Top travel tech safety tips

Just like the destination itself, logging onto a foreign free wifi hotspot can be a journey into the unknown and one that could be full of unpleasant surprises.

There's no question that smartphones and tablets have revolutionized the way we live and that's why when it comes to taking a holiday with them, rather than from them, there appears to be no debate: the phone and the slate and often even a notebook are as high on the list as packing clean underwear.
And because of this, holidaymakers need to keep in mind their digital as well as their personal safety if taking a vacation this summer.
Public wifi
You may feel it's fine to use a hotspot at an airport or a renowned hotel but in general a public hotspot is just that: the opposite of private. As Sean Sullivan, Security Advisor at F-Secure Labs, says: "It may feel private because you're using your personal device, but it's not." He advises against using a public hotspot for anything personal or for anything that requires you to enter a password or user details. Stick to browsing.
Complementary computers
From hotel lobbies to cafes and bars, a number of places offer free computer access. Unless you can 100 percent guarantee that they're not brimming with malware or keystroke-registering viruses, use them for checking the weather, following sports or reading the headlines, but nothing else.
Take email precautions
Sullivan suggests setting up a special one-off email address specifically for use during a vacation so that if it's an emergency and you have to use a public wifi hotspot or communal PC to get in touch with someone, the damage is minimized. "That way if someone hacks your vacation email account, they might see emails with your mom and the cat sitter, but they won't have access to the other sensitive data that would be in your main email account," he says. Setting up a one-off account will also somewhat minimize the impact of losing or of having a phone or tablet stolen.
Banking away from home
The simple answer is to stick to physical banks if at all possible. But if using online banking is unavoidable, bite the bullet and accept the data usage roaming fees that come with using a smartphone to access the internet in a foreign country and do it via the dedicated app. But make sure to sign out of it again when the transaction is completed.
Saving your memories
For most people the content on their devices is just as important as the devices themselves. So make sure they are totally backed up before the holidays start and if the smartphone is serving as a camera too consider using some form of cloud storage for preserving images -- such as Apple's iCloud if you have an iPhone -- or, for Android users, think about swapping out and storing the SD cards.
If you're using a real, high specification camera, rather than a smartphone for capturing memories, think about the professional photographer's trick of covering the device in duct tape and stickers so that the camera looks like it's falling apart rather than a state-of-the-art imaging unit and therefore avoiding unwanted attention.
Saving the device
For a number of years, Apple has offered a free ‘Find My Phone' service and app that enables iPhone and iPad owners to track and locate a missing device and, in the case of theft, remotely erase its contents. Make sure it is set up before you go. For Sony Xperia users, there is a similar Sony-specific service that is currently rolling out globally, while at the beginning of August, Google announced that it will be launching the same type of find-my-phone service currently available to iPhone users to the larger Android device-owning community before the end of the month.

