STOCK MARKET WATCH -- Thursday, 5 September 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Thursday, 5 September 2013[font color=black][/font]

SMW for 4 September 2013

AT THE CLOSING BELL ON 4 September 2013
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Dow Jones 14,930.87 +96.91 (0.65%)
S&P 500 1,653.08 +13.31 (0.81%)
Nasdaq 3,649.04 +36.43 (1.01%)


[font color=red]10 Year 2.89% +0.04 (1.40%)
30 Year 3.80% +0.02 (0.53%) [font color=black]


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

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
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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=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
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.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.








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

[Demeter]

1. Permission Denied

I have to say, that's the most disgusting cartoon I've seen in forever.

[Fuddnik]

8. Want to see a more disgusting picture? Remember Rummy shaking hands with Saddam?

http://www.independent.co.uk/news/world/middle-east/pictures-emerge-showing-us-secretary-john-kerry-and-president-assad-dining-in-syria-together-8796846.html

[AnneD]

39. Brings to mid the photo...

of Rumsfield shaking hands with Sadam Hussein. Hell we have real terrorists and banksters here, why do we need to fight the ones over there. I think that peace prize should be returned.

[Demeter]

2. Obama: 'I didn't set a red line' on Syria

http://news.yahoo.com/obama-reserves-right-to-buck-congress-on-syria-strike-140227751.html



Recasting his role in setting a “red line” on Syria, President Barack Obama insisted on Wednesday that Congress and the world will lose credibility if Bashar Assad’s alleged chemical weapons massacre goes unpunished.

“My credibility’s not on the line. The international community’s credibility is on the line, and America and Congress’ credibility is on the line,” Obama said during a visit to Stockholm, Sweden.

“I do have to ask people, well, if, in fact, you’re outraged by the slaughter of innocent people, what are you doing about it?” Obama asked. “The moral thing to do is not to stand by and do nothing.”

The president rejected any notion that he needs to use military force against Syria in order to preserve his personal standing in the world after calling a chemical weapons attack a “red line” in an Aug. 20, 2012, press conference.

“I didn’t set a red line. The world set a red line,” he insisted. “The world set a red line when governments representing 98 percent of the world’s population said the use of chemical weapons are abhorrent and passed a treaty forbidding their use even when countries are engaged in war.”

And “Congress set a red line when it ratified that treaty. Congress set a red line when it indicated, in a piece of legislation titled the Syria Accountability Act, that some of the horrendous things that are happening on the ground there need to be answered for,” he added.

The Chemical Weapons Convention, which Syria never signed, does not call for unilateral military force in response to violations by countries not party to the treaty. The Syria Accountability Act imposes tough economic sanctions on Syria, but it does not envision unilateral military force. And Obama mentioned neither in his fateful remarks one year ago.

Still, Obama insisted on Wednesday, “that wasn’t something I just kind of made up. I didn’t pluck it out of thin air. There’s a reason for it.”

CAN WE PLEASE TALK ABOUT SOMETHING REAL?

[Demeter]

3. Obama Shaken by Boehner’s Support by Andy Borowitz

http://www.newyorker.com/online/blogs/borowitzreport/2013/09/obama-shaken-by-boehners-support.html?mbid=nl_Borowitz%20%28162%29

—Aides to President Obama said today that he was “visibly shaken” after receiving support from House Speaker John Boehner for his Syria campaign, adding that the Speaker’s vote of confidence was “making him rethink the whole thing.”

An aide to Mr. Obama, speaking on the condition of anonymity, said that he was in the Oval Office with the President when he got the call from Mr. Boehner: “As it became clear that Boehner was going to support him on this, he looked more and more stunned. He was trying to stay calm and all but you could see that he was really taken aback.”

After putting down the phone with Mr. Boehner, the President reportedly told aides, “Boehner’s supporting it. That’s so weird. This is still a good idea, right?”

Moments after the President had “seemed to settle down,” the aide said, he received a phone call from House Majority Leader Eric Cantor, who also offered his support for the Syria plan.

“That one really rattled him,” the aide said. “He was like, ‘I think I need to take a long walk.’”

The calls from Mr. Boehner and Mr. Cantor have created what the aide called “the biggest crisis of confidence this President has ever experienced.”

“I checked in on him later in the day, just to see if he was O.K.,” the aide said. “He was cradling his head in his hands saying, ‘I just don’t know. I just don’t know anymore.’”

While the President’s plan to attack Syria remains on the table, the aide indicated that the situation is very fluid: “If Rand Paul calls today and says he’s in, the whole thing goes away.”

[Demeter]

4. And Oliphant Gets to the "Crux" of the Matter

http://assets.amuniversal.com/dfb4eab0f70f0130139a001dd8b71c47?width=750

[Demeter]

5. Summers’s Opponents Must Overcome His Bond With Obama

WHEN I FIRST READ THE HEADLINE, I THOUGHT IT SAID:

"Summers Must Overcome His Bond With Obama"

WHICH I THOUGHT VERY INSIGHTFUL....

http://www.nytimes.com/2013/09/05/business/economy/in-fed-succession-obamas-favorite-faces-opposition.html



...Mr. Obama, well aware of Mr. Summer’s love-him-or-hate-him reputation and the trouble he could face winning Senate confirmation, reasoned that it was hardly too soon to think about courting senators, even if a final decision on a nominee was nearly a year off. Shifting from his confidants — Treasury Secretary Timothy F. Geithner and the man who soon would succeed him, the White House chief of staff, Jacob J. Lew — the president gave Rob Nabors, then his liaison to Congress, the Summers project.

“He needs to do some work on the Hill,” Mr. Obama said, according to people with knowledge of the meeting. “You need to work with him, Rob.”

Months later, decision time is here, and Mr. Obama still has not finally settled on Mr. Summers or Janet L. Yellen, the economist he named to be Fed vice chairwoman in 2010. Yet as that Oval Office exchange shows, the president has long had Mr. Summers in mind to become the world’s most powerful central banker, based on their intellectual partnership that dates to the 2008 campaign and was “forged in the crucible of the financial crisis,” as the longtime Obama strategist David Axelrod put it. And Mr. Obama still does have Mr. Summers in mind, associates say.

“It’s like the attachment you feel for your heart surgeon after he performs a quadruple bypass,” said a former administration official, who like most others did not want to be identified speaking of such a sensitive personnel matter.

But as that Oval Office meeting last year also suggests, Mr. Obama’s one concern about nominating Mr. Summers has been the potential for a Senate battle — not only from Republicans spoiling for fights, but also from liberal Democrats who view Mr. Summers as too friendly toward deregulating big banks when he was Treasury secretary late in the Clinton administration. That concern about confirmation has been affirmed in recent weeks as bloggers and groups on the left have mobilized, either to oppose Mr. Summers outright or to urge Mr. Obama to pick Ms. Yellen to be the first female Fed chairman. Mr. Summers declined to comment for this article.

