June 20, 2013

Bernanke taper talk sends markets into a tailspin

NEW YORK (MarketWatch) — U.S. stocks tumbled on Thursday, with the S&P 500 suffering its worst session since November 2011, hit by fear that the Federal Reserve will scale back its bond buying later this year.

Asian and European stocks, along with gold, oil and Treasurys, also posted steep declines. Disappointing Chinese data further hit sentiment.

After dropping as much as 380 points intraday, the Dow Jones Industrial Average ended down 353.87 points, or 2.3%, to 14,758.32, with all of its 30 components in negative territory.

It was the Dow’s largest one-day percentage decline since Nov. 7, 2012, the day after the U.S. presidential election. And it was the index’s biggest one-day point decline since Nov. 9, 2011. ....................(more)

The complete piece is at: http://www.marketwatch.com/story/us-stocks-fall-sharply-on-fed-taper-fears-2013-06-20?dist=afterbell

June 20, 2013

Brazil World Cup Champ Calls for Hospitals Instead of Cup

(Bloomberg) A member of Brazil’s team that won the 2002 World Cup, Rivaldo Ferreira, took to Twitter this week to support protesters who say the 30 billion reais ($13.3 billion) being spent on next year’s tournament should go to social services.

“It’s shameful to spend so much money for this World Cup and leave the hospitals and schools in such a precarious state,” posted Rivaldo, who said his father was hit by a car and died after failing to receive medical attention in a public hospital. “At this moment we aren’t in shape to host the World Cup, we don’t need it, we need education and health.”

Protests initially staged in response to higher bus fares have expanded to include issues from government corruption to lack of adequate public services. While mayors of Sao Paulo, Rio de Janeiro and other cities rolled back the fare increases, demonstrations are scheduled tonight across the country. The protests are taking place during the FIFA Confederations Cup, which is being played in six new or renovated stadiums.

In a video posted online yesterday, soccer legend Pele called on Brazilians to “forget all this confusion that’s happening in Brazil” and refrain from booing the national squad, which yesterday beat Mexico in Fortaleza. ..................(more)

The complete piece is at: http://www.bloomberg.com/news/2013-06-20/brazil-world-cup-champ-calls-for-hospitals-instead-of-cup.html

June 20, 2013

Booz Allen, the World's Most Profitable Spy Organization

(Bloomberg Businesseek) In 1940, a year before the attack on Pearl Harbor, the U.S. Navy began to think about what a war with Germany would look like. The admirals worried in particular about the Kriegsmarine’s fleet of U-boats, which were preying on Allied shipping and proving impossible to find, much less sink. Stymied, Secretary of the Navy Frank Knox turned to Booz, Fry, Allen & Hamilton, a consulting firm in Chicago whose best-known clients were Goodyear Tire & Rubber (GT) and Montgomery Ward. The firm had effectively invented management consulting, deploying whiz kids from top schools as analysts and acumen-for-hire to corporate clients. Working with the Navy’s own planners, Booz consultants developed a special sensor system that could track the U-boats’ brief-burst radio communications and helped design an attack strategy around it. With its aid, the Allies by war’s end had sunk or crippled most of the German submarine fleet.

That project was the start of a long collaboration. As the Cold War set in, intensified, thawed, and was supplanted by global terrorism in the minds of national security strategists, the firm, now called Booz Allen Hamilton (BAH), focused more and more on government work. In 2008 it split off its less lucrative commercial consulting arm—under the name Booz & Co.—and became a pure government contractor, publicly traded and majority-owned by private equity firm Carlyle Group (CG). In the fiscal year ended in March 2013, Booz Allen Hamilton reported $5.76 billion in revenue, 99 percent of which came from government contracts, and $219 million in net income. Almost a quarter of its revenue—$1.3 billion—was from major U.S. intelligence agencies. Along with competitors such as Science Applications International Corp. (SAIC), CACI, and BAE Systems (BA/), the McLean (Va.)-based firm is a prime beneficiary of an explosion in government spending on intelligence contractors over the past decade. About 70 percent of the 2013 U.S. intelligence budget is contracted out, according to a Bloomberg Industries analysis; the Office of the Director of National Intelligence (ODNI) says almost a fifth of intelligence personnel work in the private sector.

