STOCK MARKET WATCH -- Wednesday, 23 January 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 23 January 2013[font color=black][/font]

SMW for 22 January 2013

AT THE CLOSING BELL ON 22 January 2013
[center][font color=green]
Dow Jones 13,712.21 +62.51 (0.46%)
S&P 500 1,492.56 +6.58 (0.44%)
Nasdaq 3,143.18 +8.47 (0.27%)


[font color=green]10 Year 1.84% -0.03 (-1.60%)
30 Year 3.02% -0.03 (-0.98%) [font color=black]


[center][/font]

[HR width=85%]

[font size=2]Market Conditions During Trading Hours[/font]
[center]


[/center]

[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

[/center]

[center]

[/center]

[HR width=95%]

[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
[center]
Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
[/center]

[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
[center]
The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
[/center]

[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
[center]
Matt Taibi: Secret and Lies of the Bailout


[/center]

[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
[center]
LegitGov
Open Government
Earmark Database
USA spending.gov
[/center]

[font color=black][font size=2]Handy Links - Videos:[/font][/font]
[center]
Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
[/center]

[div]
[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."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.



[HR width=95%]


[center]
[HR width=95%]
[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]

[Fuddnik]

1. Or as Jon Stewart put it.......

Romney became the first devout Mormon to utter the phrase, "Oh for f**ks sake"!

[Tansy_Gold]

2. Too mild

Last edited Tue Jan 22, 2013, 10:41 PM - Edit history (1)

More like [font size=30]FUUUUUUUUUUUCK![/font size=30]

[Demeter]

3. Aaron Swartz, Financial Fraud, and the Justice Department By Dean Baker

Many people have been asking about the Justice Department's priorities in the wake of the suicide of computer whiz and political activist Aaron Swartz. As has been widely reported, the Justice Department was pressing charges that carried several decades of prison time against Swartz. He was caught hacking M.I.T.'s computer system in an apparent effort to make large amounts of academic research freely available to the public. The Justice Department's determination to commit substantial time and resources to prosecuting Swartz presents a striking contrast to its see no evil attitude when it comes to financial fraud by the Wall Street banks. People should recognize that this is not just a rhetorical point. It is clear that the Justice Department opted to not pursue the sort of investigations that could have landed many high level people at places like Goldman Sachs and Citigroup behind bars.

First, it is important to acknowledge that stupidity, not fraud, was probably the largest factor driving the housing bubble. In the years when the bubble was peaking, 2002-2006, I met many people with no obvious stake in lying who would tell me stories of how housing was always a great investment. The same was true when the stock market was selling at twice its historic valuations in the late 1990s. Unfortunately, many of the people who control large amounts of money at banks, pension funds, mutual funds and elsewhere can be pretty clueless when it comes to understanding the economy. This mismatch of jobs and skills imposes large costs on the economy, but does not involve criminality.

However there clearly was a substantial component of criminality in the housing bubble, which the Justice Department has chosen not to pursue. Specifically, we know that large numbers of fraudulent mortgages were issued. The FBI publicly warned about an "epidemic of mortgage fraud" as early as 2004. This was not an issue of people lying to qualify for mortgages; it was overwhelmingly a case of issuers putting down false information to give people mortgages for which they were not qualified. This could mean, for example, that a couple applying for a $400,000 mortgage accurately reports their income at $60,000. Since this income would be grossly inadequate, the bank issuing the mortgage changes the income number to $120,000. I received numerous e-mails during these years from people telling me about friends or relatives working at major subprime lenders who were being told to change numbers so that people would be able to get mortgages for which they were not qualified. Unless there was a conspiracy to fool Dean Baker, this sort of practice must have been commonplace.

The way the Justice Department would prosecute this fraud would be to find some of the worst branches and put together a case against the worst loan officers. They would then offer them the option of substantial prison time or explaining why their supervisors were unconcerned about them writing in phony numbers on loan forms. When they have two or three loan officers to make a case against a supervisor, they then offer the supervisor the option or jail time or explaining how he/she decided that it was clever to have their branch office engage in mortgage fraud. It is impossible to say whether this sort of investigation would have nailed an Angelo Mozilo (the CEO at Countrywide), but there is no evidence the Justice Department even started down this path. In the case of the investment banks, the questions would be directed at the people who packaged together tens of thousands of fraudulent mortgages in mortgage backed securities. Again, being fooled by someone who passed along a bad mortgage is not a crime, but making a decision to ignore all sorts of warning signals so that Goldman Sachs or Citigroup can securitize the mortgage is a crime....The Justice Department apparently wanted to send a message with its decision to prosecute Swartz while ignoring the financial fraud that fueled the housing bubble. It certainly did.

[snot]

4. Anyone who suggests Goldman didn't know exactly what they were doing

when they bought derivatives betting that the securitized mortgages would crater is either a liar or an utter fool.

The mere fact of those bets should have triggered mass firings if not prosecutions; instead, it was mass bonuses.

They won, not because they did anything clever, let alone productive. They won because they cheated.

Sorry; preaching to the choir.

[Demeter]

5. The real problem is the failure of government

and that's not so easy to explain. Or fix.

[westerebus]

17. Amen.

[Demeter]

6. The Agenda for Obama's Second Term: Full Employment and Fighting Poverty

I REMAIN A SKEPTIC, AND WILL NEED TO BE CONVINCED OF THAT.

