STOCK MARKET WATCH -- Wednesday, 13 August 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 13 August 2014[font color=black][/font]

SMW for 12 August 2014

AT THE CLOSING BELL ON 12 August 2014
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Dow Jones 16,560.54 -9.44 (-0.06%)
S&P 500 1,933.75 -3.17 (-0.16%)
Nasdaq 4,389.25 -12.08 (-0.27%)


[font color=red]10 Year 2.45% +0.03 (1.24%)
30 Year 3.28% +0.04 (1.23%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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(click on link for latest updates)
http://tools.investing.com/market_quotes.php?
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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]

[Demeter]

1. And yet another loss: Lauren Bacall

[xchrom]

2. JAPAN'S GDP TANKS

http://www.businessinsider.com/japan-q2-gdp-2014-8

Japan's GDP fell 6.8% in Q2.
This was a sharp reversal from the 6.1% spike we saw in Q1.

While the drop is jarring, it wasn't totally unexpected. In fact, economists were actually forecasting a 7.0% decline.

Late in 2013, Japan announced a consumption tax hike that would go into effect in April. This caused Japanese consumers to shop like crazy in Q1 in anticipation of the tax.

In economics, this is called pulling forward demand.

Consumer spending dropped by 5.2% in Q2, which was worse than the 3.7% decline expected.



Read more: http://www.businessinsider.com/japan-q2-gdp-2014-8#ixzz3AFs1LYoL

[xchrom]

3. A Rare 'Payday Lending' Case Sheds Light On A Mysterious Multibillion-Dollar Industry

A Rare 'Payday Lending' Case Sheds Light On A Mysterious Multibillion-Dollar Industry

http://www.businessinsider.com/states-struggling-to-regulate-vicious-cycle-of-payday-lending-2014-8



New York State prosecutors have indicted three executives for allegedly far exceeding the state's limits on interest rates on short-term loans, through so-called payday loans that are often poorly regulated, reports The New York Times.

The rare case highlights the risk customers can face from payday loans that can lead them to dire financial straits. It also sheds light on a multibillion-dollar industry that has rarely been the subject of criminal actions, The Times points out.

Payday loans are typically for less than $500 and due on the borrower's next payday, according to the Consumer Financial Protection Bureau. The loan's finance charge could range from $10 to $30 per $100 borrowed, with a typical two-week loan amounting to an annual percentage rate (APR) of nearly 400%, compared to 12% to 30% for credit cards.

Carey Vaughn Brown allegedly owned a dozen companies throughout the U.S. and overseas to try to dodge American authorities while controlling all parts of an exploitative loan process, including extending loans with exorbitant interest rates between 350% and 650% and collecting automatic payments from borrowers' bank accounts.

[xchrom]

4. World Awash in Oil Shields Markets From 2008 Price Shock

http://www.bloomberg.com/news/2014-08-13/world-awash-in-oil-shields-markets-from-2008-price-shock.html

Fighting across Iraq, Libya, Ukraine and Gaza, and an accelerating economy, should mean higher oil prices. Yet crude is falling.

Six years ago, oil soared to a record $147 a barrel as tension mounted over Iran’s nuclear program and the world economy had just seen the strongest period of sustained growth since the 1970s. Now, West Texas Intermediate, the U.S. benchmark price, has traded below $100 for 10 days and Brent, the European equivalent, tumbled to a 13-month low yesterday.

What’s changed is the shale fracking boom. The U.S. is pumping the most oil in 27 years, adding more than 3 million barrels of daily supply since 2008. The International Energy Agency said yesterday that a supply glut is shielding the market from disruptions. Bank of America Corp., Citigroup Inc. and BNP Paribas SA concur.

“North America has pushed out an incredible amount of crude oil that it used to import,” Ed Morse, the head of commodities research at Citigroup, said in a phone interview from New York yesterday. “The world doesn’t need that much.”

[xchrom]

5. Scots Anti-Independence Support Gains Amid Pound Doubts

http://www.bloomberg.com/news/2014-08-12/scots-anti-independence-support-gains-amid-pound-doubts.html

Scottish nationalists seeking independence from the U.K. lost ground in the latest poll of voting intentions for the Sept. 18 referendum, as campaigners to keep the 307-year-old U.K. intact extended their lead.

Support for staying a part of the U.K. rose to 45 percent from 41 percent while backing for independence held at 32 percent, according to the monthly survey published by TNS today. Among the 71 percent of respondents who said they were certain to vote, the No camp was unchanged at 46 percent, while backing for Yes rose 1 percentage point to 38 percent. Sixteen percent said they were undecided, down 2 points, TNS said.