The president has already interviewed Mr. Summers and Ms. Yellen for the job, as well as Donald L. Kohn, a former Fed vice chairman, aides say. But administration insiders say they believe Mr. Obama remains inclined to nominate the man who, as his chief economic adviser through 2009 and 2010, helped him through the worst recession and global financial crisis since the Depression. Mr. Summers’s edge, they say, reflects that relationship, not any arguments against Ms. Yellen, whom Mr. Obama does not know well. And they do not rule out a fourth person emerging, though no other names are known to be in the mix. Many current and former presidential advisers also favor Mr. Summers, including several who had run-ins with him on policy, or chafed at what many call his condescension and arrogance. But they say Mr. Obama knows Mr. Summers so well, he does not need their input.

Among the people the president is said to have consulted are Mr. Geithner, Mr. Lew and Mr. Axelrod. The list also includes Mayor Rahm Emanuel of Chicago, Mr. Obama’s first chief of staff and a Summers advocate, and Denis R. McDonough, the current chief of staff. (Aides say Mr. McDonough has stayed neutral.) Two of the most influential advisers on the nomination are the deputy chiefs of staff, Mr. Nabors and Alyssa Mastromonaco, given their knowledge of Senate confirmation politics. Also influential — and described as the one insider pulling for Ms. Yellen — is Valerie Jarrett, the president’s close adviser and longtime Chicago friend, who had a cool relationship with Mr. Summers.


ECHO CHAMBER EFFECT, ANYONE?


An announcement had been possible next week, aides said, until plans for the coming debate in Congress over American military intervention in Syria scrambled the timing...MORE SUCKING UP AT LINK

[Demeter]

6. David Dayen: Could the White House Want to Confirm Larry Summers With Republican Votes?

OBAMA WON'T BE ABLE TO CONFIRM LARRY WITH DEMOCRATIC SUPPORT.

WHY WOULDN'T OBAMA WANT TO CONFIRM JANET YELLEN WITH BIPARTISAN SUPPORT?

WHY DO FOOLS FALL IN LOVE?

http://www.nakedcapitalism.com/2013/08/44836.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29



If we’re to believe the thin sourcing from CNBC’s John Harwood, sometime in the next few weeks, Larry Summers will be announced as the nominee to become the next Federal Reserve chair. As I mentioned when this came out, it’s fitting that the news broke on Women’s Equality Day. Indeed, after Janet Yellen resigns in disgust (at least that’s my assumption of what will happen next) there will be no women on the Fed board of Governors, with Elizabeth Duke already gone and Sarah Bloom Raskin nominated for a top position at Treasury. Add Jerome Powell (whose term expires next year) and you have five spots vacating in the next year. Does Summers even have four brothers?

Nominations of this type at least strip away the excuses that Obama has been somehow “misled” by his economic team. It’s beyond clear that he drove the Summers selection from the very beginning; he’s comfortable with Summers, he thinks the guy did a good job in 2009-2010, and he lines up ideologically with him. Maybe Barack Obama didn’t say personally that bringing in “cheap Chinese goods” is good for the U.S. economy, or that global warming requires a “go slow” approach, but that’s the perspective of his top advisor. So what’s the difference?

I don’t think there’s much hope at this point in blocking the nomination from the outside; apparently a chief executive can make terrible choices for dodgy reasons whenever he wants, as we’ve learned time and again. And someone who secured re-election largely on the strength of his appeal to women in the electorate can create a glass ceiling for the aforementioned gender, without much of a backlash. It’s good to be the king, especially when the court is so cowed (and by court I mean the professional DC liberal class).

However, we’re starting to see the stirrings of strategizing about whether Summers can get the votes in the Senate for confirmation. I start from the position that he can and will – I have seen far too little inclination from Senate Democrats to stand up to their party leader, and regardless of how big a game Republicans talk, when the officialdom wants something to happen, it usually does. Nevertheless, the capacity does exist to bottle up the nomination, particularly in the Senate Banking Committee, if not on the Senate floor. Reuters gamed this out:

Summers, who writes an opinion column for Reuters, has drawn the ire of two Democrats on the committee that will need to clear his nomination. And a third of the Democratic caucus in the Senate sent Obama a letter urging him to choose Yellen, putting the onus on the president to court Republicans to reach the required number of votes if he picks Summers instead [...]

If Obama chooses Summers, the first hurdle would be getting through the Senate Banking Committee.

Obama’s fellow Democrats have a 12-10 majority on the panel, but two of them are Summers’ biggest critics within the party – Sherrod Brown of Ohio and Jeff Merkley of Oregon. Elizabeth Warren of Massachusetts, a consumer advocate and fierce critic of Wall Street, also sits on the committee.

Brown, who spearheaded the pro-Yellen letter, has told Reuters he would vote against Summers, while Merkley has said he has serious doubts about the former World Bank chief economist.

For her part, Warren is trying to reinstate a modern version of the Glass-Steagall Act – the 1933 law that barred banks from merging their investment activities with commercial banking, which Summers helped dismantle when he was Treasury Secretary in 1999.

If Brown follows through, the White House would need at least one committee Republican to support Summers for his nomination to be considered by the full 100-member Senate.

Things get trickier if Merkley and Warren also oppose him.

...First of all, this is a threshold moment for the named Senators here, and if they really don’t want to see Summers at the Fed they should make it known very directly to the White House that their votes cannot be had. They don’t have to go public, though that might help. But they need to be direct. Brown has gone public, and good for him; Merkley has expressed “reservations,” and Warren has been very tight-lipped (it would not be enough to get a viral video out of some tough questions and then going along with the vote; Warren did oppose Michael Froman for U.S. Trade Representative over the TPP, so there’s precedent here for her). There are others in the caucus, like Maria Cantwell and Bernie Sanders, who could vote no if Summers advanced out of committee and onto the floor, but I think the deal is sealed at that point. It’s either committee or bust...

MORE NOSE-COUNTING AT LINK

[Demeter]

7. NAP TIME (it's paper night)

See you in the morning, Marketeers!

[Fuddnik]

9. Me too. I'm supposed to train for a job tomorrow.

I'll have to let them know about my income restrictions to see if they still want me.

[jtuck004]

10. From a comment on The Big Picture Blog

http://www.ritholtz.com/blog/2013/09/midweek-pm-reads-3/

“Insensitive as it might sound, the idea of the Fed cutting its monthly bond purchases to a likely $60 billion from $85 billion is scarier to investors than the massive loss of life, exodus of two million refugees and escalating world tensions that the Syrian crisis has generated.”

Speaks for itself.
_________________________________________

Exactly. They care about their money. Not people here, not people there. And you can see it in the market.

[Demeter]

12. Dealers in Debt Pare Commitments Raising Risk as Rules Bite

ISN'T THAT A SNAPPY, OLD-STYLE JOURNALISM HEADLINE?

http://www.bloomberg.com/news/2013-09-03/dealers-in-debt-pare-commitments-raising-risk-as-new-rules-bite.html

The worst losses in U.S. debt in at least 37 years are being magnified by investors exiting the market at the same time new regulations prompt Wall Street firms to cut back on trading corporate bonds.

Bank of America Merrill Lynch’s U.S. Broad Market Index is on pace to drop 4.41 percent, the biggest annual loss since at least 1976. Investors pulled $123 billion from bond funds since May, according to TrimTabs Investment Research.

