The Six Best Hours to Trade the Euro

The euro (EUR) ranks second behind the U.S. dollar (USD) in terms of global liquidity, trailed by the Japanese yen (JPY) and British pound (GBP). Forex traders speculate on EUR strength and weakness through currency pairs that establish comparative value in real-time. Although brokers offer dozens of related crosses, most clients focus their attention on the six most popular pairs:

U.S. dollar (USD) – EUR/USD
Swiss franc (CHF) – EUR/CHF
Japanese yen (JPY) – EUR//JPY
British pound (GBP) – EUR/GBP
Australian dollar (AUD) – EUR/AUD
Canadian dollar (CAD) – EUR/CAD
EUR trades continuously from Sunday evening to Friday afternoon in the United States, offering significant opportunities for profit. However, volume and volatility can fluctuate greatly in each 24-hour cycle, with bid/ask spreads in the less popular pairs widening during quiet periods and narrowing during active periods. While the ability to open and close positions at any time marks a key benefit of forex, the majority of trading strategies unfold during active periods.
Many forex traders focus their full attention on the EUR/USD cross, the most popular and liquid currency market in the world. The cross maintains a tight spread throughout the 24-hour cycle, while multiple intraday catalysts ensure that price actions will set up tradable trends in both directions and along all time frames. Long- and short-term swings also work extremely well with classic range-bound strategies, including swing trading and trading channels.

Euro Price Catalysts
The best time to trade the euro coincides with the release of economic data, as well as the open hours at equity, options and futures exchanges. Planning ahead for these data releases requires two-sided research because local (eurozone) catalysts can move popular pairs with the same intensity as catalysts in each of the cross venues. Moreover, U.S. economic data can have the greatest impact on all currencies, due to the overriding importance of the EUR/USD pair.

In addition, EUR crosses are vulnerable to economic and political macro events that trigger highly correlated price actions across equities, currencies and bond markets around the world. China’s devaluation of the yuan in August 2015 offers a perfect illustration. Even natural disasters have the power to generate this type of coordinated response, as evidenced by the 2011 Japanese tsunami.

Economic Releases
Eurozone monthly economic data is generally released at 2 a.m. Eastern Time (ET) in the United States. The time segment from 30 to 60 minutes prior to these releases and one to three hours afterwards highlights an enormously popular period to trade EUR pairs because the news will impact at least three of the five most popular crosses. It also overlaps the run-up into the U.S. trading day, drawing in significant volume from both sides of the Atlantic.

U.S. economic releases tend to be released between 8:30 a.m. and 10 a.m. ET and generate extraordinary EUR trading volume as well, with high odds for strongly trending price movement in the most popular pairs. Japanese data releases get less attention because they tend to come out at 4:30 p.m. and 10 p.m. ET, when the eurozone is in the middle of their sleep cycle. Even so, trading volume with the EUR/JPY and EUR/USD pairs can spike sharply around these time zones.

Euro and Equity Exchange Hours
The schedules for many EUR traders roughly follow exchange hours, centering their activity when the Frankfurt and New York equity markets and Chicago futures and options markets are open for business. This localization generates an increase in trading volume around midnight on the U.S. East Coast, continuing through the night and into the American lunch hour, when forex trading activity can drop sharply.

However, central bank agendas shift this activity cycle, with forex traders around the world staying at their desks when the Federal Reserve (FOMC) is scheduled to release a 2 p.m. ET interest rate decision or the minutes of the prior meeting. The Bank of England (BOE) issues its rate decisions at 7 a.m. ET, while the European Central Bank (ECB) follows at 7:45 a.m. ET, with both releases taking place in the center of high volume EUR activity.

The Bottom Line
Six popular currency pairs offer euro traders a wide variety of short- and long-term opportunities. The best times to trade these instruments coincide with key economic releases at 1:30 a.m., 2 a.m., 8:30 a.m. and 10 a.m. U.S. Eastern Time, as well as between midnight and noon, when European and American exchanges keep all cross markets active and liquid.

 

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Endowment

Endowment

What is an ‘Endowment’
An endowment is a financial asset, in the form of a donation made to a non-profit group, institution or individual consisting of investment funds or other property that may or may not have a stated purpose at the bequest of the donor. Most endowments are designed to keep the principal amount intact while using the investment income from dividends for charitable efforts.
Endowments provide ongoing benefits for those that receive them by earning a market rate of interest while keeping the core endowment principal intact to fund future years of scholarships or whatever efforts the donor seeks to fund. In some cases, a certain percentage of the assets are allowed to be used each year, so the amount pulled out of the endowment could be a combination of interest income and principal. The ratio of principal to income would change year to year based on prevailing market rates. Endowments can be set up for purposes ranging from higher education to the wellbeing of pets, and can include terms like swimming tests and ice-cream made available at all times.

Types of Endowments
There are four different types of endowments; unrestricted, term, quasi, and restricted.