It’s safe to say that most Americans, if they’d heard of Booz Allen at all, had no idea how huge a role it plays in the U.S. intelligence infrastructure. They do now. On June 9, a 29-year-old Booz Allen computer technician, Edward Snowden, revealed himself to be the source of news stories showing the extent of phone and Internet eavesdropping by the National Security Agency. Snowden leaked classified documents he loaded onto a thumb drive while working for Booz Allen at an NSA listening post in Hawaii, and he’s promised to leak many more. After fleeing to Hong Kong, he’s been in hiding. (He didn’t respond to a request for comment relayed by an intermediary.)

The attention has been bad for Booz Allen’s stock, which fell more than 4 percent the morning after Snowden went public and still hasn’t recovered. Senator Dianne Feinstein (D-Calif.), who chairs the Select Committee on Intelligence, has called for a reexamination of the role of private contractors in intelligence work and announced she’ll seek to restrict their access to classified information. Booz Allen declined to comment on Snowden beyond its initial public statement announcing his termination. ..................(more)

The complete piece is at: http://www.businessweek.com/articles/2013-06-20/booz-allen-the-worlds-most-profitable-spy-organization#r=read

June 20, 2013

Airlines to Cheapskate Road Warriors: Pay Up to Keep Your Elite Status

(Bloomberg Businessweek) The loyalty of airline passengers will no longer be measured in miles, as industry watchers have long anticipated. In the future, earning the stature and privileges of a high-end frequent flier will be tallied in a more conventional currency: cold, hard cash. Two of the world’s largest airlines have already moved to impose yearly spending requirements for their traveling elites.

United Airlines (UAL) began notifying members of its MileagePlus program today that the base level of elite, called Premier Silver, would require spending at least $2,500 “premier qualifying dollars” with the company next year, while top-level status, known as 1K, will come with a $10,000 spending minimum. The current system is based on mileage accrual, and travelers will still need to meet those benchmarks—from 25,000 to 100,000 each year—to attain elite status. There’s one loophole, but it also involves spending money: United will waive the spending requirement for program members who spend at least $25,000 next year on a company-branded card issued by JPMorgan Chase (JPM).

United’s new rules largely mirror those that Delta Air Lines (DAL) announced in January for its 2014 program. Delta’s highest status level, Diamond, will require a $12,500 expenditure plus 125,000 miles.

The changes for both United and Delta, which will take effect on Jan. 1, 2015, mark a long-awaited shift in the way the industry measures customer loyalty. The new systems focus on passengers’ financial value to an airline instead of merely calculating who flew the most. The distance-only tallies had become easy to game due to the wide variety of fares on each flight and mileage junkies’ longstanding habit of racking up elite status with flights cobbled together at cheap fares. That practice has been facilitated by online chat boards where fliers trade the best mileage-boosting deals they find. .....................(more)

The complete piece is at: http://www.businessweek.com/articles/2013-06-19/airlines-to-cheapskate-road-warriors-pay-up-to-keep-your-elite-status#r=rss

June 20, 2013

Hemp 1, DEA 0

WASHINGTON -- The House of Representatives on Thursday overcame last-minute lobbying from the Drug Enforcement Administration to pass a farm bill amendment that would legalize the growing of hemp for research purposes. The 225-200 vote came after a flurry of opposition from the DEA, which argued that it would be too difficult for the agency to differentiate legal hemp from illegal marijuana, both varieties of the cannabis plant.

The House amendment, proposed by Reps. Jared Polis (D-Colo.), Earl Blumenauer (D-Ore.) and Thomas Massie (R-Ky.), is far more modest than a Senate effort by Minority Leader Mitch McConnell (R-Ky.) to fully legalize growing hemp for industrial purposes. McConnell had hoped to have his measure inserted into the underlying farm bill or approved on a simple voice vote, but neither path proved open.

Polis said he'd been unsure whether the amendment would pass, but was gratified by the final tally. "We're having a hemp milkshake," he joked to HuffPost afterward. "Break out the hemp ice cream."

"On the merits, this is a no-brainer. Industrial hemp is an important product," he added. "It's perfectly legal, but currently we require that it be imported from other countries. Basically it's taking jobs away from American producers." .......................(more)

The complete piece is at: http://www.huffingtonpost.com/2013/06/20/hemp-amendment_n_3472967.html?ncid=txtlnkushpmg00000037

June 20, 2013

Bernanke Kills Fed Credibility and the Confidence Fairy in One Shot

from Naked Capitalism:


Bernanke Kills Fed Credibility and the Confidence Fairy in One Shot


How many markets are in upheaval right now? The ten year Treasury has gone from 2.18% to 2.44% in less than a day. Gold is down to $1288. Asia had a bad night with the Chinese interbank market going into even more distress than before (that can’t be laid mainly at the Fed’s doorstep but it sure didn’t help). The Nikkei was down 1.7%, which is almost a routine market move, but the Hang Seng also fell 2.9%. All major European stock markets are down over 2%. S&P future are down over 16 points, or roughly 1%.

