STOCK MARKET WATCH -- Tuesday, 19 August 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Tuesday, 19 August 2014[font color=black][/font]

SMW for 18 August 2014

AT THE CLOSING BELL ON 18 August 2014
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Dow Jones 16,838.74 +175.83 (1.06%)
S&P 500 1,971.74 +16.68 (0.85%)
Nasdaq 4,508.31 +43.39 (0.97%)


[font color=green]10 Year 2.32% -0.06 (-2.52%)
30 Year 3.12% -0.05 (-1.58%) [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]

[Crewleader]

1. Tax Dodge

[Demeter]

2. Oh, that's just insane! 175 points? For what reason?

We create our own reality, indeed! Or some of us, anyway.

[Demeter]

3. THE OSTENSIBLE REASON: US stocks gain; Dollar General jumps after bid By STEVE ROTHWELL

STOLEN FROM OMAHA STEVE

http://apnews.excite.com/article/20140818/financial_markets-903565a13e.html



NEW YORK (AP) — Corporate deal news gave the US stock market a lift on Monday as a bidding contest erupted for a discount retailer. Stocks also climbed amid reports of diplomatic efforts to broker a cease-fire in the conflict in Ukraine.

Dollar General jumped after making a bid for retailer Family Dollar, a rival discount store. The offer topped a bid made last month by Dollar Tree, another discount retailer. Airlines were also among the big gainers as the price of oil slumped.

The stock market is bouncing back after a bout of summer volatility pushed the Standard & Poor's 500 down earlier this month to its lowest level since May. The index is now less than 1 percent below its record close of 1,987 reached on July 24. Investors had become skittish on concerns that the tensions between Russia and Ukraine were escalating.

"Investors are focusing back on earnings and fundamentals and not as worried about some of those geopolitical pressures right now," said Chris Gaffney, a senior market strategist at Everbank Wealth Management.

[Demeter]

4. Another Un-Funny

[xchrom]

5. is global income inequality really falling?

http://www.slate.com/articles/business/moneybox/2014/08/global_income_inequality_it_may_not_be_falling_after_all.html

If you look within individual countries, income inequality is clearly rising around the globe. But what happens if you forget about national borders and treat the world as one big, 7 billion-person whole? Flip the question that way, and some would argue that “Inequality Is Falling on Planet Earth,” as NPR declared in a headline last week. While “such a framing may sound startling at first, it should be intuitive upon reflection,” economist Tyler Cowen wrote for the New York Times in July. “The economic surges of China, India and some other nations have been among the most egalitarian developments in history.”

Writers have been making versions of this point for a while, usually as part of the argument that Americans and Europeans should calm down about the growth of inequality next door. For example, the same trade policies that helped decimate U.S. manufacturing employment and widened the American income gap are also the ones that made China’s factory workers’ far better off—and, supposedly, those changes have left the world a far more equal place. “Liberals should care about global welfare,” economist Scott Sumner once wrote at the Money Illusion. “Are they closet nationalists?”

Sick burn, professor. But here’s the thing: It’s not actually clear that global inequality is falling. The claim that the world’s income distribution is flattening out a little bit is usually based on the work of Branko Milanovic, an economist at the City University of New York’s Luxembourg Income Study Center. But in his latest paper, co-authored with the World Bank’s Christoph Lakner, Milanovic doesn’t say the income divide is shrinking around the world. He says we can’t really tell.

Why not? In the United States and much of Europe, economists have extremely detailed tax data at their disposal, which gives us a pretty precise picture of how income gets divvied up. But most countries don’t have those sorts of statistics. To get a comprehensive picture of inequality across the entire planet, researchers have to rely on national surveys, such as the U.S. census. As I’ve written before, there’s evidence that surveys tend to miss the richest households, making inequality look less severe than it really is.

[Demeter]

26. Stealth Wealth

If you can't see it, you can't count it!

[xchrom]

6. The British Pound Just Got Whacked

http://www.businessinsider.com/british-pound-falls-after-uk-cpi-2014-8

The British pound dropped to $1.663 from around $1.671 moments ago.

The move followed a new inflation report that showed UK consumer prices fell by 0.3% month-over-month in July, which was worse than the -0.2% expect. On a year-over-year basis, CPI climbed by just 1.6% year-over-year, missing expectations for 1.8% growth.

"Disinflationary tailwinds from sterling appreciation should push down on the headline rate in months to come," wrote Bloomberg economists Jamie Murray, Niraj Shah and David Powell. "In this environment, it would take a sustained burst of above-trend wage growth for inflation to gain significant traction — an unlikely prospect."

The cooler than expected inflation levels gives the Bank of England more flexibility to keep monetary policy loose and interest rates lower for longer, all things being equal.



Read more: http://www.businessinsider.com/british-pound-falls-after-uk-cpi-2014-8#ixzz3ApVxu1jH

[Demeter]

27. Disinflation should mean the pound rises

because its purchasing power increased relative to recent history.

[xchrom]

7. Here's Why North Carolina Keeps Getting Poorer

http://www.businessinsider.com/why-north-carolina-has-a-poverty-problem-2014-8

Poverty is growing steadily in North Carolina.

A recent Brookings Institution report found four North Carolina metro areas (Winston-Salem, Greensboro-High Point, Raleigh, and Charlotte) fell within the top 10 in the nation for both growth in poor population and growth of poor neighborhoods.