Term endowments usually stipulate that only after a period of time or a certain event can the principal be expended.
Unrestricted endowments assets that can be spent, saved, invested, and distributed at the discretion of the institution receiving the gift.
A quasi-endowment is a donation by an individual or institution who give the gift with the intent of having that fund serve a specific purpose. The principal is typically retained while the earnings are expended or distributed per specifications of the donor. These endowments are usually started by the institutions that benefit from them via internal transfers or by using unrestricted endowments already given to the intuition.
Restricted Endowments have their principal held in perpetuity, while the earnings from the earnings from the invested assets are expended per the donor’s specification.
Except in a few circumstances, the terms of these endowments cannot be violated. If an institution is near bankruptcy or has declared it, but it still has assets in endowments, a court can issue a doctrine of cy-près so the institution can use those assets to move them to better financial health while using the endowment in a way that reflects the wishes of the donor as closely as possible.

Use of Endowments in Universities and Colleges
Endowments are such an integral part of Western academic institutions that a fair measure of a college or university’s wellbeing can be the size of their endowment. They provide colleges and universities with the ability to fund their operating costs with sources other than tuition, and ensure a level of stability by using them as a potential ‘rainy-day-fund’.

Endowments set up by these institutions or given as gifts by donors have multiple uses. They can ensure the financial health of specific departments, they can establish professorships, and they be awarded to students in the form of scholarships or fellowships as awards for merit or as assistance to students from a background of economic hardship.

‘Chair positions’, or ‘endowed professorships’ are paid with the revenue of an endowment, and free up capital with which institutions can use to hire more faculty, increasing professor to student ratios. These chair positions are considered prestigious and are reserved for senior faculty.Endowments can also be established for specific disciplines, departments, or programs within universities. Smith College, for instance, has an endowment specifically for their botanical gardens, and Harvard has upwards of 10,000 separate endowments.

Management of Endowments
The goal of any group given the task of managing a university’s endowments is to sustainably grow the funds by reinvestment of the endowment’s earnings while also contributing to the operating cost of the institution and it’s goals. Older educational institutions like the Ivy League schools in the United States have been successful in building extremely robust funds in party because of continued donation from wealthy graduates and well managed funds. Harvard, Yale, Princeton, Stanford, and MIT have, respectively, $32 Billion, $20 billion, $18.7 billion, $18.6 billion, and $10 billion in their endowments.

Management of an endowment is a discipline unto itself. An outline of considerations made by a management team include; setting objectives, developing a payout policy, building an asset allocation policy, selecting managers, managing risks systematically, cutting costs, and defining responsibilities.

Criticism and Student Activism
Harvard and other elite higher educational institutions have come under criticism for the size of their endowment. Critics have questioned the utility of large, multi-billion dollar endowments, likening it to hoarding, especially as tuition costs began rising at the end of the 20th century. Large endowments had been though of as rainy day funds for educational institutions, but during the 2008 recession endowments did the opposite, instead many of them cut the payouts on endowments. A study published in the American Economic Review looked closely at the incentives behind this behavior, found that there has been a trend of overemphasis on the health of an endowment instead of that of the institution as a whole by endowment managers.

It’s not unusual for student activists to look with a critical eye at where their colleges and universities invest their endowment. In 1977 Hampshire College divested from South Africa in protest to apartheid, a move that a large number of educational institutions in the United States followed soon after. Advocating for divestment from industries and countries students find morally compromised is still a common tactic used by student activists.

Private Non-Operating Foundations and Federally Required Payout
Managers of endowments have to deal with the push and pull of interests to make use of assets to forward their causes, or to sustainably grow their respective foundation, institution, or university. Philanthropies, or more specifically private non-operating foundations, a category that includes the majority of grant-making foundations, are required by federal law to pay out 5% of their investment assets on their endowment every year for charitable purposes.

Private operating foundations must pay substantially all (85% or more) of it’s investment income, while community foundations have no requirement.

History
The oldest endowments still active today were established by both Henry the VIII and his relatives. His grandmother, Countess of Richmond established endowed chairs in divinity at both Oxford and Cambridge, while King Henry the VIII established professorships in a variety of disciplines at both Oxford and Cambridge.

Marcus Aurelius established the first recorded endowment for the major schools of philosophy in Athens circa 176 AD.

 

iPayYou – Bitcoin

Startup Allows Bitcoin to be Sent via Twitter (TWTR)
By Anthony Jerdine July 22, 2016 — 11:34 AM EDT

Seattle-based tech startup iPayYou now allows people to anonymously send Bitcoin payments using only the receiver’s Twitter (TWTR) handle. Using a Twitter handle may be more convenient for some people rather than inputting a 35-character alphanumeric Bitcoin address in order to send a payment. The company hopes that using this method will increase awareness of Bitcoin and attract a broader user base.

Bitcoin Payments Over Twitter
While iPayYou’s service is not the first attempt to simplify the bulkiness of traditional Bitcoin addresses—which are the hash of a public key in a public-private key pair —it is the first to successfully integrate Twitter handles. Some have used email addresses, for example, but being on Twitter, a person’s handle is publicly available and searchable, while an email address may remain private.

Twitter presents a unique opportunity for iPayYou customers. Hundreds of millions of customers already use and know Twitter very well; they’re familiar with the process of logging into Twitter and interacting with their favorite content publishers. At the same time, Twitter is also unique because it is a massive social network that allows any user to hide their personally-identifiable information from other users.”

