STOCK MARKET WATCH -- Thursday, 16 April 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Thursday, 16 April 2015[font color=black][/font]

SMW for 15 April 2015

AT THE CLOSING BELL ON 15 April 2015
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Dow Jones 18,112.61 +75.91 (0.42%)
S&P 500 2,106.63 +10.79 (0.51%)
Nasdaq 5,011.02 +33.73 (0.68%)


[font color=black]10 Year 1.89% 0.00 (0.00%)
[font color=green]30 Year 2.54% -0.01 (-0.39%) [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)
Market Updates
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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. Spring is Sprung, there's no going back

the willows are leafing, the forsythia blooming, the primroses are in bud. The fruit trees are breaking leaf, the daffodils will bloom tomorrow.

We are having a bona fide Spring this year. That only happens once every dozen years or so.

[Demeter]

2. A few Hymns to the season

[Demeter]

18. Another beautiful day (#6) with a chance of April Showers!

Enjoy it. I will be sweating in the dentist's chair...

[Demeter]

3. Ex-Freddie Mac Officials Settle SEC Suit Over Subprime Loans

http://www.bloomberg.com/news/articles/2015-04-14/ex-freddie-mac-officials-settle-sec-claims-over-subprime-loans

Three former Freddie Mac executives settled a lawsuit with federal regulators over whether they misled the market over the mortgage-finance company’s exposure to risky mortgage loans, in a deal that included about $300,000 in donations to a fund set up to reimburse investors.

The settlement marks a quiet end to a high-profile U.S. effort to hold individuals accountable for some of the shocks to the financial system after banks, ratings companies and others underplayed the risks of subprime mortgages.

Richard Syron, the former chief executive officer of Freddie Mac, and two other executives settled the Securities and Exchange Commission’s 2011 lawsuit without admitting liability. In 2007 and 2008, according to the SEC suit, the three executives had said exposure to subprime mortgage loans was from $2 billion to $6 billion, when it was actually as high as $244 billion.

“This was one of the big cases to come out of the financial crisis. They accused CEOs of lying,” said Peter Henning, a corporate law professor at Wayne State University in Detroit. “And now, it ends, with I guess you can say, a whimper.”

MORE PATHOS AT LINK

[Demeter]

4. Will Mario Draghi Leave the ECB Without Ever Raising Rates?

http://www.bloomberg.com/news/articles/2015-04-14/will-mario-draghi-leave-the-ecb-without-ever-raising-rates-

Here’s one way of measuring how troubled Europe’s economy is: Investors are betting Mario Draghi will complete his eight-year term as head of the European Central Bank in 2019 without ever raising interest rates.

Money-market derivatives indicate the ECB won’t increase its key rate from 0.05 percent until December 2019 -- two months after Draghi’s tenure is scheduled to end, according to Deutsche Bank AG economist Torsten Slok.

By contrast, Draghi’s predecessor, Jean-Claude Trichet, raised rates 11 times. Even Ben S. Bernanke got to tighten at the Federal Reserve on three occasions.

Swaps now suggest the Fed will lift its benchmark by next March, Slok told clients in a report last week. A year ago, markets indicated the Fed and ECB would be acting in unison by November 2016....

[Demeter]

5. Speaking of Leaving...

http://www.washingtonpost.com/wp-dyn/content/article/2006/04/19/AR2006041901099.html

Richard M. Nixon Will You Please Go Now! By Art Buchwald

Tuesday, July 30, 1974

My good friend Dr. Seuss wrote a book a few years ago titled "Marvin K. Mooney Will You Please Go Now!" He sent me a copy the other day and crossed out "Marvin K. Mooney" and replaced it with "Richard M. Nixon." It sounded like fun so I asked him if I could reprint it. Please read it aloud.

