STOCK MARKET WATCH -- Monday, 17 November 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 17 November 2014[font color=black][/font]

SMW for 13 November 2014

AT THE CLOSING BELL ON 13 November 2014
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Dow Jones 17,634.74 -18.05 (-0.10%)
[font color=green]S&P 500 2,039.82 +0.49 (0.02%)
Nasdaq 4,688.54 +8.40 (0.18%)


[font color=green]10 Year 2.32% -0.04 (-1.69%)
30 Year 3.05% -0.02 (-0.65%) [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.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts







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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. There's a layer of snow--and it's sticking

welcome to global warming: snow 5 weeks before winter starts.

[Demeter]

2. It will be going down into the teens all week

It's January in November! We get to skip all those pesky holidays...

[DemReadingDU]

32. Already 3 inches of snow in Ohio

and how long until summer, lol!

[Demeter]

3. Merkel urges Europeans to speed up TTIP trade talks with U.S.

DO I DETECT A NOTE OF PANIC HERE? DOES MERKEL REALLY THINK THERE'S A WAY TO BAIL HER OUT OF HER DISASTROUS AUSTERITY FOR THE EUROZONE, WHICH IS NOW COME HOME TO ROOST IN GERMANY AFTER DEVASTATING THE REST OF EUROPE? OR THAT THE US WOULD PROVIDE ONE?

http://www.reuters.com/article/2014/11/16/us-australia-germany-idUSKCN0J00E320141116?feedType=RSS&feedName=businessNews

German Chancellor Angela Merkel urged European nations on Sunday to speed up their negotiations with the United States over a Transatlantic Trade and Investment Partnership (TTIP) agreement between the U.S. and EU.

Speaking a news conference in Sydney following the Group of 20 Summit in Brisbane, Australia, Merkel said the EU should negotiate in a "speedy and determined" way with the U.S. to complete the trade deal.

Merkel's remarks follow comments by British Prime Minister David Cameron, who spoke out at the G20 Summit against opponents of the trade deal, where Cameron, Merkel, U.S. President Barack Obama and French President Francois Hollande met for talks on the TTIP.

The TTIP, which has been strongly opposed by trade unions, would eliminate all tariff barriers between the U.S. and EU nations.

Merkel declined to reveal the contents of a meeting she had earlier on Sunday with Russian President Vladimir Putin over the crisis in Ukraine, saying the discussion was confidential.

YUP. MERKEL IS IN FULL PANIC MODE. THE EURO IS ON BORROWED TIME. BY 2016, PERHAPS, EUROPE WILL BE FREED FROM THIS BONDAGE...

[Demeter]

4. The $375 billion Europe wants to invest but doesn't have

http://www.reuters.com/article/2014/11/16/us-eu-investment-idUSKCN0J00L620141116?feedType=RSS&feedName=businessNews

New European Commission President Jean-Claude Juncker is preparing a 300 billion euro ($375 billion) investment plan he will present as a cornerstone of efforts to revive an ailing economy. But history suggests the program risks becoming an exercise in financial engineering rather than a conduit for the new money the region needs to help boost output and create jobs. A flagship project of the new European Union executive, the investment scheme is due to be unveiled before Christmas. It is still being finalised and few details have been made public. If all the money it promises is raised and spent, it could provide the 28-nation EU with roughly an additional 0.7 percent of GDP in investment per year over three years.

"It is significant," said Carsten Brzeski, economist at ING bank in Frankfurt. "You would expect some kind of a multiplier effect from investment on jobs and purchasing power and it would increase the growth potential. The downside is that public investment can take years before it gets started."

But even more than "when?", the big question hanging over the plan is "how much?". The 300 billion euros is an overall target for both the public and private money that the Commission hopes to mobilize. The Commission itself does not have any money and is funded through annual EU budgets that must be balanced. Of the region's 28 governments, only Germany seems to have public finances strong enough to significantly increase investment. But in its drive to have a balanced budget, Berlin is not keen to spend more. So the Commission plans to use what little public money is available to lure bigger private funds into projects that would otherwise seem too risky or with too low a rate of return.

"Our aim is to 'crowd in' private money for big infrastructure projects in the energy sector, transport, broadband or research and development. The private sector cannot take all the risks," Commission Vice President Jyrki Katainen told Reuters.

SHOW US THE MONEY

Potential investors will want to know how much the EU will provide, and whether it will be new funds or re-labeled money already accounted for in various EU spending schemes.

"If it is additional money, it would be OK, but I fear that it will be funds taken from other places in the EU budget," said Christoph Weil, economist at Commerzbank.

Very little new money ended up in the 120 billion euro "growth and jobs" compact that EU leaders approved at the start of 2012, which failed to prevent a recession and was followed by two years of falling investment. It was made up of existing EU structural funds and a 10 billion euros capital boost for the European Investment Bank so that it could potentially lend 60 billion more over three years. The new scheme looks likely to utilize similar ideas. Juncker said in July it would be financed "through the targeted use of the existing structural funds and of the European Investment Bank (EIB) instruments already in place or to be developed".

Katainen told Reuters the capital of the EIB, which is owned by EU governments, could be raised again. Structural funds that poorer EU countries receive could be leveraged in a similar way as with EU project bonds, under which EU cash becomes a first loss guarantee (???) on a debt issue from private investors, he said. Economists are doubtful about leveraging, which failed to calm markets when used to theoretically boost the size of the euro zone bailout fund during the sovereign debt crisis. Making loans cheaper for investors also makes little sense at a time when, with European Central Bank rates at close to zero, cheap money is already available, ING's Brzeski said.

"The 300 billion investment plan will really have to be coherent, with very little wishful thinking and the leverage part should be small. It has to be realistic and convincing," Brzeski said. "If it is mainly leveraging, it would be a disappointment."

What would make a difference is impetus for more euro zone integration, minimizing the risk that the euro currency could again be at risk of collapse in future.

THEY DON'T GET IT, DO THEY? AND THEY WON'T GET IT UNTIL THEIR ENTIRE HOUSE OF CARDS HAS COLLAPSED AROUND THEIR EARS.

[Demeter]

5. Swiss Demand for Currency Automation Could Reshape Trading

http://www.bloomberg.com/news/2014-11-14/regulator-call-for-automated-trades-unprecedented-push-correct-.html

Switzerland’s decision to mandate automated trading of currency is an unprecedented push by a regulator to limit the scope for market manipulation and may accelerate a trend already reshaping the industry.

Switzerland’s Financial Market Supervisory Authority, or Finma, directed UBS AG (UBSN) to use electronic platforms to perform at least 95 percent of its foreign exchange trades after finding that employees conspired to rig currency benchmarks. The action will probably prompt some banks and regulators to do the same to avoid any appearance of being lax on financial crime, said Charles Geisst, a professor of finance at Manhattan College in Riverdale, New York.

“If they’re successful, if it can be executed well, the others will have to follow suit because UBS would simply say, ‘Well, come and do business with us because we don’t rig ’em anymore,’” Geisst said, adding he couldn’t recall another case where a regulator has imposed a minimum automated trading share.

Authorities and some FX clients have pressed banks to switch to computer-driven trading as a way to eliminate the potential for manipulation that prompted U.S., British and Swiss regulators to fine UBS and five other global banks a combined $4.3 billion this week. Algorithmic-driven trading already accounts for the majority of spot trades, the buying and selling of currency for immediate delivery, a trend that has cost a growing number of traders their jobs in recent years...MORE

[Demeter]

6. Credit Suisse gets temporary asset manager exemption from DOL

http://www.pionline.com/article/20141114/ONLINE/141119920?AllowView=VDl3UXk1SzRDL0NCblIzQURleUhaRUt0amswVkErOWZHUT09&utm_campaign=smartbrief&utm_source=linkbypass&utm_medium=affiliate

The Department of Labor is deferring a final decision on Credit Suisse’s bid for permission to continue providing asset management services to retirement plans, after its banking entity pleaded guilty to helping U.S. citizens avoid taxes overseas.

The Labor Department will hold a public hearing Jan. 15 on whether to grant a permanent exemption, and under what conditions. Until then, Credit Suisse has a temporary exemption with several conditions, “to avert possible disruptions in retirement plan investments that would be detrimental to the financial well-being of individuals saving for retirement, or pensions,” said a DOL statement Friday.

The company can continue to manage retirement plan assets while waiting for the permanent exemption. It managed $17.8 billion for U.S. institutional tax-exempt clients as Dec. 31, according to Pensions & Investments data.

DOL officials have granted waivers for all 23 firms seeking individual waivers since 1997, with conditions specific to each case.

[Demeter]

7. Wall Street Wins Delay in Part of CFTC Overseas Swaps Policy

http://www.businessweek.com/news/2014-11-14/wall-street-wins-delay-in-part-of-cftc-overseas-swaps-policy

Wall Street won a delay in a controversial U.S. derivatives policy that extends the overseas reach of Dodd-Frank Act trading regulations. The Commodity Futures Trading Commission will postpone enforcing a provision applying the rules to trades structured in the U.S. that banks then book in overseas affiliates, according to a notice posted on its website today. The agency granted the delay until as late as Sept. 30, 2015. The policy, first devised in 2013, extended the agency’s oversight and drew opposition from lobbying groups representing Goldman Sachs Group Inc., JPMorgan Chase & Co. and Deutsche Bank AG as well as overseas regulators. The groups unsuccessfully sued the CFTC to try to overturn the regulation. Timothy Massad, the agency’s chairman, told traders in Chicago on Nov. 5 that he supported a delay to give regulators “the necessary time to consider” the issues.

“We should strive for rules that are clear and predictable -- and that, as much as possible, do not create negative effects on competition,” Massad said at the Futures Industry Association conference.

