London knocks off New York City as top spot for foreign investors

A combination of factors, such as the financial crisis, a false recovery, new government regulations, and a general mistrust from investors, has dented Wall Street.  This is now showing up based on the recent survey conducted by the Wisconsin School of Business.  London now is the #1 destination for foreign investors:

London is the top choice for foreign investors, beating New York City, which finished second in a poll released today.
San Francisco ranked third, followed by Houston and Los Angeles. Washington, D.C., fell out of favor as a destination for foreign money, dropping to ninth, after Tokyo, Madrid and Munich. New York ranked first in the previous three years.
The survey was conducted in the fourth quarter of last year by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business. Respondents were members of the Association of Foreign Investors in Real Estate (AFIRE.)

Read more here: http://www.mcclatchydc.com/2014/01/06/213625/london-knocks-off-new-york-as.html#storylink=cpy

The Dubai Bubble - Hot money in frontier and emerging markets

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Keiser Report: NSA manipulates bank accounts?

Indian tribe to create their own cryptocurrency Maza Coin

An American Indian tribe in South Dakota is experimenting with the use of their own BitCoin alternative, MazaCoin.  They believe it will help the economic situation of their tribe, and also be a boost for the local community where they live.  Indian Reservations have a semi-sovereign status, so if this MazaCoin does take off, it will be interesting to see how any disputes will be resolved, if any.

Will Bitcoin become the new virtual gold for the Oglala Lakota Nation? The impoverished tribe's reservation is based in rural Rapid City, South Dakota. Payu Harris, the tribal council representative, thinks the Bitcoin (BTC) can empower his people.
Harris is spearheading theBTC Oyate Initiative Project, an "exciting chance for Bitcoin to prove its market viability as a means of trade, identify potential pitfalls and security challenges, and showcase its availability as a merchant-payment solution for small business and entrepreneurs," states the website.
The tribe's currency, the MazaCoin "will be as simple & easy to use as BitCoin of which it is a fork custom designed for the socio-economic needs of the Oglala Lakota," statesMazaCoin on Twiiter.
"We're estimating the initial price on the going market of copy.25, which gives us a $2 billion market capitalization," Harris toldKOTARadio.com.

The Oyate Project will assemble a small-scale "mining cluster" to generate bitcoins while providing the public a hands-on chance to learn about mining and how bitcoins are generated, explains the project's website. "The btc generated will be forwarded to the second aspect of the project which is Crypto Currency Exchanges and trading and will be used to help train beginning Native American traders on the basics of cryptocurrency trading, futures contracts, market strategy, CC pairs, and more," states the Oyate Project description. "Also lastly the project aims to produce a massive promotional campaign aimed at small business owners to help facilitate their acceptance of bitcoin as a viable means of payment for goods and services."

Read more athttp://indiancountrytodaymedianetwork.com/2014/01/03/can-bitcoin-alleviate-poverty-pine-ridge-reservation-tribe-pursues-its-own-cryptocurrency

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Cap Ex nabbed by NFA for overcharging for 'software fees'

In an amazing case of lies and overcharging on fees, a CTA charged a customer so many fees that they would have needed to make 12% a month just to break even!  This complaint is a must read.

From the NFA:

For Immediate Release
December 31, 2013

For more information contact:
Larry Dyekman (312) 781-1372, ldyekman@nfa.futures.org
Karen Wuertz (312) 781-1335, kwuertz@nfa.futures.org

NFA orders Westminster, California commodity trading advisor Cap Ex Partners LLC to permanently withdraw from NFA membership and sanctions its principals, Keith R. Bramlett and Ralph H. Johnson

December 31, Chicago - National Futures Association (NFA) has ordered Cap Ex Partners LLC (Cap Ex), a commodity trading advisor Member of NFA located in Westminster, California, to permanently withdraw from NFA membership. NFA has also orderedKeith R. Bramlett (Bramlett) and Ralph H. Johnson (Johnson), associated persons and listed principals of Cap Ex, to withdraw from NFA membership. Bramlett and Johnson are prohibited from applying for NFA membership or associate membership for a period of two years from the date of their withdrawals. In addition, Bramlett and Johnson are prohibited from acting as a principal of any NFA Member for a period of three years from the date of their withdrawals. The Decision, issued by a designated panel (Panel) of NFA's Hearing Committee, is based on a Complaint filed against Cap Ex, Bramlett and Johnson on August 29, 2013, and a settlement offer submitted by Cap Ex, Bramlett and Johnson.

