STOCK MARKET WATCH -- Friday, 22 May 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 22 May 2015[font color=black][/font]

SMW for 21 May 2015

AT THE CLOSING BELL ON 21 May 2015
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Dow Jones 18,285.74 +0.34 (0.00%)
S&P 500 2,130.82 +4.97 (0.23%)
Nasdaq 5,090.79 +19.05 (0.38%)


[font color=green]10 Year 2.19% -0.06 (-2.67%)
30 Year 2.99% -0.05 (-1.64%) [font color=black]


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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. David Dayen: Out of Control – New Report Exposes JPMorgan Chase as Mostly a Criminal Enterprise

http://www.nakedcapitalism.com/2013/03/david-dayen-out-of-control-new-report-exposes-jpmorgan-chase-as-mostly-a-criminal-enterprise.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen

There’s been an unlikely yet welcome resurgence of chatter about breaking up the nation’s largest and most powerful banks. Bloomberg’s story quantifying the too big to fail subsidy grabbed some eyeballs (and there’s an upcoming GAO report on the subsidy that will do the same). Sherrod Brown announced an unlikely pairing with David Vitter working on legislation on the subject. Dallas Fed President Richard Fisher is going to give a big speech on Friday on breaking up the banks… at CPAC, the largest conservative political conference of the year.

At the same time the unending stream of reports of abuses and fraudulent actions give fuel to the movement. And we’ll get another one Friday, when Carl Levin’s Senate Permanent Subcommittee on Investigations releases their report, complete with a companion hearing, on the London “Fail Whale” trades, the losses for which stretch as high as $8 billion. Early reports suggest that the report will be unsparing. Levin’s committee did an excellent job in prior investigations of Wall Street, including Goldman Sachs (which they gift-wrapped to the Justice Department as a criminal referral, only to see DoJ toss it in the wastebasket). People I’ve talked to expect the hearing to be explosive.

As an excellent preview for the Friday fireworks, I urge you to read an astonishing new report, which I’ve embedded below, from analyst Josh Rosner of Graham-Fisher and Co. The best way to describe the report, “JPM – Out of Control,” is that it reads like a rap sheet. Notably, Rosner takes mortgage abuses almost entirely out of the equation, and yet still manages to fill a 45-page report with documented case after documented case of serious fraud and abuse, most of which JPM has already admitted to (at least in the sense of reaching a settlement; given out captured regulatory structure the end result is invariably a settlement with the “neither admit nor deny wrongdoing” boilerplate appended). Rosner writes, “we could not find another ‘systemically important’ domestic bank that has recently been subject to as many public, non-mortgage related, regulatory actions or consent orders.”

Obviously this contrasts with Jamie Dimon’s spotless reputation (at least in Washington) and his bold talk of a “fortress balance sheet.” Yet as you read the report, it’s hard to see the bank as anything but a criminal racket just days away from imploding, were it not propped up by implicit bailout guarantees and light-touch regulators. Rosner paints a picture of a corporation saddled with pervasive internal control problems, which end up costing shareholders, and which “could materially impact profitability in the future.” He calculates that since 2009, JPM has paid out $8.5 billion in settlements for its outlaw activity, which equals nearly 12% of net income over the same period.

It’s hard to summarize all of the documented instances in this report of JPM has been breaking the law, but here’s my best shot. I try to keep up on these matters, and yet some of these I’m learning about for the first time:

Bank Secrecy Act violations;
Money laundering for drug cartels;
Violations of sanction orders against Cuba, Iran, Sudan, and former Liberian strongman Charles Taylor;
Violations related to the Vatican Bank scandal (get on this, Pope Francis!);
Violations of the Commodities Exchange Act;
Failure to segregate customer funds (including one CFTC case where the bank failed to segregate $725 million of its own money from a $9.6 billion account) in the US and UK;
Knowingly executing fictitious trades where the customer, with full knowledge of the bank, was on both sides of the deal;
Various SEC enforcement actions for misrepresentations of CDOs and mortgage-backed securities;
The AG settlement on foreclosure fraud;
The OCC settlement on foreclosure fraud;
Violations of the Servicemembers Civil Relief Act;
Illegal flood insurance commissions;
Fraudulent sale of unregistered securities;
Auto-finance ripoffs;
Illegal increases of overdraft penalties;
Violations of federal ERISA laws as well as those of the state of New York;
Municipal bond market manipulations and acts of bid-rigging, including violations of the Sherman Anti-Trust Act;
Filing of unverified affidavits for credit card debt collections (“as a result of internal control failures that sound eerily similar to the industry’s mortgage servicing failures and foreclosure abuses”);
Energy market manipulation that triggered FERC lawsuits;
“Artificial market making” at Japanese affiliates;
Shifting trading losses on a currency trade to a customer account;
Fraudulent sales of derivatives to the city of Milan, Italy;
Obstruction of justice (including refusing the release of documents in the Bernie Madoff case as well as the case of Peregrine Financial).

And, exhale.

The sheer litany of illegal activities just overwhelms you. And these are only the ones where the company has entered into settlements or been sanctioned; it doesn’t even include ongoing investigations into things like Libor, illegally concealing inclusions of mortgage-backed securities in employer funds (another ERISA violation), the Fail Whale trades, and especially putback suits for mortgages, where a recent ruling by Judge Jed Rakoff has seriously increased exposure. While the risks are still very much alive and will continue to weigh on the firm, ultimately shareholders will pay, certainly not executives as long as the no-prosecutions standard holds.

Again, read the report, but two case studies stand out. First, JPM is trying to stick the public with losses related to its purchase of Washington Mutual and its related liabilities. Rosner documents painstakingly how JPM originally accepted the risks and responsibilities with the WaMu deal, and continued to do so for several years. But now that they see the actual possibility of mass mortgage-related putback claims, JPM wants to shift losses on over $190 billion in MBS onto the FDIC. They hope to get out from under as much as $5 billion in losses in this fashion. It’s impossible to logically follow JPM’s claim that they purchased WaMu but not any of its risk-related activities. The case “demonstrates the unwillingness to accept responsibility for their own management failures,” Rosner writes.

Finally, we have the Fail Whale trade, the subject of the Friday Permanent Subcommittee on Investigations hearing. Rosner keys in on JPM’s internal “Task Force” report, which he compellingly characterizes as a complete whitewash. The Task Force was led by the heir apparent to the company, Michael Cavanagh (“like asking Joe Paterno to do the Penn State investigation instead of Louis Freeh,” in the words of former SEC chair Harvey Pitt). It limited the scope of the investigation to late 2011 and 2012, when now-public data clearly shows the problems at the Chief Investment Office going back years earlier, and fully known to senior management at the time. Rosner correctly brings up Sarbox Title III violations in conjunction with this, as top executives annually attested to the accuracy of financial statements now known to be untrue. The Task Force tried to exonerate Jamie Dimon by actually saying in a footnote that he was out of town for a period of time covered by the report.

And this footnote from the Task Force takes the cake:

The description of “what happened” is not a technical analysis of the Synthetic Credit Portfolio or the price movements in the instruments held in the Synthetic Credit Portfolio. Instead, it focuses on the trading decision-making process and actions taken (or not taken) by various JPMorgan personnel. The description of activities described in this Report (including the trading strategies) is based in significant measure on the recollections of the traders (and in particular the trader who had day-to-day responsibility for the Synthetic Credit Portfolio and was the primary architect of the trades in question) and others. The Task Force has not been able to independently verify all of these recollections.

Hey, who knows, don’t believe anything we’re saying, it’s not an investigation so much as an impressionistic collage.