From 2008 to 2012, the poverty rate within the state has grown from 14.6% to 18%, according to the Pew Charitable Trusts.

University of North Carolina professor Gene Nichol — who has written extensively on poverty in North Carolina — has some interesting insights into why so many people in the southern state continue to be destitute. Nichol told us North Carolina "has suffered a double-whammy in a way that is uncommon."



Read more: http://www.businessinsider.com/why-north-carolina-has-a-poverty-problem-2014-8#ixzz3ApZJdszd

[xchrom]

8. Here Are 10 Countries Hoarding Enormous Piles Of Gold

http://www.businessinsider.com/countries-with-largest-gold-reserves-2014-8?op=1

10. India


Official gold holdings:
557.7 tonnes

Percent of foreign reserves in gold:
7.3%

9. Netherlands



Official gold holdings:
612.5 tonnes

Percent of foreign reserves in gold:
54.3%


8. Japan



Official gold holdings:
765.2 tonnes

Percent of foreign reserves in gold:
2.5%



Read more: http://www.businessinsider.com/countries-with-largest-gold-reserves-2014-8?op=1#ixzz3ApcAS93D

[xchrom]

9. Chinese Generals Wonder If Military Is Too Corrupt To Fight And WIn A War

http://www.businessinsider.com/r-chinese-militarys-ability-to-wage-war-eroded-by-graft-its-generals-warn-2014-18

BEIJING (Reuters) - As tensions spike between China and other countries in Asia's disputed waters, serving and retired Chinese military officers as well as state media are questioning whether China's armed forces are too corrupt to fight and win a war.
A slew of articles in official media in recent months have drawn parallels with the rampant graft in the People's Liberation Army and how a corrupt military contributed to China's defeat in the Sino-Japan War 120 years ago.

The concerns are striking given the rapid modernization of the PLA, from the development of stealth fighter jets to the launch in 2012 of China's sole aircraft carrier. Backed by a budget that is second only to the United States, China's military is projecting power deep into the South and East China Seas, unsettling the region as well as Washington.

But two scandals have shone the spotlight on deeply rooted graft in the PLA - a key target of President Xi Jinping's sweeping anti-corruption drive.



Read more: http://www.businessinsider.com/r-chinese-militarys-ability-to-wage-war-eroded-by-graft-its-generals-warn-2014-18#ixzz3ApcrPfF0

[Demeter]

28. They don't even need to invade Vietnam! Kudos!

[xchrom]

10. Major Shipping Firm Maersk Raises Profit Outlook As Shipping Volume Grows

http://www.businessinsider.com/maersk-raises-profit-outlook-2014-8

Danish shipping and oil conglomerate AP Moeller Maersk raised its full-year profit guidance on Tuesday after quarterly results were boosted by a strong performance by its container shipping business.
It also said it would return about $1.0 billion (749 million euros) to shareholders over the next year through a share-buyback programme.

The group, which has about 15 percent of the global container market through Maersk Line, said profit was expected to be $4.5 billion this year rather than the previously stated $4.0 billion after stripping out discontinued operations, impairment losses and divestment gains.

Maersk Line, which accounts for about 40 percent of group revenue, reported a 6.6 percent volume increase and bolstered profits through cost cutting initiatives that included operating ships at a slower speed.



Read more: http://www.businessinsider.com/maersk-raises-profit-outlook-2014-8#ixzz3ApgTPYKh

[xchrom]

11. Home Depot Had A Nice Spring Rebound

http://www.businessinsider.com/home-depot-earned-152-per-share-in-q2-2014-8

America's favorite home improvement retailer had a pretty great second quarter.
Home Depot's comparable store sales jumped 5.8%, beating expectations for 4.4% growth.

This led to earnings of $1.52 per share in Q2, beating expectations for $1.44.

"In the second quarter, our spring seasonal business rebounded, and we saw strong performance in the core of the store and across all of our geographies," said CEO Frank Blake.

Management reiterated its expectation for $4.52 per share in full year earnings, which was a bit higher than the $4.41 expected by analysts.

Shares are up 2.8% in pre-market trading.



Read more: http://www.businessinsider.com/home-depot-earned-152-per-share-in-q2-2014-8#ixzz3Aph3u6La

[xchrom]

12. Asian Shares And The Dollar Rise

http://www.businessinsider.com/r-asian-shares-dollar-rise-on-hopes-of-ukraine-progress-2014-18

TOKYO (Reuters) - Asian stocks got a lift on Tuesday from an upbeat day on Wall Street, while the dollar got some help as U.S. Treasury yields pulled away from recent lows on upbeat U.S. housing data and hopes of progress in the Ukraine crisis.

Foreign ministers from Russia, Ukraine, Germany, and France gathered in Berlin over the weekend to discuss talks for a ceasefire or a political solution, and Russia's Foreign Ministry said on Monday a 'certain progress' was achieved during the talks.

Still, investors continued to cautiously monitor developments. Military spokesmen said dozens of people, including women and children, were killed as they fled fighting on Monday when their convoy of buses leaving the rebel-held city of Luhansk was hit by rocket fire.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent in early trade, while Japan's Nikkei stock average added 0.8 percent.



