STOCK MARKET WATCH -- Tuesday, 24 April 2012

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Tuesday, 24 April 2012[font color=black][/font]

SMW for 23 April 2012

AT THE CLOSING BELL ON 23 April 2012
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Dow Jones 12,927.17 -102.09 (-0.78%)
S&P 500 1,366.94 -11.59 (-0.84%)
Nasdaq 2,970.45 -30.00 (-1.00%)


[font color=red]10 Year 1.93% +0.01 (0.52%)
30 Year 3.09% +0.01 (0.32%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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Financial Sector Officials Convicted since 1/20/09 = [/font][font color=red]12[/font]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison



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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]

[Demeter]

1. The American Dream

It is not possible to have Obscenely Wealthy people and anything else. The Obscenely Wealthy will have to be relieved of their unearned and undeserved hoards so that People have the means to live beyond total deprivation.

This solution isn't popular with the Obscenely Wealthy, despite its inevitability as seen throughout history and nature. But it will happen. The questions are: when and how?

[Demeter]

2. Can Obama TRUMP CITIZENS UNITED with SIGNING STATEMENTS?

YEAH, LIKE THAT WILL HAPPEN. HE HASN'T GOT THE ABILITY TO GIVE UP AN ADVANTAGE, EVEN IF IT WOULD BENEFIT ALL IN THE LONG AND SHORT RUN...IF HE WERE PRESIDENT AT THE BEGINNING OF THE NUCLEAR AGE, WE'D HAVE HAD ARMAGEDDON LONG AGO.

http://www.dailykos.com/story/2012/04/21/1085361/-Can-Obama-TRUMP-CITIZENS-UNITED-with-SIGNING-STATEMENTS-

On a progressive talk show recently, I heard a caller say that President Obama can pull away the curtain around all the super PACs by issuing a simple signing statement saying essentially:

"All corporations and individuals who have contracts with the United States must declare all political contributions."

The operating concept here is that since they receive federal money, political transparency can be required. Is this accurate? If so, are there restrictions? And strategically, is this a ploy that is best served up after the conventions when all the 1% cash has already been committed? Or is it better to do it sooner so details on donors help Democrats in Congress and state races?

So was this caller onto something? Could this be the Citizens United poison pill? Imagine if we went into the election season with all knowledge of rightie corporate supporters for Dem candidate ads. We could make pie charts, and voters would see this tiny slice on the upper right labeled, "private citizens." Wouldn't that finally register with conservative voters, helping them acknowledge at long last the cancer of corporate influence on our electoral process?

If they are ever to understand their status within the 99%, this would do it.

I AM AMAZED THAT EVEN 4 YEARS IN, SOME PEOPLE ARE STILL STARRY-EYED BELIEVERS.

[Demeter]

3. What If Pensions Funds Grabbed the Reins?

http://truth-out.org/news/item/8663-what-if-pensions-funds-grabbed-the-reins?

Public and private pension funds in the United States collectively have trillions of dollars in combined assets. They own more than a third of all domestic equity, with stakes in most public U.S. companies, and large holdings of corporate and government bonds, real estate, and infrastructure. They are unique in that they are both very large and have a much longer investment horizon than most other types of investors.

But, with few exceptions, American pension funds do not self-manage the majority of those assets, and they ignore the flexibility that their long-term horizon can bring, experts said. They employ private firms to invest their assets for them, often with a short-term focus and at a high cost. Many of their trustees are political appointees without any experience in finance. And so, instead of being viewed as powerful financial players, with the capacity to initiate deals and lead markets, pension funds act — and are treated by the financial advisors they employ — more like large customers.

"Collectively, pension funds have a huge amount of potential power," said James Hawley, a professor of business at St. Mary's College and an expert in fund management. "For the most part, that power is not being used."

Some of the largest public pension funds in Canada, though, have taken a very different approach than their American cousins. Set up as quasi-independent entities, the funds have appointed board members with strong backgrounds in economics and finance and, over the course of the last two decades, have developed and rely largely on in-house investment management teams....

I AM BEGINNING TO BELIEVE THAT THE ONLY WAY TO PENSION REFORM IS SINGLE-PAYER...THAT A GOVERNMENT COLLECTS AND REDISTRIBUTES ALL SAVINGS AS NEEDED, THAT "INVESTMENT" IS ALL PUBLIC SERVICE, THAT BANKS ARE BANNED AS WMDS. IF THAT BE SOCIALISM, MAKE THE BEST OF IT!

[Demeter]

6. SEC accuses two former CalPERS board members of fraud

http://www.latimes.com/news/la-sec-calpers-m,0,3038562.story?track=rss

The Securities and Exchange Commission today sued two former members of the California Public Employees' Retirement System, alleging they "induced" investment firms to pay fees in exchange for receiving contracts to handle investments for the pension fund.

Named in the lawsuit were Federico R. Buenrostro, a former CalPERS chief executive, and Alfred J. R. Villalobos, a former board member and a Los Angeles deputy mayor in the 1990s. They are accused of scheming to defraud private investment firm Apollo Global Management of $20 million in fees in return for placing CalPERS investments with Apollo.

The civil action seeks them to return any ill-gotten gains, pay financial penalties and be permanently enjoined from violating federal securities laws....

ONLY TWO? THAT'S NOT BAD FOR THE CORRUPT US.