"Richard M. Nixon will you please go now!
The time has come.
The time has come.
The time is now.
Just go.
Go.
Go!
I don't care how.
You can go by foot.
You can go by cow.
Richard M. Nixon will you please go now!
You can go on skates.
You can go on skis.
You can go in a hat.
But
Please go.
Please!
I don't care.
You can go
By bike.
You can go
On a Zike-Bike
If you like.
If you like
You can go
In an old blue shoe.
Just go, go, GO!
Please do, do, do, DO!
Richard M. Nixon
I don't care how.
Richard M. Nixon
Will you please
GO NOW!
You can go on stilts.
You can go by fish.
You can go in a Crunk-Car
If you wish.
If you wish
You may go
By lion's tale.
Or stamp yourself
And go by mail.
Richard M. Nixon
Don't you know
The time has come
To go, go, GO!
Get on your way!
Please Richard M.!
You might like going in a Zumble-Zay.
You can go by balloon . . .
Or broomstick.
Or
You can go by camel
In a bureau drawer.
You can go by bumble-boat
. . . or jet.
I don't care how you go.
Just get!
Richard M. Nixon!
I don't care how.
Richard M. Nixon
Will you please
GO NOW!
I said
GO
And
GO
I meant . . .
The time had come
So . . .
Richard WENT."

Nixon resigned Friday, August 9, 1974...TEN DAYS LATER

I WISH ART WAS AROUND TO PULL OFF THAT KIND OF MAGIC AGAIN.

[Demeter]

6. And Marx Said...

[Demeter]

9. ECB promises 'firm' roll-out of money printing

http://uk.reuters.com/article/2015/04/15/uk-ecb-policy-tapering-idUKKBN0N61GI20150415

The head of the European Central Bank pledged on Wednesday to roll out its money-printing programme 'firmly' and granted continued backing for Greece, saying there was no need yet to limit emergency funding for its banks. Describing speculation that the fledgling 60 billion euro (£43.04 billion) a month scheme would be scaled back as "surprising", Mario Draghi underlined his determination to see through quantitative easing until September 2016, or until inflation was back up to target. "Our focus will be on the full implementation of our monetary policy measures," Mario Draghi told a news conference after the ECB left interest rates at record lows. At the last count, euro zone inflation was running at -0.1 percent. The ECB's target is below but close to 2 percent.

"Through these measures we will contribute to a further improvement in the economic outlook," Draghi said, predicting that the economy would 'strengthen gradually'.

Draghi's news conference was interrupted when a young woman sitting in the front row among journalists leapt onto the podium, shouting 'end the ECB dictatorship'. She showered confetti as she stood over Draghi, who held his hands above his head before she was taken away by security guards. Recent violent protests in Frankfurt targeted the ECB for the spending cuts demanded in Greece and elsewhere.

The ECB's main refinancing rate, which determines the cost of credit, is now just 0.05 percent, while the ECB's deposit rate, which means banks pay to park funds at the central bank and has the most influence on market rates, is -0.2 percent.

EXPECTING HIS RAIN DANCE TO PRODUCE DUST SHOWERS....

[Hugin]

7. Double plus good cartoon today, Tansy.

Looks like I will have to brush up on my New Speak to do my taxes.

[Demeter]

8. China growth slowest in six years, more stimulus expected soon

http://www.reuters.com/article/2015/04/15/us-china-economy-gdp-idUSKBN0N52E220150415

China grew at its slowest pace in six years at the start of 2015 and weakness in key sectors suggested the world's second-largest economy was still losing momentum, intensifying Beijing's struggle to find the right policy mix to shore up activity.

Measures to support the property sector and a series of cuts in interest rates and bank reserve requirements look to have delivered less support to the economy than hoped, apart from feeding a stock market surge, raising expectations of more stimulus soon.

Gross domestic product (GDP) grew an annual 7.0 percent in the first quarter, slowing from 7.3 percent in the fourth quarter of 2014, China's statistics bureau said. While matching the median forecast in a Reuters poll, some analysts said it seemed stronger than data on the components of growth suggested.

"Despite a headline growth rate in line with expectations, underlying economic activities appear to have softened further," Qu Hongbin, HSBC's co-head of Asian Economic Research, said in a note.

MORE

[Demeter]

10. Former IMF chief ‘under investigation for money laundering’

LOOKS LIKE ALL THE CROOKS GO TO IMF...STRAUSS-KAHN, AND SO ON

http://www.euronews.com/2015/04/15/former-imf-chief-under-investigation-for-money-laundering/


Former chief of the International Monetary Fund, Rodrigo Rato, is under investigation for money laundering, government sources have told Spanish daily El Pais. According to the newspaper, the Spaniard – a former finance minister – applied for a 2012 tax amnesty. This was legal, however, online publication Vozpopuli claims he ‘cleaned’ the ‘dirty’ money outside of Spain, before declaring it: notably in the tax havens of Gibraltar and the Virgin Islands.

