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STOCK MARKET WATCH -- Wednesday, 9 January 2013
[font size=3]STOCK MARKET WATCH, Wednesday, 9 January 2013[font color=black][/font]
SMW for 8 January 2013
AT THE CLOSING BELL ON 8 January 2013
[center][font color=red]
Dow Jones 13,328.85 -55.44 (-0.41%)
S&P 500 1,457.15 -4.74 (-0.32%)
Nasdaq 3,091.81 -7.00 (-0.23%)
[font color=green]10 Year 1.86% -0.02 (-1.06%)
30 Year 3.07% -0.02 (-0.65%)[font color=black]
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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]
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[center]
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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
[center]
Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
[/center]
[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
[center]
The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
[/center]
[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
[center]
Matt Taibi: Secret and Lies of the Bailout
[/center]
[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
[center]
LegitGov
Open Government
Earmark Database
USA spending.gov
[/center][font color=black][font size=2]Handy Links - Videos:[/font][/font]
[center]
Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
[/center]
[div]
[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.
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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]
55 replies
= new reply since forum marked as read
= new reply since forum marked as read
love,
Demeter
since Robin Hood Prince of Thieves. He stole every scene he was in. In drama school, he was criticized for his voice and delivery. Frankly, those are the two things I find most endearing. He is not a cookie cutter actor.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/07/we-dont-have-a-spending-problem-we-have-a-military-spending-problem/
...“Since 2001, the base defense budget has soared from $287 billion to $530 billion — and that’s before accounting for the primary costs of the Iraq and Afghanistan wars.” Or, if you prefer to see it in graph form:
That’s big money. More than we spent on Medicare, in fact. But it’s big money that doesn’t often get recognized in our budget conversation...
The Bush tax cuts, he finds, were responsible for about a quarter of the deterioration in the budget outlook, making them the single most expensive set of policies enacted. But all spending, together, was responsible for about half of the turn towards deficits. Finally, the flagging economy accounts for another quarter. “Had the tax relief never been enacted but everything else happened as it has, we still would face enormous deficits today,” Blahous concludes.
So where did all the new spending come from? Well, largely from the post-9/11 defense build-up. “One major factor that worsened the fiscal outlook was a large increase in federal discretionary spending. Much of this, of course, happened after the United States was attacked on September 11, 2001. The U.S. thereafter conducted major military operations in Afghanistan and Iraq, and also increased expenditures on homeland security.”
MORE
...“Since 2001, the base defense budget has soared from $287 billion to $530 billion — and that’s before accounting for the primary costs of the Iraq and Afghanistan wars.” Or, if you prefer to see it in graph form:
That’s big money. More than we spent on Medicare, in fact. But it’s big money that doesn’t often get recognized in our budget conversation...
The Bush tax cuts, he finds, were responsible for about a quarter of the deterioration in the budget outlook, making them the single most expensive set of policies enacted. But all spending, together, was responsible for about half of the turn towards deficits. Finally, the flagging economy accounts for another quarter. “Had the tax relief never been enacted but everything else happened as it has, we still would face enormous deficits today,” Blahous concludes.
So where did all the new spending come from? Well, largely from the post-9/11 defense build-up. “One major factor that worsened the fiscal outlook was a large increase in federal discretionary spending. Much of this, of course, happened after the United States was attacked on September 11, 2001. The U.S. thereafter conducted major military operations in Afghanistan and Iraq, and also increased expenditures on homeland security.”
MORE
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/07/everything-chuck-hagel-needs-to-know-about-the-defense-budget-in-charts/
1) The United States spent 20 percent of the federal budget on defense in 2011.
3) The Pentagon’s budget mostly consists of personnel pay, weapons procurement, and operations.
4) The United States spent more on its military than the next 13 nations combined in 2011.
MORE AT LINK
1) The United States spent 20 percent of the federal budget on defense in 2011.
3) The Pentagon’s budget mostly consists of personnel pay, weapons procurement, and operations.
4) The United States spent more on its military than the next 13 nations combined in 2011.
MORE AT LINK
http://truth-out.org/progressivepicks/item/13759-is-there-an-alternative-for-capitalist-economics-and-politics-richard-wolff-says-yes
Few are better equipped than economist Richard Wolff, professor emeritus at the University of Massachusetts, to address the massive failings and inequalities of capitalism as he does in his latest book, Democracy at Work: A Cure for Capitalism.
He also describes Workers' Self-Directed Enterprises (WSDEs) as an alternative to the capitalism that broke the US economy and has resulted in massive economic redistribution to the ruling elites...