[Demeter]

10. Ex-Calpers chief accused of fraud

Buenrostro and a friend charged with falsifying documents to induce Apollo to pay $20m in fees
Read more >>

http://link.ft.com/r/H60H77/EXGWVM/7ZY85/TUC7I9/XHELM4/T3/t?a1=2012&a2=4&a3=24

[Demeter]

4. Dreaming of a New ‘Norm’ for Executive Pay By Froma Harrop

http://www.nationofchange.org/dreaming-new-norm-executive-pay-1334931573

Lavishly paid executives have a new 1 percent number to ponder. It's not about their perch on the top branch of U.S. incomes. It's the lousy 1 percent rise in Citibank's quarterly revenues, which helped prompt the bank's stockholders to reject CEO Vikram Pandit's $15 million pay package. That they were earning a meager 1-cent-a-share quarterly dividend did not improve their mood. A cornerstone of capitalism is that by richly rewarding successful managers who build up businesses, we all prosper. That makes sense but for one thing: Corporate America has learned to fix the game so that their honchos walk away with fortunes, whether their companies do well or not...


(STOCKHOLDER)"Say on pay" is hardly a revolution in either stockholder rights or curbing extravagant executive pay. The vote is for show, and the board may ignore it. But even this meek exercise in executive scrutiny is too much for some. When the Securities and Exchange Commission addressed the "say on pay" provision, its two Republican members opposed it. They said that it would pile added cost on "small business" (you know, all those mom and pop gift shops listed on the stock exchange). Although the "say on pay" vote has no teeth, it is not without consequence. The attention drawn to excessive pay levels is not good for the companies involved. And such votes may push some return to a socio-economic "norm" that had been all but discarded starting in the 1980s.

As MIT economist Frank Levy told me, by the end of World War II, "business had a bad reputation and kept its head down." This stance reflected lingering public anger over the Great Depression and some profiteering during the war. To get things moving, President Truman held a conference in November 1945. Truman envisioned a "foundation for industrial peace and progress" that enlisted three parties: business, labor and government. It established an expectation that post-war prosperity would be shared with workers and that their unions would be respected. Listen to Eric Johnston, president of the U.S. Chamber of Commerce, speaking at the 1945 conference:

"Labor unions are woven into our economic pattern of American life, and collective bargaining is a part of the democratic process. I say recognize this fact not only with our lips but with our hearts."

On to the chamber's view on organized labor circa 2012: A major mission, according to the website, is to "restrain abusive union pension fund activism and block labor's anti-competitive agenda."

It happens that these pension funds own huge blocks of stock. For example, CalPERS, the California state pension fund, holds almost 10 million Citigroup shares. CalPERS can be as active as it wants to be. Revealing was a CalPERS director's comment on pay and performance at Citi. Anne Simpson said: "If you reward them for focusing on high-risk, short-term profits, that's what you get, and that's how the financial crisis caught fire."

MORE

[Demeter]

32. Employees, Too, Want a Say on the Boss’s Pay By GRETCHEN MORGENSON

http://www.nytimes.com/2012/04/22/business/employees-too-want-a-say-on-the-bosss-pay.html?ref=business

...Here and there this proxy season, executive pay is coming under attack from the people who actually own public companies, which is to say, stockholders. At Citigroup last week, a $15 million paycheck for Vikram S. Pandit, the chief executive, got a big thumbs down. Some 55 percent of votes cast went against the package.

One potentially powerful class of shareholders — employees — seems to be rousing, too. And, to the degree that employee-shareholders band together to have their say on the boss’s pay, they can be a formidable force.

Mr. Pandit seems to understand this. On April 13, he sent a memo to Citigroup’s employees, urging them to vote their shares. No surprise, he also recommended that they vote “yes” on the financial giant’s executive pay plans. It is unclear whether Citigroup’s employee-shareholders played a significant role in last week’s vote, which, though not binding, nonetheless was a sharp rebuke for Mr. Pandit and his board.

Traditionally, employee-shareholders have rarely exercised their voting power. But, as the vote at Citigroup suggests, stockholders of all stripes may be starting to assert themselves more...

WALMART, VERIZON...IS THERE NO END TO THE REVOLT OF THE STOCKHOLDERS?

[Demeter]

33. New York Times Details Widespread Bribery in Wal-Mart Mexico and Top Executive Coverup

http://www.nakedcapitalism.com/2012/04/new-york-times-details-widespread-bribery-in-wal-mart-mexico-and-top-executive-coverup.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

The Grey Lady has an amazingly detailed, must-read account of corruption at the highest levels of Wal-Mart. In 2005, Sergio Cicero Zapata, a lawyer who had been with WalMart in Mexico for ten years and had resigned in 2004, came forward with a description of his involvement, sanctioned by top executives in Wal-Mart’s Mexican operation, of handing out bribes totaling over $24 million to accelerate the construction of new stores. This activity is a clear violation of the Foreign Corrupt Practices Act.

Even though the Bentonville giant quickly found evidence corroborating the Cicero’s charges, as well as that of a cover-up by the top brass in Mexico, and looked into hiring an outside law firm to conduct an independent investigation, it quickly converted it to a limited review by an internal unit whose main activity was handling shoplifting cases. And lead responsibility for the probe was assigned to the general counsel of Wal-Mart de Mexico, a sure-fire way to assure no tough questions would be asked. Not only was the Mexico CEO who was deeply involved in this program promoted repeatedly after the notification by Cicero, ultimately becoming vice chairman at the parent level, but the current CEO, Michael Duke, had just been installed as the head of WalMart International, was involved in the coverup. The then-current CEO, Lee Scott, criticized the internal investigators for being too aggressive....