Read more: http://www.businessinsider.com/r-asian-shares-dollar-rise-on-hopes-of-ukraine-progress-2014-18#ixzz3Apho3SRD

[xchrom]

13. GLOBAL STOCKS UP ON US HOUSING, UKRAINE DIPLOMACY

http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-08-19-04-09-00

BEIJING (AP) -- Global stock markets rose Tuesday on improved U.S. housing sentiment and news of diplomatic efforts to broker a cease-fire in Ukraine.

KEEPING SCORE: In morning trading, France's CAC-40 rose 0.5 percent to 4,252.32 and Germany's DAX gained 1 percent to 9,334.55. London's FTSE 100 rose 0.5 percent to 6,773.25. Futures pointed to gains on Wall Street. Dow futures rose 0.3 percent to 16,846 and S&P 500 futures gained 0.3 percent to 1,973.10.

ASIA'S DAY: Tokyo's Nikkei 225 added 0.8 percent to 15,449.79 and China's Shanghai Composite Index rose 0.3 percent to 2,245.33. Taiwan's Taiex climbed 1.1 percent to 9,243.78 while India's Sensex gained 0.2 percent to 26,454.99. Seoul, Sydney and Southeast Asian markets also rose.

UKRAINE: Russian Foreign Minister Sergey Lavrov said issues related to sending a humanitarian convoy to Ukraine were resolved following weekend talks in Berlin with his counterparts from Ukraine, Germany and France. Germany's Frank-Walter Steinmeier reported progress on "some issues," though Lavrov said there was no movement on establishing a cease-fire between the government and pro-Russian rebels.

THE QUOTE: "Markets started the week on a firm note as investors took positively the talks between Russia and Ukraine over the weekend even though no major breakthrough was reached," said Credit Agricole CIB in a report.

[xchrom]

14. US WON'T REVEAL RECORDS ON HEALTH WEBSITE SECURIT

http://hosted.ap.org/dynamic/stories/U/US_HEALTH_OVERHAUL_SECURITY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-08-19-03-26-10

WASHINGTON (AP) -- After promising not to withhold government information over "speculative or abstract fears," the Obama administration has concluded it will not publicly disclose federal records that could shed light on the security of the government's health care website because doing so could "potentially" allow hackers to break in.

The Centers for Medicare and Medicaid Services denied a request by The Associated Press under the Freedom of Information Act for documents about the kinds of security software and computer systems behind the federally funded HealthCare.gov. The AP requested the records late last year amid concerns that Republicans raised about the security of the website, which had technical glitches that prevented millions of people from signing up for insurance under President Barack Obama's health care law.

In denying access to the documents, including what's known as a site security plan, Medicare told the AP that disclosing them could violate health-privacy laws because it might give hackers enough information to break into the service.

"We concluded that releasing this information would potentially cause an unwarranted risk to consumers' private information," CMS spokesman Aaron Albright said in a statement.

[xchrom]

15. USDA: COST TO RAISE CHILD UP SLIGHTLY TO $245,340

http://hosted.ap.org/dynamic/stories/U/US_PARENTING_COST?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-08-18-14-00-35

WASHINGTON (AP) -- A message for new parents: get ready for sticker shock.

A child born in 2013 will cost a middle-income American family an average of $245,340 until he or she reaches the age of 18, with families living in the Northeast taking on a greater burden, according to a report out Monday. And that doesn't include college - or expenses if a child lives at home after age 17.

Those costs that are included - food, housing, childcare and education - rose 1.8 percent over the previous year, the Agriculture Department's new "Expenditures on Children and Families" report said. As in the past, families in the urban Northeast will spend more than families in the urban South and rural parts of the U.S., or roughly $282,480.

When adjusting for projected inflation, the report found that a child born last year could cost a middle-income family an average of about $304,480.

[xchrom]

16. UK INFLATION RATE FALLS MORE THAN EXPECTED

http://hosted.ap.org/dynamic/stories/E/EU_BRITAIN_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-08-19-05-39-37

LONDON (AP) -- Britain's inflation rate fell more than expected in July, to 1.6 percent from 1.9 percent in June, easing pressure on the Bank of England as it weighs when to raise interest rates.

The Office of National Statistics said Tuesday that a fall in clothing prices provided the biggest contribution to the drop in consumer price inflation. A drop in the cost of alcohol, financial services and food also contributed.

The Bank of England, which targets a 2 percent inflation rate, is assessing when to start increasing rates as the economy improves.

Samuel Tombs, senior U.K. economist at Capital Economics, says "a general environment of benign inflationary pressure will give the (Bank of England) scope to raise them at an even more gradual pace than currently anticipated by the markets."

[xchrom]

17. Ireland's permanent tsb reduces losses but still trailing rivals

http://uk.reuters.com/article/2014/08/19/uk-permanenttsb-results-idUKKBN0GJ0FN20140819

(Reuters) - Irish state-owned mortgage lender permanent tsb (PTSB)(IPM.I) has cut its first-half underlying loss by 62 percent but continues to lag behind its main rivals, who have returned to profit after the country's banking crash.

The smallest and weakest of Ireland's three remaining domestically-owned lenders posted a 171 million-euro (137 million pounds) loss on Tuesday, with impairment charges on loans falling to 148 million euros, down by two-thirds on a year ago.

That compared with a profitable six months for both Allied Irish Banks (ALBK.I) and Bank of Ireland (BKIR.I), which are recovering faster from a crisis that saw some banks fail, others fall into state hands and led Ireland into a three-year EU/IMF bailout.

