Off the Wires

Wal-Mart Health Cuts Reopen Debate Over Obamacare Costs, Savings

October 8th, 2014  |  Source: Bloomberg

Wal-Mart Stores Inc. (WMT)’s move to eliminate health insurance for about 30,000 part-time workers underscores the mixed benefits of Obamacare for companies and their employees.

Wal-Mart said yesterday it would no longer provide health coverage to employees who work less than 30 hours a week, following similar moves by retailers such as Target Corp. (TGT)Home Depot Inc. (HD) andWalgreen Co. (WAG) Wal-Mart had already dropped benefits for many new part-time workers in 2012.

The U.S. Patient Protection and Affordable Care Act, known as Obamacare, has brought more health-care options for employees pushed out of corporate benefit plans. That may have made it more palatable for Wal-Mart to make the change, which could save the company about $50 million in premiums this year.

VC Tim Draper Wins Entire Cache in Bitcoin Auction

July 2nd, 2014  |  Source: Bloomberg

Venture capitalist Tim Draper was the single winning bidder for a cache of bitcoins at a U.S. government auction, part of a larger pool of the virtual currency seized from the Silk Road website.

Draper, the co-founder of investment firm Draper Fisher Jurvetson, will work with startup Vaurum to help provide access to bitcoins in developing economies and use the about 30,000 bitcoins won in the auction as a source of liquidity, according to a statement that Vaurum posted on publishing service Medium today.

“Bitcoin frees people from trying to operate in a modern market economy with weak currencies,” Draper said in the statement. “With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies.”

The auction attracted 45 bidders, including New York brokerage SecondMarket Inc., and 63 bids were submitted during the 12 hours of the auction on June 27, according to the U.S. Marshals Service. The agency, which didn’t disclose the winner’s identity, said yesterday that it notified the bidder and transferred the money.

Stamp with history of intrigue could fetch $20 million

June 17th, 2014  |  Source: CS Monitor

A British Guiana One-Cent stamp could fetch $20 million at an auction, which would make it the most valuable artifact by weight in history. Billionaires are salivating.

In 1856, if you were looking for a long-term investment, a British Guiana 1-Cent Magenta postage stamp would’ve been a pretty good buy.

The last known stamp of this kind will go up for auction at Sotheby’s Tuesday, and experts say it will likely fetch around $20 million. Not only would this make the Magenta the most expensive stamp ever sold by a factor of 10 – it would also make it the most valuable human artifact by weight in recorded history.

A growing global class of the über-rich, combined with the Magenta’s rarity and its colorful history – peppered by war, murder, and aristocratic intrigue – has led to the high price tag, say economists and stamp experts, known as philatelists.

U.S. Projects $179 Billion Profit From Fannie Mae, Freddie Mac

March 10th, 2014  |  Source: Bloomberg

Fannie Mae and Freddie Mac could return $179.2 billion in profits to taxpayers over the next 10 years if they continue operating under federal conservatorship, according to White House budget analysts.

The U.S.-owned mortgage-finance companies, seized by regulators during the 2008 credit crisis, have returned to profitability as the housing market recovers. By the end of this month, they will have sent $202.9 billion back to the Treasury, which counts as dividends on the U.S. investment and not repayment of the $187.5 billion they got in taxpayer aid.

The projections, released today as part of an annual analysis prepared by the Office of Management and Budget, show an increase from last year, when budget writers forecast a $51 billion profit from Washington-based Fannie Mae (FNMA) and McLean, Virginia-based Freddie Mac (FMCC) through 2023.

Super Bowl Prostitution Digitally Mapped by Data Trackers

February 1st, 2014  |  Source: Bloomberg

Sitting in an operations center outside Washington, Josh Gearheart and his team have spent the last week tracing the digital footprints of Super Bowl sex traffickers with the same technology he once used to hunt insurgents in Afghanistan.

A former Army intelligence officer, Gearheart is part of a two-year partnership between trafficking researchers and a defense contractor called Praescient Analytics, whose 100 employees normally provide intelligence analysis to the U.S. Special Operations Command, the Federal Bureau of Investigation and others from the company’s headquarters in Alexandria, Va.

The group’s goal is to discern how gangs and traffickers operate as 400,000 fans descend on New Jersey and New York for the country’s biggest sports-themed bacchanal and then apply that knowledge to next year’s game in Arizona. A separate coalition of law enforcement agencies arrested 18 people today, breaking up a cocaine and sex ring that was operating in the shadows of the championship game, according to New York Attorney General Eric Schneiderman.

“Any sports venue and especially the Super Bowl acts as a sex trafficking magnet,” said Representative Chris Smith, a New Jersey Republican, at a Jan. 27 House Foreign Affairs Committee hearing on trafficking and sports events. “Along with welcoming enthusiastic fans, the state also is preparing for the likely influx of both domestic and international traffickers.”

Musk Says China Possible Top Market for Tesla

January 23rd, 2014  |  Source: Bloomberg

Tesla Motors Inc. (TSLA)’s Elon Musk said sales of electric Model S cars in China should match U.S. levels as early as next year, with demand from the world’s largest auto market eventually requiring a local plant.