...WalMart informed the Justice Department of the possible (as in probable) violations of the Foreign Corrupt Practices Act only in December 2011, after it got wind of the New York Times investigation.

This is a Murdoch-News of the World level scandal involving a company that is extraordinarily powerful in the US. The Times account is far more damning, detailed, and supported by documents and interviews than the initial releases by the Guardian on l’affaire Murdoch. It also indicates it found evidence of bribery in Mexico beyond those relating to the store expansion, namely, kickbacks from construction companies. It will reveal a great deal about the state of the rule of law in the US as to what sort of investigations and prosecutions result from these revelations.

READ THE NYT REPORT AT http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced.html?_r=1&hp

[Demeter]

47. Weighing the Legal Ramifications of the Wal-Mart Bribery Case

http://dealbook.nytimes.com/2012/04/23/weighing-the-legal-ramifications-of-the-wal-mart-bribery-case/?ref=business

The United States government puts a premium on corporate cooperation in foreign bribery cases, relying on companies to conduct thorough internal investigations and voluntarily disclose any wrongdoing.

Indications that Wal-Mart Stores may have taken steps to keep an internal investigation from digging deeper into $24 million in questionable payments — and later promoting an executive who may have been implicated in them — may affect how the government decides to proceed against the giant retailer.

Wal-Mart first disclosed in December that it had started “a voluntary internal review of its policies, procedures and internal controls pertaining to its global anticorruption compliance program.” That review was the result of reporting by The New York Times about bribery by Wal-Mart de México to secure permits and approvals to build new stores...

MUCH MORE

[Demeter]

5. Ten Reasons the JOBS Act Is an Insane Race to the Bottom By William K Black

http://truth-out.org/op-ed/item/8676-ten-reasons-the-jobs-act-is-an-insane-race-to-the-bottom

A REPOST, IN CASE YOU MISSED IT THE FIRST TIME

[Demeter]

7. With horrorscopes like this, who needs enemies?

"When was the last time you got seriously flirtatious? You know, that non-subtle, sparkly-eyed flirt that involves cheesy-yet-charming lines and good clean compliments? There is nothing wrong with making someone else feel good, especially because it will end up making you feel good too! Make someone's day today ... toss out a compliment to a clerk in a store, smile at a random stranger or send a drippy sweet email to your honey. Remind yourself that life is supposed to be fun! "

[Demeter]

8. Investors launch Deutsche Bank protest

Deutsche Bank’s non-executive board is facing a protest from an influential activist investor over its pay policies and turbulent succession planning in another sign of how global investors are challenging bank directors


Read more >>
http://link.ft.com/r/H60H77/EXGWVM/7ZY85/TUC7I9/YBQT55/T3/t?a1=2012&a2=4&a3=24

[Demeter]

9. Facebook profits dip before IPO

Facebook’s revenue and profit growth are slowing, marking a turning point for the high-growth social networking company just weeks before its initial public offering.

A leap in expenses hit the company’s net income, as Facebook boosted its staff, primarily in marketing and research, and accounted for the cost of fulfilling employee stock options.

Read more >>
http://link.ft.com/r/9ULF66/089BWV/HI3M9/L9T6OS/KQ2IQP/JY/t?a1=2012&a2=4&a3=23


AS MAXWELL SMART WOULD SAY: "MISSED IT BY THIS MUCH!"

[Demeter]

11. Europe must confront crisis of legitimacy

The reality is that the crash is stirring a potentially far-reaching crisis of legitimacy in Europe’s political system

Read more >>
http://link.ft.com/r/3JFELL/089GUR/MJTKN/KQL87W/FK6WNN/SN/t?a1=2012&a2=4&a3=24

[Demeter]

13. Eurozone economic activity contracts

PMI data shows region pushed deeper into recession, denting hopes Germany can drive growth and casting shadow over upbeat business sentiment

Read more >>
http://link.ft.com/r/3JFELL/089GUR/MJTKN/KQL87W/U1DPVK/SN/t?a1=2012&a2=4&a3=24

[Demeter]

12. Obama pushes for student debt reprieve

President calls on Congress to prevent doubling of interest rate in move that helps with his push to attract young voters in presidential election

Read more >>
http://link.ft.com/r/3JFELL/089GUR/MJTKN/KQL87W/B5H7SF/SN/t?a1=2012&a2=4&a3=24

[rfranklin]

16. Debt slaves will only be beaten on Tuesdays! Whoopee!

Education is an investment in the future, not an indulgence.

[Demeter]

17. That depends on whether one learns anything that can be applied to the real world

or just engages in mental masturbation, which seems to be the trend now...to be considered "with it" (talk about dating oneself!) one must muse upon string theory and dark matter, neurolingistic programming, and marijuana, high fructose corn syrup, organic meat and produce, and other food Nazi topics.

God forbid one should learn how to balance accounts, research, employ scientific method, or repetitive drill and "try, try again". Or change diapers, serve in any political capacity, or engage in manual labor.

[rfranklin]

24. You sound like an old fuddy duddy! There are huge numbers of students pursuing "practical" careers

in accounting, engineering, etc. It hardly takes a college education to change a diaper, especially with the new fangled ones with tape and velcro. Manual labor was always an alternative to college, i.e., "If you don't study, you'll end up digging ditches!"

What if Steve Jobs hadn't pursued the useless art of calligraphy or meditating at Hariakhan Baba?

There are many paths to enlightment and achievement!

[Demeter]

28. What if Steve Jobs Hadn't Dropped Out of Harvard?

What if he hadn't even gotten in, in the first place?