"I don't want to get too carried away yet because we're still losing money," Chief Executive Jeremy Masding told the Newstalk radio station.

[xchrom]

18. Zloty pauses before wages, employment data

http://uk.reuters.com/article/2014/08/19/uk-markets-easteurope-idUKKBN0GJ0R520140819

(Reuters) - The zloty was little changed on Tuesday before key wage and jobs data from Poland, which should provide some more evidence on whether the country's central bank will cut interest rates soon.

Conflict between neighbouring Ukraine and Russia has slowed economic recovery in Central Europe, contributing to expectations that Poland's central bank will resume rate cuts that appeared to have ended last year.

The region's most liquid currencies, including the zloty EURPLN= were flat against the euro. Poland's 5-year benchmark bond yield PL10YT=RR, which hit record lows in recent days, rose to 2.65 percent from 2.63 percent at Monday's close.

Analysts said investors would watch Polish employment and corporate sector wages figures for July, due at 13:00 PM BST, and Wednesday's industrial output data, for clues on central bank policy and the direction of the zloty and Polish bonds.

[xchrom]

19. Only Rich Know Wage Gains With No Raises for U.S Workers

http://www.bloomberg.com/news/2014-08-19/only-rich-know-wage-gains-with-no-raises-for-u-s-workers.html

Call it the no-raises recovery: Five years of economic expansion have done almost nothing to boost paychecks for typical American workers while the rich have gotten richer.

Meager improvements since 2009 have barely kept up with a similarly tepid pace of inflation, raising the real value of compensation per hour by only 0.5 percent. That marks the weakest growth since World War II, with increases averaging 9.2 percent at a similar point in past expansions, according to Bureau of Labor Statistics data compiled by Bloomberg.

Federal Reserve Chair Janet Yellen has zeroed in on faster wage growth as an important milestone for declaring the job market healed and ready to withstand policy tightening, even as other labor measures improve. Stagnant earnings also explain an economy that’s having trouble sustaining a rebound in housing and consumer spending, according to David Blanchflower, a professor of economics at Dartmouth College in Hanover, New Hampshire.

“The bottom line is, we’re a million miles from full employment,” said Blanchflower, a Bank of England policy maker from 2006 to 2009. “Workers are struggling, and they don’t see signs that things are suddenly going to change.”

[antigop]

34. precisely why unions and worker co-ops are needed. K&R

[xchrom]

20. Credit Swaps Polished in $19 Trillion Derivative Overhaul

http://www.bloomberg.com/news/2014-08-19/credit-swaps-polished-in-19-trillion-derivative-overhaul.html

The biggest overhaul to the $19 trillion credit derivatives market in more than a decade will seek to solve flaws that have stopped some contracts paying out as buyers anticipated.

The changes come too late for investors in the junior debt of Banco Espirito Santo SA, whose credit-default swaps were devalued this month when the Portuguese lender was rescued and restructured by the government. Since the contracts are tied to the majority of a company’s debt, if the borrower is reorganized the swaps don’t necessarily stay tied to the securities they’re meant to protect.

Investors will start signing up to convert outstanding trades into new contracts as early as this week after the International Swaps & Derivatives Association rewrote the documentation to address the weaknesses. The biggest impact of the shakeup may be in the cost of swaps tied to subordinated bank bonds like those of Banco Espirito Santo, which will be about 50 percent more than existing contracts, according to Citigroup Inc.

“The fact that the new contract will afford more protection will mean it will cost more as well,”said Sean Boland, a money manager at Cheyne Capital in London, which manages about $6.5 billion. “The past few precedents haven’t been too favorable. It’s extremely positive that as the market environment and regulatory environment changes, the CDS contracts are changing as well.”

[xchrom]

21. SNB to Cap Franc Until 2016 as Euro Area Recovery on Hold

http://www.bloomberg.com/news/2014-08-19/snb-to-cap-franc-until-2016-as-euro-area-recovery-on-hold.html

The Swiss National Bank is seen maintaining its cap on the franc for at least another two years as the economic revival in the neighboring euro area struggles to gain tractions.

More than three quarters of the respondents in the Bloomberg Monthly Survey of 23 economists say that the central bank will keep its ceiling of 1.20 per euro at least until 2016. Not even a 10th say it will remove the barrier next year.

The Zurich-based institution set the minimum exchange rate three years ago amid the euro area’s debt crisis, citing the risk of deflation and a recession. The 18-country bloc’s recovery stalled in the second quarter and European Central Bank President Mario Draghi said interest rates would remain at their present low for an extended period.

“So long as the ECB doesn’t raise rates, the SNB can’t do anything either,” said David Marmet, an economist at Zuercher Kantonalbank. “The ECB is very hesitant to do anything, and that indicates that the point in time for the Swiss doing anything gets pushed back.”

[xchrom]

22. Broadcasters Say FCC Airwave Sale Will Cost Them Viewers

http://www.bloomberg.com/news/2014-08-19/broadcasters-say-fcc-airwave-sale-will-cost-them-viewers.html

A trade group representing thousands of local U.S. television stations sued the Federal Communications Commission to block an auction of airwaves to wireless providers.

The FCC is to sell airwaves given up by TV stations to satisfy the soaring demand for smartphones and other mobile devices connecting to the Internet. Finding more spectrum to meet the demand is a goal of President Barack Obama’s administration. The TV stations would get some compensation.