PLUS, I WOULD LIKE TO SEE THE RULE OF LAW RETURN: CLOSE GUANTANAMO, DISMANTLE DHS AND TSA, CANCEL FISA, REINSTATE HABEAS CORPUS, ETC.

AND BUST THE BANKSTERS.

http://truth-out.org/opinion/item/14063-the-agenda-for-obamas-second-term-full-employment-and-fighting-poverty

President Obama has been emphatic that his top priority for his second term is to defend the economic interests of the U.S. middle class. This is what he said in his inaugural address earlier today:

We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class. We know that America thrives when every person can find independence and pride in their work; when the wages of honest labor liberate families from the brink of hardship. We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else, because she is an American, she is free, and she is equal, not just in the eyes of God but also in our own.

It is hard to argue with these sentiments, as far as they go. But it would help a lot if Obama got a lot more specific very soon. Here are two specifics: get serious about fighting for 1) full employment and 2) a dramatic reduction in poverty. Both of these are eminently achievable over the next four years. They will also be wildly popular with the overwhelming majority of people, regardless of race, color, creed, sexual orientation or political affiliation.

Starting with unemployment, Obama’s goal should be to cut the official rate in half by the end of 2016, from today’s level of 7.8 percent to 3.9 percent—the unemployment rate last achieved in 2000. This would be the single most important thing he could do to support middle-class well-being in this country. It would mean that nearly 7 million people who cannot find work today would become newly employed. But we also must not forget that, at present, 6.2 percent of the labor force is either underemployed—working part-time because they can’t get full-time—or too discouraged to have looked for work within the past few weeks. Obama should cut that figure in half as well by the end of 2016, creating new opportunities for an additional 6 million people and their families. The goal should therefore be at least 13 million more decent jobs by the end of 2016. As I have discussed in previous posts as in Back to Full Employment, pushing the unemployment rate down aggressively will also give workers more bargaining power, which in turn will deliver higher wages and better working conditions.

Now on poverty reduction: As of the most recent 2011 figures, 15 percent of all U.S. residents—46 million people—were living below the official poverty line (with the official poverty line being thoroughly inadequate for measuring conditions of economic duress in this country, as the U.S. Census Bureau itself recognizes). Obama should also set as his goal to also cut the official poverty rate to at least the rate achieved in 2000, which was just above 11 percent. Cutting the poverty rate in this country from 15 to 11 percent as of 2016 would mean a significant improvement in the lives of 13 million people...

[Demeter]

7. Three Things Obama Can Do If He Is Serious About Promise to Middle Class

http://truth-out.org/video/item/14073-three-things-obama-can-do-if-he-is-serious-about-promise-to-middle-class

...Jay: So let's narrow the discussion, to begin with, about this promise to fight deficits. There was a promise to, you know, save money on health care. I'm not sure what he means, 'cause I don't know that he's got any new health care initiative coming. He's going to focus on fighting—lowering the deficit, no talk of any kind of stimulus, and no—I didn't hear much in terms of what he's going to do to deal with unemployment. What was your take?

Pollin: I agree with you. He had some nice words about the need to create opportunity for the middle class and poor. But how do you create opportunity for the middle class and poor? The number one way is to create jobs. And by focusing instead on deficit reduction as opposed to any strategy to move toward full employment, to create jobs, this ends up being just rhetoric. And the problem of the deficit is still being treated, even in his own inaugural speech, as the primary economic problem of the day and not a secondary one. The primary problem is the need for job creation. Deficit reduction is a secondary problem.

Jay:Now, you wrote a blog recently about the appointment of Jacob Lew as secretary of the Treasury. And you take that, and you also take the speech, which is sort of still on this narrative that deficit fighting is the critical issue, and you made a critique of this. Why don't you take us through that?

Pollin: Thank you for mentioning my recent blog post. I try to make three simple points that are irrefutable. These aren't, like, huge philosophical issues as to whether 47 percent of the population are freeloaders or not or whether we tax the rich more or not. We can get into that. I have strong opinions. But let's just start with three points that are absolutely irrefutable.The first point is simply we are not in a fiscal crisis. Now, what do I mean by that? If you take the common-sense meaning of the term fiscal crisis, that would suggest that the U.S. government is facing difficulties paying off its creditors next month, two months, six months a year. We're nowhere near close to that.As a matter of fact, the U.S. is now paying, as a share of its overall budget, a historically low amount to creditors relative to, for example, even the 1980s. The 1980s and '90s, under Republican presidents Reagan and Bush, we paid about 16 percent of overall government spending to interest payments on our debt. Today, we're paying 7.7 percent of our total government expenditure on interest payments—less than half. There is no fiscal crisis. That point should frame all debates in Washington about the need for deficit reduction. There is no fiscal crisis.Number two, the interest rates that we're paying, the government is paying on Treasury bonds, how much we borrow, is historically low as well. We're paying less than 1 percent on the money the government borrowed. That's of course the reason why the interest payments are also historically low. Under Ronald Reagan, the hero of the conservative right of this country, when Reagan borrowed, we were borrowing at 15 percent interest. Now we're paying less than 1 percent. Why can't Jacob Lew, the Treasury secretary designate, just hammer on that point over and over again?And then the third point is, of course, the fiscal deficit as a share of GDP is high. It's about 8.5 percent of GDP, which is historically high. But isn't it obvious that the reason we have high fiscal deficits is due to the recession?In 2007, the fiscal deficit was 1.7 percent of GDP, which—. Now, are we going to argue that all of a sudden people started demanding stuff that they didn't want in 2007? No. It's ridiculous. In fact, the deficit is due to the recession and mass unemployment. Solve mass unemployment, you will solve most of the deficit....