ch/cm

Insight: Flip that mansion: investors see riches in luxury U.S. homes

By Tim Reid

LOS ANGELES (Reuters) - Jan Brzeski stands in a sun-filled, beautifully refurbished living room high in the Hollywood Hills, looking out at a swimming pool and, miles (km) below, stunning views of Los Angeles.
Brzeski is a private money lender running an investment firm in Los Angeles that provides loans to house flippers, investors who buy a home, refurbish it, and sell it on at a profit. Many flippers go to money lenders because they can't get banks to provide such short-term, quick financing.
Standing with Brzeski is Scott Ryan, the realtor who bought this four-bedroom, five-bathroom house in December 2012 for $1.5 million - with money lent by Brzeski - and has transformed it with another $600,000. This week the property will go on the market at $3.295 million.
"People will come in here and fall in love," Ryan said, with a house flipper's standard issue optimism. "This is an emotional sale. If it takes a week to sell, I will be surprised. There are a lot of young, wealthy people here, and a lot of money out there."
Eighteen months ago Brzeski and his firm, Arixa Capital Advisors, were lending investor money to flippers on very different properties: $250,000 single family homes in southern California's up-and-coming low to middle class blue-collar neighborhoods. Most of the deals involved foreclosed homes that were totally refurbished, and then sold quickly.
No more. Brzeski now focuses on developers working on high-end flips of mansions and townhouses in exclusive neighborhoods, such as the Hollywood Hills and Bel Air.
And he is not alone. There has been a surge in high-end and luxury flipping nationwide. Between 2011 and today, flips of homes valued at $1 million or more have risen almost 40 percent across the United States, according to RealtyTrac, the housing data company.
Between 2011 and 2012, high-end flipping rose 456% in Phoenix (150 properties from 27); 867% in Orlando (29 homes from 3); and to 73 properties from 10 in Las Vegas, according to RealtyTrac. To qualify as a flip for the figures, a home has to be bought and sold within six months.
Brzeski says two main factors combined to send him upmarket in the projects he lends on.
Newly flush Wall Street investors moved into the mid-market with so much money that they bought nearly every foreclosure in sight, mostly to rent. The Blackstone Group, for example, spent $5.5 billion on 32,000 homes across America, according to the firm. American Homes 4 Rent, the California-based real estate investment trust founded by self-storage billionaire Wayne Hughes, spent $3.3 billion, on over 19,000 houses.
"These Wall Street guys employed huge dollars," Brzeski said. "These firms came to the courthouse steps and bought everything in sight. So the low to mid-market dried up."
Brzeski said he had originally been wary of the high-end market, because of the much bigger sums involved and thus greater risk. But then in 2011 he financed the purchase of a house in West Hollywood for $1.425 million. Another $1.175 million was spent on a total refurbishment.
"When the developer put it on the market, they had multiple, all-cash offers," he said. "There was a line out the door to buy it. It sold for $3.5 million. This was an incredibly profitable project. This really opened my eyes."
The house was bought by actress Sarah Gilbert, who became famous on the sitcom "Roseanne."
Daren Blomquist, RealtyTrac's vice-president, said: "Flippers are getting more confident that the market is really recovering, and therefore are more willing to go high-end, even though it's more risky."
Blomquist said with the stock market doing so well, there is a lot of investor cash out there, and a huge amount of wealth and pent-up demand at the high-end of the market. When a beautifully refurbished mansion hits the market, they are snapped up, often with all-cash offers, he said.
Foreign investors are also spending billions on the U.S. property market. Last year, Chinese investors spent $12 billion on U.S. real estate, making the country the second biggest foreign investor, just behind Canada, according to the National Association of Realtors.
Blomquist also sounded a warning for anyone who thinks flipping is easy. Many who try, make catastrophic losses.
"It's 10 times as risky doing high-end flips. Unfortunately what happens a lot of times, flippers have a property, then they can't find a buyer to purchase it."
Brzeski's business model is simple. Using a fund of investor money he lends 75 percent of a project's "hard costs" - that is money used for the purchase and refurbishment - and collects interest at an annual rate of approximately 10 percent.
Usually the loan is repaid within six to 12 months. He does not share in the profit made by the flip. Brzeski loans between $1 million and $4 million on each project.
Another factor, unique to California, helps him fund luxury flips, said Brzeski. Because of a 1978 voter initiative law knows as Proposition 13, the tax assessments of California houses have increased dramatically less than home values since the law was enacted, as long as the home has remained unsold.
Now, owners who had been reluctant to part with their large homes since the early 1970s because of "Prop 13" are dying, or are finally ready to downsize.
"Almost all our homes in these A and A plus neighborhoods have something in common. You look at the appliances in the kitchen. If they are from the 1960s or 1970s, that's the house to flip," Brzeski said.
Across the country, close to Washington, D.C., Chris Haddon works for Hard Money Bankers. They provide money for investment deals on "fix and flip" projects in Washington, Maryland and Virginia.
Haddon says he, too, has seen a surge in deals involving high-end properties.
"A few years ago, you would look at a $2 million property and have no idea how long it would take to sell. The high-end market is always the last to rebound. But it's now rebounded and D.C. is hot."
In Miami, Mark Black, a realtor, said people with cash have been moving into the high end of the market in the past year.
"The market has gone through the roof. You see people buying properties one year ago and selling them at 20, 30 percent profit. Some of these are no more than paint jobs. The ones that are doing big rehabs are making huge profits."
In Manhattan, Tim Desmond, a realtor with luxury realtors Stribling, said high-end flips in New York are not for the faint of heart, but the profits can be huge.

He cited a 12,000-square-foot (1,115-square-meter) home on Manhattan's East 56th Street that was bought by an investment group for $10 million. It took two years to convert it into two, three-storey, 6,000-square-foot (557-square-meter) condominiums. The first is now on the market for $17 million.

(Reporting by Tim Reid; Edited by Ronald Grover, Martin Howell and Sandra Maler)