Rosner has compiled an impressive dossier for any systemic risk regulator, if we had such things in more than name only in America. And I trust this will be a contribution to the ongoing debate – there really is one – over whether these mega-banks have become too big to manage, and too corrupt to continue.

Here’s the Executive Summary: http://www.scribd.com/doc/130290952/Gf-Co-Executive-Summary-JPM-Out-of-Control

Here’s the full report: http://www.scribd.com/doc/130291230/GF-Co-JPM-Out-of-Control

ANOTHER SUMMARY: http://www.corporatecrimereporter.com/

THIS COLUMN IS FROM MARCH, 2013.
THE COMMENTS ARE WELL WORTH PERUSING, TOO.

[Demeter]

7. AND TODAY: JPMorgan Rewards Shareholders with 10% Dividend Hike

http://finance.yahoo.com/news/jpmorgan-rewards-shareholders-10-dividend-192507633.html

JPMorgan Chase & Co. JPM has announced a dividend hike of 10%. This was part of the company’s 2015 capital plan that was approved by the Federal Reserve in Mar 2015. JPMorgan will pay quarterly cash dividend of 44 cents per share. The dividend will be paid on Jul 31 to shareholders of record as on Jul 6. This dividend yields 2.70%.

Following the 2008 financial crisis, the company had slashed its dividend to 5 cents per share from 38 cents. Nonetheless, since second quarter of 2011, JPMorgan has been annually increasing its dividend. These hikes follow the Fed’s approval of the same after the company cleared stress tests. JPMorgan’s 2015 capital plan also includes share repurchase of up to $6.4 billion starting from Apr 1, 2015 to Jun 30, 2016. Moreover, this program includes shares repurchased to offset issuances under the company's equity-based compensation plans....

Apart from JPMorgan, other Wall Street biggies including KeyCorp. KEY, Wells Fargo and Co. WFC and BB&T Corporation BBT have increased their dividends after receiving the Fed’s consent.

[Demeter]

12. Five global banks to pay $5.7 bln in fines over rate rigging

http://www.reuters.com/article/2015/05/20/banks-forex-settlement-usa-idUSL1N0YB0UW20150520

Five of the world's largest banks, including JPMorgan Chase & Co and Citigroup Inc, were fined roughly $5.7 billion, and four of them pleaded guilty to U.S. criminal charges over manipulation of foreign exchange rates, authorities said on Wednesday. A fifth bank, UBS AG , will plead guilty to rigging benchmark interest rates, the U.S. Justice Department said. U.S. banks JPMorgan Chase and Citigroup will pay $550 million and $925 million in criminal fines, respectively, as part of their guilty pleas. British banks Barclays Plc will pay $650 million in criminal penalties and Royal Bank of Scotland Plc $395 million. Each will plead guilty to one felony count of conspiring to fix prices and rig bids for U.S. dollars and euros in the foreign exchange spot market.

Euro dollar traders at four of the banks described themselves as members of "The Cartel" and used an electronic chat room and coded language to manipulate exchange rates to increase profits, the Justice Department said. The $5.7 billion total includes $1.6 billion in fines separately imposed by the U.S. Federal Reserve on the five banks. Separately, the Fed fined Bank of America Corp $205 million for unsound practices in foreign exchange. Barclays also will pay an additional $1.3 billion to settle with the New York State Department of Financial Services, the U.S. Commodity Futures Trading Commission and the UK's Financial Conduct Authority, authorities said.

As part of the agreement, Barclays will fire eight bank employees involved with rigging foreign exchange rates, the New York regulator said. In addition, Barclays will pay a $60 million criminal penalty for violating an earlier non-prosecution agreement with the Justice Department to resolve a probe of the manipulation of the London interbank offered rate, or Libor, and other benchmark interest rates.

Swiss-based UBS will separately plead guilty to manipulating Libor and other benchmark interest rates. It will also pay a $203 million criminal penalty for breaching a 2012 non-prosecution agreement with the Justice Department over Libor.

The fines announced on Wednesday follow agreements in November with many of the same banks over currency trading and bring total penalties to nearly $9 billion, the Justice Department said.

[Demeter]

15. World’s Largest Banks Admit Massive Global Financial Crimes, But Escape Jail (Again) By Matt Taibbi

http://www.democracynow.org/2015/5/21/matt_taibbi_worlds_largest_banks_admit

Five of the world’s top banks will pay over $5 billion in fines after pleading guilty to rigging the price of foreign currencies and interest rates. Citigroup, JPMorgan Chase, Barclays and Royal Bank of Scotland pleaded guilty to conspiring to manipulate the price of U.S. dollars and euros exchanged in the $5 trillion FX spot market. UBS pleaded guilty for its role in manipulating the Libor benchmark interest rate. No individual bank employees were hit with criminal charges as part of the settlements. We are joined by Matt Taibbi, award-winning journalist with Rolling Stone magazine.

[Hotler]

21. JAMIE! Come out and play.

JAMIE! Come out and play. JAMIE! Come out and play. JAMIE! Come out and play.

You rat fucker.

[Demeter]

2. David Dayen: The Gradual Privatization of Medicaid MARCH 2013 AGAIN

http://www.nakedcapitalism.com/2013/03/david-dayen-the-gradual-privatization-of-medicaid.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Over the past week, both houses of the Florida legislature have rejected the Medicaid expansion program endorsed by Governor Rick Scott. You may recall the huzzahs from the progressive world when Scott, a self-possessed anti-Obamacare warrior, decided to accept the Medicaid expansion. What didn’t get reported as much is that Scott’s announcement coincided with the go-ahead from the Administration for Florida to fully privatize their Medicaid system. The move into managed care represents an enormous cash cow for private corporate interests, including Scott’s former colleagues – he ran a health care company (notable for his racking up the largest Medicare fraud fine in history). A pilot project was seen as disastrous for almost everyone involved, save perhaps the insurers. Providers and patients alike are uneasy about full privatization.

So what was up with the Legislature’s rejection? Tea Party politics? Some unlikely show of principle against crony capitalism and corporate welfare? No. They just want a different kind of privatization.

Arkansas’ privatization, in particular – which would just completely liquidate the public Medicaid program and have the state, in the immediate term, pay for premiums for everyone up to 138% of the poverty line to purchase private health insurance. There would be no more public disposition of Medicaid for the poor. It folds Medicaid into the as-yet-untested insurance exchanges. Arkansas Governor Mike Beebe, a Democrat, said he got “everything he wanted” from the Department of Health and Human Services, who appear so desperate to expand coverage under Medicaid that they’re willing the privatize the entire thing. This actually jacks up costs over time, perhaps as much as 50%, as Medicaid is cheaper to administer, and always will be, considering that it involves the direct provision of services rather than running them through a middleman. It will only lead to more of the kind of price gouging chronicled by Steven Brill in that monster Time piece, not less. It makes the system more fragmented and unsustainable. It may not even be legal; it’s based on a fairly dubious reading of a 25 year-old clause in the Social Security Act.

But since the Supreme Court ruling that made Medicaid expansion under Obamacare more of an opt-in for states (which, granted, was unanticipated by most of the political class), the canniest of Governors have cajoled HHS into giving them whatever they wish. For some states, that may end up being a positive – Oregon springs to mind. But in the main, HHS is saying, “Just go ahead and provide the coverage and you can make Medicaid bear as little resemblance to a public insurance program as you want.” Among the goodies they’ve been handing out: allowances to states to cut payments further to doctors and providers (which often does restrict access in our fragmented system), blessings for throwing the entire patient base into managed care (which carries a myriad of challenges), and now this folding of Medicaid into the exchanges, with its promise of an even bigger market for the private insurance industry.