The agency was empowered by Dodd-Frank to put in place new rules for the $700 trillion global swaps market after the products helped fuel the 2008 credit crisis. The regulations seek to have most swaps guaranteed at clearinghousees and traded on exchanges or other platforms that are designed to foster transparency in prices.

Massad’s predecessor, Gary Gensler, argued that extending CFTC rules to trades in other jurisdictions was crucial to protecting the U.S. financial system from a foreign-born crisis. Swap-trading at a London unit of American International Group Inc. led to a U.S. bailout of the insurer during the crisis.

[Demeter]

8. G20's Carney says bank crisis reforms "substantially complete"

http://uk.reuters.com/article/2014/11/14/g20-summit-regulations-idUKL6N0T420V20141114

The job of fixing flaws that led to the 2007-09 financial crisis is largely done and the focus will turn to spotting new risks and rebuilding trust among regulators, a global watchdog set up by the Group of 20 (G20) leading economies said on Friday. The Financial Stability Board (FSB) has coordinated the enforcement of rules forcing banks to hold more capital after many were bailed out by taxpayers in the crisis.

"The G20 has worked intensively over the past six years to correct the fault lines that led to the global financial crisis," FSB Chairman Mark Carney said in a letter to G20 leaders meeting in Brisbane, Australia. While the job is "substantially complete", further work remains in order to build a fully resilient system, said Carney, who is also governor of the Bank of England.

Earlier this week, the FSB unveiled the last major piece of crisis reforms, a proposed requirement for banks to hold equity and bonds equivalent to 16 to 20 percent of their risk-weighted assets to shield taxpayers in a collapse.

Sven Giegold, a Green party member of the European Parliament, said Carney was being overly optimistic as large banks remain "too big to fail". Giegold doubted that regulators would allow several big banks to collapse in a crisis.

The FSB has already finalised tougher standards for financial derivatives such as credit default swaps, but Carney said implementation was uneven and behind schedule. Carney said the next phase for the FSB was to focus on new and constantly evolving risks from "shadow banking" or institutions that deal in credit outside traditional banking. He will also focus on how rules are implemented and make refinements if needed. The FSB would work to rebuild trust among regulators to stop countries fragmenting global markets by taking unilateral steps to shield their taxpayers from a failing foreign bank.

The FSB has already set global principles for banker bonuses, such as requiring a portion to be deferred over several years, and Carney said it would now focus on the link between pay, risk appetite and governance of banks. Pay structures at top insurers would be looked at in 2015. The watchdog also confirmed it would revise how it planned to select big asset managers for tougher scrutiny, saying it would develop incremental policy measures to address the systemic risks they pose.

Separately on Friday, the Geneva-based World Economic Forum said Carney and International Monetary Fund head Christine Lagarde would take part in a new initiative looking at the future of the global financial system. Anders Borg, a former Swedish finance minister who heads the initiative, told reporters the aim was to get regulatory frameworks across the world working well together and get credit flowing into the economy.


HAVE THESE BOZOS NEVER HEARD OF THE EFFECTS OF CLOSELY COUPLED SYSTEMS? WHEN ONE GOES DOWN, THE REST FOLLOW, BECAUSE THEY ARE LOCKED TOGETHER.

GLOBALISM IS FAR WORSE FOR THE WORLD THAN COMMUNISM (IT IS IN FACT THE CAPITALIST VERSION OF COMMUNISM)

[xchrom]

9. The 10 Most Important Things In The World Right Now

http://www.businessinsider.com/10-most-important-things-in-the-world-nov-17-2014-11

1. Japan's economy has slipped into recession with GDP unexpectedly falling 1.6% between July and September.

2. Some economists believe Japan's shockingly poor GDP numbers confirm that Prime Minister Shinzo Abe is going to call a snap general election.

3. Russian President Vladimir Putin left the G20 summit in Brisbane, Australia, early, saying he needed sleep after "after enduring hours of browbeating by a succession of Western leaders urging him to drop his support for secessionists in eastern Ukraine," The Guardian reports.

4. Facebook is secretly working on a new professional website that would allow users to keep their personal profile separate from their work profile, the Financial Times reports.

5. Italian Prime Minister Matteo Renzi has warned that Britain leaving the European Union would be a disaster.



Read more: http://www.businessinsider.com/10-most-important-things-in-the-world-nov-17-2014-11#ixzz3JKHzZ9Vu

[Demeter]

10. G-20 Plans $2 Trillion Growth Boost to Uneven Global Economy

http://www.bloomberg.com/news/2014-11-16/g-20-says-growth-plans-to-boost-gdp-by-2-1-if-implemented-1-.html

Group of 20 leaders agreed to take measures that would boost their economies by a collective $2 trillion by 2018 as they battle patchy growth and the threat of a European recession...Citing risks from financial markets and geopolitical tensions, the leaders said the global economy is being held back by lackluster demand, according to their communique following a two-day summit that ended yesterday in Brisbane. The group submitted almost 1,000 individual policy changes designed to lift growth and said they would hold each other to account to ensure they are implemented.

With policy makers facing domestic challenges to implementing their deregulation and investment plans, immediate impact from the communique was limited. Stocks (MXAP) sank in Asian trading, hurt in part by a surprise report from Japan that the world’s third-largest economy tipped into a recession -- adding to gloom over Europe’s challenges and China’s jump in bad loans.

“The G-20 plan to boost global growth is long on ambition but short on specifics,” Frederic Neumann, co-head of Asian economics at HSBC Holdings Plc in Hong Kong, said in an e-mail. “What needs to be done to revive global growth is clear: structural reforms. Trade is one such area where more concrete steps could have been laid out.”

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“There are some worrying warning signs in the global economy that are threats to us and our growth,” U.K. Prime Minister David Cameron said after the G-20 meeting ended. “If every country that has come here does the things they said they would in terms of helping to boost growth,” including trade deals, then growth will continue, he said.

Action to bolster growth comes as policies around the world are diverging with the U.S. tapering its monetary easing as it boasts the strongest economy among advanced nations, while Europe and Japan add further stimulus to ward off deflation. The International Monetary Fund last month cut its projection for world economic growth next year to 3.8 percent...The mostly structural policy commitments spelled out in each country’s individual growth strategy include China’s plan to accelerate construction of 4G mobile communications networks, a A$476 million ($417 million) industry skills fund in Australia and 165,000 affordable homes in the U.K. over four years.

IMF Managing Director Christine Lagarde told the leaders that in order to avoid the “new mediocre” of low growth, low inflation, high unemployment and high debt, all tools should be used at all levels, she said at a press conference yesterday in Brisbane. “That includes not just monetary policy, which is being significantly used, particularly in the euro zone, but also fiscal policy, structural reforms and, under certain conditions, infrastructure,” she said.

The IMF and Organisation for Economic Co-operation and Development assessed the policy commitments and said they would raise G-20 gross domestic product by an additional 2.1 percent from current trajectories by 2018, according to the communique. “It’s a worthy objective for the G-20 as global growth is still lagging,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which manages about $125 billion. “But a lot of those measures might not be fully implemented and, even if they do, they may not deliver the results.”

The G-20 also agreed to establish a global infrastructure hub, based in Sydney, with a mandate of four years that would encourage the exchange of information among governments, the private sector, development banks and other international organizations, according to the communique.

“With the global economy struggling with an uneven recovery, we welcome G-20 leaders’ commitment to raising growth and delivering quality jobs,” World Bank Group President Jim Yong Kim said in a statement. “G-20 leaders have rightly identified investment in infrastructure as crucial to lifting growth, creating jobs and tackling poverty.”

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IMF Restructuring

IMF reform to give emerging economies more equal representation remains a priority and leaders are “deeply disappointed” with delays in implementing changes agreed in 2010, according to the communique. The G-20 urged the U.S. to ratify the changes, and said if it does not happen by the end of the year it would ask the IMF to provide other options, according to the communique. Leaders of the BRICS nations -- Brazil, Russia, India, China and South Africa -- said Nov. 15 that delays in the IMF reform are “unjustifiable” and called on the G-20 to consider alternatives.

G-20 chiefs also pledged to do “what is necessary” to try to eradicate Ebola and address economic and humanitarian costs from the outbreak. The group welcomed an IMF initiative to make available a further $300 million to stem the outbreak and ease pressures on Guinea, Liberia and Sierra Leone, through a combination of concessional loans, debt relief and grants.


SO THAT'S WHAT THEY WERE UP TO! BUILDING CASTLES IN THE CLOUDS....

[xchrom]

11. Economists React To Japan's Awful GDP Report

http://www.businessinsider.com/economists-japan-to-delay-tax-hike-2014-11

COMMENTARY:

YOSHIKI SHINKE, CHIEF ECONOMIST, DAI-ICHI LIFE RESEARCH INSTITUTE

"I did not expect the growth figures to be this weak.

"We had expected capital investment would underpin the economy but the weak capital spending in these GDP numbers raises worries about the economic outlook. And considering the huge fall that we saw in consumer spending in the second quarter, the extent of its rebound looks especially weak.

"I think the Bank of Japan will have to cut its growth forecast for this fiscal year when it releases reviews of its economic and price forecasts next January. In addition to that, the pace of rise in consumer prices will slow given oil price falls while market speculation about further easing will probably increase."

JUNKO NISHIOKA, CHIEF ECONOMIST, RBS SECURITIES JAPAN

"Domestic demand was quite bad, with consumption and capital investment both much worse than expected. This environment makes it increasingly tough to call for an increase in the consumption tax, making it virtually certain that they'll put off the tax hike and hold a snap election."