What if he had just followed real doctors' orders instead of self-medicating by the latest California fads?

I AM an old fuddy-duddy, and I'm tired of cleaning up the debris of dreamers and lotus-eaters.

And as for changing diapers...if the over-educated can't be bothered to perform this basic parenting function, what does that say about their family life?

[AnneD]

37. It was...

Bill Gates that dropped out of Harvard. Bill also has an arrest record in NM-Santa Fe I believe.

Steve Jobs went to Reed College.

Neither was academically incline but both were definitely intellectually curious.

[Demeter]

44. Steve Jobs went to Harvard for a two year training from 1996 to 1997.

http://wiki.answers.com/Q/When_did_Steve_Jobs_drop_out_of_Harvard

[AnneD]

50. Thanks....

From what I read... I wasn't 100% sure, but Reed was a definite. Considering that GWB graduated from HBS and helped totally trashed the economy and Bill and Steve dropped out but did a little better-is not a ringing endorsement of the program.

The Chicago School of Business is another that needs to re-evaluate their program.

[Demeter]

51. Yeah, Jobs dropped out of Reed

Just as well. The 'rents couldn't afford it, anyway.

[Demeter]

14. THE WORLD'S ECONOMIC SPRING MEET-AND-GREET

The International Monetary Fund and the World Bank are meeting this weekend, and once again fixing Europe's debt problems will be the big subject. “Compared with autumn last year, there has certainly been a gradual improvement,” said Thomas Mirow, president of the European Bank for Reconstruction and Development. But compared with early 2011, he said, “things have not improved and maybe have even darkened.”

In order to continue battling the economic crisis, Christine Lagarde, the IMF's managing director, has asked for $400 billion in extra funds to deploy in the member countries. This would bring the total the organization has on hand to $700 billion, and emerging nations are expect to add to the pot—a marked difference from the past where only developed countries did the lending. Lagarde has also pushed a change to the bailout fund, allowing it to lend to financial institutions that could derail the economy even further in the next 18 months, and not just countries. Germany has bristled at the notion of getting involved of these safety measure—while much of the continent is in peril, Germany just saw its business confidence climb for the sixth consecutive month.

[Demeter]

15. It's hard to find news this week

There's lots of history, hand-wringing, and outright hysteria, but very little factual information out there...

I have very little unread email. too. What information is in it is probably outdated by now.

The usual suspects are staying low. So the hunt will have to widen for clues to events.


But now, I have to deal with trash day. It was way too windy to put it out last night. I felt like I was going to do a Sally Field at the dog park yesterday, and I am not 99 lbs, either, nor equipped with an aerodynamic hat...

Those halcyon days of 80F in March seem like a dream...the mornings are chilly, even if frost doesn't form. The days warm nicely enough, if it's not blowing like 80mph, and I guess that the cold nights are keeping the bugs down, except those carpenter bees, who are trying to eat the wood trim off the garage again.

[DemReadingDU]

19. My dogs were barking furiously outside yesterday

So I go to see who or what invaded their 'space'. It turned out that a trash can blew into the yard on the other side of the fence.

[Demeter]

31. I can't blame the poor puppies--they could have been brained!

[DemReadingDU]

18. Gideon Sundback Google Doodle

April 24, 2012: Google honors Gideon Sundback with a really funny doodle. He develops the zipper (Dec. 1913). So pull down the zipper on the Google homepage...
Gideon Sundback was a Swedish-American electrical engineer. He was born on April 24th 1880 - 132 years ago. Happy birthday, Gideon Sundback.

&feature=player_embedded

[Demeter]

20. Lehman Brothers "Fudged the Numbers," Says Investigator

WELL, THEY WEREN'T THE FIRST, NOR THE LAST....AND THEY ARE ALL GETTING AWAY WITH IT, INCLUDING FORMERLY RELIABLE GOVERNMENT SOURCES.

http://www.alternet.org/newsandviews/?akid=8637.227380.97QB0Z&id=907962&rd=1&t=4

Anton Vakulas, the federal investigator tasked with looking into now-defunct economic grenade Lehman Brothers, appeared on "60 Minutes" last night to explain what happened—and make the case for prosecution. Huffington Post:

“They'd fudged the numbers,” Anton Vakulas, the attorney appointed by the federal bankruptcy court to investigate Lehman Brothers’ collapse told 60 Minutes' Steve Kroft. “They would move what turned out to be approximately $50 billion of assets from the United States to the United Kingdom just before they printed their financial statements.”

The segment, which marks the first time Vakulas has been interviewed since filing hisnine-volume, 2,200-page report two years ago, claims there is sufficient evidence to prosecute officials at Lehman. According to Vakulas, Lehman Brothers was intentionally misrepresenting their financial health.

More in favor of at least some kind of justice for, you know, the global financial collapse. Watch the segment AT LINK.

LEHMANS WAS 4TH LARGEST INVESTMENT BANK...HMMMM

[xchrom]

21. morning

[DemReadingDU]

39. What are they looking at? Is that a dog in the background? n/t

[xchrom]

41. i figure kids looking at something Gross. like worms.

i think it's a dog -- maybe something else.