Trading in corporate fixed-income securities is the lowest ever as a proportion of outstanding debt, and volumes in Treasuries are little changed from 2007 levels even though the market has almost tripled to $11.5 trillion, Financial Industry Regulatory Authority and ICAP Plc data show. Bonds are getting riskier even with inflation at bay and corporate profits hitting new highs.

“When bond investors start to meaningfully divest themselves of their positions, it will be analogous to yelling fire in a crowded theater,” Michael Underhill, the chief investment officer at Capital Innovations LLC, which manages $1.5 billion, said in an e-mail Aug. 23. Investors say it’s becoming harder to quickly exit positions as banks cut inventories and curb riskier businesses such as trading (NTMBIV) with their own money to comply with rules from the Basel Committee on Banking Supervision and the U.S. Dodd-Frank Act. ...


INTERESTING INSIGHT INTO BOND MARKETS

[Demeter]

16. Pimco Sees Taper in Worst MBS Slump Since 1999: Credit Markets

http://www.bloomberg.com/news/2013-08-30/pimco-sees-taper-in-worst-mbs-slump-since-1999-credit-markets.html

U.S. government-backed mortgage bonds are heading toward their longest monthly slump since 1999 as concern mounts that the Federal Reserve will begin paring its debt purchases even as the steepest rise in home-loan rates in at least 40 years slows the housing rebound.

Securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae lost 0.33 percent through yesterday, heading for their fourth month of declines and bringing losses since April to 2.78 percent, according to Bank of America Merrill Lynch index data. For almost a year, the Fed has been adding $40 billion of bonds to its balance sheet each month from the more than $5 trillion market. It expanded the purchases in January to include $45 billion of Treasuries.

Investors led by Pacific Investment Management Co., manager of the world’s biggest bond fund, are bracing for the Fed to scale back its stimulus when policy makers meet next month, even after data the past week showed falling home sales and a slowdown in property appreciation. Average rates for 30-year mortgages reached a two-year high of 4.58 percent last week.

“We still believe that tapering is going to happen,” said Michael Cudzil, an executive vice president who specializes in mortgages at Newport Beach, California-based Pimco. “The Fed is looking at the progress seen in the data over a long-term period of time, rather than any one given month.” ...

[Demeter]

11. It's a Brave New World

I WONDER IF THAT'S WEINER...

[Demeter]

13. Crashing exchanges: Code blue--A new type of market crash proliferates

http://www.economist.com/news/finance-and-economics/21584360-new-type-market-crash-proliferates-code-blue

TIME was it took a war to close a financial exchange. Now all it needs is a glitch in technology. On August 26th trading on Eurex, the main German derivatives exchange, opened as usual; 20 minutes later it shut down for about an hour. Four days earlier the shares of every company listed on NASDAQ, an American stock exchange, ceased trading for three hours. The direct impact of these computer crashes was small. But, given that global markets and financial firms are all hooked up through complex trading programs, the indirect impact could be significant.

In these two cases there was no news of big losses. So there was no panic. All concerned also appear to be making a genuine effort to understand and disclose what went wrong. NASDAQ’s reputation and revenues are still suffering from the disastrous public offering of Facebook in May of 2012, when computer glitches produced an estimated $500m-worth of errant trades. Knight Capital, a securities firm, never recovered from a $460m trading glitch last year. On August 20th a flurry of misdirected trades by Goldman Sachs, a bank, caused embarrassment and as yet unspecified losses. Even the most robust seem vulnerable. But the frequency of such failures may actually make them less disturbing. Amazon and Google, generally reckoned to be capable and resilient operators on the web, each had blackouts in recent weeks. Systems were reset, business resumed, small losses were absorbed. Zero tolerance of failure, which applies to airlines, bridges and tunnels is not so vital for electronic operators and financial firms. Especially if the problems are laid bare and addressed. The Securities and Exchange Commission (SEC) has ordered a post-mortem from the New York Stock Exchange’s Arca division, which electronically trades non-NYSE stocks and where the problems tied to the NASDAQ outage began. And it has asked for an account of what unfolded in a system operated by NASDAQ which consolidates trading at America’s 17 exchanges. The system was overwhelmed while trying to reconnect with Arca, triggering a “code blue” alert (a term used in hospital emergencies) and the cessation of trading.

Oddly, nowhere near as much attention is being applied to Goldman, which has been secretive about what went wrong. It has said only that “immaterial losses” occurred from trading problems during a system upgrade and that a review is under way. It is widely believed that Goldman’s losses stemmed from a “dark pool”—designed to gather and match trading interest unobtrusively—which inadvertently spat out prices onto public exchanges. Reports put the losses anywhere between tens and hundreds of millions of dollars.

Even before the glitches, the SEC was taking increased interest in potential trading problems and how they might be disclosed. In March it published a proposal known as Regulation SCI (systems compliance and integrity). Exchanges and banks are resisting one of its requirements, which is to report blackouts even if they do not lead to anything as severe as trading halts. America’s regulators are often accused of being heavy-handed. But forcing more transparency on the black boxes that have replaced screaming humans on Wall Street must be a good thing.

[Demeter]

14. SEC says won't appeal resource payment disclosure ruling CORPORATIONS TAKE THE 5TH

http://uk.reuters.com/article/2013/09/03/us-sec-resource-extration-idUSBRE9820XB20130903

U.S. securities regulators announced Tuesday they will not appeal a July federal court decision which tossed out a new rule requiring oil, natural gas and mining companies to disclose the payments they make to foreign governments.

Instead, Securities and Exchange Commission spokesman John Nester said the SEC intends to revise the rule, which was required by the 2010 Dodd-Frank Wall Street reform law, through a new rulemaking process.

"The court remanded the matter for further SEC proceedings, which the commission will undertake informed by the court's decision," Nester said.

IT'S NICE THAT SOMEONE, OR RATHER SOME THING, IS GETTING THE BENEFIT OF THE BILL OF RIGHTS...

[Demeter]

15. Italy introduces tax on high-speed trade and equity derivatives By Philip Stafford

http://www.ft.com/intl/cms/s/0/378dcace-117e-11e3-8321-00144feabdc0.html?siteedition=intl&siteedition=intl#axzz2dlacLsuF

Italy will on Monday become the first country to introduce a tax on high-frequency trading in a move that has become a test case for potential further crackdowns on the controversial practice. The country will introduce levies against high-speed trading and equity derivatives in the final part of a two-stage process established this year to tax equity-related transactions. However banks and brokers – many of whom were scrambling on Friday for clarification of key details – have warned the new taxes could further damage liquidity in the Italian market. Volumes have fallen sharply since the introduction of a tax on equities in March.

Policymakers in Europe are considering levies on financial transactions as a way to stabilise markets, curb so-called speculative and high-speed trading and plug gaps in government budget deficits. A European Commission proposal has the backing of 11 eurozone countries while France mandated a watered-down tax similar to UK stamp duty a year ago. Similar proposals have also been floated by lawmakers in the US and Australia. The Italian version explicitly focuses on high-frequency trading and derivatives, which are often used by corporations and banks to hedge against risk. The tax will also apply regardless of where the transaction is executed, or the country of residence of the counterparty.

For high-frequency traders, order changes and cancellations will be taxed at 0.02 per cent when they occur within a timeframe shorter than half a second, once above a threshold. There will be fixed charges for equity derivatives, depending on the type of contract, and deals executed off-exchange will subject to a higher tax band. Intermediaries such as market makers are exempt from the tax.