Needless to say, states are falling all over one another to get a piece of this action, this leverage opportunity, in the words of one Bush-era official. One of the remaining Republican holdouts, Pennsylvania Governor Tom Corbett, has a meeting set with HHS head Kathleen Sebelius. Indiana and Virginia have their own privatization plans. The Florida Legislature, while rejecting Governor Scott’s deal, put up an alternative that looks exactly like the Arkansas privatization proposal. As George Washington University’s Sara Rosenbaum said in an interview, “Every state will be eyeing this.”

If Arkansas is allowed to do this, I expect it to spread like wildfire. I have three calls with Texas reporters who want to know more about what Arkansas is doing. New York is another state that is looking at something similar… I think that every state is now going to be eying this thing. My own suspicion is it’s going to be very popular. I think CMS sees this as a way to lure in states that might not otherwise do the expansion.

So off we go into the ultimate privatization of the entire health care system… oh but “tightly regulated,” you see. Because this country has such a rich history of stringent regulation on powerful, deep-pocketed interests. The exchanges moved private individual insurance coverage into a private insurance pool with a few subsidies. But privatizing the public Medicaid program is another kettle of fish.

[Demeter]

3. COMMENT Ned Ludd

March 14, 2013 at 5:13 am

I think “cajoled” is the wrong word. Ezra Klein, who acted like an unofficial spokesman for the Obama administration during the push for the ACA, says complete privatization was the plan all along.

If Republicans can make their peace with the Affordable Care Act and help figure out how to make the Affordable Care Act’s exchanges work to control costs and improve quality, it’d be natural to eventually migrate Medicaid and Medicare into the system. Liberals would like that because it’d mean better care for Medicaid beneficiaries and less fragmentation in the health-care system. Conservatives would like it because it’d break the two largest single-payer health-care systems in America and turn their beneficiaries into consumers. But the implementation and success of the Affordable Care Act is a necessary precondition to any compromise of this sort. You can’t transform Medicaid and Medicare until you’ve proven that what you’re transforming them into is better. Only the Affordable Care Act has the potential to do that.

I would guess that Obamacare was drafted in order to lay the foundation for the eventual elimination of Medicare and Medicaid. “Only the Affordable Care Act has the potential to do that.” Obama was, as it turns out, thinking several moves ahead. He and his administration, however, thought the exchanges would need to be set up before they could “migrate Medicaid and Medicare into the system”. The governors aren’t cajoling him. For Obama, this is an opportunity to end Medicaid as we know it, earlier than he planned.

[Demeter]

5. The Devil is in the Details Obamacare: A Deception by PAUL CRAIG ROBERTS FEB. 2013

http://www.counterpunch.org/2013/02/05/obamacare-a-deception/

The article below is the most comprehensive analysis available of “Obamacare” – the Patient Protection and Affordable Care Act. The author, a knowledgeable person who wishes to remain anonymous, explains how Obamacare works for the insurance companies but not for you.

Obamacare was formulated on the concept of health care as a commercial commodity and was cloaked in ideological slogans such as “shared responsibility,” “no free riders” and “ownership society.” These slogans dress the insurance industry’s raid on public resources in the cloak of a “free market” health care system.

You will learn how to purchase a subsidized plan at the Exchange, what will happen when income and family circumstances change during the year or from one year to the next, and other perils brought to you by Obamacare. It is one of the most important articles that will be posted on my website this year. Americans will be shocked to learn the extent to which they have been deceived. The legislation neither protects the patient nor are the plans affordable.

The author shows that for those Americans whose income places them between 138% and 400% of the Federal Poverty Level, the out-of-pocket cost for one of the least expensive (lower coverage) subsidized policies ranges from 2% to 9.5% of Modified Adjusted Gross Income (MAGI), a tax base larger than the Adjusted Gross Income used for calculating federal income tax....

[Demeter]

4. Obama Wants a Bigger Hit to Seniors on Social Security than He Did to the Wealthy on Taxes by Dean B

http://www.cepr.net/blogs/cepr-blog/president-obama-wants-to-give-a-bigger-hit-to-seniors-on-social-security-than-he-did-to-the-wealthy-on-taxes

That's what President Obama's aides keep saying. They generally don't put in those terms, probably because they assume that everyone already knows, but the cut to the typical senior's Social Security benefit from the adoption of the chained CPI would be a larger hit to their income in retirement than the increase in income taxes put in place at the start of the year is the typical affluent taxpayer.

The arithmetic on the chained CPI is straightforward. It reduces benefits by an amount that increases 0.3 percentage points each year a person is retired. This means that after 10 years the reduction in the annual benefit would be 3.0 percent, after 20 years the reduction would be 6.0 percent, and after 30 years the reduction would be 9 percent. If we assume that a typical beneficiary lives long enough to collect benefits for 20 years, their hit from the chained CPI would on average be 3.0 percent over this period.

For the typical retiree, Social Security benefits are close to two-thirds of their income. This means that the use of the chained CPI would amount to a hit to their income of approximately 2.0 percent (two-thirds of 3.0 percent).

By contrast, if we assume that a couple earning $500,000 a year is the typical household affected by the tax increase, then their additional tax burden will be 4.6 percent of their income over $450,000 or $2,300. If we assume that this couple had not unusual exemptions (or even usual ones), then their after-tax income before the tax increase would have been around $350,000. This means that the Obama tax increase would reduce their after tax income by a bit less than 0.7 percent. This means that the hit to Social Security beneficiaries from the chained CPI will be around three times as large as the hit to the typical affluent taxpayer from the Obama tax increase.

GRAPH AT LINK

[Demeter]

6. Report: Half trillion need to update schools THIS WAS 2 YEARS AGO

http://bigstory.ap.org/article/report-half-trillion-need-update-schools

America's schools are in such disrepair that it would cost more than $270 billion just to get elementary and secondary buildings back to their original conditions and twice that to get them up to date, a report released Tuesday estimated. In a foreword to the report, former President Bill Clinton said "we are still struggling to provide equal opportunity" to children and urged the first federal study of school buildings in almost two decades.

Clinton and the Center for Green Schools urged a Government Accountability Office assessment on what it would take to get school buildings up to date to help students learn, keep teachers healthy and put workers back on the jobs. The last such report, issued in 1995 during the Clinton administration, estimated it would take $112 billion to bring the schools into good repair and did not include the need for new buildings to accommodate the growing number of students.

The Center for Green Schools' researchers reviewed spending and estimates schools spent $211 billion on upkeep between 1995 and 2008. During that same time, schools should have spent some $482 billion, the group calculated based on a formula included in the most recent GAO study. That left a $271 billion gap between what should have been spent on upkeep and what was, the group reported. Each student's share? Some $5,450. To update and modernize the buildings, the figure doubles, to $542 billion over the next decade.

"We have a moral obligation," said Rachel Gutter, director of the group affiliated with the U.S. Green Building Council. "When we talk about a quality education, we talk about the "who" and the "what" — teachers and curriculum — but we don't talk about the "where." That needs to change."

THIS FELL OFF THE TABLE ALMOST IMMEDIATELY, WITH CHARTER SCHOOLS...

[Demeter]

8. Wall Street’s Nemesis, Benjamin Lawsky, to Resign in June

http://www.nakedcapitalism.com/2015/05/wall-streets-nemesis-benjamin-lawsky-to-resign-in-june.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yesterday was a sad day for American citizens. Benjamin Lawsky, the Superintendent of the New York State Department of Financial Services, announced that he was resigning in June.

