STOCK MARKET WATCH -- Monday, 20 May 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 20 May 2013[font color=black][/font]

SMW for 17 May 2013

AT THE CLOSING BELL ON 17 May 2013
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Dow Jones 15,354.40 +121.18 (0.80%)
S&P 500 1,667.47 +17.00 (1.03%)
[font color=black]Nasdaq 3,498.97 0.00 (0.00%)


[font color=red]10 Year 1.95% +0.06 (3.17%)
30 Year 3.17% +0.05 (1.60%)[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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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.










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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]

[Fuddnik]

1. The 4 Big Ways That Insatiable Corporate Hunger for Profits Has Devastated American Life -- and the

The 4 Big Ways That Insatiable Corporate Hunger for Profits Has Devastated American Life -- and the World Along with It
Big business is making its way around the world like a modern-day Attila the Hun, pillaging and despoiling the planet.
May 19, 2013 |



The damage caused by the relentless corporate drive for profits has become more clear in recent years. In the most important areas of American life, devastating changes have occurred:

Health Care: Almost half of the working-age adults in America passed up doctor visits or other medical services because they couldn't afford to pay. The system hasn't supported kids, either. A UNICEF study places the U.S. 26th out of 29 OECD countries in the overall well-being of its children.

Education: Student loan balances increased by 75% between 2007 and 2012.

Household Wealth: Median wealth fell by 66% among Hispanic households and 53% among black households between 2005 and 2009, mainly because of the mortgage banking collapse. Almost half of Americans have ZEROwealth, with their assets surpassed by debt.

Water and Food: Life-giving seeds and drinking water have been increasingly treated as products to be bought and sold.

All these areas of life have been degraded by a free-market system that has thrived on publicly-funded research, infrastructure, and defense. Yet in a brazen show of hypocrisy, major corporations have ignored all the problems they've caused, choosing instead to cut their taxes in half despite doubling their profits, to hold 60% of its cash offshore, to eliminate workers rather than create jobs, and to reduce the pay of their remaining employees.

An Apple executive explained: "We don't have an obligation to solve America's problems."

(snip)
http://www.alternet.org/economy/4-big-ways-insatiable-corporate-hunger-profits-has-devastated-american-life-and-world-along

[Demeter]

3. Somebody Better Explain to Apple Executives

If you aren't part of the solution....you ARE the problem, and you are going to get fixed, not to your satisfaction!

[tclambert]

17. If killing people made them a penny more in profit, well, . . . it's profit!

Hey, they owe it to their stockholders to do WHATEVER THEY CAN to maximize profit.

I've been saying this for awhile hoping it will gain some traction somewhere. If your entire ethical inquiry comes down to "Does it make a profit?" then every horrible thing not only becomes possible but becomes a businessperson's economic duty. Lying, theft, fraud? Of course. Standard practice. Negligent homicide? Sure. Murder? It's been done. Starting wars for, say, oil? You know it. Genocide? Well, as Chief Tecumseh said, "Where today are the Pequot? Where are the Narragansett, the Mohican, the Pokanoket, and many other once powerful tribes of our people? They have vanished before the avarice and the oppression of the White Man, as snow before a summer sun."

[Demeter]

2. Washington Signals Dollar Deep Concerns By Paul Craig Roberts

http://www.informationclearinghouse.info/article35002.htm

Over the past month there has been a statistically improbable concurrence of events that can only be explained as a conspiracy to protect the dollar from the Federal Reserve’s policy of Quantitative Easing (QE). (Quantitative Easing is the term given to the Federal Reserve’s policy of printing 1,000 billion new dollars annually in order to finance the US budget deficit by purchasing US Treasury bonds and to keep the prices high of debt-related derivatives on the “banks too big to fail” (BTBF) balance sheets by purchasing mortgage-backed derivatives. Without QE, interest rates would be much higher, and values on the banks’ balance sheets would be much lower. Quantitative Easing has been underway since December 2008. During these 54 months, the Federal Reserve has created several trillion new dollars with which the Fed has monetized the same amount of debt.) One result of this policy is that most real US interest rates are negative. Another result is that the supply of dollars has outstripped the world’s demand for dollars. These two results are the reason that the Federal Reserve’s policy of printing money with which to purchase Treasury bonds and mortgage backed derivatives threatens the dollar’s exchange value and, thus, the dollar’s role as world reserve currency. To be the world reserve currency means that the dollar can be used to pay any and every country’s oil bills and trade deficit. The dollar is the medium of international payment. This is very helpful to the US and is the main source of US power. Because the dollar is the reserve currency, the US can cover its import costs and pay for its cost of operation simply by creating its own paper money. If the dollar were not the reserve currency, Washington would not be able to finance its wars or continue to run large trade and budget deficits. Therefore, protecting the exchange value of the dollar is Washington’s prime concern if it is to remain a superpower.

The threats to the dollar are alternative monies--currencies that are not being created in enormous quantities, gold and silver, and Bitcoins, a digital currency. The Bitcoin threat was eliminated on May 17 when the Gestapo Department of Homeland Security seized Bitcoin’s accounts. The excuse was that Bitcoin had failed to register in keeping with the US Treasury’s anti-money laundering requirements. Washington has stifled the threat from other currencies by convincing other large currencies to out-print the dollar. Japan has complied, and the European Central Bank, though somewhat constrained by Germany, has entered the printing mode in order to bail out the private banks endangered by the “sovereign debt crisis.” That leaves gold and silver. The enormous increase in the prices of gold and silver over the last decade convinced Washington that there are a number of miscreants who do not trust the dollar and whose numbers must not be permitted to increase. The price of gold rose from $272 an ounce in December 2000 to $1,917.50 on August 23, 2011. The financial gangsters who own and run America panicked. With the price of the dollar collapsing in relation to historical real money, how could the dollar’s exchange rate to other currencies be valid? If the dollar’s exchange value came under attack, the Federal Reserve would have to stop printing and would lose control over interest rates. The bond and stock market bubbles would pop, and the interest payments on the federal debt would explode, leaving Washington even more indebted and unable to finance its wars, police state, and bankster bailouts. Something had to be done about the rising price of gold and silver.

There are two bullion markets. One is a paper market in New York, Comex, where paper claims to gold are traded. The other is the physical market where personal possession is taken of the metal--coin shops, bullion dealers, jewelry stores. The way the banksters have it set up, the price of bullion is not set in the markets in which people actually take possession of the metals. The price is set in the paper market where speculators gamble. This bifurcated market gave the Federal Reserve the ability to protect the dollar from its printing press. On Friday, April 12, 2013, short sales of gold hit the New York market in an amount estimated to have been somewhere between 124 and 400 tons of gold. This enormous and unprecedented sale implies an illegal conspiracy of sellers intent on rigging the market or action by the Federal Reserve through its agents, the BTBF that are the bullion banks. The enormous sales of naked shorts drove down the gold price, triggering stop-loss orders and margin calls. The attack continued on Monday, April 15, and has continued since. Before going further, note that there are position limits imposed on the number of contracts that traders can sell at one time. The 124 tons figure would have required 14 traders with no open interest on the exchange to sell all together in the same few minutes 40,000 futures contracts. The likelihood of so many traders deciding to short at the same moment at the maximum permitted is not believable. This was an attack ordered by the Federal Reserve, which is why there is no investigation of the illegality. Note also that no seller that wanted out of a position would give himself a low price by dumping an enormous amount all at once unless the goal was not profit but to smash the bullion price. Since the April 12-15 attack on the gold price, subsequent attacks have occurred at 2pm Hong Kong time and 2 am New York time. At this time activity is light, waiting on London to begin operating. As William S.Kaye has observed, no entity concerned about profits would choose this time to sell 20,000 to 30,000 futures contracts, but this is what has been happening. Who can be unconcerned with losing money in this way? Only a central bank that can print it.

Now we come to the physical market where people take possession of bullion instead of betting on paper instruments. Look at this chart from ZeroHedge. http://www.zerohedge.com/news/2013-05-16/gold-demand-one-chart-physical-vs-etf The demand for physical possession is high, despite the assault on gold that began in 2011, but as the price is set in the non-real paper market, orchestrated short sales, as in the current quarter of 2013, can drive down the price regardless of the fact that the actual demand for gold and silver cannot be met. While the corrupt Western financial press urges people to abandon bullion, everyone is trying to purchase more, and the premiums above the spot price have risen. Around the world there is a shortage of gold and silver in the forms, such as one-ounce coins and ten-ounce bars, that individuals demand. That the decline in gold and silver prices is an orchestration is apparent from the fact that the demand for bullion in the physical market has increased while naked short sales in the paper market imply a flight from bullion.

What does this illegal manipulation of markets by the Federal Reserve tell us? It tells us that the Federal Reserve sees no way out of printing money in order to support the federal deficit and the insolvent banks. If the dollar came under attack and the Federal Reserve had to stop printing dollars, interest rates would rise. The bond and stock markets would collapse. The dollar would be abandoned as reserve currency. Washington would no longer be able to pay its bills and would lose its hegemony. The world of hubristic Washington would collapse. It remains to be seen whether Washington can prevail over the world demand for gold and silver. Can the dollar remain supreme when offshoring has deprived the US of the ability to cover its imports with exports? Can the dollar remain supreme when the Federal reserve is creating 1,000 billion new ones each year, while the BRICS, China and Japan, China and Australia, and China and Russia are making deals to settle their trade balances without the use of the dollar? If the consumption-based US economy, deprived of consumer income by jobs offshoring, takes a further dip down in the third or fourth quarter--a downturn that cannot be masked by phony statistical releases--the federal deficit will rise. What will be the effect on the dollar if the Federal Reserve has to increase its Quantitative Easing?

A perfect storm has been prepared for America. Real interest rates are negative, but debt and money are being created hand over foot. The dollar’s demise awaits the world’s decision how to get out of it. The Federal Reserve can print dollars with which to keep the bond and stock markets high, but the Federal Reserve cannot print foreign currencies with which to keep the dollar afloat. When the dollar goes, Washington’s power goes, which is why the bullion market is rigged. Protect the power. That is the agenda. Is it another Washington over-reach?

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

I'M THINKING IT WON'T WORK. THIS IS THE LAST KICK OF THE CAN DOWN THE ROAD TO HELL....