[xchrom]

22. STIGLITZ: America Is Being Devoured By Parasites

http://www.businessinsider.com/stiglitz-america-is-being-devoured-by-parasites-2012-4

Economist Joseph Stiglitz offered some grim imagery to describe America today, in an interview with The European:
We are facing a very difficult transition from manufacturing to a service economy. We have failed to manage that transition smoothly. If we don’t correct that mistake, we will pay a very high price. Already, the average American is suffering from the failed transition. My concern is that we have set in motion an adverse economics and an adverse politics. A lot of American inequality is caused by rent-seeking: Monopolies, military spending, procurement, extractive industries, drugs. We have some economic sectors that are very good, but we also have a lot of parasites. The hopeful view is that the economy can grow if we rid ourselves of the parasites and focus on the productive sectors. But in any disease there is always the risk that the parasites will devour the healthy body parts. The jury is still out on that.


Read more: http://www.businessinsider.com/stiglitz-america-is-being-devoured-by-parasites-2012-4#ixzz1sxS2GOa5

[Demeter]

30. Being gutted by multinationals and banksters doesn't constitute a "transition"

unless it's like the transition from life to death. Parasites isn't half of it.

[xchrom]

23. stiglitz interview in The European

http://theeuropean-magazine.com/633-stiglitz-joseph/634-austerity-and-a-new-recession

"Politics Is at the Root of the Problem"
by Joseph Stiglitz —

The European: Four years after the beginning of the financial crisis, are you encouraged by the ways in which economists have tried to make sense of it, and by the ways in which those insights have been taken up by policy makers?
Stiglitz: Let me break this down in a slightly different way. Academic economists played a big role in causing the crisis. Their models were overly simplified, distorted, and left out the most important aspects. Those faulty models then encouraged policy-makers to believe that the markets would solve all the problems. Before the crisis, if I had been a narrow-minded economist, I would have been very pleased to see that academics had a big impact on policy. But unfortunately that was bad for the world. After the crisis, you would have hoped that the academic profession had changed and that policy-making had changed with it and would become more skeptical and cautious. You would have expected that after all the wrong predictions of the past, politics would have demanded from academics a rethinking of their theories. I am broadly disappointed on all accounts.

The European: Economists have seen the flaws of their models but have not worked to discard or improve them?
Stiglitz: Within academia, those who believed in free markets before the crisis still do so today. A few people have shifted, and I want to give credit to them for saying: “We were wrong. We underestimated this or that aspect of our models.” But for the most part, the response was different. Believers in the free market have not revised their beliefs.

The European: So let’s take a longer view. Do you think that the crisis will have an effect on future generations of economists and policy-makers, for example by changing the way that economic basics are taught?
Stiglitz: I think that change is really occurring with the young people. My young students overwhelmingly don’t understand how people could have believed in the old models. That is good. But on the other hand, many of them say that if you want to be an economist, you still have to deal with all the old guys who believe in their wrong theories, who teach those theories, and expect you to believe in them as well. So they choose not to go into those branches of economics. But where I have been even more disappointed is American policy-making. Ben Bernanke gives a speech and says something like, there was nothing wrong with economic theory, the problems were a few details in implementation. In fact, there was a lot wrong with economic theory and with the basic policy framework that was derived from theory. If your mindset is that nothing was wrong, you will not demand new models. That’s a big disappointment.

[Demeter]

25. IMF encourages Europe's economic suicide By Ambrose Evans-Pritchard

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9219600/IMF-encourages-Europes-economic-suicide.html

China, Japan, America, the oil powers, and the rising economies of Latin America had a chance to pull Europe back from suicide through IMF pressure, but the world dropped the ball.

AND IF YOU BELIEVE THAT, I HAVE A NICE BRIDGE IN HISTORIC NEIGHBORHOOD FOR SALE...

Another vast pledge to save the euro, another chance lost to break the hold of Europe’s austerity mystics and force a shift in strategic direction. “We’re north of a trillion dollars,” said Christine Lagarde, the International Monetary Fund’s queen bee. Kudos to her for netting such sums in her Louis Vuitton handbag but what exactly does this achieve, given that Europe remains bent on committing “economic suicide” -- in the words of Nobel laureate Paul Krugman? Big language from world officialdom had traction in the early phases of this saga, when episodic spasms of angst caused “sudden stops” in capital to the South – each quickly reversed by bazookas, firewalls, and solemn incantations. Europe has by now progressed to the tertiary phase of its currency disease. A large chunk of global funding for EMU deficit states has been cut off indefinitely. There has been an almost irreversible collapse of investor confidence in the policy mix and governing machinery of monetary union. It is a “permanent stop”. Firewall can do nothing for this condition.

The IMF’s trillion talk merely encourages EMU and German elites to persist in their belief/dogma that the essence of this crisis is a speculative attack on the euro, and that defensive firepower on a crushing scale is therefore the solution. Such thinking allows Berlin in particular to continue evading the uncomfortable truth that this mess is home-grown, stemming from massive trade and capital imbalances between North and South, compounded by the world’s most leveraged banking system with loan-to-deposit ratios of 1.3 – the same as Japan at top of the Nikkei bubble. (America is a sober 0.7). There is little point rehearsing the stale debate over whether Club Med states are to blame for living beyond their means, or whether Germany is as much to blame for beggar-thy-neighbour mercantilism, and for flooding the South with excess capital. Both played a role, and much else besides.

