STOCK MARKET WATCH -- Friday, 20 September 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 20 September 2013[font color=black][/font]

SMW for 19 September 2013

AT THE CLOSING BELL ON 19 September 2013
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Dow Jones 15,636.55 -40.39 (-0.26%)
S&P 500 1,722.34 -3.18 (-0.18%)
[font color=green]Nasdaq 3,789.38 +5.74 (0.15%)


[font color=red]10 Year 2.75% +0.06 (2.23%)
30 Year 3.80% +0.05 (1.33%)[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.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.








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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]

[Tansy_Gold]

1. Honorable mention 'toon

[Hugin]

4. Not to mention...

ZOMBIES!!i1!!i

When the zombie apocalypse hits, it's probably one of the safest places to be... I bet'cha.

[Tansy_Gold]

5. Y'know, I haven't figured that one out yet

I guess I have never read a zombie book. Or seen a zombie movie. Or done a zombie anything.

I just don't get it........



(And I love the ¡¡¡¡ !!!)

[Hugin]

8. Zombie 101.

There is a subset of "zombies", as they are portrayed in the popular media, who seek to eat living human brains... Similar to how Vampires are reported to have a thirst for blood. This group is often shown to be shuffling along moaning, "Braaaains! Brains! Braaaains!" Mostly, the type appear in the comedies of the zombie genera.

"They'd starve in certain places..." Has become a running gag with zombie references. Implying, that there are places where even with the presence of humans there is little in the way of human brains to sustain a brain eating zombie.

[AnneD]

29. Texas is another safe spot...

during a zombie apocalypse is Texas. I plan to make a bee line to the state capital. The Leg doesn't have brains much less a conscious.

[DemReadingDU]

2. Ian Welsh: Keeping the Economy on Life Support

9/19/13 Shorter Federal Reserve: The Economy Breathes Sort of OK if We Keep it On Life Support
.
.
It is worth reiterating that the purpose of Quantitative Easing is to make the rich richer, and that it has done. US stock markets increased 150% from their lows, one of those bull markets traders dream of. However the employment situation has not significantly improved (ignore the unemployment rate, even in absolute terms there are still fewer people employed than there were before the financial crisis.) Median household net worth is down, median income is down, but the rich are richer.

This is not to say that QE does no good for the regular economy, it does, but it does far less good than could be done with eighty five billion dollars a month. A program to, say, retrofit every single federal building for active and passive solar would employ more people and have more of a ripple effect. Eighty five billion dollars a month (970 billion a year) is a LOT of money.

Nonetheless, given its refusal to break up the large banks; the President and Congress’s refusal to actually tax rich people (thus necessitating the Fed buying treasury bonds); and a refusal to allow the housing market to settle to its actual value while supporting underwater homeowners, the Fed is in a bind. If you refuse to do anything that is primarily intended to help ordinary people, refuse to engage in sufficient measures to break the oil supply bottleneck (and no, Fracking isn’t cutting it); refuse to tax rich people (who have the money); and refuse to engage in any sort of industrial policy while funneling money to industries like banking, insurance, pharma and the military-industrial complex which are ultimately parasitical, why then, it can certainly seem like you have no choice but to continue throwing money at banks and rich people, and hoping some of it gets to the real economy.

Yellen won’t be any better, by the way. Bernanke’s job was to make sure that the financial collapse did not cause an FDR or New Deal: to make sure that the rich weren’t wiped out by the financial bubble they caused. His academic work is about this exact problem: how to make sure that a New Deal doesn’t happen: how to make sure ordinary people don’t get their share of the pie. Yellen won’t change that, no one will be picked for the Federal Reserve who would change that.

http://www.ianwelsh.net/shorter-federal-reserve-the-economy-breathes-sort-of-ok-if-we-keep-it-on-life-support/

[DemReadingDU]

3. The Automatic Earth - Derivatives, The Gift That Keeps On Taking

9/19/13 Ilargi: Derivatives, The Gift That Keeps On Taking

If there's one lesson to be drawn from the Federal Reserve's non-taper decision yesterday, September 18, it's that the Fed will continue to ignore the interests of the real economy, even if that's what's supposed to be its task and mandate. The Federal Reserve is part of the financial system, and as such it represents the interests of that system, not the people in the street. It will do whatever benefits the former, and whichever choices it makes will always drain ever more resources away from the latter.

There is no US economic recovery, quite the contrary in fact, there is at best a set of seemingly good looking numbers that indicate good news for financial institutions, and bad news for everyone else. In the same vein, the financial markets don't reflect what goes on in the streets of America (and beyond). If they did, the Dow and S&P could not reach new records at a point in time when Bernanke himself claims the real economy's numbers are too weak to taper.