– iPayYou CEO Gene Kavner

Sending digital currency payments via Twitter handle not only can simplify the receiver’s address, but it can also increase the practice of tipping users small amounts as a reward for posting interesting or compelling material online. It could even enable easier access for charitable donations and political contributions using Twitter as the underlying social platform. Even if the recipient isn’t expecting any payment, the Twitter user can still receive passively.
Twitter users can now send and receive Bitcoin payments using nothing more than their Twitter handle, rather than bulky traditional Bitcoin addresses or private emails. The hope is that by using this method, it will grow awareness and use of digital currency systems and promote charitable giving and other forms of donations.

 

The Uptrend in Commodities

The Uptrend in Commodities Is Just Getting Started (ABX, AA)
By Anthony Jerdine| July 13, 2016 — 11:11 AM EDT

Commodities are still on the rise, and the long-term buy signs that are appearing on the charts are tempering the views of even the most devoted bears. In the article below, we’ll take a look a closer look at the charts and try to identify strategic levels for the placement of entry and stop-loss orders.

PowerShares DB Commodity Index Tracking Fund
When it comes to the broad commodities market, many active traders prefer to turn to exchange-traded products such as the PowerShares DB Commodity Index Tracking Fund (DBC) because it offers a broad level of diversification in one investment. For those new to trading commodities, DBC is comprised of commodity futures on fourteen of the most heavily traded and important physical commodities in the world such as gold, oil, and copper. Taking a look at the chart below, you can see that the price is currently trading near the combined support of the ascending trendline and the 50-day moving average. The proximity of key support levels triggers ideal conditions for bullish traders based on the risk-to-reward ratio and many will likely buy at current levels and look to protect their positions by placing stop-loss orders below 14.69 or the 200-day moving average depending on risk tolerance. Longer-term traders will use the crossover between the 50-day and 200-day moving averages back in May as a sign of confirmation of a move higher and will likely maintain this outlook until the price closes below the aforementioned support levels.

Alcoa
One company that tends to be used as a barometer for corporate earnings and the state of the industrial metals complex is Alcoa, Inc. (AA). The recently announced earnings beat on both the top and bottom lines has triggered a rally in the stock, which has found bullish traders tripping over themselves as they look to fill buy orders above the dotted resistance of the sideways consolidation pattern. The chart below clearly illustrates the levels of support and resistance that will be of most interest to active traders, and it would be surprising if most maintain a bullish outlook until the price closes below $9.

Barrick Gold Corp.
When it comes to commodities, a recent surge in volatility has also triggered a move into precious metals such as gold. While there are many funds that one could use for gaining exposure, many are finding that they’d like to invest directly in the companies that are doing the mining. This added interest in the miners has sparked a sharp rally in Barrick Gold Corp. (ABX) and as you can see from the chart below, the momentum is clearly in favor of the bulls. Notice how the 50-day moving average has propped up the price on each attempted pullback so far in 2016. Most active traders would expect this behavior to continue and will likely protect their positions by placing a stop-loss order below either the swing low of $19 or the 50-day moving average of $19.24 depending on risk tolerance.

The Bottom Line
The strong uptrend in the commodities market has lasted longer than many bears have anticipated. While many remain skeptical, the long-term buy signs that are appearing on the chart are changing the minds of many and from a technical analysis perspective, there is little reason to expect the momentum to change directions any time soon.

 

Get Faster Results

Get Faster Results (4 Tactics)
Have you ever been frustrated over a lack of results from your workout routine? If so, you are in good company. Even the most seasoned athletes experience times when their results plateau.

When you continue to put in the same effort day after day with little or no results it is safe to say that you’ve hit your own fitness plateau.

Your body adapts quickly to any repetitive routine. The definition of ‘insanity’ is to do the same thing over and over while expecting different results. This holds true for your workouts. When your results stop then it’s time to do something new.

I have good news—the following 4 tactics are guaranteed to crank your workouts up to the next level and to deliver the fast results you want.

#1: Focus on Negatives

Each time that you do a weight lifting repetition you are utilizing three types of strength. These are:
Positive strength: the motion of lifting the weight.
Static strength: holding weight in a contracted position.
Negative strength: the motion of lowering the weight.
Most people completely miss the benefit of the negative in each repetition by allowing the weight to drop quickly with little control. It is understood that the negative portion of a repetition is just as important as the positive portion, and possibly more important.

Focus on the negative portion of each repetition by lowering the weight very slowly. Concentrate on the negative contraction, and make each repetition count.

If you are advanced, then use a training partner to assist you in moving heavier-than-normal weight into a contracted position, then lower it very slowly.

Another way to utilize negative repetitions on a machine is to lift the weight using two limbs but then lower it with just one. For example, use both legs to lift the weight on a leg extension machine, but then lower it back down slowly using only one leg.

#2: Do a Drop Set

Drop sets have long been used to fight off exercise plateaus. This technique is great for adding muscle strength, endurance and for increasing the cardiovascular benefit of your workout – resulting in more fat burn.

Here, in a nutshell, is how to do a drop set: When you perform an exercise to exhaustion, don’t stop there. Drop the weight by 80% and do another set.

You could take it a step further by dropping the weight twice, making it a double drop. Or drop the weight three times for a descending drop set.

Use this technique only once or twice per workout, on the final set of the exercise.