Analysis: Financials near to regaining S&P 500's top spot

By Alison Griswold

NEW YORK (Reuters) - It's hard to overstate the damage that the banking crisis caused financial stocks.
At their peak on June 1, 2007, the stocks in the Standard & Poor's 500 financial sector index had a collective net worth of more than $2.9 trillion, roughly 30 percent greater than that of the next largest group, tech stocks.
Then the housing bubble burst, and their market value plummeted by $2.4 trillion, a drop of 83 percent, compared with the broader S&P 500's 58 percent swoon. When financial stocks hit bottom in March 2009, the whole group was worth just $510 billion, roughly the equivalent of the combined pre-crisis market value of JPMorgan Chase & Co. and Citigroup.
Such a fall makes their comeback all the more remarkable: The financial sector stands within a whisker of recapturing the mantle as the $17 trillion U.S. stock market's heaviest hitter.
At present, the financial index accounts for 16.6 percent of the entire S&P 500 - about 1 percentage point less than the technology sector, data from S&P Dow Jones Indices showed. At the start of the year, the gap between the two stood at about 3.5 points.
"The psychology toward banking has been so incredibly negative, and the big financial gurus were so negative, that they completely missed the fact that the banking industry was showing this gradual steady improvement," said Dick Bove, bank analyst at Rafferty Capital Markets in Tampa, Florida. "In the past couple weeks, they're all saying, 'Banking is back.'"
Financials have added nearly 25 percent this year, lagging only healthcare and consumer discretionary shares. Should they surpass tech, they would top the S&P's 10 industry sectors for the first time since May 2008. At the market low on March 9, 2009, they had a market weight of just 8.9 percent, the smallest since 1991, when the S&L crisis was in full rage.
For the most part, big banks are driving the growth. JPMorgan Chase, Wells Fargo, Citigroup and Bank of America have provided the sector's biggest boost. Each has gained at least 24 percent so far this year.
Wells Fargo, the nation's largest bank by market value, hit an all-time high in late July. This year, the stock has risen nearly 27 percent, on track for its best year since 2000.
MORE UPSIDE?
Banking stocks may have even more room to run, according to an analysis by StarMine, a Thomson Reuters company.
On balance, stocks in the group trade at about 76 percent of their StarMine intrinsic value, which evaluates a stock based on projected growth over the next decade, using a combination of analysts' forecasts and industry growth expectations. By that measure, tech shares are 8 percent overvalued.
Sector heavyweights Citigroup, Bank of America and AIG are considered cheaper than more than 90 percent of the market. Citigroup's intrinsic value is $88.57, better than 70 percent above its current $51.32. StarMine sees comparable upside for Bank of America, pegging its intrinsic value at $25.62 versus Friday's closing price of $14.45.
"The problem with the refinancialization of the U.S. economy is it puts us at greater risk for another financial collapse," said Barry Ritholtz, chief executive and director of equity research at Fusion IQ in New York.
"The collapse started the process of definancializing, and now we're back to refinancializing."
Meanwhile, several of the largest banks remain in the crosshairs of authorities. This week, the U.S. government accused Bank of America of fraud in its sale of mortgage-backed securities.
JPMorgan, struggling to repair its reputation since losing more than $6 billion in 2012 on its so-called "London Whale" derivatives trades, is under both criminal and civil investigation for its own MBS sales.
For the week, financial shares slipped 1.9 percent, exceeding the S&P 500's pullback of 1.1 percent. Still, the stocks have posted double-digit gains for four of the past five years, and are on pace for a fifth straight quarterly rise.
Traditionally, steady performance by financial stocks was seen as a promising sign for the economy, as increased borrowing and lending helps businesses and individuals by encouraging consumption and job creation.
Through 2007, bank stock prices far outpaced the broader market. After the recession, though, they languished while others, such as consumer and energy shares, did well. Their sluggish performance in the early years of the recovery reflected not only the headwinds of a stiffer regulatory environment, but the slow rebound in demand for credit.
TECH HAS ITS DEFENDERS
Some in the financial industry say tech should remain in the top spot, a perch it has held for more than five years now.
"Tech, in my opinion, has more redeeming underlying value than finance," said Ralph Shive, portfolio manager of Wasatch Large Cap Value Fund in South Bend, Indiana. "Technology usually adds value, adds productivity, creates value out of thin air."
Goldman Sachs, in a research report earlier this month, ranked financials among the weakest S&P 500 industry sectors in terms of value and growth. The tech sector earned the highest marks.
Others contend that the financial sector's advance over tech can be healthy for the economy, so long as the market cap of the financial index does not swell to levels that historically have proved unsustainable.
Right before the tech bubble burst in 2000, for example, the S&P 500 tech sector amounted to 34.5 percent of the index - the highest percentage of the S&P that any sector has ever reached, S&P Dow Jones data shows.
"Now that financials and tech are relatively equal, that is an indicator that the market is very balanced at this point in time," said Doug Cote, chief market strategist at ING U.S. Investment Management in New York. "Those have traditionally been the biggest two sectors."

(Reporting by Alison Griswold; Editing by Dan Burns, Steve Orlofsky and Jan Paschal)