The Tax Agency has provided the Executive Service for Prevention and Capital Laundering (Sepblac) with the names of 705 anonymous taxpayers. Sepblac has launched an investigation into those on the list, who are suspected of using the immunity deal to launder money. Vozpopuli says Rato – a former government official in Prime Minister Mariano Rajoy’s Popular Party – was on this list. Spain’s current finance minister, Luis de Guindos, refused to elaborate on the alleged investigation.

“I have a duty to keep things under wraps, a duty of confidentiality,” he said. “The only thing I can tell you is that all state institutions will comply with any legal procedures,” he said.

Rato has neither denied nor confirmed the accusation of money laundering. However, he has stated that he has not been notified whether or not he’s under investigation. “I have received no document from any agency stating that I am being investigated by Sepblac,” he told El Pais. If Rato is proven to have used the amnesty to launder money, questions will be raised over whether or not the government attempted to cover up the crime.

Additional investigations

A judge is also holding him accountable for credit card abuse that took place at Caja Madrid and Bankia banks, where he was chairman.

In addition, he is under investigation for the way Bankia was floated on the Spanish stock market. Investigators believe this may have involved fraud and document forgery.

[Demeter]

11. IMF says global financial risks harder to spot

SEE ABOVE ARTICLE, FOR EXAMPLE

http://www.usatoday.com/story/money/business/2015/04/15/delamaide-global-risks-world-bank-imf-meetings/25835961/

The kaleidoscope of risk has shifted in the global economy in the wake of plunging commodities prices, the higher dollar and the impact of loose monetary policies, top officials of the International Monetary Fund said Wednesday. Risks have "rotated" in three ways, José Viñals, head of the IMF's monetary and capital markets department, said: from banks to non-banks, from solvency risks to liquidity risks and from advanced economies to emerging market economies.

NOT SO! THE BANKS ARE STILL INSOLVENT, THE ADVANCED ECONOMIES ARE STILL PROSTRATE, IT'S JUST THAT ATTENTION HAS SHIFTED. NOTHING HAS BEEN RESOLVED--DEMETER

Viñals, who is also financial counselor to IMF Managing Director Christine Lagarde, spoke at a press conference to present the semiannual Global Financial Stability Report. The briefing was part of this week's activities surrounding the spring meetings of the World Bank and IMF. "Risks have increased since October," Viñals said, "to parts of the system that are harder to assess and harder to address."

The European Central Bank's move to quantitative easing, for instance, pushing interest rates lower by injecting more money into the system through asset purchases, creates risks for medium-size life insurance companies in the region, who may have trouble meeting their solvency ratios. In the meantime, Viñals said, the U.S. Federal Reserve may have trouble executing a "smooth normalization" of monetary policy as financial markets seem to expect a slower pace of monetary tightening than some of the Fed policymakers.

While the quantitative easing by the ECB and the Bank of Japan provides an important stimulus to economic recovery in these areas, it must be accompanied by other measures. In Europe, national authorities "must tackle non-performing loans in the banking system," the IMF official said, to improve credit flow. Banks with lots of bad loans on their books lend less, and this is slowing recovery. "They must deal with the stock of bad loans," Viñals said, by finding more efficient ways of restructuring and writing off the bad debt. "This requires dedicated attention."

The drop in the price of oil and other commodities is creating problems for emerging market exporting countries, many of which have borrowed heavily on the basis of projected revenue. The sharp increase in the value of the dollar — brought on by the shift in Fed monetary policy — exacerbates the problem. It is not only public sector debt, but corporate debt that poses risks in many of these countries, Viñals said. "You have to know if this debt is properly hedged," he said, calling for micro- and macro-prudential vigilance in these countries. Many of the corporations exposed to foreign currency debt are already weak, and could impact banks that are in many cases themselves weak.

[Demeter]

12. London stakes its claim as global bitcoin hub

http://ca.reuters.com/article/businessNews/idCAKBN0N622320150415

London, center of the $5-trillion-a-day global currency market, now wants to be home to a controversial upstart - bitcoin. British authorities have come out in support of digital currencies in the name of promoting financial innovation, while proposing that regulations should be drawn up to prevent their use in crime.