With little more than five weeks before the ballot, the poll suggests that Scottish First Minister Alex Salmond has yet to convince voters of the benefits of independence. In the first televised debate of the campaign on Aug. 5, Alistair Darling, the former U.K. chancellor of the exchequer who heads the No campaign, was judged the winner after questioning Salmond on the pound. A second debate is planned for Aug. 25.

There’s “literally nothing anyone can do to stop” an independent Scotland from using sterling, Salmond said in an op-ed in the Sunday Herald newspaper on Aug. 10, saying the country is “keeping it, come what may.” He also reiterated a threat to walk away from the country’s 130 billion-pound ($218 billion) share of U.K. debt if a currency union is denied, as the U.K. government and the opposition have said they will do.

[xchrom]

6. Russia Sanctions Spur Bank Drive for Shariah Funding Role

http://www.bloomberg.com/news/2014-08-13/russia-sanctions-spur-drive-for-shariah-funding-islamic-finance.html

Sanctions on Russia over the crisis with Ukraine are leading banks to call for the development of Islamic finance as they seek alternatives to European and U.S. pools of funding.

The expansion of the Shariah-compliant industry would let the country attract fresh capital from the Middle East and Asia, the Association of Russian Banks said this week in response to an inquiry from the state bank. The Bank of Russia should develop rules for Islamic banking, the association said.

Global Islamic financial assets are growing at 17 percent a year and are set to reach $2.7 trillion by 2017, according to PricewaterhouseCoopers LLP. Expansion of the industry in Russia could help lenders such as state-backed OAO Sberbank and VTB Group manage being mostly shut out of U.S. and European capital markets amid penalties over Russia’s role in supporting separatists in eastern Ukraine.

“Necessity will create innovation,” Rizwan Kanji, a Dubai-based partner at King & Spalding LLP, said by phone on Aug. 7. The law firm has advised on some Shariah compliant transactions in Russia since 2012. “Russia may be at the cusp of transition. The opportunity for Islamic finance is mouth-watering.”

[xchrom]

7. Europe's Crash-and-Burn Economy

http://www.bloombergview.com/articles/2014-08-12/europe-s-crash-and-burn-economy


As the euro-region economy struggled to emerge from recession in recent years, officials could at least comfort themselves with the performance of the German economy: "We'll always have Frankfurt," to miscoin a phrase. That's no longer true.

German investor confidence has worsened for eight consecutive months; today, it collapsed to its lowest level in two years. The euro-region economy is in flames. Here ends the argument that the world of finance and economics is shrugging off Ukraine and Iraq and Ebola and Gaza and all the other geopolitical risks currently assailing the headlines.

A sentiment index measuring faith in the six-month economic outlook dropped to 8.6 this month, according to the ZEW Center for European Economic Research in Mannheim. The index has slumped from a seven-year high of 62 reached in December. ZEW explained the situation thus:

The decline in economic sentiment is likely connected to the ongoing geopolitical tensions that have affected the German economy. Since the economy in the euro zone is not gaining momentum either, the signs are that economic growth in Germany will be weaker in 2014 than expected.

[xchrom]

8. EU’s East Braced for Sanctions Pain With GDP Set to Slide

http://www.bloomberg.com/news/2014-08-12/eu-s-east-braced-for-sanctions-pain-with-gdp-set-to-slide.html

The European Union’s biggest eastern economies are flagging as escalating sanctions against Russia and retaliation from President Vladimir Putin exacerbate the euro area’s stuttering recovery from a record slump.

Poland probably grew 0.5 percent from the previous three months in the second quarter, less than half the pace of the January-March period, according to a Bloomberg survey. Czech expansion probably slowed to 0.3 percent from 0.8 percent, while Hungary’s decelerated to 0.7 percent from 1.1 percent, separate surveys show. The three nations report the data tomorrow.

The worst standoff in more than two decades between Russia and its former Cold War foes is curbing trade in the EU’s ex-communist members and threatening the euro region’s revival. As Russia responds to sanctions by banning food from the EU, Germany, the east’s No. 1 export market, is facing a first economic contraction in two years and crumbling confidence.

“The region will face more growth worries should geopolitical risks choke off the already stunted recovery in the euro area, which accounts for a significant share of central and eastern European exports,” Shweta Singh, a London-based economist at Lombard Street Research, said in an Aug. 11 report.

[xchrom]

9. Euro Near Nine-Month Low on Weakening Economy; Baht Gains

http://www.bloomberg.com/news/2014-08-12/euro-near-nine-month-low-on-economy-yen-holds-declines.html

The euro traded 0.3 percent from a nine-month low before reports this week that may show growth in the region weakened and inflation slowed, adding to signs the bloc’s economy is struggling to recover.