So quit expecting Bernanke or his successor to do anything that would benefit you personally. The longer you keep hoping for that, the more you will be puzzled and disappointed. Central banks and governments worldwide have made the financial system their sole priority, and they will bleed their people dry in order to serve that priority. This should not come as a surprise, since it's inevitable that if you allow money to enter into your political system, money will end up buying it outright. This happens for the same reason that bad money will always drive out good money from an economy. It's elementary.

The Federal Reserve doesn't give a hoot how many Americans are unemployed, how many children live in poverty, and how many millions survive on foodstamps. Their policies, all of them, are geared towards maximizing the profits in the financial system. If that is achieved by raising your standard of living, it will go up. If it's achieved by making you poor, you will be made poor. In the present situation, where the financial system sits on trillions of dollars in debt and trillions more in highly leveraged wagers, your money, the fruit of your labor, is badly needed to not let the financial system go bust. The Federal Reserve's iron hold on your money makes the outcome obvious and predictable (and for any loose ends, there's always the Treasury department).

One area where we will see this inevitable outcome play out is in derivatives. Nothing in the system is riskier, more highly leveraged, or potentially more lethal to our real economies and societies. The political/financial system has made provisions for this in the form of legislation. Under Clinton, regulation of derivatives was strangled, under Bush, bankruptcy law was adapted to accommodate the derivatives markets, and under Obama, the proposed Dodd-Frank legislation is being molded to deliver the few remaining blows.

Dodd-Frank should have been a contemporary Glass-Steagall, but the area of the world where politics and finance converge has both changed and expanded too much over the past 80 years to make that possible. Legislation ostensibly aimed at protecting the people will instead turn out to do the exact opposite.

much more...
http://theautomaticearth.com/Finance/derivatives-the-gift-that-keeps-on-taking.html

[Fuddnik]

6. Want to see how the Real Estate Market collapses? Especially the Florida market.

A friend of mine sent me this, with no link, but probably from the Tampa Bay Times (formerly the St. Pete Times). I can't check for a link, because they hid their content behind a paywall a couple of days ago.

I already pay $1300 per year in flood insurance, on top of $3000 per year in homeowners insurance. If I get hit this bad, the bank can have the keys back. Ain't no way I can afford increases like this.
-----------------------------------------------------------------------------------------------------------------
Soaring flood insurance rates fuel anxiety in real estate

ST. PETERSBURG — Nearly 40 real estate agents packed the sweltering conference room in downtown St. Petersburg this week to hear flood insurance expert Pete Travis describe the new — and expensive — world coming Oct. 1.

He didn't pull any punches.

Many older homes in flood zones have long benefited from a big subsidy that kept flood insurance rates very low. Starting next month, those homeowners will typically see annual rates jump more than 20 percent, including a fee for a new reserve fund. A late payment could cost them their subsidy immediately.

If the owner sells the home, the buyer will lose the subsidy. That could, as in one scenario, raise a premium that had been $1,400 a year to $9,500.

Travis wasn't hopeful of a congressional reprieve in the next couple of weeks.

"Have I demoralized everyone here?" he asked.

Concern about rising flood insurance rates — triggered by the Biggert-Waters Act of 2012 — has been percolating for months. Now, just weeks before the law's main provisions take effect, real estate agents and communities from Apollo Beach to Treasure Island are galvanizing, worried about falling property values, busted real estate sales and a crippling effect on the broader economy.

"This is a major change," said Patty Latshaw of St. Petersburg-based Wright National Flood Insurance Co., the biggest writer of federal flood insurance in the country. "I'm just glad to see people are realizing what is going on and asking questions and becoming involved. Finally."

For Cristy and Fred Assidy, reality hit too late.

After 15 years in their "starter home" in St. Petersburg's Shore Acres, the couple was excited recently to close on a new home in Riviera Bay near Weedon Island.

Then came a shocker.

During this first year, their premium through the National Flood Insurance Program is a doable $1,700; next year it jumps to $17,000. For a house they bought for $205,000.

"This is going to devastate the real estate market here just when it's barely making a comeback," Cristy Assidy said. "People are going to leave the state in mass exodus."

Biggert-Waters was intended to help keep the National Flood Insurance Program afloat after suffering huge losses from Hurricane Katrina. Key to the makeover was getting rid of subsidized rates, in some cases gradually and in other cases — like the sale of a home — in one fell swoop.

Most flood policyholders nationwide will see only single-digit increases in rates next year. In fact, just 20 percent of all flood policies in the United States are subsidized. But in Florida, the impact will be much greater. With 40 percent of all flood policies nationwide, Florida has by far the most subsidized homes.

