STOCK MARKET WATCH -- Friday, 3 January 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 3 January 2014[font color=black][/font]

SMW for 2 January 2014

AT THE CLOSING BELL ON 2 January 2014
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Dow Jones 16,441.35 -135.31 (-0.82%)
S&P 500 1,831.98 -16.38 (-0.89%)
Nasdaq 4,143.07 -33.52 (-0.80%)


[font color=green]10 Year 2.99% -0.03 (-0.99%)
30 Year 3.92% -0.02 (-0.51%) [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

[Demeter]

2. Bitcoin Is Evil Paul Krugman

http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/?_r=0

It’s always important, and always hard, to distinguish positive economics — how things work — from normative economics — how things should be. Indeed, on many of the macro issues I’ve written about it has been obvious that large numbers of economists can’t bring themselves to make that distinction; they dislike activist government on political grounds, and this leads them to make really bad arguments about why fiscal stimulus can’t work and monetary stimulus will be disastrous. I don’t, by the way, think that this effect is symmetric: although people like Robert Lucas were quick to accuse people like Christy Romer of fabricating macro arguments to support a big-government agenda, this didn’t actually happen.

But I come now to talk not about macro but about money — specifically, about Bitcoin and all that.

So far almost all of the Bitcoin discussion has been positive economics — can this actually work? And I have to say that I’m still deeply unconvinced. To be successful, money must be both a medium of exchange and a reasonably stable store of value. And it remains completely unclear why BitCoin should be a stable store of value. Brad DeLong puts it clearly:

Underpinning the value of gold is that if all else fails you can use it to make pretty things. Underpinning the value of the dollar is a combination of (a) the fact that you can use them to pay your taxes to the U.S. government, and (b) that the Federal Reserve is a potential dollar sink and has promised to buy them back and extinguish them if their real value starts to sink at (much) more than 2%/year (yes, I know).

Placing a ceiling on the value of gold is mining technology, and the prospect that if its price gets out of whack for long on the upside a great deal more of it will be created. Placing a ceiling on the value of the dollar is the Federal Reserve’s role as actual dollar source, and its commitment not to allow deflation to happen.

Placing a ceiling on the value of bitcoins is computer technology and the form of the hash function… until the limit of 21 million bitcoins is reached. Placing a floor on the value of bitcoins is… what, exactly?

I have had and am continuing to have a dialogue with smart technologists who are very high on BitCoin — but when I try to get them to explain to me why BitCoin is a reliable store of value, they always seem to come back with explanations about how it’s a terrific medium of exchange. Even if I buy this (which I don’t, entirely), it doesn’t solve my problem. And I haven’t been able to get my correspondents to recognize that these are different questions. But as I said, this is a positive discussion. What about the normative economics? Well, you should read Charlie Stross:

BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions.

Go read the whole thing. http://www.antipope.org/charlie/blog-static/2013/12/why-i-want-bitcoin-to-die-in-a.html

[Demeter]

3. Krugman Nails WSJ Pulitzer Winner For Misleading Inequality Claim

http://www.huffingtonpost.com/2014/01/02/krugman-wall-street-journal-inequality_n_4531338.html



Breaking news: The Wall Street Journal editorial page is full of it.

OK, that's not really news. But an unusually flagrant example of the WSJ editorial page's hogwash artistry caught the world's eye on Thursday, when New York Times columnist Paul Krugman pointed out several big problems with a column published this week by the WSJ's Bret Stephens. Krugman cited an earlier blog post from economist Miles Kimball, who first noted what he called the WSJs "analytical errors."

Stephens, who won the 2013 Pulitzer Prize for commentary, on Monday declared that the United States does not have an income inequality problem, but rather an envy problem. In other words, all of us Poors and Middles are merely jealous of those Riches who are constantly straining their trapezius muscles from nodding too vigorously when reading Stephens' columns. To prove his point, Stephens accused President Obama of misleading the public in a big speech last month about economic mobility and inequality.

"The top 10 percent no longer takes in one-third of our income -- it now takes half," Obama said in the speech.

Stephens declared this statement incorrect in several ways:

Here is a factual error, marred by an analytical error, compounded by a moral error. It's the top 20% that take in just over half of aggregate income, according to the Census Bureau, not the top 10%. That figure is essentially unchanged since the mid-1990s, when Bill Clinton was president. And it isn't dramatically different from 1979, when the top fifth took in 44% of aggregate income.

Besides which, so what? In 1979 the mean household income of the bottom 20% was $4,006. By 2012, it was $11,490. That's an increase of 186%. For the middle class, the increase was 211%. For the top fifth it's 320%. The richer have outpaced the poorer in growing their incomes, just as runners will outpace joggers who will, in turn, outpace walkers. But, as James Taylor might say, the walking man walks.

As James Taylor might also say, the bullshitting man bullshits.

FIND OUT HOW AT LINK

[Demeter]

4. The Man Who Sold the Bailouts: The Bernanke Legacy by DEAN BAKER

http://www.counterpunch.org/2013/12/27/the-bernanke-legacy/



Federal Reserve Board Chairman Ben Bernanke gave his last press conference as chair and already the retrospectives have begun. One item that should be corrected off the top, Bernanke did not just inherit an economic disaster from Alan Greenspan.

Bernanke did not go directly from being a Princeton economics professor to being Fed chair. He got there by being a member of the Board of Governors of the Fed from 2002 to 2005 and then was chair of President Bush’s Council of Economic Advisers from the spring of 2005 until he took over as Fed chair in January of 2006. In other words, Bernanke held top policy posts during the period in which the housing bubble was growing to ever more dangerous levels driven by a flood of junk mortgages.

While Greenspan certainly deserves the most blame for the economic disaster caused by the housing bubble, there were few people better positioned than Bernanke to try to slow the growth of the bubble before it grew to such dangerous levels. There is no evidence that he ever suggested any concern about the risks posed by the bubble and the reckless lending that drove it. (He explicitly dismissed such concerns in a session of the American Economics Association in 2004.)