For Dell, buyout uncertainty adds to poor PC sales outlook

By Poornima Gupta

SAN FRANCISCO (Reuters) - Months of public bickering, secretive backroom negotiations and eleventh-hour deals for control of Dell Inc belie the fact that the combatants are vying for a company facing steadily declining sales prospects.
The tussle between Chief Executive Michael Dell and firebrand activist investor Carl Icahn is also starting to spook some customers.
It's the last thing a company, grappling with the ever-darkening global outlook for personal computers, needs. IDC estimates Dell's PC shipments slid 4.2 percent in the second quarter, compared to a year earlier.
Some customers have begun asking if Dell is even going to be around in the longer term, said Michael Gavaghen, vice president of sales and marketing at Florida-based Dell reseller SL Powers. Sales are taking longer to close as well, he said.
"We hold their hand and gently say to just table the purchasing decision another few weeks," said Gavaghen. He stressed, however, that customers are "not fleeing by any means."
The cacophony surrounding the $25 billion buyout bid proposed by Michael Dell and Silver Lake Partners has picked up over the past month. Icahn threatened to wage a campaign to replace the CEO and his board, and sued the company in Delaware to try to force an earlier shareholder vote.
Michael Dell raised his offer twice to try to win over major investors. A shareholder vote has been scheduled for September after being delayed three times.
Morale within the company is stable for now, say some employees, though they add that could change rapidly if Icahn has his way and were to reshuffle management.
John Pucillo-Dunphy, senior engineer and owner of Miracle Networking Solutions, a Dell reseller based in Middleboro, Massachusetts, said he supports Dell's going private and is more comfortable with Michael Dell's leadership since it remains unclear what Icahn's long game is.
"I have seen the emails from Michael Dell. I haven't seen anything from Icahn," Pucillo-Dunphy said.
Icahn, who with 8.9 percent of the company is now its second-largest shareholder, has said little about what future he envisions for the company beyond that it has promising prospects based on its large base of PC customers, and that it should remain partly public.
Pucillo-Dunphy said customers are not overly concerned about the drama. "For the most part, they kind of have that mentality that (Dell is) too big to fail."
The company declined to comment on the issue. Michael Dell sent employees an email on Thursday exhorting the troops to stay focused. He followed that up on Friday with a similar assurance for customers.
"I know this hasn't been an easy time. The competition has been aggressive during this period of uncertainty, but we are, as we have always been, determined to prove to you why Dell is the best solutions provider to meet your needs," the CEO said.
WATCHING AND WAITING
China's Lenovo zipped into first place for PC sales globally in the second quarter, and its 16.7 percent market share now takes it past Hewlett-Packard's 16.4 percent, IDC estimates. Dell is No. 3 at 12.2 percent.
Apart from personal computers, analysts say arch-rival HP already outpaces Dell in key areas of the industry including networking and storage. HP is also making strides into enterprise computing, catching attention with its just-launched Moonshot micro-servers, intended to save on power and costs for corporations.
"Without individual specifics, (it is) safe to say that the roadmap is robust," said Dell spokesman David Frink, adding that the company will soon host a number of customer conferences around the world to showcase new products and services.
Analysts have so far refrained from estimating the longer-term impact of the battle on Dell's business. They are watching the situation carefully ahead of the company's quarterly earnings release on August 20.
"It's going to be a high-risk and painful process," Morningstar analyst Carr Lanphier said, adding that the unsettled outcome "makes customers leery."
The average Wall Street forecast is for quarterly profit of $417 million, about half the $875 million reported a year ago. Revenue is expected to slip 2 percent to $14.2 billion.
Dell's fortunes remain closely tied to PC sales, despite $13 billion in acquisitions since 2008 to expand into everything from software to networking. PC sales, which have been shrinking for the last three years, still yield half of revenue.
Global PC sales are expected to fall 7 percent this year and 4.5 percent next year, according to analysts at CLSA. Dell's revenue is seen shrinking every year through 2016, according to Boston Consulting Group, the firm hired by Dell's board to review the buyout offer.
"Investors should take the Silver Lake-Michael Dell bid and run for the hills," said Brian Marshall, analyst with ISI Group. He said the company may end up underperforming his earnings forecast of 26 cents per share on revenue of $14.3 billion.
The CEO, responding to opposition to his buyout, had raised his offer price this month by a dime to $13.75 a share and tacked on a special dividend of 13 cents per share. Before the offer was announced in February, shares were trading around $10 apiece.
Michael Dell, who holds roughly a 16 percent stake in the company he started in college in 1984, wants to overhaul it without interference from shareholders. His option involves sticking to a path established years ago, of transforming the company into a provider of services like storage and computing to corporations and government agencies, in IBM's mold.
Yet even if he should triumph over Icahn, some analysts think it may be too late, since a large swathe of the corporate market has been locked up by IBM and Hewlett-Packard Co.

"HP and IBM have being doing this for the last seven to 10 years," said Steven Nathasingh, managing director at research and consulting firm Vaxa Inc. "Dell has just started."

(Editing by Edwin Chan, Tiffany Wu and Prudence Crowther)

IRS Now Targeting Small Businesses

Small business owners across the country are receiving letters from the IRS questioning if they are reporting all of their cash income, in a new push by the agency some are saying could unnecessarily create fear in the small business community.
The Wall Street Journal reports the initiative is an attempt to respond to what the agency feels is a widespread failure by small businesses to report all their cash sales.
The agency says the letters are not the same as an audit, and it is simply seeking more tax information from the businesses. However, some lawmakers and business owners who received the letters say the initiative is alarming.

Read more

US mulling arrest of bank employees

The US government is planning to arrest two former JP Morgan Chase & Co. employees for their alleged role in masking the size of a multibillion-dollar trading loss.
The former employees, who worked in London, could be arrested in the next few days and extradited to their countries, the New York Times reported on Saturday citing people familiar with the matter.
The two employees, Javier Martin-Artajo, a manager who oversaw the trading strategy, and Julien Grout, a low-level trader in London, are natives of other European countries.
Martin-Artajo worked in London as the direct supervisor of Bruno Iksil, the trader who became known as “the London Whale”, the sources said.
A scandal in the US has tainted the reputation of JPMorgan, the largest US bank, and led to calls for greater oversight of its chief executive, Jamie Dimon.

JPMorgan™s massive loss in April 2012 highlighted the scale of the bank’s risk-taking activities and sparked public outrage as well as civil and criminal investigations. The Loss has also led to multiple Congressional hearings.
Since last year, a number of the bank’s employees changed jobs and several, including chief investment officer Ina Drew, left the firm, according to The Guardian.
Martin-Artajo and Grout, who left JPMorgan earlier this year, understated the value of their trades to hide the problem from executives in New York, according to the federal prosecutors and the FBI in Manhattan.
New evidence shows that Martin-Artajo directed Grout to falsify internal records.
ARA/ARA
…read more
Republished from: Press TV

