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Tansy_Gold

(17,817 posts)
Wed Mar 27, 2013, 07:32 PM Mar 2013

STOCK MARKET WATCH -- Thursday, 28 March 2013

[font size=3]STOCK MARKET WATCH, Thursday, 28 March 2013[font color=black][/font]


SMW for 27 March 2013

AT THE CLOSING BELL ON 27 March 2013
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Dow Jones 14,526.16 -33.49 (-0.23%)
S&P 500 1,562.85 -0.92 (-0.06%)
[font color=green]Nasdaq 3,256.52 +4.04 (0.12%)


[font color=red]10 Year 1.94% +0.01 (0.52%)
30 Year 3.17% +0.02 (0.63%) [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 - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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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=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.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.





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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]


40 replies = new reply since forum marked as read
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STOCK MARKET WATCH -- Thursday, 28 March 2013 (Original Post) Tansy_Gold Mar 2013 OP
If only that "toon weren't true. Demeter Mar 2013 #1
Big Banks Face $100 Billion Legal Tab (And That's If They're Lucky) Demeter Mar 2013 #2
European Regulators to Charge Banks Over Derivatives Demeter Mar 2013 #3
Five Reasons to Stop Worrying and Love the Sequester By Robert S. Becker HUMOR, I THINK Demeter Mar 2013 #4
This glibness is a bit premature. The Federal Sabbath was postponed last weekend. Hugin Mar 2013 #9
I hope you are kidding Demeter Mar 2013 #10
YO!........... Hotler Mar 2013 #28
That's the spirit! Fuddnik Mar 2013 #36
Hotler's a Ghost?!! Demeter Mar 2013 #40
TransPacific Partnership Will Undermine Democracy, Empower Transnational Corporations Demeter Mar 2013 #5
Truthout must be down temporarily. Fuddnik Mar 2013 #6
It's there now...1 AM Demeter Mar 2013 #7
What If You Couldn't Take Your Money To Another State? by JACOB GOLDSTEIN Demeter Mar 2013 #8
... xchrom Mar 2013 #11
IMF: Governments need to end energy subsidies xchrom Mar 2013 #12
‘Trickle-down consumption’: How rising inequality can leave everyone worse off xchrom Mar 2013 #13
It's Called "Theft" Demeter Mar 2013 #16
indeed. nt xchrom Mar 2013 #17
Cyprus reopens its banks for first time in more than a week; capital controls apply xchrom Mar 2013 #14
Your 401(k) Is Out to Get You xchrom Mar 2013 #15
Whatever happened to pensions? DemReadingDU Mar 2013 #26
right? of course -- if corporations remembered they actually had to contribute to them....nt xchrom Mar 2013 #27
The courts ruled they were corporate assets in bankruptsy and the pirates followed. n/t kickysnana Mar 2013 #35
U.S. economy posts sluggish growth in fourth quarter xchrom Mar 2013 #18
Europe's south rises up against those who act as sadistic colonial masters xchrom Mar 2013 #19
Cyprus waits for its 'giant leap back into the dark' xchrom Mar 2013 #20
How student loan servicers have a hold on your soul xchrom Mar 2013 #21
The effect may be even worse Tansy_Gold Mar 2013 #39
BRICS take shot at shattering predominance of World Bank, IMF xchrom Mar 2013 #22
Yen fall worrisome, Ford CEO says xchrom Mar 2013 #23
Mao's Disneyland: 'Red Tourism' Is Golden for Chinese Economy xchrom Mar 2013 #24
Jobless Claims in U.S. Increase More Than Forecast xchrom Mar 2013 #25
OECD predicts stronger global growth xchrom Mar 2013 #29
South Korea lowers growth forecast as exports slow xchrom Mar 2013 #30
Haruhiko Kuroda says Japan's debts are not sustainable xchrom Mar 2013 #31
ETA News Release: Unemployment Insurance Weekly Claims Report (03/28/2013) mahatmakanejeeves Mar 2013 #32
Never mind Cyprus – look to Germany for causes of the euro crisis xchrom Mar 2013 #33
What should I do for the Weekend? Which theme? Demeter Mar 2013 #34
I think they're gonna pay tribute to a bunny or something this week-end. Fuddnik Mar 2013 #37
I remember something about that...it was in '93? Demeter Mar 2013 #38
 

Demeter

(85,373 posts)
1. If only that "toon weren't true.
Wed Mar 27, 2013, 08:24 PM
Mar 2013

Good evening, all. I am still alive, if not enjoying it particularly.

The crocus are up, freezing their half-open buds off. Windchill at 33F, temp at 41F. Papers any minute now...

 

Demeter

(85,373 posts)
2. Big Banks Face $100 Billion Legal Tab (And That's If They're Lucky)
Wed Mar 27, 2013, 08:40 PM
Mar 2013
http://www.huffingtonpost.com/2013/03/27/too-big-to-fail-legal-tab_n_2963898.html

You may think that being a too-big-to-fail bank is just one long, consequence-free romp, but it does come at some cost: an enormous and growing legal tab that will probably swell beyond $100 billion, all told. See, when you're an immense sea-creature of a bank, you naturally have your tendrils in a lot of different holes, which means you're ever more likely to get yourself into trouble by doing stuff like accidentally-on-purpose manipulating interest rates or lying to investors about the quality of putrid mortgage junk you sell them. Of course, you're far too big to go to jail, so you don't ever have to worry about that. But that doesn't mean your victims won't come after you with the one thing they have at their disposal: lawyers.

