STOCK MARKET WATCH -- Monday, 20 August 2012

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 20 August 2012[font color=black][/font]

SMW for 17 August 2012

AT THE CLOSING BELL ON 17 August 2012
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Dow Jones 13,275.20 +25.09 (0.19%)
S&P 500 1,418.16 +2.65 (0.19%)
Nasdaq 3,076.59 +14.20 (0.46%)



[font color=black]10 Year 1.81% 0.00 (0.00%)
30 Year 2.93% 0.00 (0.00%) [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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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
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
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."




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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. I think there's an intermediate step: Blowing up the Party

which is going on right now, and will prevent the final panel from occurring---this time. Especially if we nail Obama's ass to the wall so he can't turncoat again, and get it in writing from Congress.

[Demeter]

2. Why the Right Has New Legal Ammunition in Its Quest to End Medicare, Soc. Sec., Entire Safety Net

http://www.alternet.org/civil-liberties/why-right-has-new-legal-ammunition-its-quest-end-medicare-social-security-and-our?akid=9193.227380.jyhO7w&rd=1&src=newsletter690298&t=13&paging=off

...Conservatives may have been dealt a momentary set-back when the Supreme Court upheld the constitutionality of the Affordable Care Act in June, but there's every reason to think they plan to use that decision to launch even more legal attacks not just on the healthcare reform law, but on the entire social safety net -- and plenty of reason to worry they'll succeed.

Launching a legal crusade takes time, and theories challenging established law usually get worked out first in the laboratories of law schools and think-tanks. In the case of the challenges to constitutionality of the Affordable Care Act, and the coming challenges to other social programs, conservatives first decided on a political strategy and then reverse-engineered a legal strategy to get them to their political goals.

That's where Jonathan Adler and Michael Cannon come in.

A paper authored by Adler of Case Western Reserve University and Cannon of the Cato Institute floats the likely next set of legal theories that will be used to challenge the Affordable Care Act. Adler and Cannon argue that the federal exchanges -- the entities through which people without health insurance can purchase it -- cannot legally give people subsidies to help pay for coverage, and that the IRS rule that enables those federal exchanges to administer subsidies is unjustifiable. Those subsidies are critical to making insurance affordable for all...

[Fuddnik]

4. You just knew Roberts was up to no good.

[Demeter]

5. The reasoning is tortured, to say the least

I am not convinced that they can pull it off before the angel of Death takes Fat Tony and his homies to Hell.

A lot can happen before it gets this far.

[spotbird]

70. There is a special potion that keeps evil alive

Think Dick Cheney. For years I wanted to put an asterisk on my driver's license donor card precluding Dick Cheney as a recipient.

Ruth is the most likely to go.The others aren't stressed by issues like conscience, so they'll be around until your grandchildren would have been old enough to collect Social Security.

[wordpix]

41. O should just come out for Medicare for all in this election

Let the R's deal with THAT.

Do it like Canadian provinces: you pay a quarterly premium based on your income, and you pay through sales tax on everything except for groceries.

In return, you get excellent health care including mental health care, and subsidized child care and college if needed according to your income.

That's how it was in Canada when I lived there for 5 yrs. And I had excellent health care there, including prenatal care, a birth and well baby care, and subsidized child care when I went back to work. And since my now grown son went to college in Canada as a Canadian citizen born in Canada, his college costs were very reasonable.

[Fuddnik]

49. That's not his gig.

His gig is to make private insurers and providers wealthier.

[Demeter]

57. Still, It's a Nice Dream. Welcome, WordPix!

[Demeter]

3. The Global 1%: Exposing the Transnational Ruling Class MUST READ

http://www.projectcensored.org/top-stories/articles/the-global-1-exposing-the-transnational-ruling-class/?utm_source=Media+Freedom+foundation+List&utm_campaign=72cfb80560-Desperate+Times+Demand+Revolutionary+Measures&utm_medium=email

Abstract: This study asks Who are the the world’s 1 percent power elite? And to what extent do they operate in unison for their own private gains over benefits for the 99 percent? We examine a sample of the 1 percent: the extractor sector, whose companies are on the ground extracting material from the global commons, and using low-cost labor to amass wealth. These companies include oil, gas, and various mineral extraction organizations, whereby the value of the material removed far exceeds the actual cost of removal.We also examine the investment sector of the global 1 percent: companies whose primary activity is the amassing and reinvesting of capital. This sector includes global central banks, major investment money management firms, and other companies whose primary efforts are the concentration and expansion of money, such as insurance companies. Finally, we analyze how global networks of centralized power—the elite 1 percent, their companies, and various governments in their service—plan, manipulate, and enforce policies that benefit their continued concentration of wealth and power. We demonstrate how the US/NATO military-industrial-media empire operates in service to the transnational corporate class for the protection of international capital in the world.

***********************************************************

... there is little understanding as to who comprises the 1 percent and how they maintain power in the world. Though a good deal of academic research has dealt with the power elite in the United States, only in the past decade and half has research on the transnational corporate class begun to emerge. Foremost among the early works on the idea of an interconnected 1 percent within global capitalism was Leslie Sklair’s 2001 book, The Transnational Capitalist Class. Sklair believed that globalization was moving transnational corporations (TNC) into broader international roles, whereby corporations’ states of origin became less important than international agreements developed through the World Trade Organization and other international institutions. Emerging from these multinational corporations was a transnational capitalist class, whose loyalties and interests, while still rooted in their corporations, was increasingly international in scope.

Sklair writes:

The transnational capitalist class can be analytically divided into four main fractions: (i) owners and controllers of TNCs and their local affiliates; (ii) globalizing bureaucrats and politicians; (iii) globalizing professionals; (iv) consumerist elites (merchants and media). . . . It is also important to note, of course, that the TCC [transnational corporate class] and each of its fractions are not always entirely united on every issue. Nevertheless, together, leading personnel in these groups constitute a global power elite, dominant class or inner circle in the sense that these terms have been used to characterize the dominant class structures of specific countries.

Estimates are that the total world’s wealth is close to $200 trillion, with the US and Europe holding approximately 63 percent. To be among the wealthiest half of the world, an adult needs only $4,000 in assets once debts have been subtracted. An adult requires more than $72,000 to belong to the top 10 percent of global wealth holders, and more than $588,000 to be a member of the top 1 percent. As of 2010, the top 1 percent of the wealthiest people in the world had hidden away between $21 trillion to $32 trillion in secret tax exempt bank accounts spread all over the world. Meanwhile, the poorest half of the global population together possesses less than 2 percent of global wealth. The World Bank reports that, in 2008, 1.29 billion people were living in extreme poverty, on less than $1.25 a day, and 1.2 billion more were living on less than $2.00 a day. Starvation.net reports that 35,000 people, mostly young children, die every day from starvation in the world. The numbers of unnecessary deaths have exceeded 300 million people over the past forty years. Farmers around the world grow more than enough food to feed the entire world adequately. Global grain production yielded a record 2.3 billion tons in 2007, up 4 percent from the year before—yet, billions of people go hungry every day. Grain.org describes the core reasons for ongoing hunger in a recent article, “Corporations Are Still Making a Killing from Hunger”: while farmers grow enough food to feed the world, commodity speculators and huge grain traders like Cargill control global food prices and distribution. Addressing the power of the global 1 percent—identifying who they are and what their goals are—are clearly life and death questions.

It is also important to examine the questions of how wealth is created, and how it becomes concentrated. Historically, wealth has been captured and concentrated through conquest by various powerful entities. One need only look at Spain’s appropriation of the wealth of the Aztec and Inca empires in the early sixteenth century for an historical example of this process. The histories of the Roman and British empires are also filled with examples of wealth captured. Once acquired, wealth can then be used to establish means of production, such as the early British cotton mills, which exploit workers’ labor power to produce goods whose exchange value is greater than the cost of the labor, a process analyzed by Karl Marx in Capital. A human being is able to produce a product that has a certain value. Organized business hires workers who are paid below the value of their labor power. The result is the creation of what Marx called surplus value, over and above the cost of labor. The creation of surplus value allows those who own the means of production to concentrate capital even more. In addition, concentrated capital accelerates the exploitation of natural resources by private entrepreneurs—even though these natural resources are actually the common heritage of all living beings...