More than 50,000 of Pinellas County's 142,000 properties with flood policies have subsidized flood rates, more than any other county nationwide.

For someone staying in a subsidized home in a high-risk flood zone, rates will typically rise 16 or 17 percent Oct. 1. That doesn't include a 5 percent charge toward the new flood reserve fund.

The impact is more immediate, and devastating, for recent buyers of subsidized properties, like the Assidys, or those who let their subsidized policies lapse. After Oct. 1, their premiums will reflect the full "risk-based" rate, typically adding many thousands to their premiums.

Homeowners feel trapped, unable to sell and potentially facing double-digit annual rate increases if they stay. Some buyers of flood-subsidized properties feel duped, unaware that because their deal closed after July 6, 2012, they'll be forced to pay the full rate when they renew after Oct. 1.

St. Petersburg real estate agent Bonnie Davis, who organized this week's briefing with Travis, surmised the industry may have been late to mobilize because many thought Congress would intervene by now.

"The Realtors are starting to speak up now because they're starting to lose some deals. And this really is just the tip of the iceberg," said Christopher Heidrick, an insurance agent from Lee County, which like Pinellas is one of the hardest-hit counties.

Heidrick worked with a buyer from the U.S. Virgin Islands who planned to purchase a 900-square-foot home in Sanibel — until he found out the flood premium would jump from $2,440 to $16,092 when he renewed next year. "That blew up the deal," he said

Pinellas County Property Appraiser Pam Dubov thinks it's premature to speculate on the impact on market values and the broader economy. Beachfront home prices are up about 9 percent from a year ago.

Fourth-quarter results, Dubov said, could be radically different based on a rising number of anecdotes of pending sales gone bad because of the flood premium disclosure.

"I don't want to pretend this is going to go away and suggest this isn't going to affect the market because that's ridiculous," Dubov said. "There is no way this is not going to do that."

On the other hand, she said she doesn't want to alarm people that "every house prior to 1975 in a flood zone is worth nothing."

There are several measures being discussed in both the U.S. Senate and House of Representatives to stave off "unintended consequences" of Biggert-Waters. But so far the sole measure that has passed the House would delay only a small part of the law — and wouldn't stop the premium hikes from hitting new buyers of subsidized properties.

On Monday, the Independent Community Bankers of America echoed calls for a freeze on any increases until FEMA can complete a study on the impact on home affordability. Moving forward Oct. 1 threatens to price people out of their homes, destroy home values and disrupt the housing market's recovery, the bankers group maintained.

Property owners caught in the middle of the financial squeeze, like the Assidys, can only hope for the best.

The couple contacted FEMA to see if they can qualify for a grant to elevate their new home. But Cristy Assidy doubts that will work out in time.

"Apparently those dollars are kind of hard to get, and there's a limited time you can (apply)," she said. "I just hope the government just sees the light and realizes this will kill the real estate market here."

Jeff Harrington can be reached at [e-mail] or [phone].

Fla., Pinellas to be hardest hit

Why are flood insurance rates rising?

To more accurately reflect the risk of flooding, the Biggert-Waters Flood Insurance Reform Act of 2012 calls for eliminating some artificially low rates and discounts.

Will everybody's rates go up sharply?

No. In fact, the biggest rate hikes focus on just 20 percent of flood policies in the country, those covering older properties in low-lying areas (called a Special Flood Hazard Area) for which owners have been paying cheaper, subsidized rates. The affected properties date to before Flood Insurance Rate Maps were adopted in the 1970s and 1980s.

What about properties within Tampa Bay?

Florida is the hardest-hit state and Pinellas County is tops with more than 50,000 subsidized flood policies that could face significant rate hikes. That translates to about 35 percent of all flood policies in the county.

Among other bay area counties: more than 14,000 Hillsborough policies (or 21 percent of all flood policies) are subsidized; in Pasco, it's more than 11,000 policies (36 percent); in Citrus, about 2,900 policies (41 percent); and in Hernando, about 1,000 (22 percent).

I've heard some property owners will face 25 percent annual increases for several years? Who does that affect?

• Owners of investment properties that have been subsidized with lower rates already started paying the higher rates on policy renewals after Jan. 1.

• Owners of businesses and nonresidential properties with subsidized rates will see the higher rates effective Oct. 1.

• A subsidized property that has experienced severe or repeated flooding will see the higher rates kick in Oct. 1.

What if I live in my home and currently benefit from subsidized rates on my flood policy?

If you continue to live in your home and don't sell, you most likely will be able to keep the lower, subsidized rates with the higher premiums phased in. The phase-in rate for a subsidized homeowner in an A or V flood zone is 16 or 17 percent annually until the rate is determined to be at full-risk.