So we have to understand that Bernanke was cleaning up a mess that he had helped to create. In this role his performance was at best mixed. The pundits routinely give Bernanke credit for heading off a second Great Depression, but this is mostly because they heard someone else say it, not because they have any idea what they mean by saying it...

MORE AT LINK

[Demeter]

5. Turkey first of Fed Taper victims as political crisis scares investors

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10539706/Turkey-first-of-Fed-Taper-victims-as-political-crisis-scares-investors.html



The Turkish lira has tumbled to a record low amid a deepening political crisis in Ankara, the first emerging market domino to wobble as the US Federal Reserve starts to wind down global dollar stimulus.

The currency has weakened by 6pc against the euro over the last two days, culminating a 25pc fall this year. Foreign funds have cut holdings of Turkish debt by a quarter since the May.

Turkey has gone from star performer to 'sick man' of the emerging market block as the Fed begins to taper bond purchases, a move that threatens to set off a further rotation of funds back into US dollar assets.



MORE

[Demeter]

6. Clawbacks? They’re Still a Rare Breed By GRETCHEN MORGENSON

http://www.nytimes.com/2013/12/29/business/clawbacks-theyre-still-a-rare-breed.html



Financial executives who are actually held to account for misdeeds remain as rare as hen’s teeth, alas. That’s why a recent enforcement action by the Securities and Exchange Commission caught my eye. The case was filed Dec. 4 against Fifth Third Bank, which is based in Cincinnati and has $126 billion in assets. Daniel T. Poston, the bank’s former chief financial officer, was also named in the suit. The S.E.C. contended that both the bank and Mr. Poston improperly delayed writing down the value of $1.5 billion of nonperforming loans in 2008. Mr. Poston certified that Fifth Third’s financial statements had been prepared in accordance with generally accepted accounting principles, but the S.E.C. said that wasn’t the case.

Both the bank and Mr. Poston settled the case, the bank paying $6.5 million in penalties and Mr. Poston paying $100,000. Neither the bank nor Mr. Poston, who became chief strategy and administrative officer at Fifth Third in October, admitted or denied the S.E.C.’s allegations.

The Fifth Third case is interesting because it shows that securities regulators can indeed require executives to pay penalties out of their own pockets when they settle charges of flouting securities laws. But the regulatory action is also notable for what it did not involve: an executive pay clawback under the Sarbanes-Oxley law. Indeed, the Fifth Third action illustrates how challenging it is for regulators to mount such cases.

Sarbanes-Oxley, you’ll recall, was the legislative response to Enron, WorldCom and the other titanic accounting frauds of the early 2000s. Hoping to eliminate the temptation among executives to misstate their companies’ financial positions — making their performance look better and reaping rich bonuses as a result — the law required chief executives and chief financial officers to affirm the accuracy of their books. If misconduct resulted in an earnings restatement, those executives might have to forfeit incentive pay or proceeds from stock sales made during the 12 months after the misstatements...MORE

[Demeter]

7. Americans Still Pessimistic About Economy: Almost 70 percent think the economy is in bad shape

http://business.time.com/2013/12/27/americans-still-pessimistic-about-economy/

Never mind a stock market breaking records and an unemployment rate inching down: Americans still think this economy stinks.

That’s according to a new CNN poll out Friday, which found almost 70 percent of respondents think the economy is in bad shape, while only 32 percent think things are good. More than half of Americans don’t think conditions will improve next year, according to the poll.

The economy has seen marked improvements in recent weeks. Stocks have surged, unemployment is the lowest it’s been in five years, gas prices have dropped and even the housing market is recovering. But the long-term unemployed or under-employed continue to cut back. The poll found 36 percent were reining in spending on food or medicine, a five-percent increase from 2008, during the height of housing market crash.

Those who viewed the economy negatively are mostly rural residents, according to the poll. The poll surveyed 1,035 Americans by telephone between Dec. 16 and 19, with a sampling error of plus or minus three percentage points....

REALLY? ARE THE ROLLING FARMLANDS OF THIS COUNTRY FILLED WITH DEBT-STRANGLED COLLEGE GRADUATES? BOOMERS GETTING THE SHAFT AT 50? FAST FOOD WORKERS STARVING, WALMART EMPLOYEES ON WELFARE?

YEAH, THEY SHOULD A LL MOVE TO THE CITIES....

[Demeter]

8. Okay, at 9PM it's 8F, windchill of -6F

Meanwhile, it's 4 am in Helsinki, 34F, windchill of 27F

I WANT MY MICHIGAN WEATHER BACK!

[Demeter]

9. Here's why Wall Street has a hard time being ethical

http://www.theguardian.com/business/2013/nov/25/wall-street-hard-time-ethical



My first year on Wall Street, 1993, I was paid 14 times more than I earned the prior year and three times more than my father's best year. For that money, I helped my company create financial products that were disguised to look simple, but which required complex math to properly understand. That first year I was roundly applauded by my bosses, who told me I was clever, and to my surprise they gave me $20,000 bonus beyond my salary.

The products were sold to many investors, many who didn’t fully understand what they were buying, most of them what we called “clueless Japanese.” The profits to my company were huge – hundreds of millions of dollars huge. The main product that made my firm great money for close to five years was was called, in typically dense finance jargon, a YIF, or a Yield Indexed Forward.

Eventually, investors got wise, realizing what they had bought was complex, loaded with hidden leverage, and became most dangerous during moments of distress.

I never did meet the buyers; that was someone else's job. I stayed behind the spreadsheets. My job was to try to extract as much value as possible through math and clever trading. Japan would send us faxes of documents from our competitors. Many were selling far weirder products and doing it in far larger volume than we were. The conversation with our Japanese customers would end with them urging us on: “We can’t fall behind.”


IN OTHER WORDS, CRIME DOES PAY, IN THIS CORRUPTED ECONOMY
NO REGULATION, NO PROSECUTION, NO FAULT

[Demeter]

10. £2m: average pay award for JP Morgan's top staff in 2012 revealed

http://www.theguardian.com/business/2014/jan/01/2m-average-bonus-jp-morgan-bankers?CMP=twt_fd

Fresh evidence of the pay deals on offer in the City has emerged, with the biggest US bank, JPMorgan Chase & Co, revealing it gave more than 100 of its top staff in London an average of £2m each in 2012.