"The fact that domestic demand was so bad was unexpected ... It seems that the bad weather this summer may have played a role, but the overall trends are not that bad.

"If you look at other fundamental indicators, they've shifted over to an increasing trend, so if this continues, even though this quarter was unfortunate, the next quarter should be better."



Read more: http://www.businessinsider.com/economists-japan-to-delay-tax-hike-2014-11#ixzz3JKIUBKXs

[xchrom]

12. German Bundesbank President Goes Against Europe's Plans To Stimulate Its Floundering Economy

http://www.businessinsider.com/german-bundesbank-president-jens-weidmann-warns-about-qe-2014-11

Bundesbank boss Jens Weidmann, the man most closely associated with Germany's opposition to easier monetary policy, is slamming the brakes on expectations that the European Central Bank will finally go for quantitative easing (QE).

He was speaking to Handelsblatt, a German business newspapers, and his comments are here:

"Such purchases might create new incentives to run up debt, besides adding to the reform fatigue in a number of countries," he cautioned. Nor was there any guarantee that quantitative easing would indeed have the intended impact on the economy, Weidmann pointed out.
He added that Germany shouldn't offer Europe a stimulatory boost with fiscal policy either:

Calls for Germany to increase its investment to help its partners amounted to nothing more than a plea for a common fiscal policy, he asserted. For another thing, Weidmann pointed out, such expenditure would do little to help countries on Europe's periphery.


Read more: http://www.businessinsider.com/german-bundesbank-president-jens-weidmann-warns-about-qe-2014-11#ixzz3JKJEZYbM

[xchrom]

13. European Stocks Opened Down After A Sell-Off In Asia

http://www.businessinsider.com/market-update-nov-17-2014-2014-11

Here's the scorecard:

France's CAC 40 is up 0.08% after opening down.

Germany's DAX is down 0.22%

The UK's FTSE 100 is down 0.19%, the only loser.

Italy's FTSE MIB is down 0.42%

Spain's IBEX is down 0.24%

Asian markets are up. Japan's Nikkei closed down 2.96%, after some unexpected and very poor GDP figures. Hong Kong's Hang Seng closed down 1.21%.

US futures are down a little too: the Dow is down 32 points, and the S&P 500 is 4 points lower.



Read more: http://www.businessinsider.com/market-update-nov-17-2014-2014-11#ixzz3JKJvLlbM

[Demeter]

14. G20 leaders force Australia to back down on climate change language

http://www.theguardian.com/environment/2014/nov/16/g20-leaders-australia-back-down-climate-change-language

World leaders have forced Australia to include stronger language on climate change in the G20 communique, but Tony Abbott told the summit that as the leader of a major coal producer he would be “standing up for coal”. The references demanded by other leaders, including the US president, Barack Obama, were reluctantly accepted by Australia at the last minute. They included a call for contributions to the international green climate fund that the prime minister has previously derided and for the “phasing out of inefficient fossil fuel subsidies”. A European Union spokesman reportedly described the climate negotiations with Australia as being like “trench warfare”. Other officials said it had been “very difficult” and protracted.

Speaking to the media after the summit, the Australian prme minister downplayed the importance of the “green climate fund” to which Obama pledged $3bn on Saturday and the Japanese prime minister, Shinzo Abe, $1.5bn on Sunday. He took a similar line on the new greenhouse reduction pledges unveiled by Obama and the Chinese president, Xi Jinping. He said all nations “support strong action … to address climate change”, but added: “We are all going to approach this in our own way and there are a range of climate funds which are there.” Obama and the UN secretary-general, Ban Ki-moon, both urged G20 countries to contribute to the green climate fund, which is seen as critical to a successful outcome at crucial climate negotiations in Paris next year. In the end, at Australia’s insistence, the communique called for contributions to financing funds “such as the green climate fund”. Obama said the US and Chinese agreement meant there was “no excuse for other nations” not to make similar commitments on greenhouse gas reductions. But Abbott said by his reading the deal “means 80% of China’s power needs in 2030 are still going to be provided by coal”. He said coal was critical to lifting 1.3bn people out of poverty, and “what we need to do is to ensure that the coal-fired power stations we need are as efficient as possible”.

The Australian treasurer, Joe Hockey, also downplayed the deal earlier on Sunday.
“Barack Obama has to get any initiative on climate change through a hostile US Congres,” he said. “So far he hasn’t had great success.” As Obama explained again on Sunday, the US “shaped that target based on existing authorities” to use Environment Protection Agency powers “rather than the need for additional congressional action”.

Abbott began the closed-door discussion on energy on Sunday morning by telling the world leaders that “as the world’s largest producer of coal, I’d like to stand up for coal”, sources told Guardian Australia. Speaking to the press after the meeting, Abbott denied Australia had been forced into climate discussions, saying “the very first draft of the G20 communique talked about climate change, all the way through we have been talking about energy efficiency and climate change”. As revealed by Guardian Australia, the first draft did include climate change, but in very general terms. But European countries and the United States argued until late on Saturday to force the host country to strengthen the words - including the commitment to the green climate fund, which Abbott has previously said Australia would not support. Australia was also reluctant to include the reference to fossil fuel subsidies in the communique, but it was eventually included after forceful support from Obama. The communique calls on G20 members to “rationalise and phase out inefficient fossil fuel subsidies”...As the G20 progressed, the Queensland government was preparing to unveil new infrastructure spending to help the development of Australia’s largest coal mine. Abbott, who recently said coal was “good for humanity”, also endorsed the mine, proposed by the Indian company Adani, at the leaders’ meeting.

The Queensland premier, Campbell Newman, has said the new spending would help coal development in the Galilee basin, which has been under a cloud because of the declining coal price. The announcement is expected to be made during the visit of the Indian prime minister Narendra Modi, who is addressing federal parliament on Tuesday, and the chairman of the Adani group, Gautam Adani. “We are prepared to invest in core, common-user infrastructure. The role of government is to make targeted investments to get something going and exit in a few years’ time,” Newman said. “It will be open access infrastructure. We want a new coal basin to open.”

In an interview from Brisbane with the Indian Express, Adani said the Australian government had given all environmental and regulatory clearances for the $7.5bn coal, rail and port project. The Carmichael mine in the Galilee Basin is the one of the largest thermal coal mines in the world, and the largest in Australia. It requires a 388km rail line to a new terminal at Abbot Point. But the project has been under pressure as coal prices fall to five-year lows. Adani told the Indian Express a South Korean firm, Posco, had been given the contract to build the railway line and sources suggested the Newman government might be preparing to underwrite the project.

The director of energy finance studies for the Institute of Energy Economics and Financial Analysis, Tim Buckley, said the Newman government’s plans were “absolutely farcical”. “I have not spoken to a single person in finance who thinks this can proceed or that it is commercially viable. Eight major international banks have said they won’t go near it,” he said. Adani says it has already invested $2bn in Australia, but it has no equity here. It bought the rights to the Abbot Point port with loans from a syndicate headed by the Commonwealth Bank and Westpac, and another loan from the State Bank of India.


HMMM....THINK OBAMA WILL GET THE US GOVT. TO STOP SUBSIDIZING FOSSIL FUELS IN THE USA? NOT IF THE KOCH BORTHERS HAVE ANYTHING TO SAY ABOUT IT!


WHAT A BUNCH OF MAROONS!

[xchrom]

15. Japan's Stocks Tanked And Now A Snap Election Seems Even More Certain

http://www.businessinsider.com/japans-gdp-prompts-snap-election-2014-11

Japan's main stock index, the Nikkei, closed down 2.96% after some truly awful economic data. GDP figures were expected to show a modest bounce, with growth of 0.5%, but actually recorded a 0.4% fall in output, putting Japan in recession.

That's a strong signal that the tax hike that was brought in earlier this year by prime minister Shinzo Abe has had a bigger impact on the economy than expected.

The Nikkei has had a roller coaster year already. In the middle of October's global sell-off, it was down more than 9% on the start of 2014, followed by an explosion to a 7-year high as the Bank of Japan supercharged its QE programme.

Abe doesn't seem too happy with the state of the current tax hike, and even less happy with what comes next: in less than a year, there's meant to be another increase, which would bring the tax to 10%.



Read more: http://www.businessinsider.com/japans-gdp-prompts-snap-election-2014-11#ixzz3JKKM40E9

[xchrom]

16. Bird Flu Found At British Duck Farm

http://www.businessinsider.com/r-bird-flu-found-at-british-duck-farm-restriction-zone-set-up-2014-11

LONDON (Reuters) - A case of bird flu has been found on a duck-breeding farm in northern England, the government said on Monday, though the case was not the deadly H5N1 strain, officials told the BBC.

The Department for Environment, Food and Rural Affairs said it had set up a restriction zone around the farm in Yorkshire and was culling all poultry on the facility to prevent any spread of infection.

On Sunday, Dutch authorities said they had found a highly contagious strain of bird flu at a poultry farm in the center of the country and had begun destroying 150,000 chickens.



Read more: http://www.businessinsider.com/r-bird-flu-found-at-british-duck-farm-restriction-zone-set-up-2014-11#ixzz3JKKmDnBf

[xchrom]

17. 10 Things You Need To Know In Markets Today

http://www.businessinsider.com/european-markets-open-nov-17-2014-2014-11

Japan Is In Recession And The Yen Hit A 7-Year Low. Unexpectedly poor GDP data just sent Japan into a recession, with a -0.4% contraction in Q3, when 0.5% growth was expected. The dollar hit ¥117 as the news broke, the highest since 2007.

A 24-Year Old Streak In The Korean Auto Market Has Ended. South Korea is on track to spend more on vehicle imports from Europe this year than it earns from exports the other way, for the first time in 24 years, as German brands breach the once impregnable fortress of Hyundai Motor and its local rivals.