The European Commission’s transactions tax has been delayed amid fierce criticism from many areas of the market over its implementation, point of collection and ambition.

[xchrom]

17. Spain’s Deficit Struggle Shows Threat to ECB Rally

http://www.bloomberg.com/news/2013-09-04/spain-s-deficit-struggle-shows-threat-to-ecb-rally-euro-credit.html

Spain’s bid to meet its budget-deficit target for the first time in five years is running into trouble, fueling concerns that increased financial stability is masking deeper economic problems.

The shortfall for the central government in the first seven months of the year was 4.38 percent of Spanish output, compared with a 3.8 percent goal for the year, government data show. Economists at the savings banks’ foundation Funcas, Mizuho International and Bank of America Merrill Lynch said Spain may miss the European Union’s overall goal for this year of 6.5 percent as benefit spending climbs and tax income falters.

German Finance Minister Wolfgang Schaeuble, campaigning ahead of this month’s national general election, has cited signs of economic recovery in Spain as evidence that Chancellor Angela Merkel’s prescription of forcing budget cuts on euro-area countries in exchange for support is bearing fruit. The unraveling of Spain’s consolidation program may undermine his case and jeopardize the 13-month rally in Spanish debt that set the spread with German bunds at a two-year low last month.

“Probably influenced by crisis fatigue and criticism of European austerity policies, the European Commission has overlooked the lack of progress this year in some structural reforms and the deficit,” said Ruben Segura-Cayuela, a former Bank of Spain economist who works at Bank of America Merrill Lynch in London. “The key question is whether rating agencies will also look the other way.” He forecasts a 7 percent deficit this year.

[xchrom]

18. ECB Keeps Rates at Record Low Amid Euro-Area Recovery

http://www.bloomberg.com/news/2013-09-05/ecb-keeps-rates-at-record-low-amid-euro-area-recovery.html

The European Central Bank kept its benchmark interest rate unchanged at a record low after the 17-nation euro area returned to growth in the second quarter.

Policy makers meeting in Frankfurt today left the main refinancing rate at 0.5 percent for a fourth month after reducing it by a quarter point in May. The decision was predicted by all 56 economists in a Bloomberg News survey. ECB President Mario Draghi will hold a press conference at 2:30 p.m.

With interest-rate expectations near levels that he described last month as “unwarranted,” Draghi’s challenge will be to convince investors of his July pledge to keep rates low even as the economy recovers. Gross domestic product expanded 0.3 percent in the three months through June after six quarterly contractions and recent economic indicators point to the rebound continuing.

“Draghi is going to give it another try to push down rate expectations today,” said Nick Kounis, head of macro research at ABN Amro NV in Amsterdam. “The ECB is certainly not happy with the market’s reaction over the past months.”

[xchrom]

19. French unemployment rises above 3 million

http://www.france24.com/en/20130905-france-jobless-unemployment-number-rises-above-3-million-economy-crisis

French unemployment rose for the first time above 3.0 million in the second quarter, but the unemployment rate rose by only 0.1 percentage point to 10.5 percent, official data showed on Thursday.

The headline total is bad news for the government on the opening day of the G20 summit in Saint-Petersburg, Russia, largely on the world economy, but there are signs that the upward trend may be easing.

The unemployment rate for young people fell from the first-quarter level while remaining high at 24.6 percent, the figures from the national statistics agency INSEE showed.

The data showed that the number of people without work rose above 3.0 million for the first time, but the labour minister said that he was pleased with the slowing trend.

[DemReadingDU]

20. Ellen Brown: Making the World Safe for Banksters: Syria in the Cross-hairs

Ellen Brown ties together the Greg Palast uncovering the Larry Summers End Game Memo
http://www.gregpalast.com/larry-summers-and-the-secret-end-game-memo/

and the Wesley Clark video that the Bush regime wanted to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

9/4/13 Ellen Brown: Making the World Safe for Banksters: Syria in the Cross-hairs
.
.
What did these countries have in common? Besides being Islamic, they were not members either of the WTO or of the Bank for International Settlements (BIS). That left them outside the long regulatory arm of the central bankers’ central bank in Switzerland. Other countries later identified as “rogue states” that were also not members of the BIS included North Korea, Cuba, and Afghanistan.

The body regulating banks today is called the Financial Stability Board (FSB), and it is housed in the BIS in Switzerland. In 2009, the heads of the G20 nations agreed to be bound by rules imposed by the FSB, ostensibly to prevent another global banking crisis. Its regulations are not merely advisory but are binding, and they can make or break not just banks but whole nations. This was first demonstrated in 1989, when the Basel I Accord raised capital requirements a mere 2%, from 6% to 8%. The result was to force a drastic reduction in lending by major Japanese banks, which were then the world’s largest and most powerful creditors. They were undercapitalized, however, relative to other banks. The Japanese economy sank along with its banks and has yet to fully recover.

Among other game-changing regulations in play under the FSB are Basel III and the new bail-in rules. Basel III is slated to impose crippling capital requirements on public, cooperative and community banks, coercing their sale to large multinational banks.

The “bail-in” template was first tested in Cyprus and follows regulations imposed by the FSB in 2011. Too-big-to-fail banks are required to draft “living wills” setting forth how they will avoid insolvency in the absence of government bailouts. The FSB solution is to “bail in” creditors – including depositors – turning deposits into bank stock, effectively confiscating them.

Countries laboring under the yoke of an extractive private banking system are being forced into “structural adjustment” and austerity by their unrepayable debt. But some countries have managed to escape. In the Middle East, these are the targeted “rogue nations.” Their state-owned banks can issue the credit of the state on behalf of the state, leveraging public funds for public use without paying a massive tribute to private middlemen. Generous state funding allows them to provide generously for their people.

Like Libya and Iraq before they were embroiled in war, Syria provides free education at all levels and free medical care. It also provides subsidized housing for everyone (although some of this has been compromised by adoption of an IMF structural adjustment program in 2006 and the presence of about 2 million Iraqi and Palestinian refugees). Iran too provides nearly free higher education and primary health care.

Like Libya and Iraq before takedown, Syria and Iran have state-owned central banks that issue the national currency and are under government control. Whether these countries will succeed in maintaining their financial sovereignty in the face of enormous economic, political and military pressure remains to be seen.

As for Larry Summers, after proceeding through the revolving door to head Citigroup, he became State Senator Barack Obama’s key campaign benefactor. He played a key role in the banking deregulation that brought on the current crisis, causing millions of US citizens to lose their jobs and their homes. Yet Summers is President Obama’s first choice to replace Ben Bernanke as Federal Reserve Chairman. Why? He has proven he can manipulate the system to make the world safe for Wall Street; and in an upside-down world in which bankers rule, that seems to be the name of the game.

http://webofdebt.wordpress.com/2013/09/04/making-the-world-safe-for-banksters-syria-in-the-cross-hairs/

[Demeter]

27. Well, that explains a lot. In fact, it explains everything

and it tells us what we as citizens have to do. One way or the other, the banksters have got to go.

[golfguru]

41. Bankers are going no where

so long as they are heavy contributors to politicians of both parties.