The disclosure comes after Goldman Sachs said its high flyers received £2.7m on average – up 50% on the year before – adding to anger about bankers' bonuses.

The banks are required to provide the information about their operations in the UK to comply with an EU rule introduced after the 2008 banking crisis. Banks must give details of the pay of "code staff", those deemed to be taking and managing risk for their organisations.

The details of the pay awards come as new rules from Brussels come into force to restrict top bankers' bonuses to one times their salary – or twice, with the approval of shareholders. Sharon Bowles, the MEP who chairs the European parliament's economic and monetary affairs committee, said the move was intended to change the culture of banking....

MORE

[Demeter]

11. I HOPE THIS WORKS--LET ME KNOW

http://www.dailykos.com/story/2014/01/01/1266277/-Congress-solves-unemployment?detail=email

[Tansy_Gold]

16. It worked

Unfortunately, so did congress' scheme to "shrink" unemployment.

[Demeter]

12. Medicaid Expansion Boosted Emergency Room Visits In Oregon

WELL, WHAT DID THEY THINK WOULD HAPPEN?

http://www.npr.org/blogs/health/2014/01/02/259128081/medicaid-expansion-boosted-emergency-room-visits-in-oregon?ft=1&f=1001

Giving poor people health insurance, the belief was, would decrease their dependence on hospital emergency rooms by providing them access to more appropriate, lower-cost primary care.

But a study published in the journal on Thursday finds that's not the case. When you give people Medicaid, it seems they use both more primary care and more emergency room services.

"Medicaid coverage increases emergency department use, both overall and for a broad range of types of visits, conditions, and subpopulations," says , an economics professor at MIT and one of the authors of the study. "Including visits for conditions that may be most readily treatable in primary care settings."

IT CAN'T BE SAID TOO OFTEN, NOR TOO LOUDLY: PEOPLE NEED HEALTHCARE, AND THEY NEED IT NOW! THAT'S THE VERY DEFINITION OF EMERGENCY!

MORE AT LINK

[Demeter]

13. Happy New Year, Losers William Greider

http://www.thenation.com/blog/177751/happy-new-year-losers#



Chief Justice Roberts wishes a Happy New Year to all those losers who will not get healthcare insurance, thanks to his clever reading of the Constitution. There are 4.8 million of these losers, and 2.6 million of them are people of color, black and Hispanic mainly. Not that the Chief Justice and his right-wing colleagues on the Supreme Court would make racist distinctions. No, no, no. They assure us their decision is solely driven by a matter of high constitutional principle—states’ rights.

The problem with these people is that they are low-income adults without dependent children—not quite poor enough to qualify for Medicaid nor old enough to qualify for Medicare. President Obama’s original legislation took care of them by expanding Medicaid coverage and putting up the federal money to pay for it. The Roberts decision insisted that state governments have a constitutional right to reject this financial aid from Washington. And twenty-five states took him up on the offer.

This odd failure will probably be blamed on Obama but should rightly be called the “Surpeme Court gap” in unversal healthcare coverage. Because these folks do not not quite earn enough to qualify for Obamacare’s tax credits to help people purchase health insurance. A report from the Kaiser Family Foundation outlined the consequences: “Most of these individuals have very limited coverage options and are likely to remain uninsured.”

Of course, they could get a job that pays more. Or maybe get married and have children that would qualify them for Medicaid. State governments set many of the rules for Medicaid coverage and some conservatives think fedeal aid saps individual initiative and rewards indolence. It is not entirely a coincidence that many of these rejectionist states are the same states that defied the Supreme Court half a century ago and resisted racial integration and equal rights for minorities. Some of them are the very states that went to war to defend slavery. Republicans are sometimes called a “neo-Confederate party.” After the Supreme Court gutted the voting-rights act, the neo-Confederates were free to pass restrictive laws designed to shrink minority voting, and so they did....

[tclambert]

15. Ah, I get it. Without the Medicaid expansion, they would just go without medical care

and decrease the surplus population, just like all good Scrooges Republicans want.

[kickysnana]

18. Sadly, You can find many such stories of actual DUers increasing over the last few years.

[kickysnana]

17. There is so much to this...

I had one doctor that had appointment opens for urgent things usually three weeks away. If she didn't see me it became an emergency but that is the way it was. I had to switch. If you have multiple health issues most colleagues you take instead take one look at your file and say, I think you better wait for your doctor or be sure to go to the ER.

They keep changing things. At one point a few years ago I was told that I needed to go to the emergency room with gall bladder attack in order to be put on the schedule for surgery, they said they were doing that with many things wanting an ER visit as an intake to hospital. Has that changed?

We haven't used an emergency room in a few years and they had made it impossible for you to get back out through the emergency room where my van was parked on a below zero February morning. The walk would have been long and brutal, it was new, large complex, in a suburban area on a hill with a wind chill of about 35 below. I am allergic to the cold, anaphhlactic shock allergic. It looked like it was going to take an act of Congress to let me go back out the Emergency room to our van. I believe I actually said "this is ridiculous" and brushed by the nurse and guard who were there telling me I could not leave the hospital through the Emergency Room where I came in, even if it might kill me. I probably have another note on my permanent record somewhere for that one. I had been there about 10 hours while my Aunt was treated and admitted for blood clots in her leg that was cutting off circulation to her foot. I am a four hour up, one hour nap kind of gal when things are going well. I told my Aunt she almost had a roommate after all that happened. What a colossal waste of time and resources.

Things did get better but things still worked a while lot smoother with the attitude we had before we got all worried about them terrerists the exclusion of all reason and compassion.

[Demeter]

34. Yes, if you need hospitalization, you need to start at the ER

I suppose, if it were plastic surgery, one could be conveniently scheduled at a tony private hospital, with valet service and all...