#3: Modify the Exercise

There are certain exercises that are considered ‘staples’ in the gym. The squat. The lunge. The chest press. The shoulder press. The bicep curl. You get the idea…

While you shouldn’t throw these exercises out the window, find creative ways to modify the familiar motion in order to challenge your muscles. Try these exercise modifications:
Squat on a Bosu ball or balance board.
Place a weighted bar across your shoulders and do walking lunges.
Use an exercise ball for chest presses instead of the bench.
Do a full squat between each repetition of shoulder presses.
Do a shoulder press between each repetition of bicep curls.
#4: Use Active Rest to turn each workout into High Intensity Interval Training

Every minute of your workout is an opportunity to increase intensity and to burn more fat. Don’t waste precious minutes with long rest periods between exercises.

While it is important to catch your breath if you feel winded, most of the time you would benefit more from an active rest than a passive one. Perform one of the following activities for 30 seconds between exercises and turn your regular workout into High Intensity Interval Training.
High Knees with Alternating Punches: Alternately bring each knee high to your chest in a quick jumping movement while alternating forward punches at shoulder level.
Burpees: Start in a sanding position and bend at the waist. Once your hands hit the floor, push your entire body back, extending your legs until they’re straight and you’re in the push-up position. Go down for a push-up, and when you push yourself up, jump slightly to bring your feet back near your hands. Finally, jump in the air with your arms fully extended over your head.
Side-to-Side Jumps on Bench: Stand on one side of an exercise bench. Place the foot closest up onto the bench, jump up and switch feet, then land on the opposite side of the bench.
Mountain Climbers: Place your hands wider than shoulder-width apart on the ground in a push-up position. Bring one knee to your chest and then back to the starting position, alternate each leg quickly.
Side-to-Side Ab Twists: With feet close together, jump and twist your legs left to right – holding your abs tight. Keep a bend in your knees and swing your upper arms with each twist.
Jump Lunges with Pop Squat: Start in a lunge position, lunge down then quickly jump up, switching your leg position in midair, land in an opposite leg lunge. Once you’ve done both legs, jump straight into a squat.
Medicine Ball Squat Jumps: With feet wider than shoulder-width apart hold a medicine ball at chest level. Squat down until your knees are at a 90 degree angle. Explosively jump up, raising the medicine ball straight over your head.

Using Elliott Wave To Trade Forex Markets

Using Elliott Wave To Trade Forex Markets
By Anthony Jerdine

In terms of the total value of all transactions, the forex market has become the largest market in the world. As the economies of countries across the globe become more and more intertwined, the relationship between the currencies of various countries grows in importance. It is this development that continues to drive interest in the forex markets. This article will examine a method to trade forex markets using the Elliott Wave Theory.

The Elliott Wave Theory
The Elliott Wave Theory is a method of analysis developed by Ralph Nelson Elliott (1871-1948) that is based on the theory that, in nature, many things happen in a five-wave pattern. As applied to the financial markets, the assumption is that a given market will advance in a pattern of five waves – three up waves, numbered 1, 3 and 5 – which are separated by two down waves, number 2 and number 4. The theory further holds that each five-wave up-move will be followed by a down-move also consisting of five waves – this time, three down waves, numbered 1, 3 and 5, separated by two up waves numbered two and four.

In addition, the theory holds that each of the countertrend waves – i.e., wave number 2 and number 4 – will unfold in an ABC pattern. In other words, during waves 2 and 4 of a five-wave uptrend, the security in question will retrace part of the wave 1 advance in a pattern consisting of two smaller down waves (labeled A and C) separated by one up wave (labeled B). Likewise, during waves 2 and 4 of a five-wave down-trend, the security in question will retrace part of the wave one decline in a pattern consisting of two smaller up-waves (labeled A and C) separated by one down-wave (labeled B).

In reality, things typically do not unfold in such a neat, clean, and easy to follow five-wave pattern. As a result, many individuals who espouse a belief in Elliott Wave analysis nevertheless end up interpreting the current wave count differently than other adherents. And in fact, it can be argued that the Elliott Wave is as much an art as it is a science, and that various interpretations are to be expected.

As such, one important thing to note is that this article is not so much about how to generate an Elliott Wave count – since so many individuals end up with different interpretations – but rather about how to trade forex markets using the Elliott Wave as the driving force. For the purposes of this article, I will use the Elliott Wave count as generated objectively by ProfitSource source software by Hubb. The software has an automated algorithm for generating and displaying the wave count.

It should be noted that the preferred count can change dramatically from one day to the next based on the built-in algorithm, and that another person or program may arrive at a different interpretation of the wave count and any given point in time. Still the benefit of using this method is that for better or worse, the count is calculated using an objective algorithm and is not open to subjective interpretation.