Europe’s shared currency fell yesterday after data showed German investor confidence slumped more than analysts forecast, following figures last week that indicated Italy returned to recession. The yen held a two-day slide, as Bank of Japan officials said they will maintain unprecedented stimulus and Japan’s economy shrank. Australia’s dollar rose after consumer confidence improved and Chinese retail sales climbed. Thailand’s baht gained as local markets reopened after a holiday.

“Concerns that Europe’s economic recovery will slow will keep the euro under pressure,” said Junichi Ishikawa, an analyst at IG Markets Securities Ltd. in Tokyo. “The focus should be whether or not the European Central Bank will add to easing this year.”

The euro was little changed at $1.3370 as of 7:18 a.m. in London. It fell to $1.3333 on Aug. 6, a level not seen since Nov. 8. The shared currency fetched 136.76 yen from 136.72. The yen traded at 102.29 per dollar from 102.26 yesterday, after falling 0.2 percent over the previous two trading sessions.

[xchrom]

10. Asian Stocks Rise as Investors Weigh Earnings, Data

http://www.bloomberg.com/news/2014-08-13/asia-stocks-drop-first-time-in-three-days-after-japan-gdp.html

Asian stocks rose, with the regional gauge gaining a third day, as investors weighed earnings and economic reports.

Amorepacific Group. jumped 6.1 percent to lead gains among consumer staples stocks after brokers raised their target prices on the South Korean maker of cosmetics. CSL Ltd., the world’s second-biggest maker of blood-derived therapies, rose 2.6 percent in Sydney after posting an increase in annual profit and saying it will consider buying back more shares. Dentsu Inc., Japan’s largest advertising agency, rose 3.3 percent after its quarterly loss narrowed. Eclat Textile Co. slumped 6.9 percent in Taipei after net income missed estimates.

The MSCI Asia Pacific Index (MXAP) gained 0.3 percent to 147.06 as of 4:02 p.m. in Hong Kong after falling as much as 0.2 percent. The Hang Seng China Enterprises Index, also known as the H-share index, added 1.2 percent, reversing losses amid speculation policy makers will step in to bolster growth after China’s central bank said aggregate financing was 273.1 billion yuan ($44.3 billion) in July, missing the 1.5 trillion yuan median estimate of analysts surveyed by Bloomberg News.

“It’s definitely a ‘bad is good’ thematic playing out in Hong Kong and China today, as investors are expecting more easing,” said David Welch, the head of equity sales trading at Reorient Group Ltd. “Investors who are underweight the market are being forced to cut bearish bets and return to at least a market weighting.”

[xchrom]

11. China Industrial-Output Growth Slows in Sign Recovery at Risk

http://www.bloomberg.com/news/2014-08-13/china-industrial-output-growth-slows.html

China’s industrial-output and fixed-asset investment growth unexpectedly slowed last month, putting a recovery at risk as the government copes with a property slump and rising bad loans.

Factory production rose 9 percent from a year earlier, the National Bureau of Statistics said today in Beijing, compared with June’s 9.2 percent pace, which was also the median estimate of analysts surveyed by Bloomberg News. Fixed-asset investment increased 17 percent in the January-July period and retail sales gained a less-than-projected 12.2 percent last month.

Earlier today, a report showed the broadest measure of new credit unexpectedly plunged to the lowest level since the global financial crisis. Today’s figures suggest Premier Li Keqiang will need to step up stimulus to meet his target for economic growth of about 7.5 percent this year.

Growth in retail sales compared with the 12.5 percent median projection of analysts surveyed by Bloomberg. The median estimate for fixed-asset investment excluding rural households was 17.4 percent expansion in the January-July period, after a 17.3 percent increase in the first half.

[xchrom]

12. Blue Diamond Worth $25.6 Million Hints at Earth’s Origins

http://www.bloomberg.com/news/2014-08-12/blue-diamond-worth-25-6-million-hints-at-earth-s-origins.html



At the New York headquarters of Cora International LLC, Suzette Gomes is spellbound by a sight of rare beauty.

“You can’t describe that blue,” said Gomes, chief executive officer of the diamond-cutting company. “You just drown in it.”

“That blue” refers to the Blue Moon diamond. Cora paid $25.6 million for the uncut, 29.6-carat stone in February.

Colored diamonds are the world’s most expensive stones. A 14.82-carat orange diamond sold for $36 million at Christie’s International in Geneva in November, setting a record $2.4 million a carat. The same month, Sotheby’s sold the Pink Dream, a 59.6-carat pink stone, for $83 million.

[xchrom]

13. JPMorgan Joins Goldman in Designing Derivatives for a New Generation

http://www.bloomberg.com/news/2014-08-12/swaps-reincarnate-boosting-debt-bets-in-new-era-credit-markets.html

Derivatives that helped inflate the 2007 credit bubble are being remade for a new generation.