THE ARTICLE GOES ON TO NAME NAMES AND LINKAGES AND WHAT THEY ARE CURRENTLY UP TO, LEADING UP TO THIS CONCLUSION:

The Occupy movement uses the 1 percent vs. 99 percent mantra as a master concept in its demonstrations, disruptions, and challenges to the practices of the transnational corporate class, within which the global superclass is a key element in the implementation of a super-elite agenda for permanent war and total social control. Occupy is exactly what the superclass fears the most—a global democratic movement that exposes the TCC agenda and the continuing theater of government elections, wherein the actors may change but the marquee remains the same. The more that Occupy refuses to cooperate with the TCC agenda and mobilizes activists, the more likely the whole TCC system of dominance will fall to its knees under the people power of democratic movements.

I HOPE THEY ARE RIGHT, BECAUSE THE OTHER CHOICES ARE GENOCIDE OR PITCHFORKS

[Egalitarian Thug]

68. This is indeed a MUST READ article/study. Please do an OP on this.

If you would rather, and I can find the time I will do it.

[Demeter]

69. You had better do it. I have board stuff this week.

and no brain.

[Demeter]

6. Dollar's climbing--Oil is NOT dropping

but gold and silver are...

[Warpy]

7. The spot market future price of oil has been disconnected from the dollar

for some years now, today's activity providing even more proof of how the commodities market has been manipulated by investment banks.

Asia sure is buying up the buck right now. I wonder what they're starting to smell over there.

[Demeter]

8. I think they were trying to QE a little flutter in their market

It didn't work, though.

OR, the Bernank and Timmeh squashed it.

[Po_d Mainiac]

65. huh? n/t

[Demeter]

9. Still No Escape for Taxpayers If Banks Go Bust MUST READ

http://www.cnbc.com/id/48699806

Five years since the start of the financial crisis, taxpayers would still be forced to foot the bill should more banks fail because countries are delaying alternative solutions.

Finding a way to shut down big banks quickly without triggering market mayhem — the threat of which prompted governments around the world to resort to publicly-funded bailouts between 2007 and 2009 — remains a mammoth task.

Britain, Switzerland and the United States, frustrated by the slow pace of reform, have drawn up plans giving their local regulators power to step in should a major lender go bust.

But they still need a global deal to give those same powers to regulators worldwide if the laws are to be effective.

The U.K. published its plans this month, hoping to get other countries moving and draw lessons from the collapse of U.S. bank Lehman Brothers in September 2008, the impact of which is still being felt in the markets...

I DON'T BUY THIS ARGUMENT. ONE NATION CAN RATIONALIZE ITS FINANCIAL SITUATION WITHOUT THE OTHERS FOLLOWING. TAKE SWEDEN, OR ICELAND. THEY NATIONALIZED AND PROSECUTED, AND THE WORLD DID NOT END FOR ANYONE EXCEPT THEIR BANKSTERS...

THIS SMACKS OF ONE-WORLD GLOBALISM, TRYING TO REINFORCE THE PRISON BARS FOR ALL THE LITTLE PEOPLE...WHILE THE BANKSTERS ESTABLISH DOMINION.

[Demeter]

10. Revealed: The £93m City (OF LONDON) lobby machine

http://www.thebureauinvestigates.com/2012/07/09/revealed-the-93m-city-lobby-machine/

The British financial services industry spent more than £92m last year lobbying politicians and regulators in an ‘economic war of attrition’ that has secured a string of policy victories. As the industry prepares to fight off renewed calls for root-and-branch reform in response to the Barclays rate-fixing scandal, an investigation by the Bureau has revealed the firepower of the City’s lobbying machine, prompting concern that its scale and influence puts the interests of the wider economy in the shade. The Bureau’s four-month study also gained previously undisclosed documents that show how finance lobbyists won a host of important policy changes in Whitehall and Westminster. These include:

• The slashing of UK corporation tax and taxes on banks’ overseas branches, after a lobbying barrage by the City of London Corporation, the British Bankers’ Association (BBA) and the Association of British Insurers. The reform will save the finance industry billions.

• The neutering of a national not-for-profit pension scheme launching in October that was supposed to benefit millions of low paid and temporary workers.

• The killing of government plans for a new corporate super-watchdog to police quoted companies.

An extensive trawl of registries, consultations and hundreds of interviews has identified 129 organisations engaging in some form of lobbying for the finance sector, with over 800 people employed directly and at a cost of £92.8m. Lobbyists include in-house bank staff, public affairs consultancies, industry body representatives, law firms and management consultants.

The findings sparked a renewed attack on banks from business secretary Vince Cable. ‘The banking sector is disproportionately influential,’ he said, ‘In terms of its contribution to the economy, the financial services sector – widely defined – is comparable to manufacturing and a little bigger than the creative industries. It is important for rebalancing the economy that these sectors grow in relative importance,’ Cable said. ‘Yet I do worry that Britain’s financial sector, particularly the banks - as opposed to more successful and less problematic financial services like insurance - are too dominant and is too easily assumed to represent the national interest. Its interests are often not the same as those of the real economy.’ He continued: ‘If Britain is going to grow on a sustainable basis we need smaller banks and more competitive banking focused on supplying credit to British business. Yet there has been strong resistance to bank reform.’

MORE

[Demeter]

18. & AT HOME: Washington’s Wall Street Sugar Daddies By Hillary Lehr

http://www.nationofchange.org/washington-s-wall-street-sugar-daddies-1345124114

How much is democracy worth to you?

If you’re like most people, it’s priceless. But for the hedge funds and insurance companies on Wall Street, it does have a price tag. And now, thanks to a new report by Global Exchange, we know the number on it: approximately $4.2 billion. That’s how much the Finance, Insurance, and Real Estate (F.I.R.E.) sector has invested in political influence through campaign contributions and lobbying since 2006. That comes to $1,331 a minute spent on political power.

The new report is called “Meet the F.I.R.E. Sector: How Wall Street Is Burning Democracy.” It was developed by Elect Democracy, a nonpartisan effort by Global Exchange to expose and challenge the impact of corporate money in U.S. politics. The report contains extensive research tracking Wall Street’s investment in political power, and analyzes exactly how Wall Street has secured what Global Exchange calls “industry-loyal voting practices” in Congress: by shoveling stacks of campaign cash in the direction of Congressional hopefuls from both major political parties.

That money lets these industries get what they want in Washington. The F.I.R.E. sector contributed $879 million to members of Congress since 2006, and took positions on 383 bills during the 112th Congress. For instance, they supportedFree Trade Agreements with Korea, Panama, and Colombia in 2007, and backed the bailout in 2008. Bills they opposed include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2009, the Limited Homeowner and Investor Loss in Foreclosure Act of 2010, and the Stop Student Loan Interest Rate Hike Act of 2011.

At every turn, the F.I.R.E. sector demands special treatment for Wall Street while consumers, homeowners, and students get stuck with the bills. As Senator Bernie Sanders put it an interview with MSNBC this May, "Wall Street is extraordinarily powerful. Congress doesn't regulate them. The big banks regulate what Congress does."

MORE

***********************************************************

Hillary V. Lehr wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas and practical actions. Hillary has worked with Rainforest Action Network, co-founded the California Student Sustainability Coalition, and is currently taking on Wall Street money in politics as Campaign Director for Global Exchange’s Elect Democracy project.

[Demeter]

11. CIA's 'Facebook' Program Dramatically Cut Agency's Costs By The Onion

&feature=player_embedded

[Roland99]

48. Faceplant down 0.6% to $18.94

[Po_d Mainiac]

67. that was the plan

http://online.wsj.com/article/SB10000872396390443324404577595360897586798.html?ru=yahoo&mod=yahoo_hs

[Demeter]

12. 'End of Capitalism': Bolivia to Expel Coca-Cola

http://rt.com/news/bolivia-ban-coca-cola-581/

In a symbolic rejection of US capitalism, Bolivia announced it will expel the Coca-Cola Company from the country at the end of the Mayan calendar. This will mark the end of capitalism and usher in a new era of equality, the Bolivian govt says.

“December 21 of 2012 will be the end of egoism and division. December 21 should be the end of Coca-Cola,” Bolivian foreign minister David Choquehuanca decreed, with bombast worthy of a viral marketing campaign.