Laying Out the Steps of a Plan
Before embarking on any trading campaign it is essential to have a plan in place. So let’s set up a straightforward plan for using Elliott Wave as a basis for trading forex markets. Here are the steps that we will employ:

Step 1. Select a method for generating an Elliott Wave count.
This may be based on your own analysis, or via some charting or analysis software. As mentioned, we will use the wave count generated by ProfitSource software by HUBB.
Step 2. Wait for a wave 5 to begin.
In ProfitSource this occurs when a wave marked as “3” changes to a wave marked as “4” (this actually indicates the end of wave 4 and the start of wave 5). Waiting for this to occur can be the toughest part, for this step can require a great deal of patience. A given single forex market may experience the setup that we are looking for only a few times a year.
Step 3. Look for confirmation of the trend using another indicator or indicators.
Long Setup Confirmation: Once a wave 3 above the price bar changes to a wave 4 marked below the price bar we will then assess the following indicators to confirm that a long trade should be made:
90-day Commodity Channel Index (CCI) is positive (i.e., greater than zero)
The three-day relative strength index reverses to upside for one day.
These two confirming actions do not have to take place on the day that the wave number changes from 3 to 4. As long as the both occur at some point prior to the wave count being something other than 4, then a confirmation is considered to be in force and we will enter a long trade.

Short Setup Confirmation: Once a wave 3 below the price bar changes to a wave 4 marked above the price bar we will then assess the following indicators to confirm that a short trade should be made:

90-day CCI is negative (i.e., greater than zero)
The three-day RSI reverses to downside for one day
These two confirming actions do not have to take place on the day that the wave number changes from 3 to 4. As long as the both occur at some point prior to the wave count being something other than 4, then a confirmation is considered to be in force and we will enter a short trade.

Step 4. Identify a reasonable stop-loss point.
For a long setup we will subtract three times the three-day average true range from the low established leading up to the trade as our initial stop-loss point. For a short setup we will add three times the three-day average true range to the high established leading up to the trade, and use this as our initial stop-loss point (See example to follow).
Step 5. Enter trade and stop-loss order.
We will assume that a trade is entered at the next day’s open price. The stop-loss order will also be placed. This order is a trailing stop and we be updated each day that the trade is open.
Step 6. Consider taking some profits on first good move and trail a stop for the rest of the position.
Trade Exit Plan
1. If stop-loss order is hit then the entire trade is exited.

2. If the three-day RSI reaches 85 or higher for a long trade, or 15 or lower for a short trade, or if the wave count changes from 4 to 5, we will sell half and adjust our trailing stop as follows:

For a long trade we will use a trailing stop that subtracts one times the three-day average true range from the previous day’s low.
For a short trade we will use a trailing stop that adds one times the three-day average true range to the previous day’s high.
3. If the wave count changes to something other than a wave 5, we will simply exit the trade on the next day.

Example Setup and Trade
In Figure 1 we see the setup for a short trade. On the most recent trading day, the blue number 4 first appeared above the price bar. Prior to the day, a blue number 3 had appeared below each price bar for the past several days. This suggests that a wave 5 decline may be setting up.

Below the bar chart you can see that the three-day RSI ticked lower on the day and that the 90-day CCI is in negative territory. This confirms the setup and constitutes a sell short signal, so we also calculate our stop-loss price by adding three times the average true range over the last three days to the current day’s high price. On the next day the euro/yen cross was sold short at 112.63 and a trailing stop was entered at 117.74.
Figure 1 – A sell short setup for the euro/yen cross is completed.
In Figure 2 you can see that roughly a month later the three-day RSI registered a reading below 15. As a result, on the next day we would have bought back half of our position at 109.50 and also adjusted our trailing stop to only one times (rather than three times) the average true range over the past three days added to the current day’s high, thus generating a much tighter trailing stop (this tighter stop does not appear until Figure 3).
Figure 2 – Three-day RSI signal profit-taking opportunity; half of short position is covered and trailing stop is tightened.
Finally, in Figure 3 you can see that the euro/yen cross worked slightly lower over the next several weeks, but ultimately our trailing stop was hit and the remaining portion of our original short position was closed out at 109.44.
Figure 3 – Trailing top is hit; trade is exited.

Conclusion
There are many ways to interpret an Elliott Wave count. There are also many methods for entering and exiting trades once a signal is deemed to have occurred. This article serves as an example of just one way to go about performing these tasks. Whatever method one ultimately chooses the keys to successful implementation are to:

Develop some objective way to interpret the current Elliott Wave count. Consider employing some sort of filter or filters to ensure a valid trading signal.
Always have a stop-loss point.
Consider taking profits on the first good move in the expected direction and then letting the rest ride with a trailing stop.

 

The Bilderberg Illuminati Secret Conference

The Bilderberg Illuminati Secret Conference
By Anthony Jerdine| June 13, 2016 — 8:22 AM EDT

The world’s most secretive meeting took place on June 9-12. At an undisclosed location in Dresden, Germany, heads of states, politicians, tech luminaries and finance’s top names will convene for the 64th annual Bilderberg Summit. The invite-only conference will feature no press, no cameras and no quotes. Led by a steering committee, helmed by Henri de Castries, French Count and CEO of multinational insurance firm AXA, the Bilderberg provides its attendees with a forum for informal discussions about the major issues facing the world, without the need to propose resolutions or pass any votes deciding any outcome.

Naturally, the veil of secrecy has stimulated the imaginations of conspiracy theorists, who view the Bilderberg Meetings as a forum for a cabal of the world’s elite to influence the future course of humanity. One of the most popular conspiracy theories behind the purpose of the meetings, is the furthering of the so-called “New World Order”—a homogenous single government that seeks to impose its dominion over every sovereign nation on the planet.