What is clear is that these imbalances have built up to such a degree that the Greco-Latin bloc is now trapped in debt-deflation – like victims of the 1930s Gold Standard – with wage costs out of kilter by 20pc or more. Equally clear is that Germany cannot cling to a structural trade surplus with all southern Europe in perpetuity, at least on this scale. The system has to balance over time. Germany must either give up its intra-EMU surplus, or furnish offsetting funds through capital flows or fiscal transfers, if it wishes to preserve the euro. It is the complete refusal of Germany’s governing class to face up to this dilemma that is now destroying monetary union. Firewalls are a decoy...MORE

DEFINITION OF BANKER AND GERMAN INSANITY APPLIES HERE

[Demeter]

26. IMF allows eurozone to stay in its fantasy world By Liam Halligan

http://www.telegraph.co.uk/finance/comment/liamhalligan/9218608/IMF-allows-eurozone-to-stay-in-its-fantasy-world.html

Under Christine Lagarde’s stewardship the IMF is continuing to indulge the eurozone’s banks while the fund’s donor countries seethe. For some time, International Monetary Fund supremo Christine Lagarde has argued that a stronger “global firewall” is needed, to contain “any future financial crises”. Well, at this weekend’s IMF-World Bank meetings in Washington, she announced there are now “firm commitments” from member states to boost the IMF’s lending power. The extra resources, Lagarde’s officials dutifully claimed, will be “available for the whole IMF membership, not earmarked for any particular region”. Everyone knows this is nonsense. This higher IMF firewall has been created because governments around the world are petrified the eurozone could implode, sparking another “Lehman moment”.

Since 2007, the IMF has extended over $300bn in loans. With another $430bn of finance now available, in theory at least, these latest “pledges” have almost doubled its existing lending capacity. “We made a call to action, and our members delivered,” proclaimed Lagarde. Behind the rhetoric, though, donor countries are seething — not least those who aren’t even in the euro. Switzerland, the UK, South Korea and Sweden have respectively stumped up $26bn, $15bn, $15bn and $10bn. Norway has weighed in with $9bn, Australia and Singapore pledging $7bn and $4bn each. The US is refusing to contribute to the IMF’s new lending facility, for the unspoken reason that Barack Obama would be eviscerated if he even thought about asking Congress this close to the election for money for the olde world. Based on its jealously guarded voting quotas, America’s “fair share” would be $70bn. The large emerging markets said that, between them, they’ll chip in over $100bn. Before making specific commitments, though China, Russia and Brazil want more evidence of “eurozone governance”. So, a communist country, a formerly communist country and a country not so long ago rightly described as “an economic basket-case” now need proof that Western Europe is capable of facing up to its problems. Can you blame them?

Right across the emerging markets, in fact, where incomes per head remain way below Western levels, there is deep concern about ponying up for a region rich enough to look after itself – if only that region’s elite could agree on sustainable monetary and regulatory arrangements. This ongoing eurozone debacle shows they can’t. And now the eurozone is going cap-in-hand to the rest of the world, albeit under the face-saving auspices of the IMF...

MORE

[Roland99]

27. Markets looking rosier today

S&P 500 1,365.50 +2.75 0.20%
DOW 12,910 +39.00 0.30%
NASDAQ 2,652 +1.75 0.07%

[Demeter]

29. Ben is such a sissy

He can't bear to see an index fall.

[Demeter]

34. Duty Calls

Gonna go strangle it, right now...

[xchrom]

35. ...

have a good one, miss demeter!

[xchrom]

36. Irish mortgage arrears still rising, Bank of Ireland warns

http://www.guardian.co.uk/business/2012/apr/24/irish-mortgage-arrears-rising-bank-of-ireland

Bank of Ireland, the only Irish lender to escape nationalisation during the financial crisis, warned that arrears on residential mortgages are still rising, reflecting high unemployment.

The bank stills hopes that impairment charges will fall this year from last year's high levels, but the pace of reduction depends on its Irish residential mortgage book and commercial property markets.

The lender said: "Arrears in our Irish residential mortgage book have continued to increase reflecting the difficult economic environment in Ireland and elevated levels of unemployment. While consumer confidence surveys have shown improvements in the first three months of 2012, domestic economic indicators remain weak, unemployment remains elevated and residential property prices do not appear, as yet, to have fully stabilised." Ireland's unemployment rate was 14.3% in March.

A group of foreign investors bought a stake in the bailed-out bank last summer, saving it from being nationalised, while the state retained a 15% stake.

[xchrom]

38. US home prices drop for 6th straight month

http://www.guardian.co.uk/world/feedarticle/10210374

AP Economics Writer= WASHINGTON (AP) — Home prices dropped in February in most major U.S. cities for a sixth straight month, a sign that modest sales gains haven't been enough to boost prices.

The Standard & Poor's/Case-Shiller home-price index shows that prices dropped in February from January in 16 of the 20 cities it tracks.

The steepest declines were in Atlanta, Chicago and Cleveland. Prices rose in Phoenix, San Diego and Miami. They were unchanged in Dallas.

The declines partly reflect typical offseason sales. The month-to-month prices aren't adjusted for seasonal factors.

Still, prices fell in 15 of the 20 cities in February compared with the same month in 2011. That indicates that the housing market remains far from healthy despite the best winter for sales in five years.

[DemReadingDU]

40. and Apple reports later today. Good? Bad?

[xchrom]

42. they've been getting Dinged here lately -- so i don't know. nt

[hamerfan]

54. Apple Reports Results for Q2 2012: $11.6 Billion Profit on $39.2 Billion in Revenue

CUPERTINO, California—April 24, 2012—Apple® today announced financial results for its fiscal 2012 second quarter ended March 31, 2012. The Company posted quarterly revenue of $39.2 billion and quarterly net profit of $11.6 billion, or $12.30 per diluted share. These results compare to revenue of $24.7 billion and net profit of $6.0 billion, or $6.40 per diluted share, in the year-ago quarter. Gross margin was 47.4 percent compared to 41.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue.