[Demeter]

14. Fannie Mae, Freddie Mac may be too profitable to shut down

http://www.latimes.com/business/la-fi-fannie-freddie-future-20140103,0,7476895.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+%28L.A.+Times+-+Business%29&utm_content=My+Yahoo

Federal officials swooped in to rescue mortgage finance giants Fannie Mae and Freddie Mac in 2008 with the largest of all the financial crisis bailouts — a combined $187.5 billion — because they were considered too big to fail.

Now, despite bipartisan support to shut them down, Fannie and Freddie may prove to be too profitable to close.

Fannie and Freddie play a vital role in the mortgage market by purchasing or guaranteeing more than 6 in 10 new loans. And the housing market's recovery has reversed the finances of the once-private companies, now wards of the U.S. government.

Fannie and Freddie are not only making money but also sending huge dividend checks to the Treasury — a combined $39 billion this week for their latest quarterly payment — and some are wondering why they should be put out of business....MORE

[xchrom]

19. Spanish Bond Yield Drops to 3 1/2-Year Low as Unemployment Falls

http://www.bloomberg.com/news/2014-01-03/german-bonds-set-for-weekly-gain-before-euro-area-inflation-data.html

Spain’s bonds advanced, pushing the 10-year yield to the lowest since May 2010, as a report showing unemployment (SPUECHNG) dropped the most in six months in December added to speculation the euro-area economy is gaining momentum.

The additional yield investors demand to hold Spanish 10-year debt over similar-maturity German bonds dropped below 200 basis points for the first time since May 2011. Unemployment in Spain fell 107,570 last month, the biggest drop since June, the Ministry of Labor said. Italy’s 10-year yield declined to the lowest since May. Germany’s benchmark 10-year bund yield was about three basis points from the highest level since September.

“It’s a sign of belief that the worst is over,” said John Wraith, a fixed-income strategist at Bank of America Corp. in London. “Although the data’s not great it’s still suggesting that we’re not necessarily heading back to any traumatic situation any time soon. These bonds can go on performing for the time being.”

Spain’s 10-year yield declined seven basis points, or 0.07 percentage point, to 3.90 percent as of 10:01 a.m. London time. The 4.4 percent bond due in October 2023 rose 0.565, or 5.65 euros per 1,000-euro ($1,365) face amount, to 103.98.

[xchrom]

20. Bank of Finland Warns Debt Level Poised to Double: Nordic Credit

http://www.bloomberg.com/news/2014-01-03/bank-of-finland-warns-debt-level-poised-to-double-nordic-credit.html

The Bank of Finland is warning that the euro area’s best-rated economy risks sliding down a path that could see its debt burden rival Italy’s.

Finland has little room to deviate from a proposal to fill a 9 billion-euro ($12.3 billion) gap in Europe’s fastest-aging economy if it’s to avoid debt levels doubling in the next decade and a half, according to the central bank.

The northernmost euro member risks joining the bloc’s most indebted nations if the government fails to reform spending, according to calculations by the Helsinki-based Bank of Finland. Without the measures, debt could exceed 110 percent of gross domestic product by 2030, according to the bank. The ratio was 53.6 percent in 2012. Success with the plan would help restrain debt levels to about 70 percent by 2030, the bank said.

The central bank’s assessment shows that the government’s plan would have a “real impact,” Finance Minister Jutta Urpilainen said in an e-mailed response to questions via her aide. Structural reforms are needed if “the Finnish welfare state has a chance to survive,” she said.

[xchrom]

21. Lira Oversold as Turkish Graft Probe Spurs Drop: Market Reversal

http://www.bloomberg.com/news/2014-01-03/lira-oversold-as-turkish-graft-probe-spurs-drop-market-reversal.html

The Turkish lira is poised to rebound after a corruption scandal engulfing Prime Minister Recep Tayyip Erdogan’s government pushed the currency to its most oversold level in a decade.

The lira’s 14-day relative-strength index climbed to a 10-year high of 74 this week, measured on a quarterly basis, signaling a turnaround may be imminent, data compiled by Bloomberg show. The RSI stood at 63 at the end of June last year when mass unrest was ignited by police tear-gassing a park in Istanbul occupied by people who opposed plans to tear it down for a government redevelopment project. The lira slid yesterday to 2.1886 per dollar, its weakest level since at least 1981.

The Central Bank of Turkey reacted to last year’s 17 percent plunge in the lira by pledging Dec. 24 to buy at least $6 billion of the local currency through the end of this month to prop it up and keep the nation’s current-account deficit under control. The sons of three ministers and the head of state-run lender Turkiye Halk Bankasi AS (HALKB) were arrested last month amid a probe into bribery, gold smuggling and corruption in government tenders.

“It would be brave to take a short position on a currency when it’s already this cheap,” Mehmet Gerz, the chief investment officer at Ata Asset Management, said in an interview in Istanbul yesterday. “Having fallen so much in 2013, the lira is certainly no longer overvalued.” A short position is a bet an asset will fall in value.

[xchrom]

22. Emerging Stocks Retreat With Copper as Gold, Yen Advance

http://www.bloomberg.com/news/2014-01-02/asian-futures-fall-as-u-s-stocks-slip-yen-gold-rebound.html

Emerging-market stocks fell and industrial metals retreated after a gauge of China’s service industries dropped. European shares rebounded from the biggest decline in two weeks, Spain’s two-year yield slid to a record and gold rose with the yen.

The MSCI Emerging Markets Index lost 1 percent at 10:23 a.m. in London, while the Stoxx Europe 600 Index gained 0.3 percent and Standard & Poor’s 500 Index (SPX) futures added 0.1 percent. The yield on Spain’s two-year note slid to 1.05 percent, the lowest since Bloomberg started tracking the data in 1993. The yen strengthened 0.5 percent per dollar. Copper dropped 0.8 percent, gold rose 0.6 percent and South African corn jumped to a record.

China’s non-manufacturing gauge fell to a four-month low in December, after two measures of factory output in the world’s second-largest economy weakened. Spanish bonds gained as a report showed unemployment (SPUECHNG) in the nation dropped the most in six months. Federal Reserve Chairman Ben S. Bernanke is due to speak today at an economics conference in Philadelphia.