Big banks around the world are probably looking at $100 billion in legal costs for all of the various lawsuits they're defending, covering misdeeds from the financial crisis to the Libor scandal, the Wall Street Journal guesstimates. That may be too conservative. The big six U.S. banks alone have already agreed to cough up $62.6 billion in settlements, according to research firm SNL Financial. Bank of America is the dubious leader of this group, having paid $41.6 billion in settlements all by its lonesome in just the past three years. Wells Fargo is a distant second, at $8.3 billion, and JPMorgan Chase is a close third at $7.8 billion. The rest of the Big Six include Citigroup, Goldman Sachs and Morgan Stanley. The bulk of these lawsuits involved the banks selling crummy mortgages to investors, and there could be another $25 billion in legal costs on that front alone, the WSJ suggests, citing research by Compass Point Research & Trading. That gets you close to the WSJ's $100 billion in a hurry.

This doesn't even begin to cover the potential legal liabilities for manipulation of the short-term interest rate known as Libor. As the WSJ points out, Macquarie Research has estimated the total cost to banks could be $176 billion. The low-end estimate for potential Libor liability is almost nothing, about $8 billion. But when it comes to these sorts of things, it's usually best to err on the side of caution, particularly if you are a bank trying to set enough money aside to cover your bills. And new scandals come to light just about every day in the banking sector, in what must feel like an endless nirvana for plaintiffs' lawyers. For example, if you don't have standing to sue banks over manipulating Libor -- and if you have ever borrowed money or traded derivatives, you may well have a shot -- maybe you'll have better luck with the unfolding gold-price manipulation scandal.

Of course, this does not begin to account for the non-stop hellfire of regulatory probes and settlements afflicting the banks, particularly the biggest ones. JPMorgan Chase, for example, is under investigation for its disastrous London Whale trades, Libor manipulation, electricity-market manipulation, poor money-laundering controls, mortgage foreclosure practices, and more. The New York Times reported a fresh regulatory headache on JPMorgan's list this morning: It's under investigation for maybe not giving authorities a timely heads-up about Ponzi-schemer Bernie Madoff....But don't feel too bad for these banks. Though all of the scandals and legal costs may be a bit of a worry for investors, banks were still the best-performing sector in the market last year -- led by Bank of America, despite its legal woes. JPMorgan has managed to bravely overcome its many legal and regulatory challenges to post record profits. The banking sector in total turned a $141 billion profit in 2012, the second-highest on record, according to FDIC data. The big banks recently got the all-clear from the Fed to give more money back to shareholders, suggesting they've got more than enough to pay their legal bills.

All in all, being too big to fail, or prosecute, still seems like a pretty good deal.
 

Demeter

(85,373 posts)
3. European Regulators to Charge Banks Over Derivatives
Wed Mar 27, 2013, 08:45 PM
Mar 2013
http://gata.org/node/12392

European antitrust authorities are moving soon to bring a case against some of the world's largest banks alleging collusion in the $27 trillion market for credit derivatives, people familiar with the investigation said. The probe by the European Commission involves 16 financial groups. It focuses on whether they sought to stifle competition from exchanges in the market for credit-default swaps, which pay out when a country or a company defaults on its debts. If the European regulators press ahead with their administrative case and win, some or all of the banks could face fines. Also under investigation is Markit Group, a credit derivatives data provider that is partly owned by the dealers, and ICE Clear Europe, a unit of Intercontinental Exchange Inc. Markit and ICE declined to comment. The commission said Tuesday it also had "preliminary indications" a derivatives trade body, the International Swaps and Derivatives Association, might have been part of an alleged effort to limit access to the credit-derivatives market. ISDA said it "is aware that it has been made subject to these proceedings" and is "confident that it has acted properly at all times and has not infringed EU competition rules." Markit and ISDA are likely to be part of the commission's case, a person familiar with the investigation said.

The probe is part of U.S. and European efforts to bring more competition to the opaque markets for CDS. The contracts came under fire during the 2008 financial turmoil and, more recently, the European debt crisis. Critics complained that some investors used them to speculate on the health of a country or company, not just as insurance against defaults. The U.S. Department of Justice has launched a probe into the possibility of anticompetitive activity in credit-derivatives trading and clearing, and in information services industries supporting the activities. That probe is ongoing, a DOJ spokesman said, declining to elaborate. Among those the European Commission probe has focused on are such industry giants as J.P. Morgan Chase, Goldman Sachs Group Inc., and Deutsche Bank, the commission has said. Others potentially involved, it has said, are Bank of America, Citigroup Inc., Barclays, BNP Paribas SA, Commerzbank AG, Credit Suisse Group, HSBC Holdings PLC, Morgan Stanley, Royal Bank of Scotland Group, UBS AG, Wells Fargo & Co., Credit Agricole, and Societe Generale. The banks either declined to comment or didn't immediately reply to requests for comment.

.............................

The probe is part of a push by European officials to wrest control of the market from a relative handful of global derivatives dealers and move swaps trading onto exchanges, where pricing is more transparent. The U.S. Dodd-Frank law and new EU legislation both called for derivatives, with some exceptions, to be traded on exchanges. Officials hope that moving trading onto exchanges would help regulators monitor risks in the market and help prevent a repeat of the 2008 credit debacle. A reshaping of credit-derivatives markets, and a move to open futures exchanges, poses a threat to profits dealers have long made in that market by dominating it. Profits for financial institutions that act as the intermediaries could shrink because of a smaller spread between bid and ask prices. European regulators in April 2011 began looking into whether a number of investment banks had used Markit Group, the leading provider of financial information in the CDS market, to block the development of certain CDS trading platforms. The commission said it was looking at whether dealers were providing raw swaps data only to Markit. The banks at the time either declined to comment or didn't respond to requests for comment. Markit runs auctions to determine the price at which CDS holders can settle when a default occurs, but it does so on behalf of ISDA, which owns the intellectual property on the swaps auctions....European authorities are looking into whether ISDA refused to allow exchanges to license CDS auction data that would be necessary to determine the payout on an exchange-traded CDS contract, according to two people familiar with the probe.