JPMorgan Chase & Co. is offering a swap contract tied to a speculative-grade loan index that makes it easier for investors to wager on the debt. Goldman Sachs Group Inc. is planning as much as 10 billion euros ($13.4 billion) of structured investments that bundle debt into top-rated securities, while ProShares last week started offering exchange-traded funds backed by credit-default swaps on company debt.

Wall Street is starting to return to the financial innovation that helped extend the debt rally seven years ago before exacerbating the worst financial crisis since the Great Depression. The instruments are springing back to life as investors seek new ways to boost returns that are being suppressed by central bank stimulus. At the same time, they’re allowing hedge funds and other investors to bet more cheaply on a plunge after a 145 percent rally in junk bonds since 2008.

***oh goody

[xchrom]

14. Ex-MIT Professor, Son to Plead Guilty in Hedge Fund Scam

http://www.bloomberg.com/news/2014-08-12/ex-mit-professor-son-to-plead-guilty-in-hedge-fund-scam.html

A former Massachusetts Institute of Technology professor and his son agreed to plead guilty to running a $500 million hedge-fund scam that was uncovered by investigators probing Bernard Madoff’s Ponzi scheme.

Gabriel Bitran, who was a professor and associate dean at MIT’s Sloan School of Management, and his son, Marco, wooed investors to GMB Capital Management LLC with fake claims of success in managing family and friends’ accounts using a trading model based on the father’s research, according to a copy of a charging document provided by federal prosecutors in Boston.

The men, who raised more than $500 million from 2005 to 2011, meanwhile put money into “funds of funds,” which rely on investments by other hedge funds, and fed money to Madoff’s firm and Madoff feeder funds, according to prosecutors.

The Bitrans’ funds suffered losses of more than $140 million. The men paid themselves as much as $16 million in management fees over the life of the businesses and recovered $12 million of their own investments when the funds were doing poorly, the U.S. said, adding that the two discussed their scheme in e-mail exchanges.

[xchrom]

15. Obama Donors Embrace Corporate Inversions He Criticizes

http://www.bloomberg.com/news/2014-08-13/obama-donors-embrace-corporate-inversions-he-criticizes.html

President Barack Obama has been bashing companies that pursue offshore mergers to reduce taxes. He hasn’t talked about the people behind the deals -- some of whom are his biggest donors.

Executives, advisers and directors involved in some of the tax-cutting transactions include Blair Effron, an investment banker who hosted Obama for a May fundraiser at his two-level, 9,000-square-foot apartment on Manhattan’s Upper East Side.

Others are Jim Rogers, co-chairman of the host committee for the 2012 Democratic National Convention; Roger Altman, a former senior Treasury Department official who raised at least $200,000 for Obama’s re-election campaign; and Shantanu Narayen, who sits on the president’s management advisory board.

The administration’s connections to more than 20 donors associated with the transactions are causing tensions for the president as he urges Congress to act against the deals and prods the Treasury Department for short-term steps to curb them. The president’s tough talk also may become a liability as Democrats seek corporate America’s cash this year as they try to preserve their majority in the U.S. Senate.

[xchrom]

16. Brokers Lure Soldiers Out of Low-Fee Federal Retirement Plan

http://www.bloomberg.com/news/2014-08-12/brokers-lure-soldiers-out-of-low-fee-federal-retirement-plan.html


John LaRandeau, a retired civil engineer from Omaha, Nebraska and autocross sports car

John Turner suspected that brokers were encouraging federal workers to ditch their top-flight retirement plan. So he went under cover.

The former U.S. Labor Department economist called representatives at companies such as Bank of America Corp., Charles Schwab Corp. and Wells Fargo & Co. He identified himself as a potential client grappling with what to do with his own nest egg.

Turner thought he knew the right answer: Leave it alone. As a legacy of his government service, he kept his money in the Thrift Savings Plan, considered the gold standard of 401(k)-type programs for its rock-bottom fees. Yet all but one company told him to roll over all his money into individual retirement accounts. On average, stock funds charge almost 50 times more than the government plan.

“It’s a scandal,” said Turner, director of the Pension Policy Center in Washington. “They are trying to sell me an IRA clearly not in my interest. It’s in their interest. They want to get the fees.”

[xchrom]

17. India Gold Imports Seen Dropping as Rajan Protects Rupee

http://www.bloomberg.com/news/2014-08-13/gold-imports-by-india-dropping-15-as-rajan-protects-rupee-1-.html

Gold imports by India, the world’s biggest consumer after China, will probably decline for a third year as the government keeps curbs on shipments to prevent the current-account deficit from widening and to support the rupee.

Foreign purchases may drop 15 percent to 700 metric tons in 2014, according to the median of estimates from nine analysts and jewelers including Gitanjali Gems Ltd. (GITG) and Rajesh Exports Ltd. (RJEX) compiled by Bloomberg. Imports fell 44 percent to 350 tons in the first half, government and World Gold Council data show.