[Demeter]

4. Global Government Debt Is Already 80% Of Global GDP

http://goldsilverworlds.com/gold-silver-general/global-government-debt-is-already-80-of-global-gdp/

In his latest commentary, Michael Pento writes ”there is a reason why the Fed and other central banks have been unable to achieve a healthy and viable economy even after five years of trying to manufacture one from a printing press. The truth is an economy that is soaked in debt just doesn’t grow because it is always marked by at least one, if not all three, of the following growth-killing conditions; high interest rates, rampant inflation and onerous tax rates.” When debt levels increase to an extent that they are equal or greater than its GDP capital flows out of the private sector due to burdensome rollovers and interest payments on that debt. Penton continues: “In addition, rising tax rates act as a disincentive to increase productivity and whatever money that is taken from the private sector is always redeployed in an inefficient, GDP-destroying manner. Rising interest costs also discourage borrowing and lead to capital shortages. And finally, inflation destroys the purchasing power of the middle class by eroding the value of the currency and leaving consumers with an inability to make discretionary purchases.”

Now how high is our debt actually? We know meantime the indebtedness per country with Japan as the big winner with a government debt to GDP ratio close to 220% (source). But what about the global indebtedness? The Wall Street Journal provides some details about the world debt levels.



$223.3 trillion is the total indebtedness of the world. It includes all parts of the public and private sectors, amounting to 313% of global gross domestic product. The world GDP was some $70 trillion at the end of 2012.

I

n developed economies debt amounted to $157 trillion, or 376% of GDP.
In emerging markets debt totaled $66.3 trillion, or 224% of GDP.

“The $223.3 trillion in total global debt includes public-sector debt of $55.7 trillion, financial-sector debt of $75.3 trillion and household or corporate debt of $92.3 trillion. (The figures exclude China’s shadow finance and off-balance-sheet financing.)”

An important figure from these data is the $55.7 trillion representing government debt. As discussed above, the government debt worldwide is already 80% of the global GDP. The global governmental debt level is ridiculously high and close to a system problem even from a global point of view (not only in a group of sovereign nations). There is a reason why the debt crisis continues and is often called a train accident in slow motion.

This is related to gold in a direct way. The bigger the debt problem, the higher the counterparty risk, the higher the value of precious metals (in physical form). We wrote earlier that government and central bank intervention leads to distorted market signals. “What can be said is that governments can’t create trillions of new currency units without consequences. Therefore we believe it is important to focus on the big picture and not get lost in the details. Debt is the biggest issue! The leading nations of the world such as the US, UK, European Union and Japan are facing the highest level of public debt in times of peace. In addition to these high levels of debt there are unfunded liabilities which are also exploding, the aging population and increasing unemployment. Our financial system is simply not sustainable.”

PARTLY TRUE--THE OTHER PART OF THE EQUATION IS THAT NONE OF THAT CREATION IS GETTING TO THE PRODUCERS OF WEALTH: THE WORKERS. IT'S SITTING IN HOARDS OF THE 1%, PERSONAL AND CORPORATE. THE ECONOMY IS STARVING FOR LACK OF CIRCULATION. THE TOURNIQUET AROUND THE WORKERS' NECKS WILL KILL THIS COUNTRY.

[Demeter]

12. Here's Why The Feds Seized Assets From The World's Biggest Bitcoin Exchange

http://www.businessinsider.com/mt-gox-bitcoin-exchange-shut-down-2013-5

Ars Technica reports on the finer details of how the government was able to seize a bunch of cash from Mt. Gox, the world's largest Bitcoin exchange.

Homeland Security says it had probable cause to believe that Mt. Gox is guilty of money transmitting without a license. Companies like PayPal and Western Union have this license, but Mt. Gox does not.

Punishment for money transmitting without a license is a fine or a maximum of five years in jail.

By using a confidential informant to move Bitcoins through Mt. Gox to Dwolla, one of the most popular ways to turn the digital currency into physical currency, authorities were able to trace the money and find it to be a violation.

This is an interesting (and major) way for the government to acknowledge Bitcoin...Gawker has the full seizure warrant, which we've embedded below: SEE LINK

Read more: http://www.businessinsider.com/mt-gox-bitcoin-exchange-shut-down-2013-5#ixzz2ToBjFgXw

MORE AND MORE, WE ARE REDUCED TO CASH, GOLD AND BARTER BY THE PREDATORS OF FINANCE AND THEIR FASCIST GOVERNMENT MINIONS

THIS DOESN'T EXPLAIN WHY...IT OUTLINES THE PRETEXT AND THE HOW....BUT NOT THE WHY.

[Demeter]

25. And So It Begins: The Feds Target Bitcoin Transactions By Josh Harkinson

... A creation of bank-fearing techies, Bitcoins are now worth more than $1 billion, and consumer interest has been skyrocketing. For more background, read our Bitcoin explainer: http://www.motherjones.com/politics/2013/04/what-is-bitcoin-explained

The DHS is focusing on Dwolla, an online payment system (sort of like PayPal) that has become a popular way for Bitcoin users to transfer money to and from Mt. Gox. A Dwolla spokesman confirmed to BetaBeat that DHS and the US District Court for the District of Maryland have issued a "seizure warrant" for funds associated with the company's Mt. Gox account, which is known as Mutum Sigillum.

"In light of the court order," Dwolla told BetaBeat, "...Dwolla has ceased all account services associated with Mutum Sigillum."

The shutdown was first brought to light earlier today by Chris Coyne, the founder of OKCupid, who posted the following screenshot of an email from Dwolla notifying him of the DHS crackdown:



The reason for the seizure is not entirely clear. Up to a point, Bitcoins may be allowable under federal law, but "if Bitcoins facilitate too much drug-dealing or money laundering, the US government could make their production illegal," Harvard public policy lecturer Steven Strauss wrote recently on the Huffington Post . And, of course, there are federal statues making it illegal to produce a separate currency...

[Demeter]

26. It is a stretch to claim that Bitcoin is a rival to the dollar

since Bitcoin is a GLOBAL currency....and more and more, the dollar is NOT!

[AnneD]

37. There is you answer right there.....

this is why DHS did the raid. The M$M has poopooed bit coin at every opportunity yet the government nea banksters are pissing in their jack boots at night thinking what this means regarding controlling their populations and interests. Take the control of the monetary system out of their hand and what do they have. Democracy may break out world wide and then where would they be. You can bet they want to smother this baby while it is still in the cradle.

[siligut]

41. Yes, it's about control

But we proles aren't supposed to know that.

[Demeter]

5. Lawsuit Says IRS Illegally Seized 60 Million Health Records

ONE WONDERS: WHAT DID THEY DO THAT FOR? SHEER CURIOSITY IS NOT A REASONABLE ANSWER. NOR IS ABUSE OF POWER FOR THE JOY OF IT.

http://www.nextgov.com/health/2013/05/lawsuit-says-irs-illegally-seized-60-million-health-records/63179/

A lawsuit filed in California accuses the Internal Revenue Service of illegal seizure of 60 million electronic health care records belonging to 10 million Americans. The suit filed in the Superior Court of San Diego by Robert Barnes, a Malibu lawyer representing a corporate client named John Doe Co., charged that IRS agents raided the company on March 11, 2011, in a tax case and seized the medical records. Barnes alleged in the suit -- which was filed March 11, 2013, and surfaced Wednesday -- that the “medical records contained intimate and private information of more than 10,000,000 Americans, information that by its nature includes information about treatment for any kind of medical concern, including psychological counseling, gynecological counseling, sexual or drug treatment, and a wide range of medical matters covering the most intimate and private of concerns.”

The suit said the 15 IRS agents involved in the raid did not have a search warrant or subpoena for the medical records which “may concern the intimate medical records of every state judge in California, every state court employee in California, leading and politically controversial members of the Screen Actors Guild and the Directors Guild, and prominent citizens in the world of entertainment, business and government, from all walks of life." Barnes said the record seizure at the John Doe Company was so massive it affects "roughly one out of every twenty-five adult American citizens.” This seizure, the suit charged, violated privacy rules enshrined in the 1996 Health Insurance Portability and Accountability Act, known as HIPAA. Barnes said in his suit that IRS agents “stole” the medical records in an investigation into a "tax matter involving a former employee of the (unnamed) company.”

The suit makes it clear that the seized medical records were in an electronic format. "Despite knowing that these medical records were not within the scope of the warrant, defendants threatened to 'rip' the servers containing the medical data out of the building if IT [information technology] personnel would not voluntarily hand them over,” Barnes alleged. Even though the agents knew that the records they were seizing were not included within the scope of the search warrant, they “searched and seized the records without making any attempt to segregate the files from those that could possibly be related to the search warrant. In fact, no effort was made at all to even try maintaining the illusion of legitimacy and legality,” Barnes said in his suit. Barnes said executives of the company and IT personnel warned the IRS agents that the medical records were “privileged” under HIPAA. He said the IRS agents “ignored and discarded each of these warnings, ignored their own published and public-reliant rules and governing ethical requirements, and ignored the limitations of the court's search warrant authorization, seizing the records under threat of destroying company property." Barnes said the IRS search warrant only “authorized the seizure of financial records related principally to a former employee of the company; it did not authorize any seizure of any health care or medical record of any persons, least of all third parties completely unrelated to the matter.” Despite this stricture, Barnes charged the agents “seized personal mobile phones, including all the data and information on those phones, without any employing the proper and procedurally correct screening methods to protect private and privileged information, all of which was completely unapproved by the search warrant."

When the agents finished their raid, Barnes said they then used the John Doe Company facilities to relax, eat and watch sports on television. “Adding insult to injury, after unlawfully seizing the records and searching their intimate parts, defendants decided to use John Doe Company's media system to watch basketball, ordering pizza and Coca-Cola, to take in part of the NCAA tournament, illustrating their complete disregard of the court's order and the Plaintiffs' Fourth Amendment rights,” the suit said. The suit said the IRS refused to disclose which agents participated in the raid, who saw the medical records, and where the records are today. It seeks $25,000 in damages "per violation per individual" whose records were compromised.

The suit also asked the court to order the IRS to return the records and expunge them from any government databases. The IRS, reeling this week after revelations that it had targeted Tea Party conservative organizations for scrutiny, has not yet replied to a request for a comment by Nextgov on the medical record seizure lawsuit.

[siligut]

42. This doesn't make sense

I am not at all sure regarding this statement:

Barnes said the IRS search warrant only “authorized the seizure of financial records related principally to a former employee of the company; it did not authorize any seizure of any health care or medical record of any persons, least of all third parties completely unrelated to the matter.”

I tend to think Barnes has this wrong. It just doesn't make sense.