The electric-car maker said yesterday the Model S will be priced from 734,000 yuan ($121,280) in China when deliveries begin. Musk, Tesla’s billionaire co-founder and chief executive officer, will travel to China in late March to inaugurate the company’s entry there, he said in a phone interview.

For Tesla, “it could be as big as the U.S. market, maybe bigger. I don’t want to get overexcited about it,” Musk said yesterday. “Even without building there locally, it’s always going to be the second-biggest market after the U.S.”

After a rocky start ramping up Model S assembly in 2012, Palo Alto, California-based Tesla surprised analysts and investors this month when it said fourth-quarter deliveries were 20 percent above its target. Musk, 42, has pinned his goal of selling hundreds of thousands of electric autos annually to a global strategy in which China, EuropeJapan and other markets bolster its U.S. business.

If all goes well, Model S shipments to China can match U.S. sales by 2015, Musk said. “It’s not my firm prediction -- it’s more like a low-fidelity guess.”

Will Users’ Class-Action Lawsuit Be The End Of Facebook?

January 14th, 2014  |  Source: Adotas

Facebook, the popular social network with over a billion users worldwide, has just been hit with a class-action lawsuit. The allegations, revealed in the FT, are that Facebook systematically scans the content of private messages so it can sell the data to third parties such as advertisers.

Facebook’s entire business model is based on the fact that it monitors what users write, “like” and upload in order to sell this information on to others. I have covered some of the concerns about this in my articles ‘How Facebook Exploits Your Private Information’ and ‘How Facebook Likes Reveal Your Intimate Secrets’. In principle, there is nothing wrong with Facebook using our data to make commercial gains. In the end, the service is free and Facebook has to make money somehow. However, my biggest concern is that the data mining activities are not as transparent as they should be.

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U.S. general who opened Guantanamo prison says shut it down

December 12th, 2013  |  Source: Reuters

The U.S. general who opened the Guantanamo detention camp said Thursday it was a mistake and should be shut down because "it validates every negative perception of the United States."

"In retrospect, the entire detention and interrogation strategy was wrong," Marine Major General Michael Lehnert wrote in a column published in the Detroit Free Press.

Lehnert, now retired from the military and living in Michigan, was the first commander of the task force that opened the detention camp in January 2002 at the Guantanamo Bay U.S. Naval Base in Cuba.

He said the United States opened it "because we were legitimately angry and frightened" by the September 11 hijacked plane attacks in 2001 and thought the captives sent there would provide "a treasure trove of information and intelligence."

He quickly became convinced that most of them never should have been sent there because they had little intelligence value and there was insufficient evidence linking them to war crimes, he wrote.

"We squandered the goodwill of the world after we were attacked by our actions in Guantanamo, both in terms of detention and torture," Lehnert wrote. "Our decision to keep Guantanamo open has helped our enemies because it validates every negative perception of the United States."

Bitcoin hits $785 with a little help from Bernanke

November 19th, 2013  |  Source:

A US Senate hearing on the “risks, threats and promises” of virtual currencies sparked a new leg up in the price of Bitcoin, the experimental currency which has risen by more than 5,000 per cent in value this year.

An intervention by Ben Bernanke, chairman of the Federal Reserve, enabled Bitcoin’s enthusiasts to put the spotlight where they believe its potential value lies: as a cheaper alternative to the current system for transferring money around the world.

An intervention by Ben Bernanke, chairman of the Federal Reserve, enabled Bitcoin’s enthusiasts to put the spotlight where they believe its potential value lies: as a cheaper alternative to the current system for transferring money around the world.

Mr Bernanke, in a letter to the Homeland Security committee, pointed out the Fed’s longstanding view that while virtual currencies pose money laundering and other risks, “there are also areas where they may hold long-term promise”.

Full story here:

How McDonald's and Wal-Mart Became Welfare Queens

November 13th, 2013  |  Source: Bloomberg

It seems that welfare queens are back in the news these days. The old stereotype was an inner-city unwed mother -- that’s dog-whistle-speak for black -- having multiple babies to get ever bigger welfare checks (throw in a new Cadillac and the myth is complete). Regardless, welfare reform of the 1990s ended that narrative.

No, the new welfare queens are even bigger, richer and less deserving of taxpayer support. The two biggest welfare queens in America today are Wal-Mart and McDonald's.
This issue has become more known as we learn just how far some companies have gone in putting their employees on public assistance. According to one study, American fast food workers receive more than $7 billion dollars in public assistance. As it turns out, McDonald's has a “McResource” line that helps employees and their families enroll in various state and local assistance programs. It exploded into the public when a recording of the McResource line advocated that full-time employees sign up for food stamps and welfare.

Wal-Mart, the nation’s largest private sector employer, is also the biggest consumer of taxpayer supported aid. According to Florida Congressman Alan Grayson, in many states, Wal-Mart employees are the largest group of Medicaid recipients. They are also the single biggest group of food stamp recipients. Wal-mart’s "associates" are paid so little, according to Grayson, that they receive $1,000 on average in public assistance. These amount to massive taxpayer subsidies for private companies.

Why are profitable, dividend-paying firms receiving taxpayer subsidies? The short answer is, because they can. The longer answer is more complex and nuanced.
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