Lawsky demonstrated, decisively, that a determined regulator can be effective, even from an unlikely, historically not influential position as a state regulator. The New York attorney general had always been the power player by virtue of wielding New York’s securities law, the Martin Act. But Lawsky was willing to use the weapon that other regulators were too craven to deploy, that of threatening to pull the license of a regulated entity. His first target was Standard Chartered, a bank that had flagrantly, repeatedly violated money laundering laws, with its US general counsel rejecting the advice of outside counsel and presiding over a regime of doctored wire transfers. Lawsky used the power of the threat to revoke Standard Chartered’s license to secure a vastly bigger fine than Federal regulators originally contemplated, in large measure because they were prepared to accept the Promontory Group cover story that hardly any wires were out of compliance. The bank eventually ‘fessed up that the Promontory report came up with a figure that was over four orders of magnitude too low.

Even though Federal regulators howled at being upstaged by a mere state-level player, and worse a newbie, Lawsky arguably paved the way for regulators seeking much bigger fines, particularly against foreign players in money laundering. How much that was due to them being politically safe targets, and how much to Lawsky having purview over foreign banks that operated through New York branches remains to be seen. But Lawsky also sought, and increasingly won, having individuals punished as part of his settlements. Although the DFS lacked prosecutorial powers, he insisted that responsible individuals leave their institutions. In his campaign to rein in Standard Chartered, he took a zero tolerance attitude towards the bank’s open resistance to his order, calling CEO Peter Sands on the carpet for making dismissive remarks about the US sanctions. Sands continued to cross swords with Lawsky and failed to clean up the bad conduct (Sands tried to blame it on IT issues, which at that juncture was not exactly credible). That paved the way for his ouster. Lawsky also secured high-level resignations at other banks, the latest at Barclays.

Lawsky cut new grounds on other important fronts. He went not only after miscreant institutions but also their enablers. He fined PriceWaterHouse Coopers $25 million for issuing an unduly favorable report on behalf of its client, Bank of Tokyo-Mitsubishi UFJ. PWC was engaged to provide a supposedly objective report on the extent of money laundering of clearing dollar transactions in the US on behalf of blacklisted countries. Laswky also aggressively pursued servicing abuses aggressively at Ocwen. It was no surprise to anyone who knows the industry that the rot was pervasive, proof of the abject failure of the Obama mortgage settlements to clean up the industry. The one-time darling went into meltdown, eventually transferring its mortgage servicing rights to JP Morgan.

To his credit, Lawsky is not going the revolving door route but instead is starting a new firm...

MORE

[Demeter]

9. MEANWHILE, BACK AT THE SALT MINES: 40 percent of unemployed have quit looking for jobs

http://www.cnbc.com/id/102694868

At a time when 8.5 million Americans still don't have jobs, some 40 percent have given up even looking. The revelation, contained in a new survey Wednesday showing how much work needs to be done yet in the U.S. labor market, comes as the labor force participation rate remains mired near 37-year lows. A tight jobs market, the skills gap between what employers want and what prospective employees have to offer, and a benefits program that, while curtailed from its recession level, still remains obliging have combined to keep workers on the sidelines, according to a Harris poll of 1,553 working-age Americans conducted for Express Employment Professionals. On the bright side, the number is actually better than 2014, the survey's inaugural year, when 47 percent of the jobless said they had given up.

"This survey shows that some of the troubling trends we observed last year are continuing," Bob Funk, CEO of Express Employment Professionals and a former chairman of the Federal Reserve Bank of Kansas City, said in a statement. "While the economy is indeed getting better for some, for others who have been unemployed long term, they are increasingly being left behind."

Duration matters: The longer someone was out of work, the more likely it is that they've quit looking.

Of the total, 55 percent who were unemployed for more than two years fell into the category; 32 percent of those idle for 13 to 24 months and 34 percent out for seven to 12 months had quit as well. Just 21 percent out for three months or less had stopped looking. Overall, nearly 1 in 5 (19 percent) said they spent no time looking for work in the week previous to the survey. Just 10 percent said they spent more than 31 hours looking.

Unemployment compensation also matters. Federal guidelines allow for 26 weeks of unemployment compensation, though extended benefits are available in some circumstances. Nearly 9 of out 10 respondents (89 percent) said they would "search harder and wider" for work if their benefits ran out. Moreover, in a series of statements about benefits, the one that garnered the most agreement, with 69 percent, was that benefits were "giving me a cushion so that I can take my time in searching for a job," while 59 percent said compensation "has allowed me to take time for myself," 36 percent agreed that it "has allowed me to turn down positions that weren't right for me" and 40 percent agreed "I haven't had to look for work as hard knowing I have some income to rely on."

Of those out of work and not receiving benefits—those who have quit looking are not eligible—22 percent said their benefits had run out and 32 percent said they weren't eligible. The decline in labor force participation, in fact, has been a key to the drop of the unemployment rate in the post-recession economy. The jobless rate has slid from a high of 10 percent in October 2009 to its current 5.4 percent, the lowest level since May 2008. However, the participation rate has fallen from 66.1 percent to 62.8 percent during the same period.

Benefit programs have expanded as well, even as unemployment compensation dropped from the 99 weeks of eligibility during when the jobless rate was much higher. The Supplemental Nutrition Assistance Program—food stamps—now serves 45.7 million Americans, down from nearly 48 million in 2012.

"Over the last year, we have seen the unemployment rate go down, but we too easily forget that there are people still hurting, still wanting to work, but on the verge of giving up," Express Employment's Funk said. "I believe everyone who wants to work should have a job, so we must not overlook those who have been left behind and left out of the job market."

[Demeter]

10. Fed Signals June Liftoff Unlikely Amid Headwinds to Growth

http://www.bloomberg.com/news/articles/2015-05-20/many-fed-officials-saw-june-rate-rise-as-unlikely-minutes-show

Federal Reserve officials signaled they are unlikely to raise interest rates in June while leaving open the option of tightening later in the year.

Minutes of their April meeting, released on Wednesday in Washington, also confirmed that the Fed expects growth to pick up after stalling in the first quarter, even as officials fretted about the strength of the consumer spending that makes up two-thirds of the economy.

“The tone is frustration,” said Lindsey Piegza, chief economist at Sterne Agee & Leach Inc. in Chicago. “Why isn’t the economy getting any stronger? They want to raise rates but the data is just too darn weak.”

MORE INCREDULITY AT LINK AND VIDEO REPORT

[Demeter]

11. For Many American States, It's Like the Recession Never Ended

D'UH! THAT'S BECAUSE IT DIDN'T

http://www.bloomberg.com/news/articles/2015-05-20/six-years-into-recovery-u-s-states-struggle-to-balance-budgets

Six years after the recession ended, many U.S. states are hard pressed to balance budgets because of a sluggish recovery and their own policy decisions. The fiscal fragility raises questions about how they will weather the next economic downturn.

A majority of states are making cuts, tapping reserves or facing shortfalls despite an improving national economy and stock markets at record levels, according to Standard & Poors and the Nelson A. Rockefeller Institute of Government. State revenue hasn’t rebounded to a prerecession peak adjusted for inflation, and other factors are putting pressure on budgets.

Alaska, Oklahoma and energy-producing states saw receipts fall with global oil prices. Kansas overestimated revenue after tax cuts, while New Jersey faces a shortfall thanks to unfunded pensions. Even some Republican governors have championed tax increases to avoid further diminishing services curtailed during the 18-month recession, the deepest downturn since the Great Depression.

“The extent of the weakness is really impressive,” said Donald Boyd, who tracks state finances at the Rockefeller Institute in Albany, New York. “There’s a lot of pressure on governors and legislators.”