The Landmark Shanghai-Hong Kong Stock Link Just Opened. The link is expected to drive billions of dollars of trading every day.

Australia And China Just Sealed A Trade Deal. China and Australia on Monday signed a declaration of intent on a landmark free trade deal more than a decade in the making, opening up markets worth billions to Australia and loosening restrictions on Chinese investment.

Facebook Is Working On A Professional Development Website. Facebook is secretly working on a new website called "Facebook at Work" that would allow users to keep their personal profile separate from their work profile, the Financial Times reported.



Read more: http://www.businessinsider.com/european-markets-open-nov-17-2014-2014-11#ixzz3JKLGCDny

[Demeter]

18. After the G20 summit, Europe moves on the Ukraine crisis

http://www.dw.de/after-the-g20-summit-europe-moves-on-the-ukraine-crisis/a-18068276

Critical words from Western leaders don't seem to have bothered Vladimir Putin. Following the G20 summit in Brisbane, he seems content to continue the confrontation. Europe, meanwhile, is repositioning. Many heads of state and government leaders used the opportunity presented by the G20 summit in Brisbane to tell Russian President Vladimir Putin what they thought about his role in the Ukraine crisis. Now, at the start of a new week, the EU's foreign ministers will be on the move again, with a meeting planned in Brussels on Monday. The fact that the Russian president approached the West with complete indifference on the matter in Australia makes the task ahead for Europe's top diplomats all the more difficult.

German Chancellor Angela Merkel, who seems to have the - relatively - best relationship with Putin, had a private meeting of several hours with him in Brisbane, which she left without comment. In Brussels, European governments must now coordinate their reactions to the rhetorical and military offensives being launched by the Kremlin.

In any case: Stricter sanctions are not currently on the table, according to German Foreign Minister Frank-Walter Steinmeier. "But we will discuss making a sanctions list of eastern Ukrainian separatists, which would limit their access to assets and their freedom to travel," he said.

No results from EU sanctions

Up to this point, the economic sanctions imposed by Europe have wrought no concrete political changes save for more saber-rattling from Moscow. Was it an illusion to believe that one could bring about a shift in a situation of political conflict by targeting Putin's political circle?

"I don't think it's completely an illusion," says Jan Techau, a security expert and director of the research institute Carnegie Europe. "After all, what you hear in Putin's inner circle are quite different views on how to proceed."

For some, the price is already too high, according to the security expert: "One shouldn't forget, those who survive in Putin's team are existentially dependent on loyalty to their own country." The Russian economy is not in a strong position, and to let it bleed dry would certainly hurt. Thus public opinion could have a massive influence on Putin's inner circle.

"All signs point to this," confirms Giles Merrit of the Brussels-based institute Security and Defense Agenda. "That the economic sanctions are beginning to bite. And it won't be long until they impact normal Russian citizens."

The Kremlin, however, doesn't seem to be considering this. The expansion of military threats in the Pacific are also quite strange, in Merrit's view: "What could be the purpose, outside of showing the Russian public that Russia is once again a superpower?"

Economic considerations would only be superimposed on the visibility of Russian politics, thinks Merrit. It has long been clear that Russians feel humiliated and disregarded by the West, and consider the West's policy towards Ukraine provocative.

"Something has been deeply moved in the Russian soul, and they're very upset."


Green party politician Rebecca Harms, member of the Ukraine committee in the European Parliament, is promoting taking a balance of accounts: "You have to evaluate where you stand with trying to find a non-military solution to the deepening crisis that has been going on since the annexation of Crimea." It has been clear from the beginning, Harms thinks, that economic sanctions need time to start showing results: "At the moment, the Russian economy is in decline, in free fall if you look at the ruble. That is not only because of the sanctions, but also because of the decrease in oil prices." Because of this, Russia has had to rely almost exclusively on energy exports. What the Europeans do next should be twofold, according to the Green politician. "First, make it clear that sanctions will continue and that everyone is behind this, and secondly everyone should agree that no EU countries will do any big business with Russia." As examples, she cites the sale of German natural gas infrastructure to the Russian company Gazprom and two undelivered French Mistral warships Instead of doing business, Europeans should be jointly preparing for getting along with less natural gas from Russia. An emergency plan for the winter "should be made not only for Ukraine but for the whole EU." More independence from Russian gas, according to Harms, is the most important thing the EU foreign ministers have to achieve.


WELL, THE EUROPEAN GREEN PARTY IS AS DISCONNECTED FROM REALITY AS THE REST OF EUROPE...THIS AMAZINGLY DELUSIONAL "WAITING FOR GODOT" SCENARIO WOULD MAKE A CAT LAUGH.

[Demeter]

19. Dogbert Shows Us How It's Done

[Demeter]

20. International Business Defying Expectations, Japan’s Economy Falls Into Recession By JONATHAN SOBL

ANYONE WHO EXPECTED A DIFFERENT RESULT WAS ....MY FAVORITE WORD TODAY....DELUSIONAL!

http://www.nytimes.com/2014/11/17/business/international/defying-expectations-japans-economy-shrinks-further.html?_r=0

Japan’s economy unexpectedly fell into recession in the third quarter, a painful slump that called into question efforts by Prime Minister Shinzo Abe to pull the country out of nearly two decades of deflation.

The second consecutive quarterly decline in gross domestic product could upend Japan’s political landscape. Mr. Abe is considering dissolving Parliament and calling fresh elections, people close to him say, and Monday’s economic report is seen as critical to his decision, which is widely expected to come this week.

Rising sales taxes have been blamed for triggering the downturn by deterring consumer spending, and with Japan having now slipped into a technical recession, the chances that Mr. Abe will seek a new mandate from voters to alter the government’s tax program appear to have increased significantly.

The preliminary economic report, issued by the Cabinet Office, showed that gross domestic product fell at an annualized pace of 1.6 percent in the quarter through September. That added to the previous quarter’s much larger decline, which the government now puts at 7.3 percent, a slightly worse figure than in its last estimate of 7.1 percent.

MUCH MORE MOANING AND GROANING AT LINK

AUSTERITY DURING DEFLATION...WHAT WILL THOSE CRAZY PSEUDO-ECONOMISTS THINK OF NEXT?

[xchrom]

21. The Pentagon Is Tightening Its Belt

http://www.businessinsider.com/heres-how-the-pentagon-is-tightening-its-belt-2014-11

SIMI VALLEY Calif. (Reuters) - Short of funds, and awash in global challenges, the U.S. military-industrial complex is betting on robotics and other new technologies to stay ahead of rapid advances in weapons development by China, Russia and other potential foes.

But with budgets already under pressure and deeper cuts looming in fiscal 2016, it remains uncertain if the Pentagon can win support in Congress to speed up the acquisition process and turn the new technologies into game-changing weapons.

Defense Secretary Chuck Hagel unveiled a new "Defense Innovation Initiative" at a conference at the Ronald Reagan Presidential Library on Saturday, an effort to secure and expand the U.S. military's competitive edge.

Hagel cited robotics, autonomous systems, miniaturization, big data and three-dimensional printing as key areas, but gave none of the funding details that industry executives say they need to guide their own investments.



Read more: http://www.businessinsider.com/heres-how-the-pentagon-is-tightening-its-belt-2014-11#ixzz3JKNzLrsT

[Demeter]

22. What Republicans Can Do About Stagnating Wages FORBES OP-ED TYPICAL GOP CRAP

http://www.forbes.com/sites/abbymccloskey/2014/11/16/what-republicans-can-do-about-stagnating-wages/

The 2014 midterms were a referendum on the left’s economic agenda. Republicans were handed the House and Senate in a historic landslide. Exit polls showed voters’ biggest concern was the economy, which has sputtered after six years of big government policies. Now, it’s the right’s turn. There are many economic improvements to be made, but Republicans would do well to focus their attention on stagnating incomes – an issue felt by nearly 90% of the U.S. population. From 2010 to 2013, mean household income fell or was flat for all except the top income decile, according to recent research from the Federal Reserve. Low-wage workers were the hardest hit. Mean income for households in the bottom quintile declined by 8% during this time period. The average American family has less income today than they did twenty-five years ago. In 2013, the real median family income was $51,939 compared to $52,432 in 1989, using 2013 dollars.



Some may say that low incomes are cyclical, a lingering result of the recession. While the recession is certainly a factor, median household income has been steadily dropping for the better part of a decade. Low-wage workers have been experiencing downward pressure on wages for nearly thirty years. Time alone will not heal these trends. Nor will massive government intervention. The Obama administration tried this, and it backfired miserably. They overhauled the financial and healthcare systems, passed an $800 billion stimulus package, increased taxes on investment and the wealthy, and maintained the highest corporate tax rate in the developed world. By freezing capital and and tying up the economy in rules and regulation, many of these reforms left the middle class more vulnerable, not less.

The key to higher incomes lies in increasing demand for labor and freeing up capital so workers can be more productive. Two days after the election, House Speaker John Boehner and incoming Senate Majority Leader, Mitch McConnell, laid out an agenda in the Wall Street Journal for just that. Their priorities included expanding U.S. energy production, reforming the tax code, reigning in overzealous regulatory reach, and reforming the education system. Any or all of these reforms would increase economic opportunity and lay the groundwork for higher family incomes. However, the benefits of pro-growth policies may take years to be felt. In the short-term, pocketbooks continue to be squeezed. Republicans can fill that gap by providing immediate relief to families struggling to make ends meet. One way to boost incomes that has garnered wide bipartisan support is an expansion of the Earned Income Tax Credit (EITC). The EITC is essentially a wage subsidy for low-wage workers, helping to counter the downward pressure on wages. Because the EITC increases the rewards of working, numerous academic studies have found that it also increases the labor force participation rate. Expanding the program for childless workers would provide substantial relief to single men and women left out of most other government support programs. Additionally, reducing the marriage penalty by adding a secondary earner deduction would help low-wage, two-earner households. These reforms would cost money, but could be partially offset by more tax revenue from more workers and less dependence on other welfare programs.