“You cannot count on China to contribute to global growth now as the economy is still under structural adjustment,” said Dai Ming, a money manager at Hengsheng Hongding Asset Management Co. in Shanghai. “There’s no excitement in the macroeconomy and in this case it’s difficult for the stock market to have good performance.”

[xchrom]

23. S&P 500 Falls to Start Year Lower for 1st Time Since 2008

http://www.bloomberg.com/news/2014-01-02/u-s-stock-index-futures-drop-before-factory-output-data.html


U.S. stocks declined, with the Standard & Poor’s 500 Index starting the year lower for the first time since 2008, after benchmark indexes posted the biggest annual rallies in more than 15 years.

Apple Inc. (AAPL) fell 1.4 percent after Wells Fargo & Co. cut its rating on the stock, sending technology shares lower by 1.1 percent as a group. Analog Devices Inc. lost 3.2 percent after Goldman Sachs Group Inc. advised investors to sell the shares. Newmont Mining Corp. added 4 percent as gold futures rose the most in three weeks in New York.

The S&P 500 slid 0.9 percent to 1,831.98 at 4 p.m. in New York for the biggest decline in three weeks. The Dow Jones Industrial Average (INDU) decreased 135.31 points, or 0.8 percent, to 16,441.35. About 6 billion shares changed hands on U.S. exchanges, in line with the three-month average.

“More people seem to be wary, as we are, of potential corrections as markets get overexcited,” Oliver Wallin, who helps oversee $5.6 billion as investment director at Octopus Investments Ltd. in London, said by phone. “The question is just when to time it. A lot of people are willing to continue in this rally but are nervous at the same time. We’ve got one eye on the exit but we know there is money to be made in the short term.”

[xchrom]

24. Manufacturing Growth to Help Propel U.S. Expansion: Economy

http://www.bloomberg.com/news/2014-01-02/u-s-ism-manufacturing-index-fell-to-57-in-december-from-57-3.html

Manufacturing grew in December at the second-fastest pace in more than two years, fueled by a gain in orders that will help propel the U.S. expansion.

The Institute for Supply Management’s factory index eased to 57 from the prior month’s 57.3, which was the highest since April 2011, the Tempe, Arizona-based group said today. Readings above 50 indicate growth. Other data showed construction spending rose more than forecast in November and jobless claims declined last week.

Factory purchasing managers said orders were the strongest since April 2010, helping explain why companies such as General Motors Co. (GM) and Ford Motor Co. (F) are taking on more workers in response to rising sales. Recovering overseas economies, a pickup in business investment and greater demand for building materials are providing additional impetus for manufacturing, which makes up about 12 percent of gross domestic product.

“The year ended in a pretty bright spot for manufacturing and domestic demand,” said Peter Newland, a U.S. economist in New York at Barclays Plc, who correctly forecast the December ISM index. “Business activity, consumption and construction spending are all beginning to point in the same positive direction.”

[xchrom]

25. More Congressmen Say They’re Open To Clemency Deal To Bring Edward Snowden Back To U.S.

http://www.buzzfeed.com/katenocera/more-congressmen-say-theyre-open-to-clemency-deal-to-bring-e

WASHINGTON — A few members of Congress are now saying they believe the government should attempt to work out a deal to return Edward Snowden to the United States.

The National Security Agency’s loudest critics have remained largely quiet on what should happen to Snowden, the former contractor who leaked documents to reveal the extent of the agency’s massive domestic surveillance programs. But after the New York Times editorial board called for clemency for Snowden, several members of Congress have said that the United States should at least be flexible when dealing with Snowden.

“I’ve come to the conclusion that he’s more of a whistleblower than a villain,” Massachusetts Democrat Jim McGovern told BuzzFeed. “I’ve kind of wrestled with his actions for quite some time because part of me would like to think that in this country there is a process in place where people can do the right thing and not get punished for it. The more I learn about his particular case I’m not sure there was a process in place where he could have presented what he found out and actually changed things.”

“I’d rather have him in the U.S. than have him in Russia, and maybe there is an opportunity to work out some sort of a deal,” he added. “I think the outrage people in the administration have expressed toward Edward Snowden ought to be more focused on how the NSA broke privacy laws.”

[xchrom]

26. This Could Maybe, Possibly Be A Breakout Year For Bank Of America

http://www.buzzfeed.com/matthewzeitlin/this-could-maybe-possibly-be-a-breakout-year-for-bank-of-ame

Is Bank of America “no longer impacted by legacy issues?” A team of analysts at Citigroup lead by Keith Horowitz think so, upgrading the massive North Carolina-based bank to a “buy” in a note today. The analysts put a $19 share price target on BofA compared to its current price at $16.15. Why the good news? It’s a bet on the U.S. economy improving, which many economists expect in 2014, and those nasty legacy issues receding for the second-largest U.S. bank with $2.1 trillion in assets.

Bank of America is perhaps the institution still carrying the most weight from the financial crisis, with its $40 billion acquisition of the mortgage lender Countrywide in 2008 that has since cost it at least $40 billion in legal expenses alone (not to mention its government arranged swallowing of the then near-failure investment bank Merrill Lynch). BofA’s stock price jumped 34% in 2013, putting it at almost triple its 2011 low of $4.99 even if it’s still nowhere near its 2006 high of over $53. The bank’s stock was last at $19 in November 2008.



One thing Bank of America has is businesses that do especially well when the U.S. economy is growing quickly. With economic growth for the third quarter at over 4% and economists expecting quicker growth this year than last year, the bank’s businesses like credit cards and residential real estate lending will be even stronger.

In the 2012 fiscal year, BofA had over $5 billion in income from its card services and just over $4 billion in income across the whole company. Citi sees Bank of America’s consumer and business banking, which means things like making loans to businesses and individuals, growing 11% partially thanks to consumers’ increased willingness to put more money on credit card balances.