The coming ‘end’ of the Mayan lunar calendar on December 21 of this year has sparked widespread doomsaying of an impending apocalypse. But Choquehuanca argued differently, claiming it will be the end of days for capitalism, not the planet.

“The planets will align for the first time in 26,000 years and this is the end of capitalism and the beginning of communitarianism,” said Choquehuanca as quoted by Venezuelan newspaper El Periodiquito.

The minister encouraged the people of Bolivia to drink Mocochinche, a peach-flavored soft drink, as an alternative to Coca-Cola. Venezuelan President Hugo Chavez followed suit, encouraging his country to ditch the American beverage for fruit juice produced in Venezuela.

­
McFailure

Last year, Bolivia became the second Latin American country not to have a single McDonald’s. The fast food giant finally gave up on Bolivia after being unable to turn a profit in the country for over a decade. Following this failure, the monolithic multinational released a documentary titled ‘Why McDonald’s failed in Bolivia.’ Referencing surveys, sociologists, nutritionists and historians, the company came to the conclusion it was not their food that was the issue, but a culturally driven boycott. Bolivian President Evo Morales has a reputation for controversial policies similar to the Coca-Cola ban. Morales pledged last month to legalize the consumption of coca leaves, one of the main ingredients of cocaine.

“Neither the US nor capitalist countries have a good reason to maintain the ban on coca leaf consumption,” said Morales.

The coca leaf was declared an illegal narcotic by the UN in 1961, along with cocaine, opium and morphine. The consumption of coca leaves is a centuries-old tradition in Bolivia, strongly rooted in the beliefs of various indigenous groups.

WELL, MAYBE BOLIVIA HAS SOME ATTRACTION FOR REAL dEMOCRATS...

[bread_and_roses]

22. Sounds good to me

Sorry I've been MIA - mostly I've been really busy, but also just worn out with news - just stupefied by the endless parade of lies, lies, lies and more lies.

I scan SMW and WEE of course, but find myself unable to follow up and actually read any of the articles. Same at my regular grazing sites Commondreams and Alternet.

For kicks, I take a quick look at some of the other threads around here and am unutterably depressed by the usual pattern which goes something like this:

"Republicans say ..... (insert blatant lie but phrased in short, strong, plain, emotive slogan)"

DUers say ...."oh ha ha ha ... the TRUTH is .... on page xxxx of the ACA it plainly states that zimrlondd;0/wwfffskcaqbbupkrtxx/tg555 and besides President Mellifluous says blah blah drone wishy-washy folksy milque-toasty half-truth (a la "affordable" in ACA).

As far as I can see the Rs - even with all their gaffes - are still winning the war of words, since all our side has to offer is stale platitudes buttressed by pages of arcana that no one can follow or understand, much less remember. And it's the slogans - the sound-bites, the catch-phrases, the simple and gut-wrenching - that will win and lose an election.

People could understand "Health Care for All." The ACA? Not so much (since its 1000 or so pages were written to benefit the Vampire Insurance Co's more than the people - I remember around here some of the faithful demanding of critics, "did you read it???????" Well, no - and neither did you, LOL).

People could understand "Full employment - a job for everyone at living wages." The manipulated marginal drops in the unemployment level? Not so much.

People could understand "Lower the retirement age and raise taxes on the rich to pay for it." Pages of formulas and forecasts? Not so much.

That's what happens when you're trying to dress up some moldy bread fried in rancid grease to look like the giant roast pig you're serving - with garlands and apples and nut stuffing - to the 1%ers. When you are trying to make the Scraps and Bones Party look like the Party of the People.

[bread_and_roses]

30. And "our side" can't even come up with good slogans when they try

So after writing above I cruise over to Commondreams and a new article is up:

http://www.commondreams.org/view/2012/08/20-0
Published on Monday, August 20, 2012 by Common Dreams
Facts. Huh! What Are They Good For? Absolutely Nothing.
by Paul Buchheit

Now, I didn't happen to read this before I posted the above, but of course I've read many such articles. And I've worked on campaign literature at the local level.

In this article Mr. Buchheit tries to come up with some slogans for "our side."

He fails pretty miserably IMHO

George Lakoff is right. Republicans are winning the language wars. As half of America is charmed into voting against their own interests, we progressives keep telling them the facts. Instead, we should be concerned about what Joe Romm calls "language intelligence," the ability to convince people of something by moving them both intellectually and emotionally. The Republicans do it so well. They've hijacked the big issues with inflammatory phrases like "class warfare" and "death tax." We have to learn to fight back.

... "class carnage," inflicted by the super-rich. And "ancestral theft," ... "quadrillionaire's fee." ... "medikillers" or "billionaiders." ... "jobbywhackers." ... "Swindle or Dwindle." ... Nation in plight, banker's delight,
slapped with a warning: nation in mourning."

Oh ...dear. And such are to go up against "Tax Relief" - which sounds plain, simple, and attractive? Who even knows what he's talking about in most of those? Good goddess. Of course, it might help if "our side" were ACTUALLY PROPOSING ANYTHING that would ACTUALLY BENEFIT ORDINARY PEOPLE. Like a new WPA. But we're not. So we're reduced to jabberwocky.

[Demeter]

40. I feel your pain

Tansy will attest that there are days when posting this pool of despair is more than I can do. On those days, I don't get much up.

And as for the slogans? Well, it's a sign of indifference, if not total lack of interest in what the pols are supposed to be doing: of the People, by the People, for the People. After all, who pays their bribes?

I bet they've got lots of catchy slogans for the Corporations that knock on their doors.

[wordpix]

46. D's should use "Medicare for All" vs. "Couponcare" and "Social Insecurity" for R plans

"War against women" is good as is "wiping out the middle class."

"Many CEOs make more money each year than their corporations pay in taxes."

"Tax Haven Mitt"

"Prove it, show the tax returns."

"Green jobs"

"Taxes pay for roads, schools, parks and clean water."

"R's want to cut taxes for the richest 1%."


Keep it simple for the sheeple.

[bread_and_roses]

56. You're good. But they CAN'T say "Medicare for all" ...

... because it's not.

also, we find that "Green Jobs" does not play real well ("we" being those of us in my tiny pond who work on campaign lit). It is just not vivid enough, people are not sure what it means, and it's maybe been poisoned by the R propaganda - not sure.

It's not easy, crafting these. Especially when you're working with a flawed product - which in the Ds case, is all the time, since they are trying to dress up their Scraps and Bones policies.

[wordpix]

44. could be a good retirement place?

[Demeter]

13. Study Finds About 20% of US Public Companies Cheat On Earnings Reports

IS THAT ALL THEY FOUND? IT'S ONLY THE LARGEST ONES, MOST LIKELY...

http://jessescrossroadscafe.blogspot.mx/2012/07/academic-study-finds-about-20-of-public.html

"And yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered, because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply.

Primarily, this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence...

Faced by failure of credit, they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They only know the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish...

Recognition of that falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, and on unselfish performance; without them it cannot live...."

Franklin D. Roosevelt, First Inaugural Address, 4 March 1933

Bear in mind that the data from this university study is the result of a survey of 169 CFO's and not a forensic examination of the books. I am a little surprised that the fraud number came in that high in a survey. I do not know many CFOs that would readily self-identify their work as fraudulent in nature. So therefore I also think that in actuality the number is rather low, given what I have seen for myself and the vagaries of human nature. When cheating becomes accepted and profitable almost everyone does it. It should not surprise that so many of the CFO's chafe under the rules from FASB, which is the accounting industry self-regulator. They complain of too many restrictive rules, and yet they also admit fraud is pervasive. And it is their own organization that sets the standards.

Since 1973, the Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting that govern the preparation of financial reports by nongovernmental entities.

I cannot speak for the current period, but during the build up to the tech bubble the manipulation of earnings was almost par for the course, as certain industry leaders set standards of consistent returns that were obviously based on questionable accounting practices. From what I have seen, the same is true for the financial sector which had its own bubble and collapse. As a rule of thumb, any genuine bubble conceals a cesspit of fraud and criminal activity amongst insiders.


Here are the red flags that the study derived:

The three most common flags are persistent deviations between earnings and the underlying cash flows, deviations from industry and other peer experience, and large and unexplained accruals and changes in accruals.

