Amazon ends deal with 25,000 California websites

Gov. Jerry Brown has signed into law California's tax on Internet sales through affiliate advertising which will immediately cut small-business website revenue 20% to 30%, experts say.

The bill, AB 28X, takes effect immediately. The state Board of Equalization says the tax will raise $200 million a year, but critics claim it will raise nothing because online retailers will end their affiliate programs rather than collect the tax.

http://www.ocregister.com/articles/amazon-306409-affiliate-california.html

Fed's Massive Stimulus Had Little Impact: Greenspan

The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.

In a blunt critique of his successor, Fed Chairman Ben Bernanke, Greenspan said the $2 trillion in quantative easing over the past two years had done little to loosen credit and boost the economy.

"There is no evidence that huge inflow of money into the system basically worked," Greenspan said in a live interview.

http://www.cnbc.com/id/43598606

Forecasts for Growth Drop, Some Sharply

A drumbeat of disappointing data about consumer behavior, factory sales and weak hiring in recent weeks has prompted economists to ratchet down their 2011 economic forecasts to as little as half what they expected at the beginning of the year.

Two months ago, Goldman Sachs projected that the economy would grow at a 4 percent annual rate in the quarter ending in June. The company now expects the government to report no more than 2 percent growth when data for the second quarter is released in a few weeks.

Macroeconomic Advisers, a research firm, projected 3.5 percent growth back in April and is now down to just 2.1 percent for this quarter.

Both these firms, well respected in their analysis, have cut their forecasts for the second half of the year as well. Then this week, the Federal Reserve downgraded its projections for the full year, to under 3 percent growth. It started the year with guidance as high as 3.9 percent.

http://www.cnbc.com/id/43534613

Consumer spending breaks 10-month rising streak

Consumer spending failed to rise in May, breaking a string of 10 straight months of gains, as households struggled with rising prices and automakers could not deliver the models Americans wanted.

When adjusted for inflation, spending slipped 0.1 percent, the Commerce Department said on Monday. It was the second consecutive monthly drop.

The report, which confirmed that underlying inflation had quickened, suggested consumer spending would offer little support to the economy in the second quarter. In the first three months of the year, it advanced at a modest 2.2 percent annual rate, held back by the weak U.S. labor market.

http://old.news.yahoo.com/s/nm/20110627/bs_nm/us_economy

US budget office warns on debt explosion

The US Congressional Budget Office (CBO) has warned that an explosion in public borrowing could lead to debt levels as high as 100 per cent of the gross domestic product by 2021, if the current course remains unchanged.

The report by the independent budgetary think tank, released overnight, notes that US federal debt will reach roughly 70 per cent of GDP by the end of the year, the highest percentage since just after World War II.

That figure compares with a debt level of 40 per cent of GDP at the end of 2008, which compares favourably with the 40-year average of 37 per cent.

Advertisement: Story continues below The non-partisan CBO also said that if tax cuts enacted since 2001 continue to be extended, the country’s debt could be nearly twice the GDP by 2035.

The country’s total debt reached its legal limit of $US14.29 trillion ($13.58 trillion) in mid-May, and pressure has grown to raise that level ahead of an August 2 deadline. After that, says the US Treasury Department, the United States would be in default.

http://www.smh.com.au/business/world-business/us-budget-office-warns-on-debt-explosion-20110623-1ggeo.html

Federal Reserve admits US economy is struggling

The Federal Reserve has again cut its growth forecasts for the US economy and admitted that "longer-lasting" factors may help explain the current slowing in the recovery.

http://www.telegraph.co.uk/finance/economics/interestrates/8592432/Federal-Reserve-admits-US-economy-is-struggling.html

Bernanke Lies Half Life Reduced To Under One Day As Aflac Scrambling To Shore Up Liquidity On European Exposure

Yesterday during his press conference, the Chairman uttered his latest lie: "We have asked the banks to essentially do stress tests and ask, looking at all their positions, all their hedges, what would the effect on their capital be if -- if Greece defaulted...The answer is that the effects are very small.” Enter Aflac to prove that the half life of Bernanke's lies is now under 24 hours. From Bloomberg: "Aflac Inc. (AFL), the largest seller of supplemental health insurance, may issue as much as 100 billion yen ($1.24 billion) in debt as it records losses tied to investments in banks from Greece, Ireland and Portugal.

http://www.zerohedge.com/article/bernanke-lies-half-life-reduced-under-one-day-aflac-scrambling-shore-liquidity-european-expo

Geithner: Taxes on ‘Small Business’ Must Rise So Government Doesn’t ‘Shrink’

Treasury Secretary Timothy Geithner told the House Small Business Committee on Wednesday that the Obama administration believes taxes on small business must increase so the administration does not have to “shrink the overall size of government programs.”

The administration’s plan to raise the tax rate on small businesses is part of its plan to raise taxes on all Americans who make more than $250,000 per year—including businesses that file taxes the same way individuals and families do.

http://www.cnsnews.com/news/article/geithner-taxes-small-business-must-rise

Releasing Oil Reserves Called a 'Sign of Desperation'

The announcement by the US Department of Energy and the International Energy Agency that the latter would be releasing 60 million barrels of government-held stocks, immediately increasing global supply by nearly 2.5 percent, is "a sign of desperation. You don't do this if you have anything left in your arsenal," Mark Fisher, founder and CEO of MBF Clearing, told CNBC Thursday.

"This is a psychological mechanism. I think that in this case, the government is bringing a knife to a gun fight, when in reality there's only an 'x' amount of supply," Fisher said.

"I mean what happens if there is, God forbid, another Katrina this summer or there's another disaster someplace else in the world, and you really need to release the reserves?"

http://www.cnbc.com/id/43511270

BIS warns low rates may create 'financial distortions'

The Bank for International Settlements (BIS) has warned that low interest rates across the globe are a threat to world financial stability.

The BIS warned low cost of borrowing had resulted in a credit and property price boom that was fuelling inflation, especially in emerging economies.

Central banks across the globe have cut interest rates in an attempt to boost growth after the 2008 financial crisis.

However, BIS warned that the policy may prove to be counterproductive.

http://www.bbc.co.uk/news/business-13922857

Dollar seen losing global reserve status

The US dollar will lose its status as the global reserve currency over the next 25 years, according to a survey of central bank reserve managers who collectively control more than $8,000bn.

More than half the managers, who were polled by UBS, predicted that the dollar would be replaced by a portfolio of currencies within the next 25 years.

http://www.ft.com/cms/s/0/23183a78-a0c6-11e0-b14e-00144feabdc0.html#axzz1QWvsglhO