[xchrom]

27. Thai economy at risk as political rivals vow mass rallies

http://uk.reuters.com/article/2014/01/03/uk-thailand-protest-idUKBREA020AL20140103

(Reuters) - Thailand's finance minister expressed concern about a weak currency and damage to the economy on Friday as supporters and opponents of the government prepared for big rallies this month that risk pushing the divided country to the brink of chaos.

Planned infrastructure projects worth $65 billion intended to boost an economy blighted by political tension and sagging exports would be postponed until the end of the year, Kittirat Na Ranong said, while the baht's slide against the U.S. dollar could hurt imports and raise energy prices.

Protesters intent on toppling Prime Minister Yingluck Shinawatra's government want to suspend Thailand's fragile democracy by thwarting a February election and installing a "people's council" to reform the political system.

They are planning a "shutdown" of Bangkok from January 13, deepening uncertainty about a poll Yingluck's Puea Thai Party would otherwise be almost certain to win. Protesters have yet to reveal exactly what they will target, or for how long.

[xchrom]

28. Euro zone corporate lending shrinks at record pace in Nov

http://uk.reuters.com/article/2014/01/03/uk-eurozone-m-idUKBREA020BQ20140103

(Reuters) - Lending to companies in the euro zone contracted at the fastest pace on record in November, piling pressure on the European Central Bank to do more to revive the currency bloc's economy.

The ECB has cut interest rates to a record low, pumped extra liquidity into the banking system and announced a yet-to-be-used government bond purchase programme, but the measures have so far not reached all corners of the euro zone evenly.

"Worryingly, there is still no sign of any trend change in bank lending to euro zone businesses, which heaps pressure on the ECB to act," said Howard Archer, chief European economist at IHS Economics.

"Banks likely believe the economic situation and outlook in many euro zone countries still provides an uncertain and risky backdrop in which to lend, despite the euro zone eking out modest growth since the second quarter."

[xchrom]

29. Italy, Spain December inflation underlines price weakness

http://uk.reuters.com/article/2014/01/03/uk-italy-spain-prices-idUKBREA020BX20140103

(Reuters) - Consumer inflation in Italy eased slightly in December on an annual basis and remained stable in Spain, according to preliminary data on Friday which highlighted concern at continuing weakness in prices in the euro zone.

European Central Bank President Mario Draghi said at the weekend that the ECB wanted to ensure that inflation in the euro zone did not drift into what he called a "danger zone" below one percent.

But with both Italy and Spain struggling to emerge from recession, the data underlined the sickly state of their economies with consumer spending held back by soaring unemployment and declining incomes.

Annual Italian EU-harmonised consumer price inflation (HICP) for December declined to 0.6 percent from 0.7 percent in November, slightly under a forecast for a 0.7 percent rise in a Reuters survey of analysts. Over the year as a whole, the average inflation rate dropped to 1.3 percent, compared with 3.3 percent in 2012, statistics agency ISTAT said.

[xchrom]

30. Will 2014 Be the Year the Economy (Finally) Works for Workers?

http://www.theatlantic.com/business/archive/2014/01/will-2014-be-the-year-the-economy-finally-works-for-workers/282761/



Since the global recession ended, economic forecasters have been trying to call the Next Big Crash that would once again drag the world back into the sewer. It was going to be Europe. No, make that China. Or a cascading collapse of commodity prices.

But reality has been more complicated. The world hasn't fallen apart, if you look at the top-line growth figures. GDPs are expanding, bond markets are functioning, stocks are rising, and the global economy certainly seems to be working. But it's not quite working for a certain slice of the world economy commonly known as humans.

The markets missed the big meltdown. But labor got the big muddle-through.

Let's take a quick globe-trot: The EU staved off the worst fears of financial apocalypse, but unemployment has skyrocketed, particularly in Spain, Greece, and Italy. China has somehow juggled an ominous housing market and a glut of credit with a state capitalism model, while nonetheless nailing most of its growth targets. But it's still struggling to shift its economy from a making-things model, which argues for an artificially cheap currency, to a buying-things model, which would require that Chinese families have more (and more valuable) money. Japan, two decades into a historic run of high debt and slow growth, has core inflation at a 15 year high and the Nikkei stock index rose 57 percent last year, even more than the Dow, but its labor markets are still famously broken for young people.

[xchrom]

31. India has become a dystopia of extremes. But resistance is rising

http://www.theguardian.com/commentisfree/2014/jan/03/india-dystopia-extremes-resistance-rising-neoliberalism-pilger

In five-star hotels on Mumbai's seafront, children of the rich squeal joyfully as they play hide and seek. Nearby, at the National Theatre for the Performing Arts, people arrive for the Mumbai literary festival: famous authors and notables from India's Raj class. They step deftly over a woman lying across the pavement, her birch brooms laid out for sale, her two children silhouettes in a banyan tree that is their home.

It is Children's Day in India. On page nine of the Times of India, a study reports that every second child is malnourished. Nearly 2 million children under the age of five die every year from preventable illness as common as diarrhoea. Of those who survive, half are stunted owing to a lack of nutrients. The national school dropout rate is 40%. Statistics such as these flow like a river permanently in flood. No other country comes close. The small thin legs dangling in a banyan tree are poignant evidence.

The leviathan once known as Bombay is the centre for most of India's foreign trade, global financial dealing and personal wealth. Yet at low tide on the Mithi river, people are forced to defecate in ditches, by the roadside. Half the city's population is without sanitation and lives in slums without basic services. This has doubled since the 1990s when "Shining India" was invented by an American advertising firm as part of the Hindu nationalist BJP party's propaganda that it was "liberating" India's economy and "way of life".

Barriers protecting industry, manufacturing and agriculture were demolished. Coca-Cola, Pizza Hut, Microsoft, Monsanto and Rupert Murdoch entered what had been forbidden territory. Limitless "growth" was now the measure of human progress, consuming both the BJP and Congress, the party of independence. Shining India would catch up China and become a superpower, a "tiger", and the middle classes would get their proper entitlement in a society where there was no middle. As for the majority in the "world's largest democracy", they would vote and remain invisible.

