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STORIES:
Japan's
Market Skid Has Bulls Reeling - (online.wsj.com)
Hedge funds and other overseas buyers pumped more than $25 billion into
Tokyo’s stock market in the seven months before the Las Vegas conference,
according to EPFR Global, which tracks such flows. They were lured by a new
government’s plans for radical action to boost Japan’s economy after two
decades of stagnant growth and falling prices known as deflation. The bet paid
off big, at first: The benchmark Nikkei 225 index soared 83% over the seven
months to late May. Foreigners fell in love again with a market they had long
ago left for dead. Then, the rally turned with a vengeance. The Nikkei sank
7.3% on Thursday, May 23. It fell 3.2% the next Monday, 5.2% the following
Thursday and then 3.7% on Monday of this week. It has fallen 15% in just eight
trading days. Mr. Novogratz didn’t return phone calls seeking to determine what
he has done with his investments. Ordinarily, this kind of heart-thumping
decline is spurred by a crisis, such as Japan’s March 2011 earthquake. But this
time, no crisis was evident; analysts had trouble explaining why stocks were
down.
IRS
parties for $49 million at taxpayer expense – (www.examiner.com) On June 1, the Washington Post reported that
the Internal Revenue Service spent an estimated $49 million on employee
conferences over a three-year period beginning in fiscal year 2010. The finding
is expected to be confirmed in a report that will be released on Tuesday,
entitled "Collected and Wasted: The IRS Spending Culture and Conference Abuses." The finding follows another scandal in
which Tea Party groups were singled out for scrutiny as they sought tax-exempt
status. As a result, congressional hearings and criminal investigations into
the activities of IRS officials are already underway. The new scandal resembles
a similar scandal that
broke in 2012 involving conferences held by the General Services
Administration. In the report, the Treasury Department’s
inspector general provides detailed estimates on at least 220 IRS conferences,
but the exact total cost is unknown because IRS employees did not keep accurate
records of all expenses. One conference in particular is singled out: a
conference for roughly 2,600 agency employees in the IRS's small-business and
self-employed division that took place in August 2010 in Anaheim, Calif. That
conference cost roughly $4.1 million, $3.2 million of which came from the IRS
enforcement budget. During that conference, employees watched parody videos of
"Star Trek" and "Gilligan's Island"
that cost an estimated $60,000 to produce.
2/3 of America to Lose Everything Because of This Crisis -
(www.moneymorning.com) A record breaking stock market is distorting a frightening reality:
The U.S. is being eaten alive by a horrific cancer that will ultimately
destroy the economy and impoverish the vast majority of its citizens. That's
according to Peter Schiff, the best-selling author and CEO of Euro Pacific
Capital, who delivered his harsh warning to investors in a recent interview on Fox
Business. "I think we are heading for a worse economic crisis than we had
in 2007," Schiff said. "You're going to have a collapse in the
dollar...a huge spike in interest rates... and our whole economy, which is
built on the foundation of cheap money, is going to topple when you pull the
rug out from under it." Schiff says that, despite "phony" signs
of an economic recovery, the cancer destroying America stems from a lethal
concoction of our $16 trillion federal debt and the Fed's never ending money
printing. Currently, Bernanke and company is buying $1 trillion of Treasury and
mortgage bonds a year. That's about $85 billion per month against a budget
deficit that is about the same level.
The Fed is in a Lose, Lose Situation - (www.businessinsider.com) The sharp and sudden rise in long-term interest rates in response to the
perception that the Fed will taper down its bond-buying program is coming close
to placing the stock market in a lose-lose situation. If you believe, as
we do, that economic growth will remain tepid at best and that the Fed,
therefore, will not slow down its purchasing program anytime soon, S&P 500
earnings will fall far short of the big second-half increases that the “Street”
is forecasting. If, on the other hand, you think that organic economic
growth will be strong enough to enable the Fed to reduce its purchases,
long-term rates will climb by enough to stop the economy in its tracks and
result in the same negative outlook.
Zynga
to Axe 18% of Workers' Jobs; Stock Slides - (www.cnbc.com)
Zynga plans to slash
roughly 520 jobs, or nearly one-fifth of its workforce, the San Francisco-based
online game maker said Monday. Shares of the company's stock fell as much as 14
percent after being halted twice. The company updated its projected net loss
for the second quarter to between $39 million and $28.5 million.
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