The Panel found that Cap Ex, Bramlett and Johnson charged their customers excessive fees and failed to provide customers with a break-even analysis as required by NFA rules. In addition, Cap Ex and Bramlett willfully submitted false information to NFA. Further, Cap Ex used a misleading disclosure document, did business with an entity that was required to be registered as a commodity pool operator but was not registered in such capacity and failed to list an entity as a principal of the firm.

The complete text of the Complaint and Decision can be viewed on NFA's website (www.nfa.futures.org).

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Moguls Rent South Dakota Addresses to Dodge Taxes Forever

One of many interesting tax havens is right here in USA - South Dakota.  $121 Billion in assets is now being managed through trusts registered in South Dakota, according to Bloomberg News:

Among the nation’s billionaires, one of the most sought-after pieces of real estate right now is a quiet storefront in Sioux Falls, South Dakota.

A branch of Chicago’s Pritzker family rents space here, down the hall from the Minnesota clan that controls the Radisson hotel chain, and other rooms held by Miami and Hong Kong money.

Don’t look for any heiresses in this former five-and-dime. Most days, the small offices that represent these families are shut. Even empty, they provide their owners with an important asset: a South Dakota address for their trust funds.

In the past four years, the amount of money administered by South Dakota trust companies like these has tripled to $121 billion, almost all of it from out of state. The families needn’t actually move to South Dakota, or deposit their money at a local bank, or even touch down in the private jet. Little more than renting an address in Sioux Falls is required to take advantage of South Dakota’s tax-friendly trust laws.

Read more here

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Be prepared: Wall Street advisor recommends guns, ammo for protection in collapse

Being prepared is always a good plan, but now money managers are recommending being prepared 'just in case'.

From the Washington Examiner:

A top financial advisor, worried that Obamacare, the NSA spying scandal and spiraling national debt is increasing the chances for a fiscal and social disaster, is recommending that Americans prepare a “bug-out bag” that includes food, a gun and ammo to help them stay alive.David John Marotta, a Wall Street expert and financial advisor andForbes contributor, said in a note to investors, “Firearms are the last item on the list, but they are on the list. There are some terrible people in this world. And you are safer when your trusted neighbors have firearms.”His memo is part of a series addressing the potential for a “financial apocalypse.” His view, however, is that the problems plaguing the country won't result in armageddon. “There is the possibility of a precipitous decline, although a long and drawn out malaise is much more likely,” said the Charlottesville, Va.-based president of Marotta Wealth Management.

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ALERT: Cryptolocker Ransomware infecting computers and demanding payment in Bitcoin

Warning to PC users - a new malware "Ransomware" will encrypt your files and then demand payment before countdown clock expires.  See here what you need to know about Cryptolocker, including how to clean.  As a general security practice, never open any email with an attachment from unknown persons.  Also, be wary of clicking on links in emails from unknown senders that may direct you to an infected site.

From Sott:

It is being called the perfect crime and it has law enforcement around the globe baffled. 

It all starts with a simple email. "They are scared and they are angry. It is a real terrible experience for them." Joe Ruthaford is talking about computer users who mistakenly launched a potent internet phishing scheme. He recently saw one of those ravaged computers in his Beacon Hill repair shop. 

"It is extremely damaging. It is one of the worst ones." It's called cryptolocker ransomware. Kevin Swindon is with the FBI in Boston. "I would think about this particular type of malware as what would happen if your computer was destroyed," Swindon said. 