We’ve pointed to several things that have been troubling about the Fed’s apparent view prior to the FOMC statement yesterday and the Bernanke press conference, which only rattled investors further. First was that the Fed seems to be suffering from a bad case of confirmation bias, in that it seems to be underweighing data that is inconsistent with the idea that the economy is getting better (as in on the path to decent growth, as opposed to a gear or two above stagnation). For instance, even though inflation continues to fall (a sign of weakness) the central bank is taking the view that that’s temporary, and it is also of the view that the sequester isn’t going to impose a meaningful drag.

But that may not matter. Fedwatcher Tim Duy highlights the fact that the Fed has a pattern of being too optimistic about growth, but is likely to stick to its guns on exiting QE when its unemployment thresholds are breached. And the big fail is that the Fed using the headline unemployment rate as one of its main metrics for when to wind down QE means it is choosing to stick its head in the sand as far as the severity of underemployment is concerned. This is the economic version of “peace with honor”.

Frankly, the real issue seems to be that the Fed has gotten itchy about ending QE. Who knows why. It may be 1937 redux, that they’ve gotten impatient with the length of time they’ve been engaged in extraordinary measures. It may be that they can’t face up to the fact that they might have gotten into a Japan-style QE forever (I believe Japan is now on QE 8). They might also worry about political backlash if the Fed balance sheet keeps growing, or that savers and investors are suffering in a low yield environment (more likely they are concerned about depriving banks of easy profits, like real earnings on float or easy yield curve profits). John Plender suggested in the Financial Times that Bernanke may be following the view of a recent Frederic Miskin paper, in which Miskin took the view that the Fed window for a QE exit was closing. ......................(more)

The complete piece is at: http://www.nakedcapitalism.com/2013/06/bernanke-kills-fed-credibility-and-the-confidence-fairy-in-one-shot.html

June 20, 2013

Study: 'Distracted Walking' Causes More Injuries Than Distracted Driving

from the Atlantic:



PROBLEM: Because people absorbed in a conversation have trouble paying attention to anything else, we're beginning to realize that even hands-free devices don't make driving while talking on the phone much safer. But even though they have less to pay attention to, "inattention blindness" can strike pedestrians, too. In just one example, people who were using their cell phones while walking "were less likely to notice a clown on a unicycle" that passed by. One in three people don't put their phones down even to cross a busy street.

METHODOLOGY: Ohio State University researchers Jack Nasar and Derek Troyer collected information on cell-phone related emergency room visits from the National Electronic Injury Surveillance System (the same database that brought us "The Top Ways We Injure Our Genitals&quot . They looked at all injuries for pedestrians, bicyclists, and motor vehicle drivers between 2004 and 2010.

RESULTS: Nasar and Troyer's dive into hospital case studies brings us schadenfreudic gems like this: "28-year-old male walked into pole talking on phone and lacerated brow." And this: "14-year-old male walking down road talking on cell phone, fell 6-8 ft. off bridge into ditch." Notice that these people were talking, not texting. In fact, 69.5 percent of the injuries that occured during this time came from people who were distracted by a conversation; texting only accounted for 9.1 percent. The majority were under the age of 31 (because, Millennials), and men were injured more often than women. .....................(more)

The complete piece is at: http://www.theatlantic.com/health/archive/2013/06/study-distracted-walking-causes-more-injuries-than-distracted-driving/277032/

June 20, 2013

Fewer U.S. Bridges Being Repaired, One in Nine Still "Structurally Deficient"

There are 66,405 "structurally deficient" bridges in the U.S., about one in every nine, according to a new study from Transportation 4 America. That's down from just shy of 70,000 two years ago, but the pace of repair is slowing and many more bridges are reaching the end of their intended 50-year lifespan. Recent funding changes in Congress are exacerbating maintenance problems, T4A concludes.

"Today, though, there more deficient bridges in our 100 largest metropolitan areas than there are McDonald’s locations nationwide," said James Corless, director of Transportation for America.