And this part is just WTF!

When the agents finished their raid, Barnes said they then used the John Doe Company facilities to relax, eat and watch sports on television. “Adding insult to injury, after unlawfully seizing the records and searching their intimate parts, defendants decided to use John Doe Company's media system to watch basketball, ordering pizza and Coca-Cola, to take in part of the NCAA tournament, illustrating their complete disregard of the court's order and the Plaintiffs' Fourth Amendment rights,” the suit said.

So the IRS agents hung around and used the facility for their NCAA party?

Something has gone awry with the IRS or somebody is full of shit.

[Demeter]

6. 10 Amazing Charts That Demonstrate The Slow, Agonizing Death Of The American Worker

http://theeconomiccollapseblog.com/archives/10-amazing-charts-that-demonstrate-the-slow-agonizing-death-of-the-american-worker

The middle class American worker is in danger of becoming an endangered species. The politicians are not telling you the truth, and the mainstream media is certainly not telling you the truth, but the reality is that there is nothing but bad news on the horizon for workers in the United States. In the old days, when the big corporations that dominate our society did well, that also meant good things for American workers since those corporations would need more of us to work for them. But in the emerging one world economic system that our economy is being merged into, those corporations have other choices now. For instance, the big corporations can now choose to limit the number of "expensive" American workers that they employ by shipping millions of jobs to the other side of the world. And from their perspective, it makes perfect sense. They can make much bigger profits by hiring people on the other side of the planet to work for them for less than a dollar an hour. If they can get good production out of those people, then why should they hire Americans for ten to twenty times as much, plus have to give those Americans health insurance and other benefits? Another major factor in the slow, agonizing death of the American worker is technology. We live during a period when technology is advancing at a pace that is almost unimaginable at the same time that it is steadily becoming cheaper and cheaper. That means that it is going to become easier and easier for companies to replace workers with robots and computers. As I have written about previously, it is being projected that our economy will lose millions of jobs to technology in the coming years. Yes, some of us will still be needed to help build the robots and the computers, but not all of us will. And of course the overall general weakness of the economy is not helping matters either. The American people inherited the greatest economic machine in the history of the world, and we have wrecked it. Decades of very foolish decisions have resulted in the period of steady economic decline that we are experiencing now.

America is simply not the economic powerhouse that it once was. Back in 2001, the U.S. economy accounted for 31.8 percent of global GDP. By 2011, the U.S. economy only accounted for 21.6 percent of global GDP. That is a collapse any way that you want to look at it.

Today, American workers are living in an economy that is rapidly declining, and their jobs are steadily being stolen by robots, computers and foreign workers that live in countries where it is legal to pay slave labor wages. Politicians from both political parties refuse to do anything to stop the bleeding because they think that the status quo is working just great.

So don't expect things to get better any time soon.

The following are 10 amazing charts that demonstrate the slow, agonizing death of the American worker...





















Since there aren't enough jobs for everyone, why aren't more Americans trying to start their own businesses? Well, the reality of the matter is that the government has made it exceedingly difficult to start your own business today. Taxes, rules, regulations and red tape are choking the life out of millions of small businesses in the United States. As a result, the percentage of self-employed Americans is at a record low.

As all of these long-term trends continue, the middle class will continue to shrink, poverty in America will continue to explode and government dependence will continue to rise. The numbers don't lie. Today, the number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain. We are in the midst of a horrifying economic collapse, and the next major wave of that collapse is rapidly approaching.

[Demeter]

7. The Vicious New Bank Shakedown That Could Seriously Ruin Your Life

http://www.alternet.org/economy/vicious-new-bank-shakedown-could-seriously-ruin-your-life?akid=10429.227380.drj5Td&rd=1&src=newsletter839684&t=4&paging=off


It’s hard to imagine a more loathsome figure than the mob debt collector, a.k.a the “hired muscle.” It was this bruiser’s job to get the money owed to the Boss, by whatever methods he saw fit. That might include coming to your house in the dead of night to break your kneecaps. Whatever it took. The collector was promised a cut of that money, and he was going to get it. Gangsta-style big banks have taken up where this character left off. They may not send a guy to break your kneecaps, but they are working in the shadows, chasing down debts from credit cards using methods that are both fraudulent and unlawful. They do this whether you actually owe the money or not. Here’s the skinny: After widespread outrage over the big banks’ last crime wave against the American consumer – the “robo-signing” scam in which homeowners were hustled out of their houses by banks that sent fraudulent paperwork through the courts, they are at it again. This time, banksters are accused of helping debt collectors pursue faulty judgments against credit card customers by various dirty tricks that include – surprise! – robo-signing.

California Attorney General Kamala Harris, who filed suit against JPMorgan Chase last Thursday, says that from January 2008 to April 2011 -- just as people were reeling from the Wall Street-driven financial crisis -- the megabank unleashed over 100,000 lawsuits against consumers over uncollected credit-card debt in the state of California alone. That includes 469 lawsuits in a single day. Now, it usually takes time and money to pursue lawsuits through the court system. So how in the world did Chase keep up this breakneck pace? The lawsuit claims that the bank took a number of little shortcuts, like robo-signing, in which bank employees produce sworn documents and other legal filings without bothering to check bank records or examine cases for accuracy.

Another nasty trick Chase is accused of deploying is what’s known, appropriately, as “sewer service.” This means that Chase failed to properly serve notice of debt collection lawsuits against consumers (it dumped the notices “in the sewer”), but then lied and said it did. This means, you, as a consumer, have no idea that a lawsuit has been launched against you. So here’s what happens: you get a default judgment that automatically favors the debt collector. The credit card company can then garnish your wages or freeze your bank account to get the money it says you owe. And you might not even owe it! Banks are sometimes chasing down consumers who have already paid their debts. Other times they are jacking up the size of the debts by adding bogus fees and interest costs.

All of this, of course, is unlawful. But it’s happening on a massive scale.

Last summer, a civil court judge in Brooklyn who presides over as many as 100 credit card cases a day told the New York Times that a whopping 90 percent of the credit card lawsuits that came across his desk were flawed and could not prove that a person owed the debt. Here’s the kicker: The errors in credit card suits often go undetected because the borrowers usually don’t show up in court to defend themselves (how can they, if they don’t know the suit has been filed?). As a result, an estimated 95 percent of lawsuits result in default judgments in favor of lenders. The really chilling message sent in this new plot to squeeze cash out of hard-pressed Americans is that the big banks are completely undaunted by their exposure in the foreclosure robo-signing scam. Whatever penalties or bad publicity they have received have not restrained them one iota from pulling the exact same fraud again on hapless consumers. Neither has the creation of the Consumer Financial Protection Bureau, which now hangs in limbo with the endlessly delayed confirmation of Richard Cordray as head. The CFPB knows what’s going on, and it sent a friendly little note to Congress saying that “we are concerned about the system-wide problems in the debt collection market…and we want to see good practices come to dominate the market, including improved data integrity.” Well, golly, that’s reassuring...There’s a half-baked law dating back to 1977 called the Fair Debt Collection Practices Act which states, among other things, that debt collectors can’t call your house after 9pm. But until somebody actually enforces it, citing it to a goon hired by a big bank is about as effective as telling the mob’s hired man that he’s trespassing on your doorstep. And it’s certainly not preventing big banks from flooding the courts with bogus lawsuits that get decided in their favor before the consumer knows what’s hit her. Ironically, the American people are being hounded by the same big banks whose reckless activities stripped them of the jobs, pensions and financial security that they needed to pay off their credit card debts in the first place.

It’s interesting to hear what President Obama has to say about this. Oh, wait. The President didn’t say anything at all. He is completely missing in action, apparently still sticking by his gushing praise for JPMorgan Chase honcho Jamie Dimon as “one of the smartest bankers we've got.” Sure, if by smart you mean presiding over a bank that rips off consumers and loses billions in reckless derivatives trading -- and managing to keep your job.

MORE

Lynn Parramore is an AlterNet senior editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of 'Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture.' She received her Ph.d in English and Cultural Theory from NYU, where she has taught essay writing and semiotics. She is the Director of AlterNet's New Economic Dialogue Project. Follow her on Twitter @LynnParramore.

[Demeter]

8. Economic Weapons of Mass Destruction: Mortgages in the Era of Mass Terror

http://truth-out.org/opinion/item/16315-economic-weapons-of-mass-destruction-mortgages-in-the-era-of-mass-terror

...As the New York Times reported, “The banks that created risky amalgams of mortgages and loans during the boom — the kind that went so wrong during the bust — are busily reviving the same types of investments that many thought were gone for good.”

In other words, the well-heeled boys are back in town, peddling predatory mortgages to be bundled and sold on Wall Street. Even the Times, generally bullish on business, struck a cautionary tone. “The revival also underscores how these investments, known as structured financial products, have largely escaped new regulations that were supposed to prevent a repeat of the last financial crisis.”

Warnings of a repeat of the last financial crisis — printed on the front page of the New York Times?

Yet, unlike the 24-7 coverage of Boston, the national response to the threat of economic mass destruction has been muted. That’s because almost no one openly discusses the ongoing foreclosure crisis in terms of domestic terrorism. But that’s exactly what it is, and we must recognize this if we want to prevent banks from causing more damage...Why would Wall Street intend to intimidate millions of civilians? The rationale is that if people aren’t terrified of being thrown out of their homes, they won’t continue to repay the astronomical debts that are apparently the only thing keeping our economy afloat.

This argument has indeed influenced the policy of the U.S. government. Ed DeMarco, the head of the Federal Housing Finance Agency has been one of the most vehement opponents of homeowner relief, warning that the government must wield the specter of eviction or everyone will decide to default on their mortgages. As for the issue of “affecting the conduct of a government by mass destruction, assassination, or kidnapping,” bankers don’t need to resort to kidnappings; they’ve already taken the global economy hostage.

...As local pastor Reverend David Bullock explained, “It’s no longer ’68 and ’69 — the hot riot summers. The rich are no longer worried about physical security. They are worried about their money.”

GIVE IT A LITTLE LONGER, AND WE WILL GET TO RELIVE THE LONG HOT SUMMERS OF OUR YOUTH...