According to a person familiar with the matter, the commission's investigation of CDS trading is at a more advanced stage than another probe it is conducting—into whether banks colluded in the fixing of the Libor and Euribor benchmark lending rates. Under EU rules, the European Commission's antitrust department first sends a so-called "statement of objections" laying out the charges. Companies are given a chance to respond to any charges levied. If the commission decides to sanction a company, it can fine a firm up to 10% of its annual global revenue, though penalties that big are rare. Regulators also take into consideration the market impact a violation has had, as well as its duration. Companies that cooperate with a probe can be dealt with more leniently than others.
 

Demeter

(85,373 posts)
4. Five Reasons to Stop Worrying and Love the Sequester By Robert S. Becker HUMOR, I THINK
Wed Mar 27, 2013, 08:54 PM
Mar 2013
http://www.nationofchange.org/five-reasons-stop-worrying-and-love-sequester-1364397452

Government by Poison Pill: A Bold, New Model?

Only a brave contrarian defends a poison pill concoction conceived in cynicism and promoted with panic that staggers home with all the climax of a shotgun wedding. Once an orphan chick ostracized by all, fiscal sequestration has arrived, though only left-leaning curmudgeons take sufficient note. “Economic terrorism,” pipes up Thom Hartmann, but liberal metaphors are so whimsical...No such excess from know-it-all Ben Stein, declaring the Sequester a “ringing endorsement of the Republican Party,” that rare leg-up by the self-admitted stupid party against a charismatic president. Talking Points Memo offers more nuance: “Democrats Come Up Short In Sequestration Standoff.” “Short” barely cuts it, since whose prestige wasn’t halved after cutting government off at the knees? Ornery Republicans surprised Obama by not negotiating (say what?), winning the kewpie doll and snapping the president's win streak.



Stopgap Lessons To Harvest

So, this one-time dreadnaught sails into port, fires its $85 billion salvo, then vanishes from view like a vapid TV flop. Can we not gain lessons here, after divvying the good from the bad? Two weeks ago, the Great Sequester loomed like an asteroid smash-up, a self-made WMD. Now Congress and Obama are so dazzled they’ve endorsed the package wholesale until September. The stopgap calm before the next storm, and perhaps something worse. Compared to government shutdowns, however, a stopgap with a sell-by date resembles decisive action, extending our rousing adventure with government by poison pill. Thank goodness, we missed weeks of tiresome acrimony. This magical mystery tour just happened, sans high indignation or low shots. Why, here’s a viable alternative to governance, captivating tax tightwads who scour scripture for “Decry taxation as theft.” Remember, the nation that won’t learn from impaling itself on it own petard is doubly cursed – suffering the downside without any upside. As the wise chief ends Little Big Man (when his dance of death fizzles), “sometimes the magic works, sometimes it doesn’t.”

So when the magic works, time to appreciate why, stop worrying and love sequestration:

1) Action Trumps Flummery. First, the undervalued obvious: something like change happened with amazing ease, just one “Abracadabra.” No postponements, no filibustering, no Senate shenanigans, no irascible House votes that gave the majority a middle finger. Not since the Wall Street bailout has anything happened quicker. That’s because America returned to our roots, took charge of destiny and dispatched all divisive debate for pragmatic action. Thus, no bluster, no doom and gloom, no outrage. After all, what never should have been done was done, and the sky didn’t fall, nor the earth tremble. Behold the miracle.

2) Humanity Conquers the Future. Furthermore, sequestration proves, far more convincingly than End of Days chatter, that ordinary mortals can triumph over time, even the future. Lawmakers agreed on a plan, allowed it to age, then released it from its cage. If not quite the audacity of hope, is there no glimmer of optimism against our menacing future? Politicians we elected cobbled something together then, without obvious gain to anyone, demonstrated “a promise made is a promise kept.” We stand aghast our leaders didn’t flip-flop, re-deal, re-jigger history, even gush with lies. The sequester is that rare triumph of ultimatum over acumen, of expedience over judgment, a testament we are again a “can-do” culture. To paraphrase the modern Oscar Wilde, Donald Rumsfeld, we fought the deficit with the messy sequester we had, not one that never existed. Why shouldn’t this success carry over to other sticky impasses, like Iran or North Korea? We just fix hard standards years in advance, set the penalties for failure, then blast the evil-doers resistant to sensible conditions. If sequester shock and awe proves anything, here's a model with limitless (and predictable) applications. Didn’t Teddy Roosevelt suggest we should sequester quietly, then carry a louder stick?

3) Bipartisanship Trumps Brinksmanship. If today’s right has mastered anything, it’s addictive, edge-dwelling brinksmanship. And yet, here’s merry bipartisanship performed with such ease one only hopes a few conservatives learn that politics goes beyond shrill crusades. A guy can hope. Bipartisanship in and of itself is no panacea, but a marvel is still a marvel, even when covering an iron fist. Yes, sometimes a hard deadline, plus NOT voting, beats the flummery passed by huge majorities. The scariest Washington event is when unanimity, in the heat of the moment, anoints the next invitation to disaster (invasions, bailouts). As democracy itself falls hard by the wayside, laced with Constitutional ailments, let us take solace we pulled back from another cliff, putting off the inevitable. Maybe that’s why so many feel suspended in air.

4) Congress Works. Countless pundits, with nauseating regularity, write how Congress is broken, busted, kaput – a bunch of deadbeats swimming upstream while dragging medieval protocols. Congress let something happen that didn’t topple the ship of state, nor shock the stock market or bond vigilantes. “Not much” progress exceeds what all but 15% of us expect from Congress. And imagine, it was Dubya who evoked the “soft bigotry of low expectations.” Any lower expectations and we’d berate this goon show as negligent, cowardly aversion. Consistency is such a hard master.