However, you could face the big jump in rates if the property is sold, the policy lapses, you file severe or repeated flood losses, or a new policy is purchased.

Is that all?

No. Subsidized homeowners will also have to pay a new 5 percent charge into a reserve fund for future flooding losses.

I don't live near the beach. Do I have to worry?

Among the many misconceptions about Biggert-Waters is that it mainly affects beachfront property owners. To the contrary, many of the subsidized properties are inland in Pinellas County, county Property Appraiser Pam Dubov says.

How do I know if I get subsidized rates now?

Check with an insurance agent. But there are two main clues: Is the home in an "A" or "V" zone requiring flood insurance and is it at least a few decades old? It depends on when your community first created flood maps. Any flood-prone home built before 1975 predates flood maps in Tampa Bay and is likely subsidized. The earliest flood map in Pinellas County dates to May 1970 in St. Pete Beach.

I'm in an A or B hurricane evacuation zone. Does that mean I'm in a high-risk flood zone?

Not necessarily. Evacuation zones and flood zones are not the same. So don't use the zone listed on county property records as a basis for your flood zone. Best bet: Ask your insurance agent.

What if I have a subsidized policy in a flood hazard area and I sell my home or business property?

The buyer of a subsidized property will have to pay the full-risk rate for any policy issued or renewed on or after Oct. 1. That could more than triple the rates immediately. If you bought a subsidized property after the Biggert-Waters Flood Insurance Reform Act became law July 6, 2012, you could have to pay the full risk rate for a policy renewal starting in October.

I'm with a condominium association. How does this affect me?

Stay tuned. FEMA has not yet determined new rates for subsidized condos or multifamily properties.

I have flood coverage though I'm not required to do so. Am I in the clear?

Not entirely. Even nonsubsidized homes could see rates rise 6 to 9 percent.

Can property owners with unsubsidized policies face a large rate increase?

Yes. All property owners could face rate increases of up to 20 percent a year for five years if a community adopts a new flood insurance rate map as part of the program overhaul.

Can I do anything to fight higher rates?

Obtain an elevation certificate to show how high your home is compared with flood levels. There is an initial cost, but it may help reduce your rate. Review your flood zone maps to see your property's current flood risk and how close it is to a potential change in risk status if a new map is adopted.

And don't let your policy lapse, which could be a trigger for a big rate increase.

Has this changed sales contracts?

The Florida Board of Realtors recently changed its standard sales contract to let buyers know they may need to get a flood certification to obtain flood insurance. New contract language makes a buyer's offer contingent on obtaining flood coverage by a certain date at a price not to exceed a cap that is written into the contract. Moreover, the buyer and seller have to agree on when the contract can be terminated if the property is ineligible for flood insurance.

Have banks adapted as well?

All mortgage lenders have greater financial incentive to make sure that homes in flood zones carry the required coverage. Previously, the government imposed a fine of $350 per loan that did not have the required policy in place. That rose to $2,000 per loan under the new law. A total fine cap of $100,000 per lender was removed so now there is no cap.

Where can I find more details?

Go to floodsmart.gov. Or contact your insurance agent.

[Demeter]

7. How could anyone think that this was a good plan?

The entire system needs to be scrapped and rethought without profits being in the picture.

[DemReadingDU]

11. $17,000! OMG

Who can afford flood insurance with that kind of price. What is going to happen when people don't pay it?

BTW, we recently received a letter from FEMA that our neighborhood has now totally been designated in a flood plain. Previously, just a small corner of our back yard was in the floodplain and we were able to get a cheaper rated zoned x policy. I am not looking forward to the increase at renewal. Hmm, this house is paid for. I need to research if we really need flood insurance if there is no mortgage on this property.

[Fuddnik]

24. No, You don't need it.

Your homeowners policy won't cover a flood, but a bank or mortgage company will require it if you're in a designated flood plain. My house is in a AE zone. That's a place that's can expect a 100 year flood.

People who have a mortgage, will have their houses foreclosed if they can't afford it.

All those people in Colorado probably didn't have any coverage. Who the hell expects a flood in the Rocky Fucking Mountains? They were in a 1,000 year flood zone.

[DemReadingDU]

25. AE zone here

What worries me in our area is this small creek that is a few hundred feet from our house. Normally, it is shallow enough that the grandkids and I go down to wade in the water and look for bugs and nature things. Fun times.

However, last month we had a summer torrential downpour when it rained so hard and so quickly that the creek became five foot deep overflowing the banks into the streets joining up with the nearby ponds. The area was so full of water, one could have gone water-skiing.
Scary.

Thankfully, the rain stopped and the water quickly receded. Our house is just high enough that the street water didn't reach us, this time. But what if next time it rains for days and days, like in Colorado. I shudder at that thought.

