STOCK MARKET WATCH -- Friday, 23 May 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 23 May 2014[font color=black][/font]

SMW for 22 May 2014

AT THE CLOSING BELL ON 22 May 2014
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Dow Jones 16,543.08 +10.02 (0.06%)
S&P 500 1,892.49 +4.46 (0.24%)
Nasdaq 4,154.34 +23.00 (0.00%)


[font color=red]10 Year 2.55% +0.01 (0.39%)
30 Year 3.43% +0.02 (0.59%) [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.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.








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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. Transition team? Transition team?

[Demeter]

2. I think they skipped the transition

It's been one freaking embarrassment after another....and still is today.

[kickysnana]

6. +1

[Demeter]

3. Laura Berman: 'Dark money' forces seek to sway Detroit bankruptcy

THAT THE DETROIT NEWS---THAT PARANOID, RETROGRESSIVE RAG--SHOULD PRINT THIS SHOWS THAT THE KOCH BROS. ARE SHOOTING BLANKS.

http://www.detroitnews.com/article/20140522/METRO01/305220040/1409/METRO

Detroit may be the nation’s largest bankrupt city. But to Americans for Prosperity Michigan — a well-funded arm of the billionaire Koch brothers’ political operation — the city is fat with “$3 billion worth of assets” that could be liquidated, if you count the storied masterpieces at the Detroit Institute of Arts.

Before the state chips in its dollars, American for Prosperity wants those Renoirs and Rembrandts sold. “I’m more concerned about pensioners trying to put food on the table than about somebody trying to keep artwork on the wall,” said Scott Hagerstrom, the group’s executive director in Michigan.

Hagerstrom’s group disdains government spending but happily benefits from tax-exempt status granted to “social welfare organizations,” an IRS designation, also called 501C4s. And ever since the 2010 Citizens United decision of the U.S. Supreme Court, these social welfare nonprofits have staked out the freedom to buy TV ads, spend money on “political education” and exercise their constitutional rights to political speech — without being required to identify their funding sources, or to report spending except in specific time periods close to elections. The impact, says Russ Choma, a specialist in campaign finance for OpenSecrets.org in Washington, D.C., was “transformational.”

In 2014, the Michigan AFP group has spent $1.75 million in the Detroit TV market, according to the Michigan Campaign Finance Network, which tracks such spending. Almost all of that has gone to pay for ads denouncing Obamacare and U.S. Senate-hopeful Gary Peters, months before the election gets earnest. How much will they spend on phone calls and direct mail operations? There’s no way to know, which is why critics label the funding “dark money.” That’s led the Peters campaign to denounce “the out-of-state billionaires,” who have residences in Palm Beach, among other places, but not in Michigan.

MORE

[Demeter]

4. Jamie Dimon Rides to the Rescue in Motor City

AND IF YOU BELIEVE THAT....

http://finance.yahoo.com/news/jamie-dimon-rides-rescue-motor-163200373.html

Today” show host Matt Lauer looked genuinely incredulous Wednesday morning when he asked JPMorgan Chase CEO Jamie Dimon why his mega-bank had decided to invest $100 million in Detroit — as if that was more than a drop in the bucket for a bank boasting $18 billion in annual net income. Wasn’t it too much of a roll of the dice for Dimon to invest so much money in a city mired with $18 billion of long-term debt, that lost a third of its population in recent decades, where 40 percent of the street lights and buses don’t work, and where 14 percent of the population was unemployed — nearly double the national average?

Was this a legitimate investment or merely a publicity stunt to detract attention from JPMorgan’s legion of legal problems and massive federal fines, Lauer asked.

“We’re doing this to grow investments, to grow the city and create a healthy and vibrant city,” Dimon coolly responded. “And if that happens, it’s good for us too. I also look at it as an American patriot. This is one of the few cities that hasn’t had a renaissance. Most other cities have. If it’s done right, they can have one here too.”

As for cynics who might view this deal as a way to distract attention from the big bank’s legal woes, Dimon replied: “The cynics would be wrong.”

JPMorgan Chase, the largest U.S. bank, reached a tentative agreement with the Justice Department late last fall to pay a record $13 billion to resolve allegations that it knowingly sold faulty mortgage securities that contributed to the financial crisis. If finalized, the deal would constitute the largest penalty ever paid by a single company.

The $100 million from JPMorgan Chase will be made available in the form of loans and grants. The funds will include $50 million in community development spending, $25 million for blight removal, $12.5 million for job training and placement and $7 million to boost small businesses, according to a summary posted today by JPMorgan Chase.

The bank has long-standing ties to Detroit. JPMorgan Chase has more than 2,500 employees in southeast Michigan.