Thirty-two states faced budget gaps in fiscal 2015 or 2016 or both, according to an April 27 report by Standard & Poors. The fiscal year ends June 30 in all but four states...MORE

[Demeter]

13. Congress: Carried Interest Tax Change Off Table Until 2017, Ryan Says

http://www.bloomberg.com/politics/articles/2015-05-19/carried-interest-tax-changes-won-t-come-up-until-2017-ryan-says


Any major changes to private equity’s most favored tax break won’t happen until 2017, House Ways and Means Committee Chairman Paul Ryan said.

Ryan said he’s excluding the taxation of carried interest from this year’s bipartisan attempt to revamp business taxes, sparing fund managers from any change.

“That is on the individual side of the code, so it’s not something that we’re looking at right now,” Ryan, a Wisconsin Republican, said at an accounting conference in Washington Tuesday. “That’s what we see as a 2017 conversation.”

IT MUST BE AN ELECTION CYCLE...MORE AT LINK

[Demeter]

14. Clinton Foundation Discloses More than $12 Million in Speech Fees

The Clinton Foundation on Thursday disclosed nearly 100 instances in which it was paid directly for speeches delivered by Bill, Hillary and Chelsea Clinton in the past dozen years.

In all, the fees from those engagements total between $12 million and $26 million that went into the foundation’s coffers and had not been previously disclosed by the organization or by the Clintons. The release comes on the heels of the Friday filing of the Clintons’ latest financial disclosures, which showed them earning at least $30 million since the start of 2014 and having a net worth of between $11 million and $53 million—not including their two multimillion dollar homes and other personal property.

The disclosures come amid questions about the web of influence around the Clintons as former Secretary of State Hillary Clinton runs for president.

The list released Thursday is composed primarily of fees collected by former President Bill Clinton, including three between $500,001 and $1 million. Those speeches were paid for by DMC Communications Ltd. on behalf of All Ireland Scholarships, a program providing financial support to undergraduate students in Ireland; Hanwha, a South Korean company with holdings in the explosives, manufacturing and financial services industries; and Leaders and Company Ltd., which publishes Nigeria’s THISDAY newspaper.

The biggest fees brought in by Hillary Clinton for the foundation were between $250,001 and $500,000 from Citibank, N.A.; Colgate University; Fundacion Telmex, billionaire Carlos Slim’s foundation; Goldman, Sachs and Co.; Hamilton College; JP Morgan Chase Bank, N.A.; UB Foundation Activities, Inc., the University at Buffalo’s foundation; and the University of California Los Angeles.

Bill Clinton also brought in several fees in that range.

Chelsea Clinton’s biggest paydays on behalf of the foundation came for speeches to three separate Jewish groups and at the University of Missouri-Kansas City—for which she was paid between $50,001 and $100,000 apiece.

Craig Minassian, the foundation’s chief communications officer, said the list was " just another example of how our disclosure policies go above and beyond what's required of charities.”

But the disclosures came only after investigative reporting dug up inconsistencies in the foundation’s previous disclosures and amid pressure for the Clintons to be more transparent as Hillary Clinton embarks on her second presidential campaign.

http://www.bloomberg.com/politics/articles/2015-05-22/clinton-foundation-discloses-speech-fees

[Demeter]

16. It's all Greek to me-continues

Are The IMF and the EU at Loggerheads Over Greece? by Yves Smith

http://www.nakedcapitalism.com/2015/05/are-the-imf-and-the-eu-at-loggerheads-over-greece.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...This post does a very fine job of summarizing the economic basis of the simmering row between the IMF and Eurozone. But that means it’s thin on the politics of the dispute, namely, that quite a few Eurocrats, most prominently the European Commission’s Jean-Claude Juncker, are mighty unhappy that a non-European institution is playing such a powerful role in European politics. The wee problem is the EC has no checkbook, and the IMF was brought in in the first place to help defray the large costs of the stealth rescues of French and German banks. Moreover, as we’ve also discussed, the IMF’s raising of the sustainability issue at this juncture makes it even harder for the other members of the Troika to paper things over and enter into a partial bailout deal to avert a Greek default. Just as Syriza’s hard left is making it well-nigh impossible for Tsipras to capitulate, one has to wonder if the IMF is trying to play a similar role here (keep in mind that the IMF at the April 24 Eurogroup meeting at Riga took a harder line that Hugh indicates via his quote from an April 22 Wall Street Journal article).

By Edward Hugh, a macro economist based in Barcelona, who specializes in growth and productivity theory, demographic processes and their impact on macro performance, and the underlying dynamics of migration flows. He is currently working on a book “Population, The Ultimate Non-renewable Resource?” His analysis can be found on his “Don’t Shoot the Messenger” blog on www.economonitor.com. He is also a regular contributor to a number of economics weblogs, including India Economy Blog, A Fistful of Euros, Global Economy Matters and Demography Matters. Cross posted from Credit Writedowns

Everything has a cost, or so the story goes, especially time. In the Greek case we now know an additional item on the mounting bill: the country is back in recession. The issue is who – apart of course from the long-suffering Greeks themselves – will pay the extra costs of the latest imbroglio.

The Cost Of Not Finding A Solution

It is now clear that Greece’s economy has been going backwards over the last 6 months, and that it has once more fallen back into recession. Greek GDP fell by 0.4% in the last three month of 2014, and by a further 0.2% in the Jan – March 2015 period. As a result at the end of March Greek GDP was only 0.3% above the year-earlier level. This is a lot lower than expected in IMF forecasts, and – perhaps more importantly – well out of line with what is needed to maintain the 2022 debt sustainability targets on which continuing Fund support for Greek programmes depends...

The ECB's in a Tight Spot Over Greece

http://www.bloomberg.com/news/articles/2015-05-19/greek-conundrum-puts-ecb-in-tight-spot-as-bailout-talks-progress

European Central Bank policy makers will discuss Greek bank aid on Wednesday in a chore that is getting more uncomfortable every week.

The Governing Council is due to meet in Frankfurt to debate the Greek central bank’s request for an increase of 1.1 billion euros ($1.2 billion) in the emergency funding it can offer lenders, people familiar with the matter said. As Greece veers toward default, ECB officials are aware that their response could worsen the political crisis just as bailout talks show signs of progress.

ECB President Mario Draghi has repeatedly said politicians rather than unelected central bankers must decide on Greece’s future, and council decisions will be based on rules such as the solvency of its banks and a prohibition on state financing. European leaders will have their next chance at a summit on Thursday in Riga, Latvia.

“It’s very simple: the ECB doesn’t want to be the one that pulls the plug on Greece when political negotiations are still ongoing,” said Marco Valli, an economist at UniCredit SpA in Milan. “As long as there is the chance that Greece will remain solvent, that it might receive further European Union aid, then ELA can be given. Should this possibility disappear, then it will have to stop.”

The ECB may be reluctant to approve the full ELA request as the Bank of Greece still has a cash buffer available and deposit outflows stabilized last week, the people said, asking not to be named as the matter isn’t public. Spokesmen for the ECB and the Bank of Greece declined to comment...

[Demeter]

17. UKRAINE: THE OTHER WHITE MEAT

Will American and European taxpayers save Ukraine from default?

http://fortune.com/2015/05/20/ukraine-default/

Ukraine likely cannot pay back what it owes to its creditors. But several power players may very well come to its aid.