5) Law of Unintended Consequences. Resist as I may, the law of Unintended Consequences explains best why we’re beset with ungodly fiascoes. Whether war, foreign affairs, or economics, our imagined or planned outcomes not only fail to come true, but deliver sneering calamities that mock all expectations. Dire results are shockingly unpredictable, perversely opposite to declarations or promises. Everyone agreed, “warning! the sky will fall,” yet here we are, paying homage to the Lord of Unintended Circumstances. Not only did wizards conceive the sequester NOT to be enacted (soft bigotry indeed!), no one knows the ripples ahead. Is that not the god of chance offstage, cackling loudly?

MORE WEIRDNESS AT LINK

Hugin

(32,778 posts)
9. This glibness is a bit premature. The Federal Sabbath was postponed last weekend.
Thu Mar 28, 2013, 04:07 AM
Mar 2013

Last edited Thu Mar 28, 2013, 08:32 AM - Edit history (1)

Congress punted the effects of the Sequester two weeks into the future so they could enjoy a full paid two week Easter Vacation without enduring the knowing glare of the hoi-polloi.

 

Demeter

(85,373 posts)
5. TransPacific Partnership Will Undermine Democracy, Empower Transnational Corporations
Wed Mar 27, 2013, 08:56 PM
Mar 2013
http://www.truth-out.org/news/item/15353-transpacific-partnership-will-undermine-democracy-empower-transnational-corporations

Our country's democratic values could be under threat if President Obama fast tracks the Trans-Pacific Partnership.

On critical issues, the massive Trans-Pacific Partnership (TPP) being negotiated in secret by the Obama administration will undermine democracy in the United States and around the world and further empower transnational corporations. It will circumvent protections for health care, wages, labor rights, consumers' rights and the environment, and decrease regulation of big finance and risky investment practices.

The only way this treaty, which will be very unpopular with the American people once they are aware of it, can be approved is if the Obama administration avoids the democratic process by using an authority known as "Fast Track," which limits the constitutional checks and balances of Congress.

If the TPP is approved, the sovereignty of the United States and other member nations will be dissipated by trade tribunals that favor corporate power and force national laws to be subservient to corporate interests...


AND THOSE ARE THE GOOD POINTS...MORE AT LINK
 

Demeter

(85,373 posts)
8. What If You Couldn't Take Your Money To Another State? by JACOB GOLDSTEIN
Thu Mar 28, 2013, 12:58 AM
Mar 2013
http://www.npr.org/blogs/money/2013/03/27/175460747/what-if-you-couldnt-take-your-money-to-another-state?ft=1&f=1001

One day, the legislature in the state where you live passes a new law: Until further notice, you're not allowed to take your money to another state. There are exceptions. You can take a few thousand dollars with you if you go on a trip. You can do some out-of-state shopping on your credit card, but not too much. Beyond that, all your money — your checking account, your savings account, the cash you buried in your backyard — has to stay in your state. You're free to leave the state, as long as you don't take your money with you.

That's what it's like today for people who live in Cyprus.

Cyprus is having a financial crisis right now. One of the country's biggest banks failed and is about to be shut down; all of the banks there have been closed for a week and a half. The Cypriot government is trying to figure out how to reopen the banks without triggering a massive bank run. OPENING ON FRIDAY--AFTER TWO WEEKS BANK HOLIDAY

As part of the solution, the government is imposing what are known as capital controls: rules that limit how much money people can take out of the country. Capital controls have a long and surprisingly interesting history. They were common for a long time; then they went out of fashion; now people like them again, sometimes. (For more on this, see Paul Krugman's recent column on the subject, which had the excellent headline Hot Money Blues.)

But the case of Cyprus isn't just any set of capital controls: It's a set of capital controls within a currency union. Or, I should say: It's a set of capital controls within a currency union! The whole point of a currency union — the reason every U.S. state uses dollars and all the countries in the eurozone use the euro — is that the money is the same in every country where it's used. Capital controls break this fundamental rule. To see why this is so, ask yourself which of the following you would rather have:

  • A bank account in Cyprus with 20,000 euros in it. You are free to spend this money any way you want, as long as you want to spend it in Cyprus.

  • A bank account with 20,000 euros in it in any other country that uses the euro. You are free to spend this money anywhere in the eurozone — or to exchange it for dollars or any other foreign currency and spend it anywhere in the world.

    In other words, a euro in the bank in Cyprus is less valuable than a euro in the bank anywhere else in the eurozone. Tyler Cowen described this as "Cyprus leaving the euro but keeping the word 'euro' to save face." Capital controls are clearly bad news if you have a bunch of money in a bank account in Cyprus. But the controls are also a warning to people in much bigger eurozone countries: A euro in your country may someday be worth less than a euro in the rest of Europe.
  • xchrom

    (108,903 posts)
    12. IMF: Governments need to end energy subsidies
    Thu Mar 28, 2013, 08:46 AM
    Mar 2013
    http://www.washingtonpost.com/business/economy/imf-citing-trillions-in-government-subsidies-calls-for-end-to-mispricing-of-energy/2013/03/27/09957d6e-96e1-11e2-814b-063623d80a60_story.html

    Government subsidies of gasoline, electricity and other energy sources amount to about $1.9 trillion a year and should be ended or offset with taxes used to battle climate change and pay for social programs, the International Monetary Fund said Wednesday in a major foray into the global warming debate.

    From top energy users such as the United States and China to the poorest of the poor, the fund said countries should be more aggressive in developing energy tax and pricing policies that reflect the true cost of fossil fuel use, including such “externalities” as pollution and the steps needed to mitigate the effects of a warming climate.

    For the United States, the IMF estimated that would require a $1.40 levy per gallon of gas and other fees totaling more than $1,400 per person each year — around $500 billion in total, or more than 3 percent of the country’s annual economic output.