[Demeter]

9. The American Dream Is Dead; Long Live the New Dream

http://www.truth-out.org/news/item/16291-the-american-dream-is-dead-long-live-the-new-dream

The American Dream of upward mobility is dead, thanks to the neoliberal ministrations of capital and government. But a new dream could rise from the mess left by globalization, off-shoring and austerity. The continuation of the economic crisis of 2008 up to the present has driven home a social trend that has been evident since the late 1970s, the decline of what is usually called "the middle class" and the accompanying American Dream...The American Dream is the belief that if you work hard, if you are blessed with at least a modicum of ability and have a little luck, you can succeed. That is, you can rise in society no matter how humble your origin to something better in the way of material well-being, economic security, a settled life and social prestige. It is the dream of upward mobility for oneself, or at least for one's children. As Richard Wolff has pointed out in Capitalism Hits the Fan: The Global Economic Meltdown and What to do About it, this upward mobility was a reality for most citizens of the United States for several generations, from 1820 to 1970. For 150 years, real wages rose. In the quarter century from 1947 to 1973, average real wages rose an astounding 75 percent. But that shared prosperity came to a halt in the mid '70s. In the next 25 years, from 1979 to 2005, wages and benefits rose less than 4 percent. The sustained rise in standards of living had been made possible by a conjunction of historical circumstances, circumstances that began to reach exhaustion by the mid 1970s.

Post WWII prosperity was based on 1. the global economic dominance of the United States; 2. pent up consumer demand from the depression and war years; 3. supportive social programs; 4. some political clout due to a strong union movement that could demand a share of the prosperity; and 5. Keynesian stimulus (military spending, infrastructure development like the interstate highway system, etc.).

Fixing an Overaccumulation Crisis

By the mid 1970s, an overaccumulation crisis emerged, reflected in stagflation, which is simultaneous inflation and lack of economic growth. There were insufficient places to profitably invest all the surplus capital that had accumulated during the years of prosperity. The situation was set forth with unusual candor by former IMF Director Jacques de Larosière. In a 1984 policy address, he said:

Over the last four years the rate of return on capital investment in manufacturing in the six largest industrial countries averaged only half the rate earned during the late 1960s. . . . Even allowing for cyclical factors, a clear pattern emerges of a substantial and progressive long-term decline in rates of return on capital. There may be many reasons for this. But there is no doubt that an important contributing factor is to be found in the significant increase over the past 20 years or so in the share of income being absorbed by compensation of employees . . . This points to the need for a gradual reduction in the rate increase in real wages over the medium term if we are to it restore adequate investment incentives. - Quoted by William I. Robinson in "A Theory of Global Capitalism: Produc­tion, Class, and State in a Transnational World"

In other words, in order to ensure "adequate" profits to capital, workers' incomes had to be curtailed. The policies that made this suppression of incomes possible came to be called neoliberalism, a public ideology represented by President Ronald Reagan in the United States and Margaret Thatcher in England. It involved a withdrawal of government from directing the economy, leaving it instead to market forces. This meant deregulation, privatization of the commons and free trade. And that required weakening the collective hand of workers by an assault on unions and social benefits so as to strengthen the hand of capital. "Free trade" policies of our political elite were a key part of the neoliberal offensive against labor. Trade agreements like NAFTA promoted the export of entry-level jobs to low-wage countries of the global South. With globalization, beginning in the 1980s, those entry-level industrial jobs that had made mobility into middle-income levels possible were the first jobs to be sent offshore, where they could be performed by low-wage workers in the Third World. For instance, hourly compensation costs in manufacturing (wages plus benefits) amount to $1.50 or less in China, compared with $33.50 in the United States. The Economic Policy Institute has recently calculated that in the last decade alone, US trade with China has cost us 2.7 million jobs...It is important to understand that the undermining of the American Dream came at the hands of capital and government working in collusion. It is corporate capital's unquenchable thirst for profit and political leaders' eagerness to assist them that is destroying that dream. It is not blind economic forces operating with the inevitability of natural law, but the conscious policies of CEOs and political leaders that replace upward mobility with downward mobility. Political leaders, Democrats and Republicans alike, embrace Charles Wilson's adage that "what's good for General Motors is good for America." What truth might once have been embraced by this identification of the national interest with corporate interest has long since been invalidated by the globalization of capital.

MORE

[Demeter]

10. Elderly Man Allegedly Dies in Court Fighting Wells Fargo 'Wrongful' Foreclosure

http://www.alternet.org/economy/elderly-man-allegedly-dies-court-fighting-wells-fargo-wrongful-foreclosure?akid=10436.227380.7jTOP1&rd=1&src=newsletter840307&t=20&paging=off

An elderly man "succumbed to the pressure" of losing his home to Wells Fargo and died at a court hearing fighting the bank's wrongful foreclosure, his estate claims in court.

The administrator of the estate of Larry Delassus sued Wells Fargo, Wachovia Bank, First American Corp. and others in Superior Court, for wrongful death, elder abuse, breach of contract and other charges.

Delassus died at 62 of heart disease after Wells Fargo mistakenly held him liable for his neighbor's property taxes, doubled his mortgage payments, declared his loan in default and sold his Hermosa Beach condominium, according to the complaint.

"Larry Delassus tried everything to save his home," the complaint states. "He told the Bank that they were mistaken; they said no. He contacted the bank seeking information, and was told one thing and then another, and oftentimes, no information at all. He enlisted his friend and neighbor to help him, but the bank refused to recognize him as Larry's representative, despite his numerous applications and appeals. Whatever Larry needed, Wells Fargo created some excuse not to help him...

[siligut]

43. I wish I could see a way for her to win this

Popovich seeks restitution, costs, civil penalties and punitive damages for the estate.

However, because WF didn't literally pull the trigger, proving that they caused Larry's death is near impossible.

[Demeter]

44. Vindication that they wrongly foreclosed would help

making the estate whole for that, at least.

[siligut]

45. Yes, maybe that is possible

I can hope for that. Wells Fargo just seems to be like a bully with lots of power.

[Egalitarian Thug]

48. "We are in the midst of a horrifying economic collapse"

and still a majority have the capacity to pretend that they are just so much better that they will come out alright.
& R

And BTW, thanks for the charts & links. I wasn't quite depressed/pissed off enough.

[Demeter]

11. Everyday Socialism, American-Style, Is Happening Now

FROM THE GROUND UP

http://truth-out.org/news/item/16353-everyday-socialism-american-style-is-happening-now

...Chapter 11 of What Then Must We Do?

One more obvious step, for the moment, in connection with real-world democratization (and maybe also about what can be done if you want to start getting serious): I assume you are aware that socialism—real socialism, not the fuzzy kind conservatives try to pin on Barack Obama—is as common as grass (well, maybe not that common, but still very common indeed) in the United States. I'm not talking about the public programs that come to many minds when socialism is discussed in an American context. These programs often help people in need and do many other useful things, but they don't attempt to change the underlying systemic design and the political power it confers on corporate actors. I'm talking about the (efficient) government ownership of businesses, some set up in the past and still working very nicely, thank you, and many new efforts now also flourishing big-time.

For a start: It's often forgotten—or simply not known—that there are more than two thousand publicly owned electric utilities now operating, day by day, week by week, throughout the United States (many in the conservative South). Indeed, 25 percent of US electricity is supplied by locally owned public utilities and co-ops. Moreover, most of these now conventional "socialist" operations have a demonstrated capacity to provide electricity at lower cost to the consumer, not to mention cheaper and more accessible broadband. (Nationally, on average, customers of private utilities pay 14 percent more than customers of public utilities.)

One obvious reason: Public utilities and co-ops simply don't pay the same exorbitant executive salaries common in the private sector. They get pretty much the same work done for far less. General managers of the largest class of publicly owned power companies earned an average salary of roughly $260,000 in 2011. Average compensation for CEOs of large investor-owned utilities was $6 million—almost twenty-five times as much. Also, of course, public utilities and co-op producers don't have to pay private shareholders any dividends. And they return a portion of their revenues to the city or county to help supplement local budgets, easing the pressure on taxpayers. A recent study found an average transfer of 5.2 percent of revenues to municipalities—compared with average tax payments by private-investor-owned utilities of 3.9 percent.

In smaller communities revenues from public utilities are often a crucial component of city budgets. In Ashland, Oregon, for instance, fully 30 percent of the general fund that pays for such services as police, fire, and street maintenance comes from public utility profits; only 16 percent comes from property taxes. Similarly, the century-old public utility in Norwich, Connecticut, is a major contributor to the city, with more than 10 percent of its total billings—more than 5 percent of the city's total annual budget—going to the municipal general fund...A number of public utilities also play a powerful role in building a green economy. In California the Sacramento Municipal Utility District (SMUD)—one of the ten largest public utilities in the United States—now supplies more than 24 percent of its retail energy sales from renewable sources; it expects to reach a goal of 37 percent renewable energy by 2020. SMUD is also on target to slash CO2 emissions to just 10 percent of 1990 levels by 2050...Another leader, Austin Energy in Texas, runs the most successful utility-sponsored green energy marketing program in the country. Approximately 15 to 17 percent of its power currently comes from renewable sources—primarily wind, with landfill methane gas a distant second. The utility expects to reach 30 to 35 percent renewable energy by 2020. It also has a twenty-year agreement to purchase power from a large wood-fired power plant in East Texas, and it expects to achieve a CO2 reduction goal of 20 percent below 2005 levels by 2020.

A number of cities are now also regularly involved in the public land development business—increasingly in situations where public policies, such as those involving mass transit, create huge land value increases and other benefits that would otherwise simply go to private developers....

MORE REAL HOPE AND ACTUAL CHANGE AT LINK

[Demeter]

13. THE DERIVATIVES REGROUP: WALKING UNDEAD

Regulators set September deadline for derivatives deal

WHAT THE HELL...IT'S ONLY BEEN 5 YEARS SINCE THE BLOW-UP...WHAT'S THE HURRY, ANYWAY?

http://in.reuters.com/article/2013/05/15/us-g20-derivatives-idUSBRE94E0W020130515

Financial regulators have given themselves until September to try to resolve differences over how to supervise derivatives markets in the wake of the financial crisis, a U.S. watchdog said on Wednesday... Leaders of the Group of 20 economies (G20) pledged in 2009 to make off-exchange traded derivatives like credit default swaps more transparent. They wanted rules in place by the end of 2012, but this has proved difficult to achieve. The delay is partly because regulators want a common approach to avoid costly overlaps that could distort markets and competition among banks. AFTER YOU, GASTON!

"We have an aspirational goal of September for reaching resolution on some of these issues," Brian Bussey, associate director for derivatives policy at the U.S. Securities and Exchange Commission (SEC), told a Chatham House roundtable. The September deadline coincides with a G20 summit in Russia to review progress on the rules.