[Hotler]

40. One can only dream. Good mornig everyone. n/t

[Demeter]

41. You are on the wrong thread, Hotler

Although, I am probably not going to put much up on today's thread.

Instead, I'm forming the "I Hate January" Club. Want to be a charter member?

[Demeter]

8. Who Paid for This Inauguration?

http://www.thedailybeast.com/articles/2013/01/20/who-paid-for-this-party.html?utm_medium=email&utm_source=newsletter&utm_campaign=cheatsheet_morning&cid=newsletter%3Bemail%3Bcheatsheet_morning&utm_term=Cheat%20Sheet

The big-money, big-name donors from Obama’s first inauguration have disappeared—as has most of his fundraising transparency...Paul Simon and Samuel Jackson are among the 993 individuals and companies to have contributed funds to President Obama’s second-term kickoff on Monday, according to the inaugural committee. Is that Paul Simon the singer? Samuel L. Jackson the movie star? It’s hard to say, because the committee hasn’t released anything about the benefactors beyond a list of names. Four years ago, in contrast, the public got to peek at identifying information (name, employer, zip code) and the amount donated for each inaugural donor, all before the ceremony.

Though he wasn’t under any obligation do so, Obama instituted historic transparency measures for his 2009 inaugural disco. (There is no law regarding inaugural donations, and he isn’t required to release any donor information at all until an FEC filing in the spring.) The funding behind Monday’s swearing-in, however, is surprisingly more opaque.

More than half of the $170 million bill will be footed by federal and local government. The other portion Obama has managed to wrangle from private donors. And in a move that drew some liberal ire, the president has decided that this time around he’ll take corporate cash. But, of course, we’ll have to wait until the filing is released to know how much Microsoft and AT&T, two of the eight companies listed, actually coughed up. (Both companies declined to comment on the amount of their donations.)...By The Daily Beast’s unscientific count, only 13 of the 451 people that pledged $50,000 last inauguration (the maximum allowed) donated anything this year, based on a comparison of lists of donor names and records from the Center for Responsive Politics....

To be fair, the White House is still eschewing help from lobbyists and PACs. But campaign-finance reform advocates are less forgiving. “Obama recognized that it was wrong [to accept corporate donations] in 2008 … nothing has changed since then to make it right,” says Fred Wertheimer, president of advocacy group Democracy 21. “There’s no basis for going backwards here except for a triumph of expediency over the proper approach.”

[Demeter]

9. Even With the Affordable Care Act, Health Insurance Coverage Remains Unaffordable for Many

http://truth-out.org/news/item/14019-even-with-the-affordable-care-act-health-insurance-coverage-remains-unaffordable-for-many

Any hopes that large employers would be penalized for failing to offer affordable insurance coverage to the spouses and dependent children of their employees under the Patient Protection and Affordable Care Act (ACA) were recently dashed by a proposed interpretation of the law from the Obama Administration.

The interpretation, which was released by the Internal Revenue Service (IRS) late last month in the form of a proposed rule, related to the “Employer Shared Responsibility Provision” of the ACA, popularly known as the employer mandate. That provision provides that larger employers (those with more than 50 employees) offer insurance coverage not only to their employees, but to the “dependents” of those employees as well. If these employers fail to offer “affordable” coverage, they may be subject to monetary penalties.

But the IRS’s definition of dependents in the proposed rule excludes the spouses of employees, regardless of whether the spouse is employed.

Timothy Jost, a law professor at Washington and Lee University and an expert on legal interpretations of the ACA, explained that there is thus nothing in the proposed rule that would incentivize large employers who do not currently offer coverage to spouses to do so. And for employers who do currently offer coverage to spouses, he said, there is no disincentive in the proposed rule against dropping that coverage in the future...

ANOTHER FINE MESS

[Demeter]

10. The Trillion Dollar Coin: A Debt Solution for the People By Ellen Brown

http://truth-out.org/opinion/item/14015-the-trillion-dollar-coin-a-debt-solution-for-the-people

Far from being a gimmick, having the US Treasury mint high-denomination coins is a solution that cuts to the root of America’s financial problems. And Benjamin Franklin would have liked it, too...On Friday, January 11, economist and New York Times columnist Paul Krugman urged the White House to mint a platinum coin worth $1 trillion, as a counter to what was then a threat to block federal spending that Congress had already approved. (Republicans made good on that threat yesterday, putting the United States in danger of default.) The White House responded by saying the trillion dollar coin is off the table, because the Federal Reserve declared that it “wouldn’t view the coin as viable.” Even Krugman called the coin idea “silly.” He just thought it was less silly—and less dangerous—than playing with the debt ceiling. But it is not silly. We have forgotten the role that money issued directly by the government has played in our history. The American colonists did not think it was silly when they escaped a grinding debt to British bankers and a chronically short money supply by printing their own paper scrip, an innovative solution that allowed the colonies to thrive.