So yeh, even though mortgage paid off, I need to keep the flood insurance. It'll be interesting to see the price of the next billing for this area. But no way would I pay $17,000.

[xchrom]

9. Yellen Price Goal Shows Anti-Inflation Stance Belying Dove Image

http://www.bloomberg.com/news/2013-09-20/yellen-price-goal-shows-anti-inflation-stance-belying-dove-image.html

Inflation expectations in the U.S. are rising in financial markets, and hedge-fund manager Mark Spindel sees Janet Yellen’s candidacy to be the next Federal Reserve chairman as a catalyst.

“If it is Janet, I think you have to price in some tolerance for higher inflation,” said Spindel, head of Potomac River Capital LLC, which manages $570 million, and former manager of $15 billion at the World Bank’s private-sector lending unit, the International Finance Corp.

She might prove him and other investors wrong. Her economic framework and communications strategy show little tolerance for higher prices. She led a subcommittee of the Federal Open Market Committee that produced an explicit inflation target of 2 percent, a topic the panel debated for more than a decade. Her policy approach uses models and rules that view stable prices as a necessary condition to try to move the economy toward full employment while holding interest rates near zero.

“The market does have it wrong if they think she is going to be soft on inflation,” said Stephen Oliner, a resident scholar at the American Enterprise Institute in Washington and former senior adviser at the Federal Reserve Board. “She has very little tolerance for inflation above the 2 percent target.”

[xchrom]

10. Rajan Surprises With India Rate Rise to Quell Inflation: Economy

http://www.bloomberg.com/news/2013-09-20/india-unexpectedly-raises-rate-as-cash-curbs-eased-on-rupee-gain.html

ndia’s central bank Governor Raghuram Rajan surprised analysts by raising the benchmark interest rate in his first policy review, seeking to rein in inflation that’s hurt the poor and dimmed economic prospects.

Rajan, who took office two weeks ago, boosted the repurchase rate by a quarter point to 7.5 percent, the first increase since 2011, a Reserve Bank of India statement showed in Mumbai today. All 36 analysts in a Bloomberg News survey predicted no change. While the RBI also relaxed liquidity curbs in the banking system, stocks and bonds slid.

Today’s decision suggests Rajan, a 50-year-old former International Monetary Fund chief economist, is determined to build the bank’s inflation-fighting credentials, with the bump in borrowing costs coming amid the weakest economic growth since 2009. Rajan acted even after the Federal Reserve’s decision two days ago to maintain U.S. monetary stimulus eased pressure on the rupee, which has tumbled since May.

“It shows their clarity and seriousness in dealing with elevated inflation,” said Rajeev Malik, an economist at CLSA Asia-Pacific Markets in Singapore. The RBI is “sending the right hawkish signals” and will probably raise the repo rate again, he said.

[xchrom]

12. JPMorgan Guilty Admission a Win for SEC’s Policy Shift

http://www.bloomberg.com/news/2013-09-19/jpmorgan-s-guilty-admission-marks-victory-in-sec-s-policy-shift.html

The U.S. Securities and Exchange Commission, in settling claims with JPMorgan Chase & Co. (JPM) over its handling of a $6.2 billion trading loss, landed its biggest victory yet in fulfilling a pledge to force wrongdoers to admit guilt.

As part of the $920 million agreement with regulators in the U.S. and U.K., New York-based JPMorgan admitted yesterday that it violated federal securities laws when it failed to catch traders hiding losses in 2012.

“It’s no small thing to go from getting no admissions six months ago to this,” said James Cox, a law professor at Duke University School of Law in Durham, North Carolina. “It’s a useful shaming process. It has an impact on the behavior of other people.”

Under SEC Chairman Mary Jo White, 65, the enforcement division has shifted its long-standing policy of allowing defendants to settle matters without admitting or denying any wrongdoing. The practice had been thrown into question when U.S. District Judge Jed Rakoff rejected a settlement with Citigroup Inc. in part because the bank didn’t admit to any misconduct.

[Demeter]

27. Shaming Process? Behavior modification?

Just imagine how much behavior modification would come from JAILING one of the head honchos!

[xchrom]

13. Italy to Meet EU Deficit-to-GDP Limit in 2013, Official Says

http://www.bloomberg.com/news/2013-09-19/italy-will-meet-3-deficit-to-gdp-limit-finance-official-says.html

Italy will keep its deficit within the European Union limit of 3 percent of gross domestic product this year, Finance Undersecretary Pier Paolo Baretta said.