National Association of Broadcasters, saying its members will lose viewers, said the plan uses a new methodology that fails to preserve broadcasters’ coverage areas, according to its complaint filed yesterday in federal court in Washington. The FCC should be blocked from adopting the method, the group said.

The plan “ignores Congress’s clear direction to do no harm to broadcasters who choose not to participate in the voluntary auction,” the group said in a June 5 statement.

[xchrom]

23. California May Quadruple Tax Breaks for Filmmakers

http://www.businessweek.com/articles/2014-08-19/california-may-increase-tax-breaks-for-filmmakers-to-400-million#r=hp-ls

In the race against runaway production, California is fighting for another act. Hollywood’s home state is on the cusp of expanding its film subsidies, to $400 million a year, in an attempt to stem the flow of work to other states and countries that offer studios larger incentives.

California’s current subsidy program, which started in 2009, hasn’t been able to keep up with the rebates, grants, and tax credits that other places dangle in front of studios. The state currently uses a lottery to determine which productions get a piece of the $100 million in annual subsidies, awarded as tax credits. Blockbusters—movies with a budget over $75 million—aren’t eligible.

The new subsidy bill, currently making its way through the state legislature, would allow big budget films to benefit while raising the overall cap to $400 million a year. While more movie productions would benefit, California’s tax credits would still cover a smaller percentage of costs than do those of New York, Louisiana, and some international destinations.

[xchrom]

24. Fed Urged to Ensure Emergency Lending Rules Bar Bailouts

http://www.bloomberg.com/news/2014-08-18/fed-urged-to-ensure-emergency-lending-rules-bar-bailouts.html


The Federal Reserve must clarify its emergency lending authority rules to foreclose the possibility of “backdoor bailouts” in a future financial crisis, a bipartisan group of lawmakers said in a letter today.

The central bank’s proposed rules for emergency lending place “no meaningful restrictions” on its lending powers in a time of crisis, inviting the prospect of assistance similar to that provided five years ago, 15 Senate and House members wrote in the letter to Federal Reserve Chair Janet Yellen.

“If the board’s emergency lending authority is left unchecked, it can once again be used to provide massive bailouts to large financial institutions without any congressional action,” the group wrote. “The board’s proposed rule fails to strike the appropriate balance between promoting financial stability and mitigating moral hazard.”

The Fed extended billions of dollars of assistance to banks and non-bank financial firms after the credit-market collapse that toppled Lehman Brothers Holdings Inc. in 2008. In response, Congress narrowed the Fed’s ability to extend a liquidity lifeline -- as was done with Bear Stearns Cos. and American International Group Inc. -- in enacting the Dodd-Frank financial regulation law in 2010.

[xchrom]

25. Barclays Dark Pool Trading Volume at Highest Since Suit

http://www.bloomberg.com/news/2014-08-18/barclays-dark-pool-trading-volume-at-highest-since-suit.html

Barclays Plc (BARC) saw the volume of U.S. shares traded at its dark pool rise to the highest since it was sued by New York for allegedly lying to customers of the venue.

About 106 million U.S. shares were traded in the private trading platform in the week of July 28, up 21 percent from about 87.6 million in the previous week, according to data from the Financial Industry Regulatory Authority. That’s the most since 312 million shares were traded in the week of June 23.

Britain’s second-largest bank is fighting allegations by New York Attorney General Eric Schneiderman that it falsified marketing materials to hide the presence of high-frequency traders at what used to be Wall Street’s second-largest dark pool. The bank has challenged Schneiderman’s June 25 complaint, saying it’s based on “clear and substantial factual errors.”

“We do not believe this suit is justified, and we have a duty to our shareholders, clients and staff to defend our position,” Barclays said in a July 24 statement.

[Demeter]

29. EU compensates fruit and veg growers hit by Russian ban

http://www.bbc.com/news/world-europe-28834170

The European Commission has announced emergency EU funding of 125m euros (£100m; $170m) for fruit and vegetable growers hit by Russia's ban on most imported Western food. The funding is compensation for fresh produce which will not be sold. Instead it will be distributed free to schools, hospitals and other institutions....Last week the Commission announced plans to pay peach and nectarine growers for 10% of their crop, and the new funding expands that aid to many more producers. The crops affected by the EU compensation scheme are those in full season now, with no storage option for most of them and no immediate alternative market available, a statement from Agriculture Commissioner Dacian Ciolos said. "All farmers of the concerned products - whether in producer organisations or not - will be eligible to take up these market support measures where they see fit," he said. The measures will apply until the end of November. The compensation will come from a special 420m-euro fund set up under the current Common Agricultural Policy (CAP), for farmers facing potentially ruinous emergencies. The food types covered by the new compensation scheme are: tomatoes, carrots, white cabbage, peppers, cauliflowers, cucumbers and gherkins, mushrooms, apples, pears, red berries, table grapes and kiwis...EU fruit exports to Russia last year were worth 1.07bn euros (£855m; $1.4bn) - the biggest agricultural export sector, ahead of dairy produce and meat. Lithuania, Poland, Finland and Denmark each face losses running into hundreds of millions of euros because of the Russian ban, the Financial Times reports...

Russia has banned many food imports, angry at EU-US sanctions over Ukraine.