Another way to increase take-home income is childcare support. Child care cuts into a significant portion of wages, and as such, reduces the rewards to work. The average family spends approximately 7% of their income on child care. This increases to 30% or more for impoverished families. In my paper with Aparna Mathur, “How to improve economic opportunity for women,” we find that high childcare costs discourage many women from working at all. Current government programs for childcare provide little to no support for low-and-middle-wage workers. The child and dependent care tax credit is non-refundable, and as a result, namely benefits upper-income families. Only 8% of benefits went to households with incomes less than $30,000 in 2006, according to an analysis by the Tax Policy Center. Making the credit partially refundable would provide relief to working parents.

Finally, government barriers to work and higher income should be reduced. The Affordable Care Act (ACA) is a perfect example. Because of mandated benefits, the ACA will lead to a reduction in aggregate compensation of about 1% by 2024 according to the Congressional Budget Office. Additionally, because subsidies phase out with higher income, the ACA in effect functions as a tax on work. The marginal tax rates from the ACA from phasing out the subsidies could reach 50% for some earners when combined with other taxes and benefit programs, according to research by Casey Mulligan. These incentives are repeated throughout numerous government programs. For example, the Congressional Budget Office found that the phase-out of welfare programs can result in a 100% marginal tax rate. Comprehensive tax reform is needed to reduce these disincentives to work. However, until that can be achieved, a more immediate way to mitigate these negative incentives and boost incomes for working families could be through a payroll tax cut.

The next two years are a huge opportunity for Republicans to show that they can lay the groundwork for economic growth in the future and provide relief to workers today. After all Americans have been through, these years can’t come soon enough.


THESE PROPOSALS ARE LESS ABOUT "LAYING A FOUNDATION FOR GROWTH" AND MORE ABOUT PILING SANDBAGS AROUND THE LAST REMNANTS OF THE MIDDLE CLASS--WITHOUT DIVERTING THE PERFECT STORM THAT GLOBALISTS, AUSTERIANS, AND REPUBLICANS HAVE RAISED.

Abby McCloskey

I am an economist living in Dallas, Texas. I previously served as the Program Director of Economic Policy at the American Enterprise Institute, where my research focused on financial regulation and economic mobility. Prior to AEI, I was the Director of Research at the Financial Services Roundtable and a staffer for Senator Richard Shelby (R-AL). In addition to Forbes, my work has appeared in the Wall Street Journal, American Banker, National Review, US News and World Report, Real Clear Markets, and other publications. I’ve appeared on television, including Fox News, Fox Business, Al Jazeera, Voice of America, and other media outlets. In 2014, I testified before Congress on the Dodd-Frank Act. 
 I hold a Masters of Science in applied economics from Johns Hopkins University and a Bachelor of Arts in economics from Wheaton College. You can follow me on Twitter @McCloskeyAbby.

YEAH, I COULD HAVE GUESSED....AEI REARING ITS SNAKE HEAD

[xchrom]

23. STATES WORKING TO FIX HOBBLED HEALTH CARE WEBSITES

http://hosted.ap.org/dynamic/stories/U/US_HEALTH_OVERHAUL_STATE_EXCHANGES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-11-16-14-07-47

BOSTON (AP) -- The state that served as a template for President Barack Obama's Affordable Care Act had so much trouble coordinating with the federal government that it became a model of another sort: ineptitude.

The Massachusetts website, designed by the same contractor that worked on the troubled federal website, performed so poorly it prompted a public apology from Gov. Deval Patrick and forced health care officials to adopt a series of manual workarounds, creating a backlog of more than 50,000 paper applications.

Massachusetts was one of several states where the ambition of running their own health insurance marketplace inside a new federal system ran into a harsh reality.

Some, like Oregon and Nevada, folded and decided to go with the federal exchange for the second round of open enrollment, which began Saturday. Others, like Maryland and Massachusetts, fired their technology contractors and are hoping for better results this time.

It hasn't been cheap.

[xchrom]

24. CHINA AND AUSTRALIA SIGN FREE-TRADE DEAL

http://hosted.ap.org/dynamic/stories/A/AS_AUSTRALIA_CHINA?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-11-17-03-56-27

CANBERRA, Australia (AP) -- China and Australia signed a preliminary free-trade deal on Monday that would give Australia's service industry unsurpassed access to the Chinese market and Australian agriculture advantages over competitors from the United States, Canada and the European Union, officials said.

Chinese President Xi Jinping witnessed the signing by Australian and Chinese officials of a declaration of intent which officially concluded negotiations that began in 2005.

Xi earlier told Australia's Parliament that China was committed to peaceful development and resolution of territorial disputes. But China expected some concern about its rise because "it's like a big guy in the crowd."

"Others will naturally wonder how the big guy will move and act and be concerned that the big guy may push them around, stand in their way, or even take up their place," he said.

[xchrom]

25. HONG KONG-SHANGHAI STOCK LINK MAKES LOPSIDED DEBUT

http://hosted.ap.org/dynamic/stories/A/AS_HONG_KONG_CHINA_STOCK_EXCHANGES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-11-17-04-03-44

HONG KONG (AP) -- International investors plowed money into Shanghai's stock market, maxing out their daily limit, in the debut Monday of a landmark trading link that gives outsiders wider access to mainland China's main stock market through brokers in Hong Kong.

In contrast, the flow of money in the opposite direction was just a trickle on the first day of trading on the Shanghai-Hong Kong Stock Connect, which lets investors buy and sell shares through each other's exchanges.

"Today we are going to witness history," C.K. Chow, chairman of stock exchange operator Hong Kong Exchanges and Clearing, said at an opening ceremony. "It is a breakthrough in the opening up of China's financial markets and an important milestone in the development of Hong Kong as a unique gateway between the mainland and international investors."

Chow and Hong Kong leader Leung Chun-ying banged a gong at the Hong Kong stock exchange to mark the start of trading. In Shanghai, city Communist Party Secretary Han Zheng and China Securities Regulatory Commission Chairman Xiao Gang hit their own gong at the same time.

[Demeter]

26. Chocoholics beware! A chocolate shortage looms: Report

http://www.cnbc.com/id/102189158

Bad news: chocolate, the delicacy of choice for children, chocoholics and depressives everywhere, has become increasingly expensive. Now comes even worse news: global supplies of the brown stuff are becoming increasingly scarce, according to one report. The Washington Post reported on Saturday that due to a host of factors, a perfect storm is brewing that is creating a worldwide shortage of chocolate. According to the report, two of the world's largest chocolate confectionaries, Mars and Barry Callebaut, are sounding alarm bells.

Cocoa—the base ingredient for chocolate—has surged this year by at least 10 percent, on the heels of a 20 percent run up last year. The commodity's surging price, led mostly by surging emerging market demand, has led some analysts to believe chocolate may eventually become a luxury item. The problem, however, may be more acute than even some believed. The Post cited data showing the world ate more than 70,000 metric tons of cocoa than it produced in 2013. By 2020, the two major chocolate manufacturers believe that deficit could burgeon to more than a million, a whopping 14-fold surge. By 2030, the gap could blow out to 2 million metric tons.

All told, chocolate prices have exploded by more than 60 percent since 2012, according to The Post, forcing chocolate makers to hike retail prices. If the shortage continues, and if prices continue to rise, people drowning their sorrows in chocolate may be a thing of the past.

Still, there may be hope on the horizon. An agricultural research group in Central Africa is developing trees that can produce up to seven times the amount of beans traditional cocoa trees can, The Post added.

[Demeter]

27. State Dept Computers Hacked, Email Shut Down

http://www.huffingtonpost.com/2014/11/16/state-dept-computers-hacked_n_6167696.html?utm_hp_ref=business&ir=Business

The State Department has taken the unprecedented step of shutting down its entire unclassified email system as technicians repair possible damage from a suspected hacker attack.

A senior department official said Sunday that "activity of concern" was detected in the system around the same time as a previously reported incident that targeted the White House computer network. That incident was made public in late October, but there was no indication then that the State Department had been affected. Since then, a number of agencies, including the U.S. Postal Service and the National Weather Service, have reported attacks.

The official said none of the State Department's classified systems were affected. However, the official said the department shut down its worldwide email late on Friday as part of a scheduled outage of some of its internet-linked systems to make security improvements to its main unclassified computer network. The official was not authorized to speak about the matter by name and spoke on condition of anonymity.

The official said the department expects that all of its systems will be operating as normal in the near future, but would not discuss who might be responsible for the breach. Earlier attacks have been blamed on Russian or Chinese attackers, although their origin has never been publicly confirmed.

The State Department is expected to address the shutdown once the security improvements have been completed on Monday or Tuesday.

[xchrom]

28. Norway Wealth Fund Outsmarts Flash Boys as Algorithms Abandoned

http://www.bloomberg.com/news/2014-11-16/norway-wealth-fund-outsmarts-flash-boys-as-algorithms-abandoned.html

Oeyvind Schanke, head of asset strategies at Norway’s $860 billion sovereign wealth fund, has worked out how to dodge traders in the U.S. trying to profit on his orders by leaving no pattern for them to track.

Investors who want to pre-empt trades by the world’s biggest sovereign-wealth fund and act on that information to make a profit -- a practice known as front running -- won’t have much success, he said.