************************
Last November, Michigan Gov. Rick Snyder and Goldman Sachs CEO Lloyd Blankfein announced a $20 million partnership to bring the investment bank’s 10,000 Small Businesses initiative to Detroit to help create jobs and economic growth. Small businesses would receive technical assistance and access to fresh capital under the plan.

Meanwhile, some of the city's most powerful leaders are attempting to forge a plan in which nonprofit philanthropic foundations put up $500 million to spin off the Detroit Institute of Art and its valuable collection of masterpieces, with the money going to reduce pension cuts and help rebuild city services.

Detroit Mayor Mike Duggan, who just recently took office and is working in tandem with the emergency manager, appeared on the “Today” show as well and described the deal formally unveiled today as “significant” and “a good jump start” for his city.

[Demeter]

5. Michigan House approves Detroit bankruptcy bills

http://www.wxyz.com/news/state-house-passes-aide-package-for-detroit

The Michigan House has approved Detroit bankruptcy legislation that commits $195 million in state money to prevent deeper cuts in retiree pensions and the sale of city-owned art.

The House voted 74-36 Thursday to spend money to match contributions from foundations and the Detroit Institute of Arts. Eleven bankruptcy-related bills cleared the Republican-led chamber and go to the Senate.

One bill puts Detroit's finances under the oversight of a state-led commission for at least 13 years. The board could go dormant sooner if the city has balanced budgets.

Republican Rep. Al Pscholka of Stevensville says it's better to settle the bankruptcy rather than potentially leave Michigan liable for billions in pension debt. But Democratic Rep. David Nathan of Detroit says he fears Michigan's "takeover" of Detroit could go on forever.

[Demeter]

10. Detroit: the bankrupt city turned corporate luxury brand

http://www.theguardian.com/money/2014/may/14/detroit-bankrupt-brand-ad-chrysler-nostalgia?CMP=ema_565

...to an advertiser's eye, Detroit is cool. Gritty. Tough. Resilient. Authentic in its struggle. True in its American spirit of hard, honest work, ruins and all.

That's where it gets uncomfortable for Detroit, The Brand. Detroit, the American phoenix rising from the economic ashes, is sitting on a valuable natural resource: street cred. This has not escaped the notice of profit-driven companies see the city's rebirth as a chance to brand themselves and sell authenticity.

The airwaves and billboards are plastered with ads from Chrysler (a Detroit native), Redbull (from Austria), new vodka brand from the giant French Pernod Ricard group, Our/Vodka, and luxury watch and bicycle company Shinola. They present a romantic, nostalgic take on grit – a highly effective spin, which presents poverty and urban decay as cool. The nostalgia element is all the more evident in that ads by Shinola, Redbull and Our/Vodka are often filmed in black and white.

Shinola’s spot features bike riders and a beautiful, blonde, white female model hugging a (presumably local) young, black girl. Redbull’s spot aired during this year’s Grammy Awards features local artist Tylonn Sawyer telling a compelling story of beauty and resilience. Our/Vodka’s launching ad includes Detroit’s beautiful, eerie, abandoned Michigan Central Station, stating the brand is rooted in “people” and “community”.

These are brands that Detroiters, even the hip newcomers, likely can't afford. It's hard to imagine that many in Detroit could afford a $1,950 bicycle or a $900 watch, irrespective of whether or not the latter now comes with a lifetime warranty....

[Demeter]

20. Jamie Dimon’s sinister P.R. ploy: What’s really behind JPMorgan’s Detroit investment

http://www.salon.com/2014/05/21/jamie_dimons_sinister_pr_ploy_what%E2%80%99s_really_behind_jpmorgans_detroit_investment/

... the real, underlying motive is privatization ...



Beware of big banks bearing gifts. That note should be attached to JPMorgan Chase’s much-hyped planned investment of $100 million in the City of Detroit. The move is mostly an effort to boost the embattled bank’s public image, in a part of the country where they have deep roots. But corporate philanthropy like this also hopes for a return on investment – often in the form of the privatization of public infrastructure, which JPMorgan Chase certainly has in its sights.

The $100 million investment in Detroit, spread over a five-year period, comes out to about .1 percent of JPMorgan Chase’s quarterly profits. But it represents one of the more generous corporate commitments to the city, as it attempts to emerge from the nation’s largest municipal bankruptcy. The money, split between low-interest loans and grants, will go toward funding community development projects, documenting and eliminating urban blight, providing money for mortgages, training prospective workers and supporting small businesses.

This makes sense for Chase’s bottom line simply because they have a number of branches in Detroit, and over 1 million consumer customers in the region, a legacy going back to the 1930s. A revitalized Detroit helps Chase attract more business, so the bank can do well by doing good. In addition, for a bank that has mostly been in the news of late for paying fines for violating the law, a little shine to their corporate image cannot hurt. “When you’re in a town, you try to be a great citizen there,” CEO Jamie Dimon told the Detroit Free Press.