“We’ll do whatever is needed to remain within the 3 percent limit,” Baretta said in a phone interview yesterday. The government may need to find an additional 1.5 billion euros ($2 billion) of savings to reach the EU requirement because of the sluggish economy and payments of overdue debts to companies, he said.

Prime Minister Enrico Letta is under pressure to maintain the budget discipline required by the EU at the same time as former premier Silvio Berlusconi’s party is pushing for tax relief for businesses and consumers.

Letta’s cabinet will meet today in Rome to revise its budget plan and approve updated economic forecasts. The government in April predicted a 2.9 percent deficit-to-GDP ratio for this year. Letta’s administration expects debt to be 132.2 percent of GDP next year, according to a draft of the budget document set to be published tomorrow. A government spokesman declined to confirm the figures.

[xchrom]

14. Boat Sales Buoyed as Americans Downsize Fleets: EcoPulse

http://www.bloomberg.com/news/2013-09-20/boat-sales-buoyed-as-americans-downsize-fleets-ecopulse.html

More Americans took to the water in new boats this summer, often buying smaller, less expensive models, as the industry is showing signs of a recovery.

Purchases of powerboats -- which include yachts, pontoons and fishing vessels -- rose 18.9 percent in July from a year earlier, according to figures from Statistical Surveys Inc., a research company based in Grand Rapids, Michigan. Even with mild summer weather and a cold winter, year-to-date sales are up 3.1 percent, the data show.

The industry “is performing pretty well again” after bottoming in 2010, with smaller boats -- those under 30 feet in length -- showing particular strength, said Tom Walworth, the company’s president. This category has rebounded about 13 percent since 2010, outpacing the 9.3 percent growth rate for larger craft, a sign there’s been a lasting shift in consumer preferences since the 18-month recession ended in June 2009, he said.

“What really stands out in the economic recovery thus far is that demand for smaller boats is coming back pretty nicely,” said Michael Swartz, an analyst with SunTrust Banks Inc. (STI) in Atlanta. That’s partly because “very lax” lending standards before the recession have become more restrictive, so people are buying what they can afford, he said.

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15. TARGET TO HIRE FEWER SEASONAL HOLIDAY WORKERS

http://hosted.ap.org/dynamic/stories/U/US_TARGET_HOLIDAY_HIRING?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-20-07-13-22

SAN FRANCISCO (AP) -- Target plans to hire about 70,000 seasonal workers for the holiday shopping season, down about 20 percent from a year ago. The discounter is aiming to be more efficient in its hiring practices.

The move to hire 18,000 fewer temporary holiday workers versus last year's 88,000 comes as the Minneapolis-based chain saw that its own permanent employees wanted to get first dibs on working extra hours for the holiday season.

Target Corp. said it also wants to respond more quickly to the peaks and valleys of customer traffic, which have become more pronounced for many stores as shoppers time their buying for when they believe they can get the best deals.

"We're getting smarter in terms of anticipating how many resources we need when guests are really going to be shopping the hardest," said Jodee Kozlak, Target's executive vice president of human resources.

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16. INDEBTED CYPRUS DOWNSIZES INDEPENDENCE DAY PARADE

http://hosted.ap.org/dynamic/stories/E/EU_CYPRUS_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-20-07-07-50

NICOSIA, Cyprus (AP) -- Celebrations to mark Cyprus' 53rd year of independence from British colonial rule are not immune from the country's acute economic crisis.

To save money, authorities decided to drop for the first time tanks and other vehicles from a parade held annually in the ethnically split country on October 1st.

Defense Minister Fotis Fotiou says a people-only parade, as is common practice in most other EU countries, is enough to honor the country's independence and buoy public morale.

Fotiou said Friday that all the money saved will go toward providing morning meals to school children in need. Cyprus' jobless rate stands at 17 percent and is rising.

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17. HOUSE AND SENATE FACE DEEP DIVIDE OVER FOOD STAMPS

http://hosted.ap.org/dynamic/stories/U/US_FOOD_STAMPS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-20-04-02-46

WASHINGTON (AP) -- Farm-state lawmakers hoping for passage of a farm bill by the end of the year will have to bridge a deep divide between the House and the Senate over the role of the government in helping the nation's poor.

The House passed a bill Thursday that would make around $4 billion in cuts annually to the almost $80 billion-a-year food stamp program and allow states to put in place broad new work requirements for recipients. A Senate-passed farm bill would make around a tenth of the amount of those cuts, or $400 million a year.

"This bill is designed to give people a hand when they need it most," Majority Leader Eric Cantor, R-Va., said on the House floor just before lawmakers passed the bill. He said the legislation "will put people on the path to self-sufficiency and independence."

The White House threatened a veto, and Senate Democrats angrily criticized the level of cuts.