“We’ve done a lot to try and avoid leaving those patterns,” Schanke said in a Nov. 14 interview at the Oslo headquarters of the fund. “We’re trading less using algorithmic trading now than we did some years ago and are doing much more trading in large block sizes to avoid pattern-reading.”

Norges Bank Investment Management, which runs the wealth fund as part of the central bank, held about $150 billion in U.S. stocks at the end of September, according to its latest quarterly report. It holds $500 billion in stocks globally and is Europe’s biggest investor. Schanke, who started at the fund as a trader in 2001, oversees which companies and instruments it invests in from NBIM’s London office.

[Demeter]

33. The Norwegians are Nobody's Fool

[Demeter]

29. Prosecutors troubled by extent of military fraud

http://hosted.ap.org/dynamic/stories/U/US_MILITARY_CORRUPTION?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT

Fabian Barrera found a way to make fast cash in the Texas National Guard, earning roughly $181,000 for claiming to have steered 119 potential recruits to join the military. But the bonuses were ill-gotten because the former captain never actually referred any of them. Barrera's case, which ended last month with a prison sentence of at least three years, is part of what Justice Department lawyers describe as a recurring pattern of corruption that spans a broad cross section of the military.

In a period when the nation has spent freely to support wars on multiple fronts, prosecutors have found plentiful targets: defendants who bill for services they do not provide, those who steer lucrative contracts to select business partners and those who use bribes to game a vast military enterprise. Despite numerous cases that have produced long prison sentences, the problems have continued abroad and at home with a frequency that law enforcement officials consider troubling.

"The schemes we see really run the gamut from relatively small bribes paid to somebody in Afghanistan to hundreds of millions of dollars' worth of contracts being steered in the direction of a favored company who's paying bribes," Assistant Attorney General Leslie Caldwell, head of the Justice Department's criminal division, said in an interview.

In the past few months alone, four retired and one active-duty Army National Guard officials were charged in a complex bribery and kickback scheme involving the awarding of contracts for marketing and promotional material, and a trucking company driver pleaded guilty to bribing military base employees in Georgia to obtain freight shipments - often weapons which required satellite tracking - to transport to the West Coast. More recently, a former contractor for the Navy's Military Sealift Command, which provides transportation for the service, was sentenced to prison along with a businessman in a bribery case in which cash, a wine refrigerator and other gifts traded hands in exchange for favorable treatment on telecommunications work. Also, three men, including two retired Marine Corps officers, were charged with cheating on a bid proposal for maintenance work involving a helicopter squadron that serves the White House.

Justice Department lawyers say they don't consider the military more vulnerable to corruption than any other large organization, but that the same elements that can set the stage for malfeasance - including relatively low-paid workers administering lucrative contracts, and heavy reliance on contractor-provided services - also exist in the military.


MORE CORRUPTION AT LINK

[Demeter]

30. Shrinking the Financial Sector Will Make Us All Richer The Washington Monthly / By Michael Konczal

http://www.alternet.org/economy/shrinking-financial-sector-will-make-us-all-richer?akid=12471.227380.I65iOG&rd=1&src=newsletter1027194&t=19





If you want to know what happened to economic equality in this country, one word will explain a lot of it: financialization. That term refers to an increase in the size, scope, and power of the financial sector—the people and firms that manage money and underwrite stocks, bonds, derivatives, and other securities—relative to the rest of the economy.

The financialization revolution over the past thirty-five years has moved us toward greater inequality in three distinct ways. The first involves moving a larger share of the total national wealth into the hands of the financial sector. The second involves concentrating on activities that are of questionable value, or even detrimental to the economy as a whole. And finally, finance has increased inequality by convincing corporate executives and asset managers that corporations must be judged not by the quality of their products and workforce but by one thing only: immediate income paid to shareholders.

The financial system has grown rapidly since the early 1980s. In the 1950s, the financial sector accounted for about 3 percent of U.S. gross domestic product. Today, that figure has more than doubled, to 6.5 percent. The sector’s yearly rate of growth doubled after 1980, rising to a peak of 7.5 percent of GDP in 2006. As finance has grown in relative size it has also grown disproportionately more profitable. In 1950, financial-sector profits were about 8 percent of overall U.S. profits—meaning all the profit earned by any kind of business enterprise in the country. By the 2000s, they ranged between 20 and 40 percent. This isn’t just the decline of profits in other industries, either. Between 1980 and 2006, while GDP increased five times, financial-sector profits increased sixteen times over. While financial and nonfinancial profits grew at roughly the same rate before 1980, between 1980 and 2006 nonfinancial profits grew seven times while financial profits grew sixte en times .

This trend has continued even after the financial crisis of 2008 and subsequent financial reforms, including the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Financial profits in 2012 were 24 percent of total profits, while the financial sector’s share of GDP was 6.8 percent. These numbers are lower than the high points of the mid-2000s; but, compared to the years before 1980, they are remarkably high...MORE

REMEMBER THAT BUZZWORD OF THE 70'S? DISINTERMEDIATION--IT MEANS TAKING THE MIDDLEMAN OUT OF THE DEAL, PURGING THE PARASITES, ETC.

IT WAS USED TO JUSTIFY THE GROWTH OF MONEY MARKET FUNDS TO REPLACE THE INTEREST-BEARING SAVINGS ACCOUNT AND THE SAVINGS BOND.

NOW WE CAN USE IT TO DRIVE OUT THE BANKSTERS--WHO ARE OFFERING CON GAMES AND FRAUD.

[Demeter]

31. Back to 1917 – the wealth distribution in the US

http://bilbo.economicoutlook.net/blog/?p=29465

The current evolution of Capitalism is taking the world back to where it was in the early C20th, before trade unions were strong enough to protect workers’ rights, before central governments were willing to mediate the class struggle and step in to make sure workers had the means to enjoy the material prosperity that the system generated, before wages growth allowed workers to share in productivity growth and build a modicum of material wealth. There is no class struggle, Bill! How many times do I hear that now. It is just a convenient sop by those with a vested interest in promoting that view or who has been conned to believe that to be the case. Of course there is a class struggle. Industrial capital might be sharing the hegemony with totally unproductive financial capital and the robber barons of the C19th and early C20th are less prominent and the banksters and the politicians in their pay have replaced them, but don’t ever think that there is a massive conspiracy to undermine the welfare state and put workers back into an even more subservient position than before. Unemployment, part-time precarious work, tax evasion and all the rest of the scams are working a treat.

The UK Guardian reported in the article (November 12. 2014) – Full-time employee jobs account for only one in 40 created since recession – that the British labour market recovery is a chimera.

1. The Guardian reports that full-time jobs as a share of total employment has fallen from “64% in 2008 to 62% in 2014 … That is equivalent to a shortfall of 669,000 full-time employees.”

2. The Guardian reports that “job creation between 2008 and 2014 has been dominated by rising self-employment and part-time work … Employment increased by 1.08m between January to March 2008 and June to August 2014, but only 26,000 were full-time employee roles.”

3. Companies are now using “false self-employment … to evade taxes and avoid paying out entitlements such as holiday pay, sick pay and pensions.”

THE US STUFF IS AT THE END OF THE ARTICLE...BUT IT'S ALL GOOD

[Demeter]

34. What Makes Japan Bother With the TransPacific Partnership? NAKED CAPITALISM YVES SMITH

http://www.nakedcapitalism.com/2014/11/makes-japan-bother-transpacific-partnership.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

We’ve been giving regular updates, with the considerable help of our man in Japan Clive, on how the the prospects for Japan signing up for the TransPacific Partnership look extremely slim. Mind you, “extremely slim” is not impossible, but the reason we deem the probability to be that low is that the Administration appears unwilling to bargain at all, let alone offer Japan some critical and large concessions that it requires to sign up. And since Japan is a linchpin to the entire deal, if Japan is a no-go, you can kiss the TransPacific Partnership goodbye...The Japanese are a sufficiently alien culture that you are forced to suspend or retrain your assumptions about how things work. So to watch the US Trade Representative, which along with the State Department, ought to be a US agency particularly attuned to how Japan needs special handling, instead do the equivalent of repeatedly step on a rake and get smacked in the face, is entertaining in a perverse way. How can they NOT know that what they are doing is counterproductive? And how can they NOT course correct when it should be obvious that what they are doing isn’t working?

However, even though, as we have discussed, the USTR has acted in a way almost guaranteed to offend the Japanese, the government has reasons for being cool on the TransPacific Partnership yet having to feign otherwise. And they aren’t terribly mysterious either, even though they do vary with US baseline assumptions.\

By Clive, a regular Naked Capitalism commenter and self-confessed Japan-o-phile

One reader asked why it was that, in the face of seemingly tricky terrain in Washington as well as an apparent lack of convincing reasons why the TransPacific Partnership might be of any benefit at all to Japan, Prime Minister Abe is sticking with it.

The simple answer is that politicians, in Japan as elsewhere, want to appear to be in control of events and not at the whim of them. Abe has sunk political capital into the TPP and it is major plank of his (groan) “reform” agenda. He wants to be seen to be getting that agenda implemented. Of course, it is a political matter and thus subject to political considerations like you can’t, in Japan, simply swing a wrecking ball across the entire domestic agricultural industry as the U.S. is demanding Japan should do.

A slightly deeper question is, how did the TPP get on Abe’s (and Japan’s) agenda in the first place?