[xchrom]

21. US WORKER PRODUCTIVITY UP AT 2.3 PERCENT RATE

http://hosted.ap.org/dynamic/stories/U/US_PRODUCTIVITY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-05-08-49-47

WASHINGTON (AP) -- U.S. workers were more productive from April through June than previously estimated while labor costs were unchanged.

Productivity grew at an annual rate of 2.3 percent in the April-June quarter, up from an initial estimate of 0.9 percent growth, the Labor Department said Thursday. Unit labor costs were flat in the second quarter, less than the 1.4 percent rise the government had initially estimated.

The combination of stronger productivity and less of an increase in wages should provide assurances to the Federal Reserve that inflation is not a threat.

The revised productivity number reflected the fact that economic output had been revised higher for the second quarter to a growth rate of 2.5 percent. Productivity is the amount of output per hour work.


***& workers still aren't sharing in the gains.

[xchrom]

22. ADP: BUSINESSES ADDED 176,000 JOBS IN AUGUST

http://hosted.ap.org/dynamic/stories/U/US_ADP?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-05-08-44-08

WASHINGTON (AP) -- A private survey shows that American businesses added 176,000 jobs in August, fewer than in June and July but roughly in line with the monthly average for the year.

The payroll company ADP says professional and business services firms added 50,000 jobs, manufacturers 5,000 and construction firms 4,000.

The ADP figures come one day before the Labor Department will release its jobs report for August. The department's report will capture both private and public-sector job growth for the month.

[xchrom]

23. GERMAN INDUSTRIAL ORDERS OFF 2.7 PERCENT IN JULY

http://hosted.ap.org/dynamic/stories/E/EU_GERMANY_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-05-07-20-38

BERLIN (AP) -- German industrial orders dropped by a larger-than-expected 2.7 percent in July compared with the previous month, although the decline followed a very strong increase in June.

Economists had expected a 1 percent decline. However, the Economy Ministry said Thursday orders jumped 5 percent in June - revised upward from the initial reading of 3.8 percent.

July's figure was dragged lower by a 5.1 percent decrease in demand for investment goods such as factory machinery. Orders from the 17 euro area countries were off 7.5 percent after a bigger increase in the previous month.

UniCredit economist Alexander Koch noted that large swings in bulk orders have made the orders data volatile and said recent business surveys "indicate a further acceleration in the underlying order dynamics during the third quarter."

[mahatmakanejeeves]

24. ETA News Release: Unemployment Insurance Weekly Claims Report (09/05/2013)

ETA News Release: Unemployment Insurance Weekly Claims Report (09/05/2013)

Source: Department of Labor, Employment and Training Administration

Read More: http://www.dol.gov/opa/media/press/eta/ui/eta20131804.htm

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending August 31, the advance figure for seasonally adjusted initial claims was 323,000, a decrease of 9,000 from the previous week's revised figure of 332,000. The 4-week moving average was 328,500, a decrease of 3,000 from the previous week's revised average of 331,500.

The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending August 24, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 24 was 2,951,000, a decrease of 43,000 from the preceding week's revised level of 2,994,000. The 4-week moving average was 2,979,500, a decrease of 18,000 from the preceding week's revised average of 2,997,500.

UNADJUSTED DATA

....
The total number of people claiming benefits in all programs for the week ending August 17 was 4,395,712, a decrease of 72,061 from the previous week. There were 5,470,041 persons claiming benefits in all programs in the comparable week in 2012.

== == == ==

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]

25. CHINA WARNS OF ECONOMIC RISK OF SYRIA INTERVENTION

http://hosted.ap.org/dynamic/stories/G/G20_CHINA_SYRIA?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-05-03-52-59

ST. PETERSBURG, Russia (AP) -- China is warning other world powers of global economic risks of a potential U.S.-led military intervention in Syria'a civil war.

Chinese Vice Finance Minister Zhu Guangyao says such "military action would definitely have a negative impact on the global economy, especially on the oil price."

He spoke in St. Petersburg on Thursday ahead of a summit of leaders of the Group of 20 leading world economies.

He cited estimates that a $10 rise in oil prices could push down global growth by 0.25 percent.

[xchrom]

26. A Russian Botnet Is Attacking The Secret Internet For Criminals — And No One Knows Why

http://www.businessinsider.com/a-russian-botnet-is-attacking-the-secret-internet-for-criminals-and-no-one-knows-why-2013-9

Tor, the anonymous, encrypted, parallel web network favored by drug dealers, pedophiles, and privacy activists, is under attack from a Russian botnet and no one knows why.
A huge uptick in traffic was noticed on Tor in the last few days, from 600,000 to 1.2 million users per week. Many people thought that a combination of a new censorship law in Russia, the NSA's PRISM spying program (and Edward Snowden's leaks about it), and attacks by the hackers of the Syrian Electronic Army had driven new users to seek the safety of a network where speech is still unregulated and relatively free.

But the traffic is fake, according to the Fox IT blog:

Typically, it is fairly clear what the purpose of malware is, such as banking, clickfraud, ransomware or fake anti-virus malware. In this case however it is a bit more difficult. It is possible that the purpose of this malware network is to load additional malware onto the system and that the infected systems are for sale. We have however no compelling evidence that this is true, so this assumption is merely based on a combination of small hints. It does however originate from a Russian spoken region, and is likely motivated by direct or indirect financial related crime.



Read more: http://www.businessinsider.com/a-russian-botnet-is-attacking-the-secret-internet-for-criminals-and-no-one-knows-why-2013-9#ixzz2e1fwLEOJ

[Demeter]

28. European Union launches clampdown on shadow banking

http://www.reuters.com/article/2013/09/04/eu-shadowbanking-idUSL6N0H022B20130904

Special funds used by big companies to park billions of euros of cash face stricter rules to make them safer, the European Commission said on Wednesday, taking a first step to reform unregulated finance known as shadow banking. The draft law, criticised by industry as too harsh but by Germany as not strict enough, will regulate the euro money market funds sector, demanding some funds set aside cash buffers to avoid a panic should many investors withdraw money at once. This would lower what EU financial services chief Michel Barnier said was a risk to the financial system from the trillion euro sector, but users of the funds warn that demanding funds hoard more for a rainy day would make them too expensive.

The changes are part of efforts to shine a light on shadow banking, a 24-trillion-euro industry in Europe - half the world's total - that comprises money market funds, some hedge funds, and firms involved in securities lending and repurchase markets. Such groups borrow and lend, just like banks do, but because they are not banks they often fall outside the remit of regulation, which is why they are considered to be in the "shadow" of traditional finance. In the European Union, money market funds are mainly based in France, Ireland and Luxembourg and are heavily used by companies in Germany, Britain and elsewhere. For companies, they are an alternative home for short-term cash so that they can spread their reserves rather than leaving them with one bank. Unlike banks, the funds have no access to support from central banks such as the European Central Bank if things go wrong.

But the vast unchartered territory unnerves regulators in part because the sector is closely intertwined with banks, who often sponsor the funds as well as relying on them for finance themselves...The draft law also effectively bans credit ratings on money market funds, to stop a potential downgrade sparking panic, a proposal criticised by ratings agencies Moody's and Standard & Poor's...Barnier also published a "roadmap" on how the EU plans to regulate other parts of the wider sector, including a suggestion that all institutions involved in shadow banking set aside capital buffers to cover risks...The European Union's 28 member states and the bloc's parliament have the final say on the draft law and some changes are likely.