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18. GLOBAL STOCKS' FED-INSPIRED RALLY FIZZLES OUT

http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-20-07-11-15

LONDON (AP) -- The rally in global stock markets fizzled out on Friday, two days after the U.S. Federal Reserve buoyed sentiment by keeping its monetary stimulus program in place.

Many traders had expected the Fed to start scaling back its asset purchase program, instituted in the aftermath of the 2008 financial crisis to help keep the U.S. economy afloat. The program was used to increase the flow of money available for loans to push down interest rates and spur growth.

The low interest rate environment proved a boon for stock markets, where investors fled with their money in search of higher returns.

That is a key reason why stock markets rejoiced when the Fed left its "quantitative easing" program untouched earlier this week - even though the Fed is maintaining the program because the U.S. economic recovery is weak.

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19. Special Report: How a German tech giant trims its U.S. tax bill

http://www.reuters.com/article/2013/09/20/us-tax-sap-special-report-idUSBRE98J04220130920

(Reuters) - In July 2012, then-U.S. Treasury Secretary Tim Geithner traveled to an island off the German coast to meet Wolfgang Schaeuble, Germany's finance minister. Schaeuble was on vacation, but Geithner visited to discuss the euro zone crisis. Talk also turned to a long-running bugbear of Schaeuble's: corporate tax avoidance.

According to a letter Schaeuble later wrote to Geithner, the Treasury Secretary had explained in their conversation that the most aggressive forms of avoidance often involved technology companies parking valuable know-how in low-tax countries and making other parts of the company pay high rates to use it. In Schaeuble's letter he sought Geithner's support for international action against legal tax dodging. Profit shifting, the finance minister said, was largely a problem involving U.S. companies. Tax rules in Germany made it more difficult there. This "could explain why we do not know of German companies with comparable tax arrangements to the U.S. companies," the letter, seen by Reuters, said.

But an examination of the accounts of one of Germany's largest firms shows it uses similar techniques. Without them, it would pay more than 100 million euros ($133.53 million) in additional tax each year, some of it to the United States.

SAP AG provides software for businesses to process and analyze transactions, counts 80 percent of the Fortune 500 as customers and has a market capitalization of $90 billion, making it the fourth biggest firm in Germany. Its accounts show that it - like U.S. tech firms such as Google and Microsoft - channels profit to subsidiaries in Ireland, where the corporate tax rate is 12.5 percent. The comparable rate in Germany is 30 percent and in the United States, SAP's largest market, 39 percent, according to the Organisation for Economic Cooperation and Development (OECD), an international think tank.

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20. Japan firms resist Abe's calls to raise wages: Reuters poll

http://www.reuters.com/article/2013/09/20/us-japan-survey-idUSBRE98J08A20130920


(Reuters) - Japanese companies are largely ignoring Prime Minister Shinzo Abe's calls for higher wages in the face of an expected sales tax increase, a Reuters poll shows, underscoring the difficulties the government faces in trying to defeat entrenched deflation.

Abe will make a final decision on October 1 about whether to lift the tax to 8 percent from 5 percent in April. While necessary to bolster state coffers, the hike threatens to take the wind out of the success he has had with boosting stocks and weakening the yen.

Now that Japan Inc has begun to benefit from his bold monetary and fiscal policies, the prime minister wants companies to return the favour by lifting wages, which in turn will boost consumption and prices, and make the recovery sustainable.

"The government will consider bold steps in order to achieve a virtuous circle of rising profits, jobs and wages," Abe told a meeting on Friday of government, business and labour leaders. "I'd like to ask people from the industry and labour circles to make bold efforts for their part as well."

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21. U.S. economy shows signs of shrugging off higher interest rates

http://www.reuters.com/article/2013/09/19/us-usa-economy-idUSBRE98I0JP20130919


(Reuters) - U.S. home resales surged in August to a 6-1/2-year high and factories grew busier in the Mid-Atlantic region this month, signs that rising borrowing costs are weighing only modestly on the economy.

The data released on Thursday could make the Federal Reserve more willing to reduce a bond-buying stimulus program. The Fed had flagged concerns over a sharp increase in interest rates when it shocked investors on Wednesday by keeping the program at full throttle.

Last month, sales of existing homes grew 1.7 percent, the National Association of Realtors said. That took sales to an annual rate of 5.48 million units, the highest level since early 2007 when a housing bubble was deflating and the economy was sliding toward its deepest recession in decades.

The report confounded analysts who had expected higher interest rates would lead to a decline in resales. Mortgage rates have risen more than a percentage point since Fed Chairman Ben Bernanke hinted in May that the central bank could begin reducing monthly bond purchases soon.