"Capitalism, like all other economic systems, displays a variety of forms. There are, for example, largely private, laissez-faire kinds of capitalism that differ in many ways from forms of capitalism in which the state plays more significant roles, such as market regulator or social welfare guarantor (as in "state welfare capitalism"
, or as a close partner of capitalists as in fascism. What remains the same across all such forms - why they all deserve the label "capitalist" - is the exclusion of the mass of workers that produces the output and generates the profits from receiving and distributing that profit, and from generally participating democratically in enterprise decisions. Capitalism excludes workers from deciding what is produced, how it is produced, where it is produced and how profits are to be used and distributed."
MONDRAGON, ANYONE?
"Imagine a country where the majority of the population reaps the majority of the benefits for their hard work, creative ingenuity and collaborative efforts. Imagine a country where corporate losses aren't socialized, while gains are captured by an exclusive minority. Imagine a country run as a democracy, from the bottom up, not a plutocracy from the top down. Richard Wolff not only imagines it, but in his compelling, captivating and stunningly reasoned new book, Democracy at Work, he details how we get there from here - and why we absolutely must."
-- Nomi Prins, Author of It Takes a Pillage and Black Tuesday
-- Nomi Prins, Author of It Takes a Pillage and Black Tuesday
Few are better equipped than economist Richard Wolff, professor emeritus at the University of Massachusetts, to address the massive failings and inequalities of capitalism as he does in his latest book, Democracy at Work: A Cure for Capitalism.
He also describes Workers' Self-Directed Enterprises (WSDEs) as an alternative to the capitalism that broke the US economy and has resulted in massive economic redistribution to the ruling elites...
"Capitalism, like all other economic systems, displays a variety of forms. There are, for example, largely private, laissez-faire kinds of capitalism that differ in many ways from forms of capitalism in which the state plays more significant roles, such as market regulator or social welfare guarantor (as in "state welfare capitalism"
, or as a close partner of capitalists as in fascism. What remains the same across all such forms - why they all deserve the label "capitalist" - is the exclusion of the mass of workers that produces the output and generates the profits from receiving and distributing that profit, and from generally participating democratically in enterprise decisions. Capitalism excludes workers from deciding what is produced, how it is produced, where it is produced and how profits are to be used and distributed."
MONDRAGON, ANYONE?
to stir things up with the old cat and 3 dogs
1/9/13
Readers already know that when it comes to Europe, the scariest chart, from a political, economic, financial and social perspective, is that showing youth unemployment - youth, which engaged in idle, non-productive activity is a powder keg for both future economic instability and social upheaval. The monthly update is presented below. This time, we are happy to also present the "scariest heatmap" that goes with it, showing the geographic breakdown of unemployment in the critical 15-24 age groups. Those looking for geopolitical hotspots in the coming months and years, look no further than the dark shaded areas.
http://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmap
Washington Has a Critical Thinking Problem
So the "fiscal cliff" crisis has been postponed and the debate continues about how Republicans and Democrats want to narrow the deficit. The left wants to include some higher taxes. The right wants to achieve it through spending cuts and, possibly, closure of some tax loopholes. Both sides are looking for answers, but they've asked the wrong question.
The real question -- the one that should be answered first -- is, "What size should the deficit be, given our current circumstances?" Even better would be the question, "How can we set our laws to ensure our federal deficit (or surplus) comports itself to the needs of our economy now and as conditions change in the future?" Instead, what we have is a question born out of irrational fear: "How drastically and by what means should we cut the deficit?" I believe this fear comes from misunderstandings about the role of the federal budget deficit and federal debt in our economy reinforced by prominent (which is not to say correct) economists and business people who see opportunities for profit in suffering.
The federal debt and federal budget deficit are, without question, big numbers. I think, though, that it is the concept of debt -- linked, out of our personal experiences, with worry -- coupled with these large numbers that produces our collective, national fear. The antidote to that fear is understanding: understanding what the debt means, why it was accumulated, and why we need not fear about defaulting on it.
First, the largest number: the debt. Every dollar that the federal government spends in excess of the amount of taxes collected (also called "net spending" has, customarily, been "financed" through the sale of Treasuries (bonds, notes, and bills). These instruments, until maturity, represent an obligation of the United States government to deliver certain numbers of dollars to the holder at certain times and, as a whole, constitute our federal debt. Almost every dollar of this net spending went into the hands of an American person or corporation. In short, nearly every dollar of government net spending resulted in private, American wealth (although some leakage to foreign consumables probably occurred later).