    Not recognizing those costs, the IMF argues, has had profound consequences for energy markets and the world economy: encouraging overconsumption; leaving some nations short of funds to address health, education and other needs; and distorting investment decisions worldwide.

    xchrom

    (108,903 posts)
    13. ‘Trickle-down consumption’: How rising inequality can leave everyone worse off
    Thu Mar 28, 2013, 08:48 AM
    Mar 2013
    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/27/trickle-down-consumption-how-rising-inequality-can-leave-everyone-worse-off/

    As income inequality in the United States has soared and median wages have flatlined since 1980, economists have spent a lot of time debating why the top 1 percent have done so much better than everyone else. Is policy to blame? The decline of labor? Technology?

    An equally pressing question, though, is what those increasingly hefty incomes at the very top mean for the lives of everyone else. And a big, newly revised paper (pdf) by the University of Chicago’s Marianne Bertrand and Adair Morse finds that there is a connection, but not a happy one: The gains of the rich have come alongside losses for the middle class.

    As the wealthy have gotten wealthier, the economists find, that’s created an economic arms race in which the middle class has been spending beyond their means in order to keep up. The authors call this “trickle-down consumption.” The result? Americans are saving less, bankruptcies are becoming more common, and politicians are pushing for policies to make it easier to take on debt.

    If that argument sounds familiar, it’s because Cornell economist Robert H. Frank has been making this case for years. Those at the top are spending more on fancy goods and bidding up the price of homes. In response, the slightly-less-rich have been spending more to keep pace. That pressure, in turn, eventually ripples down to the middle class — where incomes have stagnated of late — in what Frank calls “expenditure cascades.”

    xchrom

    (108,903 posts)
    14. Cyprus reopens its banks for first time in more than a week; capital controls apply
    Thu Mar 28, 2013, 08:50 AM
    Mar 2013
    http://www.washingtonpost.com/business/cyprus-prepares-to-open-its-banks-for-first-time-in-more-than-a-week-capital-controls-apply/2013/03/28/2abc65f8-977b-11e2-b5b4-b63027b499de_story.html

    NICOSIA, Cyprus — Banks in Cyprus reopened to customers for the first time in nearly two weeks Thursday with strict restrictions on transactions to stop people withdrawing all their savings and triggering further chaos in the country’s financial system.

    The limits on transactions, which include caps on withdrawals and money leaving the country, are a first in the 14-year history of the euro.

    Across Cyprus, large lines had formed ahead of the opening of banks for six hours from noon, and guards from private security firms reinforced police outside some ATMs and banks in the capital, Nicosia.

    In Nicosia, one 70 year-old pensioner who only gave his name as Ioannis arrived at the bank some two hours ahead of the scheduled opening time.

    xchrom

    (108,903 posts)
    15. Your 401(k) Is Out to Get You
    Thu Mar 28, 2013, 09:00 AM
    Mar 2013
    http://www.theatlantic.com/business/archive/2013/03/your-401-k-is-out-to-get-you/274408/



    There was a period, back in the late 1990s, when 401(k) plans were hailed as the key to every household's financial dreams. Put money in your 401(k), the thinking went, and you will retire a millionaire, thanks to the magic of the stock market, which would reliably deliver 15% annual returns.*

    A 401(k) plan is a defined contribution (DC) plan (other types include 403(b), 457, and SEP-IRA plans, as well as IRAs), meaning that participants put some of their income into the plan (along with, in some cases, additional money contributed by their employer); when they retire, they get that money back, along with any investment returns it has earned along the way. The lure of high investment returns is what made DC plans so attractive. By contrast, people with traditional defined benefit (DB) pensions--which pay a predetermined amount each year in retirement--were seen as suckers.

    After two stock market collapses, defined contribution plans are no longer seen as a solution to all of life's financial problems, and for many well-known reasons. First, people don't save enough to begin with. Second, DC plans aren't reliable retirement savings vehicles, since it's too easy to take money out of a 401(k) plan. Third, the stock market doesn't always return 15% (on an inflation-adjusted basis, it's still well below 2000 levels). Fourth, and most importantly, DC plans place all that investment risk on the individual participant.

    But wait, there's more! In addition to these very real problems, 401(k) plans are generally run by the asset management industry, which (surprise!) does not always have your interests at heart.

    xchrom

    (108,903 posts)
    18. U.S. economy posts sluggish growth in fourth quarter
    Thu Mar 28, 2013, 09:09 AM
    Mar 2013
    http://www.guardian.co.uk/business/feedarticle/10721926

    WASHINGTON (Reuters) - The U.S. economy expanded at a sluggish pace in the fourth quarter although a big gain in business investment and higher exports of services led the government to push up its previous estimate for growth.
    Gross domestic product expanded at a 0.4 percent annual rate, the Commerce Department said on Thursday, just below the 0.5 percent gain forecast by analysts in a Reuters poll.
    The growth rate was the slowest since the first quarter of 2011 and far from what is needed to fuel a faster drop in the unemployment rate. It was, however, higher than the government's previous estimate of a 0.1 percent growth rate.

    xchrom

    (108,903 posts)
    19. Europe's south rises up against those who act as sadistic colonial masters
    Thu Mar 28, 2013, 09:11 AM
    Mar 2013
    http://www.guardian.co.uk/commentisfree/2013/mar/28/europe-south-rising-up

    The "new world order" announced at the end of the 1980s was the shortest in history. Protest, riots and uprisings erupted all over the world after the 2008 crisis, leading to the Arab spring, the Indignados and Occupy. A former director of operations at MI6, quoted by Paul Mason, called it "a revolutionary wave, like 1848". Mason agreed: "There are strong parallels – above all with 1848, and with the wave of discontent that preceded 1914."