There are also a number of red flags that relate to the role of the manager’s character and the firm’s culture, which allow and perhaps even encourage earnings management.

That last sentence is a polite way of saying that some companies become almost indistinguishable from criminal enterprises in their values and methods. Probably the most easily identifiable red flag is an improbable consistency, the 'beat by a penny' quarter after quarter syndrome. If something looks too good to be 'real' then it is probably based on a fraud, in either the accounting or the market activity, and often both. It may not be illegal, but it certainly may be a material misrepresentation of the health of the business that will bite down the road....

REMIND YOU OF ANYONE--VAMPIRE SQUID-LIKE?

[Demeter]

14. Mexican Drug Cartel Laundered Money Through BofA, FBI Alleges

THIS IS FROM EARLY JULY....SEEMS TO HAVE FALLEN OFF THE MAP WITH ALL THE OTHER SCANDAL TO COVER IT...

http://www.huffingtonpost.com/2012/07/09/los-zetas-laundered-money-bank-america_n_1658943.html?ref=topbar

Drug money has a way of sprawling. And some of it may have reached Bank of America. A federal probe into Los Zetas, a Mexican drug cartel, claims that the group has been laundering money through accounts at BofA, according to a recent report in The Wall Street Journal. An FBI affidavit filed in Texas last month says that the Mexican drug cartel has been reportedly funneling cash through a Texas-based racehorse business with BofA accounts. The U.S. government has described Los Zetas in the past as "the most technologically advanced, sophisticated and dangerous cartel operating in Mexico." Tremor Enterprises LLC, the horse business, was for its part allegedly run by Jose Trevino Morales, a U.S. citizen with two brothers in Los Zetas.

In the past, Mexican drug syndicates have allegedly used BofA accounts to buy planes to transport cocaine, according to Bloomberg. Between 2004 and 2007, the bank was also the alleged destination for almost $10 million in illicit funds from an influential political family in Equatorial Guinea. BofA has admitted such errors in the past. In 2006, officials acknowledged they'd failed to catch South American clients laundering $3 billion through one of its Manhattan branches, according to The New York Times.

Just to be clear, BofA hasn't been accused of any wrongdoing, and according to sources cited by the WSJ, the bank is cooperating with the FBI investigation.

Still, if Los Zetas has indeed been shifting a million dollars a month through accounts held at BofA, as the federal probe claims, it suggests the bank might still have some kinks to work out in its defenses against money laundering.

SEE SLIDESHOW EXPOSE OF 9 OTHER CRIMINAL BANK ENTERPRISES AT LINK, INCLUDING VATICAN BANK!

[Demeter]

15. Atlas shrugged? Manufacturing seems worn out

MANUFACTURING CANNOT BE SCAMMED LIKE FINANCE (ESP. MORTGAGES) OR HEALTHCARE (ESP INSURANCE) OR DEFENSE SPENDING...THE CORPORATIONS HAVE TO PRODUCE GOODS THAT SOMEBODY WANTS TO BUY. AND IF THE VALUE AND QUALITY ISN'T THERE, THE CORPORATION WILL SUFFER...

http://www.marketwatch.com/story/atlas-shrugged-manufacturing-seems-worn-out-2012-08-19

There are signs that the manufacturing sector, which has led the economic recovery, is about to take a breather. “It seems like the factory sector is stuck in neutral,” said Guy Berger, an economist at RBS in New York.

Several factors appear to be at work, economists said. Weakness in the global economy is cutting back exports. And factory owners are uncertain about how the outcome of the November election and what it means for taxes and government largesse.

“Japan is going nowhere, Europe is in recession, and we’ve got our own problems,” such as stalemate over tax policy and government spending, said Josh Shapiro, chief U.S. economist with MFR Inc.

Shapiro is concerned that there are no obvious heirs-apparent waiting in the wings to pick up the slack and propel the economy forward. Housing seems to finally in recovery mode but it seems doubtful it can pick up the load. Without an obvious source of strength, Shapiro sees a 50% chance of a recession in the next 12 months.

“I think things are more dangerous than a lot of other economists think,” Shapiro said.

Another economist forecasting a high probability of a recession in the next year is Chad Moutray, chief economist for the National Association of Manufacturers, the trade group for the factory sector...Fiscal policy “is a huge area of doubt for many manufacturers,” Moutray said. Many factory owners now do work for the defense sector, which will see $500 billion in cuts over the next decade if the so-called sequester is implemented. While it is the conventional wisdom in the nation’s capital that these tax and spending issues will be ironed out after the November election, Moutray is more wary.

[Demeter]

16. YES, PEOPLE ARE ALIKE IN THAT

[Demeter]

62. THE RAISE (story courtesy of my sis)

Employee: Excuse me sir, may I talk to you?

Boss: Sure, come on in… What can I do for you?

Employee: Well sir, as you know, I have been an employee of this prestigious firm for over ten years.

Boss: Yes.

Employee: I won't beat around the bush. Sir, I would like a raise. I currently have four companies after me and so I decided to talk to you first.

Boss: A raise? I would love to give you a raise, but this is just not the right time.

Employee: I understand your position, and I know that the current economic down turn has had a negative impact on sales, but you must also take into consideration my hard work, pro-activeness and loyalty to this company for over a decade..

Boss: Taking into account these factors, and considering I don't want to start a brain drain, I'm willing to offer you a ten percent raise and an extra five days of vacation time. How does that sound?

Employee: Great! It's a deal Thank you, sir!

Boss: Before you go, just out of curiosity, what companies are after you?

Employee: Oh, the Electric Company, Gas Company, Water Company and the Mortgage Company!

[Demeter]

17. The Betrayal of the American Dream -- A Once Vibrant Middle Class Is Now on the Brink

http://www.alternet.org/economy/betrayal-american-dream-once-vibrant-middle-class-now-brink?akid=9155.1085969.HDx6Td&rd=1&src=newsletter685406&t=5&paging=off

Donald Barlett and James Steele explain in their new book how American middle class has been impoverished and its prospects thwarted in favor of a new ruling elite...

INTERVIEW

America’s middle class has been decimated over the years due to policies governing not only taxes but also bank regulations, trade deficits and pension funds. Their new book chronicles how the American middle class has been systematically impoverished and its prospects thwarted in favor of a new ruling elite.

We’re joined now for the hour by Don Barlett and James Steele, the award-winning investigative reporters. They have worked together for over 40 years, first at thePhiladelphia Inquirer, then at Time magazine, most recently at Vanity Fair. They’ve also written seven books. Their first book, America: What Went Wrong?, was a New York Times bestseller. They share two Pulitzer Prizes, two National Magazine Awards. Their new book is called The Betrayal of the American Dream.

Jim Steele, Don Barlett, we welcome you both to Democracy Now! Start off by laying out your thesis, Don. Start off by talking about the betrayal of the American dream...

[Demeter]

19. ANOTHER PONZI FOR THE WALL OF SHAME, TANSY

Goldman, Still Playing in Bayou’s Mud By GRETCHEN MORGENSON

http://www.nytimes.com/2012/08/19/business/goldman-sachs-still-playing-in-bayous-mud-fair-game.html?ref=business

... You may recall Bayou — or at least its founder-turned-con man, Samuel Israel III. To the world, Mr. Israel was a trading whiz. Then, one August afternoon in 2005, the police responded to a 911 call from Bayou’s offices in Stamford, Conn., and found a note explaining how he had perpetrated a giant fraud.

Mr. Israel, it turned out, wasn’t managing a hedge fund at all. He was running a Ponzi scheme — a small-time version of the Madoff racket that, at that very moment, was still going strong. Mr. Israel, who said he’d become addicted to painkillers, was later sentenced to 20 years in prison — then two more for jumping bail, faking his suicide and going on the lam. His abandoned vehicle was found on the Bear Mountain Bridge over the Hudson River, the words “suicide is painless” written in the dust on the hood.

Now, as Mr. Israel sits in jail, this tale has taken yet another twist. It came late last month from, of all places, Goldman Sachs...