Weakening demand from China and India, which account for half of global consumption, may limit increases in bullion prices which advanced 9 percent this year on increasing tensions in Ukraine and the Middle East. Usage in China dropped 19 percent in the first half as investors bought fewer bars and coins. Indian Finance Minister Arun Jaitley retained import curbs in his annual budget last month.

“I don’t see the measures going away immediately,” said Devendra Pant, chief economist at India Ratings & Research, the local unit of Fitch Ratings. “If we allow gold imports to grow, that will have an impact on our current account,” he said by phone from New Delhi.

[xchrom]

18. New York Prosecutors Go After Tennessee Loan Sharks

http://www.bloombergview.com/articles/2014-08-12/new-york-prosecutors-go-after-tennessee-loan-sharks


I try not to give legal advice around here, but here's some advice about giving legal advice. If you give someone legal advice, and he's arrested for doing what you told him to do, and you're arrested for telling him to do it, and the best your lawyer can manage is, "it remains to be seen whether the advice Ms. Temple gave was incorrect or in violation of any laws," that's probably not good. Like, if you're giving legal advice on the theory that you're not yet sure that giving that advice is a crime, maybe just don't give that advice?

I don't have much other insight into the big criminal usury case that Manhattan district attorney Cyrus Vance announced today against a batch of payday lenders. I mean: Apparently usury is a crime in New York! It's a felony to charge more than 25 percent interest unless you're "authorized or permitted by law to do so"; the indictment says that this means "it is a crime for an unlicensed lender to charge more than 25 percent per annum interest on any loan less than $2.5 million."

The gist of the dispute here is that one Carey Vaughn Brown, and his lawyer Joanna Temple, set up a cluster of payday lenders -- ACH Federal, Credit Protection Depot, Owls Nest LLC, MyCashNow.com, etc. etc. -- mostly in Chattanooga, Tennesee (and a little bit in the British West Indies), and those companies made payday loans to people in New York that violated New York usury laws. The question for discussion is, can you get in trouble for violating New York usury law if you're in Tennessee, or even the British West Indies? And the answer is, of course you can, you can get in trouble for violating New York money laundering laws if you're in Cuba, everyone on earth is probably violating New York financial laws all the time, come on. This is not legal advice.

The indictment doesn't get into this issue too much, though. It's mostly just a long string of boring paragraphs like this:

6. On or about February 14, 2008, in New York County, defendant ACH Federal withdrew and received $500 in principal and $107.07 as interest from Bank of America bank account # 009468282374, held by a New York County resident, as repayment to defendants MyCashNow and CPD for a $500 loan that carried an interest rate of approximately 355 per centum per annum.

[DemReadingDU]

19. Lawsuit filed against Vanguard Group

8/12/14 Meet the Tax Lawyer Whistleblower Who’s Taking a Wrecking Ball to John Bogle’s Legendary Career at Vanguard
By Pam Martens and Russ Martens

...what would motivate David Danon, a 1998 magna cum laude graduate of Fordham University School of Law who proceeded to work at top tier corporate law firms (where he obviously saw a lot of questionable tax deals) to blow the whistle on the gold standard of the mutual fund industry, the Vanguard Group, Inc. In making his claims, Danon is also besmirching the reputation of Wall Street legend, John Bogle, who founded Vanguard and has served as its top spokesperson for the past 40 years.

In his whistleblowing lawsuit, unsealed last month in New York State Supreme Court, Danon names only Vanguard Group, Inc. and two subsidiaries as defendants. But by calling the company a major tax cheat, Danon is challenging the reputation of Bogle and the company’s Big Four accounting firm, PricewaterhouseCoopers (PwC).

By claiming that Vanguard has been running an illegal tax shelter for 40 years, Danon is aiming his slings and arrows right at the armor of its founder. Bogle started Vanguard in 1974; served as its CEO until 1996; and as Senior Chairman and Director until 2000. Bogle is still affiliated with the company as President of Vanguard’s Bogle Financial Markets Research Center.
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At the risk of a very bad pun, it is simply mind-Bogleing that John Bogle or PricewaterhouseCoopers would not have gotten an all-clear letter from the IRS on this structure at some point over the past four decades.

The takeaway for investors is this: high mutual fund fees are already gobbling up your hopes to ever retire in comfort. As Frontline’s Martin Smith exposed in April of last year, if you’re receiving the typical long-term return of 7 percent on your 401(k) plan and your fees are 2 percent, almost two-thirds of your account will go to Wall Street over the course of your career. If Vanguard, the low-cost mutual fund provider is forced to restructure itself and incur higher operating expenses and taxes, the small investor loses.