President announces ‘Guaranteed Minimum Income’ for all citizens

Anastasiades: reform of social policy

PRESIDENT Nicos Anastasiades on Friday announced the complete reform of social policy based on the principle of securing a Guaranteed Minimum Income for all citizens.
It should be fully in place by June 2014, he said.
“Beneficiaries will be all of our fellow citizens who have an income below that which can assure them a dignified living, irrespective of age, class or professional situation,” Anastasiades said in a statement.
He said the level of the Guaranteed Minimum Income would take into consideration the needs of every citizen and every household concerning nourishment, clothing, consumption of electricity and other indispensable items.
At the same time, it will guarantee the right for housing of the economically weaker groups of the population, he said. This will be done either through the subsidisation of the rent if the beneficiaries don’t own their own residence, or through the subsidisation of the interest on housing loans in the cases where people own a house but face problems in paying instalments.
“Also covered will be unforeseen expenses, which unfortunately come up in every household, such as, for example, absolutely necessary construction and repairs to houses, municipal taxes, etc,” he said.
“What I want to stress emphatically is that the Guaranteed Minimum Income will also be provided to thousands of our fellow citizens who, in spite of their needs, are not covered to this day by the existing system and they did not receive any substantial assistance from the state,” the president said.
He said these would include unemployed graduates of schools and universities, working people with particularly low earnings will have their income supplemented to reach the Guaranteed Minimum Income, and the self-employed, who have found themselves out of work and who, until now were not covered.
“Many of the pensioners with low pensions, without adequate contributions to the Social Insurance Fund, will also receive higher payments than they receive today,” said Anastasiades.
He said the general principle of the plan was that there would not be any citizen who was “not guaranteed the minimum needs for a dignified living in a European Country”.
The Guaranteed Minimum Income will replace, but will also be financed by a large number of allowances have been until now not targeted and often arbitrarily, given by different ministries and different services of the state.
“The policy of non-targeted and scattered allowance is terminated,” Anastasiades said.
“ A policy which, in spite of  burdening significantly the public finances and the taxpaying citizens, did not manage to reduce the inequalities and often ignored fellow citizens who are truly in need.”
The new policy of social welfare will from now would be concentrated under the same authority – in other words, there will be a merging of services that until today were giving subsidies, whether these refer to the Ministry of Labour and social Insurance or the Ministry of interior or the Ministry of Finance.
Allowance that concern students will remain under the Ministry of Education.
The president said the level of the Guaranteed Minimum Income would be determined in an objective and scientific way by the Statistical services, with the International Labour Office playing a catalytic advisory role.
At the same time, the new policy provides for the continuation of the unemployment allowance at the level and duration that applies today, in other words six months.
“For the first time, however, with the introduction of the new system, our fellow citizens who continue to be unemployed will be able to continue to live with dignity, since they will be receiving the Guaranteed Minimum Income,” Anastasiades added.
“The single but absolutely necessary precondition is that they don’t refuse to accept offers for employment and to participate in the policies of continuous employment that are determined by the state,” he said.
The policies of active employment will be financed mainly by the European Social Fund, and they will aim to encourage and to facilitate the unemployed in their effort to find employment. They will concern programs for education, practical training or subsidized employment.
Beyond the Guaranteed Minimum Income, the Unemployment Allowance, and the policies of active employment, the new social welfare policy of the state will be supplemented through separate allowances that concern other groups of the population which have certifiable needs, such as, for example, paraplegics and the children with special needs and a stack of other similar categories.
He said the troika had accepted the government’s proposal “for a modern conceptualization on the policy of social welfare and prosperity”.
He said dialogue would start immediately for implementation of the new system by June 2014.

People's Bank of China Launches Trial Balloon: Back to Bretton Woods

On August 5 2013 the prestigious Chinese Market Journalpublished an article by Yao Yudongof Monetary Policy Committee of the People's Bank of China.Two or three things the author mentions there warrant special attention. One is the idea to boost the role of International Monetary Fund (IMF) to provide the world economy with liquidity.  It’s not that the Monetary Fund is to become a kind of global central bank, which would issue its own supranational currency, something like the special drawing rights (SDR) it issued in small quantities four dozen years back. No, the YaoYudong’s article puts it differently; it says it is expedient to go back to the times of Bretton Woods – the United Nations Monetary and Financial Conference, which set up a system of rules, institutions, and procedures to regulate the international monetary system. It was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states. The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the ability of the IMF to bridge temporary imbalances of payments. The gold standard had existed before WWI. This time the convertibility was not complete, but rather partial, because only one currency was tied to gold – the one of the United States. The reason for doing so was the amount of monetary gold reserves the USA accumulated during the WWII years. It promised to take on the responsibility and provide for free exchange of dollars for gold. 

The People's Bankof China representative does not propose to go back to gold-dollar standard today.In 1971, the United States unilaterally terminated convertibility of the US dollar to gold. This brought the Bretton Woods system to an end and saw the dollar become fiat currency.  This action created the situation in which the United States dollar became a reserve currency used by many states. At the same time, many fixed currencies also became free-floating.Actually Washington imposed on the world the Federal Reserve System-issued papers, which lacked any back-up, as the universal reserve currency.

The most interesting Yao Yudong’s proposal is the one, which envisions the world’s return to the use of gold as a standard, but not the dollar-gold standard.  That is it’s not the US dollar only this time (at least not only), but rather the currencies backed up by significant amount of monetary gold reserves stored in central banks and  treasuries storages. Formally, the United States is still the world gold reserves leader with around eight thousand tons kept in storage. Still, everyone understands these are iffy statistics, there are serious doubts the mentioned eight thousand tons are still stored in the famous Fort Knox. There is a great chance the gold is kept far away from the storage and has been used as gold credits and gold leasing for Wall Street and London City banks. If there is something in the vaults – it may be fakes, the so-called tungsten gold, for instance.  