    Many on the left have been more circumspect. The philosopher Alain Badiou welcomed the Arab spring but did not think it would lead to a "rebirth of history". For Slavoj Žižek, 2011 was the "year of dreaming dangerously". A melancholy of the left descended as the protest wave started receding. But on this occasion the pessimism was premature. Resistance against austerity and injustice is again in the air. In Bulgaria and Slovenia, protesters unseated the government. In Italy, the overwhelming anti-austerity vote has shaken the parties committed to the Berlin orthodoxy. Large marches and rallies in Portugal and Spain have undermined governments and policies and a new push for anti-austerity unity is emerging in Britain. In Greece, the parties that brought the country to its knees and are now administering policies causing the well-documented humanitarian catastrophe and rise of fascism are on the brink of exit.

    Finally, the Cypriot government agreed the unprecedented haircut of bank savings but was forced to renege after MPs of all parties under pressure from the public voted against it and ruling party MPs had to abstain. This was the first formal rebuff of austerity, something that the obedient governments of southern Europe had not dared. When the government finally accepted the European blackmail, it presented it as unavoidable and, under instruction from Germany's foreign minister, Wolfgang Schäuble, refrained from putting it to parliament or the people. The words "democracy" and "referendum" create panic in the corridors of Brussels. But the symbolic value of a small nation rejecting the initial troika blackmail and protecting the savings of ordinary people is immense. The European debate has concentrated on the protection of savings. The protection of our democracy is perhaps more important.

    The argument against austerity has been won in southern Europe. The continuation of austerity, a matter of survival for the ruling elites, can be achieved through ideological misinformation and police repression. We cannot predict the timing and location of the next flashpoint but its occurrence is certain. It is the result of systemic pressures and failures felt by all Europeans and exacerbated in the south. Three are the most prominent.

    xchrom

    (108,903 posts)
    20. Cyprus waits for its 'giant leap back into the dark'
    Thu Mar 28, 2013, 09:13 AM
    Mar 2013
    http://www.guardian.co.uk/world/2013/mar/27/cyprus-giant-leap-back-dark

    Small countries feel the onset of poverty quickly. In Cyprus, now poised to become one of the biggest experiments in global financial history, people know that penury is just around the corner.

    Waiting for poverty to strike is no game. It makes ordinary men and women helpless, desperate and scared. "If you look at it mathematically, there is no way out: we will just never be able to repay our bills to the EU and IMF," said Haris Christou, one young Cypriot speaking for his compatriots. "Am I afraid? Of course I am afraid. Everybody knows everything in Cyprus is going to get bad, really bad. And nobody knows where exactly we are headed."

    On Wednesday night men and women, some young, some old, gave voice to that fear. They gathered outside the offices of the European commission, and then lined the road that leads up to Cyprus's colonial-era presidential palace, to protest against a rescue programme that, wittingly or not, will destroy their country's banking sector and bring its economy to its knees.

    "Out with the troika", "Fuck the troika", "Go home Troika", said the placards. "No to the policies of austerity." "No to privatisations." "No to the memorandum of catastrophe."

    xchrom

    (108,903 posts)
    21. How student loan servicers have a hold on your soul
    Thu Mar 28, 2013, 09:15 AM
    Mar 2013
    http://www.guardian.co.uk/money/us-money-blog/2013/mar/19/studen-loan-debt-providers-soul

    I'm waiting for someone to record a new cover of the classic coal-miner dirge Sixteen Tons – but, instead of having country singer Tennessee Ford warbling the tune, let's update it for the millennial generation. The new title: 26 Bills. Instead of coal mines and the company store, we'd now sing along to a tune about banksters and student loans:

    St Peter don't you call me 'cause I can't go
    I owe my soul to my student loan servicer.

    As of this week, the nation's college loan bill stands at more than $1tn. The average college graduate with debt now leaves school $26,000 in hock, which is more than a 50% increase since 2005, when Congress stopped allowing students who sought education loans from private providers such as banks to discharge the debt in bankruptcy court. Those who had received federal loans lost that right much earlier, in 1998.

    This millstone of debt that cannot be forgiven is having an enormous not-good impact on the lives of millions of people. Increasing numbers of men and women in their twenties and thirties are overwhelmed by their monthly tab. Our not-good-enough economy, with its chronic shortage of well-paying jobs, makes a bad situation worse.

    Many economists believe the ever-increasing tab is having a ripple effect on millenial finances, preventing them from saving for retirement or owning a house or car. People under the age of 40 have a significantly lower net worth than someone their age did 30 years ago, according to a recent report released by the Urban Institute. There is even some evidence student loan bills are even changing marriage patterns: research by Fenaba Addo, a fellow at the University of Wisconsin, demonstrated that men don't make permanent passes at women with student debt chassis', leaving these ladies less likely to marry than their debt-free peers.

    Tansy_Gold

    (17,817 posts)
    39. The effect may be even worse
    Thu Mar 28, 2013, 02:13 PM
    Mar 2013

    on those who were victims of corporate downsizing in the 80s and 90s and who went back to school to retrain for different careers.

    xchrom

    (108,903 posts)
    22. BRICS take shot at shattering predominance of World Bank, IMF
    Thu Mar 28, 2013, 09:29 AM
    Mar 2013
    http://www.japantimes.co.jp/news/2013/03/28/business/brics-take-shot-at-shattering-predominance-of-world-bank-imf/#.UVRFGe1qP8s

    WASHINGTON – The world’s major developing nations are laying plans to combine their economic clout in a challenge to the role that U.S.- and European-led institutions such as the World Bank and International Monetary Fund play in global economic affairs.

    Meeting this week in Durban, South Africa, the loose consortium known as the BRICS nations — Brazil, Russia, India, China and South Africa — are expected to approve establishment of a “BRICS bank” to fund infrastructure projects in poorer countries. They are also debating creation of a pool of funds to use in times of crisis, similar to what the IMF does with money from its member nations.