The plan is for the $640 trillion derivatives sector, dominated by 16 big banks, to have all trades recorded and cleared by third party clearing houses that are backed by a default fund.

I'M BETTING IT NEVER HAPPENS...AND SO ARE THE BANKSTERS!

Hong Kong investors uninterested in BRICS cross index futures

ONCE AGAIN, THE OLDEST CIVILIZATIONS SHOW THAT THEY WEREN'T BORN YESTERDAY...

http://www.scmp.com/business/article/1236997/hong-kong-investors-uninterested-brics-cross-index-futures

With many investors interested in emerging markets, it sounded like a great idea when the BRICS Exchanges Alliance was formed 19 months ago. But it now appears the alliance has been a flop. It has achieved little and its grand idea of cross-border trading of futures contracts across exchanges has fizzled. The emerging markets of Brazil, Russia, India, China and South Africa formed the alliance in October 2011, with Hong Kong Exchanges and Clearing representing China. At the time of the establishment of the alliance, the five exchanges had a combined 9,481 companies listed, with a market capitalisation of US$9.02 trillion. Their combined monthly turnover was US$422 billion, representing 18 per cent of all listed derivative trading worldwide. The aim of the alliance was to develop cross-border trading of products, and to work together to develop other projects.

There has been 15 months of cross-border trading. Yet little progress has been made so far. The only achievement has been the cross listing of each other's benchmark equity index futures in March last year. Figures show Hong Kong investors have little interest in the products. In the first four months of the year, there was no trading at all in the other four markets' index futures - India's Sensex, Brazil's Ibovespa, Russia's Micex and South Africa's FTSE/JSE Top 40.

In fact, there has been no trading at all in the FTSE/JSE Top 40 futures...

AND THIS MIGHT BE WHY THE ASIANS ARE TAKING A PASS...

Wall Street Wins Rollback in Dodd-Frank Swap-Trade Rules

NO RULE OF LAW...NO TRANSPARENCY...NO REGULATION...NO DICE!

http://www.bloomberg.com/news/2013-05-16/banks-set-to-win-rollback-in-dodd-frank-swap-trade-rules.html

JPMorgan Chase & Co (JPM)., Goldman Sachs Group Inc (GS). and the world’s largest banks won rollbacks in final Dodd-Frank Act rules that promise to transform the private swaps market by increasing competition.

The Commodity Futures Trading Commission voted 4-1 in Washington today on rules determining how buyers and sellers must trade credit-default, interest-rate and commodity swaps in a $633 trillion global market. The rule weakened a proposal by reducing the number of price quotes buyers must seek on swap-execution facilities after banks and asset managers said a five-quote requirement was onerous and would impair trading.

The vote on the rules represents “the start of a process that could eventually lead to a seismic change in trading of over-the-counter derivatives,” Richard Repetto, an analyst with Sandler O’Neill & Partners LP in New York, said in a telephone interview yesterday before the meeting. “It is a switch from an opaque, bilateral market to something where there is some price transparency and a more open and automated market.”

The trading regulations are the latest step in efforts by the CFTC and Securities and Exchange Commission to curb risk and increase transparency in the swap market. Largely unregulated trades helped fuel the 2008 credit crisis that led to the collapse of Lehman Brothers Holdings Inc. and a U.S. rescue of New York-based American International Group Inc....

MORE SAUSAGE MAKING...

CFTC adopts SEF rule, including RFQ3, voice broking

http://www.reuters.com/article/2013/05/16/idUSL2N0DX1NE20130516

The Commodity Futures Trading Commission on Thursday adopted a final rule laying out core principles for new trading platforms known as Swap Execution Facilities, or SEFs.

The rules will allow negotiating of deals over the telephone between banks and their brokers.

The minimum amount of quotes a buy-side client needs to gather before entering a swap - the so-called Request For Quote (RFQ) system - will be set at three.

Only Commissioner Jill Sommers voted against the rule.

[Demeter]

14. For all the debt, there's a shortage of bonds AND COMMON SENSE, APPARENTLY

http://uk.reuters.com/article/2013/05/15/uk-investment-bond-scarcity-idUKLNE94E00R20130515

...not only is "quantitative easing" by the world's major central banks sucking benchmark bonds out of the system, new regulations to strengthen banks and derivatives markets that effectively ring-fence bond holdings at commercial banks has raised concerns about a lack of bonds to lubricate the system. And while U.S. Federal Reserve Chairman Ben Bernanke claims to be monitoring any sign of a reckless "reaching for yield" among investors as government and corporate borrowing costs sink around the globe, the skew in supply and demand for bonds speaks volumes. JPMorgan estimates that the world's central banks and commercial banks alone now hold some $24 trillion worth of bonds - or 55 percent of the entire $44 trillion universe of government, asset-backed and corporate bonds as captured by Barclays Multiverse Global Bond Index. What's more, these players hold more than two thirds of the government bond subset, which amounts to about $25 trillion. "That's why we are in such a depressed bond yield environment," said JPMorgan economist Nikolaos Panigirtzoglou.

Cumulative bond buying since 2008 by four major central banks alone - the Fed, Bank of Japan, European Central Bank and Bank of England - reached more than $4 trillion this year. Added to existing holdings, that brings their total to $5.2 trillion. With new Fed purchases of Treasury bonds set to top $1 trillion in 2013 and Bank of Japan bond buying more than half that amount, the year-end total will be about $6.5 trillion. And as both the Fed's and the Bank of Japan's bond buying will exceed new bond sales by their governments by at least $100 billion this year, there will be fewer bonds around this year than last despite all the new debt sales. Add to that $8.7 trillion of bonds estimated to be held by central banks in China and around the globe to bank their hard cash reserves, and $10 trillion of bonds held by commercial banks in the G4 developed economies to hold down risk-weightings on their assets - then there's not much left for everyone else. With banks viewing Treasury bonds as a direct substitute for cash or "excess reserves" with slightly higher returns, the remaining bonds in the banking system get passed around like "hot potatoes" and yields converge, said Panigirtzoglou...The central point of JPMorgan's number crunch was to show the remaining $20 trillion of the bond universe, held by non-banks such as pension, insurance, mutual and hedge funds, means the investment world is unlikely to be as overweight bonds as many had assumed. That total, they reckon, would only amount to about 30 percent of their combined bond and equity holdings. And this tallies with asset managers, who are already eschewing what they consider to be scarce and over-expensive government debt in favour of often higher-yielding if lower quality corporate and emerging market bonds. "Bizarrely, despite all this debt issuance there is a shortage of bonds," said Alan Higgins, Chief Investment Officer at British private bank Coutts, adding there were plenty of signs of what he called "leakage" within the more conservative fixed income funds to higher-risk securities as a result.

What's more, this bond drought on the investment markets has added to growing concern about a shortage of high quality collateral - typically top-rated bonds - pledged and repledged within the financial system to raise cash. For example, the latest meeting of the U.S. Treasury and bond market participants - the quarterly Treasury Borrowing Advisory Committee - discussed the problem late last month. It concluded that with AAA- and AA-rated sovereign borrowers selling an estimated $2 trillion of new bonds annually, supply of this high-quality collateral would probably be two to three times demand in normal conditions. However, it said demand could well approach $10 trillion in "stressed markets".

This concern about having enough collateral available to generate credit within the financial system refocuses on a central aspect of the banking crisis and its aftermath. International Monetary Fund economist Manmohan Singh has in a number of papers over the past year estimated that interbank mistrust and banks' narrowing definition of acceptable collateral reduced the re-use or re-pledging rate by the big banks to about 2.4 times from 3.0 before the crisis, involving a drop of up to $5 trillion in the cash generated by the banks. That's more than the cash injected by the central banks' bond-buying programmes since 2008 and for many this reduced "velocity" of cash-like collateral within the system helps explain why credit in the economy at large is still stalled. For Singh, it's the rise in 'idle' or 'silo-ed' collateral due to institutional ring-fencing - QE, new bank capital and derivatives markets regulation and central bank reserve management and the like - that policymakers now need to watch closely.

[Demeter]

15. THE EUROMESS COMPENDIUM

Last edited Mon May 20, 2013, 07:44 AM - Edit history (1)

Barclays wins dismissal of U.S. shareholder lawsuit over Libor

http://www.reuters.com/article/2013/05/13/us-barclays-libor-lawsuit-idUSBRE94C10920130513

Barclays Plc, the first bank to settle with authorities over alleged manipulation of the Libor interest rate, on Monday LAST won the dismissal of a U.S. lawsuit by shareholders who claimed they lost money because of the British bank's activity. U.S. District Judge Shira Scheindlin in Manhattan said investors who owned Barclays' American depositary shares did not show that Barclays and other defendants, including former Chief Executives John Varley and Bob Diamond, misled them about Libor or took too long to reveal potential liabilities. She also said the investors failed to show that alleged Libor manipulation between August 2007 and January 2009 caused them to lose money through June 2012, when Barclays reached a $453 million settlement with U.S. and European regulators.

"The notion that the market would fail to digest three years of non-fraudulent submission rates and other more detailed financial information, and would instead leave intact artificial inflation as a result of fraudulent submission rates during the financial crisis is implausible," Scheindlin wrote.

The lawsuit had sought class-action status, and been brought on behalf of ADS purchasers between July 2007 and June 2012. It was led by the Carpenters Pension Trust Fund of St. Louis in Missouri, and the St. Clair Shores Police & Fire Retirement System in Michigan. Scheindlin said the plaintiffs will not get a chance to amend their lawsuit, having failed to address previously identified deficiencies in their second amended complaint...

IT'S TOUGH TO PROVE A CASE OF CONCEALMENT...WHEN YOU DON'T HAVE THE FACTS BECAUSE THEY'VE BEEN CAREFULLY HIDDEN!

Fitch upgrades Greece by one notch citing fiscal progress

http://in.reuters.com/article/2013/05/14/greece-fitch-idINL6N0DV4XT20130514

Ratings agency Fitch upgraded its sovereign credit rating for Greece by one notch on Tuesday, citing the country's progress in cutting its budget deficit and the receding risk of its euro zone exit. After nearly crashing out of the euro last year and coming under attack for stalled reforms, Greece has won praise in recent months from its international lenders for getting back on track and pushing through unpopular austerity measures.