And if this were only about good corporate citizenship, there would be nothing to worry about. But there’s something far more sinister here. Buried within the commitments is $5.5 million for “strategic initiatives” that includes investing in the M-1 streetcar project, and “bringing the Global Cities Initiative to Detroit.” What is the Global Cities Initiative? Simply put, it’s a giant public relations project meant to encourage the privatization of public resources in cities like Detroit....


JUST SICKENING

ALSO DOOMED TO FAIL

[xchrom]

7. Koch brothers’ Detroit abomination: Stunning avarice and cruelty reaches new low

http://www.salon.com/2014/05/22/koch_brothers_detroit_abomination_stunning_avarice_and_cruelty_reaches_new_low/

Ta-Nehisi Coates has written the day’s must-read on the legacy of slavery and white supremacy. It focuses on Chicago, and reminds all of us how white mob violence plus white “flight,” backed by discriminatory federal lending policies, kept African-Americans out of many city neighborhoods, and doomed the neighborhoods in which they were allowed to live and buy. It also reminds us that the first “race riots” weren’t what we now mostly associate with the term — the black urban uprisings of the ‘60s – but white violence against black people and black property, from Tulsa, Oklahoma, to Rosewood, Florida, to Chicago and a horrifying example he happens not to mention: Detroit in 1943.

It’s against that backdrop that the Koch brothers’ new crusade against a landmark bipartisan settlement of Detroit’s bankruptcy crisis seems particularly greedy and cruel. After much controversy and debate, Michigan’s Republican Gov. Rick Snyder has agreed to provide $195 million in state funding that will limit pension cuts to no more than 4.5 percent and protect the Detroit Institute of Art from liquidating its collection.

“This is a settlement. This not a bailout,” Snyder said. “And I want to be very, very clear about that.”

Not so fast, Gov. Snyder. Americans for Prosperity has built a shiny website, shamelessly named StrongerDetroit.com, that shrieks “NO MORE BAILOUTS.” It has committed to contacting 90,000 Michigan conservatives to get them to tell their Republican representatives to buck Snyder and (what rhymes with buck?) Detroit. The group promises to run ads against any Republican who votes in favor of the bankruptcy settlement.

Remember, Snyder is no bleeding-heart liberal; far from it. He has come under fire from Democrats and civil rights advocates for his heavy-handed use of executive power to put the finances of struggling Michigan cities, including Detroit, under state control, often usurping the power of African-American elected officials. In 2012, he flip-flopped on campaign promises to oppose an anti-union right to work law, signing the bill much loved by the Koch brothers.

[xchrom]

8. Our Economy Wants You to Be In Debt—5 Things You Can Do to Take Charge

https://www.commondreams.org/view/2014/05/22-4



Last month PM Press published the Debt Resisters' Operations Manual —also known as “the DROM.” But don’t let that menacing-sounding acronym fool you: this is a book written in plain English and filled with tips and tactics for dealing with debt.

The book has been available online since September 2012, but this publishing marks the first time the manual has been printed, bound, and sold. Don't worry, you can still find a free copy online. But, hopefully, getting this book into stores will help its message reach more people—however ironic it might seem to buy one with a credit card."Everyone is a debtor so there’s no limit to the audience" said Andrew Ross, a member of the Occupy Wall Street offshoot called Strike Debt, in aninterview with Guernica Magazine. Although Ross has gone public, most of the authors of the Debt Resister's Operations Manual have chosen to remain anonymous.

The book explains how creditors, big banks, and other lenders operate and how debtors can navigate both in and outside of the system.

"From a young age, we are conditioned to feel that being in debt is shameful and worthy of punishment," the manual's anonymous authors explain.

Debtors shouldn’t feel that way, the DROM argues, because the situation is largely unfair and out of their control. "The reason you have tens of thousands of dollars in medical bills is that we don't provide medical care to everyone," the authors write. "The reason you have tens of thousands of dollars of student loans is because the government, banks, and university administrators [are] … driving college costs through the roof."

[AnneD]

32. I've been debt free for some time now.....

Just recently (this month) went in to get a 2011 Toyota Camry with 32,301 miles for $16100. It was a great deal and I can pay it off in 3 months but am conserving my money until I get my certification and find another job.

I have also been helping my daughter pay some of her loan so I don't have much cash saved up but that is not a problem at this point.

The strangest thing in all of this is that I don't have a home as of yet. I have found a very affordable one that I will be able to buy it cash outright. I think I may move on it in a few months. I just can't believe that at this late stage of the game I will get a house paid for and have a pension too. Imagine the interest I have saved. And I am healthy enough to work 5 more years.

Cash and carry baby, cash and carry.