Despite an ostensible ceasefire between Ukraine and Russia, low level fighting continues between the Eurasian rivals. But Ukraine is about to open up a second, potentially more dangerous, front in this conflict–this time with its foreign creditors. On Tuesday, the Ukrainian Parliament passed a bill that would allow the government to default on payments to foreign creditors, amid negotiations to restructure its increasingly unsustainable debt.

So, does this mean that the Ukraine is going bankrupt? Most outside analysts agree that Ukraine can’t pay back what it owes. But as we know from the situation in Greece, just because everyone agrees a country can’t make good on their debts doesn’t mean it will default....When it comes to the Ukraine, people like financier George Soros have argued that the international community, and specifically Europe, should invest at least $50 billion on top of the $17 billion the IMF has already offered to help the nation stabilize its economy and reform its bureaucracy. If Ukraine were able to successfully go through with such reforms, such as radically reducing the size of its public sector, it could very well lead to the sort of economic growth that would enable it to pay back its benefactors. But as Soros admits, Ukraine’s track record of using international loans to spur reform is spotty. And unlike in the case of Mexico, Ukraine doesn’t have large deposits of oil to use as collateral.

Another option to saving Ukraine from financial ruin would be to force private creditors to forgive its outstanding debt. That’s the approach former Treasury Secretary Larry Summers advocated in an op-ed published on Monday. “The case for debt reduction is as strong as any that I have encountered over the past quarter century,” Summers writes. Summers argues that Ukraine cannot possibly pay what it owes, and that its troubles are not just a result of creditors over-lending and Ukraine over-borrowing. Instead, Russian aggression is also to blame. Finally, Summers writes, “Ukraine has shown real political courage in combating corruption and moving aggressively to curb energy subsidies that generated vast waste. Ukraine has done more in the past 12 months to reform its subsidies than most nations do in 12 years.”

But how exactly will the international community force private creditors, composed mostly of large investment companies like Franklin Templeton, to accept losses on Ukrainian sovereign debt? Summers is less specific on this question, but he more or less suggests that the international community support Ukraine in a high-stakes game of chicken: MORE

US and Ukraine sign $1bn loan guarantee

http://rt.com/business/259697-us-ukraine-financial-help/

The US has signed a $1 billion loan guarantee deal with Ukraine, and is prepared to consider giving additional loan guarantees of up to $1 billion at the end of 2015 if Ukraine continues implementing economic reforms and cooperating with the Congress.

A US-born Finance Minister Natalie Yaresko signed the agreement on behalf of Ukraine, while the US government was represented by US Ambassador Geoffrey R. Pyatt and USAID's Ukraine director Jed Barton.

"If Ukraine continues to make concrete steps to implement economic reforms and will also meet certain conditions of cooperation with the Congress, we will consider the possibility of providing additional loan guarantees of up to $1 billion at the end of 2015,” Pyatt said in Kiev Monday after the signing ceremony.

In April, US Vice President Joe Biden promised Ukrainian President Petro Poroshenko to extend $1 billion in loan guarantees and provide additional non-lethal military assistance to Kiev.

In January, Yaresko and US Treasury Secretary Jack Lew signed a $2 billion loan guarantee deal in Kiev.

Ukraine’s economy has been in a deep crisis since the Maidan protests at the end of 2013.

Ukraine rips up key cooperation deals with Russia

http://news.yahoo.com/ukraine-rips-key-cooperation-deals-russia-100539437.html

Kiev lawmakers on Thursday annulled five crucial security agreements with Moscow that had allowed Russia to transport troops to a separatist region of Moldova and purchase weapons that are only produced in Ukraine. The deals were suspended when Kiev accused the Kremlin of fomenting a pro-Russian revolt in Ukraine's industrial east 13 months ago that has killed 6,250 and left the ex-Soviet state's economy in ruins. But Thursday's decision means that legislative support from Ukraine's dominant nationalist and pro-European parties would be required before such cooperation could resume once the separatist conflict is resolved. It also underscores how little a truce deal reached in February has done to rebuild trust between Moscow and Kiev.

"I know of no other country that continues to be friends with a neighbour that kills your people," prominent pro-EU deputy Mustafa Nayyem wrote on Facebook.

"And only recently I learned that we still have international agreements with Russia concerning military and technological cooperation!"

The five laws include a strategic agreement allowing Moscow to send peacekeeping forces across Ukraine to Moldova's Russian-speaking Transdniester region. A top Ukrainian state security official told AFP that the transports' abrupt interruption had caught Moscow off guard when they first went into effect about a year ago. The same source said Moscow has since found new avenues by which to supply troops in the self-declared state. But several senior Russian officials signalled their alarm at the sudden complication.

"There is no other way for us reach (Transdniester) other than through Ukraine," an unnamed diplomat in Russia's foreign ministry told Interfax.

"We have to think and look for alternatives. We cannot abandon Transdniester and Moldova," the Russian parliament's defence committee head Vladimir Komoyedov added.

A second politically-charged agreement cancelled by Kiev required the neighbours to protect each others' state secrets. It was initially adopted with the arrival of one-time spy Vladimir Putin in the Kremlin in 2000. Another law covered basic Russian military transports across Ukraine and a fourth concerned mutual arms purchases. Ukraine inherited several huge Soviet-era arms manufacturing sites that formed the backbone of Russia's armed forces. The final law covered intelligence sharing between the two sides. "Many Ukrainians must have learned with some surprise today that these laws were still around," Kiev's Razumkov Centre analyst Oleksiy Melnyk told AFP.

Ukraine's Western allies have encouraged parliament to spend less time on populist -- and often little-more than symbolic -- measures and to focus instead on the numerous laws needed to get the recession-hit economy back on track. Rafts of nationalist legislation adopted since this chamber's November election have only stoked the virulent anti-Ukrainian passions of Russia's state media and senior ministers. But some analysts said Thursday's legislation meant that crucial links that tied Moscow and Kiev over the past two decades have been ruptured for many years to come. Pro-Russian legislators that supported these laws at the expense of closer links with NATO and the European Union were trounced in the November election and at present appear a longshot at making a comeback in the 2019 parliamentary vote.

"The chances of Ukraine and Russia resuming the type of military and technological cooperation that they enjoyed just a few years ago appear highly unlikely in the mid-term perspective," independent military analyst Mykhaylo Pashkov said in an interview.

"Russia's foreign policy approach is also unlikely to change under Putin," he added. "There is little chance that he will take a benevolent view of Ukraine in the next few years."

Pro-Western President Petro Poroshenko has pledged to adopt all the reforms needed for Ukraine to join the European Union by 2020.

Russia says Ukraine debt repayment law amounts to default

http://www.dailystar.com.lb/Business/International/2015/May-21/298732-russia-says-ukraine-debt-repayment-law-amounts-to-default.ashx

Russia demanded Wednesday the timely repayment of all debts owed to it by Ukraine and accused Kiev of effectively preparing the way for default with a new law. It threatened to take the issue to international courts if necessary.

The law, approved by Ukraine’s parliament Tuesday, gives the government the right to miss payments to its international creditors as it wrangles over the terms for restructuring $23 billion worth of foreign debt. Russia holds a $3 billion Ukrainian Eurobond whose full repayment is due by the end of the year. Moscow, whose relations with Kiev have been wrecked by a yearlong conflict in eastern Ukraine, has declined to join the debt restructuring talks. President Vladimir Putin, speaking at a meeting with government ministers, said he found the new law “strange.”

“To effectively announce an impending default shows a poor level of professional responsibility, all things considered,” Putin said, and noted that the International Monetary Fund does not lend to countries in default.