MORE WRITHING BY THE VAMPIRE SQUID

[Demeter]

20. The Big Bet That Nothing Will Happen in the Weeks Ahead

I WOULDN'T TAKE THAT BET...

http://www.financialarmageddon.com/2012/08/the-big-bet-that-nothing-will-happen.html

Many commentators have noted that the so-called "fear gauge," or CBOE Volatility Index (VIX), a measure of market expectations about near-term volatility, has been trading at multi-year lows, suggesting that traders are complacent about the risks ahead.

In fact, a low VIX has often been the precursor to market corrections and sell-offs over the past several decades.

But a more granular reading of the term structure of implied volatility, which shows how expectations vary at different points in time, offers, perhaps, a more interesting perspective.

As the following chart shows, expectations about implied volatility -- essentially, the relative price of options -- on two widely-followed (and heavily-traded) ETFs have over the past month fallen much more on a relative basis for short-term options than for their longer-term brethren, suggesting that investors have been making an aggressive bet that nothing untoward will happen in the immediate period ahead...

MORE

[Roland99]

50. nothing until Sept 12-13, that is

To ease, or not to ease, that is the question.
Whether tis better in the wallet to suffer
The buy orders of HFT algos
Or to short against a sea of overpriced stocks
And by shorting end the madness. To then sell. To profit.

[Demeter]

58. Do Go On! We have a Poet in Our Gang!

Shakespeare would be flattered....

[Demeter]

21. FED RESERVE: Self-Fulfilling Prophecies

http://economistsview.typepad.com/timduy/2012/08/self-fulfilling-prophecies.html

... The willingness to accept the current state of affairs suggests that fear of the 1970's remains alive and well on Constitution Ave. The risks of inflation simply outweigh the expected benefits of additional easing, at least from the point of view of Federal Reserve Chairman Ben Bernanke. Earlier this spring, Brad DeLong made an insightful observation about the real parallels with the 1970s:

In my view, there is an odd symmetry between the Federal Reserve of today and the Federal Reserve of the 1970s. The Federal Reserve of today does not take effective steps to reduce unemployment because it thinks any risk of sustained inflation above 2%/year is unacceptable. The Federal Reserve of the 1970s did not take effective steps to control inflation because it thought sustained unemployment above 7% was unacceptable. Since then, the Federal Reserve of the 1970s--Arthur Burns and G. William Miller--have been censured, condemned, scorned, and damned for their failure to understand the situation they were in and their proper objective function.

The Fed is really making the same mistake as they did in the 1970s. Not so says David Altig, who does not see so much of a conflict between the Fed's objective and the actual outcomes:

That complaint is not really about the inflation part of the mandate, but the employment/growth part of it. But if you are willing to accept that employment growth remains on a pace of 150,000 jobs per month—and I see no clear evidence to the contrary—it is not at all obvious that the pace of the recovery is inconsistent with the FOMC's view of achieving its dual mandate...

...And I am certainly begging the important issues. Would the economy have achieved even the somewhat unspectacular pace of 2 percent GDP growth, 150,000 jobs per month, and average inflation near the long-run objective absent large-scale asset purchases ("QE2&quot , forward guidance (statements indicating that policy rates are expected to be exceptionally low through at least late 2014), and maturity extension programs ("Operation Twist&quot ? Does "appropriate policy" imply that more must be done to achieve even the modest progress in the unemployment rate implied in my calculations above?

Mark Thoma replies:

I

t sounds as though the Fed has given up -- we've done all that we can, there's nothing more we can do, so we won't even try -- and we're not about to risk even the tiniest bit of inflation to find out if we are wrong...

Mark's idea that the Fed has "given up" is not sufficiently appreciated. Altig's calculations make the important assumption that the labor force participation rate holds at 63.7%. This effectively assumes that none of the decline in the labor force participation is cyclical. Instead, it is all structural:

http://economistsview.typepad.com/.a/6a00d83451b33869e201676959c4d1970b-500wi

Should the Fed take the labor force participation rate as exogenous or endogenous? If they take it as exogenous, then policymakers have effectively "given up" on the recovery. Any cyclical decline in the labor force participation rate becomes structural over time as skill loss increasingly excludes those displaced by the recession from reentering the labor force. This is similar to the debate over the current level of potential GDP. Once policymakers started to believe (on the basis of an HP filter, of all things) that the economy is operating at potential, rather than well-below potential, then they would start behaving as if the economy was in fact at potential, setting policy and managing the economy along the suboptimal level. This sends signals to economic agents about the expected growth in output (or nominal GDP), who adjust their behavior accordingly. The cyclical declines becomes structural. In other words, a shift in potential GDP becomes a self-fulfilling prophecy...

[xchrom]

23. the crab cakes last night were delish! here's a pic of them.

the china is original 30s deco china and so is the silver flatware.
my friend tony just has the most gorgeous table ware.
and the best part is all i have to do -- is walk across the street to do the cooking -- drink good wine{i bought some good bordeaux}.

i must say lump crab is still expensive -- but when i think about the work to produce it -- it's amazing we have it at all.

[Roland99]

42. mmmm...and with asparagus, too

I prefer salmon with asparagus but that looks mighty tasty1

[xchrom]

43. also green bean sauteed with shallot, garlic and red pepper flakes. nt

[DemReadingDU]

54. yum, asparagus!

Those crab cakes look really good too!

Any leftovers? I will be right over!

[xchrom]

24. The Divergence Of The US And Chinese Stock Markets Is Just Stunning

http://www.businessinsider.com/the-chart-that-keeps-us-up-at-night-2012-8

The only major global equity index which we monitor — and it is a big one – that is down for the year is the Shanghai Composite. The chart looks ugly and ready to break to new lows after its post crash peak of 3,477, way back in August 2009.
The Shanghai is down 39.2 percent from its post crash high while the S&P500 is up 42.3 percent over the same period. After falling 72.8 percent in a little over a year from its October 2007 peak, the Shanghai is now up a lowly 27 percent from it crash low. This compares to the S&P500, which fell 57.7 percent from the October 2007 high to the March 2009 low, and has now recovered 112.7% and continues to move higher.
A stunning divergence of the world’s two largest economies’ stock markets.
What makes us a little nervous is the Chinese stock market was the first to really collapse after peaking in the fall of 2007 and the first to bottom just a year later. We can relax a little as such a large and sustained divergence since August 2009 largely dismisses the notion that the Shanghai leads U.S. and global equity markets, however. The chart below illustrates even the Hang Seng, one of our favorite indicator species for global risk appetite, has decoupled from the Shanghai.


Read more: http://macromon.wordpress.com/2012/08/19/the-chart-that-keeps-us-up-at-night/#ixzz245UwkeQx

[xchrom]

25. Greek Fund Manager Explains Why Greece Will Soon Be The Source Of Some 'Dramatic Headlines'

http://www.businessinsider.com/greek-fund-manager-in-greece-2012-8

***SNIP

Preferring to remain anonymous, here's his take:

Regarding the situation in Greece, the feeling among the business community is that when the summer holidays end things will get worse. The Greek public cannot endure much more austerity and the German public cannot endure any more bailouts.
There is a fear that the Germans, now, want Greece out of the Euro. While it is possible for the coalition Government to agree on a set of measures, those measures may not be accepted by Europe. If the German mood truly sours on Greece then there is little any government can do. That would lead to an exit from the Euro, the stress of which would likely lead the country to new elections quickly.

Such elections would see a radical left Syriza victory and a very good showing from the neo-Nazi Golden Dawn party. If the Germans decide to continue aid to Greece and a more tenable solution is worked out (including possible ECB and Euro debt haircuts/restructurings and bailout extensions), it would be considered a victory for the coalition government and we would see elections again in 2-3 years. In which case Syriza would probably win but not as a radical left party but as a re-incarnation of the dying Pasok party. While elections are no guarantee in the next few months I think Greece will be the source of some dramatic headlines in the near future.