[Demeter]

9. More Nostalgia Funnies (because nothing presently is even remotely humorous)

[xchrom]

11. What is the New Populism?

https://www.commondreams.org/view/2014/05/22-5


Cover detail from new report, "The New Populism: A Movement and Agenda to Transform Our Economy and Politics," by the Campaign for America's Future.)

Today, in Washington, the Campaign for America’s Future is convening a major summit on The New Populism, keynoted by Sen. Elizabeth Warren. (It will be live streamed on our website). What follows are excerpts from remarks I will deliver at that meeting.

What is the new populism? The Princeton dictionary defines populism as “a political doctrine that supports the rights and powers of the common people in their struggle with the privileged elite.”

Not bad for a dictionary.

The New Populism arises from the stark truth about today’s America: Too few people control too much money and power, and they’re using that control to rig the rules to protect and extend their privileges.

This economy does not work for working people. This isn’t an accident. It isn’t an act of God. It isn’t due to forces of technology and globalization that can’t be changed. It isn’t a mistake. It is a power grab.

[xchrom]

12. Euro Slides on Germany as Spain Bonds Rise With Metals

http://www.bloomberg.com/news/2014-05-22/asian-futures-rise-as-yen-holds-drop-baht-forwards-gain.html

The euro weakened for a fourth day against the dollar as German business confidence fell, fueling speculation the European Central Bank will boost stimulus. Spanish and Italian bonds gained while industrial metals rose.

Europe’s shared currency depreciated 0.3 percent to $1.3621 at 6:49 a.m. in New York, touching a three-month low. The Stoxx Europe 600 Index slipped 0.1 percent and Standard & Poor’s 500 Index futures were little changed. The yield on 10-year Spanish bonds dropped five basis points to 3 percent and Italy’s rate slid six basis points to 3.18 percent. Copper rose 0.7 percent and aluminum climbed to a three-week high.

Business sentiment in the euro area’s largest economy declined more than analysts forecast, according to data from the Ifo institute. The 18-nation common currency also declined as concern grew euro-skeptic parties will gain ground in elections this weekend for the European Parliament. New home sales in the U.S. probably rose in April, economists said before a Commerce Department report today.

“The Ifo survey is the trigger for more euro weakness today,” said John Hardy, the head of foreign-exchange strategy at Saxo Bank A/S in Copenhagen. “The worry now is that momentum is waning in the core and that strengthens the case for the ECB to move in June. There is some nervousness around the European election results too.”

[xchrom]

13. Barclays Fined $44 Million for London Gold Fix Failings

http://www.bloomberg.com/news/2014-05-23/barclays-fined-44-million-for-london-gold-fix-failings.html

Barclays Plc (BARC) was fined 26 million pounds ($44 million) by Britain’s markets regulator for manipulating the price of gold, dealing a blow to Antony Jenkins’s attempts to rehabilitate the lender’s reputation.

The U.K. Financial Conduct Authority faulted the British bank for “failing to adequately manage conflicts of interest” with its customers between 2004 to 2013, according to a statement by the regulator. The FCA also fined former trader, Daniel Plunkett, 95,600 pounds and banned him from the industry.

Plunkett “exploited the weaknesses in Barclays’s systems and controls to seek to influence” the gold fixing on June 28, 2012, according to the statement. His actions allowed Barclays to avoid making a $3.9 million payment to a client, though the bank later compensated the customer in full, the FCA said.

Plunkett’s actions took place the day after the London-based bank was fined a record 290 million pounds for manipulating the London interbank offered rate. That fine led to the departure of Robert Diamond as chief executive officer. Jenkins, who took over after Diamond’s exit, has since pledged to rebuild Barclays’s relations with regulators and politicians.

[xchrom]

14. Cocaine Sales to Boost Italian GDP in Boon for Budget

http://www.bloomberg.com/news/2014-05-22/cocaine-sales-to-boost-italian-gdp-in-boon-for-budget.html

Italy will include prostitution and illegal drug sales in the gross domestic product calculation this year, a boost for its chronically stagnant economy and Prime Minister Matteo Renzi’s effort to meet deficit targets.

Drugs, prostitution and smuggling will be part of GDP as of 2014 and prior-year figures will be adjusted to reflect the change in methodology, the Istat national statistics office said today. The revision was made to comply with European Union rules, it said.

Renzi, 39, is committed to narrowing Italy’s deficit to 2.6 percent of GDP this year, a task that’s easier if output is boosted by portions of the underground economy that previously went uncounted. Four recessions in the last 13 years left Italy’s GDP at 1.56 trillion euros ($2.13 trillion) last year, 2 percent lower than in 2001 after adjusting for inflation.