Germany's Chancellor Angela Merkel insisted on Monday that the EU sanctions must stay in place "in order to show how serious we are" on the Ukraine crisis. She was speaking in Latvia, an EU member state with a large ethnic Russian minority. Its Baltic neighbour Lithuania is especially hard hit by the Russian import ban.

On 7 August, Russia declared a one-year embargo on meat, fish, dairy products, fruit and vegetables from the EU, the United States, Canada, Australia and Norway in retaliation for Western economic sanctions....Russia's Prime Minister Dmitry Medvedev said on Monday he did not think the Russian ban would push up food prices, but he added: "I hope these measures won't last very long". The embargo would encourage competition, giving Russian farmers more market access, he argued. He criticised "a situation where all the apples, for example, come from Poland or some other products - say fish is an example - all from Norway". In the EU the biggest exporters of fresh fruit and nuts to Russia were its neighbours Poland (339m euros) and Lithuania (309m euros) in 2013. They were also the biggest for fresh vegetables (Lithuania - 340m and Poland - 173m).

THAT SHOWS GLOBALISM UP FOR WHAT IT IS: A METHOD OF COERCION, EXTORTION AND BLACKMAIL.

WITH ANY LUCK, THIS ABUSE OF "FREE TRADE" WILL PUT AN END TO IT, ONCE AND FOR ALL TIME.

[Demeter]

30. The mammoth global “free trade” agreement you’ve never heard of.

http://inthesetimes.com/article/17065/tisa_tpp_and_ttip

Most progressives are, by now, familiar with the Trans-Pacific Partnership (TPP), the proposed trade deal that would link the United States with Pacific Rim powerhouses like Australia and Japan. Wonkier corners of the left are equally conversant in the intrigue of the Transatlantic Trade and Investment Partnership (TTIP), a pact that would couple the United States and the European Union. Like-minded critics would do well by memorizing yet another trade acronym: TISA, or the Trade in Services Agreement. Judging by the stakes and the ultra-secrecy of the negotiations, it could easily be the worst of the bunch.

Here's what we know: Fifty countries, including the United States, the EU nations, Australia, Canada, Hong Kong, Japan, Switzerland, Taiwan, and Turkey, have been in TISA talks since 2012. The resulting agreement will set the terms for almost 70 percent of global trade in “services”: everything from banking and construction to telecom and tourism. The public got its first glimpse of the treaty on June 19, when WikiLeaks published a draft of the agreement's chapter on financial services. It wasn't pretty. The text included proposals to extend new “market access” guarantees to all participating states and fresh limits on the ability of nations to “discriminate” against foreign financial firms. The section hasn't been finalized, but the leak confirmed what TISA skeptics feared the United States and EU are leading the charge to block countries from imposing domestic regulations on the multi-trillion-dollar industry.

“It is astounding that at a time when we are still reeling from the devastating consequences of reckless financial deregulation, our governments are negotiating further deregulation of the financial sector, solely in the interests of large financial corporations,” says Daniel Bertossa, senior policy and advocacy officer at Public Services International (PSI), a global public-sector union federation based in France.

As of yet, that leaked chapter is the only piece of the agreement to go public. In contrast to the TPP or TTIP, U.S. officials have not disclosed the dates or locations of talks ahead of time. (The secretive banking hub of Geneva has hosted all seven rounds.)

“You only have to wonder what’s in there, if they’re so afraid of citizens and civil society and workers to actually see what they’re negotiating,” says Melinda St. Louis, international campaigns director with Public Citizen’s Global Trade Watch, a watchdog group

.

....................................................................................

TISA was born from the ashes of the World Trade Organization (WTO)’s “Doha Development Round,” multilateral trade negotiations that have essentially stalled, despite much fanfare over their 2001 launch. During these talks, the United States, EU and their allies have repeatedly failed to earn strong liberalization commitments in the service sector from the BRICS (Brazil, Russia, India, China, South Africa) and other developing countries. Eventually, a frustrated pack of countries calling themselves the “Really Good Friends of Services”—dominated by the United States and EU— decided to launch their own talks in 2012, outside the WTO framework. In the highly diplomatic realm of international trade negotiations, this gesture was tantamount to flipping off the Global South.

“The United States and EU decided to basically create a coalition of the willing,” explains St. Louis, “saying, ‘If we can’t get our extreme services deregulation agenda through the WTO framework because of this opposition we’re coming up against … then we’re going to go on our own. Who’s with us?’ ”

TISA’s long game, some worry, is to nudge the full WTO into adopting whatever ultra-corporate agreement emerges. In the United States, TISA’s biggest cheerleader is the Coalition of Service Industries (CSI), a lobbying titan that includes the likes of AT&T, Citigroup, Deloitte, Ebay, Google, Microsoft and Walt Disney. CSI, in turn, has helped prop up “Team TISA,” a broader business alliance whose six co-chairs represent a comically nefarious cross-section of corporate America: Citigroup, IBM, Liberty Mutual, MetLife, UPS and Walmart.

MORE

[Demeter]

35. Why Germany Is Backing Away From a Trade Deal That Lets Corporations Sue the Government

http://www.yesmagazine.org/new-economy/why-germany-is-backing-away-from-a-trade-deal-that-lets-corporations-sue-the-government



In a move that has many on the left cautiously celebrating, Reuters reported on July 28 that Germany might reject a new trade agreement between Canada and the European Union. The deal is called the Comprehensive Economic and Trade Agreement, or CETA. It's part of a new wave of large, aggressive trade deals that also includes the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, and the Trans Pacific Partnership (TPP) between 12 countries of the Pacific Rim. If all the deals passed, they would affect more than half of the world's economy. But the red light from Germany could signal that these agreements are not as inevitable as their advocates suggest.