Read more: http://www.businessinsider.com/greek-fund-manager-in-greece-2012-8#ixzz245VOS3gC

[Roland99]

37. REUTERS NO SUBSTANTIAL SOFTENING OF AGREEMENT WITH GREECE IS POSSIBLE

GERMAN FOREIGN MINISTER WESTERWELLE SAYS GOVERNMENT IS CONVINCED NO SUBSTANTIAL SOFTENING OF AGREEMENT WITH GREECE IS POSSIBLE

[Roland99]

38. More >>>

GREEK FOREIGN MINISTER SAYS GREECE WILL PRESENT AN 11.7 BLN EURO REFORM PACKAGE IN SEVERAL WEEKS TO FULFILL REFORM REQUIREMENTS

[xchrom]

26. The ECB Just Blasted Out A Rejection Of That Der Spiegel Report On Capping Eurozone Borrowing Costs

http://www.businessinsider.com/ecb-responds-to-der-spiegel-report-2012-8

The buzz all weekend was the Der Spiegel report about the ECB planning to implement a scheme whereby peripheral borrowing costs would be capped in some manner.
The report suggested that such a scheme could be unveiled at the ECB's September 6 meeting.
But...
The ECB just rejected that Der Spiegel report about a plan to cap sovereign bond yields.
Via Zerohedge are these headlines from Bloomberg:
ECB SAYS BOND YIELD TARGETS HAVE NOT BEEN DISCUSSED BY THE COUNCIL.
ABSOLUTELY MISLEADING TO REPORT ON DECISIONS NOT YET TAKEN
WILL ADHERE STRICTLY TO ITS MANDATE


Read more: http://www.businessinsider.com/ecb-responds-to-der-spiegel-report-2012-8#ixzz245Y8k7nD

[xchrom]

27. The Shanghai Composite Has Hit A New Post-Crisis Low

http://www.businessinsider.com/the-shanghai-composite-has-hit-a-new-post-crisis-low-2012-8

The Shanghai Composite hit a new post-crisis low last night, touching 2089.02. It ended up closing at 2102.23, having fallen by 0.38% on the session.
The index is now down 4% this year, and 14% over the last year.
Here's a 5-yeart chart of the index via Yahoo Finance.

[xchrom]

28. OIL STAYS ABOVE $96 ON CONSUMER CONFIDENCE

http://hosted.ap.org/dynamic/stories/A/AS_OIL_PRICES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-08-20-05-00-29

BANGKOK (AP) -- Oil prices rose for a fifth straight day of gains Monday, on the back of rising consumer confidence in the U.S. economy.

Benchmark oil for September delivery rose 5 cents to $96.06 per barrel in late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 41 cents to end at $96.01 per barrel on the Nymex on Friday.

Brent crude rose 67 cents to $114.38 on the ICE Futures exchange in London.

The Thomson Reuters/University of Michigan preliminary August index of consumer sentiment released Friday showed its highest level since May. Most economists had been expecting a decline.

[xchrom]

29. GERMAN TAX INCOME UP NEARLY 9 PERCENT IN JULY

http://hosted.ap.org/dynamic/stories/E/EU_GERMANY_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-08-20-02-32-37

BERLIN (AP) -- Germany's Finance Ministry says the country's tax income was nearly 9 percent higher in July than a year earlier - helped by recent wage increases and underlining the continuing strength of Europe's biggest economy.

The ministry said in its monthly report released Monday that Germany's total tax take last month was (EURO)43.13 billion ($53.2 billion) - an increase of 8.6 percent compared with July 2011. Over this year's first seven months, tax income was up 5 percent at (EURO)311.36 billion.

Many German workers have enjoyed solid pay increases after two years of strong economic growth. Unemployment is low.

Germany's momentum has slowed this year, but the country is still doing far better than many others in the debt-troubled eurozone. Its economy grew 0.3 percent in the second quarter.

[Warpy]

55. Big lesson: employ your people and pay them a living wage.

The austerity they're forcing on other countries is going to insure that Germany remains in the catbird seat as long as it doesn't succumb to its own austerity hawks.

[Demeter]

59. Or we have a reverse WWII

Last edited Mon Aug 20, 2012, 05:33 PM - Edit history (1)

and everybody invades Germany, for once.

[xchrom]

31. Shell spending millions of dollars on security in Nigeria, leaked data shows

http://www.guardian.co.uk/business/2012/aug/19/shell-spending-security-nigeria-leak


If it were a country Shell would have the third highest security budget in Africa. Photograph: Adrian Arbib/Corbis

Shell is paying Nigerian security forces tens of millions of dollars a year to guard their installations and staff in the Niger delta, according to leaked internal financial data seen by the Guardian. The oil giant also maintains a 1,200-strong internal police force in Nigeria, plus a network of plainclothes informants.

According to the data, the world's largest company by revenue spent nearly $1bn on worldwide security between 2007-09: if it were a country Shell would have the third highest security budget in Africa, after South Africa and Nigeria itself.

The documents show that nearly 40% of Shell's total security expenditure over the three year period – $383m (£244m) – was spent on protecting its staff and installations in Nigeria's volatile Niger delta region. In 2009, $65m was spent on Nigerian government forces and $75m on "other" security costs – believed to be a mixture of private security firms and payments to individuals.

Activists expressed concern that the escalating cost of Shell's security operation in the delta was further destabilising the oil rich region and helping to fuel rampant corruption and criminality. "The scale of Shell's global security expenditure is colossal," said Ben Amunwa of London-based oil watchdog Platform. "It is staggering that Shell transferred $65m of company funds and resources into the hands of soldiers and police known for routine human rights abuses."

[Demeter]

60. Fine. Shell has its own Army, Let THEM Invade Iran

[Roland99]

32. US Markets looking for direction

[font color="red"] S&P 500 -0.1%
DOW -0.1%
US 10-Year +0.014 1.83%[/font]
NASDAQ +0.1%

[xchrom]

33. Banks Use $1.77 Trillion To Double Treasury Purchases

http://www.bloomberg.com/news/2012-08-20/banks-use-1-77-trillion-to-double-treasury-purchases.html

The gap between U.S. bank deposits and loans is growing at the fastest pace in two years, providing lenders with more funds to buy bonds and temper the biggest sell-off in Treasuries since 2010.

As deposits increased 3.3 percent to $8.88 trillion in the two months ended July 31, business lending rose 0.7 percent to $7.11 trillion, Federal Reserve data show. The record gap of $1.77 trillion has expanded 15 percent since May, the biggest similar-period gain since July, 2010. Banks have already bought $136.4 billion in Treasury and government agency debt this year, more than double the $62.6 billion in all of 2011, pushing their holdings to an all-time high of $1.84 trillion.

Faced with a slowing U.S. economy, unemployment above 8 percent for more than three years and regulations forcing them to hold more and higher-quality assets, banks are lending at below pre-recession levels. The bond purchases help explain why even after rising this month, Treasury 10-year note rates are about half the 3.5 percent median forecast of 43 economists in a Bloomberg survey a year ago.

“Bank deposits continue to explode and in turn they continue to buy Treasuries as the economy loses momentum, inflation is trending down, Europe continues to hang over our heads and political uncertainty reigns” said Michael Mata, a money manager in Atlanta at ING Investment Management Americas, which oversees about $160 billion. “There is no reason for interest rates to climb in any meaningful way any time soon.”

[xchrom]

34. When Wall Street Watchdogs Hunt Whistle-Blowers

http://www.bloomberg.com/news/2012-08-19/when-wall-street-watchdogs-hunt-whistle-blowers.html


You’ve probably never heard of Peter Sivere, a former compliance officer at JPMorgan Chase & Co. (JPM)

Yet his distressing story shows -- on a personal level -- that for all the tough talk about better enforcement of financial wrongdoing, just how tightly government regulators are aligned with the big Wall Street banks they are supposed to keep an eye on.


In January 1998, Sivere joined JPMorgan as a surveillance analyst in the compliance department of the fixed-income group. In December 1999, Sivere was promoted to vice president and then again to be the “team leader” of electronic-communications compliance. On Sept. 26, 2003, Sivere received his annual review and a rating of 9.63, or “great,” according to the bank’s evaluation scale.

“I consider Peter to be a brilliant surveillance analyst,” one of his colleagues wrote. “Peter is highly motivated and diligent individual with an exceptional work ethic.”

[xchrom]

35. Toyota Faces 20% Drop In Japan Industry Sales As Aid Ends

http://www.bloomberg.com/news/2012-08-19/toyota-faces-20-drop-in-japan-industry-sales-as-aid-ends.html

Toyota Motor Corp. (7203) and Honda Motor Co. (7267) can thank government aid for helping auto industry sales grow faster in Japan than any major market this year. As state subsidies are about to run out, so may the euphoria.