But it is technophiles who are leading the drive to make London a real-world hub for trade in web-based "cryptocurrencies", of which bitcoin is the original and still most popular. Every Tuesday evening in a trendy cafe in London's Shoreditch neighborhood, a group of digital currency enthusiasts gathers to discuss ideas, "vape" from e-cigarettes and exchange their pounds for bitcoins in a dedicated "ATM". With more than 2,200 members, CoinScrum, run by a former derivatives trader who left the world of traditional finance to work on a digital currency start-up, is the biggest bitcoin networking group in the world. Its meetings draw a mostly young, mostly male crowd - some amateurs, others who have come to Britain to start bitcoin businesses. Already the capital of traditional currency trading, London is competing with San Francisco's web expertise and New York's financial clout as it pushes to be the foremost financial technology - or fintech - center in the world.

Last month the British government announced plans to regulate digital currency exchanges to prevent their use in money-laundering, and to help to develop a set of standards for cryptocurrencies. Backers of bitcoin praised this for lending legitimacy to the currency - which unlike traditional money has no printed form and remains outside the control of central banks - without stifling innovation.

"London has been the home of financial innovation for hundreds of years," said Nicolas Cary, co-founder of Blockchain, which provides bitcoin data and "wallet" software for storing the currency. "It would be a historical mistake not to make this the home of digital currencies. There's an incredible amount of talent and experience here."

Just over 14 million bitcoins are in circulation, worth around $3.1 billion at the current exchange rate of around $220 each.

Bitcoin brought 29-year-old Cary to Britain two years ago from Denver, Colorado. He joined forces with Ben Reeves, then a 22-year-old computer science graduate, to develop the Blockchain wallet, spending the first year working out of a two-bedroom apartment in northern England. Now Blockchain, named after the technology behind bitcoin, is the world's biggest wallet provider, with over 3 million users. Last year it raised over $30 million in its first round of funding, including from billionaire Richard Branson.

Britain made bitcoin trading exempt from value-added tax last year. Other countries have yet to decide how to tax bitcoin, since its independence from any central bank means it does not fall into the traditional definition of money.

However, Australia has made bitcoin transactions subject to goods and services tax. That helped to drive CoinJar, an Australian company that allows users to buy, sell and spend bitcoins, to move its headquarters to London last December.

STILL MORE AT LINK

[Demeter]

13. Japan edges out China as largest holder of U.S. Treasuries

TELLS YOU THAT CHINA IS LEAVING, JAPAN IS STUCK IN $ HEGEMONY

http://www.reuters.com/article/2015/04/15/usa-economy-capital-idUSL2N0XC2NQ20150415

U.S. Treasury Department data on Wednesday showed Japan edged out China in February as the largest holder of U.S. Treasuries, a month in which foreign investors sold U.S. government debt for a fourth straight month. Data showed outflows from U.S. Treasuries totaled $6.30 billion in the month, down from net selling of $55.1 billion January, which had been the highest in at least three years.

Japan eclipsed China as the largest Treasury holder for the first time since August 2008. Japan's holdings actually declined in February, to $1.224 trillion, from $1.238 trillion the previous month, while China's also fell, to $1.223 trillion from $1.239 trillion.

Foreign central banks sold $11.1 billion in Treasuries in February, shedding U.S. government debt for a fifth straight month. The data was in line with market movements in the Treasury market, which showed investors sold Treasuries in February as yields on the long end rose. Benchmark 10-year U.S. yields in February ranged between 1.6530 percent at the beginning of the month to 2.00 percent at the end. Overall, net buying of long-term U.S. assets totaled $9.8 billion in February after an outflow of $27.4 billion in January. Including short-dated assets such as bills, overseas investors bought a net $4.1 billion in February after a revised inflow of $51 billion the month before.

The February report showed net inflows into U.S. equities of $759 million after foreign purchases of $597 million in January. Foreigners bought U.S. stocks for a fourth consecutive month...Investors bought U.S. corporate bonds for a sixth straight month in February. Net inflows totaled $9.4 billion in February from $5.7 billion in January.

[Demeter]

14. NOT ALL CREDENTIALS ARE CREATED EQUAL

[Demeter]

15. U.S. Democratic Senator Warren pushes bank breakup, tax changes

http://uk.reuters.com/article/2015/04/15/financial-regulation-warren-idUKL2N0XC1G220150415

U.S. Senator Elizabeth Warren on Wednesday called on lawmakers to break up big banks and change tax rules that benefit Wall Street, part of an ongoing effort to advance a more populist agenda. The Massachusetts Democrat and longtime consumer advocate has sought this year to draw public attention to what she sees as the unfinished job of revamping Wall Street oversight after the 2007-2009 financial crisis.