Against that backdrop, it should also be noted that David Danon, should he prevail in his lawsuit, would be entitled to collect a portion of the back taxes owed by Vanguard.

http://wallstreetonparade.com/2014/08/meet-the-tax-lawyer-whistleblower-whos-taking-a-wrecking-ball-to-john-bogles-legendary-career-at-vanguard/


Link to Lawsuit, 40 pages
http://wallstreetonparade.com/wp-content/uploads/2014/08/vanguard-complaint.pdf

[DemReadingDU]

20. PBS Drops Another Bombshell: Wall Street Is Gobbling Up Two-Thirds of Your 401(k)

4/25/13 Pam Martens: PBS Drops Another Bombshell: Wall Street Is Gobbling Up Two-Thirds of Your 401(k)

If you work for 50 years and receive the typical long-term return of 7 percent on your 401(k) plan and your fees are 2 percent, almost two-thirds of your account will go to Wall Street. This was the bombshell dropped by Frontline’s Martin Smith in this Tuesday evening’s PBS program, The Retirement Gamble.

This is not so much a gamble as a certainty: under a 2 percent 401(k) fee structure, almost two-thirds of your working life will go toward paying obscene compensation to Wall Street; a little over one-third will benefit your family – and that’s before paying taxes on withdrawals to Uncle Sam.

To put it another way – you work for Wall Street. You are their slave, their lackey and as long as their toadies dominate in Congress, nothing is going to change on the legislative front to stop the looting. Wall Street seized millions of homes through illegal foreclosures and stripped the equity from the owners. They got away with it. Some Wall Street firms further enriched themselves making bets that the housing market would collapse, using their inside knowledge of the bogus loans they had made. They got away with that also. Now Wall Street is busy asset stripping the retirement plans of the working class in America while President Obama proposes to cut Social Security benefits through a discredited calculation called Chained CPI – conveniently causing people to save more in their 401(k) plans to make up for the potential loss. But the more you save, the more Wall Street asset strips.

more...
http://wallstreetonparade.com/2013/04/pbs-drops-another-bombshell-wall-street-is-gobbling-up-two-thirds-of-your-401k/


edit to add link for the PBS program, The Retirement Gamble
4/23/13 PBS Frontline - The Retirement Gamble, appx 54 minutes
http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/

Transcript
http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/retirement-gamble/transcript-43/

[xchrom]

21. GREEK ECONOMY CONTRACTS AT SLOWEST RATE SINCE 2008

http://hosted.ap.org/dynamic/stories/E/EU_GREECE_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-08-13-07-20-23

ATHENS, Greece (AP) -- Greece's economy is shrinking at its slowest rate in nearly six years, official figures showed Wednesday, reinforcing hopes that the end of the country's punishing recession is in sight.

The Statistical Authority said Greece's economy was only 0.2 percent smaller in the second quarter than it had been a year earlier - the lowest since the third quarter of 2008. In the first quarter, the Greek economy was 1.1 percent smaller, slightly worse than previously thought. The statistics office does not publish quarterly figures.

After six years of recession brought on by the global financial crisis and Greece's homegrown debt problems, many economists are predicting modest growth in the second half of 2014.

Since the recession started in 2008, Greece's economy has shrunk by around a quarter, partly because the government had to impose tough deficit-slashing measures, such as spending cuts and tax hikes, to get its public finances into shape in return for international bailout loans from its European euro partners and the International Monetary Fund. Its recession - some refer to it as a depression - is one of the worst to afflict the Western world since the end of World War II.

[xchrom]

22. SEC EXAMINING 'ALTERNATIVE' MUTUAL FUNDS

http://hosted.ap.org/dynamic/stories/U/US_SEC_ALTERNATIVE_MUTUAL_FUNDS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-08-12-20-06-42

WASHINGTON (AP) -- Federal regulators are scrutinizing a type of mutual fund that's potentially riskier than conventional funds and is growing in popularity, prompting concerns over possible harm to ordinary investors.

The Securities and Exchange Commission has disclosed that it's conducting a "national sweep exam" of so-called alternative mutual funds, focusing in a first phase on 15 to 20 groups of funds. The SEC official who heads the agency's investment fund division says the review looks at the funds' ready assets and oversight of them by fund boards.

The regulators also are examining data on the use of riskier investment strategies by alternative funds compared with what they disclose to investors, the SEC official, Norm Champ, said in a speech in June.

The alternative funds use investment strategies similar to those employed by hedge funds, which can include commodities and complex derivatives as well as ordinary stocks.

The Financial Industry Regulatory Authority, the security industry's self-policing body, has issued an "investor alert" telling people to be aware of the characteristics and risks of alternative funds. "Alternative funds are not your typical mutual funds," the FINRA alert is titled. It warns that investors should "carefully consider not only how an (alternative) fund works, but how it might fit into their overall portfolio before investing."