The Company sold 35.1 million iPhones in the quarter, representing 88 percent unit growth over the year-ago quarter. Apple sold 11.8 million iPads during the quarter, a 151 percent unit increase over the year-ago quarter. The Company sold 4 million Macs during the quarter, a 7 percent unit increase over the year-ago quarter. Apple sold 7.7 million iPods, a 15 percent unit decline from the year-ago quarter.

“We’re thrilled with sales of over 35 million iPhones and almost 12 million iPads in the March quarter,” said Tim Cook, Apple’s CEO. “The new iPad is off to a great start, and across the year you’re going to see a lot more of the kind of innovation that only Apple can deliver.”

“Our record March quarter results drove $14 billion in cash flow from operations,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $8.68.”

http://www.apple.com/pr/library/2012/04/24Apple-Reports-Second-Quarter-Results.html

[xchrom]

43. Japan's Nikkei falls, investors rattled by European politics

http://uk.reuters.com/article/2012/04/24/markets-japan-stocks-idUKL3E8FO2E520120424


* Nikkei weighed by stronger yen, other Asian indexes
* Investors jittery ahead of big financial events
* Euro zone problems weigh on financials
By Sophie Knight
TOKYO, April 24 (Reuters) - Japan's Nikkei share average
fell on Tuesday, weighed down by falling Asian indexes as
political flux in Europe fanned fears of a widening euro zone
debt crisis and investors were anxious ahead of a week of big
financial events.
The Nikkei fell 0.8 percent to 9,468.04, while the
broader Topix index lost 0.7 percent to 803.94.
Market players said a sudden slide in Asian stocks signaled
investors were jittery about the prospect of a destabilised
Europe as well as Federal Reserve and Bank of Japan meetings to
decide on further easing measures later this week.
"The issue here is we do have a lot of events ahead of us,
but it's in a context of a lot of foreboding and nervousness
about key markets," said a trader at a foreign bank.

[Demeter]

45. What about all those excess reserves at the Fed? Edward Harrison

http://www.creditwritedowns.com/2012/04/what-about-all-those-excess-reserves-at-the-fed.html

For the Federal Reserve, as with most central banks, reserves ordinarily serve only one purpose: to help it establish a target interest rate. In ordinary times, some banks have more reserves than they need and lend them to those that have too little. The rate on those interbank loans is called the fed funds rate. If the Fed wants a higher fed funds rate, it drains reserves. If it wants a lower one, it adds reserves. The quantity of reserves, per se, is irrelevant to the Fed. It’s the interest rate that affects spending and it’s spending that drives both the demand for credit and, ultimately, inflation.

These are, of course, extraordinary times. The Fed’s orthodox means of boosting the economy is exhausted because the federal funds rate is at zero. It has increasingly turned to unorthodox means. It has bought Treasuries in an effort to lower long-term interest rates. For a while, it behaved more like a commercial bank than a central bank by making loans to banks, financial institutions, companies, and homeowners (by purchasing mortgages). These actions would only be inflationary if they stimulated demand and elevated the growth of credit; yet overall credit is contracting; the Fed’s actions have only served to stop it from contracting even more quickly.

-The truth about all those excess reserves, Grep Ip, The Economist, December 2009

Greg Ip gets it. The quote above was written in late 2009 when credit was contracting. But it is expanding now. Does that change anything though? Let’s go back to the Krugman-Keen debates from a few weeks ago to see.

Here’s what I wrote about progress on the monetary policy and banking debate in summary:

Under present institutional arrangements, the Fed Funds rate is dependent on the Fed’s supplying the required amount of reserves at any given reserve ratio to keep the interest rate at its target or within its target band. The Fed can’t target a rate unless it supplies banks with all the reserves that the banks need to make loans at that rate. This means that central banks must be committed to supplying as many reserves as banks want/need in accordance with the lending that they do subject to their capital constraints. Failure to supply the reserves means failure to hit the interest rate target. So in practice, if a banking system as a whole is at the reserve limit, central banks always increase the level of reserves desired by the system in order to maintain the interest rate. Not doing so means at once that the Fed cannot hit its target or that transactions fail as the payments system breaks down.

In sum: In a nonconvertible, floating exchange rate system, the amount of credit in the system is determined by the risk-reward calculations of banks in granting loans and the demand for those loans. Banks are not reserve constrained. They are capital constrained. Financial institutions grant credit based on the capital they have to deal with losses associated with that activity.

Doesn’t look like anything’s changed.

Here’s the question though: how do we get the economy on the right track then?

My argument has been that US household debt is still excessive, having quadrupled in the over 60 years since the Great Depression and World War II ended. The root cause of the problems in the US is private debt. The US is suffering from a balance sheet recession in which households are attempting to increase net savings in order to pay down the debt to levels that are covered by the now depreciated assets which serve as collateral. Businesses have already done the heavy lifting. As long as household financial assets provide insufficient collateral for the debts that depend on them, the household sector will continue to maintain a reduced level of consumption and investment as a percentage of income. According to (notably bearish) prognosticators like Comstock Partners, the growing optimism on housing is not justified; property prices are likely to fall further, meaning that asset price depreciation will continue, making a continued balance sheet recession a near certainty. How do you deal with that?

