Marc Faber: Look out! A 1987-style crash is coming

The S&P has rallied 19 percent in 2013, which is impressive by any measure. But the market did far better in 1987, when stocks added more than 30 percent from the beginning of the year to Aug. 8. The problem?

The market ended up tanking in the second half of that year—dropping 36 percent from the Aug. 25 peak to the October low, before closing out 1987 nearly exactly where it began.

And Marc Faber, publisher of the Gloom, Boom & Doom Report, predicts that the very same thing will happen in the back half of 2013.

"In 1987, we had a very powerful rally, but also earnings were no longer rising substantially, and the market became very overbought," Faber said on Thursday's "Futures Now." "The final rally into Aug. 25 occurred with a diminishing number of stocks hitting 52-week highs. In other words, the new-high list was contracting, and we have several breaks in different stocks."

Faber says that's exactly where we find ourselves this August.

"If you look at the last two days," Faber said, referring to Tuesday and Wednesday, "it's remarkable. We are close to the all-time high, at 1,709 on the S&P, and yet yesterday and the day before, there were 170 new 52-week lows. That's a very high figure." Read more >>

Gold prices slide to 34-month low

Gold prices are on track to lose nearly 25% this quarter after sliding to a 34-month low Wednesday. The August contract for gold fell more than 4% to $1,227.10 an ounce early Wednesday, taking the price down to the lowest level since August 2010. Prices had been nearly $1,600 at the start of the quarter and had topped $1,900 for the first time last August.

If the sell-off continues, the second quarter will go down as one of the worst in decades.
Fears that the Federal Reserve will pull back on stimulus has been particularly bad for gold, which had been driven higher by worries that the Fed's stimulus efforts would weaken the dollar and cause inflation.

"It has been a turbulent past few weeks for the yellow metal and there seems little to suggest any let-up in the months ahead," said Ishaq Siddiqi, market strategist with ETX Capital, in a note to clients. "We could see gold prices test the $1,000 mark in the run-up to Fed tapering of stimulus." Read more >>

California eyes penny-per-ounce tax on sodas and energy drinks to combat child obesity

In California, big gulps could soon be taxed in a big way. A bill that would tax sweetened beverages like soda and energy drinks a penny per ounce cleared a hurdle Wednesday in the California Legislature. The state Senate Governance and Finance Committee passed SB-622 by a 5-2 vote, sending the controversial measure on for review by the Senate Health Committee.

“This is the first time this state committee has passed a bill that would place a tax on sugary drinks and the first step toward stemming the epidemic of childhood obesity,” the bill’s lead sponsor, Democratic Sen. Bill Monning said in a news release.

The bill exempts drinks that contain fewer than 25 calories, and the funds raised by the excise tax would go to the state’s newly created Children’s Health Promotion Fund, as well as programs that combat childhood obesity.

“By taxing these products we will be able to implement programs that will assist in preventing disease among children and begin to address a public health crisis whose rising health costs affect all Californians,” Monning said. Read more >>

410 Pigs and 122 Dogs found dead in Central China

Hundreds more pigs have been found dead in China - this time together with dozens of dogs. A total of 410 pigs and 122 dogs were discovered in homes and at farms earlier this week in a village that comes under Yanshi city's jurisdiction in central Henan province, authorities said Wednesday.

The city's propaganda office said that the deaths were being investigated but that they suspected they had to do with nearby chemical factories. The factories have been ordered to suspend production and help police with a criminal investigation into the incident, according to a report on a Henan provincial news website.

No poisonous gases have been found in tests on the air around the village and its drinking water has met quality standards, said the report, which the propaganda office confirmed. Local authorities said the deaths have nothing to do with any epidemic or the H7N9 bird flu virus that has recently spread to humans. Read more >>

Weak Economy Means Living at Home

A Census Bureau report released Wednesday found that between 2007 and 2011 there was a steady increase in the percentage of adults living in someone else’s house – and that increase has mostly been driven by adult children moving in with mom and dad.

In 2011, Census Bureau researchers found that 17.9 percent of people 18 and older, or 41.2 million people, lived in a house in which they weren’t the head of the household or that person’s spouse or significant other. That’s up from 16 percent in 2007, before the nation went into recession.

About half of those people were adult children living with their parents, while the rest were other relatives or unrelated people such as a group of roommates.