Many experts believe it’s not the United States only who provides unreliable statistics. The Western developed countries exaggerate their gold metal reserves which to great extent are squandered by banksters using the very same credit-leasing schemes. At that, there are states which keep away from making publicity of the fact they have fast growing gold reserves. China is the one. The figures for the  People's Bank of China remain by and large the same during a number of years (a bit less than 1000 tons) against the backdrop of China’s leading position among gold producers (around 400 tons a year) adding the yellow metal to what it has in  state’s coffers. Besides, it annually brings in a few hundreds of gold through Hong Kong. Simple calculations based on official statistics related to gold production and imports show that today China is to have no less than five thousand tons of precious metal. Still, some experts believe the figure is no less than ten thousand exceeding the one for the United States.

 The official representative of the People's Bank of China does not put it straight; he avoids saying in no uncertain terms that he stands for switching to the yuan-based gold standard. But the article leads tothis conclusion. Mr. Yao Yudong lets know the yuan may take the dollar’s place and have the very same status the US currency enjoyed after WWII…

There have been a lot of publications devoted to the golden yuan recently. But the official Beijing has never mentioned any plans to make the yuan a golden currency.  Looks like that’s what the Rothschilds clan (I mean the world financial elite involved in gold business) wants. It’s a well-known fact that it was the Rothschild family who initiated the golden standard in the XIX. It started in Great Britain and then was imposed upon the whole world (including Russia which thanks to efforts of Sergey Witte, who was Financial Minister, switched over to golden ruble in 1897). There are reasonable grounds to believe the Rotshields want to play a win-win game (and a very profitable one) called the “golden standard”.  Moreover, the Federal Reserve System, which has the Rotshields and the Rockefellers as the major shareholders, is bursting at the seams.  So, the Rotshields are ready to leave the printing-press to its fate and saddle up the “golden calf”.    

Someone should be the first to tie national currency to gold. Once done, other things will not take much time to take place. China appears to be chosen by the Rotshields  for this role, they created “the most favorable nation” regime for it to allow the country accumulate the initial gold reserves, they dropped hints to Beijing that the yuan was to play a special role in the world.

Now, let’s put it this way, the Peoples’ Republic of China does need gold reserves (as a strategic back-up).  But it needs no golden yuan.  This currency is strong enough globally without being propped up by gold. China has concluded deals with many countries, including Japan, Russia, Brazil and others, which envision the use of national currencies in interstate trade.  It has also reached currency swap accords (the exchange of currencies) to avoid resorting to euro or dollar.   The People's Bank of China has signed such an agreement with the Bank of England.             

The currency swap accords are discussed by the Bank of China with the central banks of Switzerland and France. Iran supplies oil getting payments in Chinese currency to buy commodities in China. The use of yuan instead of dollar (as well as other national currencies) allows the so called “rogue” states to successfully get around the sanctions imposed by Washington…According to various sources, payments in yuan are accounted for no more than 1% of international transactions.  Not very impressive at first glance.  But the number of yuan settled international transactions is constantly on the rise, especially talking about the financial market speculative operations, the lion’s share of such deals is yuan settled.  The number of paymentsin yuans in the global market has grown from 0 to 12 percent in only five years, since 2008 to 2013.   By and large, it corresponds to the Chinese share of the world economy. 

The Yao Yudong’s publication has stirred great commotion in the financial world. Does it mean that Beijing is shifting its financial policy in the Rotshields’ direction? Or is it just a sign the country’s vertical of power is getting weakened and some officials may boldly speak out without looking back at what the ruling party says?

Americans abroad rejecting US citizenship as tax hikes loom

The number of Americans who decided to renounce their citizenship in the second quarter of 2013 increased sixfold the same period in 2012, a number the federal government attributes to strict impending financial disclosure rules.
The United States is the only country out of 34 in the
Organization for Economic Co-operation and Development (OECD)
that continues to tax citizens regardless of where they live
around the world.
Now, facing a high national debt and drastic cuts in government
spending, US tax enforcers are employing stricter
asset-disclosure laws under the Foreign Account Tax Compliance
Act (FACTA). For that reason, more Americans living abroad are
weighing whether it is worth holding on to their US passport.
In the three months through June, 1,131 American expatriates
turned over their passports at US embassies around the world. It
was a drastic surge from the same time span in 2012, when just
189 people renounced their citizenship, according to the Federal
Registry. The first six months of 2013 alone has seen 1,810 such
instances, compared to 235 in all of 2008.
“With the looming deadline for FACTA, more and more US
citizens are becoming aware that they have US tax reporting
obligations,” Matthew Ledvina, a US tax attorney in Zurich,
Switzerland, told Bloomberg. “Once aware, they decide to
renounce their US citizenship.”

In 2012 there were between 5 and 6 million Americans who resided
overseas.
Under FACTA, foreign banks are required to notify the US Internal
Revenue Service (IRS) about accounts held by US taxpayers. That
disclosure rules, according to the congressional Joint Committee
on Taxation, was estimated to generate an additional $8.7 billion
over the next 10 years for the US budget.
A primary goal of the rules is to cut the power of US nations the
US considers to be tax havens. Countries like Switzerland earn
that designation by protecting an individual’s finance
information, requiring only nominal taxes, or a general lack of
transparency.