Most analysts will tell you they are concerned about relative debt metrics like debt service costs or debt/income for households. These relative debt metrics are ratios that contain a numerator and a denominator. So, to decrease the ratio, one can either decrease the numerator (the debt) or increase the denominator (income). In our credit system, trying to increase the denominator is a reflationary response to a debt crisis, while decreasing the numerator is a deflationary response. For example, if I want to decrease my relative debt burden, I could save more and pay down debt (balance sheet recession) or I could work nights and use the extra income to maintain the debt load with less risk (employment and income growth). The goal should be to allow both forces to play out, to allow increased savings and debt and debt interest reduction to combine with increased income to accelerate the deleveraging process. In my view, monetary policy does next to nothing here.

Last August I told you that the Fed has already begun its third easing campaign with rate easing replacing quantitative easing as the policy tool of choice. But, this policy lever would have been utilised if rates were not at zero percent. The Fed is out of bullets on interest rate policy and has turned to other nonconventional measures like targeting medium-term inflation and interest rates and using a communications strategy as an expectations anchoring mechanism to increase its influence on medium-term outcomes. Good luck!

Bottom line: The Fed’s excess reserves are not inflationary. As Greg Ip noted in 2009, "Reserves have not been a relevant constraint on bank lending for decades, if ever. Bank lending is constrained by customer demand and by capital." Forget about excess reserves. The Fed’s easing simply doesn’t have a lot of influence in a world of overleveraged households lacking in credit demand. And Fed communications of inflation and interest rate policy is not going to be a make-or-break policy tool. If we want to get the economy on the right track, we will need to focus on jobs.

[Demeter]

46. How Pete Peterson is driving the fiscal consensus By Felix Salmon

http://blogs.reuters.com/felix-salmon/2012/04/20/how-pete-peterson-is-driving-the-fiscal-consensus/

Trudy Lieberman has a good post at CJR on the “surprisingly broad consensus” around the need to reduce the fiscal deficit in general, and to take aim at Social Security in particular. “Social Security,” she writes, “is the one issue on which the electorate is not divided” — but that hasn’t stopped a bipartisan group of Washington grandees from preaching doom whenever it is brought up.

More generally, the idea of “fiscal responsibility” seems to have become as American as motherhood and apple pie — both parties preach it, and say the other guys are the profligate ones. The group of people saying “hey, we print our own money, interest rates are at zero, inflation is not an issue, the corporate sector isn’t borrowing, there are a thousand more important things to worry about right now, why on earth is everybody worried about the deficit all of a sudden” is in a decided minority.

The obsession about fiscal prudence is a new phenomenon, and can be dated, pretty much, to 2008, when Blackstone went public and Pete Peterson took his billion dollars in proceeds and decided to use it to found the Peter G Peterson Foundation. Wherever fiscal prudence is preached, Peterson’s money can nearly always be found...

Reasonable people can differ on the question of how important it is to balance the budget, but I think it’s fair to say that there are lot of screamingly important issues, from endemic long-term unemployment to global nuclear proliferation, which aren’t getting a fraction of the attention that fiscal policy is getting. Which only goes to show, I think, just how powerful Pete Peterson’s targeted millions can be.

[Demeter]

48. Jailed for $280: The Return of Debtors' Prisons

http://finance.yahoo.com/news/jailed-for--280--the-return-of-debtors--prisons.html

How did breast cancer survivor Lisa Lindsay end up behind bars? She didn't pay a medical bill -- one the Herrin, Ill., teaching assistant was told she didn't owe. "She got a $280 medical bill in error and was told she didn't have to pay it," The Associated Press reports. "But the bill was turned over to a collection agency, and eventually state troopers showed up at her home and took her to jail in handcuffs."

Although the U.S. abolished debtors' prisons in the 1830s, more than a third of U.S. states allow the police to haul people in who don't pay all manner of debts, from bills for health care services to credit card and auto loans. In parts of Illinois, debt collectors commonly use publicly funded courts, sheriff's deputies, and country jails to pressure people who owe even small amounts to pay up, according to the AP...

DETAILS FOLLOW

[Demeter]

49. Debtors filing lawsuits over aggressive collection tactics

Kristy Schwarm was introduced to collection agencies after she bounced an $83.41 check at a Mendocino County FoodMaxx. She soon started receiving menacing letters on district attorney and sheriff's department letterhead, warning her she was under criminal investigation and threatening her with arrest.

In rural Fresno County, an 18-year-old student living with her parents became anxious and depressed and eventually dropped out of school after a Hanford-based collector kept calling at home and at work about a delinquent $3,509.18 hospital bill.

"Her voice is stuck in my head, and it's ugly, ugly," said Margarita Guzman of Parlier, a town of about 13,000 southeast of Fresno. "She made me feel like I was this bad person and couldn't be responsible.

"Then people started asking me, 'Why are you putting up with this?' " said Guzman, now 23.

Read more here: http://www.mcclatchydc.com/2012/04/23/146338/debtors-filing-lawsuits-over-aggressive.html#storylink=cpy#storylink=cpy


COPIOUS DETAILS AND STRATEGIES AT LINK

[AnneD]

52. Watch for this to increase...

with the privatization and commercilization of prisons.

This is pathetic and wrong on so many levels. WS walks while a cancer survivor goes to jail.

[Fuddnik]

53. They need to have more prisoners to work private farms.

Since the yay-hoos in Alabama and Jawja ran off all of their illegal cheap immigrant labor, and half of last years crops rotted in the fields.

They'll be leasing out the prisoners for $1.00 a day.

[AnneD]

56. Brother Were Art Thou......

Now I will have that sound track stuck in my head-but somehow, that seems appropriate for a workday.

[Demeter]

55. Hugging 13K like an addict; what a market--not