"We know what changes we need to make financial markets work better," Warren said in a speech at a Washington conference focused on the 2010 Dodd-Frank financial oversight law. "The key steps aren't hard."

Warren has pushed a more consumer-focused agenda for Democrats, calling for raising the federal minimum wage and cutting federal student loan rates.

...Warren said on Wednesday that regulators including the U.S. Federal Reserve and Securities and Exchange Commission had fostered a "slap on the wrist" culture. She said they should get tougher on big banks. She said lawmakers should crack down on banks by breaking them up and limiting the U.S. Federal Reserve's ability to lend in a crisis so that big institutions cannot count on a bailout.

"When those banks are broken up and forced to bear the consequences of the risks they take on ... regulatory oversight can be lighter and clearer as well," Warren said.

Big banks oppose efforts to break them up, saying their size makes them more efficient. Many Republicans have different ideas about preventing bailouts and view government-mandated size limits as unfair intervention in financial markets. Warren said Congress could make tax code changes to urge financial firms to drop risky or unfair practices. She called for closing a loophole that encourages big banks to pay executives big bonuses, creating incentives for companies to seek equity funding rather than debt, and taxing financial transactions to reduce market volatility.

[Demeter]

16. Deutsche Bank fined $8.4 mln by Dubai regulator

http://www.reuters.com/article/2015/04/15/deutsche-bank-emirates-regulations-idUSL5N0XC1IV20150415

Deutsche Bank has been fined $8.4 million by the regulator of Dubai's financial free zone for what the watchdog described as "serious contraventions".

"Those contraventions include misleading the Dubai Financial Services Authority (DFSA), failures in Deutsche Bank DIFC's (Dubai International Financial Centre) internal governance and systems and controls and in its client take-on and anti-money laundering processes," the DFSA said in a statement.

A statement from Deutsche Bank said that the lender had "reviewed and subsequently upgraded" its systems for bringing on clients and emphasised that the DFSA had found no evidence of financial detriment to customers during its investigation.

[Demeter]

17. SEC may pursue case against ex-S&P executive: U.S. judge

http://www.reuters.com/article/2015/04/15/us-sec-mcgrawhill-duka-idUSKBN0N61M520150415

A federal judge on Wednesday refused to stop the U.S. Securities and Exchange Commission from pursuing a case against a former Standard & Poor's executive over her role in an alleged fraud involving ratings for commercial mortgage-backed securities. U.S. District Judge Richard Berman in Manhattan said Barbara Duka did not deserve a preliminary injunction because she was unlikely to succeed on the merits of her argument that SEC administrative proceedings are unconstitutional. But the judge also departed from earlier decisions by other judges in finding he had jurisdiction to review the claim, which he called "outside the SEC's expertise." Guy Petrillo, a lawyer for Duka, said he is reviewing the decision. SEC spokesman Kevin Callahan declined to comment.

The SEC is pursuing more enforcement cases in-house, rather than in federal court where defendants may have more procedural protections, using authority it gained through the 2010 Dodd-Frank financial reforms. Others who have objected to SEC administrative proceedings include U.S. financier Lynn Tilton, who sued the regulator on April 1; former Goldman Sachs Group Inc director Rajat Gupta; and Wing Chau, an investor featured in Michael Lewis' best-seller "The Big Short."

Duka, a former head of S&P's CMBS group, was charged with having in 2011 concealed how S&P had eased its criteria for calculating some commercial mortgage ratings. S&P, a unit of McGraw Hill Financial Inc, agreed in January to pay $77 million to settle related charges by the SEC and the New York and Massachusetts attorneys general. Duka said the SEC case against her belongs in federal court, and like some other defendants argued that administrative proceedings violate Article II of the U.S. Constitution. She said this was because administrative law judges qualify as executive branch officers subject to removal only for "good cause," yet enjoy layered job protections that can make it impossible for the president to remove them.

Berman, though, said the U.S. Supreme Court had upheld restrictions on the president to remove "quasi-judicial" officials, like commissioners of the Federal Trade Commission and members of a panel reviewing World War Two injury claims.

"This court finds no basis for concluding, as Duka urges, that the statutory restrictions upon the removal of SEC ALJs are so structured as to infringe the president's constitutional authority," Berman wrote.