Many people believe that the U.S. government creates its own money. This is not true. Today, the Federal Reserve creates trillions of dollars on its books and lends them at near-zero interest to private banks, which then lend them back to the government and the people at market rates. We have been brainwashed into thinking that it makes more sense to do this than for the government to simply create the money itself, debt- and interest-free. In fact, the trillion dollar coin represents one of the most important principles of popular prosperity ever conceived: nations should be free to create their own money without incurring debt. Some of our greatest leaders, including Benjamin Franklin, Thomas Jefferson, and Abraham Lincoln, promoted this essential strategy. They realized that the freedom to print money offers a way to break the shackles of debt and free the nation to realize its full potential.

Money creation is an all-important power that has been fought over for centuries, in a largely secret battle between governments and private banks. For the last two and a half centuries, the banks have had the upper hand, making us forget that any other option exists. But we are learning the great secret of money: that how it gets created determines who has the power in society—we the people, or they the bankers. It is no secret who has that power today. Witness the great bailout of 2008 that rewarded banks for making irresponsible and fraudulent gambles in the subprime mortgage scandal. None of the bankers responsible served time in jail. Then there was the robosigning scandal, in which banks skipped important steps in the process of foreclosing on the homes of ordinary Americans, and came away with a slap on the wrist. Now we are seeing the LIBOR scandal unfold, in which traders at the Swiss financial services company UBS were convicted of colluding with other banks to tweak interest rates for their own financial benefit. We can make an educated guess as to how this too will turn out for them (hint: well). While a commoner might get 10 to 20 years for robbing a bank, bank executives get huge bonuses for robbing us.

We may rail against the banks and demand change, but change will not come until we grasp the fundamental secrets that are the foundation of their power: those who create the nation’s money control the nation, and nearly the entire money supply today is created by banks in concert with the Federal Reserve.

MORE

[Demeter]

11. Exposed! How the Billionaires Class Is Destroying Democracy

http://truth-out.org/opinion/item/14011-exposed-how-the-billionaires-class-is-destroying-democracy

...Yes, over the last hundred years, average American people have voted themselves benefits like Social Security, unemployment insurance, Medicare, and Medicaid. But at the same time, they've also supported tax increases to pay for all of these things. Remember, the Social Security tax only applies to the first $113,000 of wages - earned income. People like Paris Hilton and Mitt Romney, when they get all their money from capital gains, dividends, and carried interest, don't pay a penny of Social Security taxes on their millions of income. And the average top CEO in America, with an income of $13.7 million a year, over a million a month, only pays Social Security taxes on his first few days of income every year - every other day is Social Security tax-free. Quite literally, as Leona Helmsley famously said, only the "little people" pay such taxes. The safety net program for working class people is exclusively paid for by working class people.

On the other hand, when the Billionaire Class extracts benefits from the government for themselves, the generally don't pay higher taxes. The billions in taxpayer subsidies for Big Oil, trillions in bailouts and bonuses for Wall Street banksters, and hundreds of billions for war profiteers are always accompanied by demands for more tax cuts at the top. And, truth be told, billionaires aren't even receiving these benefits by voting for them. Instead, they always get them through the simple process of buying politicians. For example, Sheldon Adelson spent $150 million in the last election. That's more than any American spent in any election in American history. And he spent all that money to give himself the "benefits" of derailing an Obama Justice Department investigation into his casino in China and to get his taxes cut even further. Billionaires also corrupt democracy to get their benefits through billionaire-funded think tanks, like the Koch-funded American Legislative Exchange Council that writes legislation to benefit Corporate America, and then has Republicans state lawmakers introduce and pass laws in state after state, across the nation.

But despite this very clear reality of who is demanding largesse from our government, it's still working people and average voters who are targeted by right-wingers and their viral emails as the selfish "takers." That's the reason why the Business Roundtable is saying the best way to fix insurance programs like Social Security and Medicare is to raise the retirement age to 70 and voucherize Medicare...

MORE--IMPORTANT TO REBUT GOP TALKING POINTS

[DemReadingDU]

19. Interactive: Today’s ranking of the world’s richest people

Sort by
all billionaires, by industry, citizenship, gender, ages, sources of wealth

http://www.bloomberg.com/billionaires/2013-01-22/aaa

[xchrom]

12. double Air Kisses to every one on this wonderful Hump Day

[xchrom]

13. EU Speech: Cameron Says Britain to Hold 'In or Out' Referendum in 2017

http://www.spiegel.de/international/europe/british-prime-minister-david-cameron-to-offer-in-out-eu-referendum-a-879175.html

In his strongest warning to Europe yet, British Prime Minister David Cameron said Wednesday that he planned to hold a referendum on whether the United Kingdom should remain in the European Union by the end of 2017.

"I don't just want a better deal for Britain," David Cameron said in his sharply critical and long-awaited speech on London's future relations with Brussels. "I want a better deal for Europe too." He went on to describe major challenges, including high debt, a lack of competitiveness and the people's diminishing trust in European institutions. The union, he argued, must urgently be reformed.

"The biggest danger to the European Union comes not from those who advocate change," Cameron said, "but from those who denounce new thinking as heresy."