But Suzanne Macartney, an analyst in the poverty statistics branch of the Census Bureau and a co-author of the report, said the only group that saw an increase between 2007 and 2011 were adults moving in with their parents. Read more >>

Boeing to cut 30 percent of management jobs

Boeing Co said on Wednesday it will restructure its defense, space and security business and cut 30 percent of management jobs from 2010 levels as part of a broad cost-cutting drive.

Boeing, the Pentagon's second-largest supplier, said it also will close some facilities in California and consolidate several business units in an effort to trim $1.6 billion in costs by the end of 2015, on top of $2.2 billion in reductions achieved since 2010.

"We are raising the bar higher because our market challenges and opportunities require it, and our customers' needs demand it," Dennis Muilenburg, chief executive of Boeing Defense, Space & Security, told employees in a memo obtained by Reuters and confirmed by Boeing.

He said the total savings of $4 billion would make the company healthier and better able to deal with an increasingly complex and challenging marketplace. Read more >>

Monsanto and Company raise $46 million to defeat GMO labeling in California

Voters spurned a ballot measure that would have made California the first in the nation to affix labels on breakfast cereals, baked goods and other processed foods containing genetically modified ingredients.

The rejection Wednesday followed an expensive offense from agribusiness and chemical conglomerates, which raised $46 million to blitz airwaves and mailboxes with negative advertising.
With 82 percent of precincts reporting, Proposition 37 failed 54 percent to 46 percent.

Consumer activists and the organic food industry said shoppers crave information about what they're eating and should be given all the information they need to decide for themselves whether to buy products containing genetically altered ingredients. Read more >>

Secret Service Asks Americans to Spy on Twitter Users

The Secret Service has expanded its operation to Twitter, urging Americans to report on their fellow citizens whose tweets “concern you.”

“To report a tweet that concerns you, call the nearest field office in your state,” the Secret Service tweeted on Oct. 23.  The agency then links to a list of contact numbers for Field Offices in each state.

The Secret Service sent another tweet on Wednesday, again asking its followers to report tweets.  “Contact your nearest field office with time-sensitive or critical info or to report a tweet,” it said.

The agency has accrued more than 44,000 followers since joining the social media platform on May 9, 2011.  Twitter surpassed 500 million user accounts around the world earlier this year, 140 million of which are in the U.S. Read more >>

Extended families skyrocket due to poor economy

Almost a third of homeowners expect their grown children or aging parents to eventually move in with them, according to a survey by one of the nation's largest home builders.

About one in seven say they already have a "boomerang kid" — an adult child who moves back home — or elderly parent living under their roof.

The survey out Wednesday of more than 1,000 homeowners by PulteGroup, builder of everything from starter homes to upscale residences and Del Webb adult communities, shows that the rise in multi-generational households may continue.

Nesco Snackmaster Express Food Dehydrator (Google Affiliate Ad)

"It's an enormous change," says Stephen Melman, director of economic services at the National Association of Home Builders. "I remember when I was in college, no one wanted to be near their parents." Read more >>

Heating costs to rise this winter

Americans will pay more to heat their homes this winter as they feel something they didn't feel much of last year: cold. Prices for natural gas, heating oil and other fuels will be relatively stable. But customers will have to use more energy to keep warm than they did a year ago, according to the annual Winter
Fuels Outlook from the Energy Department's Energy Information Administration.

Last winter was the warmest on record. This year temperatures are expected to be close to normal. Heating bills will rise 20 percent for heating oil customers, 15 percent for natural gas customers, 13 percent for propane customers and 5 percent for electricity customers, the EIA announced Wednesday.

Biddeford Plush Electric Blanket (Google Affiliate Ad)

Heating oil customers are expected to pay an average of $3.80 per gallon, the highest price ever. That will result in record heating bills, at an average of $2,494. That's nearly $200 more than the previous high, set in the winter of 2010-2011. Kathleen Ryan of Cohoes, in upstate New York, is on a payment plan in which she is billed for oil November through May to spread out the costs. But with oil prices high and a hint of winter chill in the air, she is concerned. Read more >>

IMF chief economist says crisis will last a decade

The world economy will take at least 10 years to emerge from the financial crisis that began in 2008, the International Monetary Fund's Chief Economist Olivier Blanchard said in an interview published on Wednesday.