[Demeter]

19. Risky Moves in the Game of Life Insurance By MARY WILLIAMS WALSH

http://www.nytimes.com/2015/04/12/business/dealbook/insurers-bypass-rules-to-add-hidden-risk.html?_r=0

...Changing the Rules

The life insurance business is supposed to be dull — sell policies; collect premiums; salt the money away in the safest sorts of investments, mostly bonds; pay out benefits; and make money along the way by investing surplus assets prudently. No wild bets, no siphoning of assets, no off-the-books maneuvers...This, at any rate, has been the idea since a crusading reformer named Elizur Wright set the standard 150 years ago and became America’s first state insurance regulator, in Massachusetts.

Wright grew up helping his family shelter fugitive slaves; he went to school with John Brown, ran an abolitionist newspaper, and at age 40, visited the Royal Exchange on a trip to London. There, he saw feeble, penniless old men auctioning off their life insurance policies to speculators. After faithfully paying premiums all their lives, they were too old to work, but they could not withdraw their accumulated savings because, alas, they were not yet dead. Their best hope for survival was to parade their decrepitude and hope speculators would bet on their imminent demise. To Wright, it was little better than a slave auction. Upon his return to America, he began campaigning for a cleanup of the life insurance business, setting a strict, even moralistic tone that persists to this day. He required insurers to pay “surrender values” to policyholders on request and to hold adequate reserves to do so. Seeing how easy it was to cheat, he devised formulas for calculating the reserves. He even invented a device called the “arithmeter” — a 30-foot slide rule, more or less, wrapped around a spinning drum — that crunched the numbers when the user turned a crank.

The companies bought in. Reform fostered trust, and trust spurred sales. Under the gimlet eyes of Wright and his successors, life insurance has blossomed into an $18 trillion business, with millions of policyholders who can sleep soundly on solvency laws as immutable as Newton’s laws of motion: For every liability, there has to be an asset. Or at least that’s the way it may seem.

Over the years, life insurance has gone global and created products of dazzling complexity; many companies have gone public, too, creating shareholders who think they should have priority over all those pesky policyholders whose money built the business. With these changes, a belief has taken hold in some quarters: Wright’s principles may still guide us, but they are too old-fashioned. They force life insurers to hold more money than they need to — the way Athene Life Insurance was expected to sit on its millions when there were needy casinos to help...

IT'S A STORY AND A HALF! SEE LINK

[Demeter]

20. Citi Economist Says It Might Be Time to Abolish Cash

http://www.bloomberg.com/news/articles/2015-04-10/citi-economist-says-it-might-be-time-to-abolish-cash

Would this save the world economy?

IT WOULD GIVE THE TBTF CROOKS PLENTY OF COVER TO "STEAL AWAY"....AND PUT ORDINARY PEOPLE IN CHAINS THAT COULD NOT BE BROKEN, EVER. CORPORATE SLAVERY! THAT'S THE TICKET!

The world's central banks have a problem.

When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut — they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy. In a new piece, Citi's Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates. Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction? Cash therefore gives people an easy and effective way of avoiding negative nominal rates.

Buiter's note suggests three ways to address this problem:

1. Abolish currency.
   
   
2. Tax currency.
   
   
3. Remove the fixed exchange rate between currency and central bank reserves/deposits.

Yes, Buiter's solution to cash's ability to allow people to avoid negative deposit rates is to abolish cash altogether. (Note that he's far from being the first to float this idea. Ken Rogoff has given his endorsement to the idea as well, as have others.)...Before looking at the practicalities of abolishing currency, we should first look at whether it could ever be necessary. Due to the costs of holding large amounts of cash, Buiter puts the actual nominal rate at which the move to cash makes sense as closer to -100bp. So, in order for a cash abolition to become necessary, central banks would need to be in a position where they wished to set nominal rates much lower than that. Buiter does not have to go far to find an example of where a central bank may have wanted to set interest rates much lower to -100bp. He uses (a fairly aggressive) Taylor Rule to show that Federal Reserve rates should have been as low as -6 percent during the financial crisis.



It seems Buiter is correct: Sometimes strongly negative nominal rates are called for.
Buiter is aware that his idea may be somewhat controversial, so he goes to the effort of listing the disadvantages of abolishing cash.

1. Abolishing currency will constitute a noticeable change in many people’s lives and change often tends to be resisted.
   
   
2. Currency use remains high among the poor and some older people. (Buiter suggests that keeping low-denomination cash in circulation — nothing larger than $5 — might solve this.)
   