Without reform, he warned, "the danger is that Europe will fail and the British people will drift towards the exit". With that statement, Cameron continued on to the most important point of his speech with his announcement that, if he is re-elected, he will offer the British people a referendum by the end of 2017 on whether the country should stay in the EU. He described it as a "very simple in or out choice. To stay in the EU on these new terms; or come out altogether."

[xchrom]

14. The World From Berlin: 'Merkel and Hollande Seem to Get Along After All'

http://www.spiegel.de/international/europe/german-press-review-on-50th-anniversary-of-german-french-elysee-treaty-a-879199.html


At a grand ceremony in Berlin on Tuesday, Germany and France celebrated the 50th anniversary of the Élysée Treaty that sealed the alliance between the two former enemies after two world wars.

The continuing festivities in Berlin are focusing on the historic rapprochement between the two nations, and on their achievements -- the European single market, the European Union itself and the euro would have been unthinkable without the Franco-German alliance, still seen as the engine driving European integration.

German Chancellor Angela Merkel and French President Francois Hollande stressed their common values and hailed the importance of the partnership for Europe. They said they would bridge differences on the shape of Europe's currency union and present joint proposals for deeper economic and fiscal integration before a summit of EU leaders scheduled for June.

German media commentators said the relationship remains crucial for the Continent and noted that Merkel, a conservative, and her leftist Socialist Party counterpart Hollande, appear to be getting along better now after an uneasy start last May, when newly elected Hollande vowed to reverse German-backed austerity policies.

[xchrom]

15. Under-fire PP considers clean-conduct oath for leaders

http://elpais.com/elpais/2013/01/23/inenglish/1358946996_404639.html

As an internal inquiry gets underway into illegal cash payments allegedly made to party leaders, the Popular Party (PP) on Tuesday began looking at ways it can call in witnesses to testify before a panel and sign a clean-conduct oath without infringing their legal rights.

Sources at the PP said that party treasurer Carmen Navarro and legal advisor Alberto Durán will be calling in a host of current and past officials, alleged to have received fat cash bonuses for expenses and representation fees along with their generous salaries over the years. The focus of the investigation will center on the sources of those funds.

On Monday, former PP Deputy José Trías Sagnier acknowledged that members of the party regularly received large amounts of cash along with their normal salaries, but said he couldn't be sure if they came from anonymous donations.

The investigation comes after the PP was rocked by reports that Swiss authorities passed on information to a Spanish court concerning a 22-million-euro secret account belonging to former party treasurer Luis Bárcenas.

[xchrom]

16. Markets Are Falling After Japan Gets Slammed

http://www.businessinsider.com/morning-markets-january-23-2013-1



Markets are generally drifting a bit lower today.
US futures are down a it.
Spain is off 0.27%.
Italy down 0.6%.
Germany flat.
The big loser though?
Japan, which has seen its market weaken ever since the Bank of Japan announcement just over 24 hours ago.


Read more: http://www.businessinsider.com/morning-markets-january-23-2013-1#ixzz2Io3AGIu2

[Demeter]

28. Not here, evidently

The Confidence Fairy is in full flight.

[xchrom]

30. indeed. nt

[xchrom]

18. McDonald's Tops Estimates On Earnings, Revenues, And Same-Store Sales

http://www.businessinsider.com/mcdonalds-q4-2012-earnings-2013-1

The fast-food giant reported earnings of $1.38 per share and $6.95 billion in revenues, both above Wall Street estimates.

The company also reported global comp sales up 1 percent in Q4. Analysts were looking for a 0.3 percent decline.

While the main numbers look pretty good, McDonald's also noted that it sees top and bottom line growth remaining pressured going forward and that it expects January same-store sales growth to be negative.

The stock is unchanged from yesterday's close in pre-market trading.


Read more: http://www.businessinsider.com/mcdonalds-q4-2012-earnings-2013-1#ixzz2Io5QkqMS

[xchrom]

20. Obama Will Not Block Debt Limit Bill

http://www.voanews.com/content/obama-will-not-block-debt-limit-bill/1589078.html

WHITE HOUSE — The Obama administration is welcoming Republican lawmakers’ decision not to withhold an extension of the nation’s borrowing limit. Republicans had threatened to allow the United States to default on its obligations if government spending were not sharply cut.

White House officials say the decision by Republicans in the House of Representatives to defuse the situation was significant. Press secretary Jay Carney Tuesday praised the move.

“The House Republicans made a decision to back away from the kind of brinksmanship that was very concerning to the markets, very concerning to business, very concerning to the American people," said Carney.

Instead of tying the debt ceiling to spending cuts, House leaders plan a vote Wednesday to raise the government’s spending limit through May 18.

[DemReadingDU]

21. Yahoo, Dell Swell Netherlands’ $13 Trillion Tax Haven

1/23/13
Inside Reindert Dooves’ home, a 17th century, three-story converted warehouse along the Zaan canal in suburban Amsterdam, a 21st-century Internet giant is avoiding taxes. The bookkeeper’s home office doubles as the headquarters for a Yahoo! Inc. (YHOO) offshore unit. Through this sun-filled, white walled room, Yahoo has taken advantage of the law to quietly funnel hundreds of millions of dollars in global profits to island subsidiaries, cutting its worldwide tax bill.