“Even if the impact is hard to quantify, it’s obvious it will have a positive impact on GDP,” said Giuseppe Di Taranto, economist and professor of financial history at Rome’s Luiss University. “Therefore Renzi will have a greater margin this year to spend” without breaching the deficit limit, he said.

[Demeter]

18. Somebody has officially lost his mind

That's got to be the epitome of corruption, right there.

In the tradition of Berlusconi...

[xchrom]

15. Russia Sanction Naysayers Collect $90 Billion: Chart of the Day

http://www.bloomberg.com/news/2014-05-22/russia-sanction-naysayers-collect-90-billion-chart-of-the-day.html



Investors who have ignored international sanctions against Russia are being rewarded.

The CHART OF THE DAY shows the MSCI Russia Index of stocks has gained 22 percent, adding about $90 billion in market value since March 17, when the U.S. banned President Vladimir Putin’s business allies in response to his annexation of Crimea. MSCI’s emerging-market gauge jumped 10 percent during the period, while the Standard & Poor’s 500 Index rose 2.9 percent.

Russian stocks have rallied as the U.S. and European Union refrained from extending penalties beyond officials, individuals and companies tied to the Kremlin’s inner circle. Putin this week said he ordered troops to withdraw from the border to help ease tension ahead of a May 25 presidential election in Ukraine.

“There was a significant amount of fear in the market, but it is clear that the actual sanctions were nothing very dramatic,” Ian Hague, founding partner of New York-based Firebird Management LLC, which manages $1.1 billion of assets including Russian stocks, said in a phone interview on May 21. “In every crisis, there’s an opportunity at some point.”

MSCI’s Russian stock gauge rose to a three-month high on May 21, trimming its decline for the year to 8.5 percent. The index traded at 5.08 times trailing earnings, a 59 percent discount to the emerging-market average, according to data compiled by Bloomberg. The average discount was 47 percent over the past five years.

[Demeter]

16. Has America’s Use of Finance as a Foreign Policy Tool Backfired?

http://www.nakedcapitalism.com/2014/05/americas-use-finance-foreign-policy-tool-backfired.html



From the 1980s onward, one of the major aims of American foreign policy has been to make the world safer for US investment bankers. That might seem like an exaggeration until you look at the priorities of American economic policy as well as the actions of US-dominated international institutions like the World Bank and the IMF. The World Bank, though its International Finance Corporations, pushed emerging economies to set up capital markets. The posture was that more open markets were always better.

Now that we’ve had repeated tsunamis of hot money flows in and out of small economies wreak havoc with them, conventional wisdom among development economists is more along the lines of “protectionism in emerging economies is desirable so they can develop companies and/or export sectors that are capable of competing internationally, and also serve domestic markets, so that the economy isn’t too export dependent. Open capital markets produce too much volatility in interest and foreign exchange rates and thus undermine internal development.”

DUH!



Similarly, the US has pressed advanced economies for more open financial markets. America’s insistence that Japan deregulate its banking system was a prime driver of its 1980s bubble (I had a bird’s eye view of how the Japanese banks went full bore into all sorts of products and markets they didn’t understand and incurred huge losses as a result).

A cynic might point out that Japan’s speculative boom and bust put a decisive end to Japan’s status as serious challenger to American economic dominance. The Chinese, the poster children of successful development, have made a close study of the Japanese experience. Among other things, the Chinese decided to maintain tight control over the banking system and have restricted international capital flows. Note these curbs have become less effective over time, perhaps due to neglect. Regional governments have helped spawn a large shadow banking system and wealthy company owners have been able to evade capital controls through over-invoicing. Nevertheless, the Chinese financial system is a long way away from being deregulated. As a result, the consensus among Western securities analysts is that China will be able to engineer a soft landing despite the scary size of its credit bubble.

MUCH MORE

[kickysnana]

40. Problem is we have not been using it as a tool we have used it as a weapon.

[Demeter]

41. And the self-inflicted wounds are going to kill us long before they bother the rest of world

[xchrom]

17. Spanish Reap Growth Reward as Italy Hurt by Selloff: Euro Credit

http://www.bloomberg.com/news/2014-05-23/spanish-reap-growth-reward-as-italy-hurt-by-selloff-euro-credit.html

Spain’s borrowing costs are lower than Italy’s by the most in more than two months, reflecting the diverging strengths of their economies after investors recoiled from the euro region’s most indebted nations.

The extra yield on Italian 10-year debt over Spanish securities reached 21 basis points today, the most since March 5. Over one week, Spain’s borrowing costs increased the least in the euro region, by one basis point, compared with 10 points point for Italy, Bloomberg World Bond Indexes show.

“There is further gain to be had with Spanish bonds,” Richard Kelly, a senior fixed-income strategist at Toronto-Dominion Bank in London, said two days ago. “Overall Spain is outperforming in an economic sense.”