Germany's objections are centered specifically on the so-called "investor-state dispute settlement" provisions in CETA. These provisions—also known by the acronym ISDS—allow transnational corporations to take legal action against individual governments if they believe that the country's domestic laws violate a trade agreement. And the legal disputes happen through arbitration, which is a way to settle disputes completely outside of the involved countries' courts. We've seen this movie before. Chapter 11 of the North American Free Trade Agreement (NAFTA) stipulates that three-person panels of private attorneys decide who wins in disputes between corporations and individual governments. These proceedings are closed to public observation. The fallout has been dramatic: Corporations have used the NAFTA tribunals to win big-ticket monetary settlements from the taxpayers of nations whose domestic laws interfere with corporate profits. According to a report by the consumer-rights advocacy group Public Citizen, there are 17 pending claims in which corporations are seeking a total of $38 billion through NAFTA and other deals.

The compensation won through these claims hits particularly hard in Argentina—the most frequent target of these cases according to a 2014 report by the United Nations Conference on Trade and Development. In one example, Argentina was ordered to pay $185.3 million to the energy company BG Group, who sued for profits lost when the country froze gas prices in 2001. Argentina is not alone: another report by the same U.N. group shows that 66 percent of investor-state cases initiated in 2012 were brought against "developing or transition economies":



Meanwhile, the number of corporate claims has been on the rise: The UNCTD's report from 2014 shows that in 2002 there were fewer than 100 known treaty-based ISDS cases. By 2013, that number had reached 568—a five-fold increase over 11 years:



The cases settled through NAFTA's dispute resolution tribunals show corporate and investor rights trumping national sovereignty and domestic laws. Exxon Mobil won $60 million from Canada in 2007 because local regulations required oil companies to pay to support research and development in the country's poorest provinces. U.S. energy company Lone Pine Resources is seeking CA$250 million in damages because the firm "expended millions of dollars and considerable time and resources" on a fracking project before Quebec banned fracking in 2011—a decision Lone Pine called "arbitrary" and "capricious." Opposition to these provisions is not limited to the political left. The Cato Institute, a libertarian think tank, has taken issue with investor-state dispute provisions in trade agreements like the TPP and TTIP. The institute's Free Trade Bulletin argued in March that investor-state dispute settlements are "an unnecessary, unreasonable, and unwise provision to include," and suggests sacrificing the provision in order to save the trade agreements.

Some implications

Germany is no stranger to similar dispute settlements. After the country decided to phase out nuclear power following the disaster at the Fukushima Daiichi Nuclear Power Plant in 2011, the Swedish energy firm Vattenfall filed for arbitration to seek €3.5 billion ($4.6 billion) in damages, blaming the country for past and future loss of profits. Considering how that worked out, Germany's change of heart is perhaps to be expected. But some commentators see the move as proof that global organizing against the new round of trade agreements is gaining ground. Arthur Stamoulis, director of the Citizens Trade Campaign, noted that "The German government and other governments are starting to feel the heat from public opposition to [investor-state dispute settlements]."


As Arthur Stamoulis told YES, "With renewed activism, corporate power grabs like CETA, TTIP and the TPP ... really can be stopped."

[Demeter]

31. How to Deal With the Hardest Part of Being an Entrepreneur

http://www.inc.com/paul-b-brown/dealing-with-the-hardest-part-of-being-an-entrepreneur.html

This is so obvious that I almost didn't write it.

I have argued that the best way to deal with uncertainty is to:

• Take a small step toward what you want.
  
• Learn from taking that small step.
  
• Build that learning into the next small step you take.
  
• Learn from that one (and so on).

At the very heart of the Act, Learn, Build, Repeat model is the fact that you are going to make what by any objective measure are going to be mistakes. You thought people would clamor for your Portuguese-Brazilian-Cuban fusion restaurant idea. They didn't. You were absolutely convinced that your blog on the inner workings of the investment banking industry would be hot … but the response never got beyond room temperature. You got only 1,000 readers.

Throughout, I have said these less-than-wonderful responses are a good thing. You learned something and that new understanding could take you in another direction. (You might offer ethnic takeout dinners instead of opening an actual restaurant. To make the blog idea profitable, you decide to charge each of those 1,000 readers--who desperately need the information you provide--$5,000 annually for finding out what only you know, and all of a sudden you have a $5 million business.)

So, I have argued, initial failure is actually something you should embrace.

But at the moment when people tell you they don't like your restaurant or blog idea in their original forms, it's devastating. No one likes bad news, and your first response is not likely to be "Oh, good. I've learned something that I can apply next time." Instead, it's: "Why did I waste all that time, money, and effort. How stupid could I be?"

Unhappiness and depression--at least for a time--invariably follow.

WHAT ABOUT STARVATION, BUDDY? DOES THAT FOLLOW, TOO? PEOPLE DON'T TRY THIS FOR THEIR HEALTH. THEY ARE TRYING TO COPE IN A MARKET THAT PREVENTS SUCCESS! A JOBLESS RECOVERY, NO LESS!