However, real life is not as nefarious. According to the Bilderberg’s official page, the key topics discussed included:

Current events (most likely with an emphasis on Brexit)
China
Europe: migration, growth, reform, vision, unity
Middle East
Russia
US political landscape, economy: growth, debt, reform
Cyber security
Geo-politics of energy and commodity prices
Precariat and middle class
Technological innovation
Perhaps the SPECTRE-esque plots were on the other memo. Rather, the remarkably tame list is reminiscent of other exclusive meetings such as Davos. Of note however, is the discussion around the “precariat”, which according to British economist Guy Standing, who popularized the term, are:

“…the perpetual part-timers, the minimum-wagers, the temporary foreign workers, the grey-market domestics paid in cash… the techno-impoverished whose piecemeal work has no office and no end, the seniors who struggle with dwindling benefits, the indigenous people who are kept outside, the single mothers without support, the cash laborers who have no savings, the generation for whom a pension and a retirement is neither available nor desired.’

In other words, the marginalized and alienated groups that are fueling the rise of demagogues such as Donald Trump and new Philippines president Rodrigo Duerte, is a cause of concern amongst the global elite.

Some of the big names on this year’s guest list includes, several finance ministers, professors, 30 plus heads of companies, such as John Cryan, CEO of Deutsche Bank AG (DB), David Cote, CEO of Honeywell (HON), Ben van Beurden CEO of Royal Dutch Shell plc (RDS), Peter Thiel, President of Thiel Capital and co-founder of Paypal (PYPL) and Eric Scmidt, Executive Chairman of Alphabet Inc (GOOGL). And finally, before we get too dismissive about the conspiracies, note that two attendees from 1991 and 1993 were a young Senator from Arkansas by the name of Bill Clinton and a lowly minister by the name of Tony Blair. Coincidence? You decide.

 

Why the Saudi Investment Fund Put $3.5B Into Uber?

Why the Saudi Investment Fund Put $3.5B Into Uber
By Anthony Jerdine| June 5, 2016
Saudi Arabia’s Public Investment Fund yesterday became an unlikely investor in hot ride sharing startup Uber’s latest venture round with a $3.5 billion infusion into the service. Uber’s motivations for raising more cash are fairly clear. The service is a capital intensive business, which uses a combination of subsidies and cash bonuses to entice drivers. The $5 billion raised during this round will help it expand service at a rapid clip.

However, the reasoning behind the Saudi PIF’s funding is still a bit hazy.

After all, why did a Public Investment Fund, which was was set up to develop the country and invest in oil revenues, take a side turn to invest in a foreign company?

A Question Of Infrastructure
The answer to that question lies in the economics of low oil prices. The crash in price of the fuel has adversely affected the kingdom’s budget deficit. On top of that, the ruling family has had to increase spending on social service projects to maintain its contract with citizens and quell possible discontent of the sort that resulted in the Arab Spring five years ago.

Crown Prince Mohammed Bin Salman, who is the chief architect of economic reforms to move Saudi Arabia away from oil, fashioned a new public investment fund last year to raise funds . In an interview with Bloomberg earlier this year, he said the fund would eventually control $2 trillion, an amount that is greater than the combined market valuations of Apple Inc. (AAPL), Alphabet Inc. (GOOG), and Amazon.com Inc. (AMZN). Sale of Aramco’s shares is part of the kingdom’s strategy to raise cash for the PIF.

“What is left now is to diversify instruments,” he said, adding that the fund planned to increase its proportion of foreign investments to 50 percent by 2020 from current levels of 5 percent.

As an example, the fund invested $1.1 billion for a 38% stake in South Korean steel giant POSCO last July. It has also inked a $10 billion partnership with Russian Direct Investment Fund.

Such deals serve a dual purpose.

First, they are an investment opportunity to appreciate capital. Second, they are also a valuable source of knowledge and technology transfer for a region that is not sufficiently diversified in its industrial base to withstand a crash in oil prices. There is already a race between wealth funds in the Middle East to diversify holdings across a broad array of sectors to develop local expertise. For example, Abu Dhabi’s Mubadala fund has invested across the world in multiple sectors such as metals and entertainment. Similarly, Qatar Investment Authority has also invested in Uber and Flipkart, an Indian ecommerce startup.

When the agreement between POSCO and Saudi Arabia was announced, POSCO CEO Kwon Oh-Joon said the company would collaborate with PIF to set up a Saudi Government – run construction firm to help expedite mega-infrastructure projects that the kingdom has in works. Several such projects have been delayed because the kingdom lacks enough firms and competition in its local market.

So, what will Uber bring to the table for Saudi Arabia?
Quite possibly, a combination of technology expertise and financial returns. The company has had stratospheric growth, so far. Within slightly more than six years, it has managed to expand to 71 countries. It’s revenues are upwards of $10 billion and the company has a private market valuation of $68 billion. The purchase price for the investment funds’s stake in Uber is not known. However, it is safe to assume that investors in the startup will make a windfall, if and when the company makes its debut in the stock market.

Uber has also sketched out a grand vision of the future in its pitch to investors. This vision takes the form of an “urban logistics fabric,” wherein Uber’s service will serve as a logistics layer for a city and perform an assortment of functions, ranging from food delivery to trucking. The company is also at the forefront of the self-driving car revolution.