Spanish debt thrived during a four-month rally of euro-region bonds that ended last week and proved resilient to concerns over politics and monetary policy. The securities barely budged during the selloff that started in Greece ahead of elections to the European Parliament over coming days and the European Central Bank’s next rate decision.

[xchrom]

19. California’s $68 Billion Train Seeks Bond Sale Approval

http://www.bloomberg.com/news/2014-05-23/california-s-68-billion-train-seeks-bond-sale-approval.html

The California High-Speed Rail Authority will seek to get its plans for the first U.S. bullet-train back on track today when it asks an appeals court for approval to issue $8 billion in bonds to finance the project.

The agency suffered a setback in November when a state judge blocked it from issuing bonds because a committee didn’t adequately disclose the reasons for the financing. The judge told the authority to withdraw its funding plan.

The November decision threatens to delay and increase the cost of the first-in-the-nation bullet-train, state officials say. With public support for the $68 billion project waning, lawyers for the authority will tell the Sacramento-based appeals court that the committee’s decision isn’t reviewable and, if it is, members had sufficient grounds to approve the plan.

“The committee had all the evidence it needed to authorize the bonds: the Bond Act itself, which declares the high-speed rail system to be in the public interest,” Deputy Attorney General Stephanie Zook said in a court filing.

[xchrom]

21. German Domestic Demand Reliance Shows Uneven EU Recovery

http://www.bloomberg.com/news/2014-05-23/german-reliance-on-domestic-demand-shows-uneven-euro-recovery.html


Germany’s economic growth in the first quarter was driven exclusively by internal demand, highlighting the uneven nature of the euro area’s recovery.

Domestic consumption climbed 1.9 percent from the fourth quarter and construction surged 3.6 percent, boosted by a mild winter, the Federal Statistics Office in Wiesbaden said today. Gross domestic product increased 0.8 percent, the office said, confirming a May 15 estimate. From a year earlier, the economy grew 2.3 percent when adjusted for working days.

Germany is key to the economic recovery in the 18-nation euro area, which is struggling to pick up pace amid near-record unemployment and subdued pricing power. The Bundesbank said this month that German growth will slow in the three months through June as the effects of the warm winter recede.

“We are in a new normal for Germany where domestic demand is the new driver of economic output -- something we’ll continue to see in the coming months and years,” said Christian Schulz, senior economist at Berenberg Bank in London. “Exports will grow but imports will probably grow more.”

[Demeter]

22. You know, I wasn't paying particular attention and another Weekend Snuck Up on Me!

Not just any weekend, the Memorial Day--opening of summer weekend.

Anybody got an axe to grind, a theme, an obsession? I got nada, just too much to do, and too little time and energy to do it in.

[AnneD]

33. I have become addicted to

Secrets of the Dead on PBS. One great story they did was the settling of Australia. Once the American colonies won their independence....Britan had to look else where to dispose of their 'human rubbish'. The Voyage of the Courtesans is a fascinating episode. It shed light on British crime and punishment and the formation of Australia. From what I have heard from elders, women in the old west faced similar problems (like women in Lonesome Dove).

[Demeter]

34. Australia Sounds Intriguing

I don't think we've ever been Down Under, either. Okay.

[xchrom]

23. No Recovery for Workers in the Middle

http://www.bloomberg.com/news/2014-05-21/no-recovery-for-workers-in-the-middle-.html

Whether it's the back seat of a subcompact car or the U.S. labor market, the middle can be an uncomfortable spot.

Highly educated Americans have been enjoying the recovery for quite a while. And low-skilled Americans may finally be recovering some of their lost ground, Bloomberg News reports. The jobless rate for workers with a high school education or less is down about one percentage point since December, for example.

Left out are so-called “middle skill” workers, according to a new analysis from the Federal Reserve Bank of New York. The worse-than-mediocre prospects for these average workers repeats a four-decade trend. Recessions destroy a disproportionate number of middle-income jobs, like those held by secretaries and machine operators, that can be easily outsourced or automated. When the economy recovers, there’s demand for jobs at the top, like doctors and tech workers, and at the bottom, like restaurant workers and home health aides. But most of the jobs in the middle are gone forever.





What job categories are growing? Those that require one-on-one personal contact. It’s tough to outsource building maintenance staff or yoga instructors. Some get OK wages, like teachers and police officers. But many of the fastest-growing job categories barely get above minimum wage. More and more manicurists, retail clerks and wait-staff are needed to serve the high-income groups willing and able to shell out for more makeovers, shopping sprees and meals out.

In theory, better educational opportunities could help more Americans vault into high-skill jobs. But that’s quite a leap to make. Increasingly, the U.S. job market is looking like a ladder with a bunch of rungs missing.