In the past 90 days, thousands of people worldwide have opened a seemingly innocuous link to track a holiday package. Suddenly, all the files on their computer are encrypted. 

Joan Goodchild is the editor of "CSO," Chief Security Officer magazine based in Framingham. "This is a criminal operation. They are holding your folders and files ransom. We call this ransomware because that is exactly what it is. You need to pay in order to have access to them once again." 

And that is exactly what happened last month at the Swansea Police Department. Cryptolocker ransomware took over the department's entire computer system and the police were forced to pay a $750 ransom to get back control. As the ransomware takes over your computer, a countdown clock appears and shows victims how long they have to pay up. That means purchasing a key, or software, to reverse the process. And victims must do that using the online virtual currency known as bitcoins. 

"Once you have purchased a bitcoin, then the transaction that you use that bitcoin in is encrypted, and therefore you cannot trace it," explained Goodchild. Swindon says it appears to be the perfect crime. The FBI tells WBZ-TV they are very worried about this spreading in 2014. The scheme could be the work of organized gangs overseas. So far, no one has been caught.

Cryptolocker Ransomware Being Described As ‘The Perfect Crime’ « CBS Boston

Cryptolocker Ransomware: What You Need To Know | Malwarebytes Unpacked

Update 12/20/2013: A new version of Cryptolocker—dubbed Cryptolocker 2.0—has been discovered by ESET, although researchers believe it to be a copycat of the original Cryptolocker after noting large differences in the program’s code and operation. You can read the full blog comparing the two here.

Just last month, antivirus companies  discovered a new ransomware known as Cryptolocker.

This ransomware is particularly nasty because infected users are in danger of losing their personal files forever.

Spread through email attachments, this ransomware has been seen targeting companies through phishing attacks.

Cryptolocker will encrypt users’ files using asymmetric encryption, which requires both a public and private key.

The public key is used to encrypt and verify data, while private key is used for decryption, each the inverse of the other.

Below is an image from Microsoft depicting the process of asymmetric encryption.

The bad news is decryption is impossible unless a user has the private key stored on the cybercriminals’ server.

Currently, infected users are instructed to pay $300 USD to receive this private key.

Infected users also have a time limit to send the payment. If this time elapses, the private key is destroyed, and your files may be lost forever.

Files targeted are those commonly found on most PCs today; a list of file extensions for targeted files include:
3fr, accdb, ai, arw, bay, cdr, cer, cr2, crt, crw, dbf, dcr, der, dng, doc, docm, docx, dwg, dxf, dxg, eps, erf, indd, jpe, jpg, kdc, mdb, mdf, mef, mrw, nef, nrw, odb, odm, odp, ods, odt, orf, p12, p7b, p7c, pdd, pef, pem, pfx, ppt, pptm, pptx, psd, pst, ptx, r3d, raf, raw, rtf, rw2, rwl, srf, srw, wb2, wpd, wps, xlk, xls, xlsb, xlsm, xlsx

In some cases, it may be possible to recover previous versions of the encrypted files using System Restore or other recovery software used to obtain “shadow copies” of files. The folks at BleepingComputer have some additional insight on this found here.

Removal:

Malwarebytes detects Cryptolocker infections as Trojan.Ransom, but it cannot recover your encrypted files due to the nature of asymmetric encryption, which requires a private key to decrypt files encrypted with the public key.

In order to make removal even easier, a video was also created to guide users through the process (courtesy of Pieter Arntz).

While Malwarebytes cannot recover your encrypted files post-infection, we do have options to prevent infections before they start.

Users of Malwarebytes Anti-Malware Pro are protected by malware execution prevention and blocking of malware sites and servers.

To learn more on how Malwarebytes stops malware at its source, check out thisblog.

Where's the Gold? China prefers Gold to USD

Asia, and specifically China, has recently developed a very strong appetite for Gold.  For those who say Gold is irrelevant, bear in mind Gold's interesting relationship to fiat currencies, and key events in Global monetary history, such as when Nixon defaulted on the Gold standard thus creating the Forex market, or Roosevelt's confiscation of privately held Gold in 1933.  See this video (below) about what Asians are doing with their newly found taste for the shiny metal.