The San Francisco-based startup has already experimented with pilot programs for such services in its home base. The odds are stacked in its favor. Research firm Frost & Sullivan estimates that 16 percent of third-party logistics will be enabled by mobile platforms by 2025. Saudi Arabia is already poised to have the second largest mobile penetration in the Middle East this year. An Uber investment will help it develop local talent and competition to the service.

 

GOP GOP HQ Hotel in Cleveland

GOP HQ Hotel in Cleveland: A State-Owned Enterprise
By Anthony Jerdine

When Republicans gather in Cleveland to formally nominate Donald Trump for president in July, their headquarters will be a brand new hotel whose very existence contradicts party orthodoxy on private enterprise, less government and lower taxes.
Were the Hilton Cleveland Downtown located in in Havana, or in Moscow during the Soviet era, Republicans in a diplomatic mode would call it “state-owned.” Those favoring Trump’s aggressively plain English would call it a communist hotel.
That’s because Cuyahoga County taxpayers own the hotel—not that they had any say in the matter.
The Cuyahoga County Commissars – er, sorry, Commissioners – forced taxpayers three years ago to pay for the $276 million hotel, which is scheduled to open June 1 and connects directly to the Cleveland Convention Center, where the party will nominate its presidential standard bearer.
The taxpayers own everything in the hotel, including the signs that say “Hilton.”

How did this come to pass? The county spent years trying to attract private investors to take on this project. After none did, it forced taxpayers into underwriting it. The hotel got built through a convoluted series of transactions involving the city, the county and others so the land would be tax-exempt. The city and county will collect no property taxes, but the schools will be made whole, said Jeffrey Appelbaum, the lawyer on the project and a construction expert.
The hotel is being paid for with an increase in the county sales tax that is expected to raise $20 million per year for 20 years. In addition, the county added a 1 percent excise tax on hotel rooms. The excise tax from the Hilton will be cycled back to cover the bond payments, meaning guests will be hit for a small part of the cost.
Appelbaum said the hotel was built for much less than a private developer would have spent, which appears to be true. Still, that efficiency is hardly an argument Republicans would buy into just as they reject national single-payer healthcare even though it would be much cheaper than our disorganized nonsystem system of sick care, and it would remove a huge burden from small business owners.
Republicans also wouldn’t be crazy about the origins of a lot of the hotel inventory, which runs directly counter to Trump’s “Make America Great Again” slogan, under which he assumes a president posses dictatorial powers. Trump says if elected he will order companies like Carrier, Ford and Nabisco to build factories only in America and slap punitive tariffs on foreign-made goods, powers not granted the president under the Constitution.
The flatware and furniture offend the Trump creed. While extolling the private enterprise system after dinner, Republican delegates will put Spada brand cake forks into their desserts. The 5,400 forks, made in Indonesia, cost local taxpayers $10,314, or $1.91 each. The hotel could have bought flatware from the only American maker, Liberty Tabletop in suburban Syracuse, N.Y.
The top-floor bar, with views of Lake Erie, features sofas, bar stools and other furniture from Astoria Imports, a Florida firm that has factories and warehouses in Mexico and Asia, as well as some domestic operations.
Trump may be more comfortable with the sourcing of the banquet napkins, table clothes and table skirts, which cost Cleveland taxpayers $92,526.48. They came from a division of Mount Vernon Mills, which made clothing for the Confederate Army, though the company says its work for the 19th Century traitors was performed “under protest.” It also notes that the mill owner concealed this work for the Confederacy from Union General William T. Sherman, who decided against burning it to the ground after an evening of hospitality from the owners.
But it’s how the hotel came to exist in the first place that should offend Republicans. It required more government, not less. And what if the hotel does not generate enough revenue to pay the bondholders? On the surface the bonds are called revenue bonds, not general obligations of Cuyahoga County. But that’s a clever deceit. If revenue falls short the county must appropriate money to make up the difference, even if that means raising taxes, to ensure that the bondholders get fully paid.
Local boosters soon made a promise of “300,000 visitors and $330 million in spending” if they could just get a taxpayer owned convention center for medical conferences and a hotel, as reported by Roldo Bartimole, an 83-year-old self-employed journalist who has offered independent and critical assessment of Cleveland area government for a half century.
Bartimole said the whole idea was just another way to pick the pockets of taxpayers for the benefit of the local oligarchs. He also railed against a tax increase to subsidize, forever, the Cleveland Browns football team, Cavaliers basketball team and the Indians baseball team, two of which are owned by out-of-town billionaires.
To justify making taxpayers build a hotel a local group ordered up a study from PKF Consulting in Philadelphia. With lots of lots of tables and charts showing that the hotel would not just succeed, it would rent out so many rooms at rising prices that over the next five years it should expect that 17 cents out of every dollar of revenue would become net profit. This being a government-owned hotel technically it’s a net surplus, but the idea remains the same.
Experience suggests this was a paid-for fantasy report. Around the country there are now at least 33 taxpayer owned hotels. Like communism in practice they have not done well. The one in St Louis was an utter failure, sold off for about 32-cents on the dollar.
Other big convention hotels, both those owned outright by taxpayers and those with heavily subsidized private owners, have “a checkered past,” said Heywood T. Sanders, a University of Texas-San Antonio professor and author of the book Convention Center Follies.
He notes that the trend toward taxpayer subsidized hotels traces back to the late 1970s with Urban Development Block Grants or UDAGs. “We say the H in UDAG is for hotel, but it’s a silent H,” Sanders joked.
From 1978 to 1989 a quarter of all UDAG money went for hotel projects, in all 60,000 rooms added at 236 hotels that were new or renovated, political scientist Richard D Bingham wrote in his 1998 book Industrial Policy American Style.
The new trend is toward not subsidizing hotels, but having taxpayers own them. A study in December, published in the journal Cornell Hospitality Quarterly, concluded from analyzing 21 of these hotels that they are bad for private enterprise.
Proponents claim taxpayer-owned hotels will increase business and thus benefit existing hotels. But the study found that taxpayer owned hotels “tend to erode the key performance metrics of competitive hotels in the market.”
So just remember the next time you are told that Republicans are the party of free enterprise, less government and lower taxes that they chose as their national party convention headquarters what they would call a communist hotel built here in America.
About the author: Pulitzer Prize winner and recipient of an IRE medal and the George Polk Award, David Cay Johnston is author of five books and the upcoming The Prosperity Tax: A New Federal Tax Code for the 21st Century Economy. He is a Distinguished Visiting Lecturer at Syracuse University College of Law and Whitman School of Management, and also writes for The Daily Beast and Tax Notes.