[DemReadingDU]

32. India's Invincible Love Story With Gold

short video at link


1/2/14 India's Invincible Love Story With Gold

Despite the government's ongoing efforts to cut gold imports - aimed at closing a widening current account deficit among other status-quo-questioning factors, the following brief clip from Bloomberg TV sums it all up perfectly - For this country of over one billion, "Gold is, was, and always wlll be... money." And now, following import bans and higher taxes, the government is considering restrictions on the holiest of holies - wedding gifts, and "legislating against love."

By trying to discourage gold-buying, India's government is trying to roll-back centuries of tradition ("and an abiding love for the world's only enduring currency&quot and has created a major black-market for the precious metal...

http://www.zerohedge.com/news/2014-01-02/indias-invincible-love-story-gold

[xchrom]

33. If you want to curb immigration, pay workers a living wage

http://www.theguardian.com/commentisfree/2014/jan/02/curb-immigration-pay-workers-living-wage


Home affairs select committee chairman Keith Vaz (left) greets arrivals at Luton airport, including Victor Spiresau (right), as they arrive on New Year's Day. Photograph: Jennifer Cockerell/PA

Hello, Victor Spiresau, one of the few new arrivals that photographers and MPs found off a New Year's Day flight from Romania. His moment of fame is over and he vanishes into the shadowlands of Britain's serf-labour force. He joins that great army of the underpaid to clean, care and cater. Briefly, he stood in Luton arrivals as a woolly-hatted emblem for a host of issues that reflect none too well on the state of Britain: anti-immigration fever, Europhobia, benefit-scrounging hysteria, a living reminder of our high unemployment, low pay, weak labour laws and slum housing epidemic.

He has been promised £8 an hour in a carwash, as much as he'd earn in a day back home. But there's a high risk he'll be cheated, adrift in a virtually unregulated, uninspected world of work. That's why so many of these jobs are advertised only in eastern Europe – and why British workers with families can't take them.

Eastern European politicians, angry at anti-migrant abuse, say their people only take jobs that lazy Brits refuse to do: it's the Brits who lounge around on benefits, not hard-working newcomers. Iain Duncan Smith agrees: the dependency culture is to blame. Why else do foreigners take jobs, not our unemployed? Last week Duncan Smith told the Mail (again) that those who make benefits their "lifestyle choice" face a crackdown with "no hiding place", to be sent to "full-time mandatory attendance centres" to spend 35 hours a week applying for jobs. The assumption is that if they won't do jobs that Romanians take, they must need the screw tightened and benefits sanctioned until they have no choice. Benefits distort the market – if the market rate is whatever cheating employers can get away with.

New arrivals are vulnerable. Take a look at the Tjobs.ro site, where UK agencies offer British work to Romanians. (It's quite easy to decipher: Romanian looks like Esperanto.) See these jobs for 18- to 24-year-olds, as "apprentices", who only need to be paid the apprentice rate of £2.68 an hour, not the £6.31 minimum wage. The ad offers hotel and catering work for Hilton Hotels, Chelsea Football Club, Marriott hotels, Abbey Care homes and many others. The pay? £650-£1,000 a month, or so it says. Travel and accommodation are provided – but would they be deducted? Would uniforms, travel time and equipment be deducted? Is it piece-work, is it zero hours? Those are commonplace tricks to bring pay far below the minimum wage.

[Demeter]

35. IT'S -5F in Ann Arbor. It's 37F in Finland

i want my Michigan weather back!

We might hit a high of 14F today, but then, the wind will pick up...


they are threatening us with highs of 3F and 1F on Monday and Tuesday...lows of -13F and -5F. I have never been so cold since Finland...not even in NH.

At least, the sun is shining today, and the snow has finally stopped. Not a cloud in the sky. It's too cold for them, I guess.

[westerebus]

43. 28F sunny no snow here in Virginia. n/t

[Demeter]

36. Kanye West inspired Bitcoin alternative to launch next month

PROOF THAT THERE'S TOO MUCH FREE TIME IN THE FINANCIAL WORLD

http://www.theguardian.com/music/2014/jan/03/kanye-coinye-west-bitcoin-coinye-cryptocurrency?CMP=ema_565

The newest successor to Bitcoin is inspired by rapper Kanye West. According to an interview with Noisey, an anonymous cabal of anarcho-financiers are preparing to release a "cryptocurrency for the masses" called Coinye West. The site, coinywest.com, promises a "PROPER and FAIR" currency launch on 11 January, with a script-based algorithm that will "[fire shots at bitcoin". Yet despite its name, the project has no actual affiliation with Kanye West. In fact, the anonymous creators are nervous he could try to shut them down.

"Kanye ... is and always has been a trendsetter, and he's always keeping things unique," they wrote in an email interview with Noisey. "[Still,] we're really not sure how Kanye is gonna react to this. We hope he loves it, but if he doesn't, he really isn't someone we want to piss off." Accordingly, they have offered the rapper 100,000 Coinye if he contacts them before their launch.

Bitcoin's success has inspired a slew of alternative currencies that claim to improve upon the principles of their progenitor. Some of these, like Litecoin, are serious projects with market-caps of hundreds of millions of pounds. Others, like Dogecoin, seem like blips of meme-inspired fun.

Coinye West's creators deny that it's a joke, asserting that they hope to win the confidence of the masses. "Bitcoin is for hardcore money-hoarders, and dogecoin was more for the internet-meme crowds," they said. "Our goal with Coinye West is to make it easier for people to use cryptocurrency."

MORE DRIVEL AT LINK

[Demeter]

37. Senate Democrats plan fast-track fix to reinstate lost unemployment benefits

FAST TRACK. DOES THAT MEAN, IN TIME FOR MID-TERM ELECTIONS?

NOAH, HOW LONG CAN YOU TREAD WATER?

http://www.theguardian.com/world/2014/jan/02/senate-democrats-bill-reinstate-unemployment-benefits?CMP=ema_565

Democratic leaders in the Senate are planning to fast-track legislation to extend unemployment insurance, a move that would provide a lifeline to more than a million jobless Americans who lost their benefits five days ago. Senator Jack Reed, a Democrat from Rhode Island whose bipartisan bill will ensure a three-month extension of the federal benefits program, told the Guardian the measure would stimulate the economy and alleviate what he called the “mental torment” suffered by those long-term unemployed who now feel abandoned...“On a human level, many of these people are desperate,” Reed said in an interview on Thursday. “It is the difference between being able to pay their mortgage or not. Many of these are people who have worked for decades. They had good jobs, and they’ve been sending out sending out thousands of résumés, but they’re in a job market that is terrible.”