Barry Ritholtz - what's going on with the markets

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Taper!

Fed to taper by 10 Billion a month in asset purchases:

Hilsenrath Unveils 712 "Tapering Is Not Tightening" Words Of Wisdom In 3 Minutes

The "swap" of $10 billion of asset purchases for a lower employment threshold and lower-rates-for-longer forward guidance knne-jerked stocks dramatically higher (for now). But while that was occurring, the Wall Street Journal's Hon Hilsenrath was busy preparing 712 words in a record-setting 3-minutes to explain how the Fed remains data-dependent... and will remain dovish for longer than previously thought.
Via WSJ,The Federal Reserve said it would reduce its signature bond-buying program to $75 billion per month, taking a step away from a policy meant to recharge economic growth, and said that it will continue in "further measured steps at future meetings" if the economy stays on course.After months of intense discussion at the Fed and in financial markets, the Fed's policy-making committee announced Wednesday it would trim its purchases of long-term Treasury bonds to $40 billion per month, a reduction of $5 billion, and cut its purchases of mortgage-backed securities to $35 billion per month, a reduction of $5 billion."In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the Committee decided to modestly reduce the pace of its asset purchases,"the Fed said in its formal policy statement.The Fed also sought to enhance its commitment to keep short-term interest rates low for a long time after the bond-buying program ends.Fed officials inserted new language in the policy statement that stressed they will be in no rush to raise rates once unemployment reaches the 6.5% threshold the central bank has set out as the point at which they would start considering raising rates, as long as inflation remains in check.The Fed said that "it likely will be appropriate to maintain the current target range for the federal funds rate well past the time" that the jobless rate dips below the 6.5% threshold, "especially if projected inflation continues to run below the Committee's 2 percent longer-run goal."Short-term rates have been pinned near zero since late 2008. Most Fed officials expect to keep interest rates low well into the future. In their latest economic projections, also out Wednesday, 12 of 17 Fed officials said they expected the central bank's benchmark interest rate, which is called the fed funds rate, to be at or below 1% by the end of 2015. Ten of 17 officials expected the rate to be at or below 2% by the end of 2016.The Fed acknowledged concerns that inflation continues to run stubbornly below the central bank's 2% target, saying that it is "monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term." The Fed's preferred inflation gauge, the price index for personal consumption expenditures, increased just 0.7% in October from a year prior, according to a Commerce Department data release earlier this month.Officials by and large stuck with their economic forecasts for 2014, making only slight adjustments to projections of growth, unemployment and inflation that they made in September. In the statement, officials said that risks to the economy and jobs market have become "more nearly balanced."

Read more here...

Fed "Tightens", Tapers $10 Billion - Full Redline | Zero Hedge

Before decision

The case in favor of the Fed tapering today - Michael Casey's Horizons - MarketWatch

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United States Is Now the Most Unequal of All Advanced Economies

According to the most accurate data we have to measure, the US is now the most unequal of all advanced economies, being beat only by countries such as Ukraine and Russia.  Of course, Americans typically look at those countries as run by a bunch of mafia oligarch thugs, and believe the dream that people in the US gained their wealth through "hard work, dedication, and innovation."  Of course, statistics are not published on the millions of bankrupt potential billionaires, or the fact that the DOW removes losers every so often, or that Bill Gates comes from a family of corporate lawyers (whose father was on the board of IBM at the time of the big 'deal' that made Microsoft what it is).