Firstly, it is probably very difficult for U.S. readers to appreciate what, exactly, it is like to be in a small-ish country with a big regional power nearby. For people in the U.S. you’re the regional power, so it’s like trying to look at a painting while you’re subject in it. It’s very tricky to shift your perspective to view the situation as outsiders do. But if you live in a small country with a big, sometimes belligerent neighbour, it’s instinctive to form alliances. And that can lead you into being not altogether fussy about who those alliances are with and what they entail. Say what you like about the EU, it has demonstrated the ability of countries to form a reasonably coherent group on the world stage and act as a buffer against much larger nation states. What the EU has done with that power is, of course, debatable. Few here would I think disagree that it has ended up debasing what its stated aims are. But that doesn’t change the fact that economic and political alliances can profoundly alter the geopolitical landscape. For good or for ill. Japan doesn’t want to miss the boat — even if we might think it’s the Titanic.

Secondly, Japan’s relationship with other countries is pretty unique. It’s instinct is to be isolationist and separate (the Japanese people do sometimes relish their perception of their own uniqueness; they are pretty unique, but the world is full of unique peoples so even though they’re unique, they’re not unique in being unique. I do hope there weren’t too many reader casualties as a result of that last sentence — I know what I mean anyway…). But Japan knows its own history and fully appreciates that this isolationist tendency has brought it to the brink of two well-understood existential crises in the recent past (I won’t cover these in detail but they are: TWO ATOMIC BOMBS AND A HUMILIATING PEACE TREATY AFTER WWII). The defining characteristic of both these events was that, unbeknown to Japan, it had become vulnerable to technological advances of which it knew little or nothing. It thought it had some cards still to play, but in reality it was a busted flush. The atomic bombings and the Black Ships really did literally and figuratively come at Japan from out the blue.

Japan does not want to be in that position again. This permeates a lot of Japanese thinking. Since the end of WWII, it has deliberately sought information on what it considers the best in current external expertise and know-how on a variety of subjects. It does not, indiscriminately, use non-Japanese consulting firms. But it does use them selectively, where it considers that it might not have the sort of knowledge and experience it needs to have. Of course, sometimes as with any consulting it gets good and urgently needed advice, sometimes it gets bad advice. The Japanese don’t usually take such inputs hook, line and sinker. But they do consider them and they are given credibility (not least because of the above lessons from history). It is also conscious of its relationship with its allies, especially the U.S. Japan implemented the Plaza Accord pretty much exactly as the U.S. wished. That was in some respects very bad advice, but to a lot of Japanese, the U.S. is the most successful economy so it must know what it is doing.

These, then, are the main factors influencing Japan’s continued engagement with the TPP process. Non-Japanese may not entirely understand them, much less agree with them. Quite a lot of Japanese don’t agree with them either. But they do offer an explanation.

[Demeter]

35. Two Detroits, Separate and Unequal: A Journey Across a City Divided

http://www.nakedcapitalism.com/2014/11/two-detroits-separate-unequal-journey-across-city-divided.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

By Laura Gottesdiener, a freelance journalist and author of A Dream Foreclosed: Black America and the Fight for a Place to Call Home. Her writing has appeared in Mother Jones, Al Jazeera, Guernica, Playboy, RollingStone.com, and frequently at TomDispatch. She is currently working with Zuccotti Park Press on a book about climate change and displacement. Originally published at TomDispatch.

In late October, a few days after local news cameras swarmed Detroit’s courthouse to hear closing arguments in the city’s historic bankruptcy trial, “Commander” Dale Brown cruised through the stately Detroit neighborhood of Palmer Woods in a Hummer emblazoned with the silver, interlocking-crescent-moon logo of his private security company. Brown rolled down the window to ask a middle-aged woman walking her dog whether everything was okay (it was), and whether she had seen anything out of the ordinary (she hadn’t). Satisfied, he continued on, guided by a futuristic tablet map of the neighborhood’s languid streets. These had become even more impenetrable last year when the bankrupt city paid for and constructed a series of traffic barriers on the community’s edges. On his right, he pointed out, was the Bishop’s Residence, a 30-room Tudor Revival castle originally commissioned by a family of fabulously wealthy automobile pioneers who later sold their company to General Motors.

“This is the part of Detroit that most people are not aware of,” Brown told filmmaker Messiah Rhodes and me. And indeed, the turreted neighborhood did look far more like something you would find in Detroit’s mostly white suburbs than deep inside the city itself.

Brown is the founder of Threat Management, a private security company hired by the Palmer Woods’ neighborhood association to provide 24-hour protection to this elite enclave. He knows the two sides of Detroit more intimately than just about any of its residents. After a stint as an Army paratrooper, he moved to the city’s East Side in the mid-1990s and into a neighborhood dubbed “crack alley.” There, he started running free security for his neighbors and a few adjacent apartment buildings with only a rifle, a dog, and psychological tricks like heavily pocketed vests, since “pockets represent the unknown.” Next, he worked at a nightclub, enforcing such a strict no-beating-women-on-the-dance-floor policy that the joint soon had a regular stiletto-heeled line out the door. Two decades later, Brown’s officers, with their distinctly paramilitary aesthetic, are among the most recognizable of a burgeoning number of private security personnel and surveillance systems scattered across neighborhoods in the former Motor City that people with money have decided are worth protecting.

But the future of the rest of the sprawling city — once the symbol of American industrialization and working-class power — remains at best insecure, physically and financially. In the 1940s, President Franklin Roosevelt declared Detroit, then the nation’s fourth largest city, the “great arsenal of democracy” for churning out bombers for the Allied powers, as in peacetime it rolled out cars for the consumer economy. Then the auto giants began closing their urban factories and reopening their plants in white suburbs. In the same era, the industry, national unions, and the FBI all cracked down on the labor organizations founded by radical black workers.

The foreclosure crisis of this century, fueled by racially discriminatory predatory lending, forced hundreds of thousands of residents out of the city. The governor’s office placed the public school system and then the entire local government under emergency management, suspending the democratic process in the “arsenal of democracy.” And now, after seven decades of these slow-moving storms, including acts that are almost impossible to see as anything but retribution against the city’s predominantly African American population, Detroit is often viewed from afar as a cautionary tale, a post-industrial dystopia of vacant buildings and dormant factories.

The truth, however, is more complicated. On the brink of a new, post-bankruptcy beginning, Detroit is really two cities. One is comprised of wealthy enclaves like Palmer Woods linked to a compact, rapidly redeveloping downtown. The other is made up of the rest of the 139-square-mile urban expanse, populated by longtime residents who have fought for decades to survive in an environment that has become increasingly uninhabitable. In the first Detroit, private security is common and the living is relatively safe. In the second, running water has systematically been cut off from at least 27,000 households this year alone, the latest in a series of government-enacted policies that have made daily life an increasingly desperate battle. Rather than growing closer in the coming post-bankruptcy era, many residents fear that these two Detroits — already so separate and unequal — will have increasingly divergent futures....For Wayne State law professor Peter Hammer, however, lurking in the bankruptcy plan is a potential future that’s far more sinister than anyone is advertising. As Hammer explained, Detroit has become a blueprint for the creation of a “self-acknowledged, self-defined second-class city,” one where the state guarantees only the most basic services to most of its inhabitants: “some police,” “some fire protection,” and “a bulldozer department” to raze abandoned houses, while the remaining essential services will be available only on a private basis for those who can pay.

That Detroit is a more than 80% African American metropolis makes the idea of its rise from bankruptcy with second-class status all the more problematic. As Hammer explains, the plan for Detroit bears an eerie back-to-the-future resemblance to the famed Kerner Commission report of 1968, issued by a presidentially appointed panel in the wake of the urban rebellions that were then sweeping the country. Its findings were that the nation was moving toward two societies: black and white, separate and unequal....As the city government has receded, a lack of services has made parts of Detroit all but uninhabitable. The injustices pile up: the threat that Child Protective Services will seize custody of children who are living in waterless homes; the streets upon streets of emptied houses, their roofs caving in, their porches collapsing, their bricks blackened by fire; the all-too-common violent deaths in neighborhoods without private security, where residents must rely on a decimated public police force that clocked an average response time of 58 minutes in 2013; the charade of public school board meetings, where few decisions can be made because the school district is under the control of an unelected emergency manager the board has voted three times without success to fire; the death of a seven-year-old girl at the hands of a Detroit police officer wielding a submachine gun as his unit was being filmed executing home raids for an A&E reality TV show; the heartbreak of watching the city being disassembled and sold off as if at an estate sale — despite the fact that this Detroit has declared it will not die....Many here quietly wonder about the purposefulness of it all or, as one resident finally asked the U.N. officials during their visit: “Does this, all that you’ve heard, meet the legal definition of genocide?”

And yet, despite these injustices and the feeling of bitterness that go with them, each morning this Detroit, too, rises.... For the record, because this is not made clear in the article, both Palmer Woods and East English Village, enclaves in Detroit that ‘look far more like something you would find in Detroit’s mostly white suburbs” are both more than 80% black.

Black elites really do not differ from white elites all that much.

I EDITED OUT SO MUCH OF THIS...THE CURIOUS WOULD BE GLAD TO READ THE WHOLE THING

[Demeter]

36. The Author of the Obamacare Clusterfuck Speaks about "Stupid American Voters"

LOTS OF DAMNING COMMENTARY AT LINK. THANKS TO NAKED CAPITALISM AND Lambert Strether

http://www.nakedcapitalism.com/2014/11/jonathan-gruber-obamacare-stupid-voters-couldnt-happen-nicer-shill.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

YES, FOLKS WE'VE BEEN HAD, AND SINGLE PAYER (NOT PEOPLE DYING FOR LACK OF AFFORDABLE HEALTH CARE) IS THE ENEMY:

think for a minute about what Gruber’s magic box is really doing; far from being a “statistically sophisticated” “micro-simulation model,” it’s really got exactly one output, and it emits that output every single run when der Blinkenlights stop flashing: “Not single payer.” That’s by design; and Gruber’s software is quite performant. That’s why the the “long advocated” point that Krugman makes defending Gruber against Greenwald is irrelevant:

"And one more thing: what Gruber has had to say about health reform in the current debate is entirely consistent with his previous academic work. There’s not a hint that he has changed views, or altered his model, to accommodate the Obama administration."