[xchrom]

24. Hedge Funds Clash With Wall Street Bankers in Argentina

http://www.bloomberg.com/news/2014-05-21/hedge-funds-clash-with-wall-street-bankers-in-argentina.html


The surge in Argentina’s securities tied to economic growth is rekindling a decade-old disagreement between investors and Wall Street.

The warrants, which provide payouts when growth exceeds targets, have jumped 29 percent from a nine-month low in March on speculation a data revision that boosted the size of the economy will lead to bigger payments in the future.

While investors are piling into the securities, banks from Citigroup Inc. to Credit Suisse Group AG say the advance is excessive as the terms of the warrants have enough wiggle room for Argentina to avoid making the larger disbursements. Issued in debt restructurings from Argentina’s $95 billion default in 2001, the warrants plunged in March when the government said changes in the way it calculates growth meant the economy didn’t expand enough to pay holders this year.

“There’s been this extreme valuation schizophrenia among analysts,” Shahriar Shahida, co-founder of New York-based hedge fund Constellation Management LLC, which owns the warrants, said by telephone. “We have found the Argentine valuation story to be one of the most compelling out there, and the warrants are the best way to play that.”

[xchrom]

25. FITCH RATINGS AGENCY UPGRADES GREECE 1 NOTCH

http://hosted.ap.org/dynamic/stories/E/EU_GREECE_RATINGS_UPGRADE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-05-23-02-03-31

ATHENS, Greece (AP) -- Fitch ratings agency has upgraded Greece's sovereign debt rating by one notch, citing the country's improved deficit figures.

Although still deep in junk status, Friday's upgrade on Greek bonds, from B- to B, was a boost for the country that has been struggling through a devastating financial crisis for the past four years.

The move comes two days before Greeks vote in local, regional and European elections that the left-wing main opposition party has painted as a referendum on Greece's international bailout.

Fitch cited the country's achievement of a primary surplus - the budget balance excluding interest on outstanding debts - and described its deficit reduction over the past four years as "remarkable."

[xchrom]

26. GERMAN LAWMAKERS BACK EARLY RETIREMENT PLAN

http://hosted.ap.org/dynamic/stories/E/EU_GERMANY_EARLY_RETIREMENT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-05-23-07-25-34

BERLIN (AP) -- German lawmakers have approved a pension-reform package including a much-criticized provision for some people to retire early on full pensions.

Germany is raising the retirement age to 67 from 65 but plans, at the insistence of Chancellor Angela Merkel's center-left coalition partners, to allow people who've paid pension contributions for 45 years to retire at 63 without a financial hit.

The package also features higher pensions for mothers who stayed at home, advocated by Merkel's conservatives. Annual costs are expected to total up to 11 billion euros ($15 billion).

Lawmakers approved the plans Friday in a 460-64 vote, with 60 abstentions.

[xchrom]

27. S&P RAISES SPAIN CREDIT RATING AS ECONOMY IMPROVES

http://hosted.ap.org/dynamic/stories/E/EU_SPAIN_RATINGS_UPGRADE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-05-23-04-19-00

MADRID (AP) -- Standard & Poor's rating agency has upgraded Spain's sovereign credit grade a notch, the third agency to do so in recent months and a further sign the country is turning the corner after five years of economic turmoil.

The agency raised the grade to BBB from BBB-, citing improved economic prospects and praising the conservative government's structural and labor reforms since 2010.

Two other agencies, Moody's and Fitch, have also upgraded Spain this year.

Standard & Poor's also raised the country's average economic growth prediction for 2014-2016 to 1.6 percent from 1.2 percent.

[DemReadingDU]

30. Unemployment rate in Spain is 25%

Economy improving?
I think not.

[Demeter]

28. Timothy Geithner's Memoir Is One Big Coverup For His Own Colossal Failures

WELL, NOT A COVER-UP. MORE A JUSTIFICATION, PROPAGANDA EFFORT. SPIN, THEY CALL IT.

http://www.alternet.org/economy/timothy-geithners-memoir-one-big-coverup-his-own-colossal-failures?akid=11824.227380.83KYb7&rd=1&src=newsletter994261&t=8&paging=off&current_page=1#bookmark





Former Treasury Secretary Timothy Geithner’s memoir hit bookshelves this week. Titled Stress Test: Reflections on Financial Crises, the book recounts the financial crisis and the White House’s response to it, but offers little more than a self-serving effort to polish the reputation of the one-time member of the Obama administration’s legacy.

The “stress tests” Geithner placed on the big banks in return for the government's $700 billion bailout, were made so easy they ended up proving nothing, other than the Treasury’s inability, or unwillingness to demand tough concessions from Wall Street.