“The United States wishes to ensure that all income earned
worldwide by US taxpayers on accounts held abroad can be taxed by
the United States,” the Swiss government stated earlier this
year.
Republished from: RT

Delaware officials stonewalling IRS snooping probe, Grassley says

Charging that Delaware officials have stopped cooperating with his investigation, Sen. Chuck Grassley on Friday sent a pointed letter to the state's Division of Revenue in which he outlines specific, outstanding questions that still swirl around the handling of former U.S. Senate candidate Christine O'Donnell’s tax records.
“On multiple occasions, my staff has requested a copy of your records retention policy, the opportunity to speak with [officials at the state's Division of Revenue] and other clarifications related to these matters. To date, you have failed to respond,” the letter from the Iowa Republican reads in part.
In a case first reported by The Washington Times, Ms. O'Donnell — a tea party favorite who in 2010 ran unsuccessfully for Vice President Joseph Biden’s old U.S. Senate seat — revealed last month that her personal tax information had been accessed by David Smith, an investigator with Delaware's Division of Revenue.
The access, which took place in March 2010, spawned an inquiry by the U.S. Treasury Department along with denials by Delaware officials that anything inappropriate had taken place.
Calls and emails to the Delaware Division of Revenue weren’t immediately returned Friday afternoon.
The case has attracted the attention of Mr. Grassley and others who fear that, at best, the incident shows that personal tax information is vulnerable to snooping by state governments.
At worst, as Ms. O'Donnell alleges, it’s an example of using tax information to deliberately target a political candidate.

Even though the Division of Revenue concedes that the investigator examined the records in March 2010 — and maintains that it was part of a typical review and in no way improper — Ms. O'Donnell didn’t learn of the incident until January of this year, when she received a call from an investigator with the Treasury Department.

After the access came to light, Division of Revenue Director Patrick Carter apparently met with Treasury officials to review the incident and determined that nothing inappropriate had taken place.
But Mr. Grassley is questioning how that’s possible since he and his staff have been told that the state retains tax access records for only three months.
“On July 23, 2013, you reported to my staff that the Tax Data Services database utilized by Delaware only maintains an electronic audit trail of systems access for three months. This leads me to question how you were able to confirm information about systems access and its appropriateness when it occurred two years to your interaction with the Treasury Department,” the letter continues.
The Division of Revenue also has said, according to Mr. Grassley, that there is no “empirical proof” that Ms. O'Donnell’s tax records weren’t looked at on prior occasions, raising the possibility that her personal information was accessed on more than one occasion.
Ms. O'Donnell’s story broke just as the Treasury Department’s tax watchdog admitted to Mr. Grassley that at least four politicians or political donors have had their personal tax records improperly accessed since 2006, including one case in which a willful violation of federal law was identified.
But the Justice Department has declined to prosecute any of of the cases. Mr. Grassley, who serves on the Senate Finance and Judiciary committees, continues to seek more answers from Justice in addition to his interactions with Treasury and the Delaware Division of Revenue.

Mortgage rate spike finally hits housing

A sharp jump in mortgage rates from May to June are now beginning to weigh on the housing recovery. The two-month delay can be attributed to several factors—first and foremost that most potential home buyers lock in mortgage rates early, and sale closings can take up to two months to be finalized.
Second, there may also have been a surge in homebuying because of the rise, as those on the fence suddenly jumped in, fearing rates would continue going up and they would be priced out of the market. Those factors have now expired.
"We saw an increasing number of comments suggesting the sharp rise in mortgage rates has led to a pause in demand, with many agents saying the initial urgency they saw from buyers as rates moved higher has subsided and now buyers are stepping back to re-evaluate their options," said analysts at Credit Suisse in their monthly survey of real estate agents. They noted a drop in buyer traffic in July, the first time since last December that it didn't exceed expectations.
(Read more: Map: Tracking the US real estate recovery)

Home builders to weather rising rates?

Friday, 9 Aug 2013 | 1:19 PM ET

Mortgage applications to buy a newly built home actually jumped 14 percent in July, reports CNBC's Diana Olick. If rates are higher, and customers can't pay as much, home builders can build their home exactly how they want.

While buyers may be pausing, however, their optimism is not. Americans are increasingly hopeful about housing's return. Sixty-two percent believe mortgage rates will go up over the next year, according to a new Fannie Mae survey, but 74 percent also say it is now a good time to buy a house, an increase in both from June.
(Read more: What you need to know if Fannie and Freddie go)
"Consumers have taken the interest rate rise in stride. Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track from its dip last month," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "These results are consistent with our own analysis of previous housing cycles, which finds that interest rates and home prices are not strongly correlated."
(Read more: Taking your calls now: Obama sells housing agenda via Zillow)

Another survey from home builder PulteGroup found 43 percent of move-up buyers indicating they are planning to buy a new home within the next five years, with 76 percent saying they believe they can sell their current home within the next two years for enough to move up. Pulte targets the move-up buyer.
Mortgage applications to purchase a newly built home rose 14 percent month to month, according to the Mortgage Bankers Association, but new home buyers may be less sensitive to rates, as builders can buy down mortgage rates as part of the deal.
It all prompts the question: With rates still historically low, does a 1 percentage point jump in rates really matter?