Japan vehicle sales, after surging about 53 percent in the first seven months, will drop as much as 20 percent next quarter as the payouts expire, analysts at BNP Paribas SA and IHS Automotive said. Toyota is counting on a cheaper version of the Prius hybrid to sustain demand, while Nissan Motor Co. (7201) has said it will offer support to dealers.

About 88 percent of the 300 billion yen ($3.8 billion) budgeted for subsidies has been consumed as buyers snapped up cars, underpinning an economic recovery that economists now forecast will fade. The end of state aid of as much as 100,000 yen per vehicle will be compounded by the government’s plan to double the national consumption tax, prompting additional calls from carmakers for stimulus measures.

“The government will have to come up with ways to offset the negative impact of the consumption tax increase,” said Yoshiaki Kawano, an analyst at IHS Automotive in Tokyo. Should the subsidies end by next month, sales in the three months starting Oct. 1 will drop as much as 20 percent, he said.

[xchrom]

36. Crop Outlook Seen Eroding As July Heat Compounded Drought Damage

http://www.bloomberg.com/news/2012-08-20/crop-outlook-seen-eroding-as-july-heat-compounded-drought-damage.html

U.S. corn farmers hurt by the worst drought in a generation probably will harvest smaller crops than the government forecast this month, based an analysis of dry spells in the past 42 years.

In the five drought years since 1970, farmers on average harvested 85.4 percent of the acres planted, U.S. Department of Agriculture data show. That’s below the 90.6 percent that the USDA predicted for this year on Aug. 10, when the agency cut its output forecast by 17 percent following the hottest July since 1936. The annual Professional Farmers of America survey of more than 2,000 fields in seven Midwest states starts today.

Moderate to exceptional drought conditions covered 51 percent of the nine-state Midwest region as of Aug. 14, compared with less than 1 percent a year earlier, government data show. Corn and soybean crop conditions are the worst since the last drought in 1988, according to the USDA. Corn futures have surged 60 percent since mid-July, boosting the cost of making livestock feed, ethanol and food products.

“In a year like this, the only yield surprises are to the downside,” said Michael Cordonnier, the president Soybean & Corn Advisor Inc. in Hinsdale, Illinois, who sampled crops in eight states from Nebraska to Ohio during the week ended Aug. 3. “The number of acres harvested this year will fall.”

[Roland99]

39. European markets hitting new daily lows. IBEX heading straight down.

[font color="red"] FTSE 100 5,829 -5 -0.09%
DAX 7,040 -0 -0.01%
CAC 40 3,479 -9 -0.27%
FTSE MIB 15,025 -99 -0.66%
IBEX 35 7,457 -104 -1.38%
Stoxx 600 272 -1 -0.30% [/font]

[xchrom]

45. PM plans more cuts ahead of possible bailout{spain}

http://elpais.com/elpais/2012/08/20/inenglish/1345461242_150617.html


After the briefest of vacation periods, the Spanish Cabinet will reconvene on Friday with just one subject on its mind: the economy, which looks to be heading toward needing a full bailout.

Statements made by Prime Minister Mariano Rajoy and his ministers have evolved from denying that there will be a full rescue for Spain, to “let’s see first what the European Central Bank does and then we’ll take a decision.”

Some kind of bailout, whether granted with soft or tough conditions, appears to be inevitable now, and pensions — previously the one area in which the government wasn’t willing to make cuts — are no longer untouchable. Further tax rises may also be in the pipeline as Rajoy’s administration battles to bring the deficit down to 6.3 percent of GDP by the end of the year.

As Economy Minister Luis de Guindos revealed this weekend, the Spanish government believes that “the Eurogroup will define the procedures [for a bailout] in the second week of September.” And before that happens, the government wants to ensure that it is able to meet its deficit targets, given that a rescue would be conditioned by a request for continuous information about public spending and revenue.

[Roland99]

47. Hilsensrath: Don’t Worry About The Federal Reserve’s Hawks, QE Is Still Possible

http://www.ritholtz.com/blog/2012/08/hilsensrath-dont-worry-about-the-federal-reserves-hawks-qe-is-still-possible/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29

The Wall Street Journal – Jon Hilsenrath: Fed Hawks Speak Out Against QE3

The Federal Reserve’s “hawks” are speaking out against additional action by the central bank to spur the economy. The Fed has moved despite this group’s opposition before. Thus, the comments now don’t represent a signal from the central bank that it is backing away from its statement earlier this month that it might act. But the remarks do highlight the complicated decision Fed policy makers face as they consider whether to launch a new bond-buying program, known as quantitative easing, at their meeting next month. Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said in an interview Wednesday with The Wall Street Journal that additional action by the Fed would be of minimal long-term benefit to the economy. Moreover, he said, the Fed could do little on its own to address problems out of its control which are holding back growth, including public uncertainty about government budgets in Europe and the U.S. “I’m very dubious. There are diminishing returns to these actions,” Mr. Plosser said. “The evidence is not strong that somehow more (bond purchases) are going to help the unemployment rate move faster to where we’d like it to be. I don’t see that there’s much benefit.” He cited research by Johns Hopkins economist Jonathan Wright which shows the effects of Fed bond-buying, though initially stimulative, tend to wane within just a few months.

Comment

Jon “Fed Wire” Hilsenrath spoke again yesterday. We believe the highlighted part above is the most important passage of the story. Statements by the hawks like Fisher and Plosser do not represent a change in Federal Reserve policy. So, treat them like the crazy uncles at the family get-together and understand the rest of the family (FOMC) is still on board for more QE.

Hilsenrath publishes two types of stories. One type is the general news story about the economy or an explanation of FOMC policy. The other type typically carries a message directly from the Federal Reserve. The highlighted passage above suggests this is the latter. We do not believe Hilsenrath has gone rogue and writing this without Bernanke’s knowledge. We believe he was prompted to write this story after a conversation with someone at the Federal Reserve.

[Roland99]

51. Housing

[Roland99]

52. U.S. Home Prices 19% Below Fair Value

http://thebasispoint.com/2012/08/20/u-s-home-prices-19-below-fair-value-2/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+thebasispoint+%28The+Basis+Point%29

There are two things people must consider when buying a home: whether they can afford it and whether the market they’re buying in is trading at fair value.

The first consideration is a debt-to-income ratio. This is principal, interest, taxes, insurance, plus all other non-housing debt obligations as a percentage of income. Lenders will give you a mortgage even if your debts to you go to up to 45% of your income, though your lifestyle impact will be more similar to renting if you’re 37% or less. This is broadly speaking of course, and each person’s objectives and budget priorities are different.

The second consideration is fair value of the home you’re buying. This is normally defined as a price-to-rent ratio, which helps you understand total costs of owning vs. renting a home. Below is an excerpt from this week’s Economist showing that your chances of obtaining fair value in the U.S. is pretty high right now. Obviously all markets are local and pricing varies wildly, but even in a high priced market like San Francisco (where I am), rents are rising so quickly that home affordability math works for a lot more home buyers than it used to.

Earthbound prices are returning many markets to “fair value”, defined as the long-run average ratio of house prices to disposable income and to rents. Housing is now around or below its fair value in eight countries. But reaching this mark does not mean prices will stop falling. After dropping by a third from their 2006 peak, prices in America now stand at 19% below fair value. The bottom of the market is close, however. The month-on-month Case-Shiller index of 20 cities increased for the fourth consecutive time in May, by 0.9%. Housing sales are picking up, although they remain below their long-run average, and the number of mortgages in foreclosure has fallen to its lowest level for three years. Financing is cheap, too: real 30-year fixed mortgage rates are at 30-year lows.

[Roland99]

53. Cautious Moves on Foreclosures Haunting Obama

(NY Times)
http://www.cnbc.com//id/48724024

WASHINGTON — After inheriting the worst economic downturn since the Great Depression, President Obama poured vast amounts of money into efforts to stabilize the financial system, rescue the auto industry and revive the economy.

But he tried to finesse the cleanup of the housing crash, rejecting unpopular proposals for a broad bailout of homeowners facing foreclosure in favor of a limited aid program — and a bet that a recovering economy would take care of the rest.