    Preliminary talks made good progress Tuesday, Finance Minister Pravin Gordhan of South Africa said. Member states have basically agreed on setting up a bank with seed capital of $50 billion, but how much each country would contribute and the voting structure of the board have yet to be defined.

    Ahead of the meeting, Brazil and China agreed to a separate $30 billion currency swap that would allow much of the trade between the two nations to be financed without using dollars or euros as a common means of exchange.

    xchrom

    (108,903 posts)
    23. Yen fall worrisome, Ford CEO says
    Thu Mar 28, 2013, 09:30 AM
    Mar 2013
    http://www.japantimes.co.jp/news/2013/03/28/business/yen-fall-worrisome-ford-ceo-says/#.UVRFv-1qP8s

    MUMBAI – Ford Motor Co. Chief Executive Officer Alan Mulally said he is concerned that the depreciation of the yen is bolstering the competitiveness of Japanese carmakers.

    “The most important thing that most countries around the world believe in is letting the markets determine the currency,” Mulally told a recent Bloomberg Television program from Bangkok in reference to the Japanese currency. “That’s just so important to all of us in the international trading system.”

    The yen has fallen about 15 percent against the dollar since mid-November, when Shinzo Abe, then successfully angling to become prime minister, began a campaign to talk down the value of the currency to revive the nation’s export-led economy. That has bolstered shares of Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co.

    The yen’s slide increases profit for Japanese carmakers when they sell vehicles outside their home market, helping them to cut prices, boost advertising and improve products. The American Automotive Policy Council, backed by Ford, General Motors Co. and Chrysler Group LLC, estimates the currency advantage equates to about $5,700 per vehicle.

    xchrom

    (108,903 posts)
    24. Mao's Disneyland: 'Red Tourism' Is Golden for Chinese Economy
    Thu Mar 28, 2013, 09:39 AM
    Mar 2013
    http://www.spiegel.de/international/zeitgeist/the-growth-of-red-tourism-in-communist-china-a-891353.html


    At the Zaoyuan Revolutionary Site in Yanan, tourists can pose for pictures in communist uniforms and with plastic guns. Every morning, visitors can watch a performance here called "The Defense of Yanan," complete with fake tanks and real horses. A model airplane even drops from the sky at the end of the show.

    Wu Yongtang's great advantage is having a mole on his chin almost exactly where Mao Zedong did. The 56-year-old actor pulls at the bandage covering the spot, then carefully peels it off and touches the scab with his fingertip. He saw a doctor to have the size of the mole reduced, and now it is exactly as large Mao's was. Wu is pleased. He looks like Mao, he speaks like Mao and his mole might be his ticket to landing movie roles as Mao. There's demand for Mao look-alikes in China -- and especially now. "People have deep feelings for the chairman," Wu says.

    Wu spent a full theater season playing Mao at the open-air theater in Yanan, a city in central China described locally as the "Holy Land of the Chinese Revolution." Yanan is where the Long March ended in 1935, the military retreat that marked Mao's ascent to power, and where the Communist Party of China established its headquarters for the province of Shaanxi. Every morning, visitors can watch a performance here called "The Defense of Yanan," complete with fake tanks and real horses. A model airplane even drops from the sky at the end of the show, a moment captured by all the mobile-phone cameras of audience.

    The Chinese government has dubbed this "red tourism," and it is meant as a response to its people's identity crisis, to a certain sense of emptiness and alienation. What exactly should people in China believe in these days? Who is really still interested in ideology? Taking a proactive approach to these questions, the Communist Party decided to put its own history on stage to create reminders of the revolution in various places around the country -- and to make clear to all Chinese citizens who made their country great. The government has also set up a "National Coordination Group for Red Tourism" and convened "Conferences for Red Tourism" that have even been attended by a member of the Politburo.

    xchrom

    (108,903 posts)
    25. Jobless Claims in U.S. Increase More Than Forecast
    Thu Mar 28, 2013, 09:43 AM
    Mar 2013
    http://www.bloomberg.com/news/2013-03-28/jobless-claims-in-u-s-increased-more-than-forecast-last-week.html

    More Americans than projected filed applications for unemployment benefits last week, bringing a halt to the recent progress in the labor market.

    First-time jobless claims rose by 16,000 to 357,000 in the week ended March 23, the highest level in more than a month, Labor Department data showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for an increase to 340,000. The four-week average climbed from the lowest level in five years.

    Consumer spending has continued to climb even after lawmakers agreed to let the payroll tax rise by 2 percentage points in January, giving employers reason to retain staff. At the same time, stronger economic growth is needed to further reduce the pace of firings, add to payrolls and boost wages.

    “We’re not making progress the way we’d like to,” said Robert Brusca, president of Fact & Opinion Economics in New York, who projected claims would climb to 350,000. “It’s still a very disappointing picture for jobs.”

    xchrom

    (108,903 posts)
    29. OECD predicts stronger global growth
    Thu Mar 28, 2013, 10:07 AM
    Mar 2013
    http://www.bbc.co.uk/news/business-21966361

    The world's major economies will see stronger growth this year, but Europe's recovery will continue to be slow, an international organisation has said.

    The Organisation for Economic Co-operation and Development (OECD) predicted stronger growth in the US, Japan and Germany.

    But it said concerns remained over the recovery of the wider eurozone.

    It said governments would need to keep special measures in place to boost economic growth.

    xchrom

    (108,903 posts)
    30. South Korea lowers growth forecast as exports slow
    Thu Mar 28, 2013, 10:08 AM
    Mar 2013
    http://www.bbc.co.uk/news/business-21963610


    South Korea has cut its growth forecast for the second time in three months, amid a slowdown in its exports.

    The finance ministry now expects the economy to grow by 2.3% in 2013, down from its earlier projection of 3%.

    Exports, which account for almost half of South Korea's overall output, have been hit by weak demand from markets such as the US and the eurozone.