That’s at best silly and at worse disingenous; the single output of Gruber’s model (“not single payer”) never changes by design, and the basic parameters of the model were set by the Heritage Foundation in 1989, and all Gruber’s clients accept them; indeed, they hire them to validate their assumptions, not for simulation. Krugman is treating Gruber as if he were a scholar, when in fact Gruber is a consultant doing work-for-hire; his clients’ requirements have not changed, so naturally his deliverables have not changed.

[Demeter]

37. Private Equity (HEDGE FUNDS) Now Looking to Even Bigger Chumps, Namely 401 (k)s and Retail

http://www.nakedcapitalism.com/2014/11/private-equity-now-looking-even-bigger-chumps-namely-401-ks-retail.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

One of the reasons that private equity has managed to flourish is that its biggest investor group is what is traditionally referred to as dumb money: public pension funds, which account for 25% of industry assets. Readers may recall that even CalPERS, widely considered to be the savviest public pension fund, recently had a public board meeting where the questions asked of prospective gatekeepers, the pension fund consultants, were, with one exception, softballs. And that question was the only one to address the SEC’s revelation that private equity firms have been engaging in large scale fee-skimming and other forms of grifting. And remember, the SEC also stated that the investors in these funds, known in industry nomenclature as limited partners, have done a crappy job of negotiating their agreements.

But in predictable fashion, as one group of marks, um, sales targets, starts to dry up, private equity funds, aka general partners, are hunting for new ones. And having gone very systematically after every conceivable large pot of money, the only place left for them to go is down market, in terms of size and sophistication. As private equity industry expert Eileen Appelbaum explains in The Hill, both public and private pension funds, another big money source for private equity, are shrinking as pensions generally are under attack. So the prize for private equity is to get its hands on retail investors, namely, even lower tier wealthy and 401 (k) plans.

Before we get into how this is happening, we need to step back and underscore why this is a terrible idea. Private equity returns, even for institutional investors, are exaggerated. These reported returns do not beat stocks on a risk-adjusted basis. And that’s even when you use a measure that flatters private equity, with is internal rates of return. As we’ve discussed, IRR is known by anyone with a even a smidgen of finance training to be a terrible measure. One of the big reasons why is it overstates performance relative to better metrics, such as the widely used gold standard of discounted cash flows, or one that some academics view fondly, called public market equivalent.

So understand this: private equity’s entire raison d’etre is its allegedly superior returns. If that is bunk, the rationale for investing in private equity collapses. The other justification for investing in it, that its profile of returns doesn’t covary much with other investments, is highly sus, given that private equity is essentially levered equity. Many experts believe that the supposed differentiated pattern of returns depends heavily on private equity “smoothing” as in not marking their portfolios to market at times when markets are terrible...

[Demeter]

38. Thomas Frank on Ronald Reagan...: How ’70s and ’80s cynicism poisoned Democrats and America

http://www.salon.com/2014/11/16/thomas_frank_on_ronald_reagans_secret_tragedy_how_70s_and_80s_cynicism_poisoned_democrats_and_america/?source=newsletter


Nixon's lies and Reagan's charms created the space for Clinton, Carter and Obama to redefine (and gut) liberalism...“The Invisible Bridge” is the third installment in Rick Perlstein’s grand history of conservatism, and like its predecessors, the book is filled with startling insights. It is the story of a time much like our own—the 1970s, which took America from the faith-crushing experience of Watergate to economic hard times and, eventually, to a desperate enthusiasm for two related figures: the nostalgic presidential aspirant Ronald Reagan, and the “anti-politician” Jimmy Carter. (I discussed Perlstein’s views on Carter in this space a few weeks ago.)

In blending cultural with political history, “The Invisible Bridge” strikes me as an obvious addition to any list of nonfiction masterpieces. But I also confess to being biased: Not only do I feel nostalgia for many of the events the book describes—Hank Aaron’s pursuit of the home run record, for example—but I have been friends with Rick since long ago, when he was in college and The Baffler was publishing his essays. I interviewed Rick on an Amtrak train traveling from Seattle to Portland, Oregon, a few weeks ago (we were there to do readings from a new anthology of essays); here is an edited transcript of our conversation....

READ-WORTHY AND NOSTALGIC!

FRANK RIPS THE SCABS OFF WATERGATE, POLITICS OF THE 70'S AND 80'S VIETNAM, THE WORKS!

[Demeter]

39. The Police Are Still Out of Control I should know. By FRANK SERPICO

http://www.politico.com/magazine/story/2014/10/the-police-are-still-out-of-control-112160.html#.VGlD74ddBsQ

AN AMAZING STORY---NEW TO ME, BUT WORTH A RE-READ, IMO.

[Demeter]

40. D.C. police plan for "future seizure proceeds" years in advance in city budget documents

http://www.washingtonpost.com/investigations/dc-police-plan-for-future-seizure-proceeds-years-in-advance-in-city-budget-documents/2014/11/15/7025edd2-6b76-11e4-b053-65cea7903f2e_story.html?hpid=z4

D.C. police have made plans for millions of dollars in anticipated proceeds from future civil seizures of cash and property, even though federal guidelines say “agencies may not commit” to such spending in advance, documents show.

The city’s proposed budget and financial plan for fiscal 2015 includes about $2.7 million for the District police department’s “special purpose fund” through 2018. The fund covers payments for informants and rewards.

The financial details emerged Wednesday, when the D.C. Council’s judiciary committee unanimously voted to forward a bill that would overhaul asset forfeiture laws in the nation’s capital. The bill would raise the threshold of proof required for a forfeiture, bolster the rights of individuals whose property has been taken and require that proceeds from seizures under federal law go into the city general fund, rather than directly to the police department. The full council is set to vote on the bill Tuesday.

Council member Tommy Wells, chairman of the Committee on the Judiciary and Public Safety, said police should not have a financial incentive to make seizures. He said the bill addresses problems that are common across the country.

“All across the nation, law enforcement agencies are directly benefiting from forfeiture,” said Wells (D-Ward 6), who is leading the effort to reform asset forfeiture in the District. “In those places, forfeiture proceeds go directly to the law enforcement entity, creating at best the appearance of a conflict of interest, and at worst, an unchecked incentive for slush funds.”

...MORE

UNBELIEVABLE! IS IT FASCISM, YET? OR MORE LIKE COLOMBIA?

...Police can make seizures under state or federal laws....

[Demeter]

41. Borrowers, Beware: The Robo-Signers Aren’t Finished Yet

http://www.nytimes.com/2014/11/16/business/borrowers-beware-the-robosigners-arent-finished-yet.html?partner=rss&emc=rss

Remember the robo-signers, those mortgage loan automatons who authenticated thousands of foreclosure documents over the years without verifying the information they were swearing to?

Well, they’re back, in a manner of speaking, at least in Florida. Their dubious documents are being used to hound former borrowers years after their homes went into foreclosure.

Robo-signer redux, as it might be called, has come about because of an aggressive pursuit of former borrowers by debt collectors hired by Fannie Mae, the mortgage finance giant. What Fannie is trying to recoup from these borrowers is the difference between what the borrowers owed on the mortgages when they were foreclosed and the amount Fannie received when it resold the properties.

These monetary amounts — and they can be significant — are known as deficiency judgments. It is legal in most states for lenders to pursue them. (California is one notable exception.) The time limit for debt collectors to go after former borrowers varies from state to state; Florida allows deficiencies to be pursued for 20 years, and borrowers must pay a compounded annual interest rate of 4.5 percent.

The problem, experts say, arises when robo-signed documents enabled banks to foreclose even when they didn’t have legal standing to do so...

[Demeter]

42. UNBELIEVABLE

An additional challenge for borrowers facing these suits is that many have left Florida and must defend these cases from a distance. Late last month, Mr. Parker filed a class action against Dyck-O’Neal, contending that its attempts to collect these deficiencies violated the Fair Debt Collection Practices Act, which bars debt collectors from suing consumers in courts that are distant or inconvenient to them.

The lead plaintiff in the class action is a former borrower who was sued in Florida but who lives in St. Louis.

“It’s bad enough that Fannie Mae and their collectors are pursuing consumers many years after they’ve lost their homes,” Mr. Parker said. “But the fact that these lawsuits may be built on a foundation of foreclosure fraud is galling.”

Amazing, isn’t it, how the effects of the foreclosure crisis go on and on?

[Demeter]

43. World Economy Worst in Two Years, Europe Darkening, Deflation Lurking: Global Investor Poll

http://www.bloomberg.com/news/2014-11-13/world-outlook-darkening-as-89-in-poll-see-europe-deflation-risk.html

NOT A GOOD THING--STILL A BIT DELUSIONAL ABOUT US ECONOMY, BUT THE REST OF THE WORLD...IN THE TOILET.

[DemReadingDU]

44. The Gambler

Kenny Rogers' The Gambler on the Muppet Show

&feature=youtu.be

[bread_and_roses]

45. oh goddess ... just reading the titles & 1st paragraphs

... I keep repeating your mantra ..."what cannot endure ..." But I feel like that prophet or whoever crying "how long, lord, how long???"

I have been having fly-by shoot-outs around here with ACA defenders and 1% apologists but I get bored quickly. I simply don't have the concentration right now to contribute here, but I'm grateful as always that the SMWers are on the job.