..................................................
...The United States is also discussing new rules for money market funds but has stopped short so far of proposing cash buffers...

[Demeter]

29. BOJ says ready to act if tax hike threatens price goal

http://www.reuters.com/article/2013/09/05/us-japan-economy-idUSBRE98404320130905

The Bank of Japan said the world's third-largest economy is recovering and signaled it would increase its huge stimulus only if a planned sales tax hike was to threaten its goal of lifting inflation to 2 percent in two years....Easing the pain on the economy from the tax hike should be easier because policymakers only need to loosen fiscal and monetary stimulus further, Kuroda added. "Even if the sales tax is raised as scheduled, we don't expect the economy to falter," he said. "If risks materialize and threaten our 2 percent inflation target, we of course will respond appropriately."

As widely expected, the central bank voted unanimously on Thursday to maintain its April pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen ($603 billion) to 70 trillion yen.

Kuroda's remarks come as political debate intensifies on whether to proceed with lifting the sales tax rate to 8 percent from 5 percent next April, and to 10 percent in October 2015. The BOJ has consistently called for the need to fix Japan's tattered finances and has argued that the sales tax hike won't threaten the economic recovery or delay an end to deflation. While critics have called for a delay or watering down of the tax hike for fear of derailing the budding recovery, the government is leaning toward proceeding as scheduled and cushioning the impact with fiscal spending. That may add pressure on the central bank to offer further stimulus, although Kuroda said there was no need for pre-emptive action.

"We're seeing clearer signs a positive cycle of income and expenditure is kicking in for both the corporate and household sectors," Kuroda said. "Japan's economy is moving in line with our forecast."

RECOVERY TAKING HOLD

Japan emerged from recession in 2012 and data for much of this year has shown the benefits of Abe's reflationary policies and the BOJ's aggressive stimulus. Recent data have been particularly encouraging, with the jobless rate at the lowest in almost five years, summer bonuses increasing and core consumer prices rising at the fastest pace in nearly five years. Data on Monday showed a healthy rise in corporate capital spending, pointing to a sharp upward revision to second-quarter GDP data next week from preliminary growth of 2.6 percent. "Japan's economy is recovering moderately," the BOJ said in a statement, revising up its assessment from August when it said the economy was "starting to recover moderately."

The BOJ's rosy assessment may heighten the case for Abe to proceed with the tax hike, a decision he will make early next month.

[Demeter]

30. The 8 Groups in America That Are the Most Screwed-Over by Predatory Capitalism

http://www.alternet.org/hard-times-usa/8-groups-america-are-most-screwed-over-predatory-capitalism?akid=10872.227380.9-CyPq&rd=1&src=newsletter890789&t=7





We live in a society that allows one man to make $15 million a day while a low-income mother gets $4.50 a day for food, and much of Congress wants to cut the $4.50. Are political and corporate leaders even remotely aware of the conditions of society beneath the wealthiest 10% or so? The following are some of the victims of an economic system that has forgotten the majority of its people.

Children

One out of every five American children now lives in poverty, and for black children it's nearly one out of TWO. Almost half of food stamp recipients are children. UNICEF places us near the bottom of the developed world in the inequality of children's well-being, and the OECD found that we have more child poverty than all but 3 of 30 developed countries. It's rather embarrassing to view the charts.

Students

Over the last 12 years, according to a New York Times report, the United States has gone from having the highest share of employed 25- to 34-year-olds among large, wealthy economies to having among the lowest. The number of college grads working for minimum wage has doubled in just five years. Higher education was cut by nearly $17 billion in the years leading up to 2012-13. Through those same years large corporations were avoiding about $14 billion annually in taxes. To make up the difference, students face tuition costs that have risen almost ten times faster than median family income, leading them into their low-wage post-college positions with an average of $26,000 in student loan debt.

The Elderly

Three-quarters of Americans approaching retirement in 2010 had an average of less than $30,000 in their retirement accounts. The percentage of elderly (75 to 84) Americans experiencing poverty for the first time doubled from 2005 to 2009. The folly of cutting Social Security is reflected in two facts. First, even though Social Security provides only an average benefit of $15,000, it accounts for 55 percent of annual income for the elderly. And second, seniors have spent their working lives paying for their retirement. According to the Urban Institute the average two-earner couple making average wages throughout their lifetimes will receive less in Social Security benefits than they paid in. Same for single males. Almost the same for single females.

Wage Earners

Workers have 30% LESS buying power today than in 1968. If the minimum wage had kept up with employee productivity, it would be $16.54 per hour instead of $7.25. Almost unimaginably, conditions for workers have gotten even worse since the recession. While 21 percent of job losses since 2008 were considered low-wage positions, 58 percent of jobs added during the recovery were considered low-wage. As for members of Congress who say "get a job," only one of them was present at the start of a recent unemployment hearing.

The Sick and Disabled

Over 200 recent studies have confirmed a link between financial stress and sickness. In just 20 years America's ranking among developed countries dropped on nearly every major health measure. Victims suffer both physically and mentally. A recent study found that unemployment, whether voluntary or involuntary, can significantly impact a person's mental health. Even grimmer, from 1999 to 2010 the suicide rate among Americans ages 35 to 64 increased by almost 30 percent. In the long run, the only Americans to increase their life expectancy have been seniors covered by Medicare.

Women

Recent figures from the Bureau of Labor Statistics reveal that women earn just 80% of men's pay. In Washington, DC and California, Hispanic women make only 44 cents for every dollar made by white men. The only deviation from the norm is that in 47 of 50 large metropolitan areas, well-educated single childless women under 30 earn more than their male counterparts. But the overall disparities have worsened since the recession, with only about one-fifth of new jobs going to women, and with median wealth for single black and Hispanic women falling to a little over $100. And there's no respite with advancing age. The average American woman's retirement account is 38 percent less than a man's, and women over 65 have twice the poverty rate of men.

Minorities

The Economist states:

Before the 1960s...most blacks were poor, few served in public office and almost none were to be found flourishing at the nation's top universities, corporations, law firms and banks. None of that is true today.

Wrong. Much of that is true today. According to the Economic Policy Institute (EPI), median wealth for black families in 2009 was $2,200, compared to $97,900 for white families. (Pew Research reported $5,677 for blacks, $113,149 for whites). EPI said median financial wealth (stocks, etc.) was $200 for blacks, compared to $36,100 for whites. Since the recession, black and Hispanic wealth has dropped further, by 30 to 40 percent, while white family wealth dropped 11 percent.

Blacks and Hispanics, with 29% of the population, are also severely under-represented on corporate boards and in higher education. One of the reasons it's so hard for young blacks to be successful is that they're viewed as criminals by many white authority figures. In The New Jim Crow, Michelle Alexander documents the explosion of the prison population for drug offenses, with blacks and Hispanics the main targets even though they use drugs at about the same -- or lesser -- rate as white Americans.