The Yahoo arrangement illustrates that the Netherlands, in the heart of a continent better known for social welfare than corporate welfare, has emerged as one of the most important tax havens for multinational companies. Now, as a deficit-strapped Europe raises retirement ages and taxes on the working class, the Netherlands’ role as a $13 trillion relay station on the global tax-avoiding network is prompting a backlash.

Attracted by the Netherlands’ lenient policies and extensive network of tax treaties, companies such as Yahoo, Google Inc. (GOOG), Merck & Co. and Dell Inc. have moved profits through the country. Using techniques with nicknames such as the “Dutch Sandwich,” multinational companies routed 10.2 trillion euros in 2010 through 14,300 Dutch “special financial units,” according to the Dutch Central Bank. Such units often only exist on paper, as is allowed by law.

more...
http://www.bloomberg.com/news/2013-01-23/yahoo-dell-swell-netherlands-13-trillion-tax-haven.html

[xchrom]

22. United States of Crisis Seen Costing Jobs, Wasting Money

http://www.bloomberg.com/news/2013-01-23/united-states-of-crisis-seen-costing-jobs-wasting-money.html

With the stroke of his pen the day after New Year’s, President Barack Obama extended a $5 billion farm subsidy program that he opposes and many farmers say they no longer need.

The day before, the U.S. Senate and House -- where there is broad agreement that the direct farm payments program should be scrapped -- both voted to keep the money flowing as part of a last-minute agreement to avert most of more than $600 billion in automatic tax increases and spending cuts slated to take effect this month.

The story of how an agriculture program widely seen as outdated lived to see another day in a capital obsessed with budget-cutting highlights the unintended consequences of the dysfunction that has taken hold in Washington, D.C. Obama and congressional Republicans have settled into what economists, government officials and lawmakers from both political parties agree is a damaging pattern of governing by crisis, to the detriment of economic growth, the government’s standing at home and abroad, and the nation’s fiscal health.

“Predictability and the rule of law are the key elements to a successful economy and a successful country, but the new normal is a crisis economy,” said former Defense Secretary William S. Cohen, a Republican, in an interview. “It means that other countries that look to the United States to be the great stabilizing force that we’ve been start to have doubts about that. It’s a crisis in the political structure, and it means you’re on the road to economic decline.”

[xchrom]

23. U.S. Home Prices Rose 5.6% in 12 Months Through November

http://www.bloomberg.com/news/2013-01-23/u-s-home-prices-rose-5-6-in-12-months-through-november.html

U.S. home prices climbed 5.6 percent in the 12 months through November as buyers competed for a dwindling inventory of properties, according to the Federal Housing Finance Agency.

Prices rose 0.6 percent from October on a seasonally adjusted basis, the FHFA said today in a report from Washington. The average estimate of 15 economists in a Bloomberg survey was for a 0.7 percent advance.

Home prices have been climbing as growing employment and low borrowing costs fuel demand. Sales of existing homes fell 1 percent in December to a 4.94 million annual rate, restrained by the tight supply of available properties, figures from the National Association of Realtors showed yesterday.

The FHFA data, which is based on single-family houses with mortgages backed by Fannie Mae or Freddie Mac, doesn’t provide a specific price. The median price of an existing single-family home, as measured by the National Association of Realtors, was $180,800 last month, up 12 percent from a year earlier.

[xchrom]

24. U.S. High School Graduation Rate at Highest Since 1970s

http://www.bloomberg.com/news/2013-01-22/u-s-high-school-graduation-rate-at-highest-since-1970s.html

U.S. students graduated from public high schools at the highest rate since the 1970s, with the largest leap for Hispanic students, government data show.

In 2009-2010, 78.2 percent of students earned a diploma after four years, compared with 75.5 percent the year before, according to a U.S. Education Department report released today.

President Barack Obama’s administration, many states and education and business groups have been pushing to improve high- school graduation rates, which stagnated in the 1970s, 1980s and 1990s and fell behind the nation’s economic rivals. While the government said the reasons for the improvement aren’t clear, researchers credited elementary school preparation and better tracking of potential dropouts.

“It’s incredibly important,” Bob Wise, the former governor of West Virginia, said in a phone interview. “This is hard work, and there’s some progress being made.”

[AnneD]

25. Morning Marketeers.....

It is time once again for the mutual masturbatory economic session known as Davos to start.

Again my brother has agree to host the summit for a fraction of the cost of the Switzerland digs. Due to the drought, the fish pond is low so fishing is spotty, but the drought has forced wildlife in so that more than makes up for the fishing.

Shopping is great as the local WalMart is well stocked. If WalMart is too rich for you, there are a host of Dollar stores and second hand shops and SIL will be happy to organize a shopping expedition. The local radio station has a popular swap meet on the air. You can pick up some sweet deals if you are a first caller.

Dining is good too. They have an all you can eat Chinese Food buffet, Braum's, and several local spots. There is a drive thru liquor store, but the local law enforcement keep the roads well policed.

Bro has lots of fresh eggs and honey and a fully stocked pantry and SIL can whip up a spread in no time. My niece plays piano rather well now so we will be able to have a floor show, esp if Bro plays his 12 string guitar.

