recognizes the benefits and the disruptive nature of bitcoin and other digital currencies in the financial sector. The conference was joined by experts from the banking sector, academia, virtual currency operators, users and law enforcement agencies, to discuss the unique applications and the risks of criminal misuse. One of the main members of the Commonwealth Virtual Currencies Working Group, Aminiasi Kefu, Tonga’s acting attorney general explained: “From Tonga’s perspective, virtual currencies are a phenomena that has already arrived. Today, real estate, buildings and businesses held or owned by individuals resident in Tonga are being advertised for sale on the Internet for virtual currency, namely bitcoin.” The Working Group received presentations from nine groups involved with virtual currencies, including the U.K. Digital Currency Association, BitPesa, Bitt, Bankymoon, Ripple Labs and Minku. Many experts and representatives explained to other member states that the decentralized nature of virtual currencies, specifically bitcoin, has been the solution to economic inequality and remittances worldwide. Bankymoon CEO Lorien Gamaroff explained the importance of virtual currencies in severely underbanked regions such as Africa. “In Africa, around 80 percent of the population doesn’t have access to banks and are mainly engaged in a cash economy,” said Gamaroff.   Photo The Commonwealth / Flickr (CC) Originally appeared at: https://bitcoinmagazine.com/21794/commonwealth-virtual-currencies-working-group-issues-statement-bitcoins-potential/

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Daily FX Brokers’ News: FxNet, FXPIG, DMM Option and YJFX!

In today’s daily roundup, a number of online brokers have announced various improvements to their services. A new trading instrument, a new payment method and a number of technological upgrades are all meant to enhance trader’s satisfaction and performance. DMM Option DMM Option added another payment option, Neteller, a secure, automated online payment option for its clients. DMM Option, the binary options trading brand of DMM FX Australia Pty Limited and DMM FX Australia, is supported by the largest FX broker in the world, Japan’s DMM Group. The Australian licensed subsidiary of the Japanese powerhouse is a brand operated in order to reach the global markets beyond the shores of Japan. Neteller payments are currently available to DMM Option clients with all currency based trading accounts. FxNet FxNet revealed  its newest trading instrument; Bitcoin. FxNet Ltd, is an Investment Firm that is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC). Bitcoin will be the newest addition to the already existing over 30 global shares offered on FxNet including Apple, Amazon, Coca Cola and PayPal. The broker explained to its clients that Bitcoin, which is a rising virtual currency, is now available for trading under CFDs on Shares. According to the announcement it “will offer traders the chance to take a piece of the world’s youngest currency which has showed a lot of promise in the six years since its creation.” FXPIG FXPIG has informed its traders that MT4 for Mac computers has finally arrived. Premier Interchange Gateway is a managed Offshore Finance Company registered in New Zealand. The broker explains that, no VPS, no third party applications, just a simple native MT4 interface, like the one on Windows, is now available on the sleek MacBook, iMac, or MacMini. “After all, PIGs love Apples…” YJFX! YJFX!, the Yahoo Japan broker, notified its traders that the firm upgraded its iOS and Android mobile apps to new versions. Major changes in thisOriginally appeared at: http://www.financemagnates.com/forex/brokers/daily-fx-brokers-news-fxnet-fxpig-dmm-option-and-yjfx/

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Barclays to set bitcoin rolling

Barclays is set to become the first UK bank to officially accept payments in Bitcoin, as reported in The Sunday Times. The bank had entered into a partnership with an unnamed Bitcoin exchange or spending platform which is going to help it enable charity organizations accept Bitcoin payment. “This could fundamentally change the way banks verify customers in the future”. During that same interview with the worldwide Business Times, Derek White made a point of mentioning that Barclays was waiting until significant breakthroughs from their labs came through in order to avoid creating false buzz. This all shows the bank is interested in using Bitcoin to greater extent. The aim to go into collaboration with the cryptographic currency is to allow people to donate to charities in the digital currency. UBS is studying the “block chain”, or database, which records all bitcoin transactions. Barclays has two sites in Notting Hill and Old Street, London, dedicated to researching Bitcoin and blockchain technology, with a combined capacity of 75 staff, and is also operating a blockchain workspace in a revamped warehouse in Whitechapel, east London. Bitcoin may often be pitched as an alternative to existing fiat money based financial institutions, a distributed, non-centrally controlled cryptocurrency that rages against the machine, and yet the move by Barclays to start accepting Bitcoin payments, even in this small way, should be welcomed. Moreover, as the bank it steadily increasing its efforts to understand and implement Bitcoin and blockchain technology, it may just be the beginning of the acceptance of the technology at larger level. Focusing on charities first seems a very smart decision, which can shield Barclays from the potential regulatory and image problems, giving it time to prove the value of Bitcoin in a context that can’tOriginally appeared at: http://rapidnewsnetwork.com/barclays-to-set-bitcoin-rolling/151134/

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Take The Opportunity To Bail Before Its Too Late

Last week ended with the cackling hens on CNBC and the spokesmodels on Bloomberg bloviating about the temporary pothole on the road to riches. They assured their few thousand remaining viewers the 11% plunge in the stock market was caused by China and the communist government’s direct intervention in their stock market, arrest of a brokerage CEO, and threat to prosecute sellers surely cured what ails their market. The Fed and their Plunge Protection Team co-conspirators reversed the free fall, manipulating derivatives and creating a short seller covering rally back to previous week levels. The moneyed interests are desperate to retain the appearance of normality and stability, as their debt saturated system teeters on the verge of collapse. John Hussman’s weekly letter provides sound advice for anyone looking to avoid a 50% loss in the next 18 months. The market has been overvalued for the last three years and now sits at overvaluation levels on par with 1929 and 2000. The difference is that fear has been overtaking greed in the psyches of traders. The average Joe isn’t in the market. Only the Ivy League MBA High frequency trading computer gurus are playing in this rigged market. The 1,100 point crash last Monday is what happens when arrogant young traders, fear and computer algorithms combine in a perfect storm of mindless selling. Suddenly the pompous risk takers became frightened risk averse lemmings. The single most important thing for investors to understand here is how current market conditions differ from those that existed through the majority of the market advance of recent years. The difference isn’t valuations. On measures that are best correlated with actual subsequent 10-year SP 500 total returns, the market has advanced from strenuous, to extreme, to obscene overvaluation, largely without consequence. The difference is that investor risk-preferences have shiftedOriginally appeared at: http://davidstockmanscontracorner.com/take-the-opportunity-to-bail-before-its-too-late/

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