Geithner launches a sustained and misdirected attack against progressives and economic populists on the Left. About Senator Elizabeth Warren (D-MA), Geithner writes, “Her criticisms of the financial rescue, if well intentioned, were mostly unjustified, and her TARP oversight hearings often felt more like made-for-YouTube inquisitions than serious inquiries.” He adds, “She was worried about the right things, but she was better at impugning our choices—as well as our integrity and our competence —than identifying any feasible alternatives.”

On no fewer than two dozen occasions, Geithner invokes the Bible to describe economic populists who wished for tough justice to be carried out against the Wall Street banks that crashed the economy. “The Old Testament view that the venal should be punished. The irresponsible shouldn’t be bailed out,” is how he mocks liberal critics such as Warren. He cites the Left’s appetite for “Old Testament vengeance,” “Old Testament justice,” “Old Testament impulses,” “Old Testament populism,” and “Old Testament cravings."

FAITH-BASED ECONOMICS---BAH HUMBUG!

[Demeter]

29. MONEY QUOTE

All in all, Geithner’s memoir carries all the intellectual honesty and deep introspection of another White House memoir, Decision Points by George W. Bush, and that may be a little harsh on the former U.S. President.

[DemReadingDU]

31. NYSE Margin Debt Declined Again in April; Leading Indicator for a Market Correction?

5/21/14 NYSE Margin Debt Declined Again in April; Leading Indicator for a Market Correction? by Doug Short
http://advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-the-SPX.php

[antigop]

35. OMG, Marketeers... pigs must be flying...check out this Harvard Business Review article

http://hbr.org/2014/06/the-price-of-wall-streets-power/ar/1

The Price of Wall Street’s Power

Boeing’s launch of the 787 was marred by massive cost overruns and battery fires. Any product can have technical problems, but the striking thing about the 787’s is that they stemmed from exactly the sort of decisions that Wall Street tells executives to make.

Before its 1997 merger with McDonnell Douglas, Boeing had an engineering-driven culture and a history of betting the company on daring investments in new aircraft. McDonnell Douglas, on the other hand, was risk-averse and focused on cost cutting and financial performance, and its culture came to dominate the merged company. So, over the objections of career-long Boeing engineers, the 787 was developed with an unprecedented level of outsourcing, in part, the engineers believed, to maximize Boeing’s return on net assets (RONA). Outsourcing removed assets from Boeing’s balance sheet but also made the 787’s supply chain so complex that the company couldn’t maintain the high quality an airliner requires. Just as the engineers had predicted, the result was huge delays and runaway costs.

Boeing’s decision to minimize its assets was made with Wall Street in mind. RONA is used by financial analysts to judge managers and companies, and the fixation on this kind of metric has influenced the choices of many firms. In fact, research by the economists John Asker, Joan Farre-Mensa, and Alexander Ljungqvist shows that a desire to maximize short-term share price leads publicly held companies to invest only about half as much in assets as their privately held counterparts do. Pressure to reduce assets made Sara Lee, for example, shift from manufacturing clothing and food to brand management. Sara Lee’s CEO explained, “Wall Street can wipe you out. They are the rule-setters...and they have decided to give premiums to companies that harbor the most profits for the least assets.” In the pursuit of higher stock returns, many electronics companies have, like Boeing and Sara Lee, outsourced their manufacturing, even though tightly integrating R&D and manufacturing is crucial to innovation.

In another article in this month’s Spotlight package, Clayton Christensen argues that management’s adoption of Wall Street’s preferred metrics has hindered innovation. Scholars and executives alike have criticized Wall Street not only for promoting short-term thinking but for sacrificing the interests of employees and customers to benefit shareholders and for encouraging dishonesty from executives who feel they’re being asked to meet impossible demands. The financial sector’s influence on management has become so powerful that a recent survey of chief financial officers showed that 78% would “give up economic value” and 55% would cancel a project with a positive net present value—that is, willingly harm their companies—to meet Wall Street’s targets and fulfill its desire for “smooth” earnings.
...
So why do managers make choices they know are wrong? Why do so many believe (or act as if they believe) something that simply isn’t right? I’m a political scientist. That means that, just as an economist thinks about money or a soldier about armies, I think about power. There are lots of situations in which people—and countries—act against their own interests. One of the most important—and most dangerous—is when a single sector or group is so powerful that it dominates how an entire society thinks about itself. Once you view research from a variety of fields through that lens, it becomes clear that we must do something to curb the enormous and disproportionate power of Wall Street.

This is from the Harvard Business Review, and according to the article, in 2012,
35% of Harvard Business School grads went into the financial services sector.

[Demeter]

36. Giving that article the NSS Award--My First Such Recognition!

[DemReadingDU]

37. NSS Award

What award is that?

[Demeter]

38. pssst!

(No Shit, Sherlock!)

[antigop]

39. yes, we all knew it...but it's in the Harvard Business Review nt