From Popular Resistance:

The most authoritative source comparing wealth-concentration in the various countries is the successor to the reports that used to be done for the United Nations, now performed as the Credit Suisse Global Wealth Databook. The latest (2013) edition of it finds (p. 146) that in the U.S., 75.4% of all wealth is owned by the richest 10% of the people. The comparable figures for the other developed countries are: Australia 50.3%, Canada 57.4%, Denmark 72.2%, Finland 44.9%, France 51.8%, Germany 61.7%, Ireland 58.4%, Israel 68.9%, Italy 49.8%, Japan 49.1%, Netherlands 54.6%, New Zealand 57.6%, Norway 65.9%, Singapore 61.1%, Spain 54.0%, Sweden 71.1%, Switzerland 71.5%, and U.K. 53.3%. Those are the top 20 developed nations, and the U.S. has the most extreme wealth-concentration of them all. However, there are some other countries that have wealth-concentrations that are about as extreme as the U.S. For examples: Chile 72.5%, India 73.8%, Indonesia 75.0%, and South Africa 74.8%. The U.S. is in their league; not in the league of developed economies. In the U.S., the bottom 90% of the population own only 24.6% of all the privately held wealth, whereas in most of the developed world, the bottom 90% own around 40%; so, the degree of wealth-concentration in the U.S. is extraordinary (except for underdeveloped countries). 

 ...

The broadest mathematical measure of wealth-inequality is called “Gini,” and the higher it is, the more extreme the nation’s wealth-inequality is. The Gini for the U.S. is 85.1. Other extremely unequal countries are (pages 98-101 of this report) Chile 81.4, India 81.3, Indonesia 82.8, and South Africa 83.6. However, some nations are even more-extreme than the U.S.: Kazakhstan 86.7, Russia 93.1, and Ukraine 90.0. But Honduras and Guatemala are such rabid kleptocracies that their governments don’t even provide sufficiently reliable data for an estimate to be able to be made; and, so, some countries might be even higher than nations like Russia.

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Deutche Bank investigated for Gold price manipulation

DB is a major Forex trading bank, according to figures DB is the largest FX trading bank in the world.  So when they are investigated for Gold price manipulation, FX traders should listen.  Probably all traders should listen, but the implications for FX are uniquely disturbing.

Dec 13 (Reuters) - German banking regulator Bafin has demanded documents from Deutsche Bank as part of a probe into suspected manipulation of benchmark gold and silver prices by banks, the Financial Times reported, citing sources.

Bafin has interrogated the bank's staff during several on-site inspections over the past few months, the newspaper said on its website, citing people familiar with the matter.

Currently, gold fixing happens twice a day by teleconference with five banks: Deutsche Bank, Bank of Nova Scotia-ScotiaMocatta, Barclays Bank Plc, HSBC Bank USA, NA and Société Générale. The fixings are used to determine prices globally.  Full story

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The Next Financial Paradigm

Zero Hedge users mostly agree the financial system will implode.  It doesn't take more than high school math skills to calculate that the current debt based money system has implosion built in, and it's guaranteed (this is one rare case we can use such a word in finance!), because at some point, not enough new money can be created to pay off an ever increasing debt base.  Collapse is a mathematical certainty.  What is not certain is when this will happen, what will be the trigger, how entities will react, and other wildcard factors.

Many of us know this collapse is coming, and are either feathering our nests as much as possible, or just waiting to time the collapse that we all exit at the same time (as is the Wall Street way).  What we don't do often, is discuss what's next?  Maybe we should ask Bob, he'll tell us what's next.  

What happens after the financial collapse?   Hopefully, and this is one of the more likely scenarios, there are enough resources in the west to keep the system running on a temporary basis until a new system can be implemented.  This is up to debate but we aren't betting on Zombie Apocalypse or end of Mayan calendar or Alien invasion.  Of course anything is possible.  But let's think about it for a moment.  The financial system is a complete illusion, money does not exist.  But there is a huge physical economy, a real economy, that will not be destroyed at all during the collapse (unless people are upset and burn down buildings).  We'll still have factories, machines, tools, fuel, commodities, and last but certainly not least, human capital.  So restarting will theoretically be easy, it's just a question of organization.  And whoever is in power at that time, will have the largest vote.  So the most likely scenario is they will decide what the new system will be.  Is this why large organizations, such as The Feds, are targeting nobodys on the fringe, with a vengence?

http://www.zerohedge.com/contributed/2013-12-13/next-financial-paradigm

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