    The ministry said that it would unveil a series of stimulus measures in the coming days aimed at reviving growth.

    xchrom

    (108,903 posts)
    31. Haruhiko Kuroda says Japan's debts are not sustainable
    Thu Mar 28, 2013, 10:10 AM
    Mar 2013
    http://www.bbc.co.uk/news/business-21963615


    The Bank of Japan's new governor, Haruhiko Kuroda, has warned that Japan's debt levels are unsustainable.

    His comments follow calls by Japan's new government for aggressive stimulus measures to help revive the country's sluggish economy.

    Earlier this year, it approved a 10.3tn yen ($116bn; £72bn) stimulus package.

    There have been fears that such moves will further increase Japan's public debt, which is already the highest among industrialised countries.

    mahatmakanejeeves

    (56,897 posts)
    32. ETA News Release: Unemployment Insurance Weekly Claims Report (03/28/2013)
    Thu Mar 28, 2013, 10:10 AM
    Mar 2013

    Source: Department of Labor, Employment and Training Administration

    Read More: http://www.dol.gov/opa/media/press/eta/ui/eta20130547.htm

    - - - - - -

    Note: This week's release reflects the annual revision to the weekly unemployment claims seasonal adjustment factors. The seasonal adjustment factors used for the UI Weekly Claims data from 2008 forward, along with the resulting seasonally adjusted values for initial claims and continuing claims, have been revised.

    UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

    SEASONALLY ADJUSTED DATA

    In the week ending March 23, the advance figure for seasonally adjusted initial claims was 357,000, an increase of 16,000 from the previous week's revised figure of 341,000. The 4-week moving average was 343,000, an increase of 2,250 from the previous week's revised average of 340,750.

    The advance seasonally adjusted insured unemployment rate was 2.4 percent for the week ending March 16, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 16 was 3,050,000, a decrease of 27,000 from the preceding week's revised level of 3,077,000. The 4-week moving average was 3,072,500, a decrease of 13,000 from the preceding week's revised average of 3,085,500.
    ....

    The largest increases in initial claims for the week ending March 16 were in California (+3,007), Virginia (+1,165), Mississippi (+485), North Dakota (+54), and Puerto Rico (+38), while the largest decreases were in Pennsylvania (-2,497), New York (-2,116), Georgia (-2,023), North Carolina (-1,340), and Ohio (-1,192).

    == == == == ==

    Good morning, Freepers and DUers alike. I ask you to put aside your differences long enough to read this post. Following that, you can engage in your usual donnybrook.

    I have been posting the number every week for at least a year. I seriously do not care if the week's data make Obama look good. They are just numbers, and I post them without regard to the consequences. I welcome people from Free Republic to examine the numbers as well. They paid for the work just as much as members of DU did, so I invite them to come on over and have a look. "The more the merrier" is the way I look at it.

    I do not work at the ETA, and I do not know anyone working in that agency. I'm sure I can safely assume that the numbers are gathered and analyzed by career civil servant economists who do their work on a nonpartisan basis. Numbers are numbers, and let the chips fall where they may. If you feel that these economists are falling down on the job, drop them a line or give them a call. They work for you, not for any politician or political party.

    The word "initial" is important. The report does not count all claims, just the new ones filed this week.

    Note: The seasonal adjustment factors used for the UI Weekly Claims data from 2007 forward, along with the resulting seasonally adjusted values for initial claims and continuing claims, have been revised. These revised historical values, as well as the seasonal adjustment factors that will be used through calendar year 2012, can be accessed at the bottom of the following link: http://www.oui.doleta.gov/press/2012/032912.asp

    xchrom

    (108,903 posts)
    33. Never mind Cyprus – look to Germany for causes of the euro crisis
    Thu Mar 28, 2013, 10:13 AM
    Mar 2013
    http://www.rawstory.com/rs/2013/03/27/never-mind-cyprus-look-to-germany-for-causes-of-the-euro-crisis/

    Over the course of the last week’s tense negotiations over a Cyprus bailout deal, much of the commentary has focused on the role of Europe’s finance ministers. But perhaps closer attention should be paid to Mario Draghi, the president of the European Central Bank. On 14 March Draghi made a presentation to heads of state and government on the economic situation in the euro area. His intent was to show the real reasons for the crisis and the counter-measures needed. In this he succeeded – although not in the way he intended.

    Draghi presented two graphs that encapsulate his central argument: productivity growth in the surplus countries (Austria, Belgium, Germany, Luxembourg, Netherlands) was higher than in the deficit countries (France, Greece, Ireland, Italy, Portugal, Spain). But wage growth was much faster in the latter group. Structural reforms and wage moderation lead to success; structural rigidities and greedy trade unions lead to failure. QED.

    According to the Frankfurter Allgemeine Zeitung, which reported the affair approvingly, the impact of Draghi’s intervention was devastating. François Hollande, the French president, who had earlier been calling for an end to austerity and for growth impulses, was, according to the newspaper, completely silenced after the ECB president had so clearly demonstrated, with incontrovertible evidence, what was wrong in Europe – or rather in certain countries in the eurozone – and what must be done.

    Things are not as they seem, however. Draghi’s presentation contains a simple but fatal error – or should that be misrepresentation? As the note to the graphs indicates, the productivity measure is expressed in real terms. In other words, it shows how much more output an average worker produced in 2012 compared with 2000. So far so good. However, the wage measure that he uses, compensation per employee, is expressed in nominal terms (even if, interestingly, this is not expressly indicated on the slides). In other words, the productivity measure includes inflation, but the wage measure does not.

    Fuddnik

    (8,846 posts)
    37. I think they're gonna pay tribute to a bunny or something this week-end.
    Thu Mar 28, 2013, 01:21 PM
    Mar 2013

    He came out of a cave, saw his shadow, and we had six more weeks of austerity and sequestration or some shit. I get confused.

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