"The price has been high in terms of lost output and rising unemployment and the capacity for recovery is still in doubt," Fitch said. "Nonetheless, sovereign debt relief and an easing of fiscal targets have lifted central bank measures of economic sentiment to a three-year high and the risk of eurozone exit has receded."

The rating outlook is stable, Fitch said in a statement raising its rating to B-minus from CCC. It comes afterStandard & Poor's also raised Greece's rating to B-minus with a stable outlook from selective default in December. Moody's Investors Service has a C rating on the credit. All three are still deep in junk territory. Some analysts remain skeptical that things have turned a corner in Greece.

"Things are getting better but from a very low base," said Ben May, an analyst at Capital Economics in London. "Greece is less on a knife's edge than it was months ago but I'm not sure the worst is over because the fundamental economic problems are still there."

MORE DEPRESSING REAL DATA AT LINK

Greece not tough enough on rich tax evaders, IMF says

http://www.guardian.co.uk/world/2013/may/06/greece-not-tough-tax-evaders-imf


...The International Monetary Fund, one of the contributors to the Greek bailout, also said – at the conclusion of its mission to the debt-laden, recession-hit country – that a "taboo against dismissals" in the overstaffed public sector had led to a surge in unemployment in the private sector. Greece has pledged to cut about 20% of the public sector – or 150,000 jobs – between 2010 and 2015 to help reduce spending, but progress has been slow, while unemployment has topped 27%. A bill has been passed recently to allow 15,000 public-sector posts to be axed. However, the IMF said Greece had made progress in a socially painful recession. It had made "exceptional" improvements on its fiscal position, its competitiveness and preserving stability in the financial sector. "The achievements to date are evidence of a very strong and persistent determination on the part of Greece and its European partners to do whatever it takes to restore Greece to a sustainable situation inside the euro area," the IMF said.

The debt-to-GDP ratio for Greece is around 160%, but the IMF has called for this to be cut to 120% by 2020, resulting in the imposition of tough conditions.

But restoring growth to the country is "the overarching precondition of whether Greece succeeds", according to the IMF. In the face of criticism that some of the problems were caused by austerity measures, the Washington-based fund said that the deeper-than-expected recession was caused by a loss of confidence, concerns about a euro exit and political uncertainty.

The IMF is concerned about the lack of structural reforms, which has left the rich relatively untouched in an economy where 70% of the income is declared by wage earners and pensioners. "Very little progress has been made in tackling Greece's notorious tax evasion. The rich and self-employed are simply not paying their fair share, which has forced an excessive reliance on across-the-board expenditure cuts and higher taxes on those earning a salary or a pension," the IMF said...

EU releases first two billion euros in bailout aid CYPRUS

IT GETS EASIER WITH PRACTICE...AND THEY ARE GOING TO HAVE LOTS OF PRACTICE...

http://www.cyprus-mail.com/bailout/eu-releases-first-two-billion-euros-bailout-aid/20130514

THE EUROGROUP gave its blessings to the disbursement of €3 billion to Cyprus yesterday, with the first €2 billion already sent to the island as part of the first tranche of a €10 billion bailout expected to “buy time” for its ailing economy...During the first hour of the Eurogroup meeting, the European Stability Mechanism (ESM) board announced its approval of the Financial Assistance Facility Agreement with Cyprus and the disbursement of the first tranche of ‘rescue’ money worth €3 billion. The first tranche will be transferred in two separate disbursements: the first €2 billion was transferred yesterday, while the remaining €1 billion will be transferred before June 30. Both disbursements will be made in cash, and will be used for the general financing needs of the public sector, including the considerable sum of maturing debt the government is expected to pay next month, and the country’s fiscal needs.

“The loans granted by the ESM help to maintain financial stability in the euro area and buy time for Cyprus,” Klaus Regling, Managing Director of the ESM said. “This time enables Cyprus to undertake the reforms necessary to rebuild its economy on a sustainable basis.”

In accordance with the Eurogroup decision on March 25, Cyprus will receive assistance of up to €10 billion during the next three years... €3.4 billion of the funds will be used to cover Cyprus’ fiscal needs, €4.1 billion to redeem its medium and long-term debt, and €2.5 billion for the recapitalisation of Cyprus’ other banks.(NOT THE TWO LARGEST)

Cyprus is not only the first fully fledged macro-economic bailout financed by the ESM, it is also the first country forced to contribute to its rescue package with a “bail-in” of over €10 billion by uninsured depositors of the island’s two biggest banks. A further estimated €3 billion will come from privatisations, state gold sale and fiscal adjustments...AT THE USUAL HORRIBLE COST TO PEOPLE

[Demeter]

16. Michigan threatened with 91F today

Barely had the heat off....now have to go to ac?

[Fuddnik]

30. finally turned my AC on yesterday.

Highs in the upper 80's.

[Demeter]

18. G7 on the Move I THOUGHT THEY RAISED IT TO 8--WHO IS LEFT OUT?

G-7 Reaffirms Commitment Not to Target Currencies as Yen Slides

http://www.bloomberg.com/news/2013-05-11/g-7-reaffirms-commitment-not-to-target-currencies-as-yen-slides.html

Global finance chiefs reaffirmed their three-month old commitment not to manipulate currencies, signaling acceptance of the weakest yen in four years. Finance ministers and central bankers from the Group of Seven today agreed “not to target exchange rates,” U.K. Chancellor of the Exchequer George Osborne said after chairing a meeting in Aylesbury near London. He said members have “held to” their February pledge to avoid doing so. Finance ministers and central bankers from the Group of Seven today agreed “not to target exchange rates,” U.K. Chancellor of the Exchequer George Osborne said.

The yen this PAST week fell beyond 100 per dollar for the first time since 2009, extending a decline fueled by more aggressive monetary policy from the Bank of Japan. While the slide may hurt trade rivals, the G-7 officials are signaling acceptance of Governor Haruhiko Kuroda’s argument that Japan’s bond buying is aimed at bolstering growth and not at manipulating the currency. “The Bank of Japan isn’t targeting the exchange rate,” Kuroda told reporters yesterday. Finance Minister Taro Aso said there had been no criticism of Japan’s policies at the G-7 and he had no opinion on his currency’s value. The BOJ last month announced it would double its monthly bond purchases in an attempt to deliver 2 percent inflation within two years and end two decades riddled with recession and deflation.

“The world community has made clear that domestic tools that are designed to deal with domestic growth are within the bounds of what the international community thinks is appropriate,” U.S. Treasury Secretary Jacob J. Lew said yesterday. “We’ve made it clear that we’ll keep an eye on that.”

With the yen falling, nations including Australia, New Zealand and Switzerland are also moving to counter climbing currencies before they hurt their exporters. The risk is such efforts provoke retaliation from trade partners...

THE GLOBAL GAME OF "CHICKEN" RESUMES...


Asia-Pacific Nations Push to Rein In Rising Currencies

http://www.nytimes.com/2013/05/09/business/global/09iht-asiaecon09.html

For many countries, inflows of cash would be a blessing. But incoming money has proved to be too much of a good thing in parts of the Asia-Pacific region, pushing currencies to uncomfortably high levels just as economic growth is tapering off. For many months, policy makers across the region have deployed a range of tools to try to dampen the adverse effects that can come when too much money flows into an economy. The latest example came Wednesday, MAY 8, when the central bank in New Zealand confirmed it had been selling New Zealand dollars on the currency markets in recent weeks to try to stem the sharp rise the kiwi has staged over the past two years.

The central bank governor, Graeme Wheeler, speaking in regular twice-yearly testimony to Parliament, did not say how much money had been deployed. Still, the acknowledgement spotlighted the discomfort that is being felt in the many parts of the region that have seen their currencies soar over the past few years. On Tuesday, the central bank in Australia hinted at its unease with the Australian currency’s strength — the Australian dollar is hovering near multiyear highs — which it cited as an important reason for an interest rate cut that took borrowing costs in the country to a record low.

The Thai finance minister also recently voiced his concern that the Thai baht was too strong. In the Philippines, the central bank cut a key interest rate in late April in a move that analysts said was aimed in part at reversing some of the gains the peso had made in recent years. For export-dependent countries, in particular, strong currencies can be a significant burden, because they make locally made goods and services more expensive for overseas customers. “The strength of the Australian dollar has been a real pain for the country’s manufacturing and tourism sectors,” said Klaus Baader, a regional economist at Société Générale in Hong Kong.

A string of rate cuts by the Australian central bank over the past 18 months has failed to weaken the currency, he added, because Australia’s robust economic fundamentals, low public-sector debt and strong investment returns, relative to those in other developed economies, continue to make it an attractive destination for overseas cash. The same applies to many parts of emerging Asia, whose growth rates and interest rates easily top those in the West. Years of aggressive monetary easing in the United States, meanwhile, mean that there is more cash looking for yields — some of which has flowed into promising markets in Asia and elsewhere...

SONDHEIM ALREADY SET IT TO MUSIC! I THINK I HAVE NEXT WEEKEND THEME!



G-7 Focus on Bank-Rule Overhaul to Reduce Stability Risks

http://www.bloomberg.com/news/2013-05-11/g-7-focus-on-bank-rule-overhaul-to-reduce-stability-risks.html

Group of Seven finance ministers and central bankers said MAY 11 they are moving toward revamping banking rules and ensuring that any lender on the brink of failure can be shut down without threatening financial stability. An “extensive discussion on banking regulation” included talks about how to close banks, European Central Bank President Mario Draghi told reporters yesterday after a G-7 meeting in Aylesbury, near London. The officials had a “clear sense that the different legislations should converge as much as we can on this point,” he said.

European Union leaders began work on a banking union last year to break the cycle of contagion between nations and their lenders that has plagued the euro area in the past three years. A European bank resolution plan is due to be proposed in June. “It is important to complete swiftly our work to ensure that no banks are too big to fail,” U.K. Chancellor of the Exchequer George Osborne said after leading the meeting. “We must put regimes in place in each of our jurisdictions to deal with failing banks and to protect taxpayers, and to do so in a globally consistent manner.” The finance chiefs said they also discussed the importance of developing the EU’s banking union and cleaning up lenders’ balance sheets. A U.S. Treasury official, speaking to reporters on condition of not being identified, said participants talked about how to move quickly toward a banking union. Treasury officials, led by Secretary Jacob J. Lew, have emphasized in recent weeks that the crisis in Cyprus demonstrated the importance of a full euro-area banking union with a single supervisory mechanism and authority to shut down banks.