Mortgages

30 yr fixed 4.31% 3.48% 30 yr fixed jumbo 4.66% 3.62% 15 yr fixed 3.39% 2.90% 15 yr fixed jumbo 3.96% 3.27% 5/1 ARM 3.37% 2.74% 5/1 jumbo ARM 3.14% 2.68%

Find personalized rates: Bankrate.com

"It absolutely matters," said Craig Strent, CEO of Maryland-based Apex Home Loans. It does put people that are on the fringes that were just on the edge of qualification—it does kick them out from qualifying. For those that already did qualify, it's psychological. All of a sudden that house that was going to cost you X, is now costing you another hundred dollars a month in mortgage payments and that does make a difference."
There is also the question of home prices, which continue to rise because of a severe lack of homes for sale. This varies market-to-market, but is especially severe in formerly distressed markets that were targeted by investors.
"We see many threats to the housing recovery," said Jaret Seiberg of Guggenheim Partners. "Rising rates will make homes less affordable. We also are concerned that investors have artificially stabilized some markets and driven prices up beyond what consumers can afford at today's higher interest rates."
—By CNBC's Diana Olick. Follow her on Twitter @Diana_Olick.

A Quadrillion Yen And Counting – The Japanese Debt Bomb Could Set Off Global Panic At Any Moment

Source: Michael Snyder, Guest Post

How much is 1,000,000,000,000,000 yen worth?  Well, a quadrillion yen is worth approximately 10.5 trillion dollars.  It is an amount of money that is larger than the "the economies of Germany, France and the U.K. combined".  It is such an astounding amount of debt that it is hard to even get your mind around it.  The government debt to GDP ratio in Japan will reach 247 percent this year, and the Japanese currently spend about 50 percent of all central government tax revenue on debt service.  Realistically, there are only two ways out of this overwhelming debt trap for the Japanese.  Either they default or they try to inflate the debt away.  At this point, the Japanese have chosen to try to inflate the debt away.  They have initiated the greatest quantitative easing experiment that a major industrialized nation has attempted since the days of the Weimar Republic.  Over the next two years, the Bank of Japan plans to zap 60 trillion yen into existence out of thin air and use it to buy government bonds.  By the time this program is over, the monetary base in Japan will have approximately doubled.  But authorities in Japan are desperate.  They know that the Japanese debt bomb could set off global panic at any time, and they are trying to find a way out that will not cause too much pain.
Unfortunately, the only way that this bizarre quantitative easing program will work is if investors in Japanese bonds act very, very irrationally.  You see, the only way that Japan has been able to pile up this much debt in the first place is because they have been able to borrow gigantic piles of money at super low interest rates.
Right now, the yield on 10 year Japanese bonds is sitting at an absurdly low 0.76%.  But even with such ridiculously low interest rates, the central government of Japan is still spending about half of all tax revenue on debt service.
If interest rates go up, the game is over.
But now that the Japanese government has announced that it plans to double the monetary base, it would be extremely irrational for investors not to demand higher rates on Japanese government debt.  After all, why would you want to loan money to the Japanese government for less than one percent a year when the purchasing power of your money could potentially be halved over the next two years?
Amazingly, this is exactly what the Japanese government is counting on.  They are counting on being able to wildly print up money and monetize debt, but also keep yields on Japanese bonds at insanely low levels at the same time.
For the moment, it is actually working.  Investors in Japanese bonds are behaving very, very irrationally.
But if that changes at some point, we could potentially be looking at the greatest Asian economic crisis of all time.
And there are some very sharp minds out there that believe that is exactly what is going to happen.
For example, the founder of Hayman Capital Management, Kyle Bass, has been sounding the alarm about Japan for a long time.  He correctly predicted the subprime mortgage meltdown, and in the process he made hundreds of millions of dollars for his clients.  Now he believes that the next major crash is going to be in Japan.
According to Bass, the bond bubble in Japan is so large that once it begins to implode fear is going to start spreading like wildfire...

Remember, Japanese banks in general have 900% of their tangible assets invested in JGBs that are the most negatively convex instrument you can put into a portfolio. Assume for instance that a bank holds a 10 year bond yielding 80 basis points. A 100 basis point move will cost the JGB investor about 10 years of expected interest payments.
Think about the psychology of all the players and financial implications if rates do move 100 basis points. Think about the solvency of a nation which currently spends 50% of its central government tax revenues on debt service, half of which earns the lowest yields of any country in the world.
You can’t look at this as a simple question. You need to think about this as a multivariate equation. You have to think about the incentives and the fears of all the participants. And you need to think about the fiscal sustainability of the government.

If rates even rise by a full percentage point, it could start a stampede toward the exits that nobody in the entire world would be able to control...

I ran a survey of 1,009 Japanese investors where we asked: “If rates were to move up 100 basis points, would that engender more confidence and make you want to buy more JGBs?” or, “Would you take your money elsewhere, even if it were hamstringing your government’s ability to operate?” 8 – 9% of respondents that said that they would buy more bonds and almost 80% said they would run, not walk the other way.

For much more on this, you can watch a video of Kyle Bass discussing why Japan is doomed right here.
And of course Japan is not the only "debt bomb" that could potentially go off over in Asia.  As I mentioned in another article, the major problem over in China is the level of private debt...

In China, the big problem is the absolutely stunning growth of private domestic debt.  According to a recent World Bank report, the total amount of credit in China has risen from 9 trillion dollars in 2008 to 23 trillion dollars today.
That increase is roughly equivalent to the entire U.S. commercial banking system.

There is simply way, way too much debt in our world today.  Never before has there been so much red ink all over the planet at the same time.
Many in the mainstream media insist that this party can go on indefinitely.
But that is what they said about the housing bubble too.
Sadly, the truth is that every financial bubble eventually bursts, and this global debt bubble will be no exception.

I hope that you are getting prepared while you still can.