Ukraine, its economy battered by recession and rampant graft as well as by the conflict in the east, hopes to secure the next tranche of a $17.5 billion bailout program with the IMF this summer to shore up its foreign currency reserves. Kiev is also holding talks to restructure sovereign and state-guaranteed debt to plug a $15 billion funding gap, but the negotiations have soured in the past week. Bondholders object to any write-down on the principal owed. Kiev says their stance shows a lack of good faith. Russian Finance Minister Anton Siluanov said Moscow would seek redress in international courts if Ukraine did not respect the terms of its foreign debt repayments.

“For the time being we don’t have any grounds to act. If a payment is missed, we will exercise our right to go to court,” he said. Ukraine was due to make its next Eurobond repayment to Russia, worth $75 million, on June 20, Siluanov added. Siluanov said Russia would hold consultations with the IMF on the Ukrainian debt issue “to defend its interests during the provision of regular tranches of financial help to Ukraine.”

Putin said the terms of the Eurobond had been particularly generous to Ukraine and that Russia could have demanded an earlier redemption of the bond but had not done so at the request of the IMF. In addition to the Eurobond, Prime Minister Dmitry Medvedev said Russian banks were also heavily exposed to Ukraine through loans worth around $25 billion. In the event of a default on either commercial or sovereign debt held by Russia, Medvedev added, “it will be essential to use all possible means of defense, including via the courts.”

Relations between Kiev and Moscow soured badly after mass street protests toppled Ukraine’s pro-Russian president Viktor Yanukovich in February 2014, in what Russia called a coup. Moscow then seized Ukraine’s Crimea peninsula and has backed pro-Russian separatists battling Kiev’s forces in eastern Ukraine, though it denies Western accusations that it has sent troops and military hardware across the border.

More than 6,100 people have been killed in the conflict.

[Demeter]

18. 5 Ways To Protect Yourself Against Debit Card Fraud

http://www.forbes.com/sites/nickclements/2015/05/21/5-ways-to-protect-yourself-against-debit-card-fraud/

This week, FICO reported that debit card fraud has hit a 20 year high. Fraud at ATMs located in bank branches increased 174% from January 1 to April 9, compared with the same period last year. And ATM machines located away from bank premises experienced an incredible 317% increase.

ATMs in America remain vulnerable. When a consumer takes out cash, they need their ATM card and a pin code. The ATM card does not have chip-and-pin protection. Instead, all of the information is stored on the magnetic stripe, which is a very old technology. And most fraudsters are still using an old technique called skimming. With this technique, fraudsters attach a device on the ATM that can be very difficult to detect. When you input your ATM card, the attached device will skim the data from the magnetic stripe. Typically, a camera will also be added to the ATM machine, so that the fraudster can record your pin code. With this information, a new debit card can be created using the information skimmed from the magnetic stripe. Combined with the pin code, the manufactured card can be used to withdraw cash from ATMs. It is much easier to attach skimming devices at ATMs located in convenience stores than at bank locations, which is why ATMs away from bank branches are most vulnerable.

However, there has been an increasing risk even at bank branches. I have spoken with a number of fraud managers at large banks, and they have told me that while the ATM machines inside of a branch lobby are well protected, one vulnerability has been increasingly exploited. When you visit an ATM out of office hours, you often have to put your card into a reader to unlock the door. This device has become vulnerable to specially designed skimming devices. And while fraudsters likely will not have your pin code, they can use the credit card functionality of the ATM card to make other purchases. I used to run large fraud departments at banks earlier in my career. As a result, I have always been very paranoid about protecting myself. And I view the checking account as the most important account to protect, because it is your cash. Here are the five things I do to reduce my risk of fraud.

1. Only Use A Bank ATM And Cover Your Pin Code

ATM machines away from the bright lights and cameras of a bank branch are at a much higher risk for fraud. Whenever I need to get cash, I use a bank branch ATM. And I only do it during regular business hours, so that I avoid having to use the devices that open doors after business hours. When you input your pin code, make sure you use your hand to cover the number pad. That way, any camera would not be able to obtain your code.

2. Set Up Daily Alerts With Your Bank

Most banks give you the opportunity to set up alerts. I opt for text message alerts, because it gets my attention. I have set up the alerts so that any transaction greater than $0.01 using my ATM card results in a text message being sent to my phone. I will know right away if I have been compromised.

3. Keep As Little Cash As Possible In Your Checking Account

The more opportunities there are to access an account, the greater the chance for a fraudster to steal money. Checking accounts have more ways than any other type of account. You can remove funds by using your ATM card. You can use that same card like a credit card, making a purchase with a signature. Checks can be written. Automatic debits can be taken out of your account, if someone knows your routing number and account number, which is written on your checks. People can hack your online banking account and order a bill-pay. Every one of those transactions has a process that a fraudster is studying, and trying to break. I keep very little money in my checking account. Every month, I sweep money from my checking account to an online savings account that has no ATM card associated with it. Not only do I earn a much higher interest rate, but also I reduce the chance of theft. I have a setting on my savings account that any withdrawal will result in a notification.

4. Sign Up For 2-Factor Authentication

Many banks give you the opportunity to sign up for 2-factor authentication. That means that a username and password is not sufficient for signing into your account. Instead, you need to have a text message sent to your phone, or an email sent to your account. You are usually given a number of options for setting up this higher level of security. I turn on the higher level of security wherever it is offered. But at a minimum I would set it up for adding a new payee for online bill-paying. I have seen too many people have their online banking credentials hacked. The fraudster could then login to your bank account and send money to a new payee.

5. Consider A Credit Card For Your Everyday Purchases

Credit cards can be dangerous. For too many people, a credit card serves as a source of temptation to spend more money and get into debt. But, if you have the self-discipline to manage your credit card responsibly, it can be a wonderful tool. I put all of my monthly purchases on a credit card. That way I can keep very little money in my checking account. When I am paid each month, I pay for my home, my utilities and my single credit card bill. I then transfer the rest to a savings account, leaving a small buffer. Even better, I know that if fraud does happen, my own cash is not at risk. Instead, I dispute a credit limit rather than having to wait to get my cash re-deposited after an investigation. Although banks are generally good about putting cash back into someone’s checking account during a dispute, it does not always work perfectly.

Fraud Will Likely Happen To You

At some point, you will likely be the victim of fraud. Your first goal should be to minimize the risk of it happening. Your second goal should be to know about it as soon as it happens. And then you need to call the bank right away and report it. I have experienced fraud a number of times. But I found out about it right away, disputed it and never lost any of my own money.

[DemReadingDU]

19. Just don't use a debit card

If defrauded, your entire account could be drained which could bounce checks everywhere amassing lots of fees.
Instead use cash, or a credit card for larger purchases.

[Demeter]

20. Another brisk (45F) but sunny morning

We will be returning to the Island this Weekend, for those seeking more tropical weather.

[Demeter]

22. Of course you don’t love your job. You’re not supposed to.

http://www.washingtonpost.com/posteverything/wp/2015/05/18/of-course-you-dont-love-your-job-youre-not-supposed-to/?tid=sm_tw

Since we live in a capitalist society, it can often seem that our jobs are meant to be the most important things in our lives. Our jobs take up most of the hours of our days, provide for our families, and put food on our tables and, if we are very lucky, feed our souls. “Do what you love and you’ll never work a day in your life.” You know, especially if what you love is something that pays enough money to maintain a comfortable lifestyle. I hope you love accounting.

I, for better or worse, decided to study my passion in college and become a professional at what many others consider a hobby: writing and performing. Lots of people do my job for free, so it becomes tricky to make a living at it. But still I keep at it, hoping that with enough sweat equity it will all shake out in the end. I do have hobbies, though. One in particular has been very valuable to me. I am a very slow, awkward-looking, consistent, and devoted runner.