[xchrom]

23. STOCKS MOSTLY HIGHER, JAPAN SHRUGS OFF GDP DROP

http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-08-13-04-32-05

MUMBAI, India (AP) -- Global stock markets overcame a contraction in Japan's economy and jitters about Ukraine and Iraq to mostly rise Wednesday, but analysts said new geopolitical developments would likely make for volatile trading.

KEEPING SCORE: Germany's DAX added 0.8 percent to 9,142.83 and France's CAC 40 rose 0.6 percent to 4,187.69. Britain's FTSE 100 was steady at 6,631.61. Futures pointed to a move higher on Wall Street. Dow Jones futures rose 0.3 percent to 16,568 and S&P 500 futures gained 0.4 percent to 1,937.70.

ASIA'S DAY: Japan's Nikkei 225 closed up 0.4 percent at 15,213.63. Hong Kong's Hang Seng rose 0.8 percent to 24,890.34. China's Shanghai Composite edged up 0.1 percent to 2,222.88 while Australia's S&P/ASX 200 fell 0.3 percent to 5,514.70. Seoul's Kospi added 1 percent to 2,062.36.

JAPAN SLOWS: Government figures showed Japan's economy, the world's third largest, shrank at an annualized pace of 6.8 percent in the second quarter after spending got slammed by a sales tax hike that kicked in from April. The contraction was expected and economists think spending will pick up again in coming months.

RISK FACTORS: Russian President Vladimir Putin on Wednesday was set to travel to Crimea, the Black Sea peninsula Russia annexed in March. The visit comes a day after a convoy of more than 260 Russian trucks, reportedly packed with supplies, moved toward Russia's border with Ukraine. Kiev said the goods would only be allowed to cross if they were inspected by the International Red Cross. Ukraine is fearful that Russia could use the move as a cover for sending troops into separatist-held territory. Investors are also watching political machinations in oil-rich Iraq.

[xchrom]

24. Bank of England slashes wages forecast, says key for policy

http://uk.reuters.com/article/2014/08/13/uk-britain-economy-boe-idUKKBN0GD0OV20140813

(Reuters) - The Bank of England forecast on Wednesday that wages would grow far more slowly than previously expected and linked their rate of increase closely to borrowing costs, suggesting it was in no hurry to raise Britain's record low interest rates.

Shortly after data showed average British wages suffered their first fall in more than five years in the second quarter of 2014, the Bank cut its forecast for wage growth this year in half to 1.25 percent.

Sterling fell sharply to a 10-week low against the U.S. dollar and British government bond prices pared losses after the announcement by the Bank, which caused markets to reduce bets on the possibility of a first rate hike before the end of 2014.

The central bank also forecast a bigger fall in unemployment than it had in its last set of forecasts in May - and suggested the jobless rate could fall further than previously expected before wage pressures increased as it edged up its prediction for already strong economic growth.

[xchrom]

25. Global banks back most of G20 plans to reform forex benchmark

http://uk.reuters.com/article/2014/08/13/uk-g20-forex-reform-idUKKBN0GD11K20140813


(Reuters) - The world's top banks have backed the bulk of recommendations from regulators to reform the setting of the leading global currency benchmark following allegations of market rigging, making changes inevitable.

The $5.3 trillion (3.17 trillion pounds)-a-day foreign exchange market is the world's largest and least regulated financial market and is being investigated for collusion.

At the centre of the investigations is activity around the WM/Reuters currency fix at 4 pm local time in London, a 60-second window at which major exchange rates are set. These prices are used as reference rates for trillions of dollars of investment and trade globally.

Last month the Financial Stability Board (FSB), the regulatory task force for the Group of 20 economies (G20), proposed deep-rooted change in a document put out to public consultation.

[DemReadingDU]

26. Ellen Brown: Cry for Argentina: Fiscal Mismanagement, Odious Debt or Pillage?

8/12/14 Cry for Argentina: Fiscal Mismanagement, Odious Debt or Pillage?

Argentina was the richest country in Latin America before decades of neoliberal and IMF-imposed economic policies drowned it in debt. A severe crisis in 2001 plunged it into the largest sovereign debt default in history. In 2005, it renegotiated its debt with most of its creditors at a 70% “haircut.” But the opportunist “vulture funds,” which had bought Argentine debt at distressed prices, held out for 100 cents on the dollar.

Paul Singer’s Elliott Management has spent over a decade aggressively trying to force Argentina to pay down nearly $1.3 billion in sovereign debt. Elliott would get about $300 million for bonds that Argentina claims it picked up for $48 million. Where most creditors have accepted payment at a 70% loss, Elliott Management would thus get a 600% return.