The Homeless

The super-rich want homeless people to get jobs. But they don't want to pay taxes to support job creation. If the richest Americans - the Forbes 400 - had paid a 5% tax on their 2012 investment earnings, enough revenue would have been generated to provide a full-time minimum wage job for every person who was homeless in America on a January night in 2012. Instead, it keeps getting worse for the homeless. North Carolina made it a crime to feed them. Columbia, South Carolina approved a plan to remove them. Tampa, Florida passed a law that makes it a crime for them to sleep in public.

So who's left after all this? Oh yes, rich white men.

Paul Buchheit is a college teacher, a writer for progressive publications, and the founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org).

[Demeter]

31. The Real Story Behind the Decline of Detroit … And Yes, Great Things Are Happening There Too

http://www.alternet.org/economy/real-story-detroits-economy-good-things-are-really-happening-motown?akid=10872.227380.9-CyPq&rd=1&src=newsletter890789&t=3&paging=off



...At the height of the depression Congress added a new tool, Chapter 9, to the Bankruptcy Code to address financial failure by local governmental bodies. While it’s true that “failed states,” or in this case a failed city government, are different in various ways from a corporation, the basic issues of who owes who how much are the same. Admittedly municipal bankruptcy is not as common as private sector bankruptcy. (Not yet anyway.) So, up to a point, the “look, look, a man is biting a dog” scenario is justifiably in play. Further, because cities are units of elected governments, there is understandably a different sense of the stakes. In that context, what the MSM is mostly missing is the extent to which bankruptcy is but the latest incremental step in a long running destruction of democracy for African-Americans. As of this writing more than 55% of Michigan’s African American population lives in communities under some form of Emergency Management. That means state government has already taken away the authority of locally elected officials. Bankruptcy just moves that disenfranchisement to the federal level.

That does make news though because unlike state “emergency manager” laws, Chapter 9 federal bankruptcy puts the banks, bondholders, bond insurers and hedge funds who lent the city money at risk. That is something Michigan Governor Rick Snyder had worked very hard to avoid. Back in June of 2011, he made a pledge to his Wall Street friends. "Detroit's not going into bankruptcy," Snyder told reporters, as he beamed with encouragement from his meetings Monday with three top bond rating agencies in New York.

Predictably, what also excites and dominates MSM coverage is the blame game. The liberals did it or the blacks brought this on themselves, scream the “conservatives.” It’s the racists and the right wing’s fault, say the “liberals.” The noise can be deafening. What follows is I hope a quieter version of what the “bankruptcy” of Detroit means. The government is bankrupt. Detroit is not.



There are four economies in play in Detroit.

One is the old economy.

That means preindustrial and industrial. It’s old money. A lot of it is auto related. Especially these days, capital is highly mobile and it has virtually no loyalty to any geographic entity. If it’s not bound to a nation, it is surely even less loyal to a city. Thus the old money led the disinvestment that removed so many of the economic assets that once gave Detroit a version of what passed for prosperity in the mid-twentieth century. Long before Detroit-based capital was relocating to Mexico and China, it was moving from Detroit to its suburbs.

My name for the second Detroit economy is the pizza economy.

Others might call it the entertainment economy. As industry was moving out, the pizza economy was moving in, personified by Mike Illitch, patriarch of the family that founded the Little Caesar’s Pizza chain. Illitch bought the Detroit Tigers, the Detroit Red Wings and a premier downtown concert hall, the Fox theatre. Among other things. Most of his properties have received some sort of city, state or federal subsidy. Even now, bankruptcy notwithstanding, he is scheduled to receive $650 million in subsidies from Detroit taxpayers for a new hockey arena. Three gambling casinos also joined the Detroit entertainment scene. The core idea was that even if you couldn’t persuade white people to live in Detroit you could build an economy around getting them to visit. Sensing something was happening downtown, FIRE (finance, insurance, real estate) gazillionare Dan Gilbert (Quicken Loans among other assets) more recently jumped into the fray and now owns 19 downtown Detroit properties and is probably buying another one right this minute.

Then comes what we might call the SLOWS BarBQ economy—economy number three.

SLOW’s proprietor, Phil Cooley, personifies the urban pioneers who saw opportunity in the ruins of Detroit. So did Jackie Victor and Anne Perrault who founded the socially responsible Avalon Bakery way back in 1997. Cooley has now added a Detroit business incubator to his restaurant and real estate interests. Avalon recently acquired a huge abandoned factory in the city to service their growing business. There is big buzz about Shinola (manufacturing high end watches and bicycles) in mid-town. Within the last few months Whole Foods and the Meijer superstore chain opened stores in Detroit proper too.

And then there is economy number four—everything else. I’ll have more to say about #4 later. For now I’ll say this. Everyone has some sort of template in his or her mind about how a city is supposed to operate. Detroit hasn’t fit that template for at least 40 years. But as the disinvestment in Detroit stripped its conventional assets—good public schools, effective law enforcement, most of the good union jobs, taxes derived from healthy middle class home values and so on, what was left was a different kind of economy. Economy #4 is driven by the assumption that help is decidedly not on the way. Hundreds of thousands of people, mostly African-American, still live in Detroit. They do get by. They do constitute an economy. Some have a connection to economies one through three. Many do not. Despite the resourcefulness they repeatedly show, economies 1-3 generally consider them a problem, not an asset.

So now, back to the bankruptcy. What has astounded me again and again in recent years is that every single one of Detroit’s four economies is investing. A lot. Capital of all kinds is pouring into Detroit. A recent issue of Crain’s Detroit Business reports on 24 new businesses that have opened in midtown Detroit in the last year. Scores more have started up in downtown and other neighborhoods too. Foundations, (the “trickle down” creations of economy number one) have spent at least 2 billion dollars in Detroit in recent years. Dan Gilbert keeps closing offices in the suburbs and bringing those jobs to downtown Detroit. In some parts of the city rents are rapidly rising.

If Detroit is so bankrupt and dysfunctional, how can that be?

Government? Apparently, we don’t need no stinkin’ government. Not economy 1. Or 2. Or 3. Or 4. That’s the lesson to be learned from watching what people do as opposed to the hand-wringing things some people say. Want to see a close up of the shared dream of Karl Marx and Grover Norquist? Come to Detroit where the “state” has truly withered away, or been drowned in the bathtub. Take your pick. Well some of government as we know it anyway—the part where Detroiters had some say in their own destiny. The reality is that Detroit has been “governed” for some time by a dizzying array of state “emergency managers” and other state agency takeovers; private/public partnerships; private services for security, waste management, worker training and many other things formerly done by elected government and regional authorities of various kinds, not to mention many foundation invented organizations. (Detroit Free Press reporter John Gallagher does a good job of describing some of these dynamics in two books, Reimagining Detroit and Revolution Detroit. He also profiles many of the authentic grass roots initiatives underway in the city.)

Illustrating the theory that the exception proves the rule, the sound of wailing recently heard about the possible sale of artworks from the Detroit Institute of Art (DIA) is an example of one Detroit asset suburbanites care about that they did not get around to protecting or relocating.

MASSIVE INDICTMENT OF RACISM AND THE FOURTH ECONOMY'S FUNCTION--WELL WORTH READING THE WHOLE THING. FRANK JOYCE PREDICTS HOW THE ECONOMIC COLLAPSE WILL PLAY OUT NATIONWIDE--HE CLAIMS DETROIT IS THE MODEL OF OUR FUTURE.