There is lots of other entertainment. The girls (hens) have a few beaus, and that is always interesting. SIL added rabbits to the farm and menu. It is breeding time for the doe rabbits and that is the only x rated entertainment, but it is over pretty quickly so there is no point in charging. They still have cable but the Internet is rather slow. The stars at night are really good and brother has binoculars and a telescope. He has a gun range of sorts so that is available but use is limited as it scares the girls and they may stop laying.

No nation took up his offer so I will post the Davos TV. Jamie Dimon and Marie Blowjob are on right now but other than that, I recommend you not watch this and operate heavy machinery.


http://www.weforum.org/events/world-economic-forum-annual-meeting-2013


The Theme this year is Resilient Dynamism....


Happy hunting and watch out for the bears.

[xchrom]

26. Google profits back on track as annual revenue hits record

http://www.bbc.co.uk/news/business-21153580


Google has reported a rise in profits with a jump in revenues, as it ploughed more money into advertising and research and development.

Net profit for the final three months of last year was $2.89bn (£1.83bn), up 7% on a year earlier. Revenues were up by more than a third at $14.4bn.

Google shares rose by almost 5% in after-hours trading, following the better-than-expected results.

Separately, computer maker IBM reported a modest rise in profits.

[xchrom]

27. UK unemployment total falls to 2.49 million

http://www.bbc.co.uk/news/business-21158815


The UK unemployment total has fallen to its lowest level for 18 months while the number of people in work has reached another record high.

The jobless total fell by 37,000 between September and November to 2.49 million, the Office for National Statistics (ONS) said.

The ONS said the number of people in work had increased to 29.7 million.

The number claiming Jobseeker's Allowance fell 12,100 to 1.56 million last month, the lowest since June 2011.

[xchrom]

29. 'Tea cartel' formed by biggest producing nations

http://www.bbc.co.uk/news/business-21163357


China is one of the biggest producers and consumers, and will be an observer for now

The world's biggest producers of tea have agreed to join forces, raising the prospect of a cartel controlling the price of the popular drink.

Following talks in Colombo, Sri Lanka, India, Kenya, Indonesia, Malawi and Rwanda announced the formation of the International Tea Producer's Forum.

The nations control more than 50% of global production.

Sri Lanka's Plantations Minister Mahinda Samarasinghe suggested that quotas could be created in the future.

[xchrom]

31. IMF SEES MODEST 2013 IMPROVEMENT FOR WORLD ECONOMY

http://hosted.ap.org/dynamic/stories/U/US_IMF_GLOBAL_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-01-23-10-04-14

WASHINGTON (AP) -- The International Monetary Fund is projecting a modest uptick in global economic growth for 2013. But an IMF report released Wednesday also warns that problems in the eurozone and the United States could derail momentum.

The report was an update of the fund's World Economic Outlook. It was largely consistent with the original report's estimate in October, revising global growth down slightly by a tenth of a percentage point to 3.5 percent. The IMF estimates that the world economy grew 3.2 percent in 2012.

The IMF downgraded its forecast for the eurozone, projecting a slight economic contraction for 2013. It warned that the eurozone "continues to pose a large downside risk to the global outlook."

The report was more optimistic about the U.S. It forecasts 2 percent growth for 2013.

[Demeter]

32. The usual websites I mine for articles

are starting to look like the "Other Side" of DU: Invective, slur, whining, very little fact or analysis and no economic data to speak of.

The Farce is strong in January.

It's discouraging, for sure.

[xchrom]

33. {about face} IMF: Global economic recovery 'weakening'

http://www.bbc.co.uk/news/business-21164752

The International Monetary Fund (IMF) has warned again of a weakening global economic recovery despite government efforts to stimulate growth.

The global economy is likely to grow at a slower rate than previously forecast over the next two years, the organisation said in its latest report.

It said it now expected the eurozone to remain in recession in 2013, having previously predicted growth.

The UK's growth forecasts have also been revised down.

[xchrom]

34. Davos 2013: IMF official says fixing banking still slow

http://www.bbc.co.uk/news/business-21158253

The financial industry still has a long way to go to fix itself, the International Monetary Fund's (IMF's) deputy director general has said.

Financial products remain complex and shadow banking continues to be unregulated, Min Zhu told bankers at the World Economic Forum.

He urged bankers and regulators to cooperate more closely.

But JP Morgan chief executive Jamie Dimon hit back, arguing that better - not more - regulation was needed.

[AnneD]

37. Jamie Dimon also said......

that banks didn't need to be transparent. His analogy was that planes fly and we don't need to see the blue prints on every part to know that it will fly. I almost all over my desk. The conferences were background noise but that quote was worth it. What an arrogant pompous ass.

So I guess if someone tell me a goldfish can ride a bicycle, I don't need to see it, I can just take your word. Yeah right!

I liked the German or the x Bundes Bank guys. They had a real world take on things with an eye toward life for the future generations. There were some Chinese ecomonist that were interesting too.

[Demeter]

35. How Cold Is It? It's so cold

Jamie Dimon was spotted with his hands in his own pockets!

In Ann Arbor at 11 AM we are up to 11.5F, 14 F at the airport. Heatwave!