Blanchard told Hungarian website Portfolio.hu, in an interview conducted on September 18, that Germany would have to accept higher inflation and a real strengthening of its purchasing power as part of the solution to Europe's problems.

But even though the focus was on Europe's troubles now, he said, the United States also had a fiscal problem which it had to resolve. "It's not yet a lost decade... But it will surely take at least a decade from the beginning of the crisis for the world economy to get back to decent shape," Blanchard said. Read more >>

MI jobless rate raises to 9.4 percent

Michigan authorities say the state's seasonally adjusted unemployment rate rose 0.4 percentage points in the latest month to 9.4 percent.

The Michigan Department of Technology, Management and Budget released the August jobless figures Wednesday. The nation's August unemployment rate was 8.1 percent, down from 8.3 percent in July.

The state's jobless has fallen 1 percentage point over 12 months from an August 2011 level of 10.4 percent. But it has risen for four straight months from April's 8.3 percent. Read more >>

DNA Testing on Wheels

Owner: If You've Got $300-$600 You Can Find Out If, Indeed, That Baby Is Yours
It is a sign of the times — getting a quick DNA test is now as easy as walking up to a truck. The “Who’s Your Daddy” recreational vehicle is selling DNA tests, mostly to fathers who suspect their children may not actually be theirs.

“They flag us down, they pull us over, they talk to us,” owner and operator Jared Rosenthal said Wednesday. “Sometimes, because of the nature of the services, they want to be a little more discreet about it, but they do come or they’ll call the number.”

In this business, Rosenthal said he deals with all kinds of crazy situations all day, every day. “We have people that want to get the specimen from their spouse without them knowing about it,” Rosenthal said. “We deal with a lot of drama, it’s constant drama.”

There have been instances where men have walked in with a baby to give DNA samples only to find out later they’re not related. When asked by CBS 2’s Dave Carlin why he was taking the DNA test from the traveling truck, one unidentified man explained, “I’m paying child support anyways and I would do it anyways. You just want to know.” Read more >>

TSA Flags 18 Month Old Baby as No Fly

Eighteen-month-old Riyanna has been called a lot of things: cute, adorable and now ... a suspected terrorist. She was called that on Tuesday night at the Ft Lauderdale Airport. She and her parents had just boarded a JetBlue flight when an airline employee approached them and asked them to get off the plane, saying representatives from the Transportation Security Agency wanted to speak to them.

"And I said, 'For what?'" Riyanna's mother told only WPBF 25 News on Wednesday. "And he said, 'Well, it's not you or your husband. Your daughter was flagged as no fly.' I said, 'Excuse me?'" Riyanna's father was flabbergasted. "It's absurd," he said. "It made no sense. Why would an 18-month-old child be on a no-fly list?"

Riyanna's parents, who asked not to be identified, said they think they know the answer to that question. They believe they were profiled because they are both of Middle Eastern descent. Riyanna's mother wears a hijab, a traditional head scarf. That's why they have asked to remain anonymous. They said they're concerned about repurcussions. That said, they are both Americans, born and raised in New Jersey, just like their daughter. More...

Cost of Living Keeps Rising

Image by xcode via FlickrThe cost of living in the U.S. kept rising in September, led by continued increases in food and energy prices, posing another challenge for Americans struggling with a weak job market.

Rising prices for food, shelter and other necessities led to the first cost-of-living increase in Social Security benefits since 2009. The more than 60 million Americans who receive Social Security will see their checks increase by 3.6%, the government said, but the increase will largely be offset by higher medical-care costs.

Consumer prices last month rose a seasonally adjusted 0.3% from August, the third straight monthly increase, the Labor Department said Wednesday.

Separately, U.S. home building grew in September to the highest level in 17 months. The results, however, were driven by a more than 50% monthly increase in construction of multifamily homes with at least two units, a volatile part of the market. Construction of single-family homes rose by 1.7% from a month earlier.

The weak housing market is a key concern to economic policy makers, and Federal Reserve officials monitor the consumer price data for any signs of inflation. That's because higher prices eat into the purchasing power of many Americans already struggling to find a job or to get a pay increase. Fed officials need to calibrate their interest-rate policy so that it boosts the economy and jobs without spurring too much inflation. More...