So now we hear that we should work to reduce the national debt, because that debt is somehow "bad." There is one simple way to reduce the debt: coin new money. This would have a two-fold effect: the coined money could be used to directly retire some of the debt and the inflation caused would decrease the real value of the debt remaining. Of course, that same inflation would hurt any holder of US dollars, anyone who lent dollars expecting low inflation and anyone who borrowed heavily at a variable rate. The only other source available to pay down the national debt is the private wealth it was used to create. And you can bet that it won't be the wealthy and extremely wealthy of this country shouldering the lions share of that pain -- it will be the middle class.
Why is national debt "bad?" A family or business in debt has to make regular payment to service the debt or risk collection proceedings and bad marks on their credit that can cost them even more in the long run. If that family or business runs out of money before the debt service is paid, it is insolvent and bad things start happening. Any private debtor can, sometimes through no fault of their own, run into this situation, which is why taking on such debt is always somewhat risky. But public debt is different because of a power the federal government has which families and businesses lack: the legal right to create as much money as it chooses. The government creates money not through taxes (which actually destroy money) but by law (although the actual process does use coins). We no longer, thank God, use a commodity-based currency (since 1971); our currency is now backed by the value of "not going to jail for unpaid taxes." So there is no real danger of insolvency for our federal government, contrary to the claim frequently made by more conservative politicians. We have public debt because we choose to, not because it is necessary. It can't be that bad, or we'd have gotten rid of it already.
With that knowledge about the nature the federal debt, let's look how it came to be: the federal budget deficit and Congress's "financing" practices. In most years, the US Federal Government, through appropriations bills passed by Congress, has chosen to spend more dollars than it received in revenues (mostly taxes). Rather than coining new money, Congress chose to "finance" this spending by borrowing dollars with a promise to repay them with interest. Most economists recommend this to prevent inflation, since coining new money increases the money supply (which may bring images of money-dropping helicopters to mind). Congress's net spending is not, however, like helicopters dropping money because it buys goods and services that would otherwise not be produced or provided. Thus, the net spending is not inflationary. In fact, if anything is inflationary, it is the interest offered on Treasuries -- money spent only to keep other money out of circulation.
If Congressional borrowing is not necessary for deficit spending, then why do they do it? Looking in depth at our banking sector we can see the role that Congress's "financing" really plays: it provides a way for banks to earn money on excess reserves that wouldn't make as much return in the interbank reserve market. Were Congress to coin money without taking on debt, the money would be deposited with banks. Part of these deposits become excess reserves -- reserves the bank could lend out to other banks finding themselves short of reserves. But these reserves entered the system, increasing supply, without any matching increase in demand. Classic market economics tells us that the price/profit on the loan of reserve funds will go down in this case. If they rate slips low enough, and if Congress is borrowing money, the bank can choose the returns guaranteed by Treasuries over the lower return of the reserve market. In fact, if Congress net spent without full financing, the reserve situation would look much like Japan in, to pick a year, 2010 -- with excess reserves earning almost no interest.
So, not too surprisingly, the "financing" of our federal budget deficit is mostly a handout to the banking industry. It does also benefit people looking for risk-free investments -- like workers near retirement age. Alternatives would be needed if our country decided to entirely forgo borrowing. But the banking industry likes the status quo, so their big money funds the economics departments and think tanks insisting that "printing money" will cause rampant inflation; that story consistently drowns out the alternative analysis. The worst part of it is that politicians are either not hearing this reasoning about our debt and budget deficit, not believing it to be correct (because their experts, endorsed by the bank-owned economics establishment, tell them so), or because they don't think they can sell it to the public. They don't realize how important it is to do the critical thinking exercise about our economic situation themselves and, if necessary, educate the public to the realities.
http://www.democraticunderground.com/111628892
LT WELCOMES FEEDBACK ON THIS ORIGINAL PIECE
So the "fiscal cliff" crisis has been postponed and the debate continues about how Republicans and Democrats want to narrow the deficit. The left wants to include some higher taxes. The right wants to achieve it through spending cuts and, possibly, closure of some tax loopholes. Both sides are looking for answers, but they've asked the wrong question.
The real question -- the one that should be answered first -- is, "What size should the deficit be, given our current circumstances?" Even better would be the question, "How can we set our laws to ensure our federal deficit (or surplus) comports itself to the needs of our economy now and as conditions change in the future?" Instead, what we have is a question born out of irrational fear: "How drastically and by what means should we cut the deficit?" I believe this fear comes from misunderstandings about the role of the federal budget deficit and federal debt in our economy reinforced by prominent (which is not to say correct) economists and business people who see opportunities for profit in suffering.