[kickysnana]

39. -13 F tonight with a wind here. Then a slight warming again and snow. n/t

[Demeter]

36. A new Gold Standard is being born Ambrose Evans-Pritchard

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100022332/a-new-gold-standard-is-being-born/

Ambrose Evans-Pritchard has covered world politics and economics for 30 years, based in Europe, the US, and Latin America. He joined the Telegraph in 1991, serving as Washington correspondent and later Europe correspondent in Brussels. He is now International Business Editor in London.

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




The world is moving step by step towards a de facto Gold Standard, without any meetings of G20 leaders to announce the idea or bless the project...central banks around the world bought more bullion last year in terms of tonnage than at any time in almost half a century. They added a net 536 tonnes in 2012 as they diversified fresh reserves away from the four fiat suspects: dollar, euro, sterling, and yen.

The Washington Accord, where Britain, Spain, Holland, Switzerland, and others sold a chunk of their gold each year, already seems another era – the Gordon Brown era, you might call it. That was the illusionary period when investors thought the euro would take its place as the twin pillar of a new G2 condominium alongside the dollar. That hope has faded. Central bank holdings of euro bonds have fallen back to 26pc, where they were almost a decade ago. Neither the euro nor the dollar can inspire full confidence, although for different reasons. EMU is a dysfunctional construct, covering two incompatible economies, prone to lurching from crisis to crisis, without a unified treasury to back it up. The dollar stands on a pyramid of debt. We all know that this debt will be inflated away over time – for better or worse. The only real disagreement is over the speed.

The central bank buyers are of course the rising powers of Asia and the commodity bloc, now holders of two thirds of the world’s $11 trillion foreign reserves, and all its incremental reserves. It is no secret that China is buying the dips, seeking to raise the gold share of its reserves well above 2pc. Russia has openly targeted a 10pc share. Variants of this are occurring from the Pacific region to the Gulf and Latin America. And now the Bundesbank has chosen to pull part of its gold from New York and Paris. Personally, I doubt that Buba had any secret agenda, or knows something hidden from the rest of us. It responded to massive popular pressure and prodding from lawmakers in the Bundestag to bring home Germany’s gold. Yet that is not the end of the story. The fact that this popular pressure exists – and is well-organised – reflects a breakdown in trust between the major democracies and economic powers. It is a new political fact in the global system.

Pimco’s Mohammed El Erian said this may have a knock-on effect:

“In the first instance, it could translate into pressures on other countries to also repatriate part of their gold holdings. After all, if you can safely store your gold at home — a big if for some countries — no government would wish to be seen as one of the last to outsource all of this activity to foreign central banks.

If developments are limited to this problem, there would be no material impact on the functioning and well-being of the global economy. If, however, perceptions of growing mutual mistrusts translate into larger multilateral tensions, then the world would find itself facing even greater difficulties resolving payments imbalances and resisting beggar-thy-neighbour national policies.

“The most likely outcome right now is for Germany’s decision to have minimum systemic impact. But should this be wrong and the decision fuel greater suspicion – a risk scenario rather than the baseline – the resulting hit to what remains in multilateral policy co-operation would be problematic for virtually everybody.

As I reported on Tuesday, gold veteran Jim Sinclair thinks it is an earthquake, comparing it to Charles de Gaulle’s decision to pull French gold from New York in the late 1960s – the precursor to the breakdown of the Bretton Woods system three years later when Nixon suspended gold conversion. Mr Sinclair predicts that the Bundesbank’s action will prove the death knell of dollar power. I do not really see where this argument leads. (ME EITHER--DEMETER) Currencies were fixed in de Gaulle’s time. They float today. It is within the EMU fixed-exchange system – ie between Germany and Spain – that we see an (old) Gold Standard dynamic at work with all its destructive power, and the risk of sudden ruptures always present. The global system is supple. It bends to pressures. My guess is that any new Gold Standard will be sui generis, and better for it. Let gold will take its place as a third reserve currency, one that cannot be devalued, and one that holds the others to account, but not so dominant that it hitches our collective destinies to the inflationary ups (yes, gold was highly inflationary after the Conquista) and the deflationary downs of global mine supply. That would indeed be a return to a barbarous relic. Hopefully, it will be nothing like the interwar system. That was a dollar peg that transmitted US deflation to the whole world when the Fed tightened too hard in 1928 and went berserk in 1930.

A third reserve currency is just what America needs. As Prof Micheal Pettis from Beijing University has argued, holding the world’s reserve currency is an “exorbitant burden” that the US could do without. The Triffin Dilemma – advanced by the Belgian economist Robert Triffin in the 1960s – suggests that the holder of the paramount currency faces an inherent contradiction. It must run a structural trade deficit over time to keep the system afloat, but this will undermine its own economy. The system self-destructs. A partial Gold Standard – created by the global market, and beholden to nobody – is the best of all worlds. It offers a store of value (though no yield) (NEITHER DOES THE DOLLAR--AT ZIRP--DEMETER). It acts a balancing force. It is not dominant enough to smother the system.

Let us have three world currencies, a tripod with a golden leg. It might even be stable.

[AnneD]

38. That seems to be what the smart money is thinking.....

This is why Germany wanted to have Italy put up their gold for loan help from the Euro-zone. And if you think we wanted to free the Libyan citizens for Qaddafi for democracy's sake, let me just mention at the time I thought the West was more interested in the gold than freedom. As far as I know they may not still have their hands on it.

Maybe I am jaded, or listen to Max Keisar too much.