Running has saved my life four times. When bad or scary things happen in my life, it helps remind me who I am and what I care about most. It keeps me healthy and driven and it’s really fun...


I CANNOT AGREE WITH THIS AUTHOR.

MOST OFTEN, IT IS NOT THE JOB, BUT THE PEOPLE THAT COME ALONG WITH IT, THAT TURNS ME OFF.

IN MY EARLY DAYS, I ONCE HAD A JOB SO FULL OF TOXIC PEOPLE, THAT WHEN A SOCIAL WORKER SUGGESTED I TAKE PSYCHOTROPIC DRUGS IN ORDER TO STAND THE HORRIBLE WORKING CONDITIONS, I REALIZED IT WAS TIME TO QUIT AND TRY TO FIND SOME SANE PLACE TO SPEND MY TIME AND EFFORT AND EXPERTISE (STILL LOOKING, BTW...MY CURRENT CONTRACTS ARE CONGENIAL, BUT NOT WELL-PAYING).

TOO MANY OF THOSE TOXIC PEOPLE WERE ON "RECREATIONAL" DRUGS...A REASON WHY I DON'T SUPPORT LEGALIZATION OF ANYTHING. IF YOU NEED A CRUTCH FOR REALITY, IT'S TIME TO FIND A NEW REALITY.

AMERICA IS FULL OF TOXIC PEOPLE WHO MAKE THEMSELVES AND EVERYONE AROUND THEM SICK. THEY MAKE OUR INSTITUTIONS DYSFUNCTIONAL AND OUR LAWS A MOCKERY OF JUSTICE. IT'S MORE THAN JUST POLITICS...BECAUSE THE TOXICITY IS LEAKING OUT OF THE GOP AND INTO THE DEMOCRATIC BULLPEN, OUT OF THE US AND INTO THE LARGER WORLD.

I DON'T HAVE A SOLUTION, NOR HAVE I HEARD OF ANYONE IDENTIFYING THE PROBLEM AND DOING RESEARCH.

[DemReadingDU]

27. +++

You said it best!

I think a solution is to stay away from toxic people and their institutions, if possible.

[Demeter]

23. The Rockefellers and Rothschilds “fused” while no one was looking

http://wearechange.org/the-rockefellers-and-rothschilds-fused-while-no-one-was-looking/

Finally revealed by Vanity Fair and unbeknownst to everyone aside from insiders, the Rockefeller family and Rothschild family have merged as part of a secretive 2012 deal.

The Rockefellers (who changed their name from Rockenfelder before coming to the US in the 1800s) were founders of the Standard Oil Company in 1870 and a wealth-management firm in 1882 and have been influencing many walks of life for a long time. David Rockefeller (son of the notorious banker John D. Rockefeller) is the current patriarch of the Rockefeller family. It was revealed in his personal memoir; that David admitted to being “guilty” and “proud” of an “international conspiracy” against US sovereignty. We Are Change were one of the first to confront him about this admitted international manipulation:

The Rothschilds (whose name means “red-shield”) have been around for at least 100 more years than the Rockefellers, establishing banks in the 1790s. One of the banks under their influence is the non-federal “Federal Reserve” – the Federal Reserve that loans us our currency, therefore we are always in debt. “Our” very currency is debt, how will never get out of debt when our currency has interest just to print it? These methodical individuals understood this for a long time – as did Henry Ford who was quoted as saying,

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Lord Jacob Rothschild is the figure head for the House of Rothschild, he was also confronted by We Are Change – his reaction was very interesting:

The Deal

In the May of 2012, the two dynasties finally unveiled a merger to the world, some suspect that they have always been operating together – but this is the first instance of them being open about the endeavor. Lord Jacob Rothschild and David Rockefeller were the ones who headed the deal and oversaw the fusion of the two “elite” powerhouses. The deal was fairly simple, RIT Capital Partners, led by Rothschild, bought a 37 percent share in Rockefeller Financial Services. This appears to be a small action, but when one observes the direction of this step – only then can it be fully appreciated.

They are openly demonstrating their cooperation and their interlinking agendas, Rockefeller who knowingly admits his families “conspiracy” and Jacob Rothschild who knowingly influences the currencies of many countries – including the United States. If anything, this is something to pay attention to, there is no telling how far it will unfold; thank you for reading.

[Hotler]

24. lalalalalalalalalalalal.... I can't hear you. lalalalalalalalal

I bet when those two went out for dinner they tipped only a buck.

[Demeter]

25. Good Morning, Hotler? Had a rough week?

I took my "house guest" out for a walk around midnight, and the moon was just rising...lots of large planets glowing in the sky, through the clouds. It was a way to gain perspective.

House guest didn't do his duty until the morning, but at least I know his guts are working...I only borrow doggies, at this point in life, so I can give them back...

If you want a friend, get a dog--Harry S. Truman was reputed to have said this...

[Hotler]

28. Actually this week was better than the week before.

Thank heaven for three day weekends as I could use some sleep.
I love dogs and this is the first time in my life I have been without at least one, I usually have two. People that have never had the experience of the companionship of a good dog is missing out on one of life's simple pleasures. It's been raining here all week and I'm starting to prune.
Have a good weekend.

[Demeter]

30. Prune! We can't have that!

I did some pruning of the new fruit trees...doesn't look like they are going to flower this year, but they are very healthy, so next year! I have to put the annuals in this weekend. If it will stop frosting.

I'm beginning to think I should adopt a cat, at least. My kitty died in November, and I am really missing her...of course, the Kid's cat would have figurative kittens, if I brought competition into the house...

[Hotler]

26. The Man Who Lost $14 Billion in One Day

I wonder which American 1%ers were stung by this also.


http://www.msn.com/en-us/money/markets/the-man-who-lost-dollar14-billion-in-one-day/ar-BBk4iEq?ocid=iehp

HONG KONG—On the day Li Hejun lost roughly $14 billion, he was skipping his company’s annual meeting to attend what it said was a clean-energy exhibition in Beijing.

That company, Hanergy Thin Film Power Group Ltd., which Mr. Li controls, saw its shares plunge nearly 50% on Wednesday before trading was halted. Mr. Li, who at one time was considered China’s richest man based on the value of his majority stake in the Chinese solar company, saw his holdings suffer accordingly.

The Wednesday decline was followed on Thursday by a similarly steep fall in Goldin Financial, a broker that provides short-term corporate financing to firms and had been an advisor to Hanergy Thin Film. Goldin fell 43%, wiping $12 billion off its market value. A smaller company with the same owner, property developer Goldin Properties, fell by 41%, reducing its market capitalization by $4.6 billion.

The pain from these violent falls is stinging investors, especially those in exchange-traded funds focused on China’s energy sector.

[DemReadingDU]

29. Americans think they are immune from market losses

Ha, it was that same thinking of the markets in 1929, 1987, 2000, 2008.

And this time is not different either. Markets never go up forever.

[Demeter]

31. WEE will also celebrate Dante, 750 years young this weekend

and I'll be digging through the old files for anything still newsworthy...since sources are drying up. I don't know what I will do, when the 1.5 years of backlog are used up....run old Mensa quizzes? Well, any help with new sources will be greatly appreciated!

[Demeter]

32. I am having car problems

The kind of annoying problems that occur around 100K and after:

The door handle that the Kid ripped off in a snit, and now the power windows don't.

I have to get a car tarp to keep the damn interior dry...since it failed with every window open.

Should have used the ac....Mercury went retro on May 18th, and it's been downhill ever since...