   
3. Central banks and governments would lose seigniorage revenue.
   
   
4. Abolishing currency would inevitably be associated with a loss of privacy and create risks of excessive intrusion by the government.
   
   
5. Switching exclusively to electronic payments may create new security and operational risks.

Buiter dismisses each of these concerns in turn, finishing with:

In summary, we therefore conclude that the arguments against abolishing currency seem rather weak.

Whatever the strength of the arguments, the chances of an administration taking the decision to abolish cash seem vanishingly small.


YOU HAVE BEEN WARNED!

[DemReadingDU]

21. Why the Grexit is inevitable

An interesting possibility....


4/15/15 Why the Grexit is inevitable
.
.
The Greek government, elected by a battered and exploited Greek people, has been establishing the conditions that will give them the moral high ground (in the eyes of their voters) needed to actually leave the Euro.

Having set the conditions, when will it happen?

"Predicting the future is easy, getting the dates right is almost impossible." I would attribute that quote, but so many people have said that any attribution would be inadequate. But it certainly is true, and while I love to predict, getting the dates wrong is a specialty.

That being said, I'm still guessing May 9th.

Why?

Greece will leave the Euro, and they will do it sooner than later. They've made the April payment, but simply do not have the money for the May or June payments, and they cannot pass the legislation required by Europe and the Germans and stay in power. That gives us a late May or June date. So why earlier?

Capital flight.

Imposing currency controls will be a fundamental element of any Grexit. Accounts will be frozen, and any money in accounts will be re-denominated in New Drachmas. Once the bank accounts are unfrozen, the residual, former Euros will now be worth whatever the New Drachma has dropped to, and the drop will be significant, over--correcting to the downside.

Once it is accepted that the Grexit is coming and there will be no last minute deal, and with memories of Cyprus too fresh in every Greek's mind, the money will flow out of the country. Not just corporate money (most of which is probably off-share already) but any remaining personal money in bank accounts.

So Greece has to move before the coming Grexit is perceived as inevitable, and the money starts to flow out.

Weekend event.

When the Grexit happens, it will be on a weekend. The banks will be closed, parliament will be called into emergency session, and a packet of laws will be passed. As this needs to be on a Saturday to avoid wholesale capital flight the moment that parliament is called into session, were it a weekday.

This leaves only a few possible dates. And where there are few possible dates, I'm punting on the earlier date, so earlier in May. And looking at the calendar, that leaves us with May 2nd, 9th or 16th. My own guess is that the 2nd is too soon, and the 16th is too late.

That leaves me guessing May 9th.

more...
http://raasconsulting.blogspot.co.nz/2015/04/why-grexit-is-inevitable-soon.html

[mahatmakanejeeves]

22. ETA News Release: Unemployment Insurance Weekly Claims Report (04/16/2015)

Source: Department of Labor, Employment and Training Administration

Read More: http://www.dol.gov/opa/media/press/eta/eta20150626.pdf

U.S. Department of Labor Employment and Training Administration Washington, D.C. 20210
Release Number: USDL 15-626-NAT
Program Contacts: Tom Stengle [phone] Tony Sznoluch [phone]
Media Contact: [phone]

TRANSMISSION OF MATERIALS IN THIS RELEASE IS EMBARGOED UNTIL 8:30 A.M. (Eastern) Thursday, April 16, 2015

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS
SEASONALLY ADJUSTED DATA

In the week ending April 11, the advance figure for seasonally adjusted initial claims was 294,000, an increase of 12,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 281,000 to 282,000. The 4-week moving average was 282,750, an increase of 250 from the previous week's revised average. The previous week's average was revised up by 250 from 282,250 to 282,500.
....

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending April 4, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 4 was 2,268,000, a decrease of 40,000 from the previous week's revised level. This is the lowest level for insured unemployment since December 9, 2000 when it was 2,263,000. The previous week's level was revised up 4,000 from 2,304,000 to 2,308,000. The 4-week moving average was 2,329,000, a decrease of 32,750 from the previous week's revised average. This is the lowest level for this average since December 30, 2000 when it was 2,325,750. The previous week's average was revised up by 1,000 from 2,360,750 to 2,361,750.
....

UNADJUSTED DATA

....
The total number of people claiming benefits in all programs for the week ending March 28 was 2,527,259, a decrease of 90,744 from the previous week. There were 3,007,432 persons claiming benefits in all programs in the comparable week in 2014.