Reed’s bill, which is co-authored by the Nevada Republican Dean Heller, will only extend the federal benefits until the end of March – a temporary fix designed to allow congressional committees to work on a more permanent solution for the long-term unemployed. It would be applied retroactively, reimbursing those who lost benefits over the last week.

In a clear sign that Democrats plan to make poverty and inequality major issues in this year’s Congressional mid-term elections, Harry Reid, the Senate majority leader, told a reporter in his home state of Nevada earlier this week that the bill will be put to a vote when the Senate reconvenes on Monday. A senior Democratic aide involved in the legislation said any vote may now be pushed back to Tuesday or Wednesday, to make room for the Senate’s confirmation of Janet Yellen as the chair of the Federal Reserve. But the bill remains a priority. “We have a commitment that the the unemployment insurance bill be one of the first things the Senate moves on,” the aide said.

LORDY! THAT IS FAST, FOR HAIRY REED!


AND AFTER THEY PATCH THAT UP, MAYBE THEY MIGHT GO FOR A JOB-CREATION BILL? INFRASTRUCTURE REPAIR AND MAINTENANCE, PERHAPS? PUTTING EXPERIENCED TEACHERS BACK IN THE CLASSROOMS? WPA, FOR EXAMPLE?

[Demeter]

38. “Let the Crime Spree Begin”: How Fraudsters Benefit from Medicare’s Drug Plan

THIS IS TRULY SHOCKING AND BRAZEN. YOU HAVE TO READ IT

http://www.alternet.org/investigations/caught-medicare-drug-fraud?page=0%2C1&akid=11359.227380.lPw7N-&rd=1&src=newsletter942814&t=24&paging=off&current_page=1#bookmark

[Demeter]

39. Lookee here! Back to 16.5 K already, and it's not even noon!

The air has been let out of oil, I see.

[DoBotherMe]

40. KNR

[antigop]

41. Junk-Debt Time Bomb: Ticking Till the Fed's Money Dries Up

http://www.testosteronepit.com/home/2013/12/18/junk-debt-time-bomb-ticking-till-the-feds-money-dries-up.html

With no credible plan in sight to slow the bleeding, with only a snowball’s chance in hell of a real recovery in a tough retail environment, and mired deeply in junk territory despite the equity offering, JCP had simply delayed the inevitable by milking desperate, yield-starved lenders and blind equity investors. JCP now bandies about improved sales figures for the last two months. It has done that before. But it still hasn’t stopped burning through investor money.

These and other junk-rated borrowers across corporate America have had no trouble wringing more money out of investors. Endless new money meets endless commitment to kick the can down the road. Nothing can possibly go wrong.

The default rate by junk-rated companies is proof. It has been declining. In October, it was 2.5%; a year earlier, it was 3.6%, according to Moody’s Investors Service. Defaults only happen when money dries up for a company. But with the Fed’s money spigot wide open and short-term interest rates near zero, desperate yield-starved lenders, crazed bond investors, and reckless stock jockeys are all chasing after every opportunity to leverage the free funds from the Fed.

Companies can simply go on losing money and burning cash and shouldering more debt, while digging an ever-deeper hole. For Wall Street, which creams off fees, it’s a great deal. And it works wonderfully – until it doesn’t. See Loehmann’s.

Meanwhile, risks – the very concept that has been expunged – are coagulating into a fermenting ugly mass. One of them is interest-rate refinancing risk. These junk-rated companies have to refinance their debt over the next few years while also having to raise new money to cover their cash bleed. If the Fed ever sinks low enough to start allowing interest rates to drift up, that coagulated mass of junk debt will have to be refinanced at much higher rates – if it can be refinanced at all. It’s a time bomb. It’s ticking. And it will blow up, with big pieces of shrapnel flying every which way.

[Demeter]

42. Jim Hightower: Geithner Gets a Perch on Wall Street

STOLEN FROM MARMAR

The former Treasury Secretary is proof the Washington-to-Wall-Street revolving door serves the interests of bankers, not the public. Timmy Geithner has landed.

After President Barack Obama’s first-term Treasury Secretary resigned early this year, I lost track of him. But in November, Geithner reappeared, having spun himself through Washington’s revolving door – whoosh, whoosh, whoosh – and flung himself all the way up to Wall Street, landing softly in the cushy quarters of Warburg Pincus, one of America’s top 10 private-equity empires. Yes, the guy who was responsible for rescuing and regulating Wall Street’s too-big-to-fail, multibillion-dollar, financial casinos is now the president of one.

Writing in The New Yorker magazine, Andrew Huszar says we need not be surprised that the former treasury chief is cashing in on his insider knowledge and contacts. Huszar worked at the Federal Reserve Bank of New York when Geithner became president of that powerful supervisor of Wall Street firms.

He says that rather than promoting knowledgeable regulators from within the Fed, Geithner broke with tradition (and prudence) to put top bankers from JPMorgan Chase, American Express, Goldman Sachs, and other powerhouse firms in key regulatory positions. In other words, the new honcho built his own revolving door in the New York Fed, bringing in bankers to regulate themselves. ............................(more)

The complete piece is at: http://truth-out.org/opinion/item/20971-geithner-gets-a-perch-on-wall-street


AND THAT EXPLAINS CONTEMPT FOR GEITHNER, WITHOUT HAVING TO GO ANY FURTHER...

[westerebus]

44. Just wait till the President hears about this!!!

[Tansy_Gold]

45. I won't even post it

Cuz you guys all know it already.



Remember, Remember
The 24th of November.
And that marvelous "transition" team....

[Fuddnik]

46. Looks like somebody crapped on the Dow and the oil market near the close.