We've known these bridges are in poor shape for a while now. Two years ago T4A issued a report that also found one in nine bridges in disrepair (with updated map) and calculated that 210 million trips are made across those bridges each day. President Obama used his State of the Union speech to lament America's 70,000 deficient bridges, a line that sparked satirical shock and humorous infrastructure outrage from Jon Stewart of the Daily Show.

So it's more reminder than revelation that T4A calculates 11 percent of bridges in the country are in shoddy shape. ..................(more)

The complete piece is at: http://www.wnyc.org/blogs/transportation-nation/2013/jun/19/fewer-us-bridges-being-repaired-one-nine-still-structurally-deficient/

June 20, 2013

Phil Gingrey: We gotta teach wimmens to be wimmens and menz to be menz

(ThinkProgress) Rep. Phil Gingrey (R-GA) wants American youths to be taught gender stereotypes in grade school classes, so they understand the roles of mothers and fathers — and the importance of allowing only opposite-sex couples to marry.

In a speech Monday on the House floor, Gingrey stressed his continued support for the Defense of Marriage Act — which defines marriage as only union between a man and a woman — and suggested that children need to be carefully taught about the traditional roles of their genders:



Watch the video:



While Gingrey is right that each parent brings different strengths to a family, his suggestion that only opposite-sex couples can bring complementary skills is nearly as archaic as his view that children should be taught to conform to his outdated view of gender roles. And despite his assertions, the gender of parents has never been proven to be a relevant factor in the quality of parenting. ..................(more)

The complete piece is at: http://thinkprogress.org/lgbt/2013/06/19/2182311/gingrey-teach-gender-roles/

June 20, 2013

Dump the Pump today

Help Spread the Word About the Many Benefits of Public Transportation
on National Dump the Pump Day

Thursday, June 20, 2013


The 8th annual National Dump the Pump Day on June 20 is a day to highlight that when gas prices are high, using public transportation is a great alternative to driving that will help people save money.

We know what happens when gas prices are high. Many people park their cars and take public transportation instead. In fact, using public transportation is an economical way to beat high gas prices…if it is available. According to APTA’s most recent Transit Saving Report, a two-person household can save, on the average, more than $9,700 a year by downsizing to one car.

At a time when our economy is still hurting and gas prices are continuing to rise, people need to save money. This is a time to increase public transportation service, not decrease it. However, Congress has yet to pass a long overdue surface transportation bill that will increase public transportation investment. State and local revenues that fund public transportation have declined since the economic recession started and that has also negatively impacted public transit systems’ budgets. All levels of government – federal, state, and local – should invest more in public transportation.

From urban to suburban to rural communities, public transportation is a vital resource to Americans, and a cornerstone of our nation’s economy. Relying on public transit for their daily mobility needs, Americans use local public transportation systems to commute to and from work, to travel to school and the doctor’s office, to go shopping, and to visit with family and friends. Public transportation use reduces our nation’s dependence on foreign oil by 4.2 billion gallons of gasoline a year and it also saves 37 million metric tons of carbon emissions annually. Last, but not least, public transportation has a proven track record of reducing congestion. The latest research shows that in 2011, U.S. public transportation use saved 796 million hours in travel time, 450 million gallons of fuel, and $21 billion in congestion costs in 498 urban areas.

Quick Facts

* In 2012, Americans took 10.5 billion trips on public transportation.
* 35 million times each weekday, people board public transportation.
* Public transportation is a $57 billion industry that employs more than 400,000 people.
* More than 7,300 organizations provide public transportation in the United States.

Public Transportation Helps People Save Money

* Using public transportation is the quickest way to beat high gas prices.
* According to APTA’s Transit Saving Report, a two-person household can save, on the average, more than $9,700 a year by downsizing to one car.
* Public transportation provides an affordable, and for many, necessary, alternative to driving.

Public Transportation Provides Economic Opportunities

* Every $1 billion invested in public transportation creates and supports 36,000 jobs.
* Every $1 invested in public transportation generates approximately $4 in economic returns.
* Every $10 million in capital investment in public transportation yields $30 million in increased business sales.
* Every $10 million in operating investment yields $32 million in increased business sales.

.................(more)

The complete piece is at: http://www.apta.com/members/memberprogramsandservices/advocacyandoutreachtools/dumpthepump/Pages/TransitFacts.aspx