 

3 Reasons Million-Dollar Homes Are in a Slump

3 Reasons Million-Dollar Homes Are in a Slump
By Anthony Jerdine | May 13, 2016

The average sale price of U.S. luxury homes was down 1.1%, marking the largest decline in more than two years, according to Redfin, a company that provides web-based real estate database and brokerage services for residential markets. This slump marks a significant shift from a few years ago: Following the financial crisis of 2008, the wealthy enjoyed a strong recovery, and luxury housing was the top segment of the real estate market.

Today, home prices for the broader housing market – the other 95% – have risen 4.7% year-over-year, while the top 5% has become one of the weakest real estate segments. “For years, the high end was driving sales and price,” said Nela Richardson, chief economist at Redfin. “Now, the demand is at the middle and lower price range.” Here is a look at three factors that are contributing to the slump.

1. Stock Market Volatility
It’s not unusual for high-end buyers to tap into their investment portfolios to finance luxury home purchases, either by cashing out a few stocks or borrowing against the portfolio using a non-purpose loan – a type of margin loan that uses the investment portfolio as collateral. Historically, high-end housing is hit the hardest by stock market downturns. “As you go up the income quintile, into the top 10%, 5%, 1% by income, their stock exposure increases,” said CoreLogic deputy chief economist Sam Khater. “For the typical family, the bulk of their equity is tied up in home equity, not stock equity. It’s the reverse for high income.”

The first two months of this year tested a lot of nerves on Wall Street as investors feared a repeat of the 2008 financial crash. The volatility has left some would-be luxury buyers cautious, and rather than jumping in now with all the volatility and uncertainty – both here and in overseas financial markets – many luxury buyers have decided to wait and see what happens in the second half of 2016 before making any decisions about entering the real estate market.

2. A Strong U.S. Dollar
Overseas buyers bought $104 billion in U.S. real estate – about 8% of the total existing home sales’ dollar volume – during the one-year period ending March 2015, according to a report from the National Association of Realtors (NAR). Buyers from China, Hong Kong and Taiwan were the top foreign buyers of real estate, accounting for nearly $29 billion in sales.

Now, demand from foreign buyers is weakening in response to a strong U.S. dollar (and the relative weakness of other currencies), coupled with higher home prices for those buyers – a situation that greatly affects the affordability of high-end properties. In January, for example, the median price of existing U.S. homes was 67% higher than a year ago for buyers from Brazil, due to changes in the exchange rate, according to NAR. For Canadian buyers, the price increased 27%, and for Chinese buyers, 14%.

3. Oversupply at the Top
During the first quarter of 2016, the number of luxury homes on the market – defined as the most expensive 5% of homes sold in a quarter – increased from a year prior, according to analysis from Redfin. For homes for sale above $1 million, there was a 3.3% rise in inventory, to 70,962; homes listed above $5 million were up 13.2%. “There is oversupply at the high end, especially in certain pockets and cities,” said Redfin’s Richardson. “They should be flying off the shelves, but these homes are just sitting there.”

Deeper inventory, paired with more nervous luxury buyers, has led to price cuts across the country. In Los Angeles, for example, an $18.8 million home sold for $10 million in the first quarter of this year. A $14 million home in The Woodlands, Texas, sold for half that – $7 million. During the same quarter, the highest-priced sale (outside of New York) was a 2.2-acre estate in North Laguna, Calif. listed for $75 million. It sold for $45 million – a 40% discount.

The Bottom Line
Across the United States, the average sale price of U.S. luxury homes fell 1.1%, but certain markets have been hit harder than others. In Miami Beach, for example, a surplus of luxury development, combined with fewer foreign buyers, led to a 13.7% drop in luxury home prices. In Austin and Boston – considered hot real estate markets today – prices in the top 5% fell almost 12%, while at the same time, prices for the other 95% of the market rose 5.1% and 6.3%, respectively. Prices for luxury real estate may continue to drop while there’s volatility in the stock market, an oversupply at the top and foreign buyers are skittish.