VERY FEW ENTREPREURS HAVE UNLIMITED RESOURCES, EXCELLENT HEALTH, A LONG LIFE AHEAD OF THEM WITH SOMEBODY ELSE FEEDING THEM, AND NO COLLATERAL WORRIES LIKE CHILDREN. THEY DON'T HAVE THE LUXURY OF FAILURE. THEY DON'T GET SECOND CHANCES.

[Demeter]

32. Why Suffering Is The Secret To Success Dan Waldschmidt

http://www.businessinsider.com/suffering-is-secret-to-success-2014-8

You will do just about anything to avoid suffering. That's just how you're wired. Problems and pain and potential risks are scary. And when you don't think you need to experience any more hurt, it's all too easy just to back down from the fight and let someone else absorb the suffering. It's natural to avoid getting hurt.

You're already busy and pushed to the end of your limits by the day-to-day grind. Taking on any more is just overwhelming — but suffering is also the secret to being successful. Gain usually comes through pain.

• You can't make more money without experiencing the emotional burden of sleepless nights.
  
• You can't be a better leader without learning from your mistakes and developing the humility to adapt when you get it wrong.
  
• You can't win at sports or politics or business without experiencing embarrassing setbacks that make you question how prepared you are to win.

You can't get to where you want to be without taking body blows. So if you have to suffer, maybe it's time to think about hurting a little bit differently. Maybe it's time to embrace the results of pain. Instead of thinking about suffering as if you're being treated unfairly, think about the lessons you're learning. Think about the experience and wisdom that you're gaining.

Embrace the better version of yourself that you're building.
You can't have any of that without experiencing the pain you feel right now.
Pain is your path to reaching your full potential.
Suffering isn't life treating you unfairly.
It's not bad karma or horrible luck.

No. Suffering is you being prepared for something bigger than you are doing right now.

You're being tested and refined. Your response in your moments of suffering and pain define the measure of your greatness. You can give up and make excuses. You can run and hide, cry, and blame others around you. Or you can quietly reassure yourself that this moment is what enables you to achieve your goals. This is what you've been waiting for your entire life.

This is your chance to be amazing.

THIS HAS GOT TO BE THE CREDO OF SOME SECRET SADIST SOCIETY.

[Demeter]

33. A Critical New Role for the World Bank

http://www.nytimes.com/2014/08/18/opinion/a-critical-new-role-for-the-world-bank.html?_r=1

A federal trial in Brooklyn is focusing anew on illicit money flows. Until now, federal crackdowns have targeted European banks that laundered dirty money into dollars for drug cartels and for sanctioned countries, like Iran. The Brooklyn case involves a bank headquartered in Jordan, called Arab Bank, which plaintiffs say handled transactions for people or organizations it knew were linked to terrorist attacks from 2001 to 2004. Opening arguments were last Thursday, but the case is already reverberating through the banking industry — and not in ways that would make the world a better place.

As The Times recently reported, bank lawyers say that developments in the case could reinforce an unfortunate trend: the departure of several banks from the business of arranging remittances for immigrant workers, on the ground that the legal risk of inadvertently handling dirty money has become too high. That would threaten years of progress, spearheaded by the World Bank, to lower the fees on hundreds of billions of dollars in remittances from migrant workers in rich countries to their families in poor countries.

It is crucial for the World Bank not to let that happen. The answer is not to require that banks stay in the game, enduring tighter scrutiny; it is for the World Bank itself to step in and become a remittance center. The World Bank could pool deposits from banks and nonbank money transfer agents and parcel them to recipient banks, using its formidable certification protocols to verify that the money is coming from and going to legitimate parties. Such pooling could also reduce exchange fees, a big cost to migrants. Equally important, the World Bank could use its relationships with regulators around the world to enhance the remittance system’s integrity. Other efforts to foster remittances are helpful, including a recent law signed by President Obama to streamline the regulation of nonbank money transfer businesses. But only the World Bank can broadly transform remittances.

It should do so quickly. Throughout its history, the World Bank has changed along with development challenges. It has gone from making loans to governments to investing in private-sector projects, and from offering loans to making grants and providing insurance. The bank should now rise to the challenges posed by remittances — a critical tool in the fight against world poverty.

AN INTERESTING SUGGESTION....MAKING THE WORLD BANK NOT A CORPORATE CRONY TOOL...

[Demeter]

36. Ukraine’s Next Crisis? Economic Disaster

http://www.nakedcapitalism.com/2014/08/ukraines-next-crisis-economic-disaster.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...Ukraine’s next crisis will be a devastatingly economic one, as violent conflict destroys critical infrastructure in the east and brings key industry to a halt, furthering weakening the energy sector by crippling coal-based electricity production.

The Ukrainian military’s showdown with separatists in the industrial east has forced coal mines to severely cut production or close down entirely. This has led to an electricity crisis that can only be staunched by cutting domestic production along with exports to Europe, Crimea, and Belarus — or worse, getting more imports from Russia.

In the coal centers of Ukraine’s industrial east—Luhansk and Donetsk—fighting has forced the full closure of an estimated 50 percent of coal mines, while overall coal production has fallen 22 percent over the same period last year.

Key industry sources say they will potentially run out of coal in less than three weeks....

By Robert Bensh, an energy and energy security expert with over 13 years of experience leading oil and gas companies in Ukraine. Cross posted from OilPrice