The federal debt and federal budget deficit are, without question, big numbers. I think, though, that it is the concept of debt -- linked, out of our personal experiences, with worry -- coupled with these large numbers that produces our collective, national fear. The antidote to that fear is understanding: understanding what the debt means, why it was accumulated, and why we need not fear about defaulting on it.
First, the largest number: the debt. Every dollar that the federal government spends in excess of the amount of taxes collected (also called "net spending"
has, customarily, been "financed" through the sale of Treasuries (bonds, notes, and bills). These instruments, until maturity, represent an obligation of the United States government to deliver certain numbers of dollars to the holder at certain times and, as a whole, constitute our federal debt. Almost every dollar of this net spending went into the hands of an American person or corporation. In short, nearly every dollar of government net spending resulted in private, American wealth (although some leakage to foreign consumables probably occurred later).
So now we hear that we should work to reduce the national debt, because that debt is somehow "bad." There is one simple way to reduce the debt: coin new money. This would have a two-fold effect: the coined money could be used to directly retire some of the debt and the inflation caused would decrease the real value of the debt remaining. Of course, that same inflation would hurt any holder of US dollars, anyone who lent dollars expecting low inflation and anyone who borrowed heavily at a variable rate. The only other source available to pay down the national debt is the private wealth it was used to create. And you can bet that it won't be the wealthy and extremely wealthy of this country shouldering the lions share of that pain -- it will be the middle class.
Why is national debt "bad?" A family or business in debt has to make regular payment to service the debt or risk collection proceedings and bad marks on their credit that can cost them even more in the long run. If that family or business runs out of money before the debt service is paid, it is insolvent and bad things start happening. Any private debtor can, sometimes through no fault of their own, run into this situation, which is why taking on such debt is always somewhat risky. But public debt is different because of a power the federal government has which families and businesses lack: the legal right to create as much money as it chooses. The government creates money not through taxes (which actually destroy money) but by law (although the actual process does use coins). We no longer, thank God, use a commodity-based currency (since 1971); our currency is now backed by the value of "not going to jail for unpaid taxes." So there is no real danger of insolvency for our federal government, contrary to the claim frequently made by more conservative politicians. We have public debt because we choose to, not because it is necessary. It can't be that bad, or we'd have gotten rid of it already.
With that knowledge about the nature the federal debt, let's look how it came to be: the federal budget deficit and Congress's "financing" practices. In most years, the US Federal Government, through appropriations bills passed by Congress, has chosen to spend more dollars than it received in revenues (mostly taxes). Rather than coining new money, Congress chose to "finance" this spending by borrowing dollars with a promise to repay them with interest. Most economists recommend this to prevent inflation, since coining new money increases the money supply (which may bring images of money-dropping helicopters to mind). Congress's net spending is not, however, like helicopters dropping money because it buys goods and services that would otherwise not be produced or provided. Thus, the net spending is not inflationary. In fact, if anything is inflationary, it is the interest offered on Treasuries -- money spent only to keep other money out of circulation.
If Congressional borrowing is not necessary for deficit spending, then why do they do it? Looking in depth at our banking sector we can see the role that Congress's "financing" really plays: it provides a way for banks to earn money on excess reserves that wouldn't make as much return in the interbank reserve market. Were Congress to coin money without taking on debt, the money would be deposited with banks. Part of these deposits become excess reserves -- reserves the bank could lend out to other banks finding themselves short of reserves. But these reserves entered the system, increasing supply, without any matching increase in demand. Classic market economics tells us that the price/profit on the loan of reserve funds will go down in this case. If they rate slips low enough, and if Congress is borrowing money, the bank can choose the returns guaranteed by Treasuries over the lower return of the reserve market. In fact, if Congress net spent without full financing, the reserve situation would look much like Japan in, to pick a year, 2010 -- with excess reserves earning almost no interest.
So, not too surprisingly, the "financing" of our federal budget deficit is mostly a handout to the banking industry. It does also benefit people looking for risk-free investments -- like workers near retirement age. Alternatives would be needed if our country decided to entirely forgo borrowing. But the banking industry likes the status quo, so their big money funds the economics departments and think tanks insisting that "printing money" will cause rampant inflation; that story consistently drowns out the alternative analysis. The worst part of it is that politicians are either not hearing this reasoning about our debt and budget deficit, not believing it to be correct (because their experts, endorsed by the bank-owned economics establishment, tell them so), or because they don't think they can sell it to the public. They don't realize how important it is to do the critical thinking exercise about our economic situation themselves and, if necessary, educate the public to the realities.
http://www.democraticunderground.com/111628892
LT WELCOMES FEEDBACK ON THIS ORIGINAL PIECE