In June 2014, the US Supreme Court declined to hear an appeal of a New York court’s order blocking payment to the other creditors until the vulture funds had been paid. That action propelled Argentina into default for the second time in this century – and the eighth time since 1827. On August 7, 2014, Argentina asked the International Court of Justice in the Hague to take action against the United States over the dispute.

Who is at fault? The global financial press blames Argentina’s own fiscal mismanagement, but Argentina maintains that it is willing and able to pay its other creditors. The fault lies rather with the vulture funds and the US court system, which insist on an extortionate payout even if it means jeopardizing the international resolution mechanism for insolvent countries. If creditors know that a few holdout vultures can trigger a default, they are unlikely to settle with other insolvent nations in the future.

Blame has also been laid at the feet of the IMF and the international banking system for failing to come up with a fair resolution mechanism for countries that go bankrupt. And at a more fundamental level, blame lies with a global debt-based monetary scheme that forces bankruptcy on some nations as a mathematical necessity. As in a game of musical chairs, some players must default.

more...
http://ellenbrown.com/2014/08/12/cry-for-argentina-fiscal-mismanagement-or-pillage/

[DemReadingDU]

27. Pam Martens: How High Up Did the Madoff Fraud Go at JPMorgan?

8/13/14 How High Up Did the Madoff Fraud Go at JPMorgan? by By Pam Martens and Russ Martens

Helen Davis Chaitman is a nationally recognized litigator and author of The Law of Lender Liability. And she is two other things as well – a Bernie Madoff victim who lost a large part of her life savings to his Ponzi scheme and the tenacious lawyer who represented other victims of his fraud in district and appellate courts. Now, together with attorney Lance Gotthoffer, Chaitman has written a book titled JPMadoff: The Unholy Alliance Between America’s Biggest Bank and America’s Biggest Crook. The book is being made available to readers on a new web site which will provide a chapter each month. The first chapter is currently available and Chaitman says that the second chapter, to be posted on September 12, will detail what JPMorgan knew and when it knew it.

The authors explain their position in the book’s foreward:

“Madoff could not have stolen $64.8 billion of other people’s money without the complicity of a major financial institution. Madoff was able to get by with a three-person accounting firm working out of a store front in a shopping center in Rockland County, New York. But make no mistake about it. Madoff needed the imprimatur and facilities of a major bank. And JPMorgan Chase stepped up to the plate. Why would the bank do this? Shall we follow the money? Do you have any idea how much money JPMorgan Chase was able to make off the Madoff account? Did you know that Madoff maintained huge balances in his JPMorgan Chase account, reaching $4 billion or more from 2006 on. And do you think the folks at JPMorgan Chase know how to make money off other people’s money? You bet they do.

“The facts — which we lay out in this book — compel the conclusion that senior officers of JPMorgan Chase knew that Madoff was misappropriating customer funds and knew who all the victims were. There were 12 people who worked for Madoff who knew about Madoff’s embezzlement of money belonging to innocent investors. Outside of Madoff’s offices, nobody knew — for 20 years. Nobody, that is, except the people at JPMorgan Chase who were responsible to monitor the activities in Madoff’s account. They saw that, from 1986 to December 2008, Madoff deposited into his JPMorgan Chase account approximately $150 billion of funds — from upstate New York union pension funds, from charities, from corporate pension plans, from individual I.R.A. accounts. Bank officers knew that Madoff was an SEC-regulated broker who was retained by his customers to purchase securities for them. Yet, they saw no transactions in Madoff’s account indicating that he was purchasing securities for his customers. Instead, billions of dollars went to Madoff’s co-conspirators, or were wired overseas.”

Under the author section, Chaitman provides more detail on why she feels JPMorgan got off so easily:

“The most glaring example of the corruption of American values by the financial services industry is the government’s recent refusal to prosecute any individual at JPMorgan Chase for providing banking services to Bernard Madoff for almost 20 years with knowledge that he was dishonest. The prosecutor was Preet Bharara, formerly chief counsel to Senator Schumer who has enjoyed, over the years, a flow of political contributions from the entire Madoff family and from JPMorgan Chase.”

In January of this year, Wall Street On Parade completed months of research into court filings that detailed JPMorgan’s involvement in the Madoff fraud. Our conclusion was that there was not just a Ponzi scheme taking place but a series of frauds that sprang from the original fraud in a Russian nesting doll form of structure. (Read the full article. http://wallstreetonparade.com/2014/01/jpmorgan-and-madoff-were-facilitating-nesting-dolls-style-frauds-within-frauds/ )

and more...
http://wallstreetonparade.com/2014/08/how-high-up-did-the-madoff-fraud-go-at-jpmorgan/

[Demeter]

28. I really doubt Madoff is the biggest crook on WS, just the biggest one caught and jailed

[Crewleader]

29. Adding another special one of Robin William