Frank Joyce is an activist and author. He can heard on Dave Marsh's radio program, "Live from the Land of Hopes and Dreams," SiriusXM 127, 1-4pm EST.

[xchrom]

32. L’Shana Tova! it's rosh hashanah

unfortunately i'm not doing a new year feast this year.
we moved labor day to this weekend.

but i have been remiss in wishing my fellow SMW & WEE folks a happy new year.

[Demeter]

34. Happy New Year, X! Happy New Year to All!

For the first time in a LOOONG time, it really does feel like a new year is dawning. There's change in the winds of politics, economics, society, REAL change: minds are changing.

What it will look like when the change works through and a new stability is reached (if it is reached), I cannot predict, but I'm hoping it's better than this.

And I think it all can be attributed to Obama. If he hadn't followed the example of his predecessor (not that he's deceased, except politically) W, and been a Miserable and Very Public Failure as a President, things would have bumped along for a decade or more, as they did with Clinton. Clinton was a tough act to follow. The 1% got their money's worth out of that investment. With W and O, not so much. I expect much wailing and gnashing of teeth, when the analyses come out.


PS: I picked the peaches...ten lovely (organic) gems. Saturday is Pie Day!

[xchrom]

36. Peach Pie!

[Demeter]

33. Why Climate Change May Be Responsible for the Horrors in Syria

http://www.alternet.org/syria?akid=10875.227380.rz-NFm&rd=1&src=newsletter891217&t=9&paging=off

If you want to understand what's happening in Syria ... Please read this important post by James Fallows:

Many times I've mentioned the foreign-policy assessments of William R. Polk, who first wrote for the Atlantic (about Iraq) during Dwight Eisenhower's administration, back in 1958, and served on the State Department's Policy Planning staff during the Kennedy years. He now has sent in a detailed analysis about Syria.

Polk wrote this just before President Obama switched from his go-it-alone policy and decided to seek Congressional approval for a Syrian strike. It remains relevant for the choices Congress, the public, and the president have to make. It is very long, but it is systematically laid out as a series of 13 questions, with answers. If you're in a rush, you could skip ahead to question #7, on the history and use of chemical weapons. But please consider the whole thing when you have the time to sit down for a real immersion in the implications of Congress's upcoming decision. It wouldn't hurt if Senators and Representatives read it too. http://www.theatlantic.com/international/archive/2013/09/your-labor-day-syria-reader-part-2-william-polk/279255/

It is the most cogent recitation and analysis of the Syrian crisis that I've seen. While my opposition to this intervention is rooted in global concerns which are unrelated to this set of circumstances, these particulars bolster my instincts and my fundamental skepticism about the wisdom of this action. Here's just one interesting insight that should make us all step back and ask ourselves whether our long term interest might be better served by concentrating on a different issue that really does require American "intervention":

Syria has been convulsed by civil war since climate change came to Syria with a vengeance. Drought devastated the country from 2006 to 2011. Rainfall in most of the country fell below eight inches (20 cm) a year, the absolute minimum needed to sustain un-irrigated farming. Desperate for water, farmers began to tap aquifers with tens of thousands of new well. But, as they did, the water table quickly dropped to a level below which their pumps could lift it.

In some areas, all agriculture ceased. In others crop failures reached 75%. And generally as much as 85% of livestock died of thirst or hunger. Hundreds of thousands of Syria’s farmers gave up, abandoned their farms and fled to the cities and towns in search of almost non-existent jobs and severely short food supplies. Outside observers including UN experts estimated that between 2 and 3 million of Syria’s 10 million rural inhabitants were reduced to “extreme poverty.”

The domestic Syrian refugees immediately found that they had to compete not only with one another for scarce food, water and jobs, but also with the already existing foreign refugee population. Syria already was a refuge for quarter of a million Palestinians and about a hundred thousand people who had fled the war and occupation of Iraq. Formerly prosperous farmers were lucky to get jobs as hawkers or street sweepers. And in the desperation of the times, hostilities erupted among groups that were competing just to survive.

Survival was the key issue. The senior UN Food and Agriculture Organization (FAO) representative in Syria turned to the USAID program for help. Terming the situation “a perfect storm,” in November 2008, he warned that Syria faced “social destruction.” He noted that the Syrian Minister of Agriculture had “stated publicly that [the] economic and social fallout from the drought was ‘beyond our capacity as a country to deal with.’” But, his appeal fell on deaf ears: the USAID director commented that “we question whether limited USG resources should be directed toward this appeal at this time.” (reported on November 26, 2008 in cable 08DAMASCUS847_a to Washington and “leaked” to Wikileaks )

Whether or not this was a wise decision, we now know that the Syrian government made the situation much worse by its next action. Lured by the high price of wheat on the world market, it sold its reserves. In 2006, according to the US Department of Agriculture, it sold 1,500,000 metric tons or twice as much as in the previous year. The next year it had little left to export; in 2008 and for the rest of the drought years it had to import enough wheat to keep its citizens alive.

So tens of thousands of frightened, angry, hungry and impoverished former farmers flooded constituted a “tinder” that was ready to catch fire. The spark was struck on March 15, 2011 when a relatively small group gathered in the town of Daraa to protest against government failure to help them. Instead of meeting with the protestors and at least hearing their complaints, the government cracked down on them as subversives. The Assads, who had ruled the country since 1971, were not known for political openness or popular sensitivity. And their action backfired. Riots broke out all over the country, and as they did, the Assads attempted to quell them with military force. They failed to do so and, as outside help – money from the Gulf states and Muslim “freedom fighters” from the rest of the world – poured into the country, the government lost control of over 30% of the country’s rural areas and perhaps half of its population. By the spring of 2013, according to the United Nations High Commission for Refugees (UNHCR), upwards of 100,000 people had been killed in the fighting, perhaps 2 million have lost their homes and upwards of 2 million have fled abroad. Additionally, vast amounts of infrastructure, virtually whole cities like Aleppo, have been destroyed.

...It's not that the US has no leading role to play in the world. It's just that we are playing the wrong one.

Digby is the proprietor of Hullabaloo.

[Demeter]

35. Has it been a week already? the Weekend Is Coming! The Weekend is Coming!

and I don't have a topic at hand....

Your suggestions gratefully accepted!

Post them here. Meanwhile, duty calls. I'll check back tonight!

[rusty fender]

37. How about Zozobra?

Zozobra is giant paper puppet that is burned every year in SF, NM. The idea is that the puppet embodies the town's worries, sadness and disappointments. Once, burned, the gloom of SF's inhabitants are lifted and are thus free to celebrate the city's Fiesta unburdened.

http://www.abqjournal.com/162734/abqnewsseeker/zozobra-will-still-burn-on-a-thursday-night-admission-this-year-will-be-10.html

[Fuddnik]

38. Football season starts tonight.

NFL.

College started last week, and Ohio State will continue to inflict mayhem on Meechigan!

[Demeter]

40. I couldn't do justice to football

I just go for the half-time. But I'd be willing to open the weekend for it....

and we can burn the dummy for half-time!