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22. Fed could taper in October, depending on data: Bullard

http://www.reuters.com/article/2013/09/20/us-usa-fed-bullard-idUSBRE98J0BI20130920

(Reuters) - The U.S. Federal Reserve could still scale back its massive bond buying program at an October meeting should data point to a stronger economy, St. Louis Fed President James Bullard said on Friday.

"October is a live meeting," he told Bloomberg television.

The Fed surprised markets this week when policymakers decided not to taper its $85-billion-per-month bond buying program, citing worries about the health of the world's biggest economy.

"This was a close decision here in September," Bullard said, emphasizing the role that economic data has played and will continue to play in Fed decisions.

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23. Tensions High: Last-Minute Poll Shows Close German Race

http://www.spiegel.de/international/germany/latest-poll-shows-governing-coalition-has-narrow-lead-ahead-of-election-a-923483.html

The tension is rising in Germany as the election campaign draws to a close, with an eleventh-hour poll released on Thursday giving Chancellor Angela Merkel's conservative Christian Democrats (CDU) and her junior coalition partners, the pro-business Free Democrats (FDP), a lead of just 1 percent over opposition parties.

A 58 percent majority of Germans say they would like to see Angela Merkel remain in the Chancellery, with just 32 percent preferring her Social Democratic Party (SPD) challenger Peer Steinbrück. But while support for her party remains at a steady 40 percent, the FDP is down to 5.5 percent, barely clearing the 5 percent hurdle required for representation in parliament, but giving the coalition combined support of 45.5 percent.

According to the "political barometer" poll commissioned by public broadcaster ZDF, the SPD, the Greens and the far-left Left Party are polling at 44.5 percent after support for the SPD rose to 27 percent and for the Left Party to 8.5 percent.

The environmentalist Greens' popularity, meanwhile, dropped to 9 percent after a turbulent week that saw the party weakened by fresh evidence of its past pro-pedophile sympathies.

[Demeter]

28. The Markets Are NOT Happy, Today!

In fact, they look like they are having a collective nervous breakdown...

Is this ALL ABOUT ANGELA? Or Janet Yellen?

[DemReadingDU]

30. Federal Reserve Program Is Socialism For The Rich

9/20/13 Federal Reserve Program Is Socialism For The Rich

If you have followed any economic news at all you will have heard the term quantitative easing, or QE, which is technocratic shorthand for the Federal Reserve shoveling funds into Wall Street banks to produce a phenomenon known as the “wealth effect.” The wealth effect relies principally on trickery. The hope being that people will see higher asset prices, and in a self-fulfilling prophecy, invest and produce more thinking the economy is better – which will make the economy better. So endeth the theory.

The reality is the Federal Reserve’s QE program has made the rich a lot richer and done little to nothing for the poor and middle class – besides screwing people living on fixed incomes. In fact, it has now devolved into a redistribution scheme to take money from poor and middle class workers and give it to the rich – or so says billionaire investor Stanley Druckenmiller.

In an interview with CNBC related to Fed Chairman Bernanke’s massive cave to Wall Street earlier this week where he refused to stop QE, Druckenmiller revealed what every financially literate American knows – that QE is socialism for the rich.


Andrew Ross Sorkin, CNBC: Yesterday, and it looks like today, the market will be up. Clearly up. Should bad news be bad news – is this just a short term pop?

Stanley Druckenmiller: No, it’s not a short term pop. First of all, as a practitioner of markets I love this stuff. OK, this is fantastic. It’s fantastic for every rich person. This is the biggest redistribution of wealth from the middle class and the poor to the rich ever. Who owns assets? The rich. The billionaires. You think Warren Buffett hates this stuff? You think I hate this stuff? I had a very good day yesterday. OK?


Druckenmiller hit the nail on the head. QE and any program that relies on the wealth effect is, in truth, a redistribution of wealth from the lower classes to the rich because the rich are the ones who own the assets that are being inflated. The consequences of the spending however are borne by the lower classes who not only by definition don’t own many assets but are forced to deal with higher food and fuel prices resulting inflation can cause while also getting zero return on their savings. QE is socialism for the rich and even the 1% are admitting it. Game. Set. Match.

By the way, this also helps explain the historic inequality that corporate economists seem/pretend to be so mystified by. Why is there such a gap between the haves and the have-nots? Probably because the Federal Reserve is pumping up assets for the haves to the tune of $85 billion, a month.

So surprise surprise the stock market, income inequality, and poverty are at historic highs at the same time. Actually don’t be surprised, it is a direct and completely predictable result of the Federal Reserve’s policy of socialism for the rich, capitalism for the poor.

http://news.firedoglake.com/2013/09/20/federal-reserve-program-is-socialism-for-the-rich/?



See similar postings above, #2, #3