During his first two years in office, Mr. Obama and his advisers repeatedly affirmed this carefully calibrated strategy, leaving unspent hundreds of billions of dollars that Congress had allocated to buy mortgage loans, even as millions of people lost their homes and the economic recovery stalled somewhere between crisis and prosperity.

The nation’s painfully slow pace of growth is now the primary threat to Mr. Obama’s bid for a second term, and some economists and political allies say the cautious response to the housing crisis was the administration’s most significant mistake. The bailouts of banks and automakers are now widely regarded as crucial steps in arresting the recession, while the depressed housing market remains a millstone.

.... (much more at link)

[Demeter]

61. I've heard he stinks at poker, too

[Demeter]

63. Wells Fargo Is A Little Sorry That It Sold Securities It Knew Nothing About By Matt Levine

http://dealbreaker.com/2012/08/wells-fargo-is-a-little-sorry-that-it-sold-securities-it-knew-nothing-about/

Don’t do this:

One particular municipal entity had been a customer of Wells Fargo, or a predecessor, since at least 1988. This customer’s investment objectives were safety of principal and income. … Wells Fargo’s internal records for the customer’s account specifically stated that the account should not invest in MBS. In addition, applicable state law prohibited municipal entities such as this customer from investing in certain “high-risk mortgage-backed securities.”

Respondent McMurtry nevertheless selected and purchased for this municipal customer a SIV-issued asset-backed commercial paper program which was backed by MBS and related high-risk mortgage-backed derivatives. … On April 30, 2007, McMurtry selected and purchased Golden Key on behalf of the customer. McMurtry did not know what a SIV was at that time he selected Golden Key for his customer. Further, he did not read the PPM for Golden Key, nor did he inform the customer of the risks related to the SIV structure or the underlying high-risk mortgage-backed assets held by Golden Key.

Well, I mean, in his defense it seems that McMurtry had a very good excuse for not informing the customer of the risks of Golden Key, specifically that that he didn’t know what those risks were, or what Golden Key was, or presumably where he was or how he got there or how many fingers the customer was holding up. The world is safe from Shawn McMurtry for the next six months, since he and his employer entered into a settlement with the SEC today suspending him and fining Wells $6.5 million for its unconcern with the fact that its salesmen were not particularly interested in doing their jobs and/or illiterate:

Among other things, Wells Fargo and its registered representatives did not review the commercial paper private placement memoranda (“PPMs”) for the investments and the extensive risk disclosures in those documents. Instead, Wells Fargo and its registered representatives relied almost exclusively on the credit ratings of these products, despite warnings against such over-reliance on ratings. Wells Fargo also failed to establish any procedures to ensure that its personnel adequately reviewed and understood the nature and risks of these commercial paper programs.

The SEC’s complaint is funny and it’s pretty clear that the Wells Fargo brokers selling this stuff were goons. Actually you don’t need to read about what they did to know they were goons; this tells you a lot:

Approximately ten Wells Fargo customers were holding a total of approximately $104.4 million in commercial paper issued by Mainsail, Golden Key and Rhinebridge when the defaults occurred. … Wells Fargo’s total commission in 2007 for the sale of Mainsail, Golden Key and Rhinebridge was approximately $65,000.*

So they got paid 6.2 basis points for placing $104mm of paper. There are lots of very very smart people on Wall Street who work for 6 basis points, but I submit to you that few of those people actually read private placement memos. (Many of those people are actually robots.) You get what you pay for, and salesmanship-wise six basis points will just pay for a hearty handshake and a “how’re the kids?” Reading the private placement memo is way, way extra. Will that change now? Sure, sort of. Wells has fixed its sales practices to better handle asset-backed commercial paper, so that now when Wells Fargo sells you asset-backed commercial paper there will be at least a reasonable likelihood that someone at Wells Fargo, possibly the guy selling it to you, has looked at the disclosure for that paper, or at the very least has told you where you can look at the disclosure for that paper.**

It is less clear that these modest improvements apply to non-asset-backed commercial paper, which is of interest in part because of this:



But also because of two good things recently written about securitizations and related stuff – this St. Louis Fed piece that provides a nice overview shadow banking, and this paper by William Bratton and Adam Levitin that is a little hard to summarize but it’s basically (1) a history of some securitization-related-scandals and (2) an argument that securitizations are the apotheosis of the “nexus of contracts” theory of the firm and that law trails behind accounting in finding useful ways to put that in its pipe and smoke it. Here is a favorite quote from the St. Louis Fed:

Finally, and contrary to popular belief, this form of banking increases transparency and disclosure because banks now sell assets that would otherwise be hosted on their opaque balance sheets.

And from Bratton & Levitin:

And, despite the transactional complexity, the product brought forth (in a synthetic CDO or other structured product) is relatively simple when compared to debt securities issued by conventional operating companies. Even though the conventional operating company’s debt can be issued pursuant to a much simpler contract, market’s overall analysis will have to grapple with the factual complexity of the company and its business; there will be inevitable opaque patches in its profile. Accordingly, the bank that markets the conventional debt product will have to invest in disclosure so as ameliorate information asymmetries. Potential purchasers will have to invest in research and then go on to evaluate the notes against the yardstick of their existing portfolios; the notes may or may not fit.

A synthetic (read really "structured product&quot , in contrast, is completely transparent — the assets are there on a list for all to see, each rated by a credit rating agency. The autopilot contractual instructions for the SPE eliminate most operational risk.

These are things that I have often thought, particularly in reference to the abysmal performance of rating agencies in rating structured products: structured credit products are not that hard! They’re hard, sure, in some absolute sense, but they’re not harder than banks. Banks are like structured credit products, only instead of owning a bunch of securities that you can see on a list and think about and decide whether you like them, they own a bunch of securities whose identity is kept secret and whose composition can change every day through the actions of, y’know, Shawn McMurtry...

[Demeter]

64. Conservative lobbyist links food stamps to feeding animals

http://www.tennessean.com/article/20120817/NEWS01/308170087/Conservative-lobbyist-links-food-stamps-feeding-animals?odyssey=tab|topnews|text|FRONTPAGE&nclick_check=1



David Fowler, president of the Family Action Council of Tennessee, worries that too many people are on food stamps, and they are becoming dependent on government handouts. His solution, posted on his personal Facebook page, is to follow the advice of the National Park Service: “Do not feed the animals.”

“Their stated reason for the policy is because the animals will grow dependent on handouts and will not learn to take care of themselves,” Fowler wrote in the post. “This ends today’s lesson.”

Similar advice has been used by conservative politicians and pundits to criticize the federal food stamp program, known officially as the Supplemental Nutrition Assistance Program. Both the U.S. Senate and House of Representatives have proposed reducing funding for the program, which serves about 46 million Americans.

Fowler’s remarks angered Jennifer Bailey, an outreach specialist at Community Food Advocates in Nashville, a nonprofit that helps people get food stamps and works on local problems with hunger. She said the “don’t feed the animals” comparison dehumanizes food stamp recipients. “It removes the human face of hunger,” she said. “No human being is without dignity. That is something that should be remembered.” Bailey said that about 1 in 7 Tennesseans receives food stamps, and the face of hunger in the state has changed in recent years. “It’s the people sitting next to you in the church,” she said. “Or your grandmother.”

Warning offered

Fowler, an influential conservative lobbyist and outspoken Christian, is best known for his vocal opposition to abortion and gay marriage. He disputed claims that his comments compared people to animals. Instead, he said, the point was about the dangers of dependency. He said that he believes all people should be treated with dignity and that all people are made in God’s image.

“The obvious point of the post is that government can foster and create dependence on government,” he said. “Government creating human dependence on government demeans human dignity and is antithetical to human freedom government is intended to protect.”

He said he would be more careful about future Facebook posts.

SOUTHERN GENTILITY THERE'S NOTHING LIKE IT--AND THIS ISN'T IT.
SOUTHERN CHRISTIANITY--DITTO

[Fuddnik]

66. I wish somebody would quit feeding my ass!

Namely me.

I decided to try a low carb diet for a couple of weeks, just to see what happens. But, as usual, every time I mention trying to lose some weight, my wife fills every candy dish in the house. I think it's humanly impossible to walk past a bowl of M&Ms without grabbing a few.

I guess I'll have to survive on seafood and steak for two weeks.