The U.S. also has pressed Europe to find ways to unclog bank credit lines to small and medium-sized companies, and that topic was discussed by the ministers, the U.S. official said. Draghi said the U.S. gave a presentation on how the Federal Deposit Insurance Corp. works when closing banks, “and this is certainly going to be taken into account by our commission.”

THIS IS CAUSE TO WORRY ABOUT THE FDIC...IT MAY BE OUR LAST FUNCTIONAL COG IN THE FINANCIAL MACHINE...

[Demeter]

19. Chinese Creating New Auto Niche Within Detroit By BILL VLASIC

http://www.nytimes.com/2013/05/13/business/global/chinese-automakers-quietly-build-a-detroit-presence.html?_r=0

Dozens of companies from China are putting down roots in Detroit, part of the country’s steady push into the American auto industry. Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers. While starting with batteries and auto parts, the spread of Chinese business is expected to result eventually in the sale of Chinese cars in the United States.

“The Chinese are well behind the Japanese when they hit our shores 30 years ago,” said David E. Cole, a founder of the Center for Automotive Research in Ann Arbor, Mich. “They lack the know-how, and they’re coming here to get it.”

As businesses sprout up with little fanfare, Chinese companies seem to be trying to avoid the type of public opposition experienced by the Japanese automakers Toyota and Honda in the 1980s, when the sudden influx of foreign cars competing head-on with cars from General Motors, Ford and Chrysler was perceived as a threat to American jobs. In contrast to the Japanese, Chinese auto companies are assiduously avoiding the spotlight. Last year, the biggest carmaker in China, Shanghai Automotive Industries, opened new offices in suburban Detroit without any publicity, which is almost unheard-of in an industry that thrives on media coverage. But China’s growth in the American auto industry is drawing notice in Washington. Last year, the Obama administration filed a complaint with the World Trade Organization that China’s government was unfairly subsidizing the production of some parts shipped to America. And the country’s inroads into American-made batteries and electric vehicles have drawn scrutiny because that sector of the industry has been heavily subsidized by the United States government.

The American industry’s overall resurgence has drawn a growing Chinese population to Detroit, with Chinese-owned suppliers bringing executives from their country and American automakers adding new talent. About 50,000 Chinese, many of them engineers and other professionals who work at General Motors and the Ford Motor Company, live in the metropolitan area. Business networks are growing too. The Detroit Chinese Business Association boasts a flourishing membership, and counts about 100 Chinese-owned businesses, mostly auto-related, in the region. The Ford Chinese Association, with 650 white-collar workers, predominantly from mainland China, has become one of the largest employee groups at the company. Its president, Raymond Xu, recalled that in 1999, when he came to Detroit to attend college, there were very few Chinese in the area. “I think people are going to get more and more comfortable with it,” Mr. Xu said.

Typical of the Chinese expansion are the nondescript offices of Changan Automotive in an industrial park in the suburban city of Plymouth. Changan, a major carmaker in China, set up a research center to better understand the structural chassis of a vehicle — then hired about 20 Detroit engineers, some of whom had been laid off from Detroit’s auto companies, to staff the project.

“Most of the engineers are very young in China,” said Hong Su, the Changan executive heading the American facility. “They know how to make vehicles, but they don’t know how to develop them.”

One of his employees is Alan Wall, 54, a former contract engineer at Chrysler who lost his job during the recession.

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

In one of the more prominent deals, the Wanxiang Group bought most of the assets of the battery maker A123 Systems, which filed for bankruptcy last year despite receiving $132 million of $249 million in federal grants to build two factories in Michigan. Congressional Republicans criticized the deal, saying A123’s technology could support military applications in China. Still, the buyout was approved this year by the Committee on Foreign Investment in the United States, a federal government panel. Wanxiang, which has its United States headquarters near Chicago, has acquired several American auto parts and solar companies in recent years. But it attracted little attention until it took an interest in A123 Systems.

“I wasn’t surprised by the negative reaction,” said Pin Ni, president of the company’s American unit. “The reality is we grow here like a small seed into a bigger tree, and we cannot avoid this type of response.”

He said that Wanxiang employed several thousand American workers, and kept local management in place at companies it had bought. “We act, talk and walk like an American company,” Mr. Ni said. “In the end, it’s all about making money.” ....Only about 4 percent of Chinese-made light vehicles are exported now, mostly to countries in Africa and the Middle East. But the Detroit automakers are bracing for the day when competitive Chinese cars hit the American market.

“The Chinese have a lot of money and they are moving fast,” said Mr. Cole. “We’re going to see a lot more of them here.”

[Demeter]

20. 3 Years Later: Learning to Live With Flash Crashes

http://www.cnbc.com/id/100709978

Rather than being simply a one-off event that Wall Street could dismiss as an aberration, the first Flash Crash now looks like it was just the opening warning shot. In 20 breathtaking minutes that happened three years ago MAY 6TH, the stock market saw the Dow Jones Industrial Average lose nearly 1,000 points, only to rebound just as quickly. Academics and market experts have pondered the cause and effect of the event since, and market circuit breakers have been used to good effect at least to rein in similar events before they get out of control. But indeed there have been numerous subsequent flash crashes—none as dramatic as the initial one but each a reminder that a certain dynamic has been changed in the stock market, likely on a permanent basis.


What makes the first Flash Crash especially troubling is the lack of concrete findings about the cause. Most of the blame has been narrowed to irregular trading over a futures contract related to the Standard & Poor's 500—the "e-mini" to be specific. Regulators moved to install trip mechanisms that shut down trading if similar patterns repeat, and for the most part they have worked. But it's clear the machines have taken over, and with that will come mistakes that only machines can make.

"Flash crashes will occur and it will happen again," said Todd Schoenberger, managing director at LandColt Capital. "If you are a retail investor, you're always going to look at the market with a cautious eye because you're going to be nervous over whether Wall Street has your best interests in mind."

Most recently, the market endured a flash crash social media-style. An April 23 post on The Associated Press' Twitter feed indicated that two explosions had occurred in the White House, injuring President Barack Obama. The report triggered a brief but aggressive market sell-off that reversed itself when it quickly came to light that the AP Twitter feed had been hacked and the post was a hoax....Over the years, many companies have seen shares plunge and spike due to little else than the vagaries of the electronic high-speed trading that has come to dominate the market. The cumulative result: Little in terms of actual stock value, but much in terms of market credibility

"You have 60 percent of America invested in the market either directly or through 401(k) or pension plans. That means six of every 10 are vulnerable to a flash crash, and the only way to reduce or eliminate that risk is just not to be invested at all," Schoenberger said. "And that's not an option, either."

Indeed, while there has been drop in market trading volume, simply sitting out of the market has been an expensive form of protest. Despite all the hoopla over the initial crash and its smaller cousins, the Dow is up a staggering 42 percent since the initial event. And for how scary it may have been, the term "flash crash" seems much more significant to market insiders than it does the typical investor.

"The market's moved past it. The Flash Crash came and went so quickly that, other than being a news event, most retail clients would not have even noticed it," said Mitchell Goldberg, president of ClientFirst Strategy. "It was kind of like watching a boxing match," Goldberg said. "You get set, you get your pretzels and your beverage, you put your beverage down on the floor, you look up and the fight's over."

[AnneD]

31. For those of you that are still stuck in ....

401's and 403's, one nice way to buffet the flash crash fever is to direct you stock investments into a low fee indexed fund-IMHO. That is where mine and my daughters funds rest these days. Once I find something to invest in I will peel off some money there, but until then PM and index funds are the only thing I consider as a safe haven for small investors.

http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/retirement-gamble/index-funds-the-key-to-saving-for-retirement/

http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/

[Demeter]

21. I can't take any more good news

Even the good news is bad....I'm going to go find something cool to wear and hope to survive the opening of SUMMER: THE SEQUEL. It looks like it will be just as hot and dry as last year.

[xchrom]

22. Swedish Banks Get No Mercy as EU Agenda Ignored: Nordic Credit

http://www.bloomberg.com/news/2013-05-20/swedish-banks-get-no-mercy-as-eu-agenda-ignored-nordic-credit.html

Swedish Finance Minister Anders Borg said he won’t cave to pressure from banks or the European Union to harmonize standards and insists capital ratios in the largest Nordic economy need to be higher than those elsewhere.

“We will push ahead with higher capital requirements,” Borg said in an interview in Stockholm. “We won’t take any risks regarding the Swedish economy; we have a large banking sector and highly indebted households, so we need to be sure what’s ahead.”

Some of Sweden’s biggest banks have argued the government’s approach is hurting their ability to lend. Without harmonized capital rules, banks will suffer competitive distortions, Nordea Bank AB (NDA) Chief Executive Officer Christian Clausen has repeatedly warned. Clausen, who is also president of the European Banking Federation, said in February lenders need “one rule book.”

Yet Borg’s tougher stance is supported by debt markets, which have rewarded Sweden’s banks with some of Europe’s lowest funding costs and default risks.

[xchrom]

23. Insight - Despite curbs, China's vast hot money triangle flourishes

http://uk.reuters.com/article/2013/05/19/uk-china-laundering-triangle-insight-idUKBRE94I0CA20130519

(Reuters) - In an underground mall just a stone's throw from China's teeming border with Macau, a row of 30 small shops with identical golden plaques does a brisk, though shadowy trade with mainland Chinese visitors, many of them bound for the gambling hub.

"Good rates. Better than the banks," shout salespeople jostling to usher clients into shops where thick wads of Chinese 100 yuan ($16.31) and HK$1,000 ($130) bank notes change hands and shuffle noisily through electronic cash-counting machines. Licensed as liquor and dry goods stores with stacked shelves of rice wine and cigarettes, many conduct their real business in back rooms - as underground bankers and remittance agents.

"It's very simple," said one agent surnamed Choi, dressed in sandals and ripped jeans, as he served tea in a back office where larger transactions are typically carried out. "You give me renminbi here. Then we deliver Hong Kong dollars to you in Macau. We can move tens of millions each day," he said, glancing up at six security camera images of his shop front flickering on a flat-screen TV.

As China's economy and financial markets mature and gain in sophistication, so too does a vast underground banking industry offering swift, cheap and low risk cross-border fund transfers - shifting hundreds of millions of dollars each day. Much of that activity is conducted openly on the streets of southern China's Guangdong province, where businesses and individuals depend on underground networks to get around strict currency controls - both for legitimate commercial purposes and to safeguard assets beyond the reach of authorities.

[AnneD]

33. Vast hot money triangle....

sounds vaguely pornographic to me-like a strippers 3 inches of cloth modesty.

I think the Chinese government will eventually shut them down. unless they are getting or get a cut of the action.

[xchrom]

34. !

[Demeter]

39. I'm sure the authorities are getting a cut

The question is: through taxes to the public purse, or under the table to private pockets?

Maybe both?

[AnneD]

46. Seeing how China likes to hang....

their corporate wrong doers...I suspect it is going to some government official's pocket.

[xchrom]

24. This Is the Biggest Mistake 60-Year Old Men Make About the Economy

http://www.theatlantic.com/business/archive/2013/05/this-is-the-biggest-mistake-60-year-old-men-make-about-the-economy/275954/

I checked, and re-checked, and triple-checked, and I can confirm that it's not 1979 anymore.

Now, that shouldn't be too surprising -- I'm not writing this on an Apple II, after all -- but it is to a generation of men (and yes, they are all men) who think stagflation is always and everywhere a looming phenomenon. No matter how low inflation goes, they see portents of Weimar. But that neverending 70s show isn't just a phobia of rising prices. It's the idea that the solution to economic pain is more pain. In other words, Volcker-worship.

Stagflation wasn't supposed to happen, but it did. Economists had thought there was a stable relationship between higher unemployment and lower inflation -- the Phillips Curve -- that broke down in the 1970s: prices rose, but so did joblessness. It broke down because people started to expect more inflation the more inflation there was. This cycle of ever-rising prices got going with too loose monetary policy, and continued with the oil shocks. The former started when Richard Nixon pressured Fed Chair Arthur Burns into lowering rates in the runup to the 1972 election, and the latter turned commodity inflation into wage inflation due to widespread cost-of-living-adjustment contracts. It wasn't until Jimmy Carter appointed Paul Volcker to run the Fed in 1979 that things began to turn around. After unsuccessfully trying to target the money supply, Volcker decided to jack up interest rates, and keep them there, until inflation came down. It worked.

But whipping inflation didn't exactly make Volcker popular in the short run. It took what was at the time the deepest recession of the postwar period to bring down people's inflation expectations. Out-of-work homebuilders sent two-by-fours they no longer needed to the Federal Reserve; farmers barricaded it with their tractors. In other words, it was the paragon of what Very Serious People think about when they think about "leadership": inflicting pain today for a better tomorrow. It just so happened that in this case, it was the right thing to do.

[xchrom]

27. Man-on-the-street TV anchor guides Spain through crisis

http://www.rawstory.com/rs/2013/05/20/man-on-the-street-tv-anchor-guides-spain-through-crisis/



With his high-pitched voice, square spectacles and stubbly chin, Jordi Evole is not your typical dashing television presenter. That doesn’t stop three million Spaniards switching on to watch him every Sunday evening.

Indeed, it’s his man-in-the-street style that makes the political journalism of his hit show “Salvados” so popular in crisis-hit Spain.

In interviews with politicians, experts and citizens, Evole, 38, strips away the jargon and deference that cloud much Spanish political reporting and interviewing.

“Do you think that’s a good thing?”… “Do you think that’s normal?” he asks his interviewees, often cutting them short with a simple: “I don’t understand.”

[Demeter]

28. JPMorgan Vote Tests Stockholders’ Power

http://dealbook.nytimes.com/2013/05/19/jpmorgan-chase-vote-tests-stockholders-power/

Jamie Dimon and the 10 other directors of JPMorgan Chase take the stage in Tampa, Fla., on Tuesday, to face shareholders who can take comfort in a rising stock price and a prospering bank.

But those same shareholders may also deliver a humbling rebuff to Mr. Dimon and the bank’s board.

If shareholders vote to separate the jobs of chairman and chief executive — positions that Mr. Dimon has held since 2006 — it would signal a shift in the balance of power in corporate America, an inflection point in shareholders’ push for greater say in the boardroom. Shareholder protests at large companies are usually successful only at those that are troubled or whose stock price has disappointed.

But JPMorgan, even after suffering a multibillion-dollar trading loss that exposed weak risk controls and spurred federal investigations, is minting profits quarter after quarter. And its stock price is up 19 percent this year.

A victory against a bank that prides itself on its “fortress balance sheet” would go a long way toward proving that shareholders can push for changes even at strong companies...If JPMorgan shareholders reject the proposal — which would not require the bank to act in any case — it will be a powerful endorsement of Mr. Dimon and his leadership...

ENDLESS SPECULATION FOLLOWS.

[xchrom]

29. David Cameron warns overseas territories on tax

http://www.bbc.co.uk/news/business-22592662

Prime Minister David Cameron has urged British overseas territories to "get their house in order" and sign up to international treaties on tax.

He wrote to 10 territories and crown dependencies, including the Cayman Islands and the Isle of Man, which operate low-tax regimes.

Critics claim such places are used by companies for tax avoidance or evasion.

The plea came ahead of a G8 summit in June, when the UK is expected to push for tighter tax measures.

[xchrom]

32. Jobless Youth: Europe's Hollow Efforts to Save a Lost Generation

http://www.spiegel.de/international/europe/europe-failing-to-combat-youth-unemployment-a-900621.html

Stylia Kampani did everything right, and she still doesn't know what the future holds for her. The 23-year-old studied international relations in her native Greece and spent a year at the University of Bremen in northern Germany. She completed an internship at the foreign ministry in Athens and worked for the Greek Embassy in Berlin. Now she is doing an unpaid internship with the prestigious Athens daily newspaper Kathimerini. And what happens after that? "Good question," says Kampani. "I don't know."

"None of my friends believes that we have a future or will be able to live a normal life," says Kampani. "That wasn't quite the case four years ago."
Four years ago -- that was before the euro crisis began. Since then, the Greek government has approved a series of austerity programs, which have been especially hard on young people. The unemployment rate among Greeks under 25 has been above 50 percent for months. The situation is similarly dramatic in Spain, Portugal and Italy. According to Eurostat, the European Union's statistics office, the rate of unemployment among young adults in the EU has climbed to 23.5 percent. A lost generation is taking shape in Europe. And European governments seem clueless when they hear the things people like Athenian university graduate Alexandros are saying: "We don't want to leave Greece, but the constant uncertainty makes us tired and depressed."

Instead of launching effective education and training programs to prepare Southern European youth for a professional life after the crisis, the Continent's political elites preferred to wage old ideological battles. There were growing calls for traditional economic stimulus programs at the European Commission in Brussels. The governments of debt-ridden countries paid more attention to the status quo of their primarily older voters. Meanwhile, the creditor nations in the north were opposed to anything that could cost money.

[xchrom]

35. Gringos in the Slums: Expats Move In as Rio Favelas Improve

http://www.spiegel.de/international/world/expats-move-in-as-rio-favelas-improve-a-900626.html

A gentle wind blows across Ipanema, and the air is soft and velvety. Diego Baronio hails from Brescia near Milan, yet here he is, high above the beach at Rio de Janeiro. He has just placed a fruit basket with papaya on the table, the espresso machine is hissing, and his Brazilian companion is serving freshly squeezed pineapple juice. A tourist from Berlin is stretching on a lounger. Baronio has rented his guest room to him.

The Italian charges 500 reais (€191/$246) per month for the room, a price that includes breakfast and a spectacular view. At the hotels in Ipanema, that amount of money is only enough for one night's accommodation with a courtyard view at most. But the hotels aren't located in a favela, or shanty town, like the apartment that Baronio has purchased.
He lives in the impoverished district of Cantagalo, a rust-red labyrinth of interlaced brick buildings. The homes in these poor neighborhoods cling to the hillsides like honeycomb, far above the gated communities of Ipanema. "The people up here are poorer than those who live farther down below -- the buildings are crammed on top of each other, and trash litters the narrow streets," admits Baronio. But he says that it's not much different in many Italian cities: "I thought the favelas would be much worse."

In fact, they were. Three and a half years ago, Cantagalo was controlled by gangsters. There were frequent gunfights and tourists occasionally got caught in the line of fire.

[xchrom]

36. Insufficient Efforts: Report Faults Cyprus on Money Laundering

http://www.spiegel.de/international/business/deloitte-audit-prevention-of-money-laundering-in-cyprus-is-inadequate-a-900593.html

The controls and protective measures implemented so far by Cyprus to combat money laundering have "systemic deficiencies." That's the finding of an expert report authored by financial advisory firm Deloitte, together with Moneyval, the Council of Europe's money-laundering watchdog, which paints a far more dismal picture of the country's financial sector than had previously been seen.

The auditors called for adjustments to the €10 billion ($12.9 billion) European Union-International Monetary Fund bailout package for Cyprus that has already been approved. The adjustments should come in the form of an "action plan, to be agreed between the troika institutions and the Cypriot authorities at the time of the first review," according to a statement by the Euro Group of euro-zone finance ministers on May 13.
In March, Deloitte analyzed the data from a total of 390 top depositors, with more than €2 billion in six Cypriot banks. They found that the Cypriot banks "were not consistently in a position to understand the purpose of the account, define the customer's business economic profile and evaluate the expected pattern and level of transactions," according to a confidential summary of the report.

29 Suspicious Transactions

In 70 percent of cases they encountered complex trust structures with an average of three layers between the customer and the beneficial owner. In only nine percent of cases had the banks gathered independent information about their customers.

[Demeter]

40. It's okay if London and New York do it

but let somebody else try....

[xchrom]

38. Support for 15-M protest movement grows, says new opinon poll

http://elpais.com/elpais/2013/05/19/inenglish/1368993293_946824.html

Two years after the 15-M protest movement blossomed, public sympathy for the protest organization continues to grow, according to a poll conducted for EL PAÍS.

The survey by Metroscopia shows that Spaniards believe that 15-M, which sprouted in 2011, was a spontaneous movement that continues to have solid public backing as a peaceful protest drive.

Of the 14,000 people interviewed, 63 percent said they support the movement — a figure similar to that of two years ago and somewhat higher than that of 2012, a few months after the Popular Party (PP) landslide election victory. Support for the protests was higher among Socialist voters that those who support the PP, and among younger respondents.

Socialist dichotomy

The 87-percent support among Socialist supporters gives a clear idea of the dichotomy between the party’s own institutions and those issues its members feel more comfortable protesting about, such as the causes of the ongoing crisis.

[Demeter]

47. Tomorrow is the Annual Meeting of our Condo Association

I am not up for election, but there's the Treasurer's Report